Abacus Group plc
Annual Report & Accounts |2004 The Abacus Group is a leading franchised distributor of electronic components, flat-panel
displays, printers and related products and provides additional value added services,
including technical support, cable and electro-mechanical sub-assembly and the design
and build of display systems.
Following the purchase of TDC, the Group now employs approximately 800 people and
has 9 principal trading businesses operating in the UK, Ireland, Benelux, Nordic and Italy.
The Group’s philosophy is to offer as wide a product range as possible in order to be in
tune with the widespread market trend towards supply chain management and vendor
reduction; to work at design level with both existing and new customers in order to be
involved in the proliferation of new products that typifies the electronics industry; and to
combine these features with an unusually high level of personal service and commitment.
This philosophy has enabled the Group to grow its UK market share and to achieve a
return to shareholders well above the industry average.
The Group has a continual programme of investment to ensure that the logistics and
systems are in place to support and further these aims.
Contents
Financial and Operational Highlights 1
Abacus Group at a glance 2
Chairman’s Statement 4
Chief Executive’s Review 5
Financial Review 8
The Board of Directors, Secretary and Advisors 11
Directors’ Report 12
Corporate Governance Statements 14
Corporate Social Responsibility 18
Directors’ Remuneration Report 20
Statement of Directors’ Responsibilities 28
Auditors’ Report 29
Financial Statements 30
Five Year Summary 54
Notice of Annual General Meeting 55
Geographic Coverage 57 The principle reason for Abacus’ success in 2004 has been the strong
performance of its core UK business. This has been achieved as the result of our
focus on excellent local customer service, good logistics and a proactive
approach to the introduction of new products into a changing marketplace where
we have gained new customers.
Abacus Group plc   1
Financial and Operational Highlights
l Profit before tax and goodwill increased by 25% to £10.0m
(2003: £8.0m), after goodwill by 22% to £9.3m (2003: £7.6m)
l Turnover increased 28% to £187.8m (2003: £147.0m)
l Basic earnings per share, before goodwill, increased by 18%
to 15.9p (2003: 13.5p), after goodwill increased by 14% to
14.2p (2003: 12.5p)
l Organic sales growth of 9% exceeds industry growth of 7% 
l Dividend increase of 3% to 10.5p (2003: 10.2p)
The Five Year Summary is shown on page 54
00 01 02 03
8.0
8.8
9.7
10.2
Dividend per Share
pence
00 01 02 03
152.6
155.0
147.0
Turnover
£m
00 01 02 03 00 01 02 03
15.8
17.1
9.5
8.0
27.0
27.1
9.8
12.5
Profit before Tax and
Goodwill
£m
Earnings per Share after
Goodwill
pence
00 01 02 03
26.8
28.7
16.6
13.5
Earnings per Share before
Goodwill
pence
201.5
04
187.8
04
10.0
04
15.9
04
14.2
04
10.5 Abacus Polar has been at the forefront of electronic
component distribution for over 30 years. The sales operation
is run through a network of regional sales offices offering local
customer support. It currently has 19 sales operations in 10
locations covering the UK and Eire. A wide range of market
leading franchises are represented across all product
technologies. Abacus Polar prides itself on its high level of
customer service.
Micromark C&CD is based in Maidenhead and distributes
products across the UK and Eire. Micromark was formed in
1970, combining with C&CD in 2000. Micromark C&CD is a
narrow line, broadbased technology electronic component
distributor. The company is dedicated to providing excellent
technical support alongside a high level of 
personal service.
TDC was acquired by the Abacus Group in June 2004. The
company is based in Basingstoke and was founded in 1992.
It specialises in wireless and wired products for embedded
applications in Machine to Machine (M2M), Automotive,
Consumer Electronic and Telecommunication products. 
Abacus Group at a glance
2 Abacus Group plc
Promax is headquartered in Them in Denmark and was
established in 1985. From its original base it now markets its
services through a network of 8 sales offices in all four Nordic
countries. Promax offers a complete range of electronic
technologies from the world’s leading suppliers. Offering a
high level of technical support through its highly trained and
qualified workforce has enabled Promax to become a leading
distributor in the Nordic region.
ECC, was purchased outright in 2004 and is now solely
owned by the Abacus Group. With its headquarters in Milan,
it covers Italy through a network of regional offices. The
company has three divisions, ITC which sells IT peripherals,
Components which acts as a manufacturer’s representative
for a number of ‘Blue Chip’ manufacturers and Distribution
which holds franchises across all product groups.
Electronic component distribution
Telecom Design Communication (TDC),
the specialist distributor in Telecoms.
  CTL is based In Stonehouse, Gloucestershire and markets its
services across the UK and Eire. CTL offers a range of sub-
contract manufacturing services to the electronics industry
including standard cable assemblies, electromechanical sub-
assembly through to complex box build and associated
testing. The 40,000 sq. ft. facility in Gloucestershire employs a
cell manufacturing technique to utilise space and processes
most efficiently. Automated and semi-automated equipment is
extensively used and, where hand assembly is required, the
technicians are highly trained and qualified. The facility holds
approval to ISO and BABT, and an IIP award.
CCS is based in Runcorn and offers cost efficient wiring and
box build solutions from design through to complete project
management. CCS markets its services in the UK and Eire
and is approved to ISO and UL. 
Abacus Group plc   3
Dubilier is headquartered in Dunmow, Essex and has been
supplying products for the electronics industry for over 50
years. Originally a UK manufacturer, Dubilier now has its
products manufactured globally. Dubilier’s comprehensive
range of Passive products has in recent years been
supplemented by Electromechanical products such as fans,
connectors, fuses and more recently, batteries. The Dubilier
name is synonymous with quality and value. Dubilier markets
its products through Europe, selling both direct and through
its distribution network. 
The Trident Microsystems group was formed in 1967 and
has grown to become the leading flat-panel displays and
printer specialist in the UK. In addition, it has a Benelux
operation and is currently expanding into the Nordic region
and Italy.
Its expertise has been earned by successfully managing
customer projects, through signing key franchises and by
investing in skilled people. The group has products for OEM
industrial, medical, retail, instrumentation and automotive
designers, as well as the capability to develop bespoke
display and man-machine-interface systems according to
customer need. Trident’s products and expertise are available
through field sales engineers, a network of comprehensive
websites and through its in-house technicians and product
specialists, all ready to find solutions for customers needing
display, printer, industrial computer and card reader products. 
Value added distribution services The Board is recommending an increase in the final dividend
of 3%, making a total for the year up 3% at 10.5p.
The principal reason for Abacus’ success in 2004 has been
the strong performance of its core UK business.  This has
been achieved as the result of our focus on excellent local
customer service, good logistics and a proactive approach to
the introduction of new products into a changing marketplace,
where we have gained new customers. Our electro-
mechanical assembly businesses have fared even better than
the core distribution business, with sales growth of 17%.
Overseas our performance has been uneven with a good
result in Denmark being offset by downturns in our Swedish
and Finnish companies.  In Italy the market showed no growth 
over the period.
In May 2004 we announced the acquisition of 40% of the
share capital of ECC Distribution Limited taking our ownership
to 100%. ECC is the UK holding company of ECC Elettronica
SpA, an Italian electronic component distributor which is
headquartered in Milan and covers Italy through a network of
five additional regional offices. The ownership of ECC has
given Abacus the opportunity to enhance ECC’s franchise line
card and develop its product offering.
We believe that the market for wired and wireless applications in
communications shows significant growth potential, and in June
2004 we acquired T elecom Design Communications Ltd (TDC)
for £2 million. TDC fits well with the Abacus culture of adding
value to the products it sells, by providing customers with design
and technical support in an attractive sector of the market.
We remain cautious on the global economic outlook, but
Abacus has entered the current year with a strong order book
and a range of customer and product opportunities. The
Group will continue to expand its areas of operation, both
geographically and into areas of market growth. As in the year
under review, this will be achieved organically and by
acquisition whenever suitable opportunities arise. 
There have been a number of Board changes during the year.
In June, Bob Lambourne joined the Group as Senior
Independent Director, and we welcome the experience he
brings to the Board. In September, both Brian Murdoch and
Gary Kibblewhite retired as Directors. Brian joined Abacus in
1987 as Managing Director, and was a major force in the
Company over 17 years. He stepped down as Chief Executive
in 2000, at which time he became Deputy Chairman on a part-
time basis. We are grateful for his very considerable
contribution. Gary became a Non-Executive Director in 1991,
and his knowledge of the industry has been of great benefit to
the Board. We wish both Brian and Gary well for the future.
Again, I thank and congratulate everyone in the Abacus Group
for their support and hard work over the past twelve months.
Harry Westropp
Chairman
23 November 2004
Chairman’s Statement
I am pleased to report another strong performance from the Abacus Group, with
Group sales rising 28% to £188 million, from £147 million in the previous year.
Sales on a like-for-like basis prior to acquisitions, increased by 9% to £160 million.
This compares with growth of 7% for our industry in the UK market over the same
period. The two acquisitions made during the year added a further £28 million to
sales. Profit before taxation and goodwill was up by 25% to £10.0 million and
earnings per share increased by 18% (after goodwill, profits were up by 22% to
£9.3 million and earnings per share increased by 14%). 
4 Abacus Group plc 
CTL’s new clean room and
custom lead pre-form service. Abacus Group plc   5
General Review 
The year has seen an improvement in market conditions for
our distribution businesses, primarily in the UK and Eire. The
UK industry association, AFDEC, reports a 7% growth in the
market during our financial year compared to the same period
the previous year. This growth has been driven by increased
demand from UK customers, while average selling prices
have remained relatively stable. In the Nordic region, AFDEC
statistics show a market growth of 5%, and in Italy, ASSODEL,
their Industry Association, reports a flat market. Improvement
in the UK market also benefited our UK based electro-
mechanical assembly businesses, CTL and CCS. At Trident,
the display and related products specialist, there was a further
disappointing delay in billings on our medical contracts. 
During the year we completed the acquisition of 100% of the
share capital of ECC, our Italian based distribution business,
and in June 2004 the Group acquired 100% of Telecom
Design Communications Ltd (TDC), a UK based distributor of
wireless modules and wired communication semiconductors,
an area which has strong growth potential for the future. 
Overall, our Group sales grew by 28%, or by 9% on a like-for-
like basis when excluding acquisitions, and our Group
Bookings showed a 30% growth, or 10% on a like for like
basis. The largest growth contributors were our UK and Eire
distribution businesses, which outgrew their markets. AFDEC
data for both the Nordic and UK markets were re-stated
during the year to take account of new members. The
statistics now represent 86% of the UK distribution market,
and 54% of the Nordic region. Based on these restated
numbers, our share in the UK and Eire grew to 14% in 2004,
compared to 13.5% in 2003, but decreased from 4.9% to
4.6% in the Nordic region. In Italy ECC had a 4% market share
according to ASSODEL whose members represent 74% of the
distribution market. 
The impact of movement in component volumes and average
selling prices is significant, and we measure and closely
monitor these statistics. Our UK distribution businesses,
excluding acquisitions, showed a growth in volumes of 17% in
2004 compared to 2003, but a reduction in average selling
prices of 3%. In the Nordic region our volumes grew by 7%
and average selling prices declined by 4%. Our workloads as
measured by the number of lines shipped, showed a year-on-
year growth of 10% in the UK and a reduction of 8% in the
Nordic region.
All of the markets that we supply are extremely competitive
due to the need to support our customers with the right
products at the right price, and consequently our gross
margins are constantly under pressure. To continue to invest
in the business to support both customers and suppliers
requires us to maintain margins at a level that makes this
possible, and this has therefore always been a high priority for
Abacus management. Our gross margins in our continuing
businesses were 23.8%, compared to 23.2% in 2003. Due to
the lower gross margins prevalent in our industry in Europe,
the acquisition of ECC during the year resulted in the Group
margin for 2004 being 22.9%. 
Headcount in our continuing distribution businesses
increased by 21 in 2004. With the majority of our sales growth
coming from increased activity rather than improving prices,
plus our focus on attracting new customers and maintaining
service levels, 80% of this growth has been in new positions
within sales and marketing.  Including acquisitions, our
distribution headcount ended the year at a total of 605.
Chief Executive’s Review
Abacus Polar has continued to perform extremely well benefiting from its local
sales office culture and an increased focus on promoting new products to its
customers. It has again strengthened its position in the UK and Eire market and
has seen its new order intake increase by 21% in 2004, compared to 2003. Billings
increased by 16% over the same period. 6 Abacus Group plc
Individual Company Review
We approach the market with an extremely high level of
personal service combined with a broad product offering. A
strong technical capability supports the introduction of new
products to our existing and potential customer base, and we
combine this with the policy of having other businesses that
create a differentiation which distinguishes Abacus from our
competitors.
Abacus Polar, our UK and Eire based distribution business,
has continued to perform extremely well benefiting from its
local sales office culture and an increased focus on
promoting new products to its customers. It has again
strengthened its position in the UK and Eire market and has
seen its new order intake increase by 21% in 2004, compared
to 2003. Billings increased by 16% over the same period.
The movement of manufacturing from the UK to lower cost
areas has slowed significantly, and the impact on Abacus
Polar has again been minimal during the year.  However, we
recognise that it is still a threat to our growth and during the
course of the year we have invested in additional sales
personnel to find and introduce new customers into the
Group.  By adding headcount to support the increased
activity, we can ensure the service offered to our existing loyal
customers is unaffected. This improved focus on taking new
products to market and approaching potential new customers
will be a key driver for the business in the coming year.
Micromark C&CD has also performed well, with its order
intake growing by 9% over 2003, and its Billings by 7%. We
continue to look for opportunities to expand its franchise
base, particularly in non-commodity areas in the electro-
mechanical product range. Although these products do not
have the same potential growth opportunities as a major
semiconductor franchise, they are inherently less cyclical with
regard to demand and price and usually have higher average
selling prices and gross margins.
Promax, our Nordic distribution business, has not performed
as well as our UK businesses and has seen its order intake
remain at the same level as 2003, and its Billings decline by
2%, resulting in a small loss of market share. Its position in
the Danish market is as strong as Abacus Polar’s in the UK,
but it has not performed as well as we had expected in the
three other countries within the Nordic region. Whilst we will
continue to deliver an excellent service in Denmark, our focus
during the next financial year will be on improving our result
from the other Nordic countries. We believe that the
introduction of our UK based IT system during the past
Summer will aid this process.
ECC, our Italian distribution business, joined the Group at the
beginning of the year when we increased our shareholding to
60% and the balance of 40% was acquired in May 2004. We
have been working with ECC as a commercial partner since
1999, and therefore have a good understanding of its
business. Since joining the Group, ECC has been able to add
new franchises and will build on these in the future. ECC’s
performance has met our expectations, although compared
to financial year 2003, its order intake and Billings have
declined by 3% in a flat market. 
Chief Executive’s Review (continued)
Customer Sectors
Contract Manufacturing 
(Local) 31.2%
Audio Visual 2.0%
Medical 2.2%
Contract Manufacturing 
(Global) 2.9%
Distribution 3.6%
Printer 
Peripherals 5.8%
Communication 5.9%
Fire & security 7.3%
Instrumentation 10.1%
Others 14.3%
Industrial Control 14.7%
The new recruits – CCS expands.  Abacus Group plc   7
TDC, a UK based distributor focusing on the wireless and
wired communications market, was acquired in June 2004. In
last year’s Review, we identified this as a potential growth
market, and in such a circumstance, the option is either to
attempt to attract new franchises and personnel into the
Group, which is not easy, or to identify existing companies
that already have the franchises, the personnel and the
expertise. TDC fitted this profile well; we welcome them to the
Group, and look forward to their providing potential growth
opportunities as we move through the new financial year. One
of TDC’s major franchises has already agreed to work with us
from January 2005 in the Italian market, providing ECC with
further new products to take to existing and potential
customers.
Trident, our display and related products specialist, did not
perform as well as we had anticipated, due in the main to the
lack of shipments against their medical contracts.  Its new
order intake declined by 7% and its Billings by 2% when
compared to its 2003 result. These products remain a growth
market, and having established Trident in the Nordic region at
the end of 2003, we have now introduced the concept into
Italy. Trident will continue to focus on its core distribution
business, as well as other system build opportunities which
will bring growth in markets not normally covered by an
electronic component distributor. We will also continue to
seek ways to expand the business both in the UK and
abroad.
