ANNU AL REPOR T 2002
TT electr onics plc
TT electr onics plc  ANNU AL REPOR T 2002
TT electronics plc
Clive House
12-18 Queens Road
Weybridge
Surrey KT13 9XB
Tel: +44 (0) 1932 841310
Fax: +44 (0) 1932 836450
www.ttelectronics.com
TOMORROW’S TECHNOLOGY CONTENTS
Highlights and ﬁnancial information 1
Chairman’s statement 2
Group overview 4
Chief Executive’s review 6
Financial review 14
Directors and Company Secretary 16
Directors’ report 17
Directors’ remuneration report 21
Report of the independent auditors 25
Consolidated proﬁt and loss account 26
Consolidated balance sheet 27
Consolidated cash ﬂow statement 28
Statement of total recognised gains and losses 29
Reconciliation of movements in shareholders’ funds 29
Company balance sheet 30
Accounting policies 31
Notes to the ﬁnancial statements 33
Historical record 53
Financial calendar 53
Notice of meeting 54
Principal operating subsidiaries 56
Advisors and registered ofﬁce 56
Designed and produced by Linnett Associates. Printed by CTD Capita Limited. TT electronics plc ANNUAL REPORT 2002 1
 Continuing success achieved in the automotive sensors and systems 
market – strong order intake experienced which is expected to provide
growth of 25 per cent by 2005
 The recently announced acquisition of the business of Demo Tableaux de
Commande, a French manufacturer of electromechanical climate control
units adds complementary products which are currently designed into
Renault, Peugeot and Citroen cars
 Gearing has been further reduced to 27 per cent and TT electronics continues
to have a strong balance sheet
 The Board is recommending a maintained ﬁnal dividend of 6.36p per share
bringing the total for the year to 10.05p (2001 – 10.05p)
FINANCIAL INFORMATION
HIGHLIGHTS
2002 2001
Turnover – total £520.3m £657.9m
– discontinued – (£27.2m)
– continuing activities £520.3m £630.7m
– ceased activities – copper rod – (£36.1m)
Turnover – ongoing activities excluding copper rod £520.3m £594.6m
Proﬁt before taxation and before impairment provisions and goodwill amortisation £20.4m £29.9m
Proﬁt before taxation after impairment provisions and goodwill amortisation £7.9m £27.7m
Earnings per share before impairment provisions, goodwill amortisation and exceptional items 10.1p 16.0p
Earnings per share, basic and fully diluted 3.6p 12.2p
Ordinary dividends per share 10.05p 10.05p 2 TT electronics plc ANNUAL REPORT 2002
CHAIRMAN ’S STATEMENT
TT electronics’ turnover for 2002 was
£520.3 million compared with £630.7 million
on continuing activities (including ceased
activities being £36.1 million of copper
rod) and total turnover of £657.9 million 
in the previous year. Proﬁt before taxation
prior to amortisation of goodwill and
impairment was £20.4 million (2001 –
£29.9 million). Amortisation and impairment
of goodwill amounted to £4.7 million
(2001 – £2.2 million) which included the
write off of the balance of goodwill arising
on the purchase of Prestwick Circuits
Limited in 1999. A plant and machinery
impairment provision of £7.8 million has
been made due to the continuing losses of
certain of our businesses supplying telecom
related industries.
Earnings per share before impairment
provisions, goodwill amortisation and
exceptional items were 10.1p compared to
16.0p. Basic and fully diluted earnings per
share were 3.6p (2001 – 12.2p). The
taxation charge of 27 per cent (2001 – 27
per cent) is a combination of a charge on
current trading and the beneﬁt of deferred
taxation relief on impairment provisions.
Net borrowings of the group have been
kept ﬁrmly under control, which has
enabled the group to continue to invest in
its manufacturing facilities and at the same
time follow a strong dividend policy. Total
net indebtedness at the year end was
£55.8 million compared with £63.5 million
at the previous year end.
I mentioned in my half year statement 
that the Board’s decision to maintain skill 
levels in our telecom related businesses
would be kept under review. In the light 
The automotive industry is a growth area for electronic components; our sensor and
systems sales grew by 6 per cent this year, and are expected to grow by 25 per cent 
by the year 2005. TT electronics will continue its policy of looking to the future and
developing new products in line with the needs of the marketplace.
John Newman
Executive Chairman TT electronics plc ANNUAL REPORT 2002 3
of the uncertainty of demand from the
telecom industry over the next two years,
the Board subsequently decided that the
reorganisation of certain businesses was
necessary. As a result, the United Kingdom
manufacture of ferrites has ceased and has
been transferred to our Indian facility as
will a range of ferrites from our USA factory,
whose operation has been signiﬁcantly
reduced. Our printed circuit board production
has been successfully consolidated into
one factory. In addition to incurring these
associated reorganisation charges, redundancy
costs where employee numbers have been
reduced as the result of manufacturing
efﬁciency savings have been incurred as
a normal ongoing cost of the business.
The automotive industry is a growth area
for electronic components; our sensor and
systems sales grew by 6 per cent this year
and are expected to grow by 25 per cent
by the year 2005. This improvement in
sales comes from the introduction of new
automotive models. 2003 will show a
lower increase in sales for whilst we have
had a strong order intake, these orders will
provide us with further growth for 2004
onwards. The telecom and computer
markets would appear to have bottomed
and are likely to remain at these depressed
levels throughout the year.
Our policy to strengthen our existing
businesses by making suitable acquisitions
is being pursued. On 14 March, the assets
of Demo Tableaux de Commande SA 
with a book value of £5.5 million were
purchased for £2.5 million. Demo has a
factory in Le Mans, France and a small
assembly operation in Brazil. Demo
manufactures climate control units, their
products are designed into a number of
European cars, including Renault, Peugeot
and Citroen. Demo products being
electromechanical complement our
electronic based climate control businesses
in the United Kingdom and USA. As the
demand for additional features grows,
our in-house expertise and technology 
will beneﬁt our customers and enhance
our turnover.
Our efforts to maximise the value of our
investment in Johnston Group PLC were
successful and we sold our shareholding
for 425p per share compared with a
market price of 345p. The sale generated
£10.6 million of cash and a proﬁt on
disposal of £1.2 million.
We continue to create a total TT electronics
identity for all the businesses within the
group. An initial step has been the creation
of TT electronic manufacturing services
Limited, which is the combination of AB
Electronic Assemblies Limited and Welwyn
Systems Limited, our contract electronic
manufacturing businesses. Further name
changes, binding our companies together,
will take place during this coming year.
The strong balance sheet and low
borrowings of the group, gives the Board
the conﬁdence to recommend 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 16 May
and will be payable on 29 May 2003.
I would like to thank all the employees of
the group for their efforts during a difﬁcult
year and I look forward to them beneﬁting
in the future from a strongly established
TT electronics group.
It would appear that overall demand in the
marketplace for our products in the current
year is likely to be no better than last year.
TT electronics will continue its policy 
of looking to the future and developing
new products in line with the needs of 
our customers.
John W Newman
Executive Chairman
17 March 2003 4 TT electronics plc ANNUAL REPORT 2002
GROUP O VER VIEW
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  Resistors and resistor networks    Resistor capacitor diode networks    Blower motor resistors  Ignitor chip resistors   Headlight power hybrids  Hybrids and microcircuits    Potentiometers and trimmers    Switches    Printed circuit boards    Inductors and chokes    Transformers    Ferrites and laminations    Ferrite beads and toroids    Magnets    GLOBAL OPERATIONS
United Kingdom, Germany, Austria,
Ukraine, USA, Mexico
United Kingdom, Austria, USA, Mexico,
Barbados, Malaysia, Singapore, Japan,
Germany, France, Italy
United Kingdom, USA, India, Malaysia,
China
Cars, trucks and sports utility vehicles,
industrial equipment and white goods
Telecom, computers, automotive,
aerospace, medical and industrial
equipment, consumer and white goods
Telecom, computers, aerospace, medical
and industrial equipment, consumer and
white goods
APPLICATIONS
BMW DaimlerChrysler
Delphi Ford
General Motors Rover
Valeo VW/Audi
Airbus Alcatel
Boeing Cisco
Ericsson Nortel
Siemens Visteon
ABB Apple
Compaq Dell
IBM Intel
MAJOR CUSTOMERS
£139.0 million £148.8 million £17.8 million
TURNOVER 
Markets
 Automotive
 Telecom and Computers
 Aerospace and Industrial
– Defence
– Medical
– Consumer
– Instrumentation
SENSORS AND ELECTRONIC SYSTEMS ELECTRONIC COMPONENTS MAGNETICS
ELECTRONIC SECTOR TT electronics plc ANNUAL REPORT 2002 5
ELECTRICAL SECTOR
PRODUCTS
PCB assemblies    Finished box build    Circuit layout design    Continuous power generation   Standby power generation   Aircraft ground power units  Uninterruptible power supplies   Power and data transmission cables   Sub-sea cables   Power transmission accessories   Electrical connectors  Insulation technology   GLOBAL OPERATIONS
United Kingdom United Kingdom, Mexico United Kingdom, USA, South Africa
Telecom, computers, automotive,
industrial equipment and white goods
Banks, public and commercial buildings,
hospitals, airports, telecom base stations
and general industrial
Power utilities, building and civil
construction, electrical support systems,
railways, mining and general industrial
APPLICATIONS
British Airways Cable & Wireless
Halliburton Hyundai
Ministry of Defence Mobile One
Railtrack T-Mobile
BAE Systems BT 
Fuji Harris 
Marconi Panasonic
Toshiba Ultra
Alstom Balfour Beatty
China Light & Power Crown Agents
London Underground Scottish Power
Shell Southern Electricity
MAJOR CUSTOMERS
£52.7 million £43.4 million £118.6 million
TURNOVER 
ELECTRONIC MANUFACTURING SERVICES POWER GENERATION POWER AND DATA TRANSMISSION
Group turnover by destination
United Kingdom
Rest of Europe
United States and Canada
Mexico and Central America
Rest of the World
Group turnover by origin
United Kingdom
Rest of Europe
United States and Canada
Mexico and Central America
Rest of the World 6 TT electronics plc ANNUAL REPORT 2002
CHIEF EXECUTIVE ’S REVIEW
Overview
Our investment over the years in new
electronic products for the automotive
industry has ensured continued growth 
in this market during the year contrasting
with the very depressed demand from the
telecom market, which failed to make any
recovery throughout the year.
Our strategy over this period, and which
will remain for the foreseeable future, has
been to continue to invest both in product
development and capital expenditure to
service the group’s marketplaces and in
particular the automotive sector, as well 
as other markets we are developing such
as medical and aerospace, where sales
growth can be increased with an acceptable
return on capital employed. A tight control
on costs, including headcount reductions 
Sheridan Comonte
Chief Executive
Our investment over the years in new electronic products for the automotive industry
has ensured continued growth in this market. Over the last 18 months we have done
much to reduce headcount and costs, merged and relocated more of our manufacturing
to low labour cost areas to reduce unit costs and increased our efforts to develop new
markets. We feel conﬁdent that we have the right organisation and skills to maximise
future opportunities in our various markets.
