Theratase plc
2004
www.theratase.com
Theratase plc
Trafalgar House
11-12 Waterloo Place
London
SW1 4AU
Tel: +44 (0)20 7863 8819
Fax: +44 (0)20 7863 8820
Successful Integration
Theratase plc Annual Report and Accounts 2004 01 Highlights
02 Theratase at a Glance
04 Chairman’s Statement
05 Chief Executive’s Review
12 Board of Directors
13 Directors and Advisers
14 Directors’ Report
16 Corporate Governance
18 Directors’ Remuneration Report
22 Statement of Directors’ Responsibilities
23 Independent Auditor’s Report to the Members of Theratase plc
24 Consolidated Profit and Loss Account
25 Consolidated Balance Sheet
26 Company Balance Sheet
27 Consolidated Statement of Total Recognised Gains and Losses
27 Reconciliation of Movement in Consolidated Shareholders’ Funds
28 Consolidated Cash Flow Statement
28 Reconciliation of Net Cash Flow to Movement in Net Debt
29 Notes
51 Notice of Meeting
53 Circular to Shareholders ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 01
Highlights
£8.3m
Turnover
£1.5m
PBT
3.02p
Earnings per share
• Financial Results, once again, met market 
expectations
• Acquisition and integration into the Group 
of South African enzyme manufacturer, Seravac 
Biotech will consolidate Theratase’s position in 
the world enzyme market
• Placing and Open Offer enables the Company 
to redeem its outstanding Preference shares
• New Swedish joint venture company set up to 
develop therapeutics using hyaluronidase as 
an anti-oedema and anti-inflammatory agent 
in the prevention of transplant rejection
• Further investment in AM-Pharma to fund
extended Phase IIa clinical trials, using alkaline
phosphatase, supplied by Biozyme, in sepsis
patients
Theratase plc continues to be a world leader in the manufacture 
and supply of high quality specialist enzymes to the medical
diagnostics industry. Theratase at a Glance
Theratase’s mission is to continue to
establish itself as a world leader in the
manufacture and supply of high quality
enzymes and biochemicals to the medical
diagnostics and healthcare industries
through excellence in customer service. 
Biozyme Laboratories Ltd Blaenavon, South Wales, UK
Our People
Our outstanding expertise in the areas 
of protein manufacture and purification
enables us to offer customers a flexible
bulk contract development and
manufacturing service. Services include:
•Full client liaison throughout
•Tailored effective service
•Adaptability
50
Employees
80
Products
Our Products
Biozyme has a dedicated manufacturing
site which has facilities in line with US
FDA Current Good Manufacturing Practice
enabling it to process certain enzymes 
to be used as active pharmaceutical
ingredients (APIs) in the therapeutics
market. Biozyme provides the highest
possible standards of quality and
customer care and is a valued supplier 
of many blue chip customers. The quality
management systems of its UK operation
have been certified as meeting the
requirement of IS0 9002.
37% Diabetes monitoring
25% Immunodiagnostics
21% Clinical Chemistry
7% Molecular Biology
10% Therapeutic
02 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Markets
Biozyme supplies high purity enzymes 
to the diagnostics industry including
manufacturers of diabetes testing kits,
pregnancy test kits and HIV assays for
diagnosing AIDS. The therapeutic enzyme
market, in which Biozyme currently has
three projects, is forecast to grow to in
excess of $3 billion by 2005. 
Seravac has become a significant supplier
of naturally derived enzymes to the
diagnostic, pharmaceutical, biotechnology
and research industries. 
Our Progression Sales Sub-sectors
Biozyme Laboratories Ltd has over 30 years of manufacturing
experience as a supplier of quality bulk enzymes and biochemicals to
the diagnostics and healthcare industries. Focus is on the large scale
production of raw materials for the medical diagnostics industry. 
Our product portfolio consists of 
over 80 enzymes and biochemicals. 
Products include:
•Alkaline Phosphatase
•Glucose Oxidase
•Peroxidase
•Urease United Kingdom
Netherlands
Italy
Germany
France
Sweden
United States
South America
Japan
Far East
Austrailia
New Zealand
South Africa
Our People Our Products
Seravac Biotech (Pty) Ltd Cape Town, South Africa
ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 03
62
Employees
40
Products
Our Progression Sales Sub-sectors
Seravac Biotech (Pty) Ltd is a significant supplier of naturally 
derived enzymes to markets such as the diagnostic, pharmaceutical,
biotechnology and research industries. Seravac’s mission is to serve
its customers globally with specialised, quality biotechnology
products and customer service and to assure current and new
customers of its commitment to long-term relationships.
6.5% Diabetes monitoring
17.8%Immunodiagnostics
0.6% Clinical Chemistry
5.5% Molecular Biology
69.5%Therapeutic
Our product portfolio consists of over 
40 different product lines of enzymes 
and biochemicals. Products include:
•Deoxyribonuclease
•Chymotrypsin
•Chymotrypsinogen
•Horseradish Peroxidase
Seravac has an experienced, highly
skilled, and committed workforce. 
Many of the manufacturing staff have
decades of service and Seravac is
respected throughout the diagnostic
enzyme industry for the quality,
experience and knowledge of its staff.
Seravac is an approved supplier for all its
main customers and is ISO 9001:2000
compliant. The company is currently in
the process of obtaining registration with
the US FDA for Good Manufacturing
Practice. Seravac is also in the final
stages of obtaining viral validations
certificates for certain enzymes. 04 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Chairman’s Statement
The results for the year have met 
market expectations despite a business
environment that continues to remain
tough. Turnover and pre-tax profits for 
the year, which include the six month
contribution from our acquisition, were
£8.3m and £1.5m respectively (2003:
£6.3m and £2.2m). Basic earnings per
share were 3.02p (2003: 4.54p).
The Group’s major achievement this year
has been the successful acquisition and
integration of Seravac Biotech (Proprietary)
Limited and its subsidiary (“Seravac”).
Seravac was established in Cape Town in
1955 and is a significant supplier of
naturally derived enzymes to markets
including the diagnostic, pharmaceutical,
biotechnology, and research industries. 
This acquisition has consolidated the
Group’s existing position as one of the
world’s leading producers and suppliers of
diagnostic enzymes. It has also extended 
the range of products with therapeutic
potential. Jacobus de Kock, one of the
former vendors of Seravac, is now Executive
Chairman of Seravac and we are delighted
to welcome him onto the Theratase Board
as a Non-Executive Director.
The acquisition was funded by way of a
Placing and Open Offer, and through a new
senior debt facility. At the same time we
were able to redeem the Company’s
outstanding Preference shares. Through
this early redemption we have been able 
to maximise shareholder value, simplify 
the Company’s capital structure, and
manage more efficiently the maturity of 
our funding commitments.
The Group has also made progress with its
therapeutic projects. In February 2004, we
announced a new joint venture investment
in a Swedish biopharmaceutical company,
Applet, with Pharmalink, a Swedish
speciality pharmaceutical company.
Theratase and Pharmalink will each invest
approximately £0.5m in the joint venture,
contingent upon achieving development
milestones. At 30 September 2004,
£0.1m had already been invested by the
Group in the project. Applet will initially
develop therapeutics using the enzyme
hyaluronidase for use as an anti-oedema
and anti-inflammatory agent in the
prevention of transplant rejection. The
Group’s UK based subsidiary, Biozyme
Laboratories, will ultimately supply
hyaluronidase to the venture on the 
basis that development is successful. 
In January 2004, we agreed to make 
a further investment, in the form of a
€200,000 convertible loan in AM-Pharma
Holdings BV (“ AM-Pharma”), the Dutch 
joint venture founded in 2000 to develop
therapeutics and diagnostic treatments for
sepsis and microbial infections. Theratase
made the investment on 2 December 2004
following the successful achievement of the
required technical milestone by AM-Pharma.
This investment, which is part of a larger
fund raising initiative by AM-Pharma to raise
a minimum of €1.75m, is to fund extended
Phase IIa clinical trials using alkaline
phosphatase, supplied by Biozyme, in sepsis
patients. The commencement of these trials
was temporarily delayed by an ethical review
relating to patient informed consent which
have now been resolved. It is now
anticipated that trial results will be
available by the third quarter of 2005. 
An important technical milestone 
was achieved in May when ISTA
Pharmaceuticals announced that it had
received US FDA approval for the use of
Vitrase
®
as a spreading agent. Biozyme
produces the active pharmaceutical
ingredient, hyaluronidase, for Vitrase
®
. 
This approval enables ISTA to sell Vitrase
®
to ophthalmologists needing to facilitate
spreading of other drugs in the eye. 
This represents an important event for
Biozyme’s manufacturing facility, which was
audited successfully by the FDA in 2003.
On behalf of the Board I would like to
welcome our new employees in South
Africa to the Group and to thank them as
well as all of our UK and USA employees
for their efforts which are so important to
the continued success of the Group. 2004
has been a year of great change for the
Group with new opportunities introduced
and a broadening of our offerings. I look
forward to the challenges ahead in
improving profitability and seeking out
further appropriate opportunities.
Philip Percival
Chairman
18 January 2005
“The last 12 months have been a time of considerable
development and change for the Group. We have
succeeded in making major advances in progressing
the Group’s strategy which is to build a specialist
pharma/diagnostics company through organic growth,
appropriate synergistic acquisitions, and by investing 
in research and development through therapeutic joint
ventures. The Group’s operations have continued to be
profitable and cash generative.” 
Philip Percival, Chairman “Achieving GMP 
compliance 
underlines 
our strategy 
of achieving 
maximum
value for 
shareholders”
ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 05
Biozyme
Diagnostic
Biozyme’s most important products
continue to be glucose oxidase and
alkaline phosphatase. Over many 
years Biozyme has established solid
relationships with some of the major
players in the diagnostics market
including Lifescan Europe (a subsidiary 
of Johnson & Johnson) which is one of
the main customers for glucose oxidase,
which is incorporated into home blood
glucose testing kits. This market is
growing at a rate of over 10% per 
annum due to the increasing incidence 
of diabetes worldwide. Alkaline
phosphatase, which is manufactured 
from bovine intestine, is a key enzyme
used extensively in immunodiagnostic
testing for the diagnosis of disease and
monitoring of physiological change. It is
also used in pathology and organ function
tests. During the last year considerable
efforts, alongside DEFRA (Department 
of the Environment, Farming, and Rural
Affairs) have been made to ensure that
our manufacture and supply of alkaline
phosphatase continues to meet the 
latest EU regulations. Other enzymes 
for which Biozyme holds a strong market
reputation include hyaluronidase,
ribonuclease and urease.
Therapeutic
The core business and the sales it
generates through the diagnostics 
market are critically important for 
the Group’s financial performance.
Additionally Biozyme and Seravac, 
the recently acquired South African
business, together represent a platform
for Theratase to grow into new markets. 
Biozyme has, through its excellent
production skills and product specification
profiles, enabled Theratase to access
exciting pharmaceutical product
development programmes which
incorporate enzymes produced by the
company as active pharmaceutical
intermediates (APIs). In this respect, the
recent rating of one of the manufacturing
units within Biozyme by the US FDA as
compliant with Good Manufacturing
Practice (GMP) enables the in-house
expertise to be employed to maximum
advantage in the new development
projects in which the company is
engaged. GMP compliance is necessary
for the regulatory approval of therapeutic
products and/or their components.
Achieving GMP compliance underlines 
our strategy of achieving maximum value
for shareholders by exploiting Biozyme’s
core skills base and developing this along
ultimately more lucrative lines such as 
the production of substantially higher
margin enzymes as APIs.
The company is engaged in the following
API programmes exploiting the enzymes 
it produces for therapeutic applications.
Organ transplant rejection 
Theratase recently announced the
formation of a new joint venture, Applet
MBJ AB (“Applet”), established with the
Swedish speciality pharmaceutical
company, Pharmalink. Each company
plans to invest £0.5m in return for a
Chief Executive’s Review
“The acquisition of Seravac has broadened the Group’s
turnover, product, and manufacturing bases, and a 
new therapeutic programme has been commenced. 
The Group will be concentrating its efforts over the next
year on improving profitability at Seravac as well as
continuing to seek out appropriate therapeutic
opportunities to fuel growth.”
John Chesham, Chief Executive 06 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Chief Executive’s Review continued
47.5% stake in the JV. Theratase will be
making its payments in four tranches over
a 14 month period, which commenced 
in February 2004, on the achievement 
of development-related milestones. 
At year end the Group had invested
£0.1m. Applet is exploring the use of
hyaluronidase for its potential to reduce
organ transplant rejection. Currently, there
is no effective strategy for controlling
rejection within the first 24 hours of
organs transplanted into patients. Applet
intends to take hyaluronidase through 
the pre-clinical stage and into phase I 
and II clinical trials. Intellectual property
generated through the work will be owned
by Applet. It is believed that hyaluronidase
could be used in all transplanted organs
(liver, kidney, heart, lung) prior to surgical
interventions to minimise the risk of acute
phase rejections. 
Ophthalmic applications
The Group supplies ISTA Pharmaceuticals
Inc. with hyaluronidase for use in its drug
Vitrase
®
. Vitrase
®
has been approved by
the US FDA for use as a spreading agent.
This approval means that for the first time
Biozyme will be manufacturing product
which will ultimately be used in a clinical
setting. During the year Biozyme entered
into a new three year supply agreement
with ISTA. In addition, Biozyme granted
ISTA a technology licence to manufacture
hyaluronidase. In consideration of this
ISTA has agreed to pay Biozyme a fee of
$1.1m in instalments payable over three
years, of which $368,000 had been
received in 2004. Whilst Biozyme has left
the door open for the negotiation of a
new contract it does not anticipate,
particularly if ISTA fails to get Vitrase
®
approved for vitreous haemorrhage,
supplying ISTA with product beyond
August 2007. This has clear benefits 
to Biozyme freeing up its GMP facility 
to pursue higher value projects. 
Sepsis and septic shock
AM-Pharma is a joint venture in which
Theratase holds approximately 9% of the
equity. The venture was established in
2001 to evaluate the role of alkaline
phosphatase in the treatment of sepsis
and septic shock. At 30 September 2004
Theratase had invested £1.0m in cash
and in-kind contributions, which has
assisted AM-Pharma’s clinical progress.
Alkaline phosphatase represents a potential
major market for AM-Pharma. In addition to
the equity stake the Group has an exclusive
supply agreement following eventual
approval of the product. The programme
has progressed well and has obtained
ethics committee approval to commence
an extended Phase IIa clinical trial in sepsis
patients. The Phase I and IIa data obtained
to date in the small number of healthy
volunteers indicate the product is safe and
well tolerated. The first small Phase IIa
study using simulated sepsis (created 
by giving volunteers low doses of LPS)
achieved its main aim of demonstrating 
the potential of alkaline phosphatase to
hold back the development of the early
symptoms of septic shock. It is expected
that clinical data from the Phase IIa study 
in 50–60 patients could be available 
in the second half of 2005.
Glucose Oxidase
Source: Apergillus niger
A highly purified salt free freeze dried powder with a specific activity (Grade GO3A) of
the order of 360U/mg protein (approx 270U/mg material). Amylase, Saccharase, and
Maltase <0.05%. Ratio of Glucose Oxidase to Catalase >2000.
Production
“Theratase’s 
marketing 
experience has
and will over 
time enhance
Seravac’s market
position and 
pricing power” Seravac
Seravac is an established name in the
diagnostic market and has an ongoing
established trading relationship with
Biozyme. It operates in similar areas to
Biozyme, being the production and sale 
of diagnostic and therapeutic enzymes.
Although Seravac and Biozyme share
some customers, there are few areas
where they are in direct competition.
Bringing the two businesses together 
has consolidated the Group’s position 
as a significant producer and supplier 
of diagnostic enzymes. 
Seravac operates from a large
manufacturing facility in Cape Town where 
it employs around 60 staff. It produces
approximately 40 different product lines, 
all of which are sold outside of South Africa
mainly via third party agency agreements.
