BTG PLC 
ANNUAL REPORT & ACCOUNTS 
2005
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COMMERCIALISE CONTENTS
01 Business highlights
02 Chairman’s statement 
04 Chief Executive Officer’s review
08 The product pipeline 
12 Operations review 
14 Financial review 
16 Directors 
18 Advisers 
19 Directors’ report 
22 Corporate governance 
26 Remuneration report 
33 Independent auditors’ report
34 Consolidated profit and loss account 
34 Consolidated statement of total 
recognised gains and losses 
35 Balance sheets
36 Consolidated cash flow statement 
37 Notes to the financial statements 
59 Five-year financial record 
61 Shareholder information 
63 Glossary  BTG plc Annual Report & Accounts  01
BUSINESS HIGHLIGHTS
> Dr Louise Makin joined as Chief Executive Officer, 
Christine Soden appointed Chief Financial Officer
> Strategic review completed – BTG to focus on acquiring,
developing and commercialising medical innovations
> Portfolio prioritised to ca. 50 technologies in active
development/commercialisation
> Annual costs reduced by approximately £5 million with
additional savings of £1.5 million targeted
OUR BUSINESS
BTG acquires rights to early-stage
pharmaceuticals and other medical
technologies from a global network 
of corporations, universities and 
research institutions. 
We demonstrate proof of concept in
preclinical and clinical development
programmes. We then license the
technologies to pharmaceutical or
device companies, or create
companies to exploit them. 02 BTG plc Annual Report & Accounts
CHAIRMAN’S STATEMENT
A YEAR OF CHANGE
POSITIONING FOR PROFITABILITY
During the past year there have been significant changes to 
the Group’s strategy, operations and personnel, aimed at driving
the business to profitability and providing the platform for
sustainable future growth.
Dr Louise Makin, who joined as Chief Executive Officer in
October 2004, has completed a comprehensive review of our
strategy. As a result, we will concentrate our resources on
acquiring, developing and commercialising pharmaceuticals and
other medical technologies. We will, however, maintain sufficient
capabilities to enable us to realise value from the existing
physical sciences portfolio.
In December 2004, we took further steps to decrease ongoing
costs by reducing the size of the technology portfolio and
introducing other efficiencies. While we regret the associated job
losses, the expected savings of almost £5 million per annum will
enable us to continue building our portfolio of pharmaceuticals
and other medical technologies. 
FINANCIAL SUMMARY
Full details are provided in the Financial Review so here I will 
give the headline figures. Total revenues for the year of £42.7
million were £1.8 million higher than last year after deducting the
exceptional receipt of £12 million last year from Acambis plc. Net
revenues excluding that settlement were 6% higher at £26.3 million.
Investment in Provensis and Varisolve
®
development was 
28% lower at £11.5 million. Investment in developing other
technologies increased by 31% to £6.3 million. Administration
expenses included exceptional costs of £9.5 million relating to
the reorganisation and impairment provisions on our US and UK
office leases. Other operating expenses were higher this year
following the portfolio reductions and reflecting progress with 
a number of litigation cases.
The exceptional items referred to above, together with provisions
required against some equity investments, resulted in a loss
before tax of £34.3 million (2004: £22.8 million). At period end 
net funds were £34.4 million (2004: £66.3 million). The Directors
consider these resources to be sufficient to implement the
Group’s strategy. The Directors do not recommend payment 
of a dividend for the year.
BOARD CHANGES
In addition to the appointments of Louise Makin as Chief Executive
Officer and Alison Wood as a Non-executive Director, we are
delighted that Christine Soden is to succeed Rusi Kathoke as Chief
Financial Officer from 1 July 2005. Christine’s strong commercial
focus and life sciences industry experience will be of tremendous
value to BTG as we implement our new strategy. Rusi, who has
served BTG as Chief Financial Officer for almost 20 years and is
retiring, leaves the Board in July 2005. Sir George Radda, having
served six years as a Non-executive Director, does not intend to
stand for re-election at this year’s Annual General Meeting.
OUTLOOK
We have reduced costs and our recurring revenues are increasing.
Achieving profitability excluding the results of Provensis this year,
however, will hinge upon the completion of a few key new licence
agreements, and experience teaches us that it is difficult to predict
the exact timing and magnitude of revenues from such deals. 
With the new strategy, a strong leadership team and a 
smaller, highly capable workforce, we believe that BTG is well
positioned for the future. We thank our shareholders for their
continued support.
SIR BRIAN FENDER
CHAIRMAN BTG plc Annual Report & Accounts  03
FIVE-YEAR REVENUE ANALYSIS (£m)
01
02
03
04
05
010 2030405060
ROYALTIES
REVENUES FROM NEW LICENCE AGREEMENTS
MILESTONES
AUDIT AND SALE OF PATENTS
SALE OF INVESTMENTS
ACAMBIS
“WITH THE NEW STRATEGY, A
STRONG LEADERSHIP TEAM AND 
A SMALLER, HIGHLY CAPABLE
WORKFORCE, WE BELIEVE THAT
BTG IS WELL POSITIONED FOR 
THE FUTURE.”
£ million
Year ended Year ended
31 March 2005 31 March 2004*
Total revenue 42.7 52.9
Turnover 38.3 48.8
Net revenue 26.3 32.0
Loss before tax 34.3 22.8
Net funds 34.4 66.3
*2004 figures include the settlement with Acambis plc, which added £12.0 million to
total revenue and turnover and £7.2 million to net revenue
FINANCIAL HIGHLIGHTS 04 BTG plc Annual Report & Accounts
CHIEF EXECUTIVE OFFICER’S REVIEW
A NEW STRATEGY
A VISION FOR GROWTH
Our goal is for BTG to deliver strong growth for shareholders 
by being a leader in the development and commercialisation of
pharmaceuticals and other medical technologies. This evolution 
of strategy follows a thorough analysis of our past performance,
our strengths and weaknesses, the potential of our existing
portfolio and the market opportunities available to us.
The clear objective of the strategic review is to position BTG
for profitability and sustainable growth. To deliver sustainable
growth, we have to balance short- and long-term returns. So
whilst we have acted decisively to reduce ongoing costs by
about £5 million per annum, we recognise that future growth
will depend on continued investment, targeted at those areas
that have the potential to deliver the greatest returns.
We anticipate that, with additional savings of around £1.5
million as we fully implement our new strategy, our fixed costs
will be covered by recurring royalty revenues. We intend that,
in the near term, the direct investments we make in acquiring
and developing pharmaceuticals and other medical
technologies will be covered by non-recurring revenues from
new licence agreements, milestones and sales of patent rights
and equity holdings.
In the longer term, we anticipate that our revenues will exceed
costs and investments by an increasing margin. We can then
choose how to use the excess, striking the right balance
between re-investing profits for further growth and providing
dividends to shareholders.
INCREASED INVESTMENT FOCUS
BTG has operated four intellectual property (IP) commercialisation
models:
> Licensing life and physical science technologies to 
companies which complete development and market the
resulting products
> Asserting life and physical science technology patents
> Exploiting our IP through company creation, and
participation in other ventures, e.g. funds and investment 
in companies where we do not own the IP
> IP services, e.g. royalty auditing for third parties and IP mining.
In future, we will intensify our focus on acquiring, developing
and commercialising pharmaceuticals and other medical
technologies (such as cancer adjuvants and products for
supportive care) in our current areas of expertise in oncology,
ageing and neuroscience and drug repositioning. We will also
continue to seek opportunities in the medical devices sector. 
Each year we plan to acquire on average six new projects for
development and commercialisation. We aim to increase the
number of projects in active development at any one time 
from seven at present to fifteen over a four-year period. Direct
investment in preclinical and clinical development programmes
is anticipated to increase from its current level of around £5
million per year (excluding Varisolve
®
development) to around
£10 million per year within four years. Actual amounts invested
will, however, be commensurate with revenues earned.
DR LOUISE MAKIN
CHIEF EXECUTIVE OFFICER BTG plc Annual Report & Accounts  05
Investing in development is intended to increase the value of the
pharmaceutical or medical technology by demonstrating proof of
concept. Typically, for a New Chemical Entity (NCE) we will take
development up to Phase II clinical studies, where proof of
concept is established in patients with the target disease. In drug
repositioning, which can be a new formulation of an existing
product, a new indication for a drug, or the combination of two
approved pharmaceuticals to treat a condition for which neither
is separately approved, we will follow a similar strategy but the
type of development required varies. 
Proof of concept in man is recognised in the industry as one 
of the main inflexion points in terms of the asset value. By
licensing the NCE or repositioned drug at this stage to another
company, we seek to capture this sharp increase in value and
actively manage the risk/reward balance in the portfolio.
We usually earn signature fees when we license the
pharmaceutical or medical technology, milestone payments as
progress is made, and royalties when our licensees successfully
launch products. Alternatively, where appropriate, we will
create a company to undertake initial development prior to
commercialisation, and then seek to realise value through our
equity holding in the company as its business progresses.
SUCCESS FACTORS
Our new strategic focus builds on BTG’s strong record in
commercialising medical innovations. Inventions we have
commercialised include Magnetic Resonance Imaging, the
Oxford Knee, the Two-part hip cup, Factor IX for haemophilia B
and Campath
®
for chronic lymphocytic leukaemia.
Investments made over the past five years have resulted 
in a promising pipeline of pharmaceuticals and medical
technologies, some of which are currently under development
by BTG and others of which have been licensed to
pharmaceutical companies to complete development. 
A selection is shown on pages 8 to 11.
This track record has resulted in a growing revenue stream from
royalties on launched products. In the year to 31 March 2005,
these royalties grew by more than 12% to £31.3 million
(excluding the receipt of £12 million from Acambis in 2004).
Pharmaceuticals and other medical technologies accounted for
more than 90% of these revenues. This substantial, increasing
and dependable revenue stream enables continued investment
in the pipeline to create future value.
Having access to early-stage pharmaceuticals and other medical
technologies invented by others is critical to our success. 
We have established strong global networks with pharmaceutical
and biotechnology companies, research institutions and
universities from which we source pharmaceuticals and other
medical innovations. We intend to expand these networks. 
At the same time, we are improving our offering to the sources.
Having a solid revenue stream that enables us to conduct
preclinical and clinical development programmes is a key
differentiator for BTG that is very attractive to our sources.
Increasing our investment also allows greater flexibility in the
commercial terms we reach with sources and licensees.
“BTG HAS MANY CORE STRENGTHS:
INCREASING RECURRING REVENUE
STREAMS, A STRONG PIPELINE OF
NOVEL MEDICAL INNOVATIONS…
AND HIGHLY SKILLED EMPLOYEES.” 06 BTG plc Annual Report & Accounts
In addition to our revenue streams, growing pipeline and global
networks, we have the human capital resources to make this
strategy successful. World-class IP skills blend with technical and
commercial expertise to enable us to select the most promising
assets for development. We employ highly skilled personnel 
from the pharmaceutical industry with development, project
management and commercialisation experience. This enables 
us to conduct “virtual” development programmes very efficiently,
using our established network of external development partners.
THE MARKET OPPORTUNITY
Pharmaceuticals and other medical products generate hundreds
of billions of dollars of revenues every year, and the industry
continues to grow. The drivers for growth are well understood.
Social factors such as an ageing population, a desire to remain
healthy and active in later years, and the availability of resources
(whether self-pay or funded by national governments) have led to
increased demand for innovative medical products. Meeting this
demand creates huge opportunities for the healthcare industries.
These underlying drivers also underpin the opportunity for
BTG, though other factors are important:
> Corporations, research institutes and universities are driven 
to demonstrate returns on their research expenditure. They
may be unwilling or unable to invest in the development
programmes needed to generate proof of concept from 
their invention, but they would like to realise some value.
Increasingly, they are receptive to partnerships with
companies such as BTG that will invest in development 
and commercialisation.
> There is a recognised “innovation gap” in the pharmaceutical
industry, where greatly increased research and development
expenditure has not generated the number of new products 
or revenue growth that were once predicted. Both large
multinationals and smaller, specialist healthcare companies
are actively looking to acquire novel assets with proof of
concept for later-stage development. BTG works with these
companies to understand the types of products and
therapeutic profiles they are seeking. This feeds into our
sourcing and development strategies.
Ultimately, most revenues are generated by product sales. 
So while we seek to recover our investment when we license 
a technology by receiving a signature fee and milestone
payments, the real value is generated from royalties on product
sales. Sourcing the right early-stage pharmaceutical and
medical technologies for development is thus a key
determinant of our future growth.
BTG has the skilled, experienced personnel and the global
networks within corporations and research institutions to access 
the most promising opportunities in our chosen therapy areas. 
We have the resources and industry knowledge to conduct
development projects that add value, and we have the project
management expertise to run them efficiently through our
established partner networks. We have the commercial skills 
to find the best licensees for each product, or to create
companies if that route would lead to greatest value.
CHIEF EXECUTIVE OFFICER
A NEW STRATEGY BTG plc Annual Report & Accounts  07
OUR CORE BUSINESS MODEL
BTG acquires rights to medical innovations from 
a global network of corporations, universities and
research institutes.
We fund and manage development programmes,
ensure strong IP protection and progress
commercialisation plans. We then license the
innovation to pharmaceutical or device companies,
or create a company to exploit it.
REALISING VALUE FROM THE CURRENT PORTFOLIO
We do not intend to invest further in building a physical
sciences portfolio based on licensing enabling technologies 
or asserting patents. However, there is significant value in the
current portfolio that we intend to extract.
For example, we are currently conducting separate patent
infringement litigations against Microsoft, Apple, Amazon.com 
and a number of other companies in relation to the Teleshuttle
and WebNav patent portfolios. We also have enabling
technologies such as Radio Frequency ID (RFID), where the
market opportunity is rapidly growing.
We are therefore maintaining core expertise in these areas and 
will fund as required ongoing litigation and other activities that
we believe will extract value. An experienced, specialist team
will manage these projects through to fruition.
We have an equity portfolio comprising more than 25 largely
unlisted investments, which we have built up primarily over the
past five to six years. These include funds, passive investments
and investments in companies which we helped to create and
have continued to support. We intend to realise value from
these investments, continuing to play an active role in around
10 key companies which have the best prospects.
We do not plan to make investments as a passive investor in
third-party companies or in partner funds going forward. We
will, however, retain our company creation expertise, which
resides within the ventures personnel and other business teams.
Out-licensing the pharmaceuticals and other medical
technologies at appropriate stages of development will be 
the most common commercialisation route, but there will be 
a number of cases where creating a company to develop and
commercialise an asset is the most appropriate route.
The provision of IP services, such as royalty auditing and
providing IP services to technology transfer offices, has been 
a small-scale activity for BTG. We will maintain this activity to
the extent that there is demand from key customers.
PROSPECTS
BTG has many core strengths: increasing recurring revenue
streams, a strong pipeline of novel medical innovations, global
networks and resources to expand the pipeline, a portfolio of
physical science technologies from which we can realise value,
and highly skilled employees.
Since joining BTG, my main goals have been to reset the 
cost base to a lower level, simplify the business and develop 
a strategy that will deliver both profitability and sustainable
growth. I believe the strategy we have announced will enable
us to create shareholder value by exploiting the tremendous
opportunities available to BTG.
CORPORATIONS
UNIVERSITIES/
INSTITUTIONS
COMMERCIALISE DEVELOP
PRECLINICAL/
CLINICAL
DEVELOPMENT
LICENCE
IP/COMMERCIAL
DEVELOPMENT
COMPANY
CREATION
DOWN- 
PAYMENTS
MILESTONES
ROYALTIES
EQUITY
REALISATIONS
ACQUIRE 08 BTG plc Annual Report & Accounts
BeneFIX
®
is a purified coagulation factor produced by recombinant 
DNA technology that is used for treating Factor IX deficiency, known 
as haemophilia B.
Invented by John Church when he was a Consultant Orthopaedic Surgeon,
the two-part hip cup is a device that allows more accurate positioning 
of prosthetic hip joint replacements, thereby helping to reduce hip 
joint dislocation.
Campath
®
, a humanised monoclonal antibody, is a treatment for B-cell
chronic lymphocytic leukaemia and other diseases.
Combunox
™
is a combination of oxycodone HCl and ibuprofen that was
approved in the US in late 2004 for the short-term management of acute,
moderate to severe pain.
TRX4 is a humanised monoclonal antibody that binds to the CD3 receptor
on T cells inducing immune tolerance. It is expected to have value in
treatment of certain autoimmune diseases. 
Banoxantrone is a prodrug designed to be selectively activated in 
hypoxic regions of a broad spectrum of solid tumours. It may be used 
in combination with chemotherapy or radiotherapy, or alone as a 
single agent.
Symadex
™
(imidazoacridinone) is an orally available cancer drug with a
novel mechanism of action (lysosomal rupture).
Abiraterone is a potent inhibitor of a key enzyme governing testosterone
synthesis and may be of value in treatment of prostate cancer. The drug 
is orally available.
OUR PROGRESS
THE PRODUCT PIPELINE
01
BeneFIX
®
02
Two-part 
hip cup
03
Campath
®
04
Combunox
™
05
TRX4 
(Anti CD3)
06
Banoxantrone
(AQ4N)
07
Symadex
™
(C-1311)
08
Abiraterone
INNOVATION DESCRIPTION BTG plc Annual Report & Accounts  09
Marketed
Marketed
Marketed
Marketed
Phase I/II
Phase I 
Phase I
Phase I
2004/5 royalties received 
£13.2 million 
2004/5 revenues 
£5.4 million
2004/5 royalties received 
£5.2 million 
2004/5 milestone payment 
to BTG upon FDA approval 
$4.5 million
Future royalties payable
Licensed
Licensed
Licensed
Licensed
Licensed to Wyeth Pharmaceuticals. BeneFIX
®
was
approved for use in the US in 1997 and in Europe 
in 1999.
Licensed by BTG to all of the main prosthetic hip
manufacturers addressing the US market.
Licensed to Genzyme Corporation. Campath
®
was
approved as a treatment for B-CLL in the US and
Europe in 2001. Campath
®
is in Phase II trials as a
potential treatment for multiple sclerosis, in Phase
I/II trials as a treatment for non-Hodgkin’s lymphoma
and is also under development for other diseases.
Licensed to Forest Laboratories, Inc., Combunox
™
was launched nationwide in the US in March 2005.
TRX4 has been licensed to TolerRx. An investigator
sponsored Phase II trial in patients with new-onset
Type I diabetes has recently been concluded. In
addition, TolerRx has completed a Phase I study in
patients with moderate to severe psoriasis.
Banoxantrone has been licensed to KuDos
Pharmaceuticals Ltd, which has sub-licensed 
North American rights to Novacea. A Phase I clinical
trial in patients with oesophageal cancer has been
completed and further Phase I clinical trials are
underway in patients with solid tumours or with 
B-cell cancers. Additional trials are planned using
banoxantrone as a single agent and in combination
with other therapies.
Symadex
™
has been licensed to Xanthus Life
Sciences which is undertaking two Phase I clinical
trials in solid tumours. In addition, Xanthus has
announced preclinical data suggesting that
Symadex
™
may be active in treating autoimmune
disorders such as multiple sclerosis.
Abiraterone has been licensed to Cougar
Biotechnology Inc. A series of Phase I studies have
demonstrated reduction of testosterone levels in
men with prostate cancer. Further clinical studies 
are planned.
COMMERCIAL POSITION PHASE OF DEVELOPMENT STATUS 10 BTG plc Annual Report & Accounts
BTG acquired the rights from Institut Curie in Paris for the novel use 
of modafinil in the treatment of morphine-induced sleepiness.
A thymidylate synthase inhibitor with potential in the treatment 
of gastrointestinal malignancies and other solid tumours. 
BTG acquired rights to and has funded a development programme on CORE-2
GlcNAc-Transferase inhibitors originally identified in natural plant extracts by
researchers at King’ s College London. These compounds have the potential to
treat a number of inflammatory diseases as well as microvascular complications
of diabetes and certain forms of cancer.
Sleep apnoea syndrome is a serious respiratory disorder that involves
cessation of breathing for prolonged intervals during sleep. Currently, there
are no approved pharmacological therapies to effectively treat sleep apnoea.
