23459.04 15 August 2014 12:40 PM Proof 10
Filtronic
Filtronic plc 
Annual report and accounts 
for the year ended 31 May 2014 
Stock code: FTC
www.filtronic.com
Meeting the growing global demand for mobile telecoms infrastructure 23459.04 15 August 2014 12:40 PM Proof 10 23459.04 15 August 2014 12:40 PM Proof 10
Welcome to Filtronic plc
Filtronic plc is a world leader in the design and manufacture of a broad range of 
customised RF, microwave and millimetre-wave components and subsystems.
The company’s products are used in mobile wireless communication equipment,  
point-to-point communication systems and adjacent defence sectors. 
Filtronic’s customers include leading international original equipment manufacturers 
(OEMs) as well as a wide range of mobile phone network operators.
Filtronic’s strategic objective is to become one of the world’s leading RF electronics subsystems companies in 
the wireless infrastructure sector by utilising its proprietary technologies and engineering expertise and applying 
them to markets that offer opportunities for significant, sustainable rates of growth and shareholder return. Filtronic 
addresses these opportunities by designing and supplying sophisticated and customised RF filter and microwave 
subsystems, antennas and millimetric transceiver products to customers’ requirements and by continuing to develop 
and support its global relationships with these customers.
The group’s operations include two separately reported trading business segments: Broadband (which has been 
transitioned from the traditional point to point (PTP) backhaul business) and Wireless.
Filtronic Broadband is an established leading designer and manufacturer to the OEM mobile telecommunications 
industry for millimetre-wave products as well as providing build to print manufacturing and testing services for 
microwave and millimetre-wave products at its state of the art highly automated UK facility. The product range 
includes transceiver modules and multi-chip, surface mountable transceiver packages at microwave, E-band and 
V-band frequencies.
Filtronic Wireless is a world leader in the design and manufacture of RF filters, combiners, tower mounted amplifiers 
(TMAs), microwave subsystems, and Ultra Wide Band (UWB) antennas for the mobile telecommunications industry 
focusing on equipment for OEMs and network operators.
Filtronic
Filtronic plc Annual Report 2014 23481.04 15 August 2014 12:40 PM Design A
05
Chairman’s letter
Investment in the 4G equipment 
infrastructure market continues 
to grow and offer significant 
opportunities for both Wireless 
and Broadband.
14
Our business model
Our business model has been 
developed around close working 
relationships with both our 
customers and suppliers to 
maintain a dialogue at multiple 
levels to cover all aspects of the 
business.
06
Chief executive’s 
statement 
The next few years will see 
a continuance of increased 
demand for data with operators 
looking to differentiate themselves 
by offering seamless coverage 
and improvements in quality of 
service.
12
Objective and 
strategy
Our objective is to be a major 
supplier of RF and microwave 
products to the global 
telecommunications equipment 
infrastructure market.
What’s inside:
Strategic Report
Glossary 02
Financial highlights 04
Operational highlights 04
Chairman’s letter 05
Chief executive’s statement 06
Market overview 08
Objective and strategy 12
Our business model 14
Financial review 16
Key performance indicators 17
Risk management 18
Corporate responsibility report 20
Governance Report
Introductory letter from the chairman of 
the board on the governance report 24
Governance framework: board and 
committees, membership, remit and 
activities 25
Statement of compliance with the 2012 
UK corporate governance code (the 
“Code”) 27
Audit committee report 28
Nominations committee report 30
Directors’ remuneration report 31
Directors’ report 43
Financials
Independent auditor’s report to the 
members of Filtronic plc only 46
Consolidated income statement 48
Consolidated statement of  
comprehensive income 49
Consolidated balance sheet 50
Consolidated statement of  
changes in equity 51
Company statement of changes in equity 51
Consolidated cash flow statement 52
Company balance sheet 53
Company cash flow statement 54
Notes to the financial statements 55
Shareholder Information 81
Contents
01 23459.04 15 August 2014 12:40 PM Proof 10
3G: 3rd generation mobile networks 
4G: 4th generation mobile networks
5G: 5th generation mobile networks
CDMA: Code Division Multiple Access
Cloud RAN:  Cloud radio access network, a new cellular 
network architecture 
dBm:  an abbreviation for the power ratio in 
decibels (dB) of the measured power 
referenced to one milliwatt (mW)
Diplexer:  A diplexer is a passive device that 
implements frequency domain 
multiplexing.
E-band: 71 GHz to 86 GHz 
EDGE: Enhanced Data Rates for Global Evolution
Gbit/s: Gigabit per second
GHz: Gigahertz 10^9 Hertz
Gigabit: 10^9 bits 
GSM:  Global System for Mobile Communications 
HSPA: High Speed Packet Access 
Hz:  the international standard symbol for 
Hertz, the unit of frequency
LTE: Long Term Evolution
MHz: 10^6 Hertz
MMIC: Monolithic Microwave Integrated Circuit
Mobile PC:  Defined as laptop or desktop PC devices 
with built-in cellular modem or external 
USB dongle 
Mobile router:  A device with a cellular network 
connection to the internet and Wi-Fi or 
ethernet connection to one or several 
clients (such as PCs or tablets)
Multiplexing:  A method by which multiple analogue 
message signals or digital data streams 
are combined into one signal over a 
shared medium.
OEM: Original Equipment Manufacturer 
OFCOM:  The Office of Communications; the 
government approved regulatory and 
competition authority for the broadcasting, 
telecommunications and postal industries 
of the United Kingdom.
PetaByte: 10^15 bytes 
RAN: Remote Access Radio
RF:  Radio Frequency, a rate of oscillation in 
the range of around 3 kHz to 300 GHz
Smartphone:  Mobile phones with data processing 
capabilities, e.g. iPhones, Android OS 
phones, Windows phones but also 
Symbian and Blackberry OS
TMA: Tower Mounted Amplifier
UWB: Ultra Wide Band
V-band: 57 GHz to 66 GHz
WCDMA: Wideband Code Division Multiple Access
Glossary
Filtronic plc Annual Report 2014 23459.04 15 August 2014 12:40 PM Proof 10
Strategic report
Pictured: Filtronic antenna test range, Täby, Sweden 
www.filtronic.com Stock code: FTC
Strategic report 23459.04 15 August 2014 12:40 PM Proof 10
Strategic report
Operational highlights
• Acquired antenna capability which has subsequently 
achieved four design wins for antennas that are 
expected to generate revenue in FY2015. 
• Successfully increased the number of OEM customers 
in both Broadband and Wireless.
• Broadband completed move to a new facility at North 
East Technology Park, Sedgefield, County Durham 
reducing Broadband’s fixed cost base.
• Introduced a new Filtronic designed high power MMIC 
Amplifier for use on E-band platform.
• Successfully completed customer trial of an E-band 
transceiver to achieve 1 Gbit/s in 250MHz RF channel 
with output power of 16dBm.
Financial highlights
2014 2013
Sales revenue £32.9m £40.0m
Operating (loss)/profit (before amortisation and exceptional items) (£0.4m) £3.1m
(Loss)/profit before taxation (£3.7m) £0.2m
Basic (loss)/earnings per share (2.90p) 0.29p
Diluted (loss)/earnings per share (2.90p) 0.29p
Net cash balance as at 31 May £2.5m £1.9m
Cash in/(out) flow from operating activities £1.6m (£0.3m)
Pictured: Reconfigurable notch filter
04
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Chairman’s letter
The year ended 31 May 2014 (FY2014) was an important 
developmental year for Filtronic. The group saw the 
introduction of several new products and was involved in a 
number of custom projects which have led to design wins with 
both original equipment manufacturers (OEMs) and network 
operators. Disappointingly, sales revenue reduced to £32.9m 
(2013: £40.0m) with an operating loss before exceptional 
items and the amortisation of intangibles of £0.4m (2013: 
£3.1m). The reduction in sales revenue and profit resulted 
from the conclusion of a significant project to deliver 4G (LTE) 
interference mitigation filters, which completed in the first half 
of FY2014, and a longer lead time for expected contracts from 
new design wins with OEMs. 
Sales revenue in the Wireless business was £23.2m (2013: 
£31.9m) and £9.7m (2013: £8.1m) for the Broadband 
business. Operating profit before exceptional items and 
intangible amortisation was split between Wireless £2.6m 
profit (2013: £6.4m profit), Broadband £2.3m loss (2013: 
£2.4m loss) and central costs of £0.8m (2013: £0.9m). Net 
cash at 31 May 2014 was £2.5m compared with £1.9m; the 
increase in net cash resulted from the unwinding of working 
capital associated with projects at the previous year end 
and the improving shipments and lower inventory holding in 
Broadband. 
Wireless business
During FY2014 the Wireless business worked with a number 
of OEMs and operators to develop customised products, 
including various innovative filters, switchable filters, combiners 
and antennas to support the roll-out of LTE. A number of these 
projects have led to design wins that are anticipated to enter 
production in 2015/16.
In September 2013, the business acquired certain antenna 
assets and with the recruitment of an engineering team, 
predominantly located in Sweden, the group has developed 
a capability to design and manufacture the next generation 
of ultra wideband (UWB) antennas that cover existing and yet 
to be released frequency spectrum. We are pleased to report 
that design wins at four customers have been achieved for 
antennas and these are anticipated to be revenue-generating 
in the second half of FY2015.
The increased market complexity resulting from 4G LTE and 
the need for a heterogeneous network has resulted in a far 
more complex technology landscape. It is expected that 
OEMs will take an ever increasing role in the development of 
integrated equipment which may in the longer term reduce 
the number of operator specific projects available to Filtronic 
and further underscores the rationale of Filtronic working more 
closely with OEMs.
Broadband business
Sales revenues from E-band and V-band backhaul transceiver 
modules have increased through the year and are replacing 
lower margin, legacy product. Sales in the year included a 
last time buy of materials of £2.5m at cost by a long term 
customer to service their potential requirements until 2017, 
which suppressed the profit (as a percentage of sales) for 
Broadband. The current E-band transceiver modules are 
predominantly for ‘carrier grade’ mobile backhaul required 
by larger global operators to connect base stations into 
the mobile communications network. The V-band product 
is primarily used in enterprise solutions and ‘small cell’ 
opportunities. The business also won contracts for the supply 
of microwave devices used in phased array radars in the 
military aerospace market.
Broadband successfully relocated its operations to a new 
location at North East Technology Park (NETPark) in County 
Durham. The relocation has enabled the business to reduce 
its fixed costs and focus its manufacturing capabilities to its 
core competencies. The increased sales revenue and lower 
overheads resulted in a reduced operating loss for the year 
and at the conclusion of the period the business attained 
profitability on a monthly run rate basis. 
Dividend
The board does not recommend a dividend for 2014 (2013: nil).
Board of directors
Mike Brennan left the board in April 2014 and Rob Smith was 
appointed as chief financial officer and director subsequent to 
the year end.
Outlook
Investment in the 4G equipment infrastructure market 
continues to grow and offer significant opportunities for both 
Wireless and Broadband. The number, scale and quality of 
new opportunities continues to be strong and whilst the timing 
and volume of contracts from design wins remains uncertain, 
we expect Wireless to return to growth and with the upturn 
we have seen in Broadband the board is confident about the 
prospects for the business. 
Finally, I should like to thank all staff in the business for their 
contribution over the past year and our shareholders for their 
patience as we continue to position the business to take 
advantage of the significant market growth forecast over the 
next several years.
Howard Ford 
Chairman 
14 August 2014
www.filtronic.com Stock code: FTC
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Summary of year performance
Over the previous few years Filtronic has supplied custom 
Wireless product to a number of operator projects. These 
projects included combiners, tuneable filters and LTE mitigation 
filters that resulted in a rapid growth in sales in FY2013. 
The sales revenue from these projects has been tremendously 
beneficial for the group and has allowed us the time and 
resources to develop and expand our product offering and 
now, with the addition of tower mounted amplifiers and ultra 
wideband (UWB) antennas, we are able to target the OEMs 
with a more complete product range to establish a more 
stable underlying base level of business.
In Broadband it has enabled the company to transition away 
from low margin legacy products and concentrate its efforts on 
the supply of transceiver modules to the E-band and V-band 
markets.
However, as these projects came to their natural conclusion 
and follow on projects were delayed, sales revenue and 
operating profit receded in the second half of FY2014. In 
Wireless, it was our expectation that the take up of potential 
new projects would coincide with the conclusion of some of 
the operator projects. Unfortunately, this has not been the 
case and consequently the sales revenue in Wireless was 
lower than the previous year.
Wireless performance
In the year, Wireless achieved sales revenue of £23.2m (2013: 
£31.9m) and a profit of £2.6m (2013: £6.4m). 
With customer expectations demanding a seamless user 
experience in a heterogeneous network, where all network 
layers need to be integrated together to an unprecedented 
degree, it is our belief that integrated systems of this 
complexity can only be satisfied by the major OEMs. It is this 
market dynamic that has increased our desire to access more 
OEM programmes.
In line with this desire we have now achieved a significant 
number of design wins at key OEMs and expect these to enter 
production through FY2015. Our decision to prioritise OEM 
activity is key to providing the business with a more stable and 
sustainable growth pattern. Whilst we expect to be involved in 
several operator projects we see these as being incremental to 
the base OEM programmes in the longer term.
As stated in the chairman’s letter, we have established an 
antenna business near Stockholm in Sweden. The antenna 
assets acquired included both compact and spherical near 
field antenna measurement ranges and the latest electrical and 
mechanical modelling tools which will enable Wireless to design 
and manufacture a range of UWB antennas for the mobile 
infrastructure market. The addition of antennas to the Filtronic 
product portfolio enables Wireless to combine a number of its 
existing technologies into a system level offering that is relevant 
to the future system requirements of our customers. We are 
pleased to report that design wins at four customers have been 
achieved for antennas and these are anticipated to be revenue-
generating in the second half of FY2015.
Broadband performance
In the year, Broadband achieved sales revenue of £9.7m 
(2013: £8.1m) and a £2.3m loss (2013: £2.4m loss). Sales in 
the year included £2.5m of materials supplied to a customer to 
cover future production needs.
As the business developed, Broadband has been focused 
on its capability to design, manufacture and supply E-band 
and V-band transceiver modules. The E-band modules are 
required for ‘carrier grade’ backhaul applications to connect 
high capacity base stations into the network. As network 
density increases with ever higher capacities, backhaul 
becomes more critical to avoid creating problems. The V-band 
transceiver modules are primarily for enterprise and small cell 
applications.
Our new products are at the leading edge of what is currently 
technically achievable and during FY2014 we have been 
improving our production processes and product designs to 
improve yield and capacity. By the end of the year, yields and 
output had considerably improved and the business achieved 
a profitable monthly run rate. The demand for E-band and 
Chief executive’s statement
£23.2m
Wireless sales revenue.
(2013: £31.8m)
£9.7m
Broadband sales revenue.
(2013: £8.1m)
Filtronic plc Annual Report 2014
06 23459.04 15 August 2014 12:40 PM Proof 10
V-band products is growing and we are embedded in 
a number of OEM programmes which are at the early 
stage of market development. In the year we delivered 
the 10,000th millimetre-wave module and successfully 
completed a customer trial which achieved 1 Gbit/s in a 
250MHz RF channel with an output power of 16dBm.
In addition to E-band and V-band, Filtronic Broadband 
continues to supply to a major defence contractor with 
transmit and receive modules for aerospace, military 
grade phased array radar programmes. This is a long 
term relationship that has required Broadband to develop 
an expertise in high reliability manufacturing and testing 
techniques, which has the added benefit that relates to 
the manufacture and test of E-band and V-band modules.
During the year, Broadband completed the move to a 
new facility at NETPark, Sedgefield, UK. The relocation 
has enabled the business to rationalise a number of 
its processes and enabled us to concentrate on our 
core competencies. This rationalisation has been a major 
contributor to the improved production yields achieved 
through the year and has also resulted in a significant 
reduction in our fixed cost.
Prospects for Broadband have been enhanced by the 
development of E-band and V-band capabilities and the 
reduced cost base. The markets for the business’s products 
are growing rapidly and we look forward to Broadband being a 
major player in its field.
Future developments
The next few years will see a continuance of increased 
demand for data with operators looking to differentiate 
themselves by offering seamless coverage and improvements 
in quality of service. This is likely to see the development of 
heterogeneous networks, networks that are composed of 
multiple radio access technologies, architectures, transmission 
solutions, and base stations of varying transmission power 
to create a seamless user experience. This development 
will drive both of our businesses, with every new frequency 
release providing opportunities for Wireless and the increasing 
requirement for ‘carrier grade’ mobile backhaul providing 
additional opportunities for Broadband. 
As part of our research and development activities we are 
working to develop solutions which will support the market 
trend towards smaller, more compact products encompassing 
the use of alternative materials including ceramic. 
With Cloud RAN and later 5G, which is forecasted to 
commence roll-out in 2020, we expect to see another 
dramatic increase in data volumes and speed of connection.
Filtronic is ideally placed to participate in this market and 
continues to develop its technology roadmap to support these 
opportunities.
Alan Needle 
Chief Executive Officer 
14 August 2014
As part of our research and 
development activities we are 
working to develop solutions 
which support the market trend 
towards smaller, more compact 
products encompassing the use 
of alternative materials including 
ceramic.”
‘‘
Pictured: Transceiver module
www.filtronic.com Stock code: FTC
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Market overview
Market overview
The wireless telecommunications infrastructure equipment 
sector is a $100 billion plus market experiencing significant 
growth due to the increasing demand for data.
Network infrastructure
This demand for infrastructure is being driven by the growth 
in mobile broadband subscriptions and the increasing volume 
of data being consumed. End user expectations are for high 
quality services that allow them to consume data, and in 
particular streaming video, seamlessly whilst on the move. The 
network operators are competing to supply a comprehensive 
seamless network and are investing in infrastructure to meet 
this demand.
The original mobile networks were designed primarily for 
voice traffic. Today’s networks are being designed to provide 
a seamless user experience for customers. Operators will be 
judged on whether the various applications available can be 
accessed and whether the application works as expected by 
the user.
Mobile data traffic is projected to increase at a compound 
annual growth rate of approximately 45 per cent between 
2013 and 2019. This growth level will result in a 10-fold 
increase by the end of 2019. As smartphone subscriptions 
increase data traffic will accelerate and data per subscription, 
especially driven by streaming video, will add to this rise in 
data volume.
Smartphones are already generating more data traffic than 
mobile PCs, tablets and mobile routers. It is projected that 
smartphone subscriptions will treble by 2019, resulting in 
rapid traffic growth. The aggregate growth in traffic generated 
by more subscriptions and more data per subscription is 
expected to result in an overall increase in traffic by 10 times 
between 2013 and 2019.
The largest and most significant driver of data traffic growth is 
video. Ericsson are forecasting that this segment will grow by 
13 times by 2019 and will account for 50 per cent of all global 
data traffic. Social networking currently accounts for 10 per 
cent of data traffic and is forecast to grow in line with the overall 
10-fold increase. Music streaming although gaining in popularity, 
is expected to see slightly slower growth rates than the overall 
rate and is expected to increase 8-fold by the end of 2019; this 
is due to the ease of caching content and the ability to create 
offline playlists. Web browsing is expected to increase 6-fold 
over the same period and its relative share of overall data traffic 
will reduce as other activities grow more rapidly.
The number of mobile 
subscriptions worldwide grew 
approximately 7 per cent  
year-on-year during Q1 2014. 
The number of mobile broadband 
subscriptions grew even faster 
over this period – at a rate of 35 
per cent year-on-year, reaching 
2.3 billion. The amount of data 
usage per subscription also 
continued to grow steadily. 
Around 65 per cent of all mobile 
phones sold in Q1 2014 were 
smartphones. Together, these 
factors have contributed to a 65 
per cent growth in mobile/cellular 
data traffic between Q1 2013 and 
Q1 2014.”
 (Ericsson, June 2014)
‘‘
LTE continues to grow strongly 
and has reached 240 million 
subscriptions, with around 35 
million additions in Q1 2014. 
WCDMA/HSPA had the highest 
net additions during the quarter 
at around 70 million. Almost all 
of these 3G/4G subscriptions 
have access to GSM/EDGE 
as a fallback. The number of 
GSM/EDGE-only subscriptions 
remained flat.”
(Ericsson, June 2014)
‘‘
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10
Mobile subscriptions (billions)
9
8
7
6
5
4
3
2
1
0
2011 2012 2013 2014 2015 2016 2017 2018 2019
6.7 billion
mobile
subscriptions
9.2 billion
mobile
subscriptions
2.8 billion
LTE subscriptions by
the end of 2019
}
LTE/HSPA/GSM and LTE/CDMA
WCDMA/HSPA
GSM/EDGE
TD-SCDMA
CDMA
Other technology
25,000
20,000
15,000
10,000
5,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
Video data trafﬁc
predicted to grow 10-fold 
2013 to 2019
File sharing
Video
Audio
Web browsing
Social networking
Software download and update
Encrypted
Other
Global mobile data trafﬁc by application (PetaBytes / month)
Source: Ericsson, June 2014
Source: Ericsson, June 2014
www.filtronic.com Stock code: FTC
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There is a wide disparity in the data usage between different 
networks, markets and user types. A minority of users are 
generating a significant proportion of the traffic. The factors 
influencing user data traffic include operator volume caps, tariff 
plans, and the screen size and resolution of the user’s device.
The improved speed and increased capacity resulting from the 
introduction of HSPA networks and roll-out of LTE in Western 
Europe is expected to lead to an 8-fold increase in mobile 
data traffic between 2013 and 2019 as the user experience is 
enhanced.
European markets were among the first to adopt wireless 
technology. In the early 1990s GSM was deployed and 
WCDMA was rolled out 10 years later. The early introduction 
of infrastructure has resulted in high population coverage 
estimated currently at 90 per cent for GSM/EDGE and 
75 per cent for WCDMA/HSPA. Ericsson predict that by 
2019 coverage will increase to 95 per cent and 90 per cent 
respectively.