2002 marked the third factory expansion, of our German operation, since it joined
the group. This new facility includes a clean room for the production of specialised
customer speciﬁc components.
The chassis height sensor is manufactured at this location using fully automated
production lines.
Factory expansion TT electronics plc ANNUAL REPORT 2002 7
of a further 8 per cent during the year and
factory mergers, have been undertaken
where there is exposure to depressed
markets such as telecom and computers.
This strategy has ensured that the group
has continued to be cash generative, with
a strong balance sheet and is well positioned
to take advantage of market opportunities
when the World economies recover.
The group’s businesses
The group develops, sells and manufactures
a range of electronic, electromechanical
and electrical products using our core
technologies. Our customers include many
of the major worldwide original equipment
manufacturers, Tier 1 automotive system
suppliers, electronic manufacturing services
companies, specialist distributors in the
automotive industry, telecom, computer
and general industrial businesses including
aerospace, medical and utilities.
Whilst a United Kingdom based plc,
TT electronics is an international business
with factories and technical sales operations
in 18 countries which enables us to service
our global customers’ needs at cost
competitive prices. A central part of the
group’s philosophy is to develop a lasting
relationship with selected customers as the
majority of the products sold are customer
speciﬁc rather than standard.
Manufacturing
We are a global manufacturing company
and have developed a considerable
expertise by utilising best manufacturing
principles gained from different countries’
management teams. It is important that,
as new products are designed, the
development engineers and the production
and process engineering teams integrate
their efforts so that products can be
manufactured efﬁciently on cost effective
automated equipment which repetitively
produces identical quality product.
Developing automated production
equipment is as important as the product
itself and we have adopted the principle 
of planning the manufacturing process and
then designing the equipment which is
constructed by outside specialists or using
in-house expertise.
In many cases our customers prefer that
we manufacture relatively close to their
main assembly plants to minimise lead
times and transport costs between sites.
Where this is not practical due to a high
labour content or small runs not suitable
for automated equipment there is a growing
trend to utilise one of our manufacturing
units in low labour cost countries such as
Mexico, Malaysia, India and Barbados as
well as our recently established assembly
operation in the Ukraine.
TT electronics’ policy is to manufacture
using the most cost effective methods.
Where the products have a high labour
content manufacturing is transferred 
to one of our low labour cost factories.
During 2002 we have successfully
transferred the production of our range 
of ferrite cores from the United Kingdom
to a sister factory in India.
Moving to low cost areas 8 TT electronics plc ANNUAL REPORT 2002
CHIEF EXECUTIVE ’S REVIEW CONTINUED
Once the manufacture of a product has
started, teams of specialists including our
operatives, use modern manufacturing
methodologies, such as the Toyota Lean
Manufacturing principles, Six Sigma and
Kaizen, to minimise scrap and produce
products ‘right ﬁrst time’ which eliminates
costly rework activities.
Computerised factory planning systems 
are essential for effective control of raw
materials, machine loadings and inventories.
The group has invested and continues 
to invest in systems which help drive 
down manufacturing costs, reduce unit
prices and ensure that we meet our
customers’ expectations for 100 per cent
on time delivery.
It is not possible to compete in our
marketplaces without manufacturing the
highest quality products. Many of our
factories surpass the quality requirement 
of ISO9000 and are now achieving the
new global standard of ISO/TS16949.
Product development
The group relies on product development,
for the future growth of our business and
the design and continuous development 
of new products is a key strength.
However, it is unusual for the group to
develop new products in isolation and
our practice is to work closely with our
customers to provide solutions to their
engineering challenges which enhance
their product offering.
This way of working is reliant on long-term
relationships or strategic partnerships with
all levels of our customers’ management
teams from design and development
engineering, purchasing departments,
process engineering and administrative
functions.
Each of our main business units specialises
in a particular technology or technologies
and is responsible for achieving their new
product developments. Regular interaction
between the business units ensures that
innovations are shared, design effort does
not overlap and resources are not wasted.
Forming strategic partnerships is core to ensuring the development of the group’s
sales growth. These partnerships are established by close working relationships with
our customers’ engineers thereby ensuring that our technologies are incorporated
into their product offering. The design of complex climate control units is an
example of this close co-operation.
Customer partnerships TT electronics plc ANNUAL REPORT 2002 9
Electronic sector
Automotive market – represents 
59 per cent of the electronic 
sector turnover
The automotive industry represents the
largest marketplace for our electronic
components and systems and over 50 per
cent of all cars manufactured in Europe
and North America contain at least one
of our manufactured products. Our
customers include the World’s largest
car manufacturers, Tier 1 system suppliers 
as well as smaller specialist suppliers.
Some years ago we identiﬁed the growth
in automotive electronics as an ideal
marketplace for our technologies. Growth
of automotive electronics has been at the
rate of 6 per cent per annum in recent
years and is expected to remain at this 
rate over the next ﬁve years. By focusing
and expanding on our key technologies 
the group has since 1998 increased its
automotive sales by 70 per cent. The growth
of the group’s automotive sensors and
electronic systems for 2002 was 6 per cent
but has been offset by reduced sales of
PCBs and laminations to Tier 1 suppliers.
We have been successful in winning new
contracts for the automotive electronics
businesses which were in excess of
£180 million in 2002. These will provide
sales growth over the next few years at
currently forecast car production levels.
The growth in automotive electronics 
is driven by a combination of factors;
legislation which continues to reduce
exhaust emissions thereby producing 
less pollutants and improving fuel
consumption; safety legislation and safety
innovation to reduce road deaths and
injuries and demand from customers for
additional comfort for driver and
passenger, such as improved climate
control and in-car entertainment.
The automotive industry is highly competitive
and uses innovative engineering. However,
once a component or system has been
speciﬁed for a new car platform the
contract is most likely to last around ﬁve
The electronic accelerator pedal module developed using our patented Hall effect
technology is an important feature of the drive-by-wire system. This replaces the traditional
throttle linkages by transmitting the driver’s pedal inputs to the engine electronically rather
than mechanically.
This product has received the Society of Plastic Engineering award for outstanding innovation.
All current models of Mercedes Benz and BMW cars, including the award winning Mini 
and the new Rolls Royce, use our system.
Award winning products 10 TT electronics plc ANNUAL REPORT 2002
CHIEF EXECUTIVE’S REVIEW CONTINUED
years, albeit with contracted price reductions.
This enables appropriate product speciﬁc
automated equipment to be utilised and
depreciated over the product life, the 
cost effective long-term material supply 
to be negotiated and an in-depth training
of operatives.
Our range of automotive products includes
rotating and position sensors, temperature
and pressure sensors, climate control
modules, switches and body electronics,
hybrid circuits, trimmers, resistors and
printed circuit boards. Our contacting 
and contactless sensor technologies were
originally adopted for ‘drive, brake and
steer-by-wire’ applications on German
luxury cars such as Mercedes Benz and
BMW. These products are now used on 
a wide range of cars and continue to 
be designed in on new model platforms.
We are currently producing over 11,000
units per day of our award winning
accelerator pedal modules. We were the
innovator of the chassis height sensor
starting with the Range Rover model and
now our chassis height sensors are used to
improve comfort and safety as well as load
levelling in conjunction with ‘high intensity
discharge headlights’. TT electronics now
produces over 20,000 units per day for
cars assembled in Europe and America. We
have just completed the third extension to
one of our German factories in the last ﬁve
years to house the production equipment
to service this growth.
One of our businesses in South Wales
specialises in the design and manufacture
of complex climate control systems which
can take up to 12,000 man hours to develop
utilising the latest sophisticated integrated
design and production engineering
computer systems. Success with this
product range, particularly with American
car manufacturers, drove the decision three
years ago to manufacture climate control
products in our automotive factory in
North Carolina where the number of units
assembled has risen from 45,000 units in
1999 to 408,000 units in 2002.
The group engineers products so that they can be manufactured in
the most economical way utilising automated production lines. An
example is the steering sensor which had originally been designed
for manual assembly in a low labour cost area. When TT electronics
acquired this business in 2000 the sensor was redesigned. It now
incorporates enhanced features, and is manufactured on an
automated production line. This has reduced the labour content 
by 60 per cent and improved product quality.
Automated production TT electronics plc ANNUAL REPORT 2002 11
Telecom market – represents 11 per
cent of the electronic sector turnover
Much publicity has been given over the
last two years to the implosion of the
telecom industry which has left the 
World’s leading service providers and
equipment manufacturers struggling for
survival. One of the group’s major and 
long established marketplaces for many
years was the World’s leading telecom and
internet equipment manufacturers such as
Ericsson, Siemens, Lucent, Nortel, Alcatel
and Cisco who continue to report falling
sales to this market.
In the peak telecom year of 2000, the
group sold £86 million of products into
this market as against £38 million in 2002.
This unprecedented low level of demand
continued throughout 2002 despite the
earlier consensus of expectations that the
market would recover during the latter part
of last year. A major feature holding back
the recovery was the high stocks of
ﬁnished goods and components held 
by our customers. It is reported that 
much of this stock has been consumed
which should open the way for increasing
sales as service providers’ demand returns
to normality.
Those of our operations which had a 
heavy bias to telecom products were
particularly badly affected and considerable
headcount reductions and reorganisation
have taken place. These include the closure
of our United Kingdom based ferrite
manufacturing plant with the production
being moved to the group’s operation 
in India.
Our products based on thick and thin ﬁlm
hybrid circuits and resistive technologies
are used in a wide range of applications
such as switching for ﬁxed line, mobile
base stations as well as ﬁbre optic systems.
Many of our components are used in
internet infrastructure equipment such 
as servers and routers as well as in
communication satellites. Despite the low
demand for our products our development
engineers continue to work with our
customers on the next generation designs
to win sales as the market recovers.
Computer market – represents 8 per
cent of the electronic sector turnover
The majority of the World’s leading
computer manufacturers use our electronic
components in their products. The lower
level of production of computers in 2002,
together with component stocks still ﬁlling
the supply chain, reduced demand for our
resistors, inductors, transformers, ferrite
cores and ﬁlters, with sales to this market
dropping from £62 million in 2000 to 
£28 million in 2002. Forecasts predict 
a slight upturn in computer sales in 2003
which will be beneﬁcial if these predictions
materialise. We have maintained our
technical sales and application engineering
staff and also opened up a sales ofﬁce 
in southern mainland China to service
customers better who have moved their
production to this area making China 
one of the major electronic manufacturing
centres of the World. We continue to
develop products applicable to the next
generation of PCs and laptops which
should be launched into the market 
during 2003.
Group turnover by market
Automotive
Industrial
Telecom
Computer
Power generation
Power transmission
Group turnover by product
Sensors and electronic systems
Electronic components
Magnetics
Electronic manufacturing services
Power and data transmission
Power systems
TT electronics has developed in the 
USA for one of the largest mould press
manufacturers in the World, a mould
heater nozzle utilising our “thick ﬁlm 
on steel” resistive technology.
