POWER PROTECTION
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TOTAL SOLUTIONS 
WIDE REACH
LEADING TECHNOLOGY
ANNUAL REPORT 2003
ANNUAL REPORT 2003 CONTENTS 
2 HIGHLIGHTS
3 CHAIRMAN’S STATEMENT
5 CHIEF EXECUTIVE’S REVIEW
16 FINANCIAL REVIEW
20 DIRECTORS AND ADVISERS
22 DIRECTORS’ REPORT
26 REMUNERATION REPORT
31 CORPORATE GOVERNANCE
33 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
34 INDEPENDENT AUDITORS’ REPORT
35 CONSOLIDATED PROFIT AND LOSS ACCOUNT
36 BALANCE SHEETS
37 CONSOLIDATED CASH FLOW STATEMENT
38 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
39 NOTES TO THE ACCOUNTS
64 PRINCIPAL SUBSIDIARY UNDERTAKINGS
65 FIVE YEAR SUMMAR Y
66 NOTICE OF MEETING
68 SHAREHOLDER INFORMATION CHLORIDE ANNUAL REPORT 2003 1
THROUGH RIGOROUS FOCUS ON
INNOVATION, FLEXIBILITY AND RELIABILITY ,
CHLORIDE IS THE SUPPLIER OF CHOICE 
FOR POWER PROTECTION SOLUTIONS.
ITS STRENGTHS DERIVE FROM APPLYING
INNOVA TIVE TECHNOLOGIES AND 
INDUSTRY -LEADING CUSTOMER SERVICE 
TO THE PROTECTION OF CRITICAL
APPLICATIONS WORLDWIDE.
POWER PROTECTION
> 2002 2003
1.4 1
1.98
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
2 CHLORIDE ANNUAL REPORT 2003
HIGHLIGHTS 
> Operating profit before goodwill amortisation and exceptional items increased by 40% to £7.1 million
(2002: £5.0 million) after significant further investment in product development, on sales down 4% at
£143.0 million (2002: £148.3 million)
> Improved profitability in difficult markets from better margins, growth in the higher-margin service
business and reduced product and distribution costs 
> 13% increase in service sales, with service now accounting for 26% of total revenue
> Adjusted EPS, before goodwill amortisation and exceptional items, up 40% at 1.98p (2002:1.41p)
> Cash inflow from operating activities was £1 1.9 million (168% of operating profit before goodwill
amortisation) against £1.8 million last year
> Low gearing with net debt of £8.8 million (2002: £8.1 million)
> Dividend maintained at 1.6p per share, reflecting the Board’s confidence in the Company’s prospects
and in the key long-term growth drivers for the power protection market
> Strengthened market positions in Europe and strategic acquisition in the dynamic Chinese market
TURNOVER 
£million
OPERATING PROFIT 
Before goodwill amortisation
£million
EARNINGS PER SHARE
Adjusted basis 
pence
CASH FLOW 
From operating activities 
£million
2002 2003
1.8
11.9
2002 2003
5.0
7.1
2002 2003
1 48.3
143.0 CHLORIDE ANNUAL REPORT 2003 3
INTRODUCTION Chloride made good progress over the year, despite the
challenging market environment which reduced demand for power protection
solutions in certain market sectors. Operating profit showed a healthy increase
against marginally lower sales as we improved margins through a continued focus 
on cost control combined with better efficiency and effectiveness throughout 
the business.
We maintained sales in our core European markets, grew service revenues strongly
and further improved our ability to generate cash.
We gained market share through focusing our sales resources on specific growth
sectors of the market and further enhancement of our total power protection
solutions offering.
Investment in the future growth of the business continued to be a priority. In
February 2003 we acquired a majority stake in Shanghai-based Siemens Telcom
Power Supply Limited, now renamed Chloride Masterguard Power Systems Limited,
giving Chloride a strategic presence in the dynamic Chinese market.We also
increased our investment in new product development, building on our strong
technology platforms to provide high specification products at lower cost.
FINANCIAL Operating profit before goodwill amortisation and exceptional 
items recovered by 40% to £7.1 million (2002: £5.0 million) on total sales of 
£143.0 million (2002: £148.3 million). Margins improved across all our operations 
as a result of the vigorous control of overhead costs and supply chain management,
and a more favourable mix of higher-margin service revenues.
Profit before tax, goodwill amortisation and exceptional items was up 41% 
to £6.34 million (2002: £4.48 million) delivering a 40% increase in adjusted EPS 
to 1.98p (2002: 1.41p).This was achieved after absorbing in excess of £1 million 
of increased product development, pension and insurance costs.
Cash flow from operating activities was 168% of operating profit before goodwill
amortisation reflecting the Group’s ability to generate strong cash flow from 
its operations.Year-end net debt was £8.8 million (2002: £8.1 million) with gearing 
on shareholders’ funds at 13.0% (2002: 12.1%), after the investment associated 
with our strategic acquisition in China.
DIVIDEND The Board is confident that the long-term outlook for the market 
is positive, given the underlying growth drivers for power protection solutions, and
that our approach will deliver consistently improving results. Against this background,
the Board is recommending the payment of a final dividend of 0.8p (2002: 0.8p).
Together with the interim dividend of 0.8p (2002: 0.8p), this gives an unchanged 
full year dividend of 1.6p (2002: 1.6p).The Board believes this strikes the right
balance between rewarding shareholders for performance during the year,
reflecting future prospects and re-building dividend cover.
The final dividend will be paid on 29 July 2003 to shareholders on the register 
at 4 July 2003.
CHAIRMAN’S STATEMENT 
“We are confident that Chloride has never been better placed to exploit
opportunities from the long-term growth in the power protection market.
We will continue to focus our marketing activities on the higher-growth
sectors within our market and on extending our total solutions strategy 
to gain competitive advantage.” SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
4 CHLORIDE ANNUAL REPORT 2003
LONG-TERM CUSTOMER RELATIONSHIPS An essential part of our strategy
to increase competitive advantage remains consistent – to build long-term partnerships
with blue-chip customers in our chosen markets by providing the industry-leading
power protection solutions they require to ensure their business continuity.This
approach has put Chloride in a good position to win market share and increase
margins despite the current market downturn.We are confident that the Company
has never been better placed to exploit opportunities from the long-term growth 
in the power protection market.We will continue to focus our marketing activities
on the higher-growth sectors within our market and on extending our total solutions
strategy to further competitive advantage.
PEOPLE Once again, the Board is grateful for the commitment shown by our
employees in driving forward the business. In the UK, we operate a hybrid defined
benefit/defined contribution pension scheme which, like many similar schemes 
and after several years of surplus, has been adversely impacted by the downturn 
in the stock market. Our defined benefit section is small, having been closed to new
members in 1998.The Board has demonstrated its commitment to the Scheme by
agreeing a substantial one-off Company contribution of £1.5 million and increasing
the Company’s regular contributions.
CORPORATE GOVERNANCE The Board supports the adoption of best
practice guidelines in corporate governance and this year is able to confirm that 
the Company complies fully with the Combined Code in its current form.The Board 
has considered carefully the recommendations and guidance of the Higgs and Smith
Reports on Corporate Governance and Audit Committees.We have decided to
await the final, revised Combined Code on Corporate Governance and evaluate
emerging best practice before implementing changes to corporate governance
procedures within the Company.
OUTLOOK The immediate trading environment remains challenging and we do 
not expect any recovery in the short term. Nevertheless, we believe we are well
positioned to improve performance as we enter the new financial year.Whilst we
are cautious about the outlook for the current year, our sharpened focus, improved
competitiveness and leading range of power protection solutions should enable us 
to make further progress.
NORMAN BROADHURST
CHAIRMAN’S STATEMENT CONTINUED and distribution costs were reduced through the combined benefits of lower-cost
new products, greater outsourcing to lower-cost, high-quality suppliers in the Far East
and improved procurement and logistics.
Cash flow was generated at 168% of operating profit before goodwill amortisation
and exceptional items, as a result of actions taken to reduce working capital.
An important element of this was the establishment of a new logistics operation 
in Duisberg, Germany to channel our imported products through a single European
hub.The main benefit of this will come through in the current financial year with
reduced inventories and improved service levels to customers.
SALES Sales performance was characterised by a decline in product sales, partially
offset by an increase in higher-margin service revenue.
Overall, sales were down 4% as capital investment in our major markets was
deferred.We believe however that this represents an increase in market share,
particularly in our major markets of the UK and mainland Europe, given the recent
results of our major competitors who reported larger declines in sales.
In geographic terms, our sales were sustained at last year’s level in our main markets
of Europe, Middle East and Africa (EMEA).We performed less well in Asia Pacific
where we suffered from changes in our distributor network, and in Latin America.
Product sales were down 8%, with significant falls in the telecom, technology 
and manufacturing sectors due to the lower level of investment in the telecoms
infrastructure and the depressed manufacturing sector in our main European markets.
CHLORIDE ANNUAL REPORT 2003 5
INTRODUCTION In the period under review, Chloride delivered a substantial
improvement in operating profit and strong operating cash flow despite the anticipated
difficult market conditions, which resulted in reduced sales and increased pressure 
on prices.
We managed the business to maximise opportunities in the challenging market
environment, while remaining confident of our longer-term prospects. Accordingly,
we continued to invest for the future of the business, through the development 
of new products, enhancement of our solutions capabilities and expansion of our
geographic spread.
We are convinced that the fundamental growth drivers of the business – our
customers’ absolute requirement to protect mission-critical equipment and the
uncertain power quality in many countries – will prove robust over the longer term.
IMPROVING PERFORMANCE Despite the economic conditions, we delivered 
a 40% increase in operating profit before goodwill amortisation and exceptional
items, through rigorous cost control, improved product margins and a better mix 
of higher-margin service revenues.This substantial growth in operating profit was
achieved after significantly increasing our investment in product development and
without reducing our sales resources. Each of our business streams – UPS Systems,
Industrial Systems, Power Conditioning and Telecom Systems – improved operating
profit compared to the prior year.
Importantly, product margins were increased against the background of severe
pricing pressure, by focusing on our solutions approach and concentrating our 
sales efforts on projects that added value for our customers. In addition, product 
CHIEF EXECUTIVE’S REVIEW 
“Our solutions offering is supported by an international reach that
encompasses our core markets in western Europe and the USA as well 
as our growing presence in the Middle East and Far East. In all of these
markets we are building long-term partnerships with blue-chip customers.” SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
6 CHLORIDE ANNUAL REPORT 2003
Against this background we focused sales resources on the more favourable markets.
This has enabled us to make progress in the transport sector, with projects
completed in several European and Far Eastern countries, such as the technically
complex solution for the Bangkok Mass Rapid Transport Authority; in government-
related projects, such as those for the Federal Labor Office in Germany and the
Police Authorities in the UK and Turkey; and in the retail, energy and construction
sectors where we achieved good sales growth over the prior year.
CHIEF EXECUTIVE’S REVIEW CONTINUED
Service sales have consistently increased in recent years, validating our strategy 
of developing our total solutions offering, with lifetime service and support for 
the customer.We are pleased to report a 13% increase in service sales, which 
now account for 26% of total revenues.The professional and reliable delivery 
of our service solutions yields a recurring revenue stream and generates sales
opportunities, as well as allowing us to predict our customers’ requirements 
and to be well placed when equipment upgrades are contemplated.
2000 2001 2003
+26.7%
1999
+61.1%
+12.8%
+13%
2002
INCREASE IN SERVICE REVENUE 
1 > Service 26%
2 > Manufacturing and 
construction 17%
3 > Telecom 15%
4 > Other 1 1%
5 > Government/
health 8%
6 > Retail 5%
7 > Financial services 5%
8 > Transport 5%
9 > Energy 4%
10 > Petrochemicals 4%
2
3
4
5
6
7
8
9
10
1
SALES IN MARKET SECTORS Q4
2002
Q1 Q2 Q4
3,957
4,220
4,421
4,688
4,883
Q3
CHLORIDE ANNUAL REPORT 2003 7
A vital part of our service offering is our industry-leading remote diagnostic
monitoring system – LIFE – which underpins our relationships with our 
customers, for whom 24-hour continuous power protection is an important 
element of risk management.
INCREASING COMPETITIVE ADVANTAGE In the year under review 
our strategy to improve competitive advantage successfully delivered an increase 
in market share and better margins, despite pricing pressure in our markets.
We continue to gain competitive advantage through:
Building long-term customer relationships We focus on understanding our
customers’ power protection requirements, developing tailored solutions specific 
to their applications and training their staff to utilise the full capabilities of their
equipment and software.
Our customer-facing staff are trained through our customer care programme
“Achieving Service Excellence” to understand customers’ expectations and
perceptions and how to improve the quality of service delivery.
This approach has been successful, making Chloride the supplier of choice for
important customers in sectors such as transportation where power protection 
is essential for critical safety systems and operational performance, and financial
services where power protection is vital for business continuity.
LIFE CONNECTIONS GREW STRONGLY
DURING THE YEAR SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
8 CHLORIDE ANNUAL REPORT 2003
Delivering total solutions We develop and differentiate our solutions through:
–investing in product innovation to give us market-leading technology. During the
year, we made a significant investment in developing a range of UPS products 
for the US market, as well as other projects including modular UPS products 
for industrial systems; a 50-amp rectifier for telecom systems; and new 
patented telephone line protectors for our US power conditioning business;
– developing proprietary software to provide our customers with network
connectivity and to enhance our industry-leading remote monitoring and
diagnostic software – LIFE.We are now bringing to market the next generation
of LIFE, known as LIFE.net, which has additional benefits for the customer
including greater use of Internet and email communication;
– offering a combination of different technologies – AC UPS systems, DC systems,
power conditioning and industrial systems.We are increasingly focusing on
combining capabilities from our operations in Bologna, Lyon and Dol de Bretagne
to provide the fully integrated solutions that deliver through our sales and service
businesses a real competitive advantage when tendering for significant, complex
projects;
– developing our consultancy and project management capabilities;
– offering a range of service and remote monitoring options to secure the
optimum performance of our systems in critical applications;
– continually updating our know-how and capabilities to extend best practice
across all our operations.
Expanding geographic reach Late in the year, we announced the acquisition 
of a 75% interest in the Shanghai-based Siemens Telcom Power Supply Limited,
now renamed Chloride Masterguard Power Systems Limited.
This is a strategic purchase, giving us excellent facilities with which to expand our
business in China for telecom power systems, UPS and industrial systems.We have 
a major task to build on this capability and we anticipate the initial benefit of this
investment will start to come through next year. China is the fastest-growing
geographic market for power protection and we have a good-quality partner 
in Shanghai Mobile Communications Company, a subsidiary of China Mobile
Communications Corporation, together with ongoing supply arrangements 
with Siemens.
CHIEF EXECUTIVE’S REVIEW CONTINUED CHLORIDE ANNUAL REPORT 2003 9
POSITIONED FOR GROWTH Power protection is a long-term growth market
underpinned by the need for businesses and government organisations to have
uninterrupted quality power to support critical systems, against the background 
of deteriorating power quality and reliability in most economies.
We have a comprehensive total solutions offering that differentiates Chloride and
enables us to access a broad range of applications from small office LAN networks
to data and call centres, industrial plants, telecommunication infrastructure, energy
and petrochemical and major transport infrastructure projects.
Our solutions offering is supported by an international reach that encompasses 
our core markets in western Europe and the USA as well as our growing presence 
in the Middle East and Far East. In all of these markets we are building long-term
partnerships with blue-chip customers.
We have never been better placed to develop these relationships and we are
confident that by following our consistent strategy we will continue to capture
market share, build margins and generate cash.
KEITH HODGKINSON TELECOM LINE PROTECTORS
Providing uninterrupted voice and data communications is paramount in today’s converging
marketplace. Oneac, USA, has developed patented communication line protector technology 
which ensures trouble-free analogue, digital and high-speed data communications.
During the year, Oneac launched its new Convergent Series rackmount base and modular
communication line protectors.The Convergent Series features Oneac’s patented switched 
filter technology, to shield equipment from the damaging effects of lightning induced transients.
Telecommunications network operators using Oneac’s patented technology achieve a significant
improvement in system reliability and savings in service costs.
TELECOMS, GERMANY
Masterguard won a substantial contract 
to provide power protection for Vodafone
Information Systems, utilising UPS systems
with state-of-the-art Vector digital control
technology, nationwide service cover and
LIFE.net remote monitoring.
COPPER MINING IN CHILE
A Chloride solution ensures continuous
power for the smelting furnace at
Noranda’s new copper mining plant 
in Chile.This critical application is
protected by UPS systems incorporating
Vector control technology and network
monitoring software.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
10 CHLORIDE ANNUAL REPORT 2003
RESEARCH AND DEVELOPMENT
Investment in research and development
continues to be a high priority. Development
projects during the year included a range of
UPS products for the US market, modular
UPS products for industrial systems and 
a 50-amp rectifier for telecom systems. LEADING TECHNOLOGY
>
>
PROTECTING RENEWABLE 
ENERGY SOURCES
The wind power generation industry has benefited from 
the increasing pressure on governments to encourage 
clean, sustainable energy production. Danish wind turbine
companies have played a leading role in the industry for
over 20 years and construct windfarms all over the 
world. Our customers use Chloride power protection
solutions to protect the in-built computers controlling 
their wind turbines,and to support the emergency
lighting systems,in Denmark and various 
other countries.
