TT electronics plc
Clive House
12 – 18 Queens Road
Weybridge
Surrey KT13 9XB
Reg.No.87249
Tel +44 (0) 1932 841310
Fax +44 (0) 1932 836450
www.ttelectronics.com
TT electronics plc
Annual Report 2003
T omorrow’s T echnology
TT electronics plc  Annual Report 2003 Who we are and what we do
TT electronics is a global supplier 
of high quality electronic and
electrical products to the World’s
major original equipment
manufacturers. It is committed 
to the development of innovative
products for the automotive,
telecom, computer and 
industrial markets.
The group has World class global
manufacturing presence with
factories employing over 8,500
people in the United Kingdom,
Continental Europe, USA and 
low labour cost countries.
Our vision
Our vision is to be a global leader 
in the application of tomorrow’s
technology in the products 
we manufacture.
Contents
Page
1 Highlights and ﬁnancial information
2 Chairman’s statement
5 Tomorrow’ s T echnology
6 – Product development
7 – Breadth of markets
8 – Operational efﬁciency
9 Chief Executive’s statement
12 Financial review
14 Directors and Company Secretary
15 Directors’ report
20 Directors’ remuneration report
24 Consolidated proﬁt and loss account
25 Consolidated balance sheet
26 Consolidated cash ﬂow statement
27 Statement of total recognised gains and losses
27 Reconciliation of movements in shareholders’ funds
28 Company balance sheet
29 Accounting policies
31 Notes to the ﬁnancial statements
53 Report of the Independent Auditors
54 Notice of meeting
56 Group operations
58 Historical record
59 Form of proxy
IBC Shareholder information
Designed and produced by Linnett Webb Jenkins. Printed by CTD Capita Limited.
Annual General Meeting
The Annual General Meeting will be held on 19 May 2004 at 
12 noon at the Ironmongers’ Hall, Shaftesbury Place, Barbican,
London EC2Y 8AA.
Results
Announcement of 2004 half year results –  mid September 2004
Preliminary announcement of 2004 results –  late March 2005
Annual Report 2004 – to be posted mid April 2005
Dividends
The ﬁnal dividend in respect of the year to 31 December 2003
will be paid on 28 May 2004 to those shareholders on the
register on 21 May 2004. Shares ex dividend on 19 May 2004.
The interim dividend in respect of the year to 31 December 2004
will be paid in late October 2004.
For those shareholders who currently receive their dividends 
by post, arrangements can be made to pay your dividends
automatically into your bank or building society account.
A registration form will be included with the ﬁnal dividend.
This service has a number of beneﬁts:
– there is no chance of the dividend cheque going missing 
in the post; and
– the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without the
need to wait for the cheque to clear .
Multiple accounts on the shareholder register
If you have received two or more copies of this document, this
means that there is more than one account in your name on the
shareholder register .This may be caused by either your name or
address appearing on each account in a slightly different way.
For security reasons, the Registrars will not amalgamate the
accounts without your written consent, so if you would like any
multiple accounts combined into one account, please write to
Lloyds TSB Registrars at the address given below.
Share dealing services
Shareview dealing is a telephone and internet service arranged
through Lloyds TSB Registrars and provides a simple and
convenient way of selling TT electronics plc shares.
For telephone sales call 0870 850 0852 between 8.30am 
and 4.30pm, Monday to Friday, and for internet sales log 
on to www.shareview.co.uk/dealing.
A postal dealing service for buying and selling TT electronics plc
shares is also available and a form can be obtained by calling
0870 242 4244.
Shareholder information
ShareGift
ShareGift is a charity share donation scheme for shareholders,
administered by The Orr Mackintosh Foundation. It is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomical to sell on a commission
basis. Further information can be obtained at
www.sharegift.org or from Lloyds TSB Registrars.
Shareholder enquiries
Lloyds TSB Registrars maintain the register of members of the
Company. If you have any queries concerning your shareholding,
or if any of your details change, please contact the Registrars:
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Telephone
0870 600 3970
Fax
0870 600 3980 
Textphone for shareholders with hearing difﬁculties 
0870 600 3950
Lloyds TSB Registrars also offer a range of shareholder
information on line at www.shareview.co.uk.
Website
Information on the group’s activities, share price and ﬁnancial
performance is available at www.ttelectronics.com. TT electronics plc Annual Report 2003 1
Highlights
• Proﬁt before goodwill amortisation, exceptional items and taxation 
was £20.0 million (2002 – £19.2 million)
• Group turnover on continuing activities of £527.5 million 
(2002 – £512.5 million)
• Sales to the automotive market grew by 12 per cent which was ahead 
of the average market growth.The group has received over £350 million
new automotive orders spread over the lives of the product lines
• The acquisition of Optek T echnology for £30.3 million signiﬁcantly
expanded our sensor activities and will contribute to group 
proﬁtability in 2004
• The Board is recommending a maintained ﬁnal dividend of 6.36p per
share bringing the total for the year to 10.05p (2002 – 10.05p)
Financial information
2003 2002
£million £million
T urnover – continuing activities 527.5 512.5
– discontinued activities 6.4 7.8
T urnover – total 533.9 520.3
Operating proﬁt before impairment provisions and goodwill amortisation 22.1 22.4
Interest (2.1) (3.2)
Proﬁt before impairment provisions, goodwill amortisation, exceptional items and taxation 20.0 19.2
Proﬁt on ordinary activities after taxation on continuing activities 10.8 9.6
Earnings per share, basic and fully diluted (0.1)p 3.6p
Earnings per share before impairment provisions, goodwill  amortisation and exceptional items 10.4p 10.1p
Ordinary dividends per share 10.05p 10.05p 2 TT electronics plc Annual Report 2003
Turnover for 2003 on continuing activities was £527.5 million
compared with £512.5 million in the previous year , an increase
of 3 per cent. Proﬁt before taxation, impairment provisions,
goodwill amortisation, and exceptional items was £20.0 million
(2002 – £19.2 million). No impairment provisions were made
this year (2002 – £10.4 million), goodwill amortisation was
£1.8 million (2002 – £2.1 million) and exceptional items
totalled £15.0 million (2002 – £1.2 million credit).After these
items the proﬁt before taxation amounted to £3.2 million
(2002 – £7.9 million).
The exceptional items totalling £15.0 million (2002 – £1.2 million
credit) comprise reorganisation costs of the group’s magnetic
businesses of £3.7 million; goodwill in respect of these
magnetic businesses of £10.1 million which had previously
been written-off to reserves in 1995; the loss on sale of the
business of Air Transport Avionics Limited of £0.4 million 
and associated goodwill written-off to reserves in 1994 of 
£0.8 million.A taxation charge of £3.2 million has been incurred
being at an effective rate of 23 per cent (2002 – 27 per cent).
Interest costs have reduced to £2.1 million from £3.2 million 
in 2002. Earnings per share before impairment provisions,
goodwill amortisation and exceptional items were 10.4p
compared with 10.1p in 2002.
After a difﬁcult ﬁrst half-year I am pleased to report that the
group achieved a 19 per cent growth in proﬁt over the ﬁrst half
of 2003. Operating proﬁt before goodwill amortisation increased
to £12.0 million from £10.1 million in the ﬁrst half of 2003 and
compares with £9.3 million in the second half of 2002.
The group ended the year with net borrowings of £78.2 million
compared with £55.8 million in 2002.The increase in borrowings
was mainly due to the US$51.3 million (£30.3 million)
consideration for the acquisition of Optek Technology Inc.
The reduction in the borrowings before the acquisition of
Optek Technology conﬁrms the strong cash management
of the group.
During the year TT electronics has beneﬁted from a continuing
growth in the requirement for electronic products by the
automotive industry.Automotive sales have grown by 12 
per cent and the group has received substantial new orders
amounting to over £350 million spread over the lives of the
product lines we are supplying. Sales to the telecom industry
have continued to suffer from lack of demand. Order intake,
however , has recently shown signs of improvement.As stated
in my half-year Chairman’s statement we have discontinued 
our laminations business and closed our ferrite manufacturing
in the USA and United Kingdom.We are transferring our ferrite
manufacturing to India and are in the course of expanding 
our Indian factory to handle the increased volumes.
Within the Electrical sector we continue to concentrate on those
business areas which in the future will have the ability to meet
the group’s ﬁnancial requirements. During the year we ceased
the manufacture of generator sets in the United Kingdom and
these are now only manufactured in our Mexican facility.
We have continued to follow our policy of seeking to acquire
businesses at sensible prices which will strengthen our position
in the marketplace.As reported in my interim statement, the
net assets of Demo Tableaux de Commande SA with a book
value of £4.4 million were purchased for £1.7 million on
14 March 2003. Demo manufactures electromechanical climate
controls which complement our electronic climate control units.
In recent months there has been an
improvement in the group’s order
intake and as a result TT electronics
looks forward with conﬁdence to
better trading conditions.
The acquisition of Optek T echnology
is a signiﬁcant expansion of our
successful sensor activities.
John Newman
Chairman’s statement TT electronics plc Annual Report 2003 3
On 3 December 2003 Optek Technology Inc was acquired 
for a consideration of US$51.3 million (£30.3 million) subject 
to completion accounts.The Company has its engineering 
and administrative centre at Carrollton,Texas, USA and its
manufacturing facility in Juarez, Mexico, the other side of the
USA border to El Paso.This acquisition represents a signiﬁcant
expansion of the group’s sensor activities. In the year to 
31 January 2003 Optek Technology made proﬁts before goodwill
amortisation, interest and tax of US$4.0 million (£2.4 million)
on a turnover of US$68.6 million (£40.4 million). Prior to 
the acquisition Optek Technology closed its silicon wafer
manufacturing facility and consolidated all manufacturing 
in Juarez, Mexico resulting in a signiﬁcant improvement 
in proﬁtability. Optek Technology is a leading supplier of
infrared light emitting diodes.These components are used in
marketplaces served by the group including the ofﬁce equipment
market where the products are used for photocopiers and mail
handling devices to monitor the edge of a moving sheet of
paper . Optek Technology also manufactures sensors for the
automotive industry particularly used for cam and crankshafts.
The reputation of Optek Technology in the marketplace leads us 
to believe that there will be opportunity for good future growth.
On 11 March 2004,TT electronics announced the acquisition
of Sensopad Technologies Ltd, for a cash consideration of 
£1.4 million together with the payment of future royalties.
Sensopad Technologies has developed an inductive sensor
technology that has both position and angle capabilities.
The group believes that this is the technology which will enable 
it to secure orders from the automotive industry in the year
2006 onwards when we commence to replace products based
on the Hall effect technology.This acquisition will ensure the
group’s future growth in the automotive market.
TT electronics holds a 24.4 per cent shareholding in Pressac plc,
a manufacturer of relays, electronic and plastic components
for the automotive and telecom accessories markets. On 
7 January 2004, Sheridan Comonte joined the Board of Pressac;
in 2003 we did not have a signiﬁcant inﬂuence on the affairs 
of Pressac and have therefore treated this shareholding as an
investment. Pressac has a strong presence in the European
automotive industry particularly in France.
The Board recommends a ﬁnal dividend of 6.36p per share,
this brings the total dividend for the year to 10.05p, the same
as last year .The dividend will be paid to shareholders on the
register on 21 May and will be payable on 28 May 2004.
The requirement to adopt International Financial Reporting
Standards comes into effect with our 2005 accounts.We are
keeping the matter under review to ensure that the adoption 
of these standards runs smoothly.
The Board continues to address the issues of Corporate
Governance including the Revised Code based on the 
reports of Sir Derek Higgs and Sir Robert Smith. Mr Timothy
Reed, a non-executive Director of TT electronics plc, comes up
for re-election as an independent non-executive Director at the
forthcoming Annual General Meeting and annually thereafter .
Timothy Reed, aged 63, has been a non-executive Director for
more than the nine year term recommended for guidance in the
Revised Code; he is a former corporate lawyer who has
presented a strong independent voice on the Board since his
appointment. He has seen the group evolve over recent years
and it is the opinion of the whole Board that as an independent
non-executive Director his continuing involvement in the 
group will be beneﬁcial to the future of TT electronics plc.
Group turnover by market %
Automotive 42
Industrial 14
Telecom  6
Computer  4
Power generation 10
Power transmission 24
Group turnover by product %
Sensors and electronic systems 31
Electronic components 29
Electronic manufacturing services 6
Power and data transmission 24
Power systems 10 4 TT electronics plc Annual Report 2003
The executive and non-executive Directors recommend that
shareholders vote in favour of Timothy Reed being re-elected 
as an independent non-executive Director at the Annual 
General Meeting.
The Board will be seeking shareholder approval, as set out in 
the accompanying circular , at the Annual General Meeting on
19 May 2004 for the adoption of two new share option plans
to replace the existing schemes, one of which expires in May
2004 and the other in 2006, and amendments to the current
share option schemes to allow the use of Treasury Shares. Due
to the economic downturn, particularly in the telecom industry,
the group’s proﬁts have been at lower levels.As a result the
performance criteria of the share incentive schemes have not 
in recent years been met.The Board considers that share option
plans have two principal objectives, ﬁrstly to make senior
managers of operating companies feel part of TT electronics
and share in its success and secondly to provide senior staff
based at head ofﬁce with an incentive to achieve above average
performance for the beneﬁt of shareholders.The Board intends
to discuss these proposals with major shareholders and subject
to their support the share option plan resolutions set out on
page 55 will be submitted to shareholders at the Annual General
Meeting.The Board of TT electronics is recommending that
shareholders vote in favour of these resolutions.
The past two years have been a difﬁcult trading period for
manufacturers supplying the electronics industries.The group’s
workforce has responded well despite, in many companies, some
of their colleagues having to accept redundancy. I would like to
thank them for their perseverance.As the trading environment
continues to improve, the business outlook becomes better
which in turn will beneﬁt all the group’s employees.
I would like to pay tribute to Sheridan Comonte, who retires 
on 5 April having reached the age of 65. Over the past sixteen
years Sheridan’s considerable knowledge and experience 
has made an immense contribution to TT electronics.
As announced in my half-year statement, Neil Rodgers 
will take over as Chief Executive on Sheridan’s retirement.
The weakening of the US dollar against other currencies
creates its own challenges, but also opportunities. For the last
two years we have been cautious and whilst there has been
encouraging news we have, in retrospect, been rightly guarded
in believing it was sustainable. In recent months we have
experienced an improvement in order intake which we believe
will be maintained and as a result now look forward with
conﬁdence to better trading conditions in the current year .
John W Newman
Executive Chairman
29 March 2004
Chairman’s statement continued
Robert A Fletcher
Divisional Chief Executive
Graham M Entwistle
Divisional Chief Executive
Thomas Moore
Divisional Chief Executive
John W Newman 
Executive Chairman
Neil A Rodgers
Chief Executive ( April 2004)
Roderick W Weaver
Finance Director
James W Armstrong
Corporate Development Director
Management team TT electronics plc Annual Report 2003 5
TT electronics has invested in
development and production
processes to ensure that our
technologically advanced products
meet customers’ requirements.
The group is committed to
manufacturing and supplying 
high quality innovative electronic
products for tomorrow’s technology.
The following pages highlight
products we have developed,
the breadth of the markets 
we serve, and our World class
manufacturing capability.
T omorrow’s T echnology 6 TT electronics plc Annual Report 2003
TT electronics works closely with
customers ensuring that its products
provide the features of innovation
and cost effectiveness needed 
to keep in the forefront of current
technology.
Our technologies cover a range of
electronic products, many of which
are patented.These are continually
updated and added to by the group’s
skilled design and development
engineers.
Product development
1. Filament light bulbs are becoming 
old technology and being replaced by
light-emitting diodes (LED’s) which do
not suffer the same reliability problem.
Our specially developed aluminium
substrate circuit (patent applied for) 
is used as a mounting for high intensity
LED’s.An initial development is for 
use on emergency services vehicles.
3. The lighter the car the less fuel it
uses. Heavy copper cabling currently
used in vehicles is being replaced by
the much lighter weight ﬁbre optic
alternative. Our range of ﬁbre optic
tranceivers has been used for some
years in the telecom industry and has
now been engineered for specialist
automotive applications.
2. The intelligent accelerator pedal
incorporates speed limiting functions
and will utilise data provided by GPS
navigation systems to reduce a car’s
speed in conformity with speed limits
unless overridden by the driver .This
will help improve road safety.
1 2
3 TT electronics plc Annual Report 2003 7
4 5
Breadth of markets Electronic devices are now a 
major part of our everyday life.
A large proportion of our sales are
to the automotive, telecom and
computer markets.We are currently
expanding into other markets 
and are allocating additional
engineering resources to develop
products for the ofﬁce equipment,
defence and medical sectors.
The group’s sales engineers are
based in all the major industrial
countries, giving global coverage.
4. Many of our resistive products are
incorporated into a range of ofﬁce
equipment including telephone systems,
photocopiers, PC’s, laptops and servers.
The acquisition of Optek Technology
has added its range of sensors to the
group.This will enable us to increase
our sales into these markets.
6. Many of our products are used in the
civil and military aerospace industry.
The products include electronic modules,
specialised potentiometers for wing
ﬂap control and complex switches that
control the cabin air conditioning.
5. Sales to the automotive industry
represent 63 per cent of our electronics
sector turnover , where we specialise 
in a range of sensor products and
assemblies used for driver and passenger
comfort and engine management
systems. Over 60 per cent of all cars
produced in Europe and North America
have at least one of our products built
into them.
Copyright BMW
6
Copyright Airbus 8 TT electronics plc Annual Report 2003
9
7 8
Operational efﬁciency The group has manufacturing
locations around the World with 
a number in low labour cost areas.
We achieve our World class
manufacturing standards using 
a team of experts who are trained
in a range of modern techniques.
We maintain our manufacturing
efﬁciencies by investing in
appropriate new equipment.
