Commercialising
high-value
technologies
BTG plc Annual report and accounts
for the year ended 31 March 2003
Contact BTG at:
BTG in Europe
10 Fleet Place
Limeburner Lane
London
EC4M 7SB
UK
Tel: +44 (0)20 7575 0000
Fax: +44 (0)20 7575 0010
BTG in North America
Five T ower Bridge
300 Barr Harbor Drive
7th Floor 
West Conshohocken
PA 19428-2998
USA
Tel: +1 610 278 1660
Fax: +1 610 278 1605
BTG in Japan
7f Kato Building
5-26-8 Shimbashi
Minato-ku
Tokyo 105-0004
Japan
Tel: +81 (0)3 5777 6831
Fax: +81 (0)3 5777 6835
Visit our website to ﬁnd out 
more about BTG:
www.btgplc.com
E-mail: info@btgplc.com
In the UK and USA, BTG operates
through wholly owned subsidiaries,
BTG International Ltd and 
BTG International Inc, respectively.
BTG plc Annual report and accounts 2003 BTG is a leading technology
commercialisation company.
We find, develop and commercialise
emerging technologies in the life 
and physical sciences. These
innovations are protected by a strong
portfolio of intellectual property. 
We create value by investing in
further technical development,
enhancing the scope and strength 
of the intellectual property and
developing commercialisation plans.
We capture value by licensing 
the rights to the technologies and 
by forming new business ventures
around them.
1 Highlights
2 The year in review 
4 Chairman’s statement 
5 Chief Executive Officer’s review 
8 Chief Operating Officer’s review
15 Chief Financial Officer’s review
18 Directors 
20 Advisers
21 Directors’ report
23 Corporate governance
26 Directors’ remuneration report
32 Statement of Directors’
responsibilities
33 Independent auditors’ report 
to the members of BTG plc
34 Consolidated profit and 
loss account
34 Consolidated statement of total
recognised gains and losses
35 Balance sheets
36 Consolidated cash flow statement
37 Notes to the accounts
55 Five year financial record
57 Shareholder information
Shareholder information
Financial calendar
Annual General Meeting 23 July 2003
Preliminary announcement of interim results for the period 
ended 30 September 2003 November 2003
Circulation of interim report for the period ended 30 September 2003 December 2003
Preliminary announcement of annual results for the year ended 31 March 2004 May/June 2004
Circulation of annual report for the year ended 31 March 2004 June 2004
Shareholders
At 31 March 2003 there were 6,154 holders of ordinary shares in the Company. Their shareholdings are analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Size of shareholding shareholders shareholders ordinary shares ordinary shares
1 – 5,000 5,575 90.6 3,477,105 3.3
5,001 – 50,000 418 6.8 6,775,238 6.4
50,001 – 100,000 50 0.8 3,342,365 3.2
100,001 – 500,000 70 1.1 16,049,933 15.2
Over 500,000 41 0.7 75,691,655 71.9
Total 6,154 100.0 105,336,296 100.0
Shareholders are further analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Type of owner shareholders shareholders ordinary shares ordinary shares
Employee share schemes 2 – 2,029,897 2.0
Employee shareholders 84 1.4 1,305,251 1.2
86 1.4 3,335,148 3.2
Private shareholders 4,459 72.5 5,573,370 5.3
Limited companies 58 0.9 3,837,211 3.6
Bank and nominee companies 1,518 24.7 91,560,307 86.9
Insurance companies and pension funds 9 0.1 298,903 0.3
Other 24 0.4 731,357 0.7
Total 6,154 100.0 105,336,296 100.0
Shareholders holding their shares within PEPs and ISAs are included within ‘Bank and nominee companies’.
Shareholder change of address
As described in the accompanying Notice of Annual General Meeting, the Company offers the facility, in conjunction with 
Capita Registrars, to conduct a number of routine matters via the web, including the ability to notify any change of address. If you
are a shareholder and are either unable or would prefer not to use this facility, please do not send the notification to the
Company’s registered office. Please write direct to Capita Registrars, at their address shown below, where the register is held. 
Registered office and Registrars and transfer office Registered number 
head office number Capita Registrars 2670500
BTG plc The Registry
10 Fleet Place 34 Beckenham Road
Limeburner Lane Beckenham
London Kent
EC4M 7SB BR3 4TU
Telephone: +44 (0)20 7575 0000 Telephone: +44 (0)870 162 3100
Facsimile: +44 (0)20 7575 0010
57 BTG plc  Annual report and accounts 2003 1 BTG plc  Annual report and accounts 2003
Highlights
1
2
3
4
1 R oyalties from launched products 24.9
2 Revenue from new agreements 3.9
3 Milestone payments 1.5
4 Audit revenues 1.2
  31.5
October 2000 – March 2003 (£ million) 2003 (£ million)
1 Balance of net funds 61.1
2 Development & purchase
 of new technology 2.9
3 New ventures & strategic alliances 14.8
4 Other (net of existing cash) 9.2
5 Provensis 34.0
  122.0
1999
2000
2001
2002
2003
 Royalties 
 Revenues from new 
 agreements
 Milestone payments
 Audit & sale of patents
 Equity disposal
1
2
3
4
5
010 20 3040
£ million £ million
Y ear ended Y ear ended
31 March 2003 31 March 2002
T otal revenues 31.5 33.2
Provensis development (13.6) (12.6)
Loss before tax (36.2) (22.6)
Net funds 61.1 97.5
Revenue analysis
Five-year revenue analysis 
(£ million)
Use of Rights Issue cash 2 BTG plc  Annual report and accounts 2003
Theyear in
review
July 
2002 
Two-part hip cup patents
licensed to Wright Medical
The two-part hip cup is a
prosthetic hip joint replacement
that allows accurate positioning
by the surgeon, helping to
prevent hip joint dislocation.
Since its invention, the
technology has been fully
adopted by the prosthetics
industry and is a key component
in approximately 90% of
available products. In July , BTG
licensed the two-part hip cup
patents to Wright Medical
T echnology , Inc., a worldwide
designer, manufacturer and
distributor of orthopaedic
implants and instruments. This 
is the eighth licence agreement
signed for this technology .
September 
2002
Licence for new BSE test
BTG licensed its enhanced
chemiluminescence
technology to a European
company for use in a new,
rapid method of testing cattle
carcasses for BSE. The test kits
are now being distributed
worldwide by Abbott
Diagnostics.
November 
2002
BTG invests in new cancer
therapeutics company
BTG has invested in Iclectus
Ltd, a new biotechnology
company that will focus on
developing intrabody and
masked antisense molecules 
as therapies for the treatment
of cancer, and as tools for
validating new drug targets. 
Its approach is to target
specifically disease-causing
entities within the cell. Iclectus
has access to a portfolio of
intellectual property licensed
or optioned to the company
by MRC-T echnology, and will
continue to collaborate with
the MRC.
December 
2002
Campath licences granted
New Campath
®
(alemtuzumab)
licences were granted during
the year, including diagnostics
rights, rights to distribute the
product in the Far East and
rights to all non-oncology
indications, to ILEX Oncology ,
Inc. ILEX continued to make
good progress in establishing
Campath
®
as a treatment for
chronic lymphocytic leukaemia,
its approved indication, and in
developing the product in other
indications. A randomised, open
label Phase II study began in
December 2002, comparing 
the safety and efficacy of
Campath
®
to Rebif (interferon
beta-1a) in 150 patients with
early , active relapsing-remitting
multiple sclerosis. 3 BTG plc  Annual report and accounts 2003
January 
2003
New company to develop
treatments for ageing-
related diseases
BTG and Catalyst BioMedica
Ltd invested £1.4 million in a
new biotechnology company ,
Senexis Ltd, which is
developing pharmaceuticals for
the diagnosis and treatment of
ageing-related diseases caused
by amyloidosis – a common
pathogenic process. Based at
the University of Manchester
Institute of Science and
T echnology , Senexis will focus
on developing a novel class of
potent inhibitors that can
effectively block and reverse 
a key step in the process of
protein/peptide aggregation,
or amyloidosis.
February 
2003
New licence for MLA
BTG signed a second licence
for the Microlithographic array
(MLA) technology . Originally
developed at Princeton
University , this technology is
used in biochemical analysis
and offers a new approach to
separating biomolecules such as
DNA, RNA, proteins or even
whole cells. Under the new
licence, a US technology
development company will
develop diagnostics using MLA
for pre-natal DNA screening.
Under a licence signed earlier
in the year, U.S.Genomics, Inc.
will incorporate the MLA into
their novel DNA analysis
system, the GeneEngine™
platform for ultra-rapid analysis.
March 
2003
BTG to commercialise
web navigational tracking
patents
Building on a strong track
record of generating value from
under-utilised corporate assets,
BTG is to commercialise a
portfolio of patents relating to
web navigational tracking and
online affiliate programmes.
Originally developed by
Infonautics, these patents are
fundamental to one of the 
most successful e-commerce
marketing tools – affiliate
programmes, sometimes called
pay-per-lead or pay-per-click
programmes. They are used by
more than 5,000 active online
merchants worldwide.
March 
2003
BTG completes staged
investment in KetoCytonyx
KetoCytonyx,Inc.was launched
by BTG to develop treatments
based on ketone bodies 
for acute and chronic
neurodegenerative conditions.
Having appointed the first
members of the management
team, developed plans to start
clinical trials and initiated
scale-up of materials for the
trials, BTG has completed its
staged investment of £3 million
in the company . The first
clinical study , in an indication
that should allow rapid
demonstration of proof of
principle, is expected to
commence this financial year.
BTG’s revenue growth over the
medium term will come from
technologies already in the portfolio.
Our activities this year show
progress towards our medium-term
goals and have laid the foundations
for future growth. 4 BTG plc  Annual report and accounts 2003
Chairman’s statement
‘BTG is a clear world leader in technology
commercialisation. By increasing our focus and
reducing our cost base, we are on a solid footing
to become a sustainable, profitable business. ’
of £36.2 million (£22.6 million the
previous year). The Board does not
recommend payment of a dividend for 
the year.
As stated last year, I will not stand for 
re-election at the Annual General Meeting
on 23 July 2003. I am delighted to report
that Sir Brian Fender, currently Senior
Independent Director, will be appointed
Chairman. In addition, Mrs Consuelo
Brooke, who joined the Board 12 months
ago, will be appointed Senior Independent
Director. Mrs Brooke and Dr William
Jenkins, who also joined the Board this
year, have already contributed significantly
to the Company’s development.
I am grateful to my colleagues past and
present on the Board, and to all of BTG’s
former and current employees, for their
contributions to making this business 
a clear world leader in technology
commercialisation. The planned
expansion of BTG’s business over the 
past years has of necessity been curtailed
by the global downturn. Nonetheless,
I firmly believe that we have continued to
build value in the business. This, together
with the recent changes we have made 
to increase our focus and reduce our 
cost base, places us on a solid footing to
become a sustainable, profitable business.
Dr Jack Leonard
Chairman
from established products, and the down-
payments and royalties we anticipate from
technologies we expect to commercialise
in the near future. Although less
predictable, we also expect to earn
revenues from other new business
opportunities and technologies that are
not yet in the commercialisation phase.
Thus, even in this harsher economic
climate, we are able to reconfirm our
objective of achieving profitability by
2006, excluding any impact from
Provensis Ltd.
Provensis currently represents both 
our biggest investment and greatest
opportunity. We are very encouraged by
the significant progress made this year,
described in detail in the Chief Executive
Officer’s review.
Turnover for the year of £31.5 million
was slightly ahead of the previous year.
However, total revenues, in which we
include equity realisations, were 
£1.6 million lower than in the previous
year when we realised £2.3 million 
profit from the sale of an equity stake.
Consequently, net revenues of 
£17.8 million were £2.1 million less than
the previous year. Investment in Provensis
development increased by £1.0 million to 
£13.6 million, and investment in other
technology development almost doubled
to £1.9 million this year compared 
with £1.0 million the previous year.
Administrative costs, including a
restructuring cost of £1.9 million, were
slightly higher at £33.0 million. These,
together with a higher than normal
patent amortisation charge following
December’s reorganisation, less net interest
receivable and a write-down of equity
investments, resulted in a loss before tax 
BTG’s business has been evolving during
a period of significant change in the
global economic and political climates.
The impact of these changes has been 
felt strongly in the high tech and biotech
sectors, where many established
companies are struggling to grow and
emerging companies are focused on
surviving the downturn. 
As we have said previously, this presents us
with as many opportunities as challenges.
Our objective over the past year has been
to balance the likelihood of having to ride
out tough economic conditions over the
next few years, while continuing to invest
in major opportunities for creating future
value. We have therefore restructured our
business to concentrate our investment
activities on a smaller number of high-
value technology sectors. This has also
enabled us to reduce our cost base, which
is expected to fall by approximately 
£6.0 million this year.
Our business model provides reasonable
visibility for a significant proportion of
the revenues we expect to generate over
the medium term. These include the
recurring royalty streams already flowing 5 BTG plc  Annual report and accounts 2003
Chief Executive Ofﬁcer’s review
‘The success of BTG’s business depends 
on the performance of the technology 
portfolio as a whole. W e anticipate further
significant operational and financial 
progress this year. ’
common commercialisation routes are
licensing the technology to an established
industry player, and creating a venture that
we will fund initially prior to attracting
third party investment.
Our business model is characterised by
investment in the early years with value
generation commencing from three to five
years or even more. W e create value in the
intervening period by securing strong
intellectual property protection, developing
the technology and determining the
optimum route for realising value. W e then
use our commercial skills to secure licences
or create ventures. Most technologies will
not make it all the way through, either
because they do not perform as anticipated
or because the market opportunity
diminishes. Those that do make it must
therefore generate sufficient returns to pay
for the failures (although some individual
technologies that fail still do make money
for BTG from down-payments and
milestone payments).
The confidence to pursue our strategy
stems from three drivers. Firstly ,
universities and companies more than ever
need to create commercial returns from
their research outputs. The availability to
us of key technologies has not abated.
Secondly , product innovation will continue
to drive markets and economic growth.
Finally , BTG’s role in this expanding
market is bridging this gap, providing the
patent, technical and commercial platforms
for transforming scientific and technical
ideas into market-leading products. W e
have the capabilities, resources and proven
track record in commercialising
technologies to take advantage of this
increased market opportunity .
What has changed is our technology focus,
driven by changes in the marketplace.
In the first half of the year, we conducted 
a detailed review of our business that
resulted in a significant restructuring of
our operations. W e made these changes 
to make sure that we can deliver on our
commitment to shareholders to create a
profitable, growing technology
commercialisation business over the
medium term. In this review I describe
the progress we are making, with reference
to the key areas that we addressed in our
business review . I then provide an update
on Provensis.
Business strategy
Our central strategy is to create a
sustainable, profitable business by
acquiring, developing and commercialising
important life and physical science
technologies that will shape tomorrow’s
markets. This has not changed.
We are building a broad, diversified
portfolio of technologies, to which we
continually add promising new
technologies. W e move these forward by
securing strong intellectual property
protection, by investing where appropriate
in developing the technology , and by
selecting the optimal route for
commercialisation. The two most
Our business is structured around five areas: ageing
and neuroscience; biopharmaceuticals; oncology;
semiconductors; and IP-driven opportunities outside
the four target areas.
BTG’s marketplace
In October 2000, we raised £122 million
to expand the business so that we could
address more opportunities across a broad
range of technology sectors. At that time,
most sectors were growing, there was
significant investment flowing into
established and new companies, and there
was strong competition in industry to gain
access to early stage technologies.
Since then, there has been turmoil in the
world’s economies. This has affected many
of the market sectors in which we operate,
but the impact has not been uniform and
demand in some sectors, especially in life
sciences, remains strong.
We have a healthy flow of new
technologies from universities and
companies seeking to extract value from
their assets. W e have welcomed many new
clients during the past year, including
Georgetown University Medical Center
and W ashington University in St Louis in
the US, and the University of Greenwich
in the UK. 
In some high tech areas, such as telecoms
and IT , investment in new product
development has decreased significantly .
The near-term prospects for BTG realising
value from technologies addressing these
markets have also reduced. W e have been
unable to commercialise some
technologies, or to generate the value we
once thought possible from others. 
We believe there will be a recovery in
many sectors, but this will be a gradual
process that takes place over several years.
Increased focus
We have been realistic and balanced the
prospects for global recovery in the near
term with our available resources. W e have 6 BTG plc  Annual report and accounts 2003
Chief Executive Ofﬁcer’s review (continued)
refocused the business to concentrate our
investments on the highest-value
technology sectors and opportunities. W e
have withdrawn completely from some
areas where we believe the long-term
economic prospects are poor. In doing so,
we may miss out on some opportunities,
but we believe the strategy we are
following is appropriate for the market
conditions in which we are operating.
We have structured our technology
investments around five business 
areas: ageing and neuroscience;
biopharmaceuticals; oncology;
semiconductor technology, including
optoelectronics and nanotechnology;
and an area we call strategic business
development. The latter aims to exploit
substantial IP-driven commercial
opportunities that fall outside the four
targeted areas. The Chief Operating
Officer’s review describes these areas
in detail.
A regrettable but inevitable consequence
of increasing our focus was a reduction in
our people of about 30%, which was
completed in December. Ceasing
investment in certain technology sectors
and reducing our headcount will yield
savings of about £6.0 million per annum
from the financial year ending in March
2004. In making these changes, we have
assumed that the current economic climate
will continue for another two to three
years. W e will continue to monitor both
our own operating performance and the
general economic outlook. W e have the
flexibility to adapt our operations should
circumstances change.
People and capabilities
In July we created an Operational
Leadership T eam chaired by our Chief
Operating Officer, Anthony Lando. This
team is responsible for delivering the
business results agreed with BTG’s Board
and Executive Committee.
We have a strong management team and
highly capable and committed employees.
Even in these adverse times we are
stepping up our commitment to providing
appropriate training and development. 
This year we have also introduced a new
“balanced scorecard” compensation plan
for all employees to provide the strongest
possible consistency between the activities
and goals of individuals, teams, the
Company and shareholders.
Provensis
The Provensis team made significant
progress during the past year as the focus
for VARISOLVE
®
Microfoam has shifted
to completion of trials, regulatory filings
and commercialisation.
Clinical update
The final patient in the European Phase III
trial was treated in January , and over half of
the 439 patients treated with VARISOLVE
®
Microfoam have now completed their
extensive one-year follow-up. A further
223 patients were treated with surgery or
alternative sclerotherapy .
Data collection and consolidation are
ongoing, and the final study report is due
later in the year followed shortly by
publication of efficacy and safety data. 
Preliminary indications are that the 
results of treatment with VARISOLVE
®
Microfoam have lived up to expectations
and are in line with those observed in the
European open label and Phase II studies.
In the US, the first cohort of twenty
patients in the Phase II trial has been
treated and data submitted to the Food
and Drug Administration for review.
Manufacturing
Agreements are now in place covering
each stage of the manufacturing process
and the supply of VARISOLVE
®
Microfoam for clinical trials and
commercial launch.
The product is an integrated bi-can unit
that, at the point of use, produces a sterile
microfoam containing polidocanol. Croda
Chemicals plc will manufacture the
polidocanol in accordance with cGMP
under an exclusive supply agreement;
the plant is being prepared for regulatory
inspection. Bi-can components have 
been sourced from a range of established
suppliers, for assembly and manufacture 
of the finished product by CP
Pharmaceuticals Ltd on their Wrexham
site. CP Pharmaceuticals has MHRA and
FDA approval for the manufacture of a
wide range of products including sterile
dosage forms for the global market.