CTL and CCS, our electro-mechanical assembly businesses,
have both benefited from the improvement in the UK market
with a combined growth in their new order intake of 16% in
2004 compared to 2003, and a Billings growth of 17% in the
same period. They both offer a high quality local
manufacturing facility to UK customers whose volume or
complexity of product does not lend itself to offshore
manufacturing. We remain convinced that offering a different
service from our competition is another key factor to our
successful growth in the UK market.
Dubilier, our “own brand” component business, which has in
excess of 80% of its sales in Passive products, has seen an
increase in volumes of 10% but a further reduction in average
selling prices of 14%. It continues to seek new products in the
electro-mechanical product area to broaden its product range
and, as with CTL and CCS, remains both a key differentiator
and a useful contributor to the Group’s gross margins.
Outlook
We enter the new year with a number of key parameters in
our business showing improvement over the position at the
beginning of financial year 2004. Our 90 day order book
across the Group is up 3%, whilst in the UK and Eire
distribution it is up 8%. The daily turns business, measured as
new orders Booked and Billed in the same month, is up 18%
in our UK and Eire distribution companies. However, whilst a
number of the major semiconductor manufacturers have
experienced strong growth, over the past 12 months we have
seen a minimal rise in average selling prices for
semiconductors and virtually no supply problems. Industry
forecasters are currently predicting smaller growth in 2005,
and consequently we do not expect to get any benefit from
supply shortages or increased prices in the near future.
Organic growth in our business will come from us continuing
to offer an excellent level of service to all our customers. This
ensures that we remain focused on the fundamentals of our
business so that we deliver an overall performance above the
average for our industry. However, we are committed to
seeking opportunities to strengthen our presence in existing
markets, and to expanding our geographical coverage for the
various divisions of the Group.
Martin Kent
Chief Executive
23 November 2004 8 Abacus Group plc
Turnover
In the year to 30 September 2004, sales increased by 28% to
£188 million, or by 9% on a like for like basis excluding the
sales for ECC and TDC, which were acquired in October 2003
and June 2004 respectively. On a like for like basis, sales in
the first half were up 6% on the prior year, whilst sales in the
second half were up 11% on the comparable period a year
earlier.  During a year in which sales in the UK, excluding
TDC, increased by 11% year on year, all operations continued
to deliver profit, with the exception of Promax, the Group’s
distributor in the Nordic region, which suffered a drop in sales
of 2% in both local currency terms and Sterling.
Looking at the geographical markets, 67% (2003: 79%), 
12% (2003: 15%) and 13% (2003: 0%) of the Group’s turnover
arose in the UK, Nordic and Italian regions respectively.
Based on AFDEC’s restated market figures, the Group
increased its UK market share in 2004 to 14% from 13.5% in
2003, but in the Nordic region Promax’ share declined slightly
from 4.9% to 4.6%.  The Group now holds 4.0% of the Italian
market, following the acquisition of ECC.
Gross Margins
Margins improved slightly during the course of the year,
reversing the deterioration in the latter half of the previous
year, with the gross profit margin for 2004, excluding TDC and
ECC, coming in at 23.8%, as against 23.2% in the previous
year.  After including TDC and ECC, the Group gross margin
in 2004 was 22.9%. 
Operating Expenses and Goodwill
Other operating expenses (excluding goodwill of £0.7million)
for the year ended 30 September 2004 were £32.1 million as
compared to £25.5 million in 2003. Excluding TDC and ECC,
they rose by 9% to £27.8 million. This increase arose mainly
from expenditure on improving the Group’s business system
and on servicing the increase of 9% in organic sales,
demonstrating the Group’s ability to control its cost base.  
During the year, distribution headcount increased from 516 
at September 2003 to 605 at September 2004. This increase
in heads resulted from a net organic increase of 21 staff, with
the acquisitions of ECC and TDC adding a further 51 and 17
staff respectively.  This tight headcount control has been
achieved by continuing to focus on operational efficiencies,
whilst ensuring that our customer service levels and franchise
support have not diminished. 
All acquired goodwill is written off over a 20 year period on a
straight-line basis, subject to investment impairment reviews.
The Group’s goodwill amortisation charge increased to
£0.7million in 2004 compared to £0.3 million in the previous
year. This increase reflects the reduction made in 2003 in the
estimated deferred consideration payable on the Trident
acquisition and the subsequent adjustment to the goodwill
charge in 2003. 
Finance Charges 
Finance charges rose from £0.6million to £0.9million, but
excluding TDC and ECC remained flat at £0.6 million. This
was achieved in part through our strategy of utilising lower
interest rates on Yen, Euro and US$ borrowings. Even after
the TDC and ECC acquisitions the Group achieved a robust
interest cover of 12.5 times (2003: 15), based on profit before
interest and goodwill (11.6 times after goodwill amortisation).
Taxation 
The Group’s effective tax rate for the year, based on profits
before taxation and goodwill, was 32.7% against 29.4% in the
previous year (35.2% and 31.0% respectively after goodwill).
This increase primarily resulted from:
a) the acquisition of ECC, which has a higher tax rate; 
b) the Group moving from a position of a net deferred tax 
asset, which the Group had prudently not recognised, to 
one of a net deferred tax liability, and the consequent 
increase in tax charge; and
Financial Review
The Directors are recommending a final dividend of 7.0p, giving a total dividend
for the year of 10.5p. This 3% increase on 2003 reflects the Group’s confidence in
effectively managing its working capital and in its ability to generate cash.
Abacus Group Stand –
Electronica Exhibition, Munich,
November 2004. Abacus Group plc   9
c) an increase in carried forward losses and consequent 
deferred tax asset, which the Group does not recognise as
recoverability is uncertain. 
Working Capital and Cash Flow
The Group retains its key focus throughout each business 
on maintaining tight management of working capital. 
The Group’s cash flow varies, both during the course of each
month and seasonally across the year. Debt tends to be
highest at the month end, dipping sharply during the first ten
days of each month as some debtors pay a few days late: it
is the Group’s policy to pay its creditors on time, and the bulk
of these payments are due at the end of each month. During
the course of the year, cash flow tends to improve during the
latter part of the summer, which coincides with the Group’s
year end. In addition, both at the half year mark and at the end
of the year, the Group’s Credit Control departments make
extra efforts to resolve outstanding issues and this tends to
lead to the debtors’ figure being lower than in the preceding
few months.
Debt for the year increased by £10.8million, compared to an
increase of £0.2million in 2003. The change related mainly to:
a) cash inflow from operating activities rising to £13.1million 
from £10.7million in the previous year. However, this 
increase was more than offset by;
b) capital expenditure of £2.4million (2003: £4.8million); 
c) acquisition expenditure of £1.6million for ECC and 
£2.0million for TDC and the consolidation of their
associated debts of £7.9million and £0.2million
respectively; and 
d) a payment of £2.4million of deferred consideration on 
the Trident acquisition made in the year ending 30
September 2001.
Looking at each of these in turn:
Operating activities 
Operating profit before depreciation and goodwill increased
to £12.6million in 2004, from £9.8million in 2003 (see note
21), and cash inflow from creditors and provisions was
£3.2million against an outflow in 2003 of £2.3million. The latter
in part reflects the 9% increase in like for like year on year
sales and the associated increase in cost of sales. 
In 2004 cash outflow on debtors was £3.0million against 
an outflow of £0.3million in 2003. The £2.7million increase 
in outflows again reflected the 9% increase in sales. The
Group’s year end gross debtors’ days were 67 in 2004
against 62 in 2003, mainly due to the acquisition of ECC
which has higher debtors’ days. There was a £0.3 million
inflow from a decrease in stock (2003: inflow of £3.4million). 
Capital expenditure 
During the year the Group’s capital expenditure amounted 
to £2.4million (2003: £4.8million), whilst depreciation was
£1.6million (2003: £1.2million). During the year we invested 
a further £1.5million in upgrading our business system 
(2003: £2.3million). 
It is the Group’s policy that its larger properties be acquired
on a freehold basis in order to optimise our use of each
property, although if circumstances would indicate leasing to
be more appropriate in certain specific situations, then such 
a route would be considered.
Acquisitions 
As part of the acquisition price for the Trident Microsystems
Limited group, which was acquired in October 2000, an
element of consideration was deferred until after April 2004,
based upon the profit performance of Trident during the two
years ending 30 September 2003. This deferred consideration
amounted to £2.4million and was paid during the year.
In January 1999 the Group sponsored a management buy-out
of ECC Elettronica SpA. In August 2003 the Group purchased
9% of ECC Distribution Limited (the parent company of ECC
Elettronica SpA) for £0.2million, and during the year, the
Group purchased a further 51% and 40% in October 2003
and May 2004 respectively, bringing the total investment 
to £1.8million. 
Debt
Net debt at the end of the year was £29.4million, as against
£18.7 million at the end of the previous year. As mentioned
before, this increase was mainly due to the £14.1million cost
of acquisitions comprising cost of investment (£3.6million),
consolidation of acquired debt (£8.1million) and payment of
deferred consideration (£2.4million).  10 Abacus Group plc
Treasury
The Group’s treasury function is managed centrally from
Newbury, providing a service to the operating businesses,
with regular reporting to the Board. The Group’s treasury
policy is to ensure that adequate capital is available to the
Group for its business operations and that this is provided in
a cost-effective fashion. No speculative transactions as such
are undertaken, in that all foreign currency purchases are
related to current or projected transactions. However, the
nature of treasury management is such that the timing and
extent of currency hedging will of necessity always involve a
degree of speculation as to the future movement of rates. 
The Group’s practice is to review its hedging programme
continually, with a policy of increasing the use of hedging at 
a time of substantial currency movements.
An explanation of the Group’s objectives, policies and
strategies for the role of derivatives and other financial
instruments in creating and changing the risks of the Group
can be found in the Corporate Governance Report.  Details of
the Group’s debt, currency and interest rate structure can be
found in Note 24 to the Accounts. 
Currency Translation and Exposure
The results of the Group’s overseas subsidiaries are translated
into Sterling at the monthly average exchange rates for the
relevant year. The balance sheets of these subsidiaries are
translated into Sterling at the spot exchange rates at the end
of each year. Any gain or loss arising from such translations
from one year to the next is recorded in reserves. The principal
currencies to which the Group is exposed are the US Dollar,
the Danish Kroner, the Euro and the Japanese Yen.
Pensions
The Group operates a number of staff pension schemes, all
of which are of a defined contribution nature. The Group has
never operated a defined benefits scheme.
Balance sheet
The Group’s balance sheet continues to be strong.
Shareholders’ funds at 30 September 2004 were £44.2million
(2003: £42.4million), the increase primarily comprising the 2004
retained earnings of £1.6million. The return on capital employed
before goodwill (profit before interest, taxation and goodwill
divided by shareholders’ funds and net debt) was 14.8% 
(2003: 14.1%) and after goodwill was 13.8% (2003: 13.4%).   
Dividend
The Directors are recommending a final dividend of 7.0p,
giving a total dividend for the year of 10.5p. This 3% increase
on 2003 reflects the Group’s confidence in effectively
managing its working capital and in its ability to generate
cash, The final dividend will be paid on 25 January 2005 to
those shareholders on the Register at the close of business
on 10 December 2004, subject to shareholder approval at the
Annual General Meeting on 20 January 2005.
Dividend cover, before and after goodwill, for the year ending
30 September 2004 is respectively 1.5 times (2003: 1.3) and
1.3 times (2003: 1.2).
Earnings per share
Basic earnings per share, before goodwill, were 15.9p (2003:
13.5p), and after goodwill were 14.2p (2003: 12.5p).
Peter Griffith-Jones
Finance Director
23 November 2004
Financial Review (continued)
Cabvision – Trident’s state of the art computer and
screen technology provide London cab users with
the latest in ‘Infotainment’. Abacus Group plc 11
The Board of Directors, Secretary and Advisors
The Board of Directors
The Board currently comprises three non-executive Directors and four executive Directors. 
Current Board Directors
A. H. Westropp, Non-executive Chairman
aged 59, has been Chairman of the Company since 1994. He
is Chairman of the Upperpoint Group and a non-executive
Director of The Throgmorton Trust Plc. He is also a Director of
a number of other companies.
P. L. Griffith-Jones MA, ACA, Finance Director and Secretary
aged 50, qualified as a Chartered Accountant with Arthur
Andersen. He spent three years working in the semiconductor
test industry, before moving to Digital Research, a software
company, for four years. He joined Abacus as Finance Director
in 1987 and was a member of the buy-out team.
G. J. Grover, Managing Director, Trident
aged 49, joined Trident in 1978 before becoming Sales Director
in 1983. He was instrumental in moving the business into the
displays market. He was appointed Managing Director in 1987
and joined the Board of Abacus in March 2004. 
R. E. Lambourne, Non-executive Director
aged 52, a Chartered Accountant, joined the Board of Abacus
in June 2004. He is the Senior Independent Director of Pace
Micro Technology plc. He has held a number of public
company directorships, including appointments as Finance
Director of Fosesco plc, Hepworth PLC and RMC Group Plc.
M. R. Kent, Chief Executive
aged 53, has been Chief Executive of the Group since
November 2000. He has been in the industry since 1969. He
joined Abacus in 1975, was the Marketing Director for the
Group from December 1987 and was a member of the buy-out
team.
G. McBeth, Managing Director, ECD UK & Nordic
aged 42, developed his career within National Semiconductor
for 11 years before moving to Abacus in 1995. He was
appointed to the Board in 1997. He is now responsible for the
ECD companies in the UK and Nordic region.
Mrs M. Rice-Jones, Non-executive Director
aged 43, joined the Board of Abacus in January 2003. She has
considerable experience as a senior executive in major
companies in the electronics industry. She is a Corporate Vice
President of Motorola Inc. and Regional General Manager of
the network business in Europe, the Middle East and Africa.
Retirements from the Board during the year
B. R. Murdoch MA, Deputy Chairman
aged 58, has worked in electronics distribution since 1970. He
joined Abacus in 1987 as Managing Director and led the
management buy-out in February 1989. He was Chief
Executive until November 2000, at which time he became
Deputy Chairman. He retired from the Board on 30 September
2004. 
S. E. Wotherspoon, Commercial Director
aged 57, joined Polar Electronics in 1983 and was appointed
to its Board in 1984. He was part of the team which launched
Polar plc on the USM in 1989. He is now Commercial Director,
involved in front line sales and responsible for developing
Abacus Polar Gold, a division focused on sales to blue-chip
customers. He stepped down from the Board in February
2004.
G. Kibblewhite, Non-executive Director
aged 64, joined the Board of Abacus in 1991 and has worked
within the electronic components industry for over 30 years. He
is Chairman of AFDEC in the UK and the International
Distribution of Electronics Association in Milan. Also, he is a
partner in Europartners Consultants, specialised consultants to
the electronics industry. He retired from the Board on
30 September 2004.
Secretary
P . L. Griffith-Jones MA, ACA
Registered Office
Abacus House, Bone Lane,
Newbury, Berkshire, RG14 5SF
Stockbrokers
Hoare Govett Limited,
250 Bishopsgate, London, EC2M 4AA
Auditors
Deloitte & Touche LLP
Chartered Accountants & Registered Auditors,
Abbots House, Abbey Street,
Reading, Berkshire, RG1 3BD
Solicitors
Hammonds,
Rutland House, 148 Edmund Street,
Birmingham B3 2JR 
Registered Number
2278260
Financial Advisors
Hoare Govett Limited,
250 Bishopsgate, London EC2M 4AA
Principal Bankers
HSBC Bank plc,
70 Pall Mall, London SW1Y 5ES
Registrars and Transfer Office
Computershare Services plc
PO Box 82, The Pavilions,
Bridgwater Road, Bristol, BS99 7NH
Web site
www.abacus-group.co.uk The Directors present their Annual Report on the affairs of the Group, the Accounts and Auditors’ Report for the year ended 30
September 2004.
Principal activity 
The Abacus Group distributes electronic components.
Business review and future developments
The Chairman’s Statement, Chief Executive’s Review and the Financial Review comment on the results for the year and future
developments.
Results and dividends
The results for the year ended 30 September 2004 are shown in the consolidated profit and loss account on page 30.