7. Our customer base of global OEM’s
demand the highest level of quality with
a failure rate not to exceed a few parts
per million. Our companies are qualiﬁed
to ISO 9001 with many having already
received the even more demanding
TS 16949 standard.
9. This innovative patented product 
was developed from our ‘thick ﬁlm 
on steel’ technology and acts as a
heater to enable a ﬂow of material 
at a constant temperature in plastic
moulding machines.
8. High performance sensor
technologies have been developed
by our facility in Werne, Germany to
meet the demands of modern exhaust
emission regulations. This automatic
production equipment is for the
programmable camshaft sensors ﬁtted
in BMW 4, 6, 8 and 12 cylinder engines. TT electronics plc Annual Report 2003 9
We continue to respond rapidly 
to the changing demands of 
our customers for new technical
developments, improving factory
efﬁciencies and moving more
production to our factories 
in low labour cost areas.
Sheridan Comonte
Overview
It is with mixed emotions that I am writing my last report as
Chief Executive, having joined TT electronics plc in 1987. Over
the last 16 years the group has been changed signiﬁcantly 
and is now focussed on its electronic and electrical businesses.
The group has a global presence servicing major customers
including the majority of the World’s major original equipment
manufacturers (“OEM”) in the automotive, telecom, computer
and general industrial markets working with them on the
development of new product lines.The group has built up 
a reputation amongst this blue chip customer base as being
innovative, cost effective and a high quality manufacturer 
of a range of electronic and electrical products.
The global economy in 2003 was generally sluggish with a number
of the World’s developed countries near to recession.The ﬁrst
quarter gave rise to some optimism in the electronic sector but
this was dashed by the SARS outbreak and the Iraq war and the
second and third quarters produced a difﬁcult economic climate.
There were some positive signs in the fourth quarter of a
strengthening of demand in certain markets which has been
maintained so far in 2004.
Sales to the automotive market grew by 12 per cent over last
year .This success was due to the strength of our product range
and to the successful range of vehicles using our components.
Electronic component sales were reduced as a result of
downsizing, the reorganisation of our unproﬁtable magnetics
operations and lower sales to the still depressed telecom and
computer markets. Sales of our electronic manufacturing services
business were also reduced following the decision by one large 
customer to take assembly work back in house.There was little
sign of a recovery in the telecom data infrastructure or computer
markets during the year but currently there is generally more
optimism for the sector during 2004.The power transmission
and generation markets remained highly competitive, imports
from low labour cost countries had an adverse effect on
margins and our export business to the Far East was held 
back in the early part of the year due to the SARS virus.
We continue to respond rapidly to the changing demands 
of our customers for new technical developments, improving
factory efﬁciencies and moving more production to our factories
in low labour cost areas will enable satisfactory proﬁt margins
to be achieved.We have continued the introduction of cost
reduction programmes and to streamline our administration.
We continue to take a long-term view of our markets and have
increased resources appropriately in both product development
and technical sales where we see opportunities for growth.
Whilst the group emphasises the importance of organic 
growth to all our businesses, we actively seek suitable acquisitions
at the right price provided they enhance our technologies 
and product range for the markets we serve.The acquisition 
of Optek Technology in December 2003, a £40 million turnover
company based in Dallas,Texas with a large manufacturing
unit located just across the border in Juarez, Mexico met our
acquisition criteria and is successfully being fully integrated
into the sensor and electronic systems sub-sector .
Chief Executive’s statement 10 TT electronics plc Annual Report 2003
Electronic sector
The electronics’ market continues to change rapidly not only
from a technological standpoint but also as the large OEMs
move from one country to another to take advantage of the
most cost competitive manufacturing base as well as to serve
the rapidly growing customer demand in developing countries.
We continue to monitor and respond to these dynamics.
Automotive market – represents 63 per cent of the
electronic sector turnover
Over the last decade the electronic content of cars has increased
annually at an average of 6 per cent and this trend is forecast 
to continue. It is pleasing to note that our sales growth to this
market was 12 per cent and above the average market growth.
We recognised the potential of this market some years ago and
have developed a range of technologies and products which
satisfy this demand. Currently 60 per cent of all cars produced
in Europe and North America incorporate at least one of our
products.The demand for electronics is driven by three main
features and our technologies and products are used in all 
three of these growth areas:
Demand for enhanced vehicle performance and better fuel efﬁciency
A key aspect of reducing exhaust pollutants is to improve fuel
efﬁciencies which is achieved by a combination of better
engine management systems and lighter weight cars.
TT electronics has developed a number of sensors which form 
a part of the complex electronics required in today’s engine
management systems as well as being a pioneer in drive-by-
wire technologies for accelerator , brake and steering systems.
Currently all new BMW and Mercedes Benz cars use our
accelerator pedal sensor modules which are produced on
dedicated automated production lines at one of our German
plants. Electronic steering is taking over from the currently 
used hydraulic systems as this saves weight, improves fuel
consumption and reduces cost.TT electronics was one of the
ﬁrst to market sensors for an electrically powered system and
these are now incorporated into a growing number of European
and North American cars. Sales of these sensors grew by 
20 per cent last year .
Demand for improvements to car safety 
A car’s stability on the road is paramount and we produce 
a range of sensors for chassis height control as well as ABS
braking sensors. Other sensors and systems include hybrid
circuits for controlling high intensity discharge headlamps.
Demand for improved driving comfort
At our automotive engineering centre in Wales we specialise in
the design of complex climate control systems which control
the different zones in a vehicle’s passenger compartment as
well as incorporating in-car entertainment systems. Such
systems can take up to 12,000 engineering hours to develop
due to the need for the software to interface with other
electronic and electrical systems within the car as well as
designing the appropriate style of the unit incorporated into
the dashboard.These products are manufactured in Wales and
the USA and, following the acquisition of Demo, in France and
Brazil. Last year the total number of our units sold increased
to over two million units.
T elecom market – represents 9 per cent of the
electronic sector turnover
The telecom market had in the past shown steady growth
which peaked during the boom year of 2000. Subsequently,
in part due to the ﬁnancial difﬁculties of many of the World’s
largest service providers and equipment manufacturers, the
demand for the wide range of components we manufacture 
for this industry collapsed. Sales this year reduced by 16 per cent
from 2002 and by over 60 per cent from 2000.Telecom products
attracted a good proﬁt margin and this reduction in demand
has adversely affected proﬁtability.
Currently there are signs that investment in both wireless and
wireline infrastructures will increase as service providers and
equipment manufacturers repair their balance sheets and the
World’s spare capacity becomes more utilised driven by the
demand for new technologies.We expect some growth in this
market in 2004.
Due to the reduction in demand and increasing competition
from China sales of our magnetic components have been badly
affected.We have responded by a major reorganisation of our
operations.This included closing our manufacturing plants for
laminations in the United Kingdom and exiting this market.
Our ferrite manufacturing plants in the United Kingdom and
USA have been closed and production transferred to our low
labour cost factory in India which is being enlarged to handle
the additional equipment and turnover .
Computer market – represents 6 per cent of the
electronic sector turnover
Our range of inductors and resistors continue to be designed
into assemblies by the World’s leading computer manufacturers.
However , the rapid move of the production of PC’s and laptops
to China has impacted on the sales which have reduced by
34 per cent from 2002 and over 60 per cent from 2000.These
factors have caused us to re-evaluate our supply chain into 
this market. During the year we increased our presence
in China by opening a technical centre based at our sales ofﬁce
in Shenzhen and set up a manufacturing facility in Southern
Mainland China.This has the effect of bypassing import duties
Chief Executive’s statement continued TT electronics plc Annual Report 2003 11
into China and giving us a more competitive base to offset 
the rapid rise in local Chinese competition.
Industrial market – represents 22 per cent of the
electronic sector turnover
This market includes a wide range of industries and a large
number of companies, from large international to more niche
specialist companies.The majority of our sales have been to 
the control instrumentation and aerospace sectors which have
been stagnant during the year . Our marketing departments
continually analyse the opportunities and focus our technical
sales and engineering on growth areas or where we have 
a technological advantage.
Optek Technology sales to the ofﬁce equipment market
represent 32 per cent of their turnover and it is our intention
to use their contacts and expertise to increase sales of our
existing products into this market.
Electrical sector
Power generation – represents 29 per cent of the
electrical sector turnover
The majority of the generator sets we manufactured in the
United Kingdom were for export to Africa, the Middle East and
the Far East.This market has been depressed for some years
and made worse by the strength of sterling against the US
dollar .This year proﬁtability was adversely affected by technical
problems on a large complex project for North Africa.To enable
us to remain competitive we have withdrawn from production
in the United Kingdom and transferred business to our efﬁcient
and proﬁtable factory in Mexico which has undergone an
expansion and upgrade programme over the last three years.
We continue to run a maintenance and overhaul service for
both the United Kingdom and selected overseas customers.
Our uninterruptible power supply business which has suffered
due to the telecom downturn won a number of new orders 
for our product incorporated into mobile base stations 
in Singapore and Thailand.
Power transmission – represents 71 per cent of the
electrical sector turnover
We have been successful in winning the sub-sea cable
contracts for both of the offshore wind farms constructed in 
the United Kingdom to date and have expectation of winning
future orders.The wind farm cable delivered in the middle 
of 2003, whilst achieving an acceptable margin, due to its
technical complexity caused other production disruptions and
delays.The general industrial cable market is still oversupplied
and is open to competition from low cost imports from Eastern
European countries which has the effect of depressing margins.
The specialist cable contract which we won in the second half
of 2003 for new naval vessels currently under construction 
will commence delivery shortly and further orders are 
expected later this year .
Outlook
I stated in my review in March last year that 2003 would be 
a demanding environment in which to grow sales. In the early
stages of 2004 there is generally more optimism for the recovering
worldwide economy and demand for our products is increasing.
TT electronics is well prepared to beneﬁt from such a recovery.
Our policy has and will be to continue to manage the group 
in the long-term interest of shareholders and employees.
I am pleased to be handing over my role to Neil Rodgers,
who joined the group 12 years ago and has for the last 7 years
been Divisional Chief Executive responsible for our successful
automotive businesses. I wish him and the management
teams who have supported me over the years good fortune
and an improving marketplace.
Sheridan W A Comonte
Chief Executive
29 March 2004 12 TT electronics plc Annual Report 2003
Results
The group has undergone major changes during the year , in
particular the acquisition of Optek Technology at a cost of 
£30.6 million and the reorganisation of the magnetics business.
The reorganisation of magnetics involved the discontinuance of
the United Kingdom based laminations operation and the transfer
of ferrite production from the USA and United Kingdom to
India.The group also acquired the business of Demo T ableaux
de Commande SA (“Demo”) for £1.7 million and sold the
business of Air Transport Avionics for £1.1 million.
The results of the acquisitions, being turnover of £9.4 million
and operating proﬁt before goodwill amortisation of £0.2 million
and the discontinued activities being sales of £6.4 million and
an operating loss of £0.5 million are shown separately on the
proﬁt and loss account.
There are exceptional items of £15.0 million which include 
£10.9 million of goodwill in respect of the reorganisation of the
magnetics businesses and the disposal of Air Transport Avionics.
The group’s turnover from continuing activities including
acquisitions increased to £527.5 million (2002 – £512.5 million)
and operating proﬁt before goodwill amortisation was
£22.6 million (2002 – £24.0 million).
The electronic sector has beneﬁted from a strong demand for
automotive products, particularly from European customers,
but the demand from other markets remains weak.Turnover 
for electronics including acquisitions was £349.3 million 
(2002 – £341.2 million) and operating proﬁt before goodwill
amortisation was £16.9 million (2002 – £17.3 million).
The electrical sector turnover was £178.2 million (2002 –
£171.3 million) and operating proﬁt was £5.7 million
(2002 – £6.7 million).There were no exceptional items 
or goodwill amortisation affecting the electrical sector .
The reduced proﬁtability was mainly due to manufacturing
problems experienced on a sub-sea cable contract and the 
very demanding speciﬁcation of a power generating project
supplied to North Africa. Both these problems related to the
ﬁrst half of 2003. Production of complex power generating
installations has now ceased in the United Kingdom and sales
of generator sets are now focussed on more straightforward
designs.These will be manufactured at our plant in Mexico
which has been successful in supplying this type of product.
Acquisitions
In early December the group acquired Optek Technology at a
cost of £30.6 million. Optek Technology is based in Texas, USA
with its manufacturing plant in Mexico where it manufactures
speed and position sensors which are used in the automotive,
ofﬁce machinery and industrial equipment markets. In the
month since acquisition it was proﬁtable on a turnover of 
£2.6 million. In March 2003 the group purchased Demo which
designs and manufactures automotive climate control units.
This cost £1.7 million and since acquisition has generated
turnover of £6.8 million but is not yet proﬁtable. It is planned 
to build on the strength of our United Kingdom climate 
control operation and develop a strong base to address the
continental European and particularly the French market.
Exceptional items
The exceptional items comprise the loss on disposal of the
business of Air Transport Avionics, the cost of discontinuing 
Roderick Weaver 
Financial review
Geographical analysis %
of net assets
United Kingdom 44
Rest of Europe 14
North America 38
Rest of the World 4
Geographical analysis %
of turnover by origin
United Kingdom 49
Rest of Europe 26
North America 19
Rest of the World 6 TT electronics plc Annual Report 2003 13
the laminations business and transferring the manufacture 
of ferrites from the United Kingdom and USA to the group’s
factory in India. In previous years the magnetics businesses were
a signiﬁcant part of the group’s activities.These costs include the
write-off and loss on disposal of ﬁxed assets, provision for
obsolete stock and redundancy and other costs associated with
the termination of employment. Exceptional items also include a
charge of £10.9 million through this year’s proﬁt and loss account
for the goodwill which arose on the acquisition of Air Transport
Avionics and the laminations business.This goodwill had already
been written-off to reserves in 1995 or before and this therefore
has no effect on the group’s shareholders’ funds.
Finance costs
The interest charge for the year was £2.1 million 
(2002 – £3.2 million).The reduction from the prior year is due
to lower interest rates during 2003, particularly in respect 
of US dollars, and lower borrowings for the majority of the 
year .The interest rate on US$65 million of borrowings has 
been ﬁxed by the use of interest rate swaps at an average 
rate of 2.7 per cent until June 2005.
Taxation
The effective rate of tax was 23 per cent (2002 – 27 per cent).
This low rate of tax reﬂects the utilisation of losses, some of
which have been carried back for relief against the tax charge
of prior years and the tax efﬁcient corporate structure.The
charge through the proﬁt and loss account for the goodwill
previously written-off has no effect on taxation.
Cash ﬂow and net borrowings
The group has generated £45.2 million (2002 – £42.6 million)
from operations which continues to reﬂect the high priority given
to control over working capital. In 2003 the investment in capital
expenditure totalled £23.5 million (2002 – £26.5 million). In
December the borrowings increased by £30.2 million as a result
of the acquisition of Optek Technology. Excluding this acquisition
the group’s borrowings would have reduced by £7.8 million to
£48.0 million and a gearing of 24 per cent (2002 – 27 per cent).
Following the acquisition at 31 December 2003 the gearing was
40 per cent (2002 – 27 per cent) with total debt of £78.2 million
(2002 – £55.8 million).
Earnings and dividends
The group has generated earnings per share before goodwill
amortisation and exceptional items of 10.4p per share 
(2002 – 10.1p per share).The loss for the year is £0.1 million
(2002 – £5.6 million proﬁt) which is attributable to the charge
though the proﬁt and loss account of £10.9 million of goodwill
which had previously been written-off to reserves.The Board
proposes that the ﬁnal dividend is held at 6.36p per share,
giving an unchanged total dividend for the year of 10.05p 
per share.A dividend of 10.05p per share will result in a
distribution of £15.6 million which is covered by proﬁt before
charging the exceptional items and goodwill amortisation.
T reasury and foreign currency
Treasury policy is controlled centrally and the group’s
borrowing requirements are predominantly provided by 
three clearing banks in the United Kingdom. Borrowings are
funded by overdraft arrangements and an unsecured £50 million
multi-currency loan facility which expires in 2006.There are
also facilities with local banks in other countries. The group’s
policy is to avoid the risk of the effect of movements in foreign
currency exchange rates; known and anticipated future
transactions are hedged using appropriate forward currency
contracts.The exchange differences arising from the translation 
of assets and proﬁt streams denominated in non-sterling
currencies are also hedged by the use of matched borrowings 
and forward currency contracts.The overall effect of the
strengthening euro and weakening US dollar against sterling
has not had a material impact on the group results.There are
no off balance sheet borrowing arrangements and the use
of derivatives is restricted to reducing the group’s exposure
to price and cost, including interest rate, ﬂuctuations.
Pensions
The group has made the appropriate disclosures for pensions
as required by FRS 17 in note 34 to the accounts.The shortfall
between the pension funds’ assets and liabilities has reduced
due to the recovery in the market value of equities as measured
at 31 December 2003, offset by the lower bond yield used 
by the independent actuary to discount future pension fund
liabilities. During the year the contribution rate paid by the
employees increased by one percentage point for all deﬁned
beneﬁt schemes which with higher employer contributions 
will address this shortfall over the coming years.The group’s
deﬁned beneﬁt schemes are closed to new members.
Risk management
The group maintains strict ﬁnancial control over its operations
through detailed internal control systems.The adequacy of 
all aspects of internal control systems are reviewed formally 
by the Audit Committee twice a year and the Board as a whole
reviews the signiﬁcant risks to which the group is exposed
during the course of its operations.
Financial reporting
The accounts for 2003 have been prepared using accounting
policies which are unchanged from 2002.The group will be
required to adopt International Financial Reporting Standards
(‘IFRS’) for the results of 2005.The ﬁnalisation of the new
standards in March 2004 enables the group to determine 
its most appropriate accounting policies under IFRS and the
group is currently undertaking a review of the impact on its
reported results.
