osmetech annual report 2004    xx
osmetech plc
annual report and accounts 2004 xx    osmetech annual report 2004  
osmetech today
osmetech is a fast developing and well funded international diagnostics
business targeting the high growth point of care sector the acquisition
of the opti range of blood gas analysers in april 2003 from roche
marked a transformation of the business by providing a profitable and
high quality revenue base this has created a strong platform from
which the group’s exciting pipeline of new products can be developed
based in atlanta us opti has also provided an excellent operational
infrastructure which together with a strong international distributor
network is capable of supporting the osmetech’s future growth
contents
1 highlights
2 chairman’s statement
3 chief executive officer’s review
7 board of directors
8 report of the directors
12 independent auditors’ report
13 consolidated profit and loss account
13 consolidated statement of total recognised gains and losses
14 consolidated balance sheet
15 company balance sheet
16 consolidated cash flow statement
16 reconciliation of net cash flow to movement in net funds
17 notes to the consolidated cash flow statement
19 notes forming part of the financial statements
32 notice of annual general meeting
form of proxy
directors and advisers osmetech annual report 2004    1
highlights
• sales revenues well ahead of expectations at £62m
• loss before tax substantially reduced to £13m 2003 – £38m
• well funded group with £32m in cash and term deposits at 30 april 2004
• significant improvement in commercial and financial risk profile
• five new opti products scheduled for launch in the coming year
• good progress with development of vaginal infection product
• important long term agreements signed with idexx for veterinary market
• excellent growth prospects 2 osmetech annual report 2004  
during the last financial year osmetech has made significant advances
with its strategy to develop a medical devices and diagnostics business in
the fast growing point of care market  as a result of the successful
acquisition of the opti product line of blood gas analysers from roche
the group’s risk profile improved substantially and the business is now
well funded with over £3m of cash and term deposits at the year end
chairman’s statement
the first full year of trading of the opti product line has exceeded our expectations at all levels
now fully integrated this business provides a sound and profitable commercial base for the
group  there are clear organic growth plans for opti which will commence in the second half of
the coming financial year following the launch of three key new products and the start of the
important trading relationship with idexx in the veterinary market
the opti business has provided us with an excellent platform from which we can develop other
opportunities within the group notably the vaginal infection product scheduled for the next
calendar year  the experience of the opti management team and the proven development and
engineering capabilities will be very valuable in this process of bringing new products through to
market
i am delighted to welcome alfred marek to the board alfred joined osmetech from roche at the
time of the opti acquisition and is president of osmetech’s critical care division based in atlanta
previously with avl he was instrumental in developing their entire blood gas business prior to its
sale to roche
this strengthening of the management team comes at an important time for the group as it seeks
to grow both organically and through continued strategic acquisitions
gordon hall
chairman
5 august 2004 osmetech annual report 2004    3
chief executive officer’s review
introduction
during the course of this financial year the group has been successfully transformed from a pre
revenue technology development operation to an international diagnostics business through the
ground breaking opti acquisition the highly reliable revenue streams from opti have exceeded our
expectations and provide a solid base from which the business can develop its exciting opportunities
for further growth the acquisition has substantially improved the financial and commercial risk
profile for osmetech as it is now able to pursue its strategy for growth from a position of strength
the market
the global medical diagnostics market is worth approximately 20bn and growing steadily with
osmetech positioned in the fast growing point of care poc market segment annual double digit
percentage growth is expected to continue in this sector as healthcare operators increasingly
demand faster test results
the opti business operates in the poc arterial blood gas market which has experienced high
growth over recent years as testing migrates from traditional central hospital laboratory settings
osmetech’s vaginal infection product currently under development will also target similar poc
markets where there is a significant unmet need for improved infectious disease testing
business structure
following the successful integration of the opti acquisition we have been able to consolidate the
group’s operations on to the atlanta site where we have an excellent 60000 sq ft facility capable
of supporting the anticipated growth of the business 
the development of the vaginal infection product is now directly benefiting from the considerable
experience and expertise of the opti team these benefits span the full commercial progression
from product development through to clinical regulatory production sales and marketing
operations both products have similar customer bases and we intend to use opti’s strong
international network of distributors to gain access to all significant world markets
opti trading
sales revenues for the first full year of trading of 105m £62m far exceeded our original
expectations these revenues include approximately 1m £06m of sarsrelated sales to china
during the first half of the year
new instrument sales accounted for 33 of total revenues with over 800 new analyser instruments
sold during the year the active installed base of over 4000 instruments with customers provides
robust and reliable demand for our proprietary consumables that are necessary in order to perform
the tests this high quality stream of consumable sales revenues amounted to 65 of total sales
and should steadily grow as the installed base of instruments widens and further advances are
made with initiatives to increase the average number of tests per instrument
opti’s self contained optical sensor cassette for
blood gas electrolyte and metabolite analysis
over 13 million consumable tests sold in 20034
representing 65 of total opti sales and a highly
reliable source of revenue 4 osmetech annual report 2004  
chief executive officer’s review continued
new opti products
we remain on target to introduce five new products during the coming year the first three of
which including the new critical care analyser with colour touch screen were launched at the
recent american association of clinical chemists conference aacc in los angeles two further
key products are expected to be introduced in the second half of the year and should provide the
basis for substantial revenue growth both through the sale of new instruments and consumable
revenues for the growing installed base we believe that much of this new business will be
incremental as we will be able to offer products aimed at reducing the cost per test for both the
higher usage customer and those operators only requiring a narrow range of tests
idexx agreement
we have recently entered into an oem manufacturing and supply agreement with idexx
laboratories inc a worldwide leader in the development and commercialisation of animal health
diagnostic products in 2003 idexx had sales of 475m and have a current market capitalisation of
approximately 18bn this long term commercial relationship should provide a substantial level of
new business for opti in both instruments and consumables thereby allowing us to benefit from
leveraging our highly scaleable manufacturing infrastructure in atlanta
we have also entered into a development and supply contract with idexx to create a new
platform for measuring critical care parameters based on osmetech’s proprietary optical
fluorescence technology
both contracts will span over a period of at least 10 years and will open the veterinarian market for
osmetech’s technology and products 
this relationship is not only a further validation of the opti technology but also demonstrates
osmetech’s ability to scale up its manufacturing efficiently and become a top quality provider of
critical care diagnostic instrumentation
vaginal infection product
the increasing spread of sexually transmitted diseases stds continues to be of major concern in
all markets worldwide the centre for disease control has reported that 15 million people are
diagnosed annually with an std in the ten year period to 2002 the nhs in the uk reported that
the number of std patients doubled with 1 in 10 of the entire uk adult population now estimated
to be infected with chlamydia
current diagnostic practice is unable to provide results in a timely manner that would allow the
early commencement of appropriate treatment that could provide improved control over the
further spread of infection in the community there is a clear unmet need for a simple and
objective test for the most common and clinically important vaginal infections that is capable of
delivering results within the time period of a normal patient visit
the portable opti cca analyser
over 800 new opti cca instruments sold in 20034
