Gooch & Housego PLC 
Dowlish Ford, Ilminster 
TA19 0PF, United Kingdom
T: +44 (0)1460 256440  
E:  plc@goochandhousego.com
goochandhousego.com
ANNUAL REPORT
SEPTEMBER 2016
GOOCH & HOUSEGO  ANNUAL REPORT 2016
GH18_AR_Cover.indd   1 4/11/16   08:43:46 GOOCH & HOUSEGO PLC www.goochandhousego.com >>
Gooch & Housego PLC is a 
global leader in Photonics 
solutions for Industrial, 
Aerospace & Defence,  
Life Sciences and Scientific 
Research applications
CONTENTS
Financial Highlights 01
Our Sectors and Applications 04
STRATEGIC REPORT
Chairman’s Statement 08
Chief Executive Officer’s Statement  09
Market Overview 12
Financial and Operating Review 20
Strategy Overview 24
Principal Risks and Uncertainties 25
GOVERNANCE
Board of Directors 26
Directors’ Report 28
Audit Committee Report 32 
Nomination Committee Report 32
Remuneration Committee Report 33
FINANCIAL STATEMENTS
Independent Auditors’ Report – Group 37
Group Income Statement 38
Group Statement of Comprehensive Income 38
Group Balance Sheet 39
Group Statement of Changes in Equity 40
Group Cash Flow Statement 41
Notes to the Group Cash Flow Statement 42
Notes to the Financial Statements 43
Independent Auditors’ Report – Company 61
Company Balance Sheet 62
Company Statement of Changes in Equity 63
Company Cash Flow Statement 64
Notes to the Company Cash Flow Statement 65
Notes to the Company Financial Statements 66
SHAREHOLDER INFORMATION
Company Information 72
Notice of Annual General Meeting 73 FINANCIAL HIGHLIGHTS GOOCH & HOUSEGO PLC 01
Financial Highlights
* adjusted figures exclude the amortisation of acquired intangible assets, gain on bargain 
purchase, impairment of goodwill and exceptional items being restructuring, provision 
for export compliance and transaction costs.
2015  17.3
11.7
-32.4%
Net cash
(£ million)
2014
2013
2012
2016
2015
11.7
17.3
(0.3)
5.7
8.7
2015  78.7
86.1
+9.3%
Revenue
(£ million)
2014
2013
2012
2016
2015
86.1
78.7
60.9
63.3
70.1
2015  8.2
9.0
+9.8%
Total
dividends 
per share
(pence)
2014
2013
2012
2016
2015
9.0
8.2
7.2
5.2
6.3
2015  39.5
42.5
+7.6%
Adjusted
basic earnings 
per share
(pence)*
2014
2013
2012
2016
2015
42.5
39.5
35.6
28.2
32.0
2015  12.9
14.2
+9.7%
Adjusted
profit 
before tax
(£ million)
2014
2013
2012
2016
2015
1 4.2
12.9
8.2
9.7
11.5
2015  10.1
10.1
Statutory profit before tax
(£ million)
2015  30.9
29.1 -5.8%
Basic earnings per share
(pence) FINANCIAL HIGHLIGHTS GOOCH & HOUSEGO PLC 02
Fremont
Moorpark
Total
Group Revenue
(£ millions)
£86.1m
(2015 £78.7m)
‘‘
During FY 2016 G&H made good progress with 
its strategic goals of further diversification and 
moving up the value chain; we met our financial 
objectives; made a number of strategically 
important investments and have acquired 
two highly complementary companies.
These strategic initiatives combined with a 
record year end order book mean we are  
well placed for future material growth”
Mark Webster 
Chief Executive Officer
Bedford
Orlando
Cleveland
Glenrothes
T orquay
Ilminster
HQ
STG
Norderstedt
Nagoya
St Asaph
FREMONT , USA
New Fremont site provides 
much improved facilities and 
room for expansion
 MANUFACTURING CLEVELAND, USA
Cleveland facility, which 
houses our world leading 
crystal growth capabilities, is 
being refurbished which will 
help drive efficencies
F AR EAST
Geographical footprint across 
the Far East, including China, 
Singapore and Japan
 SALES OFFICES
USA £34.9m / 40.6%
Continental Europe £19.2m / 22.3%
United Kingdom £17.2m / 20.0%
Asia Pacific and Other £14.7m / 17.1%
REVENUE BY GEOGRAPHIC REGION
(£ million)
Madison GOOCH & HOUSEGO PLC FINANCIAL HIGHLIGHTS 03
REVENUE 
BY CURRENCY
REVENUE 
BY SECTOR
OPERATING & STRATEGIC HIGHLIGHTS
•  Excellent performance from our fibre based business, 
in particular telecoms, satellite communications and 
fibre sensing
•  Strong second half performance with good 
momentum going into FY17
•  Two highly complementary acquisitions completed 
in the Aerospace & Defence sector
•  Substantially upgraded a number of our real  
estate assets
•  Ongoing performance improvement initiatives 
driving efficiencies
•  Investment in R&D up 15.4%, 21 new products 
introduced and 5 new patents granted
FINANCIAL HIGHLIGHTS
•  Revenue for the year £86.1m, 9.3% higher than 
2015. Acquisitions contributed £2.4m in the year.
•  Adjusted profit before tax up 9.7%
•  Strong cash performance delivering net cash of 
£11.7m at year end, after investing £5.7m in 
acquisitions and £9.7m in property, plant & 
equipment (2015: £17.3m).
•  Record year-end order book of £52.8m, up 45% 
from 30 September 2015 
•  Proposed final dividend of 5.7p. Full year dividend 
growth of 9.8%. 
Scientific
Research
3.9
2014
2013
2012
2016
2015
3.9
4.1
4.3
3.9
Aerospace 
& Defence
2014
2013
2012
2016
2015
15.4
18.8
17.3
19.8
HISTORICAL REVENUE 
BY SECTOR
(£ millions)
Industrial
2014
2013
2012
2016
2015
54.3
46.1
34.3
35.8
39.8
Life
Sciences
7.9
2014
2013
2012
2016
2015
5.7
7.3
7.4
9.0
Industrial
(£millions)
54.3
63%
Aerospace 
& Defence
(£millions)
20.0
23%
Life
Sciences
(£millions)
7.9
9%
Scientific
Research
(£millions)
3.9
5%
$ USD
70%
£60.1m
2015
69%
£ GBP
24%
£20.7m
2015
24%
€ EUR
6%
£5.3m
2015
7%
20.0 OUR SECTORS AND APPLICATIONS GOOCH & HOUSEGO PLC 04
INDUSTRIAL
Photonics play an ever-increasing role in industrial manufacturing. 
G&H serves these applications and markets with a diverse product 
portfolio, from components to sub-assemblies and final test and 
measurement equipment.
Production Technologies
Laser Material Processing
Laser material processing is a broad term which encompasses 
production processes such as ablating, bending, cutting, curing, 
forming, fusing, marking, micro-machining, sintering, thermal 
annealing, via drilling, and welding.
For these applications, we design and manufacture products which 
are used in laser cavities, to steer and control or to modulate the beam.
Printing
In lithography and micro-lithography, the production process is 
inherently photonic in nature. Computer-to-plate technologies, 
flexographic, and offset printing production components utilize  
laser processing to create the printing tools.
We provide a variety of optical components into these applications 
where accurate transmitted wavefronts and high energy tolerance 
provide superior printed image quality and longevity in production.
 
Test and Measurement
Photonics is used across a wide variety of applications to ascertain 
quality, damage, motion, chemical composition, temperature, 
location, distance, and to automate these types of tests.
Sensing
Fibre optics are deployed in a wide variety of sensing applications. 
These applications may use fibre simply as the communication medium 
for speed, lack of ignition sources, or weight. They may also integrate 
fibre gratings as the sensor to leverage the superior resolution.
We supply fibre optic and acousto-optic sub-assemblies and 
components to equipment manufacturers and installers of  
these systems.
Telecommunications
We serve the more demanding applications within 
telecommunications. Our customers deploy our fibre-based 
products in undersea networks and in space for  
satellite-to-satellite communications. 
In addition we supply specialist crystals into 40G  
and 100G modulation systems.
Sectors and Applications
Gooch & Housego’s wide range of photonic devices are deployed across a  
uniquely broad range of applications, often in challenging environments. OUR SECTORS AND APPLICATIONS GOOCH & HOUSEGO PLC 05
AEROSPACE & DEFENCE
Defence and avionics markets have been important drivers for our 
investment in operational quality and program management.
We continue to invest in our continuous improvement and lean 
manufacturing programs, as well as production equipment and 
metrology to better serve our most demanding aerospace and 
defence customers.
Communications
Tactical communications require rugged, hi-reliability components and 
sub-systems; in some instances light-weight for maximum mobility.
We support a number of C4ISR (command, control, communications, 
computers, intelligence, surveillance, and reconnaissance) 
applications including RF over fibre, secure fibre optic networks and 
surveillance and target acquisition.
Our military-grade components are designed to survive under 
extreme conditions, manufactured in AS9100C facilities, and 
qualified to the necessary Telcordia, BSI, DIN, or MIL  
specifications as required.
Imaging under Extreme Conditions
Sights, telescopes, periscopes, and other imaging systems have  
long played a role in defence. In recent years photonics has 
broadened imaging systems to a wide variety of conditions (night, 
fog and haze, smoke, sand storm, aerial, and space) and adapted  
to a range of situations. G&H provides an array of photonic 
components, sub-assemblies, and systems into these applications 
which include building and asset surveillance, fire-fighting, policing 
and LIDAR mapping.
Target Designation and Range-Finding 
used on Land-Based and Airborne Systems
From missiles to guided bombs, photonic targeting and  
range-finding systems ensure correct deployment of  
munitions. Extreme conditions require athermalized,  
instant “on” systems.
G&H designs and delivers a variety of sub-systems  
and components to prime contractors.
Countermeasures for Ground-Based Systems  
and Airborne Platforms
Infrared countermeasures protect military assets from missile 
attacks. These systems require accurate modulation of the  
infrared energy under extreme environmental conditions.
We provide fibre optic, acousto-optic, and nonlinear crystal  
products which are used in customer-specific countermeasure 
applications, both ground based and airborne.
Gyroscopes for Navigation
Gyroscopes are used in inertial navigation systems in aircraft, guided 
missiles, submarines, ships, and spacecraft for rotation sensing to 
measure or maintain orientation.
We design and produce ring laser gyroscopes and fibre optic 
gyroscopes which are deployed in commercial aircraft as  
well as missiles, satellites, and other military vehicles. OUR SECTORS AND APPLICATIONS GOOCH & HOUSEGO PLC 06
SPACE
G&H has a proven track record in the design and development  
of space hardware for European Space Agency (ESA), National 
Aeronautics and Space Administration (NASA), and other western 
allied national space agencies, missions and other, commercial 
projects, with components, modules and systems integrated within 
operational satellites and on board the probes and rovers.
We maintain a leading role in research and development programs in 
Europe, the USA and Asia, through multiple projects and contracts 
centered on optical inter- and intra-satellite communication links. 
Our work on space projects fuels the company roadmap on a new 
generation of product lines.
G&H works with major prime contractors and government agencies 
on ground-breaking scientific and technology development 
programs for navigation, earth observation and communication.
Our enabling technologies span our core capabilities in  
Acousto-Optics, Fibre-Optics and Precision Optics. OUR SECTORS AND APPLICATIONS GOOCH & HOUSEGO PLC 07
LIFE SCIENCES
G&H serves the life sciences markets with photonics engineering 
solutions from across the company’s technology portfolio.
Optical Coherence Tomography (OCT)
Widely used for ophthalmic imaging, OCT has proven invaluable in 
improving the diagnosis of glaucoma and macular degeneracy.  
We serve most of the world’s leading manufacturers of OCT retinal 
imaging systems. 
Medical and Cosmetic Laser Systems
G&H is helping develop new fibre-delivered laser products which 
enable less invasive surgical techniques. Applications include cataract 
replacement, vision correction, prostate surgery, varicose vein 
treatment, and mole treatment in addition to tattoo removal,  
teeth whitening, freckle removal, and wrinkle reduction.
SCIENTIFIC RESEARCH
G&H works with some of most prestigious  
Big Science projects in the world.
We are a primary supplier of many critical optical components  
such as very large frequency conversion crystals used in the  
world’s most powerful laser system at the National Ignition  
Facility (NIF) at Lawrence Livermore National Laboratory.  
We supply similar products to the Commissariat à l’énergie  
atomique et aux énergies alternatives (CEA) and other  
inertial confinement fusion (ICF) programs  
around the world. STRATEGIC REPORT GOOCH & HOUSEGO PLC 08
Chairman’s Statement
I am pleased to report that your company has performed well in 2016 and 
has continued to make good progress in delivering on its strategic objectives. 
The year was characterised by mixed trading conditions. After a slow start, 
activity increased as the year progressed and was particularly strong in the 
second half, following a trend that has continued into the start of the new 
financial year. This trading pattern presented considerable challenges in 
terms of manufacturing capacity planning towards the end of the period, 
but investments in additional skills and a programme of internal efficiency 
improvements across the organisation ensured that these challenges 
were successfully met. Other notable achievements include the completion 
of two acquisitions and the relocation of one of our largest 
manufacturing facilities.
Headline revenues increased 9.3% year on year, with approximately 55% 
of total sales in the second half. Your company has continued to deliver 
profitable growth with adjusted profit before tax increasing by 9.7%. The 
business remains in a strong net cash position at £11.7 million (2015 : £17.3 
million) despite making two acquisitions in the year and making material 
investments in capital assets to drive the business forward.
We have started the current financial year with a favourable trading 
environment. This is driven by the order book for our fibre based business, 
in particular high reliability undersea fibre couplers, fibre based satellite 
communications, fibre sensing and critical components used in 
microelectronic manufacturing. At the year end the order book stood at 
£52.8 million, an increase of 45% compared with the same time last year. 
In July 2016 your company completed two acquisitions in the Aerospace 
& Defence sector; one in the UK and the other in the US. These acquisitions 
continue to further our strategic objectives of broadening our product 
offerings and diversifying our markets, both geographically and by sector. 
Kent Periscopes Ltd designs, develops and manufactures periscopes and 
sighting systems for Armoured Fighting Vehicles (“AFVs”). Alfalight 
specialises in diode and diode-pumped lasers for the US defence sector.
Significant progress was made in the year in relocating and upgrading a 
number of our real estate assets. The relocation of our Palo Alto operations 
to nearby Fremont was a major undertaking but it has provided much 
improved facilities and room for growth at a similar ongoing cost. We have 
continued to upgrade and expand our T orquay facility , allowing us to manage 
the considerable increases in demand we have seen in this site over the 
past two years. 2016 also saw the commencement of the refurbishment 
of our Cleveland facility, which will help drive much needed operational 
efficiency as well as showcasing the site’s unique world leading crystal 
growth capabilities to customers.
Having spent eight years as a non-executive Director, Paul Heal has decided 
not to stand for re-election at the AGM in February 2017. Paul has played an 
integral role in the development of Gooch & Housego as a business over 
those years and I would like to record my thanks to Paul for his support and 
guidance, which have been invaluable. We have begun a process to identify 
a replacement for Paul. 
In summary , 2016 has been a busy and successful year for Gooch & Housego. 
We have acquired two businesses, continued our drive for operational 
excellence, relocated one of our largest facilities and materially expanded 
another. All of this has been achieved against a backdrop of challenging, if 
ultimately favourable, trading conditions. As we enter 2017, the strength 
of the US Dollar against the British Pound will benefit the business in the 
short term, but there remains uncertainty in world markets. With a strong 
balance sheet, good cash flow, excellent order book and enhanced facilities, 
processes and systems, the Company is well positioned to exploit exciting 
growth opportunities in photonics. I would like to thank my fellow directors 
and employees of Gooch & Housego for making 2016 another successful 
year for the Company.
Gareth Jones
Chairman
29 November 2016
‘‘
Y our company has performed well 
in 2016 and has continued to make 
good progress in delivering on its 
strategic objectives.” Overview
Gooch and Housego(G&H) has made good progress towards achieving its 
twin strategic goals of further diversification and moving up the value 
chain. We have continued to focus on driving a higher level of organic growth 
from our portfolio of world leading products and technologies, invested 
in a number of strategically important areas and have acquired two highly 
complementary companies during FY 2016.
G&H’s FY 2016 financial expectations were met, with revenue and adjusted 
profit growth of 9.3% and 9.7% respectively. This was achieved despite 
challenging first quarter market conditions in our industrial laser business 
and is testament to the resilience of the business and our active policy of 
diversification designed to offset the impact of the economic cycle on 
some of our core markets. 
In addition to pursuing further diversification we want to build a company 
that moves up the value chain by selling sub-systems and systems wherever 
possible. The Systems Technology Group (STG), based at our Torquay site, 
is dedicated to helping G&H achieve this and now has over 30 engineers 
and scientists. They bring a wide range of skills such as electronic, software 
and mechanical engineering, which are necessary if we are to present a 
complete sub-system or system to our customers.
The most notable success of the STG during FY 2016 has been the growth 
of the strategically important space satellite communications business. 
Funding has been secured from the European Space Agency, UK Space 
Agency and other sources to pursue leading edge research and we have 
won our first commercial contract for the development of critical 
subsystems used in inter satellite communications.
Our performance improvement plan has made further progress during the 
course of the year. The aim is to develop a more unified business where 
the skills, expertise and technologies across our nine sites are better 
leveraged throughout G&H and our customers are presented with a 
more complete and professional offering. 
G&H’s operations group has now established small globally focused teams 
representing each of the key manufacturing disciplines. They hold each 
site to the same high standards and have made a good start on introducing 
lean manufacturing principles. The recently introduced A&D business 
development executives have brought enhanced access to tier 1 companies 
and helped develop new A&D focused R&D projects. In FY 2016 we hired 
our first Life Science business development executive in the USA and 
intend to achieve similar positive results in this sector. A more targeted 
approach has been taken towards R&D, with better funded projects and 
this has resulted in a record 21 new products in FY 2016.
The Industrial sector represents 63% of G&H’s revenue and has provided 
most of the growth during FY 2016. A&D and Life Sciences give a better 
balance to our business, provide significant opportunities for our 
technologies and have greater potential than Industrials for moving up the 
value chain. It is our intention to grow A&D and Life Sciences to levels where 
we can, over time, establish a similar critical mass to our Industrial sector. 
This will be achieved through a mix of investment in R&D and acquisitions.
To this end, we acquired two A&D businesses during 2016:
•  Kent Periscopes Ltd (Kent) is a UK based supplier of periscopes, vehicle 
sights and related equipment for land based armoured vehicles. Its proven 
capability in system level optical products in harsh environments and 
impressive ‘blue chip’ customer list make it a great fit. Kent will benefit 
from G&H’s greater global reach and complementary technologies.
•  The trade and assets of Alfalight Inc, a designer and manufacturer of high 
reliability, laser based, electro-optic systems for defence and security 
applications, based in Madison, Wisconsin. It is highly complementary to 
our existing Boston, Massachusetts site and will be incorporated into 
this business unit.
The completion of substantial infrastructure investment in our T orquay site 
has enabled us to meet the challenge of the exceptional year on year growth 
of our high reliability fibre couplers for undersea cables. Our Palo Alto 
facility has now completed its move across the San Francisco Bay to a 
purpose built facility in Fremont, with plenty of room for further growth 
for its core business, based on fibre lasers and 40G / 100G modulation 
systems for land based telecommunications. The Cleveland site which 
houses our strategically important crystal growth facility will complete 
its upgrade project during FY 2017.
G&H is in a strong position financially and is well positioned to make 
further investment in the business.
Markets and Applications
Industrial
The Industrial sector represents 63% of G&H’s revenue and is composed 
of a diverse range of industrial applications aligned to our world class 
photonic technologies, including microelectronic manufacturing, 
semiconductor manufacturing and test, remote sensing, metrology  
and telecommunications.
Our Industrials division grew by £8.2 million or 17.9% compared to previous 
year and this is reflective of a number of positive market trends in this 
sector. This growth was achieved despite the challenging market 
conditions for microelectronic manufacturing in China and the far east, 
which saw a slow down in the first quarter. The industrial laser market did 
pick up markedly for the rest of the year and when combined with record 
orders for our fibre based business it led to a higher second half weighting 
than last year and a strong overall performance.
There is a general trend towards fibre optic solutions across a range of 
applications and this is especially so for lasers used in materials 
processing applications. Fibre lasers are gaining share from solid state 
lasers and at the same time increasing the number of applications where 
STRATEGIC REPORT GOOCH & HOUSEGO PLC 09
Chief Executive Officer’s 
Statement
‘‘
During FY 2016 G&H made good 
progress with its strategic goals of 
further diversification and moving 
up the value chain; we met our 
financial objectives; made a 
number of strategically important 
investments and have acquired two 
highly complementary companies.” STRATEGIC REPORT GOOCH & HOUSEGO PLC 10
lasers have utility; this is due to fibre lasers often providing improved 
reliability and flexibility at a lower cost.
G&H is a world leader in acousto-optic products for industrial lasers and is 
well positioned to take advantage of this trend. Fibre laser components 
now represent a higher proportion of our business than the traditional 
conduction cooled or water cooled “Q-switches” for solid state lasers. The 
ground breaking Fibre-Q used for a range of laser modulation applications 
was the recipient of a prestigious Queen’s Award for Enterprise in the 
Innovation category this year. We remain committed to further investment 
in new products and cost reduction initiatives in this area to enable us to 
retain our market leading position.
This year saw the first contract for our precision measurement system 
used on smart phone/ tablet production lines and is an area of good 
future potential.
The semiconductor manufacture and test market showed strong growth 
during FY 2016. Laser technology is essential to enhance miniaturisation 
and speed in this fast moving sector, which means that we see this as a 
good growth driver for G&H over the medium term.
Remote sensing took a step forward this year with a hard-earned security 
and surveillance contract for an oil pipeline.
The need for ever more data capacity from government, industry and the 
consumer has driven an especially strong telecommunications performance. 
G&H provides the more technically challenging elements to both land 
based and undersea telecommunications systems. There has been a 
significant ‘uptick’ in demand for our ultra high reliability fibre couplers 
which are used in amplifiers on the sea bed in the undersea cable network. 
This growth is driven by ‘non-traditional’ investors in these undersea 
networks from ‘Silicon Valley’ that want to control their own traffic.
Aerospace & Defence
A&D represented 23% of our revenue in FY 2016, and was flat on the 
previous year. This reflects a sector that for G&H’s range of technological 
capabilities is a target rich environment, but a business that has not yet 
reached a critical mass. The two recent A&D acquisitions coupled with 
the investment in new areas of growth such as SWIR lenses, for low light 
environments and our developing position in space satellite 
communications are key ‘steps on the way’ to achieving this.
Product quality, reliability and performance are essential success criteria in 
the A&D arena and that plays to G&H’s strengths. We have well established 
positions in target designation, range finding, ring laser and fibre optic 
gyroscope navigational systems, infra red and RF countermeasures and 
have recently added SWIR lenses, for low light environments and space 
photonics. The customers for our products encompass the major A&D 
companies in both Europe and the USA.
Our fibre optic and infrared capabilities very much reflect the ‘direction of 
travel’ for this sector as our A&D customers upgrade their products to lighter, 
more durable and reliable technologies. Many of our customers in this sector 
prefer to buy sub-systems and integrate them into their systems and 
though the quality barriers to this are challenging we have succeeded 
with some high profile companies in selling sub systems rather than just 
high quality critical components and are actively trying to move more 
customers up the value chain.
Space satellite communication is entering into a new period of development 
based on lighter, more efficient and robust fibre optic technology and G&H 
is at the leading edge of this revolution.
Life Sciences
Life Sciences represents 9% of G&H’s revenue and after a strong year last 
year sales were down. As with A&D we see good potential for our 
technologies in this sector, a greater ability to move up the value chain 
than with Industrials, but a business that has not yet reached critical mass. 
It is therefore susceptible to the ordering patterns of one or two customers. 