A pilot scale plant providing materials for
clinical trials and stability studies is already
operational at this site. W orking with CP
Pharmaceuticals and design consultants,
Jacobs Engineering Ltd, we have
commenced construction of a new
manufacturing facility at the Wrexham site
BTG’s corporate road map
National Research
Development
Corporation
(NRDC) founded 
in 1948
Torotrak, developing an infinitely
variable transmission for cars and
lorries, demerged in 1998
NRDC merges with National
Enterprise Board in 1981 to
create British T echnology Group
Commercialisation of the
cephalosporin antibiotics,
alternatives to penicillin,
and Pyrethrin, the first
environmentally friendly insectide
The cholesterol
assay, a new method
of testing blood
cholesterol levels is
commercialised 
First MRI licences granted
US and European regulatory
approval for Factor IX, a
recombinant treatment for the
bleeding disorder haemophilia B
Provensis Ltd
formed to develop
VARISOLVE
®
Microfoam as a
new treatment for
varicose veins
1940 1950 1960 1970 1980 1990
Following privatisation 
in 1992, the Company lists on
the London Stock Exchange
in 1995 as BTG plc 7 BTG plc  Annual report and accounts 2003
for the supply of commercial product. This
facility will be owned by Provensis and
operated by CP Pharmaceuticals, who will
also provide full support services. 
Initially , a small-scale production line will
be established within the new facility to
support early product launches. This can
be expanded rapidly as the product
becomes established and demand increases,
thus providing flexibility and phasing of
the manufacturing investment over a
number of years. An investment of up to
£7.4 million will be made this year to
construct the outer shell and small-scale
production line.
Market and commercial options
The commercial success of VARISOLVE
®
Microfoam will be driven by the strength
of the regulatory package, backed up by a
strong brand and IP position, and extensive
technical and commercial know-how .
Recent market research with physicians
and consumers has better defined the
target audience and provided an increased
understanding of the prevalence and
demographics of varicose veins. With its
large and ageing population, high
disposable income, familiarity with self-pay
and interest in new treatment options, the
US will account for a majority share of the
value of VARISOLVE
®
Microfoam.
Plans to develop a strong brand position 
in the US and other markets are well
advanced. The IP portfolio is being
developed, with additional patents and
patent applications already granted, filed 
and planned to add to the original patent
assigned to BTG by the inventor of the
technique that is the basis of VARISOLVE
®
Microfoam. The original patent is being
challenged in Germany , where the Court of
First Instance ruled it invalid. BTG believes
this decision was wrong and is appealing
against it, even though we believe the loss 
of this patent would have no impact on 
the commercial prospects for the product.
The decision only has effect in Germany ,
and the patent remains in force there
pending the outcome of the two-to-three
year appeals process.
We are currently considering
commercialisation options which
include the licence to, or joint venture
with, an established healthcare company.
With only around 1,000 specialist vein
clinics in the US, however, another option
is for Provensis to bring the product to
market itself with contracted support.
Data from the European Phase III trial
and additional market research studies,
under way since the start of the year, will
be central to the decision as to which
option provides the best risk-reward
profile. It is expected that, in association
with the Provensis Board, the Board of
BTG will decide upon the preferred
commercialisation option during the
current financial year.
Management
Provensis has its own Board of experienced
executive and independent Directors,
chaired by Dr John Preston. During the
past year, as the focus has shifted from
technical and clinical development to the
completion of trials, regulatory filings and
commercialisation, the management team
has also been changed and strengthened.
Dr Frank Armstrong, formerly with
ICI/Zeneca Pharmaceuticals and Bayer
AG,has been appointed Chief Executive
Officer and Director of Provensis. W e
thank Dr Paul Harper, former CEO, for
his major contribution during the
development period for Provensis. In
addition, Provensis has appointed a new
Chief Financial Officer and new VPs of
Marketing and Medical and Regulatory
Affairs. This team is wholly focused on
market launches in the EU in 2005 and
the US in 2006.
Outlook
As valuable as we believe the
VARISOLVE
®
Microfoam product to be,
the success of BTG’s business depends
upon the performance of the technology
portfolio as a whole. This year, for
example, we expect revenue growth to
result from newer products such as
Campath
®
, and from technologies we
expect to licence or otherwise
commercialise during the year. W e
anticipate further significant operational
and financial progress in the coming year.
Ian Harvey
Chief Executive Officer
Since its foundation in 1948 by the UK government, BTG has commercialised many important
innovations in the life and physical sciences. Originally, all of our technologies came from UK
universities. T oday, half come from industry, and roughly a third each comes from the UK, the rest 
of Europe and North America. W e have focused our investment in five key technology areas, and 
we are working towards our target of profitability by 2006, with sustainable growth beyond.
BTG is targeting a return
to profitability by 2006, and
sustainable growth beyond
BTG reports first 
profit since becoming 
a public company
Rights Issues raises 
£122.0 million to 
expand the business
Target for first European
launch of VARISOLVE
®
Microfoam
VARISOLVE
®
Microfoam
completes European
Phase III trial
Campath
®
(alemtuzumab), the
first humanised monoclonal
antibody , approved as a
treatment for chronic
lymphocytic leukaemia and
launched in the US and Europe
Responding to changes in the
economy and its marketplace,
BTG focuses its business on
five core areas to invest
carefully and control costs
2000 2001 2002 2003 2004 2005 2006 8 BTG plc  Annual report and accounts 2003
Chief Operating Ofﬁcer’s review
‘W e have focused our investment in the areas
where there is greatest demand for innovative
products: ageing and neuroscience therapeutics,
biopharmaceuticals, cancer treatments,
and semiconductor technologies including
optoelectronics and nanotechnology . ’
further technical development up to certain
limits. Investment in technical development
is designed to generate further proof of
principle and to create a commercialisation
package, which is then used to attract
licensees or external investors. This year we
authorised twenty-four new development
projects, with a combined financial
commitment of £2.8 million.
BTG adds value to a technology by
investing in development, by securing
strong intellectual property protection and
by applying its commercial skills to
determine the optimum routes to market.
The first tangible return on investment and
demonstration of the value we have created
is usually when the technology is licensed
to an established company . It then
completes further technical development
and takes the finished product to market.
This year we signed fifteen new licence
agreements, nine of which contributed
revenues during the period.
Portfolio review
Following the refocusing of our business,
we carried out a detailed review of our
technology portfolio, assessing each
technology , its associated intellectual
property and any existing licence
agreements. T echnologies that were no
longer in a core focus area and that would
require significant further investment prior
to commercialisation have in most cases
been returned to the sources. Those in
which we have already made significant
investment and are in, or close to, the
business unit on commercialisation. 
A ventures team works with the business
units when an opportunity is best addressed
through a start-up route, and it also seeks
ventures opportunities with third party
investors and entrepreneurs.
Improved processes
During the year we streamlined our
operating processes and created a new
Operational Leadership T eam responsible
for the performance of the technology
portfolio. The changes have improved both
our flexibility to respond quickly to new
opportunities and our ability to monitor the
progress of technologies to facilitate go/no
go decisions at appropriate milestones.
A new technology is only accepted into 
the portfolio if it meets strict criteria,
which are based around technical feasibility ,
patentability , the competitive landscape, the
market opportunity , the BTG “value add”
and the investment required to create value.
We screen about twenty times more
technologies than we accept and we have,
through improving our processes,
substantially reduced the time it takes to
screen an opportunity . This is important
since the technology source, usually a
university or company , needs to know 
as soon as possible whether we wish to
acquire it or not. During the year, we
acquired thirty-four new technologies.
Once accepted, for each technology 
we prepare a business plan and, where
appropriate, a technical development plan.
T eams have the authority to invest in
The Chief Executive Officer’s review has
described why and how we have focused
our business to concentrate our investments
on those technology sectors that we believe
offer the greatest opportunities for value
creation. This review describes how we are
structured to capture value in each of the
areas. It also outlines the progress we have
made during the past year, and highlights
some of the technology development and
commercialisation projects under way that
will drive the business towards profitability .
Business focus
BTG has four business units focused
respectively on ageing and neuroscience,
biopharmaceuticals, oncology ,
semiconductor technologies including
optoelectronics and nanotechnology , and 
a fifth team, strategic business development,
which seeks to exploit opportunities that
may fall outside the targeted areas.
The business teams have seven to nine
members, who together have appropriate
technical and scientific expertise as well as
strong commercial experience. Each team
acquires, develops and commercialises
technologies in its own area, and each has
specific budgets and operating targets.
The teams draw on the expertise of
operating support units, including patents,
legal and finance, all of which play an
integral role in the acquisition,
development and commercialisation of
technologies. A dedicated licensing support
and assertion team works with each 9 BTG plc  Annual report and accounts 2003
Rights to a technology that could produce insulin
therapies with a more selective action on the liver
were licensed to a major pharmaceutical company.
commercialisation phase are being
progressed on a case by case basis. Similarly ,
we have rationalised the patent estates and
licence agreements associated with our
technology portfolio.
The portfolio currently contains in excess
of 250 technologies, protected by over
4,000 patents and patent applications with
more than 220 licence agreements in place.
Around two-thirds of technologies are
from life sciences sectors, one-third from
physical sciences areas.
Each focus area is described in this review ,
together with examples of technologies
that have progressed during the year, and 
of others that we anticipate will contribute
to our revenue growth over the coming
few years. 
Ageing and neuroscience
The focus of the ageing and neuroscience
team is on finding, developing and
commercialising pharmaceutical assets 
in the therapeutic areas of pain,
neurodegeneration including Alzheimer's
disease and multiple sclerosis, and obesity .
These are all areas of high unmet medical
need. There is a big demand for new
differentiated products in these areas.
In the long term the team's aim is to build
a high-value, risk-balanced pipeline of
technologies that fulfils pharmaceutical
customer needs for new medicines in these
therapeutic areas. With the industry
increasingly willing to make significant
upfront payments and pay higher royalty
rates for technologies supported by clinical
data, the team is identifying later-stage
opportunities with the goal of putting at
least one compound into clinical
development this year. 
In terms of commercial success this year,
rights to an insulin-based technology ,
acquired from King's College, London, and
Deutsches W ollforschungsinstitut an der
RWTH Aachen E.V ., Germany , were
licensed to a major pharmaceutical
company . This technology could deliver
new insulin therapies with a more selective
action on the liver - a concept that has
value for insulin therapy in both type I 
and type II diabetes.
On the development front, good progress
has been made in the pain portfolio with
three technologies from Virginia
Commonwealth University now ready to
transition to the commercialisation stage.
One of these, a novel series of neuronal
nicotinic receptor agonists has the
potential to address important market
needs as a clinically useful analgesic
particularly for neuropathic pain
applications. Other technologies currently
in commercialisation include a phase II
potent cholesterol lowering agent, an
agent for the treatment and prophylaxis 
of acute myocardial infarction and stroke,
and novel monoamines re-uptake
inhibitors for multiple CNS indications. Chief Operating Ofﬁcer’s review (continued)
A research programme aims to identify a specific
diagnostic test and potential therapeutic approaches
for coeliac disease, an intolerance to the gluten
present in, for example, wheat, rye and barley.
pre-natal diagnostic technology for
detecting genetic disorders in foetal DNA
circulating in the maternal blood. This
technology has been evaluated by a number
of diagnostics companies. Still ahead of its
time, we are actively in the process of
acquiring complementary enabling
technologies and it remains a key target for
commercialisation.
We signed another licence this year for the
enhanced chemiluminescence technology ,
this time with a European company that
provides a variety of testing services to the
livestock industry . The company is using
this technology in a novel, rapid method of
testing for BSE in cattle carcasses.
Eleven development projects are ongoing
and others are being planned. The team
intends to invest in a research programme
to identify a specific diagnostic test and
potential therapeutic approaches for
identifying and treating coeliac disease,
a poorly treated intolerance to gluten. 
The programme will be carried out in
association with the inventors, originally
from Oxford University .
In the therapeutics arena, the team is
focusing on technologies that can
accelerate clinical validation, provide new
uses for medicines that have already been
approved, and offer new formulations that
may for example result in an improved
safety profile or a faster onset of action. In
clinical diagnostics, the focus is on
molecular diagnostics, on technologies that
provide markers of disease mechanisms and
on prenatal/genetic markers. In addition,
the team will invest in technologies that
provide improvements in lead optimisation,
alternative validation approaches and
diagnostic platforms that aid drug discovery
and development.
Examples of such technologies include 
Q-cells, a protein production platform that
can enhance production of recombinant
proteins and other biomolecules. The 
Q-cells technology is being evaluated by a
major manufacturer under a licence option
signed this year. Another example is the
BioPharmaceuticals
The strategy of the biopharmaceuticals
team is to invest in therapeutics,
diagnostics and platform technologies 
that have the potential to accelerate the
pharmaceutical value chain. It usually
takes ten to twelve years or more to
develop pharmaceutical products, and
throughout that period the remaining
patent-protected life decreases. Shortening
the time to market, even by a few months,
can result in significant increases in
revenue potential. This is a major focus 
for pharmaceutical, biotechnology and
diagnostics companies around the world.
It also provides a significant opportunity
to BTG, with the potential for relatively
rapid commercial returns and multiple
commercialisation routes.
‘BTG is committed to 
being a leader in the
development and
commercialisation of
technologies that will 
shape the markets of
tomorrow.’
10 BTG plc  Annual report and accounts 2003 from extensive pre-clinical and clinical 
data from programmes carried out by
AstraZeneca. In these trials, the compound
did not meet the criteria set for further
development as a broad-spectrum inhibitor
of common tumours, but it did show
significant activity in certain tumour types.
Based on the clinical data, to which BTG
has rights, and guidance from a clinical
advisory board of respected cancer experts,
the oncology team has decided (with the
full support of the Institute of Cancer
Research) to invest in a staged Phase I/II
study of 9331 initially as a treatment for
gastric cancer. The study is expected to
commence this financial year.
Campath
®
continued to make good
clinical and commercial progress. 
Our licensee, ILEX Oncology, Inc. 
has continued to report strong growth in
sales and also progress in developing the
product for other indications, including
multiple sclerosis. Revenues increased to
£4.0 million during the year, reflecting
Oncology
The revolution in the scientific
understanding of the genetic and cellular
basis for cancers over recent years will
enable development of drugs that have a
real prospect of delivering major benefits
over existing therapy . The effectiveness of
many current treatments is limited and
there is strong demand from patients,
physicians and the industry for innovative
products. These factors together with a
favourable regulatory environment and a
segmented market that supports the
introduction of many new drugs make the
area an attractive one for investment. BTG’s
oncology team aims to capitalise on this,
and build on the Company’s past
experience and successes in oncology , to
develop a profitable, sustainable business
that ultimately delivers products that can
significantly improve the treatment of
people with cancer.
Although primarily focused on cancer
therapeutics, the team will also select 
cancer therapy adjuncts and pharmaceutical
products for supportive care. Projects will be
selected to provide a balance of near-term
and long-term opportunities. T o maximise
the value of certain technologies before
commercialisation, the team will invest in
clinical development. Compounds with
supporting clinical data have significantly
enhanced value to pharmaceutical and
biotechnology companies.
One such candidate is 9331, a potent and
selective inhibitor of thymidylate synthase
that prevents tumour cell proliferation by
interfering with DNA synthesis. Developed
in a collaboration between AstraZeneca, the
Institute of Cancer Research (Sutton, UK)
and BTG, this compound already benefits 
increased sales and additional agreements
concerning diagnostics rights and Far East
distribution. 
BTG filed additional patent applications
supporting AQ4N, an agent to enhance
chemo- and radiotherapy that was licensed
to KuDos Pharmaceuticals. KuDos is
developing AQ4N, and in parallel BTG 
is continuing a Phase I trial.
BTG licensee Xanthus Life Sciences has
generated promising pre-clinical data on
C-1311, a novel drug that may be useful 
for treatment of high-incidence cancers,
including colorectal cancer. The start of
European clinical trials is anticipated in 
the near future.
BTG and the Institute of Cancer Research are working
together on a new drug that selectively destroys cancer
cells. A specific cancer cell receptor is used to transport
the drug across the cell’s plasma membrane. The slides
(courtesy of Professor Ann Jackman) help prove the
concept of selective drug uptake by the cancer cells.
11 BTG plc  Annual report and accounts 2003 Chief Operating Ofﬁcer’s review (continued)
Semiconductor technologies,
optoelectronics and nanotechnology
The semiconductor and optoelectonics
business units address a diverse market that
generated around £100 billion in sales
revenues worldwide in 2001. The teams
will focus on opportunities that offer
strongly protected IP assets, building
strategic and opportunistic partnerships
that provide access to later stage rights.
The semiconductor team is building
strategic partnerships with established
industry players. The portfolio is being
built around key areas of low-power
methodologies, advanced memories,
system level integration, inter- and intra-
system communication and storage,
fundamental materials and cell designs.
In optoelectronics, the focus is on
components and devices technologies that
will enable the next generation systems,
including lasers, LEDs, OLEDs,
waveguides, modulators, filters, speciality
fibres, and related materials and fabrication
processes. Although some parts of the
industry are currently distressed, telecoms
for example, there is no doubt that “the
future is light”. BTG’s optoelectronics
team is concentrating on technologies that
provide a broad spectrum of
commercialisation opportunities.
The nanotechnology focus is currently on
nanowires and photonic bandgap
materials, and the team has excellent
relationships with key researchers in these
fields at the University of Lund, Denmark,
and the University of Southampton, UK.
In future the team plans to extend its
portfolio with other enabling technologies
such as carbon nanotubes and dendrimers.
Nanotubes are expected to be used to
create second-generation field emission
displays, for large, low cost computer
displays and TVs. Dendrimers may be able
to greatly extend product lifetimes and
increase brightness and efficiency levels in
flat panel displays.
Assertion opportunities feature strongly in
these portfolios. Examples include the
Celltrace IP , which enables remote
updating of SIM cards in mobile
telephones. Following a success at the
European Patent Office last year, the team
has been pursuing licensing discussions and
enforcement opportunities with
manufacturers and mobile operators.
Hitachi, BTG’s licensee for the multilevel
cell technology , signed its first sub-licence
this year, with a major flash memory
manufacturer, generating a significant
payment. Another licence was also signed
for the microlithographic array technology ,
used for separation of biomolecules, and a
fifth licence was completed for the
electroabsorption modulator technology ,
again with Hitachi.
BTG has commissioned a development
programme for the lithium polymer
battery , a technology from the University 
of Leeds, UK, to develop lighter, more
powerful batteries for use in portable
electronic equipment.
Other technologies in development and
commercialisation include: X-
MatchPROVW,a proven lossless data
compression technology; a write head with
preconditioning gap for magnetic media
drives, which increases data density and
media capacity; and Blue VCSEL, a blue
vertical cavity surface emitting laser for
high density storage, general lighting and
biophotonic applications.
BTG’s NQR explosives and drug detection
technology is being used to develop an explosives
detection device for use by airlines to monitor
carry-on bags under an agreement between BTG
licensee QRSciences and Lockheed Martin
Corporation.
12 BTG plc  Annual report and accounts 2003 Strategic business development
A substantial proportion of commercial
opportunities in BTG’s recent history has
derived from opportunistic efforts outside
of the main targeted focus areas. Examples
include V ARISOL VE
®
Microfoam,
Primaxis (the venture fund we co-founded
with the Royal Bank of Canada), and the
ketone body technology that forms the
basis of our new venture KetoCytonyx.
The strategic business development team
has been created to pursue these
opportunities in a structured way . T eam
members have a mixture of life and physical
science experience, together with
appropriate experience in commercialising
technologies through diverse channels.
Its role is to be flexible in identifying IP-
driven commercial and partnership
opportunities, and to have the capability 
to operate rapidly and flexibly .
A significant proportion of short-term
opportunities is expected to come from
patent assertion licensing, working closely
with the licensing support and assertion
team. The team is also exploring
opportunities from BTG’s legacy portfolio
that may be suitable for ventures, and for
these they will work closely with BTG’s
dedicated ventures team. They will also
pilot IP-based partnership initiatives that
employ BTG’s capabilities and offer
significant returns to BTG and its clients.