The early introduction of mobile networks in Europe has 
meant that there is a legacy of older base stations compared 
to regions where infrastructure was rolled out subsequently. 
This has resulted in the need to modernise base stations 
in recent years as more efficient infrastructure is required 
to handle multi-standard technologies such as GSM/EDGE 
and WCDMA/HSPA. Other regions have seen modernisation 
programmes driven by the introduction of LTE.
Network backhaul
Mobile broadband backhaul capacity is predicted to see 
further expansion as demand continues to grow. Capacity per 
base station will vary by site depending on population density 
and target data rates. By 2019, high capacity base stations 
are predicted to require backhaul in the 1 Gbit/s range.
Microwave currently accounts for 60 per cent of base station 
connections and Ericsson predict that this technology will 
continue to connect approximately 50 per cent of such 
connections in 2019.
Smart mobile devices such as smartphones and tablets 
running various applications account for the majority of data 
traffic over mobile broadband networks. Ericsson predict that 
the evolution of devices and applications with more complexity 
will fuel further growth in traffic.
Mobile backhaul—Backhaul plays 
an important role in providing a 
good user experience and overall 
network performance. As network 
density increases with higher 
capacities, backhaul becomes 
more critical, as it needs to be 
aligned with the radio access 
capacities to avoid creating 
bottlenecks.”
(Ericsson, June 2014) 
‘‘
Market overview continued
Pictured: MMIC
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Future developments
Early mobile networks pre-date the development of smart 
mobile devices and were designed primarily to service voice 
traffic. Mobile network operators have been forced to invest 
in modernisation of their infrastructure and to adopt new 
technologies such as HSPA and LTE. The modernisation 
process has resulted in the development of seamless 
heterogeneous networks capable of handling multiple 
technologies.
The development of heterogeneous networks is resulting in 
the requirement for complex hardware solutions combining 
multiple technologies. OEMs are developing integrated 
product solutions to address this requirement and these 
standardised products will address multiple operators in 
multiple territories. 
Conclusion
The wireless telephony infrastructure market, including mobile 
backhaul, is set to grow over the coming years as network 
operators upgrade their networks to provide platforms capable 
of delivering the capacity and speed required to service the 
growing data traffic generated by users of smart mobile 
devices. Streaming video is the single most important driver 
and the delivery of a seamless service is imperative to meet 
consumer expectations.
It is this growth that will drive demand for both the Wireless 
and Broadband business and Filtronic is positioned to be 
a key supplier to OEMs and operators as they develop and 
supply products required to upgrade networks to satisfy end 
user demand.
Data and information in the market overview has been sourced 
from the June 2014 Ericsson Mobility Report that is available 
at http://www.ericsson.com/res/docs/2014/ericsson-mobility-
report-june-2014.pdf.
Microwave technology evolution 
—Microwave technology has 
improved in terms of capacity 
and spectrum efficiency. Gigabit 
capacities can now be made 
available anywhere. 
In recent years, microwave 
products have pushed capacity 
limits using multiple technologies 
such as higher order modulation, 
wider channels and carrier 
aggregation. They have also 
evolved to work more efficiently 
using built-in packet aggregation 
and adaptive modulation to 
minimize costs for initial rollout or 
network upgrade.” 
(Ericsson, June 2014) 
‘‘
Heterogeneous networks—
Heterogeneous network is a 
term used for a network that is 
typically composed of multiple 
radio access technologies, 
architectures, transmission 
solutions, and base stations 
of varying transmission power. 
The main objective of deploying 
heterogeneous networks is 
to create a seamless user 
experience. This implies the use 
of various access nodes in a 
wireless network. 
Such a network can use a 
combination of macro cells, micro 
cells, and pico cells deployed in 
a variety of environments. The 
degree of integration that can be 
achieved between the macro cell 
and the small cell layers will to a 
large extent determine the overall 
network performance.” 
(Ericsson, June 2014) 
‘‘
www.filtronic.com Stock code: FTC
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Objective and strategy
The group comprises two divisions.
Wireless
This division designs and manufactures bespoke filters, 
combiners, tower mounted amplifiers, antennas and RF 
microwave subsystems for the mobile telecommunications 
market supplying both the OEM market and network operators.
Broadband
This division designs and manufactures, for the OEM mobile 
backhaul market, E-band and V-band transmit and receive 
modules. Additionally, Broadband supplies modules for 
phased array radars and offers a build to print, design and 
test manufacturing service for precision hybrid/surface mount 
technology at microwave, E-band and V-band.
Key group strategic drivers
The demand for infrastructure equipment is being driven 
by the growth in mobile broadband subscriptions and the 
increasing volume of data being consumed. Our customers 
include the network operators and more recently the large 
OEMs that supply these network operators. In Wireless we are 
focused on achieving ‘design wins’ onto the major equipment 
platforms that will be needed to support this equipment 
roll-out. Increasingly, our revenues are generated by expanding 
our market access for microwave filters, combiners and RF 
subsystems and the introduction of new products such as 
TMAs and antennas. Importantly, we are now able to offer 
a more complete product portfolio and this maximises our 
opportunity per customer whether operator or OEM. In 
Broadband the focus is on introducing the next generation of 
E-band and V-band modules. By 2019, high capacity base 
stations are predicted to require mobile backhaul to achieve 
a data traffic rate of 1 Gbit/s and then, with the adoption of 
C-RAN, a rate of up to 10 Gbit/s.
  
The Mobile Radio Access Network 
LTE equipment market for both 
macro and small cell radios will 
witness tremendous growth over 
the next five years, with LTE RAN 
revenue levels expected to outdo 
the RAN revenue peaks of GSM in 
2007 and WCDMA in 2011.”  
 
(Dell’Oro Group quarterly report, July 2014)
‘‘
Our objective is to be a major supplier of RF and microwave products to the global 
telecommunications equipment infrastructure market. There is a growing need for suppliers to provide 
solutions to satisfy technically difficult specifications to support the increasing complexity within the 
wireless telecommunications market. Filtronic is well positioned to capitalise on this need.
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Filtronic plc Annual Report 2014 23459.04 15 August 2014 12:40 PM Proof 10
Market strategy
Wireless
Initially, the Wireless business predominantly focused on 
the mobile operators and in providing combiner solutions 
to enable new networks to be integrated into the existing 
networks and products to manage cell site interference 
and capacity improvements. Additionally, the time to 
market when supplying operators is significantly faster 
than the OEM market where the development of products 
for their mainstream platforms can take up to 18 months 
before volume manufacture commences. Due to the 
project nature of the business to operators, revenues can 
be extremely variable and subject to last minute change 
and it is therefore difficult to forecast and resource for this 
customer base. With OEM business, forecasting tends to 
be more straightforward due to the OEM having multiple 
end customers. As the product range and the business 
reach has grown we are now involved with many OEMs 
and have a number of design wins which include, frequency 
diplexers, antennas, RF subsystems, TMAs, combiners and 
small cell developments.
The majority of these major platform developments commence 
production within the next 12 months and are forecast to 
expand, year-on-year, for the foreseeable future.
Broadband
The Broadband business supplies OEMs with E-band 
and V-band, transmit and receive modules, for point to 
point backhaul solutions. Broadband’s engineering team 
is experienced in the design of MMICs. This, coupled with 
our system design knowledge and capability, has enabled 
Broadband to design the RF transmit and receive modules 
that are required for ‘carrier grade’ mobile backhaul 
applications at E-band frequencies. Broadband also provides 
build to print services at V-band and E-band which take 
advantage of the in-house expertise that has been developed. 
The build to print product usually has some key component or 
design feature that creates intellectual property, protects our 
sourcing position and enables a higher yield manufacture.
Over the year, Broadband has successfully improved 
production yields for what is technically difficult product 
to manufacture, delivering the 10,000th millimetre-wave 
transceiver module. The focus now is on introducing the 
next generation of E-band transceivers, increasing the OEM 
customer base and expanding the possible applications to 
other market sectors such as small cell and other enterprise 
opportunities to take advantage of this developing market.
Pictured:  Filtronic antenna test range,  
Täby, Sweden 
Pictured: E-band transceiver testing
www.filtronic.com Stock code: FTC
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Our business model
Filtronic Wireless
Filtronic Wireless is a designer  
and manufacturer of RF filters,  
combiners, TMAs, microwave  
subsystems and antennas for the  
mobile telecommunications industry, 
focusing on equipment for OEMs  
and network operators.
Filtronic Wireless provides a range of products to support 
global customers in the mobile telecommunications industry 
such as Ericsson AB, Alcatel Lucent, Nokia Siemens Networks, 
Motorola, O2, Sprint and Metro PCS as well as numerous smaller 
companies. Filtronic Wireless has its headquarters in Leeds, UK 
and has major design and engineering sites in the UK, Sweden 
and the US. With certified management systems and cost 
effective new product introduction and development processes, 
our experienced staff are able to support the needs of our 
customers for manufacturable high performance products.
Volume manufacturing is sourced from our manufacturing 
partner who is based in Suzhou, China where we have our 
own dedicated staff on site. We can provide the complete 
manufacturing process in house to minimise potential lead times, 
whilst maintaining the highest quality.
Filtronic Wireless has continued to develop new designs and 
products and now offers the following range of solutions for 
network operators and OEMs;
• Custom filtering for interference suppression and blocking 
protection
• Remote radio head products for the OEM base station market
• Innovative combining solutions which enable the rapid 
deployment of new systems maximising the use of available 
spectrum in the most compact and cost effective way
• TMAs to improve base station capacity
• UWB antennas to support the need to reduce the 
environmental impact of mobile phone telecommunication 
towers and support the introduction of new transmission 
frequencies
Solutions must also minimise the need for capital outlay, the 
need for extra antennas and avoid as far as possible planning 
permission for civil works. 
Filtronic Broadband
Filtronic Broadband is a  
designer and manufacturer of  
60 to 90GHz millimetre-wave  
products for mobile broadband 
backhaul, defence applications  
as well as providing build to print 
manufacturing at its state of the art, 
highly automated UK facility.
Our key offerings are:
• Design and manufacture of E-band and V-band transceiver 
modules
• Design and manufacture of microwave and millimetric filters 
and diplexers
• Design and manufacture of customised MMICs for multi-chip 
module applications and advanced packaging
• Build to print and design for cost/manufacture services for 
precision hybrid/surface mount technology at 60 to 90GHz
Broadband products support global OEM customers for ‘carrier 
grade’ mobile backhaul and a number of smaller second tier 
OEM customers that supply the enterprise mobile backhaul 
market. Modules for phased array radars and has build to print 
and test contracts for complex microwave modules at 4 to 
90GHz.
Filtronic Broadband offers a vertically integrated design, 
manufacture and test capability for E-band and V-band 
transceivers for the mobile broadband backhaul market. The 
‘carrier grade’ transceiver performance results from the use of 
proprietary MMICs. These MMICs have been designed in-house, 
for manufacture on the processes of leading foundries, and offer 
a differentiating capability in the market. The build to print projects 
involve some element of design for manufacture and rely on the 
vast experience that has been developed to achieve and support 
volume manufacture.
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Investing in research and 
development
Filtronic operates in a fast moving, 
technology driven market place 
where generating our own proprietary 
technology is key to maintain our 
competitive advantage. The group 
therefore invests in research and 
development and where appropriate 
obtains patents to protect our intellectual 
property.
From time to time, the group also 
benefits from grants, schemes and 
other incentives to carry out research 
and development. In FY2014 the group 
received £nil (2013: £36,000).
As part of our research and development 
activities we are working to develop 
solutions which support the market trend 
towards smaller, more compact products 
encompassing the use of alternative 
materials including ceramic.
Strategic relationships
Our business model has been developed 
around close working relationships with 
both our customers and suppliers to 
maintain a dialogue at multiple levels to 
cover all aspects of the business.
Wireless continues to develop its 
long-standing relationship with its 
manufacturing partner in Suzhou, China 
where Wireless has its own specialist 
staff on site to ensure close co-operation 
and good communication.
When there is a customer requirement 
to dual source production, for reasons 
of security of supply, Filtronic will, where 
economically viable, use more than one 
source of supply.
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Financial review
Financial results
Sales revenue in the year ended 31 May 2014 was £32.9m 
(2013: £40.0m) and operating loss before interest, intangible 
amortisation and exceptional items was £0.4m (2013: £3.1m 
profit). The group net loss before taxation for the year was 
£3.7m (2013: £0.2m profit). Amortisation of intangible assets 
arising from the acquisition of Isotek (Holdings) Limited 
charged in the year was £2.4m (2013: £2.4m). Exceptional 
costs, primarily relating to the relocation of the Broadband 
business of £0.8m (2013: £0.4m) were recognised in the year.
During the year, Broadband recognised sales revenue of 
£2.5m in respect of a last time buy to secure materials for 
a customer programme for legacy product. The customer 
ordered the material from Filtronic against their forecast 
requirement for finished product. No margin was made on 
the sale of the last time buy material and consequently the 
operating profit percentage to sales for Broadband and the 
group were reduced.
Key performance indicators (KPIs)
The directors set budgets for the year which are reviewed 
against the management accounts on a monthly basis. In 
addition to these results the directors review a number of KPIs 
to assess the performance of the group and assist in decision 
making. Historically, revenue and operating results by segment 
(note 3) have been the main KPIs used by the group.
In line with industry practice, a more comprehensive set 
of financial KPIs has been introduced to monitor business 
performance. These KPIs are set out on page 17.
Taxation
A tax credit of £0.9m (2013: £0.05m) has been recognised for 
the year, see note 12, to the financial statements. 
Funding and cash flow
The group ended the year with net cash of £2.5m (2013: 
£1.9m), the increase in net cash resulted from the unwinding 
of working capital associated with projects completed in the 
year and a reduction in inventory in Broadband. Cash in/(out) 
flow from operating activities was £1.6m (2013: £(0.3m)).
Filtronic has an invoice discounting facility with Barclays Bank 
plc of £2.0m. As at 31 May 2014 no funds were drawn down 
against this facility (2013: £0.5m).
Inventory provision
Inventory is valued at the lower of cost or net realisable value. 
It is the group’s policy to regularly review the carrying value 
of its inventories and to make a provision for excess and 
obsolete inventory. As at 31 May 2014 the inventory provision 
was £1.6m (2013: £1.5m).
Warranty provision
In line with industry practice the group provides warranties to 
customers over the quality and performance of products it 
sells. The group’s policy is to make a provision, calculated as a 
percentage of sales revenue, after reviewing costs associated 
with faulty products returned.
In Broadband, sufficient data has existed to enable the group 
to establish a reliable calculation of warranty provision.
In the case of our Wireless business, no historic data was 
available to the group when it acquired the business and 
consequently up to 31 May 2013 the group has provided a 
cautious estimate of the provision likely to be required. By the 
year ended 31 May 2014 sufficient warranty returns data had 
been accumulated to enable the business to calculate a more 
reliable value required to cover the cost of any warranty returns 
for product supplied and still under warranty. This recalculation 
of warranty and normal adjustments resulted in a reduction of 
overall provision of £0.5m which was credited to the income 
statement in the year.
Capital expenditure
Capital expenditure of £1.1m (2013: £1.5m) included £0.7m 
for the Wireless business and £0.3m in Broadband.
Research and development costs
Research and development costs in the year were £6.4m 
(2013: £5.4m). In line with the requirements of IFRS, the 
group’s policy is to capitalise development expenditure as 
intangible assets when all the qualifying criteria set out in note 
2 to the financial statements have been met. After considering 
the criteria no research and development costs were 
capitalised in the balance sheet in the year (2013: £nil).
Working capital
At 31 May 2014 net working capital was £8.0m (2013: £9.0m). 
Net working capital comprised inventories of £3.9m (2013: 
£5.4m), receivables of £9.9m (2013: £17.2m) and payables of 
£7.4m (2013: £13.6m).
Rob Smith 
Chief Financial Officer 
14 August 2014
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Key performance indicators
Group Broadband Wireless
FY2014 FY2013 FY2014 FY2013 FY2014 FY2013
Operating (loss)/profit per 
employee  
Filtronic recognises that employees 
are a critical asset in our business and 
we monitor the profit per employee to 
measure productivity.
£(2,376) £17,636 £(24,837) £(29,155) £30,103 £75,929
Research and development to 
sales per cent
The board recognises that the group 
needs to invest in new products, 
capabilities and technologies to 
participate in a technology driven  
market and monitors the investment 
made in research and development as a 
proportion of sales.
19.3% 13.6% 10.4% 16.4% 23.0% 12.9%
Operating (loss)/profit to 
sales per cent  
The board monitors profitability to ensure 
that an acceptable return is being made 
on operating activities in the year.
(1.3)% 7.6% (23.5)% (30.1)% 11.3% 20.0%
Inventory turns
The group maintains inventory so that it 
can meet customer demand for scarce 
and long lead-time items and to fulfil 
customer orders where deliveries are 
scheduled over a number of months or 
years.
7.4 8.6 1.7 1.4 9.8 18.4
Trade receivables days
In line with other companies in the 
sector the group extends credit facilities 
to customers that have an acceptable 
credit rating.
94 61 83 93 122 59
Trade payables days 
The group receives credit from a 
number of suppliers and recognises the 
importance of paying its suppliers on 
time. 
62 85 55 90 79 84
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Risk management
The directors recognise that risk is inherent in any business and seek to manage risk in a controlled manner. The key business 
risks are set out as follows: -
Risk Nature Mitigation
Change  
in year
Market We supply a range of niche products to a small 
number of large OEM customers for both the 
Broadband and Wireless businesses as well as 
a number of network operators in the Wireless 
business. The loss of any of these customers, or 
any material reduction in orders from any such 
customers, may have a material adverse effect 
upon Filtronic’s financial condition. With the 
rapid evolution of product technology and other 
corporate decisions the size of our addressable 
market may be affected. We may also fail to 
forecast market movements correctly so missing 
opportunities or wrongly predicting product 
longevity.
The group seeks to mitigate this risk by working 
closely with OEMs, on an engineer to engineer 
basis, to ensure that we are designed in to their 
products at an early stage. The group is actively 
seeking to increase the number of design wins 
across a range of OEM products. This strategy is 
designed to diversify market risk.
The relationship that the group maintains with 
OEMs is key to ensuring that we are involved in the 
early stages of product design.

Manufacturing In most of the products, production is demand 
led and customers may vary their requirements 
from the business at short notice, which also 
impacts inventory management. Customers in 
these businesses expect consistently high quality 
product and reducing prices, hence we depend 
on control of our operating environment, including 
management of security of supply in our supply 
chain, and the provision of correctly designed 
technological solutions including the achievement 
of target cost reduction plans. Non-performance in 
these areas risks a diminished market position.
The group’s internal and outsourced manufacturing 
processes are certified to ISO9001.
Our Broadband division has relocated to a new 
facility. This move provided us with the opportunity 
to take greater control over our in house processes 
and where appropriate we have outsourced non-
core processes to suppliers who can offer better 
quality and consistency of manufacturing.
All our products are provided to customers after 
detailed qualification testing. We work closely with 
our customers to ensure that the test process 
employed ensure that all the products are supplied 
compliant to the customer’s specification.

Technology Our product competitiveness is strongly influenced 
by technology choices at product concept 
stage and throughout execution of design to 
product launch. For products in the production 
cycle, technology insertion is often required as 
a means of achieving price reductions, which 
underpin sales. The market is time sensitive and 
opportunities may be lost if the technology we 
develop is not appropriate or ready for exploitation 
to match market demand, so having an adverse 
effect on business performance.
Our ability to remain competitive in terms of 
technology and product design is underpinned by 
retaining key staff.
We work closely with our customers and suppliers 
to gain a thorough knowledge of the technology 
being developed in the marketplace. By staying 
close to the market we position ourselves to react 
quickly to any technology changes that develop.

Effective risk management is key to our success against the characteristics both of the industry 
that we operate in and within our chosen business model. Filtronic supplies microwave, base 
station filter products and antennas for the wireless telecommunications market. The group 
operates in a fast-changing sector with a small number of sophisticated customers, demanding 
performance standards and international competition, all of which pose risks to the business.
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Risk Nature Mitigation
Change  
in year
Financial 
management
The group has a specific exposure to credit risk, 
interest rate and exchange rate fluctuations.
The group has established a number of policies 
to mitigate these risks, further details of which are 
presented in note 36 to the financial statements.

Legacy disposals We have sold four divisions of the group in the 
past 10 years and have provided warranties in 
support of these transactions. These warranties 
typically cover matters such as product liability, 
environmental impact risks on freehold property 
and tax risks. We may receive claims in future 
related to these current and future commitments.
Following a review, the group has made financial 
provisions for potential liabilities and periodically 
reviews its potential liability in respect of these 
disposals.

The board has established a continuous process for identifying, evaluating, and managing the significant risks the group faces 
which has operated throughout the year and up to the date of this report. 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 with 
respect to the preparation of financial information and the safeguarding of assets and against material misstatement or loss.
In compliance with the UK Corporate Governance Code, the board regularly reviews (at least annually) 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 systems. 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. The board has also performed a specific assessment for the purpose of this 
annual report. This assessment considers all significant aspects of internal control arising during the period covered by the report. 
The audit committee assists the board in discharging its review responsibilities.
During the course of its review of the risk management and internal control systems, the board has not identified or been advised 
of any failings or weaknesses which it has determined to be significant. Therefore, a confirmation in respect of necessary actions 
has not been considered appropriate.
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Corporate social responsibility report
Employees
The group’s success depends on its employees and the board 
recognises that it is their commitment and contribution that is 
vital to the execution of the group’s strategy.
With an international workforce, it is important that we provide 
an environment where we attract, motivate and reward high 
quality employees.
Employee development
Employee development is an important element of employee 
retention and motivation. The group has an education and 
training policy in place to implement continuous improvement 
where beneficial to the group and employee, thus underlying 
the group’s commitment to ongoing employee development 
and training.