The Directors recommend a final ordinary dividend of 7.0 pence per share, which, with the interim dividend of 3.5 pence, makes a
total for the year of 10.5 pence (2003: 10.2 pence). If approved, the Company will pay the final ordinary dividend on 25 January
2005 to shareholders on the register at the close of business on 10 December 2004.
Directors
The names of the current Directors, and those who retired during the year, are given on page 11. All the current Board Directors
served at 30 September 2004 and during the year, except G. Grover and R. Lambourne who were appointed on 30 March 2004
and 1 June 2004 respectively. The interests of all the Directors, who served at any time in the year, in the share capital of the
Company at 30 September 2004 are given in the Directors’ Remuneration Report. 
M.R. Kent and P .L. Griffith-Jones, who retire at every third Annual General Meeting (AGM), and A.H. Westropp, who now retires at
every AGM, being eligible offer themselves for re-election. G. Grover and R. Lambourne, who were appointed by the Board as
Directors on 30 March 2004 and 1 June 2004 respectively, offer themselves for re-appointment at the AGM. These three
executives’ and two non-executives’ service contracts can be terminated by either party giving in writing not less than twelve and
six months notice respectively.
Events since the balance sheet date
There have been no significant events since 30 September 2004.
Substantial shareholdings
The Company has been advised of the following interests in 3 per cent or more of the Ordinary shares in issue at 23 November
2004. 
No. of 
Shares %
Insight Investment Management 3,623,604 8.52
Topfib Ltd 3,230,500 7.59
M & G Investment Management 2,853,458 6.71
Morley Fund Management 2,704,468 6.36
Threadneedle Asset Management 2,226,900 5.24
Aegon Asset Management 2,149,123 5.05
Unicorn Asset Management 1,867,205 4.39
Legal & General Investment Management 1,697,376 3.99
J P Morgan Fleming Asset Management 1,674,089 3.94
Collins Stewart 1,554,486 3.65
Supplier payment policy
Group policy is to set terms of payment when agreeing each transaction with suppliers, clearly explain payment procedures,
consistently settle bills within contract terms and only extend terms with prior agreement. The Group operates systems for
promptly advising suppliers of, and resolving, queried and contested items.
Trade creditors of the Group at 30 September 2004 were equivalent to 34 days purchases (2003: 37 days). The Company has no
trade creditors.
Charitable donations
The Group contributed £2,089 (2003: £1,957) to charities during the year.
Fixed Assets
In the opinion of the Directors, the current open market value of the Group’s interests in freehold land and buildings is equal to its
fair value.
12 Abacus Group plc
Directors’ Report International Financial Reporting Standards (IFRS)
The Group has undertaken an extensive exercise to evaluate the impact of IFRS, which the Group will adopt from the 1 October
2005. The Group considers that IFRS will have the most significant effect in the following areas:
a) the fair value of share options granted after 7 November 2002 will be expensed to the profit and loss account; 
b) there will be greater recognition of intangibles on acquisitions and a consequent reduction in goodwill; 
c) goodwill will be subject to impairment review and will no longer be amortised;
d) greater disclosure of segmental information in the Accounts; 
e) dividends approved after the balance sheet date will no longer be included in the profit and loss or balance sheet prior to date
of approval; and
f) some operating leases will be treated as finance leases.
Auditors
A resolution for the re-appointment of the Auditors, Deloitte & Touche LLP, will be proposed at the forthcoming Annual General
Meeting. Deloitte were first appointed as the Group’s Auditors in July 2002.
Annual General Meeting
The notice of the Annual General Meeting on 20 January 2005 follows the Report and Accounts, and a Proxy voting form is
enclosed. 
Ordinary Resolutions 1 to 9 constitute the ordinary business of the meeting: to approve the Accounts, appoint Directors and
Auditors and approve the Directors’ Remuneration Report. 
Resolutions 10 to 12 constitute special business.
Ordinary resolution 10 authorises the Directors to issue Ordinary shares up to a nominal value of £708,933, one third of the
issued share capital at 30 September 2004.
Special resolution 11 allows the Directors to issue Ordinary shares for cash without applying the pre-emptive rights in section 89
of the Companies Act 1985. It empowers the Directors to make rights issues and issue shares up to a total nominal value of
£106,340, 5% of the issued share capital at 30 September 2004. The authority expires within 15 months or at the end of the
Annual General Meeting in the year 2005, if earlier.
Special resolution 12 sets out the framework in which the Company may purchase its own shares. It limits a purchase to a
maximum of 15 percent of the issued share capital and sets the upper and lower prices to be paid. The Directors intend to
exercise this power only if, in the light of market conditions prevailing at the time, they believe that a purchase will increase
earnings per share and be in the best interest of shareholders generally. In reaching their decision, they will consider other
investment opportunities, appropriate gearing levels and the overall position of the Group. Abacus Group plc shall cancel shares
purchased in this way and reduce the number of shares in issue.
Shareholders may inspect copies of the Directors’ service contracts and the register of Directors’ interests at any time from the
date of the Notice of Annual General Meeting until the end of the Annual General Meeting. These documents are held at the
registered office, which is open during normal business hours. 
By order of the Board
Abacus House, Bone Lane, Newbury, P .L. Griffith-Jones, MA, ACA
Berkshire, RG14 5SF (registered office) Secretary
23 November 2004
Abacus Group plc 13 Abacus Group plc has for several years been committed to maintaining high standards of corporate governance, and remains so
committed. These statements describe how the Company applies and complies with the principles of the Combined Code,
annexed to the Listing Rules of the Financial Services Authority and for which the Board is accountable to its shareholders. 
Following the Higgs and Smith Reports into the roles of non-executive directors and audit committees, the Code was superceded
and replaced in July 2003. 
Statement of compliance with Code of Best Practice
The Company has complied throughout the year with the Code provisions set out in the previous and updated Section 1 of the
Combined Code on Corporate Governance issued by the Financial Reporting Council. 
The Board of Directors
At 30 September 2004, the Board included a non-executive Chairman, Harry Westropp, a Chief Executive, Martin Kent, three other
executive and two other non-executive Directors including a Senior Independent Director (SID), Robert Lambourne, to whom
concerns may be conveyed. During the year, Brian Murdoch and Stuart Wotherspoon stepped down as Executive Directors on
12 February and 30 September 2004, respectively, and Graham Grover was appointed an executive Director on 30 March 2004.
In addition, Gary Kibblewhite stepped down as a non-executive Director on 30 September 2004, and Robert Lambourne was
appointed as a non-executive Director on 1 June 2004. 
All non-executive Directors who served during the year were considered by the Board to be independent of management.
Although Mr Westropp has been a Board member for more than nine years, he is considered to be independent as he has never
had business or personal relationships with the Company, is not a significant shareholder, does not hold cross-directorships,
receives only fixed Directors’ fees, has never been an employee of the Company and is considered to be of sufficient calibre and
experience that he can exercise judgement free from undue influence of management. The Board considered Mr Kibblewhite
independent whilst he served as a non-executive Director for the same reasons. 
The Company believes it has a balance of executive and non-executive Directors appropriate for a business of its size. 
Each individual executive Director’s performance is formally appraised at an annual review by the Chief Executive, whose
performance in turn is appraised by the non-executive Chairman. The Chairman’s performance is appraised by the non-executive
Directors, who in turn are appraised by the Chairman, Chief Executive and Finance Director. 
The Company Secretary is responsible to the Board for ensuring that the Board, in conducting its business, follows its procedures
and best practice whilst complying with applicable rules and regulations. All Directors have access to the advice and services of
the Company Secretary.
Conduct of Board Meetings
The Board meets each month to consider matters specifically reserved to it for decision (during the year, the Board had twelve
such monthly meetings, and details of attendance are given on page 15). When required, the Board convenes between the regular
meetings.
Within seven days of each meeting all members receive up to date reports on key areas of the business and information to support
decisions. Where information is insufficient to enable the Board to discharge its duties, Board members may make further
enquiries.
A part of each meeting is devoted to strategy and planning, and in dealing with issues of strategy, performance, resource
allocation, key appointments and standards of conduct, Board members use their independent judgement. In carrying out their
duties, Board members may also take independent professional advice, at the Company’s expense.
Retirement of Directors
The Articles of Association of Abacus Group plc require that:
a) the Directors must submit themselves for election by shareholders at the next Annual General Meeting after appointment;
b) non-executive Directors who have served nine years or less on the Board, and all executive Directors, are required to retire
every three years; and
c) non-executive Directors, who have served more than nine years on the Board, are required to retire annually.
The names of Directors retiring at the next Annual General Meeting are given on page 12, and biographical details of the Directors
on page 11.
The Board has established three committees, namely the Nominations Committee, the Remuneration Committee and the Audit
Committee, the terms of reference for which are available from the Company Secretary and which will also be available at the
Annual General Meeting. Details of, and attendees at, each of these committees are as follows: 
Nominations Committee
Abacus Group plc has developed formal and transparent procedures for appointing new Directors to the Board. These duties are
discharged through the Nominations Committee, which Harry Westropp chairs. Its other members are Margaret Rice-Jones, Martin
Kent, Peter Griffith-Jones, Gary Kibblewhite until his retirement on 30 September 2004 and Robert Lambourne with effect from
1 June 2004. If appropriate, the Committee instructs external professional consultants to ensure a wide range of candidates is put
14 Abacus Group plc
Corporate Governance Statements
for the year ended 30 September 2004 forward. Before appointing suitable candidates, the Board considers the recommendations of the Committee. The Committee met
three times during the year to discuss the appointments of Graham Grover and Robert Lambourne, and to consider the
resignations of Stuart Wotherspoon, Brian Murdoch and Gary Kibblewhite.
Newly appointed Directors undertake appropriate training to enable them to discharge the responsibilities of their office.
Remuneration Committee
To avoid potential conflicts of interest, the Board has delegated responsibility for defining remuneration policy for executive
Directors and senior management to the Remuneration Committee. Robert Lambourne is Chairman (previously Gary Kibblewhite),
with its other members being Harry Westropp and Margaret Rice-Jones. The Committee met six times during the year. 
The Board is responsible for establishing the fees and responsibilities of the non-executive Directors and takes into account
relevant market information.
The Remuneration Report on pages 20 to 27 describes the Company’s remuneration policy and the procedures for developing it
and for determining remuneration.
Audit Committee and accountability
Robert Lambourne is Chairman of the Audit Committee (formerly Harry Westropp). Its other members are Harry Westropp,
Margaret Rice-Jones and until his resignation on 30 September 2004, Gary Kibblewhite. Robert Lambourne is a Chartered
Accountant, who qualified with PricewaterhouseCoopers, and has previously been Group Finance Director of three listed
companies, including Hepworth PLC and RMC plc. The Committee has clear terms of reference, under which the Board gives it
authority to examine matters concerning the financial affairs of the Group, internal and external audit reports, Annual and Interim
Accounts, internal control procedures, accounting policies and other matters referred to it by the Board, including arrangements for
‘whistleblowing’.
Periodically the Audit Committee reviews the cost effectiveness of the audit, the independence and objectivity of the Auditors and
the level of non-audit services. The Board’s practice when contracting for non-audit services is to ensure that the level of fees and
importance of the work is considered alongside the audit work, in such a way that non-audit services are provided without
detriment to the Auditors’ independence. For the year ending 30 September 2004, the Audit Committee considered that the level
of non-audit fees of £6,000 compared to the audit fee of £113,000, did not prejudice the independence of the Auditors.
Minutes of the Committee’s proceedings are copied to the Board and discussed by it where appropriate.
Attendees at Board and Committee Meetings 
Number convened/ Board Nominations Remuneration Audit
attended by Directors Meetings Committee Committee Committee
Number Convened 12 3 6 3
Executive Director
Martin Kent 12 3 2 (in attendance) 2 (in attendance)
Brian Murdoch** 10
Peter Griffith-Jones 12 3 3 (in attendance) 3 (in attendance)
Graham McBeth 11
Graham Grover* 4 
Stuart Wotherspoon** 4
Non Executive Director
Harry Westropp 12 3 6 3
Gary Kibblewhite** 10 3 6 3
Margaret Rice-Jones 9 3 4 1
Robert Lambourne* 4 1 1 1
External Auditors
Deloitte & Touche LLP N/A N/A N/A 3 (in attendance)
* Graham Grover and Robert Lambourne were appointed as Directors on 30 March 2004 and 1 June 2004 and, in addition to
the above, attended four and one Board meetings respectively before their Board appointments.
** Stuart Wotherspoon resigned as a Board Director on 12 February 2004, and Brian Murdoch and Gary Kibblewhite on 30
September 2004.
Maintenance of a sound system of internal control
The Board has applied Principle D.2 of the Combined Code by establishing a continuous process for identifying, evaluating and
managing the significant risks which the Group faces. The Board regularly reviews the process, which has been in place
throughout the year and up to the date of approval of this Report, and which is in accordance with Internal Control: Guidance for
Directors on the Combined Code, published in September 1999. The Board is responsible for the Group’s system of internal
Abacus Group plc 15 control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve
business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
In compliance with Provision D.2.1 of the Combined Code, the Board continuously reviews the effectiveness of the Group’s system
of internal control. The Board’s monitoring covers all controls, including financial, operational and compliance controls and risk
management. It is based principally on reviewing reports from management to consider whether significant risks are identified,
evaluated, managed and controlled and whether any significant weaknesses are promptly remedied and indicate a need for more
extensive monitoring. In addition, a regular assessment is carried out to identify and evaluate all significant risks and consider all
significant aspects of internal control in place to manage them.
The Audit Committee assists the Board in discharging its review responsibilities.
Managing business risk
Discussed below are the Group’s five major business risks, together with the systems and initiatives in place to address them:
Market
The year under review has seen an improvement in market conditions for Abacus’ distribution businesses, primarily in the UK and
Eire where statistics produced by AFDEC show a 7% market growth during the 12 months of the financial year compared to the
same period in the previous financial year. This growth has been driven by increased volume demand from UK customers, as
average selling prices have remained relatively stable. Abacus’ UK based electro-mechanical assembly businesses, CTL and CCS,
have also benefited from the improvement in the UK market. At Trident, the display and related products specialist, the
disappointing delay in billings on medical contracts has impacted the growth opportunity.
The movement of manufacturing from the UK to lower cost areas has slowed significantly and the impact on Abacus Polar has
again been minimal during the year. However, it is recognised that it is still a threat to growth potential and during the course of the
year Abacus invested in additional sales personnel to find and introduce new customers into the Group. By adding headcount to
support the increased activity, Abacus can ensure the service offered to its existing loyal customers is unaffected. Abacus has also
implemented its strategy of identifying and benefiting from potential growth areas by purchasing TDC, a UK distributor focussing on
the wireless and wired communications market. During the year, Abacus increased its UK market share from 13.5% to 14.0%.
In the Nordic region, statistics produced by AFDEC show a market growth of 5% and in Italy ASSODEL, their Industry Association,
report a flat market. The Group’s Nordic share of the market declined from 4.9% to 4.6%. Management’s strategy next year is to
focus on the Swedish, Norwegian and Finnish markets and to leverage the benefits from the introduction of its UK based IT
system. ECC, the Group’s recent Italian acquisition, performed in line with expectations, with the focus next year being on
extending its franchised lines. 
Operational
This relates to the risk of financial loss or impairment to reputation resulting from inadequate or failed internal processes and
systems and from the actions of people or external events, such as a catastrophic disaster. The Group’s business units manage
this risk through appropriate controls and loss mitigation actions. Examples include:
a) bespoke business system providing comprehensive management reporting;
b) taking sufficient insurance cover, including for business interruption;
c) maintaining a detailed disaster recovery plan for all major sites and installing sprinkler systems in the main UK warehouse;
d) maintaining rigorous data backup procedures;
e) performing regular risk assessments at each of the Group’s locations;
f) carrying out a regular review of the principal suppliers and customers of the Group, and how each impacts on the Group’s
business;
g) regularly reviewing actual performance against budgets and forecasts;
h) establishing clearly defined procedures for the authorisation of major new investments and commitments.
In addition, specialist support functions provide expertise in ensuring the Group adheres to local regulatory and legal requirements.
Credit
The Group scores the creditworthiness of any new major customers before commencing trade with them. Based on this and the
customer’s capital base, authorised limits of trade are set. A proactive approach to the identification and control of bad and
doubtful debts is maintained and significant credit risks are highlighted to the Board.
