Annual Report & Accounts 2006
Volex Group plc Contents
01 Financial Highlights
02 Total Solutions in Cable Assemblies
04 Products & Global Footprint
06 Chairman’s Statement
08 Chief Executive’s Review
13 Finance Director’s Review
16 Board of Directors
17 Consolidated and Company Income Statements
17 Consolidated and Company Statements of Recognised Income and Expense
18 Consolidated and Company Balance Sheets
19 Consolidated and Company Cash Flow Statements
20 Notes to the Financial Statements
54 Independent Auditors’ Report to the Members of Volex Group plc
56 Corporate Governance Report
60 Social, Ethical and Environmental Report
62 Directors’ Remuneration Report
72 Directors’ Report
76 Five Year Summary
77 Shareholder Information
77 Registered Office and Advisors Financial Highlights
Volex Group plc Annual Report & Accounts 2006 01
2006 2005
£m £m
Revenue 250.4 244.6
Operating profit 
(1) (2)
5.3 1.8
Major restructuring programme charge (8.6) (6.8)
Profit/(loss) on ordinary activities before tax 
(1)
1.9 (2.4)
Loss on ordinary activities before tax (6.7) (9.2)
Tax charge 2.4 4.4
Adjusted loss per share 
(1)
(1.0)p (23.4)p
Basic loss per share (18.5)p (46.2)p
Cash generated by operations:
before cost of major restructuring programme 13.2 1.8
after cost of major restructuring programme 11.7 1.6
(1) Before major restructuring programme charge £8.6m (2005: £6.8m)
(2) Operating loss after £8.6m major restructuring charge (2005: £6.8m) was £3.3m (2005: loss £5.0m)
Revenue Operating profit 
(1) (2)
Revenue by product
PowerCords 
Wiring Harness 
7
0 Total Solutions in Cable Assemblies
02
Volex provides global support to leading producers of
computers, telecommunications systems and networking
devices. In addition, the Group produces cable assemblies
and harnesses for consumer products, medical and industrial
applications and for the transportation, defence and
aerospace industries.
Consumer Products
As the world’s leading manufacturer of power cords Volex
supplies an extensive range of international standard and
custom designed products suitable for a variety of markets
including PC’s, notebooks, printers, white/brown goods,
floorcare, gardening, power tools and small appliances. Volex
also supports the full range of cable assemblies required by
the digital and analogue home entertainment sector.
Data and Telecommunications
Volex has become a leader in the production of cable
assemblies used in advanced routing, switching, fixed line
applications and wireless communication systems. Increasing
demand for high-speed Internet access, the continued growth
in wireless communication and the roll-out of “Triple Play”
infrastructures (bundling voice, video and Internet) are
providing growth potential for the Group in the telecom sector
and demand for band width and data services, so creating
additional opportunities in the server and storage markets.
Industrial and Medical
Volex produces a wide variety of custom cable assemblies
and power cords for a range of medical equipment, including
cardiac monitoring equipment, ultrasound equipment, MR
equipment, X-ray equipment and nuclear medicine
equipment. Cable assemblies and harnesses are produced for
industrial applications, such as automation equipment, test
and measurement equipment and vending machines.
Vehicle and Aerospace
In our specialist Wiring Harness division we produce
sophisticated, multi-drop harnesses used in commercial and
off-highway vehicles, aerospace and industrial engines,
avionics and flight management systems and defence
applications, such as weapons systems and armoured
fighting vehicles. 
Leveraging our core competency of interconnect technology
cable assemblies and power cords, Volex provides a Total
Solution to its customers centred around a broad product
portfolio, superior quality and wide variety of assembly and
supply services.
Total Product
Volex offers a complete product portfolio, ranging from
commodity style cables such as power cords, small
harnesses and industry standard cable assemblies, to high-
end custom cable assemblies, such as radio frequency, high
speed and fibre optic cables.
Volex is a leading global producer of electronic and fibre optic
cable assemblies and electrical power cords. The Group
currently operates from 18 manufacturing facilities with 21 sales
and support offices located strategically in Asia, Europe and
North and South America. Volex Group plc Annual Report & Accounts 2006 03
Our design and development capabilities enable us to design
a product from the early concept stage, improve product
performance, provide alternative material sourcing and
improve the manufacturing efficiency of the product. 
Our global footprint allows the transfer of products quickly
from one location to another, enabling us to develop our
products close to our customers and produce them in lower
cost regions to offer a competitive product solution in every
region of the world.
With our Total Product Solution Volex can service a wide
range of customer product supply requirements and offers the
customer an opportunity to utilise Volex as its consolidated
supplier of products across the cable assembly spectrum.
Total Quality
Volex is recognised industry wide for its quality products and
we continue to invest in training and equipment to maintain
our leadership in this area. 
Our commitment to quality is shown in our extensive range of
industry-specific product safety approvals, our customer
quality awards and our investment in various ISO
certifications, ranging from ISO 9001:2000 to ISO 14001,
OHSAS 18001 and other industry specific certifications such
as TL 9000 and QS 9000.
In the electronics industry the production of environmentally
friendly products has become increasingly important with the
forthcoming implementation of the Restriction of Hazardous
Substances (RoHS) directive on 1July 2006 and the future
implementation of the Waste Electrical and Electronic
Equipment (WEEE) directive.  Both directives are aimed at
reducing the hazardous materials content in electronic
products as well as increasing the recycling of these products.
In preparation for complying with RoHS, Volex initiated a
management project working with its customers and its
extensive supply base to ensure that as a minimum it
conformed with the legislative requirements.  In addition, the
design of our products is aimed at reducing their
environmental impact in terms of production, product usage
and disposal which will assist producers in complying with the
WEEE directive either prior to or upon implementation. 
Minimising the environmental impact from our products has
been an approach adopted by Volex for a number of years.
For instance, since 2003 Volex has used lead-free injection
moulding compound for its power cords and currently
supplies a range of lead-free cord sets to its customers.
Total Service
Volex operates in rapidly changing and highly competitive
markets characterised by increased consolidation and
outsourcing from OEM’s (Original Equipment Manufacturers)
to EMS (Electronics Manufacturing Service) providers,
dramatically reduced supply bases, increased price erosion
and a shift from regional to global supply sourcing. 
In this dynamic environment value-add services play an
important role in winning and maintaining customer
programmes. Our customers have become truly global
players and expect Volex to work with them on a global level.
Our Global Accounts organisation meets that requirement and
offers customer relationship management on a global level,
managing global project activities, co-ordinating local
programmes and offering a single point of contact for our
customers.
With the continuing globalisation of our market place and the
importance of manufacturing in lower cost areas, supply chain
management and logistical services are a vital part of our Total
Services offering. Our customers and product diversity drive a
wide and deep supply chain that enable us to aggregate an
individual customer’s demand and maintain material availability
to support rapid swings in demand. Volex can provide a range
of logistical services that increase the flexibility for our
customers, enabling shipment directly to local hubs, third
parties or even to the point of installation. Our global position
also enables us to benefit from global supply contracts and
provides us with opportunities to use locally sourced
materials, which reduces lead times and cost.
With our global presence and our vast range of quality
products and services, Volex is well positioned to service our
targeted markets and to be a preferred supplier to our
customers, offering a Total Solution for their cable assembly
demand. Products & Global Footprint
04
Volex manufactures a wide range of cable assembly solutions
that can be categorised into three broad product groupings –
PowerCords, Infocom Products and Wiring Harnesses.  All
our manufacturing sites have ISO 9000 certification and the
majority have environmental management systems certified to
ISO 14001.
The Volex Group is headquartered in Warrington, United
Kingdom.  The Group is structured on a divisional basis
representing each global product grouping
PowerCords 
Volex produces and supplies a wide range of power cords
and cable assemblies finished to OEM specification. Our
power cords are used in computer products, medical
products, electrical and electronic consumer products and
industrial tools and equipment. 
The PowerCords operation has its headquarters in Singapore
with manufacturing and sales teams in China, Indonesia,
India, Vietnam and Mexico.  These are further supported by
sales offices in USA, UK, Turkey, Brazil, Malaysia, Thailand,
Taiwan, Japan, Korea and the Philippines.
Infocom Products
These products carry signals within and/or between
equipment for applications such as communications,
networking and computing products and medical/industrial
equipment. The majority of these cable assemblies are
custom designed. 
This operation is co-ordinated through offices in Ireland and
US with manufacturing and sales office support in China,
Mexico, Brazil, India, Canada, Croatia, Poland and Sweden.
Industry Standard
Volex offers an extensive range of “industry standard” cable
assemblies for the communications and computer market, by
which is meant products that operate in accordance with
standardised industry parameters. The cable assembly is also
customised in its design, for example by reference to length,
angle of connector, moulding and colour. Volex cable
assemblies are used in, for example, networking products,
servers and storage systems, internal switching and industrial
products. 
High Speed
Volex offers a range of standard and custom high speed cable
assemblies, including Fibre Channel and InfiniBand, to a
number of OEM customers. Cable assemblies are engineered
to meet the stringent signal integrity and mechanical
requirements of industry standard specifications and are
increasingly used in system area networks, parallel processing
applications and server storage systems.
Radio Frequency
Volex offers a range of radio frequency cable assemblies
including flexible, conformable, semi-rigid, corrugated and
phase matched assemblies. These products are used within
switching devices, industrial automation, telecoms networks,
testing and measurement, medical and antenna products.
Fibre Optic
Volex offers custom designed fibre optic cable assemblies.
These products are used within Sonet/SDH devices,
networking devices, switching devices and base stations.
Wiring Harness
These hybrid products have both power and signal
transmission capabilities within the cable harness.
Multifunction cable harnesses include specialist wiring
harnesses, which Volex designs, manufactures and supplies
for use in commercial and off-road vehicles and aerospace
and defence applications, and multifunction cable assemblies
for a variety of other applications including medical and
industrial markets.
The Wiring Harness operation has its headquarters in the UK
with manufacturing in the UK, Estonia and China.
Volex manufactures a wide range of cable assembly
solutions that can be categorised into three broad
product groupings – PowerCords, Infocom and Wiring
Harness. Volex Group plc Annual Report & Accounts 2006 05
PowerCords 
Infocom Products Industry Standard High Speed
Radio Frequency Fibre Optic
Wiring Harness Chairman’s Statement
06
The last year has seen the later stages of the restructuring
programme that the Company embarked on four years ago.
In June 2005 we raised £17.6m net of costs by way of an
equity placing with existing and new shareholders in order to
provide the financial and strategic stability to allow us to
execute a long-term strategy that will result in sustainable
returns over the forthcoming years.  We have made significant
progress in achieving the key elements of the strategic plan
set out in the Circular to shareholders on 6 June 2005.
Specifically we have:
• Realigned the manufacturing footprint and moved to
lower cost locations. By the end of FY2006 we have
closed seven facilities and downsized two more and plan
to close three further facilities in FY2007 and downsize
one more. Over 95% of our direct labour force is now
located in the low cost areas of Asia, Mexico and Eastern
Europe.
• Restructured the organisation into three global product
groups to align with the market and better serve our
customers.
• Strengthened the management team through the addition
of key staff in engineering, sales, sourcing and operations.
The new team members join us from leading companies
both inside and outside the industry.  
• Enhanced our penetration of high growth and emerging
markets such as medical, high speed assemblies and
WiMax (Worldwide Interoperability for Microwave Access).
• Focused on cost reduction and cash generation to
improve profitability and balance sheet.  The Group
generated cash flows from operations of £11.7m,
compared with £1.6m in the previous year.
• Seen the operating profit before the £8.6m major
restructuring programme charge triple to £5.3m from
£1.8m.  We managed to increase our operating margin
despite a significant increase in commodity prices and
pricing pressure from our customers.  We saw benefits of
the cost saving and restructuring programmes during the
second half of the year when we generated £3.9m
operating profit against £1.4m in the first half of FY2006.
• Reduced net borrowings from £30.5m to £13.3m. 
Results
The revenues for the financial year ended 2 April 2006 were
up 2.4% at £250.4m and operating profit (before the cost of
the major restructuring programme) was £5.3m  (2005:
£1.8m).  Net borrowings closed at £13.3m, down from
£30.5m a year ago.
The Group took a gross £8.9m charge in respect of the
accelerated restructuring programme but a £0.3m credit in
respect of higher fire insurance proceeds reduced the charge
to £8.6m.  The net loss for the year after this charge was
£3.3m (2005: loss £5.0m).
The Board is not proposing a dividend in respect of the 
year. 
Board and management changes
As the Group is now transitioning from a restructuring phase
to one of growth, changes have been made to the Board and
management of the Company.  Heejae Chae was appointed
as the Chief Executive Officer of the Group.  Heejae has
already served as the Chief Operations Officer and has
successfully guided the Group through the restructuring in the
past year, particularly in North America.  Heejae was
previously the worldwide General Manager of the Radio
Frequency Group of Amphenol Corporation.  Martin May
resigned as Chairman after providing leadership during the
restructuring phase.  Additionally, Derek Walter, 58, has
tendered his resignation as Finance Director but will remain
with the Group until a new Finance Director has been
appointed and an orderly handover period has been
completed.  This new management team, together with a
significant number of other new team members, will meet the
requirements of the next stage of the Group’s development.
Dimitri Goulandris has also been appointed a non-executive
Director of the Board.  Dimitri is a partner of Cycladic Capital
LLP , which is a major shareholder of Volex.
“The stability provided by the injection of funds by existing
and new shareholders will allow the Group to maximise the
available market potential and build a Company capable of
sustainable returns over the forthcoming years.”
Richard Arkle Chairman
“We have now passed the inflexion point of
restructuring into a path of growth and profitability
but we nevertheless recognise the significant
challenges ahead of us.” Volex Group plc Annual Report & Accounts 2006 07
Future
The Group is well positioned to take advantage of the
dynamics of the global cable assembly and power cord
marketplaces.  Based on independent research, Volex is the
third largest player in the cable assembly market (which
includes power cords) and, using internal research material,
the largest player in the power cord assembly market.
Despite our leading market positions, our market share is
single digit providing us the opportunity for significant growth.
We are uniquely positioned to grow by leveraging our global
footprint, broad technology capabilities and strategic and
preferred relationships with customers that are leaders in the
markets they serve.
We have now passed the inflexion point of restructuring into a
path of growth and profitability but we nevertheless recognise
the significant challenges ahead of us.  The industry dynamics
of customers reducing their vendor base, rising commodity
prices and pricing pressure are issues we face daily.
Predicting the future in today’s uncertain environment is
difficult but we are confident that following the major changes
that have been achieved over the last twelve months, we are
well placed to make further progress towards bottom line
profitability and enhancing shareholder value.
In closing, I would like to thank everyone in the organisation.
Our people span the world and many cultures and the
business has over one hundred years of history.  We would
not have achieved our leadership position if not for the
dedication, hard work and passion of our people.  As we
move forward to an exciting future, we recognise that respect,
teamwork and collaboration with all our stakeholders must be
the cornerstones that will drive the Group forward on a global
footing and produce the anticipated returns for our
shareholders.  We will be asking the shareholders to support
a new long term incentive plan for the senior team and details
of the plan will be presented for approval at the Annual
General Meeting.
Richard Arkle
Chairman
13 June 2006 Chief Executive’s Review
08
During FY2006, Volex Group went through a significant
transformation financially, organisationally and culturally.  We
emerged from the year poised to build on our leadership
position in the PowerCord, Infocom and Wiring Harness
markets we serve.
We have:
• Restructured the organisation into three global product
groups - PowerCord, Infocom and Wiring Harness - to
align with the market and better serve the customers.
We believe that the global nature of our customers and
supply chain require that we operate as a global
organisation.  Each product group is responsible for all
aspects of the business on a global basis.  We can
respond and service consistently the customers’ needs
anywhere in the world.  We believe that the global
structure allows us to leverage the knowledge,
technology and scale to achieve greater efficiency and
lower cost to better serve all our customers across the
world.  
• Accelerated the global restructuring programme.  By
the end of FY2006 we have closed seven
manufacturing facilities and downsized two more and
we plan to close three further facilities and downsize
one more in FY2007.  As a result, we significantly
reduced our costs enabling us to enter FY2007 with a
much lower cost base and over 95% of our direct
labour is now located in the low cost areas of Asia,
Mexico and Eastern Europe.
• Streamlined central functions and corporate structure.
In order to empower each global product group, the
global purchasing and IT functions were merged into
each product group.  Additionally, we have taken action
to benefit from lower costs at headquarters in the
coming year.  We believe that the responsibility for
business decisions should rest with the product
groups, not the corporate office.  The product groups
are closer to the customers and can react much more
quickly to the changing marketplace.  
• Transformed the organisation’s cultural mindset to
Global from Regional.  With the reorganisation into
global product groups, our perspective and mindset
have become global.  We are breaking down the
barriers to better share knowledge and competencies
across the organisation.  This change will allow us to
better manage our knowledge and technologies to
ensure that we provide the best service consistently to
all of our customers throughout the world.
• Developed a performance driven organisation.  We
enter FY2007 with a focus on results and
accountability.  Everyone in the organisation
understands our strategy and goal.  We recognise that
we must benchmark ourselves against the competition
and drive the organisation to outperform, measuring
ourselves against quantifiable metrics and performance
goals.  