The team’s successes this year include the
acquisition of potentially valuable
technologies such as MESNA, or the
Chemical Scalpel, a chemically assisted
dissection tool used in EN&T and
gynaecology applications, developed at the
University of Parma, Italy . In its final phase
of development, BTG has rights in surgery
applications. Another important
acquisition, already in commercialisation, is
a portfolio of web navigation history
tracking patents. BTG will be asserting
these patents against companies believed to
be using these patented techniques.
BTG succeeded in expanding the scope of
the approval granted by the Environmental
Protection Agency for the water treatment
technology ,Active-OX™,which paves the
way for two US licensees to expand their
product offerings and sales efforts. The team
also secured a significant settlement for our
mature MRI technology with a major
manufacturer,which resulted in a payment
of $1.6 million this year and is expected to
generate payments of $1.0 million per
annum over the next three years.
Licensing support and assertion
This team provides broad
commercialisation support to all of 
the strategic business units, in particular
when technologies reach the
commercialisation phase.
As mentioned previously , a significant
proportion of BTG’s revenues derives from
IP that is already in use and is therefore
being infringed. In these cases, BTG asserts
the patents and seeks to reach negotiated
settlements that recognise the value of the
IP , both historically and looking forward.
In some areas IP is complex, and it is often
the case that infringement is inadvertent,
and negotiated agreements can be reached.
The revenue obtained is shared with the
source of the IP . 
Examples of assertion licensing include the
electro-absorption modulator technology
from BT and the two-part hip cup, both of
which now have multiple licences in place
that did not require litigation by BTG.
When third parties are reluctant to settle,
however, BTG takes a robust approach and
ultimately is prepared to litigate to enforce
its IP rights. In some cases, litigation is
necessary from the outset. This may be for
technical reasons, to ensure a favourable
MRI is one of the most important technologies
commercialised by BTG, and has generated significant
revenues over many years. Although now mature, this
year BTG reached an agreement with a major
manufacturer worth $4.6 million over three years.
13 BTG plc  Annual report and accounts 2003 14 BTG plc  Annual report and accounts 2003
Chief Operating Ofﬁcer’s review (continued)
jurisdiction before opening negotiations,
or because the royalties being sought 
are so large that the infringer may try and
use pre-emptive litigation to frustrate
further action.
Patent assertion is a complex process
requiring integrated technical, legal and
commercial expertise and experience,
which the BTG team has demonstrated 
on many occasions. The assertion team 
is seeking opportunities to capitalise on 
its capabilities and successful track record,
focusing on high-value and important
technologies. It works alongside other
business teams to secure the best outcome
from assertion opportunities, and will 
take on full responsibility for managing 
the opportunity , working very closely 
with the legal team when litigation is
deemed necessary .
Active projects include the T eleshuttle
portfolio of e-commerce patents, Celltrace
IP for the remote updating of SIM cards in
mobile telephones, the two-part hip cup,
MRI, solitons and over a dozen other cases
that are not yet in the public domain.
Ventures
BTG has a long history in creating new
ventures and for the last eighteen months
has had a dedicated team to explore
opportunities both within BTG’s portfolio,
working alongside the appropriate business
team, as well as with other entrepreneurs
and investors.
Unlike many venture funds, BTG’s
ventures team is not restricted
geographically . In addition to capital, the
team is also able to provide technology and
the commercial, legal, patent, financial and
management experience from within the
BTG organisation.
The team focuses on seed and early stage
investments, but will consider selected
opportunities for later stage investments.
Usually , BTG is the first institutional
investor involved in early stage companies
and a driving force in the technology
commercialisation process. The investment
focus is on technology development, with
most ventures derived from university-
based technology and corporate spin-outs,
often including technologies within BTG’s
portfolio. The team leverages BTG’s
corporate expertise, and typically plays a
much greater role in the technical and
commercial development and IP creation
than a traditional VC fund.
During the year,the team invested in five
new ventures with a combined commitment
of £5.5 million. These included Senexis Ltd,
which raised £1.4 million from BTG and
Catalyst BioMedica Ltd. Senexis is a new
biotechnology company focusing on the
development of pharmaceuticals for the
diagnosis and treatment of ageing-related
diseases caused by a common pathogenic
process called amyloidosis. The team also
invested in Iclectus Ltd,a new biotechnology
company that will focus on developing
intrabody and masked antisense molecules 
as therapies for the treatment of cancer,
and as tools for validating new drug targets
produced,for example,by the sequencing 
of the human genome.
Several investee companies have made
progress during the year. VisionT ec Ltd,
which is developing a new , low-cost 
method of producing toric contact lenses
for people with astigmatism, has made
good technical and commercial progress.
They have moved to larger premises to
house their manufacturing activity ,
commercial partners have been confirmed
and sales are expected to commence
during this financial year
Mesophotonics Ltd, based on
Southampton University technology , has
met its development milestones. Focusing
on optical devices and components, the
company has now recruited its key board
and management members.
BTG completed its staged investment in
KetoCytonyx, Inc. and the first members
of the management team were appointed.
This early stage pharmaceutical company is
focused on cytoprotection and critical cares
developing treatments based on ketone
bodies for acute and chronic neurological
and neurodegenerative diseases. Planning 
of the clinical development programme is
advanced, as is the scale-up development
programme required to produce materials
for clinical trials. It is intended that the 
first study will focus on an indication that
provides a rapid entry route and ability to
demonstrate proof of principle. W e expect
the first clinical study to commence during
the current financial year.
The year ahead
This financial year, we expect to report
further progress in each of the areas
described in this review . W e will add
important new technologies to the
portfolio. Of those already in the portfolio,
some will achieve significant development
milestones, and others will start to return
value by being commercialised. All of these
activities increase the value of the portfolio.
In all, we have set ourselves approximately
twenty specific objectives for the year. If 
we achieve most of them, we will be able to
demonstrate real value creation and tangible
progress as we develop our business.
Anthony Lando
Chief Operating Officer However, we are not relying on an
economic upturn to succeed. Managing
in the current environment requires us to
take a balanced approach between
creating long-term value, generating
short-term revenues and managing costs.
Managing costs in response to the current
environment has to be done in a way 
that does not impair our ability to 
create value.
We have tried to accomplish this in the
recent restructuring of our business. We
are targeting future investments towards
the technology sectors that we believe
can deliver the greatest value. In financial
terms this means being selective about
each investment, prudent about costs,
rigorous about monitoring progress and
ruthless in terminating investment when
performance milestones are not met. 
We are managing our cash resources in
order to maintain a core cash balance 
to cater for unforeseen delays in
commercialisation, or failures of
technologies we would have expected 
to generate revenues between now and
March 2006. W e also intend that in the
medium term the net cash outflows from
the business, including our investments in
Provensis, will be largely covered by the
emergence of sustainable new revenue
streams from licensed technologies that are
about to enter the market, and growing
revenue streams from technologies, such as
Campath
®
,that continue to increase sales in
their respective markets.
15 BTG plc  Annual report and accounts 2003
Chief Financial Ofﬁcer’s review
‘BTG’s business is essentially about investing in 
a portfolio of technologies over the long term. 
We aim to generate increasing revenues from
licence signature payments, from milestone
payments, from long-lasting royalty streams and
from equity realisations as the technologies are
commercialised and reach the market.’
Usually we do not begin to realise any
value from a technology until three to five
years after it has entered the portfolio.
Thus when adding new technologies to
the portfolio, as we have been since
raising money in October 2000 to expand
the business, in the early years the
investments (which are largely expensed
through the P&L) are expected to exceed
the revenues. This has been the case, and
our reported loss has increased, as
anticipated, over the past two years.
Managing in the current climate
One characteristic of BTG’s business is
that it is not possible to see from the
financial statements the future value we
are creating. Other than a few quoted
equity investments, our balance sheet
reflects only the unamortised costs of
patents and the net book value (cost less
provision for permanent diminution) of
our technology investments in companies. 
Investors are seeking demonstrably viable
business models and clear progress
towards profitability. We have therefore
outlined a roadmap to profitability, which
we are targeting for the financial year
ending March 2006 – excluding
Provensis, which is a special case. By this
time, we anticipate that many of the
investments we have been making over
the past few years will have begun to
generate consistently growing revenues,
and we also expect that the general
economic situation will have begun 
to improve. 1 Investment in Provensis 14.6
2 Other direct investment 15.4
3 All other items 6.4
36.4
1
2
3
4
5
1
2
3
4
5
1 Investment in Provensis 13.2
2 Other direct investment 7.9
3 All other items 9.2
30.3
2002 (£ million) 2003 (£ million)
1
3
2
1
3
2
16 BTG plc  Annual report and accounts 2003
Cash outflow 
Chief Financial Ofﬁcer’s review (continued)
Financial results for the year 
to 31 March 2003
The results for the year show a modest
increase in turnover and a modest
reduction in total revenues. Our overhead
increased slightly, and we incurred an
additional cash cost of £1.9 million
relating to our restructuring. We increased
investment in technology development,
Provensis accounting for £13.6 million,
and in ventures. Consequently, net funds
reduced by £36.4 million overall to
£61.1million.
Revenues
Turnover was £0.7 million higher than
in the previous year at £31.5 million.
T otal revenues, in which we include any
profits made from equity realisations,
were this year the same as our turnover
but £1.6 million less than last year when
we realised £2.3 million profit from the
sale of equity in Acambis plc. Despite a
difficult economic climate, the trend in
long-term royalties is positive. Royalties
from launched products grew by 13% to
£24.9 million, having risen by 53% over
the past five years. Factor IX, our largest
current revenue earner, generated 
£11.1 million, slightly higher than last
year, and Campath
®
contributed 
£4.0 million compared with £2.7 million
the previous year. Campath
®
revenues
included non-royalty elements related to
a licence extension and a cross-licence.
Charts showing the breakdown of
revenues and five-year revenue analysis
are shown on page 1 of this report.
Milestone payments at £1.5 million were
comparable to the previous year, but were
still some way short of the peak figure of
£5.4 million in 2000. These contractual
payments are made when our licensees
reach development milestones. Although
they indicate progress and increase
confidence that the technology is moving
towards the market, these payments should
be treated with caution as not all of our
technologies have milestones attached to
them. Furthermore, timing of receipts is
determined by our licensees’ progress.
This year, for example, we anticipated
receiving an additional £3.0 million from
Forest Laboratories Inc. on FDA approval
of the oxycodone/ibuprofen product.
Forest received an approvable letter from
the FDA but, as the regulator requires 
some additional work, the payment has
been deferred.
Income from new agreements at 
£3.9 million is somewhat below last year’s
figure of £5.2 million, but in line with
the five-year average of £3.8 million. 
This reflects the difficulty of persuading
licensees to commit capital to long-term
technology projects in the current climate.
Notwithstanding these circumstances, we
signed fifteen licence agreements during
the year, one more than last year, of which
nine contributed revenues during 
the period.
Expenses
Operating expenses (mainly patent
amortisation) were 41% higher this year at
£6.2 million as a consequence of focusing
on a smaller number of technology areas.
More patents and patent applications than
usual were discontinued, resulting in an
amortisation charge of £5.0 million, 43%
higher than last year.
Administrative expenses remained fairly
static as anticipated. In the current year,
we expect to reduce overall costs by
approximately £6.0 million, the vast
majority of which will come from
administrative expenses. BTG’s largest
investment and greatest asset is its 
multidisciplinary workforce. In deciding
to concentrate on a smaller number of
high-value technology sectors, there has
been a 30% decrease in our employee
numbers from 234 at 31 March 2002 to
164 at 31 March 2003. Most of the
headcount reduction took place in the
final quarter of the financial year; hence
these savings will become visible when
we report our results for the first half-year
in November.
Loss before taxation
The operating loss, which has increased to
£36.9 million, therefore reflects both the
impact of the current economic climate
and the effects of the actions we have
taken in restructuring the business to
address the trends we see in the future
technology commercialisation market.
A higher loss before tax was expected
owing to increased investment in
Provensis and other technology
development projects and lower interest
on cash deposits. Restructuring costs,
which included a higher than normal
patent amortisation charge and
redundancy payments, together with a
write down of equity investments resulted
in a loss before tax of £36.2 million,
compared with £22.6 million last year. 17 BTG plc  Annual report and accounts 2003
Equity investments
During the year we invested £10.0 million
in twelve ventures. BTG’s investee
companies have, on the whole, performed
according to expectations. However, the
reduced valuations of listed technology
companies has impacted unlisted investee
companies, some of which have had to
raise new funds at a significant discount to
previous valuations. In accordance with
our established accounting practice, BTG
carries the value of these investments in its
balance sheet at cost less provisions for
permanent impairment where there has
been a fund-raising in the current year.
Consequently we have made a provision
of £2.5 million against our investment
portfolio this year.
Cash
Our cash balance should be looked at 
in the context of our strategy. Three 
years into an investment programme
following our Rights Issue, we have
invested selectively in technology
development, principally in Provensis,
and in ventures where our particular 
skills complement those of other 
investors. As the charts above show, this
year we spent a total of £36.4 million
compared with £30.3 million last year.
More than £30.0 million or 82% of this
related to investment in the development
of Provensis and on other technologies,
compared with £21.1 million or 70% last
year. Consequently, we have been able to
maintain a strong balance sheet and finish
a year of significant investment with 
£61.1 million net funds. The chart on
page 1 of this report shows a breakdown
of the use of the Rights Issue cash.
Financial outlook
In the current financial year we expect to
see a resumption in revenue growth driven
by the continued progress of established
products and technologies we expect to
commercialise during the year. Our costs
are firmly under control as a result of the
steps taken during the year to refocus the
business. Investment in Provensis will
increase in line with the company’s plan 
to commence small-scale manufacturing.
In other technology developments and 
in ventures we expect to invest at similar
levels to the year under review . Our
operating loss, excluding Provensis, is
expected to decrease as the potential of
revenue streams that were laid down many
years ago begins to be realised. The overall
picture is expected to show clear progress
towards our target for profitability ,
excluding Provensis, by March 2006.
The long-term strategy of the Board,
together with the measures we have taken
in the current climate to ensure that we
are investing only in the highest-value
technology sectors and to control our costs
have positioned us well to continue to
build long-term value, generate short-term
revenues and create a sustainable, profitable
technology commercialisation business.
Rusi Kathoke
Chief Financial Officer
‘The measures we have taken to ensure 
we are investing only in the highest-value
technology sectors and to control our costs,
have positioned us well to continue to
develop a sustainable, profitable technology
commercialisation business.’ 18 BTG plc  Annual report and accounts 2003
Directors
1 Dr Jack Leonard (71) +
Chairman
Following degrees in electronic and
control engineering and experience in
the electronics industry, Jack co-founded
Eurotherm plc of which he was
Chairman until August 1996. He joined
BTG as Chairman in 1993. He is
currently a Non-executive Director of
Dataflex plc. He is also Chairman of
BTG’s Remuneration Committee.
2 Ian Harvey (58) #
Chief Executive Officer
Ian Harvey has an MA in Mechanical
Sciences from Cambridge University and
an MBA from Harvard University. He
was with Vickers and Laporte Industries
for ten years before seven years at the
World Bank. He joined BTG in 1985 as
Chief Executive Officer. Between 1988
and 1993 he served as a member of the
Prime Minister’s Advisory Council on
Science and T echnology. He is a fellow 
of Nottingham University (1994), was 
a member of the Advisory Panel for
“SPRU” (Science and T echnology Policy
Research Unit of Sussex University)
1989-2003. He became a Director of the
Intellectual Property Institute in 1998 and
was appointed as Institute Chairman in
July 1999. He is a director of Primaxis
T echnology Ventures Inc, a member of Air
Products & Chemicals Inc European 
Advisory Council and a member of the
Appointments Committee of the Particle
Physics and Astronomy Research
Council. He was appointed Chairman 
of the UK Government’s Intellectual
Property Advisory Committee in
September 2001. He is a Companion 
of the British Institute of Management.
3 Rusi Kathoke FCA (55)
Chief Financial Officer
Rusi Kathoke has been BTG’s Chief
Financial Officer since April 1986. 
After obtaining a BA in Economics and
History, Rusi qualified as a Chartered
Accountant in 1975. Following short
spells in the consumer finance and oil
industries he joined the National
Enterprise Board (NEB) in 1979. Shortly
after the merger of the NEB and the
NRDC in 1981 to form BTG, he was
appointed Assistant Finance Director.
Between 1979 and 1989 he was involved
in all aspects of the management, and
ultimate divestment, of a large number 
of technology based investments. 
Rusi has managed all of BTG’s major
corporate transactions ranging from the
employee and management buyout in
1992 to BTG’s Rights Issue in 2000.
Rusi is a Non-executive Director of XTL
Biopharmaceuticals Ltd and a Trustee of
the T riangle T rust, a charitable foundation
established to assist the disabled and
disadvantaged. 
4 Sir Brian Fender CMG (68) +*#
Non-executive Director
Sir Brian is BTG’s Senior Independent
Director. He joined BTG as a 
Non-executive Director in 1992. 
He was Chief Executive of the Higher
Education Funding Council for England
from 1995-2001. He is also a member 
of the UK Meteorological Board. 
5 Malcolm Coster (58)*#
Non-executive Director
Malcolm is Executive Chairman of 
MTL Instruments Group plc, and a 
Non-executive Director of a number 
of other public companies, including
Torotrak plc. He is an External Director
of the Performing Right Society and 
also Chairman/Director of a number of
private companies in the UK and USA.
Malcolm was previously President of
Unisys Europe, and an Executive Partner
and Head of Management Consultancy 
in Coopers & Lybrand. He joined BTG
as a Non-executive Director in 1995.
6 Professor Sir George Radda CBE
FRS (66) +
Non-executive Director
Sir George is Chief Executive of the
Medical Research Council. He was 
Head of the Department of Biochemistry,
University of Oxford, from 1991 to 1996.
In 1988 he was made the Honourary
Director of the MRC Biochemical and  19 BTG plc  Annual report and accounts 2003
1 2 3 4 5
6 7 8 9
Clinical Magnetic Resonance Unit at
Oxford, a position which he held until his
current appointment in October 1996.
He is a Fellow of Merton College,
Oxford, a Fellow of the Royal Society
and is the British Heart Foundation
Professor of Molecular Cardiology at 
the University of Oxford (currently on
secondment). In 2001 he became the first
Chairman of the new formed National
Cancer Research Institute. He joined
BTG as a Non-executive Director in
1999. Since 1961 he has over 700
publications to his name reviewed in
scientific and medical journals worldwide. 
7 Fred Weiss (61) *
Non-executive Director
Fred is Managing Director of a private
consulting and investment management
firm in the USA. From 1979 to 1996, he
held a number of positions with W arner-
Lambert Co., with his final role being
Vice President, Planning, Investment and
Development. He is also a director of a
number of Merrill Lynch mutual funds,
W atson Pharmaceuticals, Inc., the 
Michael J. Fox Foundation for Parkinson’s
Research and The Parkinson’s Research
Action Network. He joined BTG in 2001.
8 Consuelo Brooke (56) +
Non-executive Director
Consuelo has recently retired as a
Managing Director of Merrill Lynch
Investment Managers (MLIM) after 
over 32 years in the investment
management industry with MLIM and its
predecessor companies, Mercury Asset
Management and Warburg Investment
Management. She is also a Non-executive
Director of Xansa plc, a member of the
Board of University of Sussex Intellectual
Property Ltd and Treasurer of Sussex
University. She joined BTG in 2002.
9 Dr William Jenkins (55)
Non-executive Director
William was previously Head of Clinical
Development & Regulatory Affairs for
Novartis Pharma AG and held the same
position pre-merger from 1992 with
CIBA-Geigy AG. Prior to that he was
Head of Global Clinical Research at Glaxo
from 1988. Since 1999 he has been a
consultant to pharmaceutical companies
and to investment companies in the life
sciences sector. He is a member of the
Boards of Strakan Group Ltd,Tanox, Inc.,
ViroLogic, Inc. and Eurand. He gained BA
and MD degrees from the University of
Cambridge and his earlier career was in
medical research at the Royal Postgraduate
Medical School and later as a Lecturer at
the Royal Free Hospital, London
University . He joined BTG in 2002.