Customers include some of the world’s
leading diagnostic and pharmaceutical
companies. Seravac is an approved
supplier for all its main customers and is
ISO 9001: 2000 compliant. The company
is currently in the process of obtaining
registration with the US FDA for Good
Manufacturing Practice.Seravac has
historically committed minimal resources 
to marketing and the Board believes that
the application of Theratase’s marketing
experience has and will over time enhance
Seravac’s market position and pricing
power. Due to the minimal customer
overlap, opportunities for cross-selling 
and joint marketing initiatives are being
identified, particularly in the USA, the most
important market for Biozyme. Seravac
manufactures pharmaceutical and
diagnostic enzymes. Its products may 
be split into two groups: animal derived
enzymes and plant derived enzymes.
Animal derived enzymes
This category includes various proteases,
which are enzymes extracted from bovine
pancreas, and hyaluronidase, which is 
an enzyme extracted from bovine or 
ovine testes. The main products are
deoxyribonuclease, chymotrypsin, 
and chymotrypsinogen which are used 
as anti-inflammatory agents as well as
digestive aids.
Plant derived enzymes
The main product in this category is
peroxidase which is extracted from
horseradish roots and is used in conjunction
with glucose oxidase to monitor glucose
levels in diabetics and as an indicator in
immunodiagnostics to monitor diseases.
Integration of Seravac
In the six months since acquisition
excellent progress has been made in
integrating Seravac into the Group. The
operations of Seravac USA have been
combined with those of Biozyme’s US
operations, and Seravac’s US office 
has been closed. Some management
changes have been made in Cape Town
to improve the management structure.
Joint marketing initiatives have
commenced and changes have been
made to technical/marketing websites 
to facilitate cross-selling. Seravac 
and Biozyme use similar production
techniques for extraction and purification
of enzymes and operational synergies
ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 07
Glucose Oxidase
Application
Used in the measurement of glucose in biosensors. Used in the measurement of
glucose in colorimetric assays in conjunction with Peroxidase. For use as an enzyme
label, e.g. in ELISA systems.
End User Benefits
Control and management at home of blood glucose levels in diabetics.
Application 08 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Chief Executive’s Review continued
from the sharing of knowledge and
production processes are already being
seen. Assistance from Biozyme has
enabled Seravac’s technical staff to make
a significant improvement in production
yields of some of their most important
products. These yield enhancements 
have already assisted in achieving an
improvement in Seravac’s margins. 
Scope remains for further improvements
and joint programmes are continuing 
to address both yields and also other
opportunities for joint product ventures.
Opportunities to rationalise the production
and sale of some products and to
improve the utilisation of plant are being
progressed. In addition, there may be an
opportunity to enter into joint research
and development projects, particularly
in the area of therapeutics.
The acquisition has resulted in the
enlarged Group being less dependent 
on Biozyme’s current two main products,
alkaline phosphatase and glucose oxidase
as well as reducing Seravac’s reliance 
on pancreatic enzymes. The acquisition
has enhanced the Group’s strategy of
expanding into the therapeutic enzyme
market as Seravac has additional
therapeutic enzyme products to add 
to the Group’s existing portfolio.
Through a number of agency agreements,
Seravac has a presence in Far Eastern
markets which are being utilised to assist
Biozyme in selling into these areas.
Similarly Biozyme is assisting Seravac to
increase sales of its products in Europe.
The Board believes that Seravac has
several products which, with the benefit
of technological enhancement, have
significant growth potential, in particular,
through the sale of proteases as digestive
aids and food supplements into the Far
Eastern markets.
Corporate social responsibility
Theratase is committed to conducting
business in an ethical and socially
responsible manner. While we are
accountable to our shareholders, we 
take into account the interests of all our
stakeholders including our employees, 
our customers, and our suppliers as 
well as the local community, and the
environment in which we operate.
Employees and Health & Safety
The Group recognises that attracting,
retaining and motivating skilled people
is essential to its success. We are
committed to giving equal opportunities 
to all groups of people irrespective of
background. Our aim is to recruit the best
staff in the industry and we believe in
maximising every employee’s potential.
We encourage in-house training and
support staff in further studies where
appropriate.
Theratase takes its responsibility for
employee health and safety very seriously
and it is our policy to comply fully with
regulatory requirements and industry 
best practice.
DNA’se
Diagnostic & Indicator Enzymes, Seravac Biotech (Pty) Ltd
DNA’se is an enzyme derived from mammalian pancreas. Seravac’s purpose built
facility provides a capacity potential not matched by competitors. 
Preparation: From bovine pancreas
Form: A light brown, salt free, freeze-dried powder
Activity: >100 Kunitz units/mg material (blended to customer request)
Associated material: lactose
Store: –20°C 
Production
“Theratase is 
committed to
conducting 
business in 
an ethical 
and socially 
responsible 
manner” ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 09
Environmental policy
The Group recognises the benefit of
adopting a sustainable development
approach to its operations, and will 
make reasonable endeavours to operate
within the broad concept of sustainable
development. The Board recognises and
accepts that concern for the environment
and all employees is an integral and
fundamental part of our corporate
business strategy. Biozyme is committed
to preventing pollution and is certified to
the Welsh Green Dragon Environmental
Standard. Processes have been set up
to identify and control potential pollution
threats from its activities and products.
This year at the Wales Environment
Awards, Biozyme won the prestigious
award for Waste Minimisation Best
Practice for small companies and was
shortlisted for the Business and
Biodiversity Award. Seravac takes great
care in managing the environmental
impact of its activities and waste 
products and has a proud history of
compliance to all statutory requirements.
During the past year Seravac has
embarked on a proactive environmental
management programme with the aim
of achieving ISO 14000 certification
within two years.
Charitable donations and political
contributions
The Group believes that the choice 
of charitable donations is a matter of
conscience for individual staff and
shareholders. The Group supports staff
who volunteer their services to charitable
activities. The Group’s policy is not to
make any donations or to otherwise
support any political party or organisation.
Financial review
Business performance
The Group is one of the few profitable
businesses in the listed diagnostic and
pharmaceutical sector. Turnover for the
year was £8.3m (2003: £6.3m), an
increase of 31.7%. Seravac contributed
£2.3m of turnover in the six months since
acquisition. The majority of sales by each
subsidiary are exported: at Biozyme 69%
of turnover is exported, mainly to North 
America and the EU; at Seravac exports
make up 100% of turnover mainly to
Europe and the Far East. During 2004, 
sales of alkaline phosphatase have 
been lower than in the previous year,
largely because 2003 was boosted 
by a significant order from a US based
customer who typically orders every
second year. Glucose oxidase sales,
particularly to Lifescan Europe, have
strengthened in line with expectations. 
Operating profit for the Group was £1.7m
(2003: £2.2m) of which £0.2m was
contributed by Seravac. Profit before tax
was £1.5m (2003: £2.2m) which was in
line with expectations. Profit after tax
amounted to £1.1m (2003: £1.5m).
Taxation
The tax charge on the operating results
was £0.5m for 2004 (2003: £0.7m)
giving an effective tax rate of 30% which
is the standard corporation tax rate in 
the UK. The additional tax costs relating
to our operations in the US have been
DNA’se
DNA’se is used in anti-inflammatory applications and in conjunction with fibrinolysin, 
to treat exudative lesions. The main markets are in the Far East and Europe.
•Used in the structural analysis of DNA.
•Treatment of empyema, meningitis, cystitis, acute mastitis, breast abscess,
tuberculous abscess, intra-peritoneal abscess, systemic lupus erythematosus. 
•HIV gene therapy.
•Allogenic or autologous hematopoetic cell transplantation. 
•Botulinum toxin screening in food products.
Application Chief Executive’s Review continued
10 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
offset by savings generated following the
settlement of prior year tax provisions.
Earnings per share and dividend
Basic earnings per share for the year 
were 3.02p per share (2003: 4.54p).
During the year dividends were paid to
Preference shareholders amounting to
£870,000, of which £854,000 was
declared in 2003, and the remaining
£16,000 in 2004. The Preference 
shares were then redeemed in total 
at a discount of £237,000. Details of
these transactions can be found in 
the Directors’ Report on page 14.
In the short term the Board intends that
any future excess profits generated by 
the Group will be invested in order to 
grow the Group or to reduce borrowings.
However, as soon as it becomes
appropriate, the Board intends to adopt 
a progressive policy of paying dividends 
to Ordinary shareholders.
Capital and treasury
As part of the funding arrangements for 
the acquisition of Seravac and the final
redemption of the Preference shares, 
the Group completed a placing and open 
offer of Ordinary shares on 6 April 2004.
8,657,318 shares were placed with new
and existing shareholders at 51p raising
£3.9m net of expenses. In addition,
1,209,150 consideration shares were
issued to Good Hope Holdings (Proprietary)
Limited, a company controlled by 
Kobus de Kock.
The redemption of the Group’s Preference
shares has simplified the Group’s capital
structure, and enabled the Group to
introduce an appropriate level of gearing.
A new senior debt facility has been
negotiated, consisting of a seven year
term loan of £3m and a five year
revolving credit facility of up to £2m. 
At year end, £1.4m of the revolving credit
facility remained undrawn. The interest 
on the term loan is fixed at 7.055%. 
The interest rate on the revolving credit
facility is set at 2% above LIBOR. 
The Group had a net cash balance at year
end of £1.1m (2003: £2.0m). This cash
is used to provide day-to-day working
capital to the Group’s operations in the
UK and overseas. Net assets have
increased to £4.8m (2003: £2.5m).
The acquisition of Seravac has
considerably increased the Group’s risk
exposure to foreign currency movements.
Recognising the need to manage these
foreign exchange exposures, the Board
has introduced appropriate controls and
procedures. The Board’s current view is
that hedging strategies do not at present
offer good value for money but this is kept
under constant review.
The Group entered certain foreign
currency contracts immediately prior to
the acquisition of Seravac to manage 
the risk of movements in the South
African rand on the cost of repaying 
local borrowings. The net exchange gain
arising of £95,000 has been treated as 
a reduction in the borrowings acquired.
Peroxidase
Diagnostic & Indicator Enzymes, Seravac Biotech (Pty) Ltd
Product code: 161-451
Preparation: From horseradish root
Form: A brown to red-brown, salt-free, freeze-dried powder 
Activity: >250 Guaiacol units/mg material 
Purity: RZ>3.0 
Store: –20
O
C
Production
“The enlarged
Group has the
resources to
improve its 
position as a
world leader” ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 11
Much of the Group’s invoicing is in US
dollars and the recent weaknesses of 
the dollar against the rand is therefore 
of continuing concern. The average US
dollar rate this year was 12.2% less
favourable than in the previous year.
Cash flow
Net cash inflow from operating activities
was £0.9m (2003: £2.1m). Both net
cash inflow and debtors at year end 
have been affected by the timing of 
sales which were heavily skewed 
towards the end of the financial year. 
Post balance sheet events
On 2 December 2004, the Company made
a further investment in AM-Pharma in the
form of a convertible loan of €200,000.
Accounting policies
The Group will be required to adopt
International Accounting Standards in 
the reporting of the consolidated accounts
for the year ended 30 September 2006.
Implementing these changes will be a
significant exercise, and as a result, we
are undertaking a careful review of the
new requirements.
Outlook
Much has been achieved in 2004 to
implement the Group’s corporate strategy
and to build a solid platform to continue
to develop and grow the enlarged
business. The acquisition of Seravac 
has introduced new opportunities and
broadened the Group’s turnover, product,
and manufacturing bases. In addition, 
a new therapeutic programme has
commenced. The Group will be
concentrating its efforts over the
next year on improving profitability 
at Seravac as well as continuing to 
seek out appropriate opportunities 
within therapeutics to fuel growth.
The Board believes that the coming year
will be challenging and exciting and that
the enlarged Group has the resources to
improve its position as a world leader in
its market and that overall prospects
remain good.
John Chesham
Chief Executive
18 January 2005
Peroxidase
Occurrence
Peroxidase is present in most plant cells and has also been isolated from leucocytes, fig
sap, yeast and milk. Seven isoenzymes have been extensively purified from horseradish.
Applications
• In conjunction with glucose oxidase, it is used to monitor glucose levels in diabetic
patients. 
• A general indicator enzyme which can be used in neural mapping and in
immunodiagnostics for the detection of numerous diseases.
Application 12 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Board of Directors
Alan Aikman PhD*
Non-Executive Director (57)
Jacobus de Kock
Non-Executive Director (36)
Philip Percival MBA*
Non-Executive Chairman(58)
Jo Rooke LLB
Administration Director (38)
Colin Anderson BAcc ACMA
Finance Director (46)
John Chesham PhD MBA
Chief Executive (46)
Having started his career at ICI, John
Chesham occupied roles of Research and
Development Manager with Cambridge
Life Sciences and then with Abbott
Laboratories. In January 1995, he took
up the post of Operations Manager for
Theratase’s diagnostics division. His key
role in the restructuring of the Group and
his strategic vision led him to being
appointed Managing Director of Biozyme
Laboratories Limited in January 1998.
Following shareholder approval of a
settlement with Inverness Medical
Technology Inc and the associated Board
changes John was elevated to Chief
Executive in March 1999. 
Colin Anderson has over 25 years’
experience working in both large and
small companies. He has worked in a
variety of technology industries including
telecommunications, software distribution
and computer services. Prior to joining
Theratase he worked in senior roles in
both the UK and Australia, including
several Financial Controller positions, two
years as a Manufacturing Manager and
five years as joint Managing Director of
his own computer company. Colin has
now been at Theratase for over ten 
years, having joined as Group Financial
Controller. He joined the Board as
Finance Director in August 1999.
With over 30 years’ experience in fund
management, management consultancy
and venture capitalism, Philip Percival is 
a director of SG Capital Europe Ltd. Prior
to his work with SG, he was a Managing
Director of EM Warburg Pincus & Co, one
of the leading US venture capital firms,
where he specialised in healthcare
investments. Philip has considerable
experience of the role of the board with
smaller companies and of dealing with
complex strategic and financial issues. 
He has been Non-Executive Chairman of
Theratase since March 1999 and is also
Chairman of the Audit and Remuneration
Committees. 
A PhD Biochemist, Alan Aikman has
worked in the healthcare sector for over
30 years. Having worked for a range of
companies, including GD Searle and
Palmer Bio-Science, he was appointed
Managing Director of Homecraft Supplies,
a manufacturer of daily living aids for
disabled and elderly people. In 1991, 
Alan led the buyout of Homecraft Supplies
and its subsequent sale to Smith &
Nephew until December 1997 and now
operates as a Chairman / independent
Director and adviser to SME’s .
Alan joined the Board of Theratase in
March 1999 and is a member of the
Audit and Remuneration Committees 
and also Chairman of the Internal Control
Risks Committee. 
After working for a packaging
manufacturing group for five years and
completing a Management Diploma 
at Wits University, Johannesburg, Kobus 
de Kock founded and headed Good 
Hope Holdings, to focus on turnaround
strategies for manufacturing business 
in the export market. During his tenure 
as Chief Executive Officer of Good Hope
Holdings, the company acquired shares 
in Seravac Biotech. Seravac was
subsequently acquired by the Group 
in April 2004. Following the acquisition
Kobus was appointed to the Theratase
Board as a Non-Executive Director and 
as Executive Chairman of Seravac.
Jo Rooke is a barrister who worked in
private practice specialising in commercial
work and litigation prior to joining Theratase
in 1995, working alongside the Company
Secretary. In 1996 she was appointed
Group Legal Adviser and became Group
Company Secretary in 1997. In addition 
to her roles as Legal Adviser and Company
Secretary, Jo is also responsible for Group
insurances, pensions, properties, personnel
and patents and trademarks. She was
appointed to the Board as Administration
Director in March 1999.