This successful joint development has
achieved the initial goal of an “easy on,
easy off” nozzle. Other beneﬁts include
improved reliability and yields as well 
as 25-30 per cent energy saving.
Innovative products 12 TT electronics plc ANNUAL REPORT 2002
CHIEF EXECUTIVE ’S REVIEW CONTINUED
Industrial market – represents 22 per
cent of the electronic sector turnover
Due to the major downturn in the telecom
market we have been working hard to
increase sales into the industrial market.
This has required a redirection of our
engineering focus and product
development to meet the challenges of this
market which is large overall, but diverse
and very fragmented and is represented by
numerous companies ranging from global
original equipment manufacturers to small
family owned businesses.
Whilst we have had successes in this
market it has been difﬁcult due to the
weak demand in a number of sectors,
notably aerospace and control
instrumentation. Our focus on the medical
market has won us orders for components
into deﬁbrillators, pacemakers and a range
of diagnostic equipment and we expect
this to continue to grow. Our electronic
manufacturing business has won a contract
worth £20 million over the next four years
for sub-assemblies for use in high
frequency radio systems for the Ministry
of Defence Bowman programme.
Electrical sector 
Power generation – represents 
31 per cent of the electrical 
sector turnover
Our businesses in the United Kingdom and
Mexico design and build electrical power
generating units of between 50 and
2000KVA for both standby and continuous
power generation. We export generator
sets to Africa, the Middle East, China and
the Far East, Central and South America.
The global market for power generation
declined by 12 per cent in 2002 causing
stiff competition. We commenced delivery
of a large contract worth £5.8 million that
was won at the end of 2002 for an oil
project in North Africa. This proved to
require a more stringent speciﬁcation than
was anticipated and has utilised more
engineering time than had been planned
thus reducing our margin. On the positive
side the group’s operation based in Mexico
achieved another excellent year of proﬁt
and our uninterruptible power supply
business in the United Kingdom, which 
has been suffering from the downturn in
telecom, won a substantial contract for
equipment for the new generation 3G base
stations in Singapore. Our ground power
generation company which manufactures
units for airlines and airports suffered 
from the substantial cut back on capital
expenditure in this industry. We were,
however, successful in winning an order
worth £4.3 million spread over three years
for airstart units for the Ministry of Defence.
The harsh environment connector business
also won a contract ultimately for the
Ministry of Defence for output panels,
harnesses and connectors for ﬁeld power
systems worth £7.7 million over a three
year period.
Power transmission – represents 
69 per cent of the electrical 
sector turnover
Whilst these businesses improved their
performance in 2002 the lack of an
expected large sub-sea cable contract was
disappointing but we now anticipate the
contract for which our cable has been
Modern day medical technologies utilise
advanced electronics. TT electronics is
addressing this growing £1.0 billion
market.
The group has developed specialised ultra
reliable products for use in deﬁbrillators,
pacemakers, MRI scanners and 
a range of diagnostic equipment.
Potential new markets Ready for new technology
TT electronics plc ANNUAL REPORT 2002 13
speciﬁed, to be placed in late 2003. The
cable industry is still suffering from over-
capacity with competitive pricing from
Eastern European countries. However, our
cable accessories and specialist compound
businesses again produced good results.
Some time ago we identiﬁed that off-shore
wind farms, which the Government are
partially funding as sources of renewable
energy, would require our speciﬁcation of
sub-sea cable and late last year we won 
a contract worth £3.2 million which will 
be delivered in the ﬁrst half of 2003.
Outlook
We expect 2003 to be a demanding
environment in which to grow our sales.
Over the last 18 months we have done
much to reduce headcount and costs,
merged and relocated more of our
manufacturing to low labour cost areas to
reduce unit costs and increased our efforts
to develop new markets. We feel conﬁdent
that we have the right organisation and
skills to maximise future opportunities 
in our various markets.
Sheridan W A Comonte
Chief Executive
17 March 2003
The group’s specialist uninterruptible power supply operation has added to its product
range by developing a modular, dc power system. This has been successfully sold to Mobile
One in Singapore for the roll-out of its 3G system for mobile telephony. Other customers in
the United Kingdom, Hungary and Thailand are also planning to use our latest technology
to achieve the greater functionality required for the latest infrastructures. in the light of the weak demand in the
telecom and computer markets and the
increasing competition from low labour
cost locations. This has led to production
being transferred to the group’s low labour
cost factories. There are however, certain
manufacturing processes which are
impracticable to transfer and in these cases
factory outputs have had to be reduced.
This has led to under-recovery of overheads
and in some circumstances to losses 
which in turn lead to the need to make
impairment provisions in order to reduce
the carrying value of ﬁxed assets to their
recoverable amount. Impairment provisions
totalling £7.8 million have been made
against the carrying value of tangible ﬁxed
assets; these are in respect of the ferrite,
lamination and printed circuit board
businesses. The goodwill which arose on
the acquisition in 1999 of Prestwick
Circuits Limited, the printed circuit board
manufacturer, has also been fully written
off. These charges together with the
amortisation of goodwill are disclosed
separately in the consolidated proﬁt and
loss account.
Exceptional items
In December 2002 the investment in the
shares of Johnston Group PLC was sold for
£10.6 million, which generated a proﬁt of
£1.2 million. In line with the requirements
of FRS 3 this proﬁt is reported as an
exceptional item in the consolidated proﬁt
and loss account.
Interest charge
The interest charge was £3.2 million 
(2001 – £6.1 million). The reduction is 
due to a combination of lower interest
14 TT electronics plc ANNUAL REPORT 2002
FINANCIAL REVIEW
Business performance
The group’s turnover for the year from
continuing activities was £520.3 million,
(2001 – £630.7 million). Operating proﬁt
generated from continuing activities totalled
£22.4 million (2001 – £36.7 million)
before impairment provisions and goodwill
amortisation of £12.5 million (2001 – 
£2.2 million).
The electronic sector turnover of
£349.0 million (2001 – £399.6 million)
was seriously affected by the continuing
low levels of demand in the telecom and
computer marketplaces, which was partially
offset by strong demand from automotive
customers. The sales of electronic
components and magnetics which are
more sensitive to demand from telecom
customers were £166.6 million (2001 –
£209.7 million) a reduction of £43.1 million.
The excess manufacturing capacity
together with price pressure from the 
Far East impacted on the results of the
printed circuit board business. The electronic
manufacturing services business was also
affected, turnover reducing to £43.4 million
in 2002 (2001 – £58.9 million), which was
mainly caused by a major customer taking
work back in house. The automotive
electronic sensors and systems business
continues to be successful and achieved 
a growth in turnover of 6 per cent to
£139.0 million (2001 – £131.0 million).
This sector’s operating proﬁt of £15.7 million
(2001 – £32.9 million) before goodwill
amortisation and provision for impairment
was adversely affected by the overall
turnover reduction and reduced margins 
as a result of the lower telecom turnover
which has above average margins.
The electrical sector turnover was 
£171.3 million (2001 – £231.1 million).
The majority of this reduction resulted from
the closure of the copper rod manufacturing
operation whose sales were £36.1 million
in 2001 and £nil in 2002. The power systems
businesses’ turnover was £52.7 million
(2001 – £60.0 million) resulting from 
a depressed World market for diesel
generating sets. The power transmission
operations’ turnover was £118.6 million
(2001 excluding the effect of closures 
and disposals – £135.0 million). Margins
beneﬁted from the cost reduction actions
taken in 2001 and good performances from
the businesses supplying compounds and
cable accessories. The operating proﬁt for
the electrical sector improved to £6.7 million
(2001 – £3.8 million).
Impairment of ﬁxed assets
The group has reviewed its operations 
Roderick Weaver
Finance Director TT electronics plc ANNUAL REPORT 2002 15
rates, particularly in respect of US dollar
borrowings, and the full year effect of the
current funding arrangements. Since June
2001 the majority of sterling borrowings
have been at interest rates between 3.9 per
cent and 5.7 per cent. These borrowings
replaced the loan which was at a ﬁxed rate
of 11.4375 per cent. An average interest
rate of 2.9 per cent has now been ﬁxed to
June 2004 on US$65 million of borrowings.
Other interest charges are mainly on UK
borrowings typically from 0.5 to 1.0 per
cent above money market rates.
Taxation 
The group has adopted FRS 19 and has
now fully provided for deferred taxation.
The amount of deferred taxation unprovided
at the end of 2001 was £0.6 million and
the effect of this change in policy has been
included in the total tax charge for 2002
as it was not considered sufﬁciently material
to require a prior year adjustment.
The effective taxation charge on proﬁts
was 27 per cent (2001 – 27 per cent) and
is lower than the natural rate of tax due to
the utilisation of losses and a tax efﬁcient
corporate structure.
Cash ﬂow and borrowings
The cash generated from operations totalled
£42.6 million (2001 – £76.6 million) and
reﬂects the group’s constant monitoring and
strict control over working capital. Capital
expenditure amounted to £26.5 million
(2001 – £35.4 million) and included a new
factory in Germany to house the expanding
automotive electronic sensor business.
Other signiﬁcant items of cash ﬂow were
the proceeds from the sale of the shares in
Johnston Group PLC of £10.6 million, tax
paid of £2.9 million (2001 – £7.4 million)
which was mainly in respect of overseas
proﬁt and net interest paid of £3.2 million
(2001 – £8.1 million).
The total net debt at the end of 
December 2002 was £55.8 million 
(2001 – £63.5 million) and gearing reduced
to 27 per cent (2001 – 29 per cent).
Dividends
In light of the strong balance sheet and
good cash generation the Board proposes
that the ﬁnal dividend is held at 6.36p per
share, giving a total dividend of 10.05p per
share (2001 – 10.05p per share). This
dividend is covered by the earnings before
goodwill amortisation and impairment
provisions but is not covered by earnings
after these provisions. These provisions do
not affect cash ﬂow and the Company has
sufﬁcient distributable reserves to enable it
to pay the recommended ﬁnal dividend.
Treasury and foreign currency
The group’s treasury function is controlled
centrally. Three clearing banks in the UK
provide overdraft and ancillary facilities and
a mid-term unsecured £50.0 million loan
facility which matures in June 2006. There
are also appropriate facilities with local
clearing banks in each of the other countries
where the group has a signiﬁcant presence.
The group’s policy is to reduce the risk of
the effect of movements in foreign currency
exchange rates by hedging transactions
and obligations by means of forward
currency contracts, and to hedge the
translation of certain non-sterling assets
and proﬁt streams by use of matched
borrowings and forward currency contracts.
There are no off balance sheet borrowing
arrangements and derivatives are used only
to minimise risk of price ﬂuctuations in key
raw materials, changes in foreign currency
exchange rates and interest rates.
Pensions
The group has not adopted FRS 17 for
pensions accounting but has made the
appropriate transitional disclosures in
note 33 to the accounts. The equity
markets have fallen dramatically since
December 2001, the FTSE100 having
dropped by 26 per cent since that date.
This fall in the market value of equities as
measured at December 2002 has widened
the shortfall between the pension funds’
assets and their liabilities. The group has
closed its deﬁned beneﬁt schemes to new
members and is planning to increase both
employee and employer contributions to
address this shortfall over the coming years.