16 Abacus Group plc
Corporate Governance Statements (continued)
for the year ended 30 September 2004 Liquidity
This relates to the risk that the Group is unable to fund its requirements either because of insufficient banking facilities or because it
is constrained by the risk of breaching banking covenants. The Group funds its day to day operations and short term assets
through a mixture of retained profits, short-term bank overdraft facilities and creditors, and its long term assets and acquisitions
through bank term loans. The Group’s policy on liquidity is to ensure that there are sufficient medium and long-term committed
borrowing facilities to meet funding requirements. Debt is principally raised centrally and then lent to operating subsidiaries on
commercial terms. It is Group policy not to trade in or enter into speculative transactions. Except for finance leases, loan notes and
a Danish Kroner loan, the Group pays interest on all debt financing arrangements at an agreed margin over bank base rates. The
majority of the cash comprises bank balances with HSBC Bank plc, Unibank AS and a number of Italian banks, institutions which
the Group considers creditworthy. The Group complied with all the relevant bank covenants during the year. 
Foreign currency risk
The Group has significant transactional currency exposures. Such exposures arise from sales and purchases by operating units in
currencies other than the unit’s functional currency. When appropriate, the Group seeks to cover net foreign exchange exposures
with forward contracts, which are arranged centrally, and by negotiating sales and purchases in the same currency where
appropriate. The net assets of the Group’s non-sterling operations represent only 11% of the Group’s total assets. The Group does
not consider it significant enough to justify borrowing any foreign currency to mitigate any structural currency exposure that may
arise from the translation of the foreign currency assets. The Group Finance Director appraises the Board of any significant
movement in the Group’s foreign currency exposure. 
Internal Audit
The Board has formally reviewed the need for an internal audit function. At the current time, a formal internal audit function is not
considered necessary for a number of reasons: the size of the Group, widespread executive involvement in the Group’s day to day
business, the depth of management reporting from all subsidiary managers to the Board, the level of variance analysis during the
review of the monthly management accounts by both senior management and the Board Directors, robust internal controls and the
annual in-depth review of the Group’s subsidiary companies’ accounting functions by a senior Group accountant. 
Dialogue with institutional shareholders
The Directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders. The
Chief Executive and Finance Director are the main contacts. In addition, all shareholders have the opportunity to meet with the
executive and non-executive Directors after the Annual General Meeting to discuss any issues they may have, and are available
upon request at all other times.
The Company maintains regular dialogue with institutional investors and presents the Interim and Preliminary results to them.
The Board is regularly briefed on feedback from institutional visits.
Shareholder relations
The Company encourages participation by, and communication with, its shareholders. It welcomes and responds to all contacts by
shareholders on a wide range of issues, and uses the Annual General Meeting to communicate with private investors. The
Chairmen of the Audit, Remuneration and Nomination Committees attend the Annual General Meeting and are available, along with
operational management, to answer questions from shareholders at the meeting.
The Annual General Meeting is conducted in accordance with the Combined Code. This includes informing members present at
the Meeting of proxy votes for and against resolutions, once the resolution has been voted on by a show of hands.
The Group’s annual and interim results are circulated to shareholders and the financial press. The Group’s share price is listed in
the Financial Times, The Daily Telegraph and The Times. Investor relations information and news releases are made available on
the Company’s website (address: www.abacus-group.co.uk).
Going concern
On the basis of current financial projections and the facilities available, the Directors have a reasonable expectation that the
Company and the Group have 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.
Abacus Group plc 17 General
Whilst the Board’s primary accountability is to its shareholders, it is also tries to maximise value for all its other “stakeholders”
including employees, customers, suppliers and the community at large, as well as considering the impact of its actions on health,
safety and the environment. Overall responsibility for each of these areas ultimately resides with the full Board. However, specific
responsibility for employee-related and environmental issues resides with the Group Finance Director, Peter Griffith-Jones, and
external stakeholder issues with the Chief Executive, Martin Kent. The Group’s social, environmental and ethical risk management
procedures are currently being implemented and will be subject to a process of regular reviews.
Management at all levels in the organisation is committed to taking account of its corporate social responsibility in its actions,
endeavours to show due respect for human rights, and works to high standards of integrity and ethical propriety. As a multinational
organisation, Abacus takes account of cultural differences between the various territories in which it operates.
Through its continuing commitment to corporate social responsibility, Abacus Group is a member of the FTSE4 Good Series Index.
Employee consultation
The Group values the involvement of its employees. It has continued to inform employees, through meetings, noticeboards and the
intranet, of matters affecting them and of Group performance. The Group consults employee representatives regularly on a wide
range of matters affecting their current and future interests. All eligible employees may join the ShareSave Scheme at periodic
intervals.
Employee development
The Group places great importance on the development and retention of staff. It operates a formal appraisal scheme whereby the
employee and manager provide each other with performance feedback after commencement of employment and at annual
intervals thereafter. At each of these meetings objectives, against which performance is regularly measured, are set for the coming
period and training needs identified. 
Over the last three years, a formal and structured training programme has been established for UK employees, promoting such
areas as communication skills, appraisal training, train the trainer and management development. The Group adopts practices to
encourage promotion from within including notifying employees via e-mail of any vacancies and identifying individuals for certain
positions as part of its formal succession planning. Graham McBeth, Executive Director responsible for the UK and Nordic
companies, holds overall responsibility for training throughout the Group.
Equal opportunities
Group companies are committed to providing equal opportunities to all employees, irrespective of sex, gender orientation, marital
status, creed, colour, race, religious belief, ethnic origin or disability. The Group’s philosophy is that all discrimination on any of the
above grounds is abhorrent and it will condone no discrimination whatsoever, whether negative, positive or of any other nature.
The commitment covers recruiting, training, career development, performance appraisal and social interaction, both in and outside
the workplace. The Group continues to monitor its application of this policy and its compliance with legislation and codes of best
practice.
Disabled Employees
The Group gives full consideration to applications for employment from disabled persons where the requirements of the job can be
adequately fulfilled by a handicapped or disabled person.
Where existing employees become disabled, it is the Group’s policy to provide continuing employment under normal terms and
conditions and to provide training, career development and promotion to disabled employees wherever appropriate.
Ethical Conduct
We expect our staff to act according to the highest standards of ethical behaviour covering such areas as fraud, conflict of interest,
internet abuse, bribery and corruption. This is reinforced through written policies, the inclusion of an anti-harassment clause in
contracts of employment, and the application of disciplinary procedures. The Group does not make corporate political donations
and prohibits the use of bribery and facilitation payments. 
Health and safety
The maintenance and improvement of working standards to safeguard the health and well being of staff is a continuing priority.
This is achieved through a documented Health and Safety policy, endorsed by the Chief Executive, annual risk assessments
carried out at the Group’s main locations and training staff in areas such as ‘manual handling’, which all warehouse staff receive on
their induction, and ‘hotwork handling’. All sites maintain accident books, the data from which is collected centrally every quarter
and reviewed by the Health and Safety Committee. Any actions identified are implemented wherever possible. The Group complies
with all local health and safety regulations. 
In the interests of staff health, smoking inside company premises is permitted only in designated areas.
Fire Wardens and First Aiders are appointed at each location and receive periodic training. 
18 Abacus Group plc
Corporate Social Responsibility Suppliers and Customers
The Group believes that long term relationships, founded on trust and mutual advantage, are vital to Abacus’ success. To foster
these relationships, the Group promptly advises suppliers and customers of queries and contested items. It always endeavours to
resolve any queries through dialogue and adopts a commercial stance in their resolution. Contract terms are clearly explained and
payment terms are only extended with prior agreement. The Group has ISO approval, which covers procedures such as dealing
with customer queries, supplier assessments, customer contract review, sales order entry and logistics. The Group’s business
systems monitor delivery performance and these statistics are studied closely, with corrective action being implemented where
appropriate. Customers and suppliers frequently tour Company warehouses and factories, and conduct their own competence
audits of the Group’s performance in various different areas of its operations. The results of these audits are discussed with the
appropriate management, with a view to continuous improvement in the Group’s performance.
The environment
It is Group policy to operate in a responsible manner with regard to the environment. The Group, wherever possible, uses recycled
and recyclable packaging materials, and it recycles waste paper. 
Examples of current initiatives include:
a) reusing approximately 20% of outer packaging from incoming warehouse deliveries for outbound shipments;
b) segregating, compacting and baling waste cardboard and paper packaging before dispatching to recycling mills;
c) encouraging customers to return empty specialist anti-static packaging for reuse;
d) using durable returnable pallet box containers for inter-company shipments;
e) dispatching empty printer and photocopier cartridges and waste office paper for recycling;
f) disposing of electronics components and waste cable via registered scrap merchants, which recycle the product where
possible;
g) encouraging suppliers to send data electronically rather than using paper. 
The Group sets objectives to reduce waste, and engages with its staff, customers and suppliers with the mandate to continually
find ways to minimise the use of resources.
The Group operates a continual review of its energy and resource utilisation with a view to minimising the impact of the Group’s
activities on the environment. An example is the refurbishment of the Newbury office, in which the most energy efficient lighting,
boilers and air conditioning units were installed. In addition, the lighting is now activated by motion sensors, thereby reducing
energy consumption.
Assisted by the change in emphasis in State legislation in the UK to an emissions based tax on company cars, the Group
continues to actively encourage employees to downsize cars. The Board also continues to encourage the use of push bikes as
commuter transport.
The Group requires company car drivers to comply with the laws on the use of mobile telephones whilst driving, and pays for the
cost and installation of hands free kits, informing staff by e-mail of the latest legislation and penalties for contravening it, and
including guidance on the use of telephones in the Group’s car policy document.
Although the Group uses minimal environmentally damaging or hazardous material, it ensures that all personnel receive appropriate
training in its handling and all material is properly disposed of.
Abacus Group plc 19 Introduction
This Report has been prepared so as to comply with requirements introduced by the “Directors’ Remuneration Report Regulations
2002”. The Report covers all Directors, both executive and non-executive. 
The Regulations require the Auditors to report to the Company’s members on the ‘auditable part’ of the Directors’ Remuneration
Report and to state whether in their opinion that part of the Report has been properly prepared in accordance with the Companies
Act 1985. The Report has therefore been divided into two separate sections, audited and non-audited information.
As required by the Regulations, a resolution to approve the Report will be proposed at the Annual General Meeting of the
Company at which the financial statements will be approved.
Unaudited Information
Composition of the Remuneration Committee
The members of the Remuneration Committee comprise the three non-executive Directors, whose names are given on page 15
and none of whom had any personal financial interest in decisions (other than as shareholders) and no cross-directorships or
participation in any incentive schemes.
During the year, the Committee consulted the Chief Executive and Company Secretary on its proposals.
Terms of Reference
The Board agrees the terms of reference of the Remuneration Committee. Its principal functions are to determine, on behalf of the
Board and shareholders: -
■ remuneration and incentives for the executive Directors, senior managers and other key staff of the Group;
■ targets for performance related bonuses for the executive Directors. The Committee also monitors performance against these
targets;
■ contractual terms of service agreements, including termination, pension arrangements and other benefits.
The composition of the Remuneration Committee and its operation comply with the Combined Code. The members are the non-
executive Directors, Harry Westropp, Margaret Rice-Jones and Robert Lambourne following his appointment on 1 June 2004.
Gary Kibblewhite resigned from the Committee on 30 September 2004. 
Remuneration policy
In framing policy, the Committee seeks and will continue to seek to balance the cost of packages which attract, retain and
motivate Directors of the highest quality, whilst avoiding paying more than is necessary.
The package of each executive Director reflects the principles of the Combined Code in setting remuneration, and takes into
account Group objectives and personal achievement.
The Committee seeks to balance the amount of remuneration paid to an individual Director within the overall package. These
packages are aimed to provide a competitive reward, having regard to the remuneration paid by comparable public companies and
relative performance. In evaluating the remuneration packages offered by comparable companies, the Committee sought advice in
June 2004 from an independent source, New Bridge Street Consultants, which also acted as consultants on the 2003 Share
Option Scheme and 2004 Sharesave Scheme. In determining pay increases, the Committee is sensitive to pay and employment
conditions of all staff in the Group. Staff pay is determined by market conditions and by both the Group’s and the individual’s
performance.
Performance-related elements of the remuneration packages are established as a significant proportion of total pay. These
elements are designed both to motivate executive Directors to perform at the highest levels and to align their interests with those of
shareholders.
There are no provisions in any of the Directors’ service contracts for compensation on early termination. Compensation payments
for early termination would be tailored, within legal constraints, to avoid rewarding poor performance and to deal equitably with the
Director.
Whilst the Company has stated its current and future remuneration policy of offering competitive and cost effective packages,
which incorporate a significant performance related element, it is conscious that any remuneration policy needs to be flexible. Any
changes to this policy will be stated in subsequent Annual Reports. 
20 Abacus Group plc
Directors’ Remuneration Report
for the year ended 30 September 2004 Abacus Group plc 21
Components of the policy for executive Directors’ remuneration
■ Basic salary: An executive Director’s basic salary review is carried out by the Committee prior to the beginning of the year and
when an individual changes position or responsibility. In deciding appropriate levels, the Committee takes into account the
individual’s responsibilities and performance, and if considered necessary will take external advice. In June 2004 the Board
undertook an extensive bench-marking exercise with the assistance of New Bridge Street Consultants. In addition to basic
salary, the executive Directors receive certain benefits-in-kind including a car or car allowance, business and private fuel,
permanent health insurance, life assurance and private medical insurance. 
■ Annual bonuses: In which the Chief Executive Officer, the Finance Director and the Managing Director (ECD) participate. The
bonuses are based on minimum targets, set by the Committee, being exceeded. These bonuses are capped at 100% of basic
salary level and are based on actual profit before tax and goodwill exceeding the Company Broker’s forecast set before
commencement of the performance year. Bonuses as a percentage of salary are earned as follows:
Actual exceeds forecast by Formula Bonus
< 5% 0 0
5% - 9% 2% per complete 1% 10% - 18%
10% - 25% 4% per complete 1% 40% - 100%
25% + Capped 100%
50% of any bonus is payable in cash. The remaining 50% of the bonus is deferred for three years. All or some of the deferred
bonus may be invested in the Company’s shares or taken as a cash amount. The deferred elements will be delivered three
years after the end of the performance year, subject to continued employment during those three years, or if appropriate, the
Director being a “good” leaver (redundancy, ill-health or retirement).
An additional maximum of 20% of basic salary can be earned for achieving predetermined personal objectives set at the outset
of the financial year. 
For the year ending 30 September 2004, the Company’s Broker in September 2003 forecast profit on ordinary activities before
goodwill and taxation of £8,000,000, compared to an actual profit of £10,025,000 for both acquisitions and existing
operations. As actual profit exceeded forecast by over 25% the three eligible Directors earned bonuses totaling £544,000,
equivalent to 100% of their basic salaries. No bonuses were earned for the year ending 30 September 2003.
■ Share options: The Committee seeks to encourage share ownership by executive Directors and senior staff through share
option arrangements. The Committee may consider granting share options to individual executive Directors as part of an overall
remuneration and incentive package. In establishing share option schemes, the Committee determines the scope of
participation of the executive Directors and appropriate performance targets. 
It is an expectation that Directors participating in the Share Option Scheme 2003 will build up personal shareholdings in the
Company amounting to a value between two and three times their salary, within five years of their first participation in the
Scheme. The Scheme allows for the grant of two types of share options, those approved by the UK Inland Revenue (approved)
and those not (unapproved). The targets for the Scheme were set after receiving independent, external advice from New
Bridge Street Consultants in consultation with the Group’s major shareholders.
Following adoption of the 2003 Scheme, options may no longer be granted under the 1993 Executive Share Option Scheme
(approved) and the 1996 Unapproved Share Option Scheme.  22 Abacus Group plc
Directors’ Remuneration Report (continued)
for the year ended 30 September 2004
Details of each of the schemes are as follows:
■ Pensions. The executive Directors participate in personal pension schemes or the Group’s pension plans. All pension
schemes are defined contribution. Details of the Company’s pension contributions, which are based on a % of each executive
Director’s basic salary, are summarised below:
Age Company contribution as a
% of basic salary
Under 45 15% Graham McBeth
45 to 50 20% Peter Griffith-Jones*
Graham Grover**
Above 50 25% Martin Kent
Brian Murdoch***
Stuart Wotherspoon***
* Peter Griffith-Jones was 50 in September 2004 and his pension contribution increased to 25% with effect 1 October 2004. 