The desired “future state” will be achieved through a combination of 
investment in R&D and acquisitions. 
The principal applications are in optical coherence tomography (OCT), laser 
surgery and microscopy. OCT is widely used in ophthalmology and G&H has 
developed a strong position with the main participants in this market. The 
potential for this technology to be used in other areas of medical diagnostics 
is high and we have a number of programmes with medical diagnostic 
companies designed to exploit these opportunities. 11 GOOCH & HOUSEGO PLC  
|
 STRATEGIC REPORT GOOCH & HOUSEGO PLC
‘‘
G&H is in a strong position 
financially and is well positioned 
to make further investment in  
the business.”
Laser surgery is a fast growing area particularly in ophthalmology, prostate 
and aesthetic treatments and has the potential to be exploited beyond 
these current areas of high use. 
G&H has established a sub-system presence with a number of our 
customers and our aim is to extend this during FY 2017. 
Scientific Research 
G&H’s scientific research market is dominated by a small number of ‘big 
science’ projects in the fields of nuclear fusion research and synchrotron 
radiation sources. It provides 5% of our revenue and revenue is flat year- 
on-year. This is a prestigious and profitable sector for G&H where we have 
some unique capabilities and over time this is an area that should provide 
steady growth, and we will continue to selectively invest in this area.
Outlook
During FY 2016 G&H made good progress with its strategic goals of further 
diversification and moving up the value chain; we met our financial 
objectives; made a number of strategically important investments and 
have acquired two highly complementary companies.
We are committed to make further R&D investment in our targeted high 
growth areas. These include fibre optic  lasers, fibre optic sensing, precision 
inspection equipment for microelectronic manufacturing, laser surgery , A&D 
sub systems, OCT medical diagnostics and space satellite communications.
G&H intends to build on the good progress made with our performance 
improvement programme by: further improving operational efficiency, with 
particular reference to the introduction of lean manufacturing across all our 
sites; continuing to invest in A&D business development, establishing 
similar business development activity in Life Sciences and focussing our 
resources on fewer, but higher return R&D projects.
We will continue with an active policy of making further progress towards 
a more diverse and balanced business by building critical mass in A&D and 
Life Sciences through a mix of R&D investment and acquisitions.
These strategic initiatives combined with a record year end order book 
mean the Board remains confident that Gooch and Housego is well 
positioned to deliver further progress in FY 2017 and beyond.
Mark Webster
Chief Executive Officer
29 November 2016 STRATEGIC REPORT GOOCH & HOUSEGO PLC 12
Market Overview
Industrial
APPLICATIONS, PRODUCTS AND MARKETS
Industrial Lasers for materials processing applications. Gooch & Housego 
supplies Q-switches and other acousto-optic, electro-optic and fibre 
optic products. The end users for industrial lasers are extensive due to 
the ubiquitous adoption of this technology in manufacturing. The 
microelectronics industry represents the largest end market. During 2016 
this sector was down during the first quarter, but recovered strongly 
throughout the year to show a year on year increase.
Telecommunications specifically for high reliability and high performance 
applications. The products supplied into this market are based upon the 
Group’s fibre optic, crystal growth and precision optics technologies. The 
end users of these products are typically global telecommunication 
equipment companies, and more recently large technology companies, for 
applications such as undersea and long haul telecommunication networks 
and tuneable lasers. The demand for more data from government, industry 
and particularly the consumer, has driven especially strong growth in this 
sector, something we see continuing into 2017 and beyond.
Metrology for laser-based, high-precision, non-contact measurement 
systems. The Group principally supplies its precision optics, acousto-optics 
and instrumentation systems into this market; the customers are 
typically blue-chip OEMs. This market has grown throughout the year as 
a result of improved customer focus and successful product launches 
from our instrumentation facility in Orlando.
Remote sensing for applications including asset protection, perimeter 
security, strain, temperature and pressure sensing. Gooch & Housego 
supplies fibre optic and acousto-optic components and sub-assemblies, 
including the recently developed Fibre-Q. Manufacturers of these systems 
address diverse end markets such as wind energy and oil and gas. This has 
been a significant growth area in 2016, following strong orders for Fibre-Q 
based subassemblies, used in oil pipeline protection.
Semiconductor for lithography and test and measurement applications. The 
products supplied into this market are precision optics and acousto-optics. 
Customers are typically global semiconductor equipment manufacturers. 
This market is closely aligned with the micro-electronics industry and has 
demonstrated good growth across the year.
GROWTH STRATEGY
•  To continue to invest in R&D and engineering in order to bring new 
products to existing markets and to develop existing products, such 
that we remain at the cutting edge of technology.  During 2016 Gooch 
& Housego introduced a record thirteen new products that address its 
Industrial market. 
•  T o focus on niche markets that play to the strengths of Gooch & Housego, 
principally those that demand high levels of quality , reliability and 
survivability in harsh environments.
•  To expand into and develop new geographical markets that offer high 
growth opportunities, through leveraging and expanding the Group’s 
global sales organisation.
•  T o continue to focus our energies and investment on making the transition 
from a components supplier to a manufacturer of sub-assemblies, 
instruments and systems, where appropriate.
•  To invest in longer term R&D projects.
•  To make strategic acquisitions. Gooch & Housego will continue to seek 
high quality acquisition opportunities as a route to grow its Industrial 
business STRATEGIC REPORT GOOCH & HOUSEGO PLC 13
Revenue
(£millions)
54.3
+17.8%
2015  46.1
Adjusted 
Operating Profit
(£millions)
10.8
+12.5%
2015  9.6
63%
Percentage 
of Revenue
2015  59% STRATEGIC REPORT GOOCH & HOUSEGO PLC 14
Market Overview
Aerospace & Defence
APPLICATIONS, PRODUCTS AND MARKETS
Target designation and range finding used on both land-based and 
airborne systems. The products supplied into this market are based upon 
our precision optics and electro-optics technologies. Our customers are 
US and European defence contractors. In 2016 this business was lower 
than in previous years due to the timing of programmes.
Guidance and navigation components for ring laser gyroscope and fibre 
optic gyroscope inertial navigation systems. The products supplied into 
this market are based upon our precision optic and fibre optic 
technologies. Gooch & Housego navigation components are used in  
a variety of end markets, including civil and military aircraft, missiles, 
satellites and space exploration. In 2016 this business was lower than  
in previous years due to lower demand from a key customer and price 
pressure, which affected margins.
Countermeasures for ground based systems and airborne platforms.  
The products supplied into this market are based upon fibre optic, 
acousto-optic and non-linear optics technologies. The customers are  
US and European defence contractors.
Space Photonics G&H is leveraging its heritage of ultra-high reliability 
components for space applications in order to address the next 
generation requirement for fibre optics on satellites. We are working 
with both the European Space Agency and commercial organisations to 
develop and deploy sub-systems for inter-satellite and satellite to 
ground communications, radio over fibre and optically inter-connected 
on-board processors within telecommunications satellites.
Surveillance, Displays and Secure Communications for land based 
Armoured Fighting Vehicles (“AFVs”). This capability was added during 
the year following the acquisition of Kent Periscopes Ltd. This business 
has a proven track record of providing system level products for harsh 
environments, to an impressive list of blue chip defence companies and 
is a solid contributor to our record year end order book.
GROWTH STRATEGY
•   To continue to focus energy and investment to move from being a 
components supplier to a sub-systems provider.  Our Aerospace & 
Defence customers are moving their own business models away from 
sub-system manufacture and are looking for companies such as Gooch 
& Housego that are capable of providing a full service in this area.
•  To continue to invest in manufacturing processes and engineering in 
order to meet the exacting expectations of this sector, which is 
becoming increasingly demanding in terms of quality and price.
•  To make strategic acquisitions that will provide synergies, are 
complementary to our existing A&D business and will help us build a 
critical mass in this sector. Gooch & Housego acquired two companies in 
the Aerospace & Defence sector in July 2016. Kent Periscopes Ltd designs, 
develops and manufactures periscopes and sighting systems for AFVs. 
G&H also acquired the trade and assets of Alfalight, an expert in diode 
and diode pumped lasers for use in the US defence sector.
•  To introduce a greater number of new products, including products 
which look to fill a “market gap” as well as projects initiated by our 
customers. During 2016 Gooch & Housego introduced four new 
products that address its Aerospace & Defence market. STRATEGIC REPORT GOOCH & HOUSEGO PLC 15
Revenue
(£millions)
20.0
+1.0%
2015  19.8
Adjusted 
Operating Profit
(£millions)
1.5
-28.6%
2015  2.1
23%
Percentage 
of Revenue
2015  25% STRATEGIC REPORT GOOCH & HOUSEGO PLC 16
Market Overview
Life Sciences
APPLICATIONS, PRODUCTS AND MARKETS
Optical Coherence T omography (OCT) is primarily used in retinal imaging 
for the diagnosis of glaucoma and macular degeneration. Gooch & Housego 
provides a family of fibre optic products in this market, ranging from discrete 
components to full optical systems. Customers include most of the world’s 
leading manufacturers of OCT retinal imaging systems. This market was 
lower than in previous years due to customers’ product lifecycles becoming 
more mature. We are working on the next generation of products with 
key customers.
Laser surgery is used in a wide range of applications including prostate 
surgery, scar correction, cataract surgery, freckle, mole and tattoo removal 
as well as wrinkle reduction and teeth whitening. The products supplied 
into this market are based upon electro-optic, fibre optic and acousto-optic 
technologies. The customers in this market include both laser system 
manufacturers and biomedical equipment manufacturers. This market 
remained buoyant in the year and continues to be a growth area.
Microscopy modern, laser-based techniques are revolutionising the field 
of microscopy. Gooch & Housego’s acousto-optic devices and hyperspectral 
imaging systems are used to control the multiple laser sources and 
analyse complex images. The end customers are typically medical 
equipment manufacturers. This market was stable in the year for G&H.
The growth strategy for Life Sciences mirrors that for Aerospace & Defence 
in many respects. This is particularly true in terms of the size of the available 
market and the desire of the customer base to “pull” Gooch & Housego 
up the value chain.
GROWTH STRATEGY
•  To continue to invest in longer term R&D projects and to develop the 
existing portfolio of products, to ensure that they remain competitive. 
During 2016 Gooch & Housego introduced five new products that 
address its Life Sciences market.
•  Where appropriate seek to sell the full range of our Life Sciences 
products to a wider range of customers.
•  To make strategic acquisitions that are synergistic, are complementary 
to our existing Life Science business and will help us build critical mass 
in this sector. Gooch & Housego will continue to seek high quality 
acquisitions as a route to grow its Life Sciences business should the 
opportunity arise. STRATEGIC REPORT GOOCH & HOUSEGO PLC 17
Revenue
(£millions)
7.9
-12.2%
2015  9.0
Adjusted 
Operating Profit
(£millions)
1.6
+0.0%
2015  1.6
9%
Percentage 
of Revenue
2015 11% STRATEGIC REPORT GOOCH & HOUSEGO PLC 18
Market Overview
Scientific Research
APPLICATIONS, PRODUCTS AND MARKETS
Nuclear fusion research & energy... laser technology is being used to 
recreate the conditions found in the core of the sun. At these temperatures 
and pressures isotopes of hydrogen fuse to form helium and in doing so 
release huge amounts of energy – the energy that powers the sun and 
stars. One of the most exciting potential applications of this research is 
using laser fusion to provide limitless quantities of clean, carbon-free 
energy to meet the world’s growing needs. The products supplied into 
this market utilise a wide range of the Company’s technologies including 
crystal growth, precision optics, thin-film coatings and fibre optics. Gooch 
& Housego supplies many of the world’s leading nuclear fusion energy 
research facilities. Gooch & Housego is sole supplier of many critical 
optical components used in the world’s most powerful laser system at 
the National Ignition Facility (NIF) at Lawrence Livermore National 
Laboratory in Northern California.
Instrumentation for applications in agricultural, solar, marine and 
industrial research. An example of an industrial research application is 
the development of Light Emitting Diode (LED) illumination systems. 
Instrumentation products are supplied from our Orlando facility and 
include photometers, radiometers, spectroradiometers and their 
associated calibration services. The customer base ranges from 
universities and research institutes to Government agencies and 
national standards laboratories.
A small number of “Big Science” projects, which are reliant on 
government funding, dominate this market. 
The products supplied into this market span the complete breadth of the 
Company’s technology portfolio. Many of Gooch & Housego’s current 
products have evolved from early stage collaborations with universities 
and this is an area the Company continues to focus on.
GROWTH STRATEGY
•  To maintain and develop the business’s capabilities in crystal growth and 
ultra-precision optics for nuclear fusion research and energy, university 
research and “Big Science” projects. Gooch & Housego is the custodian of 
some of the world’s most advanced optical technologies.
•  To continue to invest in R&D to develop and commercialise the next 
generation of Instrumentation products. STRATEGIC REPORT GOOCH & HOUSEGO PLC 19
Top 3 images courtesy of Lawrence Livermore National Laboratory
Revenue
(£millions)
3.9
+0.0%
2015  3.9
Adjusted 
Operating Profit
(£millions)
0.7
+0.0%
2015  0.7
5%
Percentage 
of Revenue
2015  5% STRATEGIC REPORT GOOCH & HOUSEGO PLC 20
Financial and Operating Review
PERFORMANCE OVERVIEW
The business has once again delivered strong profitable growth.
Group revenue for the year was a record £86.1 million. This represents an 
increase of £7.3 million, or 9% over the previous year of £78.7 million. 
During the year Gooch & Housego acquired two businesses, which 
contributed a combined £2.4 million to group revenue and £0.3m in profit 
before tax in the year. On a constant currency basis revenue was 3% higher 
than the previous year.
During 2016, Gooch & Housego invested £9.7 million in property , plant and 
equipment and £5.7 million in acquisitions. Despite this the business has 
maintained a net cash position of £11.7 million at 30 September 2016 
(2015 : £17.3 million), through strong operating cash flows.
In the financial year under review, adjusted operating margins were 16.6%, 
compared to 16.6% in 2015. Margin was influenced by a number of factors 
during the year. Whilst there were price pressures in our navigation and 
fibre laser components businesses, this was counteracted by the business 
benefiting from volume driven margin increases in our Torquay fibre 
based and Orlando instrumentation businesses.
REVENUE
 2016 2015
Year ended 30 September £’000 % £’000 %
Industrial 54,296 63% 46,054 59%
Aerospace & Defence (A&D)  19,977 23% 19,804 25%
Life Sciences 7,904 9% 8,978 11%
Scientific Research 3,874 5% 3,866 5%
Group Revenue 86,051 100% 78,702 100%
In our Industrial segment, revenue grew by 18% from £46.1 million last 
year to £54.3 million this year. Revenue in our Aerospace & Defence 
business was broadly flat, and our Life Sciences business fell from £9.0 
million to £7.9 million. Sales into our smallest segment, Scientific 
Research, remained stable at £3.9 million.
GROUP EARNINGS PERFORMANCE 
All amounts in £’000 Adjusted Reported
Year ended  
  30 September 2016 2015 2016 2015
Operating profit 14,258 13,102 10,184 10,294
Net finance costs (88) (188) (88) (188)
Profit before taxation 14,170 12,914 10,096 10,106
Taxation (3,865) (3,380) (3,048) (2,647)
Profit for the year 10,305 9,534 7,048 7,459
Basic earnings  
  per share (p) 42.5p 39.5p 29.1p 30.9p
The Group adjusted profit before tax amounted to £14.2 million (2015: 
£12.9 million) and represented a net margin of 16.5% which is broadly 
consistent with the previous year.  Statutory profit before tax was £10.1 
million compared with £10.1 million last year, including the one-off costs 
associated with the Palo Alto facility move, restructuring costs, provision 
for regulatory risk compliance and acquisition costs. 
The adjusted effective rate of tax was 27.3% (2015: 26.2%). The effective 
rate of tax of 30.2% (2015: 26.2%) was higher due to the inclusion of the 
Research and Development Expenditure Credit (“RDEC”) within operating 
profit for the year and the effect of the impairment of goodwill and gain on 
bargain purchase, neither of which are subject to tax. The rate reflects a 
combination of the varying tax rates applicable throughout the countries 
in which the Group operates, principally the UK and the USA.
The effective rate of tax should benefit in the future from further reductions 
in the UK tax rate, although the proportion of profit generated in the USA, 
where tax rates are higher, will affect this.
Adjusted earnings per share (EPS) increased from 39.5p to 42.5p. Basic 
EPS was 29.1p compared with 30.9p last year.
NON GAAP MEASURES
The Company uses a number of non GAAP measures which are shown in 
the table above and in the segmental analysis. These measures are used 
to illustrate the impact of non-recurring and non-trading items on the 
Company’s financial results. These are the impact of the amortisation of 
acquired intangible assets and costs associated with restructuring 
activities, the provision for regulatory risk compliance and also include the 
gain on bargain purchase of Alfalight and impairment of goodwill in 2016. 
The Company also uses the term EBITDA (Earnings before interest, taxation, 
depreciation and amortisation), which is a commonly used measure of 
operating performance and cash flow.
RECONCILIATION OF ADJUSTED PERFORMANCE MEASURES
 Operating Profit Net finance costs Taxation Earnings per share
Year ended 30 September 2016 2015 2016  2015 2016 2015 2016 2015
 £000 £000 £000 £000 £000 £000 pence pence
Reported 10,184 10,294 (88) (188) (3,048) (2,647) 29.1p 30.9p
Amortisation of acquired intangible assets 1,263 1,604 – – (333) (419) 3.8p 4.9p
Gain on bargain purchase (578) – – – – – (2.4p) –
Impairment of goodwill 771 – – – – – 3.2p –
Provision for regulatory compliance risk 500 – – – – – 2.1p –
Restructuring costs 1,652 1,204 – – (391) (314) 5.2p 3.7p
Transaction fees 466 – – – (93) – 1.5p –
Adjusted 14,258 13,102 (88) (188) (3,865) (3,380) 42.5p 39.5p STRATEGIC REPORT GOOCH & HOUSEGO PLC 21
SEGMENTAL ANALYSIS
Industrial
Our Industrial business grew strongly during the year, with revenues of 
£54.3 million, compared with £46.1 million last year. This growth was 
largely driven by a combination of our sensing, instrumentation and 
telecommunications businesses. Revenue from the Group’s industrial 
laser business segment, after a poor first quarter, showed an increase 
compared with the previous year. The traditional Q Switch now represents 
10% of total group revenue (2015: 9.9%). 
After adjusting for the costs associated with the Palo Alto facility move and 
restructuring, operating profit for the Industrial sector as a whole was 12% 
higher at £10.8 million, compared with £9.6 million last year. This primarily 
reflects a combination of the growth in our Torquay fibre business and 
our instrumentation business.
Aerospace & Defence (A&D)
A&D revenue was £20.0 million, broadly flat on last year, although this is 
being flattered by the acquisitions which contributed revenue of £2.4m in 
this sector. The business provides both components and sub-systems to 
the Company’s European and US A&D customers. We continue to believe 
this business represents a growth opportunity for Gooch & Housego, as 
optical technologies continue to be increasingly deployed in this market 
sector. This sector has been significantly strengthened this year with the 
acquisitions in July of Kent Periscopes and Alfalight. Operating margins in 
this sector fell as a result of the timing of some programme business and 
tighter margins on our navigation components business.
Life Sciences
In 2016 Life Sciences revenue was down by 12% compared to the prior year. 
Sales of electro-optic products into the laser surgery market remained 
strong, but this was offset by a decline in sales into Optical Coherence 
Tomography due to customers’ product lifecycles becoming more mature. 
Despite this, adjusted operating profit in this sector was in line with the 
previous year due to a more beneficial mix. We are working on the next 
generation products with key customers and continue to believe this 
market offers a significant growth opportunity.
Scientific Research
Our activities in the Scientific Research market are dominated by a small 
number of large, long-term programmes. This market was stable in 2016 
and this resulted in a consistent financial performance when compared 
to the previous year. 
RESEARCH & DEVELOPMENT (R&D)
Gooch & Housego continues to invest in R&D in all areas of the business 
and regards this as fundamental to the continued growth of the company. 
There were a record 21 product releases in 2016, together with five new 
patents granted.
Expenditure on R&D in the year to 30 September 2016 increased by 15.4% 
from £6.4 million to £7.4 million. A proportion of this increase was funded 
through UK and European grant funding. R&D expenditure represented 
8.6% of revenue (2015: 8.0%). The Group capitalised £0.7m (2015: £0.7 
million) of development expenditure.
SITE PERFORMANCE
In 2015 G&H took the decision to re-locate its Palo Alto facility to nearby 
Fremont. This decision was based on a landlord change which threatened 
the long term viability of Palo Alto as a location. This move is now complete 
and has provided a much improved facility and room for growth at a similar 
rent. The move itself took longer than expected due to regulatory licence 
and landlord contractual issues. The delay contributed an additional £0.9 
million in costs in the first six months of 2016. 
The Torquay site has recently been expanded and upgraded allowing us 
to manage the capacity challenges that come with a 2.5 fold increase in 
demand for Hi-Reliability undersea fibre couplers. Further investment in 
capacity at this site will continue throughout 2017.
Our continuous improvement programme is proceeding well. Operationally 
the move to a lean manufacturing environment across all of our sites is set 
to deliver efficiency savings in 2017 and the drive for fewer more productive 
R&D projects combined with enhanced business development support has 
started to deliver an increased number of product opportunities. 
As reported last year, the Company has committed to upgrading its 
Cleveland, Ohio facility. This facility, which houses the business’s world 
leading crystal growth capabilities, is a key contributor to current and 
future profitability and will benefit from the proposed modernisation. 
The refurbished facility will help drive much needed operational efficiency 
as well as showcasing our capabilities to customers. The upgrade is 
expected to be a two-year programme costing in the region of $5 million.
NON TRADING ITEMS
Restructuring costs of £1.7 million (2015: £1.2 million) related to the 
re-location of our Palo Alto facility to Fremont and to restructuring costs 
arising from the efficiency savings the business was able to derive from its 
operational efficiency measures.
Management have booked a provision for export compliance risk of £0.5m 
in the year. Further details are given in note 23. STRATEGIC REPORT GOOCH & HOUSEGO PLC 22
‘‘
The business has once again 
delivered strong profitable growth.” STRATEGIC REPORT GOOCH & HOUSEGO PLC 23
BALANCE SHEET
The Group’s total equity at the end of the year was £90.2 million, an increase 
of £11.8 million over the prior year. This increase comprised £6.0 million due 
to foreign exchange and £5.8 million from retained earnings.
Additions to property, plant and equipment totalled £8.4m (excluding 
acquisitions). The main additions related to investment in plant and 
machinery, the expansion of our Torquay facility, the refurbishment of 
our Cleveland facility and the Palo Alto facility move.
Working capital was 24.5% of revenue in the current year compared  
to 20.3% in 2015. This metric has been adversely affected by the 
acquisitions in July and the impact of the GBP:USD exchange rate on 
balance sheet values.
Inventory at the year end was £19.0 million, an increase of £3.0 million 
over the prior year. Once the impact of currency and the inventory 
attributable to the acquisitions are removed, the underlying inventory 
fell by £0.5m, or 3%, in the year.
T rade receivables have increased by £8.8 million from £11.7 million in 2015 
to £20.5 million at this year-end. This is a function of a strong shipment 
profile towards the end of the year, the acquisitions and the impact of 
foreign exchange rates.
Cash balances at 30 September 2016 were £23.2 million, compared with 
£22.6 million at 30 September 2015. Net cash flows from operating activities 
generated £12.6 million, compared with £13.6 million last year. During the 
year the business moved from a net cash position of £17.3 million as at 
30 September 2015 to a net cash position of £11.7 million, following the 
acquisition of Alfalight & Kent Periscopes and the £9.7 million invested in 
property, plant and equipment. 