increasing the active installed base of units to over
4000 from which repeat consumable sales
will be generated osmetech annual report 2004    5
300
250
200
150
100
50
0 1999 2000 2001 2006
chief executive officer’s review continued
good progress has continued to be made with the development of a device capable of satisfying
this market requirement the device’s automated testing process has been clinically tested and has
provided results comparable to the manual methods currently used this is an important step and
the tests will now be optimised further and combined within the single platform device prior to the
commencement of clinical trials fda regulatory approval for the combined device will be required
prior to launch in the us in 2005
financial review
sales revenues totalled 10453000 £6180000 with 38 representing direct us sales and the
remainder through third party distributors serving other markets in product terms the highly
reliable repeat consumable sales accounted for 65 of total business revenues
the gross profit margin was abnormally high at 558 reflecting the successful utilisation of slow
moving and redundant inventory acquired as part of the purchase of the opti business
the profitable trading of opti together with the significant reduction in the cost base of the
remainder of the business has contributed to a substantial reduction in the loss for the year to
£1168000 2003 – £3667000 development costs associated with the new product introductions
will however increase in the coming year
cash outflows before financing at £2084000 were higher than the reported loss for the year
reflecting the final payments of the deferred consideration of 795000 £422000 for opti
together with an increase of £474000 in trade debtors due to the growth of the business over the
full trading period
following the £2000000 placing to institutional investors in october 2003 the group ended the year
with cash balances and term deposits of £3172000 this represents a strong cash position and we
are satisfied that the group should have sufficient funds available to launch all of the new opti
products scheduled for the coming year through to the launch of the integrated vaginal infection
device
all of opti’s sales revenues and the majority of its costs are dollar based the surplus of dollars
that this generates broadly matches the dollar requirements for the rest of the group
global near patient and point of care
blood gas testing market revenues m 
the market segment has grown significantly in recent
years and is expected to grow at an annual rate of
13 over the 5year period 20016 as more testing
moves away from the central laboratory setting 6 osmetech annual report 2004  
chief executive officer’s review
continued
outlook
the relocation of osmetech’s operational base to atlanta has been extremely successful and our
thanks go to all our employees old and new for making this move and indeed this year as
productive and encouraging as it has been
we have a high quality operational infrastructure capable of supporting the continued growth of
the business  we expect to be able to build on the excellent performance of opti this year and
are confident of significant growth commencing in the second half of next year through the new
product introductions and the idexx relationship
osmetech is well placed in a fast growth market sector with a strong commercial business base
and access to enabling technologies including its proprietary electronic nose technology capable
of meeting the market requirements for new products  we will also continue to search for
opportunities through suitable acquisitions to further stimulate this growth
james white
chief executive officer 
5 august 2004 osmetech annual report 2004 7
board of directors
for the year ended 30 april 2004
gordon james hall
nonexecutive chairman
gordon hall aged 61 was managing director of shield diagnostic group plc now axisshield plc until october 1997 and prior to
this held senior positions at abbott laboratories he was appointed to the board as executive chairman on 24 september 1998
becoming nonexecutive chairman on 1 february 2001
james nicholas gerald white
chief executive officer
james white aged 33 was previously a senior consultant in arthur d little ltd’s corporate finance practice where he specialised
in advising venture capitalists on investments in small and medium sized companies he was operations manager of osmetech
from september 1998 until appointed to the board as chief operating officer on 1 october 1999 he was appointed chief
executive officer on 22 december 2000
david anthony sandilands
chief financial officer
david sandilands aged 43 was group financial director at bluebird toys plc until its takeover by mattel inc of the usa 
mr sandilands qualified as a chartered accountant with price waterhouse and was appointed to the board as chief financial
officer on 1 july 1999
gordon bruce kuenster
nonexecutive
gordon kuenster aged 70 has founded and developed major medical diagnostic companies he was appointed group vice
president and a director of squibb corporation following its acquisition of advance technology laboratories inc he is chairman
of umd technology inc a medical technology company he was appointed to the board on 3 february 1998 as director of
development and was appointed chief technology officer on 1 october 1999 becoming a nonexecutive director on
3 september 2002
alfred marek
executive
alfred marek aged 58 is president of osmetech’s critical care division based in atlanta having joined the company at the time
of the opti acquisition in april 2003 he was previously with avl and was instrumental in developing their entire blood gas
business prior to its sale to roche in 2000 mr marek was appointed to the board on 21 april 2004 8 osmetech annual report 2004
report of the directors
for the year ended 30 april 2004
the directors submit their report together with the audited financial statements for the year ended 30 april 2004
results and dividends
the results of the group for the year are set out on page 13
the directors do not recommend the payment of a dividend 2003 – £nil
principal activities trading review and future developments
the principal activity of the group is the design development and manufacture of healthcare diagnostics and medical devices
incorporating sensing technology
the principal activities of two of the subsidiaries osmetech inc and osmetech technology inc are the same as osmetech plc the
principal activity of the third subsidiary osmetech aesop trustee limited is to act as a trustee to an employee share ownership
trust
a review of the trading and future developments are dealt with fully in the accompanying chairman’s statement and chief
executive officer’s review
charitable and political contributions
the group did not make any charitable or political contributions during the year
directors
the directors of the company at 30 april 2004 and their interests which were all held beneficially in the ordinary share capital of
the company at the balance sheet date were
ordinary shares of 1p each ordinary shares of 1p each
30 april 2004 30 april 2003 or date of
appointment if later
shares options shares options
g j hall 763946 1000000 653946 1000000
j n g white 1509500 25120000 2289500 25120000
d a sandilands 330263 12500000 330263 12500000
g b kuenster 330540 3350000 330540 3350000
a marek appointed 21 april 2004 261900 10000000 261900 10000000
there have been no movements in the directors’ interests in the company’s share capital between 30 april 2004 and 5 august
2004
in accordance with the articles of association and having been appointed since the date of the last annual general meeting 
mr a marek retires and being eligible offers himself for election as a director at the annual general meeting to be held on 
23 september 2004 mr marek’s appointment is terminable by at least 12 months’ notice
in accordance with the articles of association mr g j hall and mr g b kuenster will retire by rotation and being eligible 
offer themselves for reelection mr hall and mr kuenster do not have service agreements with the company mr hall’s and 
mr kuenster’s appointments are terminable by at least 12 months’ notice
directors’ interests in contracts
no director was or is materially interested in any contract subsisting during or at the end of the financial year which was
significant in relation to the business of the group osmetech annual report 2004 9
report of the directors
continued
substantial shareholdings
in addition to the directors’ shareholdings shown above the directors have been notified or are aware of the following interests in
3 per cent or more of the issued ordinary share capital of the company as at 14 july 2004
shareholder number of shares per cent
barclayshare nominees limited 45546929 754
t d waterhouse nominees europe limited smktnoms account 34498187 571
barnard nominees limited e i i l account 31333333 518
hsbc global custody nominee uk limited 813259 account 23446884 388
hsdl nominees limited 18463107 305
compliance
as an aim listed company the combined code is not mandatory and the company has therefore not produced a separate
corporate governance or directors’ remuneration report
going concern
having reviewed the group’s budgets and financial projections and after making due and careful enquiries the directors have a
reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future
the accounts therefore are prepared on a going concern basis
directors’ responsibilities