+ member of the remuneration
committee
# member of the nomination committee
* member of the audit committee 20 BTG plc  Annual report and accounts 2003
Advisers
Stockbrokers
Credit Suisse First Boston
20 Columbus Courtyard
Canary Wharf
London E14 4DA
T elephone: +44 (0)20 7888 8888
Facsimile: +44 (0)20 7888 8296
Auditors
KPMG Audit Plc
PO Box 695
8 Salisbury Square
London EC4Y 8BB
T elephone: +44 (0)20 7311 1000
Facsimile: +44 (0)20 7311 2919
Solicitors
Allen & Overy
One New Change
London EC4M 9QQ
T elephone: +44 (0)20 7330 3000
Facsimile: +44 (0)20 7330 9999
Bankers
National Westminster Bank plc
PO Box 3038
57 Victor ia Street
London SW1H 0HN
First Union National Bank
PA5403
2240 Butler Pike
Plymouth Meeting
PA 19462
USA
Registrar
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
T elephone: +44 (0)870 162 3100 The Directors of BTG plc (the “Company”) present their report
together with the audited accounts of the Group for the year
ended 31 March 2003. 
Principal activities and business review
The Chairman’s statement on page 4, together with the 
Chief Executive Officer’s, Chief Operating Officer’s and 
Chief Financial Officer’s reviews on pages 5 to 17, describe 
the principal activities, operations, performance, financial
position and likely future prospects of the Group. The results 
of the Group are set out in detail on pages 34 to 36 and in the
accompanying notes.
The Directors do not recommend the payment of a final
dividend for the year (2002: nil). The Company did not pay 
an interim dividend (2002: nil). 
Directors
The Directors of the Company at the date of this report, together
with their biographical details and dates of appointment, are
shown on pages 18 and 19. Douglas Fairservice resigned as a
Director on 30 July 2002 and Consuelo Brooke was elected at
the Annual General Meeting of the same date. Dr William
Jenkins was appointed on 1 September 2002.
Under the Company’s Articles of Association, each Director is
subject to re-election at intervals of not more than three years.
Any Director appointed during the year is required to retire and
seek election by the shareholders at the next Annual General
Meeting. In accordance with the Articles of  Association,
Ian Harvey and Sir Brian Fender will be retiring at this year’s
Annual General Meeting and, as a newly appointed Director,
Dr William Jenkins will also retire. They are eligible to stand 
and propose to offer themselves for re-election. Dr Jack Leonard
retires at the Annual General Meeting and does not propose 
to stand for re-election.
The Board is pleased to announce that Sir Brian Fender is 
to be appointed as Chairman of BTG, following the retirement 
of Dr Jack Leonard, at this year’s Annual General Meeting. 
Mrs Consuelo Brooke is to be appointed as Senior Independent
Director in succession to Sir Brian Fender.
Information on Directors’ remuneration, contracts and their
beneficial interests, including those of their immediate families,
in the shares of the Company is shown in the Directors’
remuneration report on pages 26 to 31. 
Shareholders
During the year a total of 147,601 ordinary shares were allotted
under the Company’s various employee share schemes. At 
31 March 2003, the Company had 6,154 ordinary shareholders
(2002: 6,743). Further details of shareholdings and Company
reporting dates may be found on page 57.
At 28 May 2003 the Company had been notified of the
following interests held, directly or indirectly, in 3% or more 
of the Company’s issued share capital.
Number of Shares %
Invesco Asset Management 17,087,697 16.22
Deutsche Asset Management 14,328,249 13.60
Merrill Lynch Investment Managers 10,461,664 9.93
Oppenheimer Funds Inc 5,828,338 5.53
M & G Investment Management Ltd 5,331,312 5.06
A X A Investment Managers UK Ltd 3,982,649 3.78
Henderson Global Investors 3,745,851 3.56
Legal & General Assurance Society Ltd 3,578,457 3.40
Corporate social responsibility report
BTG recognises the increasing importance of corporate 
social responsibility to its employees, its investors and the 
wider community. 
In addition to established corporate governance and risk
management procedures, described elsewhere, the Group has
in place various human resource policies required by legislation
and codes of practice. BTG, via its Ethics and Policy Guide,
provided to all employees and regularly updated on the
Company’s intranet, offers clear guidance to employees in
relation to general business ethics, fair trading and personal
accountability. BTG is committed to constantly improving 
its policies and reporting on them, commensurate with the
Company’s status as a publicly traded company.
BTG recognises the current guidance on Corporate Social
Responsibility, which the Association of British Insurers (“ABI”)
issued in October 2001. BTG intends to comply with the ABI
guidance and is currently conducting a review of the existing
policies, systems and procedures to ensure they are up to date.
The following is a summary of some key policies.
Equal opportunities policy
BTG is committed to achieving equality of opportunity in 
all its employment practices, policies and procedures. BTG
practices equal treatment of all employees or potential employees
irrespective of their race, creed, colour, sexual orientation,
nationality, ethnic origin, religion, disability, age, gender or
marital status. BTG’s policies comply with all UK and US
guidelines and exceed current UK equal opportunities and
discrimination legislation, and Codes of Practice.
This policy covers all permanent and temporary employees
(including Non-executive Directors), all job applicants, agency
staff, associates, consultants and contractors. 
21 BTG plc  Annual report and accounts 2003
Directors’report Family friendly employment policies and careers
The maternity leave and maternity pay policy meet, and in part
exceed, the statutory minimum. Flexible approaches to return to
work after maternity leave and part-time or non-standard hours
and work patterns are adopted where viable. The Group has
adopted a paternity leave policy in line with current legislation.
Employment of disabled persons
BTG ensures that people with disabilities are supported and
encouraged to apply for employment and to progress within the
Group. If job applicants or employees are disabled, they will have
an equal opportunity to be selected, trained and promoted. BTG
makes every reasonable effort to retain disabled persons in the
employment of the Group.
Employee communication and involvement
There are extensive arrangements for consultation on corporate
objectives, plans and performance and on other relevant matters
of interest to employees. Exchanges of information take place
throughout the Group in regular meetings. The Group also
issues a regular internal newsletter to all staff informing them 
of developments in the business.
Environment
BTG is committed to complying with all environmental
legislation and minimising the impact of its activities on the
environment. BTG considers that its direct activities have a low
environmental impact. Nevertheless, waste products are recycled
where practicable and the Group endeavours to control its use 
of energy.
Political and charitable contributions
BTG’s policy is that it does not donate money, services or
facilities to political parties. However, BTG may campaign for or
against proposed changes in legislation or regulations that might
affect its business or the environment in which it does business.
Officers or employees may, with BTG’s approval, participate in
Government advisory committees or Non-Governmental
Organisations that are relevant to the business. No political
contributions were made during the year (2002: nil).
BTG encourages employee involvement in charitable causes in a
number of ways. In the UK, BTG operates and promotes a Give
As Y ou Earn Scheme, whereby employees can make a regular
donation to any registered charity, or other recognised body of
their choice, from their monthly pay. In addition, BTG matches
other donations made by employees up to a fixed amount that 
is set annually based on the previous year’s donations. Each year
in the UK BTG also adopts a different charity, which is chosen
by an annual ballot of employees. Employees are encouraged to
organise money-raising activities for the charity throughout the
year and reasonable use of BTG time and facilities is allowed. 
In the USA, BTG operates a matching gift plan to support 
the interests and concerns of employees and to recognise and
encourage active community involvement. Cash donations made
by full-time employees to qualified charitable, educational and
other non-profit organisations are matched by BTG up to a limit
of $500 per employee, per year.
Charitable contributions made by the Group during the year
amounted to £4,711 (2002: £49,857). In 2002, BTG staff
decided to cancel the annual Christmas party for employees 
and their spouses/partners, following the tragic events of 
11 September 2001, in order to make a substantial donation 
to the T win T owers Orphan Fund.
Policy on payment to creditors
The Company does not follow any specific guidance with
respect to payment of creditors, however it is Group policy 
to abide to terms of payment agreed with suppliers. In many
cases, the terms of payment are as stated in the supplier’s own
literature. In other cases, the terms of payment are determined
by specific written or oral agreement.
At 31 March 2003 the total owed to trade creditors by the
Group was equivalent to 22 days average purchases. The
Company had no trade creditors at that date. 
Annual General Meeting
The Annual General Meeting of the Company will be held 
at 10.30 a.m. on 23 July 2003 at BTG’s offices, 10 Fleet Place,
Limeburner Lane, London EC4M 7SB. The notice of meeting 
is enclosed with this report.
Auditors
Resolutions will be proposed at the forthcoming Annual
General Meeting to re-appoint KPMG Audit Plc as auditors 
of the Company and to authorise the Directors to determine 
its remuneration.
By order of the Board
Rusi Kathoke
Secretary
29 May 2003
22 BTG plc  Annual report and accounts 2003
Directors’report (continued) The Board supports the principles of corporate governance
advocated by The Principles of Good Governance and Code 
of Best Practice (the ‘Combined Code’), issued by the Financial
Services Authority, and has complied with the Code provisions
set out in Section 1 therein throughout the year under review.
The Board has also noted the report by Derek Higgs entitled
‘Review of the Role and Effectiveness of Non-executive
Directors’ and Sir Robert Smith’s ‘Report and Proposed
Guidance for Audit Committees’, both published in January
2003. In addition, during 2002, the Board considered and, where
appropriate, implemented the guidelines on corporate social
responsibility (“CSR”) issued by the Association of British
Insurers in October 2001. The Board takes full responsibility 
for CSR and it is included in the risk management process.
Further details on the Company’s approach to CSR are included
in the Directors’ report on pages 21 and 22.
The Company applied the principles of the Combined Code 
in the following ways:
Directors
Board of Directors
The Group’s business is managed by the Board of Directors. The
Board meets regularly and met a total of seven times during the
past year. Additional Board meetings are held as and when
required. Matters specifically reserved for the Board’s decision
include the approval of the interim and annual accounts, major
investments and disposals, budgets and long-term plans, major
litigation and senior executive remuneration and appointments.
The Board takes regular account of significant risks to the
Group. Following a significant refocusing of the business in
December 2002, the Audit Committee, on behalf of the
Board, is currently conducting a review of risk management
in the Group. 
The Directors are sent an agenda and a full set of Board papers
for each item to be discussed, prior to each Board meeting.
Additional information is provided as appropriate and senior
executives regularly make presentations at Board meetings on
the results and strategies in their areas of responsibility.
The Board currently comprises a Non-executive Chairman, two
Executive Directors and six further Non-executive Directors.
Their names, together with brief biographical details, are set out
on pages 18 and 19. Different Directors hold the roles of
Chairman and Chief Executive Officer and there is a clear
division of responsibilities between them. 
It is considered by the Company that all the Non-executive
Directors who served during the year are independent of
management and, with the exception of Professor Sir George
Radda and Mr Malcolm Coster, free from any business
relationship. Sir George Radda, as a source of technology, has 
a revenue sharing agreement with the Group that was signed in
1982, seventeen years before he was appointed as a Director of
BTG. Sir George Radda takes no part in any decision relating 
to this technology and during the year received £1,012 (2002:
£829) under this agreement. During the year the Group signed
an agreement with the Medical Research Council (“MRC”), in
relation to its Campath technology. Professor Radda, as Chief
Executive of the MRC took no part in any discussions or
decisions in respect of this agreement. Mr Malcolm Coster is a
Director and currently Chairman of iX Imaging Ltd, a small
start-up company in which the Group invested during the year.
He also purchased shares in SAMSys T echnologies, Inc, following
the Group’s investment in that organisation. Due to Mr Coster’s
involvement with these companies, he takes no part in any
related discussions or decisions that may be made by the Group.
The Non-executive Directors, with their different backgrounds,
bring a wide range of experience, expertise and independent
judgement to the Company . Sir Brian Fender has fulfilled the role
of Senior Independent Director throughout the year.
The current Non-executive Chairman, Dr Jack Leonard, retires
at the Annual General Meeting on 23 July 2003. The Board is to
appoint Sir Brian Fender to succeed him as Non-executive
Chairman. Mrs Consuelo Brooke is to be appointed as Senior
Independent Director, in succession to Sir Brian Fender. It is
proposed that both these new appointments take effect as from
the date of the Annual General Meeting.
Executive Directors have service contracts containing a notice
period of one year. Non-executive Directors receive a letter of
appointment for an initial period of three years but, as with
Executive Directors, they must seek election at the first available
Annual General Meeting after their appointment and every
three years thereafter. The Directors retiring at the next Annual
General Meeting are disclosed on page 21.
There is an agreed procedure for Directors to take independent
professional advice, if necessary, at the Company’s expense.
Directors have direct access to the advice and the services of the
Company Secretary who is responsible for ensuring that Board
procedures are followed. The appointment and removal of 
the Company Secretary is a matter for the Board as a whole.
Appropriate training is available for all new Directors.
The Board has established several Committees with specified terms
of reference which assist it in the exercise of its responsibilities.
Committees of the Board
In July 2002, the membership of all the various Committees was
reviewed and a number of changes were instituted. Names in
parentheses are the Chairman followed by other Committee
members who served prior to the July 2002 changes.
Audit Committee
Members of the Committee are all Non-executive Directors
and are currently Sir Brian Fender (Chairman), Malcolm
Coster and Fred Weiss (previously Douglas Fairservice, Sir
Brian Fender and Sir George Radda). The Chief Financial
Officer and external auditors attend meetings at the invitation
of the Committee.
The Audit Committee deals with accounting matters, financial
reporting, corporate governance and internal control. It also
reviews the scope and results of the external audit and the
independence and objectivity of the auditors. It meets at least 
23 BTG plc  Annual report and accounts 2003
Corporate governance twice a year and reviews the interim and annual accounts before
they are submitted to the Board. It also monitors changes in
accounting policy and monitors compliance with external laws
and regulations. The Committee has reviewed the impact of the
Smith report and is considering its activities in the light of the
report’s recommendations. The Committee is also involved in 
a review of risk management on behalf of the Board.
Investment Committee
Members of the Committee are currently Rusi Kathoke
(Chairman), Consuelo Brooke, Malcolm Coster and Fred W eiss. 
In addition, Dr Geoffrey V ernon has been co-opted to the
Committee as an external member with substantial experience 
of venture capital investment.
The Committee, created during the financial year under review,
is responsible for reviewing all significant equity investment
proposals submitted by the various business units. If the
investment exceeds the Committee’s level of authority, the
Committee submits the proposal to the Board, along with its
recommendation, for approval.
Remuneration Committee
Members and terms of reference are included in the Directors’
remuneration report on pages 26 to 31.
Nomination Committee 
Members of the Committee are currently Sir Brian Fender
(Chairman), Ian Harvey and Malcolm Coster (previously 
Dr Jack Leonard, Ian Harvey and Douglas Fairservice).
The Committee considers, at the request of the Board,
candidates for new Board appointments. They interview
candidates and produce a shortlist for subsequent interview 
by all Board members. They also advise the Board on matters
generally relating to Board appointments. 
During the past year the Committee has been involved in the
recruitment of two new Non-executive Directors and the search
for a new Non-executive Chairman. The Committee employees
external recruitment consultants to search for suitable candidates.
Relations with shareholders
The Company maintains good communications with
shareholders through a dedicated investor relations function.
Meetings are held with representatives of major institutional
shareholders and analysts at regular intervals to discuss the
strategies and objectives of the Group. 
The annual report contains a full business review and the
interim report gives an update at the half year. Extensive
information, including annual reports and all press releases are
published on the Company’s web site (http://www.btgplc.com)
for access by all shareholders. The Company’s annual and
interim results presentations to financial analysts are broadcast
live on the web site and are available for viewing as an archive
thereafter. In addition, through the web site, individuals 
can register to receive electronic copies of all company
announcements the day they are issued. See the enclosed 
Notice of the Annual General Meeting for further information
on the registration process.
The Annual General Meeting is the principal opportunity for
private shareholders to meet and discuss the Group’s business
with the Directors and other senior management. A full business
presentation is given and there is an open question and answer
session during which shareholders may ask questions both about
the resolutions being proposed and the business in general.
Notice of the Annual General Meeting, which will be held at
10.30 a.m. on 23 July 2003, at BTG’s offices, 10 Fleet Place,
Limeburner Lane, London EC4M 7SB, is enclosed with this
report. This Notice is being sent to shareholders at least 20
working days before the meeting. The Notice includes details 
of the resolutions and explanatory notes thereon along with a
proxy form for use by those members of the Company unable to
attend. Both Crest members and other shareholders may send their
proxy votes to the Company’s Registrars electronically and further
information on these facilities is also included in the Notice. 
At the Annual General Meeting the number of proxy votes cast
for each resolution will be disclosed. The chairmen of the Audit,
Remuneration and Nomination Committees will be present at
the Meeting to answer shareholders’ questions. 
Accountability and audit
The statement of Directors’ responsibilities in relation to the
accounts is set out on page 32.
Going concern
On the basis of current financial projections and facilities
available, the Directors have a reasonable expectation that the
Group 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.
Internal control and risk management
The Combined Code requires the Board to maintain a sound
system of internal control and recommends that the Directors
review the effectiveness of the Group’s system of internal
controls. The Audit Committee on behalf of the Board
undertakes the detailed monitoring of the controls. The system
is designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can only provide reasonable, not
absolute, assurance against material misstatement or loss.
The criteria for judging the effectiveness of these controls 
are that they allow the maximisation of shareholder wealth by
exploiting business opportunities whilst ensuring that risks are
properly managed. The controls are currently under review to
ensure that they enable the proper management of business 
risks without restricting efficiency and the entrepreneurial
nature of the business. Currently there is no specific internal
audit function within the group and the Audit Committee
proposes to review the need for this on an annual basis. 
24 BTG plc  Annual report and accounts 2003
Corporate governance (continued) There are a number of areas of risk inherent in the Group’s
business, particularly in relation to the development of early-
stage technologies. BTG endeavours to reduce these risks by
having a broad-based portfolio. This portfolio approach helps to
insulate the business from the effects of a failure of an individual
technology and downturn in one particular market.
The fundamental elements of the Group’s internal controls and
risk management are described below.
Structure and reporting
BTG has a management structure with clear lines of
responsibility and accountability, staffed by appropriate personnel.
The Board of Directors of BTG, with seven Non-executive and
two Executive Directors, focuses on overall Group strategy and
the interest of shareholders. An Executive Committee is
responsible, in conjunction with the Board, for setting the
overall strategy and reviewing the performance of the Group. 
It is also responsible for developing the capabilities of the people
employed by the Group. An Operational Leadership T eam (the
“OLT”), chaired by the Chief Operating Officer, manages the
day-to-day running of the Group. It comprises senior staff
members from all parts of the business to ensure that appropriate
corporate controls are in place throughout the Group. The OLT
includes corporate as well as operational members who have
specific responsibility for risk management and compliance in
respect of individual items of business.
Following a review and re-focusing of the business in December
2002 the Group was reorganised into a number of strategic
business units, operational support units and corporate functions.
Within these areas there are defined management structures 
and processes for acquisition, assessment and evaluation of
technology opportunities and development and execution 
of commercialisation strategies. Specialist teams, some based out 
in the field, covering much of the US and Europe, are important 
in ensuring good liaison with inventive sources. In-house expert
groups evaluate the commercial application of individual
technologies at an early stage and have dedicated teams with 
up-to-date market and technical knowledge to ensure that the
technologies are commercialised effectively. These teams work
with the in-house patent attorneys, lawyers and other experts
and also make use of outside expertise when necessary.