Risk management
The policy of maintaining strict ﬁnancial
control has been adhered to by the group
for several years. There is a detailed
examination of internal control and external
audit procedures by the audit committee
twice a year and the Board as a whole
regularly undertakes formal reviews of 
all signiﬁcant risks to which the group is
exposed during the course of its operations.
Roderick W Weaver
Finance Director
17 March 2003
Geographical analysis of net assets
United Kingdom
Rest of Europe
United States and Canada
Mexico and Central America
Rest of the World 16 TT electronics plc ANNUAL REPORT 2002
DIRECTORS AND COMPANY SECRETARY
John W Newman
Executive Chairman (57) 
Appointed to the Board in 1986.
A Chartered Accountant who is also
Chairman of Send Group plc and  the
Newship Group of companies.
Roderick W Weaver FCA
Finance Director (52)
Appointed to the Board in 1995.
A Chartered Accountant who 
was previously with AB Electronic
Products Group PLC.
Timothy H Reed
Non-executive Director (62)
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.
Mark S Evans
Non-executive Director (69)
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.
Sir Laurence Magnus
Non-executive Director (47)
Appointed to the Board 
in 2001. An investment
banker ,Vice Chairman 
of Lexicon Partners,
non-executive Chairman 
of Xchanging ins-sure
Holdings Limited and a
non-executive Director of
The J.P . Morgan Fleming
Income & Capital
Investment T rust plc.
David E A Crowe
Non-executive Director (63)
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.
Martin G Leigh ACMA
Group Company Secretary (58)
James W Armstrong
Corporate Development Director (55)
Appointed to the Board in 1998.
A Chartered Accountant previously 
with Newship Group Limited.
Joined TT electronics plc in 1988.
Sheridan W A Comonte
Chief Executive (64)
Appointed to the Board in 1987.
Previously an executive Director 
of Newship Group Limited. DIRECTORS’ REPOR T
The Directors submit their report and the audited ﬁnancial statements for 
the year ended 31 December 2002.
Business review The operational and ﬁnancial reviews are set out on 
pages 6 to 15 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 page 56, operate in the electronic and electrical sectors.
Results The group’s proﬁt on ordinary activities before taxation was 
£7.9 million (2001 – £25.8 million). The audited ﬁnancial statements 
of the group are set out on pages 26 to 52.
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 substantially improve existing products and processes.
Ordinary dividends The Directors recommend a ﬁnal dividend of 6.36p 
per share (2001 – 6.36p) to be paid on 29 May 2003 to ordinary
shareholders on the register at 16 May 2003 which, together with the
interim dividend paid on 31 October 2002, makes a total of 10.05p for 
the year (2001 – 10.05p). After this distribution of £15.6 million, there 
is a retained loss of £10.0 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 review set out on pages 3 
and 13 respectively.
Directors M J Mallett, who retired on 8 May 2002, and the Directors 
set out below held ofﬁce during the year.
In accordance with the Articles of Association, S W A Comonte, R W Weaver
and M S Evans retire by rotation. Messrs Comonte, Weaver and Evans being
eligible, offer themselves 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 2002, 31 December 2002 and 7 March 2003:
31 Dec 2002 and
7 Mar 2003 1 Jan 2002
Ordinary shares Ordinary shares
J W Newman 16,112,627 16,112,627
S W A Comonte 64,500 64,500
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 2002, 31 December 2002 and 7 March 2003:
31 Dec 2002 and
7 Mar 2003 1 Jan 2002
Ordinary shares Ordinary shares
J W Newman 10,182,437 10,182,437
The ordinary shares in which J W Newman held a non-beneﬁcial interest
comprised part of the holding in which he held a beneﬁcial interest.
Share capital The share capital during the year and the number of ordinary
shares reserved for issue are shown in note 25 to the ﬁnancial statements.
Annual General Meeting The Notice of the Company’s 2003 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 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.
TT electronics plc ANNUAL REPORT 2002 17 DIRECTORS’ REPOR T CONTINUED
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.
A resolution will be proposed to approve the Directors’ remuneration report
for the year ended 31 December 2002.
Substantial shareholdings At 7 March 2003 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)
16,112,627 10.4
Tweedy, Browne Company LLC 10,854,129 7.0
Newship Industries Limited
(1)
10,182,437 6.5
Newship Investments Limited
(1)
9,903,250 6.3
FMR Corp
(2)
7,038,429 4.5
Legal & General Investment
Management Limited 4,776,549 3.1
(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.
(2)
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
(2001 – £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.
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 group has complied throughout the year 
with the provisions set out in Section 1 of the Combined Code.
The Board aims to achieve high standards of corporate governance. It recognises
that shareholders require leadership and control of the Company to accord
with those standards.
The Board of TT electronics plc currently comprises the Executive Chairman,
the Chief Executive, the Finance Director, the Corporate Development Director
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.
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. Discussions on 
all matters at Board meetings are based on timely distribution of written
information to all Directors.
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 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.
S W A Comonte, the Chief Executive, is responsible for the running of the
group’s operating companies.
T H Reed, M S Evans, D E A Crowe and Sir Laurence Magnus, the four non-
executive Directors, bring a strong and independent element to the Board.
They contribute to the testing and maintenance of the corporate governance
of the group. T H Reed has been designated senior independent Director.
18 TT electronics plc ANNUAL REPORT 2002 A Remuneration Committee and an Audit Committee which report to the
Board have been established. Each comprises the four non-executive
Directors: T H Reed, M S Evans, D E A Crowe and Sir Laurence Magnus.
T H Reed is the Chairman of both Committees. The duties of the Audit
Committee include 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 discussions 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.
When a Board appointment is to be made, possible candidates are discussed
by all Directors before any approach is made to any candidate. The decision
to make a Board appointment is made by the full Board in the light of 
such discussions.
All Directors are subject to re-election every three years and, on appointment,
at the ﬁrst Annual General Meeting after appointment.
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 on internal controls 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, via an established reporting
procedure, the risks set out in the register of principal business 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 regularly 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.
– 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.
TT electronics plc ANNUAL REPORT 2002 19 DIRECTORS’ REPOR T CONTINUED
– 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 2002 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 56 days 
of average supplies for the year (2001 – 45 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 and 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 25
and should be read in conjunction with this statement.
Approved by the Board on 17 March 2003 and signed on its behalf by
M G Leigh
Secretary
20 TT electronics plc ANNUAL REPORT 2002 DIRECTORS’ REMUNERATION REPOR T
The Board submits its Directors’ remuneration report for the year ended 31 December 2002. The following sections of the report have been audited: the
table of Directors’ remuneration together with the preceding paragraph; the table of Directors’ share options and the table of executive Directors’ pensions.
The Remuneration Committee which reports to the Board comprises the four non-executive Directors: T H Reed, M S Evans, D E A Crowe and 
Sir Laurence Magnus. T H Reed is the Chairman of the Committee.
Remuneration
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 twelve companies above and twelve 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 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 2001 and 31 December 2002.
Set out below are tables of remuneration of the Directors who served throughout the year ended 31 December 2002 (except where stated). The amount
of each element in the remuneration received by the Directors in the year including basic salary and fees and beneﬁts in kind was:
2002 2001
Salary/fees Beneﬁts Total Total
£000 £000 £000 £000
Executive Directors
J W Newman 431 38 469 444
S W A Comonte 237 35 272 320
R W Weaver 177 18 195 205
J W Armstrong 137 19 156 160
Non-executive Directors
T H Reed 32 – 32 31
M J Mallett (retired 8 May 2002) 8 – 8 24
M S Evans 24 – 24 24
D E A Crowe 24 – 24 24
Sir Laurence Magnus 24 – 24 12
1,094 110 1,204 1,244
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.
The fees in respect of M J Mallett were paid to Ayre Mallett and Company Limited.
TT electronics plc ANNUAL REPORT 2002 21 DIRECTORS’ REMUNERATION REPOR T CONTINUED
Service contracts
The Company’s policy is not to grant service contracts to executive Directors and that the executives should be satisﬁed with the working relationship
and if dissatisﬁed, should be able to leave without restraint. Accordingly there are no service contracts and the notice periods amount to a maximum 
of three months for any executive Director. 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 and it is not envisaged that
there will be any participants in 2003.
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.
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
2002 is shown on the graph below compared with the return performance achieved by the FTSE All Share companies.
TT electronics total shareholder return v FTSE All Share Source: DATASTREAM
TT electronics plc
FTSE All Share
The FTSE All Share has been selected as a broad equity market index comparison.
22 TT electronics plc ANNUAL REPORT 2002
0
20
40
60
80
100
120
140
160
0
20
40
60
80
100
120
140
160
Dec
97
Mar Jun Sept Dec
98
Mar Jun Sept Dec
99
Mar Jun Sept Dec
00
Mar Jun Sept Dec
01
Mar Jun Sept Dec
02 Directors’ 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 Company 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 Company 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. The Board continues to review the appropriateness of that
performance condition at each future option grant and have no present intention to change the condition. Meis have not provided any other services 
to the Company.
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.
Share options granted in the period exercisable between April 2005 and April 2012 at a price of 165p:
Options
J W Newman 128,593
R W Weaver 52,935
J W Armstrong 40,793
Share options outstanding at 31 December 2002 and the date of this report:
Weighted
average
price
Options pence Exercise period
Exercise price above year end closing price
J W Newman 740,843 204.5 Apr 1998 – Apr 2012
S W A Comonte 414,947 202.6 Apr 1998 – May 2011
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
R W Weaver 109,289 91.5 Mar 2003 – Mar 2010
J W Armstrong 109,289 91.5 Mar 2003 – Mar 2010
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 2001 and 2002 as derived from the Stock Exchange
Daily Ofﬁcial List were 156.5p and 105.5p respectively. During the year the middle market price of TT electronics plc ranged between 193.5p and 105.5p.
TT electronics plc ANNUAL REPORT 2002 23 DIRECTORS’ REMUNERATION REPOR T CONTINUED
Executive Directors’ pensions
Each of the persons who were executive Directors during the year, was a member of the Company’s pension scheme, which covers most senior employees
of the Company.
Accrued Transfer Transfer
Increase pension at value at Increase value at
in accrued 31 Dec 31 Dec in transfer 31 Dec
pension 2002 2002 value 2001
£000 £000 £000 £000 £000
J W Newman 18 183 1,627 174 1,432
S W A Comonte 5 111 1,401 202 1,188
R W Weaver 8 57 457 46 402
J W Armstrong 5 36 324 43 274
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 2002.
(g) Transfer values are calculated in accordance with the “Retirement Beneﬁt Schemes – Transfer Values (GN 11)” published by the Institute of Actuaries
and the Faculty of Actuaries and dated 6 April 2001.