united kingdom company law requires the directors to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the company and the group and of the profit or loss of the group for that year in preparing
those financial statements the directors are required to
• select suitable accounting policies and then apply them consistently
• make judgements and estimates that are reasonable and prudent
• state whether applicable accounting standards have been followed subject to any material departures disclosed and
explained in the financial statements
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that the financial statements comply with the companies act
1985 they are also responsible for the system of internal control for safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities
the maintenance and integrity of the web site is the responsibility of the directors the work carried out by the auditors does not
involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that have occurred
to the information contained in the financial statements since they were initially presented on the web site 10 osmetech annual report 2004
report of the directors
continued
legislation in the united kingdom governing the preparation and dissemination of the financial statements and other information
included in the annual reports may differ from legislation in other jurisdictions
supplier payment policy
the company has due regard to the payment terms of suppliers and settles all undisputed accounts in accordance with the
payment terms agreed with the supplier for each business transaction the company had 18 days 2003 – 22 days of purchases
outstanding at the end of the financial year
crest
the company’s ordinary shares are eligible for settlement through crest the system for securities to be held and transferred in
electronic form rather than in paper shareholders are not obliged to use crest and can continue to hold and transfer shares in
paper without loss of rights
independent auditors
a resolution to reappoint deloitte  touche llp as the company’s auditor will be proposed at the annual general meeting
electronic communications
the company may deliver shareholder information including annual and interim reports forms of proxy and notices of general
meetings in an electronic format to shareholders 
if you would like to receive shareholder information in electronic format please register your request on the company’s registrar’s
electronic database at wwwcapitaregistrarscom you will initially need your unique ‘investor code’ which you will find at the top of
your share certificate there is no charge for this service if you wish to subsequently change your mind you may do so by
contacting the company’s registrars by post or through their web site
if you elect to receive shareholder information electronically please note that it is the shareholder’s responsibility to notify the
company of any change to their name address email address or other contact details shareholders should also note that with
electronic communication the company’s obligations will be satisfied when it transmits the notification of availability of
information or such other document as may be involved to the electronic address it has on file the company cannot be held
responsible for any failure in transmission beyond its control any more than it can for postal failure in the event of the company
becoming aware that an electronic notification is not successfully transmitted a further two attempts will be made in the event
that the transmission is still unsuccessful a hard copy of the notification will be mailed to the shareholder in the event that specific
software is required to access information placed on the company’s website it will be available via the website without charge
before electing for electronic communications shareholders should ensure that they have the appropriate equipment and
computer capabilities sufficient for the purpose the company takes all reasonable precautions to ensure no viruses are present in
any communication it sends out but cannot accept responsibility for loss or damage arising from the opening or use of any email
or attachments from the company and recommends that shareholders subject all messages to virus checking procedures prior to
use any electronic communication received by the company that is found to contain any virus will not be accepted
shareholders wishing to receive shareholder information in the conventional printed form will continue to do so and need take no
further action
should you have any further questions on this please contact the company’s registrars capita registrars on 0870 162 3131 osmetech annual report 2004 11
report of the directors
continued
annual general meeting – explanation of special business
renewal of authority to allot shares and disapplication of preemption rights resolutions 6 and 7
resolution 6
the directors may only allot shares or grant rights over shares if authorised to do so by shareholders the general authority
granted at the annual general meeting held on 28 august 2003 is due to expire at the annual general meeting in 2004
accordingly resolution 6 will be proposed as an ordinary resolution to grant a new authority to allot unissued share capital up to
an aggregate nominal value of £2014767 representing 33
1
3 per cent of the total issued ordinary share capital as at 5 august
2004 if given this authority will expire at the earlier of a 31 october 2005 and b the conclusion of the annual general meeting in
2005 other than in respect of the company’s obligations under its employee share schemes the directors have no present
intention of utilising the authority set out in this resolution to issue any of the authorised but unissued share capital of the
company this authority if granted will be in addition to any other like authority to the extent not utilised at the time and date it is
granted
resolution 7
the directors also require additional authority from shareholders to allot shares or grant rights over shares where they propose to
do so for cash and otherwise than to existing shareholders pro rata to their holdings the general authority granted at the annual
general meeting held on 28 august 2003 is due to expire at the annual general meeting in 2004 accordingly resolution 7 will be
proposed as a special resolution to grant such authority if given this power will expire at the earlier of a 31 october 2005 and b
the conclusion of the annual general meeting in 2005 apart from rights issues open offers and other preemptive issues the
authority will be limited to the issue of shares up to an aggregate nominal value of £1208860 being 20 per cent of the issued
ordinary share capital at 5 august 2004 this authority does not accord with ipc guidelines but the directors regard the authority
as desirable to maximise the options open to the company in the coming year 
by order of the board
s a craig
secretary
5 august 2004 12 osmetech annual report 2004
independent auditors’ report
independent auditors’ report to the members of osmetech plc
we have audited the financial statements of osmetech plc for the year ended 30 april 2004 which comprise the consolidated
profit and loss account the balance sheets the consolidated cash flow statement the reconciliation of net cash flow to movement
in net funds notes to the consolidated cash flow statement the consolidated statement of total recognised gains and losses and
the related notes 1 to 26 the financial statements have been prepared under the accounting policies set out therein
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 our responsibility is to audit the
financial statements 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 are properly prepared in
accordance with the companies act 1985 we also report 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 read the directors’ report and the other information contained in the annual report for the above year as set out in the
contents section 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 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 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 are free from material
misstatement whether caused by fraud or other irregularity or error in forming our opinion we also evaluated the overall
presentation of information in the financial statements
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 30 april
2004 and of the loss of the group for the year then ended and have been properly prepared in accordance with the companies
act 1985
deloitte  touche llp
chartered accountants and registered auditors
liverpool
5 august 2004 osmetech annual report 2004 13
consolidated profit and loss account
for the year ended 30 april 2004
year ended year ended
300404 300403
note £ £
turnover 2 6180028 686411
cost of sales 2733651 315630
gross profit 3446377 370781
administrative expenses 4864443 3469618
operating loss 4 1418066 3098837
exceptional cost of fundamental restructuring of continuing operations 5 – 862981
1418066 3961818
interest receivable 8 102245 130919
interest payable and similar charges 9 97 146
loss on ordinary activities before taxation 1315918 3831045
taxation 10 147804 163762
loss for the year transferred from reserves 21 1168114 3667283
basic and diluted loss per share 12 021p 094p
all activities arose from continuing operations
consolidated statement of total recognised gains and losses
for the year ended 30 april 2004
year ended year ended
300404 300403
£ £
loss for the financial year 1168114 3667283
currency translation difference on foreign currency net investments 241703 2930