MOVEMENT IN NET CASH 
All amounts in £m  Gross Gross Net
  Cash Debt Cash
At 1 October 2015  22.6 (5.3) 17.3
Operating cash flows  15.7 – 15.7
Debt repayment (net of drawdown) 5.4 (5.4) –
Acquisitions  (5.7) – (5.7)
Net capital expenditure  (10.3) – (10.3)
Working capital  (1.8) – (1.8)
Interest, tax and dividends  (3.5) – (3.5)
Exchange movement  0.8 (0.8) -
At 30 September 2016  23.2 (11.5) 11.7
ORDER BOOK
As at 30 September 2016, the Group order book stood at £52.8 million, 
compared to £36.3 million at the end of the 2015 financial year, a 45% 
increase. The acquisition of Alfalight and Kent Periscopes added £11.4 
million to the order book. On a constant currency basis the order book was 
36% higher. Book to bill ratios for the business as a whole were 1.01 times 
(six month rolling average) as at 30 September 2016.
STAFF
The Group workforce increased from 700 at 30 September 2015 to 755 at 
the end of September 2016, an increase of 55. This is a net position and 
therefore reflects both the reductions in staffing resulting from the work 
the business has done in driving efficiency improvements and the 
additional headcount that has come from the recent acquisitions.
DIVIDENDS
The Directors propose a final dividend of 5.7p per share making a total 
dividend per share for the year of 9.0p (2015: 8.2p), an increase of 9.8%.  
The final dividend, if approved, will be payable on 3 March 2017 to 
shareholders on the Company’s share register as at the close of business 
on 16 December 2016. 
KEY PERFORMANCE INDICATORS (KPIS)
The Group objective is to deliver sustainable, long-term growth in revenue 
and profits. This is to be achieved through the execution of the Board’s 
strategies. 
In striving to achieve these strategic objectives, the main financial 
performance measures monitored by the Board are:
Total revenue growth  2016 2015 2014
At actual exchange rates  9% 12% 11%
At constant exchange rates  3% 8% 16%
The Board is focused on driving revenue growth by investing both organically 
and through acquisitions. The Group business has delivered underlying 
growth which was particularly strong in the second half of the year.
Target market revenue  2016 2015 2014
Aerospace & Defence (£m)  20.0 19.8 18.8
Life Sciences (£m)  7.9 9.0 7.3
The Group target markets of Aerospace & Defence and Life Sciences provide 
a route to sustainable growth, and a more diversified revenue base. These 
markets also provide significant opportunities for Gooch & Housego to 
migrate up the value-chain from materials and components to higher value 
sub-assemblies, modules and systems in response to the trend for our 
larger customers to outsource increasingly complex parts of their business. 
The decline in revenue from Life Sciences was driven by lower demand 
from one area of our Life Sciences markets.
Net cash analysis  2016 2015 2014
Net cash (£m)  11.7 17.3 8.7
In order to balance business risk with the investment needs of the Company , 
management closely monitors and manages net cash. This year, following 
the acquisition of Alfalight and Kent Periscopes and the investment in capital 
assets the net cash position reduced from £17.3 million to £11.7 million.
Earnings per share (EPS)  2016 2015 2014
Adjusted diluted EPS (pence)  41.7p 38.9p 35.2p
As a result of a strong trading performance, the business has been able 
to deliver growth in adjusted diluted EPS of 7.2%, from 38.9p to 41.7p in 
2016.
The revenue, cash and earnings per share targets for the year were met. STRATEGIES
DIVERSIFICATION  
To develop, through R&D and acquisition, a presence in new markets that 
offer the potential for significant growth as a result of their adoption of 
photonic technology, while also reducing our exposure to cyclicality in 
any particular sector.
Progress 
a)  Diversification within the Industrial market. In 2016, Gooch & Housego 
grew its business in the areas of: 
 • Instrumentation
 • Telecommunications
 • Sensing
b) Aerospace & Defence.
 • Acquisition of Alfalight & Kent Periscopes Limited
c) Life Sciences
 • Recruitment of Life Sciences business development manager
MOVING UP THE VALUE CHAIN
To leverage our excellence in materials and components to move up the 
value-chain to more complex sub-assemblies and systems.
Progress 
•  Continued expansion of the Systems Technology Group to further 
focus the business’s drive up the value chain.
•  Acquisition of Alfalight & Kent Periscopes Limited
ORGANIC RESEARCH & DEVELOPMENT
To leverage Gooch & Housego’s world leading products, technologies 
and capabilities to develop innovative new products.
Progress 
•  In 2016 the company’s organic research & development programmes 
have delivered a record twenty one new products. In addition, five new 
patents have been awarded.
•  Expansion of the STG via recruitment.
•  The Group continues to invest in longer term R&D projects in all of its 
key markets. Investment in R&D increased by 15.4% in 2016.  
STRATEGIC REPORT GOOCH & HOUSEGO PLC 24
Strategy Overview
Gooch & Housego’s strategy is built around the twin pillars of diversification and moving up the value chain. In order to ensure its strategic goals are 
met management considers investment in R&D, acquisitions and strategic partnerships. STRATEGIC REPORT GOOCH & HOUSEGO PLC 25
Principal Risks and Uncertainties
Gooch & Housego adopts a formal risk identification and management process designed to ensure that risks are properly identified, prioritised, 
evaluated and mitigated to the extent possible. A formal group wide risk register is maintained and approved by the Board on an annual basis.
The following risks are, in the opinion of the Board, the principal risks which affect Gooch & Housego. 
RISK MITIGATION
Retention of key personnel
The Group recognises the importance of retaining and developing  
its highly skilled management team and workforce in order to  
achieve its strategic objectives.
The Group maintains development and reward schemes to  
encourage individuals to play a long term role in the future development 
of the Group.
Future trading levels and order book
Adverse changes in the major markets in which the Group operates  
can have a significant impact on the Group’s performance.
Gooch & Housego PLC has seen significant growth in its business in 
recent years. Through its strategies of market diversification and moving 
up the value chain, the Group seeks to provide routes to  
new markets and reduce the dependence on any one market sector.  
Whilst the continued growth in the business is difficult to predict,  
the year-end order book was 45% higher than the previous year, 
including the effect of acquisitions. 
Financing
Although currently in a net cash position, management expects to 
require debt financing in order to achieve the Group’s growth strategy. 
Any restriction in the availability of such financing could affect the 
Group’s strategy.
As at 30 September 2016, the Group was in a net cash position of 
£11.7m (2015: net cash of £17.3m). The Group operates within certain 
banking covenants which it has reported under and complied with 
during the financial year. The Group undertakes detailed and regular 
financial planning and forecasting reviews to minimise any financial  
risk due to changing market conditions.
Further details are given in note 22. 
Research and Development
The development of new processes and products involves risks such as 
development timescales, which may take longer than originally forecast 
and hence involve more cost. There are also technical risks associated 
with development programmes that mean expected results may not be 
delivered.  
Expenditure is only capitalised once the commercial and technical 
feasibility of a product is proven. These risks are minimised by operating 
managed research and development programmes which are reviewed 
against cost and technical progress expectations.
During the year, £0.7m of product development costs have  
been capitalised. 
Non-compliance with legislation 
There is a risk of failure to comply with legislation which applies to the 
Group in the various territories in which it operates.
The Group has compliance staff in its key territories who develop the 
control framework and perform regular audits.
Foreign exchange 
The business is exposed to the impact of foreign currency variances  
on trading transactions and on the translation of the net assets of 
overseas subsidiaries. This exposure is principally to the US Dollar. 
Monthly cash management reporting and forecasting is in place to 
facilitate management of this risk.
The exposure is partially naturally hedged because a significant 
proportion of operating costs are denominated in US Dollars. The  
Group does not undertake speculative foreign currency transactions.
Quality 
The Group prides itself on the highest standards of product quality 
and customer satisfaction. In doing this, it recognises that a failure to 
maintain such standards would be detrimental to its future  
trading performance.  
An ongoing emphasis is placed on quality control and customer 
communication. During 2016, the quality team has continued  
to develop the company’s quality control systems.
The strategic report has been approved by the Board of Directors and signed on its behalf by:
Mark Webster 
Chief Executive Officer
29 November 2016 GOVERNANCE GOOCH & HOUSEGO PLC 26
Board of Directors
EXECUTIVE DIRECTORS
Mark Webster 
Chief Executive Officer 
(Appointed January 2015)
Mark was previously Chief Executive Officer of Bio Products Laboratory Ltd. He has extensive executive 
experience and has held a number of senior leadership roles, such as Senior Vice President, Bayer 
Healthcare AG, Head of Global Strategic Marketing and M&A/Business Development, Shire 
Pharmaceuticals Group PLC and Vice President, Abbott Laboratories Inc.
Mark was a non-executive Director of Gooch & Housego PLC before becoming an Executive Officer. 
He has also been a non-executive Director at Abcam PLC. 
Mark holds an honours degree in Chemistry from the University of Durham.
Andrew Boteler 
Chief Financial Officer 
(Appointed August 2009)
Andrew Boteler is a Chartered Accountant, having trained with Ernst & Young and qualified in 1993.  
He has an honours degree from Exeter University.
In 2002 Andrew was part of the team that bought out the US telecommunications components group 
JDSU’s UK fibre optics business, to establish SIFAM Fibre Optics Ltd. There, he held the position of 
Finance Director until the company was acquired by Gooch & Housego PLC in May 2007.
Between 2007 and 2009 Andrew held the positions of Head of Finance for Europe, Middle East and Africa 
and Acting Chief Financial Officer for Gooch & Housego PLC, before joining the Board in August 2009.
Alex Warnock 
Chief Operating Officer 
(Appointed November 2014)
Alex Warnock is a Chartered Engineer and member of the Institute of Engineering & Technology and 
Institute of Directors. Prior to joining Gooch & Housego PLC, Alex held senior positions at Optos PLC, most 
recently Chief Operating Officer. He has also worked in senior roles at Johnson & Johnson and Pace Micro 
Technology Inc. Alex has an honours degree in Electrical and Electronic Engineering. He has lived and 
worked in the USA and Germany.  GOVERNANCE GOOCH & HOUSEGO PLC 27
NON-EXECUTIVE DIRECTORS
Brian Phillipson 
(Appointed 1 September 2015)
Brian has extensive experience of the Aerospace & Defence industry in both Strategic and Operational 
roles across a range of locations. Most recently he has been a Board Member and Business Unit MD at 
Marshall Aerospace and Defence Group. Previously he held a number of senior roles within BAe Systems 
PLC, including Director of Strategy; Group Managing Director Major Programme Assurance; Group 
Managing Director Sea Systems; and first CEO, then later COO, of Eurofighter GmbH based in Munich.
Brian holds an MA (Hons) in Engineering from Cambridge University.
Brian Phillipson took over the role of Chairman of the Remuneration Committee with effect from  
1 October 2016.
Paul Heal 
(Appointed January 2008)
Paul Heal retired from his position as a client service Partner with PricewaterhouseCoopers at the end of 
2007, leaving a role he had held for 20 years. Based in their Bristol office, he was primarily responsible for 
middle market clients ranging from smaller listed companies (market cap <£250m) to venture capital 
backed and privately owned businesses. Gooch & Housego PLC was a client of Paul’s prior to September 
2003 and he advised the company through the preparation for IPO, and acted as reporting accountant 
for the flotation in 1997.
Paul is a non-executive Director of a number of other commercial and charitable organisations. Commercial 
directorships include Andrews and Partners (Estate Agents) and the West of England Trust (including 
Jordans Limited and Jordan Publishing Limited). He is a Trustee of The Theatre Royal, Bath and The 
Andrews Charitable Trust.
Paul Heal will retire at the forthcoming Annual General Meeting.
Dr Peter Bordui 
(Appointed February 2012)
Peter Bordui has twenty five years’ experience in the photonics industry in senior leadership roles within 
Bookham, NewFocus, JDSU and Crystal Technology (at the time a subsidiary of Siemens) and has held a 
number of additional non-executive director roles. He is a governing trustee of a private charitable 
foundation and a director of the non-profit organisation American Citizens Abroad.
Peter has bachelors, masters and PhD degrees from MIT. 
Peter has taken on the role of Senior Independent Director from 1 October 2016.
Gareth Jones 
Non-Executive Chairman 
(Appointed January 2015. Gareth was formerly Chief Executive Officer from January 2003)
Gareth Jones has an honours degree in Physics from Imperial College and is a Fellow of the Institute of 
Physics. He joined Gooch & Housego in 1978 and was instrumental in the development of new products 
and capabilities that helped transform the business from a craft-based optical engineering company into 
today’s global technology business.
Gareth became T echnical Director in 1985 and Managing Director in 1995. In 1997 he was a member of the 
team that led Gooch & Housego’s IPO on the Alternative Investment Market. In 2000, he left Gooch & 
Housego to become a Partner in a leading UK venture capital firm. He re-joined Gooch & Housego in 2003 
as Chief Executive Officer. GOVERNANCE GOOCH & HOUSEGO PLC 28
Directors’ Report
The Directors present their report together with the audited consolidated 
financial statements for the year ended 30 September 2016.
A review of the development and performance of the Group during the year 
and its future prospects is set out in the Financial Highlights on page 1 and 
in the Financial and Operating Review on pages 20 to 23. An outline of the 
business’s principal activities, strategy and the Group’s progress in the year 
towards these strategies is given in the Strategic Report on pages 8 to 25. 
An analysis of the segmental information by market sector is given on 
pages 12 to 19.
KEY FINANCIAL PERFORMANCE INDICATORS (“KPIS”)
The Group uses a selection of KPIs to monitor and review the performance 
of the business. These are detailed from page 23 of the Financial and 
Operating Review. 
DIVIDENDS
During the year ended 30 September 2016 a final dividend of 5.2p per 
share was paid for the previous financial year. The final 2014 dividend of 
4.6p per share was paid in the year ended 30 September 2015. A further 
interim dividend of 3.3p per share was paid for the half year ended 31 
March 2016 (2015: 3.0p).
For the year ended 30 September 2016, the Directors propose that a 
final dividend of 5.7p per share be paid.
SUBSTANTIAL SHAREHOLDINGS
As at 15 November 2016, the following shareholders had notified the 
Company that they held an interest in 3% or more of its issued ordinary 
share capital:
Shareholder   Number % holding
Octopus Investments   3,230,536 13.32% 
Standard Life Investments   2,178,597 8.98%
Schroder Investment Management   2,089,281 8.61%
Investec Wealth & Investment   2,032,895 8.38%
BlackRock Investment Management   1,974,913 8.14%
Franklin T empleton Investment Management  1,435,000 5.92%
JM Finn & Co   814,575 3.36%
Hargreave Hale   749,104 3.09%
Save for these interests, the Directors have not been notified that any 
person is directly or indirectly interested in 3% or more of the issued 
ordinary share capital of the Company. 
DIRECTORS
The Directors in office during the year and up to the date of signing the 
financial statements and their beneficial interests in the issued ordinary 
share capital of the Company were as follows:
 Number of shares at  Number of shares at
 30 September 2016 30 September 2015
Non-executive Directors   
 Gareth Jones 55,401 55,401  
 Paul Heal 13,085 13,085
 Dr Peter Bordui – –
 Brian Phillipson - -
Executive Directors   
 Mark Webster  - -
 Andrew N Boteler 26,181 26,181
 Alex Warnock - -
Details of Directors’ interests in options to subscribe for shares of the 
Company are given in the Remuneration Committee Report.
TREASURY POLICIES
The Group’s treasury policies are designed to manage financial risk to the 
Group that arises from operating in a number of foreign currencies and to 
maximise interest income on cash deposits, whilst maintaining the security 
of these deposits. As an international group of companies, the main 
exposure is in respect of foreign currency risk on the trading transactions 
undertaken by group companies and on the translation of the net assets 
of overseas subsidiaries. This exposure is principally to the US dollar.
Monthly cash management reporting and forecasting is in place to facilitate 
management of this currency risk. The operations of group treasury take 
place at head office.
All balances not immediately required for group operations are placed on 
short-term deposit with leading international highly rated financial 
institutions.
At a transactional level, the Group seeks to offset its exposure to foreign 
exchange movements by contracting with significant supply partners in 
US Dollars and undertakes regular financial reviews to assess whether it 
would be appropriate for the Group to enter into currency hedging 
contracts to mitigate the currency risk.  During the year there were no 
forward contracts in place.
The Group’s bank borrowings are denominated in US Dollars, which acts 
as a partial hedge of a net investment against its US Dollar denominated 
companies within the Group. GOVERNANCE GOOCH & HOUSEGO PLC 29
RESEARCH AND DEVELOPMENT
The Group has a continuing commitment to a high level of research and 
development. This commitment is to actively develop new technologies 
and capabilities that will become a key part of the Group’s future product 
portfolio and revenue.
DIRECTORS’ INDEMNITIES
The Directors have the benefit of an indemnity which is a qualifying third 
party indemnity provision as defined by Section 234 of the Companies 
Act 2006. The indemnity was in force throughout the last financial year 
and is currently in force. The Company also purchased and maintained 
throughout the financial year Directors’ and Officers’ liability insurance in 
respect of itself and its Directors.
EMPLOYEE INVOLVEMENT
The Group is committed to including all employees in the performance and 
development of the business. An established employee appraisal and 
reward scheme is in operation and employees are appraised regularly with 
relevant development support provided by the Group.
The Group attaches considerable importance to informing and involving 
its employees on matters which concern them and in the achievement of 
its business objectives. The Group has a formal employee communication 
plan involving regular meetings between management and employees 
and the provision of a comprehensive employee handbook.
STATEMENT ON EQUAL EMPLOYMENT OPPORTUNITIES
The Group is committed to providing equal employment opportunities for 
all employees and applicants for employment. The company does not 
discriminate in employment opportunity or practices on the grounds of 
gender, race, religion or belief, age, disability, sexual orientation, or any 
other characteristic protected by national laws under which the Group 
operates. Appropriate arrangements are made for the continued 
employment and training, career development and promotion of disabled 
persons employed by the group. If members of staff become disabled the 
group continues employment, either in the same or an alternative position, 
with appropriate retraining being given if necessary.
Our employees have diverse backgrounds, skills, and ideas that 
collectively contribute to the Company’s success. The Group operates to 
national standards of diversity in employment including the Affirmative 
Action Program (AAP) in the United States which is designed to attract, 
retain and develop a diverse pool of talent and which operates to an audit 
and reporting system.
CORPORATE GOVERNANCE
The Board recognises the importance of good corporate governance and 
has put in place procedures it considers appropriate.
The Board currently comprises three executive and four non-executive 
Directors. The directors holding office during the period of this report 
and their biographies are detailed from page 26 and are also available on 
our website; www.goochandhousego.com
The Board focuses on formulation of strategy, management of effective 
business controls and review of business performance. The Board is 
specifically responsible for the approval of annual and interim results and 
interim management statements, acquisitions and disposals, major 
capital expenditure, borrowings, director and company secretary 
appointments and removals, any material litigation, strategic forecasting 
and major development projects.
A framework of delegated authorities is in place that details the structure 
of delegation below Board level and includes matters reserved to the Board.
All the non-executive Directors are considered by the Board to be 
independent in character and judgement.
In accordance with the Company’s Articles of Association all directors will 
retire at the Annual General Meeting and, being eligible, offer themselves 
for re-election.
The Board has three formally constituted committees, the Audit committee, 
the Remuneration committee and the Nomination committee.
Board membership and meeting attendance is presented in the  
following table. 
Executive Directors 
 Mark Webster 8/8
 Andrew Boteler 8/8
 Alex Warnock 8/8
Non-executive Directors 
 Gareth Jones 7/8
 Paul Heal 8/8
 Peter Bordui 8/8
 Brian Phillipson 8/8
‘‘
Strong cash performance delivering 
net cash of £11.7m after investing 
£5.7m in acquisitions and £9.7m in 
property, plant and equipment.” GOVERNANCE GOOCH & HOUSEGO PLC 30
RISK MANAGEMENT AND INTERNAL CONTROL
The Directors acknowledge that they are responsible for the Group’s 
system of internal financial control. The system can provide only reasonable, 
and not absolute, assurance against material misstatements and losses.
There are defined lines of responsibility and delegation of authorities. 
There are also internal financial controls in existence which are centrally 
maintained and documented and provide reasonable assurance of the 
maintenance of proper accounting records and the reliability of financial 
information used within the business.
The Group does not have an internal audit department, but senior finance 
staff perform a formal, annual review of all the sites’ internal controls.
Annual budgets and three year strategic plans are prepared for each 
company. Financial and operational reports enable the Board to compare 
performance against budget and to take action where appropriate.
During the year the Group continued to develop its risk management policy , 
which is reviewed on a regular basis. Gooch & Housego has also developed 
and published its policies in relation to the Bribery Act and fraud.
FINANCIAL RISK MANAGEMENT
An explanation of the Group’s financial risk management objectives is 
contained in note 5.
ENVIRONMENTAL POLICY
The policy of the Group is to meet the statutory environmental 
requirements placed upon it and to apply good environmental practice in 
its operations while recognising that it is contractually obliged to meet 
its customer requirements.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and financial 
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for 
each financial year. Under that law the directors have prepared the group 
and parent company financial statements in accordance with International 
Financial Reporting Standards (IFRSs) as adopted by the European Union. 
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 the company and of the profit or 
loss of the group for that period. In preparing these financial statements, 
the directors are required to:
•  select suitable accounting policies and then apply them consistently;
•  make judgements and accounting estimates that are reasonable and 
prudent;
•  state whether IFRSs as adopted by the European Union have been 
followed, subject to any material departures disclosed and explained in 
the financial statements;
•  prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the company’s transactions and 
disclose with reasonable accuracy at any time the financial position of the 
company and enable them to ensure that the financial statements comply 
with the Companies Act 2006. They are also responsible for safeguarding 
the assets of the company and the group and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the 
company’s website. Legislation in the United Kingdom governing the 
preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions. 
So far as each Director is aware, there is no relevant audit information of 
which the Company’s and Group’s auditors are unaware. Each Director has 
taken all the steps that he ought to have taken in his duty as a Director 
to make himself aware of any relevant audit information and to establish 
that the Company’s and Group’s auditors are aware of that information.
GOING CONCERN
Based on Management’s operating projections and cash flow forecasts, 
the Directors believe that the Group will generate sufficient cash and 
have access to working capital facilities to enable it to meet its funding 
requirements for at least the next 12 months and comply with its 
banking covenants.
Accordingly, the Directors have formed a judgement, at the time of 
approving the financial statements, that there is a reasonable expectation 
that the Company and the Group have 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.
INDEPENDENT AUDITORS
A resolution to reappoint PricewaterhouseCoopers LLP as auditors to the 
Company and the Group will be proposed at the Annual General Meeting.
Approved and signed on behalf of the Board of Directors by:
Mark Webster
Director
29 November 2016 GOVERNANCE GOOCH & HOUSEGO PLC 31 GOVERNANCE GOOCH & HOUSEGO PLC 32
Audit Committee Report
The Audit Committee is responsible for ensuring that the financial 
performance of the Group is properly monitored, controlled and reported. 
The Audit Committee consists of the Chairman and three Independent 
Non-executive Directors and it has an appropriate balance between those 
individuals with finance or accounting training and those from a general 
business background. 
The Committee has met with the external auditors on three occasions 
during the year, together with the Executive Directors. At meetings 
attended by the external auditors, time is allowed for the Audit Committee 
to discuss issues with the external auditors without the Executive 
Directors being present. 
There were no material changes in the reporting standards that affect 
our consolidated financial statements in 2016.
ROLE OF THE COMMITTEE
The Audit Committee operates under formal terms of reference which are 
reviewed annually. The Committee considers that it has discharged its 
responsibilities as set out in its terms of reference to the extent appropriate 
in the year. The Audit Committee:
•  Monitors the integrity of the Company’s financial statements and reviews 
significant financial reporting judgements.
•  Reviews the effectiveness of financial and regulatory compliance 
controls and systems.
•  Oversees the relationship with the external auditors including agreeing 
their fee, scope of any non-audit services and fee and assessing their 
independence and effectiveness.