• Reinforced the organisation with new team members.
We believe that people are our most important asset
and we continuously look to invest in developing new
talent at all levels.  During the past year, we added key
staff in engineering, sales, sourcing and operations.
These individuals bring with them new perspectives
that will fuel our growth. 
• Placed emphasis on a common value system.  We
recognise that our organisation comprises people from
many countries and cultures.  Each one of us brings
unique skills and perspectives.  It is important that we
operate under common values yet recognise our
diversity.  We believe that the following values are
universal at Volex: leadership, respect and integrity.  We
must promote them through communication and
teamwork that will lead to knowledge sharing across
our diverse people. 
“The Group has benefited from the general
improvement in demand across most of the
markets that we service but has also made
significant strides in developing new business
opportunities in targeted markets.”
Heejae Chae Group Chief Executive
“Volex Group went through a significant
transformation financially, organisationally and
culturally. We emerged from the year poised to
build on our leadership position....” Volex Group plc Annual Report & Accounts 2006 09
Markets
The cable assembly market, which encompasses
PowerCord, Infocom and Wiring Harness, is estimated at
approximately US$20 billion in annual sales.  Volex’s range
of technologies and products allow us to participate in a
broad variety of industries including consumer products,
data and telecommunications, industrial, medical,
automotive and military.
The consumer product market continues to remain strong
as a result of healthy consumer spending across the world.
New applications and development further drive the growth
through the introduction of “must have” products.  Volex
has experienced solid gains in the consumer products
sector especially for flat-screen televisions, gaming and
music consoles.  We anticipate future growth through
continued new product introductions; however, as with
other competitive markets, we expect significant pricing
pressure going forward.  Our participation in the sector is
primarily through our PowerCord product line, which carries
significant copper content.  This commodity has recently
experienced large price increases which are continuing
through the early half of FY2007, further stressing the
competitive nature of this business.
The Group’s second largest segment comprises data and
telecommunications products.  We provide an array of
products in telecom infrastructure, computers and Internet
equipment (servers, storage systems and datacom
equipment) and have preferred supplier status with
customers that are leaders in the markets they serve.  We
expect the telecom market to continue to grow, in particular
the wireless sector whose indicators remain strong; wireless
subscriber growth continues with new and improved
services and lower tariffs; 3G rollouts continue to gain
traction with launches in many geographies; and the
convergence of data and voice is a driver for future growth.
As the system requirements increase and product cycles
shorten, we continue to see growth in the sector; however,
with competition from existing players and new entrants
from low cost regions, pricing pressure remains significant.
The medical equipment segment is expected to continue to
grow, driven by the demographics of an ever growing and
ageing population.  The cable assembly supply base for
medical equipment is highly fragmented but evolving:
equipment providers are aggressively managing their supply
chains as they look to generate efficiency and reduce cost.
Volex is a major supplier in the sector and now has
established a leadership position with leading medical
equipment providers through leveraging our technology,
product offerings, superior service and global footprint. 
In the automotive and military markets we supply niche
wiring harness systems for off-highway equipment,
specialist vehicles and aerospace harness systems.  Our
sectors have remained steady, unlike the broader
automotive markets, and experienced positive growth
trends as a result of the increasing complexity of harnesses
for specialty vehicles as well as the general growth in
defence spending.
Product performance
PowerCords:
Revenue increased 6.7% in sterling terms.  The growth in
net sales was a result of volume increases and higher
average selling prices due to a shift in the mix towards
higher end products as well as price increases driven by
escalating copper prices.  New sales in consumer game
consoles and increased sales to our Japanese OEM
customers were the leading contributors to organic growth.
Although the competitive pricing environment dampened
the net sales increase, we continue to compete successfully
on the basis of performance, quality, reliability, brand
reputation, service and support.
Competitive pricing pressures and escalating copper costs
contributed to an increase in cost of sales.  Copper prices
rose from US$3,300/tonne to US$5,400/tonne, compared
with a reasonably stable average of approximately
US$3,000/tonne in FY2005.  The negative impact on the
cost of sales was partially offset by aggressive supply chain
management and improvements in labour and operating
costs. 10
During FY2006, we reorganised the PowerCord division into
a single global product group, allowing us to rationalise our
marketing, manufacturing and technology strategy.  We
have closed three facilities and downsized one and intend
to close a further site in FY2007, moving the business to
our expanded China operations.  This expanded low-cost
capacity will provide labour savings, fixed cost consolidation
and supply chain leverage.  Additionally, we have invested
in the engineering resources across all regions to enhance
our value to customers on a global basis.
Infocom:
The revenue from the Infocom business declined 4.8% as a
result of our rationalising low margin business, increased
pricing pressure and a one-time award of a contract for
telecom infrastructure deployment in India completed in
FY2005.  However, revenue and profitability improvements
were realised in key market sectors including medical and
telecommunications throughout the year.  
The Infocom division went through significant changes in
FY2006 designed to align the manufacturing footprint with
our customers’ requirements and cost targets.  As a result,
we consolidated our manufacturing locations into three
principal manufacturing centres: China, Eastern Europe and
Mexico, entering FY2007 with almost 100% of our direct
labour based in low cost regions.  Additionally, we
undertook significant action to reduce overhead cost by
reorganising the general and administrative structure.  The
sales organisation was realigned to provide global coverage
of our key accounts and focus on new account
development, enabling us to identify opportunities to
leverage our technologies across application specific
opportunities.  Capitalising on our preferred supplier
position at market leading customers, we look to leverage
our technologies and products to gain new customers in
similar applications.  Going forward, technologies and
competencies will be shared and leveraged across the
entire Group to best supply our customers with a broad
offering of technology and capabilities.  
The Infocom market continues to be highly competitive
through the entrance of low cost suppliers, the need for
aggressive year on year cost reductions and the desire of
customers to consolidate their supply bases.  Additionally,
we face rising commodity prices with limited visibility of
customer demand.  With the need to improve our market
position and profitability, the actions we took in FY2006 and
those we will continue to take in FY2007 will create
additional competitive advantage and allow us to achieve
our goals.  We have begun to see the benefits of these
actions during the second half of the year through improved
profits and cash flow for the Infocom product group.
Wiring Harness:
The revenue from the Wiring Harness business increased by
11.8%, despite price reductions and was a result of the
positioning in the growing markets of construction
equipment and military/aerospace.  The automotive market
remains highly competitive with the entrance of new low
cost suppliers, as well as aggressive year on year cost
reductions.  Whilst revenue increased, profitability came
under severe pressure being impacted by an unexpected
administration proceeding at one of our larger customers
and rising commodity prices, as well as significant
operational challenges.
The Wiring Harness business in FY2006 continued its drive
to improve its operational performance and cost base.  We
merged the two separate Wiring Harness businesses into
one organisation and announced the closure of one of our
manufacturing sites in the UK.  Throughout the year we
transferred projects to low cost manufacturing locations.
The sales and engineering organisations were reorganised
and strengthened to continue the business development
activities already showing success in FY2006.  The drive in
FY2007 is to continue the downsizing in high labour cost
areas, whilst improving our operational performance, focus
on business development and build on our very strong
reputation of quality and customer service.
Chief Executive’s Review (continued) The future
As we look to the future, there is much uncertainty
regarding rising commodity prices, customer pricing
pressures, low cost competition and limited demand
visibility.  Challenging as these factors may be, this
environment has been the reality of the industry for the past
five years.  The competitive landscape is littered with those
unable to adapt to this new environment.  Nevertheless,
market leaders have emerged stronger and better and we
recognise our challenge is to outperform them.  Volex has
struggled for the last five years and has now emerged to
compete aggressively in this challenging marketplace.  We
believe that our transformation – financially, organisationally
and culturally – will bring us to the forefront of the
competitive landscape.  We have aligned our manufacturing
footprint and cost basis to support the most demanding
customers; we have the technology to satisfy cutting edge
customers: and we have the supply chain and logistic
competencies to support our global customers.  But most
importantly, we have the people who are able to adapt to
these constant changes and continue to provide the best
service to our customers.
Heejae Chae
Group Chief Executive
13 June 2006
Volex Group plc Annual Report & Accounts 2006 11 12
Financial Highlights 2006
Global sales up 2.4% to £250.4m
Operating profit 
(1)
£5.3m
Major restructuring programme charge £(8.6)m
Profit on ordinary activities before tax 
(1)
£1.9m
Loss on ordinary activities before tax £(6.7)m
(1) The operating loss after the £8.6m major restructuring programme charge was £3.3m.
Revenue by market sector Revenue by source
products
and Finance Director’s Review
Volex Group plc Annual Report & Accounts 2006 13
International Financial Reporting Standards (‘IFRS’) and
changes to previous year’s figures
FY2006 has been the first year in which Volex Group plc has
produced its financial statements in accordance with IFRS and
the comparative figures for the previous year have been
restated accordingly.  Details of Volex’s IFRS accounting policies
have already been published in the IFRS transition document
produced with the Interim Results for the 26 weeks to 2
October 2005 and published on the Company’s website, and
will be included in the Annual Report and Accounts for FY2006.
The major restatement in the Accounts has been the inclusion
in the balance sheet of the pension fund deficit of two defined
benefit schemes, which were closed on 31 March 2003 and
replaced by defined contribution arrangements.  At 2 April 2006
the combined deficits on the two defined benefit schemes
amounted to £3.5m (2005: £4.1m).
Overview
The major financial event in FY2006 has been the raising in
June 2005 of new equity (£19.0m before expenses), which has
funded the implementation of the strategy set out in the 
6 June 2005 Circular, most notably to date the realignment of
the manufacturing footprint of the Group. 
Trading for the year
Turnover for the 52 weeks ended 2 April 2006 at £250.4m
increased by £5.8m, 2.4%, over FY2005, including a £7.3m
positive currency effect.  Thus Group sales in real terms
decreased in the year, due to several factors including the
pruning of approximately US$6m of revenue, which derived
from low margin customer accounts in North America.
Operating profit before the £8.6m major restructuring
programme charge, was £5.3m, giving a return on sales of
2.1%, compared with £1.8m operating profit and a return on
sales of 0.7% in FY2005.
Year on year the average exchange rate for the US dollar
appreciated by 2.2% against sterling and the Singapore dollar
by 3.7%, with other less significant currencies including the
euro also appreciating against sterling. 
Sales by destination in Asia and South America increased by
8.1% to £77.0m, in North America by 3.2% to £74.0m and in
Europe, excluding the UK, by 2.7% to £64.8m.  Sales in the UK
were down by 10.3% to £34.6m.  
Sales of PowerCord products grew by £7.4m, 6.7%, to
£118.3m but Infocom product sales, reflecting the customer
base rationalisation in North America and some pricing
pressures particularly in Europe, fell by £5.0m, 4.8%, to
£99.4m.  Wiring Harness sales grew by £3.4m, 11.8%, to
£32.7m.  Operating profits for each division were impacted by
the restructuring programme with most of the restructuring
charge in FY2006 affecting the Infocom division, compared with
FY2005 where most of the charge related to the PowerCord
division.
A comparison of Group sales by source or manufacturing
location, based on net sales showed a year on year growth in
Asia of £8.8m, 9.7%, to £98.8m, accounting for 39.4% of the
Group’s output (2005: 36.8%).  North America’s net output
increased by £0.8m, 1.1%, in sterling terms to £75.6m over the
previous year and represented 30.2% of Group’s total output
(2005: 30.6%).  Sales sourced from Europe (excluding the UK)
fell by £7.6m, 14.8%, to £43.3m and accounted for 17.3% of
the Group’s net output (2005: 20.8%).  UK sourced sales
increased by £3.8m, 13.0%, to £32.7m, 13.1% of the Group’s
net output (2005: 11.8%).  
Gross profit increased by £3.6m to £39.1m and the gross
margin to 15.6% compared with 14.5% in the previous year.
The impact of raw material prices, in particular copper,
continued to affect the Group but the restructuring programme,
some sales price increases and the ongoing cost reduction
programmes including procurement and value added
engineering programmes contributed to the increase in margin. 
The Group recorded an operating profit (before the £8.6m
major restructuring programme charge) for the year of £5.3m
(2005: £1.8m).  The translation of foreign currency operating
profits into sterling had a positive impact of £0.6m.  
Major restructuring programme
As indicated in the Chairman’s statement in the Interim Report,
we have accelerated the restructuring programme in the latter
part of the year.  The charge taken at the half year of £1.8m
was in respect of the downsizing of the Kanata site and some
“As a result of the equity raising and the
new three year banking facilities, the
Group’s financial position has been very
significantly strengthened and enhanced.”
Derek Walter Group Finance Director
“The major financial event in FY2006 has
been the raising of new equity which has
funded the implementation of the strategy,
most notably to date the realignment of the
manufacturing footprint of the Group.” Finance Director’s Review (continued)
14
global management reduction.  A further charge of £6.8m was
taken in the second half of the year in respect of the closures
either already implemented by the year end (Fremont,
Aguascalientes and Thailand), or already announced and to be
implemented in FY2007 (Clinton and Stoke-on-Trent, the
consolidation of business from Butts Mill, Leigh, onto an
adjacent site and the downsizing of the Hermosillo factory).
The £8.6m charge for the year comprised £3.9m in respect of
severance and relocation costs spent or to be spent, £3.1m in
respect of property lease provisions and £1.9m in respect of
asset write-offs and other non-cash items less a £0.3m credit in
respect of the settlement of the insurance claim in respect of
the September 2004 fire at Tijuana.
The operating loss after debiting the £8.6m major restructuring
programme charge (2005: £6.8m) was a loss of £3.3m (2005:
loss £5.0m).  
Interest
Finance charges were £3.5m compared with £4.3m in the
previous year, reflecting the lower debt levels following the
equity raising. Higher Libor rates and stronger exchange rates
added £0.2m to the charge in FY2006.  Refinancing and
amortisation of debt interest costs were £0.7m compared with
£0.9m and the interest charge of £2.8m included interest on
the pension deficit and interest on the restructuring provisions,
which combined totalled £0.3m.  
Taxation
Despite an overall Group loss before tax, there was a tax
charge of £2.4m (2005: £4.4m).  This charge related to taxes
paid in countries where taxable profits were made and also
included a charge of £0.6m in respect of prior years’ taxes,
mainly comprising withholding tax in Brazil. 
Earnings and earnings per share (“EPS”)
The basic loss after tax was £9.1m (2005: loss £13.7m) and
the basic loss per share for FY2006 of 18.5p compares with a
loss of 46.2p in the prior year.  The adjusted loss (arrived at
after adding back the charge for the major restructuring
programme of £8.6m) was a loss of £0.5m and in EPS terms
shows an improvement from a loss of 23.4p in FY2005 to a
loss of 1.0p per share.  The earnings figures are distorted by
the higher than normal tax charge, as referred to above, and
adding back £0.6m in respect of the prior years’ tax charge,
the adjusted earnings would have been positive in FY2006. 
Excluding the major restructuring programme Volex made pre-
tax profits of £2.2m in the second half of the year and 2.3p
earnings per share, compared with a £0.2m loss in the first half
of the year and 3.3p loss per share.   
Net assets
Net assets increased, as a result of the equity raising, from
£15.1m to £26.1m at 2 April 2006.  A share premium
cancellation exercise was approved by the High Court in
October 2005 whereby the share premium account was
applied to reduce the deficit on distributable reserves.
Other significant balance sheet changes
Apart from the increase in equity and reduction in debt levels,
which together with the funds flow is discussed below, the
other significant change in the balance sheet in the year
requiring explanation was the increase in the level of provisions.
The long-term provisions have increased from £3.0m to £5.0m
and the short-term provisions have increased from £0.6m to
£4.0m.
Onerous lease provisions were set up in the previous year in
respect of two sites. As a result of the restructuring programme,
onerous lease provisions have been established in FY2006 for a
further four sites.  The short-term provisions of £4.0m relate to
the severance and other relocation costs that are expected to
be paid in the current fiscal year as well as the current year’s
lease payments in respect of the sites where onerous lease
provisions have been accrued. 
Funds flow and borrowings
Cash generated by operations was £11.7m, net of £1.5m
restructuring payments, compared with £1.6m in the previous
year.  The increased inflow arose from improvements in working
capital of £7.4m - a £4.6m inflow in FY2006 compared with a
£2.8m outflow in the previous year - as well as from improved
profits.  Net interest payments fell to £2.5m against £3.8m in
the previous year but taxation payments at £4.4m were £2.2m
higher mainly due to £1.9m spent on prior year tax issues
arising in Brazil and Hong Kong.  Capital expenditure on fixed
assets was £2.5m (including £0.1m of finance leases),
compared with £2.2m in FY2005.  New equity raised £17.6m
net of expenses and with the strengthening of the currencies
there was an adverse foreign exchange impact of £2.3m in the
year on the net debt.  Volex Group plc Annual Report & Accounts 2006 15
As a result of the above movements, net debt fell by £17.2m
from £30.5m at the start of the year to £13.3m, resulting in a
year end gearing level of net borrowings to shareholders’ funds
of 51% (2005: 202%).  The net debt at 2 April 2006 included
£2.1m (2005: £nil) of unamortised financing costs.