total recognised losses relating to the year 1409817 3664353 14 osmetech annual report 2004
consolidated balance sheet 
at 30 april 2004
at 300404 at 300403
note ££ ££
fixed assets
intangible assets 13 1021933 1074958
tangible assets 14 476513 412341
1498446 1487299
current assets
stocks 16 967278 966424
debtors – due within one year 17 1464345 1116234
investments – term deposits 18 2700000 2720000
cash at bank and in hand 472317 518833
5603940 5321491
creditors amounts falling due within one year 19 940483 1574647
net current assets 4663457 3746844
net assets 6161903 5234143
capital and reserves
called up share capital 20 6044304 5161775
share premium account 21 29493748 28038700
profit and loss account 21 29376149 27966332
equity shareholders’ funds 22 6161903 5234143
these financial statements were approved by the board of directors on 5 august 2004
signed on behalf of the board of directors
d a sandilands director osmetech annual report 2004 15
company balance sheet
at 30 april 2004
at 300404 at 300403
note ££ ££
fixed assets
intangible assets 13 680419 671065
tangible assets 14 3093 31478
investments 15 3006672 2292729
3690184 2995272
current assets
stocks 16 – 33486
debtors – due within one year 17 471547 503391
investments – term deposits 18 2700000 2720000
cash at bank and in hand 429886 412428
3601433 3669305
creditors amounts falling due within one year 19 324995 751571
net current assets 3276438 2917734
net assets 6966622 5913006
capital and reserves
called up share capital 20 6044304 5161775
share premium account 21 29493748 28038700
profit and loss account 21 28571430 27287469
equity shareholders’ funds 22 6966622 5913006
these financial statements were approved by the board of directors on 5 august 2004
signed on behalf of the board of directors
d a sandilands director 16 osmetech annual report 2004
consolidated cash flow statement
for the year ended 30 april 2004
year ended year ended
300404 300403
note £ £
net cash outflow from operating activities a 1772616 3441612
returns on investments and servicing of finance c 101049 127267
taxation c 227529 449569
capital expenditure and financial investment c 238303 166944
acquisitions and disposals b 421762 1340342
cash outflow before management of liquid resources and financing 2104103 4372062
management of liquid resources c 20000 620000
financing c 2047577 4894955
decrease in cash 36526 97107
reconciliation of net cash flow to movement in net funds
year ended year ended
300404 300403
£ £
decrease in cash in the year 36526 97107
decreaseincrease in liquid resources 20000 620000
exchange differences 9990 488
change in net funds 66516 522405
net funds at beginning of year 3238833 2716428
net funds at end of year 3172317 3238833 osmetech annual report 2004 17
notes to the consolidated cash flow statement
a reconciliation of operating loss to operating cash flows
year ended year ended
300404 300403
£ £
operating loss 1418066 3098837
depreciation and amortisation 157831 126674
loss on disposal of fixed assets – 54648
increasedecrease in stocks 62297 63876
increase in debtors 274442 725438
decreaseincrease in creditors 175642 137465
net cash outflow from operating activities 1772616 3441612
b acquisitions and disposals
on 1 april 2003 the group acquired the assets of the atlanta us based “opti” product line of blood gas analysers from roche
diagnostics inc the total consideration adjusted for final inventory levels and excluding costs was 2745000 £1671294 the
total consideration of £1762104 including legal fees of £90810 was paid in a number of instalments over the two financial years
year ended year ended
300404 300403
£ £
consideration paid during the year 421762 1340342
c analysis of cash flows 
year ended year ended
300404 300403
£ £
i gross cash flows
returns on investments and servicing of finance
interest received 101146 127413
interest paid 97 146
101049 127267
taxation
research and development tax credit 227529 449569
capital expenditure and financial investment
payments to acquire intangible fixed assets 14754 79379
payments to acquire tangible assets 223549 87565
238303 166944
management of liquid resources
transfer fromto term deposits 20000 620000
financing
shares issued 2147577 5562998
share issue expenses 100000 668043
2047577 4894955 18 osmetech annual report 2004
notes to the consolidated cash flow statement
continued
ii analysis of changes in net funds
at cash exchange at
300403 flows differences 300404
£££ £
cash at bank and in hand 518833 36526 9990 472317
current asset investments 2720000 20000 – 2700000
net funds 3238833 56526 9990 3172317 osmetech annual report 2004 19
notes forming part of the financial statements
for the year ended 30 april 2004
1  accounting policies
the financial statements have been prepared under the historical cost convention and are in accordance with applicable united
kingdom accounting standards the company has taken advantage of the exemption conferred by section 230 of the companies
act 1985 from presenting its own profit and loss account the following accounting policies which have not changed in the year
have been applied
basis of consolidation
the consolidated accounts incorporate the financial statements of osmetech plc and all of its subsidiary undertakings made up to
30 april 2004 the company uses the acquisition method of accounting to consolidate the results of its subsidiary 
undertakings the results of subsidiary undertakings are included from the date of acquisition 
investments
investments held as fixed assets are stated at cost less provision for impairment
acquisitions and disposals
on acquisition of a business including an interest in an associated undertaking fair values are attributed to the group’s share of
net separable assets under the acquisition method in frs6 ‘acquisitions and mergers’ where the cost of acquisition exceeds the
fair values attributable to such net assets the difference is treated as purchased goodwill and capitalised in the balance sheet in
the year of acquisition the results and cash flow relating to a business are included in the consolidated profit and loss account
and the consolidated cash flow statement from the date of acquisition
turnover
turnover represents sales of goods and services to third parties and access fees milestone payments and nonrefundable licence
fees due from third parties excluding value added tax
unearned amounts are carried forward as deferred income
tangible fixed assets
tangible fixed assets are stated at cost net of depreciation and any provision for impariment
depreciation
depreciation is provided to write off the cost less estimated residual values of all tangible fixed assets over their expected useful
lives it is calculated at the following rates
short leasehold improvements – over the life of lease
plant machinery and motor vehicles – 1035 per annum on cost
office equipment – 2550 per annum on cost 
taxation
current tax including uk corporation tax research and development tax credits and foreign tax is provided at amounts expected
to be paid or recovered using the tax rates and laws enacted or substantively enacted by the balance sheet date
deferred taxation
deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax or a
right to pay less tax at a future date at rates expected to apply when they crystallise based on current tax rates and law timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in
which they are included in the financial statements deferred tax assets are recognised to the extent that it is regarded as more
likely than not that they will be recovered deferred tax assets and liabilities are not discounted 20 osmetech annual report 2004
notes forming part of the financial statements
continued
1  accounting policies continued
finance costs
finance costs associated with the issue of debt are deducted from the proceeds of the issue and charged to the profit and loss
account over the term of the debt so that the amount charged is at a constant rate on the carrying amount
financial instruments
in relation to the disclosures made in note 26
• short term debtors and creditors are not treated as financial assets or financial liabilities
• the group does not hold or issue derivative financial instruments for trading purposes
• forward exchange contracts are used to fix the value of the related asset or liability in the contract currency at the contract
rate and any gains or losses on these instruments are offset where the instrument is used to hedge a committed or
probable future transaction gains and losses are deferred until the transaction occurs
foreign currency
profit and loss accounts of foreign subsidiary undertakings are translated into sterling at the average rate assets and liabilities of
the foreign subsidiary undertakings are translated into sterling at the rates of exchange ruling on the balance sheet date
exchange differences which arise from translation of the net investment in foreign subsidiary undertakings and the translation of
the profit and loss account between closing rate and average rate are taken to reserves
all other differences are taken to the profit and loss account with the exception of differences on foreign currency borrowings
which to the extent that they are used to finance or provide a hedge against foreign equity investments are taken directly to
reserves to the extent of the exchange differences arising on the net investment in those enterprises
intellectual property rights
patent and trademark costs are capitalised and written off on a straight line basis over the shorter of the life of the patent or