BTG actively monitors its revenue streams and from time to
time audits its major licensees to ensure compliance with the
terms of agreements. BTG also has a system for supporting the
protection and maintenance of patents. 
There is a comprehensive system of regular reporting to the Board
based on annual budgets and longer-term plans with regular
reporting of actual results, analysis of variances and regular 
re-forecasting. The reports include non-financial as well as financial
information and a review of technology progress with the
portfolio. The Executive Committee and the OLT each meet
formally on a regular basis to review the performance in their areas
of responsibility .
Approval procedures
There is a clear delegated authority structure within BTG that
ensures that decisions are taken at the correct level, with an
appropriate level of input by in-house legal, financial and
intellectual property personnel. Outside expertise is also sought
where necessary. Decisions with significant financial, legal or
reputational impact for BTG are reserved for approval by the
Board. A separate investment committee has been established
that reviews all of BTG’s venture investment proposals within a
delegated framework.
Corporate values
A statement of corporate values and a guidance booklet on
ethics and compliance are distributed throughout the Group, via
the Intranet, and to all new employees. The various professionals
within the Group also meet regularly to discuss external changes 
in the regulatory, legal and financial environments in which
BTG operates to ensure it remains compliant with new
legislation and best practice.
The Board, through the Audit Committee, has reviewed the
effectiveness of the internal controls of the Group. The controls
described above operate and are embedded within the day-to-day
business. There is an ongoing process for identifying, evaluating
and managing significant risks faced by the company . A reporting
structure has been in place throughout the year and up to the date
of approval of the accounts and is regularly reviewed by the
Directors in accordance with the guidance issued by the
‘T urnbull’ Committee.
Audit independence
The Board, through the Audit Committee, monitors the
effectiveness and independence of KPMG Audit Plc, the
external auditors. The auditors are appointed by the shareholders
at the Annual General Meeting to ensure their independence.
The Audit Committee reviews the overall performance of the
auditors annually and approves their terms of engagement and
remuneration. The Committee reviews the findings of the annual
audit and interim review and, in particular, discusses any major
issues that arise as part of the auditor’s work. The Committee also
reviews the non-audit work carried out by KPMG to ensure that
such services do not impair the independence or objectivity of
the auditors. 
As a result of their review, the Committee is confident that 
KPMG Audit Plc are independent in their reporting on the
audit of the Group.
Statement of compliance with the code of best practice
The Group has established procedures and is fully compliant
with the Provisions of the Code of Best Practice set out in
Section 1 of the Combined Code. 
25 BTG plc  Annual report and accounts 2003
Corporate governance (continued) This report is prepared in accordance with the requirements 
of the Directors’ Remuneration Report Regulations 2002. 
The following sections of this report have been subject to audit:
Non-executive Directors’ fees, Directors’ emoluments, Directors’
shareholdings, and Directors’ options. A resolution will be put to
shareholders at the Annual General Meeting on 23 July 2003,
inviting them to approve the report. Details of the resolution
can be found in the Notice of Annual General Meeting
accompanying this report.
The Board is responsible for the remuneration policy of the
Group. It has set up a Remuneration Committee, whose
members are all Non-executive Directors and currently comprise
Dr Jack Leonard (Chairman), Consuelo Brooke, Sir George
Radda and Sir Brian Fender. Prior to the changes in membership
in July 2002, members were Dr Jack Leonard (Chairman),
Douglas Fairservice and Sir Brian Fender. The Director of
Human Resources is Secretary to the Committee. 
The Committee reviews and recommends the salaries and other
remuneration of the Executive Directors on an annual basis. The
Committee also reviews recommendations on the remuneration
of other senior management and agrees a policy for the
remuneration of other staff. It advises on share schemes and
employee share trust matters. The Board formally ratifies the
decisions of the Committee. 
The Committee have appointed a leading independent
remuneration consultancy, New Bridge Street Consultants, to
advise them in respect of its employee share schemes, long-term
incentive arrangements and market levels of remuneration in
comparator companies. The Company also uses New Bridge
Street Consultants to advise on the operations of its employee
share schemes and two specialist US-based remuneration
consultants, LCG Group and Frederick Cook & Co for matters
specific to the US employment market. The US consultants have
not been appointed by the Remuneration Committee.
Remuneration policy
The Company’s policy on Directors’ remuneration for the
financial year ended 31 March 2003 and subsequent financial
years is to aim to ensure that all remuneration within the Group 
is competitive, takes into account individual performance 
and provides a package that is fair and reasonable for the
responsibilities involved and sufficiently dependent on
achievement to provide motivation through both incentive and
reward. Furthermore, the objective is to ensure that incentive
schemes are in line with best practice and generate alignment
with the interests of shareholders. 
The Group aims to offer a competitive benefit package. As there
are very few companies whose activities are directly comparable,
a single survey is not sufficient to make valid comparisons.
However, by identifying and using surveys of the employment
market from which the Group recruits new employees, relevant
market data can be obtained. 
The policy for remuneration is that fixed remuneration be set 
at or slightly below the median for similar sized companies. 
Bonuses, which may be up to 100% of annual salary, are paid 
on the basis of performance against demanding internal targets
as detailed below.
The performance related elements of remuneration are bonus
and share options and comprise a significant proportion of 
total remuneration.
The performance conditions to which Directors’ entitlements 
to share options are subject are summarised on page 30. The same
performance conditions apply for each Director. The performance
conditions were chosen in order to further align the interests of
option holders with shareholders. The methods to be used in
assessing whether the performance conditions are met are that the
Remuneration Committee reviews the share price performance,
seeking advice from New Bridge Street Consultants, and referring
to the audited accounts for information on turnover and other
finance-related information. These methods are chosen to ensure
that the information used for assessing the performance conditions
is verified by independent third parties. The performance
conditions require a comparison with factors external to the
Company , being the growth in the FTSE Small Cap Index of
companies (for options granted prior to September 2001) and the
growth in the FTSE T echMark 350 Index (for options granted
since September 2001).
Options granted under the Company’s sharesave and awards
under the Company’s profit sharing share scheme are not subject
to performance conditions. This is because these are all-employee
schemes to which performance conditions cannot be applied
under the relevant tax legislation.
The Company’s policy on Directors’ service contracts is that they
should be terminable by the Company on one year’s notice, with
termination payments determined by reference to normal
contractual principles.
The remuneration package
There are four components of the remuneration package: base
salary and benefits, annual bonus, long-term incentive
arrangements and pension.
Base salary and benefits: Base salary takes into account the
performance of the individual and information from
independent sources and consultants on market rates of
remuneration. This is reviewed annually and fixed at or slightly
below the median of the comparator group. Benefits in the
main are limited to the provision of a company car, or cash
equivalent, and medical benefits.
Annual bonuses: Like all other employees, Executive Directors and
Senior Management are eligible to receive specific bonuses, in
recognition of business performance and individual performance.
Such payments do not form part of pensionable earnings.
The Group’s business model is complex and there are few direct
comparisons with other companies. A key element of creating
success over the long-term is to grow revenues in order to
support and sustain the development of an extensive, high quality,
portfolio of IPR and new technology under development.
26 BTG plc  Annual report and accounts 2003
Directors’ remuneration report In recognition of this model, the criteria for paying bonuses to
the Executive Directors include the movement in the market
capitalisation of the Company, growth in revenue and growth 
in the value of the portfolio of IPR and technology. The same
performance measures were used for bonuses payable for the
years ended 31 March 2002 and 2003 and will also be used for
the year ended 31 March 2004. In future years, these criteria
will continue to form the basis of bonus calculations unless the
Remuneration Committee adjusts the policy and notifies the
Directors of the adjustment.
Using these criteria, both Ian Harvey and Rusi Kathoke were
paid bonuses during the year, in recognition of their performance
during the year ended 31 March 2002, equal to 10% of their 
31 March 2002 base salaries. The Committee have compared the
Company’s results against the performance criteria for paying
bonuses and have decided that no bonuses are payable to the
Executive Directors for the year ended 31 March 2003.
Long-term incentive arrangements: Executive Directors 
and Senior Management, together with all other employees,
participate in the Company’s share participation schemes, details
of which are given below . Executive Directors and Senior
Management are entitled to receive annual grants, under the
Company’s share option schemes, of options equal to 100% of
salary on the date of grant if their performance during the past
year has been deemed to have been fully satisfactory in the view
of the Committee. They are also entitled to participate in the
Company’s sharesave schemes on the same basis as all other
employees of the Group.
Pension:The Group operates a defined benefit final salary
pension scheme which is open to all eligible employees. The
scheme enables members to retire at 60 (or 65 under certain
instances) with a maximum pension of two-thirds final salary
after 40 years service. However, in accordance with statutory
requirements, for both Executive Directors and other employees
earning in excess of £100,000 p.a., pensionable pay is averaged
over a minimum three-year period prior to retirement. The
Scheme also offers lump sum death benefits equal to four times
base salary and dependants’ pensions. The US subsidiary runs
a defined contribution scheme for its staff.
All employees of the Group (including Executive Directors) are
remunerated using the policy described above. The remuneration
policy is established by the Board on the recommendation of the
Remuneration Committee.
Service contracts
Ian Harvey and Rusi Kathoke have service contracts, dated 26
June 1995, containing a notice period of one year. The contracts
do not provide for any predetermined amounts of compensation
in the event of early termination. In the event of early
termination, payments for loss of office would be determined by
the Remuneration Committee who would take account of the
particular circumstances in each case, including the unexpired
term of the service contract. 
The Non-executive Directors do not have service contracts, but
have letters of appointment for an initial period of three years. 
The terms of appointment do not contain any contractual
provisions regarding a notice period or the right to receive
compensation in the event of early termination. Their term of
office is limited by the Company’s Articles of Association, which
require one third of the Directors to retire at the end of each
year, and if they so wish, offer themselves for re-election at the
subsequent Annual General Meeting. 
Non-executive Directors’ fees
The Executive Directors are responsible for proposing the 
Non-executive Directors’ fees. In proposing such fees they take
account of amounts paid to Non-executive Directors in listed
companies within the Group’s listing sector. They also take
advice from the Group’s advisers and remuneration consultants.
The decision is taken by the Executive members of the Board.
Current annual fees are £40,000 for the Chairman and £17,500
for all other Non-executive Directors.
The Executive Directors have reviewed, in consultation with the
Group’s remuneration consultants, the level of Non-executive
Directors’ fees. They propose, subject to the approval of this
report at the Annual General Meeting, to amend the basis of
payment as follows:
• The Chairman’s fee will reflect market rate upon
appointment;
•Other Non-executive Directors will receive the following:
– An annual fee of £10,000;
– An attendance allowance of £1,000 per meeting for eight
meetings per annum. T eleconferenced meetings lasting
longer than two hours will be eligible for an attendance
allowance. This allowance will also be paid for attendance 
at any special sub-committees of the Board to review
individual projects;
– An attendance allowance of £1,000 per meeting of the
Audit and Investment Committees. T eleconferenced
meetings lasting longer than two hours will be eligible for
an attendance allowance;
– An attendance allowance of £500 per meeting of the
Remuneration and Nomination Committees. If the
meeting exceeds two hours the allowance will increase 
to £1,000;
–Chairmen of the Nomination and Remuneration
Committees will receive a fee of £3,000 per annum for the
additional work involved. The Chairman of the Audit
Committee will receive a fee of £6,000 per annum, as
should the Chairman of the Investment Committee,
if a Non-executive Director is appointed to that position 
in future.
•Implementing this proposal will result in fees ranging from
£18,000 to £35,000 for individual Non-executive Directors,
other than the Chairman.
Non-executive Directors do not receive benefits or pension
contributions from the Group and do not participate in any
Group incentive scheme. 
27 BTG plc  Annual report and accounts 2003
Directors’ remuneration report (continued) Directors’ emoluments
The amounts below represent emoluments earned as Directors and paid during the relevant financial year.
Basic Total emoluments
salary Bonus Fees Benefits 2003 2002
££££ £ £
Executive
Ian Harvey 310,008 26,400 – 9,340 345,748 357,325
Rusi Kathoke 260,004 21,000 – 10,061 291,065 286,046
Non-executive
Dr Jack Leonard – – 40,000 – 40,000 40,000
Consuelo Brooke
(1)
–– 14,590 – 14,590 –
Malcolm Coster – – 17,500 – 17,500 17,500
Douglas Fairservice
(2)
–– 4,375 – 4,375 17,500
Sir Brian Fender – – 17,500 – 17,500 17,500
Dr William Jenkins
(3)
–– 11,775 – 11,775 –
Professor Sir George Radda – – 17,500 – 17,500 17,500
Fred W eiss – – 17,500 – 17,500 11,667
570,012 47,400 140,740 19,401 777,553 765,038
(1) Fees were paid to Consuelo Brooke from the date of her appointment on 30 July 2002.
(2) Fees were paid to Candover Services Limited for the services of Douglas Fairservice for the period up to the date of his
retirement from the Board on 30 July 2002.
(3) Fees were paid to Dr William Jenkins from the date of his appointment on 1 September 2002. The fees for Dr Jenkins, shown
above, include £1,562 in consultancy fees from Provensis Ltd.
The bonuses paid to the Executive Directors during the year were in recognition of their performance against internal targets for the
year ended 31 March 2002. No bonuses are payable for the year ended 31 March 2003.
Benefits in the main are limited to the provision of a company car, or cash equivalent, and medical benefits.
Pension benefits earned by the Directors are:
Increase in Increase in Transfer value Transfer value Transfer value Increase in
accrued benefits accrued benefits of (A) less of accrued of accrued transfer value less
Accrued benefit excluding including Directors’ benefits at benefits at Directors’
at 31 March 2003 inflation(A) inflation
(1)
contributions
(2)
1 April 2002 31 March 2003 contributions
(3)
Ian Harvey 138,642 23,043 24,975 394,537 1,891,323 2,467,052 560,229
Rusi Kathoke 123,863 25,680 27,321 406,627 1,489,541 2,023,988 521,447
Note:
(1) The increase in the pension figures equals the benefits as at 31 March 2003 less the equivalent benefits as at 31 March 2002 
disclosed in the 2002 accounts.
(2) This is the transfer value as at 31 March 2003 of the increase in benefits (excluding inflation) over the year.
(3) This is the transfer value as at 31 March 2003 less the transfer value as at 31 March 2002 less the contributions paid by the 
Director in the year.
(4) The figures above exclude contributions to, and benefits deriving from, any Additional Voluntary Contributions paid by 
the Directors.
The Group makes payments to the defined benefit final salary pension scheme on the advice of actuaries. Both Executive Directors
are members of this Scheme and, as all other UK members of the Scheme, make an employee contribution of 5% of pensionable
earnings. Pensionable earnings comprise base salary and exclude bonuses and other benefits. Neither Director is affected by the
Inland Revenue imposed ‘Earnings Cap’ as they both joined the Group prior to 1 June 1989. 
No contributions have been required during the past seventeen years due to a surplus in the Group pension scheme (see Note 21 on
page 47 for further information).
The Group has contributed £3,049 (2002: £2,992) during the year to a money purchase pension scheme for Rusi Kathoke. This has
been funded by a reduction in the basic salary he received during the year.
28 BTG plc  Annual report and accounts 2003
Directors’ remuneration report (continued) Directors’ shareholdings
The Directors’ beneficial interests, including interests of connected persons, in the shares of the Company at the end of the financial
year and at 29 May 2003 are shown below. None of the Directors had any non-beneficial interest at any time in the period 1 April
2002 to 29 May 2003. None of the Directors who held office at the end of the financial period had any beneficial interest in the
shares of other Group companies.
Interest at Interest at
31 March 2003 31 March 2002*
Ordinary shares Ordinary shares
10p 10p
Dr Jack Leonard – –
Ian Harvey 690,504 626,737
Rusi Kathoke 155,417 97,821
Consuelo Brooke – –
Malcolm Coster – –
Sir Brian Fender 22,295 22,295
Dr William Jenkins – –
Professor Sir George Radda – –
Fred W eiss 1,000 1,000
* or date of appointment if later.
Ian Harvey and Rusi Kathoke have a beneficial interest in ordinary shares of the Company by direct holdings and by virtue of their
participation in the Company’s employee share schemes. The Non-executive Directors are not entitled to participate in any of the
Company’s employee share schemes. 
Movement in Directors’ shareholdings during the year
Profit sharing Held in
share scheme own name Total
Ian Harvey
At 1 April 2002 1,625 625,112 626,737
Exercise of share option – 63,767 63,767
Distribution from profit sharing share scheme (1,170) 1,170 –
At 31 March 2003 455 690,049 690,504
Rusi Kathoke
At 1 April 2002 1,349 96,472 97,821
Exercise of share option – 57,596 57,596
Distribution from profit sharing share scheme (969) 969 –
At 31 March 2003 380 155,037 155,417
Ian Harvey and Rusi Kathoke, as employees of the Group, also have an interest in the 1,823,849 unallocated shares held on behalf of
all employees in the BTG Employee Share Trust. 
29 BTG plc  Annual report and accounts 2003
Directors’ remuneration report (continued) Company share schemes
The Company has a number of share schemes open to all
eligible employees of the Group, including the Executive
Directors. It also has an employee share trust, the BTG
Employee Share Trust, that holds shares for the general benefit 
of all employees, including Executive Directors, who will
eventually become legally entitled to them from distributions 
in the form of bonuses and under the terms of the profit sharing
and restricted share schemes. 
The Company has established four types of share participation
schemes to incentivise, reward and motivate employees. 
In addition the Group also offers employees the opportunity 
to subscribe individually for shares under conventional savings
related share option schemes. 
Profit sharing share scheme
The Company has made periodic contributions to an Inland
Revenue approved profit sharing share scheme, established for 
the purpose of acquiring shares from the BTG Employee Share
Trust, for ultimate distribution into the legal ownership 
of individual employees. The Company made the final
contributions under this Scheme in 2000. The final tranches 
of shares will be released to current and former employees in
July 2003 at which point the scheme will close.
Restricted share scheme
The Company has established an unapproved restricted share
scheme for the purpose of making conditional awards to
selected full time employees. Awards will be granted at 
the discretion of the Board on the recommendation of the
Remuneration Committee. The Executive Directors are 
not eligible to receive awards under this scheme.
Sharesave scheme
The Company operates Inland Revenue approved save as 
you earn schemes, open to all eligible employees, including
Executive Directors, who open an approved savings contract 
to enable them to purchase shares in the Company. Under
Inland Revenue rules the maximum cumulative amount that
can be saved at any one time is £250 per month. The Company
currently offers a new savings contract each year and restricts the
amount any employee may save in any one offering to £150 per
month. The Company usually offers a discount of 20% to the
average middle market closing price on the three days prior 
to the grant date.
Stock purchase plan
The Company operates a US style stock purchase plan for its 
US employees, open to all US employees who open an approved
savings contract to enable them to purchase shares in the
Company. The Company currently offers a new savings contract
each year and restricts the amount that can be saved in any one
offering to £150 per month. However, in accordance with US
tax regulations, staff save for a period of two years rather than
three as in the UK and the Company usually offers a discount of
15% to the closing middle market price on the grant date.
Share option scheme
BTG operates an Inland Revenue approved executive share
option scheme that is open to all employees, including Executive
Directors. Options may be granted as Inland Revenue approved
awards to UK employees up to a value of £30,000. Options may
be granted to US employees up to a value of $100,000 on an
annual basis under US Internal Revenue Service rules. Options
awarded in excess of these values are issued under a separate
unapproved section of the plan. All the options are exercisable
between three and ten years from grant as long as certain
performance criteria have been met. 
For awards prior to September 2001, the main criteria were 
that the Company’s share price had grown faster than the FTSE
Small Cap Index of Companies over a period of at least three
years since the grant of the option and that there had been an
improvement in the earnings of the Company over a period of
at least three years beginning with the year in which the option
was granted. There have been a number of grants at exercise
prices in the range 308.84 pence to 1,733.10 pence per share. 