In the Danish wind turbine industry, our 
customers include VESTAS, NEG Micon 
and BONUS.
CHLORIDE ANNUAL REPORT 2003 11 BANGKOK MASS RAPID TRANSPORT SYSTEM
Bangkok’s new underground metro system, with 18 stations on the network, is due for official
opening in April 2004. Chloride has been chosen as the sole supplier of power protection solutions
for the signalling systems, revenue collection equipment and a number of operations buildings.
Chloride had clear competitive advantage with its breadth of product portfolio, covering the
requirement for both standard UPS systems and DC systems, its innovative solution for rail 
and underground applications, and its unrivalled service capability.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
12 CHLORIDE ANNUAL REPORT 2003
>
SECURE POWER FOR THE CUSTOMER
ASSESSMENT SOLUTION
PROJECT MANAGEMENT LIFE.net LIFETIME SERVICE SUPPORT
CONTACT
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Chloride’s total solution approach to delivering 
and maintaining optimum power protection requires
the highest standards throughout, from design and
implementation to life-long support. Chloride:
– designs the best solution to meet the customer’s
operational needs and budget;
–project manages the installation and
commissioning;
–provides life-long service and technical support,
with advanced LIFE.net remote monitoring 
and diagnostics. TOTAL SOLUTIONS
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IMOLA MOTOR RACING CIRCUIT
Motor racing at the Imola track is dependent on reliable technology. Chloride’s power protection solutions
provide secure power to the starting light system, the first aid building and the monitoring centre which
controls essential timing and data recording equipment.The Chloride solution, tailored to the customer’s
requirements, includes 24-hour technical support during key events such as the San Marino Formula 1 
Grand Prix, Motor Cycling World Championship events and Formula 3000 races.
CHLORIDE ANNUAL REPORT 2003 13 AZERBAIJAN PIPELINE PROJECT
The energy sector is an important international market sector for Chloride Industrial Systems.
CIS won the contract to supply equipment, including UPS systems and battery chargers to 
support the Azerbaijan, Georgia,Turkey oil pipeline project, which will carry 80 million tons 
of oil a year from 2005. CIS equipment will be installed along the pipeline to protect 
computer systems, telecommunication systems, telemonitoring systems and security valves.
1
2
3
4
5
AGRICULTURE BANK OF CHINA
One of the four biggest state-owned 
banks in China has selected Chloride
power protection solutions to protect 
the IT infrastructure in 700 branches
across China.
MICROSOFT BRAZIL
Chloride Brazil supplied power protection
for the Microsoft Solution Center in 
Sao Paulo, Brazil, which provides training
and testing facilities for Brazil’s
technological community.
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
14 CHLORIDE ANNUAL REPORT 2003
INTERNATIONAL MARKETS
1 > Europe 69%
2 > USA 14%
3 > Asia Pacific 10%
4 > Middle East/Africa 5%
5 > Latin America 2% WIDE REACH
>
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DEVELOPING MARKETS, CHINA
China now attracts the most foreign direct investments in Asia, with an increasing number of multinational
companies starting up manufacturing facilities, a growing IT and Internet sector and the world’s largest
mobile and second largest fixed-line telecom markets.This expansion will drive the demand for power
protection solutions and Chloride’s Shanghai-based acquisition, Chloride Masterguard Power Systems,
is well placed to exploit the market potential.
CHLORIDE ANNUAL REPORT 2003 15 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
16 CHLORIDE ANNUAL REPORT 2003
> The drivers for growth – degrading power supplies and
increasing critical application needs – remain strong
> Chloride’s solutions approach reduces risk and improves
business profitability
> High quality of earnings as service revenues and associated
cash returns grow
> Strengthened market positions in Europe and further
investment in developing markets such as China
> Cost base reduced and supply chain improvements made
> Adjusted EPS, before goodwill amortisation and exceptional
items, 40% up on prior year
> Dividend held at 1.6p, providing a yield of c. 5%
> Strong operating cash flow of £1 1.9 million, being 168% 
of operating profit
> Low gearing with net debt of £8.8 million
TOTAL SHAREHOLDER RETURNS We continue to monitor regularly our
performance in terms of TSR as determined by the growth in both the share price
and the dividend. During 2003 world stock markets continued to move downwards.
Chloride has not been immune to these movements and, despite the strong
fundamental drivers for growth, has seen its share price fall from a peak of 50p 
to 29p at the end of the year.
Management continues to believe that a return to increases in value in the longer
term will be driven by the increasingly poor quality of electricity supply around the
world and the growing need for power protection solutions in critical applications.
This confidence is again reflected in the dividend, which the Board recommends 
be maintained at 1.6p (a c. 5% yield at the balance sheet date).
CASH FLOW/EBITDA Cash management is crucial to performance.Turning profits
into cash enables healthy reinvestment in the businesses. Cash flow from continuing
operating activities was grown as a result of strong credit control and collections,
growth in service revenues and streamlining the supply chain to reduce inventory.
The business model should continue to provide strong cash returns.
CAPITAL EXPENDITURE AND INVESTMENTS Tangible fixed asset capital
expenditure in the year was constrained to £2.6 million of essential replacement
needs. In the coming year there will be substantial reinvestment in upgrading
customer care and witness testing facilities and also in further upgrading systems 
to support the speed and efficiency of customer interfaces.
The Employee Benefit Trust now holds 11.2 million shares to satisfy the potential
exercise of certain incentive share options.The net acquisition cost of £10.5 million 
is shown in the balance sheet under fixed assets, investments, and compares with
£3.3 million at the market price of 29p at 31 March 2003. Given the long-term
FINANCIAL REVIEW 
“The stock market fall of the last two years has eroded the gains to
shareholder value of the previous three years.The Company believes 
it is well positioned now to grow total shareholder return (TSR) as 
markets recover.” CHLORIDE ANNUAL REPORT 2003 17
nature of the share option schemes, there is not believed to be any permanent
diminution in value.
Under current draft UITF proposals these shares held by the Employee Benefit Trust
would be reclassified as a reduction in shareholders’ funds next year.
ACQUISITION In February 2003, Chloride acquired from Siemens China Ltd 
51% of the shares of Siemens Telcom Power Supply Limited (STPSS). In addition,
Chloride is committed to a further investment in STPSS, taking its shareholding 
to 75%.The joint venture partner, Shanghai Communications Service Company,
a subsidiary of China Mobile Communication Corporation in Shanghai, continues 
to hold the remaining shares.
In the year to 30 September 2002, STPSS had sales of RMB 42.2 million (£3.1 million)
and net assets of RMB 9.3 million (£0.75 million). Since acquisition, turnover has
been £130,000 and STPSS has made a small loss.
Consideration plus costs total £0.8 million and Chloride’s share of net liabilities totals
£0.3 million. Goodwill upon acquisition is £1.1 million. Further capital contributions
totalling c. £1.0 million will be made this year to fund the development of the
strategically important Chinese market.
SHAREHOLDERS’ FUNDS Despite the growth in profits, the maintenance of the
dividend has led to a marginal reduction in shareholders’ funds.
ACCOUNTING POLICIES AND PRESENTATION During the year, there have
been no new accounting standards, although several exposure drafts and guidance
on the Operating and Financial Review have been produced.The thrust remains
towards the introduction of International Accounting Standards (IAS) in 2005.
PENSIONS Once again the disclosures required under FRS 17 re pensions are
included in note 13. Full implementation has been delayed by the Accounting
Standards Board until the IAS on this topic is introduced. Although the valuation 
at 31 March 2002 indicated the UK pension scheme was well funded, the sharp
decline in UK equity valuations since then has resulted in a UK pension deficit of
c. £8 million under FRS 17 at the balance sheet date. As a result the Company 
has agreed to increase the funding level for the scheme in the coming year with 
a one-time contribution of £1.5 million and by increasing contributions to 18.5% 
of pensionable earnings of defined benefit members. During the year the charge 
to income under SSAP 24 principles has risen by c. £200,000 following the
reduction in the variation credit as part of the service charge.
RISK MANAGEMENT AND COMPLIANCE WITH GUIDELINES FOR
CORPORATE GOVERNANCE The Turnbull guidelines seek to align business
objectives with risk management such that the business can ensure that there is an
ongoing embedded process for managing and reporting on key risks. Directors are
responsible for maintaining a sound system of internal control that provides
reasonable but not absolute assurance that a company will not be hindered in
achieving its business objectives by circumstances that are not foreseen. Ongoing
reporting against these identified risks enables the Board to make the statement on
page 32. In a difficult year with uncertain macro economic conditions, the Company’s
risk control procedures have enabled the business to remain on a sound footing.
2003
66.0
1999
64.0
2000
68.7
2001
89.7
66.7
2002
SHAREHOLDERS’ FUNDS
£million
1999
13.1
11.9
2000
17.4
13.7
2001
20.3
12.8
2002
9.1
1.8
2003
10.1
11.9
EBITDA CASH FLOW
 EBITDA £million  Cash flow £million
31 March 
1998
31 March 
1999
31 March 
2000
31 March 
2001
31 March 
2002
31 March 
2003
50
100
150
200
250
300
£
TOTAL SHAREHOLDER RETURN
Chloride    FTSE Small Cap Index (excluding Investment Companies) 
This graph shows the value, by the end of March 2003, of £100 invested in Chloride on 31 March 1998 compared with the value of £100 invested in the
FTSE Small Cap Index (excluding Investment Companies).The other points plotted are the values at intervening financial year-ends. Source: Datastream SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
18 CHLORIDE ANNUAL REPORT 2003
TREASURY OBJECTIVES AND POLICIES
Management of financial risk The major financial risks faced by the Group are
liquidity risk, currency risk and interest rate risk.The Board of Chloride Group PLC
regularly reviews these risks and approves written policies covering the use of
financial instruments to manage risk, and overall risk limits.
The Company continues to operate a central treasury management service in
accordance with the policies and procedures approved by the Board.This function
operates to reduce cost and risk and no transactions are undertaken on a
speculative basis.The trading of financial instruments within the Company is 
confined to central treasury.
Core facilities and net liquid funds The Company’s management policy regarding
liquidity risk is to ensure that it always has sufficient committed facilities available to
meet its foreseeable needs. At 31 March 2003 the Company had committed term
facilities of £43.2 million of which £23.5 million remain undrawn. Since the balance
sheet date, the Group has agreed in principle to renew for a further three years
£11.2 million of expiring facilities and commit over the same period a further
£3.8 million, raising total committed facilities to £47 million. Upon final commitment,
£30 million of the loan agreements will expire in a period of greater than one year.
At 31 March 2003, the Company also had net debt of £8.8 million representing 
on-demand borrowings of £4.5 million most of which relates to the hedging of 
our overseas operations, finance lease obligations of £0.6 million, discounted trade
bills of £0.6 million and committed borrowings of £19.7 million less cash and 
short-term deposits of £16.6 million.
In its principal overseas companies the Company has on-demand overdraft and 
bill discounting facilities to provide local funding for operating and working capital
requirements. Drawings under these facilities provide a partial hedge against assets
held in local currencies.
The Company also has adequate foreign exchange contract and engagement facilities
for its day-to-day commercial and exposure-matching needs.
£0.8 million of the £4.5 million of on-demand borrowings at 31 March 2003 is
guaranteed by Chloride Group PLC.The committed term facilities are guaranteed 
by Chloride Group PLC and contain common financial covenants regarding interest
cover, a ceiling on net debt and minimum consolidated shareholders’ funds. It is
Group policy to manage the consolidated balance sheet so as to operate at all times
well within covenanted restrictions.
Currency risk The Company’s management policy re foreign currency exposure
requires subsidiaries to hedge transactional currency exposures against the currency
in which their results are measured. Net exchange exposures continue to be hedged
at transactional level using the forward foreign exchange market.
Apart from optimising expenses and interest on local borrowings, the Group does
not believe, as an internationally based business, that it is appropriate to hedge other
aspects of its profit and loss account translation exposure.There was no material
exchange impact during the year.
FINANCIAL REVIEW CONTINUED CHLORIDE ANNUAL REPORT 2003 19
Net assets are held in a number of currencies and translated at year-end rates.
This is explained more fully in the accounting policy.The resulting exposures are
managed where practicable by matching local currency assets with local currency
borrowings.
Non-sterling currencies of primary importance to the Group moved as follows in 
the year:
2003 2002 %
Average Average Change
US $ 1.55 1.43 +8
Euro 1.56 1.62 –4
Interest rate risk For funds on deposit, it is Company policy to utilise banks with 
at least an AA rating to minimise counterparty risk.
The funding structures of our UK and overseas operations are regularly reviewed
with the objective of achieving the optimal post-tax financing cost.
At 31 March 2003, the Company had a ratio of fixed rate debt to total outstanding
debt of approximately 70%. As of 31 March 2003 the Company had fixed
£17.7 million of euro-denominated borrowings at an average fixed rate of 4.7%.
The remainder of borrowings are at floating rate and predominantly EURIBOR
based.The weighted average remaining period as at 31 March 2003 for which the
above debt was fixed was 12 months.
Credit risk The Company controls credit risk by entering into financial instruments
only with highly credit rated authorised counterparties. Counterparty positions are
monitored on a regular basis to ensure that internally set limits are not broken.
Use and fair value of financial instruments At 31 March 2003, outstanding forward
contracts existed with a gross book value totalling £1 1.0 million in respect of its
actual transaction exposures.There is no significant difference between the book and
fair value of these forward foreign exchange contracts or of the above mentioned
interest rate swaps at 31 March 2003. In addition to these forward contracts the
Group is exposed to foreign exchange movements on its overseas borrowings.
At 31 March 2003 there were £24.5 million of foreign currency borrowings
(providing a partial hedge against assets held in local currencies).
At 31 March 2003, outstanding interest swaps existed with a gross book value of 
£16.8 million.There was no significant difference between the book and fair market
values of these interest swaps at 31 March 2003.
Tax rate The tax charge in 2003 represents an effective rate of 27.0% (2002: 25%).
As tax losses are used up, we anticipate that this low rate will rise.
NEIL WARNER
1999
40.0
12.1
2000
45.0
–17.2
2001
36.0
4.9
2002
23.0
–8.1
2003
23.5
–8.8
CORE FACILITIES AND NET LIQUID FUNDS
 Net liquid funds £million   Core facilities available £million SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
20 CHLORIDE ANNUAL REPORT 2003
DIRECTORS
Norman Broadhurst, age 61, non-executive Chairman
Keith Hodgkinson, age 59, Chief Executive
Angus Fraser, age 58, non-executive
Robin Southwell, age 43, non-executive
Neil Warner, age 50, Finance Director
John Wheeler, age 52, non-executive
COMPANY SECRETARY
Susan Williams
REGISTERED OFFICE
Abford House, 15 Wilton Road, London SW1V 1LT
Registered in England number 35389
Telephone +44 (0)20 7834 5500 
Facsimile +44 (0)20 7630 0563
E-mail enquiries@chloridegroup.com
Website www.chloridegroup.com
AUDIT COMMITTEE
A S J Fraser, Chairman
N N Broadhurst
RS Southwell
J A C Wheeler
Keeps under review all matters relating to audit, internal control and corporate
governance; makes recommendations to the Board on the appointment of the
Company’s auditors and sets the policy on the use of auditors for non-audit work.
NOMINATION COMMITTEE
N N Broadhurst, Chairman
ASJFraser
K H Hodgkinson
Makes recommendations to the Board of proposed new appointments of executive
and non-executive directors.
REMUNERATION COMMITTEE
N N Broadhurst, Chairman
A S J Fraser
R S Southwell
J A C Wheeler
Considers all aspects of executive directors’ emoluments, service agreements,
pensions and related matters. Exercises all powers and discretions of the directors 
in connection with the Company’s savings-related and executive share option
schemes. Has responsibility for compliance with the Combined Code regarding
directors’ remuneration.
DIRECTORS AND ADVISERS 
Norman Broadhurst Keith Hodgkinson
ADVISERS
Auditors
Deloitte & Touche
Banks
Fortis Bank
Bank of Scotland
Fleet Bank
Royal Bank of Scotland
Registrar
Lloyds TSB Registrars
The Causeway,Worthing
West Sussex BN99 6DA
Telephone 0870 600 3970 (from UK)
+44 121 415 7047 
(from outside UK)
Stockbroker and financial adviser
UBS Limited CHLORIDE ANNUAL REPORT 2003 21
DIRECTORS’ BIOGRAPHIES
Norman Broadhurst FCA FCT joined the Board in March 1998 and became
Chairman in August 2001. He is also Chairman of Freightliner Limited, Deputy
Chairman of Taylor Woodrow PLC and a non-executive director of Cattles plc,
United Utilities Plc, Old Mutual plc and Tomkins plc. He was Finance Director 
of Railtrack plc from 1994 until his retirement in 2000.
Keith Hodgkinson FCMA joined the Board in December 1991 and was confirmed
as Chief Executive in March 1992. His previous career was with GEC plc where 
he held a number of senior appointments. He is a non-executive director of 
De La Rue plc.
Angus Fraser MA MBA is Chairman of Alpha Plus Holdings Limited, non-executive
Deputy Chairman of Bertam Holdings PLC and a non-executive director of
Shepherd Building Group Limited and Technology Enterprise Kent Limited.