Roderick W W eaver
Finance Director 
29 March 2004 14 TT electronics plc Annual Report 2003
1. John W Newman (58)
Executive Chairman  
Appointed to the Board in 1986.
A Chartered Accountant who is also
Chairman of Send Group Limited
and the Newship Group of companies.
2. Sheridan WA Comonte (65)
Chief Executive 
Appointed to the Board in 1987.
Previously an executive Director 
of Newship Group Limited.
Retiring on 5 April 2004.
3. Neil A Rodgers (50)
Chief Executive 
Appointed to the Board in 2003 and
became Chief Executive on 5 April 2004.
A Chartered Management Accountant
who joined TT electronics plc in 1992.
Previously with Bodycote International
PLC and Siebe plc.
4. Roderick W Weaver FCA (53)
Finance Director 
Appointed to the Board in 1995.
A Chartered Accountant who 
was previously with AB Electronic
Products Group PLC.
5. James W Armstrong (56)
Corporate Development Director
Appointed to the Board in 1998.
A Chartered Accountant previously 
with Newship Group Limited.
Joined TT electronics plc in 1988.
6.Timothy H Reed (63)
Non-executive Director* *  
Appointed to the Board in 1973.
Non-executive Chairman from 1974
to 1995. Previously a senior partner 
of DLA – Solicitors. Also a non-
executive Director of a number 
of private companies.
7. Sir Laurence Magnus (48)
Non-executive Director* 
Appointed to the Board in 2001.
An investment banker ,Vice Chairman 
of Lexicon Partners, non-executive
Chairman of Xchanging ins-sure
Holdings Limited, a non-executive
Director of The J.P . Morgan Fleming
Income & Capital Investment Trust plc
and an elected member of the Council
of the National Trust and Chairman 
of its Finance Committee.
8. Mark S Evans (70)
Non-executive Director*
Appointed to the Board in 1997.
Formerly a Director of Credit Lyonnais
Laing. Currently a Director of Merrill
Lynch European Investment Trust PLC
and Heavitree Brewery PLC.
Will retire before the end 
of 2004.
9. David EA Crowe (64)
Non-executive Director  
Appointed to the Board in 1993.
Served as an executive Director to
30 April 2000 and is now a non-executive
Director . Previously a senior partner
of Gouldens – Solicitors.
10. Martin G Leigh  ACMA (59)
Group Company Secretary 
Directors and Company Secretary
1 2 3
4 5 6
7 8 9
10
* *Senior Independent non-executive Director
*Independent non-executive Director TT electronics plc Annual Report 2003 15
Directors’ report
The Directors submit their report and the audited ﬁnancial
statements for the year ended 31 December 2003.
Business review
The operational and ﬁnancial reviews are set out on pages 
5 to 13 of this Annual Report and should be read as part of 
the Directors’ report.
Activities
TT electronics plc is a holding company providing management
services to the group.The principal operating subsidiaries,
which are listed on pages 56 and 57, operate in the electronic
and electrical sectors.
Results
The group’s proﬁt on ordinary activities before taxation 
was £3.2 million (2002 – £7.9 million). After taxation and
minority interests the group made a loss of £0.1 million 
(2002 – £5.6 million proﬁt).The audited ﬁnancial statements
of the group are set out on pages 24 to 52.
Acquisitions
The group acquired on 14 March 2003 the business of Demo
T ableaux de Commande SA for a consideration of £1.5 million
and on 3 December 2003 Optek Technology Inc for a
consideration of £30.3 million subject to completion accounts.
Further details are set out in note 27 to the ﬁnancial statements.
Disposal
The business of Air Transport Avionics Limited was sold for
a cash consideration of £1.1 million during the year . Further
details are set out in note 28 to the ﬁnancial statements.
Fixed assets
No professional valuation of land and buildings has been
carried out during the year , but in the opinion of the Directors
the market value, on an existing use basis, is considered to be
not materially different from net book value.
Research and development 
The group carries out research and development in order 
to develop new products and processes and to improve
substantially existing products and processes.
Ordinary dividends
The Directors recommend a ﬁnal dividend of 6.36p per 
share (2002 – 6.36p) to be paid on 28 May 2004 to ordinary
shareholders on the register at 21 May 2004 which, together
with the interim dividend paid on 30 October 2003, makes 
a total of 10.05p for the year (2002 – 10.05p). After this
distribution of £15.6 million, there is a retained loss of
£15.7 million to be taken from group reserves.
Future prospects
The future prospects of the group are referred to in the
Chairman’s statement and Chief Executive’s statement,
on pages 4 and 11 respectively.
Directors 
The Directors set out below held ofﬁce during the year .
In accordance with the Articles of Association, J W Newman
and J W Armstrong and, in accordance with the Revised Code
on Corporate Governance,T H Reed retire by rotation.
Messrs Newman,Armstrong and Reed, being eligible,
offer themselves for re-election.
N A Rodgers was appointed on 4 September 2003 and, this
being an appointment since the previous Annual General
Meeting, retires in accordance with the Articles of Association
and, being eligible, offers himself for re-election.
Directors’ interests
The Directors of the Company held beneﬁcial interests in the
following numbers of the Company’s ordinary shares of 25p
each on 1 January 2003 or date of appointment if later ,
31 December 2003 and 19 March 2004:
31 Dec 2003 and 1 Jan 2003 or date of
19 Mar 2004 appointment if later
Ordinary shares Ordinary shares
J W Newman 16,212,627 16,112,627
S W A Comonte 64,500 64,500
NA Rodgers 10,000 –
R W Weaver 12,500 12,500
J W Armstrong 14,582 14,582
T H Reed 118,634 118,634
M S Evans 20,000 20,000
D E A Crowe 48,454 48,454
Sir Laurence Magnus 16,685 16,685
The following Director of the Company held non-beneﬁcial
interests in the following numbers of the Company’s ordinary
shares of 25p each on 1 January 2003, 31 December 2003 
and 19 March 2004:
31 Dec 2003 and
19 Mar 2004 1 Jan 2003
Ordinary shares Ordinary shares
J W Newman 10,182,437 10,182,437
The ordinary shares in which J W Newman held non-beneﬁcial
interests comprised part of the holding in which he held
beneﬁcial interests. 16 TT electronics plc Annual Report 2003
Directors’ report continued
Share capital
The share capital during the year and the number of 
ordinary shares reserved for issue are shown in note 24 
to the ﬁnancial statements.
Annual General Meeting 
The Notice of the Company’s 2004 Annual General Meeting 
is set out on pages 54 and 55.
Resolutions will be proposed at the Annual General Meeting 
to renew for a further year the authority of the Directors to 
allot and grant rights over the unissued share capital and to
authorise the Directors to allot and grant rights over ordinary
shares, or sell shares held in treasury (see below), for cash 
up to a maximum nominal amount representing 5 per cent 
of the issued ordinary share capital without ﬁrst making 
a pro rata offer to all existing ordinary shareholders.
A resolution will be proposed authorising the Company to
make market purchases of its own shares of up to 10 per cent 
of the issued ordinary share capital.The Company will only
make purchases of its own shares if the Directors are satisﬁed
that it would be in the best interests of the Company to do 
so and that such purchases would result in an increase in the
earnings per share attributable to ordinary shareholders.
Pursuant to changes to the Companies Act 1985 that came
into force on 1 December 2003, shares purchased out of
distributable proﬁts by the Company under the power granted 
by the resolution, may be held in treasury (for later sale,
cancellation or , providing Listing Rule requirements are met,
transfer to an employee share scheme) instead of being
cancelled immediately, providing that certain statutory
requirements are met and to the extent that such shares held 
in treasury do not exceed 10 per cent of the Company’s issued
share capital.
Shares repurchased by the Company and held in treasury can
be held indeﬁnitely pending, for example, a suitable time to
place them back on the market.This would enable the Company,
if the Board believed the circumstances to be appropriate, to
sell shares held in treasury to take advantage of capital growth
in its own shares. Sales of treasury shares must be for cash and
are subject to statutory pre-emption rights.
Shares repurchased by the Company may, in light of the
circumstances existing at the time of the repurchase, also 
be immediately cancelled.The effect of any cancellation would
be to reduce the number of shares in issue. For most purposes,
while held in treasury, shares are treated as if they had been
cancelled (for example, shares held in treasury carry no voting
rights and do not rank for dividends).
A resolution will be proposed to approve the Directors’
remuneration report for the year ended 31 December 2003.
Subject to the support of major shareholders resolutions will 
be proposed for the amendment of the current share option
schemes for the utilisation of treasury shares and the adoption
of new approved and unapproved share option plans to be
effective following the Annual General Meeting.A letter from
the Executive Chairman setting out the background to the
proposed changes is enclosed with the Annual Report.
Substantial shareholdings 
At 19 March 2004 the Company had been notiﬁed of the
following disclosable interests which represented 3 per cent 
or more of the existing issued ordinary share capital:
Number %
J  W Newman
(1)
16,212,627 10.4
FMR Corp
(2)
10,962,387 7.0
Tweedy, Browne Company LLC 10,245,227 6.6
Newship Industries Limited
(1)
10,182,437 6.5
Newship Investments Limited
(1)
9,903,250 6.3
Legal & General Investment
Management Limited 4,776,549 3.1
The TT electronics shares in which Newship Industries Limited
is interested are, as to 9,903,250 such shares, the same as
those in which Newship Investments Limited is interested and
comprise part of the holding of TT electronics shares in which
J W Newman is interested.
FMR Corp, Fidelity International Limited and Edward C Johnson 3d
have notiﬁed an interest in the same shares.
So far as can be ascertained no other person or corporation
holds or is beneﬁcially interested in any substantial part 
of the share capital of the Company.
Charitable donations 
During the year the group contributed £50,000 
(2002 – £50,000) for charitable purposes.There were 
no political contributions.
Employees 
Every company in the group is encouraged to develop and
implement employment policies and remuneration schemes,
which are designed to identify employees with that company’s
achievements and the ways by which their knowledge 
and skills can best contribute towards its success.The 
Directors recognise the importance of employee involvement
throughout the group and this is fostered by the development
of communications through the normal subsidiary company
reporting procedures.The group gives equal opportunities 
to disabled persons whenever possible, both in recruitment 
and career development.
(2)
(1) TT electronics plc Annual Report 2003 17
Auditors
A resolution will be proposed at the Annual General Meeting 
to reappoint Grant Thornton as Auditors to the Company and 
to authorise the Directors to ﬁx their remuneration.
Corporate governance 
The Company is committed to high standards of corporate
governance.This statement describes how the Board has
applied the principles of good governance set out in the
Combined Code (the Code) issued by the Hampel Committee
on Corporate Governance.The Code is part of the Listing Rules
of the Financial Services Authority. It applied to the Company
and the Company complied with it throughout the year .
In July 2003 the Financial Reporting Council revised the Code
(the Revised Code) based on reports of Sir Derek Higgs and
Sir Robert Smith, published in January 2003.The Revised Code
is not applicable to the Company in the year under review,
but the Company formalised its procedures in March 2004 
to enable the Board to report on its compliance as required
under the Revised Code in the 2004 ﬁnancial year .
The paragraphs below and in the Remuneration report on
pages 20 to 23 set out how the Company has applied the
principles laid down by the Code.They also explain certain
procedural changes that have been made in anticipation 
of and in response to the Revised Code.
The Board
The Board of TT electronics plc currently comprises ﬁve executive
Directors and four non-executive Directors.The non-executive
Directors, with the exception of D E A Crowe, are considered by
the Board to be independent of the Company's management
and free from any business or other relationship which could
interfere with the exercise of their independent judgement.
Under the Revised Code the position of T H Reed has been
reviewed and the Board have concluded that in their view
T H Reed has consistently been a strong, independent voice 
on the Board.This conclusion is supported by his background
as a practising lawyer in the ﬁelds of company and commercial
law. In addition he has never been ﬁnancially dependent on 
the Company during his period on the Board.The group has
evolved and changed substantially during his period of ofﬁce
and his knowledge of the Company and its subsidiaries and 
the history of corporate activity leading to the present structure
of the group provide a valuable independent resource to the
other non-executive Directors.This conﬁrms the Board’s
opinion that he is an independent non-executive Director .
T H Reed will be subject to annual re-election at the Company’s
Annual General Meeting.All Directors, with the exception 
of T H Reed, are subject to re-election every three years 
and on appointment at the ﬁrst Annual General Meeting 
after appointment.
The Board meets every other month and has adopted a
schedule of matters speciﬁcally reserved to itself for decision.
Strategies proposed by the executive Directors are fully
discussed at Board meetings.
T H Reed has been designated senior independent non-executive
Director and chairs the Audit and Remuneration Committees.
Discussions on all matters at Board meetings are based on
timely distribution of written information to all Directors.
The Executive Chairman is responsible for ensuring
constructive relations are maintained between executive 
and non-executive Directors.
All Directors have access to the advice and services of 
the Company Secretary and are offered such training as is
considered necessary to fulﬁl their role as Directors, both on
appointment and at any subsequent time.There is an agreed
procedure for Directors to take independent professional
advice at the Company’s expense, if necessary.
S W A Comonte will retire on 5 April 2004 and N A Rodgers will
assume the role of Chief Executive and be responsible for the
running of the group’s operating companies.
J W Newman, as Executive Chairman, takes the leading role in
strategic planning. He is also primarily responsible for liaison
with the Company’s institutional investors and relationships
with the group’s bankers.
J W Newman, S W A Comonte, N A Rodgers and R W Weaver
meet institutional investors immediately after publication 
of the annual and interim results.They are also available at
other times to enter into dialogue with institutional investors.
Information provided at these meetings together with ﬁnancial
press releases are available on the group’s website.The Annual
General Meeting is used to communicate with private investors.
Nominations Committee
The appointment of N A Rodgers was made by the Board
following a review of possible candidates.With effect from
March 2004 the Board has established a Nominations
Committee comprising the three independent non-executive
Directors and the Executive Chairman to make recommendations
to the Board on the appointment of executive or non-executive
Directors and the appointment of members to the Audit and
Remuneration Committees.The Chairman of the Committee 
is the Executive Chairman. 18 TT electronics plc Annual Report 2003
Directors’ report continued
Audit Committee
During the year the Audit Committee met three times and 
the four non-executive Directors attended all the meetings.
At two of these meetings the Committee met with the Auditors
without the executives of the Company being present.The
Committee carried out its duties including keeping under
review the scope and results of the audit and its cost
effectiveness and the independence and objectivity of the
Auditors, reviewing any changes in accounting policies and
practices, major judgmental decisions affecting interim and
annual results and compliance with accounting standards 
and with the Companies Act, and considering the Auditors’
comments on internal controls and management’s response.
The Audit Committee also keeps under review the nature 
and extent of non-audit services provided by the Auditors.
The Register of Principal Risks has been reviewed twice during
the year by the Audit Committee.The Audit Committee reviews
the effectiveness of the group’s internal control systems and
monitors the performance of the internal control function.
In March 2004 following the introduction of the Revised 
Code the membership and role of the Audit Committee were
reviewed by the Board.As a result the membership now
comprises the three independent non-executive Directors
being T H Reed, M S Evans and Sir Laurence Magnus.The
principal duties were re-conﬁrmed as set out above and it was
the Board’s opinion that the Audit Committee as a whole has 
the required ﬁnancial experience to meet the Revised Code
requirement. The Chairman of the Committee is T H Reed.
Review of principal risks and internal controls 
The Directors acknowledge that they are responsible for the
group’s systems of internal control and for reviewing their
effectiveness. In accordance with the guidance of the Turnbull
Committee and following the introduction of the Revised Code
the Board has identiﬁed and set out procedures for managing
risks faced by the group.These procedures have been in place
for the full ﬁnancial year and up to the date the ﬁnancial
statements were approved.The risk management procedures
and systems of internal control are designed to manage 
rather than eliminate the risk of failure to achieve the group’s
strategic objectives. It should be recognised that such systems
can only provide reasonable and not absolute protection
against material misstatement or loss.
Risk management and evaluation takes place as part of the
annual budget preparation cycle and the monthly management
meetings of operating companies. Having identiﬁed the risks,
each operating company then monitors and reviews them on 
a regular basis.The Board reviews at each Board meeting the
current position.A further review is carried out twice annually
by the Audit Committee.
The group’s internal control manager monitors and reports
formally biannually to the Audit Committee with appropriate
reports to the executive Directors during the course of the
review procedure on the risks set out in the Register of 
Principal Risks.
The group is committed to a policy of maintaining strict internal
ﬁnancial control over all its activities. Controls are designed 
to provide the Directors with reasonable assurance that assets
are safeguarded, transactions are properly authorised and that
material errors and irregularities are either prevented or are
discovered on a timely basis.The system of control itself is well
established. It is reviewed regularly and enhanced to meet the
requirements of the group’s development.
Principal features of the system of internal ﬁnancial 
control include:
– the Directors meet every other month as a Board to monitor
ﬁnancial performance and to maintain overall control 
of signiﬁcant strategic and ﬁnancial issues.
– the group is structured so as to enable each operating
company to be an autonomous unit, but subject to the policies,
rules and procedures determined by the Directors.The
Directors exercise control over operating companies through
senior executives who monitor and oversee the ﬁnancial
performance and controls of each operating company.The
Directors of operating companies are held accountable for
the effectiveness of the implementation and maintenance of
controls within their companies.This provides constant and
consistent management appropriate to a devolved structure.
– the group has detailed ﬁnancial planning and reporting
systems. Detailed management accounts are prepared
monthly by each operating company comparing actual
performance with budget.The ﬁnancial performance of each
operating company is subjected to detailed formal review 
at monthly meetings.An important aspect of these reviews 
is the early identiﬁcation of potential business risks and
agreement on suitable and prompt courses of action.