For awards made on or after September 2001, the main criteria
are that the Company’s share price has grown faster than the
average of the FTSE T echMark 350 Index and BTG’s total
receipts (revenues and equity realisations) in a relevant period are
at least 130% of those for the financial year prior to the Grant
Date. If both criteria have not been met at the vesting date,
retesting will take place every six months up to a maximum of
five years after the date of grant. If the criteria have not been met
after the five-year period the options will lapse. There have been
a number of grants at exercise prices in the range 102 pence 
to 225 pence per share.
30 BTG plc  Annual report and accounts 2003
Directors’ remuneration report (continued) Directors’ options
The Executive Directors have the following interests in the Group’s share option schemes. Full details of their holdings at the start
and end of the financial year and at 29 May 2003 are set out below.
Exercise At 1 April At 31 March Exercisable within Exercisable within
Director Date of grant price (p) 2002 2003 six months from seven years from Share scheme
Ian Harvey 7 July 1995 48.81 63,767 – – 7 July 2000* Option
Ian Harvey 29 August 2002 225 – 137,777 – 29 August 2005 Option
Ian Harvey 29 July 2002 251 – 2,270 1 September 2005 – SAYE Option
Rusi Kathoke 7 July 1995 48.81 57,596 – – 7 July 2000* Option
Rusi Kathoke 29 August 2002 225 – 115,555 – 29 August 2005 Option
Rusi Kathoke 2 August 2001 830.93 699 699 1 September 2004 – SAYE Option
* Exercisable within five years from this date.
The same performance criteria apply to awards of options for Executive Directors as all other members of staff and are detailed on page 30.
No payment is made for the grant of an option.
During the year Ian Harvey and Rusi Kathoke both exercised share options that they had been granted in July 1995 at an exercise
price of 48.81 pence per share. The closing middle market price at the date of exercise was 237 pence. As both continue to hold these
shares, the exercise generated an unrealised gain of £120,003 for Ian Harvey and £108,390 for Rusi Kathoke on the date of exercise. 
Holders of BTG share options at the date of the demerger of T orotrak plc in July 1998 were eligible to receive some degree of
compensation for the reduction in the value of their options. This compensation was provided by the BTG Employee Share Trust,
which indicated its intention to award each BTG employee a free option over one T orotrak share plus 75p, for every BTG share option
they held at the date of the demerger. The Executive Directors, as all other employees of the Group who held BTG share options at the
requisite date, were entitled to receive this compensation. As a result, Ian Harvey received 62,000 T orotrak shares, with a market value on
the date of release of £28,830, and a cash payment of £46,500. Rusi Kathoke received 56,000 T orotrak shares, with a market value on
the date of release of £28,280, and a cash payment of £42,000. Both the shares and cash compensation were subject to income tax, the
cash compensation being intended as a contribution towards this liability
The closing middle market price of an ordinary share on 31 March 2003 was 96 pence. During the year the share price ranged from
a low of 83 pence to a high of 582.5 pence.
Total shareholder return
The performance of the Company’s ordinary shares compared with the FTSE T echMark All Share Index (the “Index”) for the 
five-year period ended on 31 March 2003 is shown in the graph below.
This graph shows the value at 31 March 2003 of £100 invested in BTG plc on 31 March 1998 compared with £100 invested in the
Index. The other points plotted are the values at interim financial year-ends.
As the Company operates in a specific niche market it is not easy to find a specific index for comparison. However the Board 
chose the Index as it believes that it gives shareholders a reasonable comparison with the total shareholder return of other equity
investments in the emerging technology, life and high technology physical science sectors. The Company is a member of the Index
and it is used as a benchmark for deciding on the exercise of outstanding share options. The TSR performance has been measured by
New Bridge Street Consultants.
By order of the Board
Dr Jack Leonard 
Chairman 
29 May 2003
31 BTG plc  Annual report and accounts 2003
Directors’ remuneration report (continued)
FTSE T echmark All-Share Index BTG plc
350
300
250
200
150
100
50
0
31 March 98 31 March 99 31 March 00 31 March 01 31 March 02 31 March 03
Value (£)
Source: Datastream Company law requires the Directors to prepare accounts for
each financial year which give a true and fair view of the state 
of affairs of the Company and the Group and of the profit or
loss for that period. In preparing those accounts, the Directors
are required to:
• select suitable accounting policies and then apply 
them consistently;
•make judgements and estimates that are reasonable 
and prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the accounts;
•prepare the accounts on the going concern basis unless it is
inappropriate to presume that the Company and 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 to enable them to ensure
that the accounts comply with the Companies Act 1985. They
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
32 BTG plc  Annual report and accounts 2003
Statement of Directors’ responsibilities Independent auditors’ report to the members of BTG plc
We have audited the accounts on pages 34 to 54. We have also
audited the information in 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 auditor’s report and for no other purpose. T o the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed. 
Respective responsibilities of Directors and auditors
The Directors are responsible for preparing the Annual Report
and the Directors’ remuneration report. As described on 
page 32, this includes responsibility for preparing the accounts 
in accordance with applicable United Kingdom law and
accounting standards. Our responsibilities, as independent
auditors, are established in the United Kingdom by statute, the
Auditing Practices Board, the Listing Rules of the Financial
Services Authority, and by our profession’s ethical guidance. 
We report to you our opinion as to whether the accounts give 
a true and fair view and whether the accounts and the part of
the Directors’ remuneration report to be 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 accounts, 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 Group is not disclosed. 
We review whether the statement on page 25 reflects the
Company’s compliance with the seven provisions of the
Combined Code specified for our review by the Listing Rules,
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 other information contained in the Annual Report,
including the corporate governance statement and the unaudited
part of the Directors’ remuneration report, and consider whether
it is consistent with the audited accounts. We consider the
implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the accounts. 
Basis of audit opinion
We conducted our audit in accordance with 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 accounts and the part of the Directors’
remuneration report to be audited. It also includes an assessment
of the significant estimates and judgements made by the
Directors in the preparation of the accounts, and of whether 
the accounting policies are appropriate to the Group’s
circumstances, consistently applied and adequately disclosed. 
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable
assurance that the accounts and the part of the Directors’
remuneration report to be 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 accounts and
the part of the Directors’ remuneration report to be audited.
Opinion
In our opinion:
• the accounts give a true and fair view of the state of affairs of
the Company and the Group as at 31 March 2003 and of the
loss of the Group for the year then ended; and 
•the accounts and the part of the Directors’ remuneration
report to be audited have been properly prepared in
accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
London
29 May 2003
33 BTG plc  Annual report and accounts 2003 £ million
Note 2003 2002 
Total revenue 2 31.53 33.15
Turnover 2 31.53 30.85
Revenue sharing (13.71) (13.26)
Provensis development 3 (13.57) (12.56)
Other new technology development (1.94) (1.00)
Total development (15.51) (13.56)
Other operating expenses* 4 (6.19) (4.35)
Administrative expenses** 5 (33.03) (31.54)
Operating loss (36.91) (31.86)
Profit on disposal – Trust investment in own shares 6 0.02 1.48
(Amounts written off )/profit on disposal of other fixed assets 7 (2.45) 2.30
Loss on ordinary activities before interest and tax (39.34) (28.08)
Interest receivable 9 3.11 5.58
Interest payable and similar charges 10 (0.01) (0.11)
Loss on ordinary activities before taxation (36.24) (22.61)
Taxation on loss on ordinary activities 11 (0.34) (0.14)
Loss for the financial year – retained for equity shareholders 24 (36.58) (22.75)
Basic and diluted loss per share 13 (35.46p) (22.15p)
*Includes £0.90 million additional patent amortisation relating to a write-off of expenditure on patents no longer considered core
to the business following a restructuring of the business in December 2002.
** Includes £0.27 million (2002: £1.69 million) relating to costs funded by the sale of shares in the BTG Employee Share Trust
(Trust) and redundancy costs of £1.91 million incurred as a result of a reorganisation of the business in December 2002.
All results relate to continuing activities, there were no discontinued activities during the current and previous years.
Consolidated statement of total 
recognised gains and losses 
for the year ended 31 March 2003
£ million
2003 2002
Loss for the financial year (36.58) (22.75)
Currency translation differences on foreign currency net investments (0.51) (0.10)
Total recognised gains and losses relating to the year (37.09) (22.85)
The notes on pages 37 to 54 form part of these accounts.
34 BTG plc  Annual report and accounts 2003
Consolidated proﬁt and loss account
for the year ended 31 March 2003 £ million
Group Group Company Company
Note 2003 2002 2003 2002
Fixed assets
Intangible assets – patents and other IPR 14 9.64 11.28 – –
Tangible assets 15 6.86 6.55 – –
Investments 16 15.03 7.95 17.09 17.25
31.53 25.78 17.09 17.25
Current assets
Debtors: amounts falling due within one year 17 6.34 11.79 160.48 159.80
Short-term deposits 26 54.65 90.02 – –
Cash at bank and in hand 26 7.48 8.97 0.01 0.54
68.47 110.78 160.49 160.34
Creditors: amounts falling due within one year 18 (18.45) (18.06) (1.22) (0.75)
Net current assets 50.02 92.72 159.27 159.59
Total assets less current liabilities 81.55 118.50 176.36 176.84
Provisions for liabilities and charges 19 (1.29) (1.24) – –
Net assets 80.26 117.26 176.36 176.84
Analysis of net assets
BTG (excluding Provensis) 113.19 136.64 176.36 176.84
Provensis (32.93) (19.38) – –
Net assets 80.26 117.26 176.36 176.84
Capital and reserves
Called up share capital 22 10.53 10.52 10.53 10.52
Share premium account 23 159.86 159.78 159.86 159.78
Capital reserve 23 7.31 7.31 – –
Profit and loss account 23 (97.44) (60.35) 5.97 6.54
Equity shareholders’ funds 24 80.26 117.26 176.36 176.84
These accounts were approved by the Board of Directors on 29 May 2003 and were signed on 
its behalf by:
Jack Leonard Chairman
Ian Harvey Chief Executive Officer
Rusi Kathoke Chief Financial Officer
The notes on pages 37 to 54 form part of these accounts.
35 BTG plc  Annual report and accounts 2003
Balance sheets
as at 31 March 2003 £ million
Note 2003 2002
Net cash outflow from operating activities
BTG (excluding Provensis) (13.10) (18.67)
Provensis (13.23) (12.42)
Total cash outflow from operating activities 25 (26.33) (31.09)
Return on investments and servicing of finance
Interest element of finance lease payments (0.03) (0.02)
Interest paid (0.01) (0.09)
Interest received 5.60 4.28
Net cash inflow from returns on investments and servicing of finance 5.56 4.17
Taxation
Overseas tax paid (0.35) (0.13)
Tax paid (0.35) (0.13)
Capital expenditure and financial investments
Cash received on sale of tangible assets – 0.06
Purchase of tangible assets (2.07) (1.61)
Cash received on sale of investments 0.03 4.08
Expenditure on investments (9.99) (3.93)
Investment in patents (3.42) (2.94)
Net cash outflow from capital expenditure and financial investments (15.45) (4.34)
Net cash outflow before use of liquid resources and financing (36.57) (31.39)
Management of liquid resources
Cash retrieved from term deposits 35.37 26.56
Net cash inflow from management of liquid resources 35.37 26.56
Financing
Issue of ordinary share capital 0.09 1.10
Capital element of finance lease payments – (0.05)
Net cash inflow from financing 0.09 1.05
Decrease in cash in the period 25 (1.11) (3.78)
The notes on pages 37 to 54 form part of these accounts.
36 BTG plc  Annual report and accounts 2003
Consolidated cash flow statement
for the year ended 31 March 2003 1. Accounting policies
a) Basis of presentation of accounts
The following principal accounting policies have been applied consistently in dealing with items which are considered material 
in relation to the Group’s accounts.
The accounts have been prepared under the historical cost convention and on a going concern basis and, with the exception of
segmental information (note 2) and the treatment of investments (see below), in accordance with applicable accounting standards.
The Directors have, in accordance with section 226 of the Companies Act 1985, departed from the standard format of the profit and
loss account as set out in Schedule 4 of the Act on the grounds that the prescribed format is not applicable and would result in the
profit and loss account not showing a true and fair view. The accounts comply with the requirements of section 226 and Schedule 
4 of the Act in all other respects.
All subsidiary undertakings are companies and are referred to as “subsidiaries” throughout these accounts.
All participating interests are in companies and are referred to as “investments” throughout these accounts.
b) Basis of consolidation
The Group accounts consolidate the accounts of the Company and, with the exception of KetoCytonyx, Inc., all its subsidiaries. All
subsidiary company accounts are made up to 31 March 2003.
In accordance with the Companies Act 1985, investments where the Group’s interest exceeds 50% of the equity share capital are
treated as investments since they are held exclusively with a view to subsequent resale. The Directors consider that as such
investments are held as part of the Group’s portfolio with a view to the ultimate realisation of capital gains, consolidation would not
give a true and fair view of the Group’s interest in these investments and therefore it is necessary to account for them as investments. 
The effect of this departure from FRS 2 – Accounting for Subsidiary Undertakings, is to decrease the loss before taxation by 
£0.19 million (2002: nil) and increase the value of fixed asset investments by £2.92 million (2002: nil).
No profit and loss account is presented for BTG plc (the “Company”) as permitted by Section 230(4) of the Companies Act 1985.
The Company’s loss for the year was £0.57 million (2002: £0.43 million).
c) Related party transactions
The Group has taken advantage of the exemption provided by FRS 8 not to disclose transactions between group companies.
d) Treatment of foreign currencies
In the accounts of individual subsidiaries, foreign currency transactions are translated into the local currency at the rate ruling on the
transaction date or, when appropriate, at the rate of exchange in a related forward exchange contract. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate ruling on the balance sheet date except where covered by hedging
transactions; any gains or losses on translation are included in the profit and loss account.
On consolidation, gains or losses on the translation of the net investments in overseas subsidiaries are shown as a movement on
reserves. The profit and loss accounts of overseas subsidiaries are translated at the average exchange rate. The exchange differences
between the profit for the year translated at average and closing exchange rates are shown as a movement on reserves. Other
exchange differences, including those arising from currency conversions in the usual course of trading, are taken into account 
in determining profit or loss on ordinary activities before taxation.
e) Patents and other intellectual property rights
Intangible assets are stated at cost less amortisation. Cost includes both the cost of obtaining patent protection for intellectual
property rights (“IPR”) on technologies arising from inventive ideas communicated by sources, and the proportion of general
administrative overheads charged to patents and other IPR. Income from patents is derived through licensing and other agreements.
Such expenditure is amortised in a manner calculated to write off the cost, in equal annual proportions, over the effective life of 
the underlying patent or other IPR, usually about 20 years. In the event that a patent is abandoned or is considered to have suffered
an impairment in value before the expiry of its granted life, the balance of unamortised expenditure is written off in the year.
37 BTG plc  Annual report and accounts 2003
Notes to the accounts 1. Accounting policies (continued)
f) Investments
Those venture capital investments that are associated undertakings are carried at cost less provision for permanent impairment in
accordance with the Group’s normal policy and are not equity accounted as required by the Companies Act 1985. The Directors
consider that as these investments are held as part of the Group’s portfolio with a view to the ultimate realisation of capital gains, equity
accounting would not give a true and fair view of the Group’s interest in these investments. The effect of this departure is to decrease
the loss before taxation by £1.04 million and increase the value of investments by £9.50 million.
g) T angible assets
Such assets are stated at cost less depreciation, calculated on a straight line basis, to write the assets down to their residual value at the
following annual rates:
Leasehold property 10-50% Furniture and equipment 10-20%
Computers 20-33% Software packages 33%
Developed software 14%
h) Leases
Rentals payable under operating leases are charged to the profit and loss account on a straight line basis over the term of each lease.
Assets financed by leasing agreements which give rights approximating to ownership (finance leases) have been capitalised at
amounts equal to the original cost of the assets to the lessors and depreciation provided on the basis of the Group depreciation
policy over the shorter of their economic life and the lease term. The capital elements of future obligations under finance leases 
are included as liabilities in the balance sheet and the current year’s interest element, having been allocated to accounting periods to
give a periodic rate of charge on the outstanding balance, is charged to the profit and loss account.
The annual payments under all other lease arrangements, known as operating leases, are charged to the profit and loss account 
on an accruals basis.
i) T otal revenue
Total revenue represents amounts received by the Group through the commercialisation of IPR and includes both amounts received from
licensing and disposal of patented technologies and sale of investments originally received as partial consideration for a licence agreement.
j) Licence income
Licence income is credited to the profit and loss account on an accruals basis based on royalty periods completed in the financial
year. Payments received in respect of future royalty periods are credited to the profit and loss account in the relevant accounting
years. Downpayments under licences are generally credited to the profit and loss account on signature of the relevant agreement;
where these payments relate to future periods they are spread over the relevant accounting years. Milestone payments are credited 
to the profit and loss account once the requisite targets triggering the payments have been achieved.
k) Investment in new technology development
In furtherance of its core activity of patenting and licensing of inventions, the Group invests sums towards the development of new
technology. This expenditure takes the form of development projects at universities and other research establishments.
Each project is entered into in the expectation of discovering commercially relevant new IPR or improving existing IPR, which may
ultimately be licensed. However, the licensing of IPR arising from such projects is subject to such long time scales that it is not possible
to match income against the relevant associated expenditure as required by conventional accounting practice. Consequently , although
the Group regards such expenditure as investment within the context of its specialised activity , annual expenditure incurred on
individual projects is charged to the profit and loss account in accordance with SSAP 13 – Accounting for Research and Development.
l) Deferred taxation
Deferred tax is recognised on most types of timing differences, in particular gains and losses on assets and differences between the
treatment of certain items for tax and accounting purposes. BTG has adopted a policy of recognising deferred tax without discounting.
m) Pension costs
The charge to the profit and loss account for the defined benefit scheme is based on an actuarial calculation and represents a regular
cost, allowing for any actuarial surplus or deficit, so as to allocate pension costs of employees over their expected future working
lifetime. Assets of the pension scheme are held separately from the Group’s assets. Contributions in respect of the US defined
contribution scheme are charged to the profit and loss account as incurred.
n) BTG Employee Share Trust
The results of the Group include the costs of the BTG Employee Share Trust which are expensed within the accounts of the Trust 
as incurred.
38 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 2. T otal revenue
£ million 
2003 2002
Royalties from launched products 24.91 22.09
Milestones 1.50 1.59
Income from new agreements 3.86 5.19
Licence income 30.27 28.87
Audit revenues 1.26 1.98
Turnover 31.53 30.85
Income from sale of investments – 2.30
Total revenue 31.53 33.15
Geographical analysis of turnover
USA 21.16 19.27
UK 5.03 5.07
European Union (excluding UK) 2.40 1.95
Japan 2.20 4.19
Other 0.74 0.37
31.53 30.85
The Directors consider that there is only one class of business, namely the management and commercialisation of intellectual
property rights (“IPR management”). They consider that due to the nature of the business, it is neither meaningful nor practicable
to provide the additional geographical segmental information required by SSAP 25 – Segmental Reporting – in respect of turnover,
results and net assets by country of origin for licence income. Such information would relate to the location of the source or patent
and as such would not provide additional relevant information.
3. Provensis development
The costs incurred in respect of the development of the Provensis Varisolve
®
Microfoam technology are as follows:
£ million
2003 2002
Clinical development 3.68 4.28 
Manufacturing costs 4.13 4.86 
Marketing & business development 0.39 0.02 
8.20 9.16 
Staff costs 2.77 1.98 
Other costs 2.60 1.42 
Total 13.57 12.56 
Analysis of staff costs (including Directors’ emoluments)
Salaries 2.25 1.61
Social security costs 0.25 0.16
Other pension costs 0.27 0.21
2.77 1.98
The average number of persons employed by Provensis during the year was 34 (2002: 17).