The novel therapy being developed by BTG comprises a combination of two
drugs that are currently approved and in use to treat indications that are
unrelated to sleep apnoea.
A targeted drug with potential in the treatment of gynaecological and
other solid tumours.
BGC20-1259 is a potential treatment for Alzheimer’s disease that has 
been demonstrated to enhance both cholinergic and serotoninergic
neurotransmission in the brain and has a neuroprotective action. Therefore,
it has the potential to treat multiple symptoms of the disease and also the
potential to delay its progression.
BGC20-0134 is a novel approach to the treatment of multiple sclerosis. 
Inspired by an original preclinical hypothesis and confirmatory clinical
studies by UK academic investigators, BTG embarked upon a collaboration
to identify a new compound that could be developed for this devastating
neurological disease.
BTG is collaborating with Organon International to develop novel, potent
and selective aldosterone antagonists for the treatment of hypertension
and congestive heart failure. 
OUR PROGRESS
THE PRODUCT PIPELINE
09
Modafinil
10
Plevitrexed
(BGC 9331)
11
BGC20-0402
12
Sleep 
apnoea
13
BGC 945
14
BGC20-1259
15
BGC20-0134
16
Aldosterone 
antagonists
INNOVATION DESCRIPTION BTG plc Annual Report & Accounts  11
Under development 
by licensee 
Phase I/II
Preclinical
Preclinical
Preclinical
Preclinical
Preclinical
Preclinical
COMMERCIAL POSITION PHASE OF DEVELOPMENT STATUS
BTG recently concluded an exclusive licence 
of our IP to a US specialty pharma company. They
will be developing products which use modafinil 
as an adjunct to morphine-based analgesics. Our
licensee plans to seek approval for and launch the
new product in the US.
Plevitrexed has completed Phase II clinical 
trials in a broad range of solid tumours,
demonstrating efficacy in cancers of the pancreas,
ovary and stomach. BTG is undertaking a further
multicentre Phase I/II trial in gastric cancer.
The lead compound BGC20-0402 is now being
studied in proof of principle preclinical studies. 
This is a lead programme in BTG’s drug
repositioning portfolio. BTG plans to complete a
proof of principle clinical study and to develop a
new product formulation in 2006.
BGC 945 is subject to granted patents and 
patent applications. BTG is undertaking preclinical
development before out-licensing. 
BTG has completed preclinical development 
of BGC20-1259, and plans to commence a 
Phase I clinical study during 2005.
BTG has shown that BGC20-0134 is active 
in a preclinical model of MS and has identified
pharmacodynamic markers of activity. BTG 
is planning a Phase I clinical study with
pharmacodynamic markers in 2005.
BTG and Organon International have identified a
new series of highly potent and selective antagonists
and are now optimising these promising leads 
with the aim of finding the best compound to take
forward. If successful BTG will exercise its option 
to develop these compounds further.
Licensed
BTG is seeking licensee(s) to complete
development and market Plevitrexed
BTG is seeking partners to further
develop this asset
In development by BTG
In development by BTG
In development by BTG
In development by BTG
In development by BTG 12 BTG plc Annual Report & Accounts
VARISOLVE
®
DEVELOPMENT
Investment in Provensis and Varisolve
®
development
decreased by 28% to £11.5 million, as the programme
of preclinical studies aimed at enabling resumption of
US clinical development was completed.
05 11.48m
04 15.90m
INVESTMENT IN OTHER DEVELOPMENT
We increased investment in technology
development (excluding Varisolve
®
) by 31% to 
£6.3 million, of which around £5 million related 
to life sciences development programmes.
05 6.27m
04 4.79m
OPERATIONS REVIEW
A PLATFORM FOR DEVELOPMENT
OVERVIEW
There have been significant changes to BTG’s operations during 
the past year. We have refocused the business to concentrate
future investment in one area of our business: the acquisition,
development and commercialisation of pharmaceuticals and
other medical technologies.
In doing so, we have prioritised our technology portfolio to
approximately 50 technologies in active development or
commercialisation, of which two-thirds are medical innovations
and the balance physical science technologies. We will
continue to acquire promising medical innovations. We intend
to realise value from the existing physical sciences portfolio,
but will not add to this portfolio.
As a consequence of the new strategy we have reorganised
operations. Approximately 50 redundancies were made at the
end of 2004, which will yield cost savings of around £5 million in
a full year. Further savings of around £1.5 million per annum are
anticipated following full implementation of the new strategy.
To reduce fixed overheads further, we are seeking to sub-let
our current offices in London and Philadelphia and relocate to
smaller premises. The rental property market, particularly in
London, is currently difficult. Consequently, following several
unsuccessful attempts, we have taken a conservative view of
our ability to sub-let and provided significant charges for lease
impairments in the results for the year. We are, however,
continuing our efforts to sub-let both offices.
VARISOLVE
®
Provensis completed the programme of studies intended to 
enable resumption of the US clinical development of Varisolve
®
.
The preclinical data were submitted with the protocol for a
proposed Phase II clinical safety study to the US Food and
Drug Administration (FDA). The FDA requested refinements 
to the protocol, which were submitted in May 2005.
Discussions are continuing with potential partners following receipt
of the FDA’s comments on the proposed Phase II study protocol.
The total investment in Provensis operations and Varisolve
®
development during the year was £11.5 million, including 
£2.3 million relating to reorganisation costs and a lease
impairment charge.
PORTFOLIO DEVELOPMENT
There was good progress with marketed products. BeneFIX
™
(Factor IX) royalties grew 16% to £13.2 million. Campath
®
,
approved to treat B-cell chronic lymphocytic leukaemia (CLL),
continued to progress through five clinical trials. One of these
is a Phase II trial investigating the effectiveness of Campath
®
and Rebif
®
(interferon beta-1a) in delaying the sustained
accumulation of disability in 240 patients with previously
untreated relapsing/remitting multiple sclerosis. Preliminary
results are due during 2005.
Forest Laboratories, Inc. received approval in November 2004
to market Combunox
®
(oxycodone HCl and ibuprofen) for the
short-term management of acute, moderate to severe pain.
BTG received a milestone payment of $4.5 million. Forest
launched Combunox
®
nationwide in the US in March 2005. BTG plc Annual Report & Accounts  13
2005 REVENUE ANALYSIS
•
Royalties from launched products £31.3m
•
Revenues from new licence agreements £4.2m
•
Milestone payments £2.8m
•
Sale of equity and patents £4.3m
In May 2005, BTG reached settlement with Zimmer Holdings,
Inc. in respect of all litigation and ongoing claims relating to 
the Two-part hip cup. In settlement, BTG received $17.4 million
gross revenues before revenue sharing, which will be recognised
in the 2005/6 financial year, and will also receive a royalty on
future sales.
Several BTG licensees made progress with products in
development but not yet approved. Novacea, Inc. commenced
enrolment of patients for a Phase I study of Banoxantrone
(AQ4N) in treatment-resistant advanced solid tumours or non-
Hodgkin’s lymphoma (NHL). Enrolment also commenced for 
a Phase I/II study in patients with NHL or CLL.
TolerRx, Inc. has completed an 18-month follow-up of 80
patients with new-onset Type I diabetes treated with the 
TRX4 antibody (anti-CD3) in a Phase II European clinical trial.
Further clinical trials are planned for 2005. TolerRx has also
completed a Phase I clinical trial of TRX4 in subjects with
moderate to severe psoriasis.
Xanthus Life Sciences started a second Phase I study of
Symadex
™
(formerly C-1311), an investigational cancer treatment
with a novel mode of action, in patients with advanced solid
tumours. The company also presented preclinical data on the
gene expression profile of Symadex
™
at the 2005 annual meeting
of the American Association for Cancer Research. This showed
that Symadex
™
exerted a strong effect on the major classes of
genes targeted by certain cancer therapeutics. There was also
gene activity suggesting the product may have a role in
autoimmune disorders such as multiple sclerosis.
BTG invested £6.3 million progressing development
programmes for several technologies that are not yet licensed, 
of which just under £5 million related to life science programmes.
A Phase I/II trial was conducted of Plevitrexed (BGC 9331) as a
potential treatment for gastrointestinal malignancies and other
solid tumours. Plevitrexed has now completed Phase II trials in 
a broad range of solid tumours, and BTG is currently seeking
licensees for Plevitrexed.
BGC 945, a targeted cancer agent with the potential to treat
gynaecological and other solid tumours, is undergoing
preclinical development prior to out-licensing.
A proof of principle preclinical study was commenced for BGC 20-
0402, one of a series of CORE-2 GlcNAc-Transferase inhibitors.
Originally identified in natural plant extracts by researchers at
King’s College London, these inhibitors are targeting inflammatory
diseases, complications of diabetes and certain forms of cancer. 
Preclinical development was completed for BCG 20-1259, a
potential treatment for Alzheimer’s disease, and a Phase I study
is planned to commence during 2005. 
We signed 17 new licence agreements during the year,
including assigning the COLAL
®
colonic drug delivery and
other patents assigned to Alizyme plc for £1.4 million plus 
a royalty on future sales if products result from the other
patents. Modafinil was licensed to a pharmaceutical company
for development as a combination treatment for cancer pain,
generating a downpayment and a royalty on product sales. 
The Two-part hip cup was licensed to two manufacturers in
return for access fees and future royalties. 14 BTG plc Annual Report & Accounts
REVENUES
At the half-year we gave guidance that revenues were expected
to be of the same order as last year, excluding the one-off
receipt of £12 million from Acambis plc.
Total revenue was £1.8 million higher at £42.7 million (2004: 
£40.9 million excluding the receipt of £12.0 million from
Acambis). Revenues included royalties from launched products
of £31.3 million (2004: £27.8 million, excluding £12.0 million
from Acambis), showing an increase in underlying royalties of
12%. Milestone payments were £2.8 million (2004: £1.6 million),
the main component of which was a payment of $4.5 million
from Forest Laboratories, Inc. on FDA approval of the 
painkiller Combunox
™
.
Income from new agreements was £4.2 million (2004: 
£6.5 million) and proceeds from the sale of patent rights and
investments were £4.3 million (2004: £4.1 million).
INVESTMENT
The investment in developing Provensis and Varisolve
®
of 
£11.5 million (2004: £15.9 million) included £2.3 million of
redundancy and lease impairment charges. The remainder
ensured completion of the preclinical study programme,
regulatory development and maintenance of the supply chain
and operations.
Investment in other development programmes, including
Plevitrexed (BGC 9331), BGC 20-0402, BGC 20-1259 and
others (details are in the preceding review of operations), 
was £6.3 million (2004: £4.8 million).
FINANCIAL REVIEW
POSITIONING FOR PROFIT AND GROWTH
With the actions we have taken on costs, growing revenues 
and appropriate investment plans, we have positioned BTG 
for sustainable profitability.
However, there are always uncertainties associated with the
timing and magnitude of completing anticipated new business
transactions, so achieving profitability by March 2006,
excluding the results of Provensis, depends upon the
completion of a few key deals.
Whilst we intend to achieve profitability as soon as possible, 
we also intend to continue investing in finding, developing 
and commercialising pharmaceuticals and other medical
technologies. BTG’s long-term growth and profitability 
depend on continued investment. We are planning for our
operating costs to be covered by the recurring revenues, and
for the investments to be covered by other revenues.
RESULTS FOR THE YEAR
The main features of the results for the year are the growing
recurring revenues and the reorganisation of the business, which
positively impacts ongoing expenditure but adversely impacted
the year’s results because of significant exceptional charges. BTG plc Annual Report & Accounts  15
Investments totalling £2.8 million were made in seven existing
ventures, of which five were companies and two were funds.
Provisions of £3.0 million were made in the equity portfolio
following material events in three companies and a valuation 
of the portfolio. A profit of £1.3 million was made on the
disposal of other investments. The net book value of BTG’s
unlisted investments was £8.3 million (2004: £9.4 million). The
market value of listed investments was £5.8 million (2004: 
£13.8 million), primarily reflecting a decline in the market
capitalisation of SAMSys Technologies, Inc.
OPERATING AND ADMINISTRATIVE EXPENSES
Operating costs, which include patent amortisation, patent
renewal fees and litigation costs, were £7.4 million (2004: 
£4.4 million). This was a result of higher patent amortisation costs
following the streamlining of the patent portfolio, and increased
litigation costs as our Teleshuttle, WebNav and Two-part hip cup
cases moved forward.
Total administrative expenses were £32.6 million (2004: 
£29.7 million). There was a decrease in staff and other
employment related costs to £23.2 million (2004: £27.7 million),
but restructuring costs of £3.3 million and provisions for lease
impairments of £5.7 million led to the overall increase. The
restructuring will have a positive impact on costs in the current
financial year.
LOSS BEFORE TAXATION
Excluding the results of Provensis, the loss before taxation
increased to £22.8 million (2004: £6.9 million), of which 
£11.8 million related to exceptional items and another 
+12% $4.5M 
COMBUNOX
™
APPROVED
BTG received $4.5 million on FDA approval of the
combination painkiller/anti-inflammatory product
Combunox
™
. We will also receive a royalty on 
future sales.
UNDERLYING ROYALTIES
Royalties from launched products grew by 12% 
to £31.3 million (excluding the £12 million from
Acambis in 2004).
£3.0 million related to equity write-downs. Including the 
£11.5 million investment in Provensis, the overall loss before
taxation was £34.3 million (2004: £22.8 million).
CASH
Net funds at year-end were £34.4 million (2004: £66.3 million).
We consider this sufficient to fund the ongoing needs of 
the business.
OUTLOOK
There has been a positive start to the current financial year 
with the settlement of litigations with Zimmer Holdings, Inc.
generating gross revenues before revenue sharing of 
$17.4 million. There are a number of deals in the pipeline,
aimed at realising value from the existing physical sciences
portfolio and laying down additional future recurring revenue
streams as we commercialise medical innovations.
The results of new investments in developing and
commercialising medical innovations will not be realised 
for some years. This is the nature of the pharmaceuticals
development business. Before the benefits of the new strategy
come to fruition, we are able to rely on the established royalty
revenues, which have been growing at about 10% per annum,
and the existing unlicensed life and physical sciences portfolio,
the value of which we will realise over the coming two to 
three years.
We believe that the new strategy will, over the longer term,
create significant value for our shareholders. 16 BTG plc Annual Report & Accounts
DIRECTORS
WHO’S WHO WITHIN BTG
RUSI KATHOKE FCA (57) CHIEF FINANCIAL OFFICER  3
Rusi Kathoke has been BTG’s Chief Financial Officer since April
1986. He was responsible for negotiating BTG’s employee and
management buyout in 1992, and for managing the
subsequent listing on the London Stock Exchange in 1995, the
demerger of Torotrak in 1998 and subsequent fundraisings. He
is also a Non-executive Director of XTL Ltd.
MALCOLM COSTER (60) NON-EXECUTIVE DIRECTOR 4
Malcolm Coster is Executive Chairman of MTL Instruments
Group plc and President and CEO of Warp Technology
Holdings Inc. He is also a Non-executive Director of The
Performing Right Society and the MCPS-PRS Alliance. Malcolm
was previously President of Unisys Europe and an Executive
Partner and Head of Management Consulting at Coopers &
Lybrand. He joined BTG as Non-executive Director in 1995.
PROFESSOR SIR GEORGE RADDA CBE FRS (68)  
NON-EXECUTIVE DIRECTOR  5
Sir George Radda is currently Emeritus Professor of Molecular
Cardiology at the University Laboratory of Physiology Cardiac
Science Centre, University of Oxford, which he joined in
October 2003. Previously he was Chief Executive of the Medical
Research Council (MRC) from 1996 until his retirement in
September 2003. He is a Fellow of Merton College, Oxford 
and a Fellow of the Royal Society. In 2001 he became the first
Chairman of the newly formed National Cancer Research
Institute. He joined BTG as a Non-executive Director in 1999.
SIR BRIAN FENDER CMG (70)  CHAIRMAN  1
Sir Brian Fender joined BTG as a Non-executive Director in 
1992 and was appointed Chairman in July 2003. He was Chief
Executive of the Higher Education Funding Council for England
from 1995-2001. Prior to that he was Vice-Chancellor of Keele
University, Associate Director and Director of the Institut Laue-
Langevin in Grenoble, France and Chairman of the Science 
Board of the UK’s Science and Engineering Research Council. 
He is a graduate and Fellow of Imperial College. He is currently 
a member of the University Grants Committee, Hong Kong,
President of the National Foundation for Educational Research,
and a Director of Higher Aims Ltd, a private consultancy involved
in higher education and research management. Sir Brian is a
Fellow of the Institute of Physics, the Royal Society of Chemistry
and a Companion of the Chartered Management Institute. He has
honorary degrees or fellowships from 11 universities and colleges.
DR LOUISE MAKIN (44) CHIEF EXECUTIVE OFFICER  2
Dr Makin joined BTG as Chief Executive Officer on 
19 October 2004. From 2001, she was President,
Biopharmaceuticals Europe of Baxter Healthcare, where she
was responsible for sales revenues in excess of a billion dollars
from Europe, Africa and the Middle East and for several
hundred employees. Louise joined Baxter Healthcare in 2000 
as Vice President, Strategy & Business Development Europe.
Before joining Baxter, she was Director of Global Ceramics at
English China Clay and prior to that she held a variety of roles 
at ICI between 1985 and 1998. 
Dr Makin holds an MA in Natural Sciences and a PhD in
Metallurgy from the University of Cambridge, and an MBA.
1 3 2
8 7 9 BTG plc Annual Report & Accounts  17
DR WILLIAM JENKINS (57)
NON-EXECUTIVE DIRECTOR  8
Dr Jenkins was previously Head of Clinical Development 
& Regulatory Affairs for Novartis Pharma AG having held the
same position pre-merger from 1992 with CIBA-Geigy AG. 
Prior to that he was Head of Global Clinical Research at 
Glaxo from 1988. Since 1999 he has been a consultant to
pharmaceutical companies and to investment companies in 
the life sciences sector. He is a member of the Boards of
Strakan Group Ltd, Tanox, Inc., ViroLogic, Inc. and Eurand. 
He gained BA and MD degrees from the University of
Cambridge and his earlier career was in medical research at 
the Royal Postgraduate Medical School and later as a Senior
Lecturer at the Royal Free Hospital, London University. He
joined BTG as a Non-executive Director in 2002.
ALISON WOOD (41) NON-EXECUTIVE DIRECTOR  9
Alison Wood joined BTG on 7 September 2004. Alison is
currently a Group Managing Director of BAE Systems and 
of NITEworks, a joint UK Ministry of Defence and industry
partnership looking at improving future UK military capabilities.
Alison was appointed as a Managing Director within BAE
Systems in 1999 and was subsequently appointed as Group
Director of Strategy/M&A. From 1991 to 1999, Alison held
various positions with British Aerospace plc, culminating in her
role as Director of Corporate Strategy and Planning. Prior to
this, Alison was a strategy consultant with Outram Cullinan 
& Company and a research associate with Booz Allen &
Hamilton Inc. Alison holds an MA in Engineering, Economics
and Management from Oxford and an MBA from Harvard.
FRED WEISS (63) NON-EXECUTIVE DIRECTOR  6
Fred Weiss is Managing Director of FGW Associates, Inc, 
a private consulting and investment firm in the USA. From 
1979 to 1996, he held a number of positions with Warner-
Lambert Co., with his final role being Vice President, Planning,
Investment and Development. He is also a Director of a number
of Merrill Lynch mutual funds, Watson Pharmaceuticals, Inc., 
the Michael J. Fox Foundation for Parkinson’s Research, KIMC
Investments, Inc and Osmotica Holdings, Inc. He joined BTG 
in 2001 and is Chairman of the Audit Committee.
CONSUELO BROOKE (58)
NON-EXECUTIVE DIRECTOR  7
Consuelo Brooke retired as a Managing Director of Merrill Lynch
Investment Managers (MLIM) after over 32 years in the
investment management industry with MLIM and its
predecessor companies, Mercury Asset Management and
Warburg Investment Management. She is a Non-executive
Director of Xansa plc, a member of the Board of University 
of Sussex Intellectual Property Ltd and a member and Treasurer
of the Council of Sussex University. She joined BTG as a 
Non-executive Director in 2002 and has been Chairman of 
the Remuneration and Nomination Committees and Senior
Independent Director since July 2003. She is still active 
in the investment business through her directorships of 
C Brooke Investment Partners Ltd and Philippe Investment
Management Ltd.