Operating companies prepare strategic plans and annual
budgets which are implemented following review and
approval by the Directors. TT electronics plc Annual Report 2003 19
– the group has comprehensive control and approval
procedures which are rigorously enforced.There are clear
deﬁnitions of appropriate authorisation levels. Capital
investment and other major items of expenditure are made
only after compliance with detailed appraisal procedures and,
if above a set level, only with the approval of the Directors.
– accounting and reporting policies and practices require 
that the group’s accounting records are prepared with
consistency, accuracy and prudence.
– adherence to procedures is reviewed and supported by 
an internal control manager who reports to the Finance
Director .The framework for maintaining control procedures
is also monitored by the Audit Committee and the internal
control manager .
– certain key functions, including funding, taxation,
provision of legal advice, insurance and treasury are
controlled at the group’s head ofﬁce and are monitored 
by executive Directors.
The Directors have reviewed the effectiveness of the system 
of internal control during the period covered by the accounting
year to 31 December 2003 and the period since then to the
date of this report.
Supplier payments policy 
The group’s policy in relation to the payment of its suppliers 
is to agree its terms of payment with each supplier when
negotiating the terms of each business transaction. It is group
practice to abide by the agreed terms of payment unless the
supplier defaults under its own obligations.Trade creditors 
at the year end amount to 49 days of average supplies for 
the year (2002 – 56 days).
Environmental policy 
Companies in the group adopt a responsible attitude towards
the protection of the environment.The group strives to meet
requirements of all applicable environmental laws and
regulations, to improve continuously environmental performance
and to contribute to long-term economic, environmental and
social sustainability. Each site is encouraged to attain the latest
quality accreditation (such as ISO 14001) where appropriate.
Group companies develop energy efﬁcient means of manufacture,
seek to reduce, re-use and re-cycle waste and arrange for
disposal of other waste responsibly.
Statement of Directors’ responsibilities in relation 
to ﬁnancial statements 
The Directors are required by the Companies Act 1985 to
prepare ﬁnancial statements for each ﬁnancial year which 
give a true and fair view of the state of affairs of the Company
and the group as at the end of the ﬁnancial year and of the
group proﬁt or loss for the ﬁnancial year .
The Directors in preparing the ﬁnancial statements are 
required to use suitable accounting policies and to apply them
consistently, to make reasonable and prudent judgements and
estimates and to state whether the accounting standards
which they consider to be applicable have been followed.
The Directors have responsibility for ensuring that the
Company and the group prepare and maintain accounting
records which disclose with reasonable accuracy at any time
the ﬁnancial position of the Company and the group at that
time and which enable them to ensure that the ﬁnancial
statements comply with the Companies Act 1985.
The Directors have a general responsibility for taking such 
steps as are reasonably open to them to safeguard the assets 
of the Company and the group and to prevent and detect 
fraud and other irregularities.
Going concern 
The Directors conﬁrm, after making appropriate enquiries,
that they have a reasonable expectation that the group has
adequate resources to continue in operational existence for 
the foreseeable future. For this reason they continue to adopt
the going concern basis in preparing the ﬁnancial statements.
The Auditors’ responsibilities are set out on page 53 and
should be read in conjunction with this statement.
Approved by the Board on 29 March 2004 and signed on 
its behalf by
MG Leigh
Secretary 20 TT electronics plc Annual Report 2003
Directors’ remuneration report
The Board submits its Directors’ remuneration report for the
year ended 31 December 2003 which has been prepared in
accordance with the Directors’ Remuneration Report Regulations
2002 (‘Regulations’) and meets the relevant requirements of
the Listing Rules of the Financial Services Authority.As required
by the Regulations, a resolution to approve the report will be
proposed at the Annual General Meeting of the Company 
to be held on 19 May 2004.
The Regulations require the Auditors to report to the Company’s
members on the auditable section of the Directors’ remuneration
report and to state whether in their opinion that part of the
report has been properly prepared in accordance with the
Companies Act 1985 (as amended by the Regulations).
The report has therefore been divided into separate sections 
for audited and unaudited information.
Unaudited information
Remuneration Committee
During the year the Remuneration Committee comprised four
non-executive Directors, met three times and all members were
present. In March 2004, following the introduction of the Revised
Code on Corporate Governance, the role of the committee 
was reviewed by the Board and with effect from that date the
Committee consists of independent non-executive Directors
T H Reed, M S Evans and Sir Laurence Magnus.The role of the
Committee is to establish the remuneration policy and to
consider and approve on behalf of the Board the terms and
conditions of service of the executive Directors including
pensions, performance related pay and share incentive plans.
The Committee reviews remuneration trends across the group
and monitors any major changes in employee beneﬁt structures.
Fees payable to non-executive Directors are determined by the
Board.The Committee consults the Executive Chairman
concerning its proposals and has access to internal and
external professional advice.The Chairman of the Committee 
is T H Reed.
Remuneration policy
The current remuneration policy was established by the
Remuneration Committee following a review carried out by
Inbucon, the Salary Research Group, commissioned by the
Remuneration Committee. Inbucon have not provided any
other services to the Company.The report, prepared in July
2001, found that the current rates of salary were at or about
the current market levels when compared with organisations
with similar market capitalisation.The survey compared the
Directors’ remuneration against a comparative group of 12
companies above and 12 below the Company’s market
capitalisation in the FTSE Electronic and Electrical sector and
similar criteria in the FTSE 350. Since July 2001 salary increases
have been limited to increasing in 2001 the remuneration of 
a then recently appointed Director into line where it had been
slightly below the level in the Inbucon report or awarding
increases in line with inﬂation and similar to the average 
award made to other group executives. It is envisaged that 
this policy will continue and it is likely that outside consultants
will be asked for a report in the future.
The remuneration package provided to S W A Comonte 
includes an annual bonus, which is capped at 100 per cent 
of salary, that has been calculated on a pro rata payment of
£10,000 for each one million pounds of pre-tax pre-goodwill
proﬁt in accordance with the Company’s management accounts
above 90 per cent of the budgeted pre-tax pre-goodwill proﬁt
for the year . R W Weaver and J W Armstrong are each entitled 
to a discretionary bonus determined by the Remuneration
Committee.There were no bonuses paid or payable in respect
of the proﬁts earned in years to 31 December 2002 and 31
December 2003.The remuneration package for N A Rodgers
on his appointment on 4 September 2003 consisted of a base
salary only and will be re-assessed  on his appointment 
as Chief Executive on 5 April 2004.
Share options
In accordance with the remuneration policy the Remuneration
Committee generally grants options, following the announcement
of the group results, to a value representing 50 per cent of basic
salary, at full market value, to executive Directors under the
terms of the 1994 and 1996 Executive Share Option Schemes.
Options under these schemes are generally exercisable not less
than three and not more than ten years after their grant, and
then only if a performance criterion has been achieved. Prior 
to 2001 the group must have experienced annual growth in 
its earnings per share of at least 2 per cent over and above 
the Retail Price Index for a period of three years following the
grant of the options.Amendments to the TT Group PLC 1996
unapproved executive share option scheme were approved at
an EGM held on 10 May 2001. It was explained in the circular
seeking that approval that Meis Executive Compensation
Consulting had carried out a review of performance targets
and conditions currently in place within FTSE 350 companies
that had adopted new share option schemes or amended
existing share option schemes during 2000. Following receipt
of that review, the Board determined that, in future, options
granted under share option schemes would carry a performance
condition stating that the group must have experienced annual
growth in its earnings per share of at least 4 per cent over and
above the Retail Price Index for a period of three years following
the grant of the options.The constituent parts of the condition
are calculated each year to see if the performance condition
has been met.The Board believes that the conditions selected
are appropriate for the reasons set out in the Meis report. Meis
have not provided any other services to the Company. It is the
Board’s intention, subject to shareholder approval, to implement TT electronics plc Annual Report 2003 21
new share option plans following the Annual General Meeting
in May 2004.A letter from the Executive Chairman setting out
the proposed changes is enclosed with the Annual Report.
As S W A Comonte is no longer eligible under the rules of the
share option schemes to be granted further options, he has been
granted a bonus calculated so that if the pre-tax pre-goodwill
proﬁts of the group to 31 December 2002 and 31 December
2003 each year are 4 per cent per annum over the Retail Price
Index above the published pre-tax pre-goodwill proﬁts 
for the year to 31 December 2001 he will be paid the difference
between the share price on 31 March 2004 and 165 pence
multiplied by 70,000.This condition has been chosen because
it links the beneﬁt to similar conditions to those applying 
to share options granted to other executive Directors.The
performance criterion has not been achieved and therefore 
no bonus will be payable.
Service contracts
The Company’s policy is not to grant service contracts
terminable on notice of longer than three months to executive
Directors and that the executives should be satisﬁed with 
the working relationship and if dissatisﬁed, should be able 
to leave without restraint. No termination payments arise
under any contract.
Long-term incentive plan
On 9 September 1999 the Remuneration Committee
established a long-term incentive plan for executive Directors
and senior executives.The plan allows the participant, subject
to a pre-exercise condition, to transfer up to 50 per cent of any
bonus entitlements into a trust established by the Company.
This would be used to purchase shares in the Company at
market value, and be matched by a similar amount paid by the
Company into the trust to buy a matching number of shares.
The shares acquired by the contribution from the Company may
not generally be transferred to the participant until the expiry 
of three years from the date of the matching award.At the date
of this report there are no participants in the plan.
Non-executive Directors
The Inbucon report found that non-executive Directors’ fees
within the group were comparable with current market levels
and organisations. Since the date of the report, the fees have
increased by the inﬂationary percentage payment applied to the
executive Directors and other group executives.The remuneration
of the non-executive Directors is decided by other members 
of the Board. No beneﬁts in kind are provided for non-
executive Directors.
Pensions
The Company operates a deﬁned beneﬁt scheme for employees
including executive Directors which was closed to new entrants
in March 2002.All executive Directors that served throughout
the year are members of the scheme. Beneﬁts are based on
years of accrued service and ﬁnal average pensionable salary.
Policy on relative importance of performance 
linked and non-performance linked pay
The remuneration policy is to provide executive Directors 
with a basic salary that is competitive with the basic salary 
paid to directors in comparable companies as envisaged 
in the Inbucon report. In addition the performance linked
element of remuneration is intended to provide the executive
Directors with an opportunity to receive increased remuneration
subject to meeting conditions which show that the group’s
ﬁnancial performance has been enhanced.
Performance graph
For shareholders’ information, the Company’s total  shareholder
return performance, assuming dividends are reinvested, for the
ﬁve years to 31 December 2003 is shown on the graph below
compared with the return performance achieved by the FTSE
All Share companies.The FTSE All Share has been selected 
as a broad equity market index comparison.
Key
TT electronics plc
FTSE All Share
0
20
40
60
80
100
120
140
160
Dec
1998
Dec
1999
Dec
2000
Dec
2001
Dec
2002
Dec
2003 22 TT electronics plc Annual Report 2003
Audited information
Aggregate Directors’ emoluments
Set out below are tables of remuneration of the Directors who
served throughout the year ended 31 December 2003 (except
where stated).The amount of each element in the remuneration
received by the Directors in the year or from date of appointment
including basic salary and fees and beneﬁts in kind was:
2003 2002
Salary/fees Beneﬁts Total Total
£000 £000 £000 £000
Executive Directors
J W Newman 444 44 488 469
S W A Comonte 244 38 282 272
N A Rodgers 54 7 61 –
(appointed 4 Sept 2003)
R W Weaver 183 21 204 195
J W Armstrong 141 21 162 156
Non-executive Directors
T H Reed 33 – 33 32
M S Evans 25 – 25 24
D E A Crowe 25 – 25 24
Sir Laurence Magnus 25 – 25 24
M J Mallett
(retired 8 May 2002) ––– 8
1,174 131 1,305 1,204
The value of beneﬁts in kind received during the year comprised
principally company car beneﬁts and medical cover . No Directors
received expense allowances during the year .
Directors’ share options
Share options granted in the period exercisable between
March 2006 and March 2013 at a price of 80p:
Options
J W Newman 273,180
N A Rodgers 58,500
R W Weaver 112,455
J W Armstrong 86,662
Share options outstanding at 31 December 2003 and the date
of this report:
Weighted
average
price
Options pence Exercise period
Exercise price above year
end closing price
J W Newman 593,785 221.5 Apr 1998 – Apr 2012
S W A Comonte 267,889 239.1 Apr 1998 – May 2011
N A Rodgers 115,791 222.6 Jun 1999 – Mar 2013
R W Weaver 319,162 187.7 Apr 1998 – Apr 2012
J W Armstrong 167,929 165.4 Apr 1998 – Apr 2012
Exercise price below year 
end closing price
J W Newman 420,238 99.6 Sep 2002 – Mar 2013
S W A Comonte 147,058 136.0 Sep 2002 – Sep 2009
N A Rodgers 104,401 85.1 Mar 2003 – Mar 2013
R W Weaver 221,744 85.7 Mar 2003 – Mar 2013
J W Armstrong 195,951 86.4 Mar 2003 – Mar 2013
T H Reed, M S Evans, D E A Crowe and Sir Laurence Magnus 
have not been granted share options.
The closing middle market prices for an ordinary share of 25p
of the Company on 31 December 2002 and 2003 as derived
from the Stock Exchange Daily Ofﬁcial List were 105.5p and
142.0p respectively. During the year the middle market price 
of  TT electronics plc ranged between 80.0p and 142.0p.
Directors’ remuneration report continued TT electronics plc Annual Report 2003 23
Executive Directors’ pensions
Each executive Director during the year was a member of 
the Company’s pension scheme, which covers most senior
employees of the Company.
Transfer
value at
31 Dec 2002
Increase in Accrued T ransfer Increase or date of
accrued pension at value at in transfer appointment
pension 31 Dec 2003 31 Dec 2003 value if later
£000 £000 £000 £000 £000
J W Newman 9 197 1,868 217 1,627
S W A Comonte 5 119 1,623 209 1,401
N A Rodgers 2 25 176 8 165
R W Weaver 4 63 547 80 457
J W Armstrong 6 43 412 80 324
Notes
(a) Members of the scheme have the option to pay additional
voluntary contributions; neither these contributions nor the
resulting beneﬁts are included in the above table.
(b) The increase in accrued pension during the year excludes
any increases for inﬂation.
(c) The increase in transfer value during the year is net of
employee contributions made to the scheme.
(d) Each executive Director has a normal retirement date of 
his sixty-ﬁfth birthday.
(e) No actuarial reduction is made in respect of early retirement
between the ages of 60 and 65.
(f) Accrued pension is that which would be paid annually on
retirement at normal retirement date based on service and 
ﬁnal pensionable salary to 31 December 2003.
(g) Transfer values are calculated in accordance with
‘Retirement Beneﬁt Schemes – T ransfer Values (GN 11)’
published by the Institute of Actuaries and the Faculty of
Actuaries and dated 4 August 2003.
(h) Pensions in payment accrued post 1 January 1989 for 
J W Newman, S W A Comonte and J W Armstrong, and in total
for R W Weaver , are increased annually in line with the annual
rise in the All Items Index of Retail Prices subject to a maximum
of 5 per cent per annum.
(i) In the event of the death of an executive Director , a pension
equal to one half of the Director’s pension will become payable
to a surviving spouse.
