Annual Report and 
 Accounts 2004 
 
                                              www.deltaplc.com  
Delta plc 1 
Financial highlights 
 
 
  2004  2003 
 Before After Before After 
 exceptional exceptional exceptional exceptional 
 items and items and items and items and 
 goodwill goodwill goodwill goodwill 
 amortisation* amortisation * amortisation* amortisation* 
 
Continuing profit before taxation £30.2m £29.3m £27.5m £22.1m 
Profit before taxation £31.8m £30.5m £29.7m £12.7m 
Basic earnings (loss) per ordinary share 10.6p 9.7p 7.0p (3.7)p 
Cash flow from operating activities  £37.4m  £27.6m 
Dividends per ordinary share  3.0p  2.0p 
Shareholders’ funds  £153.0m  £147.7m 
Equity shareholders’ funds per ordinary share  99p  96p 
* The reconciliation of profit before and after exceptional items and goodwill amortisation is 
shown on the Group profit and loss account with the exception of basic earnings per ordinary 
share which is reconciled in note 10. 
 
 
 
 
 
 
Contents 
 1 Financial highlights  
  2 Chairman’s statement  
  4 Chief Executive’s review 
13 Financial review 
15 Board of directors 
16 Directors’ report  
19 Corporate social responsibility 
21 Corporate governance report 
27 Directors’ remuneration report  
35 Directors’ responsibilities 
36 Independent auditors’ report 
38 Group profit and loss account 
39 Balance sheets 
40 Group cash flow statement 
41 Statement of total recognised gains and 
losses 
41 Note of historical cost profits and losses 
41  Reconciliation of movement in total 
shareholders’ funds 
42 Accounting policies 
45 Notes on the accounts 
70 Shareholders’ information 
72 Notice of annual general meeting 
74 Principal Group and associated 
companies 
75 Group financial information   
2 Delta plc 
Chairman’s statement 
 
 
Overview 
 
I am pleased to report that the Group 
achieved significant improvements in both 
operating and financial performance during 
the year:   
 
• Basic earnings per ordinary share 
increased by 51% from 7.0p to 10.6p 
before exceptional items and goodwill 
amortisation. 
 
• Operating profit from continuing 
businesses increased 18% from £26.7 
million to £31.6 million, and for the first 
time in many years, exceptional items did 
not impact the Group’s profitability.  As a 
result, net profit for the year improved 
from last year’s £5.4 million loss to a 
£14.8 million profit. 
 
• Cash generation also improved 
significantly – with the net cash inflow 
from operating activities increasing from 
£27.6 million to £37.4 million.  The 
Group’s net cash balance increased 
accordingly, from £21.2 million last year 
to £42.6 million at 1 January 2005. 
 
• This overall progress was achieved despite 
significant challenges in certain markets:  
the Galvanizing and Industrial Supplies 
divisions contributed substantially 
improved profits which, when combined 
with reductions in Group head office 
costs, more than offset the adverse impact 
of unfavourable currency exchange rates 
upon our Manganese businesses as well as 
reduced volumes at Delta EMD.  The 
Chief Executive’s review covers operating 
performance in more detail. 
 
With respect to balance sheet items, cash 
outflows relating to disposal provisions were 
effectively controlled and  several open issues 
relating to businesses previously sold were 
successfully resolved.  Favourable investment 
performance from the Delta Pension Plan 
during the year, combined with the 
resumption of Company contributions and 
other proactive measures agreed with the 
plan trustee, have resulted in a significant 
reduction in the reported FRS 17 pension 
deficit.  Given the size and importance of 
the Plan to the Group, the ongoing funding 
position continues to be monitored closely. 
 
As previously reported, the Group continues 
to co-operate with the European 
Commission’s competition directorate 
investigation into allegations of anti-
competitive behaviour among certain 
manufacturers of copper plumbing fittings, 
including the Group’s former plumbing 
fittings business.  The Group retains some 
responsibility in relation to the Commission’s 
investigation, and the investigation is 
expected to result in a fine, although given 
the stage of the procedure, the Commission’s 
considerable discretion in imposing fines and 
the avenues for appeal, estimating the level of 
fine that might finally be imposed is not 
possible. 
 
 
Ongoing priorities 
 
Efforts to sharpen the Group’s strategic focus 
have also progressed with the disposal during 
the year of the Group’s shareholding in 
Cobra Investments (Pty) Ltd.  In addition, the 
review by Delta Electrical Industries Limited 
of the options available to realise value in the 
South African Industrial Supplies businesses 
is well underway. 
 
A thorough review of the global EMD 
market is nearly complete with opportunities 
for the possible development of Delta EMD’s 
business now better defined.  Encouragingly, 
global demand for EMD continues to 
improve and other suppliers’ remaining 
stocks appear largely depleted.   
 
Our galvanized steel products and services 
businesses benefited substantially from 
renewed management focus, and our 
Australian operations are now well 
positioned for further improvement in their 
healthy local market infrastructure, mining 
and construction industries.  We also have 
identified opportunities to improve the
   
Delta plc 3 
 
 
strategic position of our US and Asian 
galvanized steel products and services 
businesses, and those opportunities will be 
progressed during 2005. 
 
During 2005 the emphasis on increasing 
investment returns and cash generation is 
likely to result in further refocusing of the 
business portfolio.  Investment opportunities, 
whether organic or acquisition related, will 
be actively pursued, but only where they 
meet our stringent return criteria.  Equally, 
value enhancing offers for businesses that are 
not central to the Group’s future will be 
actively considered.  
 
Progress has been made during 2004 and it is 
gratifying for our patient shareholders that 
this has recently been reflected in the Group’s 
share price.  The contributions of all the 
Group employees who made this progress 
possible are very much appreciated and we 
look forward to further progress during 
2005. 
 
 
Board changes 
 
The Board was saddened by the sudden 
death of our former Chairman, Mr Edouard 
Stern, just a few weeks prior to the 
finalisation of this annual report.  Edouard’s 
commitment to the Group’s development, 
both as Chairman and also as its largest 
shareholder, will be very much missed. As the 
senior independent director, I have agreed to 
act as Chairman for the time being. 
In that capacity, I would like to thank Tony 
Pedder, who stepped down as a director 
during the year, for his considerable 
contribution to Delta during his six years on 
the Board. 
 
As reported previously, Mark Robson will 
leave the Group during April 2005. Mark 
Luton and Paul Marriott have been 
appointed Director – Finance and Adminis-
tration and Director – Treasury and Corp-
orate Services, respectively. In due course, a 
Finance Director will be appointed and will 
join the Board. 
 
It is the intention to strengthen the Board in 
the near term through the appointment of 
additional non-executive directors. 
 
 
Dividend 
 
The Board is recommending a final dividend 
of 2.4p per share (2003 0.5p), resulting in a 
full year 2004 dividend of 3.0p (2003 2.0p).  
At this level, the 2004 dividend is covered 3.5 
times by earnings per share before 
exceptional items and goodwill amortisation.  
 
With the progress now being made in 
increasing cash generation and investment 
returns, the Board judges that this level of 
cover should support a progressive dividend 
policy in future years whilst also enabling 
appropriate levels of capital investment in 
organic growth opportunities. 
 
 
 
 
Steven Marshall, Chairman 
   
4 Delta plc 
Chief Executive’s review 
 
 
2004 Results 
 
The Group’s profit for the year totalled 
£14.8 million (2003 £(5.4) million), resulting 
in earnings per ordinary share of 9.7 pence 
(2003 (3.7) pence).  Earnings per share 
before exceptional items and goodwill 
amortisation improved by 51% to 10.6 
pence (2003 7.0 pence). 
 
Whilst the Group’s continuing turnover 
improved by 4.4%, our operating profit 
from continuing businesses improved by 
18%, from £26.7 million to £31.6 million, 
with the improvement driven by increased 
earnings from our Industrial Supplies and 
Galvanizing divisions, together with reduced 
Group costs, which more than offset the 
adverse impact of unfavourable exchange 
rate movements on Delta EMD and 
Manganese Metal Company, as well as 
reduced volumes at Delta EMD.  Reviews of 
the performance of each of the Group’s 
divisions are provided below. 
 
Unlike recent years the Group incurred no 
net exceptional items during the year.  
Consequently the Group’s profit on ordinary 
activities before interest totalled £33.4 
million, compared to £17.4 million during 
the prior year. 
 
The Group’s net interest expense excluding 
foreign exchange differences on financing 
balances reduced from the prior year with the 
interest earned on the Group’s cash balances 
largely off-setting the interest expense 
incurred at the Group’s joint ventures.  
Taxation, as a percentage of the Group’s 
profit on ordinary activities before taxation, 
also was reduced substantially during the 
year, partly as a result of the reduction of 
losses in certain tax jurisdictions.  In 
particular, the Group’s UK trading loss was 
reduced through Group cost reductions, and 
last year’s US trading loss was turned around 
to profit through improvement at our US 
galvanizing operations. 
 
Efforts to improve the Group’s cash flow 
were successful, with the Group’s 2004 net 
cash inflow before purchase/sale of 
businesses and equity dividends totalling 
£19.8 million, a marked improvement over 
last year’s net cash outflow on the same basis 
of £2.5 million.  The Group’s year end 
reported net cash balance increased from 
£21.2 million to £42.6 million and remains 
available for the payment of dividends, re-
investment in the Group’s businesses and 
resolution of the matters remaining that 
relate to former businesses.  Provisions 
totalling £17.5 million remain for specifically 
identified legacy matters.  The Group also 
remains party to the EU Commission’s 
investigation of the copper fittings industry as 
discussed more fully below. 
 
 
Exchange rate movements 
 
The Group’s results were, and continue to 
be, affected by currency exchange rates and 
movements.  Most importantly, the margins 
realised by Delta EMD and Manganese 
Metal Company are determined in part by 
currency exchange rates, with the majority of 
both businesses’ sales being US dollar 
denominated and their production costs 
other than ore purchases being local currency 
denominated.  The functional currency of 
both businesses was US dollars.  
Consequently, the substantially stronger 
South African rand and Australian dollar 
against the US dollar significantly increased 
production costs and reduced margins at 
both businesses as reported below. 
 
Exchange rate movements also affected the 
Group’s results through the revaluation of 
Delta EMD’s local currency account 
balances.  The £0.3 million of losses realised 
by Delta EMD on the revaluation of non-
financing account balances were included in 
Delta EMD’s reported profit, whilst the £2.7 
million of losses realised on the revaluation 
of Delta EMD’s local currency financing 
account balances were included in the 
Group’s reported interest expense. 
 
Finally, the translation of the Group’s non-
UK earnings was affected by exchange rates. 
The weaker US dollar against Pound Sterling 
resulted in lower translated results from our    
Delta plc 5 
 
 
 
Manganese and US galvanizing businesses.  
Conversely, the stronger Australian dollar 
and South African rand against Pound 
Sterling benefited the translation of results 
from our Industrial Supplies and Australian 
galvanizing businesses.  Overall, the Group’s 
profit before tax was enhanced by £0.5 
million compared to 2003 as a consequence 
of translation exchange rates. 
 
 
Review of 2004 trading and prospects 
 
 
Delta EMD 
 
Delta EMD produces electrolytic Manganese 
dioxide at plants located in South Africa and 
Australia and sells EMD globally for use in 
the production of dry cell  batteries.  Delta 
EMD is owned by Delta Electrical Industries 
Limited (DEI), a South African company 
listed on the Johannesburg Stock Exchange. 
Delta plc holds 56.4% of DEI’s outstanding 
shares. 
 
Delta EMD made important progress during 
the year developing a broader customer base 
and establishing additional supply 
arrangements in the developing Asian 
markets.  During 2005 Delta EMD expects 
to supply all the major battery producers and 
to sell substantial volumes for Asian based 
battery production.  Delta EMD will 
continue to produce at capacity during 2005 
and expects to sell additional volumes from 
remaining stocks. 
 
This important progress was made 
notwithstanding difficult trading during the 
year.  The tonnes sold by Delta EMD during 
the year were substantially less than during 
2003 as a consequence of reduced share in 
the US market, which followed the 
uncertainty created by the anti-dumping 
investigation commenced, and later 
withdrawn, by Kerr-McGee, a US-based 
EMD producer. 
 
Whilst further operational efficiencies and 
cost savings were realised during the year, US 
dollar denominated margins weakened 
significantly due to strengthening of the 
Australian dollar and South African rand 
against the US dollar and resulting increases 
in US dollar accounted production costs.  
Consequently, Delta EMD’s underlying 2004 
US dollar earnings fell well below those 
achieved in 2003, and the weakening US 
dollar also adversely impacted the translation 
of those US dollar earnings to Pound Sterling 
when compared to 2003 by £0.6 million.  
The average exchange rates during the year 
for the South African rand and Australian 
dollar against the US dollar were 6.45 and 
1.36, respectively, compared to 7.53 and 
1.54 during 2003.  The importance of the 
foregoing exchange rates is unique to Delta 
EMD, as other EMD producers’ local 
manufacturing costs are borne in US dollars, 
Euros, Yen or the RMB, and their results 
would be affected only if and to the extent 
those currencies moved against the US dollar.   
 
Delta EMD’s 2004 profit was £5.2 million 
on turnover of £34.2 million compared to 
£15.8 million on sales of £45.9 million in 
2003.  2004 profit was enhanced by £3.9 
million of profit on foreign exchange 
contracts (2003 £5.5 million) but not by any 
favourable out-of-period provision 
movements (2003 £2.4 million).  The 
expenditures made during 2004 with respect 
to the US anti-dumping investigation were 
only a small portion of the £1.0 million 
expended during 2003.  The loss realised on 
the revaluation of non-financing local 
currency account balances totalled £0.3 
million (2003 £1.5 million), and the loss 
realised on the revaluation of local currency 
financing account balances, which was 
reported as interest expense, totalled £2.7 
million (2003 £3.2 million).  The reduction 
in Delta EMD’s 2004 underlying profit 
compared to 2003 should be attributed to 
volume shortfall and less favourable 
exchange rates, together, to a lesser extent, 
with the increasing cost of Manganese ore.  
 
Consistent with Delta EMD’s long-standing 
practice and our recognition that global 
EMD demand continues to grow, production 
continued at capacity during the year at both 
plants to ensure the lowest possible cost of   
6 Delta plc 
 
 
 
production.  Consequently, stocks increased 
during the year requiring additional cash 
investment. 
 
Underlying demand for batteries and EMD 
continues to grow globally, particularly the 
alkaline grade EMD produced by Delta 
EMD, with recent additional demand 
prompted by several hurricanes in the US as 
well as additional military and security 
requirements.  Growth in Asian battery 
consumption exceeds that in the US and 
Europe, and consumer preference in Asia 
continues to shift from lower performance 
Zinc Carbon batteries to higher performance 
alkaline batteries.  Delta EMD’s total 
capacity for the production of alkaline grade 
EMD now exceeds 60,000 tonnes and can be 
increased only marginally through further 
operational efficiencies.  Existing stocks 
should allow Delta EMD to meet growing 
demand in the near term. 
 
Additional global demand for EMD is likely 
to be met in part from the additional 
production capacity planned by Chinese 
competitors.  Elsewhere, current pricing and 
exchange rates are unlikely to encourage 
investment in additional capacity.  EMD 
pricing continues to reflect the balance 
between global supply and demand, as well 
as a fairly concentrated customer base, and 
unlike many other globally supplied 
speciality materials, pricing has not increased 
in line with the increased cost of raw 
materials (Manganese ore) or the weakening 
US dollar.  Pricing for supply in the US 
continues to migrate toward global prices 
with additional supply of lower priced EMD 
from China being sold in the United States.  
The agreed increase in the Japanese 
benchmark price for Manganese ore also is 
likely to add further pressure on higher cost 
EMD producers as well as on global EMD 
pricing. 
 
Delta EMD remains a low cost producer of 
alkaline grade EMD, and Delta EMD’s long-
standing reputation for quality and service, 
together with operational efficiencies and 
proximity to high grade Manganese ore, 
should enable Delta EMD to maintain a 
favourable position in this growing market.  
Delta EMD’s 2005 margins and profit will 
depend upon currency exchange rates and 
movements during the year.  Delta EMD has 
discontinued covering forward sales with 
foreign exchange contracts; consequently, 
with the expiry during 2004 of the foreign 
exchange contracts previously purchased by 
Delta EMD, Delta EMD will not benefit 
from foreign exchange contract profits 
during 2005.  
 
 
Manganese Metal Company 
 
MMC produces electrolytic Manganese 
metal in South Africa for use globally in the 
production of specialty steels and aluminium 
as well as the manufacture of electronic 
components.  MMC is a member of the BHP 
Billiton Group, with Delta plc holding 49% 
of MMC’s outstanding shares. 
 
The global market for electrolytic Manganese 
metal was robust during 2004 with 
exceptional demand from global steel and 
aluminium producers.  Limited supply from 
China, due to the allocation of electric power 
and alternative uses of productive capacity, 
affected the market’s supply and demand 
dynamics and selling prices improved 
substantially.  MMC continues to be the sole 
supplier of Selenium free Manganese metal 
and is recognised for superior quality and 
reliable supply, affording MMC a premium 
to the quoted market price for Manganese 
metal.  MMC’s average selling price during 
2004 did not reflect fully the improved 
market pricing because much of MMC’s 
production is supplied through annual 
contracts.  MMC produced at full capacity 
during the year and continues to do so to 
meet demand. 
 
Improved market conditions allowed MMC 
to reduce its loss from last year 
notwithstanding US dollar denominated 
margins weakening significantly due to 
strengthening of the South African rand and 
resulting increases in US dollar accounted 
production costs.     
Delta plc 7 
 
 
 
The Group’s 49% share of MMC’s 2004 
loss was £1.4 million on sales of £22.2 
million, compared to a loss of £2.1 million 
on sales of £19.1 million in the previous year. 
The weakening US dollar favourably 
impacted the translation of MMC’s US dollar 
loss to Pound Sterling, with the loss reduced, 
in comparison to 2003, by £0.2 million. 
 
Global demand for Manganese metal 
continues to be strong and MMC remains a 
reliable supplier of quality product essential 
to the manufacture of specialty steels, 
particularly Series 200 stainless steel, and 
Aluminium.  MMC’s proximity to high 
grade Manganese ore and reliable electrical 
power continues to afford MMC a 
competitive advantage, and its Selenium free 
material remains preferred by many 
environmentally responsible customers. 
Whilst MMC’s production capacity remains 
efficient and relatively low cost, all other 
global Manganese metal production is based 
in China, with lower costs.  Unlike Chinese 
competitors, whose local manufacturing 
costs are borne in the RMB, MMC’s margin 
reduced during the year with the weakening 
of the US dollar.  Whilst MMC anticipates 
favourable volumes and pricing during 2005, 
profitability will remain dependent upon the 
strengthening of the US dollar against the 
rand.  
 
 
Galvanizing 
 
Delta’s galvanizing businesses provide hot-
dip galvanizing services as well as fabricated 
galvanized steel products for local 
infrastructure, construction and mining 
projects in Australia, Asia and the United 
States.  Our galvanizing operations include 
nine hot-dip galvanizing plants in 
Australasia, five in Asia and five in the 
United States.  Webforge’s steel gratings 
business remains the Group’s largest 
galvanized steel products business with five 
plants in Australasia and six plants in Asia.  
Ingal EPS and Ingal Civil Products fabricate 
galvanized steel products for Australian 
markets, including safety barriers, 
underground steel structures and lighting, 
power and telecommunication poles and 
towers. 
 
Our galvanizing businesses performed 
markedly better during the year with profit 
of £12.5 million (2003 £8.3 million) on 
turnover of £131.1 million (2003 £124.2 
million).  This important improvement was 
achieved through focus on our existing 
businesses, reduced overhead costs and the 
turnaround or discontinuation of certain loss 
making businesses.  Our 2004 profit was not 
buoyed by any out-of-period provision 
movements (2003 £0.9 million) and 
benefited from improved volumes in most 
markets.  More favourable Australian dollar 
exchange rates flattered our reported 2004 
Pound Sterling profit for the Galvanizing 
division when compared to 2003 by £0.2 
million. 
 
Our Australian hot-dip galvanizing and 
galvanized steel products businesses provide 
attractive financial returns.  Their success is 
driven by the strong market positions 
enjoyed by our nine hot-dip galvanizing 
plants in each of their local job shop 
galvanizing markets, the strong market 
positions enjoyed by our steel fabrication 
businesses, and a synergistic relationship 
between our steel fabrication businesses and 
hot-dip galvanizing plants, with our steel 
fabrication businesses providing our 
galvanizing plants necessary base load. 
 
The profitability of our Australian 
galvanizing and steel products businesses 
continues to be driven by general economic 
conditions and infrastructure, construction 
and mining spend, which were strong during 
the year in Australia.  The increased cost and 
limited availability of steel disrupted demand 
in some sectors during the year and required 
careful management.  Profitability also was 
determined in part by the price of Zinc, 
which increased substantially during the year, 
with those price increases having to be 
absorbed as additional cost in our more price 
competitive markets.  These challenges were 
met successfully by our Australian 
management team, who also substantially 
improved the performance of    
8 Delta plc 
 
 
 
certain historically under-performing 
operations. 
 
During the 1990s the Group attempted to 
transplant our successful Australian business 
model to both the United States and Asia, 
with investments in the acquisition of 
existing galvanizing businesses as well as 
Greenfield developments.  Those investments 
have not achieved the same scale, market 
position or synergies that we enjoy in 
Australia, and do not provide the same 
financial returns as our Australian businesses.  
However, in 2004 turnover, as measured in 
local currencies, improved in both Asia and 
the United States, which, together with 
reduced overhead costs, afforded 
substantially improved profit in both 
geographies.  Our US operations reported a 
profit for the first time in many years. 
 
Webforge, which was acquired in February 
2003, achieved further growth in both 
turnover and profit during the year, with 
particularly robust demand in China.  The 
performance of Webforge continues to meet 
our original expectations and important 
synergies have been achieved with our 
galvanizing operations in overlapping 
geographies.   
 
General economic conditions and 
infrastructure, construction and mining 
spend continue to be strong in Australia.  
Certain Asian economies continue to be 
healthy and demand is improving slowly in 
the United States.  Unfortunately market 
conditions for hot-dip galvanizing services 
continue to be extremely competitive in the 
US and Asia, partly due to over-capacity.  
Whilst further incremental improvement 
should be achieved in both operational 
efficiencies and overhead cost savings in all 
three geographies, profitability will remain 
partly dependent upon the cost of Zinc as 
well as the price and availability of steel.  
 