(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 17 March 2003 and signed on its behalf by
M G Leigh
Secretary
24 TT electronics plc ANNUAL REPORT 2002 REPOR T OF THE INDEPENDENT A UDIT ORS
We have audited the ﬁnancial statements of TT electronics plc for the year ended 31 December 2002 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 33. 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 ﬁnancial highlights, the Chairman’s statement, the group overview, the Chief Executive’s review, the ﬁnancial review,
the Directors’ report, the unaudited part of the Directors’ remuneration report, the corporate governance statement 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 2002 and of the
proﬁt 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, 17 March 2003
The maintenance and integrity of the TT electronics plc website is the responsibility of the Directors: the work carried out by the Auditors does not involve
consideration of these matters and, accordingly, the Auditors accept no responsibility for any changes that may have occurred to the ﬁnancial statements
since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the ﬁnancial statements may differ from legislation in other jurisdictions.
TT electronics plc ANNUAL REPORT 2002 25 CONSOLID ATED PROFIT AND LOSS A CCOUNT
for the year ended 31 December 2002
2002 2001
Impairment Impairment
provisions provisions 
Business and goodwill Business and goodwill Continuing Discontinued
performance amortisation Total performance amortisation activities activities Total
Note £million £million £million £million £million £million £million £million
Turnover 1 520.3 – 520.3 630.7 – 630.7 27.2 657.9
Cost of sales 2 (427.8) (7.8) (435.6) (521.5) – (521.5) (20.4) (541.9)
Gross proﬁt 92.5 (7.8) 84.7 109.2 – 109.2 6.8 116.0
Operating expenses 2,3 (70.1) (4.7) (74.8) (72.5) (2.2) (74.7) (5.3) (80.0)
Operating proﬁt 22.4 (12.5) 9.9 36.7 (2.2) 34.5 1.5 36.0
Proﬁt on sale of ﬁxed asset investment 4 1.2 – 1.2 –––––
Loss on sale or termination of businesses 4 ––– (0.9) – (0.9) (2.1) (3.0)
Cost of demerger 4 ––– – – – (1.1) (1.1)
Proﬁt on ordinary activities
before interest 23.6 (12.5) 11.1 35.8 (2.2) 33.6 (1.7) 31.9
Interest 5 (3.2) – (3.2) (5.9) – (5.9) (0.2) (6.1)
Proﬁt on ordinary activities 
before taxation 6 20.4 (12.5) 7.9 29.9 (2.2) 27.7 (1.9) 25.8
Taxation 7 (3.4) 1.3 (2.1) (7.4) – (7.4) 0.5 (6.9)
Proﬁt on ordinary activities 
after taxation 17.0 (11.2) 5.8 22.5 (2.2) 20.3 (1.4) 18.9
Minority interests (0.2) – (0.2) –––––
Proﬁt for the year 16.8 (11.2) 5.6 22.5 (2.2) 20.3 (1.4) 18.9
Dividends – ordinary 8 (15.6) – (15.6) (15.6) – (15.6) – (15.6)
– in specie 8 ––– – – – (41.1) (41.1)
Retained loss 26 1.2 (11.2) (10.0) 6.9 (2.2) 4.7 (42.5) (37.8)
Earnings per share 9
– basic and fully diluted 3.6p 12.2p
– before impairment provisions,
goodwill amortisation and exceptional items 10.1p 16.0p
The 2002 results arise from continuing activities.
26 TT electronics plc ANNUAL REPORT 2002 CONSOLID ATED B ALANCE SHEET
at 31 December 2002
2002 2001
Note £million £million
Fixed assets
Intangible assets 13 30.2 38.1
Tangible assets 14 142.1 153.2
Investments 15 5.1 10.7
177.4 202.0
Current assets
Property 16 2.0 4.0
Stocks 17 98.2 99.1
Debtors 18 109.7 111.0
Investments 19 0.1 0.1
Cash 5.1 8.8
215.1 223.0
Creditors falling due within one year 20 (121.0) (132.6)
Net current assets 94.1 90.4
Total assets less current liabilities 271.5 292.4
Creditors falling due after more than one year 21 (57.2) (60.8)
Provisions for liabilities and charges 23 (5.8) (6.9)
Minority interests 24 (2.8) (2.6)
Total net assets 205.7 222.1
Capital and reserves
Share capital 25 38.7 38.7
Share premium account 26 56.0 56.0
Capital redemption reserve 26 4.4 4.4
Merger reserve 26 12.1 12.1
Proﬁt and loss account 26 94.5 110.9
Equity shareholders’ funds 205.7 222.1
Approved by the Directors on 17 March 2003 and signed on their behalf by
J W Newman R W Weaver
Director Director
TT electronics plc ANNUAL REPORT 2002 27 CONSOLID ATED CASH FLO W STATEMENT
for the year ended 31 December 2002
2002 2001
Note £million £million
Net cash inﬂow from operating activities 27 42.6 76.6
Returns on investments and servicing of ﬁnance
Dividends received 0.3 0.3
Interest paid (4.0) (9.1)
Interest received 0.5 0.7
Net cash outﬂow from returns on investments and servicing of ﬁnance (3.2) (8.1)
Taxation (2.9) (7.4)
Capital expenditure and ﬁnancial investment
Sale of tangible ﬁxed assets 1.2 3.2
Government grants received 1.0 2.5
Sale of ﬁxed asset investment 10.6 –
Purchase of ﬁxed asset investments (4.0) –
Purchase of tangible ﬁxed assets (26.5) (35.4)
Net cash outﬂow from capital expenditure and ﬁnancial investment (17.7) (29.7)
Acquisitions and disposals
Demerger of businesses – 15.2
Sale of businesses – 5.4
Net cash inﬂow from disposals – 20.6
Ordinary dividends paid (15.6) (15.6)
Net cash inﬂow before liquid resources and ﬁnancing 3.2 36.4
Management of liquid resources
Purchase of current asset investments – (1.7)
Net cash outﬂow from management of liquid resources – (1.7)
Financing
New loans 2.2 51.8
Loan repayments (1.6) (21.1)
Finance lease repayments (0.3) (1.3)
Net cash inﬂow from ﬁnancing 0.3 29.4
Increase in cash 28 3.5 64.1
28 TT electronics plc ANNUAL REPORT 2002 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2002
2002 2001
£million £million
Proﬁt for the year 5.6 18.9
Exchange differences on net foreign currency investments (6.4) (0.7)
Total recognised gains and losses (0.8) 18.2
TT electronics plc ANNUAL REPORT 2002 29
RECONCILIAT ION OF MO VEMENTS IN SHAREHOLDERS’ FUNDS
for the year ended 31 December 2002
2002 2001
£million £million
Proﬁt for the year 5.6 18.9
Exchange differences on net foreign currency investments (6.4) (0.7)
Total recognised gains and losses (0.8) 18.2
Dividends – ordinary (15.6) (15.6)
– in specie – (41.1)
Goodwill on demerger and disposals – 16.1
Net change in shareholders’ funds (16.4) (22.4)
Opening shareholders’ funds 222.1 244.5
Closing shareholders’ funds 205.7 222.1 COMPANY B ALANCE SHEET
at 31 December 2002
2002 2001
Note £million £million
Fixed assets
Tangible assets 14 0.3 0.4
Investments 15 140.4 146.0
140.7 146.4
Current assets
Property 16 1.5 2.1
Debtors 18 157.3 163.8
Cash – 0.3
158.8 166.2
Creditors falling due within one year 20 (48.4) (48.8)
Net current assets 110.4 117.4
Total assets less current liabilities 251.1 263.8
Creditors falling due after more than one year 21 (46.4) (48.8)
Provisions for liabilities and charges 23 (0.2) (0.1)
Total net assets 204.5 214.9
Capital and reserves
Share capital 25 38.7 38.7
Share premium account 26 56.0 56.0
Capital redemption reserve 26 4.4 4.4
Merger reserve 26 70.3 70.3
Proﬁt and loss account 26 35.1 45.5
Equity shareholders’ funds 204.5 214.9
Approved by the Directors on 17 March 2003 and signed on their behalf by
J W Newman R W Weaver
Director Director
30 TT electronics plc ANNUAL REPORT 2002 A CCOUNTING POLICIES
The ﬁnancial statements have been prepared under the historical cost convention in accordance with applicable accounting standards. The group has
adopted FRS 19 ‘Deferred Tax’ and makes the disclosures required under the second stage transitional arrangements of FRS 17 ‘Retirement Beneﬁts’.
The principal accounting policies of the group are summarised below and except for the policy on deferred taxation 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 page 56.
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. All signiﬁcant 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 14. 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 2002 31 A CCOUNTING 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, have 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 price ﬂuctuations in key raw materials. These instruments are treated 
as an economic hedge of the raw materials costs.
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.
32 TT electronics plc ANNUAL REPORT 2002 NO TES T O THE FINANCIAL STA TEMENTS
1. Analysis of turnover
2002 2001
By sector £million £million
Electronic 349.0 399.6
Electrical 171.3 231.1
Continuing activities 520.3 630.7
Discontinued activities – 27.2
520.3 657.9
Discontinued activities in 2001 arose from the demerger of the glass container businesses, the sale of the packaging machinery business, and the closure
of the copper rod business.
2002 2001
By origin £million £million
United Kingdom 270.9 368.0
Rest of Europe 112.9 105.4
United States and Canada 87.7 98.9
Mexico and Central America 18.6 20.8
Rest of the World 30.2 37.6
Continuing activities 520.3 630.7
Discontinued activities – 27.2
520.3 657.9
By destination
United Kingdom 162.4 227.2
Rest of Europe 180.3 202.1
United States and Canada 91.8 96.9
Mexico and Central America 17.4 19.0
Rest of the World 68.4 85.5
Continuing activities 520.3 630.7
Discontinued activities – 27.2
520.3 657.9
2. Impairment provisions and goodwill amortisation
2002 2001
Note £million £million
Impairment of plant and equipment 14 7.8 –
Impairment of goodwill 13 2.6 –
Total impairment provisions 10.4 –
Goodwill amortisation 13 2.1 2.2
Impairment provisions and goodwill amortisation 12.5 2.2
In accordance with FRS 11 ‘Impairment of ﬁxed assets and goodwill’ the carrying values of the ﬁxed assets and goodwill of the ferrites, laminations and
printed circuit board businesses have been compared with their recoverable amount. The recoverable amount has been derived from an estimate of their
net realisable value. The review has resulted in a charge of £10.4 million (2001 – £nil) to operating costs of which £2.6 million has been allocated to 
the goodwill which arose on the acquisition of the printed circuit board business and £7.8 million to plant and equipment.
TT electronics plc ANNUAL REPORT 2002 33 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
3. Operating expenses
2002 2001
£million £million
Sales and distribution costs 42.7 44.0
Administration expenses 35.0 34.2
Other operating income (2.9) (3.5)
Continuing activities 74.8 74.7
Discontinued activities – 5.3
Operating expenses 74.8 80.0
Administration expenses include £2.6 million (2001 – £nil) of goodwill impairment and £2.1 million (2001 – £2.2 million) of goodwill amortisation 
all of which relate to continuing activities.