*Members of the Audit and
Remuneration Committees ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 13
Directors
Philip Percival (Non-Executive)* Chairman
John Chesham Chief Executive
Alan Aikman (Non-Executive)*
Colin Anderson
Jo Rooke
Jacobus de Kock (Non-Executive)
* Members of Audit and Remuneration Committees
Secretary and Registered Office
Jo Rooke
Trafalgar House
11/12 Waterloo Place
London
SW1Y 4AU
Auditors
KPMG Audit Plc
2 Cornwall Street
Birmingham
B3 2DL
Solicitors
Richards Butler
Beaufort House
15 St Botolph Street
London
EC3A 7EE
Lewis Silkin
12 Gough Square
London 
EC4A 3DW
Bankers
KBC Bank NV
111 Old Broad Street
London
EC2N 1BR
National Westminster Bank Plc
City Link House
3rd Floor
4 Addiscombe Road
Croydon
CR0 5TT
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Patent and trademark agents
Urquhart – Dykes & Lord
Chartered Patent Attorneys
Tower House
Merrion Way
Leeds
LS2 8PA
Bromhead Johnson
Kingsbourne House
229–231 High Holborn
London
WC1V 7DP
Stockbrokers and financial advisers
KBC Peel Hunt Limited
4th Floor
111 Old Broad Street
London
EC2N 1PH
Company number
2815159
Company website
www.theratase.com
Directors and Advisers
Financial calendar
Preliminary announcement of 2004 annual results 19 January 2005
Annual General Meeting 3 March 2005
Interim results announcement 17 May 2005
Preliminary announcement of 2005 results 17 January 2006 14 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
The Directors present their annual report and the audited
financial statements for the year ended 30 September 2004.
Principal activities of the Group
The principal activities of the Group are the development,
manufacturing, marketing and sale of enzymes and
biochemicals to the medical diagnostic and healthcare
industries. These activities are carried out by Biozyme
Laboratories Limited, which operates in the UK, its subsidiary
Biozyme Laboratories International Limited, which operates
in the US and Seravac Biotech (Proprietary) Limited which
operates in the Republic of South Africa.
The principal activity of the Company is a holding company.
Business review and future developments
A review of the developments and activities of the Group 
is contained in the Chairman’s Statement and the Chief
Executive’s Review.
Profits and dividends
The Group profit for the financial year before taxation was
£1,522,000 (2003: £2,189,000).
A detailed financial review is set out in the Chief Executive’s
Review on pages 5 to 11.
The Directors are not recommending the payment of a 
dividend to Ordinary shareholders in respect of the year.
Following shareholder approval at the Company’s 2004 Annual
General Meeting the following payments were made to
Preference shareholders on 6 February 2004.
• The payment of a Preference dividend of 16p per Preference
share amounting to £570,000 in total. This payment was in
respect of arrears of the Preference dividend for the period
from 1 October 2000 to 30 September 2002 together with
interest.
• The payment of a Preference dividend of 8p per Preference
share amounting to £284,000 in total. This payment was 
in respect of accrued Preference dividend for the period 
1 October 2002 to 30 September 2003.
• The redemption of 578,000 Preference shares at par 
which were due to be redeemed on 30 September 2003.
• The payment of a Preference dividend of 2.805p per
Preference share amounting to £16,213 in total. This
payment was in respect of accrued Preference dividend 
for the period from 1 October 2003 to 5 February 2004 
on the 578,000 Preference shares due to be redeemed 
on 30 September 2003.
The Company was prohibited from making each of the above
payments on 30 September 2003 due to a lack of distributable
reserves, and in accordance with the terms of the Companies
Act, the accounts were required to be laid before the Company
at a general meeting and approved prior to payment.
In accordance with the Articles of Association of the Company
the Preference dividend payments carried interest of 3% per
annum above the base rate of National Westminster Bank Plc
from 1 October 2003 until 6 February 2004.
At an Extraordinary General Meeting of the Company and a
Separate General Class Meeting of the Preference shareholders
both held on 2 April 2004, the Preference shareholders agreed
to waive their entitlements to any accruing Preference dividends
and accept the early redemption of the outstanding Preference
shares for an amount of £2,743,478 which represented a sum
equivalent to 93.35% of the capital value of the Preference
shares outstanding as at 30 September 2003 (which excludes
£578,000, being the capital sum redeemed on 6 February
2004). This comprised a net sum of £2,624,274, which
equated to 90% of the capital value of the outstanding
Preference shares together with the amount equivalent to the
value of the Preference dividends which would have accrued 
on the outstanding Preference shares up to the date of actual
redemption. These payments were made and the outstanding
Preference shares were redeemed on 6 April 2004 using the
proceeds of a fresh issue of Ordinary shares.
Creditors payment policy
It is the Company’s normal practice to agree payment terms
with its suppliers when it enters into binding purchase contracts.
The Company seeks to abide by the payment terms agreed
whenever it is satisfied that the goods or services have been
provided in accordance with the agreed terms and conditions.
The Company does not apply a standard or code, which deals
specifically with the payment of creditors.
At 30 September 2004 the number of creditor days outstanding
for the Group was 48 days (2003: 39 days).
Charitable and political donations
No donations were made during the year to charitable or
political organisations.
Directors and Directors’ interests
The Directors who held office during the year were as follows:
PC Percival
J Chesham
CD Anderson
AA Aikman
JB Rooke
JF de Kock (appointed 6 April 2004)
Directors’ Report ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 15
As required by the Articles of Association, Mr de Kock, having
been appointed since the last Annual General Meeting, retires
and being eligible offers himself for re-election. Dr Chesham,
Mr Anderson and Ms Rooke retire by rotation in accordance
with the Articles of Association and, being eligible, offer
themselves for re-election.
The Directors who held office at the end of the financial year
had the following interests in the Ordinary shares of the
Company according to the register of Directors’ interests:
Ordinary shares Ordinary shares
30 September 30 September
2004 2003
JF de Kock 1,209,150 n/a
PC Percival 116,666 100,000
CD Anderson 90,501 69,001
J Chesham 54,440 38,092
AA Aikman 23,333 20,000
JB Rooke 5,881 1
JF de Kock held 1,209,150 shares on appointment.
Major shareholders
At 20 December 2004, the Company had been informed of the
following holdings of 3% of the issued Ordinary share capital of
the Company:
Number of Percentage 
Name Ordinary shares of issued
The Bank of New York
Nominees Limited 1,645,785 4.57
BNY (OSC) Nominees
Limited 1,355,833 3.77
Britel Fund Nominees 
Limited 3,518,913 9.78
Chase Nominees
Limited 2,745,530 7.63
Good Hope Holdings
(Proprietary) Limited 1,209,150 3.36
J M Finn Nominees
Limited 1,939,651 5.39
Pershing Keen Nominees
Limited 2,578,586 7.17
Possfund Nominees
Limited 2,392,448 6.65
William Salisbury 1,500,000 4.17
Save as disclosed above the Directors are unaware of any 
other interests of 3% or more of the issued share capital of 
the Company.
Auditors
In accordance with Section 385 of the Companies Act 1985 
a resolution for the re-appointment of KPMG Audit Plc as
auditors of the Company, is to be proposed at the next 
Annual General Meeting.
Approved and signed by order of the Board.
Ms JB Rooke
Company Secretary
Trafalgar House
11-12 Waterloo Place
London SW1Y 4AU
18 January 2005 16 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Compliance
The Board is accountable to the Company’s shareholders 
for good governance. The information and statements below
describe how the Company applies the principles identified
in the Combined Code – Principles of Good Governance 
and Code of Best Practice published in June 1998.
In addition the Board also supports the principles contained 
in the revised Combined Code issued on 23 July 2003. These 
are effective for the Group in its reporting for the year ended
30 September 2005. Following a review of the revised 
code’s requirements, the Board has put plans in place for
implementation.
The Board of Directors
The Board is responsible for the effective and proper
management of the Group.
The composition and biographies of the Board are set out 
on page 12. The Board currently comprises a Non-Executive
Chairman, two Non-Executive Directors and three Executive
Directors. There is a clear delineation of responsibility between
the Chairman, the Chief Executive and other Executives.
The Board has a schedule of matters specifically reserved 
for its decision. This includes overall Group and corporate
strategy and determining the Group’s long term objectives;
monitoring financial performance and approval of preliminary
announcements and published report and accounts;
acquisitions and disposals; approval of the annual budget;
approval of major capital expenditure; risk management and
treasury policies; the determination of dividend policy and
corporate governance.
The Board meets formally at least every two months. Board
papers are sent to all Directors in advance of each Board
meeting including management accounts and accompanying
reports from Executive Directors. At each meeting the Board 
is briefed on issues arising, reviews the progress of the Group
towards its objectives and monitors financial performance
against budget and forecast. Operational control is delegated
by the Board to the Executive Directors. Non-Executive Directors
are able to contact the Executive Directors at any time for
further information.
The Board is of the opinion that the Chairman and Dr Aikman
are independent of executive management and that there are
no relationships which could affect the independence of their
judgement. Mr de Kock, who acts as a Non-Executive Director
of the Company, is employed as Chairman of Seravac Biotech
(Proprietary) Limited, a subsidiary of the Company. All Directors
have access to the advice and services of the Company Secretary
who is responsible to the Board as a whole for ensuring that
Board procedures are properly followed and that applicable rules
and regulations are complied with. On appointment new Directors
are provided with appropriate training.
All Directors are required to stand for re-election at the first Annual
General Meeting following their appointment. At every Annual
General Meeting one third of the Board, who are subject to
rotation, retire from office. Non-Executive Directors are appointed
for a fixed term of a maximum of one year. At the end of the fixed
term their suitability for re-appointment is considered. The terms
and conditions are set out in their letter of appointment as
detailed in the Remuneration Report. Non-Executive Directors do
not participate in Company share incentive schemes and their
service is non-pensionable. Mr de Kock in his role as Executive
Chairman of Seravac has a personal provident fund scheme to
which Seravac contributes as part of his cost to the company.
Board Committees
The Company has the following Board Committees:
(i) The Audit Committee
The Audit Committee comprises Mr Percival, who acts as
Chairman, and Dr Aikman. The Committee meets at least twice
a year with the auditors in attendance. The terms of reference
include: monitoring the integrity of the financial statements of
the Group; the review of the annual accounts and interim
statement to ensure compliance with generally accepted
accounting principles and to satisfy itself as to the adequacy
and effectiveness of the Group’s audit and control procedures.
(ii) The Remuneration Committee
The Remuneration Committee comprises Mr Percival who acts
as Chairman and Dr Aikman. The Committee meets when
required to do so. Terms of reference for the Committee
include: determining, and agreeing with the Board, the total
individual remuneration packages of the Executive Directors;
reviewing the design for share incentive plans for approval by
the Board and shareholders; and approving the design of,
targets for, and payments made under performance related 
pay schemes.
Given the size of the Group the Board does not consider a
nomination committee appropriate.
Relations with shareholders
The Company maintains a regular dialogue with institutional
shareholders, mainly in the periods following the announcement
of the interim and final results but also at other permitted 
times during the year, particularly when proposed transactions
require shareholders’ approval. The Board also encourages the
participation of shareholders at the Annual General Meeting.
All Board members attend the Annual General Meeting and 
in particular the Chairman and Chief Executive are available 
to answer questions.
The Company proposes separate resolutions at the Annual
General Meeting for each substantially separate issue. There is
always a separate resolution relating to the annual report and
accounts and adoption of the Directors’ Remuneration Report. 
Corporate Governance ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 17
The Chairman counts all proxy votes at general meetings 
and will make available the proxy votes for and against each
resolution, together with any abstentions, after it has been 
dealt with on a show of hands.
In addition to meeting its obligation to shareholders, the Board
recognises that it has a responsibility to the Group’s customers,
employees, suppliers and the communities in which it operates
and invests.
All published information, including press releases, is available
on the Theratase website www.theratase.com.
Internal control
The objective of the Directors and senior management is to
safeguard the value of the business and assets of the Group.
Part of this objective requires the development of relevant
policies and appropriate internal controls to ensure proper
management of the Group’s resources and the identification
of risks which might serve to undermine them.
The Board acknowledges that it has ultimate responsibility for
the Group’s system of internal control and for reviewing their
effectiveness. However it is recognised that these systems are
designed to manage rather than eliminate the risk of failure 
to achieve business objectives and can only provide reasonable,
but not absolute, assurance against material misstatement 
or loss and eliminating the risk of failure to achieve 
business objectives.
As prescribed in the guidance of the Turnbull Committee on
internal control an ongoing process has been established for
identifying, evaluating and managing the significant risks faced
by the Group. This process has been in place throughout the
year in review and up to the date of the approval of the annual
report and accounts.
The Board has established a risk management committee
(the “Risk Committee”) chaired by Dr Aikman, which includes
Mr Anderson and Ms Rooke. It reviews the risk management
and control processes and reports to the Board. The Risk
Committee considers:
• The key risks inherent in the business and their identification,
evaluation and management;
• The effectiveness of the control systems in managing 
those risks;
• The response to significant risks which have been identified;
• The changes between annual assessments in significant risks
and the Group’s ability to respond to changes in the business
environment;
• The scope and quality of management’s ongoing monitoring 
of risks;
• The communication of monitoring results to the Board; and
• The actual and potential impact of any risks on financial
performance.
The Board has reviewed the effectiveness of its systems during
the year in the following key areas:
Strategy including: business strategy, the future
direction of the Group, reputation and value.
Compliance including: compliance with Listing Rules,
Director’s duties, and general regulatory
compliance.
Legal including: employment risks, environmental,
health and safety issues, intellectual property,
insurance risks and cover, and acquisitions.
Financial including: detailed budgets, plans and
forecasts, which are approved by the Group
Board; preparation of business plans, which
include the identification of, and the
assessment of business risks; monitoring of,
actual results compared with budgets and
updated forecasts; defined procedures for
the appraisal, review, and authorisation of
capital expenditure.
Market including: market place, regulatory changes,
customer service, and product risks.
Production including: development, production and
quality assurance.
Communication including: communication, information
technology and website.
A corporate Risk Register is reviewed regularly and updated
annually as a means of identifying and evaluating the significant
risks, which may affect the Group and the policies and
procedures by which these risks are managed.
In view of the current size of the Group, the Risk Management
Committee believe that the above procedures are adequate and
consequently the creation of an internal audit function is not
deemed necessary.
Going concern
The Directors are of the opinion 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.
Compliance with the Combined Code
During the year ended 30 September 2004 the Company has
been in compliance with the requirements of the Combined
Code in place during the year except in the following areas:
• The Audit Committee comprises of two independent Non-
Executive Directors and not at least three as is required. 
This reflects the current size of the Group.
• The Board believes that given its size and constitution it is
not appropriate to specify a “senior” Non-Executive Director 
or to appoint a nomination committee. 18 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Compliance
This report by the Remuneration Committee sets out the
Company’s policy on the remuneration of Directors together 
with details of the Directors’ remuneration packages and service
contracts. It has been approved by the Board and shareholders
will be invited to approve it at the Company’s Annual General
Meeting in accordance with the Directors’ Remuneration
Regulations 2002.
Certain parts of this report are required to be audited.
Where such disclosures are subject to audit, they have been
marked as such.
The Remuneration Committee (the “Committee”)
The members of the Committee are Mr Percival and Dr Aikman,
both Independent Non-Executive Directors. Mr Percival is also
Chairman of the Board. The role of the Committee includes:
• Determining and agreeing with the Board, the Group’s policy
on the remuneration of, benefits and terms of employment of
the Executive Directors and certain senior Group employees;
• Approving the design of, targets for, and payments made,
under performance related pay schemes;
• Reviewing the design for share incentive plans for approval 
by the Board and shareholders and overseeing the operation
of share incentive schemes.
The Executive Directors are responsible for the remuneration 
of the Non-Executive Directors, including the Chairman.
The Committee has not appointed nor sought advice from any
consultants to advise on remuneration issues, however legal
advice on such matters has been provided to the Committee
during the period. The Committee takes into consideration the
Executive Directors’ Remuneration in the Techmark Companies
Report in determining appropriate levels of remuneration.
