It means the unit in the airing cupboard has lost the signal with the wireless thermostat downstairs.
Take the thermostat upstairs to within sight of the receiver - there's a screw underneath the thermostat that will allow you to take it off the wall.
Once you've got it upstairs, take the batteries out of the thermostat and wait for the display to fade. Press button 1 and then button 2 on the main unit to put it into learn mode. Push the batteries back into the thermostat and all should be good.
If the red ALARM light stays on then try it again, if you still have no joy then there is a problem with either the thermostat or the receiver and you'll need to get both changed. It's not the most difficult job to do - the bits will srt you back around �80 or so.
We got ours done through British Gas Homecare - we signed up for it and then waited a few weeks and rang them up and got it done.
Hope that helps