Banking facilities
In conjunction with the equity raising, the Group entered into a
new three year banking facilities agreement on 30 June 2005
with its principal bankers.  The total costs incurred in FY2006 in
the renegotiation of the Group’s facilities amounted to £2.5m
and are being amortised over the life of the facilities within the
finance costs.
Treasury
The Group has a central treasury function, which monitors and
updates treasury controls throughout the Group in line with
Board policies. Subject to these controls, day-to-day foreign
exchange transactions are dealt with at the operating unit level
with the Group’s foreign exchange policy being generally to
hedge material transaction exposures. 
The Group regularly reviews its asset risk management strategy
and through internal financial controls and the use of
appropriate risk limitation instruments, principally insurance
policies, considers it has adequate financial protection against
potentially significant operating risks.
The Group holds or issues financial instruments for three main
purposes: to finance its operations; to manage the interest rate
and currency risks arising from its operations and from its
sources of finance; and for trading purposes. In addition,
various financial exposures – for example, trade receivables,
trade payables, accruals and prepayments – arise directly from
the Group’s operations.
The Group finances its operations by a mixture of retained
profits and bank borrowings. During the year the Group has
entered into new facilities which continue to allow the Group to
borrow in a range of currencies. 
The main risks arising from the Group’s financial instruments are
interest rate risk, liquidity risk and foreign currency risk.  The
Board reviews and agrees policies for managing each of these
risks and they are summarised below. These policies have
remained unchanged during the year.
Interest rate risk
The Group’s policy is to borrow in currencies at both fixed and
floating rates of interest so as to generate the desired interest
profile and to manage the Group’s exposure to interest rate
fluctuations. The Group’s policy is to keep its medium term
borrowings at rates of interest fixed for up to 6 month periods.
Liquidity risk
The Group’s objective is to maintain a balance between
continuity of funding and flexibility through the use of
borrowings with a range of maturities. The Group’s new three-
year revolving bank facilities, which include an overdraft and
revolving facilities, provide this flexibility.
Currency risk
Although the Group is headquartered in the UK, it has a
significant investment in operations in China, Singapore, USA,
Mexico, Canada, Ireland, Brazil, Croatia and Poland.  As a
result, the Group’s sterling balance sheet can be significantly
affected by movements in exchange rates between sterling and
the currencies of these countries.
The Group seeks to mitigate the effect of these structural
currency exposures by borrowing in the same currencies as the
operating (or “functional”) currencies of its main operating units.
In managing its structural currency exposures, the Group’s
objectives are to maintain a low cost of borrowings whilst
hedging against currency movements.
The Group also has transactional currency exposures.  Such
exposures arise from sales or purchases by an operating unit in
currencies other than the unit’s functional currency. The Group’s
policy is that all its operating units use forward currency
contracts to eliminate the currency exposure on any significant
receivables and payables balances.  
Derek Walter
Group Finance Director
13 June 2006 Board of Directors
16
As at 13 June 2006
Richard Arkle
Chairman
Richard Arkle, 57, was appointed Chairman of the Board on 6 May
2006. Richard joined the Board as a non-executive Director on 20 April
2005 and he is currently Chairman of the Audit and Nominations
Committees and is also a member of the Remuneration Committee. He
was a partner at KPMG LLP (and predecessor practices) from 1 October
1982 until he retired on 30 September 2004, where, as a senior partner,
he played a key role in developing the Transaction Services practice into
a UK market leadership position. Richard is a Fellow of the Institute of
Chartered Accountants in England and Wales and has extensive
experience in a range of businesses across a number of market sectors.
Richard also provides consultancy services to a variety of businesses
and professional firms.
Heejae Chae
Group Chief Executive
Heejae Chae, 37, was appointed Group Chief Executive on 5 May
2006 having joined the Board as an executive Director and Chief
Operating Officer on 30 June 2005. He was previously worldwide
General Manager of the Radio Frequency Group of Amphenol. He
also spent eight years in private equity and investment banking with
The Blackstone Group and Credit Suisse First Boston. He has an
MBA from Harvard Business School and an Engineering degree from
Columbia University.
Derek Walter
Group Finance Director
Derek Walter, 58, joined the Board as Group Finance Director on 22
October 2004.  Derek is a Fellow of the Institute of Chartered
Accountants in England and Wales.  He was previously Group Finance
Director with a number of multinational companies, including most
recently with Pressac Group plc, Braemar Seascope Group plc and
Scapa Group plc.
David Beever
Non-Executive Director
David Beever, 65, joined the Board on 1 August 2002. He is Chairman
of the Remuneration Committee and a member of the Audit and
Nominations Committees. He is also the Senior Independent Director.
David is currently Chairman of KPMG Corporate Finance and a
previous Vice Chairman of SG Warburg. He is Deputy Chairman of
London & Continental Railways Limited and a non-executive Director
of JJB Sports plc and The Paragon Group of Companies plc.  
Craig Mullett
Non-Executive Director
Craig Mullett, 37, was appointed as a non-executive Director on 
30 June 2005. Craig was recently appointed a member of the
Nominations Committee. He was previously Director of Business
Development at Amphenol Corporation and qualified as a Chartered
Accountant with Deloitte & Touche. Craig is currently President of
Branison Group LLC and is on the Advisory Board of the Shoreline
Greenway Trail, a non-profit charity.
Dimitri Goulandris
Non-Executive Director
Dimitri Goulandris, 39, was appointed as a non-executive Director on
6 May 2006. Dimitri is a partner of Cycladic Capital LLP , which is a
major shareholder in Volex Group plc. Dimitri is also a director of
Permasteelisa SpA, Forthnet SA and Azkoyen SA, being public
companies in Italy, Greece and Spain respectively. Volex Group plc Annual Report & Accounts 2006 17
Consolidated and Company Income Statements
Group Company
2006 2005 2006 2005
Note £’000 £’000 £’000 £’000
Revenue 4 250,378 244,551 39,547 36,772
Operating loss 4 (3,269) (4,978) (3,267) (2,304)
Analysed as:
Operating profit/(loss) before major restructuring programme 5,329 1,768 (870) 37
Major restructuring programme 5 (8,598) (6,746) (2,397) (2,341)
Operating loss (3,269) (4,978) (3,267) (2,304)
Investment income 7 111 59 11,153 3,083
Other losses 8 - - - (3,645)
Finance costs
- interest (2,761) (3,385) (2,108) (3,113)
- refinancing costs and amortisation of debt issue costs (739) (932) (739) (932)
9 (3,500) (4,317) (2,847) (4,045)
(Loss)/profit on ordinary activities before taxation (6,658) (9,236) 5,039 (6,911)
Taxation 11 (2,448) (4,424) (408) (659)
(Loss)/profit on ordinary activities after taxation, 
being retained (loss)/profit for the year (9,106) (13,660) 4,631 (7,570)
Loss per share (pence)
Basic and diluted* 13 (18.5) (46.2)
All results wholly relate to continuing operations.
* The loss per share before the costs of the major restructuring programme for each period is shown in note 13.
Consolidated and Company Statements of
Recognised Income and Expense
For the 52 weeks ended 2 April 2006 (3 April 2005)
Group Company
2006 2005 2006 2005
Note £’000 £’000 £’000 £’000
Exchange differences on translation of foreign operations 1,555 266 - -
Actuarial gains/(losses) on defined benefit pension schemes 32 379 (487) 379 (487)
Net income/(expense) recognised directly in equity 1,934 (221) 379 (487)
(Loss)/profit for the year (9,106) (13,660) 4,631 (7,570)
Total recognised net (expense)/income for the year (7,172) (13,881) 5,010 (8,057)
Adjustment on the first time adoption of IAS 32 and 39 21 (80) - (80) -
Total recognised net (expense)/income since prior year balance sheet (7,252) (13,881) 4,930 (8,057)
For the 52 weeks ended 2 April 2006 (3 April 2005) 18
Consolidated and Company Balance Sheets
Group Company
2006 2005 2006 2005
Note £’000 £’000 £’000 £’000
Non-current assets
Goodwill 14 1,930 1,930 - -
Other intangible assets 15 148 117 37 20
Property, plant and equipment 16 11,515 13,451 1,519 1,565
Investments 17 - - 75,362 68,593
Deferred tax asset 22 244 - - -
13,837 15,498 76,918 70,178
Current assets
Inventories 18 30,274 28,030 4,406 3,817
Trade and other receivables 19 52,825 50,381 18,963 18,497
Current tax assets 1,087 - - -
Cash and cash equivalents 11,646 14,962 2,644 5,668
95,832 93,373 26,013 27,982
Total assets 3 109,669 108,871 102,931 98,160
Current liabilities
Bank overdrafts and loans 20 - 45,315 - 44,283
Obligations under finance leases 23 124 138 - -
Trade and other payables 24 42,685 37,187 31,977 17,602
Current tax liabilities 2,580 2,993 348 -
Retirement benefit obligation 32 357 359 357 359
Provisions 25 3,996 619 1,469 200
Liability for share based payment 95 - 95 -
49,837 86,611 34,246 62,444
Net current assets/(liabilities) 45,995 6,762 (8,233) (34,462)
Non-current liabilities
Bank overdrafts and loans 20 24,690 - 14,380 -
Obligations under finance leases 23 106 43 - -
Trade and other payables 24 - 8 25,381 29,652
Retirement benefit obligation 32 3,154 3,736 3,154 3,736
Deferred tax liabilities 22 537 391 - -
Long-term provisions 25 4,983 2,957 1,823 1,800
Non-equity preference shares 27 80 - 80 -
Liability for share based payment 187 - 187 -
33,737 7,135 45,005 35,188
Total liabilities 3 83,574 93,746 79,251 97,632
Net assets 26,095 15,125 23,680 528
Equity attributable to equity holders of the parent
Share capital 26 13,888 7,465 13,888 7,465
Share premium account 28 168 20,986 168 20,986
Translation reserve 28 1,821 266 - -
Retained earnings 28 10,218 (13,592) 9,624 (27,923)
Total equity 28 26,095 15,125 23,680 528
The financial statements were approved by the Board of Directors and authorised for issue on 13 June 2006.  They were
signed on its behalf by:
Richard Arkle Derek Walter
Chairman Group Finance Director 
2 April 2006 (3 April 2005) Volex Group plc Annual Report & Accounts 2006 19
Consolidated and Company Cash Flow Statements
Group Company
2006 2005 2006 2005
Note £’000 £’000 £’000 £’000
Operating loss from continuing operations (3,269) (4,978) (3,267) (2,304)
Adjustments for:
Depreciation of property, plant and equipment 3,842 4,401 420 712
Impairment of property, plant and equipment 1,523 1,451 86 1,187
Amortisation of intangible assets 79 91 16 29
Impairment of goodwill - 1,868 - -
Loss/(gain) on disposal of property, plant and equipment 133 (1,918) - (846)
Share option expense 350 15 339 15
Adjustment for exchange gains - - (1,726) (1,040)
Increase in provisions 4,411 3,417 970 1,838
Operating cash flows before movements in working capital 7,069 4,347 (3,162) (409)
(Increase)/decrease in inventories (46) 1,264 (589) 58
Decrease/(increase) in receivables 1,469 (297) (3,372) (2,046)
Increase/(decrease) in payables 3,216 (3,731) 7,508 6,909
Cash generated by operations 11,708 1,583 385 4,512
Analysed as:
Cash generated before major restructuring programme 13,249 1,775 1,086 4,512
Cash utilised by major restructuring programme (1,541) (192) (701) -
Cash generated by operations 11,708 1,583 385 4,512
Income taxes (paid)/received (4,359) (2,159) 179 -
Interest received 111 59 870 798
Dividends received from subsidiary undertakings - - 2,119 -
Interest paid (2,639) (3,859) (1,984) (3,587)
Net cash inflow/(outflow) from operating activities 4,821 (4,376) 1,569 1,723
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment 29 7,826 - 1,131
Purchases of property, plant and equipment (2,252) (1,999) (460) (160)
Purchases of intangible assets (100) (62) (33) (12)
Loans from subsidiary undertakings - - 12,768 148
Purchase of shares in subsidiary undertakings - - (1,418) -
Net cash (used in)/from investing activities (2,323) 5,765 10,857 1,107
Cash flows before financing activities 2,498 1,389 12,426 2,830
Analysed as:
Cash inflows before major restructuring programme 4,039 (5,587) 13,127 1,699
Cash outflows utilised by major restructuring programme (1,541) 6,976 (701) 1,131
Cash flows before financing activities 2,498 1,389 12,426 2,830
Cash flows from financing activities
Proceeds on issue of shares (net of expenses of £1,414,000) 28 17,645 - 17,645 -
Repayment of borrowings 29 (43,263) - (43,263) -
Advances of borrowings 29 25,793 1,536 13,083 2,351
Refinancing costs paid 29 (2,486) (743) (2,486) (743)
(Decrease)/increase in bank overdrafts 29 (4,193) 1,050 (504) (535)
Repayments of obligations under finance leases 29 (144) (136) - -
Net cash (used in)/from financing activities (6,648) 1,707 (15,525) 1,073
Net (decrease)/increase in cash and cash equivalents (4,150) 3,096 (3,099) 3,903
Cash and cash equivalents at beginning of year 29 14,962 11,919 5,668 1,854
Effect of foreign exchange rate changes 834 (53) 75 (89)
Cash and cash equivalents at end of year 29 11,646 14,962 2,644 5,668
For the 52 weeks ended 2 April 2006 (3 April 2005) 20
Notes to the Financial Statements
1. Presentation of financial statements
Volex Group plc is a company incorporated in the United Kingdom under the Companies Act 1985 and listed on the London Stock
Exchange.  The address of the registered office is given on page 77.  The nature of the Group’s operations and its principal
activities are set out in the Chairman’s Statement and the Chief Executive’s and Finance Director’s Reviews on pages 6 to 15.
The Group prepares its accounts for the period ending on the Sunday following the Friday which falls closest to the accounting
reference date of 31 March each year.
2. Significant accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below.  These policies have
been consistently applied to all years presented, unless otherwise stated.  The financial statements have been prepared on the
historical cost basis.
Adoption of International Financial Reporting and Accounting Standards (‘IFRS’)
Until 3 April 2005, Volex Group plc’s Group and Company financial statements were prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (‘UK GAAP’).  This is the first set of consolidated and Company financial statements
prepared in accordance with IFRS, as adopted for use in the European Union (‘EU’).
The financial information presented on pages 17 to 53 has been prepared based on the adoption of IFRS, including International
Accounting Standards (‘IAS’) and interpretations issued by the International Accounting Standards Board (‘IASB’) and the
International Reporting Interpretations Committee (‘IFRIC’) of the IASB, as interpreted by any regulatory bodies relevant to the
Group.
First time adoption of IFRS
For the 52 weeks ended 2 April 2006 the Company and the Group have applied the principles set out in IFRS 1, ‘First-time
Adoption of International Financial Reporting Standards’ (‘IFRS 1’).  IFRS 1 sets out the procedures that must be followed when
adopting IFRS for the first time as the basis for preparing the Group’s and the Company’s financial statements.  It is necessary to
establish IFRS accounting policies and, in general, apply these retrospectively to determine the opening balance sheet at the date
of transition, 5 April 2004.  IFRS provides a number of optional exemptions to this general principle.  The most significant of these
are set out below, together with a description, in each case, of the exemption adopted.
• Business combinations
The accounting for business combinations completed prior to the date of transition has not been restated.
• Property, plant and equipment
Previous revaluations for certain properties have been treated as ‘deemed cost’ on the date of transition.
• Employee benefits
All cumulative actuarial gains and losses with respect to the defined benefit pension plans have been recognised in
shareholders’ equity at the date of transition.
• Financial instruments
IAS 32, ‘Financial instruments: disclosure and presentation’ (‘IAS 32’) and IAS 39, ‘Financial instruments: recognition and
measurement’ (‘IAS 39’) have been adopted from 4 April 2005.  The comparative information in respect of financial
instruments is presented in accordance with UK GAAP .
• Share based payments
IFRS 2, ‘Share-based payments’ (‘IFRS 2’) has been applied to all share based awards and options granted post 7
November 2002 and not vested at 1 January 2005.
The disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in note 35.
Basis of consolidation
The consolidated financial statements of Volex Group plc incorporate the financial statements of the Company and the entities
which it controls (its subsidiaries) and are drawn up to the relevant period end date. Control is achieved where the Company has
the power to govern the financial and operating policies so as to be able to obtain benefits from its activities.
The Group uses the purchase method of accounting to account for the acquisition of subsidiaries.  On acquisition, the assets and
liabilities, including contingent liabilities, of a subsidiary are measured at their fair value at the date of acquisition.  Any excess of the
cost of acquisition over the fair value of the identifiable net assets acquired is recognised as goodwill.  If the cost of acquisition is
less than the fair value of the identifiable net assets acquired, the difference is recognised directly in the income statement.
For the 52 weeks ended 2 April 2006 (3 April 2005) Volex Group plc Annual Report & Accounts 2006 21
Notes to the Financial Statements
2. Significant accounting policies (continued)
Basis of consolidation (continued)
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into
line with those used by the Group.
On consolidation, all intra-Group transactions, balances, income and expenses are eliminated.
Investment in subsidiary undertakings
In the Company balance sheet, investments in subsidiary undertakings are recorded at cost less provision for impairment.