Approved by the Board on 29 March 2004 and signed on its
behalf by
MG Leigh
Secretary Consolidated proﬁt and loss account
for the year ended 31 December 2003
2003 2002
Continuing Discontinued Continuing Discontinued 
activities activities activities activities
Acquisitions Ongoing Total Total Total
Note £million £million £million £million £million £million £million £million
Turnover 1 9.4 518.1 527.5 6.4 533.9 512.5 7.8 520.3
Cost of sales (8.2) (425.9) (434.1) (6.1) (440.2) (424.7) (10.9) (435.6)
Gross proﬁt 1.2 92.2 93.4 0.3 93.7 87.8 (3.1) 84.7
Operating expenses 2 (1.1) (71.5) (72.6) (0.8) (73.4) (73.3) (1.5) (74.8)
Operating proﬁt 0.1 20.7 20.8 (0.5) 20.3 14.5 (4.6) 9.9
Operating proﬁt before impairment provisions 
and goodwill amortisation 0.2 22.4 22.6 (0.5) 22.1 24.0 (1.6) 22.4
Impairment provisions ––––– (7.4) (3.0) (10.4)
Goodwill amortisation (0.1) (1.7) (1.8) – (1.8) (2.1) – (2.1)
Operating proﬁt 0.1 20.7 20.8 (0.5) 20.3 14.5 (4.6) 9.9
Cost of reorganisation – magnetics 3 – (3.0) (3.0) (10.8) (13.8) –––
Loss on sale of business 3 – (1.2) (1.2) – (1.2) –––
Proﬁt on sale of ﬁxed asset investment 3 ––––– 1.2 – 1.2
Proﬁt on ordinary activities before interest 0.1 16.5 16.6 (11.3) 5.3 15.7 (4.6) 11.1
Interest 4 (0.1) (2.0) (2.1) – (2.1) (2.8) (0.4) (3.2)
Proﬁt on ordinary activities before taxation 5 – 14.5 14.5 (11.3) 3.2 12.9 (5.0) 7.9
Taxation 6 – (3.7) (3.7) 0.5 (3.2) (3.3) 1.2 (2.1)
Proﬁt on ordinary activities after taxation – 10.8 10.8 (10.8) – 9.6 (3.8) 5.8
Minority interests – (0.1) (0.1) – (0.1) (0.2) – (0.2)
(Loss)/proﬁt for the year – 10.7 10.7 (10.8) (0.1) 9.4 (3.8) 5.6
Dividends 7 – (15.6) (15.6) – (15.6) (15.6) – (15.6)
Retained loss – (4.9) (4.9) (10.8) (15.7) (6.2) (3.8) (10.0)
Earnings per share 8
– basic (0.1)p 3.6p
– fully diluted (0.1)p 3.6p
– before impairment provisions, goodwill 
amortisation and exceptional items 10.4p 10.1p
24 TT electronics plc Annual Report 2003 2003 2002
Note £million £million
Fixed assets
Intangible assets 12 44.9 30.2
T angible assets 13 143.5 142.1
Investments 14 5.3 5.1
193.7 177.4
Current assets
Property 15 1.8 2.0
Stocks 16 98.5 98.2
Debtors 17 108.7 109.7
Investments 18 0.1 0.1
Cash 8.5 5.1
217.6 215.1
Creditors falling due within one year 19 (147.2) (121.0)
Net current assets 70.4 94.1
T otal assets less current liabilities 264.1 271.5
Creditors falling due after more than one year 20 (60.9) (57.2)
Provisions for liabilities and charges 22 (4.2) (5.8)
Minority interests 23 (2.9) (2.8)
T otal net assets 196.1 205.7
Capital and reserves
Share capital 24 38.7 38.7
Share premium account 25 56.0 56.0
Capital redemption reserve 25 4.4 4.4
Merger reserve 25 23.0 12.1
Proﬁt and loss account 25 74.0 94.5
Equity shareholders’ funds 196.1 205.7
Approved by the Directors on 29 March 2004 and signed on their behalf by
J W Newman R W Weaver
Director Director
TT electronics plc Annual Report 2003 25
Consolidated balance sheet
at 31 December 2003 Consolidated cash ﬂow statement
for the year ended 31 December 2003
2003 2002
Note £million £million
Net cash inﬂow from operating activities 26 45.2 42.6
Returns on investments and servicing of ﬁnance
Dividends received – 0.3
Interest paid (2.6) (4.0)
Interest received 0.5 0.5
Net cash outﬂow from returns on investments and servicing of ﬁnance (2.1) (3.2)
Taxation (2.9) (2.9)
Capital expenditure and ﬁnancial investment
Sale of tangible ﬁxed assets 2.2 1.2
Government grants received 0.8 1.0
Sale of ﬁxed asset investment – 10.6
Purchase of ﬁxed asset investments (0.2) (4.0)
Purchase of tangible ﬁxed assets (23.5) (26.5)
Net cash outﬂow from capital expenditure and ﬁnancial investment (20.7) (17.7)
Acquisitions and disposals
Purchase of businesses 27 (31.0) –
Sale of business 28 1.1 –
Net cash outﬂow from acquisitions and disposals (29.9) –
Ordinary dividends paid (15.6) (15.6)
Net cash (outﬂow)/inﬂow before liquid resources and ﬁnancing (26.0) 3.2
Net cash outﬂow from management of liquid resources – –
Financing
New loans 6.7 2.2
Loan repayments (0.4) (1.6)
Finance lease repayments – (0.3)
Net cash inﬂow from ﬁnancing 6.3 0.3
(Decrease)/increase in cash 29 (19.7) 3.5
26 TT electronics plc Annual Report 2003 2003 2002
£million £million
(Loss)/proﬁt for the year (0.1) 5.6
Exchange differences on net foreign currency investments (4.8) (6.4)
T otal recognised gains and losses (4.9) (0.8)
TT electronics plc Annual Report 2003 27
Statement of total recognised gains and losses
for the year ended 31 December 2003
Reconciliation of movements in shareholders’ funds
for the year ended 31 December 2003
2003 2002
£million £million
(Loss)/proﬁt for the year (0.1) 5.6
Exchange differences on net foreign currency investments (4.8) (6.4)
T otal recognised gains and losses (4.9) (0.8)
Dividends (15.6) (15.6)
Goodwill included in exceptional items 10.9 –
Net change in shareholders’ funds (9.6) (16.4)
Opening shareholders’ funds 205.7 222.1
Closing shareholders’ funds 196.1 205.7 Company balance sheet
at 31 December 2003
2003 2002
Note £million £million
Fixed assets
T angible assets 13 2.6 0.3
Investments 14 140.6 140.4
143.2 140.7
Current assets
Property 15 0.9 1.5
Debtors 17 154.3 157.3
Cash 0.1 –
155.3 158.8
Creditors falling due within one year 19 (45.5) (48.4)
Net current assets 109.8 110.4
T otal assets less current liabilities 253.0 251.1
Creditors falling due after more than one year 20 (49.0) (46.4)
Provisions for liabilities and charges 22 (0.2) (0.2)
T otal net assets 203.8 204.5
Capital and reserves
Share capital 24 38.7 38.7
Share premium account 25 56.0 56.0
Capital redemption reserve 25 4.4 4.4
Merger reserve 25 70.3 70.3
Proﬁt and loss account 25 34.4 35.1
Equity shareholders’ funds 203.8 204.5
Approved by the Directors on 29 March 2004 and signed on their behalf by
J W Newman R W Weaver
Director Director
28 TT electronics plc Annual Report 2003 The ﬁnancial statements have been prepared under the historical cost convention in accordance with applicable accounting
standards.The group continues to account for pension schemes using SSAP 24 ‘ Accounting for Pension Costs’ and makes the
disclosures required under the transitional arrangements of FRS 17 ‘Retirement Beneﬁts’.The principal accounting policies 
of the group are summarised below and have remained unchanged from the previous year .
Basis of consolidation
The group’s ﬁnancial statements consolidate the ﬁnancial statements of TT electronics plc and all of its subsidiary undertakings 
of which the principal ones are shown on pages 56 and 57.
Subsidiary undertakings acquired are consolidated for the periods from the effective dates of acquisition and subsidiary
undertakings sold or otherwise disposed of are consolidated up to the effective dates of disposal.Transactions between 
group companies are eliminated on consolidation.
Goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing the difference between the cost of acquisition and
the fair value of the separable net assets acquired, is capitalised and amortised on a straight line basis over its expected useful
economic life up to a maximum of 20 years. Goodwill on acquisitions made before 1 January 1998 was taken directly to reserves
in the year in which it arose. On the subsequent disposal or discontinuance of a previously acquired business the relevant
goodwill is dealt with in the proﬁt and loss account.
Foreign currencies
Assets and liabilities of overseas subsidiaries are translated into sterling at the rate of exchange ruling at the balance sheet date.
The results and cash ﬂows of overseas subsidiaries are translated into sterling using the average rates of exchange for the year.
Exchange movements on the restatement of the net assets of overseas subsidiaries, foreign currency loans held for the purpose
of ﬁnancing overseas investments and the adjustment between the proﬁt and loss account translated at the average rate and
the closing rate are taken directly to reserves.All other exchange differences are dealt with through the proﬁt and loss account.
Turnover
Turnover is the invoice value of goods and services supplied to external customers, excluding value added tax and other sales
related taxes.Transactions are recorded as sales when the delivery of products or performance of services takes place in
accordance with the contract terms of sale.
Tangible ﬁxed assets and depreciation
Tangible ﬁxed assets are stated at cost less a provision for depreciation. Depreciation is calculated so as to write-off the cost less
estimated residual value of tangible ﬁxed assets, in equal instalments over their expected useful lives. No depreciation is provided
on freehold land.The depreciation rates for the major categories of asset are given in note 13.The carrying values of ﬁxed assets
are reviewed for impairment when there is an indication that the assets may be impaired.
Stocks
Stocks and work in progress are valued at the lower of cost, including related overheads, and net realisable value.
TT electronics plc Annual Report 2003 29
Accounting policies Accounting policies continued
Deferred taxation
Deferred taxation is the taxation attributable to timing differences between results computed for taxation purposes and results
as stated in the ﬁnancial statements. It is recognised on all timing differences where the transaction or event which gives the
group an obligation to pay more tax, or the right to pay less tax in the future, has occurred by the balance sheet date. Deferred tax
assets are recognised when it is more likely than not that they will be recovered. Deferred tax on deﬁned beneﬁt pension scheme
surpluses or deﬁcits is adjusted against the surplus or deﬁcit. Deferred tax is measured using the rates of tax enacted or
substantively enacted by the balance sheet date.
Investments
Fixed asset investments are included at cost less amounts written-off.
Current asset investments are included at the lower of cost and net realisable value.
Leases
Assets acquired under ﬁnance leases which confer substantially all the risks and rewards of ownership of an asset are capitalised
and outstanding instalments, net of interest, are shown in creditors.Assets held under ﬁnance leases are depreciated over the
shorter of the lease terms and the expected useful lives of the assets.
Payments on operating leases are charged to the proﬁt and loss account on a straight line basis over the lease term.
Derivative ﬁnancial instruments
Monetary assets and liabilities which are hedged by forward currency exchange contracts are translated at the contract rate.
Forward currency contracts are also used to hedge the translation exposures of the proﬁt and loss account and gains or losses 
on these contracts are recognised in the proﬁt and loss account as incurred. Derivative instruments are used in order to minimise
the risk of the effect of ﬂuctuations in the cost of key raw materials and in rates of interest.These instruments are treated as an
economic hedge.
Pension costs
Pension costs for the deﬁned beneﬁt schemes are charged to the proﬁt and loss account so as to spread the costs over the
expected average service lives of employees in accordance with the recommendations of independent actuaries.
Pension costs for the deﬁned contribution schemes represent the amount of contributions payable in respect of the accounting period.
Government grants
Government grants relating to tangible ﬁxed assets are treated as deferred income and credited to the proﬁt and loss account by
equal instalments over the anticipated useful lives of the assets to which the grants relate. Other grants are credited to the proﬁt
and loss account over the period of the project to which they relate.
Research and development
Research and development costs are incurred in the development of new products and processes and in the substantial
improvement of existing products and processes.This expenditure is charged to the proﬁt and loss account as incurred.
30 TT electronics plc Annual Report 2003 1. Analysis of turnover
2003 2002
£million £million
By sector
Electronic 349.3 341.2
Electrical 178.2 171.3
Continuing activities 527.5 512.5
Discontinued activities 6.4 7.8
533.9 520.3
The results of Optek Technology Inc and the business of Demo Tableaux de Commande SA acquired during the year are reported in
the electronic sector .Air Transport Avionics Limited up to its disposal is reported as a continuing activity within the electrical sector .
The magnetics businesses, except for laminations, are reported as continuing activities within the electronic sector .
The result of the laminations business, formerly part of the electronic sector , is reported as a discontinued activity.
2003 2002
£million £million
By origin
United Kingdom 258.6 263.1
Rest of Europe 136.2 112.9
North America 102.0 106.3
Rest of the World 30.7 30.2
Continuing activities 527.5 512.5
Discontinued activities 6.4 7.8
533.9 520.3
By destination
United Kingdom 155.8 156.3
Rest of Europe 206.5 179.9
North America 101.5 108.0
Rest of the World 63.7 68.3
Continuing activities 527.5 512.5
Discontinued activities 6.4 7.8
533.9 520.3
The turnover of discontinued activities originates in the United Kingdom.T urnover of discontinued activities by destination was
£4.7 million (2002 – £6.1 million) to the United Kingdom, £0.7 million (2002 – £0.4 million) to the Rest of Europe, £0.9 million
(2002 – £1.2 million) to North America and £0.1 million (2002 – £0.1 million) to the Rest of the World.
TT electronics plc Annual Report 2003 31
Notes to the ﬁnancial statements Notes to the ﬁnancial statements continued
2. Operating expenses
2003 2002
£million £million
Sales and distribution costs 41.7 41.6
Administration expenses 34.8 34.6
Other operating income (3.9) (2.9)
Continuing activities 72.6 73.3
Discontinued activities 0.8 1.5
Operating expenses 73.4 74.8
Administration expenses include £1.8 million (2002 – £2.1 million) of goodwill amortisation and £nil million (2002 – £2.6 million)
of goodwill impairment all of which relate to continuing activities.
3. Exceptional items
2003 2002
Note £million £million
Cost of reorganisation – magnetics 28 (13.8) –
Loss on sale of business 28 (1.2) –
Proﬁt on sale of ﬁxed asset investment – 1.2
(15.0) 1.2
The group has carried out a major reorganisation of its magnetics businesses which in previous years were a signiﬁcant part of the
group’s activities.This reorganisation resulted in a charge of £13.8 million including £10.1 million of goodwill previously written-off to
reserves, see note 28. On 11 June 2003 the group sold the business of Air T ransport Avionics Limited at a loss of £1.2 million including
£0.8 million of goodwill previously written-off to reserves, see note 28.
The cost of reorganisation comprises £10.8 million in respect of discontinued activities, and £3.0 million in respect of 
continuing activities.
On 19 December 2002 the group disposed of its entire holding in Johnston Group PLC at a proﬁt of £1.2 million.
4. Interest
2003 2002
£million £million
Interest payable on bank loans and overdrafts 2.6 4.0
Bank and other interest receivable (0.5) (0.5)
Investment income receivable – (0.3)
2.1 3.2
32 TT electronics plc Annual Report 2003 5. Analysis of proﬁt on ordinary activities before taxation
2003 2002
£million £million
Proﬁt on ordinary activities before taxation is stated after charging/(crediting):
Depreciation
– tangible assets owned 26.0 26.0
– tangible assets under ﬁnance leases 0.1 –
Amortisation
– intangible assets 1.8 2.1
Fees to Auditors
– statutory audit 0.8 0.7
– audit related regulatory reporting 0.1 0.1
– tax compliance services 0.1 0.1
Operating lease rentals
– plant and machinery 0.6 0.4
– other 2.7 2.4
Research and development expenditure (net of customer funding) 8.6 8.1
Government grants credited (0.8) (1.0)
By sector
Electronic 16.9 17.3
Electrical 5.7 6.7
Continuing activities 22.6 24.0
Discontinued activities (0.5) (1.6)
Operating proﬁt before impairment provisions and goodwill amortisation 22.1 22.4
Impairment provisions – (10.4)
Goodwill amortisation (1.8) (2.1)
Total operating proﬁt 20.3 9.9
Exceptional items (15.0) 1.2
Proﬁt on ordinary activities before interest 5.3 11.1
Interest (2.1) (3.2)
Proﬁt on ordinary activities before taxation 3.2 7.9
TT electronics plc Annual Report 2003 33 Notes to the ﬁnancial statements continued
5. Analysis of proﬁt on ordinary activities before taxation continued
2003 2002
£million £million
By origin
United Kingdom 2.0 0.7
Rest of Europe 14.2 12.5
North America 4.4 5.6
Rest of the World 2.0 5.2
Continuing activities 22.6 24.0
Discontinued activities (0.5) (1.6)
Operating proﬁt before impairment provisions and goodwill amortisation 22.1 22.4
Impairment provisions – (10.4)
Goodwill amortisation (1.8) (2.1)
Total operating proﬁt 20.3 9.9
Exceptional items (15.0) 1.2
Proﬁt on ordinary activities before interest 5.3 11.1
Interest (2.1) (3.2)
Proﬁt on ordinary activities before taxation 3.2 7.9
Continuing activities include acquired activities, see note 1. Discontinued activities are deﬁned in note 1. Exceptional items are
shown in note 3.The loss on discontinued activities originates in the United Kingdom. Goodwill amortisation is in respect of 
the electronic sector .
6.Taxation
2003 2002
£million £million
United Kingdom corporation tax at 30% (2002 – 30%) based on the taxable proﬁts for the year – 0.1
Overseas taxation 6.9 3.0
Adjustment to tax charge in respect of previous periods (3.0) (1.1)
Current taxation 3.9 2.0
Deferred taxation (0.7) 0.1
3.2 2.1
The tax charge for the year represents an effective rate of 23% (2002 – 27%) after taking account of the utilisation of tax losses
available within the group.
There is tax relief in respect of exceptional items of £0.5 million (2002 – £nil million).The current tax charge is explained as follows:
2003 2002
£million £million
Proﬁt on ordinary activities before tax 3.2 7.9
Proﬁt on ordinary activities multiplied by standard rate of corporation tax in the UK
of 30% (2002 – 30%) 1.0 2.4
Effects of:
Charges to proﬁt not deductible for tax purposes 3.3 3.3
Capital allowances less than/(in excess of) depreciation 2.0 (1.1)
Utilisation of tax losses (0.9) (1.9)
Higher tax rates on overseas earnings 1.5 0.4
Adjustment to tax charge in respect of previous periods (3.0) (1.1)
Current tax charge for period 3.9 2.0
34 TT electronics plc Annual Report 2003 7. Dividends
2003 2002 2003 2002
pence per share pence per share £million £million
Equity
Ordinary dividends
– Interim, paid 3.69 3.69 5.7 5.7
– Final, proposed 6.36 6.36 9.9 9.9
10.05 10.05 15.6 15.6
8. Earnings per share
2003 2002
pence per share pence per share
Earnings per share
Basic and fully diluted (0.1) 3.6
Before impairment provisions, goodwill amortisation and exceptional items 10.4 10.1
Earnings per share has been calculated by dividing the proﬁt attributable to shareholders by the weighted average number of
shares in issue during the period.The numbers used in calculating basic and fully diluted earnings per share are reconciled below.
An adjusted earnings per share has also been presented based on the proﬁt attributable to shareholders before impairment
provisions, goodwill amortisation and exceptional items.The effect of these items on earnings is reconciled below.
2003 2002
£million £million
Net (loss)/proﬁt for the period attributable to shareholders
Earnings basic and fully diluted (0.1) 5.6
Goodwill amortisation 1.8 2.1
Impairment provisions, net of tax relief – 9.1
Exceptional items, net of tax relief 14.5 (1.2)
Earnings before impairment provisions, goodwill amortisation and exceptional items 16.2 15.6
2003 2002
million million
Weighted average number of shares in issue
Basic 154.8 154.8
Adjustment for share options 0.6 0.4
Fully diluted 155.4 155.2
TT electronics plc Annual Report 2003 35 Notes to the ﬁnancial statements continued
9. Employees
The average number of employees (including Directors) during the year was:
2003 2002
Number Number
By function
Production 6,818 7,003
Sales and distribution 750 768
Administration 523 524
8,091 8,295
By sector
Electronic 5,695 5,865
Electrical 2,337 2,335
Continuing activities 8,032 8,200
Discontinued activities 59 95
8,091 8,295
Discontinued activities are deﬁned in note 1.