He worked for Chloride from 1976 to 1988 and was appointed to the Board 
in 1984. He is the Senior Independent Director.
Robin Southwell BA OBE FRAeS joined the Board in January 2002. He is a senior
executive of EADS, European Aeronautic Defence and Space Company, Chairman 
of Ourjet Limited and Chief Executive of Airtanker Limited. He was formerly 
Chief Executive of W S Atkins PLC and his previous career included a number 
of senior appointments with BAe Systems plc, which he joined on leaving 
university in 1981.
Neil Warner BA FCA MCT joined Chloride and was appointed to the Board as
Finance Director in 1997. He was with Ocean Group PLC (now Exel plc) for six
years from 1990, following appointments in his earlier career with BICC Group PLC
(now Balfour Beatty plc), ALCOA and PricewaterhouseCoopers. He is a non-
executive director of Dechra Pharmaceuticals PLC.
John Wheeler BA joined the Board in May 1999. He is a director of S130 Limited,
a maritime leisure company. He was formerly Chief Executive Officer of neosnetworks,
and his previous career included a senior appointment with Madge Networks NV.
Angus Fraser Robin Southwell Neil Warner John Wheeler SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
22 CHLORIDE ANNUAL REPORT 2003
PRINCIPAL ACTIVITIES The principal activities during the year under review were
the manufacture and sale of power protection solutions.
ACQUISITIONS AND DIVESTMENTS Details of the acquisition made during
the year are set out in the financial review on page 17.
RESULTS AND DIVIDENDS The results for the year and the financial position 
at 31 March 2003 are shown in the consolidated profit and loss account on page 35 
and the balance sheets on page 36.The Chief Executive’s review, starting on page 5,
comments on operating performance and the future development of the business,
whilst the financial review on pages 16 to 19, covers the consolidated results,
financial position and policies.
Profit on ordinary activities after taxation for the financial year was £2.0 million 
(2002: £19.0 million loss). After dividends of £3.8 million (2002: £3.8 million) the
retained loss for the year was £1.7 million (2002: £22.8 million).
DIRECTORS Biographical details of the directors are set out on page 21.
Messrs Warner and Wheeler retire by rotation at the forthcoming Annual General
Meeting and, being eligible, offer themselves for re-election.
Of the directors proposed for re-election, Mr Warner has a contract of service
requiring him to give six months’ notice and entitling him to receive notice which 
is decreasing on a monthly basis from 24 months at 1 April 2003 to 12 months at
1 April 2004.The outstanding notice period at the date of this report is 23 months.
Mr Wheeler does not have a contract of service.
The interests of the directors in the ordinary shares of the Company were as shown
in note 10 of the notes to the accounts on page 44 and in the remuneration report
on page 30.
DIRECTORS’ INTERESTS IN CONTRACTS No director had, during the year,
a material interest in any contract or arrangement with the Company or any of 
its subsidiaries such as would fall to be disclosed pursuant to statutory or other
requirements.
POLICY ON PAYMENT OF CREDITORS Appropriate terms and conditions
are agreed for transactions with suppliers and payment is generally made on these
terms subject to compliance by suppliers.
The aggregate amount owed by the Company to trade creditors due within one
year at the financial year end represented approximately 29 days (2002: 30 days) 
of the aggregate amount invoiced by suppliers during the year.The respective figure
on a consolidated basis was approximately 79 days (2002: 68 days), reflecting
different payment practices in the various countries in which Chloride operates.
CHARITABLE AND POLITICAL DONATIONS During the year donations of
£2,145 (2002: £4,774) were made to charitable organisations which are associated
with employees or closely linked with the communities in which the Company
operates.
No political donations were made (2002: £nil).
INTERESTS IN VOTING SHARES At 22 May 2003, the Company had been
notified of the following interests of 3% or more in the Company’s ordinary shares:
Number of % of issued
Name of holder shares shares
Deutsche Bank 34,851,000 14.0
Prudential plc * 29,793,000 12.0
Legal & General 9,842,000 3.9
TRW Investment Management 9,153,000 3.7
Royal Bank of Scotland plc ** 8,154,000 3.3
Second Advance Value Realisation Company Limited 7,812,000 3.1
Newton Exempt Fund 7,736,000 3.1
* Includes 5,422,000 shares which are also included in the notifiable interests 
of Deutsche Bank as third party managers relating to the interest of Prudential
Staff Pensions Limited.
** Includes an interest as Trustee in certain shares of the Newton Exempt Fund.
DIRECTORS’ REPORT  CHLORIDE ANNUAL REPORT 2003 23
EMPLOYEE BENEFIT TRUST In June 1997, the Company established the Chloride
Group Employee Benefit Trust (the Trust) to acquire ordinary shares in the Company
to satisfy rights to shares arising on the exercise of executive share options.
During the year, the Trust made the following transfers out of the Company’s
ordinary shares:
Number of Price per
shares share
Balance at 1 April 2002 11,612,920 n/a
Transferred out (370,000) n/a
Balance at 31 March 2003 11,242,920
No shares were purchased by the Trust during the year.
The Trust is funded by interest-free loans from the Company.The cost of the 
shares held by the Trust was £10.5 million and the market value was £3.3 million at
31 March 2003. Mourant & Co Trustees Limited, as trustee of the Trust, has waived
all past and future dividends on ordinary shares held by the Trust except to the
extent of 0.0001% of each dividend payable per share.
QUEST In March 2001, the Company established a qualifying employee share
ownership trust (Quest) to meet certain future obligations of the Company relating
to share options awarded under the Chloride savings-related share option schemes.
Shares held by the Quest were as follows:
Subscription 
Number of price per
shares share
Balance at 1 April 2002 and 31 March 2003 26,232 n/a
The Quest is funded by interest-free loans and contributions from the Company,
which are used to subscribe for new shares in the Company.The cost of the shares
held by the Trust was £7,607 at 31 March 2003.
The Quest trustee company has waived all future dividends on ordinary shares held
by the Quest, except to the extent of an aggregate dividend of 1p payable in respect
of all the shares held by the Quest.
RESEARCH AND DEVELOPMENT Investment in research and development 
is considered to be key to further improvement of the Company’s competitive
position. Market-driven programmes to improve existing products and to develop
new products and applications receive high priority. Development engineers work
closely with applications and software engineers and sales and marketing staff in the
operations to ensure that development is focused on the Company’s key markets.
The Company has research and development departments specialising in the
development of power protection solutions at Oneac, USA (power conditioners 
and software); Bologna, Italy and Erlangen, Germany (AC power protection
products); Lyon, France (industrial systems) and Dol de Bretagne, France (DC power
protection products).
SOCIAL, ETHICAL AND ENVIRONMENTAL RESPONSIBILITIES
Business policies Chloride has adopted a statement of business policies and
responsibilities which recognises the importance of social, ethical and environmental
responsibility in all aspects of its operations.
The system of internal control outlined in the corporate governance report
encompasses the identification and management of all risks, including risks to 
the short and long-term value of the business arising from social, ethical and
environmental matters. Compliance with the statement of business policies 
and responsibilities is reviewed annually as part of risk identification within the
system of internal control.
Environmental policy Chloride acknowledges the importance of good environmental
practice. It is the Company’s policy to comply with environmental legislation in all
countries in which it operates and to adopt responsible environmental practices.
Local management is responsible for complying with this policy, with the aid of
external expertise, if necessary.The Company’s external risk control consultants 
audit compliance with environmental standards at the Company’s production sites
on a regular basis.The reports of the risk control consultants are reviewed by local
and Group management and appropriate action is taken in accordance with their
recommendations. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
24 CHLORIDE ANNUAL REPORT 2003
The Company has six principal sites where production activities are carried out:
Bologna, Italy; Erlangen, Germany; Dol de Bretagne and Lyon, France; Chicago,
USA; and Shanghai, China. Such activities mainly involve the assembly and testing 
of electronic products. It is the Company’s policy that where appropriate these
production sites should have environmental management systems which comply with
ISO 14001. Certification has been obtained at Masterguard, Germany and Chloride
Masterguard Power Systems, China.The process is ongoing in the Chloride Industrial
Systems facility in Lyon where certification is expected in 2004 following completion
of an investment in extending and improving site facilities. Preparations have been
started at Dol de Bretagne.The Bologna site is also expected to be certified as
complying with ISO 14001 in 2003/04.
Initiatives which benefit the environment and result in cost savings to the Company
are encouraged.These include waste recycling and reduction of energy and materials
consumption. As an international Group with 20 principal sites in 14 countries,
our requirement for air travel has been considerably reduced by the introduction 
of videoconferencing facilities at 12 sites.The opening of a centralised logistics
operation for Chloride UPS Systems in Duisberg, Germany, will also rationalise
product transportation.
Health and safety The Company recognises the primary importance of ensuring 
the health and safety of its employees. Its policy is to manage its activities so that
employees are not exposed to unnecessary or unacceptable risks to their health and
safety, and to comply with the relevant legal and regulatory standards in each of the
territories in which it operates. In each of the principal production centres, there is a
designated senior manager responsible for health and safety. Policies and procedures
are documented and in each such location there is either a Works Council or Health
and Safety Committee, which meets regularly to consider health and safety issues.
Health and safety training is provided where necessary, particularly in relation to
battery handling and working with electricity.The Group risk control consultants
carry out site audits to ensure compliance with appropriate regulations and standards.
During the year, 362 working days (approximately 0.1% of the total) were lost due
to work-related accidents.There were no claims against the Company’s Employer’s
Liability policy arising out of the current Group businesses.
Employees Chloride’s policy is to provide equal recruitment and other opportunities
for all employees, regardless of sex, religion, race or disability.We endeavour to
provide all possible help to retain employees who have become disabled while
working for the Group. It is the practice to encourage lines of employee
communications at local level through appropriate means, such as works councils,
briefing groups, workshops and newsletters.
The Company is committed to developing its people and, in the UK, participates 
in the Investors in People scheme.There is a programme to help employees 
acquire professional and technical qualifications that are relevant to their jobs.
The Company has an ongoing employee training programme – “Achieving Service
Excellence” – to promote the customer care ethos throughout the organisation,
as well as training programmes to support and promote the Company’s solutions
offerings.
MARKET VALUE OF LAND AND BUILDINGS The Company’s interests 
in freehold and long leasehold land and buildings were professionally valued as at 
31 March 2000 on an existing use basis. Having regard to this valuation, the directors
are of the opinion that the values at which the Company’s interest in land and
buildings are included in the balance sheet are fairly stated.
The directors are of the opinion that the Company’s interests in short-term
leaseholds are fairly stated in the balance sheet.
AUTHORITY TO ALLOT SHARES Section 80 of the Companies Act 1985
provides that the directors may not allot securities unless authorised to do so 
either by the shareholders in general meeting or by the articles of association.
The authority granted in July 1998, applying to shares having an aggregate nominal
value of up to £21,571,000 expires on 21 July 2003.The notice of meeting on 
page 66 includes as special business item 6, which renews the authority of the
directors to allot securities for a further five years. It is proposed to change the
present level of the Section 80 authority to apply to shares having an aggregate
nominal value of up to £20,389,000.This is approximately the current amount of
authorised but unissued share capital; it represents 32.9% of the total issued share 
DIRECTORS’ REPORT CONTINUED CHLORIDE ANNUAL REPORT 2003 25
capital as at today’s date. After providing for the allotment of ordinary shares with 
a nominal value of £354,070 in satisfaction of those options under the Company’s
savings-related share option schemes which are not capable of being satisfied by
transferring shares from the Chloride Group Employee Benefit Trust, the balance
amounts to £20,034,930 (equivalent to 32.3% of the existing issued share capital).
Other than in connection with obligations which may arise on the exercise of share
options, the directors have no present intention of allotting shares pursuant to the
authority conferred by the passing of resolution number 6 and recommend
shareholders to vote in its favour.
The notice of meeting on page 66 includes as item 7 a special resolution to renew 
for five years the power of the directors to allot shares for cash in certain limited
circumstances, without first offering such shares to existing shareholders pro rata 
to their holdings. Such power could be used by the directors in connection with 
a rights issue or otherwise, but only in relation to allotments having an aggregate
nominal value not exceeding £3,102,000 (representing almost 5% of the nominal
value of ordinary shares in issue as at today’s date).The directors recommend the
shareholders to vote in favour of resolution number 7 in the notice of meeting.
PURCHASE OF OWN SHARES No shares were purchased by the Company
during the period under review pursuant to the proposal approved by shareholders
at the 2002 Annual General Meeting for the Company generally to be authorised to
purchase its own ordinary shares. Nevertheless, the Board believes it is appropriate
to seek renewal at the forthcoming Annual General Meeting of such an authority 
for a further year, although it has no present intention of utilising such authority.
Accordingly a resolution to this effect is included as item 8 in the notice of meeting
on page 66. If the resolution is passed, the Board undertakes that such authority will
be exercised only if it results in an increase in earnings per share and is in the best
interests of the shareholders generally.
AUDITORS A resolution to re-appoint the auditors, Deloitte & Touche, will be
proposed at the Annual General Meeting.
By order of the Board
S WILLIAMS
Secretary
29 May 2003 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
26 CHLORIDE ANNUAL REPORT 2003
This report is presented in accordance with the relevant provisions of the Combined
Code on Corporate Governance (the Combined Code) and the Directors’
Remuneration Report Regulations 2002 (the Regulations).The Regulations require
the auditors to report on the “auditable part” of the remuneration report.The
audited information has therefore been separately highlighted.
The Board is responsible for executive remuneration policy and setting non-executive
fees. Responsibility for determining the remuneration packages of executive directors
and other senior executives has been delegated to the Remuneration Committee.
The members of the Remuneration Committee, who are all non-executive 
directors and considered by the Board to be independent of management, are:
N N Broadhurst (Chairman), A S J Fraser, R S Southwell and J A C Wheeler.
During the year, the Remuneration Committee received advice on executive directors’
remuneration and senior executives’ remuneration from the Chief Executive and 
the Director of Personnel, neither of whom take part in the determination 
of their own remuneration. Advice was also received from the Company Secretary
in relation to executive service contracts and the Company’s share option plans.
Advice was obtained from two external consultants, who were appointed 
by the Remuneration Committee – New Bridge Street Consultants and Hewitt
Bacon & Woodrow Limited. Hewitt Bacon & Woodrow Limited also provided
actuarial services and investment advice to the Chloride 1996 Pension Scheme.
NON-EXECUTIVE DIRECTORS 
Policy on remuneration The fees of non-executive directors are determined by 
the Board within limits authorised by the shareholders and in accordance with 
the articles of association of the Company.The policy is to set fees for the non-
executive Chairman and directors at the median level relative to companies with 
a comparable market capitalisation. Fees do not contain any performance-related
element and the non-executive directors do not participate in the Chloride 
Pension Scheme or in the share option schemes. Non-executive directors have no
entitlement to compensation for early termination of their term of appointment.
Details of fees paid to non-executive directors are included in the table headed
“Summary of remuneration” on page 29.
Term of appointment The non-executive directors are appointed for specified terms
of approximately three years.Their letters of appointment have no contractual
notice period, but the appointment of each non-executive director is subject to 
re-election by shareholders on retirement by rotation, which occurs every two 
years, or every year in the case of a director aged 65 or over. Details of the
commencement date and duration of the current letters of appointment for 
non-executives are as follows:
Date of the current Unexpired term 
Non-executive director letter of appointment of appointment
N N Broadhurst 30 August 2001 14 months
A S J Fraser 23 May 2001 14 months
R S Southwell 21 January 2002 20 months
J A C Wheeler 25 May 2003 36 months
EXECUTIVE DIRECTORS 
Policy on remuneration The policy is to provide a combination of salary, short 
and long-term incentives and benefits, which form a competitive and appropriate
total remuneration package. Performance-related remuneration in the form of 
annual bonus and share options comprises a significant proportion of the total
remuneration opportunity but is only receivable if stretching performance targets,
which require substantial improvement in financial performance, are achieved.
COMPONENTS OF THE REMUNERATION PACKAGE
Basic salary The basic salary of each executive director is determined taking 
into account the responsibilities and performance of the individual together 
with independently-furnished information on rates for similar jobs in comparable 
industry sectors. In particular, basic salaries are set in comparison with salary levels 
in a group of comparably-sized companies in the electronics sector and other similar
sectors. Details of salaries, bonuses and benefits paid to executive directors are
included in the table headed “Summary of remuneration” on page 29.
Annual bonus Chloride operates annual incentive plans for certain employees,
including executive directors. Eligibility for inclusion in such schemes and the
measures of performance to be used are decided annually, taking account of key
business issues.The measure applicable to the incentive plans for executive directors
for the year under review and for 2003/04 is actual adjusted earnings per share
REMUNERATION REPORT CHLORIDE ANNUAL REPORT 2003  27
compared with the previous year. For the executive directors, the maximum award
under the annual incentive plan is 75% of salary. Bonus amounts earned up to 50%
of salary are paid in cash and any bonuses earned above this level are deferred 
into shares which are released two years after the award, subject to the executive
remaining in the Company’s employment. As bonuses earned under this plan 
to date, have not exceeded 50% of salary, neither of the executive directors 
is currently entitled to shares in the Company under this plan. Bonuses earned 
by the executive directors under annual incentive plans are not pensionable.