For those investments in subsidiaries acquired by the issue of shares qualifying for merger relief, cost is measured by
reference to the nominal value only of the shares issued.
Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the ‘functional currency’).  The consolidated financial statements are
presented in sterling, which is the Company’s functional and presentation currency.
Transactions in a foreign currency are recorded at the rate of exchange at the date of transaction.  Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated at the rates of exchange prevailing at
that date.  Gains and losses arising on translation are included in the income statement.
The results of operations that have a functional currency different from the presentation currency are translated at the
average rate of exchange during the period and their balance sheets at the rates ruling at the date of the balance sheet.
Exchange differences arising on translation are taken directly to a separate component of equity, the translation reserve.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities and borrowings
designated as hedges of such investments are taken to a separate component of equity, the translation reserve.  The gain or
loss relating to any ineffective portion of a net investment hedge is recognised immediately in the income statement.
The Group has adopted Amendment to IAS 21, ‘The effects of changes in foreign exchange rates - net investment in a
foreign operation’, such that exchange gains and losses arising on loans between Group entities that are not expected to be
repaid in the foreseeable future and that are not in the functional currency of either party to the loan are recognised in the
translation reserve.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable from third parties for goods and services
provided in the normal course of business, net of discounts, VAT and other sales-related taxes.  Revenue from the sale of
goods is recognised when significant risks and rewards of ownership have been transferred to the buyer.
Taxation
The tax expense represents the sum of the current and deferred tax charges.
The tax currently payable is based on taxable profit for the year.  Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.  The Group’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is
accounted for using the balance sheet liability method.  Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.  Such assets and liabilities are not recognised if the
temporary differences arise from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on retained earnings in subsidiaries and
associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised.  Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited
directly to reserves, in which case the deferred tax is also dealt with in reserves. 22
Notes to the Financial Statements
2. Significant accounting policies (continued)
Property, plant and equipment
Land and buildings comprise factories, warehouses and offices.  Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss.  Depreciation is provided on all property, plant and
equipment, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset on a
straight-line basis over the expected useful life, as follows:
Freehold and long leasehold buildings up to 50 years
Plant and machinery up to 10 years
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
the fixed asset might not be recoverable.  An asset’s carrying amount is written down immediately to its recoverable amount
if the asset’s carrying amount exceeds the higher of its fair value less cost to sell and value in use.  Any impairment charge is
recorded in the income statement.
A gain or loss on disposal is determined by comparing the proceeds with the asset’s carrying amount and is recognised in
the income statement.
Leases
Assets held under finance leases and similar contracts, which confer rights and obligations similar to those attached to
owned assets, are capitalised as property, plant and equipment and are depreciated over the shorter of the lease term and
their useful economic life.  The capital elements of future lease obligations are recorded as liabilities, while the interest
elements are charged to the income statement over the period of the lease to produce a constant rate of charge on the
balance of the capital repayments outstanding. 
Rentals under operating leases are charged on a straight-line basis over the lease term, even if payments are not made on
such a basis. Benefits received and receivable as an incentive to sign an operating lease are spread on a straight-line basis
over the lease term.
Goodwill
Goodwill arising on the acquisition of subsidiaries and businesses, represents an excess of the cost of acquisition over the
fair value of the net identifiable assets acquired at the date of acquisition and is carried at cost less accumulated impairment
losses. Goodwill is tested annually for impairment. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount exceeds the higher of an asset’s fair value less cost to sell and value in use.  The gain
or loss on the disposal of an entity includes the carrying amount of goodwill relating to the entity sold.
Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts.
Goodwill arising on acquisitions in the year ended 31 March 1998 and earlier periods has been written off to reserves and
has not been reinstated in the balance sheet and is not included in determining any subsequent profit or loss on disposal.
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and use specific software.
These costs are included in the balance sheet within intangible assets and are amortised over their estimated useful lives, not
exceeding three years.
Inventories
Inventories are stated at the lower of cost and net realisable value.  Cost includes materials, direct labour and an attributable
proportion of manufacturing overheads based on normal levels of activity. Net realisable value is based on estimated selling
price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow-moving and
defective items where appropriate.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by an appropriate allowance for
estimated irrecoverable amounts.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value. Volex Group plc Annual Report & Accounts 2006 23
Notes to the Financial Statements
2. Significant accounting policies (continued)
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.  Direct issue
costs are amortised and recognised as a finance cost over the term of the borrowings.
Provisions
Provisions for restructuring costs are recognised when the Group has a present legal or constructive obligation as a result of
past events, when it is more likely than not that an outflow of resources will be required to settle the obligation and when the
amount has been reliably estimated.  Restructuring provisions comprise largely property, employee termination and relocation
costs.  Property provisions represent the anticipated net costs of onerous leases and are set up for payment of annual rental
costs on empty properties and to meet shortfalls on sub-tenanted properties. Provisions are not recognised for future
operating losses.
Retirement benefits
The Group has both defined benefit and defined contribution schemes. 
For defined benefit schemes, the retirement benefit obligation recognised in the balance sheet represents the present value
of the defined benefit obligation less the fair value of the plan assets.  The cost of providing benefits is determined using the
Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.  Actuarial gains and
losses are recognised in the statement of recognised income and expense in full in the period in which they occur.  As the
defined benefit schemes are now closed, no service cost is incurred.
For defined contribution schemes, the amount charged to the income statement in the period is the amount of contributions
payable in the period.  Difference between contributions payable in the period and contributions actually paid are shown
either in accruals or prepayments in the balance sheet.
Share based payments
The requirements of IFRS 2 have been applied, in accordance with the transitional provisions, to all grants of equity
instruments made after 7 November 2002 that were unvested at 1 January 2005.  Equity settled share based payments are
issued to certain employees and are measured at fair value at the date of grant. The fair value determined at the date of grant
of the equity-settled share based payments is expensed to the income statement on a straight-line basis over the vesting
period, based on the estimate of the number of options that will eventually vest.  Cash-settled share based payments are
measured at the fair value at the balance sheet date and the movement in this liability is recorded in the income statement.
Fair value is measured using the Black-Scholes model.
Major restructuring programme costs
These items are deemed to be non-recurring by virtue of their nature and size.  They are included under the statutory
classification appropriate to their nature but are separately disclosed on the face of the income statement to assist in
understanding the financial performance of the Group and the Company.
Share capital
Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new share or options are
shown in equity as a deduction from the proceeds, net of tax. Non-equity share capital is classified in non-current liabilities.
Critical judgements and estimates in applying the accounting policies
In the process of applying the accounting policies described above, management has made the following judgements and
estimates that have the most significant effect on the amounts recognised in the financial statements.
Major restructuring programme costs and restructuring provisions
As at 2 April 2006, the Group had restructuring provisions of £8.5 million arising as a result of the major restructuring
programme being undertaken. These provisions include amounts relating to onerous leases, termination and relocation costs.
The initial determination of the size of these provisions and the subsequent timing and amounts of the expenditure in relation
to these provisions, is inherently difficult to estimate and is based on best management judgement at the time. The
provisions are regularly reviewed in the light of the most current information available.
Taxation
Provisions for tax contingencies require management to make judgements and estimates in relation to tax issues and
exposures. Amounts provided are based on management’s interpretation of country specific tax law. Tax benefits are not
recognised unless the tax positions are probable of being sustained. In arriving at this position, management reviews each
material tax benefit to assess whether a provision should be taken against full recognition of the benefit.  24
Notes to the Financial Statements
2. Significant accounting policies (continued)
Newly issued IFRSs
At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not been
applied in these financial statements, were in issue but not yet effective:
• IFRS 7, Financial instruments: disclosures; and related amendment to IAS 1 on capital disclosures
• IFRIC 4, Determining whether an arrangement contains a lease
• IFRIC 5, Rights to interests arising from decommissioning, restoration and environmental rehabilitation funds
• IFRIC 6, Liabilities from participating in a specific market – waste electrical and electronic equipment
• IFRIC 7, Applying the restatement approach under IAS 29 Financial Reporting in hyperinflationary economies
• IFRIC 8, Scope of IFRS 2
• IFRIC 9, Reassessment of embedded derivatives
The Directors expect that the adoption of these Standards and Interpretations in future periods will have no material impact
on the financial statements except for additional disclosures on capital and financial instruments when the relevant Standards
come into effect for periods commencing on or after 3 April 2006.
3. Business and geographical segments
Business segments
For management purposes, the Group’s structure was reorganised during the second half of the year such that the Group is
now organised into three operating divisions – PowerCord, Infocom and Wiring Harness.  These classifications are based
upon the nature of products which they supply. These divisions are the basis on which the Group reports its primary segment
information.
Segment information about these businesses is presented below. 
Revenue Operating profit/(loss)
2006 2005 2006 2005
£’000 £’000 £’000 £’000
PowerCord 118,275 110,882 2,812 (243)
Infocom 99,398 104,409 (2,196) (3,822)
Wiring Harness 32,705 29,260 (3,885) (913)
Consolidated 250,378 244,551 (3,269) (4,978)
Investment income 111 59
Finance costs (3,500) (4,317)
Loss before tax (6,658) (9,236)
Tax (2,448) (4,424)
Loss from continuing operations (9,106) (13,660)
2006 2005
External revenue by market sector £’000 £’000
Consumer products 100,525 95,614
Data and Telecommunications 87,986 94,296
Industrial and Medical 27,845 25,588
Vehicle and Aerospace 34,022 29,053
250,378 244,551 Volex Group plc Annual Report & Accounts 2006 25
Notes to the Financial Statements
3. Business and geographical segments (continued)
Business segments (continued)
Wiring
PowerCord Infocom HarnessUnallocatedConsolidated
2006 2006 2006 2006 2006
£’000 £’000 £’000 £’000 £’000
Balance sheet
Assets
Segment assets 43,728 38,325 14,639 - 96,692
Deferred tax asset - - - 244 244
Current tax asset - - - 1,087 1,087
Cash and cash equivalents - - - 11,646 11,646
Total assets 43,728 38,325 14,639 12,977 109,669
Liabilities
Segment liabilities 27,129 16,526 8,291 - 51,946
Borrowings - - - 24,690 24,690
Obligations under finance leases - - - 230 230
Current tax liabilities - - - 2,580 2,580
Deferred tax liabilities - - - 537 537
Retirement benefit obligations - - - 3,511 3,511
Non-equity preference shares - - - 80 80
Total liabilities 27,129 16,526 8,291 31,628 83,574
Other information
Capital additions 1,388 642 504 - 2,534
Depreciation and amortisation 1,783 1,731 407 - 3,921
Impairment losses 589 848 86 - 1,523
Segment assets consist primarily of intangible assets, property, plant and equipment, inventories and trade and other
receivables. Segment liabilities consist primarily of trade and other payables and provisions.
Capital additions, depreciation and amortisation and impairment losses comprise those relating to goodwill (note 14)
property, plant and equipment (note 16) and intangible assets (note 15).
Wiring 
PowerCord Infocom Harness Unallocated Consolidated
2005 2005 2005 2005 2005
£’000 £’000 £’000 £’000 £’000
Balance sheet
Assets
Segment assets 47,785 34,105 12,019 - 93,909
Cash and cash equivalents - - - 14,962 14,962
Total assets 47,785 34,105 12,019 14,962 108,871
Liabilities
Segment liabilities 24,437 11,911 4,423 - 40,771
Borrowings - - - 45,315 45,315
Obligations under finance leases - - - 181 181
Current tax liabilities - - - 2,993 2,993
Deferred tax liabilities - - - 391 391
Retirement benefit obligations - - - 4,095 4,095
Total liabilities 24,437 11,911 4,423 52,975 93,746
Other information
Capital additions 1,300 715 185 - 2,200
Depreciation and amortisation 1,959 2,093 440 - 4,492
Impairment losses 1,451 1,868 - - 3,319 26
Notes to the Financial Statements
3. Business and geographical segments (continued)
Geographical segments
The Group’s operations are located mainly in Asia, South America, North America, United Kingdom and Other Europe. The
following table provides an analysis of Group’s sales by geographical market, based on both the source and destination of
the sale.  Segment assets and capital expenditure are allocated on the basis of where the assets are located.
External revenue External revenue by 
by source destination
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Asia and South America 98,761 90,022 77,033 71,243
North America 75,591 74,746 73,986 71,691
United Kingdom 32,705 28,941 34,560 38,542
Other Europe 43,321 50,842 64,799 63,075
250,378 244,551 250,378 244,551
Segment assets Capital expenditure
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Asia and South America 42,738 36,922 1,574 1,080
North America 26,091 29,828 568 666
United Kingdom 14,239 11,942 265 199
Other Europe 13,624 15,217 127 255
96,692 93,909 2,534 2,200
4. Revenue and other operating expenses
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Revenue
Sale of goods 250,378 244,551 33,445 29,810
Management services - - 5,147 6,184
Royalty fees - - 955 778
Total revenue 250,378 244,551 39,547 36,772
Cost of sales (211,288) (209,062) (31,436) (28,601)
Gross profit 39,090 35,489 8,111 8,171
Other operating income 895 856 35 -
Selling and distribution costs (13,331) (15,104) (1,394) (1,711)
Administrative expenses comprising:
Major restructuring programme costs (note 5) (8,598) (6,746) (2,397) (2,341)
Other (19,506) (18,517) (7,587) (6,026)
(28,104) (25,263) (9,984) (8,367)
Other operating costs (1,819) (956) (35) (397)
Operating loss (3,269) (4,978) (3,267) (2,304) Volex Group plc Annual Report & Accounts 2006 27
Notes to the Financial Statements
5. Major restructuring programme 
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Global management restructuring 1,535 - 1,065 -
Property provisions 3,149 3,298 30 2,000
Closure of manufacturing facilities 2,720 1,171 1,216 -
Impairment of property, plant and equipment 1,523 1,451 86 1,187
Impairment of goodwill - 1,868 - -
Insurance claim (329) 876 - -
Profit on sale of properties - (1,918) - (846)
8,598 6,746 2,397 2,341
Group
During the year, as part of the Group’s major restructuring programme, the Global management team has been restructured.
The Group’s global manufacturing footprint has been changed, with additional provisions being recorded against four
properties. Impairment charges have been recorded against property, plant and equipment at these properties.
Settlement of the insurance claim relating to the Tijuana fire was finalised in January 2006, at a higher level than had been
expected at the previous year end.
In 2005, an impairment charge against goodwill at the Brazilian operation was recorded and impairment charges against an
automated manufacturing line, which was no longer being utilised (£1,223,000) and plant and equipment at sites being
closed (£228,000) were also recorded. 
The taxation effect of the major restructuring programme was £nil (2005: £nil).
Company
During 2006, the Company recorded major restructuring programme costs associated with the Global management restructuring
and the closure of its facilities in Stoke-on-Trent.  In 2005, the impairment charge related to property, plant and equipment
associated with the automated manufacturing line and a property provision was recorded against a vacated property.
6. Exchange rates
The principal exchange rates used in the preparation of the financial statements are:
Average % change Year end % change
2006 2005 vs £ 2006 2005 vs £
United States dollar 1.80 1.84 2.2 1.75 1.89 8.0
Singapore dollar 2.98 3.09 3.7 2.83 3.12 10.2
Euro 1.46 1.47 0.7 1.44 1.45 0.7
Canadian dollar 2.15 2.36 9.8 2.03 2.29 12.8
Brazilian real 4.23 5.28 24.8 3.82 5.02 31.4
7. Investment income
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Interest on bank deposits 111 59 - -
Interest on loans to Group undertakings (note 34) - - 3,590 3,083
Dividends received from Group undertakings - - 7,563 -
111 59 11,153 3,083 28
Notes to the Financial Statements
8. Other losses
Company
2006 2005
£’000 £’000
Amounts written off investments and accrued interest income - 3,645
9. Finance costs
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Interest on bank overdrafts and loans 2,450 3,243 1,883 2,971
Interest on pension scheme liabilities (note 32) 706 656 706 656
Return on pension assets (note 32) (554) (514) (554) (514)
Interest on long-term provisions 159 - 73 -
Total interest costs 2,761 3,385 2,108 3,113
Amortisation of debt issue costs and refinancing costs 739 932 739 932
Total borrowing costs 3,500 4,317 2,847 4,045
10. Loss for the year
Group Company
2006 2005 2006 2005
Loss for the year has been arrived at after charging/(crediting): £’000 £’000 £’000 £’000
Cost of inventories recognised as an expense 152,502 147,492 21,072 16,834
Net foreign exchange (gains)/losses 1,002 165 (35) 388
Research and development costs 1,790 1,819 841 785
Depreciation of property, plant and equipment 3,842 4,401 420 712
Impairment of property, plant and equipment 1,523 1,451 86 1,187
Amortisation of acquired intangible assets 79 91 16 29
Impairment of goodwill - 1,868 - -
Loss/(profit) on disposal of property, plant and equipment 133 (1,918) - (846)
Auditors’ remuneration for audit services 366 339 165 110
2006 2005
A more detailed analysis of auditors’ remuneration on a worldwide basis is provided below: £’000 £’000
Audit services
Statutory audits 366 339
Further assurance services 167 -
Tax services
Advisory services 242 233
Compliance services 252 163
Other services 566 150
1,593 885
Amounts payable to Deloitte & Touche LLP and their associates by the Company in respect of non-audit services were
£910,000 (2005: £220,000).