** Graham Grover’s pension contribution increased from 15% to 20% with effect 1 October 2004.
*** Brian Murdoch and Stuart Wotherspoon resigned 30 September 2004 and 12 February 2004 respectively. 
Should an executive Director’s age cross one of the above thresholds, then the 5% increase in contribution is effective from
the month following his birthday.
Executive Share Option Scheme 2003 Approved Unapproved
Approved Unapproved
1993 1996
Vesting period from date of grant 3 years 3 years 3 or 5 years 3 or 5 years
Lapse period from date of grant 10 years 10 years 10 years 7 years
Maximum award, lower of: 
Absolute limit £30,000 None £30,000 None
Limit as a % of salary
EPS growth required in excess of
RPI between date of grant and
vesting
Retesting
Period in which option can be
exercised following EPS criteria
being met
Dilution limits
(the cumulative number of
unlapsed options, which can be
granted over a period as
constrained by set % limits of
issued share capital)
Cash alternative
The total of option grants issued in any one
year under the 2003 scheme is not to
exceed 200% of salary 
The total of options held under grant at any
one time across both Schemes is not to
exceed 400% of salary 
Options vest on a straight-line basis
between real EPS growth of 4% (50% of
award vests) and 6% per annum (full
vesting).
100% of award
vests on real EPS
growth exceeding
1% per annum
100% of award
vests on real EPS
growth exceeding
3% per annum
If targets not met in 3 years, re-tested on
fourth and fifth anniversary of grant
Re-tested from date of grant to any
anniversary falling between vesting date
and lapse date. 
To the extent that the performance
condition has been satisfied, that part of
the option that can be exercised may be
exercised irrespective of future EPS
performance until lapse of option.
Options can be exercised only in the period
in which EPS growth is met
10% of ordinary share capital (SC) over 10
years for all employee share option
schemes (including Sharesave Scheme)
No longer applicable No longer applicable
No Discretion of
Remuneration
Committee
No Discretion of
Remuneration
Committee Abacus Group plc 23
■ Contracts of service. The required notice for terminating an executive Director’s service contract is twelve months. The
Committee considers this period of notice to be appropriate.
Details of the executive Directors’ contracts are summarised below:
Contract Date Notice Period
Martin Kent 1 February 2004 One year
Peter Griffith-Jones 1 February 2004 One year
Graham McBeth 1 February 2004 One year
Graham Grover 30 March 2004 One year
Brian Murdoch 19 February 1998 One year
Stuart Wotherspoon 19 February 1998 One year
Non-executive Directors’ remuneration and contracts
The Board has delegated the responsibility for determining the remuneration and services of the non-executive Directors to a sub-
committee, whose members are the Chief Executive and the Finance Director.
Details of the non-executive Directors’ contracts which have no automatic renewal provisions, are summarised below:
Contract Expiry Date Notice period
Commencement Date
Harry Westropp 1 January 2004 1 January 2005 6 months
Robert Lambourne 1 June 2004 January 2007 AGM* 6 months
Margaret Rice-Jones 22 January 2003 22 January 2006 6 months
* Subject to approval at the January 2005 AGM.
The non-executive Directors’ remuneration packages are:
a) set to attract, motivate and retain the appropriate level of non-executive talent;
b) proportional to their contribution towards the interest of the business;
c) consistent with recognised best standards;
d) in the form of cash fees, payable monthly; 
e) never received in the form of share options, in order to maintain independence. 
Details of the remuneration, options and interests of the Directors are given later in this Report. Performance Graph
The Regulations require this Remuneration Report to contain a graph showing the performance of the Company and a ‘broad
equity index’ over the past five years. The comparative index chosen is the FTSE Small Cap Index (excluding Investment Trusts) as
the Company is a constituent of the FTSE Small Cap Index but is not an Investment Trust. The Regulations require that
performance is measured by total shareholder return (share price growth with dividends deemed to be reinvested gross on the
ex-dividend date). 
This graph shows the value over the 5 year period ending on 30 September 2004, of £100 invested in Abacus Group plc on
30 September 1999 compared with the value of £100 invested in the FTSE Small Cap Index (excluding Investment Trusts).
24 Abacus Group plc
Directors’ Remuneration Report (continued)
for the year ended 30 September 2004
Value £
Source: Datastream Audited Information
The total amounts for Directors’ remuneration were as follows:
2004 2003
£’000 £’000
Emoluments 1,245 868
Money purchase pension contributions 395 168
Gains on exercising share options 106 92
1,746 1,128
Emoluments
Details of individual emoluments in respect of qualifying services of each person who served during the year were as follows: 
Salary Taxable Bonus Total Total
or fees Benefits ** 2004 2003
£’000 £’000 £’000 £’000 £’000
Executive
M.R. Kent 219 17 219 455 231
B.R. Murdoch 40 8 – 48 110
P .L. Griffith-Jones 47 14 180 241 183
G. McBeth 129 18 145 292 146
G. Grover 57 6 – 63 –
S.E. Wotherspoon 27 4 – 31 97
Non-executive
A.H. Westropp (Chairman) 55 – – 55 55
G. Kibblewhite* 27 – – 27 27
M. Rice-Jones 25 – – 25 19
R. Lambourne 8 – – 8 –
Total 634 67 544 1,245
2003 totals 783 85 – 868
Pensions and bonuses are calculated in line with the relevant Scheme Rules.
* G. Kibblewhite’s fees and services were billed by Europartners for the full year. 
** 50% of the bonus is payable in cash and 50% deferred for three years.
Pension contributions
All the executive Directors are members of defined contribution pension schemes. Contributions payable by the Company are
given below.
2004 2003
£’000 £’000
B.R. Murdoch 98 28
P .L. Griffith-Jones 187 39
M.R. Kent 55 51
G. McBeth 39 29
G. Grover 9 –
S.E. Wotherspoon 7 21
395 168
Abacus Group plc 25 Share options
Aggregate emoluments on the previous page do not include the value of options to acquire ordinary shares granted to or held by
the Directors. These are given in the table below.
30 Sept
1 Oct 2003 Granted Exercised 2004 Exercise Earliest date Last date 
Number Number Number Number price for exercise for exercise
M.R. Kent 100,000 – – 100,000 392.0p 21/12/2003 21/12/2007
M.R. Kent 92,550 – – 92,550 221.5p 20/03/2006 20/03/2013
M.R. Kent 135,000 – – 135,000 228.5p 19/11/2005 19/11/2012
M.R. Kent – 182,758 – 182,758 232.0p 01/12/2006 01/12/2016
P .L. Griffith-Jones* 17,952 – (17,952) – 94.0p 22/12/2003 22/06/2004
P .L. Griffith-Jones 100,000 – – 100,000 392.0p 21/12/2003 21/12/2007
P .L. Griffith-Jones 79,000 – – 79,000 221.5p 20/03/2006 20/03/2013
P .L. Griffith-Jones 134,750 – – 134,750 228.5p 19/11/2005 19/11/2012
P .L. Griffith-Jones – 155,172 – 155,172 232.0p 01/12/2006 01/12/2016
P .L. Griffith-Jones* – 6,673 – 6,673 245.0p 19/02/2004 19/08/2009
G. McBeth 20,000 – – 20,000 200.0p 22/06/2000 22/06/2005
G. McBeth 75,000 – – 75,000 97.5p 04/01/2002 04/01/2006
G. McBeth* 14,361 – (14,361) – 94.0p 22/12/2003 22/06/2004
G. McBeth 20,000 – – 20,000 392.0p 21/12/2003 21/12/2007
G. McBeth* 1,054 – – 1,054 320.0p 20/12/2003 20/06/2006
G. McBeth 61,850 – – 61,850 221.5p 20/03/2006 20/03/2013
G. McBeth – 125,000 – 125,000 232.0p 01/12/2006 01/12/2016
G. McBeth* – 3,077 – 3,077 245.0p 19/02/2004 19/08/2009
B.R. Murdoch* 17,952 – (17,952) – 94.0p 22/12/2003 22/06/2004
S.E. Wotherspoon 20,000 – – 20,000 392.0p 22/12/2003 21/12/2007
889,469 472,680 (50,265) 1,311,884
* These options are held by the Directors under the ShareSave Scheme.
No options lapsed during the year.
Details of the share option schemes in which the Directors participate are given earlier in the Directors’ Remuneration Report.
The market price at 30 September 2004 was 244p and the range during the year was 225p to 355p.
P L Griffith-Jones, B R Murdoch and G McBeth all excerised their options when the market price was at 303.5p on 6 January
2004, giving rise to gains of £38,000, £38,000 and £30,000 respectively.
Directors’ interests in shares
2004 2004 2003 2003
Beneficial Non-beneficial Beneficial Non-Beneficial
A.H.Westropp 17,300 – 17,300 –
B.R. Murdoch** 1,525,063 – 1,505,111 –
P .L. Griffith-Jones* 1,069,252 261,399 1,119,300 273,758
M.R. Kent 53,462 – 53,462 –
G. Kibblewhite** 3,571 – 9,071 –
G. McBeth 31,861 – 17,500 –
G. Grover –– ––
S.E. Wotherspoon** –– 20,000 –
R. Lambourne 5,000 – ––
* In addition, this Director is the beneficial owner of 628,975 (2003 – 527,616) 5p Ordinary shares held by a pension scheme. 
** B R Murdoch and G Kibblewhite resigned as Directors at close of business on 30 September 2004 and S Wotherspoon on 12
February 2004
There have been no changes to the interests of the Directors between 30 September 2004 and the date of these Accounts.
26 Abacus Group plc
Directors’ Remuneration Report (continued)
for the year ended 30 September 2004 Directors’ interests in contracts
During the year, none of the Directors had a material interest in any contract which was of significance in relation to the business of
the Group.
Approval
This Directors’ Remuneration Report has been approved by the Board and signed on its behalf by:
Abacus House, Bone Lane, Newbury, P .L. Griffith-Jones, MA, ACA
Berkshire, RG14 5SF (registered office) Secretary
23 November 2004
Abacus Group plc 27 United Kingdom company law requires the Directors to prepare financial statements for each financial period, which give a true and
fair view of the state of affairs of the Company and the Group as at the end of the financial period and of the profit or loss of the
Group for that period.
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; and
■ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 to enable them to ensure that the financial statements comply with the Companies Act
1985. They are also responsible for the system of internal controls, for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
28 Abacus Group plc
Statement of Directors’ Responsibilities We have audited the financial statements of Abacus Group plc for the year ended 30 September 2004 which comprise the
Consolidated Profit and Loss Account, the Balance Sheets, the Consolidated Cash Flow Statement, the Consolidated Statement
of Total Recognised Gains and Losses and the related Notes numbered 1 to 27, together with the Statement of Accounting
Policies. 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 of the Financial
Services Authority.
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 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 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 judgments made by the Directors in the preparation of the financial statements and of whether the accounting
policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors’
Remuneration Report described as having been audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial
statements and the part of the Directors’ Remuneration Report described as having been audited.
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 September 2004 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 LLP
Chartered Accountants and Registered Auditors
Reading
23 November 2004
Abacus Group plc 29
Independent Auditors’ Report
to the members of Abacus Group plc Consolidated Profit and Loss Account
for the year ended 30 September 2004
2004 2003
Notes £’000 £’000 £’000 £’000
Before Goodwill After
goodwill amortisation goodwill
amortisation (note 9) amortisation Total
Turnover
Existing operations 159,658 – 159,658 146,980
Acquisitions 28,140 – 28,140 –
1 187,798 – 187,798 146,980
Cost of sales (144,808) – (144,808) (112,854)
Gross profit 42,990 – 42,990 34,126
Other operating expenses (32,091) (719) (32,810) (25,935)
Operating profit
Existing operations 10,289 (649) 9,640 8,191
Acquisitions 610 (70) 540 –
10,899 (719) 10,180 8,191
Finance charges (net) 2 (874) – (874) (571)
Profit on ordinary activities before taxation 3 10,025 (719) 9,306 7,620
Tax on profit on ordinary activities 5 (3,280) – (3,280) (2,359)
Profit on ordinary activities after taxation 6,745 (719) 6,026 5,261
Dividends paid and proposed on equity shares 6 (4,466) – (4,466) (4,296)
Retained profit for the year 18 2,279 (719) 1,560 965
Earnings per share 8
Basic (before goodwill) 15.9p 13.5p
Basic (after goodwill) 14.2p 12.5p
Diluted (before goodwill) 15.8p 13.4p
Diluted (after goodwill) 14.1p 12.4p
All the activities of the Group comprise continuing activities.
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 30 September 2004
2004 2003
£’000 £’000
Profit for the financial year 6,026 5,261
(Loss) profit on foreign currency translation (135) 493
5,891 5,754
The accompanying notes are an integral part of the Consolidated Profit and Loss Account and Consolidated Statement of Total
Recognised Gains and Losses.
30 Abacus Group plc Consolidated Balance Sheet
30 September 2004
Notes 2004 2003
£’000 £’000
Fixed assets
Intangible assets 9 11,826 9,105
Tangible assets 10 18,387 15,826
Investments 11 – 159
30,213 25,090
Current assets
Stocks 12 34,751 31,754
Debtors 13 41,107 28,788
Cash at bank and in hand 3,136 1,228
78,994 61,770
Creditors (amounts falling due within one year) 14 (56,274) (34,103)
Net current assets 22,720 27,667
Total assets less current liabilities 52,933 52,757
Creditors (amounts falling due after more than one year) 15 (7,272) (8,258)
45,661 44,499
Provisions for liabilities and charges 16 (1,433) (2,050)
Net assets 44,228 42,449
Capital and reserves
Called-up share capital 17 2,127 2,108
Share premium account 18 9,118 8,783
Merger reserve 18 3,323 3,323
Capital redemption reserve 18 428 428
Profit and loss account 18 29,232 27,807
Equity shareholders’ funds 19 44,228 42,449
Minority Interests 20 – –
Total capital employed 44,228 42,449
The accompanying notes are an integral part of the Consolidated Balance Sheet.
Abacus Group plc 31 Company Balance Sheet
30 September 2004
Notes 2004 2003
£’000 £’000
Fixed assets
Investments 11 5,614 3,604
Current assets
Debtors (amount falling due within one year) 13 3 3
Debtors (amount falling due after one year) 13 9,914 10,806
Cash at bank and in hand 3,059 2,983
12,976 13,792
Creditors (amounts falling due within one year) 14 (4,072) (3,452)
Net current assets 8,904 10,340
Total assets less current liabilities 14,518 13,944
Creditors (amounts falling due after more than one year) 15 (2,399) (2,399)
Net assets 12,119 11,545
Capital and reserves
Called-up share capital 17 2,127 2,108
Share premium account 18 9,118 8,783
Capital redemption reserve 18 428 428
Profit and loss account 18 446 226
Equity shareholders’ funds 12,119 11,545
The accompanying notes are an integral part of the Balance Sheet.
The Accounts on pages 30 to 53 (inclusive) were approved by the Board of Directors on 23 November 2004 and signed on their
behalf by:
M. R. Kent
P . L. Griffith-Jones Directors
32 Abacus Group plc Consolidated Cash Flow Statement
for the year ended 30 September 2004
Notes 2004 2003
£’000 £’000
Net cash inflow from operating activities 21 13,146 10,670
Returns on investments and servicing of finance 22 (874) (571)
Taxation 22 (2,499) (2,893)
Capital expenditure and financial investment 22 (2,412) (3,683)
7,361 3,523
Acquisitions 22 (9,345) 441
Equity dividends paid (4,355) (4,160)
Net cash outflow before financing (6,339) (196)
Financing 22 (3,635) 1,803
(Decrease) increase in cash in the year 23 (9,974) 1,607
The accompanying notes are an integral part of the Consolidated Cash Flow Statement.
Abacus Group plc 33 Statement of Accounting Policies
30 September 2004
The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the
preceding year.
Basis of accounting
The Accounts are prepared under the historical cost convention and in accordance with applicable UK accounting standards.