Employee communications
The group believes in keeping employees fully informed on 
matters which affect them through various communication 
forums. The group operates a UK-wide staff forum for 
information and consultation (‘ICON forum’). The ICON 
forum is designed to be a gathering at which employee 
representatives can review group progress and raise, 
share and discuss specific issues and concerns that affect 
employees with senior management. The group culture is 
one which encourages openness and interaction between all 
members of staff.
Equal opportunities
The group is committed to a policy of equal opportunities by 
which the group ensures that all employment related activities 
are based on merit and suitability for the job alone. Further 
information on our equal opportunities policy may be found on 
our website www.filtronic.com.
Diversity and inclusion
Although Filtronic currently has no specific policy on diversity, 
including gender diversity, it is one of the group’s core values 
(expected of employees, suppliers and other stakeholders) 
that all individuals are treated with dignity and respect. 
Our policies and practices emphasise the importance of 
treating people in a non-discriminatory manner across 
the full employment life cycle, including hiring, reward, 
development, promotions, mobility and departure. In the 
event that an employee becomes disabled the group will 
make reasonable adjustments, and so far as is practicable; 
will continue to provide employment. Training is provided to 
those making decisions on these factors so that no individual 
is disadvantaged and to prevent discrimination on the 
grounds of gender, religion, belief, race, creed, age, disability, 
sexual orientation, ethnic origin, or marital status. The board 
recognises the importance and benefit of ensuring diversity 
throughout the business and is considering whether a specific 
policy on diversity, equality and inclusion is required. The 
diagrams below illustrate what the gender split is at various 
levels within the group.
The chief executive officer is the board member responsible for 
human resources.
Acting with integrity and behaving responsibly is central to the execution of our strategy and 
underpins our business model. This report covers how Filtronic interacts with a range of key 
groups, stakeholders and its approach to key issues and its aims for the future.
Executive Level 
Diversity
Male 80%
Female 20%
Board of Directors’ 
Diversity
Male 100%
Female 0%
Management 
Diversity
Male 91%
Female 9%
Total Workforce 
Diversity
Male 66%
Female 34%
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Human rights
Filtronic applies human rights considerations to the way 
it does business, for example through our supplier and 
anti-bribery and anti-corruption policies, our code of ethics 
which is an integral part of our management policies, our 
practices in relation to health and safety, equal pay and 
employees’ freedom to join trade unions. At present the 
group does not have a specific policy on human rights but 
will continue to review whether such a policy is needed in 
the future.
The environment
Care for the environment is an integral part of the group’s 
business activities. It is the group’s policy to ensure that its 
facilities are safe and the group is committed to ensuring 
that its impact on the environment is minimised. The group 
supports and trains its personnel to act responsibly in matters 
relating to the environment. The group takes account of 
relevant legislation and regulations and analyses its practices, 
processes and products to reduce their environmental impact, 
and works with its customers and suppliers to achieve a high 
standard of product stewardship. 
Filtronic Wireless has streamlined its processes into 
an integrated management system to encompass the 
requirements of both the ISO9001 and ISO14001 international 
standards. This integration will allow for a more cost effective 
monitoring system to ensure compliance to the highest level 
of quality and environmental standards in our industry. Filtronic 
Broadband is adopting the same approach.
Currently we have three sites which are certified to ISO9001 
standard – Salisbury, Maryland, USA, Leeds, West Yorkshire 
and Sedgefield, County Durham. The Leeds site is certified to 
the ISO14001 standard with the Sedgefield site currently in the 
process of re-establishing its certification after its move from 
Newton Aycliffe. Efforts are ongoing to obtain certifications at 
other sites in FY2015 including our Shrewsbury and Sweden 
sites. 
Emissions statement
Filtronic calculated its global greenhouse gas (GHG) emissions 
statement using an operational control consolidation approach 
as described in the Greenhouse Gas: Protocol: A Corporate 
Accounting and Reporting Standard (Revised Edition, 2004), 
which reflects the Defra Environmental Reporting Guidelines 
(Revised October 2013).
Pictured: High precision, automated die attach machine
Pictured: Visual inspection at NET Park
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Scope 1 emissions occur from sources that are owned or where 
Filtronic has operational control. This includes direct emissions 
from gas combustion in our buildings and fuel used in leased 
company vehicles. Actual and estimated gas consumption data 
has been collected from each of the leased properties under 
the control of the Filtronic group, from data sources including 
direct meter readings, meter readings from suppliers included 
on invoices and estimations where required based on available 
information from property management suppliers and other 
sources. Actual mileage data has been collected from the 
company vehicle fleet.
Scope 2 refers to indirect emissions from the consumption of 
purchased electricity (also including any purchased heat, steam 
or cooling) from facilities owned or under the operational control 
of Filtronic. Actual and estimated data has been collected from 
each of the leased properties under the control of the Filtronic 
group, from data sources including direct meter readings, meter 
readings from suppliers included on invoices and estimations 
where required based on available information from property 
management suppliers and other sources.
Corporate social responsibility report continued
Pictured: Epoxy dispenser 
Assessment Parameters
Baseline year 1 June 2013 to 31 May 2014
Consolidation approach Operational control
Boundary summary All entities and facilities under operational control included subject to the materiality 
threshold applied
Consistency with financial statements  
 
The only variation is that leased properties deemed to be under the operational control 
have been included in scope 1 and 2 emissions
Materiality threshold Materiality has been set at group level at 5 per cent*
Assessment methodology Greenhouse Gas Protocol and ISO14064-1 (2006)
Intensity ratio Emissions per £m turnover excluding royalties
* The total of any excluded emission sources are estimated to be less than 5 per cent of Filtronic plc’s total reporting emissions.
GHG emission source (tCO
2
e) (tCO
2
e/£m)
Scope 1 189 5.7
Scope 2 1,174 35.7
Statutory total (scope 1 and 2) 1,363 41.4
The GHG emissions statement includes emissions data from leased assets that are not included in the rest of the consolidated 
financial statements, other than in note 32, operating lease arrangements.
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Supply chain
The adoption of a new, advanced product life cycle 
management software system has allowed for group-wide 
management and control of our documentation to include 
product design, suppliers and change management as well as 
a module to address specific quality processes. Supply chain 
management is working to develop partnerships with our main 
suppliers to ensure they have systems in place that focus on 
quality, environment, corporate social responsibility and health 
and safety. This includes new initiatives from our customers on 
reporting of use of conflict minerals in our supply chain. 
The implementation of these management systems, which 
are designed to monitor and control processes such as 
quality, environment and health and safety will provide Filtronic 
Wireless with the confidence that each and every product 
that is delivered to our customers is an appropriate level 
of quality, and has been designed and manufactured in a 
way that considers our impact on the environment and the 
ultimate health and safety of our employees who contribute to 
our success. Filtronic Broadband will be adopting the same 
approach.
Health and safety
The board is committed to ensuring the health and safety of 
the group’s employees and applies high standards throughout 
the group in the control and management of its operations. 
Due to recent expansion and addition of sites, we have 
refocused our efforts within each location on developing a 
robust health and safety programme that emphasises risk 
management to ensure our employees have a safe and 
healthy work environment. Our goal is to align our programme 
with the OHSAS 18001 international standard.
Charitable and community support
The group has a history of supporting charities. In the majority 
of cases this involves matching employee sponsorship for their 
chosen charity events which have included, in the past year, 
‘The Stroke Association’ and ‘Mind’ and ‘Mind the Gap’ 
(a charity for learning disabilities based in Bradford). 
For us, helping out is not necessarily just about raising funds 
or making donations; it also includes practical help. The group 
donated PCs to a local primary school, and large amounts 
of office and lab equipment to educational establishments, 
following the relocation of the Broadband business to 
Sedgefield, County Durham earlier this year. 
Opportunities are provided annually, across all divisions, for 
work experience and student placements.
To support engineering and technology we have developed 
partnerships with local universities; sponsoring a PhD 
student, awarding a group sponsored prize to ‘outstanding 
undergraduate student’ in electronic communications and 
knowledge sharing events. 
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Filtronic plc Annual Report 2014
Governance report
Introductory letter from the chairman of the board 
on the governance report
Dear Shareholder
At Filtronic, we believe that good governance is about helping 
to run the company well whilst promoting its success for the 
benefit of all of its shareholders. In practice, it is about setting 
clear goals and expectations not only for the company’s 
strategy but for its conduct and business performance and 
being honest in our business dealings. 
We are conscious that the board sets the tone for the 
company. The way in which it conducts itself, its attitude 
to ethical matters, its definition of success, the setting of 
goals and strategy and its assessment of risk, all define the 
environment in which the executive members implement the 
company’s strategy. We continue to measure the effectiveness 
of our directors, the board itself and its committees and the 
outcome from this exercise invariably generates constructive 
suggestions. The board is aware that it must continually 
develop its skills and knowledge so that it can respond to 
changing market conditions.
During a year of considerable change on the board (Michael 
Roller joined as a non-executive director in June 2013 and 
Rob Smith joined in June 2014 replacing Mike Brennan as 
CFO) our board committees have continued to perform 
effectively. The focus of the nominations committee’s activities 
this year has been on succession planning and the search for 
a new CFO. 
The remuneration committee completed an extensive review 
and benchmarking exercise on the short, medium and long 
term incentives for our UK-based executive directors and 
senior staff. It considered guidance from investor bodies and 
from the Department of Business, Innovations and Skills. The 
audit committee considered a number of key risks within the 
business and the exposure to risk within the business. 
In the pages that follow, we describe the corporate 
governance framework in more detail. We start by describing 
the board and its committees, their remit and operation, 
ending with the directors’ corporate governance statement. 
Separate reports from each of the committees are included 
followed by the directors’ report. 
The detailed statement below sets out how the company 
applied the principles of good governance set out in the UK 
Corporate Governance Code issued in September 2012 by 
the Financial Reporting Council ( The Code”). I hope you will 
find this report helpful in understanding our commitment to 
good governance.
Yours sincerely
Howard Ford 
Chairman 
14 August 2014
* During the reporting period ending 31 May 2014, the company has been deemed to be a 
‘smaller company’ in terms of code provisions including B.7.1 and directors are subject to re-
election at intervals of no more than three years after initial election by shareholders with the 
exception of Graham Meek who is subject to annual re-election by shareholders.
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www.filtronic.com Stock code: FTC
Governance framework: Board and committees, 
membership, remit and activities
Board Membership
The board is currently comprised of six directors as follows: 
the chairman, three non-executives and two executive 
directors. 
Executive directors
Alan Needle (aged 59) has been an executive director since 
November 2010 and chief executive officer since July 2012. 
Prior to the acquisition of the Wireless business he was 
head of Wireless Infrastructure of Isotek Electronics Limited. 
Previously, he had been an executive director of Filtronic plc 
from flotation in 1994, until 1997 and chief executive of the 
Wireless Infrastructure Division of Filtronic plc from 2002 until 
January 2006. He is a Chartered Engineer and a Fellow of the 
Institute of Electrical Engineers.
Robert (Rob) Smith (aged 50) was appointed as an executive 
director and chief financial officer with effect from 16 June 
2014. Prior to joining Filtronic, Rob was Finance Director 
at APC Technology Group PLC, a distributor of specialist 
electronic components and smart energy saving products and 
services provider. Rob has also served as finance director at 
Densitron Technologies plc, a manufacturer and distributor of 
electronic displays. Rob’s earlier career was spent principally 
in the electronic components industry working for GEC, 
Centronic and International Rectifier. He is a Chartered 
Management Accountant and a Fellow of the Chartered 
Institute of Management Accountants.
Non-executive directors
Howard Ford (aged 63) has been a non-executive director 
since 2008. He was appointed non-executive chairman 
on 18 September 2009. He has many years of operational 
experience in the IT and telecoms sector with IBM Europe, 
BT/Cellnet and Equant Network Services where as managing 
director the company was listed on the New York Stock 
Exchange and the Paris Bourse until its takeover by France 
Telecom in 2005. He is currently the non-executive chairman 
of Cambridge Semiconductor Limited, Light Blue Optics 
Limited, Pyreos Limited and ZBD Displays Limited and has 
also served on the boards of a UK charity and a number of 
privately held companies in the UK and France.
Graham Meek (aged 67) has been a non-executive director 
since 1999. Since 2006 he has been designated the senior 
non-executive director and is chairman of the audit committee. 
He is a non-executive director of Capital Gearing Trust plc and 
is vice-chairman of King’s College Hospital NHS Foundation 
Trust.
Reginald (Reg) Gott (aged 57) has been a non-executive 
director since 2006. He was appointed as chairman of the 
remuneration committee on 6 June 2008. He is chief executive 
of Resource Group Limited. From 2002 to 2008 he was 
an executive director of FKI plc, an international diversified 
engineering group, and from 2009 to 2012 he was chief 
executive of Nuaire Group. He has an extensive background 
in the machinery, automation and controls segments of the 
capital goods markets across Europe and North America. 
Michael Roller (aged 49) was appointed as a non-executive 
director on 1 June 2013. In March 2014 he joined the board 
of Bioquell plc as group finance director. He has previously 
been finance director of a number of quoted companies, most 
recently Corin Group plc. He has also held a number of other 
senior finance roles in a broad range of listed and private 
companies. He qualified as an accountant with KPMG.
Framework of governance: corporate duties, 
operation of the board and its committees
Leadership
The board is accountable to the company’s shareholders for 
good corporate governance. It is also responsible for providing 
leadership to the group within an effective framework of 
authority and accountability. It sets the strategy and oversees 
its implementation. It ensures that the right people and 
resources are in place in order to deliver long term value to 
shareholders through the proper management of risk in parallel 
with the promotion of innovation and entrepreneurship. In 
June 2013, Michael Roller joined the board as a non-executive 
director and in June 2014, Rob Smith joined as chief financial 
officer of the group, replacing Mike Brennan who stepped 
down in April 2014. Howard Ford, the chairman is responsible 
for the running of the board ensuring, together with the 
company secretary, that it receives timely and clear information 
to enable it to discharge its duties. 
Effectiveness
During the year, the board carried out a rigorous evaluation 
exercise involving an internal review process. The board 
did consider appointing an independent facilitator for the 
evaluation process but chose not to do so this year. The 
methodology used was as follows. 
Separate questionnaires based on the provisions of the UK 
Corporate Governance Code 2012 were prepared, with 
tailored questions for (i) the board and its committees; (ii) 
the chairman; (iii) the non-executive directors and the (iv) the 
executive directors. 
The board effectiveness questionnaires were completed by 
all directors. Contributions were submitted anonymously to 
the company secretary to facilitate candour. The results were 
reviewed initially by the chairman with a view to sharing and 
making recommendations shortly thereon with the board as a 
whole. The evaluation of the chairman was completed by all 
directors. Again contributions were submitted anonymously. 
In this case, the results were reviewed initially by the senior 
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Filtronic plc Annual Report 2014
Governance report continued
non-executive director, Graham Meek with a view to sharing 
with the entire board. The evaluation of executive and non-
executive directors was completed by all directors. Again, 
contributions were submitted anonymously and results will be 
reviewed initially by the chairman with a view to sharing with 
the entire board. 
The recommendations from this exercise will be formally 
considered by the board with a view to improving 
effectiveness.
The board considers all of its non-executive directors to be 
independent. Although Graham Meek does not meet the 
criteria for independence as set out in the Code, the board 
considers him in character and judgement to be independent. 
Mr Meek, having been invited by the board to continue to 
serve as a non-executive director has agreed to continue, 
subject to re-election by the company’s shareholders at the 
AGM on 26 September 2014. All members of the board have 
access to the advice and services of the general counsel 
and company secretary and are able to take independent 
professional advice at the company’s expense in the discharge 
of their duties. The company has procedures to deal with 
directors’ conflicts of interest and the board is satisfied that 
these procedures operate effectively. 
Accountability
The UK Corporate Governance Code states that the board 
should present a balanced assessment of the company’s 
position and prospects including the significant risks facing the 
company. The strategic report and the audit committee report 
set out these assessments in detail.
Remuneration
The remuneration committee report is set out on pages 
31 to 42 complies with the new regulations governing the 
reporting of directors’ remuneration by UK public companies. 
The directors’ remuneration policy will be proposed as a 
shareholder resolution at the AGM in September and will be 
the subject of a binding vote. The annual remuneration report 
will similarly be proposed as a shareholder resolution at the 
AGM but will be subject to an advisory (i.e. non-binding) vote.
Relations with shareholders
The chairman is chiefly responsible for ensuring that there is 
a satisfactory dialogue with shareholders. All of the directors 
recognise the importance of having clear communication 
with shareholders and the role of clear narrative reporting 
in particular to aid this communication. Meetings with 
shareholders are usually scheduled after the announcements 
of the preliminary results in July and the interim results in 
January each year. Shareholders are encouraged to attend 
the company’s AGM. The chairman aims to ensure that the 
chairmen of the audit and remuneration committees are 
available at the annual general meeting to answer questions. 
Information is also available to all investors by way of the 
company’s website at www.filtronic.com.
Remit of the board 
Whilst day to day operational matters are managed by the 
chief executive officer, other matters, including those listed 
below, are reserved for the board:
• Strategy and oversight of the management of the company;
• Approval of company and consolidated financial statements;
• Approval of major corporate transactions and commitments;
• Succession planning (appointment/removal of directors and 
the company secretary);
• Approval of all terms of reference for the committees of the 
board and delegation of authority to the chief executive 
officer;
• Review of the group’s overall corporate governance 
arrangements including systems of internal controls and risk 
management;
• Approval of the delegation of authority to the chief 
executive officer or where appropriate to the relevant board 
committee;
• Approval of the terms of reference of all committees of the 
board.
The board has established the following committees, each of 
which has written terms of reference specifying its authority: 
Audit committee
The primary function of the audit committee is to assist the 
board in fulfilling its financial and risk oversight responsibilities. 
During the year, it met three times. The committee reviews 
items such as the half and full year results and then makes a 
recommendation to the board. The audit committee is chaired 
by Graham Meek and is comprised of all of the non-executive 
directors. Further details of the role and responsibility of the 
committee can be found later in this section in the audit 
committee report. 
Nominations committee
The nominations committee is chaired by Howard Ford, 
and the other members are the independent non-executive 
directors: Graham Meek, Reginald Gott and Michael Roller. 
The nominations committee’s duties are confined to the 
nomination of appointments, reappointments and termination 
of employment or engagement of directors and the company 
secretary. Further details of the role and activities of the 
committee can be found later in this section in the nominations 
committee report. 
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Remuneration committee
The remuneration committee is chaired by Reginald Gott 
and the other independent non-executive directors, Graham 
Meek and Michael Roller together with Howard Ford, the 
chairman of the board, are members. The members of the 
committee have no personal interest in the matters considered 
other than as shareholders. No potential conflicts of interest 
exist in relation to any of the member of the committee and 
their duties. The remuneration committee’s responsibilities 
include ensuring that the remuneration policy of the company 
and its implementation are appropriate. It ensures that 
levels of remuneration are sufficient to attract, retain and 
motivate directors of the quality required to run the company 
successfully whilst avoiding paying more than is necessary 
for this purpose. Further details of the role and responsibility 
of the committee can be found later in this section in the 
remuneration report. The remuneration committee met three 
times during the year.
Executive committee
The chief executive has established an executive committee. 
The committee aims to meet monthly either by teleconference 
or face to face. The routine matters on the agenda include, 
operational matters (trading, customers, suppliers), site 
specific issues in the UK, Sweden, China and the USA, 
risk management, health and safety, human resources and 
environmental matters.
Directors’ attendance table FY2014
The board normally schedules at least 10 meetings during the 
year. Last year the board met 13 times. Attendance at board 
meetings and committee meetings during the year ended 31 
May 2014 was as follows:
Board Audit Remuneration Nominations
Total meetings in year 13 3 3 4
Director attendance
Howard Ford (Chairman) 13 3 3 4
Reginald Gott 13 3 3 4
Graham Meek 12 3 2 4
Michael Roller 13 3 3 4
Mike Brennan 10/10 n/a n/a n/a
Alan Needle 12 n/a n/a n/a
Table Governance Report: Attendance at board (and committee) meetings held in FY2014
Statement of compliance with the 2012 UK 
Corporate Governance Code (the Code)
The company is committed to the principles of corporate 
governance contained in the Code.
Notwithstanding the circumstances set out in provision B.1.1 
of the Code, the board believes that Graham Meek continues 
to be independent in character and judgement despite the fact 
that he has served on the board for more than three terms of 
three years. He continues to demonstrate his independence at 
each board meeting with the originality and acuity of his views 
not only in relation to the executive directors but also the view 
of the other non-executive directors.
In respect of code provision C.3.3 (relating to the audit 
committee’s role in monitoring the company’s internal audit 
function) as explained in the company’s audit committee 
report, the company outsources its internal audit activity 
to third parties as it is not deemed appropriate given, the 
company’s size, to have its own internal audit function. The 
audit committee considers annually whether there is a need for 
an in house internal audit function to be established and were 
it to conclude that this would be more appropriate than the 
current arrangements, would recommend this to the board.
Except for the foregoing, the directors consider that throughout 
the year ended 31 May 2014 the company has been in 
compliance with the code provisions set out in the Code.
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Audit committee report
During the year the audit committee comprised four 
independent non-executive directors: 
Graham Meek (chairman), Howard Ford, Reg Gott and 
Michael Roller. 
The audit committee’s terms of reference include the following 
roles and responsibilities: 
• monitoring and making recommendations to the board in 
relation to the company’s published financial statements 
and other formal announcements relating to the company’s 
financial performance; 
• advising the board on whether the committee believes the 
annual report and accounts, taken as a whole, are fair, 
balanced and understandable and provide the information 
necessary for shareholders to assess the company’s 
performance, business model and strategy;
• monitoring and making recommendations to the board in 
relation to the company’s internal financial controls and 
financial risk management systems; 
• annually considering the need for an internal audit function; 
• making recommendations to the board in relation to the 
appointment, reappointment and removal of the external 
auditor and approving the remuneration and terms of 
engagement of the external auditor; 
• reviewing and monitoring the external auditor’s 
independence and objectivity and the effectiveness of 
the audit process, taking into consideration relevant UK 
professional and regulatory requirements; 
• monitoring the extent to which the external auditor is 
engaged to supply non-audit services; and 
• ensuring that the company has arrangements in place 
for the investigation and follow-up of any concerns raised 
confidentially by staff in relation to the propriety of financial 
reporting or other matters. 