Further assurance services fees relate to work undertaken in connection with the Working Capital Statement prepared by the
Company’s Directors for the purposes of the Listing Particulars issued in relation to the equity raising completed in June
2005.  Other services fees relate principally to debt and strategy advisory work.
In addition to the amounts shown above, the auditors received fees of £11,000 (2005: £32,000) for the audits of and other
work associated with Group pension schemes.
A description of the work of the Audit Committee is set out in the Corporate Governance report on page 57 and includes an
explanation of how auditor objectivity and independence is safeguarded when the auditors provide non-audit services. Volex Group plc Annual Report & Accounts 2006 29
Notes to the Financial Statements
10. Loss for the year (continued)
The average monthly number of employees (including executive Directors) was:
Group Company
2006 2005 2006 2005
No. No. No. No.
Production 7,689 8,265 386 544
Sales and distribution 305 248 26 26
Administration 1,460 1,546 101 121
9,454 10,059 513 691
Their aggregate remuneration comprised: £’000 £’000 £’000 £’000
Wages and salaries 46,869 47,744 10,157 10,397
Social security costs 4,335 3,886 1,058 893
Other pension costs (see note 32) 1,507 1,592 355 316
52,711 53,222 11,570 11,606
The Group has received grant assistance from the Industrial Development Agency in Ireland conditional on 60 employees
being employed in Ireland through to 6 June 2009.  Employee numbers in Ireland are currently at this level; however, should
they reduce below this level €1.4 million would be repayable on demand.
Details of Directors’ remuneration, share options, pension contributions, pension entitlements, fees for consulting services
and interests for the year are provided in the audited part of the Directors’ remuneration report on pages 68 to 71.
11. Tax
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current tax – charge for the year 1,865 2,629 170 159
Current tax – adjustment in respect of previous years 584 930 238 -
Deferred tax (note 22) (1) 865 - 500
2,448 4,424 408 659
UK corporation tax is calculated at 30% (2005: 30%) of the estimated assessable profit for the year.  Taxation for other
jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The charge for the year can be reconciled to the loss per the income statement as follows:
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
(Loss)/profit on ordinary activities before tax: (6,658) (9,236) 5,039 (6,911)
Tax at the UK corporation tax rate of 30% (2005: 30%) (1,997) (2,771) 1,512 (2,073)
Tax effect of expenses that are not deductible and income that is not
taxable in determining taxable profit 575 2,546 (1,624) 1,349
Tax effect of non-utilisation of tax losses 1,887 1,912 462 471
Tax effect of adjustments in respect of previous periods 493 1,795 238 500
Effect of different tax rates of subsidiaries operating in other jurisdictions (1,775) (703) - -
Tax effect of unrecognised deferred tax 3,616 1,645 133 412
Tax effect of double tax relief - - (313) -
Tax effect of loss utilisation (351) - - -
Tax expense for the year 2,448 4,424 408 659 30
Notes to the Financial Statements
12. Dividends
The Directors do not recommend a dividend on the ordinary shares for the year (2005: £nil).
13. Loss per ordinary share
The calculations of the loss per share are based on the following data:
2006 Per share 2005 Per share
£’000 p £’000 p
Basic loss (9,106) (18.5) (13,660) (46.2)
Major restructuring programme costs 8,598 17.5 6,746 22.8
Adjusted loss (508) (1.0) (6,914) (23.4)
No. shares No. shares
Weighted average number of shares 49,247,645 29,540,692
Basic loss represents net loss attributable to equity holders of the Company.
The adjusted loss per share has been calculated on the basis of continuing activities before major restructuring costs, net of
tax.  The Directors consider that this loss per share calculation gives a better understanding of the Group’s loss per share in
the current and prior year.  As the Group recorded a loss per share, the share options are anti-dilutive and therefore there is
no difference between the basic and diluted loss per share.
14. Goodwill
2006 2005
£’000 £’000
Cost
At beginning and end of the year 3,798 3,798
Accumulated impairment losses
At beginning of the year 1,868 -
Impairment losses for the year - 1,868
At end of the year 1,868 1,868
Carrying amount 1,930 1,930
Goodwill acquired in a business combination is allocated, at acquisition, to the business units that are expected to benefit
from that business combination.  After recognition of impairment losses, the carrying amount of goodwill has been allocated
as follows:
2006 2005
£’000 £’000
PowerCord 1,495 1,495
Infocom 435 435
1,930 1,930
The Group annually tests goodwill for impairment, or more frequently if there are indications that goodwill might be impaired.
The recoverable amount of goodwill is determined from value in use calculations. The key assumptions used in the value in
use calculations are those regarding the discount rates, revenue and costs growth rates and the level of capital expenditure
required during the period.  The Group prepares cash flow forecasts derived from the most recently approved three-year
budgets of the relevant businesses.  The cash flows forecasts reflect the risk associated with each asset.  Cash flows for
years beyond 2009 are extrapolated based on estimated growth rates, which do not exceed the average long-term growth
rates for the relevant markets. Volex Group plc Annual Report & Accounts 2006 31
Notes to the Financial Statements
15. Other intangible assets
Group Company
2006 2005 2006 2005
Computer Software £’000 £’000 £’000 £’000
Cost
At beginning of the year 789 1,024 569 557
Additions 100 62 33 12
Disposals (15) (291) - -
Exchange differences 20 (6) - -
At end of the year 894 789 602 569
Accumulated amortisation
At beginning of the year 672 875 549 520
Amortisation charge for the year 79 91 16 29
Disposal (15) (291) - -
Exchange differences 10 (3) - -
At end of the year 746 672 565 549
Carrying amount 148 117 37 20
16. Property, plant and equipment
Group Land and buildings Plant
Long and
Freehold leasehold machinery Total
£’000 £’000 £’000 £’000
Cost
At 5 April 2004 6,892 6,973 61,770 75,635
Additions - 43 2,095 2,138
Reclassification (103) 113 (10) -
Disposals (6,269) (3,978) (4,090) (14,337)
Exchange differences 264 (82) (1,175) (993)
At 3 April 2005 784 3,069 58,590 62,443
Additions - 245 2,189 2,434
Reclassification 84 169 (253) -
Disposals (40) (892) (26,122) (27,054)
Exchange differences 7 312 3,271 3,590
At 2 April 2006 835 2,903 37,675 41,413
Accumulated depreciation and impairment
At 5 April 2004 4,276 2,313 45,323 51,912
Depreciation charge 48 375 3,978 4,401
Impairment charge (note 5) - - 1,451 1,451
Disposals (3,921) (1,018) (3,240) (8,179)
Exchange differences 14 (19) (588) (593)
At 3 April 2005 417 1,651 46,924 48,992
Depreciation charge 44 316 3,482 3,842
Impairment charge (note 5) - 281 1,242 1,523
Reclassification 3 62 (65) -
Disposals (40) (753) (26,100) (26,893)
Exchange differences - 179 2,255 2,434
At 2 April 2006 424 1,736 27,738 29,898
Carrying amount
At 2 April 2006 411 1,167 9,937 11,515
At 3 April 2005 367 1,418 11,666 13,451 32
Notes to the Financial Statements
16. Property, plant and equipment (continued)
Group (continued)
The impairment losses arose in connection with the major restructuring programme (see note 5). 
The carrying amount of the Group’s fixtures and equipment includes an amount of £164,000 (2005: £nil) in respect of assets
held under finance leases.
At 2 April 2006, the Group had entered into contractual commitments for the acquisition of property, plant and equipment
amounting to £191,000 (2005: £196,000).
Company Land and buildings Plant
Long and
Freehold leasehold machinery Total
£’000 £’000 £’000 £’000
Cost
At 5 April 2004 1,266 370 18,640 20,276
Additions - - 160 160
Reclassification (103) 103 - -
Disposals (379) - (1,284) (1,663)
At 3 April 2005 784 473 17,516 18,773
Additions - - 460 460
Reclassification - 173 (173) -
Disposals (23) - (10,155) (10,178)
At 2 April 2006 761 646 7,648 9,055
Accumulated depreciation and impairment
At 5 April 2004 454 95 16,138 16,687
Depreciation charge 48 100 564 712
Impairment charge (note 5) - - 1,187 1,187
Disposals (85) - (1,293) (1,378)
At 3 April 2005 417 195 16,596 17,208
Depreciation charge 44 39 337 420
Impairment charge (note 5) -86 - 86
Reclassification (15) 62 (47) -
Disposals (23) - (10,155) (10,178)
At 2 April 2006 423 382 6,731 7,536
Carrying amount
At 2 April 2006 338 264 917 1,519
At 3 April 2005 367 278 920 1,565
At 2 April 2006, the Company had entered into contractual commitments for the acquisition of property, plant and equipment
amounting to £15,000 (2005: £9,000). Volex Group plc Annual Report & Accounts 2006 33
Notes to the Financial Statements
17. Investments
Fixed asset investments comprise investments in wholly owned subsidiary undertakings and permanent loans.
Shares Loans Total
Cost £’000 £’000 £’000
At 5 April 2004 7,920 51,186 59,106
Repaid - (148) (148)
Additions - 21,618 21,618
Exchange differences - (82) (82)
At 3 April 2005 7,920 72,574 80,494
Additions 1,596 680 2,276
Loans capitalised - (13,522) (13,522)
Exchange differences - 6,675 6,675
At 2 April 2006 9,516 66,407 75,923
Provision for impairment
At 5 April 2004 - 9,898 9,898
Impairment recognised - 2,306 2,306
Exchange differences - (303) (303)
At 3 April 2005 - 11,901 11,901
Loans capitalised - (13,522) (13,522)
Exchange differences - 2,182 2,182
At 2 April 2006 - 561 561
Carrying value
At 2 April 2006 9,516 65,846 75,362
At 3 April 2005 7,920 60,673 68,593
Details of the Group’s operating subsidiary undertakings are set out below:
United Kingdom:
Volex Group plc operates under a divisional structure in the United Kingdom, the divisions being: Head Office and Wiring
Harness.  Volex Group Holdings Ltd is a wholly owned subsidiary of Volex Group plc which is registered in England and
Wales and which acts as a holding company.
Overseas:
The operating overseas subsidiary undertakings, the business of which is the assembly and/or sale of cable products, all of
which are wholly owned as follows:
Country of incorporation 
or registration and operation
Volex (Asia) Pte Lte* Singapore
Volex Cables (HK) Ltd
#
Hong Kong
PT Volex Indonesia
#
Indonesia
PT Volex Cable Assembly
#
Indonesia
Volex Cable Assemblies (Phils) Inc. 
#
Philippines
Volex Interconnect (India) Pvt Ltd
#
India
Volex Japan KK
#
Japan
Volex (Taiwan) Co. Ltd
#
Taiwan
Volex (Thailand) Co. Ltd
#
Thailand
Volex Cable Assembly (Vietnam) Pte. Ltd
#
Vietnam
Volex Cable Assemblies Sdn Bhd Malaysia
Volex Cable Assembly (Suzhou) Co. Ltd
∆
China
Volex Cable Assembly (Shenzhen) Co. Ltd
∆
China
Volex Cable Assembly (Zhongshan) Co. Ltd
∆
China
Volex Inc.* USA
Country of incorporation 
or registration and operation
Volex Canada Inc. Canada
Volex Hermosillo SA de CV
≠
Mexico
Volex de Mexico SA de CV
≠
Mexico
Volex do Brasil Ltda* Brazil
Volex Europe Ltd
∆
Ireland
Volex d.o.o. Croatia
Volex Sweden AB* Sweden
Volex Estonia OU Estonia
Volex Poland SP z.o.o Poland
* these interests are held through 100% owned local parent companies
# these interests are held by Volex (Asia) Pte Ltd
∆ these interests are held by Volex Group Holdings Ltd
≠ these interests are held by Volex Inc. 34
Notes to the Financial Statements
18. Inventories
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Raw materials 13,583 13,506 2,624 2,408
Work-in-progress 2,668 2,425 886 907
Finished goods 14,023 12,099 896 502
30,274 28,030 4,406 3,817
The Group wrote off inventory in the period of £2.3 million (2005: £1.0 million).
19. Other financial assets
Group Company
2006 2005 2006 2005
Trade and other receivables £’000 £’000 £’000 £’000
Amounts receivable for the sale of goods 48,641 44,631 7,815 6,050
Amounts due from Group undertakings - - 10,680 11,950
Other debtors and prepayments 4,184 5,750 468 497
52,825 50,381 18,963 18,497
The average credit period taken on sales of goods is 70 days.  An allowance has been made for estimated irrecoverable
amounts from the sale of goods. This amounts to £353,000 (2005: £475,000) and £141,000 (2005: £196,000) for the Group
and the Company respectively.  This allowance has been determined by reference to past default experience.  The Directors
consider that the carrying amount of trade and other receivables approximates their fair value.
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables.
Bank and cash balances comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less.  The carrying amount of these assets approximates their fair value.
The Group’s credit risk is primarily attributable to its trade receivables.  The Group has no significant concentration of credit
risk, with exposure spread over a large number of counterparties and customers.   Volex Group plc Annual Report & Accounts 2006 35
Notes to the Financial Statements
20. Bank overdrafts and loans
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Bank overdrafts - 4,026 2,770 2,994
Bank loans 24,690 41,289 11,610 41,289
24,690 45,315 14,380 44,283
The borrowings are repayable as follows:
Within one year - 45,315 - 44,283
In the third to fifth years inclusive 24,690 - 14,380 -
24,690 45,315 14,380 44,283
Less: Amount due for settlement within 12 months - (45,315) - (44,283)
Amount due for settlement after 12 months 24,690 - 14,380 -
At 2 April 2006, Group and Company bank loans are recorded net of debt issue costs of £2,061,000 (2005: £nil).
On 30 June 2005, new three-year banking facilities became effective with the Group’s principal Bankers.  These facilities
incorporate a US dollar based revolver facility and a sterling based overdraft facility.  These facilities are secured by fixed and
floating charges over the assets of certain Group companies.  The facilities currently incur interest at a margin of 3.25%
above LIBOR.
At 2 April 2006, the Group had available £15,784,000 (2005: £6,781,000) of undrawn committed borrowing facilities. 
Both the revolver and overdraft arrangements allow drawings in various currencies.  Borrowings can be analysed by currency
as follows:
2006 2005
Bank Bank Bank Bank
overdrafts loans overdrafts loans
Group £’000 £’000 £’000 £’000
US dollar - 13,665 1,985 26,231
Euro - 13,086 1,749 -
Singapore dollar -- - 10,246
Canadian dollar -- 292 4,812
- 26,751 4,026 41,289
Less: debt issue costs - (2,061) --
- 24,690 4,026 41,289
At 2 April 2006, the Company’s bank loans were US dollar denominated and the overdraft was euro denominated. At 3 April
2005, the denomination of the Company’s bank loans is the same as that for the Group and the overdrafts were denominated
as follows: US dollars £953,000; Canadian dollars £292,000; and euros £1,749,000.
The weighted average interest rate paid was 6.5% (2005: 5.6%).
21. Derivatives and other financial instruments
The Group occasionally utilises currency derivatives to hedge significant future transactions and cash flows. The Group can
be party to a variety of foreign currency forward contracts and options in the management of its exchange rate exposures.
The instruments purchased are primarily denominated in the currencies of the Group’s principal markets. 
The Group currently designates certain amounts of its foreign currency denominated debt as a hedging instrument for the
purposes of hedging the translation of its foreign operations.
At the balance sheet date no forward foreign exchange contracts were outstanding (2005: none). 36
Notes to the Financial Statements
21. Derivatives and other financial instruments (continued)
Adoption of IAS 32 and IAS 39
IAS 32 and IAS 39 were adopted as accounting standards on 4 April 2005.  Under IFRS 1 the comparative periods have not
been restated, and have been disclosed and measured based on UK GAAP as at 3 April 2005.  The required UK GAAP
disclosures for the comparative period are shown below.
Upon the adoption of IAS 32 and IAS 39, the Company’s non-equity preference shares have been reclassified from share
capital to non-current liabilities, reducing the Group’s and the Company’s net assets as at 4 April 2005 by £80,000.
Interest rate profile
a. Financial assets
The Group has no financial assets at 3 April 2005 other than cash deposits with a sterling value of £14,962,000 which are
part of the financing arrangements of the Group.  The deposits set out below include monies placed on the money market
at call and monthly rates.
2005
£’000
Sterling 992
US dollar 5,543
Euro 5,005
Singapore dollar 457
Canadian dollar 333
Brazilian real 286
Chinese renminbi 766
Hong Kong dollar 522
Malaysian ringitt 454
Others 604
Total 14,962
b. Financial liabilities
The interest rate risk profile for the Group’s financial liabilities, which include property and restructuring provisions was as
follows:
Floating Fixed No interest
2005 2005 2005 2005
Currency £’000 £’000 £’000 £’000
Sterling - 80 2,000 2,080
Euro 1,812 - - 1,812
US dollar 27,074 - 454 27,528
Singapore dollar 11,506 - 1,122 12,628
Canadian dollar 5,104 - - 5,104
Total 45,496 80 3,576 49,152
The interest rate on sterling non-equity preference shares is fixed at 7% (see note 27).  For further details on interest rates
on long-term floating borrowings see note 20. Volex Group plc Annual Report & Accounts 2006 37
Notes to the Financial Statements
21. Derivatives and other financial instruments (continued)
Adoption of IAS 32 and IAS 39 (continued)
Currency exposures and derivatives
The table below shows the Group’s currency exposures at 3 April 2005; for those transactional exposures that give rise to net
currency gains and losses recognised in the income statement.  Such exposures comprise the monetary assets and liabilities
of the Group that are not denominated in the operating currency of the operating unit involved, other than certain non-sterling
borrowings treated as hedges of net investments in overseas operations.  