The Committee consults the Chief Executive concerning the
remuneration of the other Executive Directors and senior Group
employees and the Chief Executive is invited to attend the
Committee’s meetings but is not present when his own
remuneration is being discussed.
The Committee meets usually at least twice a year.
Remuneration policy
The objectives of the remuneration policy for Executive Directors
are that:
• The total remuneration package should be competitive 
with companies in the same sector which are of similar 
size so that it will attract, retain and motivate Executives 
with the skills and calibre required to maximise return 
for shareholders;
• Remuneration should align the interests of Executives with
those of shareholders through the use of performance driven
cash based awards and share options in addition to base
salary and benefits;
•Performance targets should be challenging; and
• The details of each element of remuneration should be clear
and easily understood.
The components of the remuneration of the Executive Directors
are as follows:
Base salary
Individual base salaries are reviewed annually by the
Committee, taking into account a number of factors, including
individual performance, responsibility changes, and Company
performance. Base salary is also determined with reference 
to an appropriate comparator group of companies which 
is reviewed annually. In this respect specific reference to 
base salary alignment is made to the Executive Directors’
Remuneration in the Techmark Companies Report. Factors
taken into account for comparison purposes include company
type and sector and measurement of company size by market
capitalisation and turnover.
Short term incentives – performance bonus
The Executive Directors are entitled to an annual discretionary
bonus under the Executive Directors’ Bonus Scheme. The
annual bonus is set at a percentage of base salary on a sliding
scale. Bonuses are earned on the achievement of gross margin
based on forecast. For each 1% of gross margin achieved above
95% of forecast, the Executive Directors are entitled to receive
a discretionary bonus equivalent to 3% of base salary, up to a
maximum of 20% of base salary. The Remuneration Committee
determined not to award the Executive Directors with a bonus
under this scheme during the year.
The Chief Executive, under his service contract, is entitled 
to an annual performance bonus of between 5 and 10% of 
his base salary, subject to his meeting and exceeding agreed
profit targets for the business.
In June 2004 the Committee determined that the Executive
Directors should each receive a bonus following the acquisition
of Seravac Biotech (Proprietary) Limited recognising that the
Executive Directors managed the execution of a large number 
of complex transactions in a relatively short period of time and
showed excellent negotiating skills.
Share incentive schemes
The Company operates an Executive Share Option Scheme.
Executive Share Option Scheme
The Executive Share Option Scheme was approved by
shareholders in June 1993. Under the scheme rules options
can only be granted within a period of not more than 42 days
after the date on which the annual or half yearly results of the
Directors’ Remuneration Report ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 19
Company are announced. The aggregate maximum amount 
of options which can be granted to an individual is limited to
four times annual salary. The maximum number of options that
can be granted in any 10 year period is limited to a number of
shares equal to 10% of the Ordinary issued share capital of 
the Company. Options may be exercised between the first and
seventh anniversary of the date of grant. The exercise price 
of an option is not less than the mid market price of an
Ordinary share on the dealing day preceding the date of grant 
of the options. No performance criteria are imposed for
exercising options.
The scheme expired in June 2004, since under the rules of 
the scheme no option can be granted to an eligible employee 
at any time after the 10th anniversary of the scheme. The last
grant of option to Executive Directors under the scheme was
made on 28 January 2002.
The Committee has recently reviewed and taken advice on
possible replacement share incentive schemes. On the basis 
of the Committee’s advice the Board is now proposing to 
adopt the following new schemes:
• Theratase plc Long Term Incentive Plan;
• Theratase plc Savings Related Share Option Plan;
• Theratase plc International Savings Related Share 
Option Plan;
• Theratase plc Employee Share Ownership Plan Trust. 
These schemes and the Trust will be put to shareholders for
approval at the 2005 Annual General Meeting and are
described in more detail on pages 53 to 56.
Benefits
In addition to their pension provisions described below, all
Executive Directors are entitled to life assurance at three times
annual salary and private medical insurance. Executive Directors
and the Executive Chairman of Seravac are entitled to a
company car or a car allowance.
Pension arrangements
The Chief Executive has a personal pension plan to which the
Company contributes 12% of base salary. Both the Finance 
and Administration Directors are members of the Theratase plc
Pension Scheme which is a defined contribution occupational
pension scheme to which the Company contributes 12% of
base salary. The Executive Chairman of Seravac has a personal
provident fund scheme to which Seravac contributes 13.25% of
his salary as part of his cost to the company.
Pensionable earnings do not include elements of remuneration
other than salary.
Directors’ service contracts
Executive Directors each have a service contract of indefinite
duration until normal retirement age. It is the Company’s policy
that Executive Directors’ service contracts should incorporate no
more than one year’s notice of termination from the Company,
in line with current best practice. None of the Directors’ service
contracts have a provision for compensation for loss of office or
wrongful termination upon change of control beyond payment in
lieu of contractual notice.
The Committee’s policy for provision for compensation for 
loss of office is to provide compensation which reflects the
Company’s contractual obligations.
The Committee allow the Executive Directors to accept
Non-Executive Director appointments with other companies.
Any appointment is subject to Board approval. The Committee
is of the view that suitable appointments benefit the Company
and may broaden the Director’s perspective.
The Chief Executive’s service agreement dated 8 February 1999
is terminable upon either Dr Chesham or the Company giving 
to the other party not less than 12 months’ written notice. The
Finance Director’s service agreement dated 5 August 1999 
is terminable upon either Mr Anderson or the Company giving
to the other not less than three months’ written notice. The
Administration Director’s service agreement dated 8 February
1999 is terminable upon either Ms Rooke or the Company
giving to the other not less than three months’ written notice.
Mr de Kock is employed by Seravac Biotech (Proprietary)
Limited (“Seravac”) as Executive Chairman of Seravac. Under
the terms of his employment contract, dated 6 April 2004, 
he is entitled to become a member of any pension fund, 
group life and medical aid fund or scheme established by or 
for the benefit of the employees of Seravac. His contract of
employment is terminable upon either Mr de Kock or Seravac
giving to the other not less than three months’ written notice.
Non-Executive Directors
The remuneration of Non-Executive Directors is determined 
by the Board, in which matter the Non-Executive Directors play
no part. The Board takes into account the Independent Director
Survey published by Independent Remuneration Solutions in
considering the Non-Executive Directors’ remuneration. The
Non-Executive Directors do not participate in any Company
share incentive schemes, performance payments or pension
plans other than Mr de Kock, who has a pension entitlement 
on his executive role for Seravac. Mr Percival and Dr Aikman
each have letters of appointment for a period of one year and
are paid a Director’s fee and expenses. Dr Aikman, in addition
to his Non-Executive Director’s fee and outside of his duties 
as a Director may, at the Board’s sole discretion, be engaged 
as a consultant from time to time for which he is paid a daily
rate. Mr de Kock has a letter of appointment which is terminable
with immediate effect upon either Mr de Kock or the Company
giving to the other written notice. Mr de Kock is paid expenses
but does not receive a Director’s fee from the Company. 20 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Remuneration details
(Audited information)
2004 2003 2004 2003
Basic Benefits Performance
salary/fees in kind payments Total Total Pension Pension
£000 £000 £000 £000 £000 £000 £000
Executive
J Chesham 129 7 20 156 146 15 14
CD Anderson 87 6 15 108 98 10 9
JB Rooke 74 6 15 95 86 9 8
Non-Executive
PC Percival 29 – – 29 27 – –
AA Aikman 17 – – 17 16 – –
JF de Kock (from 6 April 2004) 19 – – 19 – 2 –
Total 355 19 50 424 373 36 31
At 30 September 2004 the interest of the Directors in options over Ordinary shares are as follows:
Number of options Number of options
Director at 1 October 2003 at 30 September 2004 Date of grant Price Exercise dates
J Chesham 30,000 20,000 7 April 1998 14p 7 April 2001 – 7 April 2005
600,000 600,000 23 May 2000 25.5p 23 May 2001 – 23 May 2007
200,000 200,000 28 January 2002 66p 28 January 2003 – 28 January 2009
CD Anderson 290,000 280,000 23 May 2000 25.5p 23 May 2001 – 23 May 2007
100,000 100,000 28 January 2002 66p 28 January 2003 – 28 January 2009
JB Rooke 300,000 300,000 23 May 2000 25.5p 23 May 2001 – 23 May 2007
100,000 100,000 28 January 2002 66p 28 January 2003 – 28 January 2009
Share options are awarded at the discretion of the Remuneration Committee.
On 13 August 2004 the Chief Executive exercised 10,000 options at an exercise price of 14p and Mr Anderson exercised 10,000
options at an exercise price of 25.5p yielding notional pre-tax gains of £2,050 and £900 respectively. The middle market quotation
for Ordinary 5p shares each in the Company at the close of business on 13 August 2004 was 34.5p. No other Directors exercised
share options during the year.
There were no changes in Directors’ interests in shares or options between the end of the financial year and the date of approval of
these financial statements.
The middle market quotation for Ordinary shares of 5p each in the Company at the close of business on 30 September 2004 was
36p. The high and low middle market quotations for the year ended 30 September 2004 were 61.85p and 33.5p respectively.
In accordance with the Directors’ Remuneration Regulations 2002, the tables setting out the Directors’ remuneration, share options
and pensions contained within the report have been audited; the statements of policy have not been audited.
Directors’ Remuneration Report continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 21
Total Shareholder Return (TSR)
The graph below, which has not been audited, shows the Company’s TSR for each of the last five financial periods ended 30
September 2004, together with, for general comparison, the FTSE Fledgling and FTSE All Share Index. These indices have been
chosen as they are considered to be the most appropriate comparator groups available for the Company. TSR has been calculated 
by reference to the relevant share price for each constituent company assuming Ordinary dividends are reinvested.
Historical TSR performance
This report was approved by the Board on 18 January 2005.
PC Percival
Chairman of the Remuneration Committee
September 1999 September 2000 September 2001 September 2002 September 2003 September 2004
350
Theratase
FTSE All share
FTSE Fledgling
300
250
200
150
100
50
0 22 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Company law requires the Directors to prepare financial
statements for each financial year which give a true and fair
view of the state of affairs of the Company and Group and of
the profit or loss for that period. In preparing those financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will
continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure
that the financial statements 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.
Statement of Directors’ Responsibilities ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 23
We have audited the financial statements on pages 24 
to 50. 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.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
The Directors are responsible for preparing the Annual Report
and the Directors’ Remuneration Report. As described on 
page 22, this includes responsibility for preparing the financial
statements 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 financial
statements give a true and fair view and whether the financial
statements and the part of the Directors’ Remuneration Report
to be audited have been prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion,
the Directors’ Report is not consistent with the financial
statements, if the Company has not kept proper accounting
records, if we have not received all the information and
explanations we require for our audit, or if information specified
by law regarding Directors’ remuneration and transactions with
the Group is not disclosed.
We review whether the statement on page 18 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 financial
statements. We consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards
issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements and
the part of the Directors’ Remuneration Report to be audited. 
It also includes an assessment of the significant estimates
and judgements made by the Directors in the preparation of
the financial statements, and of whether the accounting policies
are appropriate to the 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 financial statements 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 financial statements and the part of the Directors’
Remuneration Report to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair view of the 
state of affairs of the Company and of the Group as at
30 September 2004 and of the profit of the Group for
the year then ended; and
• the financial statements 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
Birmingham
18 January 2005
Independent Auditor’s Report to the Members 
of Theratase plc 24 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
2004 2003
Note £000 £000
Turnover
Continuing operations 2 5,979 6,291
Acquisitions 2 2,296 –
2 8,275 6,291
Cost of sales 3 (4,171) (2,433)
Gross profit 3 4,104 3,858
Administrative expenses (2,357) (1,664)
Operating profit
Continuing operations 1,580 2,194
Acquisitions 167 –
Operating profit 3 1,747 2,194
Share of losses of joint venture 12 (2) –
Profit on ordinary activities before interest 1,745 2,194
Net interest payable 4 (223) (5)
Profit on ordinary activities before taxation 7 1,522 2,189
Tax on profit on ordinary activities 8 (455) (723)
Profit for the financial year 1,067 1,466
Dividends proposed on non-equity shares 18 (16) (854)
Additional finance costs of non-equity shares 18 (121) –
Release of provision for additional finance costs 18 – 570
Retained profit for the financial year attributable to Ordinary shareholders 930 1,182
Earnings per Ordinary share 9 3.02p 4.54p
Adjusted earnings per Ordinary share 9 3.02p 5.57p
Diluted earnings per Ordinary share 9 2.95p 4.46p
There are no material differences between the results as disclosed in the profit and loss account and the result on an unmodified
historical cost basis and therefore no separate note has been presented.
Consolidated Profit and Loss Account
for the year ended 30 September 2004 ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 25
2004 2003
Note £000 £000 £000 £000
Fixed assets
Intangible assets – goodwill 10 2,661 –
Tangible assets 11 2,051 1,020
Investment in joint venture 12
Share of gross assets 76 –
Share of gross liabilities (76) –
– –
Loan to joint venture 78 –
78 –
4,790 1,020
Current assets
Stocks 13 2,923 922
Debtors 14 2,292 969
Cash at bank and in hand 1,088 2,015
6,303 3,906
Creditors: amounts falling due within one year 15 (3,085) (2,206)
Net current assets 3,218 1,700
Total assets less current liabilities 8,008 2,720
Creditors: amounts falling due after more than one year 16 (3,069) (133)
Provisions for liabilities and charges 17 (173) (59)
Net assets 4,766 2,528
Capital and reserves
Called up share capital 19 1,797 4,861
Share premium account 20 3,495 39
Merger reserve 20 556 –
Capital redemption reserve 20 815 –
Profit and loss account 20 (1,897) (2,372)
Shareholders’ funds 4,766 2,528
Equity 4,766 (1,030)
Non-equity 21 – 3,558
4,766 2,528
These financial statements were approved by the Board of Directors on 18 January 2005 and were signed on its behalf by:
CD Anderson
Director
Consolidated Balance Sheet
at 30 September 2004 26 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
2004 2003
Note £000 £000 £000 £000
Fixed assets
Investments 12
Other investments 9,258 8,478
Investment in joint venture
Share of gross assets 76 –
Share of gross liabilities (76) –
– –
Loan to joint venture 78 –
78 –
9,336 8,478
Current assets
Debtors 14 19,897 14,186
Cash at bank and in hand – 401
19,897 14,587
Creditors: amounts falling due within one year 15 (19,756) (17,523)
Net current assets/(liabilities) 141 (2,936)
Total assets less current liabilities 9,477 5,542
Creditors: amounts falling due after more than one year 16 (2,304) –
Net assets 7,173 5,542
Capital and reserves
Called up share capital 19 1,797 4,861
Share premium account 20 3,495 39
Capital redemption reserve 20 815 –
Profit and loss account 20 1,066 642
Shareholders’ funds 7,173 5,542
Equity 7,173 1,984
Non-equity 21 – 3,558
7,173 5,542
These financial statements were approved by the Board of Directors on 18 January 2005 and were signed on its behalf by:
CD Anderson
Director
Company Balance Sheet
at 30 September 2004 ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 27
2004 2003
£000 £000
Profit for the financial year 1,067 1,466
Differences arising from changes in foreign currency exchange rates 2 –
1,069 1,466
Reconciliation of Movement in Consolidated
Shareholders’ Funds
for the year ended 30 September 2004
2004 2003
£000 £000
Profit for the financial year 1,067 1,466
Dividends on non-equity shares (16) (854)
Issue of Ordinary shares net of expenses 4,502 –
Exercise of share options 4 –
Redemption of Preference shares (3,321) –
Exchange movements 2 –
Net increase in shareholders’ funds for the year 2,238 612
Shareholders’ funds at beginning of year 2,528 1,916
Shareholders’ funds at end of year 4,766 2,528
Consolidated Statement of Total Recognised 
Gains and Losses
for the year ended 30 September 2004 28 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
2004 2003
Note £000 £000
Net cash inflow from operating activities 24(a) 942 2,058
Returns on investment and servicing of finance 24(b) (1,064) (1,571)
Taxation paid (837) (761)
Capital expenditure and financial investment 24(c) (103) (190)
Acquisitions and disposals 24(d) (2,142) –
Net cash outflow before financing (3,204) (464)
Movement in borrowings 24(e) 1,664 (10)
Issue of shares for cash (net of expenses) 3,889 –
Redemption of Preference shares (3,321) –
Decrease in cash in the year 25 (972) (474)
Reconciliation of Net Cash Flow 
to Movement in Net Debt
for the year ended 30 September 2004
2004 2003
Note £000 £000
Decrease in cash in the year (972) (474)
Financing 24(e) (1,664) 10
Amortisation of debt issue costs (29) –
Debt acquired with subsidiary (2,411) –
Change in net funds resulting from cash flows (5,076) (464)
Net funds at beginning of year 25 1,977 2,441
Net (debt)/funds at end of year 25 (3,099) 1,977
Consolidated Cash Flow Statement
for the year ended 30 September 2004 ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 29
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the Group’s financial statements.