Industrial Supplies 
 
Our Industrial Supplies businesses provide 
goods and services to local mining, 
transportation and construction industries in 
South Africa and Australia, including the 
repair of large electrical equipment, the 
supply of ground engaging tools, 
replacement parts for heavy equipment, 
grinding media, and copper wire and 
conductors.  The Group’s South African 
based Industrial Supplies businesses are 
owned by Delta Electrical Industries Limited 
(DEI).  Delta plc holds 56.4% of DEI’s 
outstanding shares.  
 
Our Industrial Supplies businesses enjoyed 
particularly successful trading in 2004, with 
robust demand in the South African electrical 
repair market and good market conditions in 
Australia.  Profit increased from £15.6 
million to £20.7 million on turnover that 
increased from £132.1 million to £150.0 
million.  Our 2004 Pound Sterling profit for 
the Industrial Supplies division was flattered 
by £0.6 million in comparison to 2003 by 
translation with more favourable South 
African rand and Australian dollar exchange 
rates. 
 
Our Industrial Supplies division’s very good 
result masks the many challenges successfully 
managed by our South African and 
Australian management during the year.  
Exchange rate volatility in South Africa 
affected local market conditions, and the 
price and availability of both Copper and 
steel affected several of our South African 
businesses.  Robust demand from the South 
African rail transportation and industrial 
power distribution markets was successfully 
managed notwithstanding scarcity of Copper 
supply.  Our Australian management 
successfully managed substantial steel price 
increases and limited availability ensuring 
continued production and favourable 
margins.  Overhead cost savings also 
contributed to the improved profit in 
Australia. 
 
Our Industrial Supplies businesses are well 
managed, enjoy good market positions in 
their local markets and on the whole 
continue to provide attractive returns and 
cash flows. The favourable market 
conditions enjoyed during the year continue 
for the moment, with demand for grinding    
Delta plc 9 
 
 
 
media and for electrical repair particularly 
strong.  The volatility of Copper and steel 
pricing as well as exchange rates will 
continue to affect local market conditions 
and margins, and our future Pound Sterling 
profit will be affected by translation of local 
currency profit.  
 
 
Group cash flow 
 
Substantially improved cash management 
afforded the Group £37.4 million of net cash 
flow from operating activities (2003 £27.6 
million), notwithstanding cash requirements 
during the year for stock build at Delta EMD 
and the higher value of Zinc, Copper and 
steel stocks.  
 
Capital expenditures totalled 100% of 
depreciation including exceptional 
investments by Delta EMD for additional 
capacity and by Electrical Repair Engineering 
for the purchase of a formerly leased facility.    
 
Following the discontinuation during 2003 
of the Group’s former practice of net asset 
hedging, no cash was required during the 
year to settle foreign exchange contracts 
relating to net asset hedging (2003 £12.2 
million).  We also substantially reduced 
certain loan balances within the Group 
allowing a reduction of the foreign exchange 
contracts required to hedge those balances.  
Consequently, no cash was required to settle 
those contracts during the year (2003 £4.0 
million). 
 
The cash required for the payment of 
taxation was reduced from last year’s total of 
£10.1 million to £9.6 million, with a more 
favourable mix of profit and loss, and net 
interest payments were reduced from last 
year’s expense of £2.8 million to income of 
£1.0 million with our improved cash 
balances. 
 
The cash required for payments against 
provisions totalled £2.1 million (2003 £2.1 
million) and related principally to retained 
obligations relating to former businesses. 
 
At year end, the Group’s reported net cash 
balance was £38.4 million (excluding £4.2 
million of cash within Delta Insurance 
Limited).  The Group’s year end net cash 
balance was buoyed by proceeds from the 
sale of the Group’s 37.6% shareholding in 
Cobra Investments (Pty) Ltd (£4.2 million), 
the sale of properties formerly used by 
disposed businesses (£2.7 million), and the 
sale and leaseback of the Australian vehicle 
fleet (£1.3 million).   
 
As is generally accepted accounting practice, 
the Group reports the cash flow and cash 
balances of all entities under its control, 
including those that are not 100% owned.  
The cash flows and cash balances 
immediately available to the Group include 
only the dividends received from entities that 
are not wholly owned, as opposed to those 
entities’ entire cash flows and cash balances.  
Consequently, the cash available to the 
Group is less than the Group’s reported 
consolidated cash balance, and includes £2.2 
million (2003 £2.5 million) of cash held by 
entities not wholly owned by the Group and 
therefore not immediately available to the 
Group.  The portion of the Group’s reported 
net cash balance that was unrestricted and 
otherwise immediately available to the 
Group in wholly-owned subsidiaries 
increased during the year from £14.3 million 
to £36.2 million.   
 
Cash management remains a priority and 
further focus will be made on working 
capital management with the likelihood that 
Delta EMD’s stock’s will reduce during the 
year releasing some working capital.  The 
value of the Group’s Zinc, Copper and steel 
stocks will continue to vary with the price of 
those commodities, and stock levels will 
continue to vary in line with management of 
supply.   
 
 
Delta Pension Plan 
 
Favourable investment performance during 
the year further improved the FRS 17 
position of the Delta Pension Plan, as    
10 Delta plc 
 
 
 
suggested by the reported year end FRS 17 
net deficit, which reduced from £27.2 million 
as at 3 January 2004 to £10.0 million as at 1 
January 2005, as disclosed in the notes to our 
accounts.  
 
The plan trustee has implemented an 
investment strategy that reflects the mature 
liability profile of the plan with a 70% target 
allocation to fixed income investments and 
the remainder mostly invested in UK and 
overseas equities, with the fixed income 
investments including both government and 
corporate bonds.  This investment strategy 
reflects the trustee’s confidence in the 
Group’s on-going financial ability to make 
plan contributions in the future that could be 
necessary to address past service obligations, 
if for example, experience is adverse.  Should 
the trustee lose that confidence and 
implement a more conservative investment 
strategy, contributions may need to be 
increased from their present level.  
 
The Group reported a £0.3 million pension 
expense under SSAP 24 during 2004 and 
plans to continue to contribute 
approximately that amount to the plan in 
2005 for future service obligations. 
 
The plan’s assets and liabilities remain 
substantial, particularly in proportion to the 
Group.  The regulatory environment, as well 
as applicable laws and regulations, continue 
to change in light of concern generally over 
the funding status of pension plans, and 
longevity generally continues to increase.  
The plan’s liabilities, as well as future 
contribution requirements, could be affected 
by such changes, and also could be affected 
by longevity increases if borne out in practice 
by the plan’s experience.  Consequently, the 
Group and the plan trustee continue to seek 
all reasonable means to improve further all 
aspects of plan management and 
administration. 
 
Legacy matters 
 
Whilst several matters relating to former 
business were successfully concluded during 
the year, several legacy matters remain.  
During the year, payments against remaining 
provisions totalled £2.1 million, and £1.2 
million of provisions were released for 
matters finally concluded.  At year end, the 
provisions remaining for matters relating to 
former businesses totalled £17.5 million.  
Those provisions relate to the Group’s 
former Electrical Division and other disposed 
businesses. 
 
Included in that total is a provision for the 
legal expenses to be incurred in connection 
with the European Commission’s 
competition directorate investigation into 
allegations of anti-competitive behaviour 
among certain manufacturers of copper 
plumbing fittings, including the Group’s 
former plumbing fittings business.  
Notwithstanding the Group’s subsequent 
disposal of that business, the Group retains 
some responsibility in relation to the 
outcome of the Commission’s investigation 
and is co-operating fully with the 
Commission.  Whilst the investigation is not 
subject to a prescribed timetable, the 
Commission could issue a Statement of 
Objections during 2005, and a final decision 
(including any fine) would follow thereafter.  
Legal counsel have advised that applicable 
regulations limit the fines that could be 
imposed to 10% of the Group’s total 
turnover in the business year preceding the 
imposition of the fine. The investigation is 
expected to result in a fine, however the 
Commission is afforded considerable 
discretion in the determination of such fines 
as well as in the reduction of fines imposed 
on parties who seek leniency and co-operate 
with the Commission.  Given the stage of this 
particular investigation and the 
Commission’s considerable discretion in 
determining fines, it is not possible to 
estimate the level of fine that might be 
imposed upon the Group.  Any decision by 
the Commission could be appealed to the 
European Courts, although an appeal would 
not typically suspend payment of a fine.  
Consequently no provision has been raised in 
respect of this matter except for legal 
expenses expected to be incurred in 
connection with the investigation.    
Delta plc 11 
 
 
 
The Group’s legacy matters continue to be  
resolved and many have specific time 
limitations.  We expect the majority of these 
matters to be resolved during the next three 
years. 
 
Two further matters relate to the Group’s 
former businesses: surplus properties and tax 
losses.  As noted above, during the year the 
Group successfully disposed two sites 
formerly used by disposed businesses and 
received sales proceeds totalling £2.7 million.  
Three such sites remain for disposal, and two 
of those are likely to be disposed during 
2005.  The Group also remains party to 
leases for three sites formerly used by 
disposed businesses and continues to 
negotiate termination of those leases.  
Provisions remain for the cost of those leases, 
and the sales proceeds expected during 2005 
from the sale of formerly used properties will 
be of a scale similar to those proceeds 
received during 2004.  The remainder of the 
properties owned by the Group are 
manufacturing, distribution or sales facilities 
or offices employed by the Group’s 
businesses.  The reported value before 
depreciation of the Group’s properties 
totalled £52.6 million.  Included in that total 
are £13.3 million for the estimated value of 
properties revalued through professional 
valuations prior to 2000, and £39.3 million 
of original cost for properties not revalued, 
including properties acquired or developed 
since 1999 having a reported cost of £21.9 
million.  The Group discontinued revaluing 
properties in 1999.   
 
Set out in the Financial review and notes on 
the accounts is a description of the tax losses 
accumulated by the Group in the past. 
 
Strategic direction 
 
Our focus during 2004 was on the first of 
three planned stages for the Group’s 
improved performance and development.  
Our priorities were to improve the Group’s 
financial performance by improving the 
performance of under-performing businesses, 
reducing Group-wide overhead costs, and 
improving the Group’s cash flow through 
working capital management and careful 
investment.  Improving the transparency of 
the Group’s results and providing a more 
detailed explanation of the Group’s 
businesses, as well as the Group’s legacy 
matters, also were an essential objective of  
our first stage.  These objectives were largely 
met during the year.  The challenge going 
forward is to make further improvements as 
a continuation of this first stage. 
 
The second stage of the Group’s strategy 
involves narrowing the Group’s strategic 
focus by reducing our geographic spread as 
well as the diversity of our business portfolio, 
thereby simplifying the drivers that determine 
the Group’s success and facilitating more 
focused management.  The Group remains 
an opportunistic seller of businesses that lie 
on the periphery of the Group’s strategy, and 
will dispose of those businesses when best 
possible to realise shareholder value, as 
demonstrated by the sale of our 37.6% 
interest in Cobra Investments (Pty) Limited 
during the year.  The Group also has notified 
the market of the cautionary announcement 
made by Delta Electrical Industries Limited 
to the effect that DEI continues to consider 
the options that are available in South Africa 
to realise value in its Industrial Supplies 
businesses.  Whilst these businesses continue 
to perform well in attractive markets, 
opportunities to realise more immediate 
shareholder value are under review. 
 
The third stage of the Group’s strategy will 
be re-investment.  As reported last year, the 
Group has demonstrated success in three 
areas: the management and development of 
Delta EMD’s global business, the operation 
of galvanizing businesses when well 
positioned by sound investment decisions, 
and the operation of small industrial 
businesses having good market positions in 
relatively small, stable and local markets. 
Delta EMD and the Group’s Galvanizing  
Division remain immediate opportunities for 
investment. 
 
As noted above, underlying demand for 
primary batteries and EMD continues to 
grow globally, particularly for the alkaline    
12 Delta plc 
 
 
 
grade EMD produced by Delta EMD.  Delta 
EMD’s competitive cost structure and proven 
quality and service afford a substantial 
foundation for additional capacity, if justified 
by EMD selling prices.  How best to realise 
further profitable growth in the global EMD 
market is under review.   
 
Our Galvanizing Division also affords  
opportunities for possible re-investment.  
Our Australian hot-dip galvanizing and 
galvanized steel products businesses are well 
positioned for incremental investment to 
sustain or improve their financial 
performance.  The scale of such investment is 
likely to be limited, with smaller bolt-on 
acquisitions the most likely opportunities.  
Our Asian and US hot-dip galvanizing and 
galvanized steel products businesses do not 
yet enjoy the same favourable market 
positions, and corporate activity will be 
required to improve upon their market 
positions, synergies and financial 
performance.  Careful  consideration is being 
given to determine how best to realise value  
 
from the investments made in those 
geographies. 
  
The scale of investment necessary for 
additional production capacity at Delta EMD 
and for further development of our 
Australian galvanizing businesses is unlikely 
to require the resources that will be available 
to the Group.  Consequently, the Group’s 
development may well include investment in 
a substantial business that provides the 
Group additional opportunities for profitable 
growth as well as the continuity necessary for 
the Delta Pension Plan. 
 
Our principal objectives for 2005 are further 
incremental improvement in the Group’s 
financial performance, narrowing the 
Group’s strategic focus through further 
disposals and opportune re-investment in 
both Delta EMD and our Galvanizing 
Division.  We also will commence 
exploration of possible targets for a 
substantial business that provides the Group 
additional opportunities for profitable 
growth. 
 
 
 
 
Todd Atkinson, Chief Executive   
Delta plc 13 
Financial review 
 
 
The foregoing Chief Executive’s review 
addresses the Group’s financial 
performance as well as cash flow. 
 
 
Effect of interest and exchange rates 
 
The impact of the translation of unhedged 
net assets on reserves was a charge of £4.8 
million (2003 £4.6 million).  As reported 
previously, the Group discontinued net 
asset hedging during 2003. The translation 
of overseas profit before tax at the 2004 
average rates of exchange, as compared 
with the 2003 average rates, increased 
profits by £0.5 million. 
 
 
Taxation 
 
The continuing tax charge of £9.1 million 
was less than in the prior year (2003 £10.0 
million) partly as a result of the successful 
resolution of an historic tax dispute in 
South Africa which benefited the 2004 tax 
charge by £0.6 million. Notwithstanding, 
the effective tax rate relating to continuing 
business decreased as a result of an 
improved mix of profit and loss from 
businesses in tax jurisdictions with 
different effective tax rates. In particular 
the results from our US operations were 
improved (without incurring a tax liability) 
and central overheads in the UK (which are 
not effectively tax deductible) were 
reduced. 
 
The accumulated losses reported by the 
Group for tax purposes in various tax 
jurisdictions include the following, most of 
which were incurred by disposed 
businesses.  The following figures are 
subject to audit by tax authorities and do 
not include amounts recognised as deferred 
tax assets that are expected to be utilised in 
the near future. 
   Tax losses 
Country   in £ million 
Germany    97 
United Kingdom   19 
United States    9 
Other jurisdictions   2 
The future use, if any, of these 
accumulated losses will depend upon then 
governing tax rules and regulations, and 
upon the Group generating appropriate 
taxable income in those countries. 
 
 
Cash flows relating to previously 
disposed businesses 
 
During the year the Group received £1.9 
million in relation to previously disposed 
business, primarily in the form of deferred 
consideration.   
 
The Group continues to proactively 
manage liabilities relating to disposed 
businesses.  During 2004, the Group paid 
£2.4 million in respect of such liabilities, 
£2.1 million of which was paid from 
provisions, with the remainder from 
creditors. 
 
 
Borrowings and borrowing facilities 
 
Net cash (including current asset money 
market funds) increased from £21.2 
million to £42.6 million. Net gearing 
remained at nil (2003 nil). 
 
The net interest charge decreased to £2.9 
million (2003 £4.7 million) largely as a 
result of the Group moving into a positive 
cash position, together with the impact of 
foreign exchange differences on financing 
balances decreasing to £2.7 million in 
2004 from £3.2 million in 2003. The 
Group maintained positive net cash 
throughout the year and retains a £15 
   
14 Delta plc 
 
 
 
million committed bank facility to provide 
further funding if necessary. The Group’s 
funding requirements are reviewed 
regularly.  
 
Further details of the funding structure are 
given in notes 20 and 30 to the accounts. 
 
 
Treasury policies  
 
The underlying philosophy of the Group’s 
treasury policies remained one of risk 
management and control, and the policy of 
the Group remained not to undertake 
speculative transactions.  Group treasury 
does not operate as a profit centre, and all 
activities are closely monitored by the 
Group treasury committee, which has a 
mandate to make recommendations to the 
Board on matters of treasury policy and to 
implement policies approved by the Board.   
 
Material currency exposures arising from 
trading transactions at most of the Group’s 
businesses are covered as they arise.  Delta 
EMD and our associate Manganese Metal 
Company do not cover material currency 
exposures.  During the year, Delta EMD 
benefited from foreign exchange contracts 
purchased before October 2003, at which 
time Delta EMD discontinued all forward 
cover.  All such contracts expired during 
the year.   
 
The Pound Sterling value of profits arising 
in other currencies also are not hedged.  
Consequently, the Pound Sterling value of 
overseas profits remains subject to 
currency exchange movements.  The US 
dollar was used as the functional currency  
for Delta EMD and Manganese Metal  
 
Company.  
 
Group treasury monitors interest rate 
exposures. At present the Group has no 
significant interest rate exposures, and 
consequently the Group has no 
outstanding interest rate hedges. 
 
There has been no significant change in the 
Group’s use of derivatives since the end of 
the financial year. 
 
 
Transition to International Financial 
Reporting Standards (IFRS) 
 
In common with other public companies in 
the European Union, the Group will be 
required to present its financial statements 
drawn up under IFRS, commencing with 
our annual accounts for the year ending 31 
December 2005.  The Group has 
commenced the conversion of accounts 
from existing UK GAAP to IFRS. 
 
Senior management continues to identify 
the likely effects of conversion, with the 
accounting treatments most likely to be 
affected being: 
 
- The Effects of Changes in Foreign 
Exchange Rates (IAS 21), particularly 
in regard to the functional currency of 
the EMD business 
 
- Employee Benefits (IAS 19), 
particularly in regard to the Delta 
Pension Plan 
 
- Income taxes (IAS 12) 
 
- Dividends 
 
- Disclosure 
 
 
 
 
Mark Robson, Finance Director 
   
Delta plc 15 
Board of Directors 
 
 
Steven Marshall 
Non-executive Director and Chairman 
 
Steven Marshall (48) was appointed a non-executive director in April 2004 and is the 
Senior Independent Director. Following the death of Edouard Stern, Steven has undertaken 
the role of Chairman. He was Executive Chairman of Queens Moat Houses plc until 
October 2004. Steven was formerly Group Chief Executive of Railtrack Group plc and 
prior to that Thorn plc having previously been Group Finance Director at both companies. 
Steven is a Fellow of the Institute of Chartered Management Accountants. 
 
 
Todd Atkinson 
Chief Executive 
 
Todd Atkinson (48) was appointed Chief Executive and joined the Board in July 2003. 
Previously he was President of Delta America Inc before becoming the Group’s Director of 
Corporate Development and Legal Affairs in 2000. Todd is also the non-executive Chairman of 
Delta Electrical Industries Limited.   
 
 
Mark Robson 
Finance Director 
 
Mark Robson (47) was appointed Finance Director and joined the Board in March 1999.  He 
joined Delta from ICI where he was Finance Director of its Performance Chemicals business.  At 
ICI, Mark held a number of senior financial positions in the UK and Continental Europe. Mark 
is also a non-executive director of Delta Electrical Industries Limited. As previously announced, 
Mark will be leaving the group during April 2005.  
 
 
Charles Fisher  
Non-executive Director 
 
Charles Fisher (55) was appointed a non-executive director in June 2000.  He has a 
background in property and building materials.  He is Chairman of both Mowlem plc and 
Country Homes and Gardens plc. Until February 2005 he was a non-executive director of 
Baggeridge Brick PLC, and until April 2004 he was a non-executive director of Travis 
Perkins plc.  
 
 
 
   
16 Delta plc 
Directors’ report 
 
 
The directors of Delta plc submit their report together with the audited financial statements 
for the year ended 1 January 2005. 
 
 
Business review and future developments 
 
The Chairman's statement to shareholders on pages 2 to 3, the Chief Executive's review on 
pages 4 to 12, the Financial review on pages 13 and 14, the Corporate social responsibility 
report on pages 19 to 20, the Corporate governance report on pages 21 to 26, the 
Remuneration report by the Board of directors on pages 27 to 34 and details of the Board 
of Directors of Delta plc on page 15, form part of the Directors' report. Information about 
the Group’s businesses, financial performance and likely future developments are to be 
found in those sections. 
 
 
Dividends and transfer to reserves 
 
The directors declared an interim dividend of 0.6p (2003 1.5p) per ordinary share which was 
paid on 1 December 2004. They now recommend a final dividend of 2.4p (2003 0.5p) per 
ordinary share making a total for the year of 3.0p (2003 2.0p). Dividends paid and proposed 
for the year amount to £4.7 million (2003 £3.1 million), allowing £10.1 million to be 
transferred to reserves, compared to £8.5 million transferred from reserves for 2003. 
 
 
Disposals of businesses and property 
 
In November 2004 the Group and its co-owners sold Cobra Investments (Pty) Ltd (which 
manufactures a comprehensive range of taps and sanitary ware) to Distribution and 
Warehousing Network Ltd.  The net proceeds in respect of the Group’s 37.6% 
shareholding in Cobra were £4.2 million. 
 
The Group also sold its intermediate holding company, Delta Electrical and Engineering 
Holdings S.L., during the year, the net proceeds of which were £0.5m. 
 
The Group has continued its programme of disposing of excess property relating to its 
discontinued businesses, with proceeds totalling £2.7 million received in 2004 from the 
disposal of two sites in the United Kingdom. These disposals resulted in a profit on sale 
totalling £1.1 million, which has been treated as a non-operating exceptional item in the 
Group profit and loss account. 
  
In addition, the Group completed the sale and leaseback of its Australian vehicle fleet 
during the year, resulting in cash proceeds of £1.3 million and a gain on sale of £0.4m, 
which has been treated as a non-operating exceptional item in the Group profit and loss 
account. 
 