The committee reviews its terms of reference and its 
effectiveness annually and recommends to the board any 
changes required as a result of the review. The terms of 
reference are available on request from the company secretary 
and on the company website, www.filtronic.com. The audit 
committee meets at least three times a year and has direct 
access to KPMG LLP (“KPMG”), the company’s external 
auditor. The board considers that the members of the 
committee are independent and have collectively the skills and 
experience required to discharge their duties effectively, and 
that the chairman of the committee meets the requirements of 
the UK Corporate Governance Code as to recent and relevant 
financial experience. 
The company outsources its internal audit activity to third 
parties as it is not deemed appropriate given the size of the 
company to have its own internal audit function. However, the 
committee considers annually whether there is a need for an 
in-house internal audit function to be established and, were 
it to conclude that this would be more appropriate than the 
current arrangements, would recommend this to the board. 
During the year ended 31 May 2014 the audit committee met 
three times and discharged its responsibilities by: 
• reviewing and approving the external auditor’s terms of 
engagement, remuneration and independence; 
• reviewing the external auditor’s plan for the audit of the 
company’s financial statements, including identification of 
key risks; 
• reviewing the company’s internal financial controls operated 
in relation to the business and assessing the effectiveness of 
those controls in minimising the impact of key risks; 
• reviewing the appropriateness of the company’s accounting 
policies; 
• reviewing the company’s draft annual report and accounts, 
interim report and interim management statements prior to 
board approval; 
• reviewing the external auditor’s detailed report to the 
committee on the annual financial statements;
• reviewing the need for an internal audit function, and 
determining what aspects of the company’s operations 
should be subject to outsourced internal audit scrutiny.
The following key areas of risk and judgement have been 
identified and considered by the audit committee in relation 
to the business activities and financial statements of the 
company:
• inventory valuation
• warranty provisions
These issues were discussed with management and the 
auditor, in particular at the pre-year end audit planning meeting 
and at the conclusion of the audit of the financial statements. 
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Inventory valuation: Filtronic operates in an industry where 
developments in product technology and the highly 
customer-specific nature of some inventory may result in 
inventory becoming slow-moving or obsolete. This in turn 
may mean that inventory cannot be sold or that sales prices 
for such inventory are discounted to less than the relevant 
inventory’s book value.
The majority of Filtronic’s inventory relates to the Broadband 
division. The committee considered a paper from senior 
management analysing this inventory by customer and looking 
at projected future usage relative to current inventory on hand. 
It reviewed the provision for excess and obsolete inventory 
and noted that the level of provision and the methodology 
applied were appropriate and consistent.
Warranty provisions: Filtronic maintains a provision to 
recognise the risk of warranty claims being made against it 
by its customers. The level of warranty provision varies and 
is dependent on the customer and the complexity of the 
product. In Broadband the warranty provision rate can be up 
to 0.9 per cent of sales value whereas in Wireless the warranty 
provision is set at a fixed level of 0.32 per cent of sales value. 
The level of any such provision is necessarily judgemental 
because many of the group’s product ranges are new and 
there is no extended history of warranty claims upon which to 
base the level of ongoing provisioning.
The committee considered the provision for warranty claims in 
light of the claims experience in the current and recent years 
and the mix of new and established products sold in the year 
and concluded that the level of provision was appropriate.
The company’s management confirmed to the audit 
committee that they were not aware of any material 
misstatements. Having reviewed the reports received from 
management and the auditor, the committee is satisfied that 
the key areas of risk and judgement have been appropriately 
addressed in the financial statements and that the significant 
assumptions used in determining the value of assets and 
liabilities have been properly appraised and are sufficiently 
robust. The committee considers that KPMG has carried out 
its duties as auditor in a diligent and professional manner. 
As part of the review of auditor independence, KPMG has 
confirmed that it is independent of the company and has 
complied with applicable auditing standards. KPMG has held 
office as auditor for 12 years; in accordance with professional 
guidelines the engagement partner is rotated after at most 
five years and the current partner is in his first year on the 
engagement. 
In assessing the auditor’s effectiveness, the committee:
• challenged the work done by the auditor to test 
management’s assumptions and estimates in the key risk 
areas;
• reviewed reports received from the auditor on these and 
other matters;
• received and considered feedback from management; and
• held private meetings with the auditor that provide the 
opportunity for open dialogue and feedback between the 
committee and the auditor without management being 
present.
In addition, the chairman of the committee has discussions 
by telephone and in person with the audit partner outside the 
formal committee process throughout the year.
Having completed its review, the audit committee is satisfied 
that KPMG remained effective and independent in carrying 
out its responsibilities up to the date of signing this report 
and believes that it would not be appropriate to put the audit 
appointment out to tender at the present time although this is 
kept under review. Accordingly, KPMG LLP will be proposed 
for reappointment as auditor at the annual general meeting.
After careful consideration of the advice of the audit 
committee, the board has concluded that the 2014 annual 
report is fair, balanced and understandable and provides the 
necessary information for the company’s shareholders to 
assess the group’s risks, performance, business model and 
strategy.
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Nominations committee report
Nominations committee responsibilities 
The terms of reference for the nominations committee are 
formally approved by the board and are available on the 
company’s website. The principal duties and responsibilities 
of the committee include: reviewing the structure, size and 
composition of the board, ensuring that succession planning 
is considered, reviewing the leadership requirements of the 
company (both executive and non-executive), keeping up to 
date and informed about strategic issues and commercial 
changes affecting the company and the market in which it 
operates.
The committee is required to meet twice during the year. The 
nominations committee met four times during the year to 
consider succession planning, board composition and balance 
of skills on the board. 
Activities of the committee
Early in 2014, the committee undertook a recruitment process 
to recruit a new chief financial officer (“CFO”) to replace the 
outgoing CFO. The committee was assisted in the search 
and recruitment activities by an independent search agency. 
The nominations committee continues to review the size, 
composition and structure of the board. At the start of the 
financial year 2014, the board was strengthened by the 
addition of a new non-executive director, Michael Roller, who 
has a wealth of recent and relevant financial experience. 
The committee considers that the current composition is 
appropriate to provide the proper governance, composition 
and guidance to the company’s business. The committee 
recommends that Graham Meek, subject to re-election by 
shareholders at the annual general meeting in September 
2014, continues to serve as the senior independent non-
executive director. 
Boardroom diversity
Although the company has no separate specific policy 
on diversity (other than its employment policy for non-
discrimination), diversity (including gender) is considered 
when the board is evaluating its performance and its balance 
of skills, experience, knowledge and independence and 
especially when recruiting new members to the board. In 
the two most recent recruitment exercises, the final short 
lists were comprised in equal measure of male and female 
candidates. However, the successful candidates were 
appointed solely on merit. The company, the board and the 
nominations committee values and supports the aims of the 
Davies Report on women on boards and noting that there is 
currently no female representation at board level (other than 
the general counsel and company secretary), the committee 
will keep under review whether a formal measurable objective 
should be set for female representation at board level.
There is always room for improvement and in the coming 
year the committee will be concentrating on our longer term 
vision and ensuring that the board (both executive and non-
executive) has the optimal range of skills, experience, diversity 
and personalities to succeed. 
Yours sincerely
Howard Ford 
Chairman nominations committee 
14 August 2014
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Directors’ remuneration report
Annual statement on remuneration
Dear fellow Shareholder,
I am pleased to present the Filtronic directors’ remuneration 
report for the year ended 31 May 2014. This report describes 
how the board has applied the principles of the UK Corporate 
Governance Code relating to directors’ remuneration and is 
split into two constituent parts:
The directors’ remuneration policy sets out the policy for 
2014-15 and the key factors that were taken into account 
in setting the policy. The 2014-15 directors’ remuneration 
policy will be subject to a binding shareholder vote at the 
AGM to be held on 26th September 2014.
The annual report on remuneration (ARR) sets out 
payments and awards made to the directors and senior 
management and details the link between company 
performance and remuneration for the 2013-14 financial 
year. The ARR is subject to an advisory shareholder vote 
at the AGM.
The remuneration committee comprises all non-executive 
directors, plus the chairman. It defines the company’s policy 
on remuneration, benefits and terms of employment for 
executive directors and senior management. The committee 
also reviews and approves general increases in staff salaries 
and bonus arrangements and takes these into account when 
setting remuneration packages for executive directors and 
senior management.
The committee has reviewed the remuneration packages of 
the executive directors and senior management to ensure 
these continue to attract, retain and motivate talented people, 
while recognising wider shareholder interests. The committee 
reviews all incentive-based rewards before they are awarded 
and has full discretion to adjust awards downwards if deemed 
appropriate. 
As a consequence of this review, the remuneration committee 
is proposing, for approval at the AGM, a slightly revised long 
term incentive framework which it believes better reflects ‘best 
practice’ going forward.
The board has also reviewed the terms of reference of 
the remuneration committee and made minor changes 
to accommodate the recently updated ICSA Approved 
Remuneration Committee Terms of Reference. The new 
remuneration committee terms of reference are available to 
view at www.filtronic.com.
The remuneration committee met three times formally during 
the year and ad hoc when needed.
Reg Gott 
Chairman, remuneration committee 
14 August 2014
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Directors’ remuneration policy
The Filtronic FY2015 directors’ remuneration policy (“the Policy”) will come into effect, if approved by binding vote, at the AGM 
on 26 September 2014. The main aim of the group’s remuneration policy is to align the interests of executive directors and 
senior management with the group’s business strategy and the creation of long term shareholder value. It is the intention of the 
committee that the Policy should run, in principle, for three years. The Policy is comprised of four parts: (i) a future policy table for 
executive directors; (ii) a chart illustrating the relationship between Filtronic’s performance and the resulting remuneration using 
various scenarios; (iii) other policies relating to executive director remuneration, recruitment, service contracts and termination; 
and (iv) remuneration policies for the chairman and non-executive directors.
The Policy aims to provide the directors and senior management with competitive remuneration packages, taking into account 
the remuneration practices of other international companies of similar size and scope within our industry sector and within the 
context of the current economic climate and the applicable regulatory and governance framework. 
The remuneration policy review identified above was undertaken with the assistance of Ernst & Young LLP (E&Y) who completed a 
best practice benchmarking study against a comparator group of companies and advised on current and trend-line best practice 
that would be most appropriately applied to Filtronic within the context of the company’s business growth strategy and aspirations. 
The comparator group selection, being a very critical part of this process, was reviewed jointly by the remuneration committee 
chairman, the CEO and E&Y. The group was selected to also include some similar profile businesses that were larger in revenue, 
profit and market capitalisation terms. These larger companies were not taken directly into account in the review process but were 
included in order to provide ‘boundary guidance’ to ensure the proposed Filtronic Policy and framework would be aligned with the 
target ‘direction and rate of travel’ of the company and thereby provide robust continuity beyond the year ahead. The fees paid to 
E&Y for this work amounted to £15,000.
The study concluded that the current Filtronic plc executive remuneration policy, introduced in 2008, was still essentially fit for 
purpose but that minor adjustments would be appropriate to reflect latest best practice.
The key change in remuneration policy recommended for FY2015 was an increase in the LTIP potential to adjust the focus 
of executive and senior management remuneration toward longer term shareholder value creation and the introduction of an 
element of deferral (non-matching) to further focus on delivering long term strategy. 
Our objective is to ensure that our remuneration structure provides a fair reward to all executive management, senior 
management and staff for the performance delivered and an incentive to continue to deliver our strategy and develop our 
business over the long term. We believe the Policy we are asking you to approve does this whilst also giving the committee the 
flexibility to respond to changes in circumstances and opportunities.
We therefore submit the remuneration policy to a binding vote on 26 September 2014.
The following table applies to executive directors and senior management (as deemed appropriate by the remuneration 
committee).
Future policy table — executive directors
Element 
Purpose and  
Link to Strategy Operation Opportunity
Performance  
Measures and Period
Base Salary This element is set 
to reflect expected 
contribution to delivering 
the company’s business 
plans and to allow 
Filtronic to recruit and 
retain executive directors 
of the calibre needed to 
develop and deliver the 
company’s strategy.
Reviewed annually with any change effective 
from 1 July, or following a significant change 
in responsibilities. 
When setting salary, the committee considers 
the level of increase for employees in general, 
market data, business performance, external 
economic factors, the complexity of the 
business and the role, and the director’s 
experience and performance.
The board retains 
discretion to make 
exceptional salary 
increases above inflation 
and the general level of 
increases throughout 
the group in situations, 
for example, where the 
executive has been 
promoted or gains a clear 
increase in responsibility.
The performance of an 
executive director is taken 
into account by the board 
during annual salary 
reviews.
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Element 
Purpose and  
Link to Strategy Operation Opportunity
Performance  
Measures and Period
Benefits To provide reasonable 
benefits which are 
competitive in the market.
The taxable benefits in kind comprise 
principally a fully expensed company car (or 
cash equivalent) and private healthcare. Life 
assurance and income support are also part 
of the benefits on offer but are conditional on 
the employee joining the Filtronic stakeholder 
pension scheme. Relocation assistance and 
other benefits that are customarily provided, 
in the relevant location, are included, where 
applicable.
Benefits will vary by 
role, and the level 
is determined to be 
appropriate for the role 
and circumstances, 
including country 
of domicile, of each 
individual executive 
director.
It is not anticipated 
that the current cost of 
benefits will increase 
materially over the term of 
this policy, but the board 
retains the discretion 
to approve additional 
benefits in exceptional 
circumstances (e.g. 
relocation expenses or an 
expatriation allowance on 
recruitment, etc.).
None.
Pension 
contribution
To provide retirement 
provision, on the same 
basis as that available to 
other employees.
The company contributions are set as 
a percentage of base salary and overall 
contributions are paid monthly.
Only base salary is pensionable. The 
company also operates a cash alternative 
scheme, (which is at no additional cost to 
the company), when life time allowances are 
reached.
The company has implemented pension 
auto-enrolment during 2014 and executive 
directors as well as other employees will be 
assessed and, where eligible, will be subject 
to auto-enrolment in line with the regulations.
Under the Filtronic plc 
Stakeholder Pension Plan 
(a defined contribution 
plan) the maximum 
contribution the company 
makes is 8% of base 
salary if the employee 
makes a contribution of 
6%. 
The pension scheme 
inherited from the 
acquisition of the Wireless 
business in 2010 is also 
a defined contribution 
scheme. The maximum 
contribution the company 
makes to those who 
were employed by the 
acquired entity at the time 
of acquisition is 10% of 
base salary if the member 
makes a contribution of 
5%.
It is not anticipated 
that the current cost of 
executive pensions will 
increase materially over 
the term of this policy.
None.
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Directors’ remuneration policy continued
Element 
Purpose and  
Link to Strategy Operation Opportunity
Performance  
Measures and Period
Annual bonus To retain, incentivise and 
reward performance 
against annual financial, 
strategic and operational 
objectives which are 
consistent with the  
medium term goals of 
Filtronic.
The award of annual bonus is assessed after 
the financial year end (when audited results 
are available) by the committee based on 
performance against the targets set at the 
beginning of the year.
Historically, annual bonus targets have 
principally been financial targets (operating 
profit and cash generation targets), equally 
weighted in terms of bonus opportunity. 
The committee believes this to remain an 
appropriate structure for the annual bonus 
and will continue to apply it.
Threshold vesting occurs (i.e. starting at 0%), 
if the threshold target is achieved, rising on 
a straight line basis to the maximum bonus 
opportunity in the event that the maximum 
performance targets are achieved.
For performance in line 
with expectations (the 
lower threshold): 0%, up 
to a maximum: 50% of 
salary for achieving the 
upper threshold.
The board continues to 
hold the view that, at this 
stage in the development 
of the business, operating 
profit and operating 
cash generation remain 
appropriate measures of 
performance for annual 
bonus purposes.
Annual targets will be set 
to reflect the momentum 
in the business, the 
potential market 
opportunity, shareholder 
expectations and strategic 
plans but will always 
require management 
to deliver a stretching 
performance.
In exceptional 
circumstances the 
board retains the 
discretion to change 
measures or targets at 
the half year to ensure 
alignment of pay with 
the underlying objectives 
and performance of 
the business during the 
year. The committee 
will provide a full 
explanation of why such 
discretion was applied 
in the following year’s 
remuneration report.
ESOP To incentivise long term 
value creation through 
aligning the interests 
of executives and 
shareholders through the 
grant of share options.
The committee can make share option 
awards to executive directors under the 
Filtronic plc employee share option plan.
These take the form of awards of an option to 
acquire shares in the company at the market 
price on the date of grant of the option.
The share options are subject to performance 
criteria being met over a vesting period.
Awards may be adjusted to reflect a change 
in the capital structure of the company.
Options over shares up 
to a maximum value of 
100% of salary based on 
the market value of shares 
at the date of the grant of 
option.
Performance measures 
are selected for each 
grant to reflect strategic 
priorities.
The share options have a 
three year vesting period.
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Element 
Purpose and  
Link to Strategy Operation Opportunity
Performance  
Measures and Period
Long Term 
Incentive  
Plan (‘LTIP’)
To incentivise long term 
value creation through 
aligning the interests 
of executives and 
shareholders through 
the grant of an award in 
shares.
The selected performance 
targets support the long 
term strategy of Filtronic 
and aid retention of 
executive directors.
The committee can make annual share-based 
awards to executive directors under the 
Filtronic plc performance share plan approved 
by shareholders in September 2008. These 
awards can take the form of conditional 
awards or nil cost options.
The committee usually grants awards annually 
and performance targets are measured on 
company performance over a three year period. 
Directors are encouraged but not required 
to hold the relevant awards for at least a 
two year period, subject to satisfying any 
associated tax liabilities.
The board proposes to introduce an element 
of deferral into the LTIP scheme such that 
50% of any awarded shares will be subject 
to deferred exercise for two years. Executive 
directors are encouraged to achieve 
within five years and maintain thereafter a 
shareholding of at least their equivalent annual 
salary. 
Awards may be adjusted to reflect a change 
in the capital structure of the company.
Maximum potential value: 
100% of base salary.
Historically for the CEO 
and CFO, the maximum 
value of the award has 
been 50% and 40% of 
base salary respectively.
It is proposed to set 
the normal maximum 
level at 50% of salary 
for both the CEO and 
CFO with an exceptional 
circumstances maximum 
level at 100% being 
available to award 
at the remuneration 
committee’s discretion. If 
this discretion is applied, 
a full explanation will be 
provided in the following 
year’s remuneration 
report.
On-target performance 
will result in 25% vesting 
of the LTIP award.
In 2008 when the 
current LTIP scheme 
was introduced, the 
performance measure 
adopted was an increase 
in EPS over a three year 
period. 
The board believes this 
remains an appropriate 
measure of long term 
performance for the 
purpose of an LTIP .
Participation 
in other all 
employee 
share-based 
plans
To encourage executive 
share ownership using 
HMRC approved 
schemes.
Executive directors can choose to participate 
in the company’s approved Save As You Earn 
Share Option Scheme on the same terms 
as other UK employees. In accordance with 
the scheme and UK tax rules, share options 
may be granted with an exercise price that is 
set at a discount (currently up to 20%) to the 
market value of Filtronic’s shares at the date 
of invitation.
Options may be adjusted to reflect a change 
in the capital structure of the company.
Up to the maximum 
monthly saving amount as 
permitted by HMRC.
None.
Performance measures and targets 
The committee believes that, due to commercial sensitivity, it would not be in the best interests of shareholders if it publicly 
declared company performance targets for bonuses for the year ahead. Consequently, the performance targets for 2014-15 will 
not be declared in this report but will be declared retrospectively in the FY2015 annual report.
In terms of the LTIP scheme awards, the committee has determined that EPS growth compounded over three years will remain 
the performance target for determining LTIP vesting. Lower and upper targets will be set each year an LTIP is launched and if 
the lower target is not met after the three years the LTIP will lapse. On achieving the lower target the LTIP will vest at 25% of the 
maximum potential award and then continue to vest on a straight line basis until the upper target is achieved, at which point the 
maximum LTIP potential will vest. The committee believes this scheme will clearly align the motivation of the executive directors 
with shareholder interests.
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Directors’ remuneration policy continued
Illustration of application of Filtronic’s remuneration policy for FY2015 (on the basis that the grant of LTIPs 
will be 50% of salary)
Alan Needle
Upper threshold
Lower threshold
Minimum
Minimum
Lower 
threshold
Upper 
threshold
Salary and benefits £223,462 £223,462 £223,462
Bonus — — £100,000
LTIP — £25,000 £100,000
Rob Smith
Upper threshold
Lower threshold
Minimum
Minimum
Lower 
threshold
Upper 
threshold
Salary and benefits £173,200 £173,200 £173,200
Bonus — — £75,000
LTIP — £18,750 £75,000
In order to illustrate the potential opportunity available to the executive directors and the sensitivity of pay to performance, the 
charts above set out outcomes for three performance levels:
• Minimum: Pay is limited to fixed elements of salary, pension allowance and taxable benefits and no vesting under any of the 
long term incentive plans.
• Achievement of lower threshold: Fixed pay and long term incentives vest at 50% of the maximum.
• Achievement of upper threshold: Fixed pay plus bonuses at the maximum opportunity and long term incentives vest at 100% 
of the maximum.
It is our intention to reward success. The policy is for a significant proportion of executive directors’ total remuneration to be 
capable of being earned from variable, performance-based incentives. The objective of this policy is to provide rewards and 
incentives for success. Nearly half of each director’s potential remuneration is variable and can only be earned by good group 
performance reflected in achievement of measurable objectives.
General remuneration policy for employees
All Filtronic employees are entitled to an annual pay review, pension participation and Sharesave plan participation. Depending 
upon role and seniority, some employees may also benefit from private healthcare, an annual bonus plan and use of a company 
leased car (or cash equivalent allowance). In addition, the most senior management staff may also benefit from participation 
in the executive LTIP . The levels of participation in all bonuses and LTIPs are determined by the board via the remuneration 
committee in consideration of role responsibility and individual performance contribution.