Basis of preparation
The financial statements have been prepared under the historical cost accounting rules. The financial statements have also been
prepared in accordance with applicable UK accounting standards.
Basis of consolidation
The Group financial statements consolidate the financial statements of Theratase plc and all of its subsidiary undertakings together
with the Group share of its joint venture under the gross equity method.
The financial statements of all subsidiary undertakings are co-terminous with those of Theratase plc.
Subsidiary undertakings
The acquisition method of accounting has been adopted. Under this method the results of the subsidiary undertakings acquired or
disposed of in the year are included in the profit and loss account from the date of acquisition or up to the date of disposal.
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less any provisions for diminution 
in value. Where the consideration for the acquisition of subsidiary undertakings includes shares of the Company to which the merger
relief provisions of Section 131 of the Companies Act 1985 apply, cost represents the nominal value of such shares together with
the fair value of any other consideration given and expenses incurred. On consolidation the difference between the nominal value 
of the consideration shares and their fair value is taken to merger reserve.
In accordance with Section 230(4) of the Companies Act 1985 Theratase plc is exempt from the requirement to present its own
profit and loss account. The retained profit for the year of Theratase plc is set out in note 20 to the financial statements.
Goodwill
Goodwill, representing the excess of the fair value of the consideration over the fair value of the identifiable net assets of the
subsidiary undertakings acquired is capitalised as an intangible asset in accordance with FRS 10 for acquisitions made after 
1 October 1998, and written off on a straight line basis over its economic life, which is 20 years.
Goodwill arising on acquisitions before 1 October 1998 was written off directly against reserves on acquisition.
On the subsequent disposal or termination of a previously acquired subsidiary undertaking, the profit or loss on disposal or
termination is calculated after charging the remaining balance of goodwill after amortisation, or in respect of subsidiary undertakings
acquired before 1 October 1998, the gross amount of the related goodwill previously written off directly against reserves.
Turnover
Turnover represents the amounts (excluding value added tax) net of discounts allowed derived from the provision of goods to 
third party customers during the year to the extent that all obligations relating to that turnover have been fulfilled in accordance 
with FRS 5.
Fixed assets and depreciation
Depreciation is provided to write off the cost or valuation less the estimated residual value of tangible fixed assets by equal
instalments over their estimated useful lives as follows:
Freehold buildings – 2%–4% per annum
Plant and machinery – 10%–33.3% per annum
Motor vehicles – 25% per annum
No depreciation is provided on freehold land.
Notes
forming part of the financial statements 30 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
1 Accounting policies (continued)
Leasing and hire purchase
Where the Group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease 
is treated as a “finance lease”. These assets, together with assets acquired under hire purchase arrangements, are recorded in 
the balance sheet as tangible fixed assets and are depreciated over their estimated useful lives. Future instalments under such
arrangements, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element,
which is charged to the profit and loss account, and the capital element which reduces the outstanding obligation for future
instalments.
When the Group has leasehold property commitments and the Group is no longer using the property, the Directors have made
provision for future commitments at the estimated discounted cost to the Group.
All other leases are accounted for as “operating leases” and the rentals are charged to the profit and loss account on a straight line
basis over the life of the lease.
Debt issue costs
In accordance with FRS 4 the separately identifiable costs arising on the issue of debt instruments are capitalised and disclosed
within creditors as a deduction from the related debt. Issue costs are amortised over the life of the debt instruments they relate 
to and the associated charge to the profit and loss account is included as an interest expense.
Pension costs
The Group operates defined contribution pension schemes. The amount charged against profits represents the contributions payable
to the scheme in respect of the accounting period. The assets of the schemes are held separately from those of the Group.
F&H Baxter (Holdings) Limited and its subsidiaries operated a defined benefit scheme until the sale of the trade and assets of the
division in March 1996. The scheme has been discontinued and is in the process of being wound up. No contributions have been
made since March 1996.
Seravac Biotech (Proprietary) Limited provides post employment medical aid benefits to seven retired former employees. Costs are
assessed using the projected unit credit method.
Research and development expenditure
The cost of fixed assets acquired to provide facilities for research and development activities is capitalised as tangible fixed assets
and depreciated over the expected useful economic life of the asset concerned. Research and development expenditure is written 
off against profits in the year in which it is incurred.
Grants
Revenue based grants are credited to the profit and loss account so as to match them with the expenditure towards which they are
intended to contribute. Capital based grants are credited to the profit and loss account over the estimated useful economic lives of
the assets to which they are related.
Stocks
Stocks are stated at the lower of cost and net realisable value. For work in progress and finished goods manufactured by the Group,
cost includes an appropriate proportion of attributable overheads.
Taxation
The charge for taxation is based on the result for the year and takes into account taxation deferred because of timing differences
between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised, without discounting, in
respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen 
but not reversed by the balance sheet date, except as otherwise required by FRS 19.
Employee share schemes
The cost of awards to employees that take the form of shares or rights to shares is recognised over the period to which the award
relates. Provision is made for employer’s national insurance contributions which would become due on exercise of these options.
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 31
1 Accounting policies (continued)
Foreign currencies
Transactions denominated in foreign currencies undertaken by the Group, including those of overseas subsidiaries where the trade of
the subsidiary is more dependent on the economic environment of the investing company’s currency, are translated into sterling at
the rate of exchange on the day the transaction occurs, or at the contracted rate if the transaction is covered by a forward exchange
contract. Monetary assets and liabilities, which are denominated in a foreign currency, are translated at the rate of exchange ruling at
the balance sheet date, and the gains and losses on translation are included in the profit and loss account.
The assets and liabilities of all other overseas subsidiary undertakings are translated at the closing exchange rates. The profit and
loss accounts of such undertakings are consolidated at the average rate during the year. Where the translation of the net assets 
and related foreign currency borrowings gives rise to a net exchange difference, this is taken directly to reserves.
2 Segmental analysis
2004 2003
Turnover £000 £000
By geographical destination
United Kingdom 1,984 1,536
Other European countries 2,123 1,498
North America 2,529 2,639
Rest of the world 1,639 618
8,275 6,291
By location of operation
United Kingdom 5,435 5,610
South Africa 2,019 –
North America 821 681
8,275 6,291
Operating profit by geographical origin
United Kingdom 1,372 1,849
South Africa 150 –
North America 225 345
1,747 2,194
Geographical analysis of net assets/(liabilities)
United Kingdom 6,065 2,331
South Africa (1,646) –
North America 347 197
4,766 2,528 32 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
3 Operating profit
Continuing operations
Total Head Office Biozyme Acquisitions
2004 £000 £000 £000 £000
Turnover 8,275 – 5,979 2,296
Cost of sales (4,171) – (2,489) (1,682)
Gross profit 4,104 – 3,490 614
Administrative expenses (2,357) (765) (1,145) (447)
Group operating profit 1,747 (765) 2,345 167
Continuing operations
Total Head Office Biozyme
2003 £000 £000 £000
Turnover 6,291 – 6,291
Cost of sales (2,433) – (2,433)
Gross profit 3,858 – 3,858
Administrative expenses (1,664) (426) (1,238)
Group operating profit 2,194 (426) 2,620
In the opinion of the Directors, the Group’s activities constitute one class of business together with a head office function conducted
by Theratase plc.
Amortisation of goodwill of £64,000 (2003: £Nil) has been included within administrative expenses of the acquisition.
4 Net interest payable
2004 2003
£000 £000
On bank loans and overdrafts 146 5
Finance charges payable in respect of finance leases and hire purchase contracts 50 3
Amortisation of issue costs 29 –
Other interest payable 22 45
Notional interest arising on unwinding of discounting on provisions 1 3
248 56
Less: Interest receivable (25) (51)
223 5
5 Remuneration of Directors
Details of Directors’ remuneration, pension contributions and share options are given in the Directors’ Remuneration Report on
page 18.
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 33
6 Staff numbers and costs
The average number of persons employed by the Group (including Executive Directors) during the year, analysed by category,
was as follows:
Number of employees
2004 2003
Operations and production 70 46
Administration 15 7
85 53
The aggregate payroll costs of these persons were as follows:
£000 £000
Wages and salaries 1,811 1,369
Social security costs 154 126
Other pension costs 137 123
2,102 1,618
7 Profit on ordinary activities before taxation
2004 2003
£000 £000
Profit on ordinary activities before taxation is stated after charging/(crediting)
Depreciation and other amounts written off tangible fixed assets:
Owned 143 140
Leased 78 4
Operating lease rentals:
Land and buildings 18 28
Equipment and vehicles 25 18
Research and development expenditure:
Ongoing programmes 143 100
Goodwill amortisation 64 –
Amortisation of debt issue costs (see note 16) 29 –
(Profit)/loss on disposal of fixed assets (2) 1
Impairment of trade investment (see note 12) – 270
Amortisation of grants (7) (7)
Fees to auditors are as follows:
2004 2003
£000 £000
Audit fees (parent: £7,500; 2002: £6,000) 129 77
Non-audit fees
Transactions services 307 –
Tax services 10 12
Other services 5 4
Total non audit fees 322 16
Total fees paid to auditors 451 93
Transaction services include due diligence in respect of the acquisition of Seravac Biotech (Pty) Limited together with the reporting
accountant’s role in connection with the circular to shareholders which was approved by shareholders at the Extraordinary General
Meeting on 2 April 2004. Tax services include corporate tax compliance, tax planning and advice.
Of the total fees paid to auditors, £103,000 was charged to the share premium account, and £103,000 was offset against the debt
finance raised as part of the acquisition of Seravac. The balance was charged to the profit and loss account. 34 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
8 Tax on profit on ordinary activities
2004 2003
£000 £000
UK corporation tax
Current tax on income for the year 416 591
Adjustments in respect of prior periods (34) (52)
382 539
Foreign tax
Current tax on income for the year 83 125
Adjustments in respect of prior periods (6) –
77 125
Total current tax charge 459 664
Deferred tax:
Deferred tax on income for the year (4) 59
455 723
Factors affecting the tax charge for the current period
The current tax charge for the period is higher (2003: higher) than the standard rate of corporation tax in the UK (30%, 2003: 30%). 
A more detailed explanation is set out below:
2004 2003
£000 £000
Current tax reconciliation
Profit on ordinary activities before tax 1,522 2,189
Current tax at UK rate of 30% (2003: 30%) 457 657
Effects of:
Expenses not deductible for tax purposes:
Write down of trade investment – 83
Other non-deductible items 40 13
Differences in effective overseas tax rates 8 16
Adjustment to tax charge in respect of prior periods (40) (52)
Movements on non-taxable provisions – (53)
Grant amortisation not taxable (2) 1
Other timing differences (2) –
Capital allowances in excess of depreciation (2) (1)
Total current tax charge 459 664
Factors affecting future tax charges
The Group will continue to operate in the US where effective tax rates are higher than UK tax rates. The Group operates in the US
through its branch of Biozyme Laboratories International Limited, and through its subsidiary Seravac USA Inc.. In South Africa an
additional tax of 14% is levied on dividends paid to overseas companies. The Group does not anticipate paying dividends from South
Africa in the near future.
9 Earnings per Ordinary share
Earnings per Ordinary share have been based on the profit attributable to equity shareholders (after net appropriations in respect of
Preference shares of £137,000) of £930,000 (2003: £1,182,000) and 30,835,725 Ordinary shares being the weighted average
number of shares in issue for the year to 30 September 2004 (2003: 26,061,558). The adjusted earnings per Ordinary share has
been calculated by adding back the provision for impairment of the investment in AM-Pharma Holdings BV (see note 12) amounting
to £Nil for the period (2003: £270,000) and the weighted average number of shares in issue of 30,835,725 (2003: 26,061,558).
The calculation of the diluted earnings per Ordinary share of 2.95p (2003: 4.46p) was based on the weighted average of
31,494,882 (2003: 26,521,642) Ordinary shares, which takes into account dilutive share options, and profit attributable to 
Ordinary shareholders of £930,000 (2003: £1,182,000).
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 35
10 Intangible assets
Goodwill
£000
Cost
At beginning of year –
Additions (see below) 2,725
At end of year 2,725
Amortisation
At beginning of year –
Charge for the period 64
At end of year 64
Net book value
At end of year 2,661
At beginning of year –
On 7 April 2004 the Company acquired a 100% shareholding in Seravac Biotech (Proprietary) Limited, a company incorporated in
South Africa, along with its subsidiary company, Seravac USA Inc., a company incorporated under the laws of the State of California.
The consideration for the purchase was £1,850,000 of which £1,233,333 was in cash with the remaining £616,667 settled by 
way of the issue to Good Hope Holdings (Proprietary) Limited (a company owned and controlled by JF de Kock) of 1,209,150 new
Ordinary shares. Subsequent to completion, as a result of certain warranty claims, the cash consideration has been reduced by
£714,000. Of this sum £465,000 had been received by the Company at 30 September 2004. The balance is disclosed within
Debtors and was received after the year end. In addition, an exchange gain of £95,000 (net of tax) arose in connection with 
certain foreign currency contracts entered into prior to re-financing Seravac on acquisition. This amount has been disclosed 
as a reduction in the debt acquired.
The assets and liabilities acquired and their fair values at acquisition are shown below:
Book value Adjustments Fair value
£000 £000 £000
Intangible fixed assets 2,819 (2,819) –
Tangible fixed assets 1,150 – 1,150
Stocks 1,841 (262) 1,579
Debtors 805 – 805
Cash 94 – 94
Creditors
Bank overdraft (1,437) – (1,437)
Borrowings (2,506) 95 (2,411)
Other creditors (1,047) – (1,047)
Provisions for liabilities and charges (122) – (122)
1,597 (2,986) (1,389)
Goodwill arising on acquisition 2,725
1,336
Satisfied by the following consideration:
Cash 519
Ordinary shares in the Company 617
Acquisition costs 200
1,336
Adjustment has been made to eliminate goodwill included in the net liabilities of Seravac and to align the accounting policy to that 
of the Group in respect of the provision for obsolescence against stock. The net exchange gain of £95,000 arising immediately prior
to acquisition has been offset against the borrowings and overdraft acquired.