Benefits in kind The taxable benefits provided to executive directors are use 
of a fully-expensed car or car allowance, life insurance and medical cover.
Pensions The executive directors are eligible to be considered for augmented
entitlements under the final salary section of the Chloride 1996 Pension Scheme.
The 1996 Pension Scheme is a funded, contributory, Inland Revenue approved,
occupational pension scheme, which is contracted into the State Earnings Related
Pension Scheme. It provides a pension of up to two-thirds of final pensionable
earnings, depending on service.The 1996 Pension Scheme also provides for
dependants’ pensions and lump sums on death in service.
The table headed “Pension entitlements” on page 29 shows the retirement benefits,
excluding voluntary contributions, which accrued under the defined benefit section
of the Chloride 1996 Pension Scheme to Messrs Hodgkinson and Warner during the
period under review, together with the total accrued annual pension to which each
director would be entitled under defined benefit arrangements on leaving service.
The amounts of total accrued annual pension are those which would be payable 
at normal retirement age of 62.
Funded unapproved retirement benefit arrangements also apply in respect of
executive directors whose pension benefits are capped under legislation. During 
the year under review, Messrs Hodgkinson and Warner participated in such an
arrangement.The contributions made by the Company to money purchase pension
arrangements for Messrs Hodgkinson and Warner are shown in the table on page 29
headed “Summary of remuneration”.These arrangements ceased during the year 
and both Messrs Hodgkinson and Warner now receive amounts equivalent 
to these contributions as salary supplements.
Share options The Board believes that the potential for increased share ownership
which is provided by share option schemes is an important element in promoting a
closer alignment of the interests of shareholders and executive directors.The policy
is to make annual grants of share options under the Chloride Group 2001 Executive
Share Option Scheme. Options are normally exercisable between the third and
tenth anniversary of the date of grant, on the condition that the Company’s adjusted
earnings per share growth over a period of at least three consecutive financial years
from the date of grant exceeds the growth in the UK Retail Prices Index by:
– 3% a year compound for options over shares worth up to 100% of annual
remuneration;
– 4% a year compound for options over shares worth over 100% but not more
than 150% of annual remuneration;
– 7% a year compound for options over shares worth over 150% of annual
remuneration.
If these targets are not satisfied by the fifth anniversary of grant, the share options
will lapse. Adjusted earnings per share as disclosed in the report and accounts was
chosen as the performance condition as it requires substantial improvements in the
Company’s underlying financial performance before options may be exercised.
Prior to the Chloride Group 2001 Executive Share Option Scheme, the Company
had previously operated the Chloride Group 1994 Share Option Scheme and the
1996 Share Option Scheme, under which Inland Revenue approved options and,
in the case of the 1996 Scheme, unapproved options, were granted to executive
directors as well as senior executives and are still exercisable. No further options 
will be granted under the 1994 or 1996 Schemes.The outstanding entitlements 
of the executive directors under all schemes are set out in the table on page 30
headed “Shares under option”. Options are normally exercisable between the third
and tenth anniversaries of the date of grant, subject to meeting the performance
measures stated in the notes to the table headed “Shares under option” on page 30. POLICY ON EXTERNAL APPOINTMENTS OF EXECUTIVE
DIRECTORS The current policy is that executive directors should not take on
more than one major outside appointment and then only with the prior approval
of the Board. Fees associated with any such appointment will normally be retained
by the individual.
TOTAL SHAREHOLDER RETURN The graph set out below shows the
performance of the Company over the past five financial years in terms of 
total shareholder return (TSR), relative to the FTSE Small Cap Index excluding
Investment Companies.The Company has selected this as the comparator
because the Company is a constituent of this index and has used it as a
performance benchmark for a number of years.The graph demonstrates 
the comparative TSR in terms of annual movements.
TOTAL SHAREHOLDER RETURN
Value of a hypothetical £100 holding over five years
Chloride FTSE Small Cap Index (excluding Investment Companies)
31 March 
1998
31 March 
1999
31 March 
2000
31 March 
2001
31 March 
2002
31 March 
2003
50
100
150
200
250
300
£
SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
28 CHLORIDE ANNUAL REPORT 2003
REMUNERATION REPORT CONTINUED
Savings-related share option schemes The Company has two outstanding
savings-related schemes, the 1987 Scheme, under which options were last granted
in August 1997, and the 1997 Scheme. Under the 1997 Scheme, options – which
are available to eligible UK employees who contract to save a specified monthly
amount – are not normally exercisable until the expiry of three or, depending 
on an individual’s initial election, five or seven years from the contract start date.
The entitlements of the executive directors under these Schemes are set out 
in the table on page 30 headed “Shares under option”.
CONTRACTS OF SERVICE It is the Company’s policy to limit notice periods
under service contracts of executive directors to a maximum of one year, in
accordance with current market practice. Accordingly this policy applies to the
appointment of any new executive director. At 1 April 2003, the applicable notice
period required to be given by the Company under the service contracts of
Messrs Hodgkinson and Warner was two years. In order to comply with the
Company’s policy, these notice periods are now reducing on a monthly basis to
one year by 1 April 2004. No compensation payments will be made to executive
directors relating to the reduction of their contractual notice periods.
Mr Hodgkinson and Mr Warner last signed a contract of employment on
1 December 1991 and 23 April 1997 respectively. In the event of termination,
each of the executive directors would be entitled to salary, pension benefits,
payments in lieu of FURBS and benefits in kind for the period of notice applicable
at the time of termination (23 months at the date of this report, decreasing to 
12 months by 1 April 2004). In an appropriate case the directors would have regard
to the departing director’s duty to mitigate loss, except in the event of dismissal
following a change of control of the Company. On termination by the Company
in those circumstances, the executive directors would be entitled to receive 
a prescribed payment made up of salary and benefits for the period of notice
including a bonus payment of 20% of basic salary, which is the level of bonus
payable under the executives’ annual incentive plan for on-target performance.
No compensation payments were made to executive or non-executive directors
during the year. CHLORIDE ANNUAL REPORT 2003 29
AUDITED INFORMATION
Summary of remuneration 2003
Money 
Fees/ Performance purchase 
basic related pension Other 2002 
salary bonus contributions benefits Total T otal 
£000 £000 £000 £000 £000 £000 
Chairman
N N Broadhurst (appointed Chairman 31 August 2001) 68.0––– 68.0 49.8 
C W Foreman (retired 31 August 2001) ––––– 28.3 
Chief Executive
K H Hodgkinson 300.0 60.0 152.1 36.0 488.0 439.1 
Executive director
N W Warner 201.0 40.2 51.9 10.1 263.0 252.2 
Non-executive directors
A S J Fraser 24.3––– 24.3 22.8 
R S Southwell (appointed 21 January 2002) 21.8––– 21.8 4.4
J A C Wheeler 21.8––– 21.8 21.8 
Aggregate remuneration 636.9 100.2 204.0 46.1 886.9 818.4 
During the year, FURBS contributions for Mr Hodgkinson and Mr Warner ceased and were replaced by an equivalent salary supplement.Payments listed in the column entitled “Money purchase pension contributions”
represent the total payments under these two methods.
Performance related bonuses are earned in respect of the year under which they are shown but are not paid until the following year.
Pension entitlements Transfer value
Annual (less directors’
pension Increase in Total contributions)
accruing accrued accrued Transfer Transfer represented by Increase in  
Years and months in 2002/03 pension pension at value at value at Directors’ the annual transfer value
of pensionable excluding during the 31 March 31 March 31 March contributions pension accruing (less directors’
service at inflation year 2003 2002 2003 in 2002/03 in 2002/03 contributions)
31 March 2003 £ pa £ £ £ £ £ £ £ 
K H Hodgkinson 11 years 4 months 1,503 1,930 18,363 293,534 344,795 4,860 22,672 46,402
N W Warner 5 years 11 months 2,503 2,828 15,338 136,833 184,099 4,860 25,184 42,406
The transfer values shown in the above table are a liability of the Chloride 1996 Pension Scheme.The above table combines the disclosures required by the Listing Rules of the Financial Services Authority and the Directors’
Remuneration Regulations 2002. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
30 CHLORIDE ANNUAL REPORT 2003
REMUNERATION REPORT CONTINUED
Shares under option The directors’ interests in share options are as follows: Number of ordinary shares under option
At (Exercised) At
Date Option 1 April /granted 31 March Normal exercise period
of grant price 2002 2002/2003 Note 2003 From T o
Directors’ entitlements under executive share option schemes
K H Hodgkinson 26.06.1998 48.75p 400,000 – 1,2 400,000 26.06.2001 25.06.2008
26.07.1999 78.5p 200,000 – 2 200,000 26.07.2002 25.07.2009
30.05.2000 135.5p 616,000 – 2 616,000 30.05.2003 29.05.2010
13.08.2001 70p 415,000 – 3 415,000 13.08.2004 12.08.2011
06.06.2002 44.5p –550,000 3 550,000 06.06.2005 05.06.2012
1,631,000 550,000 2,181,000
N W Warner 26.07.1999 78.5p 559,000 – 2 559,000 26.07.2002 25.07.2009
30.05.2000 135.5p 80,000 – 2 80,000 30.05.2003 29.05.2010
13.08.2001 70p 280,000 – 3 280,000 13.08.2004 12.08.2011
06.06.2002 44.5p –375,000 3 375,000 06.06.2005 05.06.2012
919,000 375,000 1,294,000
T otal 2,550,000 925,000 3,475,000
Directors’ entitlements under savings-related share option schemes
K H Hodgkinson 25.06.1999 59.75p 28,242 (28,242) 4 – 01.10.2004 31.03.2005
03.07.2002 37.5p – 44,133 44,133 01.10.2007 31.03.2008
28,242 15,891 44,133
N W Warner 01.08.1997 25p 69,000 (69,000) 5 – 01.10.2002 31.03.2003
03.07.2002 37.5p – 44,133 44,133 01.10.2007 31.03.2008
69,000 (24,867) 44,133
T otal 97,242 (8,976) 88,266
All options were granted for nil consideration.
1Performance condition met.
2Performance condition requires the Company’s share price to outperform the FTSE Small Cap ex Inv Co Index in six out of any nine consecutive months from the 28th month following the date of grant and for growth
in the Company’s adjusted earnings per share to exceed that of the UK Retail Prices Index over a period of at least three years.
3Performance condition is the 2001 Scheme condition outlined above at the start of this section.
4 Lapsed on 30 May 2002.
5Exercised on 30 October 2002, at the option price set out in the table above.The mid-market quotation on that date was 33.5p per share.This would have given a gain of £5,865, but the shares were retained by the
executive.This was the only share option exercised by the executive directors during the year.The mid-market price of an ordinary share as at 31 March 2003 was 29p (2002: 50.5p).The mid-market price ranged during
the year from a low of 23.5p (2002: 45.5p) to a high of 51.5p (2002: 115.5p).
This report was approved by the Board on 29 May 2003 and signed on its behalf by
NORMAN BROADHURST CHLORIDE ANNUAL REPORT 2003 31
APPLICATION OF THE PRINCIPLES OF THE COMBINED CODE This
report explains how the Company has applied the principles of the Combined Code
on corporate governance to its activities.
Directors The Company currently operates with a Board of six directors comprising
the Chairman, three other non-executive directors and two executive directors. It is
the view of the Board that its size and shape are appropriate to the Company’s size
and scope of activities and provide for effective operation.
The Board considers that all the non-executive directors are independent of
management and free of any business or other relationship which could materially
interfere with the exercise of their independent judgement.The non-executive
directors are appointed for fixed terms and the unexpired terms of appointment 
are set out in the remuneration report on page 26. Each non-executive director has
been appointed for a term or successive terms totalling less than nine years, with 
the exception of Mr Fraser who joined the Board in 1984.The Board considers 
that his length of service does not affect his independence of management or the
independence of his judgement and the Board values the experience and knowledge
of the Company that Mr Fraser contributes to the Board.
The Board met six times during the year and has three standing committees – the
Audit, Remuneration and Nomination committees – the composition and summarised
terms of reference of which are shown on page 20.
The Board has reserved to itself powers relating to matters which it considers
significant to the Group’s business, operational and financial risks.These include the
approval of corporate policies, plans and budgets; acquisitions and disposals of
companies or businesses; major investment and financial decisions; appointments 
to the Board; and major management or organisational changes.
The Audit Committee meets three times a year for the purpose of reviewing the
interim and annual results, and considering all matters relating to internal control 
and financial corporate governance. Each year, the Audit Committee has a meeting
specifically for the purpose of considering risk management and internal control
matters.
It has been the Company’s practice for several years to split the responsibilities 
of Chairman and Chief Executive.
All the directors have access to the advice and services of the Company Secretary
and senior managers generally, and may take independent professional advice at the
Company’s expense if they consider it necessary to do so in the furtherance of 
their duties.
Since the year end, the Board has commenced a review of its procedures and
effectiveness, led by the Chairman and the Senior Independent Director.
Under the Company’s articles of association all directors below the age of 65 are
required to submit themselves for re-election every other year. Directors aged 65 
or over must submit themselves for re-election each year.
Directors’ remuneration The remuneration report on pages 26 to 30 demonstrates
how Chloride applies the principles of the Combined Code relating to the level and
make-up of remuneration and to disclosure.
Relations with shareholders Relations with shareholders receive the highest priority.
The Company promotes dialogue with institutional shareholders and analysts
through regular meetings following the announcement of interim and final results 
and responds positively to invitations to enter into dialogue whenever it considers 
it to be in the best interests of shareholders generally to do so.Trading statements
are issued when deemed necessary. At the Annual General Meeting there is an
opportunity, following the formal business, for informal communication between
investors and directors. In addition, information, including the presentations made 
to institutional shareholders and analysts, is readily available to shareholders on the
Company’s website – www.chloridegroup.com.
Accountability and audit The Audit Committee and the Board review the annual
and interim reports in detail to ensure that they present a balanced assessment 
of the Company’s position and prospects which is understandable to shareholders
and potential investors.
The system of internal control established to safeguard shareholders’ investments
and the Company’s assets is described on page 32.The Audit Committee considers,
in conjunction with the external auditors, the accounting policies adopted by the
Company and reviews the effectiveness of internal controls.
CORPORATE GOVERNANCE  SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
32 CHLORIDE ANNUAL REPORT 2003
External auditors are engaged to express an opinion on the Company’s annual
report and accounts.They independently and objectively review management’s
reporting of the operational results and financial position.They also review and 
test the systems of internal control and the data contained in the annual report 
and accounts to the extent necessary for expressing their audit opinion.
COMPLIANCE WITH THE COMBINED CODE The Board considers that 
the Company has complied with the recommendations of the Combined Code 
in all respects.
GOING CONCERN In compliance with the recommendation of the Combined
Code to report that the business is a going concern, the directors confirm that 
they expect that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the accounts.
INTERNAL CONTROLS The directors are responsible for the Company’s 
system of internal control which aims to safeguard the Company’s assets, to ensure
that proper accounting records are maintained, to ensure compliance with statutory
and regulatory requirements and the effectiveness and efficiency of operations,
including the assessment and management of risk. A system of internal control 
is designed to manage rather than eliminate risk of failure to achieve business
objectives and can provide only reasonable not absolute assurance particularly
against misstatement or loss.
Chloride has a well established and embedded framework of internal financial and
operational control for identifying, evaluating and managing the risks faced by the
Company.This framework has been in place for the year under review, and up to 
the date of approval of the annual report.The key elements of this review process,
which included a specific assessment by the Board for the purpose of this annual
report and accounts, and complies with the guidance,“Internal Control Guidance 
for Directors on the Combined Code” published in September 1999, are as follows:
Directors have responsibility for reviewing the strategy and monitoring the conduct
of the Company.The directors and the executive management of the Company 
are accountable for their conduct and performance within the agreed strategies.
A management structure exists with clearly defined lines of responsibility and 
the appropriate levels of delegation.
Acquisitions made during the year were reviewed by the Board and with external
advisers prior to and after completion as appropriate. Detailed due diligence 
is performed by senior management and advisers prior to acquisitions and post
acquisition integration procedures undertaken after completion.Tax and structural
planning is also undertaken. Additionally risks are mitigated through appropriate 
use or receipt of warranties.
The Company and its operations are subject to a detailed annual budget process
and ongoing formal capital investment appraisal process. Actual performance during
the year is monitored monthly against budget, forecast and previous year, and full
year forecasts are updated at regular intervals during the year, based on trended
historical data and realistic macroeconomic forecasts.These forecasts and results 
are presented to the Board regularly.The Chief Executive and Finance Director each
prepare Board reports monitoring performance and actions to achieve objectives.
The Company and its subsidiaries operate control procedures designed to ensure
complete and accurate accounting of financial transactions, and to limit the risk of
loss of assets or fraud. Measures taken include physical controls, segregation of duty
in key areas and internal reviews and checks.The identification, mitigation and
monitoring of material risks are primarily the responsibility of operating company
management. During the budget and reporting cycle general managers and financial
controllers are required to identify risks the business is exposed to, assess any
potential impact and to put in place actions to reduce them.These are also reviewed
on a Company-wide basis with significant risks reported to the Audit Committee
which are then monitored throughout the year.