Basis of consolidation
The Group Accounts consolidate the accounts of Abacus Group plc and its subsidiary undertakings drawn up to 30 September
each year. The results of subsidiaries acquired or sold are consolidated for the periods from, or to, the date at which control
passed. Acquisitions are accounted for under the acquisition method.
Intangible assets - Goodwill
Goodwill arises on the acquisition of subsidiary undertakings and businesses. If the fair value of the consideration given exceeds
the fair value of the identifiable assets and liabilities acquired, the difference, goodwill, is capitalised. Goodwill is written off on a
straight-line basis over its useful economic life, a maximum of twenty years. Provision is made for any impairment.
Negative goodwill is similarly included in the Balance Sheet and is credited to the Profit and Loss Account in the periods in which
the acquired non-monetary assets are recovered through depreciation or sale. Negative goodwill in excess of the fair values of the
non-monetary assets acquired is credited to the Profit and Loss Account in the periods expected to benefit.
Goodwill arising on acquisitions in the year to 30 September 1997 and in earlier years was written off to reserves in accordance
with the accounting standard then in force. As permitted by the current accounting standard, the goodwill previously written off to
reserves has not been reinstated in the Balance Sheet.
On disposal or closure of a previously acquired business, the attributable amount of goodwill previously written off to reserves is
included in determining the profit or loss on disposal.
Investments
Subsidiary undertakings and other fixed asset investments are stated at cost, which includes the costs of acquisition, less
provision for impairment. Current asset investments are stated at the lower of cost or net realisable value.
Where appropriate, and in accordance with Sections 131 and 133 of the Companies Act 1985, the Company records the cost of
investment as the nominal value of shares issued plus the costs of acquisition. The resulting difference arising on consolidation is
taken to merger reserve.
Tangible fixed assets
Tangible fixed assets are shown at cost, net of depreciation and provision for impairment. Depreciation is provided on all tangible
fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset over its
expected useful life, as follows:
Straight-line basis Expected useful life
Freehold buildings 50 years
Leasehold improvements over the lease term
Fixtures, fittings and equipment 3 or 8 years
Computer equipment 3 years
Plant and tooling 10 years
Reducing balance basis 
Motor vehicles at 25% per annum
Residual value is calculated on prices prevailing at the date of acquisition.
Stocks 
Stocks are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and an attributable proportion
of manufacturing overheads based on normal levels of activity on a weighted average basis. Net realisable value is based on
estimated selling price, less further costs expected to be incurred to completion and disposal.
Provision is made for obsolete, slow-moving and defective items where appropriate.
Debt
Debt is initially stated at the amount of net proceeds after deduction of issue costs if material. The carrying amount is increased by
the finance cost in respect of the accounting period and reduced by payments made in the period.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax
rates and laws that have been enacted or substantially enacted by the Balance Sheet date.
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
34 Abacus Group plc which they are included in financial statements. Deferred tax is not provided on timing differences arising from the revaluation of
fixed assets where there is no commitment to sell the asset, or on unremitted earnings of subsidiaries and associates where there
is no commitment to remit these earnings. 
Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax
assets and liabilities are not discounted.
Pension costs
The Group offers pensions to all eligible employees, including Directors, through defined contribution pension schemes. The assets
of the schemes are held independently of the Group.
The amount charged to the Profit and Loss Account for all defined contribution schemes is the total of the contributions payable in
the year.
Differences between contributions payable in the year and contributions actually paid are shown in the Balance Sheet as either
accruals or prepayments.
Foreign currency
Trading activities denominated in foreign currencies are recorded in local currencies at the exchange rates effective on the dates of
the transactions or, where appropriate, at the rate of exchange of related forward currency contracts.
Monetary assets and liabilities denominated in foreign currencies at the year end are reported at the rates of exchange prevailing at
the year end or, where appropriate, at the rate of exchange of related forward currency contracts.
The results of overseas operations are translated at the average monthly exchange rate and their balance sheets at the rates of
exchange prevailing at the Balance Sheet date.
Exchange differences arising from retranslating opening net assets and results are dealt with through reserves. All other differences
are included in the Profit and Loss Account.
Forward foreign exchange contracts
The Group uses forward foreign exchange contracts to reduce exposure to foreign exchange risk. It does not hold or issue
derivative financial instruments for speculative purposes.
A forward foreign exchange contract is treated as a hedge, if the contract reduces exposure to exchange movements and is
related to actual assets, liabilities or probable commitments denominated in the same or similar currency as the contract.
Gains or losses arising on these contracts are deferred until the hedged transaction itself is reflected in the Group’s accounts. At
this point the difference is recognised in the Profit and Loss Account.
Turnover
Turnover represents sales, less returns, by subsidiary companies to external customers excluding value added tax. Transactions
are recorded as sales when the delivery of products or performance of services takes place in accordance with the contractual
terms of sale.
Leases
Assets held under hire purchase contracts and finance leases are capitalised as tangible fixed assets and are depreciated over the
shorter of the lease term and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the
interest elements are charged to the Profit and Loss Account over the period of the lease.
Rentals under operating leases are charged on a straight-line basis over the lease term, even if payments are not made on the
same basis.
Finance costs
Finance costs of debt are recognised in the Profit and Loss Account over the term of such instruments at a constant rate on the
carrying amount. 
Related party transactions
Under the provisions of Financial Reporting Standard 8, the Company is not required to disclose details of certain related party
transactions between wholly owned subsidiaries. There were no other related party transactions throughout the year. 
Abacus Group plc 35 Notes to the Accounts
30 September 2004
1 Results and operations
Geographical segments
Both the turnover and profit before taxation of the Group are attributable to one class of business, electronic component
distribution. These are analysed below by geographical segment.
United Kingdom Nordic Italy Group
2004 2003 2004 2003 2004 2003 2004 2003
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Turnover: by origin 
Sales to third parties 139,620 124,738 21,731 22,242 26,447 – 187,798 146,980
Profit (loss) before taxation 9,729 7,921 (789) (301) 366 – 9,306 7,620
Net assets 39,576 37,993 3,608 4,456 1,044 – 44,228 42,449
Turnover by origin arising from acquistions in the United Kingdom and Italy were £1,693,000 and £26,447,000 respectively.
2003
Existing 2004 Existing
operations Acquisitions Total operations
£’000 £’000 £’000 £’000
Turnover: by destination
United Kingdom 124,822 1,562 126,384 115,699
Nordic 21,722 26 21,748 22,296
Italy 62 24,831 24,893 52
Other European Union 10,138 1,642 11,780 6,761
Other 2,914 79 2,993 2,172
159,658 28,140 187,798 146,980
The Directors have not presented further analysis of operating expenses as, in their opinion, a meaningful analysis is not available.
In relation to the acquisitions of ECC Distribution Limited and Telecom Design Communications Limited, continuing operations in
2004 include cost of sales of £23,144,000, gross profit £4,996,000 and operating expenses of £4,456,000.
2 Finance charges (net)
2004 2003
£’000 £’000
Other interest receivable and similar income (171) (163)
Interest payable and similar charges:
Bank loans & overdrafts 1,044 727
Finance leases and hire purchase contracts 1 7
1,045 734
Net interest payable 874 571
36 Abacus Group plc 3 Profit on ordinary activities before taxation
2004 2003
£’000 £’000
Profit on ordinary activities before taxation is stated after charging:
Depreciation and other amounts written off tangible fixed assets
– owned 1,555 1,131
– held under hire purchase agreements and finance leases 91 69
Amortisation of goodwill 719 316
Impairment of goodwill – 89
Loss on disposal of fixed assets 11 37
Operating lease rentals
– plant and machinery 962 838
– other 521 460
Auditors’ remuneration for
– audit services to Abacus Group plc 11 10
– audit services to Group companies 102 70
– non-audit services to Abacus Group plc – 25
– non-audit services to Group companies 6 –
4 Staff costs
2004 2003
£’000 £’000
Employee costs during the year were:
Wages and salaries 21,569 18,175
Social security costs 2,635 1,823
Other pension costs 1,531 1,149
25,735 21,147
The average monthly number of persons employed by the Group during the year, including executive Directors, was as follows:
2004 2003
Number Number
Assembly 175 168
Distribution 582 530
757 698
Details of Directors’ remuneration for the year are provided in the audited section of the Directors’ Remuneration Report on pages
25 and 26.
Abacus Group plc 37 5 Tax on profit on ordinary activities
2004 2003
£’000 £’000
Current tax
The tax charge is based on the profit for the year and comprises:
UK corporation tax at 30% 2,793 2,174
Overseas taxation 283 –
3,076 2,174
Adjustment in respect of prior periods
– UK corporation tax 51 187
– Foreign tax 1 (2)
Total current tax 3,128 2,359
Deferred tax
Effect of increase in tax rate on opening liability 9 –
Origination and reversal of timing differences 143 –
Total tax on profit on ordinary activities 3,280 2,359
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
£’000 £’000
Group profit on ordinary activities before tax 9,306 7,620
Tax on group profit on ordinary activities at standard UK
corporation tax rate of 30% (2003 – 30%) 2,792 2,286
Effects of:
Goodwill amortisation and impairment 216 121
Other expenses not deductible for tax purposes 207 128
Timing differences on deferred tax asset not recognised (5) (91)
Capital allowances in excess of depreciation (108) (237)
Unrelieved losses in foreign subsidiaries 217 137
Utilisation of brought forward losses (282) (170)
Higher tax rates on overseas earnings 39 –
Adjustments to tax charge in respect of previous periods 52 185
Group current tax charge for year 3,128 2,359
The group earns its profits primarily in the UK, and therefore the tax rate used for tax on profit on ordinary activities is the standard
rate for UK corporation tax, currently 30%.
The Group’s overseas tax rates are higher than those in the UK, primarily because the profits earned in Italy are taxed at a
standard rate of 37%, adjusted for disallowables.
6 Dividends paid and proposed on equity shares
2004 2003
£’000 £’000
Equity shares
– interim paid of 3.5p per share (2003 – 3.4p) 1,488 1,429
– final proposed of 7.0p per share (2003 – 6.8p) 2,978 2,867
4,466 4,296
38 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 7 Profit attributable to Abacus Group plc
The profit for the financial year dealt with in the Accounts of the parent company, Abacus Group plc, was £4,686,000 (2003 –
£3,988,000).
As permitted by Section 230 of the Companies Act 1985, no separate Profit and Loss Account is presented for the parent
company.
8 Earnings per share
Earnings per share in both years are calculated, in accordance with FRS 14, by dividing the earnings by the weighted average
number of shares outstanding in the year.
Basic Diluted
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Earnings after goodwill 6,026 5,261 6,026 5,261
Goodwill 719 405 719 405
Earnings before goodwill 6,745 5,666 6,745 5,666
Weighted average number of shares outstanding (number) 42,426,373 42,035,246 42,809,417 42,372,634
Earnings per share after goodwill (pence) 14.2 12.5 14.1 12.4
Effect on earnings per share resulting from goodwill (pence) 1.7 1.0 1.7 1.0
Earnings per share before goodwill (pence) 15.9 13.5 15.8 13.4
Weighted average number of shares 2004 2003
Number Number
of shares of shares
For basic earnings per share 42,426,373 42,035,246
Exercise of options 383,044 337,388
For diluted earnings per share 42,809,417 42,372,634
The Directors have also presented earnings per share before goodwill as they believe it reflects the underlying performance of the
Group.
9 Intangible fixed assets: Goodwill
Group Positive Negative Total
Goodwill Goodwill Goodwill
£’000 £’000 £’000
Cost
Beginning of year 13,038 (1,426) 11,612
Additions 3,440 – 3,440
End of year 16,478 (1,426) 15,052
Amortisation
Beginning of year 3,933 (1,426) 2,507
Provided during the year 719 – 719
End of year 4,652 (1,426) 3,226
Net book value
Beginning of year 9,105 – 9,105
End of year 11,826 – 11,826
Abacus Group plc 39 9 Intangible fixed assets: Goodwill (continued)
The increase in goodwill by £3,440,000 arose following:
a) a £446,000 increase between the estimated and actual earnout consideration paid on the acquisition of Trident Microsystems
Limited and the purchase of the minority interest of ASP (UK) Limited, both of which were made in the year ending
30 September 2001. The earnout consideration was based on trading results for the financial years ending 30 September
2002 and 2003. The total consideration paid was £12,407,000 (2003 – £11,961,000);
b) the purchase of 100% of the share capital of Telecom Design Communications Limited for £2,010,000, the fair value assets of
which were £463,000 (goodwill £1,547,000);
c) the purchase of the remaining 91% of ECC Distribution Limited for £1,599,000, bringing the total investment cost to
£1,758,000. ECC Distribution Limited’s fair value assets (excluding its own goodwill of £946,000) were £311,000 and goodwill
arising on acquisition was £1,447,000.
Goodwill on all acquisitions is amortised over the presumed useful economic lives of 20 years. 
10 Tangible fixed assets
Group Land and buildings
Freehold Leasehold Plant &
Improvements Machinery Total
£’000 £’000 £’000 £’000
Cost
Beginning of year 11,987 202 7,282 19,471
Acquisition of subsidiary undertakings 1,284 – 447 1,731
Additions 30 3 2,532 2,565
Disposals – – (2,031) (2,031)
Difference on foreign currency translation (60) – (17) (77)
End of year 13,241 205 8,213 21,659
Depreciation
Beginning of year 1,059 141 2,445 3,645
Charge for the year 246 19 1,381 1,646
Disposals – – (2,014) (2,014)
Difference on foreign currency translation (6) – 1 (5)
End of year 1,299 160 1,813 3,272
Net book value
Beginning of year 10,928 61 4,837 15,826
End of year 11,942 45 6,400 18,387
Freehold land at cost amounting to £1,717,000 (2003 – £1,612,000) has not been depreciated. The net book value of tangible
fixed assets includes £75,000 (2003 – £41,000) financed by hire purchase contracts and finance leases.
11 Fixed asset investments
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Subsidiary undertakings – – 5,614 3,604
Other investments – 159 – –
Cost and net book value – 159 5,614 3,604
Group
Other Investments
During the year Abacus Electronics Holdings Limited purchased the remaining 91% of the share capital of ECC Distribution
Limited, which owns 100% of the share capital of ECC Elettronica SpA. Hence the investment of £159,000 was reclassified to
subsidiary undertaking, which is eliminated on group consolidation. 
40 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 Abacus Group plc 41
11 Fixed asset investments (continued)
Company
Investments in subsidiary undertakings
£’000
Cost
Beginning of year 3,604
Acquisitions 2,010
End of year 5,614
Provision for impairment
Beginning and end of year –
Net book Value
Beginning of year 3,604
End of year 5,614
During the year the Company acquired 100% of the share capital of Telecom Design Communications Limited for £2,010,000.
Abacus Group plc owns 100% of the share capital of Abacus Electronics Holdings Limited which in turn holds all other
investments in trading subsidiaries. 
Principal Group investments
The Company and Group have investments in the ordinary equity share capital or local equivalent of the subsidiary undertakings,
listed below, which principally affected the profits and net assets of the Group. All companies except Innovative Electronic
Components Group Limited distribute electronic components. Innovative Electronic Components Group Limited provides central
administrative support.
Country of incorporation Proportion of shares
and operation held by
Company Group
Abacus Electronics Holdings Limited United Kingdom 100%
Telecom Design Communications Limited United Kingdom 100%
Promax Denmark A/S Denmark 100%
Promax Sweden AB Sweden 100%
Promax Finland OY Finland 100%
Promax Norway A/S Norway 100%
Innovative Electronic Components Group Limited United Kingdom 100%
Micromark Electronics Limited United Kingdom 100%
Trident Microsystems Limited United Kingdom 100%
ECC Elettronica SpA Italy 100%
Voting rights in each of the above subsidiaries are equal to the proportion of Ordinary shares held.
Dormant and intermediate holding companies subsidiaries have been omitted to avoid a statement of excessive length.
The Company acquired 100% of the issued share capital of Telecom Design Communications Limited in June 2004. Abacus
Electronics Holdings Limited acquired the remaining 91% of the issued share capital of ECC Distribution Limited in two tranches,
51% in October 2003 and 40% in May 2004. The results of the two companies were consolidated from 1 June 2004 and
1 October 2003 respectively. The trade, assets and liabilities of Telecom Design Communications Limited were transferred to
Abacus Electronics Holdings Limited on 30 September 2004.