Goodwill is being amortised over a period of 20 years on a straight line basis which is the expected economic life of the asset. 36 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
10 Intangible assets (continued)
Net cash outflows in respect of the acquisition comprised:
£000
Cash consideration and expenses 719
Cash acquired (94)
Bank overdrafts acquired 1,437
2,062
The accounting period end of Seravac preceding the acquisition was the 12 months’ period to 29 February 2004. The results for
Seravac for the one month financial period from 1 March 2004 to 31 March 2004 are as follows:
£000
Turnover 490
Operating profit 89
Loss before taxation (2)
Taxation 18
Loss after taxation (20)
11 Tangible assets
Freehold land Plant and Motor
and buildings machinery vehicles Total
Group £000 £000 £000 £000
Cost
At beginning of year 1,003 1,515 36 2,554
Reclassifications 147 (148) 1 –
Acquisition 477 668 5 1,150
Additions 47 62 – 109
Disposals (4) (56) (15) (75)
Exchange adjustment (1) (3) – (4)
At end of year 1,669 2,038 27 3,734
Depreciation
At beginning of year 478 1,033 23 1,534
Reclassifications 37 (37) – –
Charge for year 62 153 6 221
Disposals (2) (54) (15) (71)
Exchange adjustment – (1) – (1)
At end of year 575 1,094 14 1,683
Net book value
At end of year 1,094 944 13 2,051
At beginning of year 525 482 13 1,020
Included in the total net book value of motor vehicles and plant and machinery is £462,000 (2003: £20,000) in respect of assets
held under finance leases and similar hire purchase contracts.
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 37
12 Investments
Trade Joint 
investment venture Total
Group £000 £000 £000
Cost
At beginning of year 966 – 966
Additions –33
Loans –7777
Share of losses – (2) (2)
Exchange adjustment 50 – 50
At end of year 1,016 78 1,094
Provisions
At beginning of year 966 – 966
Exchange adjustment 50 – 50
At end of year 1,016 – 1,016
Net book value
At end of year –7878
At beginning of year –––
Shares
Trade Joint in Group
investment venture undertakings
Company £000 £000 £000
Cost
At beginning of year 966 – 14,625
Additions –3 780
Loans –77 –
Impairment provision – (2) –
Exchange adjustment 50––
At end of year 1,016 78 15,405
Provisions
At beginning of year 966 – 6,147
Exchange adjustment 50––
At end of year 1,016 – 6,147
Net book value
At end of year –78 9,258
At beginning of year –– 8,478
Trade investment
The trade investment represents an investment in AM-Pharma Holdings BV (previously PharmAAware Sepsis BV) which has been
established to develop therapeutics and diagnostics in the treatment of sepsis and septic shock using development of an existing
product of Biozyme. In accordance with the agreement, and allowing for exchange adjustments, the Company has made total
contributions to date of £1,016,000 which have been based upon the project achieving specified development milestones, 
including an accrual of £41,000 (2003: £57,000). The exchange adjustment shown above relates to the cumulative differences
arising on currency exchange between the original currency amounts payable and the sterling value of the actual amounts paid. The
Company has agreed to make a further convertible loan of €200,000 subject to AM-Pharma having either concluded a development
contract with an industrial partner or having achieved a technical milestone. The loan will bear interest at 20% and is repayable by
31 December 2004 unless conversion is effected. In the event that AM-Pharma concludes a satisfactory new round of funding prior
to 31 December 2004, the loan will be repaid or converted into shares in AM-Pharma at their option.
The Company owns 8.77% (undiluted) of AM-Pharma Holdings BV and on the basis that the project is successful will have the
exclusive supply agreement for the key raw material on commercialisation of the product. 38 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
12 Investments (continued)
The Directors have prepared the accounts on the basis that the contribution made by Theratase constitutes research and
development expenditure. On the basis that future revenue streams are currently uncertain, the financial statements have 
been prepared on a prudent basis and the investment immediately written off to the profit and loss account.
The cost of investment of the supply of raw materials has been treated as the normal commercial value of this supply to the Group.
Joint venture
The joint venture represents an investment in Applet MBJ AB, a Swedish company which has been set up to develop therapeutics 
in the area of organ transplant rejection. The Company owns 47.5% of Applet MBJ AB and has agreed to invest 6,235,000 SEK
(approx. £0.5m) in cash in the form of subordinated shareholder loans. The first loan and the subscription for share capital
amounting to 1,035,000 SEK (£80,000) was paid at completion. The remaining three loans of 800,000 SEK (£62,000); 
945,000 SEK (£73,000); and 3,455,000 SEK (£265,000) are to be made in three tranches over a 14 month period and are
dependent on the achievement of certain milestones in the development process. The shareholder loans are repayable immediately
upon Applet having sufficient liquidity and financing of its operations. In addition the Company, through Biozyme Laboratories Limited,
will supply hyaluronidase to the project on a fully costed basis.
The Group’s aggregate share of joint venture net assets is analysed below:
2004
£000
Fixed assets 57
Cash 17
Other current assets 2
Share of gross assets 76
Creditors (2)
Borrowings due after one year (74)
Share of gross liabilities (76)
Loan advances 78
Share of net assets 78
The Group’s share of turnover of the joint venture amounted to £Nil.
The principal companies in which the Group has an interest are as follows:
Name Nature of business % Ordinary % Ordinary
shares owned shares owned
by parent by subsidiary
Subsidiary undertakings (incorporated in Great Britain unless stated) company undertakings
Biozyme Holdings Limited Holding company 100
Biozyme Laboratories Limited Enzyme production and sales 100
Biozyme Laboratories International Limited Enzyme sales and management 100
Seravac Biotech (Proprietary) Limited (South Africa) Enzyme production and sales 100
Seravac USA Inc. (California) Enzyme sales and management 100
Joint venture
Applet MBJ AB (Sweden) Research and development 47.5
Trade investment
AM-Pharma Holdings BV (Netherlands) Research and development 8.8
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 39
13 Stocks
Group
2004 2003
£000 £000
Raw materials and consumables 802 188
Work in progress 941 127
Finished goods 1,180 607
2,923 922
14 Debtors
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Amounts falling due within one year
Trade debtors 1,501 713 – –
Amounts receivable from Group undertakings – – 17,970 11,836
Dividends receivable from subsidiary undertakings – – 1,500 2,160
Other debtors 372 2 249 –
Prepayments and accrued income 374 254 178 190
Corporation tax recoverable 45 – – –
2,292 969 19,897 14,186
15 Creditors: amounts falling due within one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans (secured) 1,029 – 1,029 –
Mortgage (secured) 53 6 – –
Overdraft 45 – 45 –
Obligations under finance leases and hire purchase contracts 186 16 – –
Trade creditors 712 348 28 47
Amounts owed to Group undertakings – – 18,246 16,282
Corporation and overseas tax 330 376 – –
Other creditors including tax and social security 176 159 1 –
Accruals and deferred income 554 447 407 340
Dividends proposed – 854 – 854
3,085 2,206 19,756 17,523
16 Creditors: amounts falling due after more than one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans (secured) 2,571 – 2,571 –
Unamortised debt costs (267) – (267) –
Mortgage (secured) 373 5 – –
Obligations under finance leases and hire purchase contracts 197 11 – –
Accruals and deferred income 195 117 – –
3,069 133 2,304 – 40 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
16 Creditors: amounts falling due after more than one year (continued)
On 5 March 2004 a funding arrangement was agreed with KBC Bank NV London Branch. This arrangement replaced the previous
overdraft facility with National Westminster Bank Plc. The KBC facilities consist of a seven year sterling term loan of £3,000,000 and
a five year revolving multicurrency facility of a maximum of £2,000,000. The term loan, which was fully drawn down at completion,
is repayable in seven equal annual instalments the first of which is due on the first anniversary of draw down. During the term of the
revolving credit facility the amount borrowed is repayable at the end of each Interest Period, which may be one, three or six months
at the option of the Company, or any other period with the agreement of the Bank. At the end of each Interest Period, the Company
has the option of making a fresh draw down up to the maximum allowed under the facility. There is a fee of 1% per annum of any
amount that has not been drawn down. At 30 September 2004, £600,000 had been drawn down.
Interest on the arrangement is at 2% over LIBOR, plus an additional fee to compensate the Bank for the cost of compliance with the
requirements of the Bank of England, the FSA, and the European Central Bank. An interest rate swap arrangement has been put in
place covering the interest payable (including the additional fee) on the term loan, which fixes the interest rate at 7.055% for the life
of the loan.
Repayment of the loans is mandatory in the event of a change of control in the Company. The Company has the option to make
early repayments.
The loans are secured by way of a debenture over the Group’s assets, guarantees by the Company and its main trading subsidiaries,
and a pledge of the shares of Seravac Biotech (Proprietary) Limited. The Company has given various warranties and covenants and
these are re-affirmed on each draw down of the revolving credit facility. The major covenants are:
• Annual capital expenditure shall not exceed 150% of depreciation;
• Shareholders’ equity shall not be less than £2.65m plus 50% of retained gross earnings of the Group after 30 September 2003;
• Earnings before interest, tax, depreciation and amortisation (EBITDA) must not be less than three times net interest expenditure;
and
•Total net debt must not be greater than three times EBITDA.
Debt costs arising on arranging the debt facilities with KBC Bank amounted to £296,000 and are being amortised over the life of
the loans.
The mortgage is secured separately on Seravac’s freehold property in Cape Town. It is payable in monthly instalments ending on
31 October 2009.
Obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
Accruals and deferred income included within creditors falling due after more than one year include deferred development grants of
£49,000 (2003: £56,000).
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 41
16 Creditors: amounts falling due after more than one year (continued)
Liquidity
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Borrowings due within one year
Bank overdraft 45 – 45 –
Bank loan (secured) 1,029 – 1,029 –
Mortgage (secured) 53 6 – –
1,127 6 1,074 –
Borrowings due between one and two years
Bank loan (secured) 429 – 429 –
Mortgage (secured) 60 5 – –
489 5 429 –
Borrowings due between two and five years
Bank loan (secured) 1,285 – 1,285 –
Mortgage (secured) 211 – – –
1,496 – 1,285 –
Borrowings due after more than five years
Bank loan (secured) 857 – 857 –
Mortgage (secured) 102 – – –
959 – 857 –
Arrangement fees netted off (267) – (267) –
3,804 11 3,378 –
Obligations under finance leases and hire purchase contracts
Within one year 186 16 – –
Between one and two years 169 10 – –
Between two and five years 28 1 – –
383 27 – –
Total borrowings 4,187 38 3,378 –
The following information is provided in accordance with the requirements of Financial Reporting Standard 13 (“FRS 13”) –
“Derivatives and other financial instruments”. The Group has taken advantage of the exemption to exclude short term debtors 
and creditors.
Treasury policy
Management
Treasury activities are managed on a Group basis under policies approved and monitored by the Board. These are designed to 
reduce any financial risks faced by the Group relating to movements in exchange and interest rates. These policies permit the use 
of financial instruments and derivatives to manage these risks. No speculative use of derivatives, currency or other instruments
is permitted. 42 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
16 Creditors: amounts falling due after more than one year (continued)
Exchange rate risk
The Group operations trade largely in their functional currencies, and therefore translation exposures arising on trade debtors 
or creditors are not material. The Group is currently considering the use of financial instruments to manage its exposure to 
exchange rate fluctuations; however, with one exception no such instruments or arrangement were in place during the year ended 
30 September 2004. As part of the funding arrangements following the acquisition of Seravac Biotech (Proprietary) Limited a forward
exchange contract was used to buy R35,000,000. A net exchange gain of £95,000 has subsequently arisen which has been treated
as a reduction in the borrowings acquired.
At the balance sheet date, the Group’s monetary assets and liabilities were expressed in the following currencies:
Group
2004 2003
£000 £000
Assets
Sterling 810 1,996
US dollars 152 19
South African rand 126 –
1,088 2,015
2004 2003
£000 £000
Liabilities
Sterling 3,652 34
US dollars 2 4
South African rand 800 –
4,454 38
Interest rate profile of financial assets and liabilities
The Group’s financial assets comprise cash at bank and on deposit.
The sterling assets receive interest based on rates ruling in the London inter-bank market.
Interest on the KBC Bank facility is noted above.
Interest on the Seravac mortgage is at the South African Prime lending rate less 1%. At 30 September 2004, the Prime lending rate
was 11%.
At 30 September 2004 the Group had floating rate financial liabilities amounting to £1,400,000 (2003: £Nil). The Group has a year
end fixed rate liability of £3,054,000 (2003: £20,000) relating to loans and finance lease obligations.
Fair values
The fair values and book values of the Group’s financial assets and liabilities are not materially different.
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 43
17 Provisions for liabilities and charges
Post
employment
Deferred medical aid
tax (see note 23) Total
Group £000 £000 £000
At beginning of year 59 – 59
Acquisition 1 121 122
Amount paid in year –––
Profit and loss account (4) (4) (8)
At end of year 56 117 173
Amounts provided for deferred taxation are set out below:
2004 2003
£000 £000
Accelerated capital allowances 131 87
Short term timing differences (40) (28)
Other timing differences (35) –
56 59
18 Dividends and other appropriations
2004 2003
£000 £000
Non-equity shares:
Preference dividends proposed or paid 16 854
Previously accrued finance cost in respect of non-equity shares – (570)
Additional finance cost in respect of Preference shares in year 121 –
137 284
The additional finance cost in respect of non-equity shares in 2004 is a notional adjustment since dividend entitlements of each
share to an 8% fixed cumulative dividend per annum was waived as part of the early redemption of the Preference shares.
19 Called up share capital
2004 2003
Group and Company Number £000 Number £000
Authorised
Ordinary shares of 5p each 37,105,000 1,855 37,105,000 1,855
Preference shares of £1 each 3,564,954 3,565 3,564,954 3,565
Allotted, called up and fully paid
Ordinary shares of 5p each 35,948,026 1,797 26,061,558 1,303
Preference shares of £1 each –– 3,558,083 3,558
Total 1,797 4,861 44 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
19 Called up share capital (continued)
Number of Number of
Ordinary Preference
shares shares
At beginning of the year 26,061,558 3,558,083
Issue of Ordinary shares 9,866,468 –
Exercise of share options 20,000 –
Redemption of Preference shares – (3,558,083)
At end of year 35,948,026 –
On 6 April 2004, the Company completed the acquisition of Seravac Biotech (Proprietary) Limited and the redemption of the
Company’s outstanding 8% Cumulative redeemable Preference shares. As part of these transactions, the Company issued
8,657,318 Ordinary shares in a Placing and Open Offer to existing shareholders at 51p per share. In addition, 1,209,150 
Ordinary shares were issued at 51p as part of the consideration for the purchase of Seravac. Expenses in relation to the 
issue of these shares amounting to £530,000 have been charged against the share premium account.
On 13 August 2004, J Chesham exercised options over 10,000 Ordinary shares at a price of 14p per share and CD Anderson
exercised options over 10,000 Ordinary shares at a price of 25.5p per share.
On 6 February 2004, 578,014 of the Company’s outstanding 8% Cumulative Redeemable Preference shares were redeemed at 
par from distributable profits in accordance with the rescheduling of payments agreed at an Extraordinary General Meeting of the
Company held on 21 February 2000. In addition, the Company paid all of the outstanding dividends on these shares to the date 
of redemption. On 6 April 2004 the remaining 2,980,069 Preference shares were redeemed using the proceeds of the Placing 
and Open Offer of new Ordinary shares. Preference shareholders waived their right to further dividends and were paid a total of
£2,743,478, which represented 93.35% of the capital value outstanding at redemption.
£578,000, being the total of Preference shares redeemed from distributable profits, and £237,000, being the discount on the final
redemption of Preference shares, have been transferred to the Capital redemption reserve in accordance with the Companies Act.
Executive Share Scheme
At 30 September 2004 options to subscribe for Ordinary shares under the Executive Share Scheme were as follows:
Number of shares outstanding
At 30 September At 30 September Subscription price 
2003 2004 Date of grant per share Exercise dates
50,000 40,000 7 April 1998 14p 7 April 2001 – 7 April 2005
1,190,000 1,180,000 23 May 2000 25.5p 23 May 2001 – 23 May 2007
355,000 355,000 12 June 2000 27p 12 June 2001 – 12 June 2007
500,000 500,000 28 January 2002 66p 28 January 2003 – 28 January 2009
20 Share premium and reserves
Share Profit Capital
premium Merger and loss redemption
account reserve account reserve
Group £000 £000 £000 £000
Balance at beginning of year 39 – (2,372) –
Premium on issue of Ordinary shares net of expenses 3,453 556 – –
Exercise of share options 3 – – –
Exchange adjustments – – 2 –
Retained profit for year for Ordinary shareholders – – 930 –
Add back accrued non-equity dividend – – 121 –
Transfer to Capital redemption reserve – – (578) 578
Discount on redemption of Preference shares – – – 237
At end of year 3,495 556 (1,897) 815
The cumulative amount of goodwill written off directly against reserves at 30 September 2004 is £5,354,000 (2003: £5,354,000).