39 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 4. Other operating expenses 
£ million
2003 2002
Patent amortisation 4.95 3.47
Patent renewal fees 0.74 0.66
Litigation costs 0.50 0.22
6.19 4.35
5. Administrative expenses
£ million
2003 2002
Staff costs 14.97 17.31
Other costs 15.88 12.54
30.85 29.85 
Restructuring costs 1.91 –
Employee costs funded by the BTG Employee Share Trust 0.27 1.69
Total administrative expenses 33.03 31.54
Analysis of staff costs (including Directors’ emoluments)
Salaries 13.33 16.06
Social security costs 1.10 1.19
Other pension costs 0.54 0.06
14.97 17.31
The average number of persons employed during the year (excluding Provensis), analysed by category, was as follows:
Number of employees
2003 2002
Executive Management 5 5
Direct business operations 92 95
Patent and legal services 40 42
137 142
Other functions 60 67
197 209
Other costs include:
£ million
2003 2002
Auditors’ remuneration (including £0.04 million in respect of BTG plc (2002: £0.04 million)) 0.16 0.16
Other professional fees paid to the auditors 0.06 0.12
Depreciation and other amounts written off tangible fixed assets:
– Owned 1.49 1.01
– Leased 0.03 0.14
Loss on exchange 0.40 0.12
Hire of land and buildings – operating leases 2.53 2.19
Hire of assets – operating leases 0.32 0.44
Administrative costs are after capitalising £0.64 million (2002: £1.26 million) within patents and other intellectual property rights.
40 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 6. Profit on disposal – BTG Employee Share Trust
£ million
2003 2002
Profit on disposal of own shares 0.02 1.48
7. (Amounts written off)/profit on disposal of other fixed assets
£ million
2003 2002
Amounts written off investments (2.45) (0.08)
Profit on disposal of investments – 2.38
(2.45) 2.30
Loss relief has absorbed the tax due in respect of the profit on disposal.
8. Directors’ remuneration
£ 
2003 2002
Fees 140,740 121,667
Salaries and benefits 589,413 493,371
Bonus 47,400 150,000
777,553 765,038
More detailed information concerning Directors’ emoluments, shareholdings, options and pension benefits is shown in the 
Directors’ remuneration report on pages 26 to 31.
9. Interest receivable
£ million
2003 2002
Interest receivable on money market and bank deposit accounts 3.11 5.58 
10. Interest payable and similar charges 
£ million
2003 2002
On bank loans and overdrafts – 0.10
Finance charges – finance leases and hire purchase contracts 0.01 0.01
0.01 0.11
41 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 11. Taxation on loss on ordinary activities 
(a) Analysis of charge for the year
£ million
2003 2002
UK corporation tax charge at 30% (2002: 30%) 0.32 0.14
Less double taxation relief on royalties (0.32) (0.14)
Foreign tax charge
– Current year 0.02 0.02
– Prior years – (0.03)
Overseas taxation on royalties 0.32 0.15
Charge for the year 0.34 0.14
(b) Factors affecting tax charge for the year
The tax assessed for the year is higher than the standard rate of corporation tax in the UK (30%). 
The differences between the standard rate of corporation tax in the UK and the tax charge for the Group are explained below.
£ million
2003 2002
Loss for the year at the standard rate of corporation tax in the UK of 30% (2002: 30%) (10.87) (6.78)
Expenses not deductible for tax purposes (primarily depreciation of fixed assets and 
patent amortisation net of patent spend) 1.28 0.62 
Utilisation of capital gains tax losses brought forward – (0.51)
Unutilised losses 9.93 6.83 
Foreign tax for which no relief is available – 0.01 
Adjustment to tax charge for prior years – (0.03)
Charge for the year 0.34 0.14 
(c) Factors that may affect future tax charges
The Group has significant unrelieved tax losses which it is carrying forward to offset against future profits. Due to a degree of
uncertainty as to how soon these will be utilised, only sufficient tax losses have been recognised to offset any deferred tax charge. 
It is not anticipated that the Group will pay a significant amount of tax in the next few years.
12. Dividends 
The Directors do not propose to declare a dividend for the year (2002: nil).
13. Loss per share
2003 2002
Loss for the financial year (£ million) (36.58) (22.75)
Loss per ordinary share (pence) basic and diluted (35.46) (22.15)
Number of shares (million)
Weighted average number of shares – basic and diluted 103.16 102.73
The weighted average number of ordinary shares in issue excludes the shares held by the BTG Employee Share Trust. Losses and the
weighted average number of shares are the same in the calculation of the basic and diluted loss per share. 
42 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 14. Intangible assets – patents and other intellectual property rights
£ million
Cost
At 1 April 2002 19.52
Additions during the year 3.42
Currency movements (0.17)
Terminated items (4.21)
At 31 March 2003 18.56
Amortisation
At 1 April 2002 8.24
Provided during the year 4.95
Currency movements (0.06)
Terminated items (4.21)
At 31 March 2003 8.92
Net book value at 31 March 2003 9.64
Net book value at 31 March 2002 11.28
15. T angible assets
£ million
Land and Computers and Furniture and
buildings software equipment T otal
Cost
At 1 April 2002 3.35 4.61 3.33 11.29
Additions 0.01 0.72 1.34 2.07
Disposals – (0.19) – (0.19)
Currency movements (0.07) (0.14) (0.13) (0.34)
At 31 March 2003 3.29 5.00 4.54 12.83
Depreciation
At 1 April 2002 1.16 2.96 0.62 4.74
Provided during year 0.32 0.77 0.43 1.52
Disposals – (0.19) – (0.19)
Currency movements (0.01) (0.07) (0.02) (0.10)
At 31 March 2003 1.47 3.47 1.03 5.97
Net book value at 31 March 2003 1.82 1.53 3.51 6.86
Net book value at 31 March 2002 2.19 1.65 2.71 6.55
In both years land and buildings are all properties held on short leasehold agreements. 
The net book value of fixed assets of £6.86 million includes an amount of nil (2002: £0.33 million) in respect of assets held under
finance leases and hire purchase contracts. Depreciation applicable on the assets held under finance lease and hire purchase contracts
is £0.03 million (2002: £0.14 million).
43 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 44 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued)
16. Investments
£ million
Group Own shares Other shares Loans T otal
Cost
At 1 April 2002 1.76 6.27 0.49 8.52
Additions during the year – 9.07 0.92 9.99
Disposals (0.16)(0.03)(0.05)(0.24)
Currency movements – (0.28) – (0.28)
At 31 March 2003 1.60 15.03 1.36 17.99
Provision
At 1 April 2002 – 0.48 0.09 0.57
Provided in year – 2.45 – 2.45
Released on disposals – – (0.05) (0.05)
Currency movements – (0.01) – (0.01)
At 31 March 2003 –2.920.04 2.96
Net book value at 31 March 2003 1.60 12.11 1.32 15.03
Net book value at 31 March 2002 1.76 5.79 0.40 7.95
£ million
Shares in
Company Own shares Other shares subsidiaries T otal
Cost
At 1 April 2002 1.76 0.01 15.48 17.25
Additions during the year – 0.03 – 0.03
Disposals (0.16)(0.03)–(0.19)
At 31 March 2003 1.60 0.01 15.48 17.09
Provisions at 1 April 2002 and 31 March 2003 ––––
Net book value at 31 March 2003 1.60 0.01 15.48 17.09
Net book value at 31 March 2002 1.76 0.01 15.48 17.25
The only listed company in which the Group has an interest in excess of 10% is SAMSys T echnologies, Inc. The Group has 
a holding of 27.85% in SAMSys T echnologies, Inc. a company listed on the T oronto Stock Exchange.
The Group has a 4.22% holding in the equity of T orotrak plc which was demerged in July 1998. The Group also has a revenue
sharing agreement with T orotrak plc which entitles it to a share of part of T orotrak’s turnover until 2020.
The Group also holds a further 0.01% shareholding in T orotrak plc via the BTG Employee Share Trust.
£ million
Investments held at net book value 2003 2002
Listed on London Stock Exchange
– own shares 1.61 1.76
– other 0.75 0.76
Listed on T oronto Stock Exchange 3.85 –
Unlisted shares 7.50 5.03
Loans 1.32 0.40
15.03 7.95
£ million
Market value of listed shares 2003 2002
London Stock Exchange
– own shares 1.93 12.59
– other 1.59 2.65
Toronto Stock Exchange 2.48 –
6.00 15.24 16. Investments (continued)
Own shares represent shares in the Company held by the BTG Employee Share Trust at cost.
Included above are 184,289 shares in BTG plc with a market value of £0.18 million on 31 March 2003 held by the trustees 
on behalf of the restricted share scheme.
If listed investments were realised at their stated market values, no taxation charge would result.
By virtue of their revenue sharing agreements with certain subsidiary companies, the original sources of technology have a beneficial
interest in some shares held by the Group in investments listed on the London Stock Exchange.
Details of BTG’s key unlisted investments
BTG’s %
Investee Company Country Class held holding Company objectives
Mesophotonics Ltd UK Ordinary 47.94% Mesophotonics designs and builds optical components utilising
photonic crystal technology to enable light to be routed and
processed at sub-millimetre scale, facilitating multiple optical
functions on a single piece of silicon.
VisionT ec CL Ltd UK Preferred 25.00% VisionT ec is a contact lens design and manufacturing company that
ordinary has developed a new manufacturing process to produce low cost,
daily disposable toric contact lenses that correct astigmatism 
Primaxis T echnology Canada Ordinary 13.90% Primaxis is a venture company investing in Canadian seed 
Ventures, Inc. and early stage companies with inventions in the advanced
technology sectors.
Petrra Ltd UK Ordinary 10.00% Petrra has developed a unique positron emission tomography
(PET) scanning system providing physiological images of tissue
function, for use in cancer detection.
iX Imaging Ltd UK Ordinary 6.33% iX Imaging is a digital imaging company that has developed a
novel x-ray sensor capable of translating x-ray and gamma rays
directly into electronic signals.
Avlar BioVentures Fund I UK Ordinary 2.42% A venture fund investing in seed and early stage biotechnology
Limited Partnership and healthcare opportunities in Europe.
Avlar BioVentures  UK Ordinary 1.16% A second venture fund investing in seed and early stage 
Fund II Limited Partnership biotechnology and healthcare opportunities in Europe.
Avera Pharmaceuticals, USA Preferred N/A Avera Pharmaceuticals is an emerging pharmaceutical 
Inc.ordinary company focused on the development and commercialisation of
novel pharmaceutical compounds in the neuroscience therapeutics
arena. The company’s mission is to identify opportunities for
therapeutic advances in the treatment of neurologic and psychiatric
disorders, and to license and develop compounds that can meet
these needs.
Elumina Lighting Canada Ordinary N/A Elumina is a developer and marketer of advanced specialty lighting 
T echnologies, Inc products, currently focusing on household nightlights based upon
Electroluminescent technology. 
Iclectus Ltd UK Convertible N/A Iclectus is a biotechnology company founded by Dr. T erence 
loan Rabbitts, Dr. Martin Stocks and Medical Research Council
T echnology (MRCT). Iclectus is developing intrabody and masked
antisense molecules as tools for validating new drug targets.
KetoCytonyx, Inc. USA Preferred N/A KetoCytonyx is a research-driven therapeutics company
ordinary developing treatments for acute and chronic neurological and
neurodegenerative disease based on ketone bodies.
Meriton Networks, Inc Canada Ordinary N/A Meriton is a wavelength networking company that is building an
advanced metro optical networking element referred to as an
Optical Add / Drop Switch (OADX).
Senexis Ltd UK Preferred N/A Senexis is developing a proprietary approach to the treatment and
ordinary diagnosis of age-related diseases caused by the common
pathogenesis process called amyloidosis.
45 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 16. Investments (continued)
The table on page 45 represents BTG’s key unlisted investments. BTG does not revalue its investments in its accounts to their BVCA or
market value and accordingly , does not recognise their increase in value in its accounts prior to the actual or deemed disposal. The
Directors do however track the BVCA valuation of BTG’s unlisted investments and their valuation of the unlisted investments and loans
is £9.23 million (2002: £5.76 million) (net book value at 31 March 2003 £8.82 million (2002: £5.43 million)). The table comprises
investments made in companies in the last thirty months and BTG’s investments in venture funds. T wo of the above investments have
received third party funding, since BTG’s initial investment, enabling BTG to review the valuation of its investment under the BVCA
guidelines. The remainder are in the early stages of development and, as a consequence, have yet to show an uplift in value.
Details of subsidiaries are set out in note 29.
17. Debtors: amounts falling due within one year
£ million
Group Group Company Company
2003 2002 2003 2002
Licence income 4.32 6.80 – –
Amount owed by subsidiary companies – – 160.44 159.74
Other debtors 1.20 1.20 0.04 –
Prepayments and accrued income 0.82 3.79 – 0.06
6.34 11.79 160.48 159.80
18. Creditors: amounts falling due within one year
£ million
Group Group Company Company
2003 2002 2003 2002
Bank overdrafts (unsecured) 1.03 1.41 – –
Obligations under finance leases and hire purchase contacts – 0.03 – –
Trade creditors 6.72 7.23 – –
Amounts owed to subsidiary companies – – 0.44 0.59
Corporation tax 0.02 0.90 – –
Accruals and deferred income 10.68 8.49 0.78 0.16
18.45 18.06 1.22 0.75
19. Provisions for liabilities and charges
£ million
Balance at Utilised Balance at
1 April 2002 during year Charge for year 31 March 2003
Provision for pension costs (note 21) 1.24 – 0.05 1.29
20. Deferred taxation 
£ million
2003 2002
Accelerated allowances on patents and other IPR 2.94 3.38
Accelerated capital allowances (0.09) (0.46)
Other timing differences (2.85) (2.92)
– –
46 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 21. Group pension benefits 
(a) Pension fund
A funded defined benefit final salary pension scheme is in operation for all eligible staff of the Group. Scheme funds are administered
by trustees independently of the Group.
The financial position of the scheme and the appropriate level of employer’s contributions are reviewed every three years by a
qualified actuary using the projected unit method. For the latest valuation as at 1 April 2002, the actuary adopted a market-led
approach in which the assets of the scheme are taken into account at a value equal to their market value at the valuation date. 
The liabilities are valued using financial assumptions derived from market yields on fixed interest and index-linked government 
stock at the valuation date.
The key financial assumptions used for this valuation were that future salary increases would average 5.3% p.a. (2002: 6% p.a.), that
present and future pensions would increase by 2.9% p.a. (2002: 3.5% p.a.), and discount rates of 6.2% (pre-retirement) and 5.2% 
(post-retirement) were applied. In addition, the assumptions for mortality in retirement and before retirement were updated to reflect
continuing improvements in life expectancy .
The valuation revealed that a small surplus had accrued to the scheme. However, since the valuation date, the fall in equity markets
has weakened the financial position of the scheme. As a consequence of this, the Board is having extensive discussions with the
trustees to consider alternatives for addressing the deficit and/or securing benefits. The market value of the scheme’s assets as at 
1 April 2002 was £68.30 million (2002: £73.04 million), which represented 107% of the benefits that had accrued to members after
allowing for expected future increase in earnings. On the assumptions prescribed by the Inland Revenue for the statutory surplus
test the funding was below 105%.
Under the Pensions Act 1995, pensions schemes must satisfy a minimum funding test known as the Minimum Funding
Requirement (MFR). At the valuation date the MFR funding ratio was 135%.
A separate valuation was carried out as at 1 April 2002 for the purpose of calculating the pension cost. This valuation was carried out
by a qualified actuary using the projected unit method. The key financial assumptions used for this valuation were the same as those
used for the actuarial valuation above, except that future salary increases would average 4.8% p.a. and discount rates of 7.2% p.a. 
(pre-retirement) and 6.2% p.a. (post-retirement) were applied.
With the exception of Provensis Ltd no employer’s contributions are currently being made. Provensis Ltd paid £0.27 million
(2002: £0.21 million) during the year.
A US subsidiary company operates a defined contribution scheme for its staff.
The Group charge to the profit and loss account for the period was £0.81 million (2002: £0.27 million). The accumulated amount
provided in excess of cash contributions is disclosed in note 19.
(b) FRS 17 retirement benefits
As required under transitional provisions for FRS 17, certain information is disclosed as if it had applied for the year ended 31 March
2003. The valuation of the pension scheme was updated by an actuary on an FRS 17 basis.
The major financial assumptions used to calculate scheme liabilities under FRS 17 are as follows:
2003 2002
% pa % pa
Discount rate 5.4 6.0
Salary increases (including increases due to promotion) 5.1 5.3
Pension in payment increases 2.7 2.9
Inflation 2.6 2.8
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the
timescale covered, may not necessarily be borne out in practice.
47 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 21. Group pension benefits (continued)
Operating profit
£ million
2003
Current service cost 1.80
Past service cost –
1.80
Finance income
£ million
2003
Expected return on scheme assets 4.70
Interest on scheme liabilities (3.50)
1.20
Reconciliation to the balance sheet
The assets and liabilities in the scheme, with the expected rates of return, were as follows:
Expected 2003 Expected 2002
return (% p.a.) £ million return (% p.a.) £ million
Equities and property 7.6 30.80 8.3 41.40
Gilts and bonds 4.6 23.90 5.3 25.10
Other 4.6 1.00 5.3 1.80
55.70 68.30
Defined benefit obligation (65.23) (58.40)
(9.53) 9.90
Movement in surplus during the year
£ million
2003
Surplus at 1 April 2002 9.90
Current service cost (1.80)
Contributions 0.27
Other financial income 1.20
Actuarial loss (19.10)
Deficit in scheme at 31 March 2003 (9.53)
Analysis of amount recognised in statement of total recognised gains and losses
£ million
2003
Actual return less expected return on scheme assets (29% of scheme assets) (16.00)
Changes in assumptions underlying the present value of the scheme liabilities (3.10)
Actuarial loss recognised in statement of total recognised gains and losses (29% of scheme liabilities) (19.10)
48 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 21. Group pension benefits (continued)
Net assets
£ million
2003 2002
Net assets per balance sheet 80.26 117.26
Pension liability under SSAP 24 1.29 1.24
81.55 118.50
FRS 17 pension adjustment (9.53) 9.90
Net assets under FRS 17 72.02 128.40
Profit and loss account reserve
£ million
2003 2002
Profit and loss account (97.44) (60.35)
Total FRS 17 pension adjustment (8.24) 11.14
Profit and loss account under FRS 17 (105.68) (49.21)
The fair value of the scheme’s assets is not intended to be realised in the short-term and may be subject to significant change before it is
realised. The present value of the scheme’s liabilities is derived from cash flow projections over long periods and thus is inherently
uncertain.
22. Share capital
The share capital of the Company is shown below:
2003 2002
Number £ million Number £ million
Authorised
Ordinary shares of 10 pence each 129,999,990 13.00 129,999,990 13.00
Allotted, called up and fully paid
Ordinary shares of 10 pence each 105,336,296 10.53 105,188,695 10.52
During the year 147,601 ordinary shares of 10p each were issued.
• 121,363 shares were issued to the two Executive Directors under the 1995 Share Option Scheme at an exercise price of 
48.81 pence per share.
• 26,238 shares were issued at prices ranging from 282.61 pence to 303.84 pence per share to current and former employees who
were entitled to exercise options under the 1998 BTG Employee Share Option Plan and the 1998 BTG Sharesave Scheme. 
The exercise periods of the above options are disclosed in more detail within the Directors’ remuneration report on pages 26 to 31.