Recruitment policy
The committee recognises the importance of attracting the best talent available to the company in order to deliver company 
strategy and long term shareholder value. The company will, therefore, on recruitment of executive directors or senior 
management staff, or on the promotion of internal staff to an executive or senior management role, apply the remuneration policy 
in full. The committee will not approve joining bonuses but will retain the discretionary authority to set first year annual bonus 
performance targets for new recruits different to those for the other participants in order to reflect a commencement period after 
budgets have been set and to offer, also at commencement, immediate participation in the then current year LTIP plan. 
Exit payments
When determining any loss of office payment for a departing executive director or senior manager the committee will ensure that 
a consistent approach is adopted so that there is no reward for poor performance and the liabilities of the group are minimised 
where appropriate. The underlying principle to be applied is that an individual shall not receive more remuneration benefits as 
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a consequence of their departure than they would have been contractually entitled to had they continued in employment with 
the company in the same capacity for their full notice period, with the exception that, for ‘good leavers’ the committee will retain 
discretionary authority over the grant of pro-rata LTIP , Sharesave and ESOP awards.
No severance payment shall be made to any employee who is dismissed for serious breach of contract, serious misconduct or 
under-performance or any acts or omissions that bring the company into disrepute.
Executive directors’ service agreements
The executive directors have service contracts with an indefinite term with notice periods of no more than 12 months. The 
committee considers these notice periods to be reasonable and proper and in the best interests of all stakeholders. 
Executive directors can accept appointments as non-executive directors of other companies and retain any fees received, 
provided such an appointment does not conflict with their duties to the company. Specific approval of the board is required in 
each case. Neither of the executive directors currently serves as non-executive directors of other companies.
Future policy table – non-executive directors
Alignment with  
strategic objectives Operation Maximum Level
Performance  
Measures and Targets
Chairman and non-executive 
director fees
To attract and retain high 
calibre individuals who have 
the experience to conduct both 
statutory duties of directors as well 
as advise on company strategy 
and oversee its implementation.
Fee reviews are conducted 
annually, and take into account 
economic conditions, market 
levels and the time commitment 
and contribution of each individual 
as well as the affordability for the 
company.
The chairman and the non-
executive directors are paid 
an inclusive fee regardless of 
whether they serve as chairman 
or a member of the remuneration 
committee and / or audit 
committee, or if they are elected  
as senior independent director.
Fees are payable entirely in cash. 
Neither the chairman nor the non-
executive directors are permitted 
to participate in the company’s 
performance-based incentive 
plans.
The last fee increase was in 
September 2009.
It is anticipated that any increases 
to fee levels will typically be in line 
with market levels of fee inflation. 
In exceptional circumstances 
(e.g. material misalignment with 
the market or a change in the 
complexity, responsibility or time 
commitment required to fulfil a 
non-executive director role) the 
board retains the discretion to 
make appropriate adjustments to 
fee levels to ensure they remain 
market competitive and fair to the 
director.
None.
Non-executive directors’ terms of appointment
Non-executive directors are appointed for an initial period of three years with subsequent three year reviews and can be 
terminated with three months’ notice. The chairman’s appointment can be terminated by the company on six months’ notice.
Consideration of shareholder views 
When determining remuneration, the committee takes into account the views of the company’s shareholders and guidelines set 
by shareholder representative bodies such as the Association of British Insurers. The Board always welcomes feedback from 
shareholders on the company’s remuneration policy and commits to undertaking shareholder consultation in advance of any 
significant changes to policy. Detail on the votes received on the directors’ remuneration report at the AGM is provided in the 
following year’s ARR.
The committee did not consult with employees when preparing the directors’ remuneration policy for this report.
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Filtronic plc Annual Report 2014
Annual report on remuneration 
Details of the service contracts currently in place for directors are as follows:
Name Executive service agreement appointment date Key current terms
Alan Needle CEO Appointed to the board on purchase of Isotek (Holdings) 
Limited on 16 November 2010
Appointed CEO on 1 August 2012
Base salary £200,000
Annual bonus potential 50% of salary
Potential LTIP 50% of salary
Health insurance
Car allowance 
Pension
Rob Smith CFO Appointed to the board on 16 June 2014 Base salary £150,000
Annual bonus potential 50% of salary
Health insurance
Potential LTIP 50% of salary
Car allowance 
Pension
Name Role Non-executive terms of appointment date Fee
Howard Ford Chairman Appointed to the board on 5 December 2008
Appointed to chairman on 18 September 2009
£70,000
Graham Meek Senior non-executive director and 
audit committee chairman Appointed to the board on 5 November 1999 £40,000
Reg Gott Remuneration committee chairman Appointed to the board on 13 July 2007 £40,000
Michael Roller Appointed to the board on 1 June 2013 £40,000
Certain sections of the remuneration report constitute the audited part of the reports of the remuneration committee.
The committee sought external independent advice from Ernst & Young in reviewing and revising the executive director and 
senior management remuneration policy which it proposes to implement for the 2014-2015 financial year.
Total single figure of remuneration for directors - audited
The executive directors’ total remuneration in respect of the year under review are shown below and compared to the previous 
year. The information in these tables has been audited by the company’s independent auditors.
Salary or fee Bonus Benefits
Total remuneration 
excluding pension 
contributions 
and share based 
payments
£000’s FY2014 FY2013 FY2014 FY2013 FY2014 FY2013 FY2014 FY2013
Executive directors
Alan Needle 199 179 — 90 9 9 208 278 
Hemant Mardia — 78 — — — 3 — 81 
Michael Brennan*  
(resigned 15 April 2014) 222 123 — 38 8 8 230 169 
Non-executive directors
Howard Ford 70 70 — — 1 1 71 71 
Graham Meek 40 40 — — — — 40 40 
Reginald Gott 40 40 — — — — 40 40 
Michael Roller 40 — — — — — 40 —
Total 611 530 — 128 18 21 629 679 
* Michael Brennan received exit payments as part of his remuneration in the year, see ‘payments to past directors and exit payments’, page 39.
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Notes to the single figure table of remuneration for directors - audited
Taxable benefits 
Taxable benefits in kind were unchanged in FY2014 and comprised car allowance and private health insurance.
In addition to these taxable benefits, the executive directors are provided with life assurance.
Incentive outcomes for FY2014
Neither the profit nor the operating cash targets required to trigger an annual bonus payment were achieved in FY2014, therefore 
no performance incentive payments were made.
There was no LTIP scheme launch in FY2011 and therefore no LTIP shares vested in respect of FY2014.
Payments to past directors and exit payments
Michael Brennan, formerly the CFO, resigned during the year. Michael, at the request of the Board, worked and provided 
continuing full service until the date of his departure, 15th April 2014. Consequently, Mr Brennan was considered a good leaver 
and in accordance with policy, he left with a proportion of his share options remaining exercisable. Payments to Mr Brennan 
include pay in lieu of notice of £69,483 and a compensation payment in respect of potential claims of £41,200, both of which are 
included in the salary column in the table entitled ‘total single figure for remuneration for directors’. In accordance with policy no 
other exit payments were made.
Appointment of a new director
Following the resignation of Michael Brennan, Rob Smith was recruited and appointed to the role of CFO and commenced his 
service with the company on 16 June 2014. Given the disappointing performance of the company in FY2014 and the challenging 
strategic growth targets the board has set for the business, the board considered that a CFO of exceptional talent, and with 
a proven track record of achievement with a listed company in the sector was essential. The board was therefore pleased to 
secure Rob to serve in the role and considered his salary of £150,000 (an increase of 17 per cent over his predecessor) to be 
appropriate and reasonable.
Statement on voting at the 2013 annual general meeting
The voting on the directors’ remuneration report at the 2013 AGM was as follows:
Shares
For/discretionary 92.3% 53,738,044
Against 6.1% 3,572,701
Withheld 896,728
Statement of implementation of remuneration policy in 2014 -15
The remuneration policy, as set out on pages 33 to 37, will be implemented, subject to shareholder approval, with effect from the 
AGM in 2014 as follows:
General pay increase 
A general pay increase, including the executive and non-executive directors of zero has been implemented. This decision will be 
reviewed at the beginning of December, subject to first half performance.
Base salary
Base salaries for the CEO and CFO in FY2015 will be £200,000 and £150,000 respectively.
Executive director
Base salary* as of 
1 July 2014
Base salary as of 
1 July 2013 % change
Alan Needle £200,000 £200,000 nil %
Rob Smith £150,000 n/a n/a
*Base salary is the only pensionable portion of the remuneration package
Pension and benefits
The executive directors will continue to receive pension contributions and benefits in line with the existing policy as described on 
pages 32 to 37 of the directors’ remuneration policy.
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Annual report on remuneration continued
Annual cash bonus
In line with the proposed policy changes, the maximum bonus for all executive directors will be 50 per cent of base salary.
Fifty per cent of bonus potential will be based on delivering operating profit performance and 50 per cent on delivering operating 
cash generation performance. Performance against each target will be independently measured and paid accordingly, i.e. the 
non-performance against one target will not affect payment for achieving the other target.
Executive directors
FY2015 annual cash bonus targets (as percentage of basic salary):
Metric
On-target 
cash bonus
Maximum 
cash bonus
Operating profit nil% 25%
Operating cash generation nil% 25%
Total FY2015 cash bonus potential nil% 50%
Long term incentive plan (award as a percentage salary)
Conditional awards or nil-cost options will be made under the proposed revised LTIP in FY2015. The vesting of awards will be 
dependent on EPS growth over the period FY2015 to FY2018. The performance targets are summarised below:
Metric
On-target 
bonus
Maximum 
bonus
Operating profit 12.5% 25%
Operating cash generation 12.5% 25%
Total FY2015 cash bonus potential 25% 50%
The awards will be made during FY2015, dependent upon first half performance and full year outlook, but will be subject to 
approval of the directors’ remuneration policy by the shareholders at the 2014 AGM.
Vested shares will be subject to a 50 per cent deferral for two years.
Non-executive directors
The fees payable to the non-executive directors in FY2015 will be: 
Non-executive director Fee
Howard Ford £70,000
Graham Meek £40,000
Reg Gott £40,000
Michael Roller £40,000
* Fees are flat fees and include payments for chairing any committees
Relative spend on pay
£- £4,000,000
2014 2013
Total remuneration paid to group employees
Distributions to shareholders
Total payments to directors
Expenditure on research and development
£8,000,000 £12,000,000
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Percentage change in the remuneration of the chief executive officer compared with the average 
remuneration of employees
2014
£000
2013
£000 % change
CEO total remuneration 208 278 -33.7%
Average employee total remuneration 49 51 -4.1%
Five year chief executive officer total emoluments
Financial year ended 31 May CEO
Single total figure of 
remuneration
£000
Annual variable 
element (% of 
maximum, including 
deferred element)
PSP/share options 
vesting outcome (% 
of maximum)
2014 Alan Needle 208 0% 0%
2013* Alan Needle 232 90% 0%
2013 Hemant Mardia 81 0% 100%
2012 Hemant Mardia 219 49% n/a
2011 Hemant Mardia 198 0% n/a
2010 Hemant Mardia 225 50% n/a
* Pro-rata from date of appointment as Chief Executive on 1 August 2012.
Directors’ and relevant senior management holdings of Filtronic shares - audited
The interests of the directors, who were serving as at 31 May 2014, in the company’s 0.1 pence ordinary shares, which exclude 
interests under the share option schemes, are set out below:
2014 2013
Shares % Shares %
Alan Needle 2,246,142 2.3% 2,196,142 2.3%
Howard Ford 106,422 0.1% 93,626 0.1%
Reg Gott 102,159 0.1% 102,159 0.1%
Graham Meek 89,722 0.1% 89,722 0.1%
Michael Roller 26,212 0.0% — 0.0%
 2,570,657 2.6% 2,481,649 2.6%
All of the above shareholdings are held beneficially and include holdings of directors’ connected parties.
Michael Brennan resigned as a director on 15 April 2014. At 31 May 2013 he held 98,165 shares.
Directors’ interests in Filtronic share schemes and option plans
Directors are not required but encouraged to have holdings in the ordinary share capital of the company.
The information in the following tables has been audited by the company’s independent auditors.
Long term incentive scheme: performance shares and nil-cost options - audited
Vesting Date 2014
Granted 
during the 
year
Cancelled 
during the 
year 2013
Michael Brennan 29/Nov/13 — — 114,286 114,286
02/Sep/16 — 136,986 136,986 —
Alan Needle 02/Sep/16 253,425 253,425 — —
253,425 390,411 251,272 114,286
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Annual report on remuneration continued
The performance conditions that apply to conditional awards granted in FY2014 were based on the company’s earnings per 
share (EPS) (calculated as set out below) over a three year performance period comprising the company’s financial years: 2013, 
2014 and 2015. 
The performance condition will be assessed in July 2015 following the completion of the audit of the company for FY2015, and 
any awarded shares will vest in July 2016. 
Each award will vest as follows:
• if the group’s earnings before tax, interest, intangible amortisation and exceptional items (EBIT) for FY2015 is equal to £6m 
giving an EBIT EPS figure (using 96,997,993 shares in issue) of 6.19p per share then 25% of the award will vest;
• if the group’s earnings before tax, interest, intangible amortisation and exceptional items for FY2015 is equal to or exceeds 
£7.5m giving an EBIT EPS figure (using 96,997,993 shares in issue) of 7.73p per share then 100% of the award will vest;
• between threshold vesting at 25% and full vesting at 100%, awards will vest on a pro-rata straight line basis, so that, for 
example, 50% of the award will vest if the group’s earnings before tax, interest, intangible amortisation and exceptional items 
for FY2015 is equal to £6.5m giving an EBIT EPS figure (using 96,997,993 shares in issue) of 6.70p per share, and 75% of the 
award will vest if the group’s earnings before tax, interest, intangible amortisation and exceptional items for FY2015 is equal to 
£7m giving an EBIT EPS figure (using 96,997,993 shares in issue) of 7.22p per share.
All employee share option scheme (Sharesave plan) - audited
Exercise period Option price 2014 2013
Michael Brennan 01/05/2015–31/10/2015 22.6p 30,106 30,106
01/05/2016–31/10/2016 56.4p 3,893 3,893
33,999 33,999
The closing middle market price on 30 May 2014 was 42.25p, and on 31 May 2013 it was 62p. The range of middle market 
share prices during the year ended 31 May 2014 was 69p – 37.62p.
There were no changes in directors’ interests between 31 May 2014 and 26 July 2014. The company’s register of directors’ 
interests, which is open to inspection at the registered office, contains full details of directors’ shareholdings.
Total shareholder return performance graph 
This graph illustrates the performance of the company’s shares measured by total shareholder return (TSR) relative to a broad 
equity market index over the past five years. The FTSE All Share is considered to be the most appropriate index against which 
to measure performance, as the company has been a constituent of the FTSE All Share throughout the five year period and the 
index is widely used. TSR is the measure of the returns that a company has provided for its shareholders, reflecting share price 
movements and assuming reinvestment of dividends.
0
50
100
150
200
250
300
31/05/2009 31/05/2010 31/05/2011 31/05/2012 31/05/2013 31/05/2014
 
Total shareholder return
1 June 2009 to 31 May 2014 weekly index
Filtronic total return indexed
FTSE All share total return indexed
Source: Thompson Reuters Datastream
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Directors’ report
The directors present their report together with the audited 
consolidated financial statements for the year ended 31 May 
2014. The corporate governance statement set out earlier in 
the governance report forms part of this directors’ report and 
is incorporated by reference.
Going concern
The group’s business, together with the factors likely to 
affect its future development, performance and position 
are set out in the strategic report. The group has sufficient 
financial resources to cover budgeted future cash flows 
together with contracts with its customers and suppliers 
across different geographic areas and industries. At 31 May 
2014 the group had a cash balance of £2.5m and no interest 
bearing borrowings. The directors believe that the group is 
well placed to manage its business risks despite the current 
trading conditions. In arriving at this conclusion, the board 
undertook a review of its forecasts for the following two 
years and, accepting the inherent risks associated with the 
business, reviewed a number of scenarios and sensitivities. 
On completion of this process the board was satisfied that the 
going concern principle was appropriate for the preparation of 
the financial statements.
In accordance with the corporate governance requirements 
and the statement of directors’ responsibilities on page 44 
to 45, the directors confirm that they have a reasonable 
expectation that the group has adequate financial resources 
to continue to trade for the foreseeable future. Thus, they 
continue to adopt the going concern basis in preparing the 
financial statements.
Directors and their interests
The directors of the company during the year were as follows:
Alan Needle 
Michael Brennan (resigned 15 April 2014)  
Howard Ford 
Graham Meek 
Reginald Gott 
Michael Roller
Details of directors’ interests in the share capital of the 
company are set out in the remuneration report on page 41.
Alan Needle retires by rotation and, being eligible, offers 
himself for re-election at the annual general meeting.
Rob Smith, having been appointed by the board on 16 June 
2014, offers himself for election at the annual general meeting.
Graham Meek, having served on the board for more than nine 
years, retires and being eligible, offers himself for re-election at 
the annual general meeting.
Directors’ indemnity
The company has in place directors’ and officers’ liability 
insurance on behalf of its directors and officers in accordance 
with the provisions of the Companies Act. In addition, certain 
directors benefit from an indemnity from the company, to the 
extent not prohibited by law, in respect of losses incurred as 
a result of the discharge of their duties in the management 
or supervision of any company in the group. The indemnity 
does not automatically terminate when the indemnified person 
ceases to be a director.
Directors’ conflicts of interest
There are no declarations to be made under Article 182 of the 
Companies Act 2006.
Research and development expenditure
Research and development costs were £6.4m (2013: £5.4m). 
Grant income of £nil (2013: £0.1m) was received to assist with 
part of these costs.
Cash balances
The directors have reviewed the budgeted cash flow and other 
relevant information and have a reasonable expectation that 
the group has adequate resources to continue in operational 
existence for the foreseeable future. For this reason, the 
directors continue to adopt the going concern basis in 
preparing the financial statements.
Substantial shareholdings
Up to 31st May 2014 the company had been notified, in 
accordance with chapter 5 of the disclosure and transparency 
rules, of the following voting rights as a shareholders of the 
company. An analysis of shareholders as at 31 May 2013 
(as disclosed by shareholders via TR1), is set out in the table 
below.
As at 31 May 2014 the company had issued share capital of 
97,160,986 10p ordinary shares.
Shareholder Shareholding (number of 10p ordinary shares) Percentage of issued share capital
Aberforth Partners LLP 18,664,173 19.2 %
Legal & General Investment Management 17,062,172 17.6%
Prudential plc 3,863,785 4.0%
John David Rhodes 3,794,769 3.9%
Church of England Commissioners 2,945,964 3.0%
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Directors’ report continued
Financial results and dividend
The results for the year are set out in the income statement on 
page 48. The position at the end of the year is shown in the 
balance sheet on page 50.
The directors are not recommending payment of a dividend 
(2013: nil).
Share capital
The company’s share capital consists of 10p ordinary shares. 
The rights and obligations attached to each share are equal. 
Each share carries the right to one vote at general meeting of 
the company and carries no right to fixed income. There are 
no limitations on holding or transfer of the shares. The board 
has no powers to issue or buy back the company’s shares, 
other than those approved by the shareholders at the annual 
general meeting held in September 2013. 
Emissions statement
All disclosures concerning the group’s greenhouse gas 
emissions required by the mandatory carbon regulations are 
contained in the corporate social responsibility report which 
forms part of the strategic report on pages 21 to 22.
Political and charitable contributions
No contributions were made for political purposes. The group 
donated £100 (2013: £nil) to various charities.
Equal opportunities
The directors are committed to ensuring that there are equal 
opportunities throughout the group for all employees with 
no discrimination on account of race, gender, age, sexual 
orientation, disability, political views or religious beliefs.
Disabled employees
Applications for employment by disabled persons are always 
welcome and fully considered bearing in mind the skills and 
aptitude of the applicant concerned. Where an employee 
becomes disabled, all reasonable efforts are made to 
ensure that employment with the group continues and that 
appropriate training is arranged. It is the policy of the group to 
ensure that the training, career development and promotion 
of disabled persons should, as far as possible, be identical to 
that of other members of staff.
Employee communication
Employee engagement with its strategy and values is vital to 
the success of the group. The directors place great importance 
on keeping employees informed on matters that affect them as 
employees as well as matters that affect the performance of the 
group. This is achieved through formal and informal meetings as 
well as through group communications sessions.
Annual general meeting 
The annual general meeting of the company will be held on 
26 September 2014 at the offices of Pinsent Masons LLP , 1 
Park Row, Leeds, LS1 5AB. Full details of the business to be 
transacted at the meeting will be set out in the notice of annual 
general meeting.
Statement of directors’ responsibilities in respect of 
the annual report and the financial statements 
The directors are responsible for preparing the annual report 
and the group and parent company financial statements in 
accordance with applicable law and regulations. 
Company law requires the directors to prepare group and 
parent company financial statements for each financial year. 
Under that law they are required to prepare the group financial 
statements in accordance with IFRSs as adopted by the EU 
and applicable law and have elected to prepare the parent 
company financial statements on the same basis. 
Under company law the directors must not approve the 
financial statements unless they are satisfied that they give a 
true and fair view of the state of affairs of the group and parent 
company and of their profit or loss for that period. In preparing 
each of the group and parent company 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 they have been prepared in accordance with 
IFRSs as adopted by the EU; and 
• prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the 
parent company will continue in business. 
The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the parent 
company’s transactions and disclose with reasonable 
accuracy at any time the financial position of the parent 
company and enable them to ensure that its financial 
statements comply with the Companies Act 2006. They have 
general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the group and to 
prevent and detect fraud and other irregularities. 
Under applicable law and regulations, the directors are also 
responsible for preparing a strategic report, directors’ report, 
directors’ remuneration report and corporate governance 
statement that complies with that law and those regulations. 