trademark or its useful economic life the company’s other intellectual property rights are stated at cost and amortised over their
useful economic lives in relation to revenues generated 
goodwill
purchased goodwill representing the excess of the fair value of the consideration over the fair value of the assets acquired is
capitalised and amortised on a straight line basis over its useful economic life this is presumed to be 15 years unless
circumstances change significantly resulting in an impairment of the carrying value
research and development
all research and development expenditure is charged to the profit and loss account in the year in which it is incurred
stock
stocks are valued at the lower of cost or net realisable value cost is calculated as follows
raw materials – cost of purchase on first in first out basis
finished goods – cost of raw materials and labour and attributable overheads based on the normal level of activity
net realisable value is based on estimated selling price less further costs to completion and disposal osmetech annual report 2004 21
notes forming part of the financial statements
continued
1  accounting policies continued
pension costs
contributions to defined contribution pension schemes are charged to the profit and loss account in the year in which they
become payable
operating leases
rentals under operating leases are charged on a straight line basis over the lease term even if the payments are not made on
such a basis
2  turnover
the turnover is wholly attributable to the group’s principal activity
turnover is analysed by market as follows
2004 2003
£ £
united kingdom 123923 3008
rest of europe 1142784 43082
usa 2331073 212399
far east 2120280 403038
rest of world 461968 24884
6180028 686411
all turnover originates in the united states all turnover is to external customers 
3  analysis of loss before taxation and net assets
the directors have not disclosed segmental analysis on the grounds that it is considered seriously prejudicial to the group’s
commercial interests
4  operating loss
2004 2003
£ £
this is arrived at after charging
amortisation of intangible fixed assets 30807 16566
depreciation 127024 110108
auditors’ remuneration – audit services osmetech plc 24500 22500
– audit services other group companies 17791 17493
previous auditors – non audit services – 12877
operating lease rentals – plant and machinery – –
– other 263036 192576
research and development 1744862 1375948
loss on disposal of fixed assets – 54648
amounts payable to deloitte  touche llp and their associates by the company and its uk subsidiary undertakings in respect of
nonaudit services were £11000 2003 – £nil 22 osmetech annual report 2004
notes forming part of the financial statements
continued
5  cost of fundamental restructuring of continuing operations
the costs in 2003 relate to the closure of the company’s facilities in woburn massachusetts usa and crewe cheshire uk and
related provisions for the write off of intangible and tangible fixed assets
2004 2003
£ £
intangible fixed assets – 243903
tangible fixed assets – 112361
closure costs – 506717
 – 862981
the effect of this exceptional charge on pre and post tax results in 2003 was £862981
6  employees
2004 2003
£ £
staff costs for all employees including executive directors consist of
wages and salaries 2739148 1150246
social security costs 227584 110302
other pension costs 107637 87443
3074369 1347991
the average monthly number of employees of the group during the year including executive directors was as follows
number number
manufacturing 24 2
research and development 21 19
selling and administration 19 8
64 29
7  directors
2004 2003
£ £
emoluments 403261 479303
defined contribution pension scheme payments 40230 40780
443491 520083
highest paid director
emoluments 198311 155866
defined contribution pension scheme payments 22500 18750
220811 174616
directors’ interests
the interests of the directors in ordinary shares of osmetech plc are all held beneficially as reported in the report of the directors
on page 8 osmetech annual report 2004 23
notes forming part of the financial statements
continued
7  directors continued
defined contribution pension scheme payments
2004 2003
number of number of
directors directors
defined contribution pension schemes 3 3
options
total options lapsed total options
on ordinary granted surrendered on ordinary exercise
shares during the during the shares date of price per exercisable
director 300403 year year 300404 grant share from to
g j hall 1000000 – – 1000000 250998 2p 211001 210108
j n g white 120000 – – 120000 250998 2p 211001 210108
5000000 – – 5000000 300902 2p 300905 300912
15815900 – – 15815900 240203 239p 240204 240213
4184100 – – 4184100 240203 239p 240204 240213
d a sandilands 2500000 – – 2500000 300902 2p 300905 300912
5815900 – – 5815900 240203 239p 240204 240213
4184100 – – 4184100 240203 239p 240204 240213
g b kuenster 1350000 – – 1350000 260400 26
1

4
p 260403 260410
1000000 – – 1000000 200301 11p 200304 200311
1000000 – – 1000000 290102 12
3

4
p 290105 290112
a marek appointed 21 april 2004 10000000 – – 10000000 10403 233p 10404 10413
the midmarket price of the shares at 30 april 2004 was 433p 2003 – 345p and the range during the period was between 281p
and 5p 2003 – 175p and 1242p 
or date of appointment if later
8  interest receivable
2004 2003
£ £
interest on bank balances and term deposits 102245 130919
102245 130919
9  interest payable and similar charges
2004 2003
£ £
bank borrowings 97 146
97 146 24 osmetech annual report 2004
notes forming part of the financial statements
continued
10  tax on loss on ordinary activities
the tax credit comprises
2004 2003
£ £
current tax
uk corporation tax receivable 147804 227529
adjustment in respect of prior years research and development tax credit – 63767
total tax on loss on ordinary activities 147804 163762
the difference between the total current tax shown above and the amount calculated by applying the standard rate of uk
corporation tax to the profit before tax is as follows
2004 2003
£ £
loss on ordinary activities before tax 1315918 3831045
tax credit at 30 394775 1149314
effects of
–   losses which are available to set against future profits 418074 1149314
–   research and development tax credit 147804 163762
–   expenses not deductible for tax purposes 10959 –
–   capital allowances in excess of depreciation 22826 –
–   movement in short term timing differences 11432 –
total current tax credit 147804 163762
factors that may affect the future tax charge
a deferred tax asset has not been recognised in respect of timing differences relating to tax losses carried forward as there is
insufficient evidence that the asset will be recovered the amount of the asset not recognised at a standard tax rate of 30 is
£6412912 2003 – £5019332 in addition a deferred tax asset in respect of capital allowances and general provisions of £317063
2003 – £nil has not been recognised these assets will be recoverable if the company generates profits in the future from the
same trade in which the losses were incurred
11  loss attributable to the company
the loss for the financial year dealt with in the financial statements of the parent company was £1283961 2003 – £2987237 as
permitted by section 230 of the companies act 1985 no separate profit and loss account is presented in respect of the parent
company
12  loss per share
the loss per share of 021p 2003 – loss per share 094p has been calculated on the weighted average number of shares in issue
during the year namely 561457432 2003 – 389690248 and losses of £1168114 2003 – £3667283 
frs 14 requires presentation of diluted eps when a company could be called upon to issue shares that would decrease net profit
or increase net loss per share for a loss making company with outstanding share options net loss per share would only be
increased by the exercise of outofthemoney options since it is inappropriate to assume that option holders would act
irrationally no adjustment is made to diluted eps for outofthemoney share options osmetech annual report 2004 25
notes forming part of the financial statements
continued
13  intangible assets
group company
patents and intellectual patents and intellectual
trademarks property goodwill total trademarks property goodwill total
£££ £ £££ £
group
cost
at beginning of year 180932 600000 405629 1186561 180932 600000 – 780932
additions 14754 – – 14754 14754 – – 14754
currency translation adjustment – – 38074 38074 ––– –
at end of year 195686 600000 367555 1163241 195686 600000 – 795686
amortisation
at beginning of year 13607 96260 1736 111603 13607 96260 – 109867
charge for the year 5400 – 25407 30807 5400 – – 5400
currency translation adjustment  – 1102 1102 ––– –
at end of year 19007 96260 26041 141308 19007 96260 – 115267
net book value
at 30 april 2004 176679 503740 341514 1021933 176679 503740 – 680419
at 30 april 2003 167325 503740 403893 1074958 167325 503740 – 671065
14  tangible assets
short plant machinery
leasehold and motor office
improvements vehicles equipment total
£££ £
group
cost
at beginning of year – 340904 150647 491551
additions 1124 138678 83747 223549
currency translation adjustment – 23234 13236 36470
at end of year 1124 456348 221158 678630
depreciation
at beginning of year – 69170 10040 79210
charge for the year 39 70445 56540 127024
currency translation adjustment 1 2111 2005 4117
at end of year 38 137504 64575 202117
net book value
at 30 april 2004 1086 318844 156583 476513
at 30 april 2003 – 271734 140607 412341 26 osmetech annual report 2004
notes forming part of the financial statements
continued
14  tangible assets continued
plant machinery