 
Donations 
 
During the year the Group donated £14,000 (2003 £33,000) to charities of which £nil (2003 
£nil) was in the United Kingdom.  There were no political donations made during the year 
(2003 £nil). 
   
Delta plc 17 
 
 
 
Directors 
 
The names and brief biographical details of the directors as at the date of this report are 
listed on page 15.  Edouard Stern served as non-executive Chairman until his death on 1 
March 2005. Steven Marshall was appointed to the Board on 1 April 2004 and assumed 
the role of Chairman on 4 March 2005, and Sir Philip Beck retired on 5 May 2004.  Tony 
Pedder retired on 31 December 2004. 
 
 
Substantial shareholders 
 
As at the date of this report, the following interests of 3% or more in the issued ordinary share 
capital of the Company appeared in the register maintained under the provisions of section 211 
of the Companies Act 1985: 
 
Mainz Trading Limited  24.0% 
MFP Investors LLC 7.8% 
Dawnay Day International Limited 7.2% 
Steel Partners II LP 6.5% 
Legal & General Investment Management Limited 3.6% 
 
As disclosed in the Group’s 2003 annual report and accounts, the Company had been notified 
that E Stern, then a director of the Company, was the beneficial owner of the 39,374,659 shares 
of the Company’s issued ordinary share capital held by Mainz Trading Limited (36,413,425 
shares) and Finance and Trading Limited (2,961,234 shares).  As at the date of this report, the 
Company has not been advised that the number of the Company’s ordinary shares held by 
Mainz Trading Limited and Finance and Trading Limited has changed from those reported in 
our 2003 annual report and accounts. 
 
 
Research and development 
 
The Group spent £0.6 million during 2004 (2003 £1.0 million) on research and 
development as defined by SSAP 13 and had significant development expenditure 
associated with product development and the improvement of production processes. All 
research and development expenditure is expensed as incurred. 
 
 
Payment of creditors 
 
The Group’s policy in respect of the majority of its trade creditors is to negotiate terms and 
conditions with its trade creditors and, provided mutual compliance with these, payments 
are made accordingly.  Where payment terms are not specifically agreed, trade creditors are 
paid in accordance with local commercial practice. 
 
Trade creditor days for the year ended 1 January 2005 were 29 days (2003 36 days), based 
upon the average daily amount invoiced by suppliers during the year. 
 
 
Insurance of directors 
 
The Company maintains insurance for its directors and officers against liabilities as 
permitted by the Companies Act 1985.   
18 Delta plc 
 
 
 
Power to purchase own shares 
 
The directors believe that it remains advantageous for the Company to be able to purchase 
its own ordinary shares in the market.  Accordingly, resolution 5, which will be proposed 
as a special resolution at the annual general meeting, seeks to enlarge the existing general 
authority to make market purchases from 7,600,000 ordinary shares to 15,000,000 
ordinary shares.  The details of the minimum and maximum price at which such shares 
would be purchased are set out in the resolution.  The Company did not purchase any of its 
own shares during the year and the directors have no present intention of utilising this 
authority. 
 
 
Going concern 
 
After making appropriate enquiries, the directors have a reasonable expectation that the 
Group has adequate resources to continue in operational existence for the foreseeable 
future.  For this reason, they continue to adopt the going concern basis in preparing the 
Group’s financial statements. 
 
 
Auditors 
 
A resolution to reappoint Deloitte & Touche LLP as auditors to the Company will be 
proposed at the Annual General Meeting. 
 
 
On behalf of the Board  
 
 
 
J P Narciso 
Secretary 
24 March 2005 
 
   
Delta plc 19 
Corporate social responsibility 
 
 
The Board’s objective is to build a sustainable and profitable business while behaving as a 
good corporate citizen in all activities.  The Board regards corporate social responsibility as 
a sustainable approach to business that seeks to benefit all stakeholders, be they customers, 
employees, communities, the environment or the Company and its shareholders. 
 
The Group is committed to conducting its business activities in an equitable, ethical and 
proper manner in compliance with applicable laws and regulations. The Board takes 
regular account of the significance of social, environmental and ethical matters relevant to 
the Company by various risk reporting processes in place as described more fully in the 
Corporate governance report.  The Group’s policies with regard to social, environmental 
and ethical matters are embodied in the Corporate Policy Manual, to which each business 
unit and divisional managing director and finance director attests compliance on an annual 
basis.  The review of such practices and procedures and related risks and opportunities is 
an ongoing process upon which the Board places significant importance. 
 
 
Our people, their safety and development 
 
A safe working environment is paramount to the Group’s ethical business operation whilst 
also supporting high levels of business performance.  The health and safety of our 
employees and those who enter our facilities is of primary importance.  The Group has 
various health and safety frameworks in place that comply as a minimum with applicable 
local laws and regulations.  
 
Injuries or near misses trigger a process of site-specific review and discussion of potential 
remediation procedures, with such being reported as an integral part of our monthly 
reporting process. Medium term safety performance is reviewed as part of our half year 
review and profit planning processes.  Independent audits of many of the Group’s 
businesses have been performed during the year, with items noted for improvement being 
remedied currently. 
 
The personal and professional development of our people is supported by training 
programs, both in house and externally.  The Group participates in a number of 
apprenticeship/workplace training programs, and in some jurisdictions training levies apply 
to promote and financially support such initiatives.  Succession planning and objective-
based performance appraisal seek to further develop our people. 
 
The Group's policy is to ensure the equal and fair treatment of all employees without 
unlawful or unfair discrimination on the grounds of colour, race, nationality, ethnic or 
national origin, sex, marital status or disability.  Wherever possible the employment, 
retention and appropriate training of disabled people are supported, having regard to their 
particular aptitudes and abilities.  
 
The Group emphasises the need for two way communication with managers and employees 
throughout the Group, recognising that a better informed, knowledgeable workforce is 
more productive and committed to achieving the Group’s business goals.  Employee 
involvement in, and an awareness of, the financial and economic performance of the Group 
is promoted.  
 
 
   
20 Delta plc 
 
 
 
Environmental 
 
The nature of some of our manufacturing processes potentially exposes the environment to 
risks that require careful and appropriate management.  The Group proactively pursues 
compliance and targets best practice in all areas of environmental compliance.  
Environmental policies and practices are tailored to local regulatory requirements with best 
practice developments shared between our facilities where appropriate.  Our employees are 
briefed by management in matters of policy and procedure relating to potential 
environmental risk that may concern their particular area of operation. Our internal 
reporting and review procedures that apply to health and safety also apply to 
environmental matters to ensure that actual or potential issues are reported promptly for 
action. 
 
 
Sustainability 
 
Many of the Group’s products and services contribute to environmental sustainability and 
human safety.  The galvanizing process uses Zinc to protect steel from corrosion, thereby 
extending useful life.  The Manganese metal sold by Manganese Metal Company is 
Selenium free, and our electrical repair business in South Africa promotes the repair and 
extended use of heavy duty electrical equipment rather than disposal and subsequent new 
purchase. 
 
The Group operates a Zinc recycling facility in Australia that processes the waste from 
internal and external galvanizing and other related processes into by-products for sale into 
other industries, primarily the fertiliser industry. 
 
 
 
   
Delta plc 21 
Corporate governance report 
 
 
The Board, Company and Group are committed to high standards of corporate 
governance.  The Board recognises that it is accountable to the shareholders for the 
Group’s corporate governance and this statement, together with the Remuneration Report, 
seeks to demonstrate how the principles of good governance advocated by the revised 
Combined Code issued by the Financial Reporting Council in July 2003 (‘revised 
Combined Code’) have been and continue to be applied. 
 
The Company has been in compliance with Section One of the revised Combined Code for 
the duration of the year, with the exception that for part of the year members of the Audit 
Committee did not have the recent and relevant financial experience suggested by the 
revised Combined Code.  Steven Marshall, who possesses such experience, was appointed 
to the Board and Audit Committee on 1 April 2004. 
 
 
The Board, its directors and operations 
 
As of the date of this report, the Board comprises two non-executive directors and two 
executive directors, whose names and brief biographies appear on page 15.  In addition, 
until 1 March 2005, Edouard Stern served on the Board as non-executive Chairman.  
Edouard Stern was not considered independent by virtue of his then 25.9% beneficial 
shareholding in the company.  All other non-executive directors are considered 
independent.  Tony Pedder, formerly an independent non-executive and Senior 
Independent Director, served on the Board until his retirement on 31 December 2004.  
Since that date Steven Marshall has served as Senior Independent Director, and has 
undertaken the role of Chairman since 4 March 2005. 
 
The roles and responsibilities of the Chairman and Chief Executive were clearly separated.  
No changes of significance occurred during the year with respect to the Chairman’s other 
commitments and hence the amount of time he was able to contribute to the performance 
of his duties as Chairman was not reduced. 
 
The Board is the principal decision making forum of the Group and exercises overall 
control of the Group’s affairs by addressing the matters reserved for its decision. These 
include responsibility for the Group’s strategy, the approval of financial and other public 
statements, acquisitions and disposals, treasury and risk management policies and the 
appointment and removal of executive management and the Company Secretary.  Various 
operational matters of a specified size or importance are referred to the Board for approval 
in accordance with an established delegation of authority. 
 
Comprehensive briefing papers are distributed to Board members by the Company 
Secretary on a monthly basis, sufficiently in advance of each Board meeting to enable 
detailed review.  Such papers address strategic matters, items reserved for Board review and 
approval, actual, forecast and budget financial results, changes to risks and controls, and 
various other matters which should reasonably be considered by the Board.  This practice 
ensures that the Board is supplied with information on the Group’s businesses in a timely 
manner, and that the directors are properly briefed to discuss such items at Board meetings.  
A statement of the directors’ responsibilities in respect of the Report and Accounts is set 
out on page 35.  
 
The Group has procedures in place to allow directors to seek both independent 
professional advice, at the Group’s expense, and the advice and services of the Company 
Secretary in order to fulfil their duties.  The Group maintains appropriate insurance cover 
in respect of directors’ and officers’ liabilities.   
22 Delta plc 
 
 
 
During the year the Chairman met on several occasions with the other non-executive 
directors without the presence of the executive directors. The independent non-executive 
directors also met during the year without the presence of the Chairman. 
 
The non-executive directors also play a leading role in corporate accountability and 
governance through their membership of the various committees of the Board.  The 
membership and remit of each committee is described below and on page 27, together with 
a record of directors’ attendance. Where it is considered appropriate, training is made 
available to directors and training needs are assessed as part of the Board evaluation 
procedure referred to below. 
 
All non-executive directors are appointed for an initial three year period following which the 
appointment is renewable at the option of the Board for two further terms of three years.  The 
maximum period of appointment is normally nine years.  Directors must stand for election by 
shareholders at the first annual general meeting following their initial appointment. 
 
Each year (excluding those directors retiring and not seeking re-election and those retiring and 
seeking election following their appointment during the year) the number nearest to but not 
exceeding one-third of the directors shall retire by rotation.  Whilst the Company’s articles of 
association do not expressly provide that each director will offer himself for re-election at no 
more than three year intervals, the Directors, being cognizant of developing best practice, 
undertake to ensure that each director will offer himself for re-election at no more than three 
year intervals.       
 
 
Board committees 
 
Copies of the terms of reference of the Committees described below may be obtained from 
the Company Secretary. 
 
Nominations committee 
 
The Nominations Committee consisted of all non-executive directors, was chaired by 
Edouard Stern, and met twice during the year.  The Committee reviews the structure, size 
and composition of the Board and recommends changes thereto to the Board for its 
consideration.  
 
During the year the Committee engaged independent recruitment consultants to assist with 
changes to Board composition.  Candidates suggested by such consultants would then be 
interviewed by Committee members and meet with the Chief Executive, following which a 
decision regarding appointment would made. 
 
Audit committee 
 
The Audit Committee consists of all the independent non-executive directors and is chaired 
by Steven Marshall, who has recent and relevant financial experience.  It met three times 
during the year. 
 
The Chief Executive, Finance Director and other senior financial executives, whilst not 
members of the Committee, were invited to attend meetings of the Committee when 
required.  The Audit Committee is responsible for reviewing half year and annual accounts 
before their submission to the Board, reviewing the Group’s systems of internal control   
Delta plc 23 
 
 
 
and the effectiveness thereof, reviewing and discussing reports of internal and external 
audit, and advising the Board on the appointment of external auditors and their 
remuneration both for audit and non-audit work.  In addition, the Audit Committee 
reviewed the appointment, remuneration and utilisation of the Group’s internal audit 
service which during the year was outsourced to PricewaterhouseCoopers. 
 
Apart from external audit, the Company’s auditors, Deloitte & Touche LLP, performed 
minimal services to the Group.  Procedures exist, both within the Group and Deloitte & 
Touche, to promptly identify any potential non-audit services for pre-approval.  The 
Committee has satisfied itself as to the independence of Deloitte & Touche LLP, which has 
confirmed such conclusion. 
 
The persons responsible for internal and external audit services to the Group have a direct 
line of communication to the Chairman of the Audit Committee. 
 
 
Appointments and remuneration committee 
 
Details of the Committee, its members and operations are contained in the Remuneration 
Report on page 27. 
 
 
Meetings of the Board and Board committees 
 
Details of directors’ attendances at Board and Committee meetings are shown in the table 
below:  
    Appoint- 
    ment &  
    remun- 
  Main Audit eration Nomination 
  board committee committee  committee 
 
Number of meetings in the year  10 3 9 2 
Number of meetings attended: 
E Stern  10 - - 2 
T G Atkinson  10 - - - 
M P W Robson  9 - - - 
C M Fisher  9 3 8 2 
A P Pedder  10 3 9 2 
S Marshall  8 2 6 1 
Sir Philip Beck  3 1 2 - 
 
Steven Marshall was appointed a director on 1 April 2004 and has attended all Board and 
Committee meetings of which he was a member since his appointment.  Sir Philip Beck 
retired as a director on 5 May 2004 and with the exception of one meeting of the Board, 
attended all Board and Committee meetings of which he was a member until his 
retirement. 
 
 
Board performance evaluation 
 
During the year the Board initiated an evaluation of the performance of the Board as well 
as the three Committees of the Board.  The Board also reviewed the performance of the  
24 Delta plc 
 
 
 
non-executive directors, including the Chairman, to ensure that their performance 
continued to be effective. 
 
The evaluation was conducted by way of written questionnaires and private discussions 
between the Chairman and the directors. 
 
 
Relations with shareholders 
 
Communication with shareholders is given high priority and a number of methods are used 
to promote greater understanding and dialogue with investment audiences.  
 
The executive directors meet with shareholders on a regular basis, with significant points 
from such meetings communicated to the Board on a monthly basis. During the year the 
Senior Independent Director contacted major shareholders to discuss their views of various 
company matters.  Shareholders will continue to be afforded an opportunity to meet or 
converse with the Senior Independent Director to address any items regarding the Group. 
 
During the year shareholders were kept informed of the progress of the Group through 
trading statements and other announcements of significant developments that were released 
through the London Stock Exchange and were available on the Group’s website. 
 
Additionally, individual shareholders were afforded the opportunity to question the 
Chairman and the chairmen of the Board Committees at the Annual General Meeting.  The 
Annual Report and Accounts and Notice of the Annual General Meeting are sent to 
shareholders at least 20 working days prior to that meeting.  The Group indicates the level 
of proxy votes lodged in respect of each resolution proposed at the Annual General 
Meeting, together with the number of votes for and against each such resolution, following 
each vote on a show of hands. Details of abstentions are also disclosed. 
 
 
Internal control and risk management 
 
The Board is responsible for the operation and effectiveness of the Group’s systems of 
internal control and risk management and undertakes to direct the identification, 
evaluation and management of significant risks faced by the Group, in accordance with the 
Turnbull guidance. 
 
Internal control systems are designed to meet the Group’s particular needs and the risks to 
which it is exposed, and by their nature the Group’s internal control systems provide 
reasonable but not absolute assurance against misstatement or loss.   
 
The effectiveness of the Group’s systems of internal control has been reviewed by the Board 
during 2004 and up to the date of the approval of the financial statements. The key 
procedures which the directors have established to provide effective internal control are as 
follows: 
 
(i) Regular review of risks and compensating controls 
 
The Group’s schedule of risks and compensating controls is formally considered by the 
Board twice a year. All areas of the business are required to undertake risk-profiling  
   
Delta plc 25 
 
 
 
exercises to formally review their principal areas of risk, which forms the basis for the 
schedule reviewed by the Board.  
 
Risks and controls are discussed at length during business unit half year and profit plan 
reviews, which are attended by the Chief Executive and members of senior divisional and 
Group management.  Changes to such risks and controls are identified in each division’s 
monthly report, copies of which are circulated with the Board papers.  Any changes of 
significance are reported to the Board.  Schedules of pending litigation and potential 
liabilities pertaining to disposed businesses are similarly circulated.  
 
(ii) Delegation of authority 
 
The Group’s delegation of authority details authority, referral and reporting requirements 
with respect to certain transactions, events or occurrences. The delegation of authority 
forms part of the Corporate Policy Manual. 
 
(iii) Detailed budgeting and subsequent review 
 
Each business unit is required to prepare, on an annual basis, a detailed plan covering the 
next three years addressing both financial and non-financial objectives.  Such plans are 
reviewed at divisional and Group levels, and ultimately reviewed and approved by the 
Board, as part of the Group’s profit plan. 
 
Performance against plan is reported on a monthly basis. In addition, business units 
prepare a detailed monthly forecast through June (in January and February) and then 
through December during the remainder of the year.  Written monthly reports accompany 
such data and contain variance analyses (in the case of financial data) and commentary (in 
the case of non-financial data). 
 
(iv) Annual statements of compliance 
 
The Group has an established framework of policies and procedures laid down by the 
Board to which personnel are expected to comply and attest such compliance on an annual 
basis. These policies cover key issues including authorisation levels, segregation of duties, 
ethical and legislative compliance as well as health, safety and environmental issues. 
 
(v) Internal audit 
 
The Group has an internal audit function which during the year was outsourced to 
PricewaterhouseCoopers. All significant business units are visited on a three year rotational 
cycle. The scope and results of internal audit’s work are reviewed by the Audit Committee, 
and the resolution of points raised is overseen by Group senior management and reported 
to the Audit Committee to ensure resolution in a timely and satisfactory manner.  
PricewaterhouseCoopers’ internal audit partners have a direct line of communication to the 
Chairman of the Audit Committee. 
 
The internal audit function has been reviewed by the Audit Committee which has 
concluded such to be effective in achieving its objectives.   
26 Delta plc 
 
 
 
(vi) Whistle blowing procedures 
 
The Group has implemented whistle blowing procedures whereby employees are provided 
a means of communication independent of executive management to express any concern 
relating to perceived malpractice, improper business practices, management impropriety or 
other similar matters.   
Delta plc 27 
Directors’ remuneration report by the Board of directors  
 
 
This report has been prepared in accordance with the Companies Act 1985 (as amended) 
and the relevant requirements of the Listing Rules of the UK Listing Authority.  A 
resolution to approve this report will be proposed at the Annual General Meeting of the 
Company. 
 
 
The Appointments and Remuneration Committee (the Committee) 
 
Role and composition of the Committee 
 
The role of the Committee includes the making of recommendations to the Board on policy 
for remuneration of the Company’s Chairman, executive directors, and members of senior 
management.  The Committee consists solely of directors considered by the Board to be 
independent and works within detailed terms of reference, copies of which are available 
from the Company Secretary.  
 
Charles Fisher has been a member of the Committee throughout the year, and succeeded 
Sir Philip Beck as Chairman of the Committee on 5 May 2004.  Other members of the 
Committee during the year were Steven Marshall since his appointment to the Board on 1 
April 2004, and Tony Pedder until his retirement from the Board on 31 December 2004. 
 
Whilst the Chairman of the Board is not a member of the Committee, both he and the 
Chief Executive attend Committee meetings by invitation when required.  All directors are 
excluded from matters regarding their own remuneration.  The Committee seeks the 
recommendations of the Chief Executive concerning the remuneration of senior 
management. 
 
Advisers to the Committee 
 
In order to remain informed of the latest developments and market trends in remuneration 
best practice, the Committee considers advice from New Bridge Street Consultants (NBSC), 
an independent firm of remuneration consultants.  NBSC is independent of the Board and 
provides no other services to the Group other than advice on remuneration policy and 
practice. 
 
 
Remuneration Policy 
 
General remuneration policy 
 
The Committee, in setting remuneration policy for executive directors and senior 
management, recognises the need to be competitive in an international market. The 
Committee’s policy is to set remuneration levels which ensure that the executive directors 
are fairly and responsibly rewarded in return for high levels of performance.  
Remuneration policy is designed to support key business strategies and create a strong, 
performance-oriented environment.  At the same time, the policy must attract, motivate 
and retain talent.  Accordingly, executive directors receive competitive basic salaries 
comparable with companies of a similar size and international scope and have the 
opportunity to earn enhanced total remuneration for performance measured against targets 
set by the Committee. 
 
The Committee appreciates that its policy must be reviewed over time in response to   
28 Delta plc 
 
 
 
several internal and external factors. 
 
Remuneration Components – Executive Directors 
 
The main components of remuneration for executive directors are: 
 
(i) Basic salary 
 
Basic salaries are reviewed annually by the Committee and are the only pensionable 
element of remuneration.  
 
(ii) Performance related bonus 
 
The annual bonus is determined by the Committee with reference to agreed financial, 
strategic and personal objectives.  The financial related elements of the bonus refer to 
performance against budget and prior years across a number of measures including 
earnings, cash flow and total shareholder return.  The maximum potential bonus as a 
percentage of basic salary for the Chief Executive is 100% and for the Finance 
Director is 60%. 
 
(iii) Share options 
 
Share options are designed to provide a long term incentive which directly aligns the 
interests of the executive directors to those of the shareholders.  The Executive Share 
Option Scheme (‘ESOS’) was approved by the shareholders at the annual general 
meeting held in May 1999.  Only executive directors and certain eligible senior 
executives participate in the ESOS.  The Scheme was amended in 2002 to reflect the 
preferences of leading UK institutional investors. 
  
 Grants under the ESOS are made annually and have values of up to one times annual 
salary.   
  