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The directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
company’s website. Legislation in the UK governing the 
preparation and dissemination of financial statements may 
differ from legislation in other jurisdictions.
The directors, as at the date of this report, whose names 
and functions are listed in the board of directors on page 25 
confirm that, to the best of their knowledge: 
• the financial statements, which have been prepared 
in accordance with the applicable set of accounting 
standards, give a true and fair view of the assets, liabilities, 
financial position and profit or loss of the company and the 
undertakings included in the consolidation taken as a whole; 
and
• the strategic report includes a fair review of the development 
of the business and the position of the company and the 
undertakings included in the consolidation taken as a whole, 
together with a description of the risks and uncertainties 
they face.
Statement of directors’ responsibilities
Disclosure of information to the auditor
The directors who held office at the date of approval of this 
directors’ report confirm that: 
• so far as they are each aware, there is no relevant audit 
information of which the company’s auditor is unaware; and 
• each director has taken all the steps that he ought to have 
taken as a director to make himself aware of any relevant 
audit information and to establish that the company’s auditor 
is aware of that information.
Auditor
KPMG LLP has expressed a willingness to continue in office 
as auditor and a resolution to reappoint KMPG LLP will be 
proposed at the forthcoming annual general meeting.
Maura Moynihan 
Company secretary 
14 August 2014
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Filtronic plc Annual Report 2014
Independent auditor’s report to the members 
of Filtronic plc only
Opinions and conclusions arising from our audit
1 Our opinion on the financial statements is unmodified 
We have audited the financial statements of Filtronic Plc for 
the year ended 31 May 2014 set out on pages 48 to 80. In our 
opinion: 
• the financial statements give a true and fair view of the state 
of the group’s and of the parent company’s affairs as at 31 
May 2014 and of the group’s loss for the year then ended; 
• the group financial statements have been properly prepared 
in accordance with International Financial Reporting 
Standards as adopted by the European Union (IFRSs as 
adopted by the EU); 
• the parent company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the EU 
and as applied in accordance with the provisions of the 
Companies Act 2006; and
• the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006 and, as 
regards the group financial statements, Article 4 of the IAS 
Regulation. 
2 Our assessment of risks of material misstatement
In arriving at our audit opinion above on the financial 
statements the risks of material misstatement that had the 
greatest effect on our audit were as follows:
Carrying amounts of inventories (carrying amount of 
£3,933,000)
Refer to pages 28 to 29 (Audit Committee Report), 58 
(accounting policy) and page 69 (financial disclosure).
• The risk: The risk relating to the carrying amount of 
inventories arises from both the high value of inventory 
held by the Group and the judgement required to record 
inventory at the lower of cost and net realisable value. 
Products are hi-tech and often specific to individual 
customers which means that net realisable value is 
determined by the Directors’ estimate of forecast customer 
demand and selling price. The nature of the business means 
that there can be inherent uncertainty in customer forecasts 
because the timing of contracts is not always certain.
• Our response: Our audit procedures included, among 
others, considering the extent to which the Directors’ 
estimates take into account a balanced assessment of the 
latest available information in respect of inventory valuation, 
specifically forecast sales. For this purpose, we have tested 
the Group’s budgeting process upon which forecasts are 
based and the principles and integrity of the assumptions 
and methodology used, in particular revenue growth. In 
assessing the level of provision required to record inventory 
at the lower of cost and net realisable value, we considered 
the ageing profile of stock and the accuracy of the inventory 
provision in previous years by comparing the assumptions 
made for inventory lines included in the provision to 
subsequent sales activity for these products. We considered 
all the individual components of the current year inventory 
provision and assessed whether the assumptions applied 
in their calculation, specifically in respect of related sales 
forecasts, are underpinned by forecasts prepared for the 
Group for the next two years. We have also considered 
the adequacy of the Group’s disclosures about the degree 
of estimation involved in arriving at the provision and 
movements in that provision. 
Warranty provisions (carrying amount of £108,000)
Refer to pages 28 to 29 (Audit Committee Report), 59 
(accounting policy) and page 71 (financial disclosure).
• The risk: The Group’s products are sold with warranties. 
As the Group is constantly developing new products, 
there can be limited historical evidence available regarding 
warranty claims and return rates. The products are usually 
hi-tech in nature. Determining the amount of provision to 
be recognised requires the Group to make judgements 
and estimates that are inherently subjective. The basis of 
provisioning in respect of certain products has been refined 
this year and there is a risk that the provision could be 
materially misstated.
• Our response: Our audit procedures included, among 
others, considering the extent to which the Directors’ 
estimates of the costs of future warranty claims take into 
account the latest available information regarding costs 
of historical warranty claims recorded for the underlying 
products. We have performed analytical procedures 
comparing the cost of warranty claims to cost of sales for 
the last three years, and assessed whether the balances 
in the current year fall within the trend. We also considered 
the Group’s historical experience in assessing the level of 
provision required by comparing warranty costs incurred 
with provisions made. We have also considered the 
adequacy of the Group’s disclosures about the degree of 
estimation involved at arriving at the provision.
3 Our application of materiality and an overview of the 
scope of our audit
The materiality for the financial statements as a whole was 
set at £650,000. This has been determined with reference to 
a benchmark of Group Revenue (of which it represents 2%) 
which we consider to be one of the principal considerations 
for members of the company in assessing the financial 
performance of the Group.
We agreed with the audit committee to report to it all 
corrected and uncorrected misstatements we identified 
through our audit with a value in excess of £32,500 in addition 
to other audit misstatements below that threshold that we 
believe warranted reporting on qualitative grounds.
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Audits for group reporting purposes were performed by the 
Group audit team at the key reporting components in the UK, 
China and Sweden and by component auditors in the United 
States of America,. These audits covered 100% of total Group 
revenue, Group profit before taxation and total Group assets.
The audits undertaken for group reporting purposes at the 
key reporting components of the Group were all performed 
to materiality levels set by, or agreed with, the Group audit 
team. These materiality levels were set individually for each 
component and ranged from £100,000 to £500,000. 
Detailed audit instructions were sent to the overseas auditors 
in the United States of America. These instructions covered 
the significant audit areas that should be covered by this audit 
(which include the relevant risks of material misstatement 
detailed above) and set out the information required to be 
reported back to the Group audit team. Regular e-mail contact 
was maintained with the overseas audit team throughout the 
process, including discussions on issues as they arose. 
4 Our opinion on other matters prescribed by the 
Companies Act 2006 is unmodified 
In our opinion: 
• the part of the Directors’ Remuneration Report to be 
audited has been properly prepared in accordance with the 
Companies Act 2006; and 
• the information given in the Strategic Report and the 
Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial 
statements; and 
• information given in the Corporate Governance Report 
set out on pages 27 with respect to internal control and 
risk management systems in relation to financial reporting 
processes and about share capital structures is consistent 
with the financial statements. 
5 We have nothing to report in respect of the matters on 
which we are required to report by exception 
Under ISAs (UK and Ireland) we are required to report to you 
if, based on the knowledge we acquired during our audit, 
we have identified other information in the annual report that 
contains a material inconsistency with either that knowledge 
or the financial statements, a material misstatement of fact, or 
that is otherwise misleading. 
In particular, we are required to report to you if: 
• we have identified material inconsistencies between the 
knowledge we acquired during our audit and the Directors’ 
statement that they consider that the annual report and 
financial statements taken as a whole is fair, balanced and 
understandable and provides the information necessary for 
shareholders to assess the Group’s performance, business 
model and strategy; or
• the Audit Committee Report does not appropriately address 
matters communicated by us to the audit committee.
Under the Companies Act 2006 we are required to report to 
you if, in our opinion: 
• adequate accounting records have not been kept by the 
parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or 
• the parent company financial statements and the part of 
the Directors’ Remuneration Report to be audited are not in 
agreement with the accounting records and returns; or 
• certain disclosures of directors’ remuneration specified by 
law are not made; or 
• we have not received all the information and explanations 
we require for our audit; or
• a Corporate Governance Statement has not been prepared 
by the company. 
Under the Listing Rules we are required to review: 
• the Directors’ report, set out on page 43, in relation to going 
concern; and
• the part of the Corporate Governance Statement on 
page 27 relating to the company’s compliance with the 
nine provisions of the 2010 Corporate Governance Code 
specified for our review.
We have nothing to report in respect of the above 
responsibilities.
Scope of report and responsibilities
As explained more fully in the Directors’ Responsibilities 
Statement set out on page 44, the Directors are responsible 
for the preparation of the financial statements and for being 
satisfied that they give a true and fair view. A description 
of the scope of an audit of financial statements is provided 
on the Financial Reporting Council’s website at www.frc.
org.uk/auditscopeukprivate. This report is made solely 
to the company’s members as a body and is subject to 
important explanations and disclaimers regarding our 
responsibilities, published on our website at www.kpmg.com/
uk/auditscopeukco2013a, which are incorporated into this 
report as if set out in full and should be read to provide an 
understanding of the purpose of this report, the work we have 
undertaken and the basis of our opinions.
Johnathan Pass 
for and on behalf of KPMG LLP , Statutory Auditor  
Chartered Accountants  
1 The Embankment 
Neville Street 
Leeds 
LS1 4DW 
14 August 2014
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Filtronic plc Annual Report 2014
Consolidated income statement
for the year ended 31 May 2014
Group
 Note
2014 
£000 
2013
£000
Revenue 32,900 39,976
Operating (loss)/profit before amortisation and exceptional items (442) 3,051
Amortisation of intangibles (2,419) (2,419)
Exceptional items 5 (825) (392) 
Operating (loss)/profit 4 (3,686) 240
Finance income/(costs) — net 11 13 (2)
(Loss)/profit before taxation (3,673) 238
Taxation 12 858 46
(Loss)/profit for the period (2,815) 284
Basic (loss)/earnings per share 13 (2.90p) 0.29p
Diluted (loss)/earnings per share 13 (2.90p) 0.29p
The loss for the period is attributable to the equity shareholders of the parent company Filtronic plc. 
The above results are all as a result of continuing operations.
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Consolidated statement of  
comprehensive income
for the year ended 31 May 2014
Group
Note
2014
£000
2013
£000
(Loss)/profit for the period (2,815) 284
Other comprehensive income 
Items that are or may be subsequently reclassified to profit and loss:
Currency translation movement arising on consolidation 26 (474) 54
(474) 54
Total comprehensive income for the period (3,289) 338
The total comprehensive income for the period is attributable to the equity shareholders of the parent company Filtronic plc. 
For the company, there were no other items of comprehensive income other than the loss for the year. Accordingly, no company 
statement of comprehensive income has been presented.
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Filtronic plc Annual Report 2014
Consolidated balance sheet
at 31 May 2014
Group
Note
2014
£000
2013
£000
Non-current assets
Goodwill and other intangibles 15 5,653 8,072
Property, plant and equipment 16 2,865 3,005
Deferred tax 19 485 302
9,003 11,379
Current assets
Inventories 17 3,933 5,356
Trade and other receivables 18 9,941 17,237
Cash and cash equivalents 2,531 2,375
16,405 24,968
T otal assets 25,408 36,347
Current liabilities
T rade and other payables 20 7,447 13,611
Provisions 21 333 605
Deferred income 22 169 229
Interest bearing borrowings 35 — 496
7,949 14,941
Non-current liabilities
Deferred tax 19 485 1,112
Deferred income 22 75 96
560 1,208
Total liabilities 8,509 16,149
Net assets 16,899 20,198
Equity
Share capital 24 9,716 9,700
Share premium 25 5,145 5,111
Translation reserve 26 (436) 38
Retained earnings 28 2,474 5,349
Total equity 16,899 20,198
The total equity is attributable to the equity shareholders of the parent company Filtronic plc.
Company number 2891064
Approved by the Board on 14 August 2014 and signed on its behalf by
Alan Needle 
Chief Executive Officer 
14 August 2014
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Consolidated statement of  
changes in equity
for the year ended 31 May 2014
Company statement of  
changes in equity
for the year ended 31 May 2014
Group
Note
2014
£000
2013
£000
Opening total equity 20,198 19,841
Total comprehensive income for the period 26,28 (3,289) 338
New shares issued (net of issue costs) 24,25 50 47
Share-based payments 31 (60) 163
Exercise of share awards — (191)
Closing total equity 16,899 20,198
Company
2014
£000
2013
£000
Opening total equity 18,281 18,994
Total comprehensive income for the period 26 (1,038) (656) 
New shares issued (net of issue costs) 24,25 50 47
Share-based payments 31 (132) 87
Exercise of share awards — (191)
Closing total equity 17,161 18,281
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Filtronic plc Annual Report 2014
Consolidated cash flow statement
for the year ended 31 May 2014
Group
Note
2014
£000
2013
£000
Cash flows from operating activities
(Loss)/profit for the period (2,815) 284
Taxation (858) (46)
Finance (income)/costs — net (13) 2
Operating (loss)/profit 34 (3,686) 240
Share-based payments (60) 163
Loss/(profit) on disposal of plant and equipment 27 (24)
Depreciation 1,083 875
Amortisation of intangibles 2,419 2,419
Movement in inventories 1,315 (2,158)
Movement in trade and other receivables 6,950 (6,960)
Movement in trade and other payables (6,048) 5,189
Movement in provision (272) 40
Change in deferred income including government grants (81) (58)
Tax paid (32) —
Net cash from/(used in) operating activities 34 1,615 (274)
Cash flows from investing activities
Interest received 13 8
Acquisition of plant and equipment (1,058) (1,532)
Proceeds on sale of assets 32 55
Net cash used in investing activities 34 (1,013) (1,469)
Cash flows from financing activities
Proceeds from exercise of share options 50 47
Exercise of share awards — (191)
Interest paid — (10)
Movement in interest bearing borrowings (496) 496
Net cash (used in)/from financing activities 34 (446) 342
Movement in cash and cash equivalents 156 (1,401)
Currency exchange movement — 31
Opening cash and cash equivalents 2,375 3,745
Closing cash and cash equivalents 2,531 2,375
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Company balance sheet
at 31 May 2014
Company
Note
2014 
£000 
2013 
£000
Non-current assets
Investments in subsidiaries 14 10,569 10,564
Current assets
Trade and other receivables 18 12,840 10,792
Cash and cash equivalents 277 118
13,117 10,910
Total assets 23,686 21,474
Current liabilities
Trade and other payables 20 6,300 3,193
Provision 21 225 —
Total liabilities 6,525 3,193
Net assets 17,161 18,281
Equity
Share capital 24 9,716 9,700
Share premium 25 5,145 5,111
Retained earnings 28 2,300 3,470
Total equity 17,161 18,281
Approved by the Board on 14 August 2014 and signed on its behalf by
Company number 2891064
Alan Needle 
Chief Executive Officer 
14 August 2014
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Company cash flow statement
for the year ended 31 May 2014
Company
2014
£000
2013
£000
Cash flows from operating activities
Loss for the period (1,038) (656) 
Finance costs 200 10
Finance income (13) (38)
Operating loss (851) (684) 
Share-based payments (132) 87
Movement in trade and other receivables (2,248) (389) 
Movement in trade and other payables 3,107 27
Movement in provision 225 —
Net cash from/(used in) operating activities 101 (959)
Cash flows from investing activities
Interest received 13 8
Interest paid — (10)
Set up costs in new subsidiary (5) —
Net cash from/(used in) investing activities 8 (2)
Cash flows from financing activities
Proceeds from exercise of share options 50 47
Exercise of share awards — (191)
Net cash from/(used in) financing activities 50 (144)
Decrease in cash and cash equivalents 159 (1,105) 
Currency exchange movement — 30
Opening cash and cash equivalents 118 1,193
Closing cash and cash equivalents 277 118
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Notes to the financial statements
for the year ended 31 May 2014
1 Accounting policies
Reporting entity
Filtronic plc is a company registered in England and Wales, domiciled in the United Kingdom, and is listed on the London 
Stock Exchange.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by 
the European Union (IFRS).
In accordance with the corporate governance requirements and the statement of directors’ responsibilities, the directors 
confirm that they have a reasonable expectation that the group has adequate financial resources to continue to trade for the 
foreseeable future. For this reason the directors continue to adopt the going concern basis in preparing the annual report.
The financial statements have been prepared under the historical cost convention except for forward foreign exchange 
contracts that are accounted for on a fair value basis.
The accounting policies have been applied consistently throughout the group.
Basis of consolidation
The financial statements consolidate the income statements, balance sheets and cash flow statements of the company and 
all of its subsidiaries.
Subsidiaries are all entities over which the group has the power to govern the financial and operating policies. Subsidiaries 
are consolidated from the date on which control is transferred to the group, and are not consolidated from the date that 
control ceases. Intragroup transactions and balances are eliminated on consolidation.
In publishing the parent company financial statements here together with the group financial statements, the company has 
taken advantage of the exemptions in s408 of the Companies Act 2006 not to present its individual income statement and 
related notes that form part of these approved financial statements.
On consolidation, the financial statements of subsidiaries with a functional currency other than sterling are translated into 
sterling as follows:
• The assets and liabilities in their balance sheets plus any goodwill are translated at the rate of exchange ruling at the 
balance sheet date.
• The income statements and cash flow statements are translated at the average rate of exchange for the period, which 
approximates the rate of exchange ruling at the date of the transactions.
Currency translation movements arising on the translation of the net investments in foreign subsidiaries are recognised in the 
translation reserve, which is a separate component of equity.
Foreign currency translation
The functional currency of each group company is the currency of the primary economic environment in which the group 
company operates. The financial statements are presented in sterling which is the functional and presentational currency of 
the company.
Transactions denominated in foreign currencies are translated into the functional currency of each group company at the 
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are 
translated into the functional currency at the rate of exchange ruling at the balance sheet date.
Foreign exchange gains and losses arising on the settlement of such transactions and translation of monetary assets and 
liabilities are recognised in the income statement.
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Notes to the financial statements
for the year ended 31 May 2014
1 Accounting policies (continued)
Revenue
Revenue is recognised for goods and services during the periods when the risks and rewards of ownership have been 
transferred to the customer, there is no continuing management involvement and the amount of revenue can be measured 
reliably. Revenue excludes any related value added or sales tax.
The timing of the transfers of risks and rewards varies depending on the individual terms of the contract of sale. The majority 
of sales are made at the point the product leaves the Filtronic production facility but there are sales where the revenue is 
recognised once the product is delivered to the customer. In addition some customers require Filtronic to store items on their 
behalf, in this instance, revenue is recognised when the goods have been invoiced and when the products have been moved 
to a stock location for customer property.
Research and development
All research costs are expensed as incurred.
Development costs chargeable to the customer are recognised as an expense in the same period as the associated 
customer revenue.
Development costs incurred on projects requiring product qualification tests to satisfy customer specifications are generally 
expensed as incurred, reflecting the technical risks associated with meeting the resultant product qualification test.
Development costs incurred on projects are capitalised where firstly, the technical feasibility can be tested against 
relevant milestones, secondly, the probable revenue stream foreseen over the life of the resulting product can support 
the development, and thirdly, sufficient resources are available to complete the development. These capitalised costs are 
amortised on a straight line basis over the expected life of the associated product.
Once a new product is qualified, further development costs are expensed as they arise because they are incurred in 
response to continual customer demand to enhance the product functionality and to reduce product selling prices.
Operating leases
Operating lease rentals are charged to the income statement on a straight line basis over the lease term.
Share-based payments
The group operates share option and share award schemes, under which share options and share awards are granted to 
certain employees. The granting of the share options and share awards are share-based payments.
The fair value of the share options at the date of grant was calculated using an option pricing model, taking into account the 
terms and conditions applicable to the option grant. The fair value of the number of share options or share awards expected 
to vest was expensed in the income statement on a straight line basis over the expected vesting period. At each reporting 
period these vesting expectations were revised as appropriate.
A charge was made to equity equal to the share-based payment credit in the period.
Exceptional items
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full 
understanding of the financial results.
Business combinations
Business combinations are accounted for by applying the acquisition method.
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In 
assessing control, the group takes into consideration potential voting rights that currently are exercisable. The acquisition 
date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and 
determining whether control is transferred from one party to another.
The group measures goodwill as the fair value of the consideration transferred including the recognised amount of any non-
controlling interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired 
and liabilities assumed, all measured as of the acquisition date.
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1 Accounting policies (continued)
Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the group to the previous 
owners of the acquiree, and equity interests issued by the group. Consideration transferred also includes the fair value of any 
deferred consideration, which is undiscounted.
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present 
obligation and arises from a past event, and its fair value can be measured reliably.
Transaction costs that the group incurs in connection with a business combination, such as finder’s fees, legal fees, due 
diligence fees, and other professional and consulting fees are expensed as incurred.
Investments in subsidiaries
Investments in subsidiaries are stated in the company’s financial statements at cost less any accumulated impairment losses.
Investments in subsidiaries are tested for impairment when there is an indication of impairment.
Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets.
Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying 
amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is 
not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity accounted investee.
Goodwill, which is allocated to cash-generating units, is tested for impairment annually and when there is an indication of 
impairment. If impaired, the goodwill carrying value is written down to its recoverable amount.
Other intangible assets
Other intangible assets that are acquired by the group and have finite useful lives are measured at cost less accumulated 
amortisation and accumulated impairment losses.
Amortisation is calculated over the cost of the asset, or an other amount substituted for cost, less its residual value. 
Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives of intangible assets, 
other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of 
consumption of the future economic benefits embodied in the asset.
The estimated useful lives for the current and comparative periods are as follows:
• Intangibles relating to core technology and know-how: 4.5 years.
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Impairment charges
The carrying amounts of the group’s non-financial assets, other than inventories and deferred tax assets, are reviewed 
at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the 
asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not 
yet available for use, the recoverable amount is estimated each year at the same time. The recoverable amount of an asset 
or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the 
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the asset. For the purposes of impairment testing, assets 
that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from 
continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating 
unit, or CGU”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which 
goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which 
goodwill is monitored for internal reporting purposes.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. 