and motor office
vehicles equipment total
££ £
company
cost
at beginning of year 93374 9639 103013
additions – 3301 3301
transfers to other group companies 93374 – 93374
at end of year – 12940 12940
depreciation
at beginning of year 64763 6772 71535
charge for the year 17085 3075 20160
transfers to other group companies 81848 – 81848
at end of year – 9847 9847
net book value
at 30 april 2004 – 3093 3093
at 30 april 2003 28611 2867 31478
15  fixed asset investments
shares loan total
££ £
company
cost
at beginning of year 646 9090703 9091349
transactions in the year – 713943 713943
at end of year 646 9804646 9805292
provision for impairment
at beginning of year and end of year 645 6797975 6798620
net book value
at 30 april 2004 1 3006671 3006672
at 30 april 2003 1 2292728 2292729
the following were subsidiary undertakings at the end of the year and have all been included in the consolidated accounts
proportion of
country of voting rights and
incorporation ordinary share
name or registration capital held nature of business
osmetech technology inc usa 100 holding company
osmetech inc usa 100 same as ultimate parent company
osmetech aesop trustee limited uk 100 dormant
the country of operation is the same as its country of incorporation or registration
shares held by osmetech technology inc osmetech annual report 2004 27
notes forming part of the financial statements
continued
16  stocks
2004 2003
group company group company
££ ££
raw materials and work in progress 600574 – 424845 33486
finished goods 366704 – 541579 –
967278– 966424 33486
there is no material difference between the replacement cost of stocks and the amount at which they are stated in the financial
statements
17  debtors
2004 2003
group company group company
££ ££
due within one year
trade debtors 928649 – 589501 7550
other debtors 46251 14715 38343 38343
called up share capital not paid 290000 290000 ––
taxation recoverable 149515 149515 244420 244420
prepayments and accrued income 49930 17317 243970 213078
1464345 471547 1116234 503391
18  investments – term deposits
2004 2003
£ £
group and company
cash deposits with terms in excess of 7 days 2700000 2720000
19  creditors amounts falling due within one year
2004 2003
group company group company
££ ££
trade creditors 217984 30210 495004 202513
taxation and social security 51820 51820 30972 30972
accruals and deferred income 670679 242965 1042080 518086
other creditors –– 6591 –
940483 324995 1574647 751571 28 osmetech annual report 2004
notes forming part of the financial statements
continued
20  share capital
allotted called up allotted and
authorised and fully paid called up
2004 2003 2004 2003 2004 2003
£ £ £ £££
ordinary shares of 1p 8100000 8100000 5899304 5161775 145000 –
the number of authorised ordinary shares at 30 april 2004 is 810000000 2003 – 810000000 the number of allotted called up
and fully paid ordinary shares at 30 april 2004 is 589930397 2003 – 516177571 and the number of allotted and called up
ordinary shares at 30 april 2004 is 14500000 2003 – nil
the following ordinary shares of 1p each were issued during the year
date number consideration per share
12 june 2003 125000 175p
276000 239p
30 june 2003 125000 175p
50000 239p
1 july 2003 250000 175p
25000 239p
2 july 2003 125000 175p
352862 239p
3 july 2003 125000 175p
4 july 2003 250000 175p
418389 239p
7 july 2003 187500 175p
358686 239p
7 july 2003 250000 175p
580884 239p
22000 2p
9 july 2003 100000 175p
17 july 2003 225000 175p
21 july 2003 125000 175p
22 july 2003 93750 175p
22 august 2003 48000 2p
6 october 2003 66666667 3p
4 december 2003 125000 175p
383686 239p
9 january 2004 200000 175p
380150 239p
4 february 2004 15000000 2p
5 february 2004 250000 175p
634252 239p
9 february 2004 250000 175p
12 february 2004 250000 175p osmetech annual report 2004 29
notes forming part of the financial statements
continued
20  share capital continued
share options
the company has granted options under the osmetech plc enterprise management incentive plan “emi plan” and the
osmetech plc 2003 us equity compensation plan “us plan” and has entered into individual option agreements as follows
1 emi plan
number of ordinary shares
under option as at subscription
date 300404 300403 price exercisable between
1 march 2001 – 869565 11
1

2
p 1 march 2004 and 1 march 2011
17 september 2002 1437500 4493750 1
3

4
p 17 december 2002 and 17 september 2012
24 february 2003 11359518 14819427 239p 17 december 2003 and 24 february 2013
12797018 20182742
2 us plan
number of ordinary shares
under option as at subscription
date 300404 300403 price exercisable between
1 april 2003 25000000 25000000 233p 1 april 2004 and 1 april 2013
3 individual option agreements
number of ordinary shares
under option as at subscription
date 300404 300403 price exercisable between
25 september 1998 1237000 1307000 2p 21 october 2001 and 21 october 2008
21 may 1999 – 78872 18p 21 may 2002 and 21 may 2009
13 october 1999 – 500000 17
3

4
p 13 october 2002 and 13 october 2009
26 april 2000 1350000 3150000 26
1

4
p 26 april 2003 and 26 april 2010
1 march 2001 – 500000 11
1

2
p 1 march 2004 and 1 march 2011
20 march 2001 250000 250000 11p 20 march 2004 and 20 march 2011
20 march 2001 750000 750000 11p 20 march 2004 and 20 march 2011
29 january 2002 2000000 3500000 12
3

4
p 29 january 2005 and 29 january 2012
17 september 2002 2500000 2500000 2p 17 september 2005 and 17 september 2012
30 september 2002 7500000 7500000 2p 30 september 2005 and 30 september 2012
24 february 2003 21631800 21631800 239p 24 february 2004 and 24 february 2013
37218800 41667672
warrants
the company has warrants outstanding as follows
number of ordinary shares
under warrant as at subscription
date 300404 300403 price exercisable between
14 january 2002 300000 300000 14055p 15 january 2002 and 14 january 2005
29 january 2002 730000 730000 1332p 30 january 2002 and 29 january 2005
30 september 2002 – 15000000 2p 30 september 2002 and 30 september 2005
1030000 16030000 30 osmetech annual report 2004
notes forming part of the financial statements
continued
21  reserves
share profit 
premium and loss
account account
££
group
at beginning of year 28038700 27966332
on new share capital subscribed 1555048–
issue expenses 100000 –
loss for the year – 1168114
exchange loss on consolidation – 241703
at end of year 2949374829376149
share profit 
premium and loss
account account
££
company
at beginning of year 28038700 27287469
on new share capital subscribed 1555048–
issue expenses 100000 –
loss for the year – 1283961
at end of year 2949374828 571430
22  reconciliation of movements in shareholders’ funds
2004 2003
group company group company
££ ££
loss for the financial year 1168114 1283961 3667283 2987237
other recognised gains and losses relating to the year 241703 – 2930 –
new share capital subscribed including premium 2337577 2337577 4894955 4894955
net increase in shareholders’ funds 927760 1053616 1230602 1907718
opening shareholders’ funds 5234143 5913006 4003541 4005288
closing shareholders’ funds 6161903 6966622 5234143 5913006
23  commitments
at the balance sheet date the group had annual commitments under noncancellable operating leases as set out below
land and land and
buildings other buildings other
2004 2004 2003 2003
££ ££
operating leases which expire
within 1 year –– 437531 5821
two and five years –– – 2362
over five years 168055 5067 ––
168055 5067 437531 8183 osmetech annual report 2004 31
notes forming part of the financial statements
continued
24  related party transactions
the company has taken advantage of the exemption not to disclose transactions with other group undertakings as voting rights
are controlled within the group and consolidated financial statements are publicly available
no director was or is materially interested in any contract subsisting during or at the end of the financial year which was
significant in relation to the business of the group
25  pension costs
the company makes contributions into money purchase pension schemes for the benefit of its employees the assets of the
schemes are held separately from those of the company in independently administered funds the pension cost charge represents
contributions payable and paid by the company to the funds and amounted to £107637 for the year 2003 – £87443
26  financial instruments
the numerical disclosures in this note deal with financial assets and financial liabilities as defined in financial reporting standard
13 – derivatives and other financial instruments disclosures frs13 certain financial assets such as investments in subsidiaries
are excluded from the scope of these disclosures
as permitted by frs13 shortterm debtors and creditors have been excluded from the disclosures other than the currency risk
disclosures
there is no material difference between the fair values and book values of the group’s financial instruments either in the current or
prior year
the group’s treasury activities are designed to provide suitable flexible funding arrangements to satisfy its requirements the
group uses financial instruments comprising cash and term deposits the main risks arising from the group financial instruments
are interest rate and liquidity risks the board reviews policies for managing each of these risks and they are summarised below
these policies have remained unchanged from previous years
the group aims to achieve a balance between continuity and flexibility of funding by maintaining a range of maturities on its
liquid resources the group also mixes the duration of its deposits to reduce the impact of interest rate fluctuations