Net foreign currency monetary assets/(liabilities)*
US HK CH India Mal Thai
Sterling dollar Yen Euro dollar Rmb Rupee Ringitt Bhat Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Functional currency of Group operation
Sterling - (281) (18) (5) ----- (304)
Euro 67 (1,138) ------- (1,071)
Singapore dollar - 3,616 460 (197) (424) 2,234 563 1,864 486 8,602
Total 67 2,197 442 (202) (424) 2,234 563 1,864 486 7,227
* Comprising net trade debtors and creditors denominated in a currency that is different from the functional currency of the operation.  Net trade debtors and
creditors denominated in the functional currency are excluded from this analysis.
22. Deferred tax
Group
The following are the major deferred tax liabilities and (assets) recognised by the Group and movements thereon during the
current and prior reporting periods.
Accelerated Other short
tax term timing
depreciation differences Total
£’000 £’000s £’000
At 5 April 2004 632 (1,089) (457)
Charge to income - 865 865
Exchange differences - (17) (17)
At 3 April 2005 632 (241) 391
Credit to income - (1) (1)
Reclassification (508) 508 -
Transfer from current tax - (139) (139)
Exchange differences 16 26 42
At 2 April 2006 140 153 293
Certain deferred tax assets and liabilities have been offset.  The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:
2006 2005
£’000 £’000
Deferred tax liabilities 537 391
Deferred tax assets (244) -
293 391
At the balance sheet date, the Group had unused tax losses of £30 million (2005: £26 million) available for offset against
future profits.  No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future profit
streams.  Included in unrecognised tax losses are losses of £14 million (2005: £10 million) that cannot be carried forward
indefinitely.  Other losses may be carried forward indefinitely. 38
Notes to the Financial Statements
22. Deferred tax (continued)
Group (continued)
At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of
subsidiaries for which deferred tax liabilities have not been recognised was £55 million (2005: £51 million).  No liability has
been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the
temporary differences and it is probable that such differences will not reverse in the foreseeable future.
Company
The Company has no recognised deferred tax assets or liabilities.  At the balance sheet date, the Company had unused tax
losses of £6 million (2005: £5 million) available for offset against future profits.  No deferred tax asset has been recognised in
respect of these losses due to the unpredictability of future profit streams. 
23. Obligations under finance leases
Present value of
Minimum lease minimum lease 
Group payments payments
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Amounts payable under finance leases:
Within one year 130 148 123 138
In the second to fifth years 116 47 107 43
246 195 230 181
Less: future finance charges (16) (14)
Present value of lease obligations 230 181
Less: amount due for settlement within 12 months (124) (138) (124) (138)
Amount due for settlement after 12 months 106 43 106 43
It is the Group’s policy to lease certain of its plant and machinery under finance leases.  The average lease term is 3 years.
For the current and prior year the average effective borrowing rate was 9%.  Interest rates are fixed at the contract date.  All
leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The fair
value of the Group’s lease obligations approximates their carrying amount.  The Group’s obligations under finance leases are
secured by the lessors’ rights over the leased assets.
The Group’s lease obligations are denominated in the following currencies: 2006 2005
£’000 £’000
US dollar 167 47
Euro 13 62
Singapore dollar 50 72
230 181
Company
The Company has no obligations under finance leases (2005: £nil).
24. Trade and other payables
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Due for settlement within 12 months:
Trade creditors 33,973 27,478 4,827 3,545
Amounts owed to Group undertakings - - 24,128 11,691
Other taxes and social security 1,367 1,016 561 376
Accruals and deferred income 7,345 8,693 2,461 1,990
42,685 37,187 31,977 17,602
Due for settlement after 12 months:
Amounts owed to Group undertakings - - 25,381 29,652
Other creditors - 8 - -
- 8 25,381 29,652 Volex Group plc Annual Report & Accounts 2006 39
Notes to the Financial Statements
24. Trade and other payables (continued)
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.  The average
credit period taken for trade purchases is 70 days.
The Directors consider that the carrying amount of trade and other payables approximates their fair value.
25. Provisions Restructuring provision
property other Other Total
Group £’000 £’000 £’000 £’000
At 4 April 2005 3,576 - - 3,576
Charge 3,149 2,720 358 6,227
Utilisation of provision (587) (970) - (1,557)
Interest (note 9) 159 - - 159
Transfers (175) 396 100 321
Exchange difference 161 84 8 253
At 2 April 2006 6,283 2,230 466 8,979
Less : included in current liabilities (3,996)
Non-current liabilities 4,983
Restructuring provision
property other Total
Company £’000 £’000 £’000
At 4 April 2005 2,000 - 2,000
Charge in year 30 1,391 1,421
Utilisation of provision (199) (197) (396)
Interest (note 9) 73 - 73
Transfers 194 - 194
At 2 April 2006 2,098 1,194 3,292
Less : included in current liabilities (1,469)
Non-current liabilities 1,823
Property provisions represent the anticipated net costs of onerous leases. The provisions have been recorded taking into
account management’s best estimate of the period for which the properties will remain vacant and the level of rental income,
if any, that can be obtained from sub-tenants. This provision will be utilised as the rental payments fall due through 2016.
Other restructuring provisions principally represent employee termination and relocation payments associated with these
items are expected to be paid out in the next financial year.
Other provisions relate to ongoing legal costs.
26. Share capital
2006 2005
£’000 £’000
Authorised:
75,000,000 (2005: 35,680,000) ordinary shares of 25p each 18,750 8,920
Issued and fully paid:
55,551,699 (2005: 29,540,692) ordinary shares of 25p each 13,888 7,385
Authorised, issued and fully paid:
80,000 (2005: 80,000) preference shares of £1 each - 80
13,888 7,465
In addition to the ordinary shares of 25p each, the Company has also authorised and allotted 80,000 (2005: 80,000)
cumulative preference shares of £1 each. At 3 April 2005, these are classified as non-equity share capital; however upon
adoption of IAS 32 and IAS 39 on 4 April 2005 these have been reclassified as non-current liabilities.  See notes 21 and 27
for further details. 40
Notes to the Financial Statements
26. Share capital (continued)
On 29 June 2005, an Extraordinary General Meeting approved an increase in the authorised ordinary share capital of the
Company to £18,750,000.  On 30 June 2005, the Company issued 25,850,340 ordinary shares for gross proceeds of £19.0
million.  
During the year 67,500 shares were issued on the exercise of share options for proceeds of £58,725.
At 3 April 2005 there were 494,945 unexercised warrants.  As a consequence of signing the new banking facilities (see note
20), these warrants were amended to include a re-pricing to 73.5p and an extension of the expiry date to June 2008.  As a
result of these changes, the warrants were fair valued utilising the Black-Scholes model and the difference in the fair value
from that previously recorded was debited to debt issue costs (£227,000).  The Group utilised the following inputs into the
valuation model: share price 99.5p; exercise price 73.5p; expected volatility 60%; expected life 2 years; and risk-free rate 4%.
Subsequent to these amendments, 213,996 of the warrants were cancelled and 93,167 were exercised.  At 2 April 2006
187,782 warrants remain unexercised.
27. Preference shares
The Company has in issue 80,000 cumulative preference shares of £1 each with the rights to a fixed cumulative preference
dividend payable, at the rate of 7% per annum, on the amount paid up or credited as paid up thereon on 31 March and 30
September in each year but not to any further participation in the profits of the Company.  The preference shares confer the
right on a winding up to have the capital paid or credited as paid up, including all arrears of dividend whether declared or not
up to the commencement of the winding up, paid in priority to any payment of capital on the ordinary shares but without any
further right to participate in profits or assets.  There is no fixed repayment date.
Since the dividends are in arrears for more than three months, the preference shares currently confer on the holders the right
to have notice and to attend and vote, either in person or by proxy, at any General Meeting. 
As stated in notes 21 and 26, these preference shares have upon adoption of IAS 32 and IAS 39 been restated as non-
current liabilities, reducing the Company’s and the Group’s net assets on 4 April 2005 by £80,000.
28. Movements in shareholders’ equity
Share Share Translation Retained Total
capital premium reserve earnings equity
Group £’000 £’000 £’000 £’000 £’000
Balance at 3 April 2005 7,465 20,986 266 (13,592) 15,125
Adjustment on first time adoption of IAS 32 and IAS 39 (80) - - - (80)
Balance at 4 April 2005 7,385 20,986 266 (13,592) 15,045
Net proceeds from issue of equity shares 6,503 11,142 - - 17,645
Reserve transfer on exercise and cancellation of share
options and warrants - 150 - (150) -
Net loss for the year - - - (9,106) (9,106)
Reserves entry for warrants and option charges - - - 577 577
Capital reduction - (32,110) - 32,110 -
Actuarial gains on defined benefit schemes - - - 379 379
Exchange differences on translation of foreign operations - - 1,555 - 1,555
Balance at 2 April 2006 13,888 168 1,821 10,218 26,095
Share Share Retained
capital premium earnings Total
Company £’000 £’000 £’000 £’000
Balance at 3 April 2005 7,465 20,986 (27,923) 528
Adjustment on first time adoption of IAS 32 and IAS 39 (80) - - (80)
Balance at 4 April 2005 7,385 20,986 (27,923) 448
Net proceeds from issue of equity shares 6,503 11,142 - 17,645
Reserve transfer on exercise and cancellation of share
options and warrants - 150 (150) -
Net profit for the year - - 4,631 4,631
Reserves entry for warrants and option charges - - 577 577
Capital reduction - (32,110) 32,110 -
Actuarial gains on defined benefit schemes - - 379 379
Exchange differences on translation of foreign operations ----
Balance at 2 April 2006 13,888 168 9,624 23,680 Volex Group plc Annual Report & Accounts 2006 41
Notes to the Financial Statements
28. Movements in shareholders’ equity (continued)
On 12 October 2005 the cancellation of the Company’s share premium account was confirmed by High Court of Justice,
Chancery division.  The balance on that account at that date has been utilised to eliminate the deficit on the Company’s
retained earnings account.
Group retained earnings include non-distributable reserves in subsidiary companies of £2.3 million (2005: £1.1 million).
29. Analysis of net debt
Other non
4 April Exchange cash 2 April
2005 Cash flow movement changes 2006
Group £’000 £’000 £’000 £’000 £’000
Cash at bank and in hand 14,962 (4,150) 834 - 11,646
Overdraft (4,026) 4,193 (167) - -
Debt due after one year - (25,793) (958) - (26,751)
Debt due within one year (41,289) 43,263 (1,974) - -
Finance leases (181) 144 (11) (182) (230)
Debt issue costs - 2,486 - (425) 2,061
Net debt (30,534) 20,143 (2,276) (607) (13,274)
Non-cash changes within debt issue costs include £227,000 associated with the amendment of warrants (see note 26) and
accrued costs of £87,000, less amortisation of debt issue costs of £739,000. During the year £182,000 of property, plant and
equipment was acquired under finance leases.
30. Operating lease arrangements
Group Company
2006 2005 2006 2005
The following have been recognised in income during the year £’000 £’000 £’000 £’000
Minimum lease payments made under operating leases 5,988 6,651 981 895
Minimum sublease payments received under operating leases 433 - - -
At the balance sheet date, the Group and Company had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Within one year 5,252 4,201 961 895
In the second to fifth years inclusive 13,034 11,939 3,843 3,579
After five years 8,311 10,223 6,163 6,459
26,597 26,363 10,967 10,933
Operating lease payments represent rentals payable by the Group for certain of its office and manufacturing properties.
Leases are negotiated for an average term of 6 years and rentals are fixed for an average of 3 years.
At the balance sheet date, the Group expects to receive £3.8 million (2005: £nil) under non-cancellable subleases. 42
Notes to the Financial Statements
31. Share based payments
Group and Company
Equity-settled share option schemes
The Company operates an Employee Share Saving Scheme and Discretionary Share Option Schemes.  Details of shares
outstanding during the year are as follows:
Date of grant Option price Exercise period No.  options outstanding
(pence) 2006 2005
Employee Share Savings Scheme
7 July 2000 1,051.0 2003-2006 - 3,381
13 July 2001 631.0 2004-2007 29,418 30,955
Discretionary Share Option Schemes
23 July 1996 455.0 1999-2006 3,625 53,625
14 July 1997 410.0 2000-2007 - 12,000
18 December 1997 485.5 2000-2007 - 8,000
21 July 1998 610.0 2001-2008 5,000 33,500
8 July 1998 622.5 2002-2009 8,500 38,500
20 December 1999 922.5 2002-2009 20,000 20,000
3 July 2000 1,475.0 2003-2010 42,500 77,725
18 June 2001 788.0 2004-2011 57,000 91,500
23 July 2002 138.0 2005-2012 72,500 76,250
20 June 2003 87.0 2006-2013 160,000 227,500
10 November 2003 126.5 2006-2013 15,000 15,000
21 June 2004 147.5 2007-2014 205,000 230,000
4 July 2005 100.0 2008-2015 770,000 -
4 January 2006 107.5 2009-2016 273,255 -
1,661,798 917,936
Details of the share options outstanding during the year are as follows:
2006 2005
Weighted Weighted
average average
Number of exercise Number of exercise
Share price Share price
options (pence) options (pence)
Outstanding at beginning of period 917,936 405 976,880 497
Granted during the period 1,063,255 102 230,000 148
Exercised during the period (67,500) 87 (5,000) 138
Expired during the period (251,893) 625 (283,944) 542
Outstanding at the end of the period 1,661,798 191 917,936 405
Exercisable at the end of the period 549,125 333 334,850 845
The weighted average share price at the date of exercise for share options exercised during the period was 127p.  The
options outstanding at 2 April 2006 had a weighted average exercise price of 191p, and a weighted average remaining
contractual life of 6.8 years.  The aggregate of the estimated fair values of options granted in 2006 was £0.5 million (2005:
£0.2 million).    Volex Group plc Annual Report & Accounts 2006 43
Notes to the Financial Statements
31. Share based payments (continued)
Group and Company (continued)
Equity-settled share option schemes (continued)
The inputs into the Black-Scholes model are as follows:
2006 2005
Weighted average share price 101.9p 147.5p
Weighted average exercise price 101.9p 147.5p
Expected volatility 60% 75%
Expected life 5 years 5 years
Risk-free rate 4.1% 5.1%
Expected dividends 2% 2%
Expected volatility was determined with reference to historical volatility of the Group’s share price and FTSE Electronic and
Electrical Equipment Sector index over the previous 30 months.  The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations.
The Group and Company recognised a total expense of £350,000 and £339,000, respectively, including £228,000 as major
restructuring programme costs (2005: Group and Company £15,000) relating to equity-settled share based payment
transactions in the year. 
Cash-settled share based payments
During the year, the Company issued share appreciation rights ‘SARs’ that require the Group to pay the intrinsic value of the
SARs at three fixed dates.  At 2 April 2006, the Group has recorded a liability of £242,000 (2005: £nil).  At 2 April 2006, the
fair value of the SARs was determined by using the Black-Scholes model utilising the following assumptions : share price
126.5p exercise price 73.5p; expected volatility 60%; average expected life 1.25 years; and risk free rate 4.4%.  In 2006 the
Group recorded total expense of £242,000 (including £147,000 as major restructuring programme costs) (2005: £nil).  The
total intrinsic value at 2006 was £286,000 (2005: £nil).
32. Retirement benefit schemes
Defined contribution schemes
The Company operates two HM Revenue and Customs approved defined contribution schemes and makes contributions to
a Group pension plan.  Overseas the Group operates two defined contribution schemes, one in the USA and one in Ireland. 
The total cost charged to the Group’s income in the year was £1,507,000 (2005: £1,592,000). The total cost charged to the
Company’s income in the year was £355,000 (2005: £316,000).  
Defined benefit schemes - Group and Company
The Company maintains two HM Revenue and Customs approved defined benefit schemes that are funded by payments
held in independent trusts.  Future accrual of retirement benefits under both schemes ceased on 31 March 2003 when the
schemes were replaced with defined contribution arrangements. The last full actuarial valuation of the schemes was carried
out by a qualified independent actuary in August 2004. This valuation has been updated on an approximate basis to 2 April
2006 and utilises the projected unit valuation method.   44
Notes to the Financial Statements
32. Retirement benefit schemes (continued)
Defined benefit schemes - Group and Company (continued)
The key assumptions utilised are:
Valuation at
2006 2005
Discount rate 4.9% 5.4%
Expected return on scheme assets 6.1% 6.0%
Future pension increases 2.6% 2.6%
The following mortality assumptions have been made:
Males Females
Future life expectancy for a pensioner currently aged 65 21 24
Future life expectancy at age 65 for a non-pensioner currently aged 55 23 26
Amounts recognised in income statement (note 9) 2006 2005
£’000 £’000
Interest cost (706) (656)
Expected return on scheme assets 554 514
Finance costs (152) (142)
No other amounts have been recognised in the income statement (2005: £nil).  