2003 2002
£million £million
The aggregate emoluments (including those of Directors) for the year were:
Wages and salaries 134.0 131.5
Employers’ social security charges 18.7 16.5
Employers’ pension costs 6.2 5.9
158.9 153.9
Remuneration in respect of the Directors was as follows:
Emoluments 1.3 1.2
Further details of individual Directors’ remuneration, pension beneﬁts and share options are shown in the Directors’
remuneration report on pages 20 to 23.
10. Related party transactions
All related party transactions are with entities in which J W Newman was interested during the year . Goods and services were
supplied and purchased on normal credit terms valued at the aggregate of £84,000 (2002 – £91,000) and £21,000 (2002
– £19,000) respectively.The group in the ordinary course of business leased premises to related parties and provided normal
services in respect of such premises.The annual rentals and service charges aggregated £77,000 (2002 – £53,800) and were
calculated on open market bases and paid to the agreed terms.The group also in the ordinary course of business leased premises
from related parties.The rental and service charges aggregating £286,000 (2002 – £271,000) were calculated on open market
bases and paid to the agreed terms.As part of the demerger from TT electronics on 14 May 2001 loans totalling £8.0 million
repayable in 2004 and 2008 were made to Send Group Limited. Subsequently, Send Group Limited became a related party 
on 15 November 2002. Interest on the loans amounted to £271,000 (2002 – £33,000).
36 TT electronics plc Annual Report 2003 11. Analysis of net assets
2003 2002
£million £million
Shareholders’ funds 196.1 205.7
Loans and ﬁnance leases
– falling due within one year 1.1 1.5
– falling due after more than one year 50.0 46.8
247.2 254.0
Bank overdrafts less cash and liquid resources 27.1 7.6
274.3 261.6
By sector
Electronic 192.7 176.2
Electrical 80.9 79.8
Continuing activities 273.6 256.0
Discontinued activities 0.7 5.6
274.3 261.6
By location
United Kingdom 120.1 121.0
Rest of Europe 37.5 34.5
North America 103.8 89.6
Rest of the World 12.2 10.9
Continuing activities 273.6 256.0
Discontinued activities 0.7 5.6
274.3 261.6
Discontinued activities are deﬁned in note 1.
12. Intangible ﬁxed assets
Goodwill
£million
Group
Cost at 1 January 2003 38.7
Acquisitions, see note 27 20.6
Exchange translation differences (4.8)
Cost at 31 December 2003 54.5
Amortisation and impairment at 1 January 2003 8.5
Charge for the year 1.8
Exchange translation differences (0.7)
Amortisation and impairment at 31 December 2003 9.6
Net book amounts
At 31 December 2003 44.9
At 31 December 2002 30.2
The expected useful economic life of the goodwill carried on the balance sheet is considered to be 20 years from the date 
of acquisition.
TT electronics plc Annual Report 2003 37 Notes to the ﬁnancial statements continued
13.Tangible ﬁxed assets
Freehold land Leasehold land Plant, equipment
and buildings and buildings and vehicles T otal
£million £million £million £million
Group
Cost at 1 January 2003 65.1 9.1 325.5 399.7
Additions 1.1 0.3 22.1 23.5
Acquisitions 4.2 – 16.3 20.5
Disposals (0.2) (1.3) (33.5) (35.0)
Business sold – – (0.6) (0.6)
T ransfer to current assets (0.7) – – (0.7)
Reclassiﬁcation 1.4 (1.4) – –
Exchange translation differences (0.6) 0.1 (3.3) (3.8)
Cost at 31 December 2003 70.3 6.8 326.5 403.6
Depreciation and impairment at 1 January 2003 17.0 4.5 236.1 257.6
Charge for the year 1.4 0.3 24.4 26.1
Acquisitions 2.1 – 10.7 12.8
Disposals – (0.7) (32.8) (33.5)
Business sold – – (0.4) (0.4)
T ransfer to current assets (0.1) – – (0.1)
Reclassiﬁcation 0.5 (0.5) – –
Exchange translation differences (0.4) (0.1) (1.9) (2.4)
Depreciation and impairment at 31 December 2003 20.5 3.5 236.1 260.1
Net book amounts
At 31 December 2003 49.8 3.3 90.4 143.5
At 31 December 2002 48.1 4.6 89.4 142.1
The ﬁgures stated above for freehold land and buildings include assets held under ﬁnance leases with a net book amount 
of £0.8 million (2002 – £nil million).
The net book amount of freehold land and buildings includes £15.3 million (2002 – £15.0 million) in respect of land.
The net book amount of leasehold land and buildings comprises long leasehold (over 50 years) of £1.3 million (2002 – £2.6 million)
and short leasehold of £2.0 million (2002 – £1.9 million).
Depreciation is provided, other than on freehold land, at the following annual rates on a straight line basis:
Freehold buildings 2%
Leasehold land and buildings 2% (or over the period of the lease, if less than 50 years)
Plant, equipment and vehicles 10% to 33%
38 TT electronics plc Annual Report 2003 13.Tangible ﬁxed assets continued
Freehold land Plant, equipment
and buildings and vehicles T otal
£million £million £million
Company
Cost at 1 January 2003 0.2 1.1 1.3
Additions – 0.1 0.1
T ransfer from group companies 3.0 – 3.0
Disposals (0.2) (0.2) (0.4)
Cost at 31 December 2003 3.0 1.0 4.0
Depreciation at 1 January 2003 – 1.0 1.0
Charge for the year – 0.1 0.1
T ransfer from group companies 0.5 – 0.5
Disposals – (0.2) (0.2)
Depreciation at 31 December 2003 0.5 0.9 1.4
Net book amounts
At 31 December 2003 2.5 0.1 2.6
At 31 December 2002 0.2 0.1 0.3
14. Fixed asset investments
UK listed
£million 
Group
At 1 January 2003 5.1
Additions 0.2
At 31 December 2003 5.3
UK listed Subsidiary
at cost undertakings T otal
£million £million £million
Company 
At 1 January 2003 5.1 135.3 140.4
Additions 0.2 – 0.2
At 31 December 2003 5.3 135.3 140.6
The group’s principal operating subsidiary undertakings and the location of their principal operations are shown on pages 56
and 57.
TT electronics plc owns 100% of the ordinary share capital or equivalent and 100% of voting rights of all group subsidiary
undertakings other than Rodco Limited which is non-trading and is 60% owned. Shareholdings are held indirectly for all 
principal operating subsidiary undertakings.
TT electronics plc owns 24.4% of the equity share capital of Pressac plc. In 2003 TT electronics plc did not exercise signiﬁcant
inﬂuence over the ﬁnancial or operating policies of Pressac plc and this holding was accounted for as an investment. On 7 January
2004 SWA Comonte was appointed to the board of Pressac plc. In its latest audited accounts at 31 December 2002 the consolidated
net assets of Pressac plc were £15.0 million and its loss for the year after exceptional charges of £14.4 million and taxation 
was £15.2 million.
The market value of UK listed investments at 31 December 2003 was £4.8 million (2002 – £4.4 million).
TT electronics plc Annual Report 2003 39 Notes to the ﬁnancial statements continued
15. Property
£million 
Group
At 1 January 2003 2.0
T ransfer from ﬁxed assets 0.6
Disposal (0.8)
At 31 December 2003 1.8
£million 
Company
At 1 January 2003 1.5
Disposal (0.6)
At 31 December 2003 0.9
Properties which are no longer used for the purpose of the trade and are being held for sale are classiﬁed as current assets and
carried at the lower of cost and net realisable value.
16. Stocks
2003 2002
£million £million
Group
Raw materials 33.6 32.6
Work in progress 27.2 25.6
Finished goods 37.7 40.0
98.5 98.2
17. Debtors
Group Group Company Company
2003 2002 2003 2002
£million £million £million £million
Amounts falling due within one year
T rade debtors 85.6 85.5 0.3 0.2
Amounts owed by subsidiary undertakings 145.1 148.5
Other debtors 4.7 3.5 – –
Loan to Send Group Limited 6.0 – 6.0 –
Prepayments and accrued income 7.3 9.9 0.2 0.2
Corporation tax – – 0.4 –
Pension prepayment 1.8 1.8 0.3 0.4
105.4 100.7 152.3 149.3
Amounts falling due after more than one year
Other debtors 0.2 0.2 – –
Loan to Send Group Limited 2.0 8.0 2.0 8.0
Pension prepayment 1.1 0.8 – –
3.3 9.0 2.0 8.0
108.7 109.7 154.3 157.3
40 TT electronics plc Annual Report 2003 18. Current asset investments
Group UK listed
£million 
At 1 January 2003 and 31 December 2003 0.1
The UK listed investments are all listed on the London Stock Exchange and are classiﬁed as liquid resources.
The market value of investments at 31 December 2003 is £0.1 million (2002 – £0.1 million).
19. Creditors falling due within one year
Group Group Company Company
2003 2002 2003 2002
£million £million £million £million
Bank overdrafts 35.7 12.7 0.1 0.1
Bank loans 1.0 1.5 – 0.3
Amounts due under ﬁnance leases 0.1 – – –
T rade creditors 55.5 62.2 0.2 0.5
Amounts owed to subsidiary undertakings 31.6 33.7
Corporation tax 14.0 11.2 – 0.7
T axation and social security 5.7 4.5 1.1 0.9
Other creditors 1.0 1.2 – 0.3
Accruals and deferred income 24.3 17.8 2.6 2.0
Dividends 9.9 9.9 9.9 9.9
147.2 121.0 45.5 48.4
20. Creditors falling due after more than one year
Group Group Company Company
2003 2002 2003 2002
£million £million £million £million
Bank loans 49.5 46.8 49.0 46.4
Amounts due under ﬁnance leases 0.5 – – –
Accruals and deferred income 3.9 2.9 – –
Pension accrual 7.0 7.5 – –
60.9 57.2 49.0 46.4
TT electronics plc Annual Report 2003 41 Notes to the ﬁnancial statements continued
21. Borrowings and ﬁnancial instruments
The group’s borrowings are funded mainly through bank overdrafts and a committed unsecured £50.0 million multi-currency
revolving bank loan facility which expires in June 2006. Under this facility funds can be drawn in either sterling, US dollars or
euros or a combination thereof at ﬁxed rates of interest for periods varying from one month to a year . Interest rates are at a ﬁxed
margin over the appropriate inter bank borrowing rate at the date the funds are drawn.The group has entered into interest rate
swaps to ﬁx the average interest rate applicable to $65 million of borrowings at 2.7 per cent for the period to 30 June 2005.
The group’s treasury and foreign currency policy is set out on page 13.
The group has designated $83.5 million (2002 – $65 million) of its borrowings as a currency hedge of its US dollar related assets.
This currency hedge was increased to $ 105 million in January 2004, utilising existing borrowings.The exchange gains or losses 
on this borrowing offset the group’s gains or losses on translation of its US dollar denominated net assets.The net result is dealt
with through reserves and reported in the Statement of Total Recognised Gains and Losses, together with the exchange
difference arising from the translation of the group’s other overseas subsidiaries, mainly in Continental Europe.
Currency exposure on the translation of proﬁts earned in euros and dollars has been reduced by forward foreign exchange contracts
to sell these currencies maturing in December 2004.There is a currency exposure on the translation of proﬁts earned by other
overseas subsidiaries.The group seeks to avoid currency exposures on sales and purchasing transactions by the use of forward
currency contracts and uses forward contracts to manage the cost of key raw materials.
Short-term debtors and creditors have been excluded from the following disclosures, other than in respect of currency risk disclosures.
Financial liabilities
The interest rate proﬁle of the group’s ﬁnancial liabilities at 31 December 2003 was:
Weighted average Period for which
ﬁxed interest rate rate is ﬁxed in Fixed rate Floating rate T otal
% years £million £million £million
2003
Sterling 4.7 0.3 12.7 18.8 31.5
US dollar 2.7 1.5 36.3 10.1 46.4
Euro 3.2 3.9 1.1 7.7 8.8
Other – – – 0.1 0.1
50.1 36.7 86.8
2002
Sterling 4.7 0.3 5.8 0.1 5.9
US dollar 2.9 1.5 40.6 8.0 48.6
Euro 2.6 1.8 0.6 5.9 6.5
Other – – – – –
47.0 14.0 61.0
The ﬂoating rate debts in sterling and US dollars bear interest based on the United Kingdom base rate and the 30 day US dollar
libor rate respectively.The US dollar average ﬁxed interest rate and the period for which it is ﬁxed include the effect of the interest
rate swaps.
42 TT electronics plc Annual Report 2003 21. Borrowings and ﬁnancial instruments continued
Maturity proﬁle of ﬁnancial liabilities
Group Group Company Company
2003 2002 2003 2002
£million £million £million £million
In less than one year or on demand
Bank borrowings 36.7 14.2 0.1 0.4
Finance leases 0.1 – – –
Between one and two years
Bank borrowings 0.4 – – –
Finance leases 0.1 – – –
Between two and ﬁve years
Bank borrowings 49.1 46.8 49.0 46.4
Finance leases 0.4 – – –
86.8 61.0 49.1 46.8
Undrawn committed borrowing facilities at 31 December 2003, amounted to £6.0 million (2002 – £10.1 million).
Fair values
The fair values of ﬁnancial assets and liabilities have been determined in accordance with the guidance set out in FRS 13 and 
are shown below:
2003 2002
Book value Fair value Book value Fair value
£million £million £million £million
Financial assets
Fixed asset investments 5.3 5.3 5.1 5.1
Current asset investments 0.1 0.1 0.1 0.1
Cash 8.5 8.5 5.1 5.1
Financial liabilities
Bank overdrafts (35.7) (35.7) (12.7) (12.7)
Bank loans due within one year (1.0) (1.0) (1.5) (1.5)
Finance leases due within one year (0.1) (0.1) ––
Bank loans due after one year (49.5) (49.5) (46.8) (46.8)
Finance leases due after one year (0.5) (0.5) ––
Interest rate swaps 2004 and 2005 – (0.1) ––
(72.9) (73.0) (50.7) (50.7)
TT electronics plc Annual Report 2003 43 Notes to the ﬁnancial statements continued
22. Provisions for liabilities and charges
Other provisions Deferred tax T otal
£million £million £million
Group
At 1 January 2003 2.2 3.6 5.8
Acquisitions – (1.1) (1.1)
T ransfer (to)/from proﬁt and loss account 0.5 (0.7) (0.2)
Exchange translation differences – (0.3) (0.3)
At 31 December 2003 2.7 1.5 4.2
2003 2002
£million £million
The deferred tax provision comprises:
Accelerated capital allowances 4.7 2.6
Other short-term timing differences (2.3) 1.0
Unrelieved tax losses (0.9) –
1.5 3.6
No provision is made for any liability which may arise in the event that any reserves of overseas subsidiary undertakings 
are distributed.
The Company has a deferred tax liability of £0.2 million (2002 – £0.2 million) arising from short-term timing differences.
Other provisions are mainly for environmental costs and onerous contracts.
23. Minority interests
Minority interests comprise a 40 per cent equity interest in Rodco Limited which is non-trading.
24. Share capital
2003 2002
£million £million
Authorised
226,000,000 (2002 – 226,000,000) ordinary shares of 25p each 56.5 56.5
Issued, called up and fully paid
154,798,103 (2002 – 154,798,103) ordinary shares of 25p each 38.7 38.7
Ordinary shares of 25p each are equity share capital.
Share option schemes
At 31 December 2003 options were exercisable over 6,645,738 (2002 – 4,908,158) ordinary shares under the group share
option schemes up to 2013. Subscription prices range from 80.0p to 359.0p with a weighted average of 147.8p. Subsequent
to 31 December 2003 no options have been exercised or have lapsed.
44 TT electronics plc Annual Report 2003 24. Share capital continued
1994 Executive scheme 
This scheme for senior executives was approved at the Annual General Meeting on 24 May 1994. On 26 March 2003 options
over 670,125 ordinary shares exercisable at 80.0p were granted.The options outstanding at the date of this report are over
2,548,373 ordinary shares and such options are:
Exercisable Subscription
on or after Options price (p)
04.04.1998 142,988 241.0
15.04.1999 91,225 319.0
22.04.2000 65,221 359.0
24.03.2001 112,335 300.0
31.03.2002 195,281 177.5
28.03.2003 407,114 91.5
18.04.2004 386,495 163.0
03.04.2005 496,839 165.0
26.03.2006 650,875 80.0
1996 Executive scheme
This scheme for senior executives was approved at the Annual General Meeting on 14 May 1996. On 26 March 2003 options
over 1,310,547 ordinary shares exercisable at 80.0p were granted.The options outstanding at the date of this report are over
4,097,365 ordinary shares and such options are:
Exercisable Subscription
on or after Options price (p)
06.06.1999 136,200 353.0
22.04.2000 206,587 359.0
24.03.2001 129,088 300.0
31.03.2002 145,569 177.5
15.09.2002 514,703 136.0
28.03.2003 603,531 91.5
18.04.2004 198,710 163.0
23.05.2004 472,227 166.0
03.04.2005 406,328 165.0
26.03.2006 1,284,422 80.0
Options issued under the 1994 and 1996 Executive Share Option Schemes may not generally be exercised for a period of three
years from the date of grant and are conditional on there being an increase in earnings per share over any consecutive three year
period between the date of grant and the date of exercise of an average of 2 per cent per annum for options granted prior to
2001 and 4 per cent for options granted after 2000 above the increase in the All Items Index of Retail Prices over the same period.