 ESOS options granted on or before 29 June 2001 are subject to the following performance 
conditions: on or before the tenth anniversary of the grant date, earnings per share growth 
over a period of at least three consecutive years must equal or exceed the growth in the 
Retail Price Index plus 3% per annum, and (ii) earnings per share before exceptional items 
must equal or exceed 20 pence. 
 
 ESOS options granted after 29 June 2001 are subject to the following performance 
condition: on or before the sixth anniversary of the grant date, earnings per share growth 
over a period of at least three consecutive years must equal or exceed the growth in the 
Retail Price Index plus 3% per annum. 
 
 All performance conditions are measured against earnings per share before exceptional 
items for the financial year preceding option grant. 
 
 Subject to the fulfilment of the foregoing performance conditions, options are 
exercisable between the third and tenth anniversary of the grant date.  
 
 Under the terms of the Scheme, in certain circumstances including death, injury, ill-
health, disability, redundancy, retirement and the departure from the Group of the 
company in which a participant is employed, performance conditions are waived and 
all options granted vest immediately. The period that a participant may exercise  
Delta plc 29 
 
 
 
options in such circumstances varies between six and eighteen months from the date of 
cessation of employment with the Group. 
 
The Committee considers the performance targets chosen appropriate since they require 
substantial improvement in the underlying financial performance of the Company and has 
determined that the performance condition for the ESOS options granted on 29 June 2001 
and 3 May 2002 have been satisfied.  The exercise price for such options exceeded the 
middle market closing value of the Company’s shares on 31 December 2004.  
 
(iv) Pensions 
 
Executive directors are invited to participate in the Delta Pension Plan. The Plan is a 
funded, Inland Revenue approved, final salary, occupational pension scheme, and 
provides a pension of up to two thirds of final pensionable salary, subject to 
completion of 20 years’ pensionable service and retirement at normal retirement age.  
Final pensionable salary is calculated with reference to basic salary and not other 
elements of remuneration and is limited by Inland Revenue limits. 
  
 The Delta Pension Plan also provides lump sum life assurance cover of up to four 
times pensionable salary and makes provision for spouses’ and dependants’ pensions 
and early retirement provisions, including ill-health.  All plan benefits are subject to 
Inland Revenue limits. 
 
 In the specific instances described in this report, funded unapproved retirement benefit 
schemes (‘FURBS’) have been established to provide pension and death benefits 
attributable to executive directors’ basic salary in excess of the Inland Revenue 
‘earnings cap’.  FURBS are defined contribution schemes that are intended to provide 
benefits broadly comparable with those that would have applied under the Delta 
Pension Plan absent the Inland Revenue ‘earnings cap’. 
 
The components of remuneration described in (ii) and (iii) above are determined with 
reference to the performance of the executive director, Group and the Company’s shares. 
 
The fees earned by executive directors as non-executive directors of Delta Electrical 
Industries Limited are payable to the Company and not the individual directors. 
 
Remuneration Components – Non-Executive Directors 
 
Remuneration for non-executive directors consists of an annual fee for their services on the 
Board and Board Committees and where appropriate for devoting additional time and 
expertise for the benefit of the Group.  Non-executive directors do not participate in any of 
the Group's bonus or share option schemes nor are they eligible for membership in any of 
the Group's pension plans. 
 
The fees for non-executive directors' duties are determined by the Chairman and the 
executive directors, and the fees for the Chairman are determined by the full Board with 
regard, where appropriate, to market comparisons, within the restrictions contained in the 
Articles of Association.  Each non-executive director takes no part in determining his own 
fees. 
 
During the year the annual fees payable to the Chairman were reduced from £100,000 to 
£90,000, and for other non-executive directors from £35,000 to £30,000.  
 
   
30 Delta plc 
 
 
 
Service contracts 
 
Contracts of service are negotiated on an individual basis.  There are no provisions in any 
of the existing agreements for early termination payments, other than the notice provisions 
described below. 
 
 
Directors’ service contracts 
 
Todd Atkinson’s service contract with the Company commenced on 2 July 2003.  Either 
party may terminate the contract by giving not less than 12 months' written notice, and Mr 
Atkinson’s service contract provides for no additional termination payments. 
 
Mark Robson’s service contract with the Company commenced on 18 March 1999.  In 
accordance with his contract, the contract will terminate on 20 April 2005 as a result of 
the Company having given Mr. Robson 12 months’ written notice on 19 April 2004.  Mr 
Robson’s service contract provides for no additional termination payments. 
 
The non-executive directors have no formal service contracts, but have letters of 
engagement that do not provide for notice periods or for compensation payable for 
termination. 
 
The Committee strives to achieve an appropriate balance between ensuring continuity 
amongst senior management, limiting notice periods to no more than twelve months, and 
minimising termination payments. 
 
 
 
The following sections of the Remuneration Report are audited. 
 
 
 
Directors’ Remuneration 
 
The following are the aggregate amounts for Directors’ remuneration against profit for the 
year: 
 
     2004 2003 
     £ £ 
Basic salary     731,096 787,666 
Other emoluments     32,085 33,183 
Bonus     247,000 549,475 
Compensation in respect of loss of office    nil 457,865 
Company pension contribution    181,436 196,888 
     1,191,617 2,025,077 
 
 
   
Delta plc 31 
 
 
 
The following are the emoluments afforded individual Directors: 
       Directors' remuneration 
      2004  2003 
  Basic salary    
  (inclusive of Other   
£  directors’ fees)  emoluments (1) Bonus Total Total 
E Stern (Chairman)   92,500 - - 92,500 22,840 
T G Atkinson (2)  290,000 13,574 215,000 518,574 208,938 
M P W Robson (3)  252,000 18,511 32,000 302,511 473,534 
C M Fisher  31,250 - - 31,250 32,500 
S Marshall (4)  22,500 - - 22,500 - 
A P Pedder  31,250 - - 31,250 32,500 
Sir Philip Beck  11,596 - - 11,596 32,500 
Sir Martin Jacomb  - - - - 100,000 
J P Scott-Maxwell  - - - - 925,377 
Total  731,096 32,085 247,000 1,010,181 1,828,189 
(1) Other emoluments include benefits in kind. 
(2) T G Atkinson’s 2003 remuneration was in respect of his service since appointment on 
2 July 2003 (basic salary: £144,220; other emoluments: £6,718; bonus: £58,000) 
(3) Included in the total value of benefits in kind for M P W Robson is a relocation 
allowance of £4,937 (2003 £6,583). 
(4) S Marshall was appointed to the Board on 1 April 2004. 
 
Retirement benefits on a defined benefit basis are accruing to two directors as at 1 January 
2005 (2003 two directors).  The accrued pension entitlement shown in the table below is 
the amount that would be paid in each year on retirement at normal retirement age, based 
on pensionable service to the end of the financial year.  The normal retirement age for all 
executive directors is 60.  The Plan also provides spouse's pension, which is 50% of the 
deceased director’s prospective pension or, in the case of death in service, one third of final 
pensionable salary if greater.  Following retirement, pensions increase at an annual rate in 
line with RPI up to 5%.  The trustees have the discretionary power to grant early retirement 
pensions but a member does not have an absolute right to an early retirement pension.  No 
discretionary benefits are allowed for in the transfer values. 
 
      Transfer value 
  Accrued Accrued Increase in Employee in respect   
  pension pension accrued  contributions of increase 
  as at 3  as at 1 pension paid in accrued 
  January 2004 January 2005 in the year over year  pension  
  £ per annum £ per annum £ £ £ 
   (1)  (2) 
T G Atkinson  11,000 14,733 3,392 4,815 26,881 
M P W Robson  11,501 14,336 2,478 4,050 17,990 
 
(1) The increase in the accrued pension during the year has been adjusted to remove any 
distortion due to inflation during the year. 
(2) The transfer value has been calculated on the basis of actuarial advice in accordance 
with GN11.  The increase in the transfer value shown is less any member contributions 
paid during the year.  The transfer value as at 1 January 2005 for T G Atkinson (who 
was then age 47) was £137,528 (£81,906 as at 3 January 2004).  The increase in the 
transfer value (less member’s contributions) was £50,807.  The transfer value as at 1 
January 2005 for M P W Robson (who was then age 46) was £127,342 (£82,259 as at 
3 January 2004). The increase in transfer value (less member’s contributions) was 
£41,033.    
32 Delta plc 
 
 
 
The transfer values disclosed above do not represent a sum paid or payable to the 
individual directors. Instead they represent a potential liability of the Delta Pension Plan. 
 
Pension contributions payable by the Company to the Delta Pension Plan for T G Atkinson 
were £13,345 (2003 £nil) and M P W Robson £13,345 (2003 £nil). 
 
In addition to the foregoing pension benefit, funded unapproved retirement benefit schemes 
(‘FURBS’) have been established for Messrs. Atkinson and Robson to provide pension and 
death benefits attributable to the executive director’s base salary in excess of the Inland 
Revenue ‘earnings cap.’  FURBS are defined contribution schemes contributions based 
upon an agreed percentage rate of the executive director’s basic salary.  During the year the 
Company contributed £76,961 (2003 £90,879) on behalf of T G Atkinson to the FURBS 
established for his benefit.  Also during the year the Company contributed on behalf of M 
P W Robson £77,785 (2003 £45,235) to the FURBS established for his benefit. 
 
 
Directors’ share options over ordinary shares in the Company 
 
Details of the number of shares reserved under options and held by executive directors are 
shown in the table below: 
 
      Subscrip- Date on  
   Exer-   tion price which  Date on 
 As at 3 Granted cised Lapsed As at   payable  options which 
Option January during during during 1 January (per become options 
Scheme 2004 year year year 2005 share) exercisable lapse 
TG Atkinson : 
ESOS 42,000 - - - 42,000 154p 11/06/02 11/06/09 
ESOS 80,000 - - - 80,000 150p 29/11/03 29/11/10 
ESOS 93,000 - - - 93,000 129p 29/06/04 29/06/11 
ESOS 104,800 - - - 104,800 118p 03/05/05 03/05/12 
ESOS 119,300 - - - 119,300 110p 25/04/06 25/04/13 
ESOS 132,800 - - - 132,800 115p 26/06/06 26/06/13 
ESOS - 349,398 - - 349,398 83p 16/04/07 16/04/14 
Total 571,900 349,398 - - 921,298 
MPW Robson: 
SAYE 15,344 - - - 15,344 82p 01/01/09 01/07/09 
SAYE 9,895 - - - 9,895 72p 01/01/10   01/07/10 
ESOS 94,000  - - - 94,000 154p 11/06/02  11/06/09 
ESOS 51,000  - - - 51,000 150p 29/11/03 29/11/10 
ESOS 51,000 - - - 51,000 156p 25/01/04 25/01/11 
ESOS 131,300 - - - 131,300 129p 29/06/04 29/06/11 
ESOS 150,900 - - - 150,900 118p 03/05/05 03/05/12 
ESOS 171,800 - - - 171,800 110p 25/04/06 25/04/13 
ESOS - 227,711 - - 227,711 83p 16/04/07 16/04/14 
Total 675,239 227,711 - - 902,950  
 
   
Delta plc 33 
 
 
 
(i) The open market value of Delta plc 25p ordinary shares was 100.5p per share (middle 
market closing value as quoted in the Daily Official List of London Stock Exchange plc) on 
31 December 2004. 
(ii) The share price of the Delta plc ordinary shares during  the year ranged from a minimum 
of 77.5p to a maximum of 103.5p. (iii)All options were granted for nil consideration. The 
exercise price for options is the 5 day average price preceding the date of grant. 
(iv) The performance conditions attaching to the ESOS are explained on pages 28 and 29. 
(v) There are no performance conditions attaching to the SAYE options. 
 
 
Directors’ interests in shares 
 
The beneficial interests in the shares of the Company of the directors in office at 3 January 2004 
and 1 January 2005, including the beneficial interests of their families, are set out in the table 
below: 
 
  Number of ordinary shares of 25p each owned 
Directors' share holdings At 1 January 2005 At 3 January 2004 
E Stern (Chairman)
#
     39,374,659 39,374,659 
T G Atkinson      30,000 10,010 
M P W Robson      20,941 20,941 
CM Fisher      76,000 36,000 
S Marshall *       nil nil 
 
 
#
 E Stern advised the Company of his beneficial interest in the Company’s shares held by 
Mainz Holding Limited and Finance and Trading Limited. As at both 3 January 2004 
and 1 January 2005, Mainz Holding Limited held 36,413,425 ordinary shares of the 
Company and Finance and Trading Limited held 2,961,234 ordinary shares of the 
Company. 
*  On date of appointment. 
 
Following Edouard Stern’s death, none of the directors has a beneficial interest in the 
Company’s shares held by Mainz Holding Limited or Finance and Trading Limited.  
 
Other than the shareholdings and the options shown in the foregoing tables, none of the 
directors had or has any interest, or any holding without beneficial interest, in any class of 
any share capital of the Company or of any subsidiary.  Other than the service contracts 
described above, at no time during the year has any director had any material interest in a 
contract with any Group Company, being a contract of significance in relation to the 
Group’s business.  
 
 
 
 
   
34 Delta plc 
 
 
 
The following information is unaudited. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The chart above illustrates the Group’s total shareholder return performance for a five year 
period ending 1 January 2005 relative to the FTSE Small Cap Index (rebased to 100 in 1999).  
The FTSE Small Cap Index was selected for comparison because the Group forms part of that 
Index.    
 
 
On behalf of the Board  
 
 
 
J P Narciso 
Secretary 
24 March 2005
60
70
80
90
100
110
120
130
140
31-Dec-99 31-Dec-00 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04
Delta FTSE Small Cap Index
99 04 03 02 01 00  
Delta plc 35 
 
Responsibility of the directors for the preparation of the 
financial statements 
 
United Kingdom Company Law requires the directors to prepare financial statements for each 
financial year which give a true and fair view of the state of affairs of the Company and the 
Group as at the end of the financial year and of the profit or loss of the Group for that period.  
In preparing the financial statements, the directors are required to:  
 
• select suitable accounting policies and 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  
• confirm that the financial statements have been prepared on the going concern basis. 
 
The directors are responsible for keeping proper accounting records which disclose with 
reasonable accuracy at any time the financial position of the Company and the Group and to 
enable them to ensure that the financial statements comply with the Companies Act 1985.  They 
are also responsible for safeguarding the assets of the Group and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities.  
 
Financial information is published on the Company's website www.deltaplc.com.  The 
maintenance and integrity of the Delta plc website is the responsibility of the directors. The 
work carried out by the auditors does not involve consideration of these matters and, 
accordingly, the auditors accept no responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the website.  It should be noted that 
legislation in the United Kingdom governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions. 
 
 
 
 
On behalf of the Board 
 
J P Narciso 
Secretary 
24 March 2005   
36 Delta plc 
Independent auditors' report to the members of Delta plc 
 
 
We have audited the financial statements of Delta plc for the year ended 1 January 2005 which 
comprise the Group profit and loss account, the balance sheets, the Group cash flow statement, 
the statement of total recognised gains and losses, the note of historical cost profits and losses, 
the reconciliation of movements in total shareholders’ funds, the statement of accounting 
policies, the related notes 1 to 30 and principal Group and associated companies.  These 
financial statements have been prepared under the accounting policies set out therein. We have 
also audited the information in the part of the directors’ remuneration report that is described as 
having been audited. 
 
This report is made solely to the company’s members, as a body, in accordance with section 235 
of the Companies Act 1985.  Our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them in an auditors’ report and 
for no other purpose.  To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the company and the company’s members as a body, for our 
audit work, for this report, or for the opinions we have formed. 
 
 
Respective responsibilities of directors and auditors 
 
As described in the statement of directors’ responsibilities, the company’s directors are 
responsible for the preparation of the financial statements in accordance with applicable United 
Kingdom law and accounting standards. They are also responsible for the preparation of the 
other information contained in the annual report including the directors’ remuneration report. 
Our responsibility is to audit the financial statements and the part of the directors’ remuneration 
report described as having been audited in accordance with relevant United Kingdom legal and 
regulatory requirements and auditing standards. 
 
We report to you our opinion as to whether the financial statements give a true and fair view 
and whether the financial statements and the part of the directors’ remuneration report 
described as having been audited have been properly prepared in accordance with the 
Companies Act 1985.  We also report to you if, in our opinion, the directors’ report is not 
consistent with the financial statements, if the company has not kept proper accounting records, 
if we have not received all the information and explanations we require for our audit, or if 
information specified by law regarding directors’ remuneration and transactions with the 
company and other members of the group is not disclosed. 
 
We review whether the corporate governance statement reflects the company's compliance with 
the nine provisions of the July 2003 FRC Combined Code specified for our review by the 
Listing Rules of the Financial Services Authority, and we report if it does not.  We are not 
required to consider whether the board's statements on internal control cover all risks and 
controls, or form an opinion on the effectiveness of the group's corporate governance 
procedures or its risk and control procedures. 
 
We read the directors’ report and the other information contained in the annual report for the 
above year as described in the contents section including the unaudited part of the directors’ 
remuneration report and consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the financial statements. 
 
   
Delta plc 37 
 
 
 
Basis of audit opinion 
 
We conducted our audit in accordance with United Kingdom auditing standards issued by the 
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to 
the amounts and disclosures in the financial statements and the part of the directors’ 
remuneration report described as having been audited. It also includes an assessment of the 
significant estimates and judgements made by the directors in the preparation of the financial 
statements and of whether the accounting policies are appropriate to the circumstances of the 
company and the group, consistently applied and adequately disclosed. 
  
We planned and performed our audit so as to obtain all the information and explanations 
which we considered necessary in order to provide us with sufficient evidence to give 
reasonable assurance that the financial statements and the part of the directors’ 
remuneration report described as having been audited are free from material misstatement, 
whether caused by fraud or other irregularity or error. In forming our opinion, we also 
evaluated the overall adequacy of the presentation of information in the financial 
statements and the part of the directors’ remuneration report described as having been 
audited. 
 
 
Uncertainty relating to the amount of a potential liability for alleged anti-competitive behaviour 
 
In forming our opinion, we have considered the adequacy of the disclosures made in note 18 to 
the accounts concerning the European Commission competition directorate’s investigation into 
alleged anti-competitive behaviour in the Group’s former plumbing fittings business.  Under 
European Community law any potential fine cannot exceed 10% of the Group’s turnover.  This 
matter has been adequately disclosed as a contingent liability and our opinion is not qualified in 
this respect. 
 
 
Opinion 
 
In our opinion:  
 
• the financial statements give a true and fair view of the state of affairs of the company and 
the group as at 1 January 2005 and of the profit  of the group for the year then ended; and 
• the financial statements and part of the directors’ remuneration report described as having 
been audited have been properly prepared in accordance with the Companies Act 1985. 
 
 
 
 
London, United Kingdom Deloitte & Touche LLP 
24 March 2005 Chartered Accountants and Registered Auditors   
38 Delta plc 
Group profit and loss account 
For the year ended 1 January 2005 
    2004   2003 
  Cont- Discont-  Cont- Discont-  
  inuing inued Total inuing inued Total 
 Notes  £ million £ million £ million £ million £ million £ million 
Total turnover  337.5 14.5 352.0 321.3 36.2 357.5 
Less share of joint ventures & associates 4 (23.0) (14.5) (37.5) (20.1) (14.0) (34.1) 
Group turnover 1 314.5 - 314.5 301.2 22.2 323.4 
Cost of sales 2 (224.7) - (224.7) (216.5) (18.7) (235.2) 
Gross profit   89.8 - 89.8 84.7 3.5 88.2 
Distribution costs and administrative  
   expenses   2 (57.0) (0.2) (57.2) (56.3) (3.0) (59.3) 
 
Group operating profit  32.8 (0.2) 32.6 28.4 0.5 28.9 
Share of profits of joint ventures  
   & associates 4 (1.2) 2.0 0.8 (1.7) 1.7 - 
Total operating profit  31.6 1.8 33.4 26.7 2.2 28.9 
Profit on sale of fixed assets 5 0.4 1.1 1.5 - - - 
Disposal of businesses 5 - (1.5) (1.5) - (114.2) (114.2) 
Use of provision made in previous years 5 - - - - 102.7 102.7 
Profit (loss)  on ordinary activities before interest  32.0 1.4 33.4 26.7 (9.3) 17.4 
Net interest: parent and subsidiaries 6 (1.6) - (1.6) (4.0) - (4.0) 
 joint ventures & associates 6 (1.1) (0.2) (1.3) (0.6) (0.1) (0.7) 
 
Profit on ordinary activities before tax- 
  ation, exceptional items and goodwill  
   amortisation  30.2 1.6 31.8 27.5 2.2 29.7 
Operating exceptional items and good- 1(v)  
   will amortisation  &  (vi) (1.3) - (1.3) (5.4) (0.1) (5.5) 
Non-operating exceptional items  0.4 (0.4) - - (11.5) (11.5) 
Profit (loss) on ordinary activities before  
   taxation 1, 7 29.3 1.2 30.5 22.1 (9.4) 12.7 
Taxation 8 (9.1) (0.4) (9.5) (10.0) (0.4) (10.4) 
Profit (loss) on ordinary activities after taxation  20.2 0.8 21.0 12.1 (9.8) 2.3 
Equity minority interests  (6.2) - (6.2) (7.7) - (7.7) 
Profit (loss) for the financial year  14.0 0.8 14.8 4.4 (9.8) (5.4) 
Dividends 9 (4.7) - (4.7) (3.1) - (3.1) 
Transfer to (from) reserves     25 9.3 0.8 10.1 1.3 (9.8) (8.5) 
 
Earnings (loss)  per 25p ordinary share:  
Basic and diluted 10     9.7p     (3.7)p 
Earnings (loss) per 25p ordinary share before  
   goodwill amortisation: 
Basic and diluted 10   10.6p   (3.0)p 
Earnings per 25p ordinary share before  
   exceptional items and  goodwill amortisation: 
Basic and diluted 10   10.6p   7.0p 
   