AREAS OF FOCUS FOR THE AUDIT COMMITTEE
The following have been areas of focus during 2016:
•  Financial reporting at the half year and full year
•  Performance of the external audit, including meeting with the auditors 
at the planning and completion stages of their work for both the half 
and full year
•  Governance policies and procedures
•  Assessments of the effectiveness of the external audit process and 
effectiveness of the Audit Committee
•  Review of significant accounting policies and internal financial control 
systems
•  Review of the Group’s risk register
•  Appropriateness of the Group’s non-audit service policy
•  Consideration of key judgements and areas of focus affecting the 
financial statements
Paul Heal
Chairman of the Audit Committee
29 November 2016
MEMBERSHIP AND ATTENDANCE AT MEETINGS HELD IN 2016
Non-executive Directors 
 Gareth Jones 2/3
 Dr Peter Bordui 3/3
 Paul Heal 3/3
 Brian Phillipson 3/3
Executive Directors 
 Mark Webster 3/3
 Andrew Boteler 3/3
 Alex Warnock 3/3
Nomination Committee Report
The Nomination Committee, which consists of the Chief Executive Officer 
and all four Non-Executive Directors, is responsible for the composition of 
the Board.
ROLE OF THE COMMITTEE
•  Reviews the composition of the Board and its committees.
•  Identifies and recommends for Board approval suitable candidates to 
be appointed to the Board.
•  Considers succession planning for Directors and other senior executives 
and in doing this considers diversity, experience, knowledge and skills.
AREAS OF FOCUS FOR THE NOMINATION COMMITTEE 
•  Succession Planning
•  Search for senior executives
ADVISORS
The Nomination Committee did not appoint any advisors during the year. 
Paul Heal will retire during the year ending 30 September 2017. The 
Nomination Committee have determined the selection criteria for his 
successor and a formal search will commence early in FY17. 
Peter Bordui
Chairman of the Nomination Committee
29 November 2016
MEMBERSHIP AND ATTENDANCE AT MEETINGS HELD IN 2015
Non-executive Directors 
 Gareth Jones 1/1
 Paul Heal 1/1
 Dr Peter Bordui 1/1
 Brian Phillipson 1/1
Executive Directors 
 Mark Webster 1/1 GOVERNANCE GOOCH & HOUSEGO PLC 33
Remuneration Committee Report
INTRODUCTION
It is an objective of the Group to attract and retain Directors of high calibre 
and reward them in a way which encourages the creation of value for 
shareholders. The Committee undertakes the determination of executive 
Directors’ annual remuneration packages and these are reviewed with 
effect from 1 October each year.  No executive Director plays a part in the 
discussion about their remuneration.  
Although not a member of the committee, the Chief Executive Officer 
submits a report outlining proposals and is usually requested to present 
the report to the committee. After presenting the report he withdraws 
from the meeting and does not participate in the decision making or 
voting processes. 
Executive Directors are paid a basic salary together with annual bonus 
payments based on the achievement of Group profitability and cash targets. 
In addition, executive Directors participate in a share option scheme and 
receive benefits in kind, including medical expenses and insurance. 
Non-executive directors are paid a fee to attend board meetings and to 
serve as members of the Audit, Nomination and Remuneration committees. 
Further payments may be made in respect of additional services 
provided at the request of the Company. 
MEMBERSHIP AND ATTENDANCE AT MEETINGS HELD IN 2016
Non-executive Directors 
Gareth Jones  2/2
Dr Peter Bordui  2/2
Paul Heal 2/2
Brian Phillipson 2/2
2016 PERFORMANCE
Gooch & Housego has continued to perform well in 2016, delivering 
strong financial performance and continuing to make progress in its key 
strategic goals of diversification and moving up the value chain.
In terms of financial performance, adjusted profit before tax increased by 
9.7% to £14.2m. Once again a strong cash performance resulted in the 
Group reporting a net cash position of £11.7m, after significant investment 
in property, plant and equipment, and two acquisitions. The increasing 
strength of the balance sheet meant that the Company was able to 
recommend a 9.8% increase in the total dividend for the year.
Diversification and delivering growth have continued to be the principal 
strategic themes of the business. The trend towards a more balanced 
spread of business across the Company’s principal market sectors has 
continued. New product development at both the operational sites and 
within the Systems Technology Group continues to deliver with 21 new 
products being launched in 2016. The business has made progress on its 
drive for operational efficiency, through its continued adoption of lean 
principles. Finally the business has strengthened its Life Sciences 
Business Development capability which is expected to deliver growth for 
the business in the short to medium term. 
 
The Executive Directors’ 2016 bonus outcomes were 54% of maximum, 
reflecting the strong results for the year. 
2017 PROPOSALS
Gooch & Housego’s objective is to set salaries for its Directors within a range 
and also uses variable remuneration mechanisms to ensure that individuals 
only receive substantial remuneration for exceptional performance.
We continue to review the remuneration framework to ensure that it is 
appropriate to attract and retain executives of the right calibre.  
The committee values all feedback from shareholders and hopes to receive 
your support at the forthcoming AGM. GOVERNANCE GOOCH & HOUSEGO PLC 34
Element of
remuneration
Purpose and link to 
strategy
Policy and approach Opportunity Planned
changes
Base Salary Takes into account 
experience and personal 
contribution to the 
company’s strategy
Attracts and retains 
executives of the quality 
required to deliver the 
company’s strategy
•  Reviewed annually with changes effective 
from 1 October if applicable
•  Consideration given to individual and 
company performance
•  General pay increases across the wider 
workforce are also taken into consideration
•  Where the company considers it appropriate 
and necessary, larger increases may be 
awarded in exceptional circumstances
Base salary increases  
are applied in line with  
the outcome of the 
annual review
No
Annual Bonus Incentivise achievement 
of short-term financial 
targets that the 
Committee considers 
to be critical drivers of 
business growth
• Awarded annually
•  Award level is based upon level of normalised 
diluted earnings per share and operating cash 
flow against internal targets
•  50% of the maximum bonus is payable for 
reaching threshold targets
•  Maximum bonus is achieved for reaching 10% 
over threshold targets
Maximum of 100% of 
base salary
No
Pension Provide employees  
with market competitive 
pension scheme
•  Defined contribution personal pension plan
•  Company contributes 10% of salary
10% of base salary
The Committee keeps  
the benefit policy and 
benefit levels under 
regular review
No
Benefits Provide employees  
with market competitive 
benefits
•  Executive Directors receive private health 
insurance, life assurance and long term 
disability insurance
The Committee keeps  
the benefit policy and 
benefit levels under 
regular review
No
Long Term 
Incentive Plan 
(L TIP)
Incentivise executive 
performance over the 
longer term
Performance measures 
linked to the long-term 
strategy of the business 
and the creation of 
shareholder value over 
the longer term
•  Award levels are determined by reference to 
an individual’s position and performance prior 
to grant
•  Awards vest after three years subject to 
achievement of performance conditions  
(as set out later in the report)
Maximum award of 120% 
of base salary
No
REMUNERATION POLICY TABLE
The table below summarises our policy for 2016/17:
  
  GOVERNANCE GOOCH & HOUSEGO PLC 35
DIRECTORS’ REMUNERATION
2016 Basic pay Performance Benefits Pension Subtotal Share Total
  Related Bonus in kind contribution 2016 Options  2016
 £000 £000 £000 £000 £000 £000 £000
Executive       
  M Webster  294 146 34 - 474 - 474
  A Boteler 178 100 6 25 309 308 617
  A Warnock 225 119 12 16 372 - 372
Non-executive       
  G Jones 36 - 4 38 78 499 577
  P Heal 40 - - - 40 - 40
  Dr P Bordui 18 - - - 18 - 18
  B Phillipson 37 - - - 37 - 37
 828 365 56 79 1,328 807 2,135
2015 Basic pay Performance Benefits Pension Subtotal Share Total
  Related Bonus in kind contribution 2015 Options  2015
 £000 £000 £000 £000 £000 £000 £000
Executive       
  M Webster  275 175 19 - 469 - 469
  A Boteler 152 123 5 40 320 - 320
  A Warnock
1
 192 134 54 18 398 - 398
Non-executive       
  G Jones
2
 85 - 6 39 130 - 130
  P Heal 39 - - - 39 - 39
  Dr P Bordui 18 - - - 18 - 18
  B Phillipson
3
 3 - - - 3 - 3
  Dr J Blogh
4
 18 - - - 18 - 18
 782 432 84 97 1,395 - 1,395
The above disclosure has been audited.
1
  A Warnock was appointed on 10 November 2014. 
2
  G Jones was Chief Executive Officer until 31 December 2014. 
3
  B Phillipson was appointed on 1 September 2015. 
4
  Dr J Blogh retired on 31 December 2014. 
DIRECTORS’ PENSION ARRANGEMENTS
During the year the Company contributed to a money purchase pension 
scheme on behalf of the executive Directors. The number of Directors who 
are currently accruing benefits under a pension scheme is 2 (2015: 2). 
Contributions to a scheme on behalf of continuing Directors amount to 
10% of the Director’s basic salary. Gareth Jones sacrificed part of his salary 
in exchange for increased company pension contributions, until the 
arrangement ceased on 31 August 2016. Mark Webster has sacrificed his 
entitlement to company pension scheme contributions in exchange for 
an increase to his salary of an equal amount. Alex Warnock and Andrew 
Boteler have both sacrificed part of their pension entitlement for an 
increase in salary of the same amount.
BENEFITS IN KIND
The benefits in kind for Mark Webster include relocation expenses of 
£23,000.
DIRECTORS’ CONTRACTS
The Executive Directors have rolling service contracts that are subject to 
either six or twelve months’ notice. The Chairman and non-executive 
Directors do not have contracts of service.
DIRECTORS’ INTEREST IN SHARES OF THE COMPANY
The Directors’ interests in the shares of the Company are set out in the 
Directors’ Report on page 28. SHARE OPTIONS EXERCISED
2016  Scheme Number of Market Exercise  Exercise Total
   Share Options Price Price Date Gain
   No. p p  £’000
Executive
  A Boteler  L TIP 27,500 878.2 0.0 08/01/16 242
  A Boteler  L TIP 7,576 875.0 0.0 11/01/16 66
  G Jones  L TIP 27,500 878.2 0.0 08/01/16 242
  G Jones  L TIP 29,376 875.0 0.0 11/01/16 257
       
2015  Scheme Number of Market Exercise  Exercise Total
   Share Options Price Price Date Gain
   No. p p  £’000
Executive
  G Jones  VCP 50,000 685.0 0.0 09/12/14 343
  G Jones  VCP 62,500 685.0 0.0 15/01/15 428
  G Jones  VCP 62,900 705.0 0.0 03/03/15 443
  G Jones  CSOP 9,933 925.0 151.0 29/06/15 77
       
The VCP and CSOP exercises in the 2015 table above include options 
disclosed in the Directors’ Remuneration table for the year ended 30 
September 2013.
SHARE OPTION SCHEMES
At 30 September 2016 Gooch & Housego had one active share based 
incentive scheme as detailed below:
THE GOOCH & HOUSEGO 2013 LONG TERM INCENTIVE PLAN
The Gooch & Housego 2013 L TIP was adopted on 9 April 2013. Under the plan, awards will be made annually to key employees based on a percentage 
of salary or management grade. Subject to the satisfaction of the required TSR performance criteria and EPS financial performance, these grants will 
vest upon publication of the results of the Company three years after the grant date, with the exception of the April 2013 grant which vested in 
December 2015. The exercise price of all awards is nil.
 – Number of ordinary shares under option –
 Date of At  Awarded Exercised Lapsed At Expiry 
 grant 01.10.2015 in year in year in year 30.09.2016 Date
Executive
  M Webster 17.12.2014 91,496 – – – 91,496 17.12.2018 
  M Webster 23.12.2015 – 36,080 – – 36,080 23.12.2019
  A Warnock 17.12.2014 69,355 – – – 69,355 17.12.2018 
  A Warnock 23.12.2015 – 26,949 – – 26,949 23.12.2019
  A Boteler 09.04.2013 35,076 – (35,076) – – 16.12.2016 
  A Boteler 01.12.2013 25,911 – – – 25,911 16.12.2017 
  A Boteler 17.12.2014 28,226 – – – 28,226 17.12.2018
  A Boteler 23.12.2015 – 22,661 – – 22,661 23.12.2019
Non Executive
  G Jones 09.04.2013 56,876 – (56,876) – – 16.12.2016
  G Jones 01.12.2013 39,822 – – – 39,822 16.12.2017
 
The Gooch & Housego 2013 Long Term Incentive Plan specifies that the 
Company will operate within the standard dilution limit of 10% of the 
Company’s issued share capital over a 10 year period, but excluding the 
dilution arising from the 2010 Value Creation Plan.
During the year to 30 September 2016, £638,000 (2015: £485,000) was 
charged to the income statement in respect of the IFRS 2 share based 
payments charge on all share option schemes (valued using the Monte 
Carlo option pricing model) and £36,000 (2015: £122,000) in respect of 
employer’s national insurance contributions, based on a year end share 
price of £10.10 (2015: £8.33).
Brian Phillipson
Chairman of the Remuneration Committee
29 November 2016
GOVERNANCE GOOCH & HOUSEGO PLC 36 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 37
Independent Auditors’ Report
REPORT ON THE GROUP FINANCIAL STATEMENTS
OUR OPINION
In our opinion, Gooch & Housego plc’s group financial statements (the 
“financial statements”):
•  give a true and fair view of the state of the group’s affairs as at 30 
September 2016 and of its profit and cash flows for the year then ended;
•   have been properly prepared in accordance with International Financial 
Reporting Standards (“IFRSs”) as adopted by the European Union; and
•  have been prepared in accordance with the requirements of the 
Companies Act 2006.
WHAT WE HAVE AUDITED
The financial statements, included within the Annual Report & Financial 
Statements (the “Annual Report”), comprise:
•  the Group Balance Sheet as at 30 September 2016;
•  the Group Income Statement and Group Statement of Comprehensive 
Income for the year then ended;
•  the Group Cash Flow Statement and the Notes to the Group Cash Flow 
Statement for the year then ended;
• the Group Statement of Changes in Equity for the year then ended; and
•  the notes to the financial statements, which include a summary of 
significant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the 
Annual Report, rather than in the notes to the financial statements. 
These are cross-referenced from the financial statements and are 
identified as audited.
The financial reporting framework that has been applied in the preparation 
of the financial statements is IFRSs as adopted by the European Union, and 
applicable law.
In applying the financial reporting framework, the directors have made a 
number of subjective judgements, for example in respect of significant 
accounting estimates. In making such estimates, they have made 
assumptions and considered future events.
OPINION ON OTHER MA TTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, 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.
OTHER MA TTERS ON WHICH WE ARE REQUIRED TO REPORT BY 
EXCEPTION
ADEQUACY OF INFORMATION AND EXPLANATIONS RECEIVED
Under the Companies Act 2006 we are required to report to you if, in our 
opinion, we have not received all the information and explanations we 
require for our audit. We have no exceptions to report arising from this 
responsibility.
DIRECTORS’ REMUNERATION
Under the Companies Act 2006 we are required to report to you if, in our 
opinion, certain disclosures of directors’ remuneration specified by law are 
not made. We have no exceptions to report arising from this responsibility. 
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
OUR RESPONSIBILITIES AND THOSE OF THE DIRECTORS
As explained more fully in the Statement of Directors’ Responsibilities set out 
on page 30, the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International Standards on 
Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us 
to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the 
company’s members as a body in accordance with Chapter 3 of Part 16 of 
the Companies Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any other purpose or to 
any other person to whom this report is shown or into whose hands it may 
come save where expressly agreed by our prior consent in writing.
WHAT AN AUDIT OF FINANCIAL STATEMENTS INVOLVES
We conducted our audit in accordance with ISAs (UK & Ireland). An audit 
involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement, whether 
caused by fraud or error. This includes an assessment of: 
•  whether the accounting policies are appropriate to the group’s 
circumstances and have been consistently applied and adequately 
disclosed; 
•  the reasonableness of significant accounting estimates made by the 
directors; and 
• the overall presentation of the financial statements. 
We primarily focus our work in these areas by assessing the directors’ 
judgements against available evidence, forming our own judgements, 
and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing 
techniques, to the extent we consider necessary to provide a reasonable 
basis for us to draw conclusions. We obtain audit evidence through testing the 
effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the 
Annual Report identify material inconsistencies with the audited financial 
statements and to identify any information that is apparently materially 
incorrect based on, or materially inconsistent with, the knowledge acquired 
by us in the course of performing the audit. If we become aware of any 
apparent material misstatements or inconsistencies we consider the 
implications for our report.
OTHER MATTER
We have reported separately on the company financial statements of 
Gooch & Housego plc for the year ended 30 September 2016.
Colin Bates (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
29 November 2016
TO THE MEMBERS OF GOOCH & HOUSEGO PLC   2016 2015
 Note £000 £000
Revenue 7 86,051 78,702
Cost of revenue  (53,752) (47,659)
Gross profit  32,299 31,043
Research and Development  (6,697) (5,712)
Sales and Marketing  (6,469) (5,626)
Administration   (11,425) (10,353)
Other income and expenses 9 2,476 942
Operating profit 11 10,184 10,294
Finance income 12 39 26
Finance costs 12 (127) (214)
Profit before income tax expense  10,096 10,106
Income tax expense 13 (3,048) (2,647)
Profit for the year   7,048 7,459
Basic earnings per share 15 29.1p 30.9p
Diluted earnings per share 15 28.6p 30.4p
Reconciliation of operating profit to adjusted operating profit:
  2016 2015
  £000 £000
Operating profit  10,184 10,294
Amortisation of acquired intangible assets 17 1,263 1,604
Gain on bargain purchase 32 (578) –
Impairment of goodwill 17 771 –
Provision for regulatory compliance risk 23 500 –
Restructuring costs 11 1,652 1,204
Transaction fees 11 466 –
Adjusted operating profit  14,258 13,102
 
Group Income Statement
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 38
For the year ended 30 September 2016
  2016 2015
 Note £000 £000
Profit for the year  7,048 7,459
Other comprehensive income – items that may be reclassified subsequently to profit or loss   
Fair value adjustment of interest rate swap net of tax  – 21
Currency translation differences 26 5,954 1,800
Other comprehensive income for the year net of tax  5,954 1,821
Total comprehensive income for the year attributable to the shareholders of Gooch & Housego PLC  13,002 9,280
 
Group Statement of 
Comprehensive Income FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 39
Group Balance Sheet
For the year ended 30 September 2016
  2016 2015
 Note £000 £000
Non-current assets   
Property, plant and equipment 16 32,384 24,915
Intangible assets 17 29,916 20,155
Deferred income tax assets 24 2,674 2,552
  64,974 47,622
Current assets   
Inventories 18 18,973 16,013
Income tax assets  394 854
Trade and other receivables 19 22,679 14,394
Cash and cash equivalents 20 23,167 22,556
  65,213 53,817
Current liabilities   
Trade and other payables 21 (19,624) (14,059)
Borrowings 22 (4) (39)
Income tax liabilities  (891) (411)
Provision for other liabilities and charges 23 (940) (342)
  (21,459) (14,851)
Net current assets  43,754 38,966
Non-current liabilities   
Borrowings 22 (11,494) (5,189)
Deferred income tax liabilities 24 (4,806) (3,032)
Deferred consideration 32 (2,256) –
  (18,556) (8,221)
Net assets  90,172 78,367
Shareholders’ equity
Called up share capital 25 4,852 4,818
Share premium account 26 15,530 15,530
Merger reserve 26 2,671 2,671
Cumulative translation reserve 26 6,984 1,030
Retained earnings 26 60,135 54,318
Total equity  90,172 78,367
The financial statements for Gooch & Housego PLC, registered number 00526832, 
on pages 38 to 60 were approved by the Board of Directors on 29 November 2016  
and signed on its behalf by:
Mark Webster  
Director
Andrew N Boteler
Director   Note Called up  Share  Merger Hedging Retained Total 
    share  premium reserve rederve earnings equity
    capital account
    £000  £000  £000  £000 £000  £000
At 1 October 2014  4,774 15,420 2,671 (21) 47,093 69,937
Profit for the financial year  - - - - 7,459 7,459
Other comprehensive income for the year  - - - 21 1,800 1,821
Total comprehensive income for the year  - - - 21 9,259 9,280
Dividends 14 - - - - (1,823) (1,823)
Shares issued  44 110 - - (38) 116
Fair value of employee services  - - - - 485 485
Tax credit relating to share option schemes  - - - - 372 372
Total contributions by and distributions to owners  44 110 - - (1,004) (850)
of the parent recognised directly in equity
At 30 September 2015  4,818 15,530 2,671 - 55,348 78,367
At 1 October 2015  4,818 15,530 2,671 - 55,348 78,367
Profit for the financial year  - - - - 7,048 7,048
Other comprehensive income for the year  - - - - 5,954 5,954
Total comprehensive income for the year  - - - - 13,002 13,002
Dividends 14 - - - - (2,055) (2,055)
Shares issued  34 - - - (34) -
Fair value of employee services  - - - - 638 638
Tax credit relating to share option schemes  - - - - 220 220
Total contributions by and distributions to owners  34 - - - (1,231) (1,197)
of the parent recognised directly in equity
At 30 September 2016  4,852 15,530 2,671 - 67,119 90,172
Group Statement of Changes 
in Equity
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 40
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 41
Group Cash Flow 
Statement
For the year ended 30 September 2016
  2016 2015
  £000 £000
Cash flows from operating activities   
Cash generated from operations  13,897 14,692
Income tax paid  (1,324) (1,067)
Net cash generated from operating activities  12,573 13,625
Cash flows from investing activities   
Acquisition of subsidiaries, net of cash acquired  (5,687) -
Purchase of property, plant and equipment  (9,710) (3,053)
Sale of property, plant and equipment  - 635
Purchase of intangible assets  (629) (793)
Interest received  39 26
Interest paid  (111) (189)
Net cash used in investing activities  (16,098) (3,374)
Cash flows from financing activities   
Drawdown of borrowings  5,426 5,168
Repayment of borrowings  (39) (8,777)
Proceeds from issues of share capital  - 115
Dividends paid to ordinary shareholders  (2,055) (1,823)
Net cash generated from / (used in) financing activities  3,332 (5,317)
Net (decrease) / increase in cash  (193) 4,934
Cash at beginning of the year  22,556 17,094
Exchange gains on cash  804 528
Cash at the end of the year  23,167 22,556 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 42
Reconciliation of cash generated from operations 2016  2015
 £000 £000
Profit before income tax 10,096 10,106
Adjustments for:
- Amortisation of acquired intangible assets 1,263 1,604
- Amortisation of other intangible assets 355 301
- Gain on bargain purchase of Alfalight (578) -
- Impairment of goodwill 771 -
- Depreciation 3,042 2,715
- Loss on disposal of property, plant and equipment - 508
- Share based payment charge 638 485
- Finance income (39) (26)
- Finance costs 127 214
Total 5,579 5,801
Changes in working capital   
- Inventories 223 (729)
- Trade and other receivables (4,706) (1,101)
- Trade and other payables 2,705 615
Total (1,778) (1,215)
Cash generated from operating activities 13,897 14,692
Reconciliation of net cash inflow to movements in net cash   
 2016  2015
 £000  £000
(Decrease) / increase in cash in the year (193) 4,934
Drawdown of borrowings (5,426) (5,168)
Repayment of borrowings 39 8,777
Changes in net cash resulting from cash flows (5,580) 8,543
Finance leases acquired (25) -
Translation differences (55) 99
Movement in net cash in the year (5,660) 8,642
Net cash at 1 October 17,328 8,686
Net cash at 30 September 11,668 17,328
Analysis of net cash
    At 1 Oct Cash flow Exchange Non cash At 30 Sep 
    2015  movement movement 2016
    £000 £000 £000 £000 £000
Cash at bank and in hand   22,556 (193) 804 - 23,167
Debt due after 1 year   (5,189) (5,426) (859) - (11,474)
Finance leases   (39) 39 - (25) (25)
Net cash   17,328 (5,580) (55) (25) 11,668
Notes to the Group
Cash Flow Statement
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 43
For the year ended 30 September 2016
1. GENERAL INFORMATION
Gooch & Housego PLC (the “Company”) is incorporated and domiciled in the 
United Kingdom. The Company is listed on the Alternative Investment 
Market (“AIM Market”) of the London Stock Exchange. The address of the 
registered office of the Company is given on page 72.