49 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 22. Share capital (continued)
Details of share options outstanding at 31 March 2003:
Number of shares
Date of grant Exercise price (p) outstanding Exercisable
Sharesave scheme
1998 518.16 16,353 2003
1999 282.61 44,790 2004
2001 830.93 8,633 2004
2002 251.00 188,236 2005
Stock purchase plan
2001 498.95 327 2003
2002 186.15 71,013 2004
Share option scheme
1998 303.84-1733.10 1,081,719 2001-2008
2001 525.00-741.00 2,240,476 2004-2011
2002 107.50-225.00 5,538,854 2005-2012
23. Reserves
£ million
Share premium Capital reserve Profit and 
Group account account loss account T otal
At 1 April 2002 159.78 7.31 (60.35) 106.74
Issue of share capital 0.08 – – 0.08
Retained loss for the financial  year – – (36.58) (36.58)
Currency translation differences on foreign currency
net investments – – (0.51) (0.51)
At 31 March 2003 159.86 7.31 (97.44) 69.73
£ million
Share premium Profit and
Company account loss account T otal
At 1 April 2002 159.78 6.54 166.32
Issue of share capital 0.08 – 0.08
Retained loss for the financial year – (0.57) (0.57)
At 31 March 2003 159.86 5.97 165.83
No goodwill has been written off.
50 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 24. Reconciliation of movements in shareholders’ funds
£ million
Group Group Company Company
2003 2002 2003 2002
Loss for the financial year (36.58) (22.75) (0.57) (0.43)
Other recognised gains and losses relating to the year (net) (0.51) (0.10) – –
New share capital subscribed (net) 0.09 1.10 0.09 1.10
Net (reduction in)/addition to shareholders’ funds (37.00) (21.75) (0.48) 0.67
Opening shareholders’ funds 117.26 139.01 176.84 176.17
Closing shareholders’ funds 80.26 117.26 176.36 176.84
25. Reconciliation of operating loss to net cash outflow from operating activities
£ million
2003 2002
Operating loss (36.91) (31.86)
Depreciation charge 1.52 1.15
Amortisation charge 4.95 3.47
Decrease/(increase) in debtors
– BTG (excluding Provensis) 2.98 (3.71)
– Provensis (0.02) –
Increase/(decrease) in creditors
– BTG (excluding Provensis) 0.69 0.08
– Provensis 0.12 (0.01)
Increase in provisions 0.05 –
Other 0.29 (0.21)
Net cash outflow from operating activities (26.33) (31.09)
£ million
Analysis of changes in cash 2003 2002
Cash at bank and in hand 8.97 14.59
Bank overdrafts (1.41) (3.25)
As at 1 April 7.56 11.34
Cash at bank and in hand 7.48 8.97
Bank overdrafts (1.03) (1.41)
As at 31 March 6.45 7.56
Decrease in cash (1.11) (3.78)
26. Analysis of net funds
£ million
Balance at Balance at 
1 April 2002 Cash flow 31 March 2003
Cash at bank and in hand 8.97 (1.49) 7.48
Overdrafts (1.41) 0.38 (1.03)
7.56 (1.11) 6.45
Liquid resources 90.02 (35.37) 54.65
Finance leases within one year (0.03) 0.03 –
97.55 (36.45) 61.10
Liquid resources comprised funds placed on the money markets for periods of up to three months. During the year the Group
suffered £0.06 million exchange loss (2002: £0.01 million).
51 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 26. Analysis of net funds (continued)
Reconciliation of net cash outflow to movement in net funds
£ million
2003 2002
Decrease in cash in the period (1.11) (3.78)
Cash inflow from decrease in liquid resources (35.37) (26.56)
Cash outflow from decrease in debt 0.03 0.06
Decrease in funds resulting from cash flows (36.45) (30.28)
Net funds at 1 April 97.55 127.83
Net funds at 31 March 61.10 97.55
27. Guarantees and other financial commitments
a) Annual commitments under non-cancellable leases are as follows:
£ million
Land and Land and
buildings Other buildings Other 
2003 2003 2002 2002
Operating leases which expire:
Within one year –0.05 –0.12
Between two and five years 2.01 0.16 0.23 0.21
After five years 1.10 – 3.19 –
b) Other financial commitments and contingencies. 
The Group has entered into agreements with a number of early-stage and start-up companies to invest a total of £5.53 million. 
The total invested to date is £3.27 million leaving a contingent liability as at 31 March 2003 of £2.26 million.
The Company expects to receive additional revenue relating to the period ended 31 March 2003 upon conclusion of a legal dispute
with a licensee, in which BTG prevailed at a High Court hearing but where the judgement is subject to appeal.
As with any business whose core assets are intellectual property, the Group will from time to time resort to litigation or threats of
litigation, or other legal processes, to defend its rights. Litigation costs are regarded as a cost of doing business and will vary from 
year to year. In the current year the Group incurred £0.50 million in litigation costs (2002: £0.22 million).
28. Financial instruments
Financial instruments
The Group’s financial instruments, other than derivatives, comprise cash, short term deposits and various items such as trade debtors
and creditors which arise directly from operations. In addition a number of debt and equity investments, both quoted and unquoted
as shown in note 16 are held in technology-based companies.
The Group enters into forward currency contracts and swaps, and interest rate swaps. The purpose of such transactions is to manage
risks arising from the Group’s operations. It is the Group’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, investment risk and foreign currency risk.
Interest rate risk
The Group’s policy is to place surplus cash resources on fixed term deposits, for varying periods ranging from one to six months,to the
extent that cash flow can be reasonably predicted. This policy has not changed during the financial year and no change is anticipated.
Investment risk
It is, on occasion, deemed appropriate to take equity stakes in start up companies utilising BTG technology as part of the overall
licensing arrangement and small loans may be granted to these companies to further technology development. These investments
will be realised at an appropriate time in the development cycle. Regular reports are made to the Board on the status of investments
and disposals over £0.50 million require Board approval. These investments form part of BTG’s overall technology portfolio and 
do not materially affect liquidity.
52 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 28. Financial instruments (continued)
Foreign currency risk
The Group has two overseas subsidiaries, the revenues and the expenses of which are denominated in US dollars. As a result the
Group’s sterling profit and loss account and balance sheet may be affected by movements in US dollar: sterling exchange rates.
Approximately 67% of the Group’s revenue is denominated in US dollars with the remainder split between sterling, euros, yen and
other currencies. The majority of the Group’s operating expenses are in sterling. Where possible, anticipated foreign currency
operating expenses are matched to foreign currency revenues. The excess exposure over and above this natural hedge, to the extent
that cash flows are predictable, is managed for all foreign currencies using forward contracts or currency swaps. Only in exceptional
circumstances are contracts in excess of twelve months implemented. The Board is made aware of such contracts.
The Group has taken advantage of the exemption in FRS 13 to exclude short term debtors and creditors from all disclosures except
those relating to foreign currency exposure.
Financial assets
The Group held the following financial assets as at 31 March 2003.
£ million
Interest Non interest Fair
bearing bearing Equities & loans T otal value
Assets held as part of Group financing arrangements
Sterling cash deposits 56.76 0.43 – 57.19 57.19
US Dollar cash deposits 4.10 0.05 – 4.15 4.15
Euro deposits 0.07 0.02 – 0.09 0.09
Y en deposits 0.69 – – 0.69 0.69
Other foreign cash deposits – 0.01 – 0.01 0.01
Assets held for investment purposes
Sterling denominated debt – – 1.32 1.32 1.41
Unquoted equities – – 7.51 7.51 7.82
Quoted UK equities (excluding own shares) – – 4.60 4.60 4.07
Total 61.62 0.51 13.43 75.56 75.43
All interest bearing deposits are at floating rates of interest.
The cash deposits held as part of financing arrangements comprise deposits placed on money markets at call, on overnight and on
quarterly rates with P1/AAA rated institutions. Interest rates in UK deposits are based on LIBOR, US deposits on US discount
rates, Euro rates on the ECB central bank rate and other foreign deposits on appropriate central bank rates. Other sterling
denominated debts are loans made to UK companies.
The fair value of cash deposits and sterling denominated debt is not materially different from book value. The fair values of quoted
equities are based on open market prices with the unquoted equities valued using the BVCA guidelines for valuation and disclosure
of Venture Capital Portfolios.
Financial liabilities
The Group had the following financial liabilities as at 31 March 2003.
£ million
Floating rate 
interest bearing Fair value
Liabilities held as part of Group financing arrangements
US Dollar overdraft 1.03 1.03
Total 1.03 1.03
53 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) 28. Financial instruments (continued)
The maturity of profile of the Group’s financial liabilities is as follows:
£ million
In one year or less, or on demand 1.03
Currency exposures
As explained on page 53, the majority of the Group’s revenues are in currencies other than the functional currencies. These are
managed to ensure that the Group is able to fund foreign currency operating expenses from revenues, with the remainder converted
into sterling.
The following table shows the Group’s currency exposure, being the monetary assets and liabilities of the Group that are not
denominated in the functional currency of the operating unit involved, at 31 March 2003.
£ million
Functional currency of Group operations Sterling US Dollar Euro Y en T otal
Sterling – 5.22 0.27 0.70 6.19
Total –5.220.27 0.70 6.19
As at 31 March 2003 the Group had no outstanding net foreign contracts (2002: nil).
Fair values
The fair value of financial assets and liabilities is shown in the tables on page 53.
There were no derivative financial instruments held at the year end.
29. Subsidiaries
The subsidiaries of BTG plc at 31 March 2003 are all wholly owned, unless otherwise stated, and incorporated in Great Britain and
registered in England and Wales, unless shown otherwise. Dormant companies and companies that have never traded are excluded
from the table. A full list of the Group companies will be included in the Company’s annual return.
Class of capital Principal activity
BTG International (Holdings) Ltd
(1)
Ordinary Investment in IPR management companies
Provensis Ltd
(1)
Ordinary Commercialisation of IPR
BTG Capital Ltd
(1)
Ordinary FSA registered investment advice company
BTG International Ltd
(2)
Ordinary Management and commercialisation of IPR
BTG Licensing Ltd
(3)
Ordinary IPR management
BTG Employee Share Schemes Ltd
(3)
Ordinary Trustee company
Guernsey
BTG Investment (Holdings) Ltd
(3)
Ordinary Investment in IPR management companies
KetoCytonyx Inc
(3)(5)
Preferred ordinary Research driven therapeutics company
Delaware, USA
BTG International Inc
(4)
Common stock and IPR management
Delaware, USA permanent capital
British T echnology Group
Inter-Corporate Licensing Ltd
(4)
Ordinary IPR management
All subsidiaries operate in their country of incorporation.
(1) Subsidiary of BTG plc
(2) Subsidiary of BTG International (Holdings) Ltd
(3) Subsidiary of BTG International Ltd
(4) Subsidiary of BTG Investment (Holdings) Ltd
(5) BTG’s shareholding in KetoCytonyx, Inc. is 66.3%
54 BTG plc  Annual report and accounts 2003
Notes to the accounts (continued) Profit and loss account
£ million
2003 2002 2001 2000 1999
Total Revenue 31.53 33.15 37.81 36.40 22.61
Turnover 31.53 30.85 36.79 28.79 22.61
Revenue sharing (13.71) (13.26) (15.37) (10.94) (8.63)
Provensis development (13.57) (12.56) (5.50) (1.09) –
Other new technology developments (1.94) (1.00) (0.11) (0.26) (0.93)
Other operating expenses (6.19) (4.35) (4.69) (7.13) (6.20)
Administrative expenses – excluding Trust (32.76) (29.85) (23.48) (14.77) (15.03)
Administrative expenses – Trust (0.27) (1.69) (1.84) (0.35) (0.23)
Operating loss (36.91) (31.86) (14.20) (5.75) (8.41)
Profit on disposal – Trust investment in own shares 0.02 1.48 3.03 0.46 –
(Amounts written off )/profit on disposal of other fixed assets (2.45) 2.30 1.02 5.69 –
Exceptional item – costs of demerger of T orotrak plc – ––– (1.44)
(Loss) profit on ordinary activities before interest (39.34) (28.08) (10.15) 0.40 (9.85)
Net interest receivable 3.10 5.47 3.16 0.52 0.83
(Loss) profit before tax (36.24) (22.61) (6.99) 0.92 (9.02)
Taxation on (loss) profit on ordinary activities (0.34) (0.14) (0.21) (0.17) (0.16)
(Loss) profit for the financial year – retained for 
equity shareholders (36.58) (22.75) (7.20) 0.75 (9.18)
(Loss) earnings per share (35.46p) (22.15p) (7.51p) 0.84p (10.30p)
Analysis of total revenue
£ million
2003 2002 2001 2000 1999
Royalties from launched products 24.91 22.09 18.94 17.77 16.23
Milestone payments 1.50 1.59 5.03 5.36 2.73
Income from new agreements 3.86 5.19 3.52 3.06 3.16
Torotrak contract income – ––– 0.25
Licence income 30.27 28.87 27.49 26.19 22.37
Audit revenues 1.26 1.98 9.30 2.60 0.24
Turnover 31.53 30.85 36.79 28.79 22.61
Income from sale of patents – –0.407.61 –
Income from sale of investments – 2.30 0.62 – –
Total revenues 31.53 33.15 37.81 36.40 22.61
55 BTG plc  Annual report and accounts 2003
Five year ﬁnancial record 
For the years ended 31 March Consolidated balance sheet
2003 2002 2001 2000 1999
Fixed assets
Patents and other IPR 9.64 11.28 11.81 12.04 13.99
Tangible assets 6.86 6.55 6.13 2.90 3.23
Investments 15.03 7.95 4.24 2.15 2.92
31.53 25.78 22.18 17.09 20.14
Current assets 68.47 110.78 137.96 25.10 15.56
Creditors: amounts falling due within one year (18.45) (18.06) (19.77) (17.73) (12.10)
Net current assets 50.02 92.72 118.19 7.37 3.46
Total assets less current liabilities 81.55 118.50 140.37 24.46 23.60
Creditors: amounts falling due after more than one year – –(0.03) (0.02) (0.04)
Provisions for liabilities and charges (1.29) (1.24) (1.33) (1.34) (1.35)
Net assets 80.26 117.26 139.01 23.10 22.21
Capital and reserves
Called up share capital 10.53 10.52 10.48 9.25 9.20
Share premium account 159.86 159.78 158.72 37.50 37.42
Capital reserve 7.31 7.31 7.31 7.31 7.31
Profit and loss account (97.44) (60.35) (37.50) (30.96) (31.72)
Equity shareholders’ funds 80.26 117.26 139.01 23.10 22.21
Consolidated cash flow statement
£ million
2003 2002 2001 2000 1999
Net cash (outflow)/inflow from operating activities (26.33) (31.09) (11.02) 1.37 (2.52)
Net cash inflow from returns investments 
and servicing of finance 5.56 4.17 1.51 0.51 1.09
Tax (paid)/received (0.35) (0.13) (0.15) (0.05) 0.24
Net cash (outflow)/inflow from capital expenditure 
and financial investments (15.45) (4.34) (4.87) 7.28 (6.40)
Demerger of subsidiaries – ––– (1.13)
Equity dividend paid – ––– (0.85)
Net cash (outflow)/inflow before use of liquid resources 
and financing (36.57) (31.39) (14.53) 9.11 (9.57)
Net cash inflow/(outflow) from management of 
liquid resources 35.37 26.56 (103.43) (9.08) 13.43
Net cash inflow/(outflow) from financing 0.09 1.05 122.38 0.07 (0.04)
(Decrease)/increase in cash (1.11) (3.78) 4.42 0.10 3.82
56 BTG plc  Annual report and accounts 2003
Five year ﬁnancial record (continued)
For the years ended 31 March BTG is a leading technology
commercialisation company.
We find, develop and commercialise
emerging technologies in the life 
and physical sciences. These
innovations are protected by a strong
portfolio of intellectual property. 
We create value by investing in
further technical development,
enhancing the scope and strength 
of the intellectual property and
developing commercialisation plans.
We capture value by licensing 
the rights to the technologies and 
by forming new business ventures
around them.
1 Highlights
2 The year in review 
4 Chairman’s statement 
5 Chief Executive Officer’s review 
8 Chief Operating Officer’s review
15 Chief Financial Officer’s review
18 Directors 
20 Advisers
21 Directors’ report
23 Corporate governance
26 Directors’ remuneration report
32 Statement of Directors’
responsibilities
33 Independent auditors’ report 
to the members of BTG plc
34 Consolidated profit and 
loss account
34 Consolidated statement of total
recognised gains and losses
35 Balance sheets
36 Consolidated cash flow statement
37 Notes to the accounts
55 Five year financial record
57 Shareholder information
Shareholder information
Financial calendar
Annual General Meeting 23 July 2003
Preliminary announcement of interim results for the period 
ended 30 September 2003 November 2003
Circulation of interim report for the period ended 30 September 2003 December 2003
Preliminary announcement of annual results for the year ended 31 March 2004 May/June 2004
Circulation of annual report for the year ended 31 March 2004 June 2004
Shareholders
At 31 March 2003 there were 6,154 holders of ordinary shares in the Company. Their shareholdings are analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Size of shareholding shareholders shareholders ordinary shares ordinary shares
1 – 5,000 5,575 90.6 3,477,105 3.3
5,001 – 50,000 418 6.8 6,775,238 6.4
50,001 – 100,000 50 0.8 3,342,365 3.2
100,001 – 500,000 70 1.1 16,049,933 15.2
Over 500,000 41 0.7 75,691,655 71.9
Total 6,154 100.0 105,336,296 100.0
Shareholders are further analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Type of owner shareholders shareholders ordinary shares ordinary shares
Employee share schemes 2 – 2,029,897 2.0
Employee shareholders 84 1.4 1,305,251 1.2
86 1.4 3,335,148 3.2
Private shareholders 4,459 72.5 5,573,370 5.3
Limited companies 58 0.9 3,837,211 3.6
Bank and nominee companies 1,518 24.7 91,560,307 86.9
Insurance companies and pension funds 9 0.1 298,903 0.3
Other 24 0.4 731,357 0.7
Total 6,154 100.0 105,336,296 100.0
Shareholders holding their shares within PEPs and ISAs are included within ‘Bank and nominee companies’.
Shareholder change of address
As described in the accompanying Notice of Annual General Meeting, the Company offers the facility, in conjunction with 
Capita Registrars, to conduct a number of routine matters via the web, including the ability to notify any change of address. If you
are a shareholder and are either unable or would prefer not to use this facility, please do not send the notification to the
Company’s registered office. Please write direct to Capita Registrars, at their address shown below, where the register is held. 
Registered office and Registrars and transfer office Registered number 
head office number Capita Registrars 2670500
BTG plc The Registry
10 Fleet Place 34 Beckenham Road
Limeburner Lane Beckenham
London Kent
EC4M 7SB BR3 4TU
Telephone: +44 (0)20 7575 0000 Telephone: +44 (0)870 162 3100
Facsimile: +44 (0)20 7575 0010
57 BTG plc  Annual report and accounts 2003 Commercialising
high-value
technologies
BTG plc Annual report and accounts
for the year ended 31 March 2003
Contact BTG at:
BTG in Europe
10 Fleet Place
Limeburner Lane
London
EC4M 7SB
UK
Tel: +44 (0)20 7575 0000
Fax: +44 (0)20 7575 0010
BTG in North America
Five T ower Bridge
300 Barr Harbor Drive
7th Floor 
West Conshohocken
PA 19428-2998
USA
Tel: +1 610 278 1660
Fax: +1 610 278 1605
BTG in Japan
7f Kato Building
5-26-8 Shimbashi
Minato-ku
Tokyo 105-0004
Japan
Tel: +81 (0)3 5777 6831
Fax: +81 (0)3 5777 6835
Visit our website to ﬁnd out 
more about BTG:
www.btgplc.com
E-mail: info@btgplc.com
In the UK and USA, BTG operates
through wholly owned subsidiaries,
BTG International Ltd and 
BTG International Inc, respectively.
BTG plc Annual report and accounts 2003