Member of the Remuneration Committee
Member of the Nomination Committee
Member of the Audit Committee
56 4 18 BTG plc Annual Report & Accounts
ADVISERS
STOCKBROKERS
Credit Suisse First Boston
20 Columbus Courtyard
Canary Wharf
London E14 4DA
Tel +44 (0)20 7888 8888
Fax +44 (0)20 7888 8296
AUDITORS
KPMG Audit Plc
PO Box 695
8 Salisbury Square
London EC4Y 8BB
Tel +44 (0)20 7311 1000
Fax +44 (0)20 7311 2919
SOLICITORS
Allen & Overy
One New Change
London EC4M 9QQ
Tel +44 (0)20 7330 3000
Fax +44 (0)20 7330 9999
BANKERS
National Westminster Bank plc
PO Box 3038
57 Victoria Street
London SW1H 0HN
Citizens Bank
3025 Chemical Road
Plymouth Meeting
PA 19462
USA
REGISTRARS
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Tel +44 (0)870 162 3100 BTG plc Annual Report & Accounts  19
DIRECTORS’ REPORT
The Directors of BTG plc (“the Company”) present their report
together with the audited financial statements of the Group for 
the year ended 31 March 2005. 
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The Chairman’s statement on pages 2 and 3, together with 
the reviews on pages 4 to 15, describe the principal activities,
operations, performance, financial position and likely future
prospects of the Group. The results of the Group are set out 
in detail on pages 34 to 36 and the accompanying notes.
RESULTS
The results of the Group for the year are explained further on 
pages 14 to 15. The Group made a loss on ordinary activities 
before taxation, excluding exceptional items, of £21.69 million
(2004: £30.60 million). After charging exceptional items of 
£12.61 million (2004: credit £7.77 million), the loss before tax was
£34.30 million (2004: £22.83 million). Details of exceptional costs
are shown in notes 3 and 5 to the accounts.
DIVIDENDS
The Directors do not recommend the payment of a final dividend
for the year (2004: nil). The Company did not pay an interim
dividend (2004: nil).
POST BALANCE SHEET EVENTS
In May 2005 the Group reached a settlement with Zimmer Holdings,
Inc. in respect of all litigation and ongoing claims relating to the
Two-part hip cup. In settlement, the Group received $17.40 million
before revenue sharing, and will receive a royalty on future sales.
This income will be accounted for in the accounts for the year
ended 31 March 2006.
DIRECTORS
The Directors of the Company at the date of this report, together
with their biographical details and dates of appointment, are shown
on pages 16 to 17. The Board confirms that each of the Directors
who served during the year has been formally appraised during the
period and that they continue to demonstrate commitment to the
Board and to be an effective member.
Ian Harvey resigned as Chief Executive Officer and as a Director on
19 October 2004 and Dr Louise Makin succeeded him. She was
appointed as Director and Chief Executive Officer on the same date.
As required by the Articles of Association, she will retire at the Annual
General Meeting and, being eligible, the Board is recommending that
she offers herself for appointment.
Alison Wood joined the Company on 7 September 2004 as a Non-
executive Director. As required by the Articles of Association, she will
retire at the Annual General Meeting and, being eligible, the Board is
recommending that she offers herself for appointment.
As shareholders will be aware, Rusi Kathoke is planning to retire 
as Chief Financial Officer and Director and this will take place on 
30 June 2005. Christine Soden will be appointed as Chief Financial
Officer and Director on 1 July 2005. As required by the Articles of
Association, she will retire at the Annual General Meeting and,
being eligible, the Board is recommending that she offers herself
for appointment.
In accordance with the Company’s Articles of Association the
following Directors are subject to re-election:
> Sir Brian Fender, having reached the age of 70 years retires and,
being eligible, the Board is recommending that he offers himself for
re-election. In accordance with best practice, he will stand for re-
election annually in future. 
> Consuelo Brooke retires and, being eligible, the Board is
recommending that she offers herself for re-election.
> Fred Weiss retires and, being eligible, the Board is recommending
that he offers himself for re-election.
> Malcolm Coster has been a Board member since 1995. In line with
best practice, due to his length of service, he stands for re-election
on an annual basis. The Board considers that he provides a
valuable and independent view as a Board member and so
recommends his re-election to shareholders. Malcolm Coster retires
and, being eligible, the Board is recommending that he offers
himself for re-election.
> Sir George Radda, who has served on the Board for six years, will
retire at the Annual General Meeting and does not propose to
stand for re-election.
DIRECTORS’ INTERESTS AND REMUNERATION
Information on Directors’ remuneration, contracts and their
beneficial interests, including those of their immediate families, 
in the shares of the Company are shown in the Remuneration
Report on pages 26 to 32. 
SHAREHOLDERS
At 31 March 2005, the Company had 6,038 ordinary shareholders
(2004: 6,594). Further details of shareholdings and Company
reporting dates may be found on page 61. 
The issued share capital of the Company at 31 March 2005 was
147,578,230, unchanged from the previous year.
At the date of this report the Company had been notified of the
following interests held, directly or indirectly, in 3% or more of the
Company’s issued share capital.
%
Invesco Asset Management 29.44
M&G Investment Management Ltd 5.03
Lehman Brothers International 4.42
Legal & General Investment Management Ltd 3.91
Oppenheimer Funds, Inc. 3.00 20 BTG plc Annual Report & Accounts
CORPORATE SOCIAL RESPONSIBILITY (“CSR”) REPORT 
BTG endeavours to take into account the interests of all its
stakeholders, including its investors, employees, customers,
suppliers, business partners and sources when operating its
business. The Group regularly reviews its social, ethical and
environmental policies and procedures, amending them where
appropriate and reporting on them in the annual report. BTG
believes that having empowered and responsible employees who
display sound judgement and awareness of the consequences of
their decisions or actions, and who act in an ethical and
responsible way, is key to the success of the business. 
BTG has an Ethics and Policy Guide, available via the Group’s
Intranet, which provides guidance for employees on BTG’s policies
on a variety of CSR-related topics including employment practices
and ethics, law and compliance, and environmental practices.
A CSR Committee, comprising representatives from Investor
Relations, Legal and Finance, has been formally appointed with
responsibility for reviewing BTG’s CSR-related policies and practices,
and recommending operational and policy changes as appropriate.
Matters relating to corporate, social, ethical and environmental
policies are reported to the Board on a regular basis.
BTG is a member of the FTSE4Good Index and participates in
various benchmarking exercises focusing on CSR, to enable
comparison of its CSR policies and performance. Through
consultation and engagement BTG observes and adheres to
international standards including the ABI disclosure guidelines.
Equal opportunities policy
BTG is committed to achieving equality of opportunity in all its
employment practices, policies and procedures. Employees are
highly valued and their rights and dignity are respected. BTG does
not tolerate any harassment of, or discrimination against its staff.
BTG practises equal treatment of all employees or potential
employees irrespective of their race, creed, colour, sexual
orientation, nationality, ethnic origin, religion, disability, age,
gender or marital status. BTG’s policies comply with all UK and 
US guidelines.
The equal opportunities policy covers all permanent and temporary
employees (including Non-executive Directors), all job applicants,
agency staff, associates, consultants and contractors.
Ethical dealings
The Group also endeavours to be honest and fair in its relationships
with customers and suppliers, and to be a good corporate citizen
respecting the laws of countries in which it operates. 
Family-friendly employment policies and careers
The maternity leave and maternity pay policies meet, and in part
exceed, the statutory minimum. Flexible approaches to return to
work after maternity leave and part-time or non-standard hours 
and work patterns are adopted where viable. The Group has
adopted a paternity leave policy in line with recent legislative
changes.
Employment of disabled persons
BTG ensures that people with disabilities are supported and
encouraged to apply for employment with the Group and progress
within it. If job applicants or employees are disabled, they will have
an equal opportunity to be selected, trained and promoted in their
career development. BTG makes every reasonable effort to retain
disabled persons in the employment of the Group.
Employee communication and involvement
There are extensive arrangements, which are maintained by the
Company, for employee consultation on the Company’s corporate
objectives, plans, performance and on other relevant matters of
interest to employees. Exchanges of information take place
throughout the Group regularly through monthly communication
sessions, the Intranet and emails.
Business reorganisation
In December 2004, BTG took action to reduce the Group’s cost
base by around £5 million per annum. The majority of savings 
were achieved by prioritising the technology portfolio to around 
50 technologies in active development or commercialisation. 
As a consequence, there were approximately 50 redundancies 
among employees.
BTG consulted widely with employees about the redundancy
programme via written documentation, one-to-one and company-
wide meetings and, where appropriate and in accordance with UK
legal requirements, through elected employee representatives. The
process for selecting roles to be made redundant was transparent
and based on objective and fair selection criteria. There was also a
reorganisation at BTG’s wholly owned subsidiary Provensis Ltd
following completion of certain manufacturing and development
activities, resulting in approximately 30 redundancies. All employees
who left the Group were offered a redundancy package and
outplacement support to help mitigate the effects of redundancy.
Environment
BTG is committed to complying with environmental legislation and
minimising the impact of its activities on the environment. BTG
considers that its direct activities have a low environmental impact.
A manufacturing facility is under construction for the Varisolve
®
product. Once the facility is commissioned, an assessment of its
environmental impact will be carried out.
An environmental action plan has been put in place in the UK
through various initiatives, including recycling and also sourcing
recycled consumables. Policies are in place to source energy-
efficient IT equipment and there is the facility to recycle printer
cartridges and batteries. BTG will also continue to review working
with suppliers to improve environmental management along the
supply chain, including the introduction of a policy to source fair
trade products and consumables. Similar policies, where possible,
are being implemented in the US. 
BTG investigates and eliminates any use of compounds identified
as hazardous to the health of employees, customers, visitors,
suppliers, or compounds known to have an unacceptable or
adverse impact upon the environment.
DIRECTORS’ REPORT
continued BTG plc Annual Report & Accounts  21
The Group measures and compiles data on energy use for business
travel, energy and water consumption. Provision of video and
telephone conferencing in both offices provides an alternative 
to international travel, where appropriate.
In 2004 BTG was awarded a gold award in the Corporation of
London’s Clean City Awards Scheme, which encourages businesses
to manage their waste more effectively to make the City a safer,
cleaner and more pleasant environment.
Health and safety
Whilst the Group is considered to operate in a low-risk industry with
regard to Health and Safety (“H&S”), it continues to consider H&S 
to be a priority in all the workplaces worldwide. Continual
improvement is achieved by regular risk assessment. Trained teams
of H&S staff, fire wardens and first-aiders cover all offices. New staff
are given fire procedure training within their first month of
employment and guidelines are issued in a joiners’ handbook,
which they are requested to read and keep for reference. The
Group has an excellent safety record and there have been no
incidents or accidents to report to the Health and Safety Executive
in the UK or to the Operational Health and Safety Administration in
the USA in the past year.
Political and charitable contributions
BTG’s policy is that it does not donate money, services or facilities
to political parties. However, BTG may campaign for or against
proposed changes in legislation or regulations that might affect its
business or the environment in which it does business. Officers or
employees may, with BTG’s approval, participate in government
advisory committees or non-governmental organisations that are
relevant to the business. No political contributions were made
during the year (2004: nil).
BTG encourages employee involvement in charitable causes in 
a number of ways. In the UK, BTG operates and promotes a Give
As You Earn Scheme, whereby employees can make a regular
donation to any registered charity, or other recognised body of
their choice, from their monthly pay. In addition, BTG will match
other donations made by employees up to a fixed amount that is
set annually based on the previous year’s donations. 
BTG’s offices are in non-residential areas. However, we strive to
work with charities and organisations that are either in some way
local, or of interest to BTG employees. Each year, in the UK, BTG
also selects a charity to sponsor, which is chosen by an annual
ballot of employees. Employees are encouraged to organise
money-raising activities for the charity throughout the year;
reasonable use of BTG time and facilities is allowed. 
In the USA, BTG operates a matching gift plan to support the
interests and concerns of employees, and to recognise and
encourage active community involvement. Cash donations made
by full-time employees to qualified charitable, educational and
other non-profit organisations are matched by BTG up to a limit 
of $500 per employee, per year.
Charitable contributions made by the Group during the year
amounted to £4,461 (2004: £9,528).
POLICY ON PAYMENT TO CREDITORS
The Group does not follow any specific guidance with respect to
payment of creditors. However, it is Group policy to abide by the
terms of payment agreed with suppliers. In many cases, the terms
of payment are as stated in the supplier’s own literature. In other
cases, the terms of payment are determined by specific written 
or oral agreement.
At 31 March 2005, the total owed to trade creditors by the Group
was equivalent to 29 days average purchases (2004: 30 days). 
The Company had no trade creditors at that date (2004: nil). 
COMPANY INFORMATION
Further information on the Group is available on the Company’s
website: www.btgplc.com.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at 
10.30 a.m. on 27 July 2005 at BTG’s offices, 10 Fleet Place,
Limeburner Lane, London EC4M 7SB. The details of the resolutions
to be proposed are set out in the Notice of the Annual General
Meeting which is enclosed with this report.
AUDITORS
Resolutions will be proposed at the forthcoming Annual General
Meeting to re-appoint KPMG Audit Plc as auditors of the Company
and to authorise the Directors to determine their remuneration.
By order of the Board
Rusi Kathoke
Secretary
25 May 2005 22 BTG plc Annual Report & Accounts
CORPORATE GOVERNANCE
The Board is accountable to the Company’s shareholders for good
governance and the information and statements below describe
how the Company applies the principles and complies with the
provisions of the new Combined Code and Code of Best Practice
issued in July 2003 (“the Code”) which applied to the Company in
respect of the year ended 31 March 2005.
STATEMENT OF COMPLIANCE
The Board considers that the Company complied with the 
best practice guidelines set out in Section 1 of the Code throughout
the year ended 31 March 2005. The Board has considered and
implemented, where appropriate, the guidelines on CSR issued by
the Association of British Insurers. The Board takes full responsibility
for CSR and it is included in the risk management process.
DIRECTORS
Board of Directors 
The Board currently comprises a Non-Executive Chairman, two
Executive Directors and a further six independent Non-executive
Directors (including a Senior Independent Director). Their names,
together with brief biographical details, are set out on pages 16 to
17. The positions of Chairman, Chief Executive Officer and Senior
Independent Director are held by separate individuals and there is 
a clear division of responsibilities between them. The Non-executive
Directors are independent of management and none has any
business relationships with the Group.
The Board considers that all the Non-executive Directors are
independent and, with their different backgrounds, bring a wide range
of experience, expertise and independent judgement to the Group. 
In accordance with the criteria specified by the Code, the Chairman 
is excluded from the determination of whether at least half the Board
comprises independent Non-executive Directors. Consuelo Brooke has
fulfilled the role of Senior Independent Director throughout the year. 
The Board meets regularly and in addition holds special Board
Meetings as and when required. The Board met a total of 10 times
during the financial year. Directors attended all meetings with the
exception that Sir George Radda and Alison Wood each missed
one meeting.
The Directors are sent an agenda and a full set of Board papers 
for each item to be discussed, in advance of each Board meeting.
Additional information is provided as appropriate and senior
executives regularly make presentations at Board meetings on the
results and strategies in their areas of responsibility.
Matters specifically reserved to the Board for decision include the
approval of the interim and annual financial statements, major
investments and disposals, budgets and long-term plans, major
litigation and senior executive remuneration and appointments.
The Board takes regular account of significant risks to the group,
following a detailed review by the Audit Committee. 
At the meeting of the Board on 24 May 2005, the auditors
attended whilst the annual accounts were discussed. Following this
discussion, the Non-executive Directors had a separate meeting
with the auditors in the absence of the Executive Directors.
The Chief Executive Officer has a service contract containing a
notice period of one year. Under the transitional arrangements
entered into by the Company, the services of the Chief Financial
Officer are terminable by giving three months’ notice at any time 
on or after 1 May 2005. Non-executive Directors receive a letter 
of appointment for an initial period of three years but, as with
Executive Directors, they must seek election at the first available
Annual General Meeting after their appointment and every three
years thereafter. The Directors retiring at the next Annual General
Meeting are disclosed on page 19.
There is an agreed procedure for Directors to take independent
professional advice, if necessary, at the Group’s expense. Directors
have direct access to the advice and the services of the Company
Secretary who is responsible for ensuring that Board procedures
are followed. The Company arranges appropriate directors’ and
officers’ liability insurance. The removal of the Company Secretary
is a matter for the Board as a whole. The Nomination Committee is
responsible for providing appropriate training for all new Directors.
Board Effectiveness
The Board has evaluated its own effectiveness in line with the
requirements of the Combined Code. Each Board Committee
evaluated its own performance during the year, using an initial
checklist to generate points for discussion. As part of the
evaluation process the Committees identified areas for future
action. The Chairman of each Committee then reported the results
back to the Chairman and the full Board. 
The Chief Executive Officer is responsible for appraising the
performance of the Chief Financial Officer. The Chairman 
and Non-executive Directors review the performance of the 
Chief Executive Officer. The Chairman interviewed each Director
separately to discuss individual performance over the past year.
The Non-executive Directors had a meeting with the Chairman to
discuss the performance of the Board and how it could improve 
its monitoring of the business and add more value. The Senior
Independent Director then chaired a meeting of the Non-executive
Directors, in the absence of the Chairman, to review his
performance against personal targets. 
Committees of the Board
The Board has established several Committees with specified 
terms of reference which assist the full Board in the exercise of 
its responsibilities.
Audit Committee
The Committee members are all considered by the Company to be
independent Non-executive Directors. The Committee is chaired
by Fred Weiss who is considered by the Board to have significant
recent and relevant financial experience. Other members of the
Committee are Malcolm Coster, Sir George Radda and Alison
Wood. The Chief Financial Officer and external auditors attend
meetings at the invitation of the Committee. The Committee met
five times during the year and all members attended each meeting
with the exception that Malcolm Coster and Alison Wood each
missed one meeting. BTG plc Annual Report & Accounts  23
The role of the Committee includes a detailed monitoring of the
interim and annual financial statements. As part of this review it
discusses the audit findings and auditors’ report with management
and the external auditors and considers significant judgements and
issues contained in them. Further discussion involves whether the
financial statements comply fully with the relevant statutes and
accounting standards and present a balanced assessment of the
Company’s financial position and prospects. Following this discussion
the Chairman of the Committee reports the results of the
Committee’s review to the full Board. The external auditor also
attends the Board meeting at which the full year results are discussed. 
The Committee reviews the effectiveness of internal controls and
risk management systems. It also reviews the scope and results 
of the external audit and the independence and objectivity of 
the auditors. The Company currently has no internal audit function 
and the Committee reviews on an annual basis whether this is 
still appropriate. 
The Audit Committee reviews the overall performance of the
auditors annually and approves their terms of engagement and
remuneration. The Committee discussed the auditors’ proposed
work plan prior to the commencement of the 2005 audit. The
Committee also reviews the non-audit work carried out by the
KPMG group to ensure that such services do not impair the
independence or objectivity of the auditors. Where the cost of 
any work is expected to exceed £0.10 million, they may not be
appointed without the approval of the Committee. 
As a result of its review, the Committee is confident that KPMG
Audit Plc is independent in its reporting on the audit of the Group.
The auditors are appointed by the shareholders at the Annual
General Meeting to ensure their independence.
Investment Committee
Members of the Committee have been Rusi Kathoke (Chairman),
Malcolm Coster (Deputy Chairman), Consuelo Brooke, Fred Weiss
and Dr Geoffrey Vernon, an external member with substantial
experience of venture capital investment. The investment
committee met six times during the financial year. Meetings were
attended by all members with the exception that Consuelo Brooke
missed one meeting. 
The Committee was responsible for reviewing all significant equity
investment proposals submitted by the various business units. If
the investment exceeded the Committee’s level of authority, the
Committee submitted the proposal, along with its
recommendation, for further consideration by the Board. 