The consolidated financial statements of the Group for the year ended 30 
September 2016 comprise the Company, Gooch & Housego PLC, and its 
subsidiaries (together referred to as the “Group”). A listing of the Company’s 
subsidiaries is set out on page 68.
The Group is a manufacturer of specialist optoelectronic components, 
materials and systems and specialist instrumentation and life sciences 
devices. The Group has facilities in the United Kingdom, Germany and 
the United States.
2. BASIS OF PREPARATION
These financial statements have been prepared under the historical cost 
convention as modified by financial assets and financial liabilities (including 
derivative instruments) at fair value and in accordance with International 
Financial Reporting Standards as adopted by the European Union (“IFRS”) 
and IFRIC Interpretations in issue at 30 September 2016, and with those 
parts of the Companies Act 2006 applicable to companies preparing 
financial statements in accordance with IFRS. The financial statements 
have been prepared on a going concern basis.
3. APPLICATION OF IFRS
Adoption of new standards
There has been no material impact from the adoption of new standards 
or revised standards or interpretations which are relevant to the Group:
•  IFRS10 Consolidated financial statements (Amendment)
•  IAS 1 Presentation of financial statements (Amendment)
•  IAS 16 Property, plant and equipment (Amendment)
Certain new standards, amendments and interpretations to existing 
standards have been published that are mandatory for accounting periods 
beginning on or after 1 October 2016 or later periods but which the Group 
has chosen not to adopt early. These include the following which are 
relevant to the Group:
•  IFRS 15 Revenue from contracts with customers (effective for periods 
beginning on or after 1 January 2018);
•  IFRS 9 Financial instruments (effective for periods beginning on or 
after 1 January 2018); and
•  IFRS 2 (Amendment) Classification and measurement of share based 
payment transactions (effective for periods ending on or after 1 
January 2018)
•  IFRS 16 Leases (effective for accounting periods ending on or after 1 
January 2019)
•  IAS 12 (Amendment) Amendments to the recognition of deferred tax 
assets for unrealised losses (effective for accounting periods ending on 
or after 1 January 2017)
The group does not expect that these standards and interpretations, 
issued but not yet effective, will have a material impact on results or net 
assets of the Group.
4. ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial 
statements are set out below. The policies have been consistently applied 
to all of the years presented, unless otherwise stated.
Consolidation
Subsidiaries are entities that are directly or indirectly controlled by the Group. 
Control exists where the Group has the power to govern the financial and 
operating policies of the entity so as to obtain benefits from its activities. 
In assessing control, potential voting rights that are currently exercisable 
or convertible are taken into account.
The purchase method of accounting is used to account for the acquisition 
of subsidiaries by the Group. The cost of a business combination is 
measured as the fair value of the assets given, equity instruments issued, 
the fair value of contingent or deferred consideration and liabilities incurred 
or assumed at the date of exchange. Costs directly attributable to the 
business combination are charged to the income statement. The excess of 
the costs of a business combination over the fair value of the identifiable 
net assets acquired is recorded as goodwill. If the cost of a business 
combination is less than the fair value of the net assets of the subsidiary 
acquired, the difference is recognised directly in the income statement. 
Should the fair value of contingent or deferred consideration vary from 
the actual value on settlement date, the difference is recognised directly 
in the income statement.
T ransactions, balances and unrealised gains on transactions between Group 
companies are eliminated. Unrealised losses are also eliminated but 
considered an impairment indicator of the asset transferred. Accounting 
policies of subsidiaries have been changed where necessary to ensure 
consistency with the policies adopted by the Group.
Gooch & Housego (UK) Limited, Gooch & Housego (Torquay) Limited, 
Spanoptic Limited, Kent Periscopes Limited, G&H (US Holdings) Limited and 
G&H (Property) Holdings Limited are exempt from the requirement to file 
audited accounts by virtue of Section 479C of the Companies Act 2006.
Segment reporting
A business segment is a grouping of operations engaged in providing 
products or services that are subject to risks and returns that are different 
from those of other business segments. A market segment is engaged in 
providing products or services within a particular economic environment 
that are subject to risks and returns which are different from those of 
segments operating in other economic environments.
The chief operating decision maker in determining a business or operating 
segment is the Board of Directors.
Foreign currency translation
a.  Functional and presentation currency
The consolidated financial statements are presented in Pounds Sterling, 
which is the Group’s presentation currency. Items included in the financial 
statements of each of the Group’s subsidiaries are measured using the 
currency of the primary economic environment in which the entity 
operates (the “functional currency”).
b.  Transactions and balances
Foreign currency transactions are translated into an entity’s functional 
currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the 
settlement of such transactions and from the translation at balance 
sheet exchange rates of monetary assets and liabilities denominated in 
foreign currencies are recognised in the income statement, except when 
deferred in equity as qualifying cash flow hedges and qualifying net 
investment hedges.
Notes to the
Financial Statements FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 44
c.  Subsidiaries
The results and financial position of subsidiaries that have a functional 
currency different from the presentation currency are translated into the 
presentation currency as follows:
•  assets and liabilities for each balance sheet presented are translated at 
the closing rate at the date of that balance sheet;
•  income and expenses for each income statement are translated at average 
exchange rates (unless this average is not a reasonable approximation of 
the cumulative effect of the rates prevailing on the transaction dates, in 
which case income and expenses are translated at the rate on the dates 
of the transactions); and
•  all resulting exchange differences are recognised in other comprehensive 
income and as a separate component of equity.
On consolidation, exchange differences arising from the translation of the 
net investment in foreign operations, and of borrowings and other currency 
instruments designated as hedges of such investments, are taken to 
shareholders’ equity. When a foreign operation is partially disposed of or 
sold, exchange differences that were recorded in equity are recognised in 
the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign 
entity are treated as assets and liabilities of the foreign entity and translated 
at the closing rate.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. 
Historical cost includes expenditure that is directly attributable to the 
acquisition of the items.
No depreciation is charged on freehold land or capital work in progress. 
Certain plant used in the manufacturing process which is constructed 
from precious metals is not depreciated.
Depreciation on other assets is calculated to allocate their cost over their 
estimated useful lives, as follows:
• Freehold buildings 2-3% Straight line
• Leasehold property over term of lease Straight line
• Plant and machinery  10-20% Straight line
•  Fixtures, fittings and computers 10-33% Straight line
• Motor vehicles 25% Reducing balance
The assets’ residual values and useful lives are reviewed, and adjusted if 
appropriate, at each balance sheet date. Where an asset’s carrying amount 
is greater than its estimated recoverable amount, the asset’s carrying 
amount is written down immediately to its recoverable amount. The 
recoverable amount is the higher of an asset’s fair value less costs to sell 
or an asset’s value in use.
Intangible assets
a.  Goodwill
Goodwill represents the excess of the cost of a business combination over 
the fair value of the net identifiable assets of the acquired business. Goodwill 
arising from business combinations is included in ‘intangible assets’.
Goodwill is tested annually for impairment and carried at cost less 
accumulated impairment losses. The impairment testing requires an 
estimation of the ‘value in use’ of the Cash-generating unit (the “CGU”)  
to which goodwill is allocated using appropriately discounted cash flow 
projections. Any impairment is recognised immediately as an expense  
to the income statement and is not subsequently reversed.
For the purpose of impairment testing a CGU is defined as either a business 
segment or an operating entity, as appropriate. 
Gains and losses on the disposal of an entity include the carrying amount 
of goodwill relating to the entity sold.
b.  Patents, Trademarks and Licenses
Internally incurred costs associated with the filing and perfection of patents 
and trademarks are capitalised and carried at cost less accumulated 
amortisation. Amortisation is calculated using the straight line method to 
allocate the cost over their useful economic lives and are charged to 
Research and Development in the income statement.
Acquired patents, trademarks and licences are shown at historical cost. 
Patents, trademarks and licences have a finite useful life and are carried at 
cost less accumulated amortisation. Amortisation is calculated using the 
straight line method to allocate the cost over their useful economic lives.
c.  Computer software
Costs associated with developing or maintaining computer software 
programmes are recognised as an expense as incurred. 
Costs that are directly associated with the development of identifiable and 
unique software products controlled by the Group, and that will probably 
generate economic benefits exceeding costs beyond one year, are 
capitalised and recognised as intangible assets. Costs include the 
software development employee costs and an appropriate portion of 
relevant overheads. 
Acquired computer software and licences are capitalised on the basis of 
the costs incurred to acquire and bring to use the specific software.
Capitalised software costs are amortised using the straight line method 
over their estimated useful lives of up to 5 years and charged to 
Administration in the income statement.
d.  Research and development
Expenditure on research activities, undertaken with the prospect of gaining 
new scientific or technical knowledge and understanding, is recognised as 
an expense as incurred.
Development costs incurred after the point at which the commercial and 
technical feasibility of the product have been proven, and the decision to 
complete the development has been taken and resources made available, 
are capitalised. The expenditure capitalised includes the cost of materials, 
direct labour and an appropriate proportion of overheads.  
Capitalised development expenditure is stated at cost less accumulated 
amortisation and impairment losses. Development costs are amortised 
using the straight line method over their estimated useful life lives, which 
is typically 5 years, and are charged to Research and Development in the 
income statement.
e.  Acquired intangibles
Other acquired intangible assets are stated at fair value less accumulated 
amortisation and impairment losses. 
The useful life of each of these assets is assessed based on the differing 
natures of each of the intangible assets acquired. Amortisation is charged 
on a straight-line basis over the estimated useful life of the assets 
acquired and charged to administration in the Income Statement.
• Customer relationships up to 10 years
• Brand names up to 10 years
• Acquired patents, trademarks and licences up to 3 years
Government grants
Government grants are accounted for on an accruals basis. Grants are 
credited to the income statement over the life of the project. Where grants 
are used to fund the acquisition of property, plant and equipment, the 
grant is initially credited to deferred income then credited to the income 
statement over the estimated economic life of the asset.
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 45
For the year ended 30 September 2016
Impairment of non-financial assets
The Group assesses at each balance sheet date whether an asset may be 
impaired. If any such indicator exists, the Group tests for impairment by 
estimating the recoverable amount which is the higher of the value in use 
and the fair value less costs to sell. If the recoverable amount is less than 
the carrying value of the asset, the asset is impaired and the carrying value 
is reduced to its recoverable amount. In addition to this, assets with 
indefinite lives are tested for impairment annually. Non-financial assets 
other than goodwill which have suffered an impairment are reviewed for 
possible reversal of the impairment at each balance sheet date. 
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or 
determinable payments that are not quoted in an active market. They are 
included in current assets, except those with maturities greater than 12 
months from the balance sheet date. These are classified as non-current 
assets. Loans and receivables are classified as trade and other receivables 
in the balance sheet.
Inventories
Inventories are stated at the lower of weighted average cost and net 
realisable value. The cost of finished goods and work in progress comprises 
design costs, raw materials, direct labour, other direct costs and related 
production overheads (based on normal operating capacity). It excludes 
borrowing costs. Net realisable value is the estimated selling price in the 
ordinary course of business, less applicable variable selling expenses.
Long term contract balances included in work in progress comprise costs 
incurred on long term contracts, net of any amounts transferred to trading 
expenditure, after deducting foreseeable losses and related payments 
on account. Costs include all direct material and labour costs incurred in 
bringing a contract to its state of completion at the year end. Provisions for 
estimated losses on contracts are made in the period in which such losses 
are foreseen. Long term contract balances do not include attributable profit. 
The amount by which customer billings exceed the revenue recognised on 
a contract is shown as a payment on account.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method, less 
provision for impairment. 
A provision for impairment of trade receivables is established when there 
is objective evidence that the Group will not be able to collect all amounts 
due according to the original terms of the receivables. Significant financial 
difficulties of the debtor, probability that the debtor will enter bankruptcy 
or financial reorganisation, and default or delinquency in payments 
(more than 30 days overdue) are considered indicators that the trade 
receivable may be impaired. 
The amount of the provision is the difference between the asset’s carrying 
amount and the present value of estimated future cash flows, discounted 
at the original effective interest rate. The carrying amount of the asset is 
reduced through the use of an allowance account, and the amount of the 
loss is recognised in the income statement within ‘Administration costs’. 
When a trade receivable is uncollectible, it is written off against the 
allowance account for trade receivables.  Subsequent recoveries of 
amounts previously written off are credited against ‘Administration costs’ 
in the income statement. 
Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement 
includes cash in hand and deposits held on call with banks with original 
maturities of three months or less.
Trade payables
Trade payables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs 
incurred. Borrowings are subsequently stated at amortised cost; any 
difference between the proceeds (net of transaction costs) and the 
redemption value is recognised in the income statement over the period 
of the borrowings using the effective interest method.
Borrowing costs which are directly attributable to the acquisition, 
construction or production of a qualifying asset are capitalised as part of 
the cost of that asset.
Borrowing costs are classified as current liabilities unless the Group has 
an unconditional right to defer settlement of the liability for at least 12 
months after the balance sheet date.
Financial instruments
Financial instruments are initially recognised at fair value on the date that 
a contract is entered into and are subsequently remeasured at their fair 
value. The Group documents the relationship between the hedging 
instrument and the hedged item and, on a periodic basis, assesses 
whether the hedge is effective.
Current and deferred income tax
Income tax on the profit or loss for the year comprises current and 
deferred tax.
Current tax is the expected tax payable on the taxable income for the year 
using rates enacted at the balance sheet date, and any adjustments to tax 
payable in respect of prior years.
Amounts claimed under the RDEC scheme have been recognised within 
operating profit. 
Deferred income tax is provided in full, using the liability method, on 
temporary differences arising between the tax bases of assets and 
liabilities and their carrying amounts in the consolidated financial 
statements. However, the deferred income tax is not accounted for, if it 
arises from initial recognition of an asset or liability in a transaction other 
than a business combination that at the time of the transaction affects 
neither accounting nor taxable profit or loss. 
Deferred income tax is determined using tax rates (and laws) that have 
been enacted or substantially enacted by the balance sheet date and are 
expected to apply when the related deferred income tax asset is realised 
or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable 
that future taxable profit will be available against which the temporary 
differences can be utilised.
Deferred income tax is provided on temporary differences arising on 
investments in subsidiaries, except where the timing of the reversal of 
the temporary difference is controlled by the Group and it is probable 
that the temporary difference will not reverse in the foreseeable future.
Deferred income tax is recognised in the income statement except to the 
extent that it relates to items recognised directly in other comprehensive 
income and equity, in which case it is recognised in other comprehensive 
income and equity.
In the UK and US, the Company is entitled to a tax deduction for amounts 
treated as compensation on exercise of certain employee share options 
under each jurisdiction’s tax rules. As explained under “Share options”  FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 46
below, a compensation expense is recorded in the Company’s income 
statement over the period from the grant date to the vesting date of the 
relevant options. As there is a temporary difference between the accounting 
and tax bases, a deferred income tax asset is recorded. The deferred income 
tax asset arising is calculated by comparing the estimated amount of tax 
deduction to be obtained in the future (based on the Company’s share price 
at the balance sheet date) with the cumulative amount of the compensation 
recorded in the income statement.  If the amount of estimated future tax 
deduction exceeds the cumulative amount of the remuneration expense 
at the statutory rate, the excess is recorded directly in equity.
Employee benefits
a. Pension obligations
The Group operates money purchase pension schemes for UK employees 
and Section 401(k) plans for US employees. The Group pays contributions to 
publicly or privately administered pension insurance plans on a mandatory, 
contractual or voluntary basis. The Group has no further payment 
obligations once the contributions have been paid. The contributions are 
recognised as an employee benefit expense in the income statement when 
they are due. Prepaid contributions are recognised as an asset to the extent 
that a cash refund or a reduction in the future payments is available. 
b.  Profit share and bonus plans
The Group recognises a liability and an expense for bonuses and 
profit-sharing, based on a formula that takes into consideration the 
profit attributable to the Group’s shareholders after certain adjustments.  
The Group recognises a provision where contractually obliged or where 
there is a past practice that has created a constructive obligation.
c.  Share options
The Group operates a number of share option schemes. In accordance with 
IFRS 2 the fair value of the employee services received in exchange for the 
grant of the options is recognised as an expense in the income statement. 
The total amount to be expensed over the vesting period is determined by 
reference to the fair value of the options granted, excluding the impact of 
any non-market vesting conditions (for example, profitability targets). 
Non-market vesting conditions are included in assumptions about the 
number of options that are expected to vest. 
Employer’s National Insurance in the United Kingdom and equivalent taxes 
in other jurisdictions are payable on the exercise of certain share options. 
In accordance with IFRS 2, this is treated as a cash-settled transaction. A 
provision is made, calculated using the fair value of the Company’s shares 
at the balance sheet date, pro-rated over the vesting period of the options.
At each balance sheet date, for awards with non market vesting conditions, 
the entity revises its estimates of the number of options that are expected 
to vest. It recognises the impact of the revision to original estimates, if any, 
in the income statement, with a corresponding adjustment to equity. The 
fair value of the options under the Gooch & Housego 2013 Long Term 
Incentive Plan are determined by using the Monte Carlo option pricing model.
The proceeds received net of any directly attributable transaction costs 
are credited to share capital (nominal value) and share premium when 
the options are exercised.
Provisions
Provisions are recognised when the Group has a present legal or 
constructive obligation as a result of past events; it is probable that an 
outflow of resources will be required to settle the obligation; and the 
amount has been reliably estimated.
The Group monitors and assesses its warranty provision requirement on 
a continuing basis. The provision for other liabilities and charges provides 
for the anticipated cost of repair and rectification of products under 
warranty, based on historical repair and replacement costs. In addition 
the Directors will also assess expected changes in future costs based on 
current information.
Exceptional items
T ransactions are classified as exceptional where they relate to an event that 
falls outside the ordinary activities of the business and where individually or 
in aggregate they have a material impact on the financial statements. 
Leases
Leases which transfer substantially all the risks and rewards of ownership 
of an asset are treated as a finance lease. Assets held under a finance 
lease are capitalised at their fair value at the inception of the lease and 
depreciated over the estimated useful economic life of the asset or lease 
term if shorter.
Finance charges are associated with the finance lease are expensed in 
proportion to the capital amount outstanding.
All other leases are classified as operating leases. Operating lease rentals 
are expensed in equal annual amounts over the lease term.
Share capital
Ordinary shares are classified as equity. 
Incremental costs directly attributable to the issue of new shares or options 
are shown in equity as a deduction, net of tax, from the proceeds.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable 
for the sale of goods and services in the ordinary course of the Group’s 
activities. Revenue is shown net of value-added tax, returns, rebates and 
discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably 
measured, it is probable that future economic benefits will flow to the entity 
and when specific criteria have been met for each of the Group’s activities 
as described below. The amount of revenue is not considered to be reliably 
measurable until all contingencies relating to the sale have been resolved.
a.  Sale of goods
Revenue is recognised when the risks and rewards of the underlying sale 
have been transferred to the customer, and when collectability of the 
related receivable is reasonably assured. Depending on the terms of 
business, this occurs either on the dispatch/delivery of the goods supplied 
or on acceptance by the customer.
b.  Long term contracts
Revenue is recognised on long term contracts by reference to the stage of 
completion of the contract activity at the balance sheet date. Revenue and 
profits are determined by estimating the outcome of the contract and 
determining the costs and profit attributable to the stage of completion.
Where the outcome of the contract cannot be reliably estimated, contract 
costs are recognised as an expense when incurred and revenue is recognised 
to the extent of the costs incurred that are expected to be recoverable. 
In both cases, any expected contract loss is recognised immediately.
c.  Interest income
Interest income is recognised on a time-proportion basis using the 
effective interest method.
Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as 
a liability in the Group’s financial statements in the period in which the 
dividends are approved by the Company’s shareholders.
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 47
For the year ended 30 September 2016
5. FINANCIAL RISK MANAGEMENT
Capital risk management
Management considers capital as equity, as shown in the Group balance 
sheet, excluding net debt.
The Group’s objectives when managing capital are to safeguard the 
Group’s ability 
• to continue as a going concern, 
•  to provide returns for shareholders and benefits for other stakeholders 
and 
• to maintain an optimal capital structure to reduce the cost of capital.
The Board is satisfied that these objectives have been met during the 
year. Actions taken during the year to achieve these objectives are 
outlined in the Chief Executive Officer’s Review. 
In order to maintain or adjust the capital structure, the Group may
• adjust the amount of dividends paid to shareholders,
• return capital to shareholders,
• issue new shares,
• sell assets to reduce debt and
• vary the level of debt financing.
While the Group’s debt to equity ratio is consistently monitored, changes 
in the Group’s need for capital and the selection of the source and 
funding of capital are assessed against a number of criteria which may 
have a direct effect on the Group debt to equity ratio. 
The Group’s capital needs include, but are not solely limited to, its
• investment in non-current assets;
• investment in working capital; and
• acquisition of businesses, technologies and other intangible assets.
The criteria against which the Group’s capital needs are assessed 
include, but are not limited to, 
• availability of and cost of debt financing;
• ability to raise equity financing at an acceptable share price; and
• ratio of debt to equity. 
Financial risks
The Group’s activities expose it to a variety of financial risks: market risk 
(including foreign exchange risk and cash flow interest rate risk), credit 
risk and liquidity risk.
The Group’s overall risk management programme focuses on the 
unpredictability of financial markets and seeks to minimise potential 
adverse effects on the Group’s financial performance. Where considered 
appropriate, the Company will use derivative financial instruments to 
hedge risk exposures during the year.
i. Market risk
a. Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange 
risk arising from various currency exposures, primarily with respect to 
the US Dollar. 
Foreign exchange risk arises from 
• future commercial transactions;
• recognised assets and liabilities; and
• net investments in foreign operations.
The Group has certain investments in foreign operations, whose net 
assets are exposed to foreign currency translation risk. 
Currency exposure arising from the net assets of the Group’s foreign 
operations is managed primarily through borrowings denominated in the 
relevant foreign currencies. 
No financial derivatives have been entered into to manage foreign 
exchange exposure.
As a significant amount of the Group’s profit is earned by its US subsidiaries, 
the Group’s profit is sensitive to movements in the US Dollar exchange rate. 
If the average US Dollar exchange rate for the year had been consistent 
with the closing exchange rate at 30 September 2015, with all other 
variables constant, post tax profits for the year would have been £447,000 
lower (2015: £207,000 lower) as a result of the translation in US Dollars.
Equity is more sensitive to movement in the US Dollar exchange rate as a 
significant amount of the Group’s net assets are held in the Group’s US 
subsidiaries. If the US Dollar weakened by 10% against Pound Sterling with 
all other variables held constant, the net assets of the Group would be 
£1,821,000 lower (2015: £3,600,000 lower). If the US Dollar 
strengthened by 10% against Pound Sterling with all other variables 
held constant, the net assets of the Group would be £2,226,000 higher 
(2015: £4,900,000 higher).
b. Cash flow interest rate risk
The Group has cash balances of £23.2m which are held in interest bearing 
current accounts. The Group’s income and operating cash flows are 
substantially independent of changes in market interest rates.
The Group’s interest rate risk arises from its revolving credit facility. A 1% 
increase in the cost of borrowing would have resulted in an annualised 
increase in interest expense of £68,000 (2015: £51,000) had the Group’s 
borrowings been in place throughout the year.