Key functions such as tax, treasury, insurance, legal, personnel and systems are
controlled centrally.
RISK MANAGER A Risk Manager has been appointed for the Company.The
reviews of operations are scoped and managed by the Risk Manager and undertaken
by both the Risk Manager and other central staff.The Risk Manager provides reports
to management and the Audit Committee which also has access to the Risk
Manager’s detailed reports and working papers.The Board has reviewed the need
for an internal audit function and considers that the Risk Manager fulfils this function.
CORPORATE GOVERNANCE  CONTINUED CHLORIDE ANNUAL REPORT 2003 33
United Kingdom company law requires the directors to prepare financial statements
for each financial year which give a true and fair view of the state of affairs of the
Company and Group and of the profit or loss of the Group for that period.
In preparing the financial statements, the directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– state whether applicable accounting standards have been followed; and
– prepare the financial statements on the going concern basis unless it 
is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping proper accounting records which disclose
with reasonable accuracy at any time the financial position of the Company and
Group and enable them to ensure that the financial statements comply with the
Companies Act 1985.They are also responsible for the system of internal control,
for safeguarding the assets of the Company and Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
34 CHLORIDE ANNUAL REPORT 2003
TO THE SHAREHOLDERS OF CHLORIDE GROUP PLC We have audited
the financial statements of Chloride Group PLC for the year ended 31 March 2003
which comprise the profit and loss account, the balance sheets, the cash flow
statement, the statement of total recognised gains and losses, the reconciliation 
of movements in shareholders’ funds and the related notes numbered 1 to 33.
These financial statements have been prepared under the accounting policies set 
out therein.We have also audited the information in the part of the directors’
remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance 
with section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the Company’s members those matters we are required
to state to them in an auditors’ report and for no other purpose.To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described in the statement of directors’ responsibilities, the Company’s directors
are responsible for the preparation of the financial statements in accordance with
applicable United Kingdom law and accounting standards.They are also responsible
for the preparation of the other information contained in the annual report including
the directors’ remuneration report. Our responsibility is to audit the financial
statements and the part of the directors’ remuneration report described as having
been audited in accordance with relevant United Kingdom legal and regulatory
requirements and auditing standards.
We report to you our opinion as to whether the financial statements give a true 
and fair view and whether the financial statements and the part of the directors’
remuneration report described as having been audited have been properly prepared
in accordance with the Companies Act 1985. We also report to you if, in our
opinion, the directors’ report is not consistent with the financial statements, if the
Company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified 
by law regarding directors’ remuneration and transactions with the Company and
other members of the Group is not disclosed.
We review whether the corporate governance statement reflects the Company’s
compliance with the seven provisions of the Combined Code specified for our
review by the Listing Rules of the Financial Services Authority, and we report if 
it does not.We are not required to consider whether the Board’s statements on
internal control cover all risks and controls, or form an opinion on the effectiveness
of the Group’s corporate governance procedures or its risk and control procedures.
We read the directors’ report and the other information contained in the annual
report for the above year as described in the contents section, including the
unaudited part of the directors’ remuneration report, and consider the implications
for our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements.
BASIS OF AUDIT OPINION We conducted our audit in accordance with United
Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in
the financial statements and the part of the directors’ remuneration report described
as having been audited. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements and
of whether the accounting policies are appropriate to the circumstances of the
Company and of the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial statements and the part 
of the directors’ remuneration report described as having been audited are free
from material misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the presentation 
of information in the financial statements and the part of the directors’ remuneration
report described as having been audited.
OPINION In our opinion:
● the financial statements give a true and fair view of the state of affairs of the
Company and the Group as at 31 March 2003 and of the Group’s profit for the
year then ended; and
● the financial statements and part of the directors’ remuneration report described
as having been audited have been properly prepared in accordance with the
Companies Act 1985.
DELOITTE & TOUCHE
Chartered Accountants and Registered Auditors
London
29 May 2003
INDEPENDENT AUDITORS’ REPORT CHLORIDE ANNUAL REPORT 2003 35
2003 2002
Before Goodwill Before Goodwill 
goodwill and and goodwill and and 
exceptional exceptional exceptional exceptional 
items items Total items items Total 
Notes £000 £000 £000 £000 £000 £000 
T urnover
Continuing operations 142,837 – 142,837 148,327 – 148,327 
Acquisitions 130 – 130 –––
4 142,967 – 142,967 148,327 – 148,327 
Cost of sales
Continuing operations (85,870) – (85,870) (92,700) (4,552) (97,252)
Acquisitions (91) – (91) –––
(85,961) – (85,961) (92,700) (4,552) (97,252)
Gross profit
Continuing operations 56,967 – 56,967 55,627 (4,552) 51,075 
Acquisitions 39 – 39 –––
57,006 – 57,006 55,627 (4,552) 51,075 
Operating expenses
Continuing operations (49,818) (2,582) (52,400) (50,587) (18,104) (68,691)
Acquisitions (126) (5) (131) –––
3 (49,944) (2,587) (52,531) (50,587) (18,104) (68,691)
Operating profit/(loss)
Continuing operations 7,149 (2,582) 4,567 5,040 (22,656) (17,616)
Acquisitions (87) (5) (92) –––
7,062 (2,587) 4,475 5,040 (22,656) (17,616)
Net interest payable 6 (725) – (725) (559) – (559)
6,337 (2,587) 3,750 4,481 (22,656) (18,175)
Profit/(loss) on ordinary activities before taxation 4, 5
Tax on profit/(loss) on ordinary activities 8 (1,712) – (1,712) (1,118) 256 (862)
Profit/(loss) on ordinary activities after taxation 2 4,625 (2,587) 2,038 3,363 (22,400) (19,037)
Minority interests 27 48 – 48 (33) – (33)
Profit/(loss) for the financial year 4,673 (2,587) 2,086 3,330 (22,400) (19,070)
Dividends 11 (3,777) (3,772)
Loss retained 26 (1,691) (22,842)
Earnings per 25p ordinary share 12
Adjusted 1.98p 1.41p
Basic 0.88p (8.05p)
Diluted 0.88p (8.05p)
There are no material differences between reported and historical cost profits and losses.
The information on pages 35 to 64 inclusive forms part of these accounts.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
36 CHLORIDE ANNUAL REPORT 2003
Group Company
2003 2002 2003 2002 
Notes £000 £000 £000 £000 
Fixed assets
Goodwill 15 41,069 41,926 – –
Tangible assets 17 14,158 13,925 423 426 
Investments 19 10,519 10,624 87,983 73,900 
65,746 66,475 88,406 74,326 
Current assets
Stocks 20 29,040 29,761 – –
Debtors 21 49,948 48,899 55,416 51,176 
Cash at bank and in hand 29d 16,662 23,929 2,378 14,495 
95,650 102,589 57,794 65,671 
Creditors: amounts falling due within one year
Borrowings 24 22,398 15,836 – –
Other 22 57,028 57,195 26,841 18,450 
Net current assets 16,224 29,558 30,953 47,221 
Total assets less current liabilities 81,970 96,033 119,359 121,547 
Creditors: amounts falling due after more than one year
Borrowings 24 1,888 15,250 – –
Other 22 708 1,134 – –
Provisions for liabilities and charges 23 13,625 12,950 1,719 1,871 
Net assets 65,749 66,699 117,640 119,676 
Capital and reserves
Called-up share capital 25 62,048 61,936 62,048 61,936 
Share premium account 26 2,942 2,942 2,942 2,942 
Revaluation reserve 26 921 1,034 15 15 
Other reserves 26 (29,573) (32,881) – –
Profit and loss account 26 29,624 33,620 52,635 54,783 
Equity shareholders’ funds 65,962 66,651 117,640 119,676 
Minority interests 27 (213) 48 – –
Total capital employed 65,749 66,699 117,640 119,676 
Approved by the Board on 29 May 2003
K H HODGKINSON N W WARNER
Director Director
BALANCE SHEETS
at 31 March
The information on pages 35 to 64 inclusive forms part of these accounts. CHLORIDE ANNUAL REPORT 2003  37
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March
2003 2002
£000 £000 £000 £000 
Cash flow from operating activities 11,852 1,779 
Returns on investments and servicing of finance
Interest received 1,227 1,635 
Interest paid (1,903) (2,155)
Interest element of finance lease rentals (49) (96)
Net cash outflow from returns on investments and servicing of finance (725) (616)
Taxation (2,298) (2,692)
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,546) (2,270)
Disposal of tangible fixed assets 554 164 
Net sale/(purchase) of own shares 106 (696)
Net cash outflow from capital expenditure and financial investments (1,886) (2,802)
Acquisitions and disposals
Purchase of businesses (482) (2,733)
Deferred consideration (76) (2,259)
Net cash outflow from acquisitions and disposals (558) (4,992)
Equity dividends paid (3,786) (3,779)
Cash inflow/(outflow) before use of liquid resources and financing 2,599 (13,102)
Management of liquid resources
Net decrease in short-term deposits 3,413 21,522 
Financing
Issue of ordinary share capital 112 79 
Increase in bank advances due within one year 7,715 9,636 
Decrease in other loans due beyond one year (14,136) (8,990)
Net increase/(decrease) in discounted trade bills 304 (218)
Capital element of finance lease rental payments (157) (100)
Net cash (outflow)/inflow from financing (6,162) 407 
(Decrease)/increase in cash in the period (150) 8,827 
Reconciliations of operating profit to net cash flow from operating activities and of net cash flow to movement in net debt, together with an analysis of net debt and
other supporting information to the consolidated cash flow statement, are given in note 29 to the accounts on pages 60 and 61.
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March
The information on pages 35 to 64 inclusive forms part of these accounts.
CHLORIDE ANNUAL REPORT 2003 37 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
38 CHLORIDE ANNUAL REPORT 2003
2003 2002 
£000 £000 
Profit/(loss) for the financial year 2,086 (19,070)
Currency translation differences on foreign currency net investments 890 (291)
Total gains/(losses) recognised for the year 2,976 (19,361)
Prior year adjustment on implementation of FRS 19 (Deferred Tax) – 804 
Total recognised gains/(losses) since last annual report 2,976 (18,557)
RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
for the year ended 31 March
2003 2002 
£000 £000 
Profit/(loss) for the financial year 2,086 (19,070)
Dividends (3,777) (3,772)
Exchange adjustments 890 (291)
New share capital issued 112 61 
Share premium thereon – 18 
Net decrease in equity shareholders’ funds (689) (23,054)
Opening equity shareholders’ funds 66,651 89,705 
Closing equity shareholders’ funds 65,962 66,651 
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 March
The information on pages 35 to 64 inclusive forms part of these accounts. CHLORIDE ANNUAL REPORT 2003 39
1 ACCOUNTING POLICIES
Basis of accounting The accounts have been prepared under the historical cost convention, as modified by the revaluation of certain land and buildings, and have been
prepared in accordance with applicable accounting standards and the Companies Act 1985.
Basis of consolidation The consolidated accounts include the accounts of the parent company and all its subsidiary undertakings for the year ended 31 March 2003.
In the case of subsidiary undertakings acquired or sold during the year the results are dealt with from the effective date of their acquisition or to the effective date of 
their sale. Acquisitions are dealt with under the acquisition method.
Goodwill represents the excess of fair value of the consideration given over the fair value of the separable net assets acquired. Goodwill in respect of acquisitions made
prior to 1 April 1998 was either written off directly against reserves or, alternatively, was capitalised and amortised over an appropriate period. Goodwill in respect of
acquisitions made since 1 April 1998 is shown as an asset (in accordance with FRS 10 (Goodwill and Intangible Assets)) and each acquisition is assessed to determine 
the useful economic life of the business and goodwill. As required by FRS 10, the directors have reviewed the useful economic life of goodwill and have concluded that 
all goodwill on the balance sheet should be written off over 20 years from acquisition.
Goodwill is subject to review at the end of the year of acquisition and at any other time when the directors believe that impairment may have occurred. Any impairment
is charged to the profit and loss account in the period in which it arises.
Foreign currencies For the purposes of consolidation, the results and cash flows of non-UK undertakings are translated into sterling at average exchange rates.
The balance sheets of non-UK undertakings are translated into sterling at the exchange rates ruling at the balance sheet date. Differences arising on the retranslation 
of opening balance sheets at the closing exchange rates are taken to reserves.
On consolidation and in the accounts of Group undertakings, certain foreign currency loans, and forward foreign exchange contracts and options are matched with
overseas investments and the translation differences arising on these are offset in reserves.The translation differences on unmatched foreign currency loans are taken 
to the profit and loss account together with exchange differences arising on transactions denominated in foreign currencies.
T urnover represents the amounts, excluding VAT and similar sales-related taxes, receivable by the Group for goods and services supplied to customers in the ordinary
course of business.
Stocks are valued at the lower of cost and net realisable value. Cost is generally determined on a first in, first out basis, and, in the case of products manufactured by 
the Group, consists of direct material and labour costs together with related factory overheads.
Long-term contracts Where the outcome of a long-term contract can be assessed with reasonable certainty, turnover and profit are recognised for that portion of the
contract which is attributable to the work that has been done, on a cost to completion basis. Provision is made as appropriate for any anticipated future losses on such 
a contract.
T axation The charge for taxation is based on the results for the year. Credit is taken for advance corporation tax charged in previous years to the extent that it is determined
recoverable against short-term corporation tax liabilities.
Deferred tax is recognised on timing differences that have originated but not reversed at the balance sheet date except in the circumstances set out below.This deferred
tax is measured at the average tax rates that are expected to apply at the time in which differences are expected to reverse.
Deferred tax assets are only recognised to the extent that it is considered more likely than not that there will be suitable taxable profits from which the reversal of the
underlying timing differences can be deducted.
No deferred tax is recognised in respect of the potential unaccrued distribution of the retained earnings of overseas subsidiaries nor in respect of the gain arising from
revalued fixed assets.
NOTES TO THE ACCOUNTS 
for the year ended 31 March SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
40 CHLORIDE ANNUAL REPORT 2003
1 ACCOUNTING POLICIES CONTINUED
Depreciation is charged on the straight line basis over the expected useful lives of the assets.The rates generally in use are as follows:
Freehold land Nil
Freehold buildings 2% to 5%
Leasehold buildings 2% to 5% (or over remaining life of lease if shorter)
Plant, machinery and other equipment 5% to 33%
Vehicles 10% to 40%
Depreciation is calculated on the cost of the asset or, in the case of assets which have been revalued, the amount of the revaluation, together with subsequent additions 
at cost.
Revaluation of properties Prior to 31 March 1999, freehold and leasehold properties were revalued on a regular basis. Any material overall surplus over book value was
credited to the revaluation reserve and any material overall deficit below book value was charged to the profit and loss account in the year of revaluation.
Following the adoption of FRS 15 (Tangible Fixed Assets) in the year to 31 March 2000, no further revaluation will take place and values have been frozen at the valuation
as set out in note 17.
Fixed asset investments are shown at cost less provision for impairment where appropriate.
Research and development expenditure is written off in the year in which it is incurred.
Profit/loss on disposal of fixed assets Profits and losses on the disposal of fixed assets represent the difference between sales proceeds and the net carrying amount,
being historical cost or valuation as applicable (less subsequent depreciation or any provisions made). Any surplus previously taken to revaluation reserve is released
through reserves at the time of disposal.
Leased assets Assets held under finance leases are recorded at the fair value of the asset, with an equivalent liability categorised, as appropriate, under creditors due
within or after one year.The asset is depreciated over the shorter of the lease term and its useful economic life. Finance charges are allocated to accounting periods 
over the period of the lease. All payments under operating leases are charged to the profit and loss account as rentals fall due.
Pensions Most Group undertakings have pension or retirement benefit arrangements.These vary but are appropriate to the legal requirements and local practices 
of the countries concerned. In the United Kingdom these arrangements are funded externally, in accordance with defined benefit plans. In other cases suitable provisions
are made on a similar basis.
Pension costs for defined benefit schemes are accounted for in accordance with Statement of Standard Accounting Practice number 24, with additional disclosures 
as required by the transitional arrangements of FRS 17 (Retirement Benefits).
In all countries the levels of funding or provisions are regularly reviewed to ensure that they are adequate and appropriate in relation to local requirements.
2 PROFIT FOR THE FINANCIAL YEAR
As permitted by section 230 of the Companies Act 1985, the profit and loss account of the Company is not presented as part of these accounts. Of the Group
consolidated profit for the financial year, a profit of £1,628,000 (2002: £2,740,000) is dealt with in the accounts of the Company.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 41
3 OPERATING EXPENSES 2003 2002
Before 
goodwill Goodwill 
and and 
Before exceptional exceptional 
goodwill Goodwill Total items items Total 
£000 £000 £000 £000 £000 £000 
Distribution expenses (25,073) – (25,073) (27,044) (275) (27,319)
Administrative expenses:
Goodwill impairment ––– – (12,827) (12,827)
Goodwill amortisation – (2,587) (2,587) – (3,029) (3,029)
Other (24,871) – (24,871) (23,543) (1,973) (25,516)
Total operating expenses (49,944) (2,587) (52,531) (50,587) (18,104) (68,691)
The figures for 2003 include the following amounts relating to acquisitions: distribution costs £12,000, administrative expenses – other £114,000, administrative expenses –
goodwill amortisation £5,000.