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 45
20 Share premium and reserves (continued)
Share Profit Capital
premium and loss redemption
Company account account reserve
£000 £000 £000
Balance at beginning of year 39 642 –
Premium on issue of Ordinary shares net of expenses 4,009 – –
Exercise of share options 3––
Retained profit for year for Ordinary shareholders – 1,002 –
Transfer to Capital redemption reserve – (578) 578
Discount on redemption of Preference shares – – 237
At end of year 4,051 1,066 815
In accordance with s131 of the Companies Act, the Ordinary share capital consideration for Seravac has been shown at nominal
value in the Company’s balance sheet. In the Group accounts the premium on the shares issued as part of the consideration has
been credited to the Merger reserve.
21 Analysis of non-equity shareholders’ funds
2004 2003
Group and Company £000 £000
Preference share capital – 3,558
22 Commitments and contingent liabilities
Annual commitments under non-cancellable operating leases are as follows:
2004 2003 2004 2003
Land and Land and Plant and Plant and
buildings buildings Equipment Equipment
£000 £000 £000 £000
Group
Operating leases which expire:
Within one year – – 9 –
In the second to fifth years inclusive 98 99 3 18
After five years – – 1 –
98 99 13 18
The Company and its subsidiaries have authorised and contracted capital expenditure of £111,000 at 30 September 2004
(2003: £3,000).
In conjunction with subsidiaries, the Company has entered into a cross guarantee in favour of the Group’s bankers in respect of loan
facilities. At 30 September 2004, the Company’s potential liability under this arrangement amounted to £Nil (2003: £64,000).
On 18 October 1999 the Company assigned its leasehold property at Sandy to a third party. In the event of default by the third party
in the future the Company has a contingent liability in respect of rental obligations amounting to £125,000 per year for a further
15 years. 46 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
23 Pension scheme
The Group operates defined contribution pension schemes. No contributions (2003: £Nil) were outstanding at the end of the year.
The charge to the profit and loss account representing the contribution payable by the Group was £137,000 (2003: £114,000).
F&H Baxter (Holdings) Limited and its subsidiaries operated a defined benefit scheme until the sale of the trade and assets of the
division in March 1996. The scheme has been discontinued and is in the process of being wound up. No contributions have been
made since March 1996. The pension cost in the year is £Nil (2003: £Nil). In accordance with the scheme rules and current
legislation a future employer contribution is only required in the circumstance whereby the assets of the scheme are lower than the
valuation of the scheme’s liabilities based on the statutory minimum funding requirement. The most recent formal valuation, at April
1999, disclosed a market value of assets of £5,969,000 and these were sufficient to provide 152% of accrued liabilities based on
the statutory minimum funding requirement in force at that time.
The administration of the winding up of the scheme is almost complete and no further liability to the Group is expected to arise.
Members not currently in receipt of a pension have either transferred their rights to another scheme, or have had the Trustee 
secure them with an insurance company. The remaining assets of the scheme will be distributed to members following settlement 
of administration costs.
In November 2000 the Accounting Standards Board issued FRS 17 Retirement Benefits replacing SSAP 24 Accounting for Pension
Costs. Full adoption of the FRS is proposed in respect of the year ended 30 September 2006. Until that time companies are
required to proceed with the disclosure requirements of FRS 17. It should be clearly understood that the FRS 17 valuation disclosed
below is presented for disclosure purposes only in the format prescribed by the standard. The profit and loss account and balance
sheet of the Company have been prepared in accordance with SSAP 24 which is still the relevant accounting standard relating to
Retirement Benefits at this time.
The value of the Scheme’s liabilities has been determined by a qualified actuary as at the balance sheet date using the following
assumptions:
30 September 30 September 30 September
2004 2003 2002
Rate of increase of pensions in payment 2.75% pa 2.75% pa 2.50% pa
Discount rate 5.40% pa 5.30% pa 5.40% pa
Inflation assumption 2.75% pa 2.75% pa 2.50% pa
Fair value and expected return on assets:
Fair value at Long term Fair value at Long term Fair value at Long term
30 September expected rate 30 September expected rate 30 September expected rate
2004 of return 2003 of return 2002 of return
£000 % £000 % £000 %
Bonds 132 4.5% 149 4.5% 1,505 4.5%
Total market value of assets 132 149 1,505
Present value of scheme liabilities – – (1,000)
Surplus in the scheme 132 149 505
Related deferred tax liability at 30% (40) (45) (151)
Net pension asset 92 104 354
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 47
23 Pension scheme (continued)
Movements in surplus during the year
Year ended
30 September
2004 2003
£000 £000
Surplus in scheme at beginning of year 149 505
Movements in year:
Past service costs (including administration) (30) (318)
Other finance income 6 9
Actuarial gain/(loss) 7 (47)
Surplus in scheme at end of year 132 149
Amounts to be charged to operating profit upon adoption of FRS 17:
Year ended
30 September
2004 2003
£000 £000
Settlements and curtailments (including administration) 30 318
Total operating charge 30 318
Analysis of amounts to be credited to profit and loss interest charge upon adoption of FRS 17:
Year ended
30 September
2004 2003
£000 £000
Expected return on assets 6 23
Interest on scheme liabilities – (14)
6 9
Analysis of amount to be recognised in Statement of Total Recognised Gains and Losses (STRGL) 
upon adoption of FRS 17:
Year ended
30 September
2004 2003
£000 £000
Actual less expected return on assets 7 (15)
Experience loss on liabilities – (32)
7 (47)
History of experience gains and losses
Year ended 30 September
2004 2003 2002
£000 £000 £000
Actual return less expected return on assets 7 (15) (7)
Percentage of scheme assets 5% (10%) (1%)
Experience gains and losses arising on liabilities – (32) (60)
Percentage of present value of scheme liabilities n/a n/a (6%)
Total amount recognised in STRGL 7 (47) (168)
Percentage of present value of scheme liabilities n/a n/a (17%) 48 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
23 Pension scheme (continued)
Post employment medical aid obligation
Seravac Biotech (Proprietary) Limited provides post employment medical aid benefits to seven retired former employees. Medical
costs are assessed using the projected unit credit method. The obligations as at acquisition, and at 30 September 2004, are based
on independent valuations carried out by a qualified actuary on the balance sheet date. The post employment medical aid scheme 
is unfunded.
The principal assumptions used for accounting purposes were:
1 April 
30 September 2004
2004 (at acquisition)
Discount rate 10% 10%
Future medical cost increases 9% 9%
30 September 1 April 
2004 2004
£000 £000
Present value of post employment medical scheme liability 117 121
Related deferred tax asset – –
117 121
Analysis of amount to be charged to profit and loss interest charge upon adoption of FRS 17:
30 September 1 April
2004 2004
£000 £000
Interest on liabilities (12) –
Analysis of amount to be recognised in Statement of Total Recognised Gains and Losses (STRGL) 
upon adoption of FRS 17:
30 September 1 April 
2004 2004
£000 £000
Actuarial gains recognised in period 6 –
History of experience gains and losses
30 September 1 April 
2004 2004
£000 £000
Total amount recognised in STRGL (6) –
Percentage of the present value of the liabilities 4.9% –
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 49
24 Notes to the consolidated cash flow statement
(a) Reconciliation of operating profit to net cash inflow from operating activities
2004 2003
£000 £000
Operating profit 1,747 2,194
Amortisation of development grant (7) (7)
Amortisation of goodwill 64 –
Depreciation charge 221 144
(Profit)/loss on disposal of fixed assets (2) 1
(Increase)/decrease in stocks (422) 54
(Increase)/decrease in debtors (473) 579
Decrease in creditors (182) (730)
Movements on provisions (4) (177)
Net cash inflow from operating activities 942 2,058
(b) Returns on investment and servicing of finance
2004 2003
£000 £000
Interest paid (219) (56)
Interest received 25 51
Preference share dividends paid (870) (1,566)
(1,064) (1,571)
(c) Capital expenditure and financial investment
2004 2003
£000 £000
Purchase of tangible fixed assets (109) (238)
Sale of tangible fixed assets 6 1
Grants received in year – 47
(103) (190)
(d) Acquisitions and disposals
2004 2003
£000 £000
Investment in joint venture (80) –
Purchase of subsidiary (719) –
Net overdrafts acquired with subsidiary (1,343) –
(2,142) –
(e) Financing
2004 2003
£000 £000
Mortgage payments (99) (12)
Net capital element of finance lease and hire purchase payments (103) 2
Repayment of loans (1,438) –
New loans (net of expenses) 3,304 –
1,664 (10) 50 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
25 Analysis of net (debt)/funds
At Cash flow Acquisitions At
1 October (excluding bank 30 September
2003 overdrafts) 2004
£000 £000 £000 £000
Cash and overdrafts 2,015 (972) – 1,043
Debt due within one year (6) 475 (1,551) (1,082)
Debt due after one year (5) (2,271) (401) (2,677)
Finance leases (27) 103 (459) (383)
1,977 (2,665) (2,411) (3,099)
Notes continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 51
Notice is hereby given that the twelfth Annual General Meeting
of the Company will be held at the offices of KBC Peel Hunt
Limited, 4th Floor, 111 Old Broad Street, London, EC2N 1PH
on 3 March 2005 at 10am for the transaction of the following
business:
Ordinary resolutions
1. To receive and adopt the financial statements for the year
ended 30 September 2004 and receive the Directors’ and
Auditors’ Reports thereon.
2. To re-elect as a Director John Chesham who retires by
rotation.
3. To re-elect as a Director Colin Anderson who retires by
rotation.
4. To re-elect as a Director Jo Rooke who retires by rotation.
5. To re-elect as a Director Jacobus de Kock who, having being
appointed since the last Annual General Meeting, offers
himself for re-election.
6. To re-appoint KPMG Audit plc as Auditors and to authorise
the Directors to fix their remuneration.
7. To approve the Directors’ Remuneration Report in respect 
of the year ended 30 September 2004.
8. THAT the Theratase plc Long Term Incentives Plan (the
“LTIP”), in the form produced at the Meeting and initialled
by the Chairman of the Meeting for the purposes of
identification, be and is hereby approved and adopted. 
9. THAT the Theratase plc Savings-Related Share Option Plan
(“the SAYE”), in the form produced at the Meeting and
initialled by the Chairman of the Meeting for the purposes
of identification, be and is hereby approved and adopted
(subject to any amendments required by the Inland Revenue
in order to obtain approval to the Scheme under the Income
Tax (Earnings and Pensions) Act 2003).
10. THAT the Theratase plc International Savings-Related Share
Option Plan (“the International SAYE”) in the form produced
at the Meeting and initialled by the Chairman of the
Meeting for the purposes of identification, be and is hereby
approved and adopted. 
11. THAT the Theratase plc Employee Share Ownership Plan
Trust (the “ESOP”) in the form produced at the Meeting and
initialled by the Chairman of the Meeting for the purposes
of identification, be and is hereby approved and adopted. 
12. THAT the Directors be authorised to establish such further
share plans for the benefit of employees outside the UK
based on the LTIP and the International SAYE subject to
such modifications as may be necessary or desirable to
take account of overseas security laws, exchange control
and tax legislation.
13. THAT the Directors of the Company be and are hereby
authorised to do all acts and things which they may
consider necessary or expedient for the purposes of
implementing and giving effect to the LTIP , the SAYE, 
the International SAYE and the ESOP and to make 
such modifications as the Directors consider necessary 
to extend the plans to employees outside the UK.
14. THAT the Directors be and are hereby generally and
unconditionally authorised to exercise all powers of the
Company to allot relevant securities within the meaning of
Section 80 of the Companies Act 1985 (“the Act”) up to an
aggregate nominal value of £269,610.15 in the period
commencing on the date of this Meeting and expiring at the
end of the Annual General Meeting of the Company to be
held in 2006 or, if earlier, 15 months from the date of the
passing of this resolution, and the Company be and is
hereby authorised to make, prior to the expiry of such
period, any offer or agreement which would or might require
relevant securities to be allotted after the expiry of the said
period and the Directors may allot relevant securities in
pursuance of any such offer or agreement notwithstanding
the expiry of the authority given by this resolution.
Special resolution
15. THAT, subject to the passing of resolution 14 above, the
Directors be and are hereby empowered, pursuant to
Section 95 of the Act, to allot equity securities (as defined
in Section 94 of the Act) for cash, pursuant to the authority
conferred on them by that resolution, as if Section 89(1) of
the Act did not apply to any such allotment, provided that
this power be limited to:
(a) the allotment of equity securities in accordance with an
issue or offering by way of rights in favour of holders of
equity securities and any other persons entitled to
participate in such issue or offering where the equity
securities respectively attributable to the interests of such
holders and persons are proportionate (as nearly as may
be) to the respective numbers of equity securities held by
or deemed to be held by them on the record date of
such allotment subject only to such exclusions or other
arrangements as the Directors may consider necessary or
expedient to deal with fractional entitlements or legal or
practical problems under the laws or requirements of any
recognised regulatory body of any territory; and
Notice of Meeting 52 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
(b) the allotment (otherwise than pursuant to sub-paragraph
(a) above) of equity securities up to an aggregate
nominal value not exceeding £89,870.05 and this power,
unless renewed, shall expire at the end of the Annual
General Meeting of the Company to be held in 2006 or,
if earlier, 15 months from the date of the passing of this
resolution but shall extend to the making, before such
expiry, of an offer or agreement which would or might
require equity securities to be allotted after such expiry
and the Directors may allot equity securities in pursuance
of such offer or agreement as if the authority conferred
hereby had not expired.
By order of the Board
Ms JB Rooke
Company Secretary
18 January 2005
Registered Office
Trafalgar House
11-12 Waterloo Place
London SW1Y 4AU
Notes
(a) Any member entitled to attend and vote at the meeting
convened by the above notice may appoint one or more
proxies to attend and, on a poll, to vote instead of him. 
A proxy need not be a member of the Company. Completion
of a form of proxy does not preclude a member from
attending and voting at the Meeting in person. For CREST
members who wish to appoint a proxy or proxies by utilising
the CREST, the electronic proxy appointment service, please
refer to the form of proxy.
(b) A form of proxy is enclosed for your use if so desired. To be
valid, a duly executed form of proxy together with the power
of attorney or other authority (if any) under which it is signed,
or a notarially certified copy of such power or authority, must
be deposited at the Company’s Registrars, Capita Registrars
(Proxies), PO Box 25, Beckenham, Kent BR3 4BU by no later
than 48 hours before the time for the holding of the Meeting.
(c) Copies of all Directors’ service contracts of more than 
one year’s duration or memoranda of the terms thereof 
will be available for inspection at the Registered Office of
the Company during usual business hours of any weekday
(Saturdays and public holidays excluded) from the date 
of this notice, until the date of the Meeting and at the
place of the Meeting for 15 minutes prior to and during 
the Meeting.
(d) A copy of the annual consolidated accounts, together with 
a copy of the Directors’ Report and the Auditor’s Report on
the accounts which are to be laid before the Meeting are
enclosed.
(e) Pursuant to Regulation 41 of the Uncertified Securities
Regulations 2001, the Company gives notice that only
those shareholders entered on the register of members at
10am on 1 March 2005 will be entitled to attend or vote 
at the aforesaid Meeting in respect of the number of shares
registered in their name at that time. Changes to entries on
the register after this time will be disregarded in determining
the rights of any person to attend or vote at the Meeting.