Borrowings issued at variable interest rates expose the Group to cash flow 
interest rate risk. During 2015 and 2016, the Group’s borrowings at variable 
interest rates were denominated in Pound Sterling and US Dollars as 
detailed in Note 22.
ii. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or 
counterparty to a financial instrument fails to meet its contractual 
obligations. It arises principally from the Group’s trade receivables.
a. Trade and other receivables
The management of credit risk exposure is the responsibility of each 
business unit which has credit policies in place to mitigate the risk. The 
credit policies seek to verify a customer’s credit worthiness prior to trading 
and maintain the level of trading within agreed credit limits. Changes to credit 
limits require authorisation in accordance with internal control policies.
The Group is exposed to concentration of credit risk. The Group’s top ten 
customers in 2016 accounted for 26% of the Group’s revenue (2015: 28%). 
No individual customer made up more than 6% of revenue in either the 
current or prior year. 
The Group’s trade receivables are analysed in note 19.
b. Cash
Cash is held in current and deposit accounts with financial institutions 
which have credit ratings of A- or greater. 
iii. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial 
obligations as they fall due. The Group aims to achieve a balance between 
certainty of funding and a flexible, cost effective borrowing structure.
The Company’s facilities comprise a committed revolving credit facility of 
$15m which is fully drawn and an uncommitted undrawn flexible acquisition 
facility of $20m, both available until 30 April 2019. These are analysed in 
Notes 22 and 29.  FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 48
The Group aims to ensure that there are sufficient funds or credit lines 
available to supplement cash flows generated from trading to meet 
known obligations in the next twelve months.
6. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in accordance with International 
Financial Reporting Standards (IFRS) requires the Directors to make critical 
accounting estimates and judgments that affect the amounts reported in 
the financial statements and accompanying notes. These estimates and 
judgments are continually evaluated and are based on historical experiences 
and other factors, including expectations of future events that are believed 
to be reasonable under the circumstances. The resulting accounting 
estimates will on occasions fail to equal actual results.
The estimates and assumptions that have significant risk of causing a 
material adjustment to the carrying amounts of assets and liabilities 
within the next financial year are outlined below.
Impairment of goodwill
The Group tests goodwill for impairment at least annually. This requires an 
estimation of the value in use of the Cash Generating Units (the “CGUs”) to 
which goodwill is allocated. As set out in Note 17, estimating the value in 
use requires the Group to make an estimate of the expected future cash 
flows from the CGUs and also to choose a suitable discount rate in order to 
calculate the present values of those cash flows.
Provision for impairment of trade receivables
The Group assesses trade receivables for impairment which requires an 
estimation of the likelihood of payment forfeiture by customers. In making 
this assessment, the Directors will consider the payment history of the 
customer as well as the customer’s future viability.
Inventory provision
The Group continually monitors and assesses the provision for old and 
slow moving inventory. Factors considered by the Directors include the 
expected future usage and the potential obsolescence and deterioration 
of the Inventory.
Warranty provision
The Group monitors and assesses its warranty provision requirement on a 
continuing basis. In addition to considering historical repair and replacement 
costs, the Directors will also assess expected changes in future costs 
based on current information.
Share options
In accordance with IFRS 2, share options are measured at fair value at the 
date of grant. The fair value determined is then expensed in the Group 
income statement on a straight line basis over the vesting period, with a 
corresponding adjustment in equity. The fair value of the options under 
the Gooch & Housego 2013 Long Term Incentive Plan were measured by 
using the Monte Carlo option pricing model. The valuation of share options 
requires several judgements to be made in respect of the number of 
options that are expected to be exercised. Details of the assumptions 
included in the valuation of options are disclosed in Note 27.
Provisions for income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant 
judgement is required in determining the worldwide provision for income 
taxes. There are many transactions and calculations for which the ultimate 
tax determination is uncertain during the ordinary course of business. 
The Group recognises liabilities for anticipated tax audit issues based on 
estimates of whether additional taxes will be due. Where the final tax 
outcome of these matters is different from the amounts that were initially 
recorded, such differences will impact the income tax and deferred 
income tax provisions in the period in which such determination is made.
For the year ended 30 September 2016   Aerospace  Life Industrial Scientific Corporate Total
  & Defence Sciences  Research
For year ended 30 September 2016 £000 £000 £000 £000 £000 £000
Revenue      
Total revenue  19,977 7,904 59,875 3,874 - 91,630
Inter and intra-division  - - (5,579) - - (5,579)
External revenue  19,977 7,904 54,296 3,874 - 86,051
Divisional expenses  (18,055) (6,017) (42,719) (2,881) (1,342) (71,014)
EBITDA¹  1,922 1,887 11,577 993 (1,342) 15,037
EBITDA %  9.6% 23.9% 21.3% 25.6% - 17.5%
Depreciation and amortisation  (545) (335) (1,776) (310) (431) (3,397)
Operating profit before amortisation
   of acquired intangible assets  1,377 1,552 9,801 683 (1,773) 11,640
Amortisation of acquired intangible assets,
   gain on bargain purchase and
   goodwill impairment  - - - - (1,456) (1,456)
Operating profit  1,377 1,552 9,801 683 (3,229) 10,184
Operating profit margin %  6.9% 19.6% 18.1% 17.6% - 11.8%
Add back amortisation of intangibles, 
   impairment of goodwill, gain on bargain 
   purchase and non-recurring items 108 53 960 37 2,916 4,074
Adjusted operating profit  1,485 1,605 10,761 720 (313) 14,258
Adjusted profit margin %  7.4% 20.3% 19.8% 18.6% - 16.6%
Finance costs  - - - - (88) (88)
Profit before income tax expense  1,377 1,552 9,801 683 (3,317) 10,096
¹EBITDA = Earnings before interest, tax, depreciation and amortisation
Management have added back the amortisation of intangibles, gain on bargain purchase, impairment of goodwill, restructuring costs, provision for 
export compliance risk and transaction fees in the above analysis. This has been shown because the Directors consider the analysis to be more 
meaningful excluding the impact of this non-recurring expense. 
  Aerospace  Life Industrial Scientific Corporate Total
  & Defence Sciences  Research
For year ended 30 September 2015 £000 £000 £000 £000 £000 £000
Revenue      
Total revenue  19,880 8,978 51,892 3,866 - 84,616
Inter and intra-division  (76) - (5,838) - - (5,914)
External revenue  19,804 8,978 46,054 3,866 - 78,702
Divisional expenses  (17,112) (7,067) (35,885) (3,058) (783) (63,905)
EBITDA¹  2,692 1,911 10,169 808 (783) 14,797
EBITDA %  13.6% 21.3% 22.1% 20.9% - 18.8%
Depreciation and amortisation  (572) (322) (1,746) (129) (130) (2,899)
Operating profit before amortisation
   of acquired intangible assets  2,120 1,589 8,423 679 (913) 11,898
Amortisation of acquired intangible assets - - - - (1,604) (1,604)
Operating profit  2,120 1,589 8,423 679 (2,517) 10,294
Operating profit margin %  10.7% 17.7% 18.3% 17.6% - 13.1%
Add back restructuring costs  20 23 1,156 5 - 1,204
Operating profit excluding  2,140 1,612 9,579 684 (2,517) 11,498
   restructuring costs
Adjusted profit margin %  10.8% 18.0% 20.8% 17.7% - 14.6%
Finance costs  - - - - (188) (188)
Profit before income tax expense  2,120 1,589 8,423 679 (2,705) 10,106
¹ Management have added back the cost of the Melbourne site closure in the above analysis. This has been shown because the Directors consider the 
analysis to be more meaningful excluding the impact of this non-recurring expense. 
All of the amounts recorded are in respect of continuing operations. 
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 49
For the year ended 30 September 2016
7. SEGMENTAL ANALYSIS 
The Company’s segmental reporting reflects the information that management uses within the business. The business is divided into four market sectors, 
being Aerospace & Defence, Life Sciences, Industrial and Scientific Research, together with the Corporate cost centre.
The industrial business segment primarily comprises the industrial laser market for use in the semiconductor and microelectronic industries, but also 
includes other industrial applications such as metrology and telecommunications. Scientific Research covers academic and government funded research 
including major multi-national projects. FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 50
For the year ended 30 September 2016
Analysis of net assets/(liabilities) by location:
   2016 2016 2016 2015 2015 2015
   Assets Liabilities Net Assets Assets Liabilities Net Assets
   £000 £000 £000 £000 £000 £000
United Kingdom  70,336 (30,580) 39,756 50,359 (12,999) 37,360
USA  59,077 (9,112) 49,965 50,193 (9,679) 40,514
Continental Europe  726 (318) 408 872 (389) 483
Asia Pacific   48 (5) 43 15 (5) 10
   130,187 (40,015) 90,172 101,439 (23,072) 78,367
For the year to 30 September 2016 non-current asset additions were £2.0m (2015: £2.0m) for the UK and for the USA £7.3m (2015: £2.1m). There 
were no additions to non-current assets in respect of Europe (2015: £nil) or the Asia Pacific region (2015: £nil). The value of non-current assets in the 
USA was £34.7m (2015: £24.4m), the United Kingdom £30.1m (2015: £23.3m) and Europe £nil (2015: £0.4m). There were no non-current assets in 
the Asia-Pacific region.
Analysis of revenue by destination:
  2016 2015
  £000  £000
United Kingdom  17,247 14,897
USA  34,918 34,762
Continental Europe  19,189 16,890
Asia Pacific and Other  14,697 12,153
Total revenue  86,051 78,702
8. EXPENSES BY NATURE
  2016 2015
 Note £000 £000
Raw materials and consumables  27,424 23,749
Changes in stocks of finished goods and work in progress  1,357 (1,701)
Employee costs 10 38,280 35,697
Other operating charges  6,429 6,985
Depreciation  3,042 2,715
Amortisation of acquired intangible assets   1,263 1,604
Amortisation of other intangible assets  355 301
Gain on bargain purchase – Alfalight  (578) -
Impairment of goodwill  771 -
Other income and expenses 9 (2,476) (942)
  75,867 68,408
9. OTHER INCOME AND EXPENSES
  2016 2015
  £000 £000
Grants receivable  2,220 1,404
Loss on disposal of property, plant and equipment  - (453)
Restructuring costs  - (85)
Amounts claimed under the RDEC  270 -
Other (expense) / income  (14) 76
  2,476 942 10. EMPLOYEE BENEFIT EXPENSE
  2016 2015
  £000 £000
Wages and salaries  30,971 28,899
Social security costs  2,551 2,602
Share based payment charge  638 485
Medical and other insurance  2,851 2,501
Other pension costs  1,269 1,210
  38,280 35,697
The monthly number of employees during the year was:
  2016 2015
  Number Number
Manufacturing  471 464
Sales, finance and administration  204 210
  675 674
Key management compensation
  2016 2015
  £000 £000
Salaries and other short-term benefits  4,908 4,426
Share based payments  638 485
Other pension costs  230 256
  5,776 5,167
Key management comprise the Executive Board and the senior operational staff.
Directors’ remuneration, including the highest paid Director, has been included on page 35 of the Remuneration Committee Report. These disclosures 
have been audited. 
11. OPERATING PROFIT
Operating profit is stated after charging / (crediting):
  2016 2015
  £000 £000
Fees payable to the Company’s auditors for the audit of the parent company and consolidated financial statements  45 44
Fees payable to the Company’s auditors and its associates for 
other services:  
  - audit of the Company’s subsidiaries pursuant to legislation   110 89
  - taxation compliance services  78 57
  - taxation advisory services  117 11
  - taxation advisory services related to abortive acquisitions  10 -
  - due diligence services related to grant funding  97 -
Net gains on foreign exchange  (860) (214)
Operating lease rentals  1,520 1,571
Transaction fees  466 -
Restructuring costs of £1,652,000 were incurred in the year (2015: £1,204,000). These related to the Palo Alto site move (£929,000) and redundancy 
costs of £723,000. The costs have been included in the income statement within cost of revenue, administration costs and other income and expenses 
as appropriate.
12. FINANCE INCOME AND COSTS
  2016 2015
  £000 £000
Finance income comprises:   
  - Bank interest  39 26
Finance costs comprise:   
  - Bank interest  (126) (210)
  - Finance lease interest  (1) (4)
  (127) (214)
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 51
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 52
For the year ended 30 September 2016
13. INCOME TAX EXPENSE
Analysis of tax charge in the year
  2016 2015
  £000 £000
Current taxation
UK Corporation tax  1,760 1,480
Overseas tax  887 724
Adjustments in respect of prior year tax charge  (77) (983)
Total current tax  2,570 1,221
Deferred tax   
Origination and reversal of temporary differences  218 274
Adjustments in respect of prior year deferred tax  290 1,152
Impact of change in the UK tax rate  (30) -
Total deferred tax  478 1,426
Income tax expense per income statement  3,048 2,647
The taxation expense for the year is higher (2015: higher) than the standard rate of corporation tax in the UK.  An explanation of the differences is 
detailed below:
  2016 2015
  £000 £000
Profit before income tax expense  10,096 10,106
Profit at the effective standard rate of tax of 20.0% for the year (2015: 20.5%)  2,019 2,072
Income not subject to tax  (116) -
Permanent differences  134 (215)
Adjustments in respect of foreign tax rates  828 621
Re-measurement of deferred tax – change in UK tax rate    (30) -
Adjustments in respect of prior year  213 169
Total tax expense  3,048 2,647
Factors affecting the future tax charge
Overseas tax losses of £3.8m (2015: £3.3m) and UK tax losses of £0.8m (2015: £0.8m) are available to offset against future profits of the Group. The 
utilisation of these losses is not sufficiently certain to recognise a deferred tax asset.
Changes to the UK corporation tax rates were substantively enacted as part of the Finance Bill 2015 on 26 October 2015. These include reductions to 
the main rate to reduce the rate to 19% from 1 April 2017 and 18% from 1 April 2020. The Finance Bill 2016 replaced the 18% rate with 17% and was 
substantively enacted on 15 September 2016. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and 
reflected in the financial statements. 
The Group operates internationally; as a result, it is subject to various overseas tax rules and regulations. A change in the assessment of their 
implementation could result in an increase in G&H’s tax liability, though no such change is currently considered necessary.
14. DIVIDENDS
  2016 2015
  £000 £000
Final 2015 dividend paid in 2016: 5.2p per share (Final 2014 dividend paid in 2015: 4.6p per share)  1,254 1,101
2016 Interim dividend paid: 3.3p per share (2015: 3.0p)  801 722
  2,055 1,823
The Directors propose a final dividend of 5.7p per share making the total dividend paid and proposed in respect of the 2016 financial year 9.0p (2015: 8.2p).  15. EARNINGS PER SHARE
The calculation of earnings per 20p Ordinary Share is based on the profit for the year using as a divisor the weighted average number of Ordinary 
Shares in issue during the year. The weighted average number of shares for the year ended 30 September is given below:
 2016 2015
 Number Number
Number of shares used for basic earnings per share 24,248,471 24,115,878
Dilutive shares 436,112 405,311
Number of shares used for dilutive earnings per share 24,684,583 24,521,189
A reconciliation of the earnings used in the earnings per share calculation is set out below:
 2016 2015
 £000 pence per share  £000 pence per share
Basic earnings per share 7,048 29.1p 7,459 30.9p
Amortisation of acquired intangible assets (net of tax) 930 3.8p 1,184 4.9p
Goodwill impairment 771 3.2p - -
Gain on bargain purchase of Alfalight (578) (2.4p) - -
Provision for regulatory compliance 500 2.1p - -
Restructuring costs (net of tax) 1,261 5.2p 891 3.7p
Transaction fees (net of tax) 373 1.5p - -
Total adjustments net of income tax expense 3,257 13.4p 2,075 8.6p
Adjusted basic earnings per share 10,305 42.5p 9,534 39.5p
    
Basic diluted earnings per share 7,048 28.6p 7,459 30.4p
Adjusted diluted earnings per share 10,305 41.7p 9,534 38.9p
Basic and diluted earnings per share before amortisation and other adjustments has been shown because, in the opinion of the Directors, it provides a 
useful measure of the trading performance of the Group.
16. PROPERTY , PLANT AND EQUIPMENT
 Capital work Freehold land Leasehold Plant and Fixtures, Motor Total
 in progress land and property machinery fittings and vehicles
  buildings   computers
 £000 £000 £000 £000 £000 £000 £000
Cost or valuation       
At 1 October 2014 1,250 9,905 3,714 23,604 2,596 60 41,129
Additions 2,564 5 16 1,282 296 - 4,163
Disposals - (959) (784) (258) (90) (11) (2,102)
Reclassification (151) - - 125 26 - -
Exchange rate differences 50 50 217 698 40 1 1,056
At 30 September 2015 3,713 9,001 3,163 25,451 2,868 50 44,246
Additions 6,894 - 4 1,247 217 - 8,362
Acquired - - 22 290 112 - 424
Disposals - - - (4) (4) - (8)
Reclassification (8,013) - 7,636 359 40 - 22
Exchange rate differences 255 12 1,180 1,842 122 2 3,413
At 30 September 2016 2,849 9,013 12,005 29,185 3,355 52 56,459
Accumulated depreciation       
At 1 October 2014 - 1,596 1,264 12,508 1,584 37 16,989
Charge for the year - 182 299 2,043 184 7 2,715
Disposals - (327) (308) (233) (90) (10) (968)
Exchange rate differences - 20 80 444 50 1 595
At 30 September 2015 - 1,471 1,335 14,762 1,728 35 19,331
Charge for the year - 168 401 2,190 277 6 3,042
Acquired - - 7 151 68 - 226
Disposals - - - - (4) - (4)
Exchange rate differences - 13 227 1,156 83 1 1,480
At 30 September 2016 - 1,652 1,970 18,259 2,152 42 24,075
Net book value       
At 1 October 2014 1,250 8,309 2,450 11,096 1,012 23 24,140
At 30 September 2015 3,713 7,530 1,828 10,689 1,140 15 24,915
At 30 September 2016 2,849 7,361 10,035 10,926 1,203 10 32,384
At 30 September 2016, plant and machinery purchased under a hire purchase or finance lease agreement had a cost of £38,000 (2015: £258,000) 
and net book value of £25,000 (2015: £83,000). 
No interest was capitalised in the year (2015: £Nil).
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 53
For the year ended 30 September 2016 17. INTANGIBLE ASSETS
   Goodwill Acquired Capitalised Software Total
    intangible R&D, Patents and other
    assets and licences intangibles
   £000 £000 £000 £000 £000
Cost       
At 1 October 2014   21,688 11,189 1,522 1,633 36,032
Additions   - - 870 83 953
Reclassification   - - (35) - (35)
Exchange rate differences   347 282 47 17 693
At 30 September 2015   22,035 11,471 2,404 1,733 37,643
Additions   - - 624 70 694
Acquired   4,620 4,768 52 5 9,445
Disposals   - - (3) (1) (4)
Reclassification   - - (22) - (22)
Exchange rate differences   1,970 805 68 42 2,885
At 30 September 2016   28,625 17,044 3,123 1,849 50,641
Accumulated amortisation and impairment     
At 1 October 2014   5,654 7,807 585 1,318 15,364
Charge for the year   - 1,604 172 129 1,905
Disposals   - - (35) - (35)
Exchange rate differences   - 229 7 18 254
At 30 September 2015   5,654 9,640 729 1,465 17,488
Charge for the year   771 1,263 218 137 2,389
Acquired   - - 3 3 6
Disposals   - - (3) (1) (4)
Exchange rate differences   - 778 29 39 846
At 30 September 2016   6,425 11,681 976 1,643 20,725
Net book value     
At 1 October 2014   16,034 3,382 937 315 20,668
At 30 September 2015   16,381 1,831 1,675 268 20,155
At 30 September 2016   22,200 5,363 2,147 206 29,916
Goodwill is allocated according to each operating site as follows: Cleveland (£2.1m), Ilminster (£1.5m), T orquay (£1.6m), Moorpark (£6.4m), Boston (£5.1m), 
Palo Alto (£0.9m) and St Asaph (£4.6m).
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. The impairment testing requires an estimation of the 
‘value in use’ of the CGU. The value in use calculations use pre-tax cash flow projections based on the latest projections approved by the Board for year 
one. For the purposes of the impairment review, the following key assumptions were made in respect of the cash flows beyond year one:
• Projected gross profit margins of 22% to 44%
• Average growth in EBITDA to 2021 of up to 10%, and 2% thereafter
• 7.9% post tax discount rate used to discount cash flows
The projected gross profit margin and average growth is based on past performance and the Directors’ expectations for the foreseeable future.
The Boston cash generating unit did not meet its target for the year. However, it continues to contribute to the Group’s Space Photonics activities and 
management expect activity levels to increase. The impairment calculation for the Boston cash generating unit utilises a specific set of growth assumptions 
based on revenue increasing by an average of 7% per annum in the period to 30 September 2021, which results in an average annual forecast EBITDA of 
£0.8m over the same period. Following this year’s impairment review, and in recognition of the result for the year, the Directors consider it appropriate 
to impair the goodwill by £0.8m. If the discount rate were increased to 8.6%, or if the average annual EBITDA in the period to 30 September 2021 were 
reduced by £0.2m, a further impairment of £0.8m would arise.  However, the trade and assets of Alfalight Inc. were acquired by the Boston cash generating 
unit and the Directors expect the results of the enlarged business to improve significantly going forward. They are therefore satisfied that no further 
impairment is necessary. 
The impairment calculation for the Moorpark cash generating unit is based on an average annual forecast EBITDA to 2021 of £1.2m. The headroom on 
the calculation (of £1.2m) would be reduced to zero if the average annual EBITDA to 2021 were reduced by £0.3m or the discount rate increased to 8.7%. 
The Directors are satisfied that no impairment is necessary.
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 54
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 55
For the year ended 30 September 2016
18. INVENTORIES
  2016 2015
  £000 £000
Raw materials  6,955 5,200
Work in progress  8,689 6,615
Finished goods  3,329 4,198
  18,973 16,013
The cost of inventories recognised as an expense and included in cost of revenue amounted to £56.8m (2015: £49.0m).
The movement in the inventories provision is as follows:  2016 2015
  £000 £000
At 1 October  3,582 4,195
Acquired  264 -
Increase in / (Utilisation of) provision  71 (778)
Exchange rate movement  291 165
At 30 September  4,208 3,582
19. TRADE AND OTHER RECEIVABLES
  2016 2015
  £000 £000
Trade receivables  20,451 11,730
Other receivables  1,326 891
Grant funding held in trust account  230 1,259
Prepayments  672 514
  22,679 14,394
The carrying amount of the Group’s trade and other receivables is denominated in the following currencies:
  2016 2015
  £000 £000
Pound Sterling  9,929 3,530
US Dollar  11,861 8,712
Euro  884 2,148
Yen  5 4
  22,679 14,394
The ageing of trade receivables by due date is as follows:  2016 2015
  £000 £000
Current  14,567 9,383
1 to 3 months  4,701 2,295
Over 3 months  1,402 235
  20,670 11,913
Less provision for impairment  (219) (183)
Net trade receivables  20,451 11,730
The movement on the provision for impairment of trade receivables is as follows: 
  2016 2015
  £000 £000
At 1 October  183 200
Utilisation of provision  - (26)
Increase in provision  28 -
Exchange rate movement  8 9
At 30 September  219 183 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 56
For the year ended 30 September 2016
20. CASH AND CASH EQUIVALENTS
  2016 2015
  £000 £000
Cash at bank and on hand  23,167 22,556
21. TRADE AND OTHER PAYABLES
  2016 2015
  £000 £000
Trade payables  6,386 4,917
Other taxation and social security  553 691
Grant funding held in trust account  230 1,259
Accruals   12,455 7,192
  19,624 14,059
22. BORROWINGS
  2016 2015
  £000 £000
Current:  
Finance leases   4 39
  4 39
Non-current:  
Bank borrowings  11,473 5,189
Finance leases  21 -
  11,494 5,189
Total borrowings  11,498 5,228
The carrying values of the bank borrowings and finance leases are not materially different from their fair values and are included as part of the fair value 
disclosure for all financial instruments in note 29.
Gooch & Housego’s primary lending bank is The Royal Bank of Scotland plc. The Group’s facilities comprise a $15m dollar revolving credit facility and a $20m 
flexible acquisition facility. At 30 September 2016, the balance drawn on the revolving credit facility was $15m (2015: $8m). 