4 SEGMENTAL INFORMATION
Segmental profits/(losses) are shown at the level of profit on ordinary activities before interest. Central costs have been fully allocated. Unallocated net assets/(liabilities)
include trade investments, other non-operating assets and liabilities and provisions, dividend creditors, finance lease obligations and cash balances and borrowings.
The Company derives its revenue and profits from a single class of business, power protection.
Turnover, net assets and profit by source 2003 2002
Turnover Net Turnover Net 
Third assets/ Profit/ Third assets/ Profit/ 
Total party (liabilities) (loss) Total party (liabilities) (loss)
£000 £000 £000 £000 £000 £000 £000 £000 
Europe 122,985 115,142 19,654 6,966 139,729 117,627 18,088 4,775
Americas 21,870 21,085 3,237 41 22,838 21,968 4,750 320
Asia and Australasia 7,935 6,740 2,077 55 10,871 8,732 1,087 (55)
Inter-segment adjustments (9,823) – – – (25,111) – – –
Continuing operations 142,967 142,967 24,172 7,062 148,327 148,327 23,925 5,040 
Goodwill and amortisation 41,069 (2,587) 41,926 (3,029)
Goodwill impairment – (12,827)
Restructuring costs – (6,800)
Unallocated net (liabilities)/assets (287) – 848 –
142,967 142,967 65,749 148,327 148,327 66,699 
Profit/(loss) on ordinary activities before interest 4,475 (17,616)
Net interest payable (725) (559)
Profit/(loss) on ordinary activities before taxation 3,750 (18,175) SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
42 CHLORIDE ANNUAL REPORT 2003
4 SEGMENTAL INFORMATION CONTINUED
Third party turnover by market destination 2003 2002
£000 % £000 % 
Europe 98,889 69 99,605 67 
Americas 22,877 16 25,355 17 
Asia and Australasia 16,078 11 19,127 13 
Africa 5,123 4 4,240 3 
142,967 100 148,327 100 
5 PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 2003 2002 
£000 £000 
The profit/(loss) on ordinary activities before taxation is stated after charging the following:
Exceptional items (see note 7) – 19,627 
Depreciation (at average exchange rates during the year) 3,079 3,055 
Impairment of fixed assets – 950 
Amortisation of goodwill 2,587 3,029 
Audit fees, including Company £76,000 (2002: £69,000) 242 239 
Operating lease rentals – plant and machinery 715 374 
– other 2,173 1,217 
Research and development expenditure 4,517 4,853 
Deloitte & Touche were appointed auditors to the Company on 24 July 2002. Fees paid to Deloitte & Touche for non-audit but related advisory services to the Company
and its subsidiary undertakings amounted to £88,000. Payments to former auditors prior to 24 July 2002 were £nil (2002: £100,000).These fees are mainly in respect 
of tax advisory and acquisition-related services. Fees for non-audit work are separately negotiated to ensure a cost-effective service.
6 NET INTEREST PAYABLE 2003 2002 
£000 £000 
Bank loans and overdrafts (1,846) (1,955)
Finance leases and hire purchase contracts (49) (96)
Other (57) (143)
(1,952) (2,194)
Interest receivable and similar income 1,227 1,635 
Net interest payable (725) (559)
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 43
7 GOODWILL AND EXCEPTIONAL ITEMS 2003 2002 
£000 £000 
Operating exceptional items
Restructuring costs – 6,800 
Goodwill impairment – 12,827 
Total operating exceptional items – 19,627 
Goodwill amortisation 2,587 3,029 
Total goodwill and operating exceptional items 2,587 22,656 
The restructuring costs of £6.8 million incurred during the prior year relate primarily to the closure of the Company’s smaller end manufacturing facilities.The goodwill
write-down of £12.8 million in the prior year related primarily to the write-offs in companies mainly associated with the telecoms industry.
8 T AXA TION
a) Analysis of charge based on profit/(loss) for the year 2003 2002 
£000 £000 
Current tax
United Kingdom:
UK corporation tax on profits at 30% (2002: 30%) 1,527 1,592 
Double tax relief (1,053) (60)
Advance corporation tax displaced/(written back) 492 (122)
966 1,410 
Foreign tax 821 821
Adjustments in respect of prior years – UK tax (225) (210)
– foreign tax (96) (439)
Total current tax 1,466 1,582 
Deferred tax
Origination and reversal of timing differences – trading
– current year 129 (720)
– prior year 117 –
Total deferred tax 246 (720)
Tax on profit/(loss) on ordinary activities 1,712 862 
ACT written off in previous years amounting to £9,183,000 (2002: £8,530,000) is available to reduce taxation on trading profits in future years.The increase in the
amount of ACT written off compared with 2002 arises from the impact of the shadow ACT rules on the offset of real ACT against the tax on UK profits in earlier 
years of £492,000 (2002: £nil). Consequently, there was no utilisation of ACT in the year (2002: £122,000).
The foreign tax charge includes tax withheld from remittances to the UK of £58,000 (2002: £60,000).
The Company has tax losses amounting to approximately £25 million (2002: £21 million) of which £2.2 million (2002: £2.2 million) has been taken into account 
in calculating deferred tax. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
44 CHLORIDE ANNUAL REPORT 2003
8 T AXA TION CONTINUED
b) Factors affecting tax charge for the year The differences between the current tax charge and the amount calculated by applying the standard rate of UK corporation 
tax (30%) to the profit before tax are as follows:
2003 2002 
£000 £000 
Profit/(loss) before tax 3,750 (18,175)
Tax on profit/(loss) arrived at by applying the standard rate of UK tax (30%) 1,125 (5,453)
ACT displaced/(written back) 492 (122)
Expenses not allowable for tax (including goodwill amortisation and impairment) 1,168 5,646
Foreign exchange loss on inter-company balances (754) –
Overseas losses not tax relieved 597 2,439
Differences arising on overseas earnings – trading 261 220
Tax overprovided in prior years (321) (1,022)
Other timing differences (1,102) (126)
1,466 1,582 
9 DIRECTORS’ REMUNERATION AND PENSION ENTITLEMENTS
Information relating to the remuneration and pension entitlements of directors is contained in the remuneration report on page 29.
10 DIRECTORS’ INTERESTS IN SHARES
Information relating to the directors’ interests in shares under option is contained in the remuneration report on page 30.
The directors’ interests in shares are as follows:
31 March 2003 1 April 2002 
Number of Number of 
ordinary ordinary 
Shares shares shares 
N N Broadhurst 10,000 4,000 
A S J Fraser 30,000 30,000 
K H Hodgkinson 802,361 743,867 
R S Southwell – –
N W Warner 206,176 102,176 
J A C Wheeler – –
In addition to the interests disclosed above, all of which are beneficial, Mr Hodgkinson and Mr Warner are each regarded as having a technical interest in the ordinary
shares in the Company held by the Chloride Group Employee Benefit Trust (see page 23). Neither of them is, however, entitled to receive from the Trust more shares 
than may be allocated to him upon exercise of options under executive share option schemes shown above.The Trust held 11,242,920 shares on 31 March 2003 
(2002: 11,612,920).
Notes There have been no changes in the holdings of the directors between 31 March and 22 May 2003 except that the shareholding of Mr Hodgkinson increased 
by 20 shares on 1 April 2003 because of a dividend re-investment election made in respect of certain of his shares which are held in PEP/ISA accounts.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 45
11 DIVIDENDS 2003 2002 
£000 £000 
Paid 0.80p per share on 3 December 2002 (2002: 0.80p) 1,883 1,883
Proposed 0.80p per share to be paid on 29 July 2003 (2002: 0.80p) 1,894 1,889
3,777 3,772
The trustees of the Chloride Group Employee Benefit Trust and Chloride Quest have waived their rights to receive dividends. Accordingly the amounts shown above 
for 2003 are net of dividends of £180,306* (2002: £191,970).
* Assuming no change to the issued capital, the shareholding of the Chloride Group Employee Benefit Trust or the Chloride Quest between 22 May 2003 and the
record date.
12 EARNINGS PER SHARE 2003 2002 
million million
Weighted average number of 25p ordinary shares – basic and adjusted 236.6 236.9
Adjusted for shares under option – –
Weighted average number of 25p ordinary shares – diluted 236.6 236.9
£000 £000
Profit/(loss) for basic and diluted earnings per share calculations 2,086 (19,070)
Exceptional restructuring costs – 6,800 
Goodwill impairment – 12,827
Tax on exceptional items – (256)
Goodwill amortisation 2,587 3,029
Profit for adjusted earnings per share calculation 4,673 3,330
Earnings per share – adjusted 1.98p 1.41p
– basic 0.88p (8.05p)
– diluted 0.88p (8.05p)
The weighted average number of shares excludes shares held by the Chloride Group Employee Benefit Trust and the Chloride Quest.
The directors consider that the adjusted earnings per share figures more accurately reflect the underlying performance of the business. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
46 CHLORIDE ANNUAL REPORT 2003
13 PENSIONS
Pension costs continue to be accounted for under Statement of Standard Accounting Practice (SSAP) 24. Disclosures are provided under both SSAP 24 and FRS 17
(Retirement Benefits).
The Company has a number of pension or retirement benefit arrangements, which are established to meet local legal requirements and practices in the countries 
in which it operates.The total pension cost for the year was £1,419,000 (2002: £1,274,000) and the Company has a provision of £4,322,000 (2002: £3,257,000) 
in its balance sheet to meet the unfunded liabilities of these arrangements.
Defined benefit schemes are operated in the UK and Germany.The bases of these schemes are as follows:
UK On 1 September 1996 the Company set up a hybrid pension scheme with both defined benefit and defined contribution sections (the Chloride 1996 Scheme).
At that date the pension entitlements of active members of the pre-existing Chloride UK Pension Scheme were transferred to this new scheme.The Chloride UK Pension
Scheme was then wound up and, as a consequence, the current and future liabilities relating to the pensioners and deferred pensioners at that time were transferred to
Legal & General Assurance (Pensions Management) Ltd.The defined benefit section of the Chloride 1996 Scheme has been closed to new members since 1 April 1998.
Germany In Germany the Company operates a defined benefit scheme, which in accordance with local practice is unfunded. Provision for future liabilities is made in the
balance sheet in accordance with advice given by independent actuaries.
a) Disclosures under SSAP 24 The net charge in the UK of £502,000 comprises £536,000 (2002: £578,000) for the regular cost of meeting future benefits less a variation
credit of £49,000 (2002: £475,000) relating to the spread of unallocated scheme surpluses, together with contributions in respect of the defined contribution scheme.
The actuarial valuation of the Chloride 1996 Scheme as at 1 April 2002, which showed a surplus of £1.2 million over accrued past service liabilities, was carried out 
using the projected unit method. It was assumed that the annual rate of return on investments would exceed the annual rate of increase in pensionable pay by three
percentage points, and exceed the annual rate of growth in present and future pensions by four and a half percentage points.
On actuarial advice, payments of the employer contributions to the Chloride 1996 Scheme were partially suspended in 2003 (see note b) below).
The charge in Germany of £458,000 (2002: £121,000) represents the increase in the provision for future benefits arising in the year as advised by independent actuaries.
Pension costs relating to other schemes worldwide have been determined in accordance with local practice using appropriate accounting policies.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 47
13 PENSIONS CONTINUED
b) Disclosures under FRS 17 In the UK and Germany the Company operates defined benefit schemes for which actuarial valuations have been updated by independent
qualified actuaries to assess the liabilities of the schemes at 31 March 2003 in accordance with FRS17.The main assumptions used were:
2003 2002
UK Germany UK Germany
%% %%
Rate of increase in salaries 4.5 2.5 4.7 3.0
Rate of increase in pension payments 2.5 2.5 2.7 1.5
Discount rate 5.5 5.25 6.0 6.0
Inflation 2.5 1.25 2.7 1.5
The net assets/liabilities of the UK scheme and the liabilities of the German scheme at 31 March 2003 were as follows:
2003 2002
UK Germany Total UK Germany T otal
Long-term expected rate of return
Equities 8.0% n/a n/a 8.0% n/a n/a
Gilts 4.6% n/a n/a 5.3% n/a n/a
Other 3.5% n/a n/a 3.5% n/a n/a
£000 £000 £000 £000 £000 £000
Market value of assets
Equities 10,600 – 10,600 15,400 – 15,400
Gilts 2,200 – 2,200 2,000 – 2,000
Other ––– 500 – 500
Total market value of assets 12,800 – 12,800 17,900 – 17,900
Present value of pension liabilities (21,000) (2,394) (23,394) (18,200) (1,674) (19,874)
Deficit in the scheme (8,200) (2,394) (10,594) (300) (1,674) (1,974)
Related deferred tax assets 2,460 838 3,298 90 585 675
Net pension liabilities (5,740) (1,556) (7,296) (210) (1,089) (1,299)
In the UK the contribution rate for 2003 was 2.5% of pensionable earnings.The Company and its UK subsidiaries contributed £1.5 million to the UK fund on 28 May 2003
and increased its contribution to 18.5% of pensionable earnings from 1 April 2003. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
48 CHLORIDE ANNUAL REPORT 2003
13 PENSIONS CONTINUED 2003
£000
Analysis of the amount charged to operating profit
Current service cost 1,015
Past service cost –
Total operating charge 1,015
Analysis of the amount credited to net financial income
Expected return on pension scheme assets 1,250
Interest on pension liabilities (1,142)
Net financing credit 108
Total profit and loss charge 907
Analysis of amount recognised in statement of total recognised gains and losses
Actual return less expected return on pension scheme assets (5,500)
Experience gains and losses arising on the scheme liabilities 30
Changes in assumptions underlying the present value of the liabilities (2,312)
Actual loss recognised in the statement of total recognised gains and losses (7,782)
Movement in deficit during the year
Deficit in schemes at the beginning of the year (1,974)
Current service cost (1,015)
Contributions 69
Past service cost –
Finance income 108
Actuarial loss (7,782)
Deficit in schemes at end of year (10,594)
History of experience gains and losses
Difference between the expected and actual return on the schemes assets:
Amount £000 (5,500)
Percentage (43.0)
Experience gains and losses on the schemes liabilities:
Amount £000 30
Percentage 0.1
Total amount recognised in the statement of recognised gains and losses
Amount £000 (7,782)
Percentage (33.3)
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 49
14 EMPLOYEE INFORMATION
At 31 March 2003 the total number of the Group’s employees, including executive directors, was 1,418 (2002: 1,426).The average number of persons employed during
the year is analysed below:
2003 2002
Europe – including 180 in the UK (2002: 166) 1,040 1,110 
Americas 209 236 
Rest of the world 99 142 
1,348 1,488
Employment costs (including those relating to executive directors) were as follows:
2003 2002 
£000 £000 
Wages and salaries 34,402 31,765
Social security costs 7,008 6,066
Other pensions costs (see note 13) 1,419 1,274
42,829 39,105 
15 GOODWILL 2003 2002 
£000 £000 
Cost at 1 April 63,148 59,607 
Acquisitions 1,088 3,776
Other adjustments 642 (235)
Cost at 31 March 64,878 63,148
Accumulated amortisation:
At 1 April 21,222 5,366 
Charge to profit and loss account for the year
Amortisation 2,587 3,029 
Impairment – 12,827 
At 31 March 23,809 21,222
Net book value at 31 March 41,069 41,926 
Other adjustments relate primarily to exchange differences. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
50 CHLORIDE ANNUAL REPORT 2003
16 ACQUISITION
Siemens Telcom Power Supply Limited, Shanghai (STPSS) In February 2003 Chloride acquired 51% of the shares of STPSS (now renamed Chloride Masterguard Power
Systems Limited). Chloride also committed to subscribing for a further £1.3 million of share capital.This subscription takes Chloride’s holding to 75% of the company.
The net assets of the business have been included in the consolidated financial statements using the acquisition method as summarised below:
Fair value adjustments
Book Accounting Fair value to
value policy Revaluations the Group 
£000 £000 £000 £000 
Fixed assets 365 (80) (46) 239
Stocks 863 (24) (109) 730
Debtors 1,141 (213) (61) 867
Creditors (1,532) – (117) (1,649)
Borrowings (including finance leases) (451) – – (451)
Provisions (13) – (235) (248)
373 (317) (568) (512)
Minority interests 213
(299)
Consideration
Cash payment 482
Deferred consideration 307
Goodwill arising 1,088
Post-acquisition turnover and loss were £130,000 and £87,000 respectively. During the five months prior to acquisition and its previous reporting period, STPSS made
post-tax losses of £414,000 and £681,000 respectively.
Revaluation adjustments mainly relate to writing down assets to their net realisable value and setting up provisions for warranty and other similar liabilities.