Further explanatory notes
(a) Resolution 14 asks shareholders to renew the Directors’
general authority to allot unissued shares, should it be
desirable to do so. In accordance with corporate
governance best practice recommendations, if approved,
this authority is limited to a maximum of 5,392,203
shares, equivalent to 15% of the Company’s issued share
capital as at 18 January 2005. This authority will expire at
the 2006 Annual General Meeting or 15 months from the
date of the resolution, whichever is the earlier.
(b) Resolution 15 asks shareholders to renew the Directors’
authority to allot shares for cash to persons other than 
the existing shareholders up to a maximum of 5% of the
Company’s issued share capital. This authority, which will
expire at the 2006 Annual General Meeting or 15 months
from the date of the resolution, whichever is the earlier, 
gives the Directors flexibility to take advantage of business
opportunities as they arise and the 5% limit ensures that
existing shareholders’ interests are protected. 
Notice of Meeting continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 53
To the holders of Ordinary shares and for information only,
the holders of options over Ordinary shares.
Dear Shareholder
NEW EMPLOYEE SHARE PLANS 
Introduction 
Resolutions 8 to 13 request shareholders to approve a Long
Term Incentive Plan, a UK Sharesave Plan, an International
Sharesave Plan and an Employee Share Ownership Plan Trust.
This letter sets out the reasons for the adoption of the plans and
the circular summarises them. 
Long Term Incentive Plan (“LTIP”)
The Remuneration Committee has reviewed the remuneration 
of the Company’s senior executives and following independent
advice, the Committee has decided that a LTIP for senior
executives should be recommended for adoption by
shareholders. This will replace the Company’s 1993 Executive
Share Option Scheme which has now expired and which did not
contain performance targets. 
The design of the LTIP is intended to ensure that the interests 
of senior executives and shareholders are brought more closely
into line over the medium to long term and will incorporate
challenging performance targets. The first awards will be granted
shortly after the AGM in March 2005, the target applying to the
initial awards will be based upon comparing the growth in the
Company’s Total Shareholder Return (“TSR”) with the TSR of the
companies in the Techmark Mediscience Index over a three year 
performance period ending on 30 September 2007 and will
require the Company’s TSR to be in the median or better before
any awards vest. 
Sharesave plans
The Remuneration Committee have decided to introduce a UK
sharesave plan which will be approved by the Inland Revenue
and will be open to all UK employees and an international
sharesave plan to enable all overseas employees to participate
on similar terms. These plans replace a previous sharesave plan
which has now expired. 
The sharesave plans are designed to give all employees an
interest in the performance of the Company. 
Employee Share Ownership Plan Trust
The intention is to source sharesave options and LTIP awards
using a combination of new issue and market purchase shares.
For this reason it is proposed to introduce an Employee Share
Ownership Plan Trust (“ESOP”). The ESOP will operate in
conjunction with LTIP and Sharesave plans, it will be able 
to buy shares in the market or subscribe for shares, subject 
to certain limits, and transfer shares to participants to satisfy
sharesave options and LTIP awards. 
1 Summary of the rules of the Theratase Long Term
Incentive Plan (the “LTIP”)
Eligibility
Any employee (including an Executive Director) of a Group
company (other than a person who is within six months of his
anticipated retirement date) may be granted awards. 
Circular to Shareholders
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action to
take you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor,
accountant or other independent adviser authorised pursuant to the Financial Services and Markets Act 2000.
LETTER FROM THE CHAIRMAN
THERATASE PLC 
(Registered in England No. 2815159)
Directors Registered and Head Office
Philip Percival (Non-Executive Chairman) Trafalgar House
John Chesham (Managing Director) 11-12 Waterloo Place
Colin Anderson (Finance Director) London
Jo Rooke (Administration Director) SW1Y 4AU
Alan Aikman (Non-Executive Director)
Jacobus de Kock (Non-Executive Director) 18 January 2005 54 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
Award
An award consists either of a nil cost option or an allocation
(being a conditional right to acquire shares in the Company).
Awards can only vest after a period of at least three years 
if and to the extent that the performance condition is satisfied.
Awards are not pensionable. 
Performance condition
A performance condition will apply to all awards. The
Remuneration Committee may impose different performance
conditions for each award but will only do so if the condition 
is no less demanding than the condition applying to the initial
awards. 
The first awards will be granted shortly after the Annual General
Meeting in March 2005. The performance condition applying to
the first awards will relate to the Company’s Total Shareholder
Return (“TSR”). The Company’s TSR is compared with the TSR 
of each of the other companies constituting the Techmark
Mediscience Index of the FTSE All Share Index over the three
financial years ending on 30 September 2007. If the company’s
TSR is at the percentile specified in column 1 at the end of that
period, the degree to which awards vest is specified in column 2
with straight line vesting for intermediate positions. 
12
50th percentile or lower 0%
more than 50th percentile 25%
85th percentile or higher 100%
Grant of awards
Awards may be granted during the six weeks following the date
on which the LTIP is adopted by shareholders and thereafter
during the six weeks following the announcement of the
Company’s interim or final results (and at other times in
exceptional circumstances). No award may be granted more
than ten years after the adoption of the LTIP . Awards are
personal to the participant and except on the death of the
participant, may not be transferred.
Receipt of shares 
In normal circumstances participants may not exercise awards
granted as nil cost options and participants will not receive
shares in the case of awards granted as allocations until at least
the third anniversary of the grant date (or the end of the
performance period if this is longer). In the event of death or
cessation of employment through injury, disability or retirement
at normal retirement age or the transfer of the employing
company or business out of the Group, the performance
condition is tested over a shortened period and vesting is
restricted to a time-apportioned number of shares. Special
provisions apply if there is a takeover, reconstruction or winding
up of the Company, the performance condition for awards which
have not vested is tested over a shortened period ending on the
date of the event and vesting is restricted to a time-apportioned
number of shares. 
Adjustments to awards
In the event of any increase or variation in the share capital of
the Company, or if there is a demerger involving the Company 
or if the Company pays a special dividend, the Remuneration
Committee may make such adjustments as it considers
appropriate to the number of shares subject to an award.
Awards may not, however, be adjusted for Ordinary dividends.
Individual limits
The value of shares subject to awards granted in any financial
year may not exceed 200 per cent of a participant’s basic salary
(excluding benefits in kind) expressed as an annual rate. 
Amendments
The Remuneration Committee may at any time amend the LTIP ,
or the terms of any award granted under it. However, the prior
approval of the Company in general meeting will be required for
amendments to the advantage of participants in respect of the
eligibility requirements, the limits on the number of shares that
can be issued, the maximum entitlement for any one participant,
the basis for determining a participant’s entitlement to shares
and the rule concerning adjustments to awards (except for minor
amendments to benefit the administration of the LTIP to take
account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for
participants or the Company or any of the subsidiaries).
Tax efficient awards
The LTIP permits awards to be granted as nil cost options which
qualify as enterprise management incentive options and the
Remuneration Committee may make further amendments to 
the LTIP to enable it to be operated tax-efficiently overseas. 
2 Summary of the rules of the Theratase plc Savings
Related Share Option Plan (the “UK SAYE”)
General
The UK SAYE is constituted by rules and will be administered 
by the Board of Directors and has been submitted to the Inland
Revenue for approval.
Under the UK SAYE, employees are granted an option to acquire
Ordinary shares at a price determined shortly before invitations
to apply for the options are issued and over the number of
shares that can be acquired using the proceeds of a related
savings contract. The option price may be set at a discount (of
up to 20 per cent) to the market value of the Ordinary shares at
that time. Employees are required to save monthly through a
contractual savings arrangement over a period of either three or
five years. A tax free bonus is payable on completion of the
relevant savings contract. At the end of the savings period, the
employee may either exercise the option using the savings
contributions and bonus for a period of six months or have the
savings and bonus repaid. Employees who save for a period of
five years may leave their savings with the savings carrier for a
further two years, at which point an enhanced bonus is payable.
Circular to Shareholders continued ANNUAL REPORT AND ACCOUNTS 2004 THERATASE PLC 55
Eligibility
All eligible employees of the Company and participating
subsidiaries who have been employed for a minimum period (not
exceeding five years) are entitled to participate in the UK SAYE.
All employees eligible to participate must do so on similar terms
although that entitlement may vary by reference to levels of
remuneration, length of service or any similar factors.
Issue of invitations
The Board may issue invitations during a period of six weeks
commencing on the date on which the UK SAYE is approved 
by the Inland Revenue (which will be shortly after it is adopted
by the Company in general meeting). Thereafter, invitations may
be issued in the six week period after the date on which the
Company releases its results for any financial period or on any
day on which the Board resolves that exceptional circumstances
exist which justify the grant of options.
Employee contributions
The maximum amount an employee may save monthly over the
three-year or five-year period is £250 per month (or such higher
amount as may be permitted by the UK tax legislation). The
Board can impose a lower savings limit.
Scaling down
The Board may specify the maximum number of shares made
available each time invitations are issued and if applications
exceed this figure they will be scaled down accordingly.
Leavers
An employee who ceases to be an employee of a member of the
Group in certain circumstances (for example due to death, injury,
disability, redundancy, retirement or because his employer
company or business leaves the Group) may exercise the option
within six months after ceasing to be an employee. 
Options will also become exercisable during limited periods if 
the Company is taken over, wound up or if there is a scheme 
of reconstruction.
Exchange of options
If there is a change of control of the Company following a
general offer to acquire the whole of the issued share capital 
of the Company or all the Ordinary shares in the Company, or
following a compromise or arrangement, option holders may be
given the opportunity to exchange their options for options over
Ordinary shares in an acquiring company or they may exercise
early to the extent permitted by their savings made to that date.
Adjustment of options
Subject to the approval of the Inland Revenue, if there is a
capitalisation, a rights issue, a consolidation, a subdivision, 
a reduction or any other variation in the share capital of the
Company, the Board may make the adjustments it considers
appropriate to the number of Ordinary shares under option and
the option price.
General provisions
Options are personal to option holders and, except on the death
of an option holder, cannot be assigned, transferred or charged.
The rules of the UK SAYE can be amended at any time by the
Board. However, no amendment to the advantage of option
holders can be made without the prior approval of the
shareholders in general meeting if the amendment relates 
to the provisions in the rules relating to:
• who can participate;
• the limits on the number of Ordinary shares that can be
acquired under the SAYE (in total) and/or by each option
holder;
• the basis for determining an option holder’s entitlement to
and the terms on which Ordinary shares can be acquired
under the SAYE; and
• any permitted adjustment in the event of a variation in the
share capital of the Company.
unless the amendment is necessary or desirable in order to
obtain or maintain Inland Revenue approval of the UK SAYE, 
or is minor to benefit the administration of the UK SAYE, to 
take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for
option holders or for any member of the Group.
For as long as the UK SAYE is intended to remain approved 
by the Inland Revenue, no amendment to a key feature of the
Sharesave may be made without the Inland Revenue’s prior
approval.
No option can be granted more than ten years after the date 
on which shareholders authorise the adoption of the UK SAYE
Options are not pensionable.
3 Summary of the rules of the Theratase
International Savings Related Share Option Plan
(the “International SAYE”)
The International SAYE operates on the same basis as the SAYE
but is intended to be used to grant options, in conjunction with 
a savings contract, to eligible employees outside the UK.
The principal terms of the International SAYE are similar to the
SAYE except that:
• the International SAYE is not approved by the Inland Revenue
so it does not qualify for favourable tax treatment;
• eligible employees need not be chargeable to UK income tax;
• no tax free bonus is payable on completion of the relevant
savings contract, but interest is paid on the savings made by
Participants;
• the Participant’s employer may recover any tax or social
security due on the exercise of the option from the Participant
unless the Participant satisfies that liability himself or has
entered into arrangements to satisfy the liability, for example,
by the sale of sufficient shares; 56 THERATASE PLC ANNUAL REPORT AND ACCOUNTS 2004
• the Board has discretion to determine whether, instead of
delivering shares on the exercise of options, the Participant
will be paid a sum equal to the difference between the 
market value of the shares on the date on which the option 
is exercised and the exercise price;
• Options may be adjusted to reflect variations in share capital
and the rules may be amended without the approval of the
Inland Revenue; and
• The Board may establish sub-plans based on the International
SAYE but modified to take account of local tax, exchange
control or securities in different jurisdictions.
4 Summary of the Theratase plc Employee Share
Ownership Plan Trust (“ESOP”)
Trustee
The Trustee is Bailhache Labesse Trustees Limited based in
Jersey, Channel Islands. 
Limit
The ESOP gives the Trustee power to subscribe for shares or buy
shares in the market but the Trustee may not hold more than 10
per cent of the issued Ordinary share capital of the Company
without the prior approval by Ordinary resolution of the members
of the Company in general meeting.
Satisfying awards under the LTIP and sharesave plans
The Trustee may enter into an agreement with the Company 
to agree to transfer shares in the Company on the exercise or
vesting of an award granted under the LTIP or the exercise of
options granted under the sharesave plans.
Dividend waiver
The Trustee is required to waive dividends payable on any share
in the Company unless otherwise directed by the Company.
Beneficiaries
The ESOP is a discretionary trust. The class of potential
beneficial includes employees and former employees within the
Group and their families. The Company is excluded from benefit.
Voting
The Trustee is not permitted to vote shares held in the ESOP .
Amendment 
The Company may amend the ESOP subject to certain
restrictions, in particular the Company may never benefit 
under the ESOP . 
5 Summary of dilution limits applying to the LTIP
and sharesave plans
In any 10 year period the number of new shares in the Company
which may be utilised to satisfy awards granted under the LTIP or
options granted under the sharesave plans may not exceed 10
per cent of the issued Ordinary share capital of the Company.
Shares transferred out of treasury to satisfy options or awards,
shares issued to the Trustee of the ESOP and new shares
utilised for other employee share plans established by the
Company count towards the limit. 
Documents
The Ordinary resolutions adopting the plans appear as
resolutions 8 to 13 in the resolutions convening the 
Annual General Meeting.
The proposed rules of the plans will be available for inspection
during normal business hours at the registered office of the
Company and at the offices of KBC Peel Hunt Limited on any
weekday (Saturdays and public holidays excepted) up to and
including the date of the Annual General Meeting and for at
least 15 minutes prior to and during the meeting. The
Remuneration Committee reserves the right up to the time of
the Annual General Meeting to make such amendments and
additions as it considers necessary or desirable provided that
such amendments and additions do not conflict in any material
respect with the contents of this circular. 
Recommendation
The Board considers that the proposals are in the best interests
of the Company and its shareholders and therefore recommends
you to vote in favour of Resolutions 8 to 13 at the Annual
General Meeting as they intend to do themselves in respect of
their own beneficial holdings of Ordinary shares (representing
approximately 4.17 per cent of the issued Ordinary share capital
of the Company).
Circular to Shareholders continued 01 Highlights
02 Theratase at a Glance
04 Chairman’s Statement
05 Chief Executive’s Review
12 Board of Directors
13 Directors and Advisers
14 Directors’ Report
16 Corporate Governance
18 Directors’ Remuneration Report
22 Statement of Directors’ Responsibilities
23 Independent Auditor’s Report to the Members of Theratase plc
24 Consolidated Profit and Loss Account
25 Consolidated Balance Sheet
26 Company Balance Sheet
27 Consolidated Statement of Total Recognised Gains and Losses
27 Reconciliation of Movement in Consolidated Shareholders’ Funds
28 Consolidated Cash Flow Statement
28 Reconciliation of Net Cash Flow to Movement in Net Debt
29 Notes
51 Notice of Meeting
53 Circular to Shareholders Theratase plc
2004
www.theratase.com
Theratase plc
Trafalgar House
11-12 Waterloo Place
London
SW1 4AU
Tel: +44 (0)20 7863 8819
Fax: +44 (0)20 7863 8820
Successful Integration
Theratase plc Annual Report and Accounts 2004