The facilities above are committed until 30 April 2019 and attract an interest rate of between 0.9% and 1.8% above LIBOR dependent upon the 
Company’s leverage ratio. 
Maturity profile of bank and other borrowings
  2016 2015
  £000 £000
Within one year  4 39
Between two and five years   11,494 5,189
  11,498 5,228
23. PROVISION FOR OTHER LIABILITIES AND CHARGES
The movements in the Group provision for other liabilities and charges during the year are as follows: 
  2016 2015
  £000 £000
At 1 October   342 447
Acquired with Kent Periscopes Limited  38 -
Utilised during year  - (118)
Charged to the income statement  556 -
Exchange movements  4 13
At 30 September  940 342
The Group provision for other liabilities and charges includes amounts provided for the anticipated cost of repair and rectification of products under 
warranty, based on known exposures and historical occurrences.
Following a routine audit our internal export compliance team identified two isolated potential violations of export control laws which apply to the 
business. After identifying these, voluntary disclosures were made to the relevant authorities. Management have taken legal advice which indicated 
that a penalty may be imposed. A provision for £500,000 has therefore been made in respect of this contingent liability. FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 57
For the year ended 30 September 2016
24. DEFERRED TAX ASSETS AND LIABILITIES
The movements in the Group’s deferred tax assets and liabilities during the year are as follows:
  2016 2015
  £000 £000
At 1 October   (480) 808
Charged to the income statement  (478) (1,426)
Acquired  (28) -
Arising on acquired intangible assets  (1,121) -
Credited directly to equity   45 78
Exchange movements  (70) 60
Net liability 30 September   (2,132) (480)
The deferred tax provided for in the financial statements is disclosed under the following balance sheet headings and can be analysed as follows:
  2016 2015
  £000 £000
Deferred income tax assets  
Intangible assets  1,071 905
Share options  573 528
Provisions  788 1,114
Other timing differences  242 5
  2,674 2,552
Deferred income tax liabilities  
Property, plant and equipment  (2,446) (1,975)
Intangible assets  (2,360) (1,057)
  (4,806) (3,032)
Deferred tax balance at 30 September  (2,132) (480)
Overseas tax losses of £3.8m (2015: £3.3m) and UK tax losses of £0.8m (2015: £0.8m) are available to offset against future profits of the Group. The 
Group has not recognised a deferred income tax asset of £1.3m (2015: £1.2m) in respect of these losses due to uncertainty as to whether they would 
be utilised within the foreseeable future.
No deferred tax has been provided in relation to unremitted earnings from overseas subsidiaries on the basis that no incremental tax charge is 
currently anticipated to arise upon remittance of these earnings to the UK.
25. CALLED UP SHARE CAPITAL
The movements in the Group’s deferred tax assets and liabilities during the year are as follows:
 2016 2015 2016 2015
 Number Number £000 £000
Issued and fully paid    
At 1 October 24,091,118 23,871,210 4,818 4,774
Shares issued and fully paid 168,906 219,908 34 44
At 30 September 24,260,024 24,091,118 4,852 4,818
During the year 168,906 shares (2015: 204,482 shares) were allotted under share option schemes.  26. RESERVES
    Share Merger Cumulative Retained
    premium reserve translation earnings
    account  reserve
    £000 £000 £000 £000
At 1 October 2015    15,530 2,671 1,030 54,318
Profit for the financial year    - - - 7,048
Dividends paid    - - - (2,055)
Shares issued    - - - (34)
Fair value of share options    - - - 638
Tax credit relating to share options    - - - 220
Currency translation differences    - - 5,954 -
At 30 September 2016    15,530 2,671 6,984 60,135
27. SHARE OPTIONS
The Company operates the Gooch & Housego 2013 Long Term Incentive Plan (the “2013 L TIP”).
The Gooch & Housego 2013 Long Term Incentive Plan
On 9 April 2013, a new Long T erm Incentive Plan was adopted.  Under the plan, awards will be made annually to key employees based on a percentage of 
salary. Subject to the satisfaction of the required TSR performance criteria and EPS financial performance, these grants will vest upon publication of the 
results of the Company three years after the grant date.
There have been four grants of options under the 2013 Long T erm Incentive Plan, the details of which are given below. The remuneration report provides 
further details on the share options awarded and exercised during the financial year. 
The 2013 Long T erm Incentive Plan Awards were valued using the Monte Carlo option pricing model. The expected volatility used in the model was based on 
the historical volatility of the Company’s share price over the three years prior to the grant date.  
 Grant date
 23 Dec 2015 17 Dec 2014 1 Dec 2013 9 Apr 2013
No. of options granted 147,458 260,193 144,875 179,150
Expected volatility 25% 29% 33% 43%
Risk free rate 0.9% 0.8% 0.9% 2.7%
Fair value (£) 629,506 878,475 441,252 429,795
A reconciliation of total share option movements is shown below:
 2016 2015
 Number Weighted Number Weighted
  average   average
  exercise price   exercise price
Outstanding at 1 October 546,300 - 490,589 3.1p
Awarded 147,458 - 260,193 -
Exercised (168,906) - (204,482) 9.0p
Lapsed (12,000) - - -
Outstanding at 30 September 512,852 - 546,300 -
Exercisable at 30 September - - 26,741 -
The weighted average fair value of options granted in the year was 427.0p per option (2015: 338.0p per option). For the options exercised, the average 
market price was 887.0p per share.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
 Expiry date Exercise  Number of share options
  price per
  share option  2016 2015
2010 VCP 6-Jan-2020 0.0p - 26,741
2013 L TIP 8-Apr-2023 0.0p 512,852 519,559
   512,852 546,300
The total charge for the year relating to share options was £638,000 (2015: £485,000), all of which related to equity-settled share based payment 
transactions.
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 58
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 59
For the year ended 30 September 2016
28. OPERATING LEASES
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
  2016 2015
  £000 £000
Within one year  1,199 797
Between two to five years  3,652 2,291
  4,851 3,088
29. FINANCIAL INSTRUMENTS
The Group’s financial instruments comprise bank borrowings, cash at bank, finance leases and various items such as trade receivables and trade 
payables that directly arise from its operations. The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and 
foreign currency risk.
The Board’s policy on these risks is set out in note 5.
Operations are financed through a mixture of retained profits, cash reserves, bank borrowings and finance leases. Other than finance leases the 
Board’s policy is to use variable rate borrowings whenever possible.
The currency profile for the Group’s financial assets and liabilities are set out below.
 Financial assets Financial liabilities
 2016 2015 2016 2015
 £000 £000 £000 £000
Pound Sterling 11,269 8,764 24 39
US Dollars 9,999 12,571 11,474 5,189
Euro 1,857 1,208 - -
Yen 42 13 - -
 23,167 22,556 11,498 5,228
The financial assets listed in the above table are subject to floating rates of interest. The interest rates on the financial liabilities are provided in Note 22.  
The financial assets include cash at bank but exclude short-term receivables, prepayments and other receivables. The financial liabilities includes bank 
borrowings and finance leases.  Other short-term payables are excluded from this disclosure. 
30. CAPITAL COMMITMENTS
  2016 2015
  £000 £000
Authorised and contracted but not provided for  264 4,367
All capital commitments relate to property, plant and equipment.
31. RELATED PARTY TRANSACTIONS
In addition to duties performed in his role as a non-executive director, Dr Peter Bordui has provided additional consultancy services at the request of 
the company. Fees during the year to 30 September 2016 amounted to £19,140 (2015: £18,720). At the balance sheet date the balance outstanding 
totalled £4,785 (2015: £4,680). The transactions are performed in the normal course of business on an arm’s length basis and the outstanding 
balance is unsecured. Dr Peter Bordui has ceased his consultancy services with effect from 1 October 2016.
No other material contracts or arrangements have been entered into during the year, nor existed at the end of the year, in which a director or key 
manager had a material interest. 
Details of key management compensation are given in note 10.  32. ACQUISITIONS
Kent Periscopes Limited
On 8 July 2016, the Group completed the acquisition of the entire issued share capital of Kent Periscopes Limited, a St Asaph, Wales based manufacturer 
of periscopes and vehicle sights. The acquisition strengthened the Group’s position in the aerospace and defence sector.
The consideration for the acquisition was £8m, paid in cash on completion, and a further £2.5m contingent deferred consideration based on the 
performance of the business for a two year period post acquisition.  
The fair value of the assets acquired is summarised as follows:
   Provisional
   fair value
Property, plant and equipment   148
Intangible assets   3,291
Cash   3,376
Trade and other receivables   2,162
Inventory   1,455
Trade and other payables   (3,959)
Current and deferred tax liabilities   (810)
Hire purchase and finance lease liabilities   (27)
Net assets acquired   5,636
Consideration paid:  
Cash paid on completion   8,000
Deferred consideration   2,256
Goodwill   4,620
The fair value of the intangible assets represents the estimated fair value of Kent’s order book, its customer relationships and its brand. These have been 
valued using a discounted cash flow model. The deferred consideration has been discounted using the company’s weighted average cost of capital. 
The goodwill arising on acquisition reflects items not separately recognised, including the expertise of Kent’s employees and their contacts in target markets.
Post-acquisition, the acquired business contributed £1.5 million of revenue and £0.0 million of profit after tax excluding central costs to the 
consolidated income statement. 
Alfalight Inc.
On 6 July 2016, the Group completed the acquisition of the trade and certain assets of Alfalight Inc, a Madison, Wisconsin based expert in diode and 
diode pumped solid state lasers. The acquisition strengthened the Group’s position in the aerospace and deference sector. 
The consideration for the acquisition was £1.1m, paid in cash on completion. 
The fair value of the assets acquired is summarised as follows:
   Provisional
   fair value
Property, plant and equipment   50
Intangible assets   1,528
Trade and other receivables   480
Inventory   295
Trade and other payables   (171)
Current and deferred tax liabilities   (541)
Net assets acquired   1,641
Consideration paid:  
Cash   1,063
Gain on bargain purchase   578
The fair value of the intangible assets represents the estimated fair value of Alfalight’s customer relationships and its brand. These have been valued 
using a discounted cash flow model. 
The gain on bargain purchase of £0.6 million, representing the excess of net assets acquired over the consideration paid, has been credited to the 
income statement. 
Post-acquisition, the acquired business contributed £0.9 million of revenue and £0.2 million of profit after tax excluding central costs to the 
consolidated income statement.
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 60
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 61
Independent Auditors’ Report
REPORT ON THE GROUP FINANCIAL STATEMENTS
OUR OPINION
In our opinion, Gooch & Housego plc’s company financial statements  
(the “financial statements”):
•  give a true and fair view of the state of the company’s affairs as at  
30 September 2016 and of its cash flows for the year then ended;
•  have been properly prepared in accordance with International Financial 
Reporting Standards (“IFRSs”) as adopted by the European Union and as 
applied in accordance with the provisions of the Companies Act 2006; and 
•  have been prepared in accordance with the requirements of the 
Companies Act 2006.
WHAT WE HAVE AUDITED
The financial statements, included within the Annual Report & Financial 
Statements (the “Annual Report”), comprise:
• the Company Balance Sheet as at 30 September 2016; and
•  the Company Cash Flow Statement and the Notes to the Company Cash 
Flow Statement for the year then ended;
• the Company Statement of Changes in Equity for the year then ended; and
•  the notes to the financial statements, which include a summary of 
significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in the preparation 
of the financial statements is IFRSs as adopted by the European Union, and 
applicable law, and as applied in accordance with the provisions of the 
Companies Act 2006. 
In applying the financial reporting framework, the directors have made a 
number of subjective judgements, for example in respect of significant 
accounting estimates. In making such estimates, they have made 
assumptions and considered future events.
OPINION ON OTHER MA TTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, 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 statematements.
OTHER MATTERS ON WHICH WE ARE REQUIRED TO REPORT  
BY EXCEPTION
ADEQUACY OF ACCOUNTING RECORDS AND INFORMATION AND 
EXPLANATIONS RECEIVED
Under the Companies Act 2006 we are required to report to you if, in our 
opinion: 
•  we have not received all the information and explanations we require for 
our audit; or
•  adequate accounting records have not been kept by the company, or 
returns adequate for our audit have not been received from branches 
not visited by us; or
•  the financial statements are not in agreement with the accounting 
records and returns.
We have no exceptions to report arising from this responsibility.
DIRECTORS’ REMUNERATION
Under the Companies Act 2006 we are required to report to you if, in our 
opinion, certain disclosures of directors’ remuneration specified by law are 
not made. We have no exceptions to report arising from this responsibility.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
OUR RESPONSIBILITIES AND THOSE OF THE DIRECTORS
As explained more fully in the Statement of Director’s Responsibilities set out 
on page 30, the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International Standards on 
Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). Those standards require us 
to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the 
company’s members as a body in accordance with Chapter 3 of Part 16 of 
the Companies Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any other purpose or 
to any other person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent in writing.
WHAT AN AUDIT OF FINANCIAL STATEMENTS INVOLVES
We conducted our audit in accordance with ISAs (UK & Ireland). An audit 
involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement, whether 
caused by fraud or error. This includes an assessment of: 
•  whether the accounting policies are appropriate to the company’s 
circumstances and have been consistently applied and adequately 
disclosed; 
•  the reasonableness of significant accounting estimates made by the 
directors; and 
•  the overall presentation of the financial statements. 
We primarily focus our work in these areas by assessing the directors’ 
judgements against available evidence, forming our own judgements, 
and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing 
techniques, to the extent we consider necessary to provide a reasonable 
basis for us to draw conclusions. We obtain audit evidence through 
testing the effectiveness of controls, substantive procedures or a 
combination of both.
In addition, we read all the financial and non-financial information in the 
Annual Report to identify material inconsistencies with the audited 
financial statements and to identify any information that is apparently 
materially incorrect based on, or materially inconsistent with, the knowledge 
acquired by us in the course of performing the audit. If we become aware 
of any apparent material misstatements or inconsistencies we consider 
the implications for our report.
OTHER MATTER
We have reported separately on the group financial statements of Gooch 
& Housego plc for the year ended 30 September 2016.
Colin Bates (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
29 November 2016
TO THE MEMBERS OF GOOCH & HOUSEGO PLC  2016 2015
 Note £000 £000  £000 £000
Non-current assets     
Investments 5  27,169  19,170
Property, plant and equipment 6  7,482  7,936
Intangible assets 7  156  297
Deferred income tax assets 9  681  476
   35,488  27,879
Current assets     
Other receivables 8 2,769  5,031 
Cash and cash equivalents  7,211  8,126 
  9,980  13,157 
Current liabilities      
Trade and other payables 10 (3,774)  (1,995)
Net current assets   6,206  11,162
Non-current liabilities      
Deferred income tax liabilities 9  (101)  (82)
Net assets    41,593  38,959
     
Shareholders’ equity     
Called up share capital 11  4,852  4,818
Share premium account   15,530  15,530
Retained earnings   21,211  18,611
Total equity   41,593  38,959
The financial statements on pages 62 to 71, were approved by the Board of Directors on 29 November 2016 and signed on its behalf by:
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 62
For the year ended 30 September 2016
Company Balance Sheet
Mark Webster  
Director
Andrew N Boteler
Director FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 63
Company Statement 
of Changes in Equity
For the year ended 30 September 2016
  Note Called up  Share Retained Total 
   share premium earnings equity
   capital account
    £000 £000 £000 £000
 At 1 October 2014  4,774 15,420 13,645 33,839
 Profit for the financial year  - - 5,970 5,970
 Total comprehensive income for the year  - - 5,970 5,970
 Dividends 4 - - (1,823) (1,823)
 Proceeds from shares issued  44 110 (38) 116
 Fair value of employee services  - - 485 485
 Tax credit relating to share option schemes  - - 372 372
 Total contributions by and distributions to owners  44 110 (1,004) (850)
 of the parent recognised directly in equity
 At 30 September 2015  4,818 15,530 18,611 38,959
 At 1 October 2015  4,818 15,530 18,611 38,959
 Profit for the financial year  - - 3,750 3,750
 Total comprehensive income for the year  - - 3,750 3,750 
 Dividends 4 - - (2,055) (2,055)
 Proceeds from shares issued  34 - (34) -
 Fair value of employee services  - - 638 638
 Tax credit relating to share option schemes  - - 301 301
 Total contributions by and distributions to owners  34 - (1,150) (1,116)
 of the parent recognised directly in equity
 At 30 September 2016  4,852 15,530 21,211 41,593 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 64
Company Cash Flow 
Statement
  2016 2015
  £000 £000
Cash flows from operating activities   
Cash generated from / (used by) operations  4,280 (510)
Income tax paid  (41) (26)
Net cash generated from / (used by) operating activities  4,236 (536)
Cash flows from investing activities   
Acquisition of subsidiaries, net of cash acquired  (7,999) -
Purchase of property, plant and equipment  (15) (33)
Purchase of intangible assets  (13) (142)
Interest received  36 25
Net cash used in investing activities  (7,991) (150)
Cash flows from financing activities   
Repayment of borrowings  - (1,550)
Proceeds from issues of share capital  - 116
Dividends received from subsidiary companies  4,905 7,150
Dividends paid to ordinary shareholders  (2,055) (1,823)
Interest paid  (13) (6)
Net cash generated from financing activities  2,837 3,887
Net (decrease) / increase in cash  (915) 3,201
Cash at beginning of the year  8,126 4,925
Cash at the end of the year  7,211 8,126 Reconciliation of cash generated from operations 2016  2015
 £000 £000
Profit before income tax 2,561 5,755
Adjustments for:
- Dividends received from subsidiaries (4,905) (7,150)
- Amortisation of other intangible assets 154 143
- Depreciation 469 474
- Share based payment obligations 638 484
- Finance income (36) (25)
- Finance costs 13 37
Total (3,667) (6,037)
Changes in working capital   
- Trade and other receivables 4,038 (613)
- Trade and other payables 1,348 385
Total 5,386 (228)
Cash generated from / (used by) operating activities 4,280 (510)
Analysis of net cash
      At 1 Oct Cash flow At 30 Sep 
      2015  2016
      £000 £000 £000
Cash at bank and in hand     8,126 (915) 7,211
Net cash     8,126 (915) 7,211
Notes to the Company
Cash Flow Statement
FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 65
For the year ended 30 September 2016 FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 66
For the year ended 30 September 2016
1. COMPANY ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared under the historical cost convention as modified by financial assets and liabilities (including derivative 
financial instruments) at fair value and in accordance with International Financial Reporting Standards as adopted by the European Union (“IFRS”) and 
IFRIC interpretations in issue at 30 September 2016, and with those parts of the Companies Act 2006 applicable to companies preparing financial 
statements in accordance with IFRS. The financial statements have been prepared on a going concern basis. 
The accounting policies have been consistently applied over the period reported.
Adoption of new standards
There has been no material impact from the adoption of new standards or revised standards or interpretations which are relevant to the Company:
• IAS 1 Presentation of financial statements (Amendment)
• IAS 16 Property, plant and equipment (Amendment)
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for accounting periods beginning on 
or after 1 October 2016 or later periods but which the Company has chosen not to adopt early . These include the following which are relevant to the Company:
• IFRS 9 Financial instruments (effective for periods beginning on or after 1 January 2018); and
• IFRS 2 (Amendment) Classification and measurement of share based payment transactions (effective for periods ending on or after 1 January 2018)
• IFRS 16 Leases (effective for accounting periods ending on or after 1 January 2019)
•  IAS 12 (Amendment) Amendments to the recognition of deferred tax assets for unrealised losses (effective for accounting periods ending on or after 
1 January 2017)
The Company does not expect that these standards and interpretations, issued but not yet effective, will have a material impact on results or net assets 
of the Company.
Pension schemes
The Company operates a money purchase pension scheme for Directors and staff. The assets of the scheme are held in separately administered funds.  
Contributions are recognised as an employee benefit expense in the income statement when they are due. Prepaid contributions are recognised as an 
asset to the extent that a cash refund or a reduction in the future payments is available. 
Share options
The Company operates a number of share option schemes. In accordance with IFRS 2 the fair value of the employee services received in exchange for 
the grant of the options is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined 
by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability targets). 
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. 
Employer’s National Insurance in the United Kingdom and equivalent taxes in other jurisdictions are payable on the exercise of certain share options. In 
accordance with IFRS 2, this is treated as a cash-settled transaction. A provision is made, calculated using the fair value of the Company’s shares at the 
balance sheet date, pro-rated over the vesting period of the options.
At each balance sheet date, for awards with non market vesting conditions, the entity revises its estimates of the number of options that are expected 
to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. The fair 
value of the options under the Gooch & Housego 2013 Long Term Incentive Plan are determined by using the Monte Carlo option pricing model.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the 
options are exercised.
Foreign currency translation
a.  Functional and presentation currency
The financial statements are presented in Pounds Sterling, which is the Company’s presentation currency.
b.  Transactions and balances
Foreign currency transactions are translated into the  functional currency using the exchange rates prevailing at the dates of the transactions. Foreign 
exchange gains and losses resulting from the settlement of such transactions and from the translation at balance sheet exchange rates of monetary 
assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash 
flow hedges and qualifying net investment hedges.
Property, plant and equipment
Property , plant and equipment is stated at historical purchase cost less 
accumulated depreciation. Cost includes expenditure that is directly 
attributable to the acquisition of the items. No depreciation is charged on 
freehold land or capital work in progress. Depreciation on other assets is 
calculated to allocate their cost over their estimated useful lives, as follows: 
Freehold buildings  2-3% Straight line
 Plant and machinery  10-20% Straight line
 Fixtures, fittings and computers 10-33% Straight line
 Capitalised software and licences 25-33% Straight line
Investments 
Investments are stated at cost less provision for any impairment in value. Where overseas borrowing is required to finance the investment in overseas 
subsidiaries, the investment is retranslated at the exchange rate ruling at the balance sheet date. FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 67
For the year ended 30 September 2016
Deferred tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their 
carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for, if it arises from initial recognition of an 
asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are 
expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary 
differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary 
difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax is recognised in the income statement except to the extent that it relates to items recognised directly in other comprehensive income 
and equity, in which case it is recognised in other comprehensive income and equity.
In the UK and US, the Company is entitled to a tax deduction for amounts treated as compensation on exercise of certain employee share options under 
each jurisdiction’s tax rules. As explained under “Share options” below, a compensation expense is recorded in the Company’s income statement over the 
period from the grant date to the vesting date of the relevant options. As there is a temporary difference between the accounting and tax bases, a deferred 
income tax asset is recorded. The deferred income tax asset arising is calculated by comparing the estimated amount of tax deduction to be obtained in 
the future (based on the Company’s share price at the balance sheet date) with the cumulative amount of the compensation recorded in the income 
statement. If the amount of estimated future tax deduction exceeds the cumulative amount of the remuneration expense at the statutory rate, the 
excess is recorded directly in equity.
Trade Payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of 
resources will be required to settle the obligation; and the amount has been reliably estimated.
Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends 
are approved by the Company’s shareholders.
Financial instruments
The Company has not used derivative financial instruments to hedge its exposure to currency risk. The Company’s interest rate swap expired in the 
year ended 30 September 2015 and has not been renewed. 
Share Capital
Ordinary shares are classified as equity. 
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2. COMPANY PROFIT AND LOSS ACCOUNT
Gooch & Housego PLC has taken advantage of section 408(3) of the Companies Act 2006 and has not included its own profit and loss account in these 
financial statements. The Company’s profit after tax was £3,750,000 (2015: £5,970,000 profit). 
Fees payable to the Company auditors for the statutory audit for the year amounted to £16,000 (2015: £15,800).