The accounting policy adjustments mainly relate to the write-off of deferred taxation assets and intangibles and adjustments to depreciation.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 51
17 T ANGIBLE FIXED ASSETS Group 
Freehold land Leasehold land and buildings Plant and Group Company
and buildings Long lease Short lease machinery total total
£000 £000 £000 £000 £000 £000
Cost or valuation:
At 1 April 5,537 1,425 2,336 16,233 25,531 1,364
Exchange rate adjustments 604 173 122 859 1,758 –
Acquisitions –– 97 142 239 –
Capital expenditure 86 – 79 2,356 2,521 164
Disposals and adjustments 1,380 (1,598) – (510) (728) (52)
At 31 March 7,607 – 2,634 19,080 29,321 1,476
Accumulated depreciation:
At 1 April 523 794 793 9,496 11,606 938
Exchange rate adjustments 33 98 17 426 574 –
Charge for the year 280 – 301 2,648 3,229 162
Disposals and adjustments 830 (892) – (184) (246) (47)
At 31 March 1,666 – 1,111 12,386 15,163 1,053
Net book value:
At 1 April 2002 5,014 631 1,543 6,737 13,925 426
At 31 March 2003 5,941 – 1,523 6,694 14,158 423
Notes
a) In the above table, the net book value for the Group includes £588,000 (2002: £1,240,000) in respect of tangible fixed assets held under finance leases, and the
depreciation charge for the year includes £204,000 (2002: £163,000) in respect of these assets.
b) The tangible fixed assets of the Company comprise plant and machinery, including motor vehicles and office equipment.
c) If land and buildings had not been revalued the Group net book values would have been:
d) During the year the Group acquired the freehold interest in land and buildings which had previously been held on a finance lease.These buildings were previously 
shown under leasehold land and buildings, long lease, and are now shown under freehold land and buildings. Leasehold land
Freehold land and buildings
and buildings Short lease 
£000 £000 
Historical cost 7,316 2,466
Accumulated depreciation thereon 1,751 964
5,565 1,472
Freehold and long leasehold land and buildings were professionally valued at open market value on an existing use basis in 1993, with subsequent additions at cost as follows:
Freehold land 
and buildings 
£000 
Group
Valuation at 1993 1,425
Cost 6,182
Cost and valuation at 31 March 2003 7,607 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
52 CHLORIDE ANNUAL REPORT 2003
18 RELATED PARTY TRANSACTIONS
The Company makes a service charge to the UK pension scheme in respect of pensions administration, office accommodation and related service costs.The total service
charge for the year was £92,950 (2002: £92,000).
At 31 March 2003 the Company had receivable and payable balances with its two non-wholly owned subsidiaries, Chloride Masterguard Power Systems Limited and
Chloride Koexa SA, of £509,000 (2002: £12,000) and £nil (2002: £46,000) respectively. During the year these companies purchased goods from fellow subsidiaries to 
the value of £491,000 (2002: £26,000).
19 INVESTMENTS Group Company
2003 2002 2003 2002
£000 £000 £000 £000
The net book value of investments is made up as follows:
Subsidiary undertakings – – 87,983 73,900 
Other investments 10,519 10,624 – –
10,519 10,624 87,983 73,900
Subsidiary undertakings
Cost:
At 1 April 95,532 95,532
Additions 14,083 –
At 31 March 109,615 95,532
Amounts written off:
At 1 April 21,632 21,632
Movements in the year – –
At 31 March 21,632 21,632
Net book value at 31 March 87,983 73,900
The principal subsidiary undertakings at 31 March 2003 are shown on page 64.
Other investments Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Own shares at cost:
At 1 April 10,624 9,928 – –
Net (disposal)/purchase of own shares (105) 696 – –
At 31 March 10,519 10,624 – –
“Own shares at cost” represents 11,242,920 (2002: 11,612,920) ordinary shares in the Company held by the Chloride Group Employee Benefit Trust as noted in the
directors’ report on page 23, having a market value at 31 March 2003 of £3.3 million (2002: £5.9 million).The Trust holds these shares to meet long-term commitments 
in relation to employee share option plans.The directors are of the opinion that the current deficit between market and balance sheet value represents a short-term
correction and is not a permanent diminution in value.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 53
20 STOCKS Group
2003 2002
£000 £000
Raw materials and components 13,134 15,301
Work in progress 4,963 2,256
Finished goods 10,943 12,204
29,040 29,761
There is no material difference between the current replacement cost and the historical cost of stocks.
21 DEBTORS Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Amounts falling due within one year
Trade debtors 39,846 40,568 – –
Discounted trade bills 342 263 – –
Due from subsidiary undertakings – – 54,276 50,158 
Other debtors 4,380 2,838 174 207 
Prepayments and accrued income 397 376 124 120 
Tax receivable 1,006 1,080 200 –
Deferred tax 1,248 1,030 642 204 
47,219 46,155 55,416 50,689 
Amounts falling due after more than one year
Other debtors 58 57 – –
Tax receivable 1,000 768 – –
Deferred tax 1,671 1,919 – 487 
Total debtors 49,948 48,899 55,416 51,176 
The deferred tax asset relates to short-term timing differences and overseas brought forward tax losses. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
54 CHLORIDE ANNUAL REPORT 2003
22 CREDITORS Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Amounts falling due within one year
Obligations under finance leases 110 143 – –
Payments received on account 136 77 – –
Trade creditors 24,140 21,642 620 355
Discounted trade bills 632 274 – –
Amounts owing to subsidiary undertakings – – 21,223 13,372
UK corporation tax and corporate foreign taxes 9,000 10,147 735 812
Other taxation and social security 2,267 2,024 117 199
Other creditors 7,863 8,314 1,039 913
Accruals 10,916 12,668 1,212 893
Dividends payable 1,964 1,906 1,895 1,906
57,028 57,195 26,841 18,450
Group
2003 2002
£000 £000
Amounts falling due after more than one year
Corporate taxes 8 315 
Obligations under finance leases 479 550 
Other creditors 221 269 
708 1,134 
23 PROVISIONS FOR LIABILITIES AND CHARGES Pensions Deferred 
Deferred and similar purchase 
tax obligations consideration Other Total
£000 £000 £000 £000 £000
Group:
At 1 April 317 3,257 227 9,149 12,950
Exchange rate adjustments 27 390 – (183) 234
Arising from acquisitions ––– 248 248
Profit and loss account (174) 837 – 1,066 1,729
Utilised in the year – (162) (108) (1,266) (1,536)
At 31 March 170 4,322 119 9,014 13,625
Company:
At 1 April 46 – – 1,825 1,871
Profit and loss account (46) – – (15) (61)
Utilised in the year ––– (91) (91)
At 31 March ––– 1,719 1,719
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 55
23 PROVISIONS FOR LIABILITIES AND CHARGES CONTINUED
Deferred taxation is provided in respect of timing differences, principally related to capital allowances in the UK and overseas tax accounting requirements. No provision 
is included in respect of the potential liability for tax amounting to £211,000 (2002: £244,000) before potential loss relief that would arise if properties included at valuation
in the Group balance sheet were to be sold at these valuation amounts. After loss relief there is no potential net liability (2002: nil).
The provision for pensions and similar obligations relates mainly to the liability in Italy and Germany for certain unfunded employee retirement entitlements.
Other provisions mainly relate to product warranty, contractual and other obligations for continuing and disposed businesses.The timing of the utilisation of these
provisions is uncertain except for product warranties which are anticipated to be utilised within the next three years.
24 BORROWINGS Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Borrowings are repayable as follows:
Due on demand or under one year:
Bank 22,398 15,836 – –
22,398 15,836 – –
Other borrowings due after one year:
Due over one and under two years 108 14,950 – –
Due over two and under five years 1,251 183 – –
Due over five years 529 117 – –
1,888 15,250 – –
Included in the above are loans of £16.8 million (2002: £14.1 million) at a fixed rate of interest of 4.81% (2002: 5.07%) per annum for a weighted average period of nine
months, and loans of £0.9 million (2002: £0.2 million) at a weighted average fixed rate of interest of 2.46% per annum for seven years.
In the Group and Company balance sheets, borrowings and cash balances have been offset where the legal right of offset exists.The Company’s Articles of Association
limit the external borrowings of the Company and its subsidiary undertakings to an amount equal to twice the share capital and consolidated reserves.
At 31 March 2003 the Group had £43.2 million of committed facilities (2002: £47 million), of which £23.5 million (2002: £22 million) was unutilised. Of this amount,
£28.2 million expires within one year (2002: £20 million), £nil million expires within one to two years (2002: £2 million) and £15 million (2002: £nil) expires after 
two years. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
56 CHLORIDE ANNUAL REPORT 2003
25 SHARE CAPITAL Group
2003 2002
£000 £000
Authorised:
Equity
Ordinary shares of 25p each: 329,752,000 (2002: 329,752,000) 82,438 82,438 
82,438 82,438 
Issued:
Equity
Ordinary shares of 25p each 248,192,546 (2002: 247,743,406) 62,048 61,936 
62,048 61,936 
The increase in the issued ordinary share capital of the Company is due to the exercise during the year of executive and savings-related share options over a total 
of 449,140 shares.
As at 31 March 2003, there were 15,179,000 ordinary shares (2002: 13,135,000) under option under executive share option schemes and 1,416,279 (2002: 1,407,737)
under option under the Company’s savings-related share option schemes.
The following table shows aggregate option entitlements under the executive share option schemes outstanding at 31 March 2003. It also includes information as to
whether performance measures are applicable and, if so, whether they have yet been met.
Number of shares Status of
31 March 31 March performance measure(s)
Date of grant Option price 2003 2002 as at 31 March 2003
1984 Scheme
17.09.93 25p – 100,000 not applicable
1994 Scheme
03.08.94 30.5p 163,000 393,000 met
21.06.95 25p – 190,000 ”
20.12.95 25p 99,000 107,000 ”
30.07.97 33p 160,000 160,000 ”
28.11.97 39p 34,000 34,000 ”
26.06.98 48.75p 103,500 133,500 ”
02.12.98 49.5p 110,000 110,000 ”
26.07.99 78.5p 61,500 129,500 under measurement
29.10.99 80.25p 55,000 55,000 ”
31.05.00 135.5p 122,434 132,434 ”
25.07.00 184.5p 16,260 16,260 ”
31.10.00 206.0p 61,047 61,047 ”
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 57
25 SHARE CAPITAL CONTINUED Number of shares Status of
31 March 31 March performance measure(s)
Date of grant Option price 2003 2002 as at 31 March 2003
1996 Scheme
29.08.96 35p 130,000 130,000 met
30.07.97 33p 194,000 194,000 ”
28.11.97 39p 91,000 91,000 ”
26.06.98 48.75p 1,190,500 1,240,500 ”
02.12.98 49.5p 135,000 135,000 ”
05.01.99 58.25p 250,000 250,000 under measurement
26.07.99 78.5p 2,281,500 2,448,500 ”
29.10.99 80.25p 550,000 600,000 ”
30.05.00 135.5p 2,894,566 3,102,566 ”
25.07.00 184.5p 83,740 83,740 ”
30.10.00 206.0p 358,953 388,953 ”
16.11.00 187.5p – 50,000 ”
2001 Scheme
13.08.01 70p 2,439,000 2,549,000 under measurement
13.08.01 70.52p 230,000 250,000 ”
06.06.02 44.5p 3,090,000 – performance measurement
03.07.02 42p 275,000 – not yet started
15,179,000 13,135,000
The following table shows entitlements outstanding under the savings-related share option schemes as at 31 March 2003.
Number of shares
Three, five or 31 March 31 March Normal exercise
seven year options Date of grant Option price 2003 2002 period
1987 Scheme
Five year 01.08.97 25p – 347,460 01.10.02 to 31.03.03
Seven year 01.08.97 25p 59,280 85,600 01.10.04 to 31.03.05
1997 Scheme
Five year 17.07.98 39p 183,110 228,213 01.10.03 to 31.03.04
Seven year 17.07.98 39p 7,000 23,000 01.10.05 to 31.03.06
Three year 25.06.99 59.75p – 50,162 01.10.02 to 31.03.03
Five year 25.06.99 59.75p 94,326 284,104 01.10.04 to 31.03.05
Seven year 25.06.99 59.75p 101,484 108,864 01.10.06 to 31.03.07
Three year 28.06.00 119.25p 16,404 51,974 01.10.03 to 31.03.04
Five year 28.06.00 119.25p 17,263 62,450 01.10.05 to 31.03.06
Seven year 28.06.00 119.25p – 4,622 01.10.07 to 31.03.08
Three year 29.06.01 82.75p 13,575 73,507 01.10.04 to 31.03.05
Five year 29.06.01 82.75p 18,353 81,565 01.10.06 to 31.03.07
Seven year 29.06.01 82.75p – 6,216 01.10.08 to 31.03.09
Three year 03.07.02 37.5p 370,057 – 01.10.05 to 31.03.06
Five year 03.07.02 37.5p 439,562 – 01.10.07 to 31.03.08
Seven year 03.07.02 37.5p 95,865 – 01.10.09 to 31.03.10
1,416,279 1,407,737 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
58 CHLORIDE ANNUAL REPORT 2003
26 RESERVES Share Profit 
premium Revaluation Other and loss Total 
account reserve reserves account reserves 
£000 £000 £000 £000 £000 
Group:
At 1 April 2,942 1,034 (32,881) 33,620 4,715 
Exchange rate adjustments –47 3,308 (2,465) 890
Realised – (160) – 160 –
Retained loss for the year ––– (1,691) (1,691)
At 31 March 2,942 921 (29,573) 29,624 3,914
Company:
At 1 April 2,942 15 – 54,783 57,740 
Retained loss for the year ––– (2,148) (2,148)
At 31 March 2,942 15 – 52,635 55,592
The cumulative amount of goodwill resulting from acquisitions which has been written off to reserves is £6.3 million (2002: £6.3 million).
The retained profits of foreign subsidiary undertakings, if distributed as dividends, would be liable to UK and/or foreign taxes and subject to double tax relief.
27 MINORITY INTERESTS 2003 2002 
£000 £000 
At 1 April 48 –
On acquisition of subsidiary (213) 45 
Exchange differences – (30)
Profit and loss account (48) 33 
At 31 March (213) 48
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 59
28 FINANCIAL COMMITMENTS 2003 2002 
£000 £000 
a) Net finance lease obligations repayable:
Within one year 110 143 
Over one and under two years 90 90 
Over two and under five years 234 257 
Over five years 154 204 
588 694 
b) The Group is committed to make payments totalling £2,081,000 (2002: £1,668,000) in the following year in respect of operating leases which expire:
Plant and machinery
and other
Land and buildings operating leases 
2003 2002 2003 2002
£000 £000 £000 £000
Within one year 403 274 162 58
Over one and under five years 326 542 307 266
After five years 883 528 – –
1,612 1,344 469 324 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
60 CHLORIDE ANNUAL REPORT 2003
29 CASH FLOW STATEMENT SUPPORTING INFORMATION
a) Reconciliation of net cash flow to movements in net funds 2003 2002 
£000 £000 
(Decrease)/increase in cash in the period (150) 8,827 
Net cash outflow/(inflow) from increase in debt and lease financing 6,274 (328)
Cash inflow from (decrease) in liquid resources (3,413) (21,522)
Change in net funds resulting from cash flows 2,711 (13,023)
Debt and finance leases acquired with subsidiary (451) (249)
Exchange rate translation differences (2,981) 264 
Decrease in net funds in the period (721) (13,008)
Net (debt)/funds at 1 April (8,124) 4,884 
Net debt at 31 March (8,845) (8,124)
b) Reconciliation of operating profit to net cash flow 2003 2002 
£000 £000 
Operating profit/(loss) 4,475 (17,616)
Depreciation and closure-related impairment 3,079 4,005 
Amortisation and impairment of goodwill 2,587 15,856 
Book profit on sale of tangible fixed assets 12 –
Decrease in stocks 3,100 2,370 
Decrease in debtors 3,555 11,881 
Decrease in creditors and provisions (4,956) (14,717)
Cash inflow from operating activities 11,852 1,779 
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 61
29 CASH FLOW STATEMENT SUPPORTING INFORMATION CONTINUED
c) Purchase of business 2003 2002 
£000 £000 
Net assets:
Tangible fixed assets 239 450 
Stocks 730 600 
Debtors 867 1,107 
Creditors and provisions (1,897) (2,711)
Debt including finance leases (451) (249)
Other current assets – 55 
Goodwill capitalised 1,088 3,776 
Minority interest 213 (45)
789 2,983 
Satisfied by:
Cash net of expenses 482 2,733 
Deferred consideration 307 250 
789 2,983 
The businesses acquired during the year contributed a cash inflow of £76,000 from operating activities, paid £2,000 in respect of servicing of finance, paid £nil in respect
of taxation and £33,000 for capital expenditure and financial investment.
d) Analysis of net funds/(debt) Exchange At 
At 1 April translation 31 March 
2002 Acquisitions Cash flow differences 2003 
£000 £000 £000 £000 £000 
Cash 10,032 163 (4,254) 233 6,174
Overdrafts (6,034) – 4,104 (590) (2,520)
Debt due within one year (9,802) (614) (7,715) (1,747) (19,878)
Debt due after more than one year (15,250) – 14,136 (774) (1,888)
Discounted trade bills (274) – (304) (55) (633)
Finance lease obligations (693) – 157 (52) (588)
Liquid resources 13,897 – (3,413) 4 10,488
Net (debt)/funds (8,124) (451) 2,711 (2,981) (8,845)
Liquid resources comprise short-term bank and money market deposits. In the Group balance sheet, cash at bank and in hand comprises the amounts for cash and liquid
resources stated in the above table. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
62 CHLORIDE ANNUAL REPORT 2003
30 CURRENCY AND INTEREST RATE EXPOSURE OF FINANCIAL ASSETS AND LIABILITIES
The currency and interest rate exposure of the financial assets and liabilities of the Group at 31 March was:
2003 2002
Assets Liabilities Net Assets Liabilities Net 
£000 £000 £000 £000 £000 £000 
Sterling 9,539 (328) 9,211 20,911 (89) 20,822 
Euro 4,201 (23,683) (19,482) 1,746 (31,617) (29,871)
US dollars 1,150 – 1,150 526 – 526 
Other 1,772 (863) 909 747 (75) 672 
16,662 (24,874) (8,212) 23,930 (31,781) (7,851)
Of which – cash 16,662 – 16,662 23,930 – 23,930 
– borrowings falling due within one year – (22,398) (22,398) – (15,836) (15,836)
– borrowings falling due after more than one year – (1,888) (1,888) – (15,251) (15,251)
– obligations under finance leases – (588) (588) – (694) (694)
16,662 (24,874) (8,212) 23,930 (31,781) (7,851)
At 31 March 2003 the Group did not have any interest-free borrowings (2002: nil). All amounts shown above are at floating interest rates based on the relevant national
LIBOR equivalents, with the exception of loans of £17.7 million (2002: £14.3 million) (see note 24).