the group has limited foreign currency risk since overseas subsidiaries derive revenues and incur expenses denominated
predominantly in the currencies of the countries in which they operate all monetary assets and liabilities of the group are
materially denominated in the operating or functional currency of the operating unit involved
interest bearing financial assets
functional currency of operations
2004 2003
group sterling dollar group sterling dollar
£££ £££
cash 472317 429886 42431 518833 411730 107103
term deposits 2700000 2700000 – 2720000 2720000 –
3172317 3129886 42431 3238833 3131730 107103
the sterling and us dollar cash balances attract interest at floating rates based on the bank of england base rate and us prime rate
respectively
the term deposits are of 1 month’s duration at a weighted average fixed rate of 406 2003 – 1 month’s duration 369 32 osmetech annual report 2004
notice of annual general meeting
notice is hereby given that the annual general meeting of osmetech plc the “company” will be held at the offices of ashurst
broadwalk house 5 appold street london ec2a 2ha on 23 september 2004 at 1100 am for the purpose of considering and if
thought fit passing the following resolutions
ordinary business
1 to receive and consider the accounts for the year ended 30 april 2004 together with the reports of the directors and auditors
thereon
2 to elect a marek as a director
3 to re–elect g j hall as a director
4 to re–elect g b kuenster as a director
5 to re–appoint deloitte  touche llp as auditors of the company until the conclusion of the next annual general meeting and
to authorise the directors of the company to determine their remuneration
special business
to consider and if thought fit to pass the following resolutions which number 6 will be proposed as an ordinary resolution and
number 7 will be proposed as a special resolution
6 that the directors be and they are hereby generally and unconditionally authorised for the purposes of and pursuant to
section 80 of the companies act 1985 the “act” to exercise all the powers of the company to allot relevant securities within
the meaning of section 802 of the act up to an aggregate nominal amount of £2014767 provided that this authority shall
unless renewed varied or revoked expire at the earlier of a 31 october 2005 and b the conclusion of the next annual
general meeting of the company to be held in 2005 and provided further that the company may before the expiry of such
period make any offer agreement or arrangement which would or might require relevant securities to be allotted after such
expiry and the directors of the company may allot relevant securities pursuant to any such offer agreement or arrangement as
if the authority hereby conferred had not expired this authority shall be in addition to any like authority pursuant to the said
section 80 to the extent not utilised at the time and date on which this resolution 6 is passed
7 that subject to the passing of resolution 6 above the directors of the company be and they are hereby empowered to allot
equity securities within the meaning of section 942 of the act for cash pursuant to the authority conferred by resolution 6
above as if section 891 of the act did not apply to any such allotment provided that this power shall unless renewed varied
or revoked expire at the earlier of a 31 october 2005 and b the conclusion of the next annual general meeting of the
company to be held in 2005 and provided further that this power shall be limited to the allotment of equity securities
i in connection with a rights issue open offer or other preemptive issue in favour of ordinary shareholders where the
equity securities respectively attributable to the interests of all ordinary shareholders are proportionate as nearly as
practical to the respective number of ordinary shares held by them but subject to such exclusions or other arrangements
as the directors may deem necessary or desirable in relation to fractional entitlements or legal or practical problems
arising in or pursuant to the laws of any territory or the requirement of any regulatory body or stock exchange in any
territory and
ii otherwise than pursuant to paragraph i above up to an aggregate nominal amount of £1208860  osmetech annual report 2004 33
notice of annual general meeting
continued
and provided further that the company may at any time before the expiry of such power make any offer or enter into any
agreement which would or might require equity securities to be allotted after the expiry of such power and the directors may
allot equity securities in pursuance of any such offer or agreement as if such power conferred hereby had not expired this
power shall be in addition to any existing like power to the extent not utilised at the time and date on which this resolution 7
becomes unconditional
by order of the board registered office  
s a craig broadwalk house
secretary 5 appold street
london ec2a 2ha 
5 august 2004
notes
1 a member of the company may appoint one or more proxies to attend and on a poll to vote instead of the member a proxy
of a member need not also be a member
2 the instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a notarially
certified copy of that power or authority must be deposited with the company’s registrars capita registrars proxy
department the registry 34 beckenham road beckenham kent br3 4tu not less than 48 hours before the time for
holding the meeting a form of proxy accompanies this document for use by members
3 completion of the form of proxy will not preclude a member from attending and voting in person
4 as permitted by regulation 41 of the uncertificated securities regulations 2001 only those holders of ordinary shares who
are registered on the company’s share register as at 1100 am on 21 september 2004 shall be entitled to attend the annual
general meeting and to vote in respect of the number of shares registered in their names at that time changes to entries on
the share register after 1100 am on 21 september 2004 shall be disregarded in determining the rights of any person to attend
andor vote at the annual general meeting
5 the register of directors’ interests in the share capital of the company is available for inspection at the company’s registered
office during normal business hours from the date of this notice until the date of the annual general meeting and will be
available for inspection at the place of the annual general meeting for at least 15 minutes prior to and during the meeting  osmetech plc proxy for use at annual general meeting
please insert iwe
full name
please use block letters
and address of
of
being members of the above–named company hereby appoint the chairman of the annual general meeting
or see note 1
as myour proxy to vote for meus and on myour behalf at the annual general meeting of the company to be held at the offices
of ashurst broadwalk house 5 appold street london ec2a 2ha on 23 september 2004 at 1100 am and at any adjournment
thereof
iwe request such proxy to vote on the following resolutions as mentioned below see note 2
signature see note 3 dated this day of 2004
joint holders if any see note 5
name name 
name name 
notes
1 if you wish to appoint some other person as your proxy please insert hisher name and address initial and strike out the words “the chairman of the meeting” a
proxy need not be a member of the company appointing a proxy will not preclude you from personally attending and voting at the meeting in substitution for your
proxy vote if you subsequently decide to do so
2 please indicate with an “x” in the appropriate box how you wish your votes cast unless otherwise instructed the proxy will exercise hisher discretion as whether and
if so how heshe will vote
3 this form of proxy must in the case of an individual be signed by the appointer or hisher attorney or in the case of a corporation be given under its common seal
or signed on its behalf by an attorney or a duly authorised officer or if it is subject to the companies act 1985 as amended in accordance with section 36a thereof
4 to be valid this form of proxy and any power of attorney or other authority under which it is executed or a duly notarised copy thereof must be lodged with the
registrars of the company capita registrars proxy department the registry 34 beckenham road beckenham kent br3 4tu not less than 48 hours before the
time appointed for the meeting or adjourned meeting at which it is to be used
5 in the case of joint holders of a share the vote of the senior who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the
other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the statutory register of members in respect of the
share
6 any alteration in this form of proxy must be initialled by the person in whose hand it is signed or executed
ordinary business for against
1 to receive and consider the accounts for the year ended 30 april 2004 together with the 
reports of the directors and auditors thereon
2 to elect a marek as a director
3 to reelect g j hall as a director
4 to reelect g b kuenster as a director
5 to reappoint deloitte  touche llp as auditors of the company until the conclusion of the
next annual general meeting and to authorise the directors of the company to determine 
their remuneration
special business
6 to authorise the directors to allot shares of the company up to a maximum amount
of £2014767
7 to empower the directors to allot shares for cash otherwise than on a preemptive basis up to
a maximum amount of £1208860


Summary:
 osmetech annual report 2004    3
chief executive officer’s review
introduction