Delta plc 39 
Balance sheets 
At 1 January 2005 
 
      Group   Company 
    2004 2003 2004 2003 
   Notes £ million £ million £ million £ million 
Fixed assets 
Intangible assets: Goodwill   11 14.3 14.0 - - 
Tangible assets    12 90.8 100.4 - - 
Investments: Joint ventures- share of gross assets  13 1.4 1.6 - - 
  share of gross liabilities  13 (1.0) (1.2) - - 
  loans to joint ventures   13 1.1 1.1 - - 
     1.5 1.5 - - 
Investments: Associated companies   13 7.1 17.3 - 1.6 
 Group companies   13 - - 148.7 166.1 
    113.7 133.2 148.7 167.7 
Current assets 
Stocks   14 66.3 59.4 - - 
Debtors - amounts falling due after one year  15 3.9 4.0 0.3 0.6 
Debtors - amounts falling due within one year  15 56.1 59.2 0.5 1.2 
Investments - money market funds   13 23.7 13.0 19.4 8.2 
Bank and other deposits    38.4 31.7 10.5 0.6 
    188.4 167.3 30.7 10.6 
Creditors - amounts falling due within one year 
Borrowings   20 (18.8) (22.5) (16.7)  (26.9) 
Other creditors   16 (66.9) (64.4) (9.6) (3.4) 
Net current assets (liabilities)    102.7 80.4 4.4 (19.7) 
Total assets less current liabilities    216.4 213.6 153.1 148.0 
Creditors - amounts falling due after more than one year 
Borrowings   20 (0.7) (1.0) - - 
Provisions for liabilities and charges   21 (25.1) (29.6) (0.1) (0.3) 
Net assets    190.6 183.0 153.0 147.7 
 
Capital and reserves  
Called up share capital   23 40.7 40.7 40.7 40.7 
Share premium account   25 32.5 32.5 32.5 32.5 
Revaluation reserve   25 26.2 47.5 18.3 (21.6) 
Profit and loss account   25 54.6 28.0 62.5 97.1 
Employee share ownership trust   25 (1.0) (1.0) (1.0) (1.0) 
 
Equity shareholders' funds    150.2 144.9 150.2 144.9 
Non-equity shareholders' funds   23 2.8 2.8 2.8 2.8 
Total shareholders' funds    153.0 147.7 153.0 147.7 
Equity minority interests    37.6 35.3 - - 
    190.6 183.0 153.0 147.7 
  
The accounts on pages 38 to 69 were approved by the directors on 24 March 2005 and are signed on their 
behalf by:  
 
Todd Atkinson Mark Robson 
Chief Executive Finance Director   
40 Delta plc 
Group cash flow statement 
For the year ended 1 January 2005 
 
        
      2004 2003 
     Notes £ million £ million 
Net cash inflow from operating activities     26 37.4 27.6 
Returns on investments and servicing of finance 
Interest received      4.4 7.2 
Interest paid      (3.4) (10.0) 
Preference dividends paid      (0.1) (0.2)  
Dividends paid to minority shareholders      (4.0) (5.6) 
Net cash outflow from returns on investments and servicing of finance    (3.1) (8.6) 
Taxation      (9.6) (10.1) 
Capital expenditure and financial investment  
Purchase of tangible fixed assets       (10.7) (15.6) 
Sale of tangible fixed assets      4.6 1.2 
Associated company loans       1.2 (1.5) 
Cash received from restructuring associate      - 4.5 
Net cash outflow from capital expenditure and financial investment    (4.9) (11.4) 
Acquisitions and disposals 
Purchase of businesses      29 (1.3) (22.4) 
Net cash acquired on purchase of businesses    29 - 1.3 
Sale of businesses     29 4.5 115.0 
Net cash disposed of on sale of businesses      29 - (1.8) 
Net cash inflow from acquisitions and disposals      3.2 92.1 
Equity dividends paid      (1.7) (9.1) 
Cash inflow before use of liquid resources and financing    28 21.3 80.5 
Management of liquid resources 
(Increase) decrease in short term cash deposits and current asset investments  (16.7) 1.5 
Financing 
Issue of ordinary share capital      - 0.4 
Debt due within one year:  increase in short term borrowings    0.2 4.0 
 repayment of short term borrowings    (3.8) (92.0) 
Debt due after one year: increase in loans      - 0.4 
 repayment of loans      (0.2) (0.1) 
Net cash (outflow) inflow from foreign exchange instruments  
   hedging investments in subsidiaries       - (12.2) 
Net cash outflow from financing      (3.8) (99.5) 
Increase (decrease) in cash in the period     27 & 28 0.8 (17.5) 
 
   
Delta plc 41 
Statement of total recognised gains and losses  
For the year ended 1 January 2005 
 
 
      2004 2003 
      £ million £ million 
Profit (loss) for the financial year      14.8 (5.4) 
Other recognised losses for the year: 
Currency translation differences on: foreign currency net investments   (4.8) (9.6) 
 foreign currency loans    - 5.0 
Total recognised gains (losses) for the year      10.0 (10.0) 
 
 
 
 
 
Note of historical cost profits and losses  
For the year ended 1 January 2005 
 
Reported profit on ordinary activities before taxation     30.5 12.7 
Realisation of property revaluation gains of prior years    0.4 6.9 
Difference between historical cost depreciation and actual depreciation 
charge for the period calculated on the revalued  amount    - - 
Historical cost profit on ordinary activities before taxation    30.9 19.6  
Historical cost profit (loss) for the period retained after taxation, minority interests and dividends 10.5 (1.6) 
    
 
 
 
Reconciliation of movement in total shareholders' funds 
For the year ended 1 January 2005 
 
Profit (loss) for the financial year      14.8 (5.4) 
Dividends      (4.7)  (3.1) 
      10.1 (8.5) 
Other recognised losses for the year      (4.8) (4.6) 
Goodwill transferred to the profit and loss account in respect of businesses sold (note 5 (i)) - 0.7 
Shares issued      - 0.5 
Net increase (decrease) in shareholders' funds for the year      5.3 (11.9) 
Total shareholders' funds at the beginning of the year    147.7 159.6 
Total shareholders' funds at the end of the year      153.0 147.7 
   
42 Delta plc 
Accounting policies 
 
 
 
 
1 Accounting convention and Standards 
 
 The financial statements are prepared in accordance with the historical cost accounting convention, modified 
to include the revaluation of certain fixed assets, and in accordance with applicable Accounting Standards in 
the United Kingdom.   
 
 
2  Group consolidation 
 
(i) The Group’s financial statements comprise a consolidation of the Company and all its subsidiaries. 
(ii) The Group share of results of joint ventures and associated companies is included in the Group profit 
and loss account and its share of post-acquisition reserves is included in the Group balance sheet.  The 
figures for associates and joint ventures are based on their latest audited accounts ending in the 
financial year, updated by reference to unaudited management accounts in certain cases to coincide 
with the Group's financial year. 
(iii) The results of businesses acquired or sold during the year are dealt with from the date of acquisition or 
to the date of sale.  From the beginning of 1998, the net goodwill arising on acquisition is capitalised 
and amortised through the profit and loss account over its expected useful life, which does not exceed 
20 years. 
(iv) The gain or loss on the disposal of a business is calculated by comparing the carrying value of the net 
assets sold and any unamortised goodwill (for businesses acquired after the beginning of 1998) or 
goodwill previously written off directly to reserves on acquisition (for businesses acquired prior to 
1998) with the proceeds received.   
 
 
3  Research and development, patents and trademarks 
 
All expenses are written off as incurred. 
 
 
4  Pensions and post retirement benefits 
 
 The costs of providing defined benefit pension schemes are charged to the profit and loss account in 
accordance with SSAP 24 ‘Accounting for pension costs’. In the cases of the UK and Australian defined 
benefit pension schemes, the cash cost of contributions has been charged to the profit and loss account. 
Charging such cash cost to the profit and loss account results in a higher charge than the amortisation of the 
surplus/deficit over the remaining service lives of members.  The costs of providing defined contribution 
pension schemes are charged to the profit and loss account as incurred. 
 
 
5  Stocks 
 
 Stocks are valued at the lower of cost (including an appropriate element of production overhead costs) and 
net realisable value of the separate items of stocks or of groups of similar items. Provision is made for 
obsolete, slow moving or defective items where appropriate. 
 
 
6  Tangible assets 
 
(i) Prior to the adoption of FRS 15 ‘Tangible fixed assets’ in 2000, freehold and leasehold properties were 
revalued regularly. In implementing FRS 15, the Group decided that no further revaluations would be  
   
Delta plc 43 
 
 
 
 
 
 undertaken and in accordance with the transitional provisions contained in FRS 15, whilst the previous 
valuations have been retained, they have not been updated. 
 
 
(ii) Depreciation is provided on the straight-line basis at the following rates: 
 Freehold land Nil 
 Plant and machinery 10% 
 Freehold buildings 2% 
 Motor vehicles 25% 
 Leasehold property; over the term of lease, but not less than 2% 
 Fixtures, fittings, tools and equipment 20% 
 Major items of computer software   20% - 33% 
 Assets in the course of construction   Nil 
 
(iii) Finance leased assets are capitalised as tangible fixed assets and depreciated accordingly. The capital 
element of future lease payments is included in borrowings and the finance element is charged to the 
profit and loss account. Operating lease rentals are charged in the profit and loss account as incurred. 
 
 
7 Investment in subsidiary undertakings 
 
 The Company accounts for its investments in subsidiary undertakings by the equity method, whereby the 
original cost of the investments is adjusted for the movement in underlying net assets applicable to the 
investments since their date of acquisition with an adjustment to the Company’s revaluation reserve, except 
where any diminution in the value of the investment is considered permanent.  In such cases the permanent 
diminution is recorded as a reduction in the Company’s profit and loss account reserve. 
 
 
8  Taxation    
 
 The profit and loss account charge is calculated at current rates of corporation tax and overseas tax on the 
taxable profits for the year. Deferred tax is provided in full on timing differences that result in an obligation 
at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to 
apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of 
items of income and expenditure in taxation computations in periods different from those in which they are 
included in the financial statements. Deferred tax is not provided on timing differences arising from the 
revaluation of fixed assets where there is no binding contract to dispose of these assets. Deferred tax is not 
provided on un-remitted earnings where there is no binding commitment to remit those earnings. Deferred 
tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. 
Deferred tax assets and liabilities are not discounted. 
 
 
9  Turnover  
 
 Turnover is the amount receivable for goods sold or supplied and services provided, excluding intra-group 
transactions and value added tax. 
 
 
10  Foreign currency  
 
 Transactions in overseas currencies are translated at the exchange rate ruling at the date of the transaction 
or, where forward foreign exchange contracts have been taken out, at the contractual rates. For consolid-   
44 Delta plc 
 
 
 
 
 
-ation purposes the profit and loss accounts of overseas companies are translated into sterling at average 
exchange rates for the financial year. Overseas companies’ balance sheets (including intangible assets) and 
also the foreign currency assets and liabilities of UK companies, including financial instruments hedging 
foreign currency investments, are translated into sterling at the rates ruling on the last day of the financial 
year or at a contractual rate if applicable.  The exchange differences arising from the re-translation of the 
opening net assets of overseas companies at year end rates are taken directly to reserves. Similarly, the 
difference between the net profits of overseas companies translated at average rates and year end rates is 
taken directly to reserves.  Up to August 2003 the exchange differences on foreign currency liabilities 
purchased to hedge the net assets of overseas companies were taken to reserves. In August 2003 the Group 
ceased its practice of hedging the net assets of overseas companies. 
 
 Certain non-United States subsidiaries have adopted the US dollar as their functional currency. They 
maintain their accounting records in local currency, which are then translated into their functional currency 
(US dollars), using the temporal method, for reporting purposes. Fixed assets and other non-monetary assets 
and liabilities are translated at historical rates and monetary assets and liabilities at the closing rate. The 
resulting differences are accounted for in the profit and loss account in accordance with SSAP 20. Foreign 
exchange differences on financing balances are included within interest. 
 
 
11 Financial instruments 
 
 The Group uses derivative financial instruments to hedge its exposures to fluctuations in interest and foreign 
exchange rates. The derivative instruments used are: interest rate swaps, foreign exchange swaps and 
forward foreign exchange contracts. Derivatives are not intended to be used for purposes other than 
hedging. 
 
 Interest differentials on derivative instruments are recognised by adjusting the net interest charge. Receipts 
and payments on interest rate instruments are recognised on an accrual basis over the life of the instrument. 
Finance costs associated with debt issuance are charged to the profit and loss account over the life of the 
instruments. 
 
 Gains and losses on foreign currency hedges are recognised on the maturity of the underlying transaction, 
other than the translational hedges of foreign currency investments which are taken to reserves (as stated in 
10 above).   
Delta plc 45 
Notes on the accounts 
    2004  2003 
   Profit    Profit  
   before Net  before Net 
  Turnover taxation assets Turnover taxation assets 
  £ million £ million £ million £ million £ million £ million 
1 Principal activities 
By activity:   
Electrolytic manganese dioxide  34.2 5.2 47.6 45.9 15.8 47.8 
Manganese metal  22.2 (1.4) 7.1 19.1 (2.1) 10.1 
Galvanizing   131.1 12.5 61.8 124.2 8.3 70.0 
Industrial supplies  150.0 20.7 41.9 132.1 15.6 32.9 
Group costs   - (4.1) (6.8) - (5.5) - 
Profit on sale of fixed assets (note 5)  - 0.4 - - - - 
Exceptional operating items (v)  - - - - (4.3) (0.2) 
Goodwill (vi)  - (1.3) 14.3 - (1.1) 14.0 
Continuing operations  337.5 32.0 165.9 321.3 26.7 174.6 
Discontinued operating profit (vii)  14.5 1.8 (0.7) 36.2 2.2 7.8 
Profit on sale of fixed assets (note 5)  - 1.1 - - - - 
Disposal of businesses (note 5)  - (1.5) - - (114.2) (0.8) 
Provision/use of provision made in  
  previous year (note 5)  - - (17.2) - 102.7 (19.8) 
Discontinued operations  14.5 1.4 (17.9) 36.2 (9.3) (12.8) 
Interest/net borrowings & money market  
  fund current asset investments  - (2.9) 42.6 - (4.7) 21.2 
   352.0 30.5 190.6 357.5 12.7 183.0 
Less: joint ventures and associated  
 companies (ii)  (37.5) - - (34.1) - - 
   314.5 30.5 190.6 323.4 12.7 183.0 
 
 
By origin:  
Europe    4.3 (4.5) (3.8) 5.4 (4.9) 2.8 
Asia Pacific    197.0 22.0 91.1 195.3 25.2 98.8 
North America  12.9 0.5 11.0 13.2 (1.1) 12.4 
Africa    123.3 14.9 53.3 107.4 12.9 46.8 
Profit on sale of fixed assets (note 5)  - 0.4 - - - - 
Exceptional operating items (v)  - - - - (4.3) (0.2) 
Goodwill (vi)  - (1.3) 14.3 - (1.1) 14.0 
Continuing operations  337.5 32.0 165.9 321.3 26.7 174.6 
Discontinued operating profit (vii)  14.5 1.8 (0.7) 36.2 2.2 7.8 
Profit on sale of fixed assets (note 5)  - 1.1 - - - - 
Disposal of businesses (note 5)  - (1.5) - - (114.2) (0.8) 
Provision/use of provision made in  
  previous year (note 5)  - - (17.2) - 102.7 (19.8) 
Discontinued operations  14.5 1.4 (17.9) 36.2 (9.3) (12.8) 
Interest/net borrowings & money market  
  fund current asset investments  - (2.9) 42.6 - (4.7) 21.2 
   352.0 30.5 190.6 357.5 12.7 183.0 
Less: joint ventures and associated  
 companies (iii)  (37.5) - - (34.1) - - 
   314.5 30.5 190.6 323.4 12.7 183.0   
46 Delta plc 
Notes on the accounts 
    2004  2003 
   Profit    Profit  
   before Net  before Net 
  Turnover taxation assets Turnover taxation assets 
  £ million £ million £ million £ million £ million £ million 
1 Principal activities (continued)   n/a n/a  n/a n/a 
By destination: Europe          19.3   19.1 
 Asia Pacific  182.5   169.5 
 North America  27.4   42.9 
 Near & Middle East  0.6   0.2 
 Africa  84.7   69.5 
 Continuing operations  314.5   301.2 
 Discontinued operations -   22.2 
    314.5 n/a n/a 323.4 n/a n/a 
 
(i) The impact of acquisitions on turnover and operating profit were not material to the Group or individual 
business segments in 2004. 
 
Taxation and interest have been allocated to discontinued activities on the basis of the legal entities or 
business to which they relate. Comparative figures have been restated on this basis. 
 
(ii) Joint ventures and associated companies  
By activity: Manganese metal  22.2 (1.4) 7.1 19.1 (2.1) 10.1 
  Galvanizing  0.8 0.2 1.5 1.0 0.4 1.5 
  Discontinued (iv)  14.5 2.0 - 14.0 1.7 7.2 
  Interest  - (1.3) - - (0.7) - 
    37.5 (0.5) 8.6 34.1 (0.7) 18.8 
 
(iii) Joint ventures and associated companies  
 By origin: Asia Pacific   0.8 0.2 1.5 1.0 0.4 1.5 
  Africa   22.2 (1.4) 7.1 19.1 (2.1) 10.1 
  Discontinued (iv)  14.5 2.0 - 14.0 1.7 7.2 
  Interest  - (1.3) - - (0.7) - 
    37.5 (0.5) 8.6 34.1 (0.7) 18.8 
 
(iv) Joint ventures and associated companies 
Discontinued: Industrial supplies  14.5 2.0 - 13.6 1.8 7.2 
  Electrical  - - - 0.4 (0.1) - 
  Interest  - (0.2) - - (0.1) - 
    14.5 1.8 - 14.0 1.6 7.2 
 
 Europe  - - - 0.3 (0.1) - 
 Asia Pacific  - - - 0.1 - - 
 Africa  14.5 2.0 - 13.5 1.8 7.2 
 North America  - - - 0.1 - - 
  Interest  - (0.2) - - (0.1) - 
    14.5 1.8 - 14.0 1.6 7.2   
Delta plc 47 
Notes on the accounts 
 
         2004    2003 
     Oper-  Oper-  
     ating Provi- ating Provi- 
     profit sions profit sions 
     £ million £ million £ million £ million 
1 Principal activities (continued)  
(v) Exceptional operating items: 
 By activity: Electrolytic manganese dioxide   - - (0.2) (0.2) 
  Galvanizing    - - (4.8) - 
  Industrial supplies    - - (0.2) - 
  Group costs    - - 0.9 - 
  Discontinued: Industrial supplies  - - (0.1) - 
      - - (4.4) (0.2) 
 By origin: Europe     - - 0.9 - 
  Asia Pacific    - - (1.4) (0.2) 
  North America    - - (3.8) - 
  Discontinued: Europe   - - (0.1) - 
      - - (4.4) (0.2) 
 
         2004   2003 
        Amort- Intangible  Amort- Intangible 
        isation assets  isation assets 
        £ million £ million  £ million £ million 
(vi) Goodwill: 
 By activity: Electrolytic manganese dioxide   - 0.6 (0.1) 0.6 
  Galvanizing    (0.6) 5.3 (0.4) 5.0 
  Industrial supplies    (0.7) 8.4 (0.6) 8.4 
       (1.3) 14.3 (1.1) 14.0 
 By origin: Asia Pacific    (0.6) 5.6 (0.4) 5.2 
  North America    - 0.3 (0.1) 0.5 
  Africa     (0.7) 8.4 (0.6) 8.3 
      (1.3) 14.3 (1.1) 14.0 
 
        2004      2003 
     Operating Net  Operating Net 
   Turnover profit assets Turnover profit assets 
   £ million £ million £ million £ million £ million £ million 
(vii) Discontinued activities:  
 By activity: Industrial supplies  14.5 1.8 (2.4) 21.6 1.7 5.3 
  Electrical    - - 1.7 14.6 0.5 2.5 
    14.5 1.8 (0.7) 36.2 2.2 7.8 
 By origin: Europe   - - 0.7 17.1 0.6 1.9 
  Asia Pacific  - - - 2.5 - - 
  North America  - - (1.4) 3.1 (0.2) (1.2) 
  Africa   14.5 1.8 - 13.5 1.8 7.1 
     14.5 1.8 (0.7) 36.2 2.2 7.8   
48 Delta plc 
Notes on the accounts 
     Continuing activities 
    Pre operating Operating  
    exceptional exceptional Discon- 
    charges & good- charges & good- tinued 
    will amortisation will amortisation activities Total 
    £ million £ million £ million £ million 
2 Analysis of expenses 
Cost of sales             224.7  - - 224.7 
Distribution costs      25.7 - - 25.7 
Administrative expenses     30.0 1.3 0.2 31.5 
     55.7 1.3 0.2 57.2 
Year ended 1 January 2005    280.4 1.3 0.2 281.9 
 
Cost of sales      212.8  3.7 18.7 235.2 
Distribution costs      24.8 - 2.9 27.7 
Administrative expenses    29.8 1.7 0.1 31.6 
     54.6 1.7 3.0 59.3 
Year ended 3 January 2004    267.4 5.4 21.7 294.5 
 
     2004 2003 
     £ million £ million 
3  Group employees 
(a) Employee costs (including directors) 
 Aggregate remuneration  United Kingdom     4.1 7.4 
  Overseas      62.8 59.3 
       66.9 66.7 
 Social security contributions      1.3 2.2 
 Pension contributions      4.6 4.7 
 Other employee costs      0.1 2.1 
       72.9 75.7 
 
   
   Average monthly number Actual number at the year end 
     2004 2003 2004 2003 
(b) Number of employees   
 United Kingdom  118 292 111 122 
 Overseas  4,361 4,509 4,467 4,329 
    4,479 4,801 4,578 4,451 
 
(c) Pensions 
The Group operates a number of pension arrangements throughout the world, including defined benefit 
schemes (of which 9% of Group employees are members), defined contribution schemes, obligatory 
statutory schemes and provident funds. The pension arrangement assets are held in separate trustee 
administered funds, unless determined otherwise by local best practice and regulations. Of the total 
pension contributions, £4.1 million (2003 £4.5 million) relates to overseas schemes and £3.7 million 
(2003 £3.7 million) relates to defined contribution schemes. Where appropriate the pension contributions 
are assessed in accordance with the advice of a qualified independent actuary.  
 