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to 
reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other 
assets in the unit (group of units) on a pro-rata basis.
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1 Accounting policies (continued)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in 
prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An 
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An 
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that 
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and less any accumulated impairment 
losses.
Depreciation is provided on a straight line basis over the estimated useful lives of the assets as follows:
Land Not depreciated
Buildings 50 years
Plant and equipment 3 to 10 years
Property, plant and equipment are tested for impairment when there is an indication of impairment. If impaired, the carrying 
values of the assets are written down to their recoverable amounts.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises weighted average cost of materials and 
components together with attributable direct labour and overheads. Net realisable value is the estimated selling price less 
estimated costs of completion and sale.
Trade and other receivables
Trade and other receivables are stated net of any provision for doubtful debts.
Cash and cash equivalents
Cash and cash equivalents comprises cash balances and bank deposits with an original maturity of three months or less.
Defined contribution pension schemes
Defined contribution pension schemes are operated for employees. Contributions are recognised as an expense in the 
income statement as incurred.
Financial liabilities
Other current financial liabilities comprise borrowings and trade and other payables, and are recognised initially at fair value 
and subsequently measured at amortised cost.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using rates enacted or 
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred taxation
Deferred tax is provided using the balance sheet liability method. Provision is made for temporary differences between the 
carrying amounts of assets and liabilities in the financial statements and the amounts for taxation purposes.
Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting nor 
taxable profit. No provision is made for differences relating to investments in subsidiaries to the extent that they will probably 
not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of 
the assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against 
which the asset can be utilised.
Deferred tax assets of £302,000 have been reclassified as non-current from current in the year.
Notes to the financial statements
for the year ended 31 May 2014
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1 Accounting policies (continued)
Grants
Capital based grants are included within deferred income in the balance sheet and credited to the profit and loss account 
over the estimated useful economic lives of the assets to which they relate.
Grants that compensate the group for expenses incurred are recognised in profit or loss as other operating income on a 
systematic basis in the same periods in which the expenses are recognised.
Warranty provision
A provision is recognised in the balance sheet when there is a present legal or constructive obligation as a result of a past 
event, and it is probable that an outflow of economic benefits will be required to settle the obligation. A warranty provision 
is recognised when products are sold. The provision is based on historical warranty data. The level of warranty provision 
required is reviewed on a product by product basis and adjusted accordingly in light of actual experience.
Dilapidations and onerous leases
A provision for dilapidations and onerous leases is recognised in the balance sheet on a lease by lease basis and are based 
on the group’s best estimates of the required cost to settle the obligations.
Share capital
Ordinary shares issued are classified as share capital in equity.
Dividends
Interim dividends are recognised in equity in the period they are paid. Final dividends are recognised in equity in the period 
they are declared by shareholders.
Accounting developments
(a) A number of new standards, amendments to standards and interpretations are effective for the year ended 31 May 
2014.
• IFRS 13 ‘Fair Value Measurement’. IFRS 13 establishes a single framework for measuring fair value and making 
disclosures about the fair value measurements when such measurements are required or permitted by other IFRSs. 
It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in 
an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure 
requirements about fair value measurements in other IFRSs, including IFRS 7. As a result, the Group has included 
additional disclosures in this regard.
• ‘Presentation of items of Other Comprehensive Income’ (Amendments to lAS 1). As a result of the amendments to 
lAS 1, the Group has modified the presentation of items of OCI in its statement of profit or loss and OCI, to present 
separately items that would be reclassified to profit or loss from those that would not be. Comparative information has 
been re-presented accordingly.
(b) There are also a number of new standards, amendments to standards and interpretations that are effective for financial 
statements after this reporting period, but the group has not adopted them early. None of these is expected to have a 
material impact on the results or financial position of the group.
The following adopted IFRSs have been issued but have not been applied by the group in these consolidated financial 
statements:
• IFRS 10 ‘Consolidated financial statements, (2011)
• IFRS 12 ‘Disclosures of involvement with other entities, (2011)
• IAS 27 ‘Separate financial statements (revised 2011)’ has been amended for the issuance of IFRS 10 but retains the 
current guidance for separate financial statements; and
• IAS 28 ‘Investments in associates and joint ventures (revised 2011)’ has been amended for conforming changes based 
on the issuance of IFRS 10 and IFRS 11.
Each of these standards has an effective date for periods beginning on or after 1 January 2014. The impact of these new 
standards is not expected to have a significant impact on the group.
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1 Accounting policies (continued)
Forward currency contracts
Forward currency contracts are held at fair value. The gain or loss on re-measurement to fair value is recognised immediately 
in the consolidated income statement.
2  Accounting estimates and judgements
The preparation of the financial statements requires the use of accounting estimates and judgements, that affect the 
application of accounting policies and reported amounts of assets and liabilities, income and expenses. The accounting 
estimates and judgements are continually evaluated. They are based on historical experience and other factors, including 
expectations of the future, that are believed to be reasonable under the circumstances. Actual results may differ from the 
expected results.
The accounting estimates and judgements that have a significant effect on the financial statements are considered below.
Goodwill and other intangibles impairment
Goodwill and other intangibles are tested for impairment by reference to the expected cash generated by the business unit. 
This is deemed to be the best approximation of value, but is subject to the same uncertainties as the cash flow forecast 
being used.
Inventory
Inventories are stated at the lower of cost and net realisable value. The assessment of the net realisable value of inventory 
requires forecasts of the future demand and selling prices of inventory.
Debtors
In line with industry practice Filtronic extends credit terms to its customers. Due to the concentration of debtors the effect of 
any one debtor defaulting would be material on the group’s financial statements. Estimates and judgements are made when 
valuing the debtor as to the recoverability. A bad debt provision is created when it is unlikely the debt will be recovered.
Deferred tax asset
The recognition of the deferred tax assets relating to tax losses carried forward depends on forecasts of the future taxable 
profits of the company and its subsidiaries. These forecasts require the use of estimates and judgements about the future 
performance of the company and its subsidiaries.
Warranty provision
Warranties are given to customers on products sold to them. A warranty provision is recognised when products are sold. 
The provision is based on historical warranty data. Actual warranty costs in the future may differ from the estimates based 
on historical performance. The level of warranty provision required is reviewed on a product by product basis and adjusted 
accordingly in light of actual experience.
Capitalisation of development costs
In line with the requirements of IFRS, the group’s policy is to capitalise development expenditure as intangible assets when all 
the following criteria are met:
• the technical feasibility of completing the asset so that it will be available for use or sale;
• the intention to complete the asset and use or sell it;
• the ability to use or sell the asset;
• the asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness 
of the asset if it is to be used internally;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell it; 
and
• the ability to measure reliably the expenditure attributable to the intangible asset.
This process is continually reviewed to ascertain whether any development costs meet the criteria for capitalisation. This 
requires various judgements by management as to whether the various criteria have been met.
Notes to the financial statements
for the year ended 31 May 2014
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3  Segmental analysis
Operating segments
IFRS 8 requires consideration of the chief operating decision maker (“CODM”) within the group. In line with the group’s 
internal reporting framework and management structure, the key strategic and operating decisions are made by the CEO, 
who reviews internal monthly management reports, budget and forecast information as part of this. Accordingly, the CEO is 
deemed to be the CODM.
Operating segments have then been identified based on the reporting information and management structures within the 
group. The group has four customers representing individually over 10 per cent each and in aggregate over 74 per cent of 
revenue. This is split as follows:
• Customer A (Wireless) — 24%
• Customer B (Wireless) — 19%
• Customer C (Broadband) — 18%
• Customer D (Wireless) — 13%
The group operates in two trading business segments:
• The design and manufacture of transceiver modules and filters for backhaul microwave linking of base stations used in 
Wireless telecommunications networks (Broadband).
• The design of radio frequency conditioning product for base stations used in Wireless telecommunication networks 
(Wireless).
The group also contains a central services segment that provides support to the trading businesses.
In the table below reportable segment assets and liabilities include intersegment balances. These have been included to 
reflect the assets and liabilities of the segment as monies are freely moved around the group to provide funding for working 
capital where required.
Broadband Wireless
Central 
services Total
2014
£000
2013
£000
2014
£000
2013
£000
2014
£000
2013
£000
2014
£000
2013
£000
Revenue 9,736 8,127 23,164 31,849 — — 32,900 39,976
Finance income — — — — 13 8 13 8
Finance costs — — — — — (10) — (10)
Depreciation 605 621 478 254 — — 1,083 875
Reportable segment (loss)/profit before 
amortisation of intangibles and 
exceptional items (2,285) (2,449) 2,619 6,378 (776) (878) (442) 3,051
Reportable segment (loss)/profit before 
amortisation of intangibles and income tax (2,749) (2,720) 2,563 6,378 (1,068) (1,001) (1,254) 2,657
Reportable segment assets 10,861 7,293 9,005 20,499 13,032 16,734 32,898 44,526
Capital expenditure 326 595 732 937 — — 1,058 1,532
Reportable segment liabilities 14,422 8,298 3,340 16,824 788 1,757 18,550 26,879
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3  Segmental analysis (continued)
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material 
items
2014
£000
2013
£000
Depreciation and amortisation
Reportable segment totals 1,083 875
Adjustments/amortisation of intangibles 2,419 2,419
Consolidated depreciation and amortisation 3,502 3,294
(Loss)/profit before taxation
Total (loss)/profit for reportable segments (1,254) 2,657
Group/unallocated (2,419) (2,419)
Consolidated (loss)/profit before taxation (3,673) 238
Assets
Total assets for reportable segments 32,898 44,526
Intercompany (10,041) (10,730)
Group/unallocated 2,551 2,551
Consolidated total assets 25,408 36,347
Liabilities
Total liabilities for reportable segments 18,550 26,879
Intercompany (10,041) (10,730)
Consolidated total liabilities 8,509 16,149
Geographical information
In presenting information on the basis of geographical segments, segment revenue is based on geographical location of 
customers. Segment assets are based on the geographical location of the assets.
Revenue by destination
2014
£000
2013
£000
United Kingdom 10,429 14,083
Europe 4,351 7,880
Americas 15,081 6,001
Rest of the world 3,039 12,012
32,900 39,976
Split of non-current assets by location
2014
£000
2013
£000
United Kingdom 5,963 8,016
Europe 173 —
Americas 2,635 3,048
Rest of the world 232 315
9,003 11,379
Non-current assets relate to property, plant and equipment, intangible assets and deferred tax.
Notes to the financial statements
for the year ended 31 May 2014
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4  Operating (loss)/profit
2014
£000
2013
£000
Revenue 32,900 39,976
Other operating income (21) (58)
Raw materials and consumables 18,838 23,047
Wages and salaries 7,784 7,417
Social security costs 867 654
Pension costs 456 382
Share-based payments (60) 125
Exceptional redundancy costs — 180
Staff costs 9,047 8,758
Amortisation of intangibles 2,419 2,419
Depreciation 1,083 875
Depreciation and amortisation 3,502 3,294
Other operating charges 5,220 4,695
Operating costs 36,586 39,736
Operating (loss)/profit (3,686) 240
The operating (loss)/profit is stated after the exceptional items in note 5. Exceptional items have all been charged through 
other operating charges in 2014.
5  Exceptional items
Operating (loss)/profit is stated after charging exceptional items as follows:
2014
£000
2013
£000
Management reorganisation — 212
Redundancy costs — 180
Dilapidation of premises of discontinued operations 310 —
Filtronic Broadband relocation 463 —
Swedish entity set up costs 52 —
825 392
There is a charge for dilapidations of premises (£310,000) which relates to a liability for dilapidations following the termination 
of two leases relating to the disposal of the group’s former UK defence business. The charge reflects recent negotiations with 
the landlords and is based on the company’s best estimate of the liability.
During the year Filtronic Broadband Limited relocated to the North East Technology Park in Sedgefield, significantly lowering 
the fixed cost base of the entity. 
Costs of £52,000 were incurred in setting up a Swedish entity for the group to enter the antenna market.
6  Operating items
2014
£000
2013
£000
Operating (loss)/profit is stated after charging/(crediting):
Research and development costs 6,339 5,432
Operating lease rentals 243 194
Foreign exchange loss 168 12
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7  Auditor’s remuneration
The company’s auditor is KPMG LLP . The auditor’s remuneration was as follows:
2014
£000
2013
£000
Company auditor:
Audit of the group and company financial statements 10 10
Company auditor and their associates:
Audit of subsidiaries’ financial statements pursuant to legislation 35 39
Other services pursuant to such legislation 7 7
Taxation services 24 16
Other services 13 5
89 77
8  Employees
The average number of employees comprised:
2014
Number
2013
Number
Manufacturing 85 93
Research and development 80 62
Sales 3 2
Administration 18 16
186 173
9  Compensation of directors
Details of the remuneration, pension entitlements and share options of the individual directors are set out in the remuneration 
report on pages 31 to 42. The compensation of the directors was:
2014
£000
2013
£000
Salary or fees 500 530
Loss of office 111 —
Bonuses — 128
Benefits 18 21
Total remuneration excluding pension contributions and share-based payments 629 679
Pension contributions 24 29
Share-based payments 1 30
654 738
The directors are related parties.
Notes to the financial statements
for the year ended 31 May 2014
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10  Related party transaction
Identity of related parties
The group has a related party relationship with its subsidiaries and with its directors.
Transactions with subsidiaries
The main transactions between the company and its subsidiaries are management administration recharges to its 
subsidiaries of £432,000 (2013: £432,000) and a royalty charge of 1 per cent of Wireless sales to the Wireless business of 
£230,000 (2013: £314,000). The royalty charge is eliminated on consolidation.
The company also acts as a central service to distribute money around the group to ensure subsidiaries are adequately 
funded to meet obligations and to invest funds from subsidiaries where surplus cash exists. The total figures for these 
transactions along with the management and royalty charge can be seen in notes 18 and 20 through the movement in the 
company’s intercompany receivables and payables.
Transactions with key management personnel
Key management personnel is considered to be the executive directors of the company. The remuneration given to these 
individuals is disclosed in the directors’ remuneration report on pages 38 to 42.
11  Finance income/(costs) — net
2014
£000
2013
£000
Interest income 13 8
Interest costs of borrowing — (10)
13 (2)
12  Taxation
Recognised in the income statement
2014
£000
2013
£000
Current tax (credit)/charge
Overseas taxation in the period 43 15
Adjustment in respect of prior year — R&D tax credit (65) —
Total current tax (credit)/charge (22) 15
Deferred tax credit
Release from deferred tax liability (627) (648)
(Origination) and reversal of temporary differences (209) 587
Total deferred tax (836) (61)
Income tax credit (858) (46)
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12  Taxation continued
The reconciliation of the effective tax rate is as follows:
2014
£000
2013
£000
(Loss)/profit before taxation (3,673) 238
2014
£000
2013
£000
(Loss)/profit before taxation multiplied by standard rate of corporation tax 
in the UK (23%) (833) 24% 57
Disallowable items 4% 164 12% 28
Tax relief for share options exercised — — (25%) (59)
Income not taxable (6%) (205) (1%) (3)
Deferred tax not recognised 11% 405 102% 243
Trading losses utilised — — (104%) (248)
Impact of rate change on deferred tax (1%) (32) (17%) (41)
Adjustment in respect of prior years — R&D credit (2%) (65) — —
R&D tax credit (8%) (276) — —
FX rate change of deferred tax 1% 25 — —
Foreign tax not at UK rate (1%) (41) 15% 36
Deferred tax liability write off — — (8%) (19)
Recognition of capital allowances — — (17%) (40)
Taxation (23%) (858) (19%) (46)
13  (Loss)/earnings per share
Group
2014
£000
2013
£000
(Loss)/profit for the period (2,815) 284
000 000
Basic weighted average number of shares 97,078 96,951
Dilution effect of share options — 592
Dilution effect of share awards — 70
Diluted weighted average number of shares 97,078 97,613
Basic (loss)/earnings per share (2.90p) 0.29p
Diluted (loss)/earnings per share (2.90p) 0.29p
Notes to the financial statements
for the year ended 31 May 2014
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14 Investments in subsidiaries
Company
investments 
in 
subsidiaries
£000
Cost
At 1 June 2012 and 31 May 2013 21,110
Additions 5
At 31 May 2014 21,115
Impairment
At 1 June 2012, 31 May 2013 and May 2014 10,546
Carrying amount at 1 June 2012 and 31 May 2013 10,564
Carrying amount at 31 May 2014 10,569
The company’s subsidiaries are related parties.
The subsidiaries at 31 May 2014, which were directly owned by Filtronic plc, were as follows:
Name of subsidiary
Country of 
incorporation
Description of 
equity held
Proportion 
held Activity
Filtronic Broadband Limited UK 1p ordinary shares 100% Design and manufacture of microwave 
products for telecommunication systems
Filtronic Holdings UK Limited UK £1 ordinary shares 100% Holding company
Isotek (Holdings) Limited UK 1p ordinary shares 100% Holding company
Owned by Filtronic Holdings UK Limited:
Filtronic Wireless AB Sweden SEK1 ordinary shares 100% Design and manufacture of Filtronic products 
for telecommunication systems
Owned by Isotek (Holdings) Limited:
Filtronic Wireless Limited UK 1p ordinary shares 100% Design and manufacture of Filtronic products 
for telecommunication systems
Filtronic Wireless Inc USA $1 ordinary shares 100% Design and manufacture of Filtronic products 
for telecommunication systems
Isotek Limited UK 1p ordinary shares 100% Dormant company
Owned by Filtronic Wireless Limited:
Isotek Hong Kong Holdings 
Limited
Hong Kong HK $1 ordinary shares 100% Holding company
Owned by Isotek Hong Kong Holdings Limited:
Isotek Suzhou China USD $350,000
paid in share capital
100% Design and manufacture of Filtronic products 
for telecommunication systems
Filtronic Wireless Suzhou China USD $162,000
paid in share capital
100% Design and manufacture of Filtronic products 
for telecommunication systems
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15  Goodwill and other intangibles
Goodwill
£000
Other 
intangibles 
(core
technology) 
£000
Total
£000
Cost
At 1 June 2012, 31 May 2013 and 31 May 2014 3,235 10,884 14,119
Amortisation
At 1 June 2012 — 3,628 3,628
Provided in year — 2,419 2,419
At 31 May 2013 — 6,047 6,047
Provided in year — 2,419 2,419
At 31 May 2014 — 8,466 8,466
Carrying amount at 1 June 2012 3,235 7,256 10,491
Carrying amount at 31 May 2013 3,235 4,837 8,072
Carrying amount at 31 May 2014 3,235 2,418 5,653
Goodwill and other intangibles relate to the acquisition of Isotek (Holdings) Limited.
Goodwill is allocated to the Wireless cash-generating unit (CGU) and this CGU represents the lowest level within the group at 
which the goodwill is monitored for internal management purposes, which is not higher than the group’s operating segments 
as reported in note 3. The group tests goodwill annually for impairment or more frequently if there are indications that 
goodwill may be impaired.
The carrying value of intangible assets and goodwill has been assessed for impairment by reference to its value in use. Value 
in use was determined by discounting the future cash flows generated from the continuing use of the unit. The calculation of 
the value in use was based on the following key assumptions:
• budgets incorporating cash flows have been prepared to 31 May 2015 based on past experience and actual operating 
results;
• cash flows for a further 6 years have been extrapolated from the second half of FY2015. A revenue growth factor of  
5 per cent was applied to the projections together with cost inflation of 3 per cent; and
• a pre-tax discount rate of 12 per cent was applied in determining the recoverable amount of the unit, being the 
estimated weighted average cost of capital for the wireless CGU.
Based on this testing the directors do not consider any of the goodwill or intangible assets to be impaired, even allowing for 
a reasonable degree of sensitivity to the underlying assumptions, including the discount rate.
Notes to the financial statements
for the year ended 31 May 2014
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16  Property, plant and equipment
Group
plant and 
equipment
£000
Cost
At 1 June 2012 7,486
Additions 1,532
Disposals (108) 
Currency translation movement 5
At 31 May 2013 8,915
Additions 1,058
Disposals (146)
Currency translation movement (89)
At 31 May 2014 9,738
Depreciation and impairment
At 1 June 2012 5,111
Depreciation 875
Disposals (78) 
Currency translation movement 2
At 31 May 2013 5,910
Depreciation 1,083
Disposals (89)
Currency translation movement (31)
At 31 May 2014 6,873
Carrying amount at 1 June 2012 2,375
Carrying amount at 31 May 2013 3,005
Carrying amount at 31 May 2014 2,865
17  Inventories
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Raw materials 1,968 3,940 — — 
Work in progress 1,445 669 — — 
Finished goods 520 747 — —
3,933 5,356 — —
Inventories are stated net of provision 1,596 1,542 — —
The amount charged to the income statement in the year in respect of write downs of inventories is £200,000 (2013: 
£375,000). The amount credited to the income statement in the year in respect of reversals of write downs of inventories 
is £146,000 (2013: £221,000), principally resulting from the subsequent sale of inventory previously provided for. These 
amounts are classified within cost of sales in the consolidated income statement.
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18  Trade and other receivables
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Trade receivables 8,908 16,514 — —
Group receivables — — 12,818 10,729
Other receivables and prepayments 1,033 723 22 63
9,941 17,237 12,840 10,792
Trade receivables are stated net of provision — 16 — —
19  Deferred tax
Group 
Deferred tax liability
2014
£000
2013
£000
Opening balance 1,112 1,762
Release to income statement (627) (650)
Closing balance 485 1,112
The deferred tax liability largely relates to the intangible assets arising upon acquisition of the Wireless business. The liability 
at acquisition was £2,938,000 and at 31 May 2014 was £485,000. This will be released to the income statement in the next 
financial year.
Deferred tax assets of £302,000 have been reclassified as non-current from current in the year.
Group 
Deferred tax assets
2014
£000
2013
£000
Opening balance 302 887
Tax losses recognised/(used) 192 (585)
Effect of change in UK corporation tax rate (9) —
Closing balance 485 302
The deferred tax assets relate to the recognition of tax losses and capital allowances in the Wireless business.