4. Exceptional items
2002 2001
£million £million
Proﬁt on sale of ﬁxed asset investment 1.2 –
Loss on sale of businesses – (2.3)
Loss on termination of business – (0.7)
1.2 (3.0)
Costs of reorganisation – demerger – (1.1)
1.2 (4.1)
On 19 December 2002 the group disposed of its entire holding in Johnston Group PLC at a proﬁt of £1.2 million, see note 15.
In 2001 the group sold the business of F. D. Sims Limited, a magnet wire manufacturer, and United Packaging PLC, a packaging machinery manufacturer,
and closed the copper rod production facility of Rodco Limited.
5. Interest
2002 2001
£million £million
Interest payable on bank loans and overdrafts 4.0 7.0
Finance charges on hire purchase contracts – 0.1
Bank interest receivable (0.5) (0.7)
Investment income receivable (0.3) (0.3)
3.2 6.1
34 TT electronics plc ANNUAL REPORT 2002 6. Analysis of proﬁt on ordinary activities before taxation
2002 2001
£million £million
Proﬁt on ordinary activities before taxation is stated after charging/(crediting):
Depreciation
– tangible assets owned 26.0 31.3
– tangible assets hire purchase – 0.4
Amortisation
– intangible assets 2.1 2.2
Fees to Auditors
– audit services 0.7 0.8
– non-audit services 0.1 0.1
Operating lease rentals
– plant and machinery 0.4 0.5
– other 2.4 3.0
Research and development expenditure (net of customer funding) 8.1 9.6
Government grants credited (1.0) (1.8)
By sector
Electronic 15.7 32.9
Electrical 6.7 3.8
Continuing activities 22.4 36.7
Discontinued activities – 1.5
Operating proﬁt before impairment provisions and goodwill amortisation 22.4 38.2
Impairment provisions and goodwill amortisation (12.5) (2.2)
Total operating proﬁt 9.9 36.0
Exceptional items 1.2 (4.1)
Proﬁt on ordinary activities before interest 11.1 31.9
Interest (3.2) (6.1)
Proﬁt on ordinary activities before taxation 7.9 25.8
The impairment provisions and goodwill amortisation are in respect of the electronic sector.
TT electronics plc ANNUAL REPORT 2002 35 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
6. Analysis of proﬁt on ordinary activities before taxation continued
2002 2001
By origin £million £million
United Kingdom (0.9) 6.4
Rest of Europe 12.5 10.6
United States and Canada 3.2 12.8
Mexico and Central America 2.4 1.8
Rest of the World 5.2 5.1
Continuing activities 22.4 36.7
Discontinued activities – 1.5
Operating proﬁt before impairment provisions and goodwill amortisation 22.4 38.2
Impairment provisions and goodwill amortisation (12.5) (2.2)
Total operating proﬁt 9.9 36.0
Exceptional items 1.2 (4.1)
Proﬁt on ordinary activities before interest 11.1 31.9
Interest (3.2) (6.1)
Proﬁt on ordinary activities before taxation 7.9 25.8
Impairment provisions and goodwill amortisation are shown in note 2. Exceptional items are shown in note 4. Discontinued activities are deﬁned in note 1.
7. Taxation
2002 2001
£million £million
United Kingdom corporation tax at 30% (2001 – 30%) based on the taxable proﬁts for the year 0.1 0.7
Overseas taxation 3.0 5.9
Adjustment to tax charge in respect of previous periods (1.1) (0.6)
Current taxation 2.0 6.0
Deferred taxation 0.1 0.9
2.1 6.9
The tax charge for the year represents an effective rate of 27% (2001 – 27%) after taking account of the utilisation of tax losses available within the group.
There is tax relief of £1.3 million on the impairment provisions and tax in respect of exceptional items of £nil (2001 – £0.5 million tax relief).
2002 2001
The current tax charge is explained as follows: £million £million
Proﬁt on ordinary activities before tax 7.9 25.8
Proﬁt on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% (2001 – 30%) 2.4 7.8
Effects of:
Charges to proﬁt not deductible for tax purposes 3.3 0.9
Capital allowances in excess of depreciation (1.1) (1.5)
Utilisation of tax losses (1.9) (1.5)
Higher tax rates on overseas earnings 0.4 0.9
Adjustment to tax charge in respect of previous periods (1.1) (0.6)
Current tax charge for period 2.0 6.0
36 TT electronics plc ANNUAL REPORT 2002 8. Dividends
2002 2001
pence pence 2002 2001
per share 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
On 15 May 2001 the group’s glass container businesses were demerged by way of a dividend in specie of Send Group plc shares. Net assets demerged
amounted to £41.1 million including £14.6 million of goodwill previously written off to reserves.
9. Earnings per share
2002 2001
pence pence
per share per share
Earnings per share
Basic and fully diluted 3.6 12.2
Before impairment provisions, goodwill amortisation and exceptional items 10.1 16.0
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.
2002 2001
£million £million
Net proﬁt for the period attributable to shareholders
Earnings basic and fully diluted 5.6 18.9
Goodwill amortisation 2.1 2.2
Impairment provisions, net of tax relief 9.1 –
Exceptional items, net of tax relief (1.2) 3.6
Earnings before impairment provisions, goodwill amortisation and exceptional items 15.6 24.7
2002 2001
million million
Weighted average number of shares in issue
Basic 154.8 154.8
Adjustment for share options 0.4 0.5
Fully diluted 155.2 155.3
TT electronics plc ANNUAL REPORT 2002 37 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
10. Employees
2002 2001
The average number of employees (including Directors) during the year was: Number Number
By function
Production 7,003 8,279
Sales and distribution 768 863
Administration 524 591
8,295 9,733
By sector
Electronic 5,960 6,911
Electrical 2,335 2,494
Continuing activities 8,295 9,405
Discontinued activities – 328
8,295 9,733
Discontinued activities are deﬁned in note 1.
2002 2001
The aggregate emoluments (including those of Directors) for the year were: £million £million
Wages and salaries 131.5 149.1
Employers’ social security charges 16.5 18.8
Employers’ pension costs 5.9 7.0
153.9 174.9
Remuneration in respect of the Directors was as follows:
Emoluments 1.2 1.2
Further details of individual Directors’ remuneration, pension beneﬁts and share options are shown in the Directors’ remuneration report 
on pages 21 to 24.
11. Related party transactions
Subsidiary undertakings of the group in the ordinary course of their respective businesses supplied and purchased goods and services valued at the
aggregate of £119,000 (2001 – £122,000) and £19,000 (2001 – £21,000) respectively to and from companies in which J W Newman was interested
during the year. Such supplies were made on normal credit terms. Additionally, the Company in the ordinary course of its business leased premises and
provided normal services in respect of such premises to a company wholly owned by J W Newman during the year. The annual rental and service charge
aggregating £16,800 (2001 – £16,800) and were calculated on open market bases and were paid monthly. The group also in the ordinary course of
business leased premises from companies wholly owned by J W Newman during the year. The annual rentals, including service charges where applicable,
aggregating £271,000 (2001 – £267,000) were calculated on open market bases and were paid monthly. On 15 November 2002, J W Newman, and
parties acting in concert with him acquired control of Send Group plc. As part of the demerger from TT electronics, loans totalling £8 million repayable 
in 2004 and 2008 were made to Send Group plc. Interest on the loans for the period since 15 November 2002 amounted to £33,000. Goods and services
valued at £10,000 were supplied to Send Group companies in the ordinary course of business and on normal credit terms since 15 November 2002.
38 TT electronics plc ANNUAL REPORT 2002 12. Analysis of net assets
2002 2001
£million £million
Shareholders’ funds 205.7 222.1
Loans and ﬁnance leases
– falling due within one year 1.5 1.9
– falling due after more than one year 46.8 50.1
254.0 274.1
Bank overdrafts less cash and liquid resources 7.6 11.5
261.6 285.6
By sector
Electronic 179.0 199.3
Electrical 82.6 84.1
Continuing activities 261.6 283.4
Discontinued activities – 2.2
261.6 285.6
By origin
United Kingdom 116.3 135.5
Rest of Europe 38.5 34.1
United States and Canada 92.7 101.8
Mexico and Central America 4.0 5.1
Rest of the World 10.1 9.1
261.6 285.6
Discontinued activities are deﬁned in note 1.
13. Intangible ﬁxed assets
Goodwill Other Total
£million £million £million
Group
Cost at 1 January 2002 42.4 0.2 42.6
Disposal – (0.2) (0.2)
Exchange translation differences (3.7) – (3.7)
Cost at 31 December 2002 38.7 – 38.7
Amortisation at 1 January 2002 4.3 0.2 4.5
Charge for the year 2.1 – 2.1
Impairment, see note 2 2.6 – 2.6
Disposal – (0.2) (0.2)
Exchange translation differences (0.5) – (0.5)
Amortisation and impairment at 31 December 2002 8.5 – 8.5
Net book amounts
At 31 December 2002 30.2 – 30.2
At 31 December 2001 38.1 – 38.1
The impairment provision writes off the goodwill arising from the acquisition of Prestwick Circuits Limited.
The expected useful economic life of the remaining goodwill is considered to be 20 years from the date of acquisition.
TT electronics plc ANNUAL REPORT 2002 39 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
14. Tangible ﬁxed assets
Freehold Leasehold Plant,
land and land and equipment
buildings buildings and vehicles Total
£million £million £million £million
Group
Cost at 1 January 2002 63.5 9.0 328.5 401.0
Additions 2.6 – 23.9 26.5
Disposals – – (22.1) (22.1)
Exchange translation differences (1.0) 0.1 (4.8) (5.7)
Cost at 31 December 2002 65.1 9.1 325.5 399.7
Depreciation at 1 January 2002 16.2 4.2 227.4 247.8
Charge for the year 1.2 0.3 24.5 26.0
Impairment provisions, see note 2 – – 7.8 7.8
Disposals – – (21.0) (21.0)
Exchange translation differences (0.4) – (2.6) (3.0)
Depreciation and impairment at 31 December 2002 17.0 4.5 236.1 257.6
Net book amounts
At 31 December 2002 48.1 4.6 89.4 142.1
At 31 December 2001 47.3 4.8 101.1 153.2
The ﬁgures stated above for plant, equipment and vehicles include assets held under ﬁnance leases with a net book amount of £nil million 
(2001 – £1.2 million).
The net book amount of freehold land and buildings includes £15.0 million (2001 – £15.3 million) in respect of land.
The net book amount of leasehold land and buildings comprises long leasehold (over 50 years) of £2.6 million (2001 – £2.8 million) and short leasehold
of £1.9 million (2001 – £2.0 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 4% to 33%
Freehold Plant,
land and equipment
buildings and vehicles Total
£million £million £million
Company
Cost at 1 January 2002 and 31 December 2002 0.2 1.1 1.3
Depreciation at 1 January 2002 – 0.9 0.9
Charge for the year – 0.1 0.1
Depreciation at 31 December 2002 – 1.0 1.0
Net book amounts
At 31 December 2002 0.2 0.1 0.3
At 31 December 2001 0.2 0.2 0.4
40 TT electronics plc ANNUAL REPORT 2002 15. Fixed asset investments
UK listed
£million
Group
At 1 January 2002 10.7
Additions 4.0
Disposal (9.4)
Provision (0.2)
At 31 December 2002 5.1
UK listed Subsidiary
at cost undertakings Total
£million £million £million
Company
At 1 January 2002 10.5 135.5 146.0
Additions 4.0 0.3 4.3
Disposals (9.4) (0.5) (9.9)
At 31 December 2002 5.1 135.3 140.4
The group’s principal operating subsidiary undertakings and the location of their principal operations are shown on page 56.