The main UK scheme, which is a funded defined benefit scheme, covers 2% of the Group’s employees and was 
the subject of a formal actuarial valuation at 5 April 2003. For the purposes of these accounts, a formal review 
of the UK scheme was performed at 31 December 2003 using the same data as was used for the 5 April 2003  
Delta plc 49 
Notes on the accounts 
 
 
 
 
3 Group employees (continued) 
(c) Pensions (continued) 
valuation. Both the valuation and formal review have been performed by a professionally qualified actuary. The 
formal review uses the projected unit method, with the assumptions that have the most significant effect on the 
results of the valuation being investment returns 5.8%, earnings growth 3.2% and inflation 2.2%. The formal 
review shows the market value of the assets of the main UK scheme was £591.4 million and the actuarial value 
of the assets was sufficient to cover 101% of the benefits that had accrued to members after allowing for 
expected future increases in earnings. The profit and loss charge for the year was £0.3 million (2003 £nil). 
 
The employee related provisions shown in note 21 include a provision of £0.3 million (2003 £0.3 million) for 
pensions. The major part of this £0.3 million provision relates to the excess of the accumulated liability over the 
amount funded in overseas schemes. 
 
FRS 17 ‘Retirements benefits’ 
 
In accordance with the transitional provisions of FRS 17 ‘Retirement benefits’, whilst the SSAP 24 disclosure 
and measurement principles have been applied for pensions in these financial statements, the disclosures 
illustrating the pension assets and liabilities that would have been recorded had the measurement principles of 
FRS 17 been applied are set out below.   
 
FRS 17 specifies accounting practice and measurement techniques that differ significantly from SSAP 24. In the 
case of the Group’s schemes, the most significant impact has been within the calculation of the actuarial value of 
liabilities. FRS 17 specifies the use of a discount rate which is lower than that used under SSAP 24, resulting in a 
higher present value of these liabilities.  
 
The group maintains defined benefit schemes in the United Kingdom, Australia and South Africa. In all cases it 
has  been necessary to roll forward the calculation of scheme liabilities from earlier valuations. All such 
calculations have been performed by qualified independent local actuaries. 
 
The latest valuation of the South African scheme performed at 31 December 2001 has been updated to 1 
January 2005 and discloses a surplus amounting to £0.9 million before related deferred tax effects and minority 
interests.  During 2002, the Pension Funds Second Amendment Act, 2001, was passed in South Africa. Under 
this Act, surpluses in pension funds have to be used in a manner specified under the Regulations to the Act, to 
improve current and former members’ benefits prior to the employer obtaining any benefit from the surplus. 
Consequently, it is considered unlikely that the company will obtain any benefit from the surplus within the 
South African scheme and accordingly no asset is included in the disclosures below. The latest actuarial 
valuation of the South African scheme was performed at 31 December 2001.  
 
The latest actuarial valuation under FRS 17 of the UK and Australian schemes was 5 April 2003 and 1 January 
2003 respectively, and the results were updated to 1 January 2005. The major assumptions used by the actuaries 
were: 
   as at 1  as at 3  28 Decem- 
   January 2005  January 2004  ber 2002 
  UK Australia UK Australia UK Australia 
  % % % % % % 
Rate of increase in pensionable salaries  3.8 4.0 3.8 4.0 3.2 4.0 
Rate of increase in pension payments  3.0 n/a * 3.0 n/a * 3.0 n/a* 
Discount rate   5.3 5.5 5.4 6.0 5.4 6.0 
Inflation rate   2.8 2.5 2.8 2.5 2.2 2.5 
Expected rate of return on equities  7.0 6.8 7.0 6.8 7.0 7.9 
Expected rate of return on bonds  4.5 4.3 4.9 4.3 4.4 4.3 
Expected rate of return on property and cash 5.5 4.6 5.3 4.6 5.0 5.0 
 
* The members of the Australian pension scheme receive a lump sum on retirement and no further 
pension payments.   
50 Delta plc 
Notes on the accounts 
 
 
     as at 1 January  2005   as at 3 January 2004 
     UK Australia Total UK Australia Total 
     £ million £ million £ million £ million £ million £ million 
3 Group employees (continued) 
(c) Pensions  (continued) 
FRS 17 ‘Retirement benefits’ (continued) 
 
The assets and liabilities in the schemes were: 
Equities    183.6 3.9 187.5 178.6 4.0 182.6 
Bonds    377.0 1.2 378.2 340.9 1.3 342.2 
Property & cash    46.0 0.9 46.9 62.5 1.3 63.8 
Total assets    606.6 6.0 612.6 582.0 6.6 588.6 
Actuarial value of liabilities   (620.8) (5.6) (626.4) (620.8) (7.2) (628.0) 
(Deficit) surplus    (14.2) 0.4 (13.8) (38.8) (0.6) (39.4) 
Less: related deferred tax (liability) asset 4.2 (0.1) 4.1 11.6 0.2 11.8 
Net pension (liability) asset   (10.0) 0.3 (9.7) (27.2) (0.4) (27.6) 
 
    as at 1  as at 3 
    January 2005  January 2004 
    £ million  £ million 
If the above amounts had been recognised in the financial statements, the  
Group’s profit and loss reserve would have been as follows: 
Profit and loss reserve excluding pension liability    54.6  28.0 
Pension liability, net of deferred tax asset of £4.1 million 
   (2003 £11.8 million)      (9.7)  (27.6) 
Profit and loss reserve including pension liability    44.9  0.4 
 
The following amounts would have been recognised in the performance 
statements in the year under the requirements of FRS 17: 
Operating profit: current service cost    0.9  1.4 
 gain on curtailment    -  (6.5) 
Total operating charge (credit)    0.9  (5.1) 
Other finance income: expected return on pension scheme assets  31.9  32.3 
  interest on pension scheme liabilities  (33.0)  (38.9) 
Net charge     (1.1)  (6.6) 
Statement of total recognised gains and losses: 
Actual return less expected return on pension scheme assets   26.0  20.0 
Experience gains & losses arising on the scheme liabilities   6.0  (13.5) 
Changes in assumptions underlying the present value of the scheme liabilities (5.7)  74.5 
Actuarial gain recognised in the statement of total recognised 
   gains and losses     26.3  81.0 
 
Movement in deficit during the year: 
Deficit in scheme at the beginning of the year    (39.4)  (119.7) 
Movement in the year: current service (cost) credit    (0.9)  5.1 
    contributions     1.3  0.8 
   other finance charge    (1.1)  (6.6) 
   actuarial gain     26.3  81.0 
Deficit in scheme at the end of the year     (13.8)  (39.4)   
Delta plc 51 
Notes on the accounts 
 
    2004    2003 
    % of present  % of present 
    value of   value of 
   % of scheme scheme % of scheme scheme 
  £million assets  liabilities £ million  assets liabilities 
3 Group employees (continued) 
(c) Pensions (continued) 
 
Details of experience gains and losses: 
Difference between the expected and actual  
   return on scheme assets  26.0 (4.2) n/a 20.0 (3.4) n/a 
Experience gains and losses on scheme  
   liabilities  6.0 n/a 1.0 (13.5) n/a (2.2) 
Total amount recognised in statement of  
   total recognised gains and losses  26.3 n/a 4.2 81.0 n/a 12.9 
 
(d) Directors’ emoluments 
 
The disclosures required by the Companies Act 1985 are included within the Directors’ remuneration 
report on pages 27 to 34.        
 
 
 
  2004   2003 
  Joint Associ-  Joint Associ-  
  ventures ates Total ventures ates Total 
  £ million £ million £ million £ million £ million £ million 
4 Turnover and profits of joint ventures and  
    associated companies 
Group share of turnover   0.9 36.6 37.5 1.2 32.9 34.1 
Group share of profits less losses  
   before interest   0.2 0.6 0.8 0.3 (0.3) - 
Interest   (0.2) (1.1) (1.3) - (0.7) (0.7) 
Taxation (note 8)   0.1 (0.7) (0.6) (0.1) 0.5 0.4 
Profit (loss) attributable to Delta shareholders 0.1 (1.2) (1.1) 0.2 (0.5) (0.3) 
No dividends were received from joint ventures and associated companies in the current and prior year. 
 
 
      2004 2003 
      £ million £ million 
5 Exceptional items 
Operating exceptional items: Rationalisation and redundancy     - (2.5) 
 Currency gain      - 2.5 
 Reduction in asset carrying values   - (4.4) 
Total operating exceptional items (iii) & (iv)     - (4.4) 
Profit on sale of fixed assets       1.5 - 
Disposal of businesses: Loss on disposals and termination of businesses (i)  (2.8) (114.2) 
 Use of provision made in previous years   - 102.7 
 Release of creditors and provisions made in previous year (ii) 1.3 - 
       (1.5) (11.5) 
Total non-operating exceptional items  (i) (iii) & (iv)    - (11.5) 
   
52 Delta plc 
Notes on the accounts 
 
 
 
 
5 Exceptional items (continued) 
(i) In 2004 this represents the loss on disposal of the associated undertaking, Cobra Investments (Pty) 
Ltd. In 2003 this represents the loss on disposal of the Electrical division and remaining Plumbing 
businesses before use of £102.7 million of provisions made in previous years for diminution in value 
of businesses to be disposed of. In 2003 £0.7 million of goodwill relating to the Plumbing businesses, 
previously written off to reserves on the acquisition of businesses was also charged to the profit and 
loss as part of the loss on disposal above. 
(ii) During 2004, the Group either settled or was released from a number of warranties or indemnities 
given in respect of businesses previously disposed of, at a cost less than was previously provided for. 
(iii) The tax credit attributable to operating exceptional items is £nil (2003 £0.4 million), the tax charge 
attributable to non-operating exceptional items is £0.1 million (2003 credit £0.5 million). 
(iv) There was £nil (2003 £nil) attributable to minority shareholders. 
(v) The net cash inflow from exceptional items was £8.2 million (2003 £114.9 million). 
 
 
      2004 2003 
      £ million £ million 
6 Interest  
Interest payable: On bank loans and overdrafts     (2.9) (7.7) 
 On other loans      (3.0) (3.2) 
       (5.9) (10.9) 
Interest receivable       4.3 6.9 
Share of joint ventures’ and associates’ net interest (note 4)    (1.3) (0.7) 
       (2.9) (4.7) 
Interest payable includes £2.7 million (2003 £3.2 million) in respect of foreign exchange differences on 
financing balances. 
 
 
7 Profit (loss) on ordinary activities before taxation is after charging: 
Amortisation of goodwill (including £nil (2003 £nil) for associates)   1.3 1.1 
 
Audit fees - Deloitte & Touche (including £0.1 million (2003 £0.1 million)  
 for parent Company)      0.4 0.4 
 
Depreciation of tangible assets       10.9 12.5 
 
Operating lease rentals: - land and buildings     2.3 2.3 
 - plant and equipment     0.9 1.0 
 
Research and development      0.6 1.0 
 
Profit on disposal of fixed assets (including £1.5 million (2003 £nil) disclosed  
  in note 5 exceptional items)      1.5 0.4 
 
Deloitte & Touche South Africa received £0.1 million (2003 £0.1 million) in respect of non-audit services 
during the year which principally related to tax compliance services. 
 
The translation of overseas profit before tax at the 2004 average rates of exchange, as compared with the 
2003 average rates, increased profits by £0.5 million (£(0.1) million of this relating to non-operating 
exceptional losses). 
 
 
   
Delta plc 53 
Notes on the accounts 
 
 
 
      2004 2003 
      £ million £ million 
8 Taxation          
Analysis of tax charge for the year: 
UK corporation tax at 30.0% (2003 30.0%)     1.9 6.0 
Double taxation relief      (1.9) (6.0) 
Overseas taxation      10.7 10.3 
Adjustments for prior years      (1.0) (0.7) 
Total current tax      9.7 9.6 
Deferred tax: Current year      (0.5) 0.7 
 Adjustments for prior years     (0.3) 0.5 
Total deferred tax       (0.8) 1.2 
Taxation of Group share of profits less losses of joint ventures & associated  
   companies (note 4)      0.6 (0.4) 
Total tax charge       9.5 10.4 
 
Factors affecting tax charge for the year: 
The tax assessed for the period is higher than the standard rate of corporation tax in the UK of 30.0% 
(2003 30.0%). 
The differences are explained below:- 
 
Profit on ordinary activities before taxation     30.5 12.7 
Add back: loss from joint ventures and associates     0.5 0.7 
       31.0 13.4 
Taxation charge at UK corporation tax rate of 30.0% (2003 30.0%)   9.3 4.0 
Tax effect of expenses not deductible for tax purposes: Operating exceptional items - 0.9 
  Non-operating exceptional items - 3.2 
  Goodwill amortisation  0.3 0.3 
  Other non-deductible expenses 0.9 1.0 
Tax effect of non-taxable income   (1.4) (0.9) 
Overseas profits subject to tax at lower rate     (0.1) (0.1) 
Timing difference not subject to deferred tax     0.1 1.5 
Timing differences subject to deferred tax     0.5 (0.7) 
Adjustments to current tax charge in respect of prior periods   (1.0) (0.7) 
Withholding tax (incl. South African Secondary Tax on Companies)   1.1 1.1 
Current tax charge for the year      9.7 9.6 
Deferred tax movements taken to the profit & loss account     (0.8) 1.2 
Joint ventures and associate tax      0.6 (0.4) 
       9.5 10.4 
 
The 2004 tax charge on continuing businesses was reduced by £1.3m due to matters relating to prior 
years, including the resolution of an historical tax dispute in South Africa which resulted in a tax refund 
and release of provisions.  This beneficial effect cannot be expected to be repeated in future years.   
54 Delta plc 
Notes on the accounts 
 
 
 
      2004 2003 
      £ million £ million 
9 Dividends 
Preference (non-equity): 6.0% cumulative first preference shares and 
 4.5% cumulative second preference shares   0.1 0.1 
Ordinary (equity): Interim 0.6p (2003 1.5p)    0.9 2.2 
  Proposed final 2.4p (2003 0.5p)    3.7 0.8 
       4.6 3.0 
Total dividends      4.7 3.1 
 
10 Earnings per share 
Basic earnings per share (EPS) is calculated in accordance with FRS 14, by dividing the earnings 
attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during 
the year. Reconciliations of the earnings and weighted average number of shares used in the calculations 
are set out in the table below. The earnings are based on the attributable profit (pre and post-exceptional 
items) less preference dividends and goodwill amortisation (where applicable) as shown below.  
 
   2004    2003 
   Per    Per 
   share    share 
 Total Weighted amount  Total Weighted amount 
 earnings average no. total  earnings average no. total 
 £ million of shares pence  £ million of shares pence 
Profit (loss) attributable to shareholders 14.8 151,174,618   (5.4) 150,784,911  
Less: preference dividends (0.1)     (0.1)   
Basic EPS 14.7 151,174,618 9.7  (5.5) 150,784,911 (3.7) 
Effects on dilutive securities: options - 80,658   - -  
Diluted EPS 14.7 151,255,276 9.7  (5.5) 150, 784,911 (3.7) 
Basic EPS (as above) 14.7 151,174,618 9.7  (5.5) 150,784,911 (3.7) 
Effect of goodwill amortisation 1.3  0.9  1.1  0.7 
Basic EPS excl. goodwill amortisation 16.0 151,174,618 10.6  (4.4) 150,784,911 (3.0) 
Diluted EPS excl. goodwill amortisation 16.0 151,255,276 10.6  (4.4) 150,784,911 (3.0) 
Basic EPS excl. goodwill  
   amortisation (as above) 16.0 151,174,618 10.6  (4.4) 150,784,911 (3.0) 
Effect of operating exceptional  
   items before taxation (note 5) -  -  4.4  2.9 
Effect of non-operating exceptional  
   items before taxation (note 5) -  -  11.5  7.6 
Effect of taxation on exceptional 
   items  (note 5 iii) 0.1  -  (0.9)  (0.5) 
Basic EPS excluding exceptional  
   items and goodwill amortisation 16.1 151,174,618 10.6  10.6 150,784,911 7.0 
Diluted EPS excluding exceptional  
   items and goodwill amortisation 16.1 151,255,276 10.6  10.6 150,784,911 7.0   
Delta plc 55 
Notes on the accounts 
 
       Net 
      Amort- book 
     Cost isation value 
     £ million £ million £ million 
11 Intangible assets - goodwill 
At 3 January 2004        17.7  (3.7) 14.0 
Acquisitions  (note 29)        1.3 - 1.3 
Amortisation for the year       -  (1.3) (1.3) 
Currency translation        0.5 (0.2) 0.3 
At 1 January 2005        19.5  (5.2) 14.3 
All capitalised goodwill above is being amortised over the useful economic life of the acquisitions.  This 
does not exceed 20 years. 
    
  Cost or valuation   Accumulated depreciation 
    Fixtures,    Fixtures, 
    Plant fittings,   Plant fittings,  Net 
  Land  & & mach-  tools &   Land & & mach- tools &   book  
  buildings inery equipment Total  buildings  machinery  equipment  Total value 
  £ million £ million  £ million  £ million  £ million £ million £ million £ million £ million 
12 Tangible assets 
Group:  
At 3 January 2004  55.2 107.7 18.3 181.2 8.7 60.1 12.0 80.8 100.4 
Currency translation  (3.1) (5.7) (0.2) (9.0) (0.6) (3.1) (0.3) (4.0) (5.0) 
Disposals   (1.6) (1.2) (3.6) (6.4) (0.1) (0.9) (2.1) (3.1) (3.3) 
Acquisitions (note 29)  (0.9) - - (0.9) (0.6) 0.8 0.1 0.3 (1.2) 
Expenditure 2004  3.0 6.2 1.6 10.8 - - - - 10.8 
Depreciation 2004  - - - - 1.3 7.4 2.2 10.9 (10.9) 
At 1 January 2005   52.6 107.0 16.1 175.7 8.7 64.3 11.9 84.9 90.8 
 
Included in the above are payments on account and assets in the course of construction: 
At 3 January 2004  0.3 3.6 - 3.9 
Currency translation  - (0.3) - (0.3) 
Expenditure 2004  - 3.4 0.3 3.7 
Transfer to completed assets (0.3) (3.3) (0.3) (3.9) 
At 1 January 2005   - 3.4 - 3.4 
 
Analysis of cost or valuation of land and buildings at professional valuation in:  
2001 and earlier years          13.3 
2002 - 2004          - 
At cost           39.3 
At 1 January 2005           52.6 
 
 2004 2003  
 £ million £ million 
Analysis of net book value:  
Land and buildings: Freehold      40.0 42.2 
 Short leasehold       3.9 4.3 
Plant and machinery       42.7 47.6 
Fixtures, fittings, tools & equipment      4.2 6.3 
At  1 January 2005         90.8 100.4 
  
(i) If the land and buildings were included at cost, the net book value of land and buildings would be 
reduced by £7.8 million (2003 £9.2 million).   
56 Delta plc 
Notes on the accounts 
          Company  
         Group Asso- 
    Joint ventures  Associated companies   ciated 
    Share of   Share of   company 
   Cost reserves Loans Cost  reserves Loans Total loan 
   £ million £ million £ million £ million £ million £ million  £ million £million 
13 Investments            
(a) Associates, joint ventures  
and other investments:  
cost and share of reserves  
At 3 January 2004   0.4 - 1.1 3.0 12.2 2.1 18.8 1.6 
Currency translation   - (0.1) - (0.1) - (0.1) (0.3) (0.1) 
Disposals    - - - (0.5) (6.7) (0.3) (7.5) (0.3) 
Repayment of loans   - - - - - (1.3) (1.3) (1.2) 
Amounts retained   - 0.1 - - (1.2) - (1.1) - 
Net book value at 1 January 2005  0.4 - 1.1 2.4 4.3 0.4 8.6 - 
(i) The names of principal joint ventures and associated companies are given on page 74. 
 
     Joint ventures  Associates 
     2004  2003 2004 2003 
    £ million £ million £ million  £ million 
(b) The Group’s share in the net assets  of associates and joint  
ventures (excluding loans) comprises: 
Fixed assets       0.9 1.0 6.7 13.4 
Current assets       0.5 0.6 9.8 13.2 
Liabilities due within one year      (1.0) (0.2) (9.1) (5.2) 
Liabilities due after more than one year     - (1.0) (0.7) (6.2) 
Share of net assets       0.4 0.4 6.7 15.2 
 
        Group  Company 
  Money market funds   Other  Money market funds 
    2004 2003 2004 2003 2004 2003 
    £ million  £ million £ million  £ million £ million  £ million 
(c) Current asset  investments:  
At 3 January 2004     13.0 0.4 - 5.4 8.2 - 
Acquisitions, disposals and other movements   10.7 12.6 - (5.4) 11.2 8.2 
Net book value at 1 January  2005    23.7 13.0 - - 19.4 8.2 
 
  Book value  Amounts provided Net  book Net book 
 At 3  Movements At 1 At 3  Movements At 1 value at 1 value at 3 
 January during January January during January January January 
 2004 year  2005 2004 year  2005 2005 2004 
 £ million  £ million  £ million £ million  £ million  £ million £ million £ million 
(d) Holding company        
 investments in  
 Group companies: 
Shares     571.6 224.4 796.0 (185.4) (24.0) (209.4) 586.6 386.2 
Loans   (203.0) (217.8) (420.8) (17.1) - (17.1) (437.9) (220.1) 
  368.6 6.6 375.2 (202.5) (24.0) (226.5) 148.7 166.1 
(i) The net book value of shares is equivalent to the issued share capital and reserves of the subsidiary 
companies. 
(ii) The cost of shares in subsidiary companies is £779.1 million (2003 £600.2 million). 
(iii) The names of the principal Group companies are given on page 74. 
   
Delta plc 57 
Notes on the accounts 
       
 
      Group   Company 
     2004 2003 2004 2003 
     £ million £ million £ million £ million 
14 Stocks 
Raw materials     18.7 15.5 - - 
Work-in-progress     6.8 5.5 - - 
Finished goods     40.8 38.4 - - 
      66.3 59.4 - - 
Replacement cost     69.6 59.6 - - 
 
15 Debtors 
Amounts falling due after one year: 
Other debtors      0.7 1.1 0.3 0.6 
Deferred tax (note 21)     3.2 2.9 - - 
       3.9 4.0 0.3 0.6 
Amounts falling due within one year:  
Trade debtors      50.3 50.5 - - 
Amounts owed by Group companies    - - - 0.1 
Other debtors      2.7 5.5 0.3 0.6 
Corporation tax recoverable     1.3 0.6 - - 
Prepayments and accrued income    1.8 2.6 0.2 0.5 
       56.1 59.2 0.5 1.2 
       60.0 63.2 0.8 1.8 
 
16 Creditors 
Amounts falling due within one year: 
Trade creditors      26.1 25.6 0.1 0.1 
Amounts owed to Associated companies    0.4 0.5 - - 
Amounts owed to Group companies    - - 4.1 0.4 
Other creditors      8.0 6.9 0.2 0.2  
Corporate taxation      5.5 4.5 - - 
Other taxation and social security    1.2 1.1 0.1 0.1  
Accruals and deferred income    22.0 25.0 1.4 1.8 
Dividends       3.7 0.8 3.7 0.8 
       66.9 64.4 9.6 3.4 
 
17 Capital commitments  
Future capital expenditure, contracted but not provided for  2.8 3.6 - - 
 
18 Contingent liabilities 
Financial guarantees      2.7 5.7 1.6 1.6 
It is not expected that any loss will arise in respect of these financial guarantees. 
 