Details of the Group’s treasury objectives and policies are set out on pages 17 to 19 in the financial review.
As permitted by FRS 13 short-term debtors and creditors have been excluded from the above statement.
31 FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is defined as the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed and willing parties, excluding
accrued interest, and is calculated by reference to market rates discounted to current value.
For borrowings not at fixed rates of interest, the carrying amount is approximately equal to the fair value.
Accordingly, the Group believes that there is no material difference between the carrying amount and the fair value of its financial instruments (cash at bank or bank
borrowings).
The fair value of foreign exchange contracts entered into to provide hedging against transactional exposure represents the estimated net effect of closing out all
outstanding contracts at 31 March 2003. On this basis fair value would have been £66,000 less than book value (2002: £39,000). As there were no forward contracts 
at either 31 March 2003 or 31 March 2002 with a value date greater than 12 months, these fair value amounts would be expected to be recognised in the following year.
The fair value of interest rate swaps entered into to provide hedging against interest rate risk on outstanding debt represents the effect of revaluing these swaps over
their remaining lives at the floating rate at 31 March 2003. On this basis, fair value would have been £146,000 less than book value (2002: £84,000), which would be
expected to be realised in the following year.
There are no other unrecognised gains or losses on instruments used for hedging. Forward contracts outstanding at 31 March 2003 amounted to £11.0 million 
(2002: £14.7 million).The book value of these forward contracts was £nil (2002: £nil). Interest rate swaps in respect of outstanding debt at 31 March 2003 amounted 
to £16.8 million (2002: £14.1 million).
As permitted by FRS 13, short-term debtors and creditors have been excluded from the above statement.
NOTES TO THE ACCOUNTS CONTINUED
for the year ended 31 March CHLORIDE ANNUAL REPORT 2003 63
32 CURRENCY ANALYSIS OF NET ASSETS 2003
Operating Dividends Net cash/ 2002
assets and other (borrowing) Total Total 
£000 £000 £000 £000 £000 
Sterling 2,573 8,555 9,211 20,339 29,117 
Euro 17,071 – (19,481) (2,410) (10,935)
US dollars 3,237 – 1,150 4,387 5,276 
Other 2,077 – 908 2,985 1,759 
Sub total 24,958 8,555 (8,212) 25,301 25,217 
Unallocated 41,069 621 – 40,448 41,482 
Total net assets 66,027 7,934 (8,212) 65,749 66,699 
Net currency assets are hedged where practicable by matching local currency assets with local currency borrowings.There are no material transactional currency
exposures in the Group.
33 CONTINGENT LIABILITIES
Contingent liabilities of the Group amounting to £4,414,000 (2002: £6,672,000) are mainly in respect of bank performance bonds, operating leases and other contractual
commitments.Those of the Company amounting to £2,252,000 (2002: £3,723,000) are mainly in respect of guarantees of leases, borrowings, bank performance bonds
and other contractual commitments of subsidiary undertakings. No losses are expected to arise. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
64 CHLORIDE ANNUAL REPORT 2003
Company Country of incorporation Principal activity
Chloride Electronics Limited England Sales and service, power protection solutions
Chloride España, S.A. Spain Sales and service, power protection solutions
Chloride France S.A. France Manufacture, sales and service, power protection solutions
Chloride Hytek Pty Limited Australia Sales and service, power protection solutions
Chloride Masterguard Power Systems Limited China Manufacture, sales and service, telecom power systems 
and power protection solutions
Chloride Portugal – Artigos Electronicos, Limitada Portugal Sales and service, power protection solutions
Chloride Power Protection (Thailand) Limited Thailand Sales and service, power protection solutions
Chloride S.p.A. Italy Manufacture, sales and service, power protection solutions
Continuous Power International Limited England Sales and service, power protection solutions
Masterfix Comercio e Servicos Limitada Brazil Sales and service, power protection solutions
Masterguard GmbH Germany Manufacture, sales and service, power protection solutions
Masterguard Güç Kaynaklari Limited Sirketi Turkey Sales and service, power protection solutions
Oneac Corporation USA Manufacture, sales and service, power conditioning solutions
SAED S.A. (Chloride Telecom Systems) France Manufacture, sales and service, telecom power protection solutions
UP Systems, Incorporated USA Sales and service, power protection solutions
Notes
1 The results of each subsidiary undertaking are included in the consolidated Group results for 2002/03.
2 Except in the case of Chloride Hytek Pty Limited, which has a class of preference shares in issue, shares in these principal subsidiary undertakings are ordinary shares
or their local equivalent.
3 Except in the case of Chloride Masterguard Power Systems Limited, where the Company has committed to acquire 75% of the ordinary share capital, the entire
ordinary share capital of these principal subsidiary undertakings is held directly by the Company, or indirectly by one of the Company’s subsidiaries.
PRINCIPAL SUBSIDIARY UNDERTAKINGS
at 31 March As restated 
2003 2002 2001 2000 1999 
Notes £000 £000 £000 £000 £000 
T urnover
Continuing operations 142,837 148,327 166,271 108,345 78,181
Discontinued operations – – 25,467 43,175 44,582
T otal 142,837 148,327 191,738 151,520 122,763
Operating profit before goodwill amortisation and exceptional items
Continuing operations 7,062 5,040 15,782 11,737 7,319
Discontinued operations – –1,027 2,804 3,528
T otal 7,062 5,040 16,809 14,541 10,847
Goodwill amortisation (2,587) (3,029) (2,862) (450) (248)
Exceptional items – (19,627) – – –
Operating profit/(loss) 4,475 (17,616) 13,947 14,091 10,599
Profits/(losses) on sale or termination of operations – – 19,054 (842) 100
Profit/(loss) on ordinary activities before interest 4,475 (17,616) 33,001 13,249 10,699
Net interest (payable)/receivable (725) (559) (551) (253) 1,399
Profit/(loss) on ordinary activities before taxation 3,750 (18,175) 32,450 12,996 12,098
Tax on profit/(loss) on ordinary activities (1,712) (862) (15,791) (4,849) (3,737)
Attributable to minority interests 48 (33) – – –
Profit/(loss) for the financial year 2,086 (19,070) 16,659 8,147 8,361
Capital expenditure 2,546 2,263 6,246 7,891 4,851
Assets employed
Fixed assets and investments 65,746 66,475 79,564 67,236 36,473
Net current assets 1 8,848 8,348 5,257 18,634 15,583
Net assets employed 1 74,594 74,823 84,281 85,870 52,056
Source of finance
Equity shareholders’ funds 65,962 66,651 89,705 68,712 64,037
Minority interests (213) 48–––
Net borrowings/(cash) 8,845 8,124 (4,884) 17,158 (11,981)
Source of finance 1 74,594 74,823 84,821 85,870 52,056
Debt:equity ratio 2 13.5% 12.2% – 25.0% –
Earnings per 25p ordinary share
Adjusted 1.98p 1.41p 4.80p 4.00p 3.60p
Basic 0.88p (8.05p) 7.04p 3.45p 3.54p
Diluted 0.88p (8.05p) 7.00p 3.39p 3.51p
Net dividend per ordinary share 1.60p 1.60p 1.60p 1.40p 1.20p
Return on net assets 3 14.1% 10.4% 32.9% 26.3% 25.6%
Notes
1For the purpose of this summary: a) net current assets comprise current assets, less cash balances and other creditors and provisions for liabilities and charges; b) net borrowings, which comprise bank 
overdrafts and bank loans less cash balances, have been excluded from net assets employed and treated as a source of finance.
2 Debt:equity represents net borrowings as a percentage of shareholders’ funds.
3 This represents the profit on ordinary activities before interest excluding exceptional items and goodwill amortisation expressed as a percentage of the average of the net assets employed less goodwill.
FIVE YEAR SUMMARY
for the year ended 31 March
CHLORIDE ANNUAL REPORT 2003 65 SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
66 CHLORIDE ANNUAL REPORT 2003
Notice is hereby given that the 112th Annual General Meeting of Chloride Group PLC will be held in the Lecture Theatre, Royal Aeronautical Society, 4 Hamilton Place,
London W1J 7BQ on 23 July 2003 at 11.00 am for the following purposes:
1To receive and consider the audited accounts and the directors’ report for the year ended 31 March 2003.
2To declare a final dividend of 0.8p per ordinary share for the year ended 31 March 2003, to be paid on 29 July 2003 to shareholders on the register at the close 
of business on 4 July 2003 in respect of ordinary shares then in issue.
3To re-elect the following directors: Mr N W Warner
Mr J A C Wheeler
4To re-appoint Deloitte & Touche as auditors of the Company and authorise the directors to determine their remuneration.
And as special business, to consider and, if thought fit, pass the following resolutions 5 and 6 as an ordinary resolutions, and resolutions 7 and 8 as special
resolutions:
5 That the remuneration report contained within the report and accounts for the year ended 31 March 2003 be and it is hereby approved.
6 That the authority conferred on the directors by article 7(2) of the Company’s articles of association be renewed for a period expiring on 22 July 2008 and for that
period the Section 80 amount shall be £20,389,000.
7 That, subject to the passing of resolution number 6 above, the power conferred on the directors by article 8(2) of the Company’s articles of association be renewed
for a period expiring on 22 July 2008 and for that period the Section 89 amount is £3,102,000.
8 That the directors be generally and unconditionally authorised to make market purchases (within the meaning of Section 163(3) of the Companies Act 1985) on the
London Stock Exchange of ordinary shares of 25p each in the capital of the Company, subject to the following conditions:
i) the maximum number of ordinary shares authorised to be purchased shall be 24,000,000 representing 9.7% of the share capital of the Company in issue as at 
22 May 2003;
ii) the minimum price (exclusive of expenses) that may be paid for each ordinary share is 25p;
iii) the maximum price (exclusive of expenses) that may be paid for each ordinary share is an amount equal to 105% of the average of the middle market quotations
for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days before the day on which the purchase is made; and
iv) this authority, unless previously revoked or varied, expires at the close of the next Annual General Meeting of the Company after the date of this resolution or 
31 July 2004, whichever is the earlier.
By order of the Board
S WILLIAMS
Secretary
29 May 2003
NOTICE OF MEETING CHLORIDE ANNUAL REPORT 2003 67
Notes
1A member entitled to attend and vote at the meeting may appoint one or more proxies to attend and, on a poll, vote instead of him/her. A proxy need not be 
a member of the Company. A proxy form is enclosed and, if used, must be deposited at the transfer office of the Company, Lloyds TSB Registrars,The Causeway,
Worthing,West Sussex BN99 6UR, not less than 48 hours before the time appointed for holding the meeting. A member may register the appointment of a proxy
electronically by logging onto the website www.sharevote.co.uk, for which you will need your reference number (the 24-digit number printed below your name on 
the enclosed proxy form). Full details of the procedure are given on the website. Alternatively, if you have registered for a Shareview portfolio, log onto your portfolio
at www.shareview.co.uk and click on “company meetings”.The proxy appointment and instructions must be received by Lloyds TSB Registrars not less than 48 hours
before the time appointed for holding the meeting.The use of the Internet service for appointing a proxy is governed by Lloyds TSB Registrars’ conditions of use set
out on the website, www.sharevote.co.uk.
2 CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described 
in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment
or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in
accordance with CRESTCo’s specifications and must contain the information required for such instructions, as described in the CREST Manual.The message, regardless
of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be
transmitted so as to be received by the issuer’s agent (ID 7RA01) not less than 48 hours before the time appointed for holding the meeting. For this purpose, the
time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent
is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. CREST members and, where applicable, their CREST sponsors or voting
service providers should note that CRESTCo does not make available special procedures in CREST for any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is 
a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his/her CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
3 The following documents will be available for inspection at the registered office of the Company from the date of the above notice until the date of the meeting
during normal business hours (Saturdays and Sundays excepted) and at the place of the Annual General Meeting from 10.45 am on 23 July 2003 until the end 
of the meeting:
a) the register of directors’ share interests; and
b) copies of directors’ service contracts.
4 Information relevant to resolution 3 is included in the directors’ report in the section headed “Directors” on page 22; biographical details of the directors are also
included on page 21.
5 Information relevant to resolutions 6 and 7 is included in the directors’ report under the section headed “Authority to allot shares” on page 24.
6 Information relevant to resolution 8 is given in the directors’ report in the section headed “Purchase of own shares” on page 25.
7 The Board has provided, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, that, in order to be able to ascertain the holdings of
shareholders for the purpose of voting at the 2003 Annual General Meeting, only those shareholders registered in the register of members as at 6.00 pm on 21 July
2003 shall be entitled to attend or vote at the aforesaid general meeting in respect of the number of shares registered in their name at that time. Changes to entries
on the share register after 6.00 pm on 21 July 2003 shall be disregarded in determining the rights of any person to attend or vote at the meeting. SUPPLIER OF CHOICE FOR POWER PROTECTION SOLUTIONS >
68 CHLORIDE ANNUAL REPORT 2003
SHAREHOLDERS’ ENQUIRIES Matters relating to shareholdings, such as a request for a replacement share certificate, notification of a change of name or address 
or enquiries regarding dividend payments, should be addressed, quoting reference 489, to the Company Registrar, Lloyds TSB Registrars,The Causeway,Worthing,
West Sussex BN99 6DA, telephone 0870 600 3970.The Registrar’s website address for a range of shareholder services is www.shareview.co.uk.
GIFTING Y OUR SHARES If you wish to transfer shares as a gift, perhaps to another member of your family, please apply for an appropriate transfer form to the
secretarial department at the Company’s registered office address on page 20. Completed transfer forms should be returned to the Company Registrar at the address 
in the preceding paragraph, quoting reference 489.
If you have a small number of shares and would like to donate them to charity, please ask the Company’s secretarial department at the phone number or address on
page 20 for a ShareGift transfer form. ShareGift is a registered charity which consolidates into marketable bundles shareholdings donated to it which might be too small 
to be sold economically, sells them and distributes the proceeds to other charities. Completed ShareGift transfer forms should be returned direct to ShareGift,The Orr
Mackintosh Foundation, 46 Grosvenor Street, London W1K 3HN.
MULTIPLE SHAREHOLDER ACCOUNTS If any shareholder receives more than one copy of this annual report, it is probably because there is more than one
account for that person on the Chloride share register.This can arise when shares have been acquired on more than one occasion but the shareholder’s name or address
is shown slightly differently each time. In order to amalgamate such holdings, please contact Lloyds TSB Registrars, as above, giving details of the accounts involved and
instruction on how they should be amalgamated.
UK CAPITAL GAINS TAX Section 35 of the Taxation of Chargeable Gains Act 1992 provides for the re-basing of capital gains tax at 31 March 1982 in relation to
assets held on that date and disposed of after 5 April 1988.The date of 31 March 1982 is also relevant in determining the indexation allowances.The respective market
values of Chloride securities on 31 March 1982 were as follows:
Ordinary shares held at 31 March 1982 25.5p
Ordinary shares derived from the conversion of 7.5% cumulative convertible preference shares in August 1987 23.9p
Or, for shareholders who were at that time taxed under Section 34 of the Finance (No. 2) Act 1975 in respect 
of the capitalisation issue connected with the conversion 33.1p
LOW-COST SHARE DEALING SERVICES Low-cost share dealing services are available to private investors, in respect of purchases or sales of shares in the
Company through:
– The Share Centre Limited. Details of the service may be obtained by telephoning The Share Centre Limited on 01296 414144.
– Stocktrade, a division of Brewin Dolphin Securities Limited. Details of the service can be obtained by telephoning Stocktrade on 0845 601 0995 and quoting 
reference LOW C0124.
SHAREHOLDER INFORMATION Designed and produced by C&FD. Printed in England by Westerham Press.
This report is printed in vegetable-based inks on paper which is made from 
50% chlorine-free pulp from plantation forests, and from 50% recycled and 
de-inked fibres. It can be recycled and is bio-degradable. >
Abford House
15 Wilton Road
London SW1V 1LT
www.chloridegroup.com
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ANNUAL REPORT 2003