Following the review of Group strategy it was decided that future
investment decisions would either be delegated to management
or, where appropriate, referred to the Board. Consequently with
effect from April 2005 the Committee was disbanded.
Remuneration Committee
Details of the members of the Committee and its terms of reference
are included in the Remuneration Report on pages 26 to 32.
Nomination Committee 
The Nomination Committee is responsible for reviewing the 
size and composition of the Board; making recommendations to
the Board on the appointment of Executive and Non-executive
Directors, and their re-appointment following retirement by
rotation; and for ensuring that succession planning is in place. 
It also advises the Board on matters generally relating to Board
appointments. Consuelo Brooke chairs the Committee; other
members are Malcolm Coster, Dr William Jenkins and Sir George
Radda. The Committee meets as required but at least twice a year. 
During the past year the Committee has been involved in the
appointment of Alison Wood as a Non-executive Director and of 
Dr Louise Makin as Chief Executive Officer, due to the retirement 
of Ian Harvey. Subsequently the Committee has been responsible
for the appointment of Christine Soden as Chief Financial Officer 
to succeed Rusi Kathoke who leaves the Board at the end of June
2005. The Committee has employed external consultants to assist 
it in making the appointments and the Chairman worked closely
with the Committee in the selection of these candidates. Due to 
the significant amount of work required, the Committee met
fourteen times during the financial year. Consuelo Brooke attended
thirteen meetings, Malcolm Coster attended twelve, William Jenkins
attended seven and Sir George Radda attended eight meetings. 
Prior to any appointments, the Committee prepares a full
description of the role, desired skills and capabilities required for
the appointment. They interview candidates and produce a shortlist
for a subsequent interview by all Board members. Following their
appointment the Committee ensures that all new Directors receive 
a full induction programme. As part of the induction process the
new Director is given a full briefing on the financial history of the
company and details of budgets and forecasts for future years.
Arrangements are also made for the Director to meet with the
heads of the various Strategic Business Units to give them an in-
depth briefing on the various areas of technology in which the
company is involved. A corporate governance and Director’s
responsibilities briefing may also be given and the opportunity to
attend external courses is also available if required.
RELATIONS WITH SHAREHOLDERS
The Group endeavours to maintain good communications with
shareholders through a dedicated investor relations function. The
Company formally reports its results twice a year with preliminary
results announced in May and interim results in November. The
Directors give presentations of these results to the Company’s
institutional shareholders, analysts and the media. The
presentations are broadcast live on the web for the information 
of shareholders and are available thereafter as an archive. 
The annual report contains a full business review and the interim report
gives an update at the half year. Extensive information, including
annual reports and all press releases are published on the Group’s
website (http://www.btgplc.com) for access by all shareholders. In
addition, through the website, individuals can register to receive
electronic copies of all Company announcements on the day they 
are issued.  24 BTG plc Annual Report & Accounts
The Annual General Meeting is the principal opportunity for private
shareholders to meet and discuss the Group’s business with the
Directors and other senior management. A full business
presentation is given and there is an open question and answer
session during which shareholders may ask questions both about
the resolutions being proposed and the business in general.
The Directors receive an investor relations briefing at each Board
meeting giving information on the changes in shareholdings and
any feedback from the Company’s brokers and investors. After the
twice-yearly investor briefings given to investors and analysts,
following the publication of the interim and annual results, detailed
feedback is given to the Board on the views and reactions of
investors and analysts who attended these events. The opportunity
to meet the Chairman or Senior Independent Director, separately
from the Executive Directors, is available on request.
Notice of the Annual General Meeting, which will be held at 
10.30 a.m. on 27 July 2005, at BTG’s offices, 10 Fleet Place,
Limeburner Lane, London EC4M 7SB, is enclosed with this report.
As required by the Code shareholders will receive this Notice at
least 20 working days before the meeting. The Notice includes
details of the resolutions and explanatory notes thereon along with
a proxy form for use by those members of the Company unable to
attend. CREST members may send their proxy votes to the
Company’s Registrars electronically. 
At the Annual General Meeting the number of proxy votes cast for
each resolution will be disclosed and published on the web. The
chairmen of the Audit, Remuneration and Nomination Committees
will be present at the Annual General Meeting to answer
shareholders’ questions. 
ACCOUNTABILITY AND AUDIT
The Statement of Directors’ responsibilities in relation to the
financial statements is set out on page 25.
Going concern
On the basis of current financial projections and facilities available,
the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. For this reason they continue to adopt the
going concern basis in preparing the financial statements.
Internal control and risk management
The Board of Directors has overall responsibility for ensuring that
the Group maintains an adequate system of internal control and
risk management and for reviewing its effectiveness. The Audit
Committee on behalf of the BTG Board undertakes the detailed
monitoring of the controls and the Board has reviewed the system
of internal controls, including financial controls, for the year under
review and up to the date of approval of the annual report and
accounts. Such a system is designed to manage rather than
eliminate the risk of failure to achieve business objectives, and can
only provide reasonable and not absolute assurance against
material misstatement or loss.
The criteria for judging the effectiveness of these controls are to
allow the maximisation of shareholder value by exploiting business
opportunities whilst ensuring that risks are properly identified and
managed. The controls are regularly reviewed to ensure that they
enable the proper management of business risks without so
restricting efficiency and entrepreneurial nature that they inhibit
proper running of the business. 
The review of risk and risk management is embedded throughout
the Group. An Operational Risk Team (“ORT”) is responsible for
identifying and evaluating risks which may impact on the Group’s
strategic and business objectives and for monitoring the progress
of actions designed to mitigate such risks. The ORT reviews risk-
based reports prepared by the strategic business units, operational
support units and corporate functions which are then categorised
and prioritised in the form of a risk management plan. The risk
management plan identifies the key risks, the probability of those
risks occurring, the impact should they occur and the actions and
individuals responsible for managing the risks. The ORT discusses
the plan with the Chief Executive Officer and Chief Financial
Officer, twice yearly, and reports its findings through the Audit
Committee to the Board. 
There are a number of areas of risk inherent in the Company’s
business, particularly in relation to the development of early-stage
technologies. BTG endeavours to reduce these risks by having a
broadly based portfolio. This portfolio approach helps to insulate
the business from the effects of a failure of an individual
technology and downturn in any one particular market.
The fundamental elements of the Group’s internal control and risk
management framework are described below.
Structure and reporting
BTG has a management structure with clear lines of responsibility
and accountability, staffed by appropriate personnel.
The Board of Directors of BTG, comprising a Non-executive
Chairman, six Non-executive and two Executive Directors, focuses 
on the overall Group strategy and the interests of shareholders. The
Board is responsible for setting the overall strategy and reviewing
the performance of the Group. During the period Ian Harvey was
Chief Executive Officer, his Chief Executive’s Team (“CET”),
comprising the Chief Executive Officer, the Chief Financial Officer
and the Chief Operating Officer was responsible for recommending
to the Board the setting of overall strategy and reviewing the overall
performance of the Group. It was also responsible for developing
the capabilities of the people employed by the Group. The
Operational Leadership Team (“OLT”), chaired by the Chief
Operating Officer, managed the day-to-day operations of the Group. 
It comprised senior staff members from all parts of the business to
ensure that appropriate corporate controls were in place throughout
the Group. The OLT included corporate as well as operational
members who had specific responsibility for risk management and
compliance in respect of individual items of business.
Following the appointment of Louise Makin the CET and OLT were
disbanded and a new Leadership Team structure was set up.
Membership of the Leadership Team (“LT”) includes the Chief
CORPORATE GOVERNANCE
continued BTG plc Annual Report & Accounts  25
Financial Officer and senior staff members from various parts of the
business who are responsible for recommending to the Board the
setting of overall strategy and reviewing the overall performance of
the Group. The LT is also responsible for managing the day-to-day
business of the Group and ensuring that appropriate corporate
controls and risk and compliance are fully complied with.
The Group is organised into a number of strategic business units,
operational support units and corporate functions. Within these
areas, there are defined management structures and processes for
acquisition, assessment and evaluation of technology opportunities
and development and execution of commercialisation strategies.
Specialist teams, some based out in the field covering much of the
US and Europe, are important in ensuring good liaison with inventive
sources. In-house expert groups evaluate the commercial application
of individual technologies at an early stage and have dedicated
teams with up-to-date market and technical knowledge to ensure
that the technologies are commercialised effectively. These teams
work with the in-house patent attorneys, lawyers and other experts
and also make use of outside expertise when necessary.
BTG actively monitors its revenue streams and from time to time
audits its licensees to ensure compliance with the terms of
agreements. BTG also has a system for supporting the protection
and maintenance of patents.
There is a comprehensive system of reviews of business
performance based on annual budgets and longer-term plans with
quarterly reviews of progress against an agreed set of objectives
and performance criteria for each business unit. Reporting to the
Board is based on these quarterly assessments and analysis of
performance against annual budgets and the longer-term strategy
and objectives. The reports include non-financial as well as financial
information and a review of technology progress with the portfolio.
The LT meets formally on a regular basis to review the performance
in its areas of responsibility.
Approval procedures
There is a delegated authority structure within BTG that ensures
that decisions are taken at an appropriate level, with an
appropriate level of input by in-house legal, financial and
intellectual property personnel. Outside expertise is also sought
where appropriate. The delegated authority structure prescribes
financial limits of approval at each level and requires decisions with
significant financial, legal or reputational impact for BTG to be
approved by the Board. 
Corporate policies, values and compliance
A statement of corporate values and a guidance booklet on ethics,
business practices and compliance are distributed throughout the
Group. The various professionals within the Group also meet
regularly to discuss external changes in the regulatory, legal and
financial environments in which BTG operates to ensure it remains
fully compliant with new legislation and best practice.
The Board, through the Audit Committee, has reviewed the
effectiveness of the internal controls of the Group. The controls
described above operate and are embedded within the business.
There is an ongoing process for identifying, evaluating and
managing significant risks faced by the company. A reporting
structure has been in place throughout the year and up to the date
of approval of the accounts and is regularly reviewed by the
Directors in accordance with the Combined Code.
As required by the Code, the Board has considered whether it
would be appropriate to have an internal audit function within the
Group and has concluded that, taking into account its relatively
small size, and the way the business is run, this is not appropriate
at present. The Audit Committee reviews the need for this on an
annual basis.
Audit independence
As reported on page 23 the Audit Committee monitors the
effectiveness and independence of KPMG Audit Plc. As a result of
its review, the Committee is confident that KPMG Audit Plc are
independent in their reporting on the audit of the Group.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 
FOR THE FINANCIAL STATEMENTS
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 and of the profit or loss for
that period. 
In preparing those financial statements, the Directors are required
to select suitable accounting policies, consistently applied and
supported by reasonable and prudent judgements and estimates.
The Directors are required to state whether all accounting
standards which they consider to be applicable have been
followed, subject to any material departures disclosed and
explained in the financial statements, and the financial statements
should be prepared on the going concern basis unless it is
inappropriate to presume that the Company and the Group will
continue in business. The Directors are responsible for ensuring
that proper accounting records are maintained which disclose with
reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements
comply with the Companies Act 1985. The Directors are
responsible for taking such steps as are reasonably open to them
to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
On the basis of current financial projections and facilities available,
the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
STATEMENT OF COMPLIANCE WITH THE 
CODE OF BEST PRACTICE
The Group has established procedures and was compliant with 
the provisions of the Code during the year ended 31 March 2005
except for the non-compliance as stated below.
The Company did not comply with Code B.2.2 in that the
Chairman was a member of the Remuneration Committee until he
resigned on 2 November 2004.  26 BTG plc Annual Report & Accounts
REMUNERATION REPORT
INTRODUCTION AND COMPLIANCE
This report has been prepared by the Remuneration Committee on
behalf of the Board in accordance with the requirements of Section
234B of the Companies Act 1985 (as amended) (Directors’
Remuneration Report regulations), the new Combined Code (2003)
and the Listing Rules of the Financial Services Authority. In
accordance with the regulations, a resolution inviting shareholders
to approve the report will be put to the Annual General Meeting
on 27 July 2005.
The following sections have been subject to audit: Directors’
emoluments, Directors’ shareholdings, Directors’ share awards and
Directors’ pensions and long-term incentive schemes.
REMUNERATION COMMITTEE
The Committee is chaired by Consuelo Brooke, the Company’s Senior
Independent Director. Other current members of the Committee, who
are all independent Non-executive Directors, are Dr William Jenkins
and Fred Weiss. The Company Chairman, Sir Brian Fender, resigned
from the Committee on 2 November 2004. The Company Chairman
and Executive Directors attend meetings only at the invitation of 
the Committee. The Committee met seven times during the year 
and all members attended each meeting with the exception of 
Dr William Jenkins and Fred Weiss who each missed two meetings.
The Committee plans to meet four times in the coming year with the
aim of reducing to three meetings thereafter.
The Committee makes recommendations to, and determines on
behalf of, the Board, remuneration packages for the Chairman and
each of the Executive Directors. It also gives advice and makes
recommendations on the framework and broad policy for all
aspects of the remuneration of the Senior Management who report
directly to the Executive Directors and on the overall policy for
total compensation for all other employees. The Committee also
advises on share schemes, employee share trust matters, pensions
and other benefits.
The terms of reference of the Committee are available from the
Company Secretary.
CONSULTANTS TO THE COMMITTEE
New Bridge Street Consultants LLP , a firm of leading independent
remuneration consultants, advises the Committee on its employee
share schemes, long-term incentive arrangements and market
levels of remuneration in comparator companies. The firm also
assists with the total shareholder return (“TSR”) performance
measurement. During the year the Committee also used Mercer
Human Resource Consulting to advise on a suitable remuneration
package on the appointment of Dr Louise Makin as Chief Executive
Officer. Both firms have been appointed by the Committee. Other
than for the provision of advice as detailed below, neither firm has
any connection with the Group.
The Company also uses New Bridge Street and Mercer to advise
on other matters such as employee share schemes and pensions
and specialist US-based remuneration consultants, Smart &
Associates, for matters specific to the US employment market. 
The Committee has not appointed the US consultants.
REMUNERATION POLICY
The policy for remuneration is that the package offered should be
sufficient to attract, retain and motivate Executive Directors and
staff of the quality required, but not more than is necessary for this
purpose. It is intended that variable pay should comprise a
significant proportion of total remuneration. Furthermore, the
objective is to ensure that incentive schemes have regard to best
practice and generate alignment with the interests of shareholders.
Remuneration is reviewed annually and fixed around the mid-
market level. There are very few companies whose activities are
directly comparable to BTG’s so the Committee and its advisers
use a number of surveys of the employment market from which to
obtain data. 
THE REMUNERATION PACKAGE
The remuneration package comprises four elements: base salary
and benefits, annual bonus, long-term incentive arrangements and
pension. All employees of the Group (including Executive Directors
but excluding Non-executive Directors) are remunerated using the
policy described below. The remuneration policy is established by
the Board on the recommendation of the Committee.
Base salary and benefits: Base salary takes into account the
performance of the individual and information from independent
sources and consultants on market levels. Benefits mainly comprise
the provision of a company car or cash equivalent, medical benefits
and permanent health insurance. 
Annual bonuses: The annual incentive scheme applies to all
members of staff, including Executive Directors. The intention is 
to link incentives more closely to Group performance. Bonuses are
calculated based on personal and business performance but may
not exceed 50% of base salary. Corporate business targets were
not achieved so no bonuses will be payable in respect of the year
ended 31 March 2005.
Following the appointment of Dr Louise Makin as Chief Executive
Officer, the Committee agreed short-term targets for her to achieve
by the end of the financial year under review. These consisted
principally of targets for total revenue and cost savings, and the
preparation of a revised Group strategy. Other areas for
achievement included the establishment of a new leadership team,
working closely with the Nomination Committee to define a
shortlist of candidates for the position of Chief Financial Officer
and ensuring that a network of personal contacts was built up to
develop BTG’s market areas. 
Under the terms of her contract, Dr Makin is entitled to a bonus of
up to 50% of salary. The Committee decided that, in her first year,
50% of her bonus should be subject to the achievement of business
performance, increasing to 75% in future years, the balance being
subject to the achievement of personal performance targets.
Furthermore, for the year ended 31 March 2005 any bonus would 
be time-apportioned since Dr Makin had only been employed since
19 October 2004. Following a review the Committee agreed that 
a bonus would be payable for the achievement of personal
performance targets. Dr Makin agreed that 25% of her bonus 
would be used to purchase shares in the Company. BTG plc Annual Report & Accounts  27
The Committee has agreed similar business and personal targets
for 2006.
The personal performance targets for the Chief Financial Officer
included oversight of the Group’s financial management,
chairmanship of the Investment Committee and funding
arrangements for Provensis. Subsequently the main target has been
to find a suitable commercialisation partner, and complete a deal,
to take the Varisolve
®
technology through to market.
Targets for the new Chief Financial Officer will be discussed and
agreed with Christine Soden once she has joined the Company.
Senior Management are also eligible to receive annual bonuses, 
up to a maximum of 50% of base salary, payable 75% subject to 
the achievement of business performance and 25% subject to the
achievement of personal performance targets. Annual bonuses 
may also be paid to other staff.
Long-term incentive arrangements: Executive Directors and Senior
Management, together with all other employees, are entitled to
participate in the Company’s share option and sharesave schemes.
The Company also offers incentive plans with medium-term targets
for employees below Board level in both shares and cash.
Following the recent reduction in staff and the strategy review, 
the Company is currently reviewing, with the help of its advisers,
long-term incentive arrangements for Executive Directors and
Senior Management. This is to ensure that the various elements
contain the correct balance between short-term and long-term
incentive arrangements and also to align the long-term interests 
of Executive Directors and Senior Management with those of
shareholders. The arrangements for all other staff are also being
reviewed, with the aim of achieving similar alignment, as part of
the exercise. The Company proposes to launch the revised
arrangements during 2006.
Pension: The Company operates a defined benefit final salary
pension scheme which was open to all eligible employees of the
Group until 31 May 2004. Subsequent to this date, new employees
may join at the request of the Company. The scheme enables
members to retire at 60 (or 65 in certain instances) with a maximum
pension of two-thirds of final salary after 40 years’ service. The
Scheme also offers lump sum death benefits equal to four times
base salary and dependants’ pensions. 
The scheme was reviewed during 2004 to take account of the
deficit in the fund. As from 1 June 2004 employee contributions
rose from 5% to 7% of salary for those members wishing to
continue to accrue a pension at the rate of one-sixtieth of basic
salary per annum. Those who continued to pay 5% of basic salary
would accrue future pension benefits on the basis of one-eightieth
of basic salary per annum. Also from this date pensionable pay will
be averaged over a minimum three-year period prior to retirement
for all members. The Company contributes at a rate of 18% of
employees’ pensionable salary. A review is currently under way to
determine an appropriate strategy for executive pension provision
from April 2006 when the simplification provisions of the Finance
Act 2004 are introduced. The Company will not however,
compensate executives for any additional tax burden they suffer.
The Company offers a defined contribution scheme to new
employees and members of the existing final salary scheme may
elect to transfer to this new defined contribution scheme. The 
US subsidiary runs a defined contribution scheme for its staff.
EXTERNAL APPOINTMENTS
In certain circumstances, the Board believes that it may be
beneficial to the Company for executives to hold Non-executive
Directorships outside the Group. Any such appointments are
subject to approval by the Board and the Director may retain any
fees payable. Rusi Kathoke served as a Non-executive Director of
XTL Biopharmaceuticals Ltd and received fees of £8,500 for the
period 1 April to 31 August 2004. Dr Makin does not hold any
outside directorships.
SERVICE CONTRACTS
The Company’s policy on Directors’ service contracts is that, in line
with the best practice provisions of the Code, they should be
terminable by the Company on one year’s notice, and Directors’
contracts do not provide for predetermined compensation in the
event of termination. Any payments made would be determined 
by reference to normal contractual principles with mitigation being
applied as appropriate.
Dr Makin signed a service contract, dated 15 September 2004,
containing a notice period of one year by either party. The
Company may terminate her employment with immediate effect 
by making a payment in lieu of notice. 