In addition, Abacus Electronics Holdings Limited paid £2,207,000 of deferred consideration on its acquisition of 100% of the share
capital of Trident Microsystems Limited, and Trident Microsystems Limited in turn paid £156,000 of deferred consideration for the
purchase of the remaining 49% minority interest of ASP (UK) Limited. Both acquisitions were made in the year ending
30 September 2001 and both deferred considerations were based on trading results for the financial years ending 30 September
2002 and 2003. The total considerations paid were £11,966,000 and £441,000 respectively.
The acquisition method of accounting has been adopted for all acquisitions and the goodwill arising on the purchases has been
capitalised and is being amortised through the profit and loss account over a period of 20 years. 42 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004
11 Fixed asset investments (continued)
The consideration paid for each of the acquired companies during the year is as follows:
Loan Group Company
Cash Notes Total Total
£’000 £’000 £’000 £’000
Telecom Design Communications Limited 1,819 181 2,000 2,000
ECC Distribution Limited 1,593 – 1,593 –
Total before acquisitions costs 3,412 181 3,593 2,000
Costs of acquisitions 16 – 16 10
Total including acquisition costs 3,428 181 3,609 2,010
During the year, the acquisitions generated £1,855,000 of the Group’s net operating cashflows, paid £177,000 in respect of net
returns on investments and servicing of finance, paid £296,000 of taxation, and utilised £355,000 for capital expenditure and
financial investment.
The profit after tax and minority interest for ECC from 1 October 2003 to the date of acquisition (3 October 2003) by the Abacus
Group were £nil. The loss after tax and minority interest for ECC’s financial year ending 30 September 2003 were £6,000 and £nil
respectively. The profit after tax for Telecom Design Communications Limited from 1 January 2004 to the date of acquisition
(17 June 2004) was £147,000 (a loss after tax of £48,000 for the year ending 31 December 2003). 11 Fixed asset investments (continued)
The net assets at the dates of acquisition are as follows:
Book and fair Book value Fair Value
value
Telecom Design ECC Adjustments ECC Total
Communications Distribution Accounting Distrubtion
Limited Limited Re-valuation policy Limited
alignment
£’000 £’000 £’000 £’000 £’000 £’000
Fixed Assets
Intangible – 946 (946) – – –
(a)
Tangible 42 1,689 – – 1,689 1,731
Investment – 69 (69) – – –
(b)
Current assets
Stock 165 3,891 (605) – 3,286 3,451
(c)
Debtors 827 8,681 – – 8,681 9,508
Deferred taxation – 178 – (229) (51) (51)
(d)
Cash 8 690 – – 690 698
Total assets 1,042 16,144 (1,620) (229) 14,295 15,337
Liabilities
Overdrafts (222) (6,393) – – (6,393) (6,615)
Loans and finance leases – (2,246) – – (2,246) (2,246)
Trade creditors (174) (3,444) – – (3,444) (3,618)
Other creditors (183) (850) – – (850) (1,033)
Provisions
Provisions for agency and
employee termination indemnities – (922) (129) – (1,051) (1,051)
(e)
Total liabilities (579) (13,855) (129) – (13,984) (14,563)
Net assets acquired 463 2,289 (1,749) (229) 311 774
Minority interest (40.18% of ECC 
Distribution Limited) – (533) (533)
Remaining 40.18% of minority 
interest acquired – 533 533
Goodwill 1,547 1,447 2,994
2,010 1,758 3,768
Satisfied by
Cash 1,819 1,752 3,571
Loan notes 181 – 181
Acquisition Costs 10 6 16
2,010 1,758 3,768
Adjustments
(a) Elimination of goodwill arising on prior acquisitions.
(b) Fair value adjustment to investment held by ECC.
(c) Increase in stock provision by £605,000 following review of excess and obsolete stock. 
(d) Elimination of deferred tax asset of £229,000 in line with Group policy.
(e) Increase in fair value of agency termination indemnity by £129,000.
The net assets of ECC Distribution Limited were not significantly different as at 3 October 2003 and 17 May 2004, when 51% and
40% of the share capital were purchased respectively. 9% of the share capital had been acquired in the year ending
30 September 2003.
Abacus Group plc 43 11 Fixed asset investments (continued)
Net cash outflows in respect of the acquisitions comprised:
£’000
Cash at bank and in hand acquired 698
Bank overdrafts acquired (6,615)
(5,917)
Total cash consideration paid before acquisition costs (3,571)
Acquisition costs paid by cash (16)
Cash consideration paid in prior year 159
Total cash consideration and acquisition costs
paid in year ending 30 September 2004 *(3,428)
Net cash outflow on acqusitions (9,345)
*Split by
Purchase of subsidiary undertakings (2,721)
Purchase of minority interests (707)
(3,428)
12 Stocks
Group Group
2004 2003
£’000 £’000
Finished goods and goods for resale 34,751 31,754
There is no material difference between the replacement cost of stocks and the balance sheet values.
13 Debtors
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 40,241 27,590 – –
Corporation tax recoverable 152 78 – –
Prepayments and accrued income 675 1,120 3 3
41,068 28,788 3 3
Amounts falling due after more than one year:
Amounts owed by subsidiary undertaking – – 9,914 10,806
Corporation tax recoverable 29 – – –
Other debtors 10 – – –
39 – 9,914 10,806
41,107 28,788 9,917 10,809
44 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 14 Creditors: amounts falling due within one year
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Bank loans and overdrafts 24,846 11,373 – –
Obligations under finance leases and 
hire purchase contracts 75 9 – –
Other loans 362 249 362 181
Trade creditors 16,813 10,893 – –
Corporation tax 1,927 978 – –
Other taxation and social security 3,796 3,035 56 27
Accruals and deferred income 5,477 4,699 676 377
Proposed dividend 2,978 2,867 2,978 2,867
56,274 34,103 4,072 3,452
Bank overdrafts and loans repayable within one year were £23,136,000 and £1,710,000 respectively. Of these utilised facilities,
£17,381,000 are secured (2003 – £11,373,000) after taking into account cash balances which may be offset. Total bank overdraft
facilities are £40,682,000 (2003 – £24,065,000). 
Group operating companies have granted fixed and floating charges over their assets to secure bank and loan overdraft facilities.
Finance leases are secured against specific assets.
Other loans of £362,000 comprise non-guaranteed and guaranteed loan notes of £181,000 each. The former attracts interest of
3%, the latter interest of 4% plus a 2.125% bank guarantee charge. The date of repayment of the former is September 2005, the
latter is subject to the resolution of outstanding tax issues. All loan notes are redeemable at par.
15 Creditors: amounts falling due after more than one year
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Bank loans (secured) 7,272 8,258 – –
Amounts owed to subsidiary undertakings – – 2,399 2,399
7,272 8,258 2,399 2,399
The borrowings of the Group and Company are repayable:
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
On demand or within one year
Hire purchase and finance leases 75 9 – –
Loans and overdrafts 25,208 11,622 362 181
25,283 11,631 362 181
Between one and two years
Bank loans 1,554 68 – –
Between two and five years
Bank loans 5,718 8,190 – –
Total borrowings 32,555 19,889 362 181
Abacus Group plc 45 46 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004
16 Provision for liabilities and charges
Employment
Group Deferred Earnoutand agency 2004 2003
taxation consideration termination Total Total
£’000 £’000 £’000 £’000 £’000
Beginning of year 134 1,916 – 2,050 3,865
Acquisition of subsidiary undertakings 51 – 1,051 1,102 –
Charged to profit and loss 152 – 92 244 –
Reduction in the year – (1,916) – (1,916) (1,829)
Utilised in the year – – (30) (30) –
Foreign exchange difference 2 – (19) (17) 14
End of year 339 – 1,094 1,433 2,050
2004 2003
Deferred taxation £’000 £’000
Accelerated capital allowances 275 –
Other timing differences 64 134
Provision for deferred taxation 339 134
There was no unprovided deferred tax liability at either Balance Sheet date. 
The Directors have not provided for a deferred tax asset balance of £1,003,000 (2003 – £298,000). Of this, £341,000 (2003 –
£263,000) relates to losses incurred in Promax’s Norwegian and Finnish overseas subsidiaries, £474,000 of timing differences on
provisions in Italy and £188,000 of depreciation in excess of capital allowances. These deferred tax assets would be recognised
when the Directors could forecast with certainty that:
a) the Promax operations would move into profit; and
b) the Italian provisions would be utilised in the forseeable future.
Earnout consideration
As stated in note 9, the provision for earnout consideration was in respect of the acquisitions of Trident Microsystems Limited and
the purchase of a 49% minority interest of ASP (UK) Limited. The actual amount paid was £2,363,000 (2003 – £1,916,000 –
estimate) and was based on the profits of the companies for the two years ending 30 September 2003.
Employment and agency termination
The termination provisions related to ECC and are payable by law on the termination of employment or agency contracts. During
the year £30,000 was paid in connection with agency contracts. The Directors expect that payments from terminating contracts
could arise at any time in the future, depending on the performance of ECC Elettronica SpA, its employees and agents.
17 Called–up share capital
Company
2004 2003
£’000 £’000
Authorised share capital:
70,000,000 (2003 – 70,000,000) Ordinary shares of 5p each 3,500 3,500
Allotted, called–up and fully–paid:
42,536,007 Ordinary shares of 5p each (2003 – 42,169,041) 2,127 2,108 17 Called–up share capital (continued)
During the year 366,966 Ordinary shares of 5p each were issued for a total consideration of £354,000. The Company has options
outstanding for the following shares:
Option scheme Number of Number Number Number Number of Exercise Exercise
shares at Granted Exercised Lapsed shares at period price per
1 Oct 2003 30 Sep 2004 share
2003 26,258 – – – 26,258 2005–2012 228.5p
Approved – 25,862 – – 25,862 2006-2013 232.0p
2003 263,492 – – – 263,492 2005–2012 228.5p
Unapproved 233,400 – – – 233,400 2006–2013 221.5p
– 462,930 – – 462,930 2006-2013 232.0p
1996 21,429 – – – 21,429 2001–2005 105.0p
Unapproved 75,000 – – – 75,000 2002–2006 120.5p
75,000 – – – 75,000 2002–2006 97.5p
390,000 – – – 390,000 2003–2007 389.0p
240,000 – – – 240,000 2003–2007 392.0p
1993 82,500 – – – 82,500 1998–2005 200.0p
Approved 11,000 – – – 11,000 1999–2006 271.0p
43,571 – – – 43,571 2001–2008 105.0p
Sharesave 364,411 – (363,334) – 1,077 2003–2004 94.0p
89,858 – (3,632) (60,400) 25,826 2003–2006 320.0p
– 347,473 – (10,913) 336,560 2007-2010 245.0p
Total 1,915,919 836,265 (366,966) (71,313) 2,313,905
Details of the above Approved and Unapproved option schemes may be found in the ‘Share Options’ section of the Directors’
Remuneration Report.
18 Reserves
Non–distributable Distributable
––––––––––––––––––––––––––––––––––––––– ––––––––––––
Share Merger Capital Profit
premium reserve redemption and loss
account reserve account
£’000 £’000 £’000 £’000
Group
Beginning of year 8,783 3,323 428 27,807
Premium on share issue 335–––
Loss on foreign current translation – – – (135)
Retained profit for the year – – – 1,560
9,118 3,323 428 29,232
Company
Beginning of year 8,783 – 428 226
Premium on share issue 335–––
Retained profit for the year – – – 220
9,118 – 428 446
Cumulative goodwill of £34,642,000 has arisen on the acquisition of subsidiary undertakings in the years to 30 September 1997.
This goodwill has been written off to reserves in line with the Group’s accounting policy as described on page 34.
Abacus Group plc 47 19 Reconciliation of movement in Group equity shareholders’ funds
2004 2003
£’000 £’000
Profit for the year 6,026 5,261
Dividends paid and proposed (4,466) (4,296)
1,560 965
New share capital subscribed 354 183
(Loss) profit on foreign currency translation (135) 493
New addition to equity shareholders’ funds 1,779 1,641
Opening equity shareholders’ funds 42,449 40,808
Closing equity shareholders’ funds 44,228 42,449
20 Minority interests
2004 2003
£’000 £’000
Beginning of year – 16
Acquisition of subsidiary undertaking 533 –
Acquisition of minority interest (533) –
Disposal of minority interest – (16)
End of year – –
As stated in note 11, minority interests relate to the acquisition of 40.18% of ECC Distribution Limited, which comprise only equity
interests.
21 Reconciliation of operating profit to operating cash flows
2004 2003
£’000 £’000
Operating profit 10,180 8,191
Loss on disposal of fixed assets 11 37
Depreciation 1,646 1,200
Goodwill amortisation 719 316
Goodwill impairment loss – 89
Operating profit before depreciation and goodwill 12,556 9,833
Decrease in stocks 297 3,415
Increase in debtors (2,941) (309)
Increase (decrease) in creditors 3,179 (2,269)
Increase in provisions 55 –
Net cash inflow from operating activities 13,146 10,670
48 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 22 Analysis of cash flows
2004 2003
£’000 £’000
Returns on investments and servicing of finance
Interest received 171 163
Interest paid (1,044) (727)
Interest element of hire purchase and finance lease contracts (1) (7)
Net cash outflow (874) (571)
Taxation
UK Corporation tax paid (2,203) (2,847)
Overseas tax paid (296) (46)
Net cash outflow (2,499) (2,893)
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,418) (4,780)
Repayment of loan – 1,000
Sale of tangible fixed assets 6 97
Net cash outflow (2,412) (3,683)
Acquisitions
Purchase of subsidiary undertakings (2,721) –
Purchase of minority interests (707) –
Purchase of other investments – (159)
Net overdrafts acquired with subsidiary undertakings (5,917) –
Repayment of acquisition consideration – 600
Net cash (outflow) inflow (9,345) 441
Financing
Issue of ordinary share capital 354 183
New loans – 8,380
Repayment of loans (1,195) (6,316)
Repayment of loan notes – (319)
Payment of deferred consideration (2,363) –
Capital element of finance lease rental payments (431) (125)
Net cash (outflow) inflow (3,635) 1,803
Abacus Group plc 49 23 Analysis and reconciliation of net debt
1 Oct Cash Acquired Other Exchange 30 Sept
2003 flow with non-cash differences 2004
subsidiaries* changes
£’000 £’000 £’000 £’000 £’000 £’000
Cash at bank 1,228 1,926 – – (18) 3,136
Bank overdrafts (11,373) (11,900) – – 137 (23,136)
(9,974)
Debt due after one year (8,258) – (1,047) 2,005 28 (7,272)
Debt due within one year (249) 1,195 (849) (2,186) 17 (2,072)
Finance leases due within one year (9) 431 (350) (147) – (75)
(1,626)
(18,661) (8,348) (2,246) (328) 164 (29,419)
*Excluding cash and overdrafts
2004 2003
£’000 £’000
(Decrease) increase in cash for the year (9,974) 1,607
Cash outflow (inflow) from (decrease) increase
in debt and lease financing (1,626) (1,620)
Change in net debt resulting from cash flows (8,348) (13)
Loans and finance leases acquired with subsidiary (2,246) –
Issue of loan notes to purchase subsidiary undertaking (181) –
New finance leases (147) –
Finance leases disposed of with subsidiary undertaking – 33
Foreign exchange difference 164 (195)
Movement in net debt in the year (10,758) (175)
Net debt at beginning of year (18,661) (18,486)
Net debt at end of year (29,419) (18,661)
24 Financial instruments
An explanation of the Group’s objectives, policies and strategies for the role of derivatives and other financial instruments in
creating and changing the risks of the Group can be found in the ‘Managing business risk’ section of the Corporate Governance
Statements. As permitted under FRS 13, short term debtors and creditors have been excluded from all disclosures other than the
currency exposure disclosure.