Amounts recognised in statement of recognised income and expense
Actuarial gains of £379,000 (2005: losses £487,000) have been reported in the statement of recognised income and expense.  
Amounts recognised in balance sheet 2006 2005
£’000 £’000
Fair value of scheme assets 11,148 9,216
Present value of defined benefit obligations (14,659) (13,311)
Deficit in scheme recognised in the balance sheet (3,511) (4,095)
Current liabilities 357 359
Non-current liabilities 3,154 3,736
3,511 4,095
The Company expects to contribute £357,000 to its defined pension plans in the year ending 1 April 2007.
Movements in the present value of defined benefit obligations 2006 2005
£’000 £’000
At beginning of year (13,311) (12,094)
Interest cost (706) (656)
Actuarial gains and losses (1,099) (918)
Benefits paid 457 357
At end of year (14,659) (13,311)
Movements in the fair value of scheme assets 2006 2005
£’000 £’000
At beginning of year 9,216 8,466
Expected return on scheme assets 554 514
Actuarial gains and losses 1,478 431
Contributions from the sponsoring company 357 162
Benefits paid (457) (357)
At end of year 11,148 9,216 Volex Group plc Annual Report & Accounts 2006 45
Notes to the Financial Statements
32. Retirement benefit schemes (continued)
Defined benefit schemes - Group and Company (continued)
Composition of assets 2006 2005
£’000 £’000
Equity instruments 8,000 6,483
Debt instruments 2,954 2,569
Property 194 164
11,148 9,216
None of the fair values of the assets shown above include any of the Company’s own financial instruments or any property
occupied or other assets used by the Company (2005: £nil).
Expected long-term rates of return
To develop the expected long-term rate of return on assets assumption, the Company considered the current level of
expected returns on risk free investments (primarily government bonds), the historical level of risk premium associated with
the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class.  The
expected return for each asset class was then weighted based on the asset allocation to develop the expected long-term
rate of return on assets assumptions for the portfolio.
The expected long-term rates of return are as follows:
2006 2005
% %
Equity instruments 6.6 6.6
Debt instruments 4.6 4.6
Property 6.6 6.6
Overall 6.1 6.0
The actual return on scheme assets for the year was £2,032,000 (2005: £945,000).
Cumulative actuarial gains and losses recognised in equity 2006 2005
£’000 £’000
At beginning of the year (487) -
Net actuarial gains/(losses) recognised in the year (note 28) 379 (487)
At end of the year (108) (487)
History of experience gains and losses 2006 2005
Experience adjustments on scheme liabilities
(£’000) (1,099) (918)
% scheme liabilities 7% 7%
Experience adjustments on scheme assets
(£’000) 1,478 431
% scheme assets 13% 5%
33. Contingent liabilities
The Mexican government has issued a claim against Volex de Mexico, a subsidiary company, for 22 million pesos (approximately
£1 million) alleging misstatements on customs returns for fiscal years 2000 and 2001.  The Directors have instructed legal counsel
to file a response on the company’s behalf strongly rebutting such allegations and requesting that the case be dismissed.
The Company enters into financial guarantee contracts to guarantee the indebtedness of other Group companies.  The
Company considers these to be insurance arrangements and treats the guarantee contract as a contingent liability until such
time as it becomes probable that the Company will be required to make a payment under the guarantee.   46
Notes to the Financial Statements
34. Related party transactions
Group
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.  
Compensation of key management - Directors of parent company 2006 2005
£’000 £’000
Short-term employee benefits 1,334,475 863,665
Money purchase pension contributions 90,673 83,394
Other long-term benefits 39,750 -
Termination benefits (including £6,412 medical & life benefits) 531,884 98,269
Share based payments 534,619 7,934
2,531,401 1,053,262
Details of Directors’ remuneration, share options, pension contributions, pension entitlements, fees for consulting services
and interests for the year are provided in the audited part of the Directors’ remuneration report on pages 68 to 71.
Company
During the year the Company levied the following charges on its subsidiary undertakings:
2006 2005
£’000 £’000
Management fees 5,147 6,184
Royalty fees 955 778
Interest income (note 7) 3,590 3,083
9,692 10,045
Amounts due from and to subsidiary undertakings are shown in notes 17, 19 and 24.
35. Explanation of transition to IFRS
This is the first year that the Group and Company has presented its financial statements under IFRS.  The following
disclosures are required in the year of transition.  The last financial statements under UK GAAP were for the year ended 3
April 2005 and the date of transition to IFRS was therefore 5 April 2004.
Reconciliations from UK GAAP to IFRS of the Group and Company balance sheets as at 5 April 2004 and 3 April 2005
together with the Group and Company income statement for the year ended 3 April 2005 are presented below.  The changes
can be summarised as follows:
Net assets
Loss for year 3 April 5 April
to 3 April 2005 2005 2004
Group £’000 £’000 £’000
As previously reported under UK GAAP (13,928) 18,869 32,531
Reversal of goodwill amortisation 302 302 -
Goodwill impairment charge (132) (132) -
Defined benefit pension schemes 113 (3,914) (3,540)
Share options (15) - -
As restated under IFRS (13,660) 15,125 28,991
(a) Intangible assets
IFRS requires certain computer software assets to be shown separately as intangible fixed assets.  Under UK GAAP such
items were previously classified as property, plant and equipment.
(b) Retirement benefit obligations
The Group has applied the requirements of IAS 19, Employee Benefits (revised 2004), to its closed defined benefit
schemes.  The net deficit of the scheme assets, which are recorded at fair value, less the obligations, which are measured
at discounted present value, has been shown on the balance sheet and the movement thereon has been reflected in the
statement of recognised income and expense. 
The financing costs are recognised in the income statement in the period in which they arise. Since the schemes are
closed no service cost is required to be recognised at the operating profit level.  Interest costs of £142,000 have been
recognised in the year to 3 April 2005 whilst UK GAAP service costs of £255,000 have been removed. Volex Group plc Annual Report & Accounts 2006 47
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
(b) Retirement benefit obligations (continued)
Adjustments to liabilities to recognise the IFRS net pension deficit are calculated as follows:       
UK GAAP IFRS Net
Accruals Provisions Total Provisions Difference
£’000 £’000 £’000 £’000 £’000
Pension liabilities at:
5 April 2004 88 - 88 3,628 3,540
3 April 2005 - 181 181 4,095 3,914
(c) Effect of changes in foreign exchange rates
Under IFRS, exchange differences arising on consolidation, when translating the net assets of overseas subsidiaries, are
required to be recognised as a separate equity reserve. The Group has adopted the transitional provision of IFRS 1, which
allows cumulative translation differences to be deemed as zero at the date of transition to IFRS.  On transition at 5 April
2004, £4,032,000 and £6,041,000 have been credited to Group’s and the Company’s translation reserve, respectively, and
debited to the profit and loss account.
(d) Goodwill
UK GAAP required that goodwill arising on the acquisition of subsidiary undertakings and businesses was amortised over
its useful economic life. Under IFRS an amortisation charge is not made. Hence the UK GAAP amortisation charge in the
52 weeks to 3 April 2005 of £302,000 has been reversed thus increasing IFRS profit by this amount. As a result of
reversing the amortisation charges, the impairment charge recorded in 2005 financial year, with respect to the Group’s
Brazilian operations is increased under IFRS by £132,000, which was the UK GAAP amortisation charge recorded post 5
April 2004 but prior to the impairment being recognised.
(e) Share based payments
In accordance with the transitional rules of IFRS 1, IFRS 2, has been applied to share options granted after 7 November
2002 that were unvested at 1 January 2005.
A cumulative expense of £33,000 has been recognised in the transition balance sheet at 5 April 2004. For the 52 weeks to
3 April 2005 additional costs of £15,000 have been recorded.
(f) Presentation of financial statements
In a number of circumstances, IFRS requires a different presentation of items in the financial statements compared with
UK GAAP .  These requirements for the balance sheet include deferred tax assets to be shown as non-current assets and
for provisions to be split between current and non-current.  From an income statement perspective, IFRS does not require
the profit or loss on sale of fixed assets to be disclosed separately on the face of the statement.
(g) Exchange gains and losses (Company only) 
Under UK GAAP , investments in Group undertakings that were denominated in a foreign currency were restated at each
year end based on year end exchange rates. This movement was taken to the translation reserve.  Under IFRS,
investments are stated at cost and are not restated at each period end to reflect current exchange rates.  At 5 April 2004
and 3 April 2005 investments have been increased by £1,040,000 and £892,000, respectively, to remove the foreign
exchange losses recorded since the date of the investment.
Under UK GAAP within the Company’s financial statement, hedging of overseas net investment and external foreign
currency borrowing was possible such that where hedging was achieved exchange movements on the external debt were
taken to the translation reserve.  Under IFRS, hedging of overseas net investments is not applicable at the Company level
and as such in the Company’s financial statements exchange gains and losses recorded on the Company’s external debt
are required to be recorded in the income statement.  Furthermore, under IFRS all exchange gains and losses on Group
balances, including where they relate to balances which are not repayable within the foreseeable future, are recorded in
the Company’s income statement. Under UK GAAP such gains and losses were recorded in the translation reserve.
For the 52 weeks ended 3 April 2005 exchange losses of £563,000 have been recorded in the Company’s IFRS income
statement. 48
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the consolidated balance sheet and equity at 5 April 2004
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35 
Non-current assets
Goodwill 3,798 - 3,798
Other intangible assets - 149 149 a
Property, plant and equipment 23,872 (149) 23,723 a
Deferred tax asset - 457 457 f
27,670 457 28,127
Current assets
Inventories 29,345 - 29,345
Trade and other receivables 50,358 (457) 49,901 f
Cash and cash equivalents 11,919 - 11,919
91,622 (457) 91,165
Total assets 119,292 - 119,292
Current liabilities
Bank overdrafts and loans 3,790 - 3,790
Obligations under finance leases 93 - 93
Trade and other payables 41,880 - 41,880
Current tax liabilities 1,324 - 1,324
Retirement benefit obligation 88 74 162 b
47,175 74 47,249
Net current assets 44,447 (531) 43,916
Non-current liabilities
Bank overdrafts and loans 39,463 - 39,463
Obligations under finance leases 123 - 123
Retirement benefit obligation - 3,466 3,466 b
39,586 3,466 43,052
Total liabilities 86,761 3,540 90,301
Net assets 32,531 (3,540) 28,991
Equity attributable to equity holders of the parent
Share capital 7,465 - 7,465
Share premium account 20,986 - 20,986
Translation reserve (4,032) 4,032 - c
Retained earnings 8,112 (7,572) 540
Total equity 32,531 (3,540) 28,991 Volex Group plc Annual Report & Accounts 2006 49
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the consolidated balance sheet and equity at 3 April 2005
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35 
Non-current assets
Goodwill 1,760 170 1,930 d
Other intangible assets - 117 117 a
Property, plant and equipment 13,568 (117) 13,451 a
15,328 170 15,498
Current assets
Inventories 28,030 - 28,030
Trade and other receivables 50,381 - 50,381
Cash and cash equivalents 14,962 - 14,962
93,373 - 93,373
Total assets 108,701 170 108,871
Current liabilities
Bank overdrafts and loans 45,315 - 45,315
Obligations under finance leases 138 - 138
Trade and other payables 37,187 - 37,187
Current tax liabilities 2,993 - 2,993
Retirement benefit obligation - 359 359 b
Provisions - 619 619 f
85,633 978 86,611
Net current assets 7,740 (978) 6,762
Non-current liabilities
Obligations under finance leases 43 - 43
Trade and other payable 8 - 8
Retirement benefit obligation 181 3,555 3,736 b
Deferred tax liabilities 391 - 391
Long-term provisions 3,576 (619) 2,957 f
4,199 2,936 7,135
Total liabilities 89,832 3,914 93,746
Net assets 18,869 (3,744) 15,125
Equity attributable to equity holders of the parent
Share capital 7,465 - 7,465
Share premium account 20,986 - 20,986
Translation reserve (3,766) 4,032 266 c
Retained earnings (5,816) (7,776) (13,592)
Total equity 18,869 (3,744) 15,125 50
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the consolidated income statement 3 April 2005
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35
Revenue 244,551 - 244,551
Operating loss (7,306) 2,328 (4,978)
Analysed as:
Operating profit before major restructuring programme 1,528 240 1,768 b, e 
Major restructuring programme (8,532) 1,786 (6,746) d, f
Goodwill amortisation (302) 302 - d
Operating loss (7,306) 2,328 (4,978)
Investment income 59 - 59
Finance costs
- interest (3,243) (142) (3,385) b
- refinancing costs and amortisation of debt issue costs (932) - (932)
(4,175) (142) (4,317)
Profit on disposal of fixed assets 1,918 (1,918) - f
Loss on ordinary activities before taxation (9,504) 268 (9,236)
Taxation (4,424) - (4,424)
Loss on ordinary activities after taxation (13,928) 268 (13,660)
Reconciliation of the consolidated cash flow statement 3 April 2005
Under UK GAAP the cash flow statement reconciles the combined movement in cash and overdrafts.  The IFRS cash flow
statement reconciles movements in cash and cash equivalents only, with movements in overdrafts shown within the financing
section of the statement.
Other cash flow differences between UK GAAP and IFRS are either presentational or movements within classification.  There
is no impact on the final net debt position or the movement in net debt during the periods presented. Volex Group plc Annual Report & Accounts 2006 51
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the Company balance sheet and equity at 5 April 2004
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35
Non-current assets
Other intangible assets - 37 37 a
Property, plant and equipment 3,626 (37) 3,589 a
Investments 48,168 1,040 49,208 g
Deferred tax asset - 500 500 f
51,794 1,540 53,334
Current assets
Inventories 3,875 - 3,875
Trade and other receivables 35,066 (500) 34,566 f
Cash and cash equivalents 1,854 - 1,854
40,795 (500) 40,295
Total assets 92,589 1,040 93,629
Current liabilities
Bank overdrafts and loans 3,723 - 3,723
Trade and other payables 9,411 - 9,411
Retirement benefit obligation 88 74 162 b
13,222 74 13,296
Net current assets 27,573 (574) 26,999
Non-current liabilities
Bank overdrafts and loans 39,463 - 39,463
Trade and other payable 28,834 - 28,834
Retirement benefit obligation - 3,466 3,466 b
68,297 3,466 71,763
Total liabilities 81,519 3,540 85,059
Net assets 11,070 (2,500) 8,570
Equity attributable to equity holders of the parent
Share capital 7,465 - 7,465
Share premium account 20,986 - 20,986
Translation reserve (6,041) 6,041 - c
Retained earnings (11,340) (8,541) (19,881)
Total equity 11,070 (2,500) 8,570 52
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the Company balance sheet and equity at 3 April 2005
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35
Non-current assets
Other intangible assets - 20 20 a
Property, plant and equipment 1,585 (20) 1,565 a
Investments 67,701 892 68,593 g
69,286 892 70,178
Current assets
Inventories 3,817 - 3,817
Trade and other receivables 18,497 - 18,497
Cash and cash equivalents 5,668 - 5,668
27,982 - 27,982
Total assets 97,268 892 98,160
Current liabilities
Bank overdrafts and loans 44,283 - 44,283
Trade and other payables 17,602 - 17,602
Retirement benefit obligation - 359 359 b
Provisions - 200 200 f
61,885 559 62,444
Net current liabilities (33,903) (559) (34,462)
Non-current liabilities
Trade and other payables 29,652 - 29,652
Retirement benefit obligation 181 3,555 3,736 b
Long-term provisions 2,000 (200) 1,800 f
31,833 3,355 35,188
Total liabilities 93,718 3,914 97,632
Net assets 3,550 (3,022) 528
Equity attributable to equity holders of the parent
Share capital 7,465 - 7,465
Share premium account 20,986 - 20,986
Translation reserve (6,456) 6,456 - c, g
Retained earnings (18,445) (9,478) (27,923)
Total equity 3,550 (3,022) 528 Volex Group plc Annual Report & Accounts 2006 53
Notes to the Financial Statements
35. Explanation of transition to IFRS (continued)
Reconciliation of the Company income statement 3 April 2005
UK GAAP IFRS IFRS
adjustments
£’000 £’000 £’000 Note 35
Revenue 36,772 - 36,772
Operating loss (2,827) 523 (2,304)
Analysed as:
Operating profit before major restructuring programme 360 (323) 37 b, g
Major restructuring programme (3,187) 846 (2,341) f
Operating loss (2,827) 523 (2,304)
Investment income 3,083 - 3,083
Other losses (3,645) - (3,645)
Finance costs
- interest (2,971) (142) (3,113) b
- refinancing costs and amortisation of debt issue costs (932) - (932)
(3,903) (142) (4,045)
Profit on disposal of fixed assets 846 (846) - f
Loss on ordinary activities before taxation (6,446) (465) (6,911)
Taxation (659) - (659)
Loss on ordinary activities after taxation (7,105) (465) (7,570) 54
Independent Auditors’ Report to the
Members of Volex Group plc
We have audited the Group and individual Company financial statements (the ‘financial statements’) of Volex Group plc for the 52
weeks ended 2 April 2006 which comprise the consolidated and individual company income statements, the consolidated and
individual company balance sheets, the consolidated and individual company cash flow statements, the consolidated and
individual company statements of recognised income and expenses and the related notes 1 to 35. These financial statements
have been prepared under the accounting policies set out therein.  We have also audited the information in the Directors’
remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the annual report, the Directors’ remuneration report and the financial statements in
accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted for use in the European Union
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 described as having been
audited in accordance with relevant United Kingdom legal and regulatory requirements and International Standards on Auditing
(UK and Ireland). 