Rusi Kathoke’s intention to retire and take up permanent residence
in South Africa was disclosed in our interim report published in
November 2004. In order to facilitate this change, and ensure 
a smooth handover, Rusi Kathoke’s existing service contract was
terminated on 31 August 2004 and the Company entered into 
a consultancy agreement with another company, as noted on page
29, for the provision of his services, terminable by either party at
three months’ notice at any time on or after 31 May 2005. The
Company may terminate the agreement with immediate effect by
making a payment in lieu of notice. In the event of early
termination, no other amounts are payable under the contract.
These arrangements have not resulted in any additional costs to
the Group.
The Non-executive Directors do not have service contracts, but
have letters of appointment for an initial period of three years,
which may be renewed by mutual agreement, normally for a
maximum of two further three-year terms. The terms of
appointment do not contain any contractual provisions regarding 
a notice period or the right to receive compensation in the event
of early termination. 28 BTG plc Annual Report & Accounts
REMUNERATION REPORT
continued
Details of the Directors’ contracts and letters of appointment are as set out below.
Executive Date of contract Notice period
Louise Makin 15 September 2004 12 months
Rusi Kathoke 28 October 2004* 3 months from 1 May 2005
Non-executive Letter of appointment End of period of appointment
Sir Brian Fender 27 July 2004 31 March 2007
Consuelo Brooke 27 July 2004 29 July 2005
Malcolm Coster 7 December 2004 1 August 2006
Dr William Jenkins 27 July 2004 1 September 2005
Sir George Radda 25 January 2005 1 August 2005
Fred Weiss 28 July 2004 1 August 2007
Alison Wood 7 September 2004 7 September 2007
* Represents contract between BTG plc and another company for the provision of the services of Rusi Kathoke.
NON-EXECUTIVE DIRECTORS’ FEES
The Executive Directors are responsible for proposing the Non-executive Directors’ fees. In proposing such fees they take account of
similar fees paid to Non-executive Directors in listed companies within the Group’s listing sector and of similar size. The decision on fee
changes is taken by the Board as a whole. Individual Non-executive Directors do not take part in discussions on their remuneration. 
In April 2005, as part of the rationalisation of operations and to generate savings, Non-executive Directors’ remuneration was streamlined.
Non-executive Directors’ fees are now as follows, the intention being to align fees to the amount of work carried out by each Non-
executive Director.
> The Chairman’s fee is £75,000 p.a.;
> Other Non-executive Directors receive the following:
> An annual fee of £17,000;
> An attendance allowance of £2,000 per meeting for an expected seven meetings per annum. This allowance is also paid for any
special sub-committees of the Board to review individual projects;
> An attendance allowance of £1,000 per meeting of the Audit, Remuneration and Nomination Committees and any special
subcommittees if they take place outside the two day time period set aside for Board meetings.
The Chairman of the Audit Committee and the Senior Independent Director receive a fee of £6,000 per annum for the additional work
involved. The overall impact of these changes and the secretarial support is intended to reduce fees by £0.10 million per annum.
Non-executive Directors do not receive benefits or pension contributions from the Group and do not participate in any Group 
incentive scheme.  BTG plc Annual Report & Accounts  29
DIRECTORS’ EMOLUMENTS
The amounts below represent emoluments earned as Directors and paid during the relevant financial year.
2005 2004
Salary/ Additional Total Pension Total
fees Bonus payment Benefits emoluments contributions emoluments
££££ £ ££
Executive Directors
Dr Louise Makin
1
145,539 34,205 13,836 30,897 224,477 8,393 -
Rusi Kathoke
2
271,750 – – 4,565 276,315 – 322,672
Non-executive Directors
Sir Brian Fender 75,000––– 75,000 – 55,836
Consuelo Brooke 45,508––– 45,508 – 35,508
Malcolm Coster 44,008––– 44,008 – 37,008
Dr William Jenkins 29,008––– 29,008 – 25,008
Professor Sir George Radda 31,008––– 31,008 – 25,508
Fred Weiss 39,508––– 39,508 – 37,508
Alison Wood 9,697––– 9,697 ––
Ex-Directors
Ian Harvey
3
169,312 – – 4,725 174,037 – 382,414
Dr Jack Leonard
4
–––– – – 13,336
860,338 34,205 13,836 40,187 948,566 8,393 934,798
1
The salary paid to Louise Makin is for the period from the date of her appointment on 19 October 2004 to 31 March 2005. Her salary 
is £322,500 p.a. The additional payment represents a cash supplement for pension contributions relating to salary which exceeds the
earnings cap. Pension contributions are amounts paid to an Executive Pension Plan for Louise Makin.
2
Rusi Kathoke was paid a salary at the rate of £260,004 per annum for the period to 31 August 2004. With effect from that date, Rusi
Kathoke ceased to be employed by the Group and the Company entered into a consultancy agreement with a consulting company for
the provision of his services at the rate of £280,140 per annum. Rusi Kathoke personally received remuneration and benefits of
£112,900 for the period to 31 August 2004 and fees of £163,415 were paid to the consulting company thereafter. 
3
The table shows remuneration paid to Ian Harvey for the period up to the date of his retirement from the Board on 19 October 2004.
4
Fees were paid to Dr Leonard for the period to his retirement from the Board on 23 July 2003.
Benefits shown above for Louise Makin, Rusi Kathoke and Ian Harvey were for the provision of a company car, or cash equivalent, and
medical benefits. Louise Makin is entitled to a relocation package, which is subject to a cap, to cover her move to the UK and benefits
include £26,576 paid during the year.
Ian Harvey retired as a Director on 19 October 2004 before finally retiring from the company on reaching 60 years of age on 2 February
2005. No compensation or other enhanced payments were made to Ian Harvey.
Rusi Kathoke received no benefits from the Company after 31 August 2004. At that date Rusi Kathoke also ceased contributions to the
Company pension scheme and the Company was no longer liable to make any employer contributions on his behalf. Notwithstanding
the increase in fees payable for the provision of his services from 1 September 2004, the Company has achieved an overall reduction in
cost as benefit and pension contributions were no longer payable. 30 BTG plc Annual Report & Accounts
REMUNERATION REPORT
continued
Details of the value of individual pension entitlements and information relating to defined benefits available to Ian Harvey, Rusi Kathoke
and Dr Louise Makin, as required under the Directors’ Remuneration Report regulations (Section 234B, Schedule 7A section 12(2) of the
Companies Act 1985) and the Listing Rules are shown below:
Directors’ Remuneration Report Regulations Listing requirements
Increase/
Increase/ Increase/ (decrease) in Transfer
(decrease) in (decrease) in accrued pension value of (A)
accrued pension Transfer Transfer transfer value during year ended at 31 March 2005
Accrued during year ended value of value of less Directors’ 31 March 2005 less Directors’
benefit at 31 March 2005 accrued benefits accrued benefits contributions plus excluding contributions plus
31 March 2005 including inflation
4
at 31 March 2005 at 31 March 2004 benefits paid
5
inflation (A) benefits paid
Ian Harvey
1
120,000 (23,806) 2,405,440 2,666,026 146,970 (28,264) (159,005)
Rusi Kathoke
2
40,464 (87,730) 693,422 2,173,064 114,117 (91,705) 22,217
Louise Makin
3
764 764 6,520 – 3,312 764 3,312
Notes:
1
Ian Harvey retired on 2 February 2005. He exchanged part of his accrued benefits for a retirement lump sum of £387,556 and has been
receiving a pension since retirement at the rate of £120,000 per annum. Exchanging part of his benefits for a lump sum has served to
reduce his accrued pension benefits over the year.
2
Rusi Kathoke ceased to be employed by the Group on 31 August 2004. Subsequently he transferred part of his accrued benefits out of
the Fund. This transfer has served to reduce his accrued pension benefits in the Fund over the year.
3
Louise Makin joined the Fund on 19 October 2004.
4
The increase/(decrease) in the pension figures equals the benefits as at 31 March 2005 less the equivalent benefits as at 31 March 2004
disclosed in the 2004 accounts, adjusted as described in Notes (1) and (2).
5
This is the transfer value as at 31 March 2005 less the transfer value as at 31 March 2004 less the contributions paid by the Director in
the year plus benefits paid or transfer values taken in the year.
The Company makes payments to the defined benefit final salary pension scheme on the advice of actuaries. At the request of the
Company, Louise Makin was allowed to join the scheme on her appointment and, as most other UK members of the Scheme, currently
makes an employee contribution of 7% of pensionable earnings. Pensionable earnings comprise only base salary. She is affected by the
Inland Revenue imposed “Earnings Cap”. As part of her arrangements, Louise Makin is making additional pension contributions to a
separate Executive Pension Scheme to which the Company made employer contributions of £8,393 during the year. As stated above, the
Company also made a further cash contribution of £13,836 to bring its total contribution to 20% of salary above the earnings cap. BTG plc Annual Report & Accounts  31
DIRECTORS’ SHAREHOLDINGS
The Directors’ beneficial interests, including interests of connected
persons, in the shares of the Company at the end of the financial
year and at 25 May 2005 are shown below. None of the Directors
had any non-beneficial interest at any time in the period 1 April
2004 to 25 May 2005. None of the Directors who held office at the
end of the financial period had any beneficial interest in the shares
of other Group companies.
Interest at Interest at
31 March 2005
1
31 March 2004
2
Ordinary shares 10p Ordinary shares 10p
Louise Makin 11,272 –
Rusi Kathoke 191,460 180,188
Sir Brian Fender 34,713 31,213
Fred Weiss 1,000 1,000
Ian Harvey 883,952 883,952
1
or date of resignation
2
or date of appointment
During the year Louise Makin and Rusi Kathoke each purchased
11,272 shares and Sir Brian Fender purchased 3,500 shares in the
Company.
Louise Makin and Rusi Kathoke have a beneficial interest in
ordinary shares of the Company by direct holdings and by virtue of
their entitlements in the Company’s employee share option
schemes. As an employee of the Group, Louise Makin also has an
interest in any unallocated shares held on behalf of all employees
in the BTG Employee Share Trust. The Non-executive Directors are
not entitled to participate in any of the Company’s employee share
schemes. 
COMPANY SHARE SCHEMES
The Company has a number of share schemes open to all eligible
employees of the Group, including the Executive Directors. It 
also has an employee share trust, the BTG Employee Share Trust,
which holds shares for the general benefit of all employees,
including Executive Directors, who will eventually become legally
entitled to them. 
Share option schemes
These schemes are open to all employees, including Executive
Directors, whether based in the UK or overseas. All the options 
are exercisable between three and ten years from grant as long as
certain performance criteria have been met. No payment is made
for the grant of an option.
For awards prior to September 2001, the main criteria were that
the Company’s share price had grown faster than the FTSE Small
Cap Index of companies over a period of at least three years since
the grant of the option and that there had been an improvement in
the earnings of the Company over a period of at least three years
beginning with the year in which the option was granted. There
have been a number of grants at exercise prices in the range
254.37 pence to 1178.32 pence per share. 
For awards made on or after September 2001, the main criteria are
that the Company’s share price has grown faster than the average of
the FTSE techMARK All-share Index and BTG’s total receipts (revenues
and equity realisations) in a relevant period are at least 130% of those
for the financial year prior to the Grant Date. There have been grants
under this scheme at exercise prices in the range 90 pence to 1178.32
pence per share. 
The Company also operates a UK tax unapproved share option
scheme that is capable of being operated to grant options over
issued shares to any employees, other than Executive Directors.
The performance conditions are similar to those for awards made
after September 2001 referred to above. There have been grants
under this scheme at exercise prices in the range 83.72 pence to
136.46 pence per share.
Although retesting was permitted for grants made in previous years,
no retesting will be allowed for any future grants of options under any
share option plan.
Restricted share scheme
The Company has established a restricted share scheme for the
purpose of making conditional awards to selected full-time
employees below Board level. Awards will be granted at the
discretion of the Board on the recommendation of the
Remuneration Committee.
Sharesave scheme
The Company operates Inland Revenue approved Save As You
Earn schemes, open to all eligible employees, including Executive
Directors, who open an approved savings contract to enable them
to purchase shares in the Company. The options are exercisable
after three years at a price not less than 80% of the market value 
of the shares at the date of grant.
Stock purchase plan
The Company operates a US-style stock purchase plan for its US
employees open to all US employees who open an approved
savings contract to enable them to purchase shares in the Company.
The options are exercisable after two years at a price not less than
85% of the market value of the shares at the date of grant. 32 BTG plc Annual Report & Accounts
REMUNERATION REPORT
continued
Directors’ share awards
The following Directors have interests in BTG plc share options. Full details of their holdings at the end of the financial year and at 
25 May 2005 are set out below.
Exercise At At Exercisable within
Director Date of grant price (p) 1 April 2004* 31 March 2005 seven years from Share scheme
Louise Makin 11 November 2004 92.00 – 75,000 11 November 2007 Option
Rusi Kathoke 29 August 2002 188.36 138,030 138,030 29 August 2005 Option
* or date of appointment
The Executive Directors are entitled to participate in the Company’s share schemes on the same basis as all other employees of the
group. The performance conditions to which Directors’ entitlements to share options are subject are summarised on page 31. The same
performance conditions apply for each Director. The performance conditions were chosen in order to further align the interests of option
holders with shareholders. The Remuneration Committee, with advice from New Bridge Street Consultants, is responsible for assessing
whether the relevant performance conditions have been achieved. 
Further to the share award shown above, as part of her compensation at the time of joining the Company, it was agreed that Louise Makin
should receive a special award of 125,000 Restricted Shares under section 13.13A of the UK Listing Authority Listing Rules which permits
awards under such circumstances. These are being awarded to her on 26 May 2005 with the following performance conditions. Of the award,
50,000 to be released on the third anniversary of her appointment if she is still employed by the Group. For the balance of 75,000 shares to
be released, the Group must achieve a profit before tax in each of the two years ended 31 March 2008 and no shares will be released unless
the average share price exceeds 150p for the six months ended 31 March 2008. The full award will only be released if the average share price
for the six-month period exceeds 300p. The Committee will not make amendments to the arrangements established for Louise Makin that are
to her advantage without seeking the consent of shareholders. No payment under this long-term incentive scheme is pensionable.
The middle market price of an ordinary share on 31 March 2005 was 98p. During the year the share price ranged from a low of 81p to 
a high of 140.5p.
TOTAL SHAREHOLDER RETURN
The performance of the Company’s ordinary shares compared with the FTSE techMARK All-Share Index (“the Index”) for the five-year
period ended on 31 March 2005 is shown in the graph below.
This graph shows the value at 31 March 2005 of £100 invested in BTG plc on 31 March 2000 compared with £100 invested in the FTSE
techMARK All-Share Index. The other points plotted are the values at intervening financial year-ends.
As the Company operates in a fairly small niche market, it is not easy to find a specific index for comparison. However the Board chose this
Index as it believes that it gives shareholders a reasonable comparison with the total shareholder return of other equity investments in the
emerging technology, life and high technology physical science sectors. The Company is a member of the Index and it is used as a benchmark
for deciding on the exercise of outstanding share options. The TSR performance has been measured by New Bridge Street Consultants.
This report was approved by the Board on 25 May 2005 and signed on its behalf by
Consuelo Brooke 
Chairman of the Remuneration Committee
0
20
40
60
80
100
120
31 March
2000
31 March
2001
31 March
2002
31 March
2003
31 March
2004
31 March
2005
BTG plc
FTSE Techmark All-Share Index
Source: Thomson Financial BTG plc Annual Report & Accounts  33
INDEPENDENT AUDITORS’ REPORT 
to the members of BTG plc
We have audited the financial statements on pages 34 to 58. We
have also audited the information in the remuneration report that 
is described as having been audited.
This report is made solely to the Company’s members, as a body,
in accordance with section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members
as 
a body, for our audit work, for this report, or for the opinions we
have formed. 
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Directors are responsible for preparing the Annual Report and
the remuneration report. As described on page 25, this includes
responsibility for preparing the financial statements in accordance
with applicable United Kingdom law and accounting standards.
Our responsibilities, as independent auditors, are established in 
the United Kingdom by statute, the Auditing Practices Board, the
Listing Rules of the Financial Services Authority, and by our
profession’s ethical guidance. 
We report to you our opinion as to whether the financial
statements give a true and fair view and whether the financial
statements and the part of the remuneration report to be audited
have been properly prepared in accordance with the Companies
Act 1985. We also report to you if, in our opinion, the Directors’
report is not consistent with the financial statements, if the
Company has not kept proper accounting records, if we have not
received all the information and explanations we require for our
audit, or if information specified by law regarding Directors’
remuneration and transactions with the Group is not disclosed. 
We review whether the statement on page 25 reflects the
Company’s compliance with the nine provisions of the 2003 FRC
Code specified for our review by the Listing Rules, and we report if
it does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or form
an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report,
including the corporate governance statement and the unaudited
part of the remuneration report, and consider whether it is consistent
with the audited financial statements. We consider the implications
for our report if we become aware of any apparent misstatements 
or material inconsistencies with the financial statements. 
BASIS OF AUDIT OPINION
We conducted our audit in accordance with Auditing Standards
issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements and the part of the
remuneration report to be audited. It also includes an assessment
of the significant estimates and judgements made by the Directors
in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the Group’s circumstances,
consistently applied and adequately disclosed. 
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable
assurance that the financial statements and the part of the
remuneration report to be audited are free from material
misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial
statements and the part of the remuneration report to be audited.