The Company is registered under a group registration for value added tax and is jointly liable for the 
amount payable of £0.1million at 1 January 2005 (2003 £0.1 million) in respect of certain UK Group 
companies. 
 
The European Commission’s competition directorate is continuing its investigation into allegations of 
anti-competitive behaviour among certain manufacturers of copper plumbing fittings, including the   
58 Delta plc 
Notes on the accounts 
 
 
 
 
18 Contingent liabilities (continued) 
Group’s former plumbing fittings business.  Notwithstanding the Group's subsequent disposal of that 
business, the Group retains some responsibility in relation to the outcome of the Commission's 
investigation and is co-operating fully with the Commission. Whilst the investigation is not subject to a 
prescribed timetable, the Commission could issue a statement of objections during 2005, and a final 
decision (including as regards any fine) would follow thereafter.  Legal counsel have advised that 
applicable regulations limit the fines that could be imposed to 10% of the group's total turnover in the 
business year preceding the imposition of the fine. The investigation is expected to result in a fine, 
however the Commission is afforded considerable discretion in the determination of such fines as well as 
in the reduction of fines imposed on parties who seek leniency and co-operate with the Commission.  
Given the stage of this particular investigation and the Commission's considerable discretion in 
determining fines, it is not possible to estimate the level of fine that might be imposed upon the Group. 
Any decision by the Commission could be appealed to the European Courts, although an appeal would 
not typically suspend payment of a fine. Consequently, no provision has been raised in respect of this 
matter except for legal expenses expected to be incurred in connection with the investigation. 
 
In addition to the liabilities for which provisions have been made and those described above, the Group 
has contingent liabilities arising in the ordinary course of business and from businesses previously 
disposed, from which it is currently anticipated that the likelihood of any material liabilities arising is 
remote. 
 
     2004   2003 
     Land and    Land and  
     buildings Other  buildings Other 
    £ million £ million  £ million £ million 
19 Commitments under operating leases 
Annual commitments under operating  
leases expiring: Within one year   1.1 0.3  0.5 0.2 
 Between one and five years 1.3 1.1  3.3 0.6 
 After five years   0.4 -  1.4 - 
      2.8 1.4  5.2 0.8 
Company annual commitments for land and buildings are £0.2 million (2003 £0.2 million) for leases 
expiring between one and five years. 
 
     Group    Company 
   Due within Due after  Due within  Due after  
   one year one year Total one year one year Total 
   £ million £ million £ million £ million £ million £ million 
20 Borrowings 
At the end of this year: 
Unsecured bank loans and overdrafts  18.6 0.1 18.7 16.7 - 16.7 
Other unsecured loans    0.2 0.6 0.8 - - - 
At 1 January  2005    18.8 0.7 19.5 16.7 - 16.7 
 
At the end of last year: 
Unsecured bank loans and overdrafts  20.7 0.3 21.0 26.9 - 26.9 
Acceptances     1.7 - 1.7 - - - 
     22.4 0.3 22.7 26.9 - 26.9 
Other unsecured loans    0.1 0.7 0.8 - - - 
At 3 January  2004    22.5 1.0 23.5 26.9 - 26.9   
Delta plc 59 
Notes on the accounts 
 
 
      Group   Company 
     2004 2003 2004 2003 
     £ million £ million £ million £ million 
20 Borrowings (continued) 
The Group borrowings are repayable as follows:  
Within one year       18.8 22.5 16.7 26.9 
Between one and two years     0.2 0.3 - - 
Between two and five years     0.5 0.7 - - 
       19.5 23.5 16.7 26.9 
 
In both 2003 and 2004 there were no Group borrowings repayable wholly or partly in more than five 
years by instalments. 
 
     Group   Company 
    Restruct- 
  Employee  uring &     
  related    disposal  Deferred  Restruc- 
  provisions Insurance provisions Other taxation Total turing 
  £ million £ million £ million £ million £ million  £ million £ million 
21 Provisions for liabilities and charges (i) (ii) (iii) (iv) (v)  
At 3 January 2004    3.0 1.6 20.8 2.9 1.3 29.6 0.3 
Currency translation   0.3 - - (0.3) - - - 
Profit and loss:  
 Additional provision  0.1 - - 1.3 0.2 1.6 - 
 Unused amounts released - - (1.2) (0.2) (1.0) (2.4) - 
Utilised    (1.7) (0.1) (2.1) (0.4) 0.6 (3.7) (0.2) 
At 1 January 2005   1.7 1.5 17.5 3.3 1.1 25.1 0.1 
(i) Includes pension and long term compensation provisions. 
(ii) Delta Insurance Ltd, a captive insurance company, is a wholly owned subsidiary of the Group. 
Provision is made for claims incurred but which have not yet been notified, based on advice from its 
insurance managers and consulting actuaries. 
(iii) Restructuring and disposal provisions relate to future liabilities expected to arise as a result of 
businesses disposed (see note 5 exceptional items).  
(iv) Includes warranties, environmental and other provisions. 
 
With respect to items (i), (ii) and (iv) above, the timing of cash outflows to settle such liabilities is 
currently expected to be over the next five years. With respect to item (iii) above, the timing of cash 
outflows to settle such liabilities is uncertain, however we expect the majority of these matters to be 
resolved during the next three years. 
 
      _2004  2003 
         
       Amount   Amount 
       provided provided 
       £ million £ million 
(v) Deferred taxation 
Overseas tax on timing differences:  
Capital allowances in excess of depreciation     6.6 6.4 
Tax losses         (2.9) (1.8) 
Other timing differences        (2.6) (3.3) 
Deferred tax liabilities (above)      1.1 1.3 
Deferred tax assets – other timing differences (note 15)    (3.2) (2.9) 
Net deferred tax asset        (2.1) (1.6) 
   
60 Delta plc 
Notes on the accounts 
 
 
 
 
21 Provisions for liabilities and charges (continued) 
(v) Deferred taxation (continued) 
  2004 
  £ million  
Movement on deferred taxation in the period: 
Net deferred tax asset at 3 January 2004 (1.6) 
Credit to profit and loss account (0.8) 
Currency translation and other movements 0.3 
Net deferred tax asset at 1 January 2005               (2.1) 
 
The accumulated losses reported by the Group for tax purposes in various tax jurisdictions include the 
following, most of which were incurred by disposed businesses.  The following figures are subject to audit 
by tax authorities and do not include amounts recognised as deferred tax assets that are expected to be 
utilised in the near future. 
  Closing tax losses 2004 
Country  £ million 
Germany    97 
United Kingdom    19 
United States    9 
Other jurisdictions    2 
 
The future use, if any, of these accumulated losses will depend upon then governing tax rules and 
regulations, and upon the Group generating appropriate taxable income in those countries. 
 
 
22 Related party transactions 
During the year ended 1 January 2005, purchases on normal trading terms of £3.8 million (2003 £3.4 
million) were made from joint ventures and associated companies, no sales were made in this period.  As 
at 1 January 2005 creditors included £0.4 million (2003 £0.5 million) in respect of purchases made from 
associates and joint ventures by the Group (see note 16) and loans to associates and joint ventures were 
£1.5 million (2003 £3.2 million). See note 13. 
 
Details of the Group’s principal joint ventures and associated companies are set out on page 74. 
 
      6% 4.5%  
     Cumulative Cumulative   
     first second 
     preference preference  Ordinary Total 
     shares of shares of shares of share 
     £1 each  £1 each  25p each capital 
      £ million  £ million £ million £ million 
23 Share capital        (i) (ii)   (iii) 
Authorised:  
At 3 January 2004 and 1 January 2005     1.0 2.0 47.0 50.0 
Called up share capital - allotted and fully paid: 
At 3 January 2004      0.9 1.9 37.9 40.7 
Issued during year under share option schemes   - - - - 
At 1 January 2005      0.9 1.9 37.9 40.7 
(i) 1,000,000 shares authorised and 866,152 shares allotted and fully paid at 3 January 2004 and 1 January 
2005. 
(ii) 2,000,000 shares authorised and 1,940,000 shares allotted and fully paid at 3 January 2004 and 1 January 
2005. 
(iii) 188,000,000 shares authorised at 3 January 2004 and 1 January 2005, 151,697,846 shares allotted and 
fully paid at 1 January 2005 (2003 151,665,260).    
Delta plc 61 
Notes on the accounts 
 
 
 
 
23 Share capital (continued) 
(iv) The non-equity preference shares are not redeemable and are non-voting except in circumstances where 
the Company proposes to abrogate, modify or vary their rights. They have preferential rights to return of 
capital on a winding up. 
(v) During the year the Company allotted a total of 32,586 ordinary shares of 25p each under the Save As 
You Earn Share Option Scheme and the International Save As You Earn Share Option Scheme at 72p and 
82p. The aggregate nominal value of all the allotted shares was £8,146 and the consideration received for 
the allotments was £23,832. 
 
      International 
      Save As Save As  Senior 
    Executive You Earn You Earn executive 
24 Share options (i) (i) (ii) & (iii) (i) (i) & (ii) 
Invitation to subscribe 6th - - - 
Total number of participants at end of year 25 33 73 - 
Options granted during year: Date:  16 April & 
   20 September  - - - 
 Exercise prices 83p & 86p 
  respectively - - - 
 Number of shares 1,381,591 - - - 
Options exercised and shares  
   allotted during year: Number of shares - 11,061 21,525 - 
(i) At 1 January 2005, there were options outstanding under the UK Save As You Earn Scheme over 260,014 
shares at prices between 72p and 270p, under the International Save As You Earn Scheme over 350,890 
shares at prices between 72p and 108p, under the Senior Executive Share Option Scheme over nil shares 
and under the Executive Share Option Scheme over 4,702,914 shares between 83p and 156p. 
(ii) In normal circumstances the options under the Save As You Earn Share Option Scheme mature either 36, 
60 or 84 months following grant and can be exercised within 6 months of the relevant maturity date. 
Options under the Executive schemes can be exercised between three and ten years after the date on which 
options were granted subject to performance criteria being met. 
(iii) In preparing the accounts the directors have taken advantage of the exemption available to Inland Revenue 
approved SAYE schemes under UITF 17 (revised). 
 
  Group  Company 
  Share  Profit Employee Share  Profit Employee 
  premium Revaluation & loss  share own- premium Revaluation and loss share own- 
   account  reserve account ership trust account reserve account ership trust 
  £ million  £ million £ million £ million £ million £ million £ million £ million 
25 Reserves 
At 3 January 2004  32.5 47.5 28.0 (1.0) 32.5 (21.6) 97.1 (1.0) 
Movements during year:  
Issue of shares - - - - - - - - 
Net surplus (deficit) arising 
  on revaluation:  
Currency translation - (8.0) 3.2 - - - - - 
Group companies - - - - - 17.5 - - 
Transfer of reserves - (13.3) 13.3 - - 22.4 (22.4) - 
Transfers to (from) profit 
  and loss account:  
 Group companies - - 11.2 - - - (12.2) - 
 Associated companies - - (1.1) - - - - - 
 - (21.3) 26.6 - - 39.9 (34.6) - 
At 1 January 2005 32.5 26.2 54.6 (1.0) 32.5 18.3 62.5 (1.0)   
62 Delta plc 
Notes on the accounts 
 
 
 
 
25 Reserves (continued) 
(i) The profit and loss account of the Group includes profits retained in overseas Group companies totalling 
£56.2 million (2003 £56.2 million) which could be subject to local exchange control regulations if 
distributed as dividends. 
(ii) The profit and loss account of the Group includes retained net profits in associated companies of £4.8 
million (2003 £11.3 million) of which £5.2 million (2003 £11.6 million) is retained overseas and which 
could be subject to local exchange control regulations if distributed as dividends. 
(iii) The revaluation reserve of the Group includes £nil (2003 £1.8 million) in respect of associated companies. 
(iv) The loss for the year dealt with in the accounts of the Company is £(7.5) million (2003 £(6.8) million) As 
permitted by Section 230 of the Companies Act 1985, the Company has not presented its own profit and 
loss account. 
(v) The cumulative goodwill written off directly to reserves, attributable to continuing Group and associated 
companies held at the end of the year which were purchased prior to 1998, amounted to positive goodwill 
of £19.8 million (2003 £19.8 million). It has not proved possible to identify goodwill in respect of 
companies acquired prior to 1970, but the amounts are not considered to be material. 
(vi) In 2003 in the Group reserves £0.5 million of exchange gains on foreign currency loans were offset against 
exchange losses on the net investments in certain overseas subsidiaries and associated undertakings. 
Following the cessation of hedging in August 2003, there were no such gains/losses to be offset in 2004. 
(vii) Movement in Company shareholders' funds 
         
       2004 2003 
       £ million £ million 
Loss for the financial year      (7.5) (6.8) 
Dividends        (4.7)  (3.1) 
         (12.2) (9.9) 
Other recognised gains (losses) for the year: net surplus (deficit) arising on revaluation 
  of Group companies       17.5 (2.5) 
Shares issued        - 0.5 
Net increase (decrease) in shareholders' funds for the year   5.3 (11.9) 
Total shareholders' funds at the beginning of the year     147.7 159.6 
Total shareholders' funds at the end of the year    153.0 147.7 
 
(viii) Shares in the Employee share ownership trust (ESOT) are valued at their original cost and deducted from 
shareholders’ funds. At 1 January 2005, the 514,609 (2003 514,609) shares held by the ESOT which cost 
£1.5 million had a market value of £0.5 million (2003 £0.4 million). At 1 January 2005, £0.5 million 
(2003 £0.5 million) has been amortised to the profit and loss account. Dividend income payable to the 
ESOT has been waived. Further details of the operation of the long term incentive plan are given in the 
Directors’ remuneration report. 
 
26 Reconciliation of operating profit to net cash inflow from operating activities 
Operating profit        32.6 28.9 
Depreciation, asset carrying value adjustments and amortisation of goodwill  12.2 17.9 
Profit on disposal of fixed assets      - (0.4) 
Increase in stocks        (9.1) (5.3) 
Decrease (increase) in debtors       1.4 (5.7) 
Increase (decrease) in creditors      1.1 (11.5) 
Decrease in  provisions        (0.8)  (0.9) 
Other items          - 4.6  
Net cash inflow from operating activities      37.4 27.6   
Delta plc 63 
Notes on the accounts  
 
 
         
       2004 2003 
       £ million £ million 
27 Reconciliation of net cash flow to movement in net debt 
Increase (decrease) in cash in the year      0.8 (17.5) 
Cash outflow from decrease in debt and lease financing    3.8 87.7 
Cash outflow (inflow) from increase (decrease) in liquid resources   16.7 (1.5) 
Change in net debt resulting from cash flows     21.3 68.7 
Disposals         - 3.8 
Other non-cash changes        (2.7) (3.1) 
Translation difference        2.8 (2.1) 
Movement in net debt in the year      21.4 67.3 
Net cash (debt) at the beginning of the year      21.2 (46.1) 
Net cash at the end of the year       42.6 21.2  
Net cash comprises the following Group balance sheet accounts: 
Current asset investments – money market funds     23.7 13.0 
Bank and other deposits        38.4 31.7 
Borrowings falling due within one year      (18.8) (22.5) 
Borrowings falling due after one year      (0.7) (1.0) 
Net cash at the end of the year       42.6 21.2  
 
           
    At   Other  At 
    3 January   non-cash Translation 1 January 
    2004  Cash flow changes difference 2005 
    £ million  £ million £ million £ million £ million 
28 Analysis of net debt  
Cash in hand, at bank     26.1 2.3 (2.7) 1.2 26.9 
Overdrafts      (15.7) (1.5) - 1.3 (15.9) 
       10.4 0.8 (2.7) 2.5 11.0 
Debt due after one year     (1.0) 0.2 - 0.1 (0.7) 
Debt due within one year     (6.8) 3.6 - 0.3 (2.9) 
Debt      (7.8) 3.8 - 0.4 (3.6) 
Liquid resources (i)     18.6 16.7 - (0.1) 35.2 
Net cash      21.2 21.3 (2.7) 2.8 42.6 
(i) Liquid resources at 1 January 2005 include money market funds of £23.7 million (2003 £13.0 million) 
and bank and other deposits repayable in excess of 24 hours notice of £11.5 million (2003 £5.6 million). 
(ii) £4.2 million (2003 £4.6 million) of the Group’s net cash is restricted and not immediately available to 
other members of the Group. 
 
 
   
64 Delta plc 
Notes on the accounts 
 
 
 
 
29 Acquisition and disposal of businesses 
(i) Disposals 
In November 2004 the Group and its co-investees sold their investment in Cobra Investments (Pty) Ltd 
(which manufactures a comprehensive range of plumbing fittings) to Distribution and Warehousing 
Network Ltd. The net proceeds in respect of the Group’s 37.6% share in Cobra was £4.2 million. The 
Group also sold its intermediate holding company, Delta Electrical and Engineering Holdings S.L. during the 
year, the net proceeds of which was £0.5 million. 
 
The 2003 and 2004 results of these businesses have been included in discontinued activities for the purposes of 
these financial statements. Prior to disposal this business repaid £1.2 million of the equity loan advanced from 
Delta plc which is included in the Group’s cash flow from capital expenditure and financial investment. 
 
 (ii) Acquisitions 
During the year the Group finalised the fair value of the opening balance sheet of Webforge, which was 
acquired in 2003 from Pacifica Group. The table below presents the provisional values reflected in the 2003 
accounts, together with the adjustments thereto. There were no acquisitions made in 2004. All acquisitions have 
been recorded using acquisition accounting principles. 
 
        Acquisitions Disposals 
     2004    2003  2004 
     Provis-   2004 adjustments Amen-  
     ional Reval-  ded fair  
    Total value uation Other value Total 
    £ million £ million £ million £ million £ million £ million 
        (i)  (ii) (iii)  
Tangible fixed assets     - 12.0 (0.3) (0.9) 10.8 - 
Investments in associated companies   - - - - - 7.5 
Stocks     - 5.0 - - 5.0 - 
Debtors     - 7.1 - - 7.1 - 
Creditors (incl.  current tax)    - (6.0) - - (6.0) - 
Provisions (incl. deferred tax)    - 0.3 - - 0.3 - 
Minority interests     - 0.2 - - 0.2 - 
Borrowings     - - - - - - 
Net cash     - 1.3 - - 1.3 - 
Net assets acquired and disposed of   - 19.9 (0.3) (0.9) 18.7 7.5 
Goodwill     - 3.0 0.3 1.0 4.3 - 
Loss on disposal  (net of provisions made in prior years) - - - - - (1.5) 
          - 22.9 - 0.1 23.0 6.0 
 
Net cash payable/receivable at average exchange rates 1.2 22.4 - 0.1 22.5 4.5 
Deferred consideration payable/receivable and   
  disposal costs not yet paid    - 1.2 - - 1.2 (0.3) 
Amounts in respect of prior years  
  acquisitions /disposals     (1.3) - - - - 1.5 
Currency translation        0.1 (0.7) - - (0.7) 0.3 
         - 22.9 - 0.1 23.0 6.0 
(i) Excludes the adjustments made to the 2003 provisional valuation which are disclosed separately. The cash 
outflow of £1.2 million is in respect of deferred consideration for a business acquired in 2003 in South 
Africa. 
(ii) Finalisation of property valuations within Webforge’s Asian businesses £0.3 million. 
(iii) Finalisation of accounting policy alignments and amounts in dispute relating to the purchase consideration 
£0.9 million.   
Delta plc 65 
Notes on the accounts 
 
 
 
 
30 Financial instruments 
 
Further information on the Group’s use of financial instruments is included in the Financial Review in the 
sections on borrowings and borrowing  facilities, treasury policies and the effect of interest and exchange rates. 
This should be read in conjunction with the numerical disclosures set out here.  Short-term debtors and creditors 
have been excluded from all disclosures (other than the currency profile (section vi)). The Group does not trade 
in financial instruments, so there are no financial instruments held for trading purposes. 
 
(i) Interest rate and currency profile of financial assets and liabilities 
     South 
   US Australian African 
  Euro dollar dollar rand Sterling Other Total 
  £ million £ million £ million £ million £ million £ million £ million 
Financial assets 
At 1 January 2005: 
Cash and deposits   0.2 1.9 12.9 18.9 0.3 4.2 38.4 
Money market funds   - - - - 23.7 - 23.7 
Foreign exchange deals   4.3 2.3 1.3 - 0.7 0.1 8.7 
Loans to associates/ joint ventures  
   and other investments   - 1.1 - - - - 1.1 
Other    0.1 - - - 0.2 0.3 0.6 
     4.6 5.3 14.2 18.9 24.9 4.6 72.5 
Floating rate    4.6 5.3 14.2 18.9 24.9 4.3 72.2 
Fixed rate    - - - - - 0.3 0.3 
        4.6 5.3 14.2 18.9 24.9 4.6 72.5 
  
(a) £0.3 million of fixed rate financial assets have a weighted average fixed interest rate of 7.5% and  no set 
repayment date. 
 