For this purpose earnings per share on any relevant date is that derived from the audited ﬁnancial statements of the Company
and its subsidiaries last published prior to such date.
TT electronics plc Annual Report 2003 45 Notes to the ﬁnancial statements continued
25. Reserves
Share Capital
premium account redemption reserve Merger reserve Proﬁt and loss account
£million £million £million £million
Group
At 1 January 2003 56.0 4.4 12.1 94.5
Retained loss for the year – – – (15.7)
Goodwill relating to exceptional items – – 10.9 –
Exchange translation differences – – – (4.8)
At 31 December 2003 56.0 4.4 23.0 74.0
The goodwill arising on the acquisition of subsidiary undertakings charged to merger reserve at 31 December 2003 amounts to
£47.3 million (2002 – £58.2 million).
Share Capital
premium account redemption reserve Merger reserve Proﬁt and loss account
£million £million £million £million
Company
At 1 January 2003 56.0 4.4 70.3 35.1
Retained loss for the year – – – (0.7)
At 31 December 2003 56.0 4.4 70.3 34.4
In accordance with the exemption allowed by Section 230 of the Companies Act 1985, the Company has not presented its own
proﬁt and loss account.A proﬁt of £14.9 million (2002 – £5.2 million) has been dealt with in the ﬁnancial statements of the Company.
26. Reconciliation of group operating proﬁt to net cash inﬂow from operating activities
2003 2002
£million £million
Total operating proﬁt 20.3 9.9
Depreciation 26.1 26.0
Amortisation 1.8 2.1
Charge for impairment – 10.4
Government grants credited to proﬁt (0.8) (1.0)
Proﬁt on sale of tangible ﬁxed assets (0.7) (0.1)
Closure and other costs (1.5) (1.0)
Decrease in property current assets 0.8 2.0
Decrease in stocks 1.5 0.9
Decrease in debtors 8.6 2.2
Decrease in creditors (8.9) (4.0)
Movement on pension prepayments and accruals (0.9) (1.2)
Exchange translation differences (1.1) (3.6)
Net cash inﬂow from operating activities 45.2 42.6
46 TT electronics plc Annual Report 2003 27. Acquisitions
(a) The group acquired Optek Technology Inc, a sensor manufacturer , on 3 December 2003.
Assets acquired
Book value Valuation adjustments Fair value
£million £million £million
T angible ﬁxed assets 4.9 0.3
(i)
5.2
Stocks 3.2 – 3.2
Debtors 4.7 – 4.7
Cash 0.4 – 0.4
T rade and other creditors (4.7) – (4.7)
Deferred tax 1.2 (0.1)
(i)
1.1
Total net assets 9.7 0.2 9.9
Goodwill 20.7
Cost of acquisition 30.6
Notes
(i) The value of plant and machinery has been increased by £0.3 million based on the lower of depreciated replacement cost 
and recoverable amount. Deferred tax relating to the valuation adjustment to plant and equipment has been provided.The fair
value adjustments are provisional and the consideration is subject to the agreement of completion accounts.
(ii) In the year ended 31 January 2003 Optek Technology generated earnings before goodwill amortisation, interest and taxation
of £2.4 million on turnover of £40.4 million.
Satisﬁed by
£million
Consideration – cash 30.3
Costs – cash 0.3
30.6
(b) On 14 March 2003 the group acquired the business of Demo Tableaux de Commande SA, a manufacturer of automotive
climate control units.
Assets acquired
Book value Valuation adjustments Fair value
£million £million £million
Fixed assets – tangible 2.7 (0.2)
(i)
2.5
– intangible 0.9 (0.9)
(ii)
–
Stocks 1.0 (0.3)
(iii)
0.7
Debtors 3.0 (0.1)
(iv)
2.9
Cash 0.2 – 0.2
Creditors (2.8) (1.1)
(v)
(3.9)
Finance leases (0.6) – (0.6)
4.4 (2.6) 1.8
Goodwill (0.1)
Cost of acquisition 1.7
Notes
(i) Valuation of plant and equipment at lower of depreciated replacement cost and recoverable amount
(ii) Elimination of goodwill arising pre-acquisition
(iii) Valuation of stocks at lower of cost and net realisable value
(iv) Valuation of maintenance spares at recoverable amount
(v) Provisions for loss making contracts
TT electronics plc Annual Report 2003 47 Notes to the ﬁnancial statements continued
27. Acquisitions continued
Satisﬁed by
£million 
Consideration – cash 0.8
– deferred 0.7
1.5
Costs – cash 0.2
1.7
Cash outﬂows in respect of acquisitions
Optek  T echnology Demo T otal
£million £million £million
Cash consideration 30.3 0.8 31.1
Cash costs 0.3 0.2 0.5
Cash acquired (0.4) (0.2) (0.6)
30.2 0.8 31.0
28. Reorganisation and disposals
Cost of reorganisation – magnetics
The group has carried out a major reorganisation of its magnetics businesses.The laminations business has been discontinued.
Manufacture of ferrites in the United Kingdom and the USA has ceased.The production of certain ferrites has been transferred 
to the group’s factory in India.The cost of the reorganisation was:
£million 
Redundancy 1.0
Stock written-off 1.4
Provisions for future pension costs 0.8
Fixed assets, losses and write downs net of impairment –
Site closure and clearance costs 0.5
Goodwill, previously written-off to reserves 10.1
13.8
Ferrites 3.0
Laminations, including goodwill 10.8
13.8
Loss on sale of business
On 11 June 2003 the group disposed of the business of Air Transport Avionics Limited for a cash consideration of £1.1 million.
The net book value of the ﬁxed assets and stock sold was £1.1 million.The loss on disposal comprises:
£million 
Redundancy and site closure costs 0.2
Provision for future pension costs 0.2
Goodwill, previously written-off to reserves 0.8
1.2
48 TT electronics plc Annual Report 2003 29. Reconciliation of net cash ﬂow to movement in net debt
Loans
and ﬁnance
Cash at Bank Net cash/ Short-term lease
bank overdrafts (overdraft) investments obligations Net debt
£million £million £million £million £million £million
Balance at 31 December 2001 8.8 (20.4) (11.6) 0.1 (52.0) (63.5)
Cash ﬂow (2.1) 5.6 3.5 – (0.3) 3.2
Exchange differences (1.6) 2.1 0.5 – 4.0 4.5
Balance at 31 December 2002 5.1 (12.7) (7.6) 0.1 (48.3) (55.8)
Cash ﬂow 6.6 (26.3) (19.7) – (6.3) (26.0)
Acquisition –––– (0.6) (0.6)
Exchange differences (3.2) 3.3 0.1 – 4.1 4.2
Balance at 31 December 2003 8.5 (35.7) (27.2) 0.1 (51.1) (78.2)
30. Guarantees and ﬁnancial commitments
Financial commitments relating to bank loans are set out in notes 19, 20 and 21.The Company has no guarantees or contingent
ﬁnancial commitments.
31. Contingent liabilities
The group has contingent liabilities amounting to £3.5 million (2002 – £0.9 million) in respect of performance bonds and
guarantees entered into during the normal course of business.The Company and the group have no other contingent liabilities
which could have a material adverse effect on their ﬁnancial position.
32. Capital commitments
2003 2002
£million £million
Group
Commitments were:
Contracted 5.8 6.9
Authorised but not contracted 10.3 12.7
The Company had no capital commitments at 31 December 2003 and 31 December 2002.
TT electronics plc Annual Report 2003 49 Notes to the ﬁnancial statements continued
33. Obligations under operating leases
The operating lease payments due within one year to which the group and the Company were committed at 31 December 2003 were:
Land and 2003 Land and 2002
buildings Other Total buildings Other Total
£million £million £million £million £million £million
Group
On leases expiring:
within one year 0.2 0.1 0.3 0.2 0.1 0.3
between two and ﬁve years 0.8 0.2 1.0 0.9 0.1 1.0
over ﬁve years 1.9 0.1 2.0 1.6 0.1 1.7
2.9 0.4 3.3 2.7 0.3 3.0
Company
On leases expiring:
within one year ––– – 0.1 0.1
between two and ﬁve years – 0.1 0.1 – 0.1 0.1
over ﬁve years 0.4 – 0.4 0.4 – 0.4
0.4 0.1 0.5 0.4 0.2 0.6
34. Pension schemes
At the year end the group operated in the United Kingdom nine deﬁned beneﬁt schemes closed to new members and two deﬁned
beneﬁt pension schemes which have no active members.The assets of all eleven schemes are held under trusts and are therefore
independent of the group.These schemes will incur an increase in the current service cost under the projected unit cost method
as the members of the schemes approach retirement.The schemes were broadly associated with each of the principal subsidiary
undertakings of the Company.The group also operated in the United Kingdom two active money purchase schemes to provide
beneﬁts for eligible employees.
SSAP 24 ‘ Accounting for Pension Costs’ disclosures
Deﬁned beneﬁt schemes
Actuarial valuations of the various schemes were carried out by independent qualiﬁed actuaries between April 2000 and April
2002 principally using the projected unit cost method.The principal assumptions used were that investment returns would be
between 2.0 to 3.0 per cent higher than the growth in annual salaries and that pensions in the course of payment could increase by
up to 5 per cent.The combined actuarial valuation of the assets of the schemes operated by the group at their actuarial dates was
£168 million.These actuarial valuations represented between 73 per cent and 116 per cent of the beneﬁts accrued, on an ongoing
basis.The surpluses take account of the improvements to beneﬁts agreed by the trustees of certain schemes following the actuarial
valuations.The group’s intention is that any deﬁcits will be eliminated by the payment of increased employer contributions which
are reviewed annually. Employee contributions were increased by a percentage point with effect from 1 June 2003.The ongoing
pension costs are based on the advice of the schemes’ independent actuary.The total United Kingdom contributions charged by
the group in respect of the year ended 31 December 2003 were £5.0 million (2002 – £4.8 million).The differences between the
accumulated charge and payments made to the schemes is dealt with in debtors and creditors as appropriate.
Deﬁned contribution schemes
The assets of the schemes were in funds, administered by trustees, independent from those of the group.The total United Kingdom
contributions charged by the group in respect of the year ended 31 December 2003 were £0.3 million (2002 – £0.2 million).
50 TT electronics plc Annual Report 2003 34. Pension schemes continued
FRS 17 ‘Retirement Beneﬁts’ disclosures
This accounting standard, which is fully effective for the 2005 ﬁnancial year , requires certain disclosures in the transition period.
These disclosures are set out below.The calculations used for these disclosures are based on the most recent actuarial valuations
updated by the actuaries to assess the assets and liabilities of the schemes at 31 December 2003.
Pension scheme assets are stated at market value at 31 December 2003. Pension scheme liabilities have been calculated using
the projected unit cost method and the following ﬁnancial assumptions:
2003 2002
% %
Discount rate 5.8 6.0
Inﬂation rate 2.5 2.3
Increases to pensions in payment 2.5 – 3.0 2.3 – 3.0
Salary increases 3.1 2.9
The expected long-term rates of return on the main asset classes, net of expenses, at 31 December 2003 were:
2003 2002
% %
Equities 7.0 7.0
Bonds 5.0 5.2
Gilts and cash 4.0 3.7
On the above basis the assets and liabilities of the pension schemes were:
2003 2002
£million £million
Equities 143.5 120.6
Bonds 12.3 17.6
Gilts and cash 25.0 17.3
180.8 155.5
Present value of liabilities (242.9) (219.2)
Deﬁcit (62.1) (63.7)
Related deferred tax 18.7 19.1
Net pension liability (43.4) (44.6)
The amounts charged to the proﬁt and loss account under FRS 17 would have been:
2003 2002
£million £million
Current service cost 5.0 5.4
Expected return on pension scheme assets (10.1) (12.6)
Interest on pension scheme liabilities 13.2 12.7
Proﬁt and loss charge 8.1 5.5
TT electronics plc Annual Report 2003 51 Notes to the ﬁnancial statements continued
34. Pension schemes continued
2003 2002
£million £million
The amount that would have been included in the Statement of Total Recognised Gains and 
Losses under FRS 17 is:
Actual return less expected return on pension scheme assets 14.3 (45.0)
Experience gains and losses arising on the scheme liabilities 4.0 (2.5)
Changes in the assumptions underlying the present value of the scheme liabilities (15.3) 6.6
Actuarial gain/(loss) 3.0 (40.9)
Deferred tax movement (0.4) 12.3
Actuarial gain/(loss), net of deferred tax 2.6 (28.6)
2003 2002
Difference between expected and actual return on scheme assets:
Amount (£million) 14.3 (45.0)
Percentage of scheme assets 8% 29%
Experience gains and losses on scheme liabilities:
Amount (£million) 4.0 (2.5)
Percentage of present value of scheme liabilities 1% 1%
Total actuarial gains and losses:
Amount (£million) 3.0 (40.9)
Percentage of present value of scheme liabilities 2% 19%
2003 2002
£million £million
The movement in the deﬁcit in the year under FRS 17 would have been:
Deﬁcit at 1 January 2003, net of deferred tax (44.6) (15.8)
Current service cost (5.0) (5.4)
Contributions 6.3 6.0
Other ﬁnance cost (3.1) (0.1)
Actuarial gain/(loss), net of deferred tax 2.6 (28.6)
Exchange rate differences 0.4 (0.7)
Deﬁcit at 31 December 2003, net of deferred tax (43.4) (44.6)
2003 2002
£million £million
The effect on the group’s proﬁt and loss reserve if FRS 17 had been adopted early is shown below:
Proﬁt and loss account as stated in the ﬁnancial statements at 31 December 2003 74.0 94.5
SSAP 24 prepayment (2.9) (2.6)
SSAP 24 accrual 7.1 7.7
Net pension liability (43.4) (44.6)
Proﬁt and loss account as adjusted at 31 December 2003 34.8 55.0
TT electronics plc is a member of a multi-employer scheme, the disclosures for which are included above.
35. Post balance sheet event
On 11 March 2004 TT electronics plc announced the acquisition of Sensopad Technologies Ltd, a technology development
company, for a cash consideration of £1.4 million together with the payment of future royalties.
52 TT electronics plc Annual Report 2003 We have audited the ﬁnancial statements of TT electronics plc for the year ended 31 December 2003 which comprise the accounting
policies, the consolidated proﬁt and loss account, the balance sheets, the consolidated cash ﬂow statement, the statement of
total recognised gains and losses, the reconciliation of movements in shareholders’ funds and notes 1 to 35.These ﬁnancial
statements have been prepared under the accounting policies set out therein.We have also audited the information in the
Directors’ remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditors’ report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report, the Directors’ remuneration report and the ﬁnancial statements 
in accordance with United Kingdom law and accounting standards are set out in the statement of Directors’ responsibilities.
Our responsibility is to audit the ﬁnancial statements and the part of the Directors’ remuneration report to be audited in accordance
with relevant legal and regulatory requirements and United Kingdom auditing standards.
We report to you our opinion as to whether the ﬁnancial statements give a true and fair view and whether the ﬁnancial statements
and the part of the Directors’ remuneration report to be audited have been properly prepared in accordance with the Companies
Act 1985.We also report to you if, in our opinion, the Directors’ report is not consistent with the ﬁnancial statements, if the
Company has not kept proper accounting records, if we have not received all the information and explanations we require for 
our audit, or if information speciﬁed by law regarding Directors’ remuneration and transactions with the group is not disclosed.
We review whether the corporate governance statement reﬂects the Company’s compliance with the seven provisions of the
Combined Code speciﬁed for our review by the Listing Rules of the Financial Services Authority, and we report if it does not.
We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an
opinion on the effectiveness of the group’s corporate governance procedures or its risk and control procedures.
We read other information contained in the Annual Report, and consider whether it is consistent with the audited ﬁnancial
statements.This other information comprises only the highlights and ﬁnancial information page, the Chairman’s statement, the
Chief Executive’s statement, the Financial review, the Directors’ report, the unaudited part of the Directors’ remuneration report,
the group operations pages and the historical record.We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the ﬁnancial statements. Our responsibilities do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board.An audit
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the ﬁnancial statements and the
part of the Directors’ remuneration report to be audited. It also includes an assessment of the signiﬁcant estimates and judgments
made by the Directors in the preparation of the ﬁnancial statements, and of whether the accounting policies are appropriate to
the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements and the part of the
Directors’ remuneration report to be audited are free from material misstatement, whether caused by fraud or other irregularity
or error . In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the ﬁnancial
statements and the part of the Directors’ remuneration report to be audited.
Opinion
In our opinion the ﬁnancial statements give a true and fair view of the state of affairs of the Company and the group at 31 December
2003 and of the loss of the group for the year then ended and the ﬁnancial statements and the part of the Directors’ remuneration
report to be audited have been properly prepared in accordance with the Companies Act 1985.
Grant Thornton
Registered Auditors, Chartered Accountants
London, 29 March 2004
TT electronics plc Annual Report 2003 53
Report of the Independent Auditors to the members of TT electronics plc Notice of meeting
Notice is hereby given that the Annual General Meeting of TT electronics plc will be held at the Ironmongers’ Hall, Shaftesbury
Place, Barbican, London EC2Y 8AA on Wednesday 19 May 2004 at 12 noon for the following purposes:
1 To receive the Financial Statements for 2003, the Directors’ Report and the Auditors’ Report.
2 To approve the Directors’ Remuneration Report for the year ended 31 December 2003.
3 To declare a dividend of 6.36p per ordinary share.
4 To re-elect J W Newman a Director .
5 To re-elect J W Armstrong a Director .
6 To re-elect T H Reed a Director .
7 To re-elect N A Rodgers a Director .
8 To reappoint Grant Thornton as Auditors and to authorise the Directors to ﬁx the Auditors’ remuneration.
As special business to consider and, if thought ﬁt, to pass the following resolutions of which resolutions 9, 12, 13 and 14 will
be proposed as ordinary resolutions and resolutions 10 and 11 will be proposed as special resolutions.