OPINION
In our opinion:
> the financial statements give a true and fair view of the state of
affairs of the Company and the Group as at 31 March 2005 and 
of the loss of the Group for the year then ended; and 
> the financial statements and the part of the remuneration report
to be audited have been properly prepared in accordance with
the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
London
25 May 2005 34 BTG plc Annual Report & Accounts
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2005
£ million
Exceptional Exceptional
Note items 2005 items 2004
Total revenue 2 38.31 4.34 42.65 36.76 16.12 52.88
Turnover 2 38.31 – 38.31 36.76 12.00 48.76
Revenue sharing 2 (15.69) – (15.69) (16.01) (4.84) (20.85)
Provensis development 3 (9.17) (2.31) (11.48) (15.90) – (15.90)
Other new technology development (6.27) – (6.27) (4.79) – (4.79)
Total development (15.44) (2.31) (17.75) (20.69) – (20.69)
Other operating expenses 4 (7.35) – (7.35) (4.37) – (4.37)
Administrative expenses 5 (23.16) (9.47) (32.63) (27.66) (2.05) (29.71)
Operating loss (23.33) (11.78) (35.11) (31.97) 5.11 (26.86)
Profit on disposal of other fixed assets 6 – 2.19 2.19 – 3.08 3.08
Amounts written off other fixed assets 7 – (3.02) (3.02) –(0.42) (0.42)
Loss on ordinary activities before
interest and tax (23.33) (12.61) (35.94) (31.97) 7.77 (24.20)
Interest receivable 9 1.72 – 1.72 1.46 – 1.46
Interest payable and similar charges 10 (0.08) – (0.08) (0.09) – (0.09)
Loss on ordinary activities before taxation (21.69) (12.61) (34.30) (30.60) 7.77 (22.83)
Taxation on loss on ordinary activities 11 (0.17) – (0.17) 2.17 (2.33) (0.16)
Loss on ordinary activities after taxation (21.86) (12.61) (34.47) (28.43) 5.44 (22.99)
Loss applicable to minority equity interests 0.24 – 0.24 0.30 – 0.30
Loss for the financial year – 
retained for equity shareholders 25 (21.62) (12.61) (34.23) (28.13) 5.44 (22.69)
Basic and diluted loss per share 13 (23.53p) (19.40p)
All results relate to continuing activities. There were no discontinued activities during the current and previous years. The historical cost
loss is not materially different from the reported loss.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 
FOR THE YEAR ENDED 31 MARCH 2005
£ million
Note 2005 2004
Loss for the financial year attributable to ordinary shareholders (34.23) (22.69)
Currency translation differences on foreign currency net investments (0.31) (0.68)
Total recognised gains and losses relating to the year (34.54) (23.37)
Unrealised gain on intangible assets 14 0.24 –
Total gains and losses recognised since last annual report (34.30) (23.37)
The notes on pages 37 to 58 form part of these financial statements. BTG plc Annual Report & Accounts  35
BALANCE SHEETS
AS AT 31 MARCH 2005
£ million
Group Group Company Company
Note 2005 2004 2005 2004
Fixed assets
Intangible assets 15 10.25 11.62 – –
Tangible assets 16 10.91 10.10 – –
Investments 17 11.98 14.03 15.56 15.56
33.14 35.75 15.56 15.56
Current assets
Debtors: amounts falling due within one year 18 7.47 7.04 187.34 186.48
Short-term deposits 20.08 48.24 – –
Cash at bank and in hand 19.02 19.73 0.01 0.37
46.57 75.01 187.35 186.85
Creditors: amounts falling due within one year 19 (24.14) (25.98) (2.13) (1.25)
Net current assets 22.43 49.03 185.22 185.60
Total assets less current liabilities 55.57 84.78 200.78 201.16
Provisions for liabilities and charges 20 (7.63) (2.47) – –
Net assets 47.94 82.31 200.78 201.16
Capital and reserves
Called-up share capital 23 14.76 14.76 14.76 14.76
Share premium account 25 182.22 182.24 182.22 182.24
Capital reserve 25 7.31 7.31 – –
Profit and loss account 25 (156.43) (122.32) 3.80 4.16
Equity shareholders’ funds 26 47.86 81.99 200.78 201.16
Minority shareholders’ equity interest 27 0.08 0.32 – –
47.94 82.31 200.78 201.16
These financial statements were approved by the Board of Directors on 25 May 2005 and were signed on its behalf by:
Sir Brian Fender Chairman
Dr Louise Makin Chief Executive Officer
Rusi Kathoke Chief Financial Officer
The notes on pages 37 to 58 form part of these financial statements. 36 BTG plc Annual Report & Accounts
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2005
£ million
Note 2005 2004
Total cash flow from operating activities 28 (29.61) (15.98)
Return on investment and servicing of finance
Interest paid (0.08) (0.09)
Interest received 1.70 1.88
Net cash inflow from returns on investments and servicing on finance 1.62 1.79
Taxation
Overseas tax paid (0.16) (0.16)
Tax paid (0.16) (0.16)
Capital expenditure and financial investments
Cash received on sale of intangible assets 1.89 0.03
Purchase of tangible assets (3.07) (4.64)
Cash received on sale of investments 2.45 4.09
Cost of disposal of investments – (0.05)
Capital repayment – 0.01
Expenditure on investments (2.75) (5.37)
Transfer of KetoCytonyx to subsidiary company – 2.61
Investment in patents (2.19) (3.77)
Net cash outflow from capital expenditure and financial investments (3.67) (7.09)
Net cash outflow before use of liquid resources and financing (31.82) (21.44)
Management of liquid resources 28.16 6.41
Financing
Issue of ordinary share capital – 29.70
Expenses paid in connection with share issue (0.02) (3.09)
Net cash inflow from financing (0.02) 26.61
(Decrease)/increase in cash in the period 28 (3.68) 11.58
The notes on pages 37 to 58 form part of these financial statements. BTG plc Annual Report & Accounts  37
1 ACCOUNTING POLICIES
a) Basis of preparation of financial statements
The following principal accounting policies have been applied consistently in dealing with items which are considered material in
relation to the Group’s financial statements.
The financial statements have been prepared under the historical cost convention and on a going concern basis and in accordance with
applicable accounting standards, with the exception of segmental information (note 2); and with the 1985 Companies Act, except in
respect of the format of the profit and loss account and except as stated under investments (note 1g).
The Directors have, in accordance with section 226 of the Companies Act 1985, departed from the standard format of the profit and
loss account as set out in Schedule 4 of the Act on the grounds that the prescribed format is not applicable and would result in the
profit and loss account not showing a true and fair view. The financial statements comply with the requirements of section 226 and
Schedule 4 of the Act in all other respects.
The Statement of Total Recognised Gains and Losses for 2004 has been restated to exclude a figure relating to the adoption of UITF
Abstract 38, Accounting for ESOP Trusts, included in error.
All subsidiary undertakings are companies and are referred to as “subsidiaries” throughout these financial statements.
All participating interests are in companies and are referred to as “investments” throughout these financial statements.
b) Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and, with the exception of Iclectus Ltd, all its
subsidiaries. All subsidiary company financial statements, with the exception of KetoCytonyx, Inc. are made up to 31 March 2005. 
The financial statements of KetoCytonyx, Inc. are made up to 31 December 2004 so management accounts covering the year ended 
31 March 2005 have been used in the preparation of these financial statements. Unless otherwise stated, the acquisition method of
accounting has been adopted. Under this method, the results of subsidiaries acquired or disposed of in the year are included in the
consolidated profit and loss account from the date of acquisition or up to the date of disposal.
In accordance with the Companies Act 1985, investments where the Group’s interest exceeds 50% of the equity share capital are
treated as investments since they are held exclusively with a view for subsequent resale. The Directors consider that as such investments
are held as part of the Group’s portfolio with a view to the ultimate realisation of capital gains, consolidation would not give a true and
fair view of the Group’s interest in these investments and therefore it is necessary to account for them as investments.
The effect of this departure from FRS 2, Accounting for Subsidiary Undertakings, in the case of Iclectus Ltd, is to decrease the loss
before taxation by £0.39 million (2004: nil) and to increase the value of fixed asset investments by £0.25 million (2004: £0.80).
No profit and loss account is presented for BTG plc (the Company) as permitted by Section 230(4) of the Companies Act 1985. 
The Company’s loss for the year was £0.55 million (2004: £0.30 million).
c) Related party transactions
The Group has taken advantage of the exemption provided by FRS 8 not to disclose transactions between group companies that have
been eliminated on consolidation.
d) Treatment of foreign currencies
In the financial statements of individual subsidiaries, foreign currency transactions are translated into the local currency at the rate ruling
on the transaction date or, when appropriate, at the rate of exchange in a related forward exchange contract. Monetary assets and
liabilities denominated in foreign currencies are translated at the rate ruling on the balance sheet date except where covered 
by hedging transactions; any gains or losses on translation are included in the profit and loss account.
On consolidation, gains or losses on the translation of the net investments in overseas subsidiaries are shown as a movement on
reserves. The profit and loss accounts of overseas subsidiaries are translated at the average exchange rate. The exchange differences
between the profit for the year translated at average and closing exchange rates are shown as a movement on reserves. Other
exchange differences, including those arising from currency conversions in the usual course of trading, are taken into account in
determining the profit or loss on ordinary activities before taxation.
NOTES TO THE FINANCIAL STATEMENTS 38 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
1 ACCOUNTING POLICIES (continued)
e) Intangible assets – patents and other intellectual property rights
Intangible assets are stated at cost less amortisation. Cost includes both the cost of obtaining patent protection for intellectual property
rights (“IPR”) on acquiring patents from the inventive sources, and the costs of the patent attorneys specific to obtaining patent
protection. Income from patents is derived through licensing and other agreements.
Such expenditure is amortised in a manner calculated to write off the cost, in equal annual proportions, over the effective life of the
underlying patent or other IPR, usually about 20 years. In the event that a patent is abandoned or is considered to have suffered an
impairment in value before the expiry of its granted life, the balance of unamortised expenditure is written off in the year.
f) Intangible assets – goodwill 
Goodwill arising on the acquisition of subsidiaries and businesses, representing any excess of the fair value of the consideration given
over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight-line basis over its useful
economic life, not exceeding 20 years. The Directors consider each acquisition separately for the purpose of determining the
amortisation period of any goodwill that arises.
g) Investments
The Group holds a number of equity investments, mostly in start-up companies. Investment in these companies is generally for only 
a few years with the intention of disposing of the equity and realising a return in the form of a capital gain. The Group may have the
opportunity to appoint a Non-executive Director to sit on the Board of certain investee companies but otherwise has no involvement 
in their management. 
For these reasons, the Directors consider that equity accounting would not show a true and fair view of the Group’s interest in these
investments. Therefore, the Group does not equity account for its investments in accordance with FRS 9, but carries them in the balance
sheet at cost, less provisions for impairment. 
The effect of this departure from the Companies Act 1985 is to decrease losses before taxation by £1.21 million (2004: £0.95 million)
and increase the value of investments by £4.72 million (2004: £9.70 million).
h) Tangible assets and depreciation
Such assets are stated at cost less depreciation, calculated on a straight-line basis to write the assets down to their residual value at the
following annual rates:
Leasehold property 10-50% Furniture and equipment 10-20%
Computers 20-33% Software packages 33%
Developed software 14%
Depreciation is not charged until the asset is taken into use.
i) Leases
Rentals payable under operating leases are charged to the profit and loss account on a straight-line basis over the term of each lease.
j) Total revenue
Total revenue represents amounts receivable by the Group through the commercialisation of IPR. It includes both amounts received
from licensing (which are dealt with as part of turnover) and disposal of patented technologies and sale of investments (the profits or
losses on which are shown below operating profit or loss).
k) Licence income
Licence income is credited to the profit and loss account on an accruals basis based on royalty periods completed in the financial year.
Up-front, non-refundable licence down payments are credited to the profit and loss account on signature of the relevant agreement.
Other conditional payments are credited to the profit and loss account as the Group becomes entitled to them, usually on the
achievement of specific technical or regulatory milestones stipulated in the agreement.
A “paid-up” licence typically involves a fixed one-off payment by the licensee for freedom from suit by BTG rather than ongoing
milestone or royalty payments. Where there is no ongoing obligation on the Group, the receipt is credited to income when the Group
becomes entitled to it. If the Group has continuing obligations, such as to maintain the patents, revenue is recognised in line with the
ongoing performance obligation. BTG plc Annual Report & Accounts  39
1 ACCOUNTING POLICIES (continued)
l) Revenue sharing
Revenue sharing costs are recognised on an accruals basis in accordance with the individual agreements held with the inventive sources 
of technology.
m) Investment in new technology development
In furtherance of its core activity of patenting and licensing inventions, the Group invests in the development of new technologies. 
This expenditure takes the form of development projects at universities, companies and other research establishments.
Each project is entered into in the expectation of discovering commercially relevant new IPR or improving existing IPR, which may
ultimately be licensed. However, the licensing of IPR arising from such projects is subject to such long time scales that it is not possible
to match income against the related expenditure, as required by conventional accounting practice. Consequently, although the Group
regards such expenditure as investment within the context of its specialised activity, annual expenditure incurred on individual projects
is charged to the profit and loss account in accordance with SSAP 13, Accounting for Research and Development.
n) Deferred taxation
Deferred tax is recognised on most types of timing differences, in particular gains and losses on assets and differences between the
treatment of certain items for tax and accounting purposes. Deferred tax assets are recognised to the extent that it is regarded as more
likely than not that they will be recovered. The Group has adopted a policy of recognising deferred tax without discounting.
o) Pension costs
The charge to the profit and loss account for the defined benefit scheme is based on an actuarial calculation and represents a regular
cost, allowing for any actuarial surplus or deficit, so as to allocate pension costs of employees over their expected future working
lifetime. Assets of the pension scheme are held separately from the Group’s assets. Contributions in respect of the UK and US defined
contribution schemes are charged to the profit and loss account as incurred.
The group has followed the transitional disclosure arrangements of FRS 17.
p) BTG Employee Share Trust
The results of the Group include the costs of the BTG Employee Share Trust, which are expensed within the financial statements of the
Trust as incurred.
q) Cash and liquid resources
Cash, for the purpose of the cashflow statement, comprises cash in hand and deposits repayable on demand, less overdrafts payable 
on demand.
Liquid resources are current asset investments which are disposable without curtailing or disrupting the business and are either readily
convertible into known amounts of cash at or close to their carrying values or traded on an active market. Liquid resources comprise
term deposits of less than one year. 40 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
2 TOTAL REVENUE
£ million 
2005 2004 
Royalties from launched products 31.29 39.84
Milestones 2.81 1.58
Income from new agreements 4.21 6.45
Licence income 38.31 47.87
Audit revenues – 0.89
Turnover 38.31 48.76
Proceeds from sale of investments and patent rights 4.34 4.12
Total revenue 42.65 52.88
Revenue sharing on turnover 15.69 20.85
Revenue sharing on sale of investments and patent rights (see note 6) 0.68 –
Total revenue sharing 16.37 20.85
Total revenue net of revenue sharing 26.28 32.03
Geographical analysis of turnover
USA 29.57 26.46
UK 3.59 16.72
European Union (excluding UK) 1.99 3.60
Japan 0.76 1.32
Other 2.40 0.66
38.31 48.76
The Directors consider that there is only one class of business, namely the management and commercialisation of intellectual property
rights (“IPR management”). They consider that due to the nature of the business, it is neither meaningful nor practicable to provide the
additional geographical segmental information required by SSAP 25, Segmental Reporting, in respect of turnover, results and net assets
by country of origin for licence income. Such information would relate to the location of the source or patent and as such would not
provide additional relevant information.
3 PROVENSIS DEVELOPMENT
The costs incurred in respect of the Provensis varicose vein technology are as follows:
£ million 
2005 2004 
Clinical development 1.67 3.36
Manufacturing costs 2.41 5.97
Marketing & business development 0.04 0.27
4.12 9.60
Staff costs 2.88 3.24
Other costs 2.17 3.06
9.17 15.90
Provision for onerous leases 0.90 –
Restructuring costs 1.41 –
Exceptional costs 2.31 –
Total 11.48 15.90 BTG plc Annual Report & Accounts  41
3 PROVENSIS DEVELOPMENT (continued)
Analysis of staff costs (including Directors’ emoluments)
£ million 
2005 2004 
Salaries 2.42 2.63
Social security costs 0.28 0.28
Other pension costs 0.18 0.33
2.88 3.24
The average number of persons employed by Provensis during the year was 26 (2004: 39).
4 OTHER OPERATING EXPENSES 
£ million 
2005 2004 
Patent amortisation 3.98 2.18
Patent renewal fees 0.75 0.77
Litigation costs 2.62 1.42
7.35 4.37
5 ADMINISTRATIVE EXPENSES
£ million 
2005 2004 
Staff costs 13.02 14.59
Other costs 10.14 13.07
23.16 27.66
Provision for onerous leases 5.69 2.05
Restructuring costs 3.25 –
Additional depreciation on US tangible fixed assets 0.53 –
Exceptional costs 9.47 2.05
Total administrative expenses (excluding Provensis) 32.63 29.71
Analysis of staff costs (including Directors’ emoluments)
Salaries 10.60 12.40
Social security costs 1.00 1.01
Other pension costs 1.42 1.18
13.02 14.59
The average number of persons employed during the year (excluding Provensis), analysed by category, was as follows:
Number of employees
2005 2004
Executive Management 6 7
Direct business operations 61 72
Patent legal services 36 38
103 117
Other functions 43 45
146 162 42 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
5 ADMINISTRATIVE EXPENSES (continued)
£ million 
2005 2004 
Auditors’ remuneration (including £0.04 million in respect of BTG plc (2004: £0.04 million)) 0.18 0.18
Other professional fees paid to the auditors:
Taxation services 0.07 0.05
Other services 0.03 –
Depreciation and other amounts written off tangible fixed assets:
Owned (including additional depreciation on US tangible assets £0.53 million (2004: nil)) 2.22 2.04
Loss on exchange 0.18 1.26
Hire of land and building – operating leases 2.78 2.84
Hire of assets – operating leases 0.34 0.28
Administrative costs are after capitalising £0.07 million (2004: £0.88 million) within patents and other intellectual property rights in
respect of the direct costs of BTG’s own patent attorneys attributable to patent acquisitions.
6 PROFIT ON DISPOSAL OF OTHER FIXED ASSETS
£ million 
2005 2004 
Profit on disposal of investments 1.29 3.05
Profit on disposal of patents* 0.90 0.03
2.19 3.08
* The profit for 2005 is net of £0.68 million shared with the inventive source.
Loss relief has absorbed the tax due in respect of the profit on disposal. 
7 AMOUNTS WRITTEN OFF OTHER FIXED ASSETS
£ million 
2005 2004 
Amounts written off investments (see note 17) 3.02 0.42
8DIRECTORS’ REMUNERATION
Disclosures on Directors’ emoluments, shareholdings, options and pension benefits are shown in the remuneration report on pages 
26 to 32.
9 INTEREST RECEIVABLE
£ million 
2005 2004 
Interest receivable on money market and bank deposit accounts 1.72 1.46  BTG plc Annual Report & Accounts  43
10 INTEREST PAYABLE AND SIMILAR CHARGES 
£ million 
2005 2004 
Other interest 0.08 0.09
11 TAXATION ON LOSS ON ORDINARY ACTIVITIES 
a) Analysis of charge for the year
£ million 
2005 2004
UK corporation tax charge 0.17 0.16
Less double taxation on royalties (0.17) (0.16)
Overseas taxation on royalties 0.17 0.16
Charge for the year 0.17 0.16
b) Factors affecting tax charge for the year
The tax assessed for the year is higher than the standard rate of corporation tax in the UK (30%). The differences between the standard
rate of corporation tax in the UK and the tax charge for the Group are explained below.
£ million 
2005 2004 
Loss for the year at the standard rate of corporation tax in the UK of 30% (2004: 30%) (10.29) (6.85)
Expenses not deductible for tax purposes (primarily depreciation of fixed assets, 
net of capital allowances, and patent amortisation net of patent spend) 1.18 0.66
Estimated unutilised losses 9.28 6.35
Tax charge for the year 0.17 0.16
c) Factors that may affect future tax charges
The Group has £136.43 million (2004: £106.54 million) of unrelieved tax losses which it is carrying forward to offset against future profits.
Due to a degree of uncertainty as to how soon these will be utilised, tax losses are only recognised to the extent of an appropriate
deferred tax liability (see note 21). It is not anticipated that the Group will pay a significant amount of tax in the next few years.
12 DIVIDENDS 
The Directors do not propose to declare an ordinary dividend for the year (2004: nil)
13 LOSS PER SHARE
2005 2004
Loss for the financial year after minority interests (£ million) (34.23) (22.69)
Loss per ordinary share (pence)
Basic & diluted (23.53) (19.40)
Number of shares (million)
Weighted average number of shares – basic & diluted 145.48 116.99
The weighted average number of ordinary shares in issue excludes the shares held by the BTG Employee Share Trust. Losses and the
weighted average number of shares are the same in the calculation of the basic and diluted loss earnings per share. 
14 UNREALISED GAIN ON INTANGIBLE ASSETS
During the year equity was transferred to a technology source in exchange for a variation in the terms of the revenue sharing
agreement. The shares were transferred at fair value and the excess over the cost of the shares of £0.24 million (2004: nil) is shown as 
an unrealised gain. 44 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
15 INTANGIBLE ASSETS
£ million
Patents and 
Goodwill other IPR Total
Cost
At 1 April 2004 0.93 18.50 19.43
Additions during the year – 2.96 2.96
Disposals during the year –(0.56) (0.56)
Currency movements –(0.05) (0.05)
Terminated items –(3.35) (3.35)
At 31 March 2005 0.93 17.50 18.43
Amortisation
At 1 April 2004 0.31 7.50 7.81
Provided during the year 0.31 3.67 3.98
Writeback on disposals –(0.25) (0.25)
Currency movements –(0.01) (0.01)
Terminated items –(3.35) (3.35)
At 31 March 2005 0.62 7.56 8.18
Net book value at 31 March 2005 0.31 9.94 10.25
Net book value at 31 March 2004 0.62 11.00 11.62
16 TANGIBLE ASSETS
£ million
Assets in
Land and Computers and Furniture and the course
buildings software equipment of construction Total
Cost or valuation
At 1 April 2004 3.20 4.97 4.45 5.28 17.90
Additions – 0.09 0.06 2.92 3.07
Disposals during the year – (0.23) – – (0.23)
Currency movements (0.02) (0.04) (0.03) – (0.09)
At 31 March 2005 3.18 4.79 4.48 8.20 20.65
Depreciation
At 1 April 2004 1.78 4.19 1.83 – 7.80
Provided during year 0.47 0.44 1.31 – 2.22
Write back on disposals – (0.23) – – (0.23)
Currency movements – (0.03) (0.02) – (0.05)
At 31 March 2005 2.25 4.37 3.12 – 9.74
Net book value at 31 March 2005 0.93 0.42 1.36 8.20 10.91
Net book value at 31 March 2004 1.42 0.78 2.62 5.28 10.10
In both years, the amounts shown under land and buildings represent the cost of leasehold improvements on properties which are all
held on short leasehold agreements.  BTG plc Annual Report & Accounts  45
16 TANGIBLE ASSETS (continued)
There are no fixed assets held under finance leases and hire purchase contracts at either year-end. Depreciation includes £0.53 million
(2004: nil) additional depreciation on US furniture and equipment. The net book value of tangible assets at 31 March 2005, relating to
Provensis, is £9.39 million (2004: £7.30 million). This net book value includes £8.20 million (2004: £5.28 million) relating to the small-
scale manufacturing facility, equipment and laboratories shown in the above table under “assets in the course of construction”.