Interest Rate Risk
The Group’s interest charge and income primarily arise on bank loans, overdrafts and loan notes which are mainly denominated in
Sterling, Euro, US dollars, Yen and Danish Kroner. For overdrafts, the interest charge and income is based on the daily base rate
plus or minus a fixed percentage. For loans, the Group has committed facilities:
a) to borrow up to £7,200,000, which may be denominated in any currency at a forward LIBOR rate for periods between
one week and six months;
b) of DKR2,723,000, which is repayable in equal instalments of DKR60,000 until June 2008 and attracts interest at a fixed
rate of 5.63%;
c) of two loans, one of Euro1,000,000, which is repayable in equal instalments of Euro250,000 until May 2006, the other of
Euro500,000 repayable in full in May 2006, both of which attract interest based on the daily Euribor rate;
d) of a loan of £500,000 repayable in full in January 2005 and which attracts interest based on the daily LIBOR rate.
Within each country, all bank accounts of the same currency are pooled, which practice the Group actively utilises to minimise
interest charges. Given the Group’s low materiality of its interest rate risk profile, the Group does not consider hedging instruments
appropriate in managing interest risk. 
50 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 24 Financial instruments (continued)
The interest rate profile of the financial liabilities (excluding short term debtors and creditors) of the Group at 30 September was as
follows:
Financial assets and liabilities
(excluding short term debtors and creditors) Floating rate Fixed rate
–––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––
Balance Balance Weighted Weighted
Outstanding outstanding average average
interest rate period
for which rates 
are fixed
£’000 £’000 % Years
2004
Assets
Sterling 92–––
Euro 2,774–––
Other 270–––
3,136–––
Liabilities
Sterling (19,392) (437) 3.8 0.9
US Dollar (77) – – –
Euro (12,096) – – –
Yen (301) – – –
Other – (252) 5.6 3.7
(31,866) (689) 4.5 1.9
2003
Assets
Sterling 247–––
US Dollar 784–––
Other 197–––
1,228–––
Liabilities
Sterling (10,463) (190) 6.1 1.0
US Dollar (780) – – –
Euro (1,304) – – –
Yen (5,444) – – –
Other (1,382) (326) 5.6 4.7
(19,373) (516) 5.8 3.4
Assets in the above table for 2004 and 2003 comprise only cash balances. 
Floating rate liabilities comprise Sterling and Euro bank loans of £7,700,000 and £1,030,000 (Euro1,500,000) respectively and
overdrafts in multiple currencies of £23,136,000 all bearing interest based on daily base rates. Fixed rate liabilities comprise a
Danish Kroner bank loan of £252,000 (DKR2,723,000), outstanding obligations on finance leases (£75,000) and Sterling loan notes
(£362,000).
Interest rates on floating rate assets and liabilities are based on the relevant national Interbank rates.
Currency exposures
As described in the ‘Managing Financial Risk’ section of the Corporate Governance Statements, the Group may enter into forward
foreign currency contracts to protect against the currency exposures that arise on purchase and sale transactions. The table
overleaf shows the Group’s currency exposures. These exposures give rise to currency gains and losses recognised in the profit
and loss account, and arise from monetary assets and liabilities not denominated in the functional currency of the operating unit.
Abacus Group plc 51 24 Financial instruments (continued)
Net foreign currency monetary assets (liabilities)
Functional Currency Sterling Euro US Dollar Yen Other Total
Of Group operation £’000 £’000 £’000 £’000 £’000 £’000
Sterling – (1,591) 382 (300) 47 (1,462)
Danish Kroner (70) (2,366) 94 (166) (32) (2,540)
Euro 1 – 420 165 – 586
Total 2004 (69) (3,957) 896 (301) 15 (3,416)
Total 2003 5 (2,400) (5,377) (4,846) – (12,618)
Short term debtors and creditors have been included in the above disclosure. As at year end, the Group had outstanding
commitments for forward exchange contracts of £nil (2003 – £nil).
Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities as at 30 September was as follows:
2004 2003
£’000 £’000
On demand or within one year 25,283 11,632
Between one and two years 1,554 68
Between two and five years 5,718 8,189
32,555 19,889
Borrowing facilities
The Group had £49,663,000 (2003 – £32,391,000) of borrowing facilities at 30 September 2004 of which £17,545,000 (2003 –
£12,692,000) were undrawn and £8,982,000 (2003 – £8,326,000) were committed.
The maturity of the borrowing facilities, both drawn and undrawn, at 30 September was as follows:
2004 2003
£’000 £’000
On demand or within one year 42,391 24,133
Between one and two years 1,554 68
Between two and five years 5,718 8,190
49,663 32,391
The principal UK facilities were established in April 2003 with HSBC Bank plc. The overdraft facility (repayable on demand) is
£20,000,000 and is renewed every twelve months. The loan facility at 30 September 2004 is £7,200,000, repayable in annual
instalments until January 2008. In addition, there is a £500,000 loan facility with Cariplo Bank repayable in January 2005.
The Nordic facilities are with Unibank AS and comprise a total loan and overdraft limit of DKR46,500,000. The overdraft is rolled
over every January for twelve months and the loan (DKR2,723,000 at 30 September 2004) is repayable in equal monthly
instalments of DKR60,000 until June 2008. 
The Italian facilities comprise overdraft and loan facilities of Euro24,250,000 and Euro1,500,000 respectively. The overdraft facilities
(repayable on demand) are with seven Italian banks and are due for renewal between March and April 2005. The loan facilities
comprise two loans, one of Euro1,000,000 repayable in equal instalments of Euro250,000 until May 2006, the other of
Euro500,000 repayable in full in May 2006. 
52 Abacus Group plc
Notes to the Accounts (continued)
30 September 2004 24 Financial instruments (continued)
The maturity of the undrawn committed facilities available at 30 September, in respect of which all conditions precedent had been
met at that date, was as follows: 
2004 2003
£’000 £’000
On demand or within one year 17,545 12,692
Gains and losses on hedges
Gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged materialises. There
was no material difference on unrecognised gains and losses on hedges at 30 September 2004 between the carrying and
estimated fair values (2003 – £nil). 
Fair value
There was no material difference between the book and fair values of financial assets and liabilities at either 30 September 2004
or 30 September 2003.
25 Financial commitments
Capital commitments
The Group and Company had capital expenditure commitments of £80,000 (2003 – £450,000) and £nil (2003 – £nil) respectively
at 30 September 2004.
Operating lease commitments 
The Group is committed to pay the following annual amounts under leases outstanding at 30 September. The Company has no
operating lease commitments.
Land and buildings Other
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Operating leases which expire:
Within one year 186 33 378 254
Between two and five years 108 135 709 512
After more than five years 231 210 – –
525 378 1,087 766
26 Pension contributions
The Group operates a number of defined contribution pension schemes. The total cost of pension contributions for the year was
£1,531,000 (2003 – £1,149,000).
27 Related party transactions
There were no significant transactions with related parties during the year.
Abacus Group plc 53 2000 2001 2002 2003 2004
£’000 £’000 £’000 £’000 £’000
Income Statement
Sales 152,607 201,473 154,963 146,980 187,798
Profit before tax and goodwill 15,749 17,125 9,484 8,025 10,025
Goodwill 59 (681) (2,850) (405) (719)
Profit before tax 15,808 16,444 6,634 7,620 9,306
Profit after tax 11,204 11,324 4,112 5,261 6,026
Assets employed
Fixed assets 5,414 26,995 25,185 25,090 30,213
Other net assets 31,373 39,307 34,125 36,020 43,434
Capital employed 36,787 66,302 59,310 61,110 73,647
Net debt (4,478) (25,992) (18,486) (18,661) (29,419)
32,309 40,310 40,824 42,449 44,228
Financed by
Shareholders’ funds 32,309 40,294 40,808 42,449 44,228
Minority interests – 16 16 – –
32,309 40,310 40,824 42,449 44,228
Cash flow
Operating cash flow 9,328 18,968 16,890 10,670 13,146
Free cash flow 6,470 5,422 10,826 2,459 7,355
Dividends (3,115) (3,418) (3,802) (4,160) (4,355)
Sale of tangible fixed assets 4 114 105 97 6
Acquisitions and investments – (23,459) – 1,441 (14,135)
Equity financing 416 122 410 183 354
New finance leases – (303) – – (147)
Foreign exchange 207 8 (33) (195) 164
Movement in net debt 3,982 (21,514) 7,506 (175) (10,758)
Net debt (4,478) (25,992) (18,486) (18,661) (29,419)
Statistics
Average no. of shares (‘000) 41,562 41,688 41,816 42,035 42,426
Earnings per share (Basic pre goodwill) 26.8p 28.7p 16.6p 13.5p 15.9p
Free cash flow per share 15.6p 13.0p 25.9p 5.8p 17.3p
Dividends per share 8.0p 8.8p 9.7p 10.2p 10.5p
Dividend cover (pre excep. & goodwill) 3.3 3.3 1.7 1.3 1.5
Gross profit 23.9% 24.6% 24.7% 23.2% 22.9%
Return on sales (pre excep. & goodwill) 10.3% 8.5% 6.1% 5.5% 5.3%
Effective tax rate (pre excep. & goodwill) 29.2% 29.9% 26.6% 29.4% 32.7%
Net gearing* 13.9% 64.5% 45.3% 44.0% 66.5%
Return on capital employed** 43.6% 28.8% 17.5% 14.1% 14.8%
*Net gearing is defined as net borrowings excluding earnout consideration divided by shareholders’ funds and minority interests.
**Return on capital is defined as profit before exceptional items, interest, tax and goodwill divided by shareholders’ funds, minority
interest and net debt.
54 Abacus Group plc
Five Year Summary Notice of Annual General Meeting
Abacus Group plc 55
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Abacus Group plc (“the Company”) will be held at Abacus House,
Bone Lane, Newbury, Berkshire RG14 5SF on 20 January 2005 at 10.00 am. The Meeting will consider and, if thought fit, pass the
following Resolutions, which are to be proposed, in the case of Resolutions 1 to 10, as Ordinary Resolutions, and in the case of
Resolutions 11 and 12 as Special Resolutions of the Company:
Resolutions
1. To receive and adopt the Report of the Directors and the Accounts for the year ended 30 September 2004 and the Auditors’
Report thereon.
2. To declare and approve a final dividend of 7.0p per Ordinary share for the year ended 30 September 2004.
3. To re-elect as a Director M. R. Kent, who retires from the Board every third year.
4. To re-elect as a Director P . L. Griffith-Jones, who retires from the Board every third year.
5. To re-elect as a Director A. H. Westropp, who now retires every year. The Board proposes this re-election following the Chief
Executive’s formal performance evaluation, with input from the Board, which concludes that Mr Westropp continues to provide
sufficient commitment and effective contribution to his role as non-executive Chairman of the Board and Chairman of the
Nominations’ Committee. He attended all of the twelve Board meetings and a number of other ad hoc meetings throughout
the year. Aided by his directorships of other companies, Mr Westropp provides effective input in determining the policies of the
Group, monitoring the Group’s performance and contributing to the formulation of its strategy. Mr Westropp is considered to
be independent by the Board for the reasons outlined in the Corporate Governance section of the Annual Report.
6. To elect as a Director G. Grover following his appointment to the Board on 30 March 2004.
7. To elect as a Director R. Lambourne following his appointment to the Board on 1 June 2004.
8. To approve the Directors’ Remuneration Report. 
9. To re-appoint Deloitte & Touche LLP as Auditors, and to authorise the Directors to fix their remuneration. 
10. THAT the Directors be and they are hereby generally and unconditionally authorised to exercise all the powers of the Company
to allot relevant securities (within the meaning of section 80 of the Companies Act 1985 (“the Act”)) up to an aggregate
nominal amount of £708,933 one third of the issued share capital at 30 September 2004, provided that such authority shall
expire on the date being five years after the passing of this Resolution (unless previously renewed, varied or revoked by the
Company in general meeting) save that the Company may before such expiry or the expiry of any renewal of this authority
make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors
may allot relevant securities in pursuance of such offer or agreement as if this authority had not expired and provided further
that this authority shall supersede and revoke any other such authorities. 
11. THAT, subject to the passing of Resolution 10, the Directors be and they are hereby empowered pursuant to section 95 of the
Act to allot equity securities (as defined for the purposes of sections 89 to 96 of the Act) for cash pursuant to the general
authority conferred on them by Resolution 10 for the purposes of section 80 of the Act as if section 89(1) of the Act did not
apply to any such allotment provided that this power shall be limited:
(i) to the allotment of equity securities in connection with an issue or offer by way of rights in favour of holders of Ordinary
shares where the equity securities respectively attributable to the interests of such holders of Ordinary shares on a fixed
record date are proportionate (as nearly as may be) to the respective numbers of shares held by them but subject to such
exclusions or other arrangements as the Directors may deem necessary or expedient to deal with any legal or practical
problems under the laws of any overseas territory or the requirements of any regulatory body or any other stock
exchange in any territory or in relation to fractional entitlements; and
(ii) to the allotment (otherwise than pursuant to paragraph (i) of this Resolution) of equity securities having in the case of
relevant shares, a nominal amount or, in the case of other equity securities, giving the right to subscribe for or convert
relevant shares having a nominal amount not exceeding in aggregate the sum of £106,340, 5% of the issued share
capital at 30 September 2004,
and shall expire on the earlier of the date of the next Annual General Meeting of the Company after the passing of this
Resolution or fifteen months after the passing of this Resolution, save that the Company may before such expiry make an offer
or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity
securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
12. THAT the Company be generally and unconditionally authorised to make market purchases (as defined in Section 163(3) of
the Act) of its Ordinary shares provided that:
(i) the maximum number of Ordinary shares hereby authorised to be acquired is 6,380,401, 15% of the issued share capital
at 30 September 2004;
(ii) the minimum price which may be paid for any such Ordinary shares is 5 pence; Notice of Annual General Meeting (continued)
56 Abacus Group plc
(iii) the maximum price which may be paid for any such Ordinary share is an amount equal to 105 per cent. of the average
middle market quotations for an Ordinary share according to the London Stock Exchange Daily Official List for the five
business days immediately preceding the day on which the Ordinary share is contracted to be purchased; and
(iv) this authority shall expire at the close of the next Annual General Meeting of the Company to be held after the date
hereof; but a contract of purchase may be made before such expiry which will or may be executed wholly or partly
thereafter and a purchase of Ordinary shares may be made in pursuance of any such contract.
By order of the Board
P . L. Griffith-Jones, MA, ACA 15 December 2004
Abacus Group plc, registered office: Abacus House, Bone Lane, Newbury, Berkshire RG14 5SF
NOTES
1. Any member entitled to attend and vote at the above Meeting may appoint a Proxy to attend, and on a poll only, vote on
his/her behalf. A Proxy need not be a member of the Company.
2. To be valid, the enclosed reply-paid Form of Proxy, together, if appropriate, with the Power of Attorney or other authority (if
any) under which it is signed, or a notarially certified copy of such power or authority must be deposited at the offices of
Computershare Services plc, Registrar’s Department, PO Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH at least
forty-eight hours before the time appointed for holding the meeting.
3. Completion and return of the Form of Proxy will not preclude ordinary shareholders from attending the Meeting and voting in
person if they wish to do so.
4. Documents for inspection – Copies of the Directors’ service contracts and the register of Directors’ interests will be available
for inspection at the registered office of the Company, Abacus House, Bone Lane, Newbury, Berkshire RG14 5SF during
normal business hours on any weekday (excluding public holidays) from the date of the notice of the Annual General Meeting
until the conclusion of the Annual General Meeting and any adjournment thereof.
5. As permitted by Regulation 41 of the Uncertificated Securities Regulations 2001, only those shareholders who are registered
on the Company’s share register at 6 p.m. on 18 January 2005 shall be entitled to attend the 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 6 p.m. on
18 January 2005 shall be disregarded in determining the rights of any person to attend and/or vote at the Meeting.
(
Imprima de bussy – C88732 Abacus Group
UK and Ireland
Basingstoke
Bolton
Boston Spa
Cambridge
Dunmow
Leighton Buzzard
Limerick
Livingston
Maidenhead
Newbury
Newcastle-under-Lyme
Redhill
Runcorn
Southampton
Stroud
St Just
Benelux
Amsterdam
Denmark
Copenhagen
Them
Finland
Helsinki
Oulo
Norway
Oslo
Sweden
Gothenburg
Malmö
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ECC
Italy
Florence
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Padua
Bologna
Turin
Osimo
Local Offices
Abacus Group plc   57 Abacus House
Bone Lane
Newbury
Berkshire
RG14 5SF
www.abacus-group.co.uk