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 60% owned. Shareholdings are held indirectly for all principal operating subsidiary undertakings.
On 19 December 2002 TT electronics plc sold its entire holding in Johnston Group PLC for a cash consideration of £10.6 million. The proﬁt on disposal 
of £1.2 million is reported as an exceptional item, see note 4.
TT electronics plc owns 23.3% of the equity share capital of Pressac PLC. TT electronics plc does not exercise signiﬁcant inﬂuence over the ﬁnancial 
or operating policies of Pressac PLC. At 31 December 2001 the consolidated net assets of Pressac PLC were £30.0 million and its loss for the year 
after exceptional charges of £19.6 million and taxation was £16.9 million.
The market value of UK listed investments at 31 December 2002 was £4.4 million (2001 – £5.6 million).
TT electronics plc ANNUAL REPORT 2002 41 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
16. Property
£million
Group
At 1 January 2002 4.0
Additions 0.1
Disposal (2.1)
At 31 December 2002 2.0
£million
Company
At 1 January 2002 2.1
Additions 0.1
Disposal (0.7)
At 31 December 2002 1.5
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.
17. Stocks
2002 2001
£million £million
Group
Raw materials 32.6 33.9
Work in progress 25.6 23.2
Finished goods 40.0 42.0
98.2 99.1
18. Debtors
Group Group Company Company
2002 2001 2002 2001
£million £million £million £million
Amounts falling due within one year
Trade debtors 85.5 87.1 0.2 –
Amounts owed by subsidiary undertakings 148.5 153.9
Other debtors 3.5 4.8 – –
Prepayments and accrued income 9.9 9.1 0.2 1.9
Pension prepayment 1.8 1.1 0.4 –
100.7 102.1 149.3 155.8
Amounts falling due after more than one year
Other debtors 0.2 0.2 – –
Loans to Send Group plc 8.0 8.0 8.0 8.0
Pension prepayment 0.8 0.7 – –
9.0 8.9 8.0 8.0
109.7 111.0 157.3 163.8
42 TT electronics plc ANNUAL REPORT 2002 19. Current asset investments
Group
UK listed
£million
At 1 January 2002 and 31 December 2002 0.1
The UK listed investments are all listed on the London Stock Exchange and are classiﬁed as liquid resources in the consolidated cash ﬂow statement.
The market value of investments at 31 December 2002 is £0.1 million (2001 – £0.1 million).
20. Creditors falling due within one year
Group Group Company Company
2002 2001 2002 2001
£million £million £million £million
Bank overdrafts 12.7 20.4 0.1 –
Bank loans 1.5 1.6 0.3 0.4
Amounts due under ﬁnance leases – 0.3 – –
Trade creditors 62.2 61.0 0.5 0.4
Amounts owed to subsidiary undertakings 33.7 32.1
Corporation tax 11.2 10.5 0.7 2.3
Taxation and social security 4.5 7.3 0.9 1.6
Other creditors 1.2 2.4 0.3 –
Accruals and deferred income 17.8 19.2 2.0 2.1
Dividends 9.9 9.9 9.9 9.9
121.0 132.6 48.4 48.8
21. Creditors falling due after more than one year
Group Group Company Company
2002 2001 2002 2001
£million £million £million £million
Bank loans 46.8 50.1 46.4 48.8
Accruals and deferred income 2.9 2.8 – –
Pension accrual 7.5 7.9 – –
57.2 60.8 46.4 48.8
TT electronics plc ANNUAL REPORT 2002 43 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
22. Borrowings and ﬁnancial instruments
The group’s borrowings are funded mainly through bank overdrafts and a committed £50.0 million multicurrency 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 interest rate which will apply to $65 million of borrowings for the year to 30 June 2004.
The group’s treasury and foreign currency policy is set out on page 15.
The group has designated $65 million of its borrowings as a currency hedge of its North American and other US dollar related assets. 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 
in 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 has been reduced by forward foreign exchange contracts to sell euros maturing in
December 2003. 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 2002 was:
Weighted Period for
average ﬁxed which rate
interest rate is ﬁxed in Fixed rate Floating rate Total
% years £million £million £million
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
2001
Sterling 4.9 0.3 3.9 6.6 10.5
US dollar 4.7 0.5 44.9 12.4 57.3
Euro 4.1 3.7 1.7 2.8 4.5
Other – – – 0.1 0.1
50.5 21.9 72.4
The ﬂoating rate debts in sterling and US dollars bear interest based on the UK 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.
44 TT electronics plc ANNUAL REPORT 2002 22. Borrowings and ﬁnancial instruments continued
Maturity proﬁle of ﬁnancial liabilities
Group Group Company Company
2002 2001 2002 2001
£million £million £million £million
In less than one year or on demand
Bank borrowings 14.2 22.0 0.4 0.4
Finance leases – 0.3 – –
Between one and two years
Bank borrowings – 0.7 – 0.3
Between two and ﬁve years
Bank borrowings 46.8 49.4 46.4 48.5
61.0 72.4 46.8 49.2
Undrawn committed borrowing facilities at 31 December 2002, which are due for renewal during 2003, amounted to £10.1 million (2001 – £8.4 million).
Fair values
The fair values of ﬁnancial assets and liabilities which are the same as their book values have been determined in accordance with the guidance set out
in FRS 13 and are shown below:
31 December 2002 31 December 2001
Book value Fair value Book value Fair value
£million £million £million £million
Financial assets
Fixed asset investments 5.1 5.1 10.7 10.7
Current asset investments 0.1 0.1 0.1 0.1
Cash 5.1 5.1 8.8 8.8
Financial liabilities
Bank overdrafts (12.7) (12.7) (20.4) (20.4)
Bank loans due within one year (1.5) (1.5) (1.6) (1.6)
Finance leases due within one year –– (0.3) (0.3)
Bank loans due after one year (46.8) (46.8) (50.1) (50.1)
Interest rate swaps 2003 and 2004 –– ––
(50.7) (50.7) (52.8) (52.8)
TT electronics plc ANNUAL REPORT 2002 45 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
23. Provisions for liabilities and charges
Other provisions Deferred tax Total
£million £million £million
Group
At 1 January 2002 3.0 3.9 6.9
Transfer (to)/from proﬁt and loss account (0.8) 0.1 (0.7)
Exchange translation differences – (0.4) (0.4)
At 31 December 2002 2.2 3.6 5.8
2002 2001
£million £million
The deferred tax provision comprises:
Accelerated capital allowances 2.6 2.3
Other short-term timing differences 1.0 1.6
3.6 3.9
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 (2001 – £0.1 million) arising from short-term timing differences.
Other provisions are mainly for environmental costs and onerous contracts.
24. Minority interests
Minority interests comprise a 40 per cent equity interest in Rodco Limited not owned by the group.
25. Share capital
2002 2001
£million £million
Authorised
226,000,000 (2001 – 226,000,000) ordinary shares of 25p each 56.5 56.5
Issued, called up and fully paid
154,798,103 (2001 – 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 2002 options were exercisable over 4,908,158 (2001 – 4,174,731) ordinary shares under the group share
option schemes up to 2012. Subscription prices range from 91.5p to 359.0p with a weighted average of 175.5p. Subsequent to 31 December 2002 
no options have been exercised or have lapsed.
46 TT electronics plc ANNUAL REPORT 2002 25. Share capital continued
1994 Executive scheme This scheme for senior executives was approved at the Annual General Meeting on 24 May 1994. On 3 April 2002 options
over 548,299 ordinary shares exercisable at 165.0p were granted. The options outstanding at the date of this report are over 2,055,930 ordinary shares
and such options are:
Exercisable Subscription
on or after Options price (p)
04.04.1998 142,988 241.0
15.04.1999 99,475 319.0
22.04.2000 72,325 359.0
24.03.2001 127,597 300.0
31.03.2002 209,925 177.5
28.03.2003 446,016 91.5
18.04.2004 423,125 163.0
03.04.2005 534,479 165.0
1996 Executive scheme This scheme for senior executives was approved at the Annual General Meeting on 14 May 1996. On 3 April 2002 options
over 412,813 ordinary shares exercisable at 165.0p were granted. The options outstanding at the date of this report are over 2,852,228 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 160,751 177.5
15.09.2002 514,703 136.0
28.03.2003 615,934 91.5
18.04.2004 203,925 163.0
23.05.2004 472,227 166.0
03.04.2005 412,813 165.0
Options issued under the 1994 and 1996 Executive Share Option schemes may not be generally 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 in 2001 and 2002 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 2002 47 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
26. Reserves
Share Capital
premium redemption Merger Proﬁt and
account reserve reserve loss account
£million £million £million £million
Group
At 1 January 2002 56.0 4.4 12.1 110.9
Retained loss for the year – – – (10.0)
Exchange translation differences – – – (6.4)
At 31 December 2002 56.0 4.4 12.1 94.5
The goodwill arising on the acquisition of subsidiary undertakings charged to merger reserve at 31 December 2002 amounts to £58.2 million 
(2001 – £58.2 million).
Share Capital
premium redemption Merger Proﬁt and
account reserve reserve loss account
£million £million £million £million
Company
At 1 January 2002 56.0 4.4 70.3 45.5
Retained loss for the year – – – (10.4)
At 31 December 2002 56.0 4.4 70.3 35.1
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 £5.2 million (2001 – £67.6 million) has been dealt with in the ﬁnancial statements of the Company.
27. Reconciliation of group operating proﬁt to net cash inﬂow from operating activities
2002 2001
£million £million
Total operating proﬁt 9.9 36.0
Depreciation 26.0 31.7
Amortisation 2.1 2.2
Charge for impairment 10.4 –
Government grants credited to proﬁt (1.0) (1.8)
Proﬁt on sale of tangible ﬁxed assets (0.1) (0.3)
Closure and other costs (1.0) (0.9)
Decrease in property current assets 2.0 2.9
Decrease in stocks 0.9 8.5
Decrease in debtors 2.2 19.9
Decrease in creditors (4.0) (17.2)
Movement on pension prepayments and accruals (1.2) (3.4)
Exchange translation differences (3.6) (1.0)
Net cash inﬂow from operating activities 42.6 76.6
48 TT electronics plc ANNUAL REPORT 2002 28. Reconciliation of net cash ﬂow to movement in net debt
Loans and
Cash at Bank Net cash/ Short-term ﬁnance lease
bank overdrafts (overdraft) investments obligations Net debt
£million £million £million £million £million £million
Balance at 31 December 2000 5.1 (78.0) (72.9) 0.1 (24.4) (97.2)
Cash ﬂow 3.6 60.5 64.1 1.7 (29.4) 36.4
Demerger –––– 0.2 0.2
Exchange differences 0.1 (2.9) (2.8) – 1.6 (1.2)
Other non-cash movements – – – (1.7) – (1.7)
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)
29. Guarantees and ﬁnancial commitments
Financial commitments relating to bank loans are set out in notes 20 and 22. The Company has no guarantees or contingent ﬁnancial commitments.