17 INVESTMENTS
£ million
Other 
Group shares Loans Total
Cost
At 1 April 2004 16.20 0.70 16.90
Additions during the year 2.63 0.12 2.75
Disposals/loan repayments (3.01) – (3.01)
Currency movements (0.13) – (0.13)
At 31 March 2005 15.69 0.82 16.51
Provision
At 1 April 2004 2.83 0.04 2.87
Provided in year 3.02 – 3.02
Released on disposals (1.32) – (1.32)
Currency movements (0.04) – (0.04)
At March 2005 4.49 0.04 4.53
Net book value at 31 March 2005 11.20 0.78 11.98
Net book value at 31 March 2004 13.37 0.66 14.03
£ million
Other Shares in
Company shares subsidiaries Total
Cost at 1 April 2004 and 31 March 2005 0.01 15.55 15.56
Provisions at 1 April 2004 and 31 March 2005 – – –
Net book value at 31 March 2005 0.01 15.55 15.56
Net book value at 31 March 2004 0.01 15.55 15.56
The Group has an interest in 16.1% of the equity of SAMSys Inc., a company listed on the Toronto Stock Exchange. The Group does not
have an interest in any other listed company in excess of 10%. 46 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
17 INVESTMENTS (continued)
£ million 
Investments held at net book value 2005 2004
Listed on London Stock Exchange 0.01 0.36
Listed on Toronto Stock Exchange 3.72 4.26
Listed on Australian Stock Exchange – –
3.73 4.62
Unlisted shares 7.47 8.75
Loans 0.78 0.66
11.98 14.03
£ million 
Market value of listed shares 2005 2004
London Stock Exchange 0.01 2.47
Toronto Stock Exchange 5.52 10.95
Australian Stock Exchange 0.26 0.34
5.79 13.76
If listed investments were realised at their stated market values, no taxation charge would result due to the availability of tax losses.
Details of BTG’s key unlisted investments
a) Investments in companies where the Group’s interest exceeds 20%
BTG’s % 
Investee company Country Class held holding Company objectives
Iclectus Ltd UK Preference 68.0% Iclectus is a biotechnology company developing intrabody and
masked antisense molecules as tools for validating new drug targets.
Ignios Ltd UK Preferred 25.0% Ignios is developing a range of “Embedded Advantage” silicon IP
products that are a mixture of innovative and highly differentiated
hardware components and tools. These products will allow designers of
complex multicore systems on chip devices to utilise more effectively
the power and complexity of the hardware available to them.
Mesophotonics Ltd UK Ordinary 32.5% Mesophotonics designs and builds optical components utilising
photonic crystal technology to enable light to be routed and
processed at submillimetre scale, facilitating multiple optical functions
on a single piece of silicon.
Protez Pharmaceuticals, Inc. USA Preferred & 42.9% Protez Pharmaceuticals is developing novel antibiotics for difficult-to-
Ordinary treat infections. The company is focused on narrow-spectrum i.v. and
oral small-molecule antibiotics with the long-term strategy of
developing a franchise of hospital-based antibiotics.
Senexis Ltd UK Preferred 35.9% Senexis is developing a proprietary approach to the treatment and
diagnosis of age-related diseases caused by the common pathogenesis
process called amyloidosis. BTG plc Annual Report & Accounts  47
17 INVESTMENTS (continued)
b) Investments in companies where the Group’s interest is under 20%
Avera Pharmaceuticals, Inc. USA Preferred 2.5% Avera Pharmaceuticals is an emerging pharmaceutical company
focused on the development and commercialisation of novel
pharmaceutical compounds in the neuroscience therapeutics arena.
The Company’s mission is to identify opportunities for therapeutic
advances in the treatment of neurologic and psychiatric disorders,
and to license and develop compounds that can meet these needs.
Avlar BioVentures Fund I UK Ordinary 2.4% A venture fund investing in seed and early-stage biotechnology and
Limited Partnership healthcare opportunities in Europe.
Avlar BioVentures Fund II UK Ordinary 1.3% Second venture fund investing in seed and early-stage biotechnology
Limited Partnership and healthcare opportunities in Europe.
Elumina Lighting Canada Ordinary 6.0% Developer and marketer of advanced speciality lighting products, 
Technologies Inc. currently focusing on household nightlights based upon
Electroluminescent (EL) technology. 
Meriton Networks, Inc. Canada Ordinary 0.9% A wavelength networking company that is building an advanced
metro optical networking element referred to as an Optical Add/
Drop Switch (OADX).
Primaxis Technology Canada Ordinary 13.9% A venture company investing in Canadian seed and early-stage
Ventures, Inc. companies with inventions in the advanced technology sectors. 
Vimac Life Sciences USA Ordinary 13.6% A venture fund investing in life science companies on the East Coast 
Partnership of the US or in Eastern Canada, with a particular focus on the
biotechnology and pharmaceutical industries.
Xention Discovery Ltd UK Ordinary 14.5% Xention Discovery is a drug discovery company focused on ion
channels, an important yet under-exploited class of drug targets. 
It seeks to accelerate drug discovery in this area through using its
proprietary high throughput screening technologies.
The table above represents BTG’s key unlisted investments. BTG does not revalue its investments in its financial statements to their
British Venture Capital Association (“BVCA”) or market value and, accordingly, does not recognise their increase in value in its financial
statements prior to the actual or deemed disposal. The Directors do however track the BVCA valuation of BTG’s unlisted investments
and their valuation of the unlisted investments and loans is £8.14 million (2004: £8.92 million) (net book value at 31 March 2005 
£8.25 million) (2004: £9.41 million). The table comprises investments made in companies and BTG’s investments in venture funds.
Details of subsidiaries are set out in note 32.
18 DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
£ million
Group 2005 Group 2004 Company 2005 Company 2004
Licence income 5.40 5.30 – –
Amount owed by subsidiary company – – 187.13 186.46
Other debtors 1.05 0.74 0.21 0.02
Prepayments and accrued income 1.02 1.00 – –
7.47 7.04 187.34 186.48 48 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
19 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
£ million
Group 2005 Group 2004 Company 2005 Company 2004
Bank overdrafts (unsecured) 4.67 1.70 – –
Trade creditors 5.98 9.96 – –
Amounts owed to subsidiary company – – 1.34 0.44
Corporation tax 0.03 0.02 – –
Accruals and deferred income 13.46 14.30 0.79 0.81
24.14 25.98 2.13 1.25
20 PROVISIONS FOR LIABILITIES AND CHARGES
£ million
Balance at Utilised Charge/(Credit) Balance at
1 April 2004 during year for year 31 March 2005
Provision for pension costs (note 22) 0.42 – (0.42) –
Provision for onerous leases 2.05 (1.01) 6.59 7.63
2.47 (1.01) 6.17 7.63
The provision for onerous leases of £7.63 million (2004: £2.05 million) represents the net present value of future obligations for both the
UK and US offices of the Group, subject to finding tenants for the properties.
21 DEFERRED TAXATION 
£ million
2005 2004
Accelerated allowances on patents and other IPR 1.46 1.96
Accelerated capital allowances (0.67) (0.78)
Other timing differences (0.79) (1.18)
– –
At 31 March 2005 the Group had a total unrecognised deferred tax asset relating to tax losses of £40.93 million (2004: £31.96 million).
Due to a degree of uncertainty as to how soon these will be utilised, tax losses are only recognised to the extent of the deferred tax
liability. It is not anticipated that the Group will pay a significant amount of tax in the next few years. BTG plc Annual Report & Accounts  49
22 GROUP PENSION BENEFITS 
a) Pension fund
A funded defined benefit final salary pension scheme is in operation for all eligible staff of the Group. Scheme funds are administered 
by trustees independently of the Group.
The financial position of the scheme and the appropriate level of employer’s contributions are reviewed every three years by a qualified
actuary using the projected unit method. For the latest valuation as at 1 April 2002, the actuary adopted a market-led approach in which
the assets of the scheme are taken into account at a value equal to their market value at the valuation date. The liabilities are valued
using financial assumptions derived from market yields on fixed interest and index-linked government stock at the valuation date.
The key financial assumptions used for this valuation were that future salary increases would average 5.3% p.a. (previously 6%), that
present and future pensions would increase by 2.9% p.a. (previously 3.5%), and discount rates of 6.2% (pre-retirement) and 5.2% (post-
retirement) were applied. In addition, the assumptions for mortality in retirement and before retirement were updated to reflect
continuing improvements in life expectancy.
The valuation revealed that a small surplus had accrued to the scheme. However, since the valuation date, the fall in equity markets has
weakened the financial position of the scheme. As a consequence of this, employer contributions to the scheme recommenced as from 
1 April 2003. 
The market value of the scheme’s assets as at 1 April 2002 was £68.3 million, which represented 107% of the benefits that had accrued
to members after allowing for expected future increase in earnings. On the assumptions prescribed by the Inland Revenue for the
statutory surplus test the funding was below 105%.
Under the Pensions Act 1995, pensions schemes must satisfy a minimum funding test known as the Minimum Funding Requirement
(MFR). At the valuation date the MFR funding ratio was 135%.
The actuary has commenced the formal review of the financial position of the scheme as at 1 April 2005, the results of which should be
available later in the year.
The defined benefit scheme was closed to new entrants as from 1 June 2004 although under certain conditions new employees may still
join at the request of the Company. The service cost as a proportion of payroll will increase as the members approach retirement. A new
defined contribution scheme is offered to employees who join the company after that date. 
Following a review of the benefits under the defined benefit scheme employees were offered the opportunity to increase their
contributions to 7% in order to retain the previous accrual rate of a sixtieth of basic salary per annum or to maintain their contribution
rate at 5%, which will result in their future accrual rate reducing to an eightieth of basic salary per annum. Past benefits are unaffected
by this change. Further details are disclosed in the remuneration report on pages 26 to 32.
The pension charge for the year represents contributions payable by the Group to the scheme and amounted to £1.02 million (2004:
£1.51 million). There were no outstanding or prepaid contributions at either the beginning or end of the financial year.
A US subsidiary company operates a defined contribution scheme for its staff. During the year the US subsidiary contributed 
£0.40 million (2004: £0.41 million) to the scheme. 50 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
22 GROUP PENSION BENEFITS (continued)
b) FRS 17 Retirement Benefits
Whilst the Group continues to account for pension costs in accordance with SSAP 24, as required under transitional provisions for 
FRS 17, we disclose certain information as if it had applied for the year ended 31 March 2005.
Main financial assumptions
2005 2004 2003
% p.a. % p.a. % p.a.
Rate of inflation and increase to deferred pensions 2.9 2.9 2.6
Rate of general long-term increase in salaries (including allowance 
for promotional increases) 5.4 5.4 5.1
Rate of increase in pensions in payment 2.9 2.9 2.7
Discount rate for scheme liabilities 5.4 5.5 5.4
Long-term Long-term Long-term
expected rate expected rate expected rate
of return £ million of return £ million of return £ million
% p.a. 2005 % p.a. 2004 % p.a. 2003
Equities 7.8 19.60 7.7 35.90 7.6 30.80
Bonds 4.8 44.10 4.7 26.40 4.6 23.90
Other assets 4.8 1.90 4.7 1.80 4.6 1.00
Total market value of assets 65.60 64.10 55.70
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions, which due to the
timescale covered may not necessarily be borne out of practice.
Reconciliation to the balance sheet
The assets and liabilities in the scheme were as follows:
£ million
2005 2004 2003
Total market value of assets 65.60 64.10 55.70
Present value of scheme liabilities (70.00) (69.10) (65.23)
Net pension liability (4.40) (5.00) (9.53)
Analysis of amount charged to operating profit
£ million
2005 2004
Current service cost 1.80 1.90
Past service costs 0.10 –
Curtailments/settlements (1.10) –
Total operating charge 0.80 1.90
Analysis of amount credited to other finance income
£ million
2005 2004
Expected return on pension scheme assets 3.90 3.40
Interest on pension scheme liabilities (3.70) (3.50)
Net return/(charge) 0.20 (0.10) BTG plc Annual Report & Accounts  51
22 GROUP PENSION BENEFITS (continued)
b) FRS 17 Retirement Benefits (continued)
Analysis of amount recognised in statement of total recognised gains and losses
£ million
2005 2004
Actual return less expected return on scheme assets 0.80 8.00
Experience gains and losses arising on the scheme liabilities (0.30) (1.20)
Changes in assumptions underlying the present value of the scheme liabilities (0.70) (1.80)
Actuarial (loss)/gain recognised in statement of total recognised gains and losses (0.20) 5.00
Analysis of movement in deficit during the year
£ million
2005 2004
Deficit at 1 April (5.00) (9.53)
Current service cost (1.80) (1.90)
Contributions 1.40 1.53
Past service costs (0.10) –
Curtailments/settlements 1.10 –
Other finance income 0.20 (0.10)
Actuarial (loss)/gain (0.20) 5.00
Deficit in scheme at 31 March (4.40) (5.00)
History of experience gains and losses
2005 2004 2003
Amount (£ million) 0.80 8.00 (16.00)
Percentage of scheme assets 1.2% 12.0% 29.0%
Experience gains/(losses) on scheme liabilities:
Amount (£ million) (0.30) (1.20) –
Percentage of the present value of the scheme liabilities 0.4% 2.0% –
Total amount recognised in Statement of Total Recognised Gains and Losses:
Amount (£ million) (0.20) 5.00 (19.10)
Percentage of the present value of the scheme liabilities 0.3% 7.0% 29.0% 52 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
22 GROUP PENSION BENEFITS (continued)
b) FRS 17 Retirement Benefits (continued)
Net assets
The fair value of the scheme’s assets, which are not intended to be realised in the short-term and may be subject to significant change
before they are realised, and the present value of the scheme’s liabilities, which are derived from cash flow projections over long
periods and are thus inherently uncertain, were:
£ million
2005 2004
Net assets per balance sheet 47.94 82.31
Pension liability under SSAP 24 – 0.42
47.94 82.73
FRS 17 pension adjustment (4.40) (5.00)
Net assets under FRS 17 43.54 77.73
Profit and loss account reserve
£ million
2005 2004
Profit and loss account (156.43) (122.32)
Total FRS 17 pension adjustment (4.40) (5.00)
SSAP 24 adjustment – 0.42
Profit and loss account under FRS 17 (160.83) (126.90)
23 SHARE CAPITAL
The share capital of the Company is shown below:
Authorised Issued
Ordinary shares of 10p each Number £ million Number £ million
At 1 April 2004 and 31 March 2005 205,100,000 20.51 147,578,230 14.76
Details of share options outstanding at 31 March 2005:
Date of grant Exercise price (p) Number of shares outstanding Exercisable
Sharesave scheme
2002 210.13 127,966 2005
2004 85.07 132,234 2007
Stock purchase plan
2004 89.675 41,849 2006
Share option scheme
1998 254.37 – 301.17 296,158 2001 – 2008
1999 217.74 – 396.00 161,613 2002 – 2009
2001 481.37 – 1178.32 346,049 2004 – 2011
2002 90.00 – 534.11 6,552,715 2005 – 2012
2003 83.72 – 143.16 686,514 2006 – 2013
2004 85.00 – 136.46 1,190,678 2007 – 2014 BTG plc Annual Report & Accounts  53
24 BTG EMPLOYEE SHARE TRUST
The Group includes an employee share trust, the BTG Employee Share Trust, which was established in Guernsey in 1992. It holds shares
for the general benefit of all employees, including Executive Directors, who will eventually become legally entitled to them. At 31 March
2005 the Trust holds 1,931,917 shares in BTG plc and a further 12,596 shares in Torotrak plc. The Trust may distribute these shares to
employees of the Group on the recommendation of the Company. These distributions may be as a result of awards under the Restricted
Share Scheme and the 2003 Unapproved Share Option Scheme. In the past the Trust has also distributed shares in the form of bonuses
and under the Group’s old profit sharing scheme.
At 31 March 2005 the Trust has 519,517 shares set aside under the Restricted Share Scheme and a further 611,525 awarded under the
2003 Unapproved Share Option Scheme. The balance of the shares are being used to cover options issued under the Company’s other
share option schemes.
25 RESERVES
£ million
Share premium Capital reserve Profit and
Group account account loss account Total
At 1 April 2004 182.24 7.31 (122.32) 67.23
Issue of shares in Rights Issue (net) (0.02) – – (0.02)
Unrealised gain on intangible assets – – 0.24 0.24
Movement in shares held by Trust – – 0.19 0.19
Retained loss for the financial year – – (34.23) (34.23)
Currency translation differences on foreign currency net investments – – (0.31) (0.31)
At 31 March 2005 182.22 7.31 (156.43) 33.10
£ million
Share premium Profit and
Company account loss account Total
At 1 April 2004 182.24 4.16 186.40
Issue of shares in Rights Issue (net) (0.02) – (0.02)
Movement in shares held by Trust – 0.19 0.19
Retained loss for the financial year – (0.55) (0.55)
At 31 March 2005 182.22 3.80 186.02
No goodwill has been written off.
26 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
£ million
Group Group Company Company
2005 2004 2005 2004
Loss for the financial year (34.23) (22.69) (0.55) (0.30)
Other recognised gains and losses relating to the year (net) (0.07) (0.68) – –
Shares bought in Rights Issue by Trust – (0.22) – (0.22)
Profit on sale of Rights by Trust – 0.22 – 0.22
New share capital subscribed (net) (0.02) 26.61 (0.02) 26.61
Shares released from Trust 0.19 0.09 0.19 0.09
Net addition to shareholders’ fund (34.13) 3.33 (0.38) 26.40
Opening shareholders’ funds 81.99 78.66 201.16 174.76
Closing shareholders’ funds 47.86 81.99 200.78 201.16 54 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
27 MINORITY SHAREHOLDERS’ EQUITY INTERESTS
£ million
2005 2004
At 1 April 0.32 –
Minority interest on consolidation of KetoCytonyx, Inc. – 0.62
Loss on ordinary activities after taxation (0.24) (0.30)
At 31 March 0.08 0.32
28 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
£ million
2005 2004
Operating loss (35.11) (26.86)
Depreciation charge 2.22 2.04
Amortisation charge 3.98 2.49
Increase in debtors (0.41) (1.12)
(Decrease)/increase in creditors (5.50) 5.96
Increase in provisions 5.16 1.18
Other 0.05 0.33
Net cash outflow from operating activities (29.61) (15.98)
£ million
Analysis of changes in cash 2005
Cash at bank and in hand 19.73
Bank overdrafts (1.70)
As at 1 April 2004 18.03
Cash at bank and in hand 19.02
Bank overdrafts (4.67)
As at 31 March 2005 14.35
Decrease in cash (3.68) BTG plc Annual Report & Accounts  55
29 ANALYSIS OF NET FUNDS
£ million
Balance at Balance at
1 April 2004 Cash flow 31 March 2005
Cash at bank and in hand 19.73 (0.71) 19.02
Overdrafts (1.70) (2.97) (4.67)
18.03 (3.68) 14.35
Liquid resources 48.24 (28.16) 20.08
66.27 (31.84) 34.43
Liquid resources are comprised of funds placed on the money markets for periods of up to three months. During the year the Group
suffered £0.21 million exchange loss (2004: £0.71 million).