Deferred tax assets which have not been recognised:
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Depreciation in advance of capital allowances 1,880 1,831 435 448
Tax losses carried forward 11,204 11,550 10,880 11,216
Share options deferment 80 80 — –
13,164 13,461 11,315 11,664
The deferred tax assets have not been recognised where the directors consider that it is unlikely that the underlying 
temporary differences will reverse in the foreseeable future. There is no expiry date for these unrecognised assets.
A reduction in the UK corporation tax rate from 23 per cent to 21 per cent (effective from 1 April 2014) was substantively 
enacted on 2 July 2013, together with a further reduction to 20 per cent (effective from 1 April 2015) on the same date. 
This will reduce the company’s future current tax charge accordingly. The deferred tax liability at 31 May 2014 has been 
calculated based on the rate of 20 per cent substantively enacted at the balance sheet date.
This is not expected to have a material impact on the group’s tax position.
Notes to the financial statements
for the year ended 31 May 2014
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20  Trade and other payables
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Trade payables 5,922 9,906 86 64
Group payables — — 5,738 2,551
Other payables and accruals 1,525 3,698 476 578
Forward exchange contracts — 7 — —
7,447 13,611 6,300 3,193
21  Provisions
Group Company
Warranty provision
2014 
£000 
2013
£000
2014 
£000 
2013
£000
Opening balance 605 565 — — 
Used during the year (41) (126) — — 
Released unused during the year (487) (94) — —
Charge for the year 31 260 — —
Closing balance 108 605 — —
The provision for warranty relates to the units sold during the last two financial years. The provision is based on estimates 
made from historical warranty data.
Group Company
Dilapidation provision
2014 
£000 
2013
£000
2014 
£000 
2013
£000
Opening balance — — — — 
Used during the year (85) — (85) —
Charge for the year 310 — 310 —
Closing balance 225 — 225 —
The provision for dilapidation relates to a liability for the termination of two leases retained following the disposal of the 
group’s UK defence business in 2009.
22  Deferred income
Deferred income classified as current consists of a capital grant made by a customer that will be recognised as income in the 
next year. Deferred income classified as non-current consists of the non-current portion that will be released to the income 
statement over the life of the asset.
23  Pension costs
Group Company
2014 
£000 
2013
£000
2014 
£000 
2013
£000
Defined contribution schemes 456 432 30 34
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24  Share capital
Group and Company
Ordinary shares of 
10p each
Issued and fully paid
Number £000
At 1 June 2012 96,814,993 9,681
Shares issued in year 183,000 19
At 1 June 2013 96,997,993 9,700
Shares issued in year 162,993 16
At 31 May 2014 97,160,986 9,716
Holders of the ordinary shares are entitled to receive dividends when declared, and are entitled to one vote per share at 
meetings of the company.
The group issued 162,993 shares due to employees exercising share options from SAYE schemes and the management 
incentive plans.
25  Share premium
Group and 
Company
At 1 June 2012 5,083
Premium on share issue 28
At 1 June 2013 5,111
Premium on share issue 34
At 31 May 2014 5,145
The shares issued to employees in the year were issued at an average premium of 20p.
26  Translation reserve
Group
£000
At 1 June 2012 (16)
Currency translation movement arising on consolidation 54
At 1 June 2013 38
Currency translation movement arising on consolidation (474)
At 31 May 2014 (436)
27  Dividends
The directors are not proposing to pay a dividend for the year ended 31 May 2014 (2013: nil).
28  Retained earnings
Group
£000
Company
£000
At 1 June 2012 5,093 4,230
Profit/(loss) for the period 284 (656)
Share-based payments 163 87
Exercise of share awards (191) (191)
At 31 May 2013 5,349 3,470
(Loss) for the period (2,815) (1,038)
Share-based payments (60) (132)
At 31 May 2014 2,474 2,300
Notes to the financial statements
for the year ended 31 May 2014
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29  Share options
There are four sharesave plans that have been offered to employees. Under these plans employees who join the plan save 
up to £250 per month (which limit was increased to £500 per month in FY2014) for three years. The members of the plans 
were granted a number of share options based on the amount they would save over the three years. At the end of the three 
years the members have a six month period in which they can exercise the share options. The exercise price for an option 
was the middle market quotation of Filtronic plc’s ordinary shares as derived from the Official List of the United Kingdom 
Financial Services Authority on the dealing day immediately prior to the plan offer date.
Sharesave Plan — Scheme 1
Weighted 
average 
exercise 
price
2014 
Number of 
options 
2014 
Weighted 
average 
exercise price
2013
Number of 
options
2013
Outstanding at the beginning of the period — — 25p 276,450
Exercised during the period — — 25p (183,000) 
Cancelled during the period — — 25p — 
Lapsed during the period — — 25p (93,450)
Outstanding at the end of the period — — 25p — 
Exercisable at the end of the period — —
The first sharesave plan was offered to employees in February 2009 and has now closed.
Sharesave Plan — Scheme 2
Weighted 
average 
exercise 
price
2014 
Number of 
options 
2014 
Weighted 
average 
exercise price
2013
Number of 
options
2013
Outstanding at the beginning of the period 34.2p 98,520 34.2p 113,677
Exercised during the period 34.2p (95,888) 34.2p —
Cancelled during the period 34.2p (2,632) 34.2p (15,157) 
Outstanding at the end of the period 34.2p — 34.2p 98,520
Exercisable at the end of the period — —
The second sharesave plan was offered to employees in November 2010 and has now closed.
Sharesave Plan — Scheme 3
Weighted 
average 
exercise 
price
2014 
Number of 
options 
2014 
Weighted 
average 
exercise price
2013
Number of 
options
2013
Outstanding at the beginning of the period 22.6p 989,505 22.6p 1,040,478
Exercised during the period 22.6p (49,183) 22.6p —
Cancelled during the period 22.6p (57,064) 22.6p (50,973)
Outstanding at the end of the period 22.6p 883,258 22.6p 989,505
Exercisable at the end of the period 22.6p 30,106 22.6p —
The third sharesave scheme was offered to employees in April 2012.
The options outstanding at 31 May 2014 for Scheme 3 have a weighted average remaining contractual life of 1.5 years. The 
share options granted during the year to May 2012 have an exercise price of 22.6p and have an exercise period from 1 May 
to 31 October 2015.
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29  Share options (continued)
Sharesave Plan — Scheme 4
Weighted 
average 
exercise 
price
2014 
Number of 
options 
2014 
Weighted 
average 
exercise price
2013
Number of 
options
2013
Outstanding at the beginning of the period 56.4p 278,848 56.4p —
Granted during the period 56.4p — 56.4p 278,848
Exercised during the period 56.4p (1,730) 56.4p —
Cancelled during the period 56.4p (129,813) 56.4p —
Outstanding at the end of the period 56.4p 147,305 56.4p 278,848
Exercisable at the end of the period — —
The fourth sharesave scheme was offered to employees in March 2013.
The options outstanding at 31 May 2014 for Scheme 4 have a weighted average remaining contractual life of 2.5 years. The 
share options granted during the year to May 2013 have an exercise price of 56.4p and have an exercise period from 1 May 
to 31 October 2016.
Management incentive plans
Under this plan some managers were granted options vesting in three years time. At the end of the three years the 
employees’ options have an exercise price of 18p and 23.5p. The exercise price for an option was the middle market 
quotation of Filtronic plc’s ordinary shares as derived from the Official List of the United Kingdom Financial Services Authority 
on the dealing day immediately prior to the plan offer date.
Weighted 
average 
exercise 
price
2014
Number 
of share 
options
2014
Weighted 
average 
exercise price
2013
Number of 
share options
2013
Outstanding at beginning of the period 21.8p 428,677 21.8p 454,428
Exercised during the period 23.5p (16,192) 21.8p —
Cancelled during the period 23.5p (6,280) 21.8p (25,751)
Outstanding at the end of the period 21.7p 406,205 21.8p 428,677
Exercisable at the end of the period — —
The share options awarded during the year to 31 May 2012 have a weighted average remaining contractual life of 0.25 
years.
30  Share awards
Number of share 
awards
2014 2013
Performance share plan
Outstanding at the beginning of the period 157,943 1,019,471
Exercised during the year — (569,389) 
Granted during the year 512,634 —
Cancelled during the year (294,929) (292,139)
Outstanding at the end of the period 375,648 157,943
Notes to the financial statements
for the year ended 31 May 2014
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30  Share awards (continued)
Under the plan in the year to 31 May 2011 further share awards were made to executive directors and senior managers. 
The vesting of the share awards is subject to performance targets based on growth in earnings per share (EPS) over a three 
year period. If EPS grows such that for the year to 31 May 2013 it exceeds a figure corresponding to £5.5m of earnings 
before intangible amortisation, exceptionals, interest and tax, then 25 per cent of the awarded shares will vest. If EPS grows 
such that for the year to 31 May 2013 it exceeds a figure corresponding to £7.0m of earnings before intangible amortisation, 
exceptionals, interest and tax, then 100 per cent of the awarded shares will vest. If EPS grows to be between these two 
targets then the awarded shares will vest on a sliding scale between 25 per cent and 100 per cent of the awarded shares. 
The 157,943 remaining share awards awarded during the year to 31 May 2011 were cancelled in the year as the 
performance targets of the scheme were not met.
Under the plan in the year to 31 May 2014 share awards were made to executive directors and senior managers. The vesting 
of the share awards is subject to performance targets based on growth in earnings per share (EPS) over a three year period. 
If EPS grows such that for the year to 31 May 2015 it exceeds a figure corresponding to £6m of earnings before intangible 
amortisation, exceptionals, interest and tax, then 25 per cent of the awarded shares will vest. If EPS grows such that for the 
year to 31 May 2015 it exceeds a figure corresponding to £7.5m of earnings before intangible amortisation, exceptionals, 
interest and tax, then 100 per cent of the awarded shares will vest. If EPS grows to be between these two targets then the 
awarded shares will vest on a sliding scale between 25 per cent and 100 per cent of the awarded shares.
31  Share-based payments
 Group Company
 
 
2014
£000
2013 
£000 
2014
£000
2013
£000
Share options expense 76 60 4 3
Share awards expense 20 65 20 63
Exceptional share-based payments — 38 — 21
Non-vesting LTIP share award (156) — (156) —
(60) 163 (132) 87
Exercise of share awards — (191) — (191) 
The share options expense is the fair value of the share options at the date of grant spread over the expected vesting period 
of the share options. The fair value of the share options at the date of grant was measured using the Black-Scholes model.
The share awards made to executives and senior managers in the year to 31 May 2011 did not vest due to performance 
targets not being met. As a consequence a credit has been made to the income statement to reverse the charge previously 
made.
The inputs to the Black–Scholes model and the weighted average fair value of the share options granted during the year 
were as follows:
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Number of share options granted 512,634 278,848 512,634 7,786
Weighted average share price 63.0p 70.5p 63.0p 70.5p
Expected volatility 60% 60% 60% 60%
Expected life 3.0 years 3.0 years 3.0 years 3.0 years
Risk free interest rate 3% 3% 3% 3%
Weighted average fair value 24p 21p 24p 21p
Expected volatility is the estimate of the volatility of the share price over the expected life of the share options.
The share awards expense was the fair value of the share awards at the date of award spread over the expected vesting 
period of the share awards. The fair value of the share awards at the date of award was the market price of the shares on 
that day.
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32  Operating lease commitments
At the balance sheet date there were commitments for lease payments under non-cancellable operating leases, which fall 
due as follows:
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Less than one year 425 319 2 111
Between one and five years 1,360 701 — 2
More than five years 408 346 — —
2,193 1,366 — 113
The group leases a number of facilities, offices and vehicles under non-cancellable operating leases. The lease terms are for 
periods of one to ten years.
33  Capital expenditure commitments
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Capital expenditure contracted for at the balance sheet date but not 
provided in the financial statements — 7 — —
34  Note to the consolidated cash flow statement
Group
2014
£000
2013
£000
Operating (loss)/profit (3,686) 240
Net cash used in operating activities 1,615 (274) 
Net cash used in investing activities (1,013) (1,469) 
Net cash from financing activities (446) 342
35  Analysis of net funds
1 June
2013
£000
Cash
flow
£000
31 May
2014
£000
Cash and cash equivalents 2,375 156 2,531
Interest bearing borrowings (496) 496 —
1,879 652 2,531
Reconciliation of cash flow to movement in net funds
2014
£000
2013
£000
Movement in cash and cash equivalents 156 (1,401)
Cash flow from decrease/(increase) in debt financing 496 (496)
Effect of exchange rate fluctuations — 31
Movement in net funds 652 (1,866)
Net funds at 1 June 1,879 3,745
Net funds at 31 May 2,531 1,879
The £496,000 was secured against the debtors as per the Barclays sales financing agreement. This has now been repaid 
with no charge remaining against debtors.
Notes to the financial statements
for the year ended 31 May 2014
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36  Financial instruments
Fair value
The carrying amount of all the financial assets and liabilities approximates to their fair value as described below. 
Cash and cash equivalents comprise bank balances and bank deposits with a maturity of three months or less. 
Trade and other receivables are all receivable in less than one year. Trade receivables are generally receivable within 90 days.
Trade and other payables are all payable in less than one year. Trade payables are generally payable within 90 days. 
Liquidity risk
The group and company hold significant cash balances and also have access to a £2m sales invoicing facility with Barclays 
Bank. Cash is held on bank deposit for varying periods from overnight to six months to ensure all liabilities can be met as 
they fall due. The amount of the cash balances results in liquidity risk being very low.
The sales invoicing facility with Barclays allows the company to borrow 60% of the UK entities debtors denominated in US 
dollars and sterling up to a value of £2m.
Credit risk
The exposure to credit risk is limited to the carrying amount of cash and cash equivalents and trade and other receivables in 
the balance sheet as follows:
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Cash and cash equivalents 2,531 2,375 277 118
Trade and other receivables 9,941 17,237 12,840 10,792
12,472 19,612 13,117 10,910
The cash and cash equivalents in the balance sheet were on deposit with large banks with high credit ratings as follows:
Group Company
2014
£000
2013
£000
2014
£000
2013
£000
Barclays Bank 2,384 1,789 277 118
China Citic Bank 92 336 — —
Bank of America 1 208 — —
Bank of Delmarva 29 37 — —
Industrial and Commercial Bank of China 16 3 — —
SEB 8 — — —
ABC Bank China 1 2 — —
2,531 2,375 277 118
The credit risk related to cash and cash equivalents is considered to be low due to the banks being large with high credit 
ratings.
Credit risk is primarily related to trade receivables. The group’s businesses are concentrated on long term relationships with a 
small number of larger and long established original equipment manufacturers. Overdue receivables are regularly monitored 
and appropriate action is taken to collect payment. The group has historically incurred only low levels of unrecoverable 
receivables. Therefore credit risk is considered to be low.
The company has no trade receivables.
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36  Financial instruments (continued)
Trade receivables included the following amounts for the group’s largest customers:
Group
2014
£000
2013
£000
Customer one 2,402 9,245
Customer two 1,482 2,284
Customer three 829 938
Other customers 4,195 4,047
8,908 16,514
The age of trade receivables that have not been provided for was as follows:
Group
2014
£000
2013
£000
Not past due 7,914 14,849
Past due less than three months 577 973
Past due more than three months 417 692
8,908 16,514
The age of trade receivables that have been provided for was as follows:
Group
2014
£000
2013
£000
Past due more than three months — 16
Interest rate risk
Cash is held on short term bank deposits which earn interest at variable money market deposit rates. At 31 May 2014 
£65,000 was held in Barclays on short term deposit with an interest rate of 0.3%. The remaining cash in the group is held in 
very low interest rate accounts. Sterling interest rates are very low and therefore interest rate risk is considered to be low. 
The interest rate sensitivity of the expected annual interest income/(costs) assuming a balance on deposit or loan of 
£1,000,000 is as follows:
Interest rate
Expected 
annual 
interest 
income
£000
Expected 
annual 
interest 
costs
£000
1.5% 15 (15)
1.0% 10 (10)
0.5% 5 (5)
Notes to the financial statements
for the year ended 31 May 2014
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36  Financial instruments (continued)
Foreign currency risk
The group’s and company’s reporting currency is sterling, which is also the company’s functional currency. The functional 
currencies of the subsidiaries are sterling, US dollar, Chinese Yuan and Swedish Krona.
The group’s results and financial position are affected by fluctuations in foreign currency exchange rates.
The group has generated a surplus of US dollars during the year due to an increasing number of projects being supplied in 
US dollars. Whilst the group’s major supplier invoices in US dollars, giving some degree of a natural hedge, it is not adequate 
to offset the exposure on currency risk. Therefore, the group has used forward foreign contracts and a ‘vanilla option’ to 
reduce the currency risk from surplus US dollars. The nature of the group’s businesses means there is limited visibility of the 
currency required in US dollars. Therefore, when forward contracts are used to reduce currency risk, they are usually only 
for short periods of no more than six months. If the US dollar was to weaken significantly this could materially reduce the 
group’s revenue and operating profit.
At 31 May 2014, the group had a vanilla option in place to cover expected sales receipts of $3.2m. The fair value of the 
option was a favourable £40,000 at 31 May 2014.
Financial instruments measured at fair value are classified by the following fair value hierarchy based on the valuation 
technique used to determine fair value.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:  inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly  
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The group’s forward foreign exchange contract has been determined to represent a level 2 instrument characterised by the 
existence of quoted prices in active markets for an identical asset. The fair value is calculated by reference to fair values 
provided by financial institutions.
Cash is mainly held in sterling and US dollars.
The group’s exposure to foreign currency risk for cash and cash equivalents, trade receivables and trade payables was as 
follows:
Group
2014 2013
SEK
£000
EUR
£000
RMB
£000
USD
£000
SEK
£000
EUR
£000
RMB
£000
USD
£000
Cash and cash equivalents 13 303 110 1,750 — 10 341 925
Interest bearing borrowings — — — — — — — (496)
Trade receivables — 246 211 7,384 — 236 1,311 5,594
Trade payables (53) (186) (198) (2,247) — (360) (1,920) (6,477)
Net exposure 40 363 123 6,887 — (114) (268) (454)
The sensitivity of the group operating profit from continuing operations to US dollars to sterling exchange rate, assuming all 
other variables remain constant, is as follows:
If the US dollar had been one per cent stronger/weaker against sterling throughout the year ended 31 May 2014 then the 
group operating profit from continuing operations would have been £65,000 higher/lower.
The company has exposure to foreign currency risk through an intercompany loan with Filtronic Wireless Inc. This is 
cancelled out on Group consolidation.
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Capital management
The group’s and company’s capital is the total equity which comprises ordinary share capital and retained earnings. The 
group currently has a sales financing agreement in place for £2m which is not currently being utilised. At 31 May 2014 the 
group had net funds of £2,531,000 and the company had a cash balance of £277,000. The group and company have 
sufficient cash to cover working capital requirements and capital expenditure plans.
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to 
provide future returns for shareholders.
37  Forward-looking statements
Certain statements in this annual report are forward-looking. Where the annual report includes forward-looking statements, 
these are made by the directors in good faith based on the information available to them at the time of their approval of this 
report. Such statements are based on current expectations and are subject to a number of risks and uncertainties, including 
both economic and business risk factors that could cause actual events or results to differ materially from any expected 
future events or results referred to in these forward-looking statements. Unless otherwise required by applicable law, 
regulation or accounting standard, the group undertakes no obligation to update any forward-looking statements whether as 
a result of new information, future events or otherwise.
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Shareholder information
Directors
(All of Filtronic House, 3 Airport West, 
Yeadon, West Yorkshire, LS19 7ZA, UK)
Howard Ford —  Non Executive 
Chairman
Alan Needle —  Chief Executive Officer
Rob Smith —  Chief Financial Officer
Graham Meek —  Senior Non-Executive 
Director
Reg Gott —  Non-executive Director
Michael Roller — Non-executive Director
Company secretary
M Moynihan
Company number
2891064
Registered office
Filtronic plc 
Filtronic House 
3 Airport West 
Lancaster Way 
Yeadon, Leeds 
West Yorkshire 
LS19 7ZA 
Tel: 0113 220 000
Registrars
Capita Asset Services  
The Registry 
34 Beckenham Road 
Beckenham, Kent 
BR3 4TU
Tel: 0870 162 3100. (UK calls cost 10p 
per minute plus network extras). From 
overseas: +44 20 8639 3399. Lines are 
open 9.00am to 5.30pm, Monday to 
Friday, excluding public holidays.
Auditor
KPMG LLP 
Chartered Accountants 
1 The Embankment 
Neville Street 
Leeds 
LS1 4DW
Bankers
Barclays Bank PLC 
10 Market Street 
Bradford 
BD1 1NR
Financial public relations
Walbrook PR Limited 
4 Lombard Street 
London 
EC3V 9HD 
Tel: 020 7933 8780
Annual General Meeting
The Company’s Annual General 
Meeting will be held at 11am on Friday, 
26 September 2014 at the offices of 
Pinsent Masons LLP , No 1 Park Row, 
Leeds, LS1 5AB.
Capita Asset Services
Enquiries regarding shareholdings, 
change of address or similar particulars 
should be directed in the first instance 
to our Registrars, Capita Asset Services 
whose address is: The Registry,  
34 Beckenham Road, Beckenham, 
Kent, BR3 4TU, Kent, BR3 4TU or call 
0871 664 0300 ( UK calls cost 10p 
per minute plus network extras). From 
overseas: +44 20 8639 3399. Lines are 
open 9.00am to 5.30pm, Monday to 
Friday, excluding public holidays.
Filtronic website
Shareholders are encouraged to visit our 
website: www.filtronic.com which has 
more information about the company.
www.filtronic.com Stock code: FTC
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Filtronic plc  
Filtronic House 
3 Airport West 
Lancaster Way, 
Yeadon 
Leeds 
West Yorkshire 
LS19 7ZA 
Tel: +44 (0)113 220000
www.filtronic.com