30. Contingent liabilities
The group has contingent liabilities amounting to £0.9 million (2001 – £1.5 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.
31. Capital commitments
2002 2001
£million £million
Group
Commitments were:
Contracted 6.9 6.4
Authorised but not contracted 12.7 8.8
The Company had no capital commitments at 31 December 2002 and 31 December 2001.
TT electronics plc ANNUAL REPORT 2002 49 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
32. Obligations under operating leases
The operating lease payments due within one year to which the group and the Company were committed at 31 December 2002 were:
Land and 2002 Land and 2001
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 0.2
between two and ﬁve years 0.9 0.1 1.0 1.0 0.2 1.2
over ﬁve years 1.6 0.1 1.7 1.9 – 1.9
2.7 0.3 3.0 2.9 0.4 3.3
Company
On leases expiring:
within one year – 0.1 0.1 – 0.1 0.1
between two and ﬁve years – 0.1 0.1 –––
over ﬁve years 0.4 – 0.4 0.4 – 0.4
0.4 0.2 0.6 0.4 0.1 0.5
33. Pension schemes
At the year end the group operated nine deﬁned beneﬁt schemes closed to new members and two closed deﬁned beneﬁt pension schemes in the
United Kingdom, the assets of which were held under trusts and were 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 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 March 1999 and April 2001 principally using
the projected unit cost method. The principal assumptions used were that investment returns would be 2.0 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 at the actuarial dates of the
schemes operated by the group was £162 million. The actuarial valuations represented between 76 per cent and 116 per cent of the beneﬁts accrued,
on a continuance basis, to the members of the schemes. The surpluses take account of the improvements to beneﬁts agreed by the trustees of certain
schemes following the actuarial valuations. The deﬁcits should be eliminated at current funding rates over the average expected remaining working lives
of current employees. The ongoing pension costs are based on the advice of the schemes’ actuaries and are reduced where appropriate by the
amortisation of the surplus over the average expected working lives of the members. The total United Kingdom contributions charged by the group in
respect of the year ended 31 December 2002 were £4.8 million (2001 – £5.7 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 2002 were £0.2 million (2001 – £0.2 million).
50 TT electronics plc ANNUAL REPORT 2002 33. 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 2002.
Pension scheme assets are stated at market value at 31 December 2002. Pension scheme liabilities have been calculated using the projected unit cost
method and the following ﬁnancial assumptions:
2002 2001
% %
Discount rate 6.0 6.0
Inﬂation rate 2.3 2.5
Increases to pensions in payment 2.3-3.0 2.5-3.0
Salary increases 2.9 3.2
The expected long-term rates of return on the main asset classes, net of expenses, at 31 December 2002 were:
2002 2001
% %
Equities 7.0 7.2
Bonds 5.2 5.2
Gilts and cash 3.7 4.2
2002 2001
On the above basis the assets and liabilities of the pension schemes were: £million £million
Equities 120.6 150.5
Bonds 17.6 18.5
Gilts and cash 17.3 17.3
155.5 186.3
Present value of liabilities (219.2) (208.9)
Deﬁcit (63.7) (22.6)
Related deferred tax 19.1 6.8
Net pension liability (44.6) (15.8)
2002
The amounts charged to the proﬁt and loss account under FRS 17 would have been: £million
Current service cost 5.4
Expected return on pension scheme assets (12.6)
Interest on pension scheme liabilities 12.7
Proﬁt and loss charge 5.5
TT electronics plc ANNUAL REPORT 2002 51 NO TES T O THE FINANCIAL STA TEMENTS CONTINUED
33. Pension schemes continued
2002
The amount that would have been included in the statement of total recognised gains and losses under FRS 17 is: £million
Actual return less expected return on pension scheme assets (45.0)
Experience gains and losses arising on the scheme liabilities (2.5)
Changes in the assumptions underlying the present value of the scheme liabilities 6.6
Actuarial loss (40.9)
Deferred tax movement 12.3
Actuarial loss, net of deferred tax (28.6)
2002
Difference between expected and actual return on scheme assets:
Amount (£million) (45.0)
Percentage of scheme assets 29%
Experience gains and losses on scheme liabilities:
Amount (£million) (2.5)
Percentage of present value of scheme liabilities 1%
Total actuarial gains and losses:
Amount (£million) (40.9)
Percentage of present value of scheme liabilities 19%
2002
The movement in the deﬁcit in the year under FRS 17 would have been: £million
Deﬁcit at 1 January 2002, net of deferred tax (15.8)
Current service cost (5.4)
Contributions 6.0
Other ﬁnance income (0.1)
Actuarial loss, net of deferred tax (28.6)
Exchange rate differences (0.7)
Deﬁcit at 31 December 2002, net of deferred tax (44.6)
2002 2001
The effect on the group’s proﬁt and loss reserve if FRS 17 had been adopted early is shown below: £million £million
Reserves
Proﬁt and loss account as stated in the ﬁnancial statements at 31 December 2002 94.5 110.9
SSAP 24 prepayment (2.6) (1.8)
SSAP 24 accrual 7.7 8.1
Net pension liability (44.6) (15.8)
Proﬁt and loss account as adjusted at 31 December 2002 55.0 101.4
TT electronics plc is a member of a multi-employer scheme, the disclosures for which are included above.
52 TT electronics plc ANNUAL REPORT 2002 TT electronics plc ANNUAL REPORT 2002 53
HISTORICAL RECORD
Accounting year 2002 2001 2000 1999 1998
Turnover (£million) 520.3 657.9 746.0 612.4 619.9
Proﬁt before taxation (£million) 7.9 25.8 40.7 38.0 65.0
Ordinary dividend (£million) 15.6 15.6 15.6 16.3 16.3
Ordinary dividend per share (p) 10.05 10.05 10.05 9.79 9.79
Earnings (£million) 5.6 18.9 29.7 27.3 46.9
Average ordinary shares in issue (million) 154.8 154.8 158.4 166.4 168.9
Earnings per ordinary share before impairment provisions,
goodwill amortisation and exceptional items (p) 10.1 16.0 21.0 16.2 26.6
Basic earnings per ordinary share (p) 3.6 12.2 18.7 16.4 27.8
Shareholders’ funds (£million) 205.7 222.1 244.5 238.5 228.3
Asset value per ordinary share in issue at 31 December (p) 133 143 158 143 137
FINANCIAL CALEND AR
Annual General Meeting Interim ordinary dividend 2003 paid
14 May 2003 Late October 2003
Shares ex dividend Preliminary announcement of 2003 results
14 May 2003 Mid March 2004
Final ordinary dividend paid Annual Report 2003 posted
29 May 2003 Mid April 2004
Announcement of 2003 half year results
Mid September 2003 54 TT electronics plc ANNUAL REPORT 2002
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 14 May 2003 at 12 noon for the following purposes:
(1) To receive the Financial Statements for 2002, the Directors’ Report and the Auditors’ Report.
(2) To approve the Directors’ Remuneration Report for the year ended 31 December 2002.
(3) To declare a dividend of 6.36p per ordinary share.
(4) To re-elect S W A Comonte a Director.
(5) To re-elect R W Weaver a Director.
(6) To re-elect M S Evans a Director.
(7) 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 resolution 8 will be proposed as an ordinary resolution 
and resolutions 9 and 10 will be proposed as special resolutions.
General Allotment Authority
(8) 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 2004 save where the Directors exercise such authority pursuant to an offer or agreement made prior to that date.
Disapplication of Pre-emption Rights
(9) 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 8 above as if sub-section (1)
of Section 89 of the Act did not apply to any such allotment, provided that the power conferred by this resolution shall be limited to:
(i) the allotment 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
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) the allotment (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 2004 but shall extend to the making, before such expiry, of any offer or agreement
which would or might require equity securities to be allotted after such expiry and the Directors may allot securities 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. TT electronics plc ANNUAL REPORT 2002 55
Purchase of Own Shares
(10) 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, to make one or more market purchases (within the meaning of Section 163(3) of the Companies Act 1985) 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 2004; 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.
By Order of the Board
M G Leigh
Secretary
8 April 2003
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 48 hours before the time ﬁxed for the Annual General Meeting 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 48 hours before the time ﬁxed for the
Meeting 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 agreement 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 enclosed PRINCIPAL OPERATING SUBSIDIARIES
Electronic sector
Sensors and electronic systems
AB Automotive Electronics Limited
AB Automotive Inc, USA 
AB Electronic Limited
AB Elektronik GmbH, Germany
Electronic components
AB Mikroelektronik GmbH, Austria
BI Technologies, USA, United Kingdom, Mexico and Malaysia
International Resistive Company Inc, USA
Prestwick Circuits Limited
Welwyn Components Limited
Magnetics
MMG GB Limited
MMG India Private Limited, India
MMG North America Inc, USA
Electronic manufacturing services 
TT electronic manufacturing services Limited
Electrical sector
Power generation
Erskine Systems Limited
Genergy plc
Houchin Aerospace Limited
Ottomotores SA de CV, Mexico
Power and data transmission
AB Connectors Limited
AEI Cables Limited
AEI Compounds Limited
Wire Systems Technology (PTY) Limited, South Africa
W T Henley Limited
56 TT electronics plc ANNUAL REPORT 2002
AD VISORS AND REGISTERED OFFICE
Bankers
HSBC Bank plc
National Westminster Bank plc
Barclays Bank PLC
Auditors
Grant Thornton
Melton Street
Euston Square
London NW1 2EP
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex BN99 6DA
Registered ofﬁce
TT electronics plc
Clive House
12-18 Queens Road
Weybridge
Surrey KT13 9XB
Reg. No. 87249
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. CONTENTS
Highlights and ﬁnancial information 1
Chairman’s statement 2
Group overview 4
Chief Executive’s review 6
Financial review 14
Directors and Company Secretary 16
Directors’ report 17
Directors’ remuneration report 21
Report of the independent auditors 25
Consolidated proﬁt and loss account 26
Consolidated balance sheet 27
Consolidated cash ﬂow statement 28
Statement of total recognised gains and losses 29
Reconciliation of movements in shareholders’ funds 29
Company balance sheet 30
Accounting policies 31
Notes to the ﬁnancial statements 33
Historical record 53
Financial calendar 53
Notice of meeting 54
Principal operating subsidiaries 56
Advisors and registered ofﬁce 56
Designed and produced by Linnett Associates. Printed by CTD Capita Limited. ANNU AL REPOR T 2002
TT electr onics plc
TT electr onics plc  ANNU AL REPOR T 2002
TT electronics plc
Clive House
12-18 Queens Road
Weybridge
Surrey KT13 9XB
Tel: +44 (0) 1932 841310
Fax: +44 (0) 1932 836450
www.ttelectronics.com
TOMORROW’S TECHNOLOGY