during the course of this financial year the group has been successfully transformed from a pre
revenue technology development operation to an international diagnostics business through the
ground breaking opti acquisition the highly reliable revenue streams from opti have exceeded our
expectations and provide a solid base from which the business can develop its exciting opportunities
for further growth the acquisition has substantially improved the financial and commercial risk
profile for osmetech as it is now able to pursue its strategy for growth from a position of strength
the market
the global medical diagnostics market is worth approximately 20bn and growing steadily with
osmetech positioned in the fast growing point of care poc market segment annual double digit
percentage growth is expected to continue in this sector as healthcare operators increasingly
demand faster test results
the opti business operates in the poc arterial blood gas market which has experienced high
growth over recent years as testing migrates from traditional central hospital laboratory settings
osmetech’s vaginal infection product currently under development will also target similar poc
markets where there is a significant unmet need for improved infectious disease testing
business structure
following the successful integration of the opti acquisition we have been able to consolidate the
group’s operations on to the atlanta site where we have an excellent 60000 sq ft facility capable
of supporting the anticipated growth of the business 
the development of the vaginal infection product is now directly benefiting from the considerable
experience and expertise of the opti team these benefits span the full commercial progression
from product development through to clinical regulatory production sales and marketing
operations both products have similar customer bases and we intend to use opti’s strong
international network of distributors to gain access to all significant world markets
opti trading
sales revenues for the first full year of trading of 105m £62m far exceeded our original
expectations these revenues include approximately 1m £06m of sarsrelated sales to china
during the first half of the year
new instrument sales accounted for 33 of total revenues with over 800 new analyser instruments
sold during the year the active installed base of over 4000 instruments with customers provides
robust and reliable demand for our proprietary consumables that are necessary in order to perform
the tests this high quality stream of consumable sales revenues amounted to 65 of total sales
and should steadily grow as the installed base of instruments widens and further advances are
made with initiatives to increase the average number of tests per instrument
opti’s self contained optical sensor cassette for
blood gas electrolyte and metabolite analysis
over 13 million consumable tests sold in 20034
representing 65 of total opti sales and a highly
reliable source of revenue 4 osmetech annual report 2004  
chief executive officer’s review continued
new opti products
we remain on target to introduce five new products during the coming year the first three of
which including the new critical care analyser with colour touch screen were launched at the
recent american association of clinical chemists conference aacc in los angeles two further
key products are expected to be introduced in the second half of the year and should provide the
basis for substantial revenue growth both through the sale of new instruments and consumable
revenues for the growing installed base we believe that much of this new business will be
incremental as we will be able to offer products aimed at reducing the cost per test for both the
higher usage customer and those operators only requiring a narrow range of tests
idexx agreement
we have recently entered into an oem manufacturing and supply agreement with idexx
laboratories inc a worldwide leader in the development and commercialisation of animal health
diagnostic products in 2003 idexx had sales of 475m and have a current market capitalisation of
approximately 18bn this long term commercial relationship should provide a substantial level of
new business for opti in both instruments and consumables thereby allowing us to benefit from
leveraging our highly scaleable manufacturing infrastructure in atlanta
we have also entered into a development and supply contract with idexx to create a new
platform for measuring critical care parameters based on osmetech’s proprietary optical
fluorescence technology
both contracts will span over a period of at least 10 years and will open the veterinarian market for
osmetech’s technology and products 
this relationship is not only a further validation of the opti technology but also demonstrates
osmetech’s ability to scale up its manufacturing efficiently and become a top quality provider of
critical care diagnostic instrumentation
vaginal infection product
the increasing spread of sexually transmitted diseases stds continues to be of major concern in
all markets worldwide the centre for disease control has reported that 15 million people are
diagnosed annually with an std in the ten year period to 2002 the nhs in the uk reported that
the number of std patients doubled with 1 in 10 of the entire uk adult population now estimated
to be infected with chlamydia
current diagnostic practice is unable to provide results in a timely manner that would allow the
early commencement of appropriate treatment that could provide improved control over the
further spread of infection in the community there is a clear unmet need for a simple and
objective test for the most common and clinically important vaginal infections that is capable of
delivering results within the time period of a normal patient visit
the portable opti cca analyser
over 800 new opti cca instruments sold in 20034
increasing the active installed base of units to over
4000 from which repeat consumable sales
will be generated osmetech annual report 2004    5
300
250
200
150
100
50
0 1999 2000 2001 2006
chief executive officer’s review continued
good progress has continued to be made with the development of a device capable of satisfying
this market requirement the device’s automated testing process has been clinically tested and has
provided results comparable to the manual methods currently used this is an important step and
the tests will now be optimised further and combined within the single platform device prior to the
commencement of clinical trials fda regulatory approval for the combined device will be required
prior to launch in the us in 2005
financial review
sales revenues totalled 10453000 £6180000 with 38 representing direct us sales and the
remainder through third party distributors serving other markets in product terms the highly
reliable repeat consumable sales accounted for 65 of total business revenues
the gross profit margin was abnormally high at 558 reflecting the successful utilisation of slow
moving and redundant inventory acquired as part of the purchase of the opti business
the profitable trading of opti together with the significant reduction in the cost base of the
remainder of the business has contributed to a substantial reduction in the loss for the year to
£1168000 2003 – £3667000 development costs associated with the new product introductions
will however increase in the coming year
cash outflows before financing at £2084000 were higher than the reported loss for the year
reflecting the final payments of the deferred consideration of 795000 £422000 for opti
together with an increase of £474000 in trade debtors due to the growth of the business over the
full trading period
following the £2000000 placing to institutional investors in october 2003 the group ended the year
with cash balances and term deposits of £3172000 this represents a strong cash position and we
are satisfied that the group should have sufficient funds available to launch all of the new opti
products scheduled for the coming year through to the launch of the integrated vaginal infection
device
all of opti’s sales revenues and the majority of its costs are dollar based the surplus of dollars
that this generates broadly matches the dollar requirements for the rest of the group
global near patient and point of care
blood gas testing market revenues m 
the market segment has grown significantly in recent
years and is expected to grow at an annual rate of
13 over the 5year period 20016 as more testing
moves away from the central laboratory setting 6 osmetech annual report 2004  
chief executive officer’s review
continued
outlook
the relocation of osmetech’s operational base to atlanta has been extremely successful and our
thanks go to all our employees old and new for making this move and indeed this year as
productive and encouraging as it has been
we have a high quality operational infrastructure capable of supporting the continued growth of
the business  we expect to be able to build on the excellent performance of opti this year and
are confident of significant growth commencing in the second half of next year through the new
product introductions and the idexx relationship
osmetech is well placed in a fast growth market sector with a strong commercial business base
and access to enabling technologies including its proprietary electronic nose technology capable
of meeting the market requirements for new products  we will also continue to search for
opportunities through suitable acquisitions to further stimulate this growth
james white
chief executive officer 
5 august 2004