General Allotment Authority
9 THAT the Directors of the Company, in substitution for all authorities previously conferred upon them (save to the extent
that the same may already have been exercised), be and they are hereby authorised generally and unconditionally for the
purposes of Section 80 of the Companies Act 1985 (the ‘ Act’) to allot relevant securities (within the meaning of Section 80(2)
of the Act) up to a maximum aggregate nominal amount of £12,899,841, such authority to expire on 30 June 2005 save
where the Directors exercise such authority pursuant to an offer or agreement made prior to that date.
Disapplication of Pre-emption Rights
10 THAT the Directors of the Company be and they are hereby empowered in accordance with Section 95 of the Companies Act
1985 (the ‘ Act’) to allot equity securities (as deﬁned in Section 94 of the Act) for cash, pursuant to the general authority
conferred by resolution 9 above and/or to sell equity securities held as treasury shares for cash pursuant to Section 162D of
the Act, or partly in one way and partly the other , in each case as if sub-section (1) of Section 89 of the Act did not apply to any
such allotment or sale, provided that the power conferred by this resolution shall be limited to:
i any such allotment and/or sale of equity securities in connection with an issue or offering by way of rights in favour 
of holders of equity securities and any other persons entitled to participate in such issue or offering where the equity
securities respectively attributable to the interests of such holders and persons are proportionate (as nearly as may be)
to the respective number of ordinary shares held by them on the record date of such allotment and/or sale subject only
to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional
entitlements or legal or practical problems arising in any overseas territory or the requirements of any regulatory body 
in any territory or any other matter whatsoever; and
ii any such allotment and/or sale (otherwise than pursuant to sub-paragraph (i) of this resolution) of equity securities 
up to an aggregate nominal value not exceeding £1,934,976.
and this power , unless renewed or revoked, shall expire on 30 June 2005 but shall extend to the making, before such expiry,
of any offer or agreement which would or might require equity securities to be allotted or equity securities held as treasury
shares to be sold after such expiry and the Directors may allot securities and/or sell equity securities held as treasury shares in
pursuance of such offer or agreement as if the authority conferred hereby had not expired and so that all previous authorities
of the Directors pursuant to Section 89 of the Act, save to the extent to which any such previous authorities have already
been exercised, be and they are hereby revoked.
54 TT electronics plc Annual Report 2003 Purchase of Own Shares
11 THAT the Company be and is hereby generally and unconditionally authorised, pursuant to the provisions of Article 74 of the
Company’s Articles of Association and for the purposes of Section 166 of the Companies Act 1985 (the ‘ Act’), to make one
or more market purchases (within the meaning of Section 163(3) of the Act) on the London Stock Exchange plc (the ‘Exchange’)
of ordinary shares of 25p each in the capital of the Company (‘ordinary shares’) provided that:
i the maximum aggregate number of ordinary shares hereby authorised to be purchased is 15,479,810 representing
approximately 10 per cent of the Company’s issued ordinary share capital;
ii the minimum price which may be paid for such ordinary shares is 25p per ordinary share (exclusive of expenses);
iii the maximum price (exclusive of expenses) which may be paid for an ordinary share is not more than 5 per cent above
the average of the market values for an ordinary share as derived from the Stock Exchange Daily Ofﬁcial List for the ﬁve
business days immediately preceding the day on which the ordinary share is purchased;
iv unless previously revoked or varied, the authority hereby conferred shall expire on 30 June 2005; and
v the Company may make a contract or contracts to purchase ordinary shares under the authority hereby conferred prior
to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority, and may
make a purchase of ordinary shares in pursuance of any such contract or contracts.
Share Option Plans
12 THAT the Directors be and are hereby authorised to adopt the rules of the TT electronics plc 2004 Inland Revenue Approved
Company Share Option Plan substantially on the terms set out in Appendix 1 to the letter from the Chairman dated 16 April 2004.
Subject to any amendments as may be required to obtain approval from the Inland Revenue.
13 THAT the Directors be and are hereby authorised to adopt the rules of the TT electronics plc 2004 Unapproved Company Share
Option Plan substantially on the terms set out in Appendix 1 to the letter from the Chairman dated 16 April 2004.
14 THAT the rules of the TT Group PLC 1994 Executive Share Option Scheme and the rules of the TT Group PLC 1996 Unapproved
Executive Share Option Scheme the amended rules in draft form of which are produced to this meeting and signed by the
Chairman for the purpose of identiﬁcation be amended to allow share options to be satisﬁed by the Company using treasury
shares and that the Directors be authorised to take all actions which they consider necessary or expedient in connection with
the implementation of the amendments.
By Order of the Board
M G Leigh
Secretary
16 April 2004
Pursuant to Regulation 41 of the Uncertiﬁcated Securities Regulations 2001 the Company speciﬁes that only those shareholders
registered in the Register of Members of the Company by 6pm on 17 May 2004 shall be entitled to attend or vote at the Meeting
in respect of the number of shares registered in their name at that time. Changes to entries on the register after 6pm on 17 May
2004 will be disregarded in determining the rights of any person to attend or vote at the Meeting.
Members are entitled to appoint one or more proxies to attend and, on a poll, to vote for them.A proxy need not be a member 
of the Company. Proxies, to be effective, must be lodged with Lloyds TSB Registrars,The Causeway,Worthing,West Sussex 
BN99 6ZL at least 48 hours before the time ﬁxed for the Meeting.
No service contract exists or is proposed between any Director of the Company and the Company or any subsidiary undertaking
of the Company which is terminable on notice of longer than three months.
A form of proxy is on page 59
TT electronics plc Annual Report 2003 55 Group operations
Electronic sector
Sensors and 
electronic systems
Turnover
£161.0 million
Products
Pedal sensor modules
Throttle position sensors
Engine management sensors
Mass airﬂow sensors
Steering sensors
Chassis position sensors
ABS sensors
Pressure sensors and switches 
Climate control systems
Body control systems
Global operations
United Kingdom, Germany, France,
Ukraine,USA,Mexico,Brazil
Applications
Cars, trucks and sports utility vehicles,
industrial equipment and white goods
Major customers
BMW,DaimlerChrysler,Delphi,Ford,
General Motors, PSA, Rover ,Valeo,
VW/Audi
Principal operating subsidiaries
AB Automotive Electronics Limited
AB Automotive Inc, USA 
AB Electronic Limited
AB Elektronik GmbH, Germany
Optek T echnology Inc, USA
56 TT electronics plc Annual Report 2003
Electronic components
and magnetics
Turnover
£153.2 million
Products
Resistors and resistor networks
Resistor capacitor diode networks 
Blower motor resistors
Headlight power hybrids
Hybrids and microcircuits
Potentiometers and trimmers 
Printed circuit boards
Inductors and chokes
Ferrite beads and toroids
Magnets
Global operations
United Kingdom,Austria, USA, Mexico,
Barbados,Malaysia,Italy,Singapore,
Japan,Germany,France,India,China
Applications
Telecom,computer,automotive,
aerospace, medical and industrial
equipment, consumer and white goods
Major customers
Apple,BMW,DaimlerChrysler,Dell,
Delphi, Ford, General Motors,
Hewlett-Packard,IBM,Intel,Rover,
Valeo,VW/Audi
Principal operating subsidiaries
AB Mikroelektronik GmbH,Austria
BI T echnologies, USA, United Kingdom,
Mexico and Malaysia
International Resistive Company Inc, USA
MMG India Private Limited, India
Prestwick Circuits Limited
Welwyn Components Limited
Electronic 
manufacturing services
Turnover
£35.1 million
Products
PCB assemblies
Finished box build 
Circuit layout design
Global operations
United Kingdom 
Applications
Telecom,computer,automotive,
industrial equipment, consumer 
and white goods
Major customers
BAE Systems, BT , Fuji, Harris, Marconi,
Panasonic,Toshiba,Ultra
Principal operating subsidiaries
TT electronic manufacturing 
services Limited Electrical sector
Power systems
Turnover
£52.1 million
Products
Standby and continuous power generation
Aircraft ground power units
Uninterruptible power supplies
Global operations
United Kingdom, Mexico
Applications
Banks, public and commercial buildings,
hospitals, airports, telecom base stations
and general industrial
Major customers
British Airways, Halliburton, Hyundai,
Ministry of Defence, Mobile One,
T-Mobile
Principal operating subsidiaries
Dale Power Solutions plc
Erskine Systems Limited
Houchin Aerospace Limited
Ottomotores SA de CV , Mexico
Power and data transmission
Turnover
£126.1 million
Products
Power and data transmission cables
Sub-sea cables 
Power transmission accessories
Electrical connectors and harnesses
Insulation technology 
Global operations
United Kingdom, USA, South Africa
Applications
Power utilities, building and civil 
construction, electrical support systems,
railways, mining and general industrial
Major customers
ABB,Alstom,Bombardier,
China Light & Power ,
Crown Agents,
London Underground,
Shell, Southern Electricity
Principal operating subsidiaries
AB Connectors Limited
AEI Cables Limited
AEI Compounds Limited
WST (PTY) Limited, South Africa
WT Henley Limited
Notes
– Companies are located in the United
Kingdom except where indicated.
– Addresses and telephone numbers 
are shown on the TT electronics plc
website:www.ttelectronics.com
– Only those subsidiaries whose results
principally affected these ﬁnancial
statements are shown above.
TT electronics plc Annual Report 2003 57 Historical record
Accounting year
2003 2002 2001 2000 1999
Turnover (£million) 533.9 520.3 657.9 746.0 612.4
Proﬁt before taxation (£million) 3.2 7.9 25.8 40.7 38.0
Earnings (£million) (0.1) 5.6 18.9 29.7 27.3
Basic earnings per ordinary share (p) (0.1) 3.6 12.2 18.7 16.4
Earnings before impairment provisions, goodwill amortisation 
and exceptional items (£million) 16.2 15.6 24.7 33.2 27.0
Earnings per ordinary share before impairment provisions,
goodwill amortisation and exceptional items (p) 10.4 10.1 16.0 21.0 16.2
Ordinary dividend (£million) 15.6 15.6 15.6 15.6 16.3
Ordinary dividend per share (p) 10.05 10.05 10.05 10.05 9.79
Average ordinary shares in issue (million) 154.8 154.8 154.8 158.4 166.4
Shareholders’ funds (£million) 196.1 205.7 222.1 244.5 238.5
Asset value per ordinary share in issue at 31 December (p) 127 133 143 158 143
58 TT electronics plc Annual Report 2003 TT electronics plc Annual Report 2003 59
TT electronics plc
Form of proxy
Please print your name and address below.
Name(s)
Address
For use by ordinary shareholders for the Annual General Meeting to be held on 19 May 2004. I/We being (a) holder(s) of Ordinary
shares of 25p each of TT electronics plc hereby appoint the duly appointed Chairman of the Meeting
or
as my/our proxy at the Annual General Meeting of the Company to be held on 19 May 2004 and at any adjournment thereof and 
to vote on my/our behalf as directed.
Resolutions
Please indicate how you wish your proxy to vote by placing a tick in the appropriate place.
Unless otherwise indicated the proxy will exercise his discretion as to how he votes and whether or not he abstains from voting.
1 To receive the Financial Statements for 2003, the Directors’ Report and Auditors’ Report
2 To approve the Directors’ Remuneration Report for the year ended 31 December 2003
3 To declare a dividend of 6.36p per ordinary share
4 To re-elect J W Newman as a Director
5 To re-elect J W Armstrong as a Director
6 To re-elect T H Reed as a Director
7 To re-elect N A Rodgers as a Director
8 To reappoint Grant Thornton as Auditors and to authorise the Directors to ﬁx the Auditors’ remuneration
9 Renewal of general allotment authority
10 Renewal of disapplication of pre-emption rights
11 Authority for purchase of own shares
12 Adopt the rules of the TT electronics plc 2004 Inland Revenue Approved Company Share Option Plan
13 Adopt the rules of the TT electronics plc 2004 Unapproved Company Share Option Plan
14 Approve the amendments to the rules of the current share option schemes
Signature
Please mark this box if signing on behalf of the shareholder as Power of Attorney, Receiver , or Third Party.
This form of proxy should not be used for any comments, change of address, or any other queries. Please send separate instruction.
Date
For Against
✄ Notes
1 Pursuant to Regulation 41 of the Uncertiﬁcated Securities Regulations 2001 the Company speciﬁes that only those shareholders
registered in the Register of Members of the Company by 6pm on 17 May 2004 shall be entitled to attend or vote at the
Meeting in respect of the number of shares registered in their name at that time. Changes to entries on the register after 
6pm on 17 May 2004 will be disregarded in determining the rights of any person to attend or vote at the Meeting.
2 This form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or an ofﬁce or
notarially certiﬁed copy thereof, must be deposited at Lloyds TSB Registrars,The Causeway,Worthing,West Sussex BN99 6ZL
not later than 12 noon on 17 May 2004. A prepaid envelope is enclosed.
3 In the case of joint holders, the signature of the ﬁrst-named will be accepted to the exclusion of all others. Seniority will be
determined by the order in which names stand in the Register of Members.
4 In the case of a Corporation, the form of proxy should be under its Common Seal or under the hand of an ofﬁcer or attorney
duly authorised.
5 Unless otherwise directed, the proxy will abstain or vote as he thinks ﬁt.
6 A proxy need not also be a member of the Company.
7 Any alterations to this form of proxy should be initialled.
8 The completion of this form of proxy will not preclude the holder from attending and voting in person if he so wishes.
60 TT electronics plc Annual Report 2003
Form of proxy continued Who we are and what we do
TT electronics is a global supplier 
of high quality electronic and
electrical products to the World’s
major original equipment
manufacturers. It is committed 
to the development of innovative
products for the automotive,
telecom, computer and 
industrial markets.
The group has World class global
manufacturing presence with
factories employing over 8,500
people in the United Kingdom,
Continental Europe, USA and 
low labour cost countries.
Our vision
Our vision is to be a global leader 
in the application of tomorrow’s
technology in the products 
we manufacture.
Contents
Page
1 Highlights and ﬁnancial information
2 Chairman’s statement
5 Tomorrow’ s T echnology
6 – Product development
7 – Breadth of markets
8 – Operational efﬁciency
9 Chief Executive’s statement
12 Financial review
14 Directors and Company Secretary
15 Directors’ report
20 Directors’ remuneration report
24 Consolidated proﬁt and loss account
25 Consolidated balance sheet
26 Consolidated cash ﬂow statement
27 Statement of total recognised gains and losses
27 Reconciliation of movements in shareholders’ funds
28 Company balance sheet
29 Accounting policies
31 Notes to the ﬁnancial statements
53 Report of the Independent Auditors
54 Notice of meeting
56 Group operations
58 Historical record
59 Form of proxy
IBC Shareholder information
Designed and produced by Linnett Webb Jenkins. Printed by CTD Capita Limited.
Annual General Meeting
The Annual General Meeting will be held on 19 May 2004 at 
12 noon at the Ironmongers’ Hall, Shaftesbury Place, Barbican,
London EC2Y 8AA.
Results
Announcement of 2004 half year results –  mid September 2004
Preliminary announcement of 2004 results –  late March 2005
Annual Report 2004 – to be posted mid April 2005
Dividends
The ﬁnal dividend in respect of the year to 31 December 2003
will be paid on 28 May 2004 to those shareholders on the
register on 21 May 2004. Shares ex dividend on 19 May 2004.
The interim dividend in respect of the year to 31 December 2004
will be paid in late October 2004.
For those shareholders who currently receive their dividends 
by post, arrangements can be made to pay your dividends
automatically into your bank or building society account.
A registration form will be included with the ﬁnal dividend.
This service has a number of beneﬁts:
– there is no chance of the dividend cheque going missing 
in the post; and
– the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without the
need to wait for the cheque to clear .
Multiple accounts on the shareholder register
If you have received two or more copies of this document, this
means that there is more than one account in your name on the
shareholder register .This may be caused by either your name or
address appearing on each account in a slightly different way.
For security reasons, the Registrars will not amalgamate the
accounts without your written consent, so if you would like any
multiple accounts combined into one account, please write to
Lloyds TSB Registrars at the address given below.
Share dealing services
Shareview dealing is a telephone and internet service arranged
through Lloyds TSB Registrars and provides a simple and
convenient way of selling TT electronics plc shares.
For telephone sales call 0870 850 0852 between 8.30am 
and 4.30pm, Monday to Friday, and for internet sales log 
on to www.shareview.co.uk/dealing.
A postal dealing service for buying and selling TT electronics plc
shares is also available and a form can be obtained by calling
0870 242 4244.
Shareholder information
ShareGift
ShareGift is a charity share donation scheme for shareholders,
administered by The Orr Mackintosh Foundation. It is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomical to sell on a commission
basis. Further information can be obtained at
www.sharegift.org or from Lloyds TSB Registrars.
Shareholder enquiries
Lloyds TSB Registrars maintain the register of members of the
Company. If you have any queries concerning your shareholding,
or if any of your details change, please contact the Registrars:
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Telephone
0870 600 3970
Fax
0870 600 3980 
Textphone for shareholders with hearing difﬁculties 
0870 600 3950
Lloyds TSB Registrars also offer a range of shareholder
information on line at www.shareview.co.uk.
Website
Information on the group’s activities, share price and ﬁnancial
performance is available at www.ttelectronics.com. TT electronics plc
Clive House
12 – 18 Queens Road
Weybridge
Surrey KT13 9XB
Reg.No.87249
Tel +44 (0) 1932 841310
Fax +44 (0) 1932 836450
www.ttelectronics.com
TT electronics plc
Annual Report 2003
T omorrow’s T echnology
TT electronics plc  Annual Report 2003