3. EMPLOYEE BENEFIT EXPENSE
  2016 2015
  £000 £000
Wages and salaries  1,635 1,520
Social security  170 285
Medical and other insurances  33 20
Share based payments  638 485
Pension costs  100 111
  2,576 2,421
The average number of employees during the year was 8 (2015: 8), all of whom were administrative.   FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 68
For the year ended 30 September 2016
Directors’ remuneration
  2016 2015
  £000 £000
Directors’ remuneration  1,192 1,214
Relocation allowance  23 64
Medical and other insurances  33 20
Directors’ pension scheme contributions  80 97
  1,328 1,395
The aggregate emoluments of the highest paid Director including gain on exercise of share options were £617,000 (2015: £1,421,000). Further 
information is included in the Remuneration Committee report on page 35. 
The aggregate gain on Directors’ share option exercises in the year was £807,000 (2015: £1,291,000). 
The number of Directors who are accruing retirement benefits under a money purchase pension scheme is 2 (2015: 2).
These disclosures have been audited.
4. DIVIDENDS
  2016 2015
  £000 £000
Final 2015 dividend paid in 2016: 5.2p per share. (Final 2014 dividend paid in 2015: 4.6p per share)  1,254 1,101
2016 Interim dividend paid: 3.3p per share (2015: 3.0p)  801 722
  2,055 1,823
The Directors propose a final dividend of 5.7p per share making the total dividend paid and proposed in respect of the 2016 financial year 9.0p (2015: 
8.2p). Should the final dividend be approved at the Company Annual General Meeting, cut-off dates for payment are:  
- Record date  16 December 2016
- Payment date 3 March 2017
5. INVESTMENTS
  2016 2015
  £000 £000
Cost and net book value at 1 October   19,170 19,170
Additions  7,999 -
Cost and net book value at 30 September   27,169 19,170
The subsidiary companies at 30 September 2016, all of which are wholly owned either directly or indirectly, are listed below:
Company Name % ownership of Location and country Activity
  ordinary shares of incorporation
Gooch & Housego (UK) Limited 100% Ilminster, UK Manufacturer of acousto-optic products and precision optics
Gooch & Housego (Torquay) Limited 100% Torquay, UK Manufacturer of fibre-optic products
Spanoptic Limited 100% Glenrothes, UK Manufacturer of precision optics
Kent Periscopes Limited 100% St Asaph, UK Manufacturer of periscopes and vehicle sights
Gooch & Housego (Deutschland) GmbH 100% Norderstedt, Germany Provider of sales and customer service functions
Constelex Technology Enablers Limited 100% Athens, Greece Designer and manufacturer of advanced photonic systems
Gooch & Housego (Ohio) LLC 100% Cleveland, USA Manufacturer of electro-optic products and crystals
Gooch & Housego (California) LLC 100% Moorpark, USA Manufacturer of precision optics
Gooch & Housego (Florida) LLC 100% Melbourne, USA Manufacturer of acousto-optic products
Optronic Laboratories LLC 100% Orlando, USA Manufacturer of instruments for measuring optical radiation
EM4 Inc. 100% Boston, USA Manufacturer of fibre optics products
Gooch & Housego (Palo Alto) LLC 100% Palo Alto, USA  Manufacturer of acousto-optic, electro-optic and fibre optic 
components and systems
Gooch & Housego Japan KK 100% Nagoya, Japan Provider of sales and customer service functions
G&H (Property) Holdings Limited 100% Ilminster, UK Property holding company
G&H (US Holdings) Limited 100% Ilminster, UK Holding company
G&H Holdings (Delaware) Inc. 100% Delaware, USA Holding company
G&H Capital Holdings (Florida) Inc. 100% Florida, USA Holding company
The directors believe that the carrying value of the investments is supported by their underlying net assets.
The entire share capital of Kent Periscopes Limited was acquired on 8 July 2016. FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 69
For the year ended 30 September 2016
6. PROPERTY , PLANT AND EQUIPMENT
   Freehold Plant and Fixtures, Computer Total
   land and machinery fittings and equipment
   buildings  computers 
   £000 £000 £000 £000 £000
Cost or valuation     
At 1 October 2014   6,178 3,966 1,392 478 12,014
Additions   5 21 - 5 31
At 30 September 2015   6,183 3,987 1,392 483 12,045
Additions   - - - 15 15
At 30 September 2016   6,183 3,987 1,392 498 12,060
Accumulated depreciation     
At 1 October 2014   1,031 1,525 611 468 3,635
Charge for the year   108 265 93 8 474
At 30 September 2015   1,139 1,790 704 476 4,109
Charge for the year   108 265 93 3 469
At 30 September 2016   1,247 2,055 797 479 4,578
Net book value
At 1 October 2014   5,147 2,441 781 10 8,379
At 30 September 2015   5,044 2,197 688 7 7,936
At 30 September 2016   4,936 1,932 595 19 7,482
7. INTANGIBLE ASSETS
  Computer Other Total
  software  
  £000 £000 £000
Cost or valuation
At 1 October 2014  1,216 311 1,527
Additions  - 141 141
At 30 September 2015  1,216 452 1,668
Additions  - 13 13
At 30 September 2016  1,216 465 1,681
Accumulated depreciation
At 1 October 2014  1,005 223 1,228
Charge for the year  81 62 143
At 30 September 2015  1,086 285 1,371
Charge for the year  73 81 154
At 30 September 2016  1,159 366 1,525
Net book value
At 1 October 2014  211 88 299
At 30 September 2015  130 167 297
At 30 September 2016  57 99 156
8. OTHER RECEIVABLES
  2016 2015
  £000 £000
Amounts owed by group undertakings  251 3,533
Prepayments and accrued income  86 84
Group tax relief receivable  2,432 1,414
  2,769 5,031
Amounts owed by group undertakings are unsecured and due within one year. Non-trading amounts owed by US group undertakings are charged 
interest at the US LIBOR rate applicable for the year. Non-trading amounts owed by UK group undertakings are charged interest at the UK LIBOR rate 
applicable for the year. FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 70
For the year ended 30 September 2016
9. DEFERRED TAX
The movement in the Company deferred tax asset / (liability) during the year was as follows:
  2016 2015
  £000 £000
At 1 October  394 (44)
Credited to the income statement  61 66
Credited directly to reserves  125 372
At 30 September  580 394
The deferred tax provided for in the financial statements can be analysed as follows:
  2016 2015
  £000 £000
Property, plant and equipment  (101) (82)
Share options  497 372
Other timing differences  184 104
  580 394
Factors affecting the future tax charge
Changes to the UK corporation tax rates were substantively enacted as part of the Finance Bill 2015 on 26 October 2015. These include reductions to 
the main rate to reduce the rate to 19% from 1 April 2017 and 18% from 1 April 2020. The Finance Bill 2016 replaced the 18% rate with 17% and was 
substantively enacted on 15 September 2016. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and 
reflected in the financial statements.
10. TRADE AND OTHER PAYABLES
 2016 2015
 £000 £000
Trade payables 410 168
Amounts owed to group undertakings 1,264 145
Taxation and Social Security 226 387
Accruals and deferred income 1,874 1,295
 3,774 1,995
Amounts owed to group undertakings are unsecured and due within one year. Non-trading amounts owed to US group undertakings are charged 
interest at the US LIBOR rate applicable for the year. Non-trading amounts owed to UK group undertakings are charged interest at the UK LIBOR rate 
applicable for the year.
Following a routine audit our internal export compliance team identified two isolated potential violations of export control laws which apply to the 
business. After identifying these, voluntary disclosures were made to the relevant authorities. Management have taken legal advice which indicated 
that a penalty may be imposed. A provision for £500,000 has therefore been made in respect of this contingent liability.
11. CALLED UP SHARE CAPITAL
 2016 2015 2016 2015
 Number Number £000 £000
Allotted, issued and fully paid    
At 1 October 24,091,118 23,871,210 4,818 4,774
Shares issued and fully paid 168,906 219,908 34 44
At 30 September 24,260,024 24,091,118 4,852 4,818
During the year 168,906 shares (2015: 204,482 shares) were allotted under share option schemes.  FINANCIAL STATEMENTS GOOCH & HOUSEGO PLC 71
For the year ended 30 September 2016
12. SHARE OPTIONS
The Company operates the Gooch & Housego 2013 Long Term Incentive Plan (the “2013 L TIP”).
The Gooch & Housego 2013 Long Term Incentive Plan
On 9 April 2013 a new Long Term Incentive Plan was adopted. Under the plan, awards will be made annually to key employees based on a percentage of 
salary or management grade. Subject to the satisfaction of the required TSR performance criteria and EPS financial performance, these grants will vest 
upon publication of the results of the Company three years after the grant date.
There have been four grants of options under the 2013 Long Term Incentive Plan, the details of which are given below. The remuneration report provides 
further details on the share options awarded and exercised during the financial year. 
The 2013 Long Term Incentive Plan Awards were valued using the Monte Carlo option pricing model. The expected volatility used in the model was based 
on the historical volatility of the Company’s share price over the three years prior to the grant date.
 Grant date
 23 Dec 15 17 Dec 2014 9 Apr 2013 9 Apr 2013
No. of options granted 147,458 260,193 144,875 179,150
Expected volatility 25% 29% 33% 43%
Risk free rate 0.9% 0.8% 0.9% 2.7%
Fair value (£) 629,506 878,475 441,252 429,795
A reconciliation of total share option movements is shown below:
 2016 2015
 Number Weighted Number Weighted
  average  average
  exercise  exercise
  price  price
Outstanding at 1 October 546,300 - 490,589 3.1p
Awarded 147,458 - 260,193 -
Exercised (168,906) - (204,482) 9.0p
Lapsed (12,000) - - -
Outstanding at 30 September 512,852 - 546,300 -
Exercisable at 30 September - - 26,741 -
The weighted average fair value of options granted in the year was 427.0p (2015: 338.0p). For the options exercised, the average market price was 
887.0p per share.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
 Expiry Exercise Number of 
 date price per share options
 exercise share 2016 2015
 price option
2010 VCP 6-Jan-2020 0.0p - 26,741
2013 L TIP 8-Apr-2023 0.0p 512,852 519,559
   512,852 546,300
The total charge for the year relating to share options was £638,000 (2015: £485,000), all of which related to equity-settled share based payment 
transactions.
13. RELATED PARTY DISCLOSURES
In addition to duties performed in his role as a non-executive director Dr Peter Bordui has provided additional consultancy services at the request of the 
company. Fees during the year to 30 September 2016 amounted to £19,140 (2015: £18,720), at the balance sheet date the balance outstanding totalled 
£4,785 (2015: £4,680). The transactions are performed in the normal course of business on an arm’s length basis and that the outstanding balance is 
unsecured. Dr Peter Bordui has ceased his consultancy services with effect from 1 October 2016.
The company recharges certain costs and provides financing to its subsidiaries in the ordinary course of business. The closing balances due from and to 
the subsidiary companies are shown in notes 8 and 10 respectively.
No other material contracts or arrangements have been entered into during the year, nor existed at the end of the year, in which a director or key 
manager had a material interest. 
14. FIRST TIME ADOPTION OF IFRS
This is the first time the company has presented its results under International Financial Reporting Standards as adopted by the European Union (IFRSs). 
The policies applied under the entity’s previous accounting framework are not materially different to IFRS and have not had a material effect on equity 
or profit or loss. Consequently no transition notes are required. As required by IFRS, certain assets previously included within tangible assets, including 
computer software and licences, have been reclassified to intangible assets.  SHAREHOLDER INFORMATION GOOCH & HOUSEGO PLC 72
Company Information
NOMINATED ADVISER AND BROKER
Investec Bank plc
2 Gresham Street
London 
EC2V 7QP
LEGAL ADVISERS
Burges Salmon LLP
One Glass Wharf
Bristol
BS2 0ZX
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
2 Glass Wharf
Bristol
BS2 0FR
REGISTRARS
Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent 
BR3 4TU
COMPANY SECRETARY AND REGISTERED OFFICE
COMPANY SECRETARY Gareth J Crowe
REGISTERED OFFICE Dowlish Ford
 Ilminster
 Somerset 
 T A19 0PF
 United Kingdom
COMPANY NUMBER 00526832
EXPECTED FINANCIAL CALENDAR
Annual General Meeting  22 February 2017
Payment date for final dividend for the year ended 30 September 2016 to shareholders on the  3 March 2017 
register at close of business 16 December 2016.
Subject to approval by shareholders at the Annual General Meeting
Interim Results announcement June 2017
Financial Year End  30 September 2017
Preliminary announcement of results for the year ended  December 2017
30 September 2017
FOR FURTHER INFORMATION PLEASE CONTACT:
Gooch & Housego PLC Mark Webster / Andrew Boteler 01460 256 440
Investec Bank PLC (Nomad & Broker) Patrick Robb / David Anderson 020 7597 5970
Buchanan Communications Mark Court / Sophie Cowles 020 7466 5000 SHAREHOLDER INFORMATION GOOCH & HOUSEGO PLC 73
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the 
Company will be held at Dowlish Ford, Ilminster, Somerset, T A19 0PF on 
22 February 2017 at 11.00 a.m. for the following purposes:
To consider and, if thought fit, to pass the following resolutions as 
Ordinary Resolutions:
1   To receive the Annual Report and Financial Statements for the 
financial year ended 30 September 2016 together with the Directors’ 
Report and Auditor’s Report thereon.
2   T o receive and approve the Remuneration Committee Report set out on 
pages 33 to 36 (excluding page 34) of the Annual Report and Financial 
Statements for the financial year ended 30 September 2016.
3  To declare a final dividend, as recommended by the Directors,  
of 5.7 pence per ordinary share for the financial year ended 30 
September 2016. 
4 To re-elect Gareth Jones as a Director.
5 To re-elect Mark Webster as a Director.
6 To re-elect Alex Warnock as a Director.
7 To re-elect Andrew Boteler as a Director.
8 To re-elect Peter Bordui as a Director.
9 To re-elect Brian Phillipson as a Director.
10 To re-appoint Messrs PricewaterhouseCoopers LLP as Auditors.
11 To authorise the Directors to fix the remuneration of the Auditors. 
12   THA T the Directors of the Company be, and they are hereby, generally 
and unconditionally authorised in accordance with section 551 of the 
Companies Act 2006 (the “ Act”), in substitution for any existing authority 
to the extent unused, to exercise all the powers of the Company to allot 
shares in the Company or grant rights to subscribe for or to convert any 
security into shares in the Company on, and subject to, such terms as the 
Directors may determine. The authority hereby conferred shall, subject 
to section 551 of the Act, be for a period commencing on the date of the 
passing of this Resolution and expiring at the conclusion of the next 
Annual General Meeting of the Company or 22 May 2018 (whichever is 
the earlier) unless reviewed, varied or revoked by the Company in General 
Meeting and the maximum nominal amount of shares which may be 
allotted pursuant to such authority shall be £1,617,335 (representing 
approximately one third of the total ordinary share capital of the 
Company in issue at 29 November 2016). The Directors shall be 
entitled under such authority to make at any time prior to the expiry 
of such authority any offer or agreement which would or might 
require shares in the Company to be allotted after the expiry of such 
authority and the Directors may allot shares in pursuance of such 
offer or agreement as if such authority had not expired. 
  To consider and, if thought fit, to pass the following resolutions as 
Special Resolutions:
13  THA T the Directors of the Company be, and they are hereby, generally 
and unconditionally empowered pursuant to section 570 of the 
Companies Act 2006 (the “ Act”), in substitution for any existing authority 
to the extent unused, to allot equity securities (as defined in section 560 
of the Act) for cash pursuant to the authority conferred by Resolution 
12 above as if section 561 of the Act did not apply to such allotment, 
provided that the power hereby conferred shall be limited to:  
(i) the allotment of equity securities in connection with an offer of 
securities, open for acceptance for a period fixed by the Directors, by 
way of rights to the holders of ordinary shares in proportion (as nearly 
as may be) to the respective numbers of ordinary shares held by them 
on a record date fixed by the Directors and subject to such exclusions or 
other arrangements as the Directors may deem necessary or expedient 
to deal with legal or practical problems under the laws of any overseas 
territory or the requirements of any regulatory body or any stock 
exchange in any territory or in connection with fractional elements or 
otherwise howsoever; and  
(ii) otherwise than pursuant to sub-paragraph (i) above, the allotment 
of equity securities up to an aggregate nominal amount of £485,200 
(representing approximately 10 per cent. of the total ordinary share 
capital of the Company in issue at 29 November 2016),
  and the power hereby conferred shall expire at the conclusion of the 
next Annual General Meeting of the Company or 22 May 2018 
(whichever is the earlier), save that the Company may before such 
expiry make an offer or agreement which would or might require 
equity securities in the Company to be allotted after such expiry and 
the Directors may allot equity securities in pursuance of such offer or 
agreement as if the power conferred hereby had not expired. 
14  THA T the Company be and is hereby generally and unconditionally 
authorised for the purposes of section 701 of the Companies Act 
2006 (the “Act”) to make one or more market purchases (within the 
meaning of section 693(4) of the Act) of fully paid ordinary shares of 
£0.20 each in the capital of the Company on such terms and in such 
manner as the Directors may determine, provided that: 
(a) the maximum aggregate number of ordinary shares hereby 
authorised to be purchased is 2,426,002 (representing approximately 
10 per cent. of the total ordinary share capital of the Company in issue 
at 29 November 2016); 
(b) the minimum price (exclusive of expenses) which may be paid for 
each ordinary share is 20 pence per share; 
(c) the maximum price (exclusive of expenses) which may be paid for 
each ordinary share shall not be more than 5 per cent. above the average 
of the middle market quotations for an ordinary share as derived from 
the AIM section of the London Stock Exchange Daily Official List for the 
five business days immediately preceding the date on which the 
ordinary share is contracted to be purchased;  
(d) unless previously renewed, varied or revoked, the authority hereby 
conferred shall expire at the conclusion of the next Annual General 
Meeting of the Company or 22 May 2018 (whichever is the earlier); 
(e) the Company may , pursuant to the authority hereby conferred, enter 
into a contract to purchase ordinary shares which would, will or might 
be executed wholly or partly after the expiry of such authority and 
the Company may make a purchase of ordinary shares in pursuance 
of such contract as if the authority conferred hereby had not expired.
By order of the Board 
Gareth J Crowe 
Company Secretary   29 November 2016
Registered Office: Dowlish Ford, Ilminster, Somerset T A19 0PF 
Registered Number: 526832
Notice of Annual General Meeting SHAREHOLDER INFORMATION GOOCH & HOUSEGO PLC 74
1   Explanatory note on Resolution 2: Resolution 2 is an advisory vote only. 
The Remuneration Committee Report is set out on pages 33 to 36 of 
the Annual Report and Financial Statements for the financial year ended 
30 September 2016. Pages 33, 35 and 36 of the Remuneration 
Committee Report set out the pay and benefits received by each of the 
directors for the year ended 30 September 2016. The Company’s policy 
on remuneration and potential pay outs to directors in the future, which 
is set out on page 34 of the Annual Report and Financial Statements 
for the financial year ended 30 September 2016, is specifically 
excluded from this Resolution.
2   Resolutions 1 to 12 (inclusive) are proposed as Ordinary Resolutions. This 
means that for those resolutions to be passed, more than half of the 
votes cast on such resolutions must be in favour of such resolutions. 
Resolutions 13 and 14 are proposed as Special Resolutions. This means 
that for those resolutions to be passed, at least three-quarters of the 
votes cast on such resolutions must be in favour of such resolutions.
3   A member entitled to attend and vote at the meeting is entitled to 
appoint one or more proxies to exercise all or any of the member’s rights 
to attend, speak and vote at the meeting (or any adjournment of the 
meeting). A proxy need not be a member of the Company. If a member 
appoints more than one proxy in relation to the meeting, each proxy 
must be appointed to exercise the rights attached to a different share 
or shares held by that member. If a member submits more than one valid 
proxy appointment in relation to the same share, the appointment 
received last before the latest time for receipt of proxies will take 
precedence. A member may only appoint a proxy in accordance with 
the procedures described in notes 4,5 and 6.
4   To appoint a proxy outside of the CREST system, a form of proxy is 
enclosed for use. To be valid, this form of proxy (and any power of 
attorney or other authority (if any) under which it is signed) must by 
duly completed and signed and sent to or deposited at the office of the 
Company’s registrars, Capita Asset Services, PXS, 34 Beckenham Road, 
Beckenham, Kent BR3 4TU so as to be received not less than 48 hours 
before the time for holding the meeting (or any adjournment of the 
meeting). Completion of a form of proxy does not preclude a member 
from attending and voting in person at the meeting if that member 
so wishes.
5   T o appoint as a proxy a person other than the Chairman of the meeting, 
a member must insert the proxy’s full name in the box on the proxy form. 
If a member signs and returns a proxy form with no name in the box, 
the Chairman of the meeting will be deemed to be the member’s proxy. 
Where a member appoints as a proxy someone other than the Chairman, 
the member is responsible for ensuring that the proxy attends the 
meeting and is aware of the member’s voting intentions. If a member 
wishes a proxy to make any comments on the member’s behalf, the 
member will need to appoint someone other than the Chairman and 
give them the relevant instructions directly.
6   To appoint a proxy or to give or amend an instruction to a previously 
appointed proxy via the CREST system (Capita ID: RA10), the CREST 
message must be received by the issuer’s agent by 11.00 a.m. on 20 
February 2017. For this purpose, the time of receipt will be taken to be 
the time (as determined by the timestamp applied to the message by 
the CREST Applications Host) from which the issuer’s agent is able to 
retrieve the message. After this time any change of instructions to a 
proxy appointed through CREST should be communicated to the proxy 
by other means. CREST Personal Members or other CREST sponsored 
members, and those CREST Members who have appointed voting service 
provider(s) should contact their CREST sponsor or voting service 
provider(s) for assistance with appointing proxies via CREST . For further 
information on CREST procedures, limitations and system timings please 
refer to the CREST Manual. The Company or its Registrars may treat as 
invalid a proxy appointment sent by CREST in the circumstances set out 
in Regulation 35(5) (a) of the Uncertificated Securities Regulations 
2001. In any case your Form of Proxy must be received by the Company’s 
Registrars by no later than 11.00 a.m. on 20 February 2017.
7   A member which is a corporation is entitled to appoint one or more 
corporate representatives to exercise the same powers on behalf of the 
corporation as the corporation could exercise if it were an individual 
member. If a member which is a corporation appoints more than one 
corporate representative in relation to the meeting (or any adjournment 
of the meeting), each such corporate representative shall be entitled 
to exercise the same powers on behalf of that corporation as that 
corporation could exercise if it were an individual member, provided that 
if such persons purport to exercise those powers the same way, those 
powers shall be treated as exercised in that way, but if those persons 
purport to exercise those powers in different ways, those powers shall 
be treated as not exercised. In the case of a member which is a 
corporation, the proxy form must be executed under the corporation’s 
common seal or signed on its behalf by a duly authorised officer of the 
corporation or an attorney for the corporation.
8   Pursuant to Regulation 41 of the Uncertificated Securities Regulations 
2001, the Company specifies that only those members entered in the 
Company’s register of members at close of business  on 20 February 
2017 shall be entitled to attend and vote at the meeting in respect of 
the number of shares registered in their names at that time. Changes in 
the Company’s register of members after that time shall be disregarded 
in determining the rights of any person to attend and vote at the 
meeting. If the meeting is adjourned, the time which is 48 hours 
(disregarding any part of a day which is not a working day) before the 
time fixed for the adjourned meeting shall apply for the purpose of 
determining the entitlement of members to attend and vote at the 
adjourned meeting.
9   Copies of Directors’ service agreements and letters of appointment 
and the rules of the Company’s share option schemes will be available 
for inspection at the registered office of the Company from the date 
of this Notice of AGM until the date of the meeting during normal 
business hours, and at the place of the meeting from 10.45 a.m. until 
its conclusion.
Notes  www.goochandhousego.com > | GOOCH & HOUSEGO PLC Gooch & Housego PLC 
Dowlish Ford, Ilminster 
TA19 0PF, United Kingdom
T: +44 (0)1460 256440  
E:  plc@goochandhousego.com
goochandhousego.com
ANNUAL REPORT
SEPTEMBER 2016
GOOCH & HOUSEGO  ANNUAL REPORT 2016
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