£ million
Analysis of changes in cash 2005 2004
(Decrease)/increase in cash in the period (3.68) 11.58
Cash inflow from decrease in liquid resources (28.16) (6.41)
Movement in net funds in the period (31.84) 5.17
Net funds at 1 April 66.27 61.10
Net funds at 31 March 34.43 66.27
30 GUARANTEES AND OTHER FINANCIAL COMMITMENTS
a) Annual commitments under non-cancellable leases are as follows:
£ million
Land and Land and
buildings Other buildings Other
2005 2005 2004 2004
Operating leases which expire:
Within one year 0.06 0.04 0.01 0.05
Between two and five years 1.96 0.09 2.14 0.14
After five years 0.71 – 0.73 –
b) Other financial commitments and contingencies. 
The Group has entered into agreements with a number of early-stage and start-up companies to invest a total of £9.75 million. The total
invested to date is £5.48 million leaving a commitment as at 31 March 2005 of £4.27 million.
The Company has provided a guarantee in respect of its subsidiary, Provensis Ltd. This guarantee relates to the obligations of 
Provensis Ltd to reinstate the site of its manufacturing facility. This guarantee is capped at a maximum aggregate amount of £0.20 million
(2004: £0.20 million).
As with any business whose core assets are intellectual property, the Group will from time to time resort to litigation or threats of
litigation, or other legal processes, to defend its rights. Litigation costs are regarded as a cost of doing business and will vary from year
to year. In the current year the Group incurred £2.62 million in litigation costs (2004: £1.42 million). 56 BTG plc Annual Report & Accounts
NOTES TO THE FINANCIAL STATEMENTS
continued
31 FINANCIAL INSTRUMENTS
Financial instruments
The Group’s financial instruments, other than derivatives, comprise cash, short-term deposits and various items such as trade debtors
and creditors which arise directly from operations. In addition a number of debt and equity investments, both quoted and unquoted, 
as shown in note 17, are held in technology-based companies.
The Group enters into forward currency contracts and currency swaps. The purpose of such transactions is to manage risks arising from
the Group’s operations. It is the Group’s policy that no trading in financial instruments shall be undertaken.
The main risk arising from the Group’s financial instruments are interest rate risk, liability risk, investment risk and foreign currency risk.
Interest rate risk
The Group’s policy is to place surplus cash resources on fixed-term deposits, for varying periods ranging from one to six months, to the
extent that cash flow can be reasonably predicted. This policy has not changed during the financial year and no change is anticipated.
Investment risk
It is, on occasion, deemed appropriate to take equity stakes in start-up companies utilising BTG technology as part of the overall
licensing arrangement, and small loans may be granted to these companies to further technology development. These investments will
be realised at an appropriate time in the development cycle. Regular reports are made to the Board on the status of investments and
disposals over £0.50 million require Board approval. These investments form part of BTG’s overall technology portfolio and do not
materially affect liquidity.
Foreign currency risk
The Group has two overseas subsidiaries, the revenues and the expenses of which are denominated in US dollars. As a result the
Group’s sterling profit and loss account and balance sheet may be affected by movements in US dollar: sterling exchange rates.
Approximately 77% of the Group’s turnover is denominated in US dollars with the remainder split between sterling, euros, yen and 
other currencies. The majority of the Group’s operating expenses are in sterling. Where possible, anticipated foreign currency operating
expenses are matched to foreign currency revenues. The excess exposure over and above this natural hedge, to the extent that cash
flows are predictable, is managed for all foreign currencies using forward contracts or currency swaps. Only in exceptional circumstances
are contracts in excess of 12 months implemented. The Board is made aware of such contracts.
The Group has taken advantage of the exemption in FRS 13 to exclude short-term debtors and creditors from all disclosures except
those relating to foreign currency exposure. BTG plc Annual Report & Accounts  57
31 FINANCIAL INSTRUMENTS (continued)
Financial assets
The Group held the following financial assets as at 31 March 2005:
£ million
Interest Non-interest Equities & Fair
bearing bearing loans Total value
Assets held as part of Group financing arrangements
Sterling cash deposits 29.91 0.43 – 30.34 30.34
US dollar cash deposits 7.28 0.02 – 7.30 7.30
Euro deposits 1.24 0.01 – 1.25 1.25
Yen deposits 0.20 – – 0.20 0.20
Other foreign cash deposits – 0.01 – 0.01 0.01
Assets held for investment purposes
Sterling-denominated debt – – 0.78 0.78 0.67
Unquoted equities – – 7.47 7.47 7.47
Quoted UK equities (excluding own shares) – – 3.73 3.73 5.79
Total 38.63 0.47 11.98 51.08 53.03
All interest-bearing deposits are at floating rates of interest.
The cash deposits held as part of financing arrangements comprise deposits placed on money markets at call, on overnight and on
quarterly rates with P1/AAA-rated institutions. Interest rates on UK deposits are based on LIBOR, US deposits on US discount rates,
Euro rates on the ECB central bank rate and other foreign deposits on appropriate central bank rates. Other sterling-denominated
debts are loans made to UK companies.
The fair value of cash deposits and sterling-denominated debt is not materially different from book value. The fair values of quoted
equities are based on open market prices with the unquoted equities valued using the BVCA guidelines for valuation and disclosure 
of venture capital portfolios.
Financial liabilities
The Group held the following financial liabilities as at 31 March 2005:
£ million
Floating rate
interest bearing Fair value
Liabilities held as part of Group financing arrangements
Sterling overdraft 4.57 4.57
US dollar overdraft 0.10 0.10
Total 4.67 4.67
The maturity of profile of the Group’s financial liabilities is as follows:
£ million
In one year or less, or on demand 4.67 58 BTG plc Annual Report & Accounts
31 FINANCIAL INSTRUMENTS (continued)
Currency exposures
As explained on page 56, the majority of the Group’s revenues are in currencies other than the functional currencies. These are
managed to ensure that the Group is able to fund foreign currency operating expenses from revenues, with the remainder converted
into sterling.
The following table shows the Group’s currency exposure, being the monetary assets and liabilities of the Group that are not
denominated in the functional currency of the operating unit involved, at 31 March 2005.
£ million
Functional currency of Group operations Sterling US dollar Euro Yen Total
Sterling equivalent – 7.20 1.25 0.20 8.65
As at 31 March 2005, the Group had no outstanding foreign exchange contracts (2004: nil).
Fair values
The fair value of financial assets and liabilities is shown in the tables on page 57.
There were no derivative financial instruments held at the year-end.
32 SUBSIDIARIES
The subsidiaries of BTG plc at 31 March 2005 are all wholly owned and incorporated in Great Britain and registered in England and
Wales, unless shown otherwise. Dormant companies and companies that have never traded are excluded from the table. A full list of the
Group companies will be included in the Company’s annual return.
Class of capital Principal activity
BTG International (Holdings) Ltd Ordinary Investment in IPR management companies
Provensis Ltd Ordinary Commercialisation of IPR
BTG Capital Ltd Ordinary FSA-registered investment advice company
BTG International Ltd Ordinary Management and commercialisation
BTG Licensing Ltd Ordinary IPR management
BTG Employee Share Schemes Ltd Ordinary Trustee company
Guernsey
BTG Investment (Holdings) Ltd Ordinary Investment in IPR management companies
KetoCytonyx, Inc.* Preferred ordinary Research-driven therapeutics company
Delaware, USA
BTG International Inc. Common stock and IPR management
Delaware, USA paid in capital
British Technology Group
Inter-Corporate Licensing Ltd Ordinary IPR management
All subsidiaries operate in their country of incorporation.
* BTG’s shareholding in KetoCytonyx, Inc. is 76.2%.
NOTES TO THE FINANCIAL STATEMENTS
continued BTG plc Annual Report & Accounts  59
Consolidated profit and loss account
£ million
2005 2004 2003 2002 2001
restated*
Total revenue 42.65 52.88 31.53 33.15 37.81
Turnover 38.31 48.76 31.53 30.85 36.79
Revenue sharing (15.69) (20.85) (13.71) (13.26) (15.37)
Provensis development (11.48) (15.90) (13.57) (12.56) (5.50)
Other new technology developments (6.27) (4.79) (1.94) (1.00) (0.11)
Other operating expenses (7.35) (4.37) (6.19) (4.35) (4.69)
Administrative expenses – excluding Trust (32.41) (29.59) (32.76) (29.85) (23.48)
Administrative expenses – Trust (0.22) (0.12) (0.27) (1.69) (1.84)
Operating loss (35.11) (26.86) (36.91) (31.86) (14.20)
Profit on disposal – Trust investment in own shares – –– 1.48 3.03
Profit on disposal of/(amounts written off) other fixed assets (0.83) 2.66 (2.45) 2.30 1.02
Loss on ordinary activities before interest (35.94) (24.20) (39.36) (28.08) (10.15)
Net interest receivable 1.64 1.37 3.10 5.47 3.16
Loss before tax (34.30) (22.83) (36.26) (22.61) (6.99)
Taxation on loss on ordinary activities (0.17) (0.16) (0.34) (0.14) (0.21)
Loss for the financial year (34.47) (22.99) (36.60) (22.75) (7.20)
Loss applicable to minority equity interests 0.24 0.30–––
Loss for the financial year – 
retained for equity shareholders (34.23) (22.69) (36.60) (22.75) (7.20)
Loss per share (23.53p) (19.40p) (35.48p) (22.15p) (7.51p)
Analysis of total revenue
£ million
2005 2004 2003 2002 2001
Royalties from launched products 31.29 39.84 24.91 22.09 18.94
Milestone payments 2.81 1.58 1.50 1.59 5.03
Income from new agreements 4.21 6.45 3.86 5.19 3.52
Licence income 38.31 47.87 30.27 28.87 27.49
Audit revenues – 0.89 1.26 1.98 9.30
Turnover 38.31 48.76 31.53 30.85 36.79
Proceeds from sale of patents 1.89 0.03 – – 0.40
Proceeds from sale of investments 2.45 4.09 – 2.30 0.62
Total revenues 42.65 52.88 31.53 33.15 37.81
* The results for 2003 have been restated following the adoption of UITF Abstract 38, Accounting for ESOP Trusts. 2002 and earlier
years have not been restated.
FIVE-YEAR FINANCIAL RECORD 
FOR THE YEAR ENDED 31 MARCH 60 BTG plc Annual Report & Accounts
Consolidated balance sheet
£ million
2005 2004 2003 2002 2001
restated*
Fixed assets
Intangible assets 10.25 11.62 9.64 11.28 11.81
Tangible assets 10.91 10.10 6.86 6.55 6.13
Investments 11.98 14.03 13.43 7.95 4.24
33.14 35.75 29.93 25.78 22.18
Current assets 46.57 75.01 68.47 110.78 137.96
Creditors: amounts falling due within one year (24.14) (25.98) (18.45) (18.06) (19.77)
Net current assets 22.43 49.03 50.02 92.72 118.19
Total assets less current liabilities 55.57 84.78 79.95 118.50 140.37
Creditors: amounts falling due after more than one year – ––– (0.03)
Provisions for liabilities and charges (7.63) (2.47) (1.29) (1.24) (1.33)
Net assets 47.94 82.31 78.66 117.26 139.01
Capital and reserves
Called-up share capital 14.76 14.76 10.53 10.52 10.48
Share premium account 182.22 182.24 159.86 159.78 158.72
Capital reserve 7.31 7.31 7.31 7.31 7.31
Profit and loss account (156.43) (122.32) (99.04) (60.35) (37.50)
Equity shareholders’ funds 47.86 81.99 78.66 117.26 139.01
Minority shareholders’ equity interest 0.08 0.32 – – –
47.94 82.31 78.66 117.26 139.01
Consolidated cash flow statement
£ million
2005 2004 2003 2002 2001
Net cash outflow from operating activities (29.61) (15.98) (26.33) (31.09) (11.02)
Net cash inflow from returns on investments 
and servicing of finance 1.62 1.79 5.56 4.17 1.51
Tax paid (0.16) (0.16) (0.35) (0.13) (0.15)
Net cash outflow from capital expenditure 
and financial investments (3.67) (7.09) (15.45) (4.34) (4.87)
Net cash outflow before use of liquid 
resources and financing (31.82) (21.44) (36.57) (31.39) (14.53)
Net cash inflow/(outflow) from management of 
liquid resources 28.16 6.41 35.37 26.56 (103.43)
Net cash (outflow)/inflow from financing (0.02) 26.61 0.09 1.05 122.38
(Decrease)/increase in cash (3.68) 11.58 (1.11) (3.78) 4.42
* The results for 2003 have been restated following the adoption of UITF Abstract 38, Accounting for ESOP Trusts. 2002 and earlier
years have not been restated. 
FIVE-YEAR FINANCIAL RECORD 
continued BTG plc Annual Report & Accounts  61
FINANCIAL CALENDAR
Circulation of annual report for the year ended 31 March 2005 27 June 2005
Annual General Meeting 27 July 2005
Announcement of interim results for the half year ended 30 September 2005 November 2005
Circulation of interim report for the period ended 30 September 2005 December 2005
Preliminary announcement of annual results for the year ended 31 March 2006 May/June 2006
Circulation of annual report for the year ended 31 March 2006 June 2006
SHAREHOLDERS
At 31 March 2005 there were 6,038 holders of ordinary shares in the Company. Their shareholdings are analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Size of shareholding shareholders shareholders ordinary shares ordinary shares
1 – 5,000 5,298 87.7 4,489,753 3.1
5,001 – 50,000 549 9.1 8,319,856 5.6
50,001 – 100,000 64 1.1 4,420,208 3.0
100,001 – 500,000 76 1.3 17,886,037 12.1
Over 500,000 51 0.8 112,462,376 76.2
Total 6,038 100.0 147,578,230 100.0
Shareholders are further analysed as follows:
Percentage of
Number of total number of Number of Percentage of
Type of owner shareholders shareholders ordinary shares ordinary shares
Employee share schemes 1 – 1,931,917 1.3
Employee shareholders 56 0.9 811,170 0.5
57 0.9 2,743,087 1.8
Private shareholders 4,767 79.0 8,948,757 6.1
Limited companies 51 0.8 3,555,546 2.4
Bank and nominee companies 1,131 18.7 130,715,814 88.6
Insurance companies and pension funds 10 0.2 526,719 0.4
Other 22 0.4 1,088,307 0.7
Total 6,038 100.0 147,578,230 100.0
Shareholders holding their shares within PEPs and ISAs are included within “Bank and nominee companies”.
SHAREHOLDER INFORMATION 62 BTG plc Annual Report & Accounts
CAPITA SHARE DEALING SERVICES
A quick and easy share dealing service is available to either sell or buy more shares. An online and telephone dealing facility is available
providing shareholders with an easy to access and simple to use service.
The table below provides you with details of the associated charges:
Type of trade Online Telephone
Share certificates 1% of the value of the deal 1.25% of the value of the deal
(Minimum £17.50, max £40) (Minimum £20, max £50)
All transactions incur a Compliance charge of £2.50.
There is no need to pre-register and there are no complicated forms to fill in. The online and telephone dealing service allow you to
trade “real time” at a known price which will be given to you at the time you give your instructions.
To deal online or by telephone all you need is your surname, shareholder reference number, full postcode and your date of birth. Your
shareholder reference number can be found on your latest statement or Certificate where it will appear as either a “folio number” or
“investor code”. Please have the appropriate documents to hand when you log on or call, as this information will be needed before you
can buy or sell shares.
For further information on this service, or to buy and sell shares, please contact:
> www.capitadeal.com (online dealing)
> 0870 458 4577 (telephone dealing)
SHAREHOLDER CHANGE OF ADDRESS
As described in the accompanying Notice of Annual General Meeting, the Company offers the facility, in conjunction with Capita
Registrars our Registrars, to conduct a number of routine matters via the web including the ability to notify any change of address. If you
are a shareholder and are either unable or would prefer not to use this facility, please do not send the notification to the Company’s
registered office. Please write direct to Capita Registrars, at their address shown below, where the register is held. 
Registered office and head office Registrars and transfer office
BTG plc Capita Registrars
10 Fleet Place The Registry
Limeburner Lane 34 Beckenham Road
London Beckenham
EC4M 7SB Kent
Tel +44 (0)20 7575 0000 BR3 4TU
Fax +44 (0)20 7575 0010 Tel +44 (0)870 162 3100
Registered number 2670500
SHAREHOLDER INFORMATION 
continued BTG plc Annual Report & Accounts  63
Alzheimer’s disease: a specific disease associated with the
breakdown of nervous tissue in the brain, giving rise to dementia.
Cholinergic neurotransmission: an extensive neurotransmitter
system consisting of projections throughout the central nervous
system that affect conscious awareness; abnormalities are
associated with Alzheimer’s disease.
Chronic lymphocytic leukaemia: a slowly progressing form of
leukaemia characterised by an increased number of white blood
cells known as lymphocytes.
Clinical studies: Phase I clinical studies are normally conducted in
healthy, adult volunteers to assess the safety and pharmacokinetics
of a drug candidate. Phase II clinical studies assess short-term
safety and preliminary efficacy in a limited number of people with
the relevant disease; they also seek to determine appropriate
dosing regimens. Phase III clinical studies are used to assess
comprehensively the safety and efficacy of the drug candidate in
larger number of people with the relevant disease, with treatment
taking place under real-life conditions. 
Factor IX: an essential clotting factor; recombinant factor IX is
produced using recombinant DNA technology (and therefore can
be produced without using human blood or plasma) as a treatment
for haemophilia B.
Haemophilia B: A blood clotting disorder caused by a congenital
deficiency of Factor IX.
Humanised monoclonal antibody: Antibodies cloned from a single
source that have been engineered to minimise the potential for
rejection by the body’s immune system when used as a treatment
for diseases such as cancer, for which the human body does not
produce its own antibodies.
Lysosomal rupture: the breakdown of the lysosome inside a cell,
releasing enzymes that break down other cellular components and
potentially causing cell death; this may have therapeutic uses when
targeting cancer cells.
NCE (new chemical entity): new candidate pharmaceutical
molecules that have not previously been described in the scientific
literature.
Non-Hodgkin’s lymphoma: any of approximately 10 forms of
lymphoma (cancer of the lymphoid tissue) that do not contain
certain cells characteristic of Hodgkin’s disease (the other type of
lymphoma).
Oncology: the study of cancers.
Preclinical studies: tests conducted on a product candidate to
ensure safety and quality prior to commencing human clinical
studies. The tests investigate, inter alia, the toxicity and efficacy in
model systems, safety and stability. Certain of them continue after
clinical studies commence.
Prodrug: an inactive form of a pharmaceutical that exerts its
effects after metabolic processes in the body convert it into 
a usable or active form.
Serotoninergic neurotransmission: the serotoninergic system
modulates mood, emotion, sleep and appetite; decreased
serotoninergic neurotransmission can adversely affect these
functions.
Type I diabetes: also called insulin-dependent diabetes mellitus, a
form of diabetes in which so little insulin is produced that
supplemental insulin is required to survive.
GLOSSARY 64 BTG plc Annual Report & Accounts
NOTES Merchant in collaboration with philosophy
Typeset by Bettina Brux
Printing by Granite
The paper used for this report is made 
from a combination of TCF and ECF pulps.
It is produced at a mill that holds ISO 14001
certification and has been awarded the
Nordic Swan environmental label. CONTACT BTG AT:
BTG IN EUROPE
10 Fleet Place
Limeburner Lane
London
EC4M 7SB
UK
Tel +44 (0)20 7575 0000
Fax +44 (0)20 7575 0010
BTG IN NORTH AMERICA
Five Tower Bridge
300 Barr Harbor Drive
7th Floor
West Conshohocken
PA 19428-2998
USA
Tel +1 610 278 1660
Fax +1 610 278 1605
BTG IN JAPAN
7f Kato Building
5-26-8 Shimbashi
Minato-ku
Tokyo 105-0004
Japan
Tel +81 (0)3 5777 6803
Fax +81 (0)3 5777 6835
In the UK and USA, BTG operates
through wholly owned subsidiaries,
BTG International Ltd and
BTG International Inc., respectively.
To find out more about BTG visit:
www.btgplc.com
E-mail: info@btgplc.com