 
At 3 January 2004:  
Cash and deposits   1.0 1.3 4.5 21.4 0.4 3.1 31.7 
Money market funds   - - - - 13.0 - 13.0 
Foreign exchange deals   - - - - 14.1 - 14.1 
Loans to associates/ joint ventures  
   and other investments   - 1.1 - 1.6 0.5 - 3.2 
Other    0.2 - - - 0.5 0.4 1.1 
        1.2 2.4 4.5 23.0 28.5 3.5 63.1 
Floating rate    1.0 2.4 4.5 23.0 28.0 3.1 62.0 
Fixed rate    - - - - - 0.4 0.4 
Interest free    0.2 - - - 0.5 - 0.7 
        1.2 2.4 4.5 23.0 28.5 3.5 63.1   
66 Delta plc 
Notes on the accounts 
 
     South  
   US Australian African   
  Euro dollar dollar rand Sterling Other Total 
  £ million £ million £ million £ million £ million £ million £ million 
30 Financial instruments (continued) 
Financial assets (continued)  
At 3 January 2004:  
 
Weighted average fixed interest 
rate (%)    - - - - - 7.5 7.5 
Weighted average period (years) for  
which rate is: Fixed  (b)  - - - - - - - 
   Interest free (b) - - - - - - - 
 
(b) £0.4 million of fixed rate financial assets and £0.5 million of interest free financial assets have no set 
repayment date. 
     South  
   US Australian African   
  Euro dollar dollar rand Sterling Other Total 
  £ million £ million £ million £ million £ million £ million £ million 
Financial liabilities 
At 1 January 2005: 
Borrowings    (0.1) (1.2) (1.2) (14.5) (0.3) (2.2) (19.5) 
Foreign exchange deals   (0.1) (2.6) - (5.3) - (0.7) (8.7) 
Preference shares (c)   - - - - (2.8) - (2.8) 
        (0.2) (3.8) (1.2) (19.8) (3.1) (2.9) (31.0) 
Floating rate    (0.2) (3.8) (1.2) (19.8) (0.3) (2.9) (28.2) 
Fixed rate   - - - - (2.8) - (2.8) 
        (0.2) (3.8) (1.2) (19.8) (3.1) (2.9) (31.0) 
 
(c) The preference shares of £2.8 million are not redeemable and have a weighted average interest rate of 5%. 
 
 
At 3 January 2004: 
Borrowings    (1.0) (1.2) (5.0) (13.3) (0.2) (2.8) (23.5) 
Foreign exchange deals   (3.5) (7.9) (0.5) (1.6) - (0.5) (14.0) 
Interest rate swaps (d)   - (0.6) - - - - (0.6) 
Preference shares   - - - - (2.8) - (2.8) 
         (4.5) (9.7) (5.5) (14.9) (3.0) (3.3) (40.9) 
Floating rate     (4.5) (9.7) (3.8) (14.9) (0.2) (3.3) (36.4) 
Fixed rate    - - (1.7) - (2.8) - (4.5) 
        (4.5) (9.7) (5.5) (14.9) (3.0) (3.3) (40.9) 
 
(d)  Interest rate swaps had a notional principle of US$37.5 million expiring in September 2004. 
   
Delta plc 67 
Notes on the accounts 
 
     South  
   US Australian African   
  Euro dollar dollar rand Sterling Other Total 
  £ million £ million £ million £ million £ million £ million £ million 
30 Financial instruments (continued) 
Financial liabilities (continued) 
At 3 January 2004: 
 
Weighted average fixed interest  
rate (%)    - - 5.5 - 5.0 - 5.1 
Weighted average period (years) for  
which rate is: Fixed (e)   - - 1.0 - - - 1.0 
  Interest free  - - - - - - - 
 
(e) The preference shares of £2.8 million are not redeemable. 
 
 
Total financial assets less financial liabilities  
Floating rate    4.4 1.5 13.0 (0.9) 24.6 1.4 44.0 
Fixed rate    - - - - (2.8) 0.3 (2.5) 
At 1 January 2005     4.4 1.5 13.0 (0.9) 21.8 1.7 41.5 
 
Floating rate    (3.5) (7.3) 0.7 8.1 27.8 (0.2) 25.6 
Fixed rate    - - (1.7) - (2.8) 0.4 (4.1) 
Interest free    0.2 - - - 0.5 - 0.7 
At 3 January 2004     (3.3) (7.3) (1.0) 8.1 25.5 0.2 22.2 
 
Floating rate liabilities principally bear interest at rates based on one or three-month LIBOR or South Africa 
bank prime rates. 
 
             
       2004 2003 
       £ million £ million 
(ii) Maturity profile of financial liabilities  
In one year or less, or on demand      (27.4) (37.1) 
In one to two years        (0.3) (0.3) 
In two to five years        (0.5) (0.7) 
In more than five years        (2.8) (2.8) 
          (31.0) (40.9) 
 
Preference shares of £2.8 million, which are not redeemable, are included in the ‘In more than five years’ 
category. 
 
 
(iii) Maturity profile of undrawn committed borrowing facilities 
Within one year        (15.2) (20.2) 
 
 
(iv) Fair values of financial assets and financial liabilities 
The Group does not trade in financial instruments.  The following table provides a comparison, by category, of 
the carrying amounts and the estimated fair value of the Group’s financial assets and financial liabilities.  Set out 
on the table below is a summary of the methods and assumptions used to determine fair values.   
68 Delta plc 
Notes on the accounts  
 
      2004   2003 
     Book Fair Book Fair 
     value value value value 
     £ million £ million £ million £ million 
30 Financial instruments (continued) 
(iv) Fair values of financial assets and financial liabilities (continued) 
 
Primary financial instruments used to finance the Group’s operations: 
Other borrowing      (19.5) (19.5) (23.5) (23.5) 
Preference shares       (2.8) (1.8) (2.8) (2.1) 
         (22.3) (21.3) (26.3) (25.6) 
 
Financial assets:  
Cash and short term deposits     38.4 38.4 31.7 31.7 
Money market funds      23.7 23.7 13.0 13.0 
Loans to associates/ joint ventures and other investments  1.1 1.1 3.2 3.2 
Other        0.6 0.6 1.1 1.1 
        63.8 63.8 49.0 49.0 
 
Derivative financial instruments held to manage the interest rate profile:  
Interest rate swaps      - - (0.6) (0.6) 
Derivative financial instruments held to manage the translation exposure:  
Forward foreign currency contracts    - (0.2) 0.1 0.1 
Derivative financial instruments held to manage transaction exposures:  
Forward foreign currency contracts    - - - 4.4 
       41.5 42.3 22.2 27.3 
 
The following methodology has been used to establish estimated fair values: 
 
Item Method 
Cash at bank, short-term borrowings The fair value of these items approximates to the carrying amount. 
Preference shares The fair value of the two issues of preference shares, which are not 
redeemable, has been calculated using the mid-market value of shares as 
at 1 January 2005. 
Interest rate swaps Fair value is based on the market price of comparable instruments at 
the balance sheet date. 
Foreign exchange deals Fair value is calculated by marking each contract to market at exchange 
rates prevailing at the balance sheet date. 
 
(v) Currency and interest rate hedges 
The table below shows the extent to which the Group has unrecognised off-balance sheet positions in respect  of 
financial instruments used as hedges at the beginning and end of the year.  It also shows how they are expected 
to be included in the profit and loss account by year.  Relative to interest rates and exchange rates at the year-
end, the hedges increase (decrease) reported costs as follows:    
Delta plc 69 
Notes on the accounts  
 
 
         
       2004 2003 
       £ million £ million 
30 Financial instruments (continued) 
(v) Fair values of financial assets and financial liabilities (continued) 
Unrecognised gains (losses): 
Positions on hedges at beginning of year      4.4 0.2 
Arising in previous years included in 2004 (2003) income    (4.4) (0.2) 
Arising in previous years not included in 2004 (2003 income)    - - 
Arising in 2004 (2003)         (0.2) 4.4 
Positions on hedges at year end       (0.2) 4.4 
 
Of which:   
Expected to be included in the next financial year     (0.2) 4.4 
          (0.2) 4.4 
 
(vi) Currency profile  
The table below shows the extent to which Group companies have monetary assets and liabilities in currencies 
other than their own functional currencies.  The amounts shown take into account the effect of any foreign 
exchange contracts entered into to manage currency risks. 
 
  Net foreign currency monetary assets (liabilities) 
      Sterling Euro Rand AU dollar US dollar Other Total 
    £ million £ million £ million £ million £ million £ million £ million 
Functional currency of Group operation: 
US dollar    0.1 0.7 (18.3) (6.8) - 0.4 (23.9) 
Other    - (0.8) 2.9 2.0 (0.8) 0.1 3.4 
At 1 January  2005   0.1 (0.1) (15.4) (4.8) (0.8) 0.5 (20.5) 
 
At 3 January 2004: 
US dollar    - - - - - (1.8) (1.8) 
Other    - (0.8) - - (1.3) 1.3 (0.8) 
    - (0.8) - - (1.3) (0.5) (2.6) 
   
70 Delta plc 
Shareholders' information 
 
 
 
 
Calendar 2005 
Dividends on ordinary shares Final 2004 Announcement 24 March 2005 
  Payable 13 June 2005 
  to members registered on 8 April 2005 
 Interim 2005 Announcement  1 September 2005 
  Payable 5 December 2005 
  to members registered on   9 September 2005 
Distribution of documents to members Interim report 2005 posted   6 September 2005 
Annual general meeting Proxies to reach registrars by 11am   3 May 2005 
 Meeting to be held at 11am    5 May 2005 
Accounting periods First half year 2005 ends    2 July 2005 
 Second half year 2005 ends    31 December 2005 
 
 
Ownership of ordinary shares 
At 1 January 2005 
 
By type of shareholder 
 
 Shareholders      Ordinary shares in issue 
         Number in  
 Number % Description      millions % 
 5,769 87.7 Individual shareholders    9.0 5.9 
 727 11.0 Bank or Nominees     138.7 91.4 
 4 0.1 Insurance companies and pension funds   0.6  0.4 
 81 1.2 Other institutions      3.4 2.3 
 6,581 100.0      151.7 100.0 
 
By size of shareholding 
 
  Shareholders       Ordinary shares in issue 
         Number in  
 Number % Description      millions % 
 3,531 53.6 held up to 999 shares      1.4 0.9 
 2,834 43.1 held between 1,000 and 24,999 shares   9.4 6.2 
 155 2.4 held between 25,000 and 249,999 shares   11.8 7.8 
 61 0.9 held 250,000 shares and above    129.1 85.1 
 6,581 100.0       151.7 100.0 
 
 
Individual Savings Accounts (ISAs) and Personal Equity Plans (PEPs) 
 
The Company offers both a self-select PEP and self-select ISA administered by Halifax Share Dealing Limited.  
Both accounts provide UK residents with a tax efficient method of holding shares in Delta plc.  Any profit made 
through the sale of shares whilst they are held in a PEP or ISA are free of capital gains tax. Any dividends 
received on the shares held in a PEP or ISA can either be paid to you, or from April 2005 you can have it 
automatically reinvested. 
 
Further information regarding the Halifax Share Dealing PEP and Halifax Share Dealing ISA is available from 
Halifax Share Dealing Limited, PEP and ISA Department, Trinity Road, Halifax, HX1 2RG, telephone number: 
0870 600 9966, or from the Company Secretary. 
   
Delta plc 71 
 
 
 
 
 
The value of your investments and the income from them can go down as well as up. You may not get back the 
full amount you have invested. If you are in any doubt about the suitability of an ISA or whether to buy or sell 
shares, you should consult an appropriate Financial Advisor. The levels and bases of taxation can change and 
the value of any tax advantages to you will depend on your individual circumstances. 
 
Halifax Share Dealing Limited. Registered in England No 3195646. Registered Office: Trinity Road, Halifax, 
HX1 2RG Authorised and regulated by the Financial Services Authority, a member of the London Stock 
Exchange and an Inland Revenue approved PEP and ISA Manager. 
 
 
Registrars 
 
Our registrars, Lloyds TSB Registrars, operate a call centre dealing with shareholder enquiries.  Should you need 
any information in respect of your shareholding, please call 0870 600 3970.  Additionally, for those with 
hearing disabilities, the Registrars have provided a textphone number, 0870 600 3950. 
   
72 Delta plc 
Notice of annual general meeting 
 
 
 
 
Notice is hereby given that the one hundred and seventeenth annual general meeting of Delta 
plc will be held at the Thistle Hotel Charing Cross, Strand, London, WC2N 5HX on 5 May 
2005 at 11 am for the following purposes: 
 
1. To receive and consider the accounts for the financial year ended 1 January 2005 and the 
report of the directors and auditors thereon. 
 
2. To approve the report to shareholders on directors’ remuneration for the year ended 1 
January 2005. 
 
3. To declare a final dividend on the ordinary shares.  
 
4. To re-elect Todd Atkinson as a director of the Company. 
 
5. As special business, to consider and, if thought fit, pass the following resolution as a special 
resolution: 
 
THAT, the authority conferred on the Company by a special resolution passed at the 
extraordinary general meeting of the Company held on 25 April 1990 and subsequently 
renewed annually to make market purchases (as defined by Section 163(3) of the Companies 
Act 1985 as amended) of ordinary shares of 25p each in its capital be renewed provided that:- 
 
(a)  the maximum aggregate number of ordinary shares hereby authorised to be purchased is 
15,000,000; 
(b) the minimum price which may be paid for each such ordinary share is the nominal value of 
such share and the maximum price which may be paid for such ordinary shares is not more 
than 5 per cent. above the average of the middle market quotations for such shares taken 
from the Daily Official List of London Stock Exchange plc for the five business days in 
respect of which such Daily Official List is published immediately preceding the date of 
purchase (in each case excluding expenses); 
(c) unless previously revoked or varied the authority hereby conferred is to expire on 5 August 
2006 or at the conclusion of the annual general meeting in 2006, whichever is the earlier; 
and 
(d) the Company may make a contract to purchase ordinary shares under the authority hereby 
conferred prior to the expiry of such authority which may be or will be executed wholly or 
partly after the expiry of such authority, and may make a purchase of ordinary shares in 
pursuance of any such contract. 
 
6. To appoint Deloitte & Touche LLP as auditors of the Company and to authorise the 
directors to determine their remuneration. 
 
 
1 Kingsway, London WC2B 6NP On behalf of the Board 
24 March 2005 J P Narciso, Secretary 
 
Pursuant to Regulation 41 of the Uncertified Securities Regulations 2001, a person must be 
registered as the holder of ordinary shares by 6pm on 3 May 2005 in order for such person to 
be entitled to attend or vote at the meeting in respect of those shares. Changes to entries on the 
register after 6pm on 3 May 2005 shall be disregarded in determining the rights of any person 
to attend or vote (and the number of votes cast) at the meeting.  A person must be registered as 
the holder of preference shares by the same time in order for such person to be entitled to  
   
Delta plc 73 
 
 
 
 
 
attend the meeting in respect of those shares.  Preference shares do not entitle their holders to 
vote at the meeting. 
 
Any member entitled to attend and vote at this meeting may appoint one or more proxies, 
whether a member of the Company or not, to attend and vote on the member's behalf.  A form 
of proxy is enclosed for the use of members who may wish to vote but who are unable to attend 
the meeting.  This must reach the registrars not later than 48 hours prior to the time set for the 
meeting in order to be effective. Completing and returning a form of proxy will not prevent a 
member from attending and voting at the meeting should the member so wish. 
 
Copies of service contracts under which the directors of the Company are employed and the 
register of directors' interests will be available for inspection at the Company's registered office 
during normal office hours on any business day from 24 March 2005 to the date of the 
meeting, and at the place of the meeting from fifteen minutes prior to and during the meeting.   
74 Delta plc 
Principal group and associated companies (iv) 
At 1 January 2005 
 
 
 
GALVANIZING 
 
AUSTRALIA  
Industrial Galvanizers  Galvanizing services 
Corporation Pty Ltd 
 
Webforge Australia Pty Ltd Galvanized steel 
products 
 
CHINA 
Guangzhou Webforge Grating Galvanized steel 
Co Ltd products 
  
Wuxi Webforge Grating Co Ltd Galvanized steel 
 products 
 
INDONESIA 
PT Webforge Indonesia Galvanized steel 
 products 
 
PT Bukit Terang Paksi Galvanizing services 
Galvanizing (50%) ( joint venture) 
 
MALAYSIA 
Webforge (KL) Sdn Bhd Galvanized steel 
 products 
 
IGC-Industrial Galvanizers  Galvanizing services 
Corporation (M) Sdn Bhd (70%) 
 
NEW ZEALAND 
Webforge (NZ) Ltd Galvanized steel 
 products 
 
PHILIPPINES 
Industrial Galvanizers  Corp- Galvanizing services 
oration of the Philippines Inc 
 
Webforge Philippines Inc Galvanized steel 
 products 
 
SINGAPORE 
Webforge (Singapore) Pte Ltd Galvanized steel 
 products 
 
USA 
Industrial Galvanizers  Galvanizing services 
America Inc 
 
VIETNAM 
Vingal Industries Co Ltd (55%) Galvanizing services 
ELECTROLYTIC MANGANESE DIOXIDE 
 
SOUTH AFRICA 
Delta Emd (Pty) Ltd (iii) (55%) Electrolytic manganese 
dioxide 
 
AUSTRALIA 
Delta EMD Australia Pty  Electrolytic manganese 
Ltd (iii) (55%) dioxide 
 
 
 
MANGANESE METAL 
 
ASSOCIATE 
SOUTH AFRICA 
Manganese Metal Co (Pty) Manganese metal 
Ltd (49%)  
 
 
 
INDUSTRIAL SUPPLIES 
 
AUSTRALIA 
Donhad Pty Ltd  (60%) Mining consumables 
 
Machin  & Ewen Pty Ltd Fasteners 
 
Cutting Edges Pty Ltd Distribution of replac- 
ement parts  
 
SOUTH AFRICA 
Electrical Repair Engineering Electrical repairs 
(Pty) Ltd (iii)  
 
Equipment Spare Parts Africa Distribution of replac- 
(Pty) Ltd (iii) ement parts 
 
Transwire (Pty) Ltd (iii) Manufacture of covered 
 copper conductors 
 
Wire Electric (Pty) Ltd (iii) Distribution of indust- 
 rial consumables 
 
 
UNITED KINGDOM 
Investment Tooling  Mouldmaking and 
International Ltd specialist toolmakers 
 
Notes 
(i) The issued share capital of each of the companies, is in the form of fully paid ordinary shares. The percentage of the equity held 
by the Group is 100%, unless otherwise stated. Certain of the smaller Group companies and non-trading companies have been 
omitted. 
(ii) Companies without a designation are incorporated and operate in Great Britain. Those overseas are incorporated and operate 
in the country under which they are listed. 
(iii) Subsidiaries of Delta Electrical Industries Ltd, a South African company which is listed on the Johannesburg Stock Exchange. 
DEI is 56.4% indirectly owned by Delta plc.   
(iv) Audited information.   
Delta plc 75 
Group financial information 
 
 
 
   2000 2001 2002 2003 2004 
   £ million £ million £ million £ million £ million 
Profit and loss account (continuing) 
Turnover (including associates):  
Electrolytic manganese dioxide   57.8 37.7 47.1 45.9 34.2 
Manganese metal   20.0 16.1 22.3 19.1 22.2 
Galvanizing   72.3 75.7 85.7 124.2 131.1 
Industrial supplies   107.2 107.5 107.9 132.1 150.0 
Total     257.3 237.0 263.0 321.3 337.5 
Profit before exceptional items, goodwill 
amortisation and interest: 
Electrolytic manganese dioxide   15.1 12.7 15.6 15.8 5.2 
Manganese metal   5.2 4.5 4.6 (2.1) (1.4) 
Galvanizing   3.6 1.1 4.1 8.3 12.5 
Industrial supplies   10.7 12.1 11.0 15.6 20.7 
Group costs   (7.2) (5.5) (6.5) (5.5) (4.1) 
Total including Group costs   27.4 24.9 28.8 32.1 32.9 
Balance sheet (including discontinued operations) 
Ordinary capital issued   37.6 37.6 37.8 37.9 37.9 
Reserves    253.1 218.7 119.0 107.0 112.3 
Equity shareholders' funds   290.7 256.3 156.8 144.9 150.2 
Capital employed   402.5 352.4 244.7 161.8 148.0 
Earnings and dividends 
Basic earnings (loss) per 25p ordinary share (pence)  (5.0) (13.9) (66.8) (3.7) 9.7 
Dividends per 25p ordinary share (pence)   8.0 8.0 8.0 2.0 3.0 
Times covered   (0.6) (1.7) (8.4) (1.9) 3.2 
Statistics 
Return on capital employed (%)   7.5 2.7 (24.3) 8.6 21.6 
Equity shareholders’ funds per 25p ordinary share (pence) 194 171 104 96 99 
Debt/equity ratio 0.3:1 0.2:1 0.3:1 (0.1):1 (0.3):1 
Ratio of current assets to current liabilities 2.2:1 1.7:1 1.1:1 1.9:1 2.2:1 
Stock Market price of ordinary shares 
Highest (pence) 161 158 127 125 103.5 
Lowest (pence) 101 86 76 81 77.5 
UK Capital Gains Tax 
The market value of Delta plc ordinary shares on 31 March 1982 was 42.5p per share 
Notes: 
The profit and loss account information for 2000-2003 has been restated to reflect activities discontinued 
between 2000 and 2003 and the new segmental reporting structure adopted in 2003. All other information 
above is as published in the financial statements for the respective years, restated as follows: 
(i) 2002 being restated to reflect the implementation of UITF 38 and the change in accounting policy re long 
term employee compensation arrangements in South Africa. The figures for 1999-2001 have not been 
restated. 
(ii) 2001 being restated to reflect the adoption of FRS 19. The figures for 1999 and 2000 have not been 
restated.  
(iii) 2000 being restated to exclude money market fund current investments in the calculation of capital 
employed and to include them within debt for the calculation of the debt/equity ratio.  
(iv) 2000 being restated to include deferred tax in the calculation of capital employed. 
   
 
 
 
 
 
 
 
 
Registered office 
Delta plc (registered in London No 26077) 
1 Kingsway  
London WC2B 6NP 
Telephone: 020 7836 3535 
 
Secretary 
J P Narciso FCIS 
 
Chief accountant 
J A Ford ACMA 
 
Treasurer 
P Marriott MCT 
 
Stockbrokers 
Arbuthnot 
20 Ropemaker Street 
London EC2Y 9AR 
 
Registrars 
Lloyds TSB Registrars 
The Causeway 
Worthing 
West Sussex BN99 6DA 
 
Auditors 
Deloitte & Touche LLP 
Stonecutter Court 
1 Stonecutter Street 
London 
EC4A 4TR 
 
 
 
 
 
 
 
 
Company website 
www.deltaplc.com 
 
 
 
 
ab 
is the registered trademark of Delta plc