We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with the relevant
financial reporting framework and whether the financial statements and the part of the Directors’ remuneration report described as
having been audited have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS
Regulation.   We report to you whether, in our opinion, the information given in the Directors’ report is consistent with the financial
statements.  We also report to you 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 other
transactions is not disclosed.
We also report to you if, in our opinion, the Company has not complied with any of the four Directors’ remuneration disclosure
requirements specified for our review by the Listing Rules of the Financial Services Authority.  These comprise the amount of each
element in the remuneration package and information on share options, details of long term incentive schemes and money
purchase and defined benefit schemes.  We give a statement, to the extent possible, of details of any non-compliance.
We review whether the Corporate governance statement reflects the Company’s compliance with the nine provisions of the 2003
FRC Combined Code specified for our review by the Listing Rules of the Financial Services Authority and we report if it does not.
We are not required to consider whether the Board’s statements on internal control cover all risks and controls or form an opinion
on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report as described in the contents section including the unaudited part of
the Directors’ remuneration report and we consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. 
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements and the part of the Directors’ remuneration report described as having been audited. It also includes an assessment of
the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the
accounting policies are appropriate to the Company’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 described as having been audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial
statements and the part of the Directors’ remuneration report described as having been audited. Volex Group plc Annual Report & Accounts 2006 55
Independent Auditors’ Report to the Members of Volex Group plc
Opinion
In our opinion:
• the financial statements give a true and fair view, in accordance with IFRSs as adopted for use in the European Union, of the
state of the Group’s and the individual Company's affairs as at 2 April 2006 and of the Group’s loss and the individual
Company’s profit for the 52 weeks then ended; 
• the financial statements and the part of the Directors’ remuneration report described as having been audited have been
properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation; and 
• the information given in the Directors’ report is consistent with the financial statements.
Separate opinion in relation to IFRSs 
As explained in note 2 to the financial statements, the Group and Company, in addition to complying with their legal obligation to
comply with IFRSs adopted for use in the European Union, have also complied with the IFRSs as issued by the International
Accounting Standards Board.  Accordingly, in our opinion the financial statements give a true and fair view, in accordance with IFRSs,
of the state of the Group’s and Company’s affairs as at 2 April 2006 and of the Group’s loss and the Company’s profit for the year
then ended.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Manchester
13 June 2006 56
Corporate Governance Report
The Board is responsible for the governance of the Company, governance being the systems and procedures by which the Company
is directed and controlled.  It is recognised that a presented set of rules does not itself determine good governance or stewardship of a
Company and the Directors believe that in fulfilling their responsibilities, they govern the Company in the best interests of the
shareholders, whilst having regard to the interests of other stakeholders of the Company.
Throughout the reporting period ended 2 April 2006 there have been a number of changes to the composition of the Board, which
have been made in response to changing business needs and the implementation of the restructuring and growth programmes.  The
Board has continued to try to ensure that, where possible, its procedures achieve compliance with the provisions of Section 1 of the
Combined Code on Corporate Governance, issued by the Financial Reporting Council in July 2003 ("FRC Combined Code").
Statement of Compliance with the Code of Best Practice
In the opinion of the Directors the Company has complied with the provisions of Section 1 of the FRC Combined Code throughout the
financial year ended 2 April 2006 (the "Year") and up to the date of reporting except for the following matters. These have arisen as a
result of the changes to the Board discussed above.
The former Chairman, Mr Molloy, was a member of the Remuneration Committee although he was not independent in terms of the
FRC Combined Code (sections A.3.1 and B.2.1), in view of his previous employment as Chief Executive of the Group.   All the other
members of the Remuneration Committee during the Year were independent. Following the appointment of Mr Arkle as Chairman,
there is now only one independent non-executive Director on the Board (section A.3.2) and consequently neither the Nominations
Committee, Remuneration Committee nor the Audit Committee have the required number of independent non-executive directors as
recommended by sections A.4.1, B.2.1 and C.3.1 respectively.  The composition of the Board and its Committees will be reviewed
during the current financial year with a view to complying with these requirements.  As at the date of reporting, the roles of Chairman
and Chief Executive are performed by separate individuals, Mr Chae having been appointed Group Chief Executive on 5 May 2006 and
Mr Arkle having been appointed Chairman on 6 May 2006.  However, prior to these appointments, Mr May held the role of Executive
Chairman following the resignation of Mr Corcoran as Group Chief Executive on 29 November 2005 and accordingly, there was no
division of responsibilities between the role of Chairman and Chief Executive for a period of five months (section A.2.1).  This situation
was only intended to be on an interim basis until such time as a new Chief Executive Officer was found.  Due to the number of changes
to the Board composition during the Year a view was taken that it was not appropriate to undertake a performance evaluation of the
Board, its Committees or the individual Directors during the Year (section A.6.1).   Performance reviews will be resumed in financial year
2006/2007.
The Board and its Committees
The Board currently comprises a non-executive Chairman and three non-executive Directors, one of which is independent, together
with two executive Directors.  The biographies of the Directors can be found on page 16.  The Board views the size of the Board to be
satisfactory in that the balance of skills and experience is appropriate for the business of the Company.  
Changes to the Board during the year can be summarised as follows:
20 April 2005 Mr RM Arkle appointed as a non-executive Director
30 June 2005 Mr DJ Molloy resigned as Chairman
30 June 2005 Mr DMM Beever appointed interim Chairman
30 June 2005 Mr HR Chae appointed as an executive Director in the capacity of Chief Operating Officer
30 June 2005 Mr C Mullett appointed as a non-executive Director 
8 September 2005 Mr MK May appointed Chairman 
8 September 2005 Mr JE Roberts resigned as a non-executive Director
21 September 2005 Mr D Payzant resigned as an executive Director
14 October 2005 Mr M Ashcroft resigned as Company Secretary
14 October 2005 Ms W Tate appointed Company Secretary
25 October 2005 Mr M Ashcroft resigned as an executive Director
29 November 2005 Mr J Corcoran resigned as Group Chief Executive
29 November 2005 Mr MK May appointed Executive Chairman
5 May 2006 Mr HR Chae appointed Group Chief Executive
5 May 2006 Mr MK May resigned as Chairman
6 May 2006 Mr RM Arkle appointed Chairman
6 May 2006 Mr D Goulandris appointed as a non-executive Director
On 5 May 2006, Mr Walter tendered his resignation with due notice. There have been no other changes to the constitution of the Board
either during the Year or since the end of the Year. Volex Group plc Annual Report & Accounts 2006 57
Corporate Governance Report (continued)
On 30 June 2005, Mr Mullett was appointed as a non-executive Director of the Board.  At that time the Company also entered into a
consultancy services agreement with Mr Mullett’s company, Branison Group LLC, to provide services relating to specific designated
projects. Accordingly, Mr Mullett would not be viewed as independent within the meaning of the FRC Combined Code due to the fact
that he has a material business relationship with the Company.  The Company has recently given notice to terminate such services. 
On 6 May 2006, Mr Goulandris was appointed as a non-executive Director of the Board. Mr Goulandris is a partner of Cycladic Capital
LLP , which is a major shareholder in the Company, and accordingly he has a material interest in the Company and is not therefore
independent within the meaning of the FRC Combined Code.
On appointment, Directors are briefed regarding the activities of the Group and the Chairman and Company Secretary ensure that a
new Director has access to appropriate training or advice in relation to the duties of Directors.
Mr Beever is the senior independent Director who makes himself available to meet with shareholders.
The Board is scheduled to meet at least ten times a year and during the Year met fifteen times. It has a formal list of matters specifically
reserved to it including an overview of the business, all major strategy, policy and investment decisions affecting the Group and
development of Group policies in a number of areas including health and safety and social environmental and ethical issues.  It also
meets, by telephone conference call, to discuss ad hoc issues from time to time.  All Directors attended all Board meetings held during
the Year (either in person or by telephone conference) with the exception that Mr Beever was unable to attend three meetings, two of
which were called at short notice; Mr Mullett and Mr Roberts were each unable to attend one meeting which was called at short notice
and Mr Chae was unable to attend one meeting. During the Year the Chairman has met with the non-executive Directors without the
executive Directors being present.  The non-executive Directors have also met without the Chairman or the executive Directors being
present. 
The Chairman, the Group Chief Executive and the Group Finance Director are responsible to the Board for the timeliness and quality of
all financial information submitted to the Board.  The Company Secretary is responsible for the timeliness and quality of all other
information submitted to the Board and for advising the Board through the Chairman on governance issues.  The normal procedure is
to distribute Board papers one week in advance of meetings.  The Chairman is primarily responsible for ensuring the Board has
adequate information provided to it before making decisions.  The Directors have access to the advice and services of the Company
Secretary and the Board has adopted a policy under which the Directors are able to take independent advice at the Company’s
expense.
Directors are subject to re-election at the next Annual General Meeting following the initial date of appointment and then at least every 3
years.  In addition, a Director is required to vacate his office at the conclusion of the Annual General Meeting commencing next after he
attains the age of 70.  As disclosed in the Directors’ report, Mr Beever (being 3 years since his last re-appointment) and Mr Goulandris
(having been appointed since the last Annual General Meeting) are offering themselves for re-election and election respectively at the
2006 Annual General Meeting.  In accordance with the FRC Combined Code, the Board recommends the re-appointment and
appointment of the Directors on the basis that they each bring business experience and expertise to the Board, which enhances the
Board’s ability to respond flexibly and promptly to the needs of the Company.  
Board Committees
The Board has appointed an Audit Committee, a Remuneration Committee and a Nominations Committee.  Each Committee has
adopted written terms of reference dealing clearly with the Committee’s authority and duties and which are available on request and
can be found on the Company’s website (www.volex.com).
The Audit Committee consists of Mr Beever, an independent non-executive Director and the Chairman.  Mr Arkle currently chairs the
Committee. Both Mr Arkle and Mr Beever have recent and relevant financial experience.  The Committee monitors the integrity of the
financial statements of the Company and any formal announcements in relation to the Company’s financial performance.  It reviews the
Company’s internal financial controls and also reviews the scope and effectiveness of the internal audit function, although the Group’s
internal control risk management processes are considered by the Board as a whole.  The Committee recommends to the Board the
appointment and re-appointment of the external auditors. It considers the scope and results of the external audit and its cost
effectiveness.  Furthermore the Committee monitors the independence and objectivity of the auditors and the nature and extent of non-
audit services supplied by the external auditor by analysing fees for audit and non-audit work; by receiving from and discussing with the
auditors their annual report regarding their independence policies and procedures; and by receiving from the auditors confirmation that
they have complied with APB Ethical Standards. During the Year the Audit Committee met three times and all members of the
Committee were present at each meeting.
The Audit Committee recommends the re-appointment of Deloitte & Touche LLP as auditors to the Company. 58
Corporate Governance Report (continued)
The Nominations Committee currently consists of Mr Arkle who is the Committee Chairman, Mr Beever who is an independent non-
executive Director and Mr Mullett, a non-executive Director. Throughout the Year the majority of members were independent non-
executive Directors.  Board appointments are discussed initially by the Nominations Committee, which makes recommendations to the
full Board for further consideration and approval. The Nominations Committee takes advice from a variety of sources including external
recruitment consultants where necessary. During the Year, Oxygen, the search consultants, were used for the appointment of Mr Arkle
as a non-executive Director. However, neither external recruitment consultants, nor open advertising were used for the appointments of
Mr Mullett and Mr Goulandris as non-executive Directors or the appointment of Mr May nor Mr Arkle as Chairman, although, the
appointments were made on merit, against an objective criteria and based, where appropriate, on the recommendations of external
third parties and also following discussions with major shareholders.  The Board seeks to maintain an appropriate balance between
executive and non-executive Directors and the composition of the Board will be reviewed again during the current financial year
following consultation with the Company’s major shareholders.  There is an induction process for newly appointed Directors involving
the Chairman, the Company Secretary and the executive Directors, together with visits to the Group’s operations.  The Board also has
a rolling programme of meetings with senior operational management throughout the Group in order to further enhance the
Board’s understanding of key regional developments.  During the year the Nominations Committee met three times and all
members of the Committee were present at each meeting.
The structure and business of the Remuneration Committee are summarised in the Directors’ remuneration report on page 62.
In addition, the Board has established a number of other committees, such as the Finance Committee and the Sealing Committee
and also establishes ad hoc committees from time to time to deal with specific issues.  All committees have clear terms of
reference specified by the Board and the Secretary records the minutes.  
Directors and Officers insurance against legal action is in place providing cover for Directors and Officials of the Company and its
subsidiaries.  In addition, following the changes to the Companies Act 1985 (section 309C), the Company has granted indemnities
to the executive and non-executive Directors. Copies of the indemnities will be available for inspection at the Annual General
Meeting.
Internal controls
The Board acknowledges its responsibility for the Group’s system of internal control and for reviewing its effectiveness.  It must be
understood, however that such a system is designed to manage rather than eliminate the risk of failure to achieve business
objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has applied principle C.2 of the FRC Combined Code by establishing a continuous process of identifying, evaluating
and managing the significant operational, management and financial risks faced by the Group which accords with the guidance on
internal control published in September 1999 (the Turnbull Guidance).  The Board regularly reviews the process, which has been in
place throughout the financial year and up until the date of approval of this report.  The process is built around the established
management systems of the Group and is reviewed on a regular basis.  In the third quarter of each financial year the Senior
Executive Committee (comprising the executive Directors and senior operational and corporate managers) carries out an exercise
to identify the significant risks currently faced by the business.  Each operating unit then evaluates the potential financial impact of
the risk and sets out the preventative and mitigating actions it will implement. The results are reviewed by the Board. The risks and
actions are monitored through the monthly accounts process and a full update at the half year.
In addition to this process, the policy regarding insurance of risk is a matter reserved to the Board; the Audit Committee monitors
financial control and risk in conjunction with both the internal audit function and external auditors; and the Group finance
department monitors and develops internal financial control systems throughout the Group.
The Board receives with the monthly management accounts a monthly management report covering each of the Group’s
operations and the consolidated results.  The Board also receives following the end of each quarter, commentary on the identified
risks and the internal control processes dealing with those risks.  This is considered by the Board each quarter.  The Board
considers this process satisfies the requirements set out in the Internal Control: Guidance for Directors on the Combined Code.
Whistle-blowing policy
The Company has adopted a whistle-blowing policy, which has been made available to employees on the Company’s website and
on site notice boards.  The aim of the policy is to encourage all employees, regardless of seniority, to bring matters which cause
them concern to the attention of the Board. Volex Group plc Annual Report & Accounts 2006 59
Corporate Governance Report (continued)
Relations with shareholders
The Directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders by
making annual and half-year presentations to institutional investors and stockbroking analysts, meeting existing and potential
institutional shareholders and organising occasional factory tours.  Individual shareholders have the opportunity to discuss issues
with the Directors on an informal basis at the time of the Annual General Meeting and are welcome to communicate with any
Director at any time during the year.  It is the Company’s policy that all Directors attend the Annual General Meeting.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements. The Directors have chosen to prepare
accounts for the Company and the Group in accordance IFRS. Company law requires the Directors to prepare such financial
statements in accordance with IFRS, the Companies Act 1985 and Article 4 of the IAS Regulation. IAS 1, ‘Presentation of financial
statements’ requires that financial statements present fairly for each financial year the Company’s financial position, financial
performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in
accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International
Accounting Standards Board’s ‘Framework for the Preparation and Presentation of Financial Statements’. In virtually all
circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. Directors are also required to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information; and
• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial
performance.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to
continue in operational existence for the foreseeable future.  For this reason, they continue to adopt the going concern basis in
preparing the accounts.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of
fraud and other irregularities and for the preparation of a Directors’ report that complies with the requirements of the Companies
Act 1985.
The Directors are responsible for the maintenance and integrity of the Company website. Legislation in the United Kingdom
governing the preparation and dissemination of the financial statements differs from legislation in other jurisdictions. 60
Social, Ethical and Environmental Report
The Board has adopted a Statement of Social, Ethical and Environmental Policy (the Policy Statement) which applies to the entire
Volex Group of companies. It is circulated through the unit Managing Directors to all employees via the normal regional
communication channels and is available on the Company’s web site www.volex.com and in hard copy from the Secretary.
Volex is committed to:
• respecting the rule of law, conducting our business with integrity and showing respect for the rights of the
individual; 
• creating mutual advantage in all our relationships so that people both inside and outside the Group trust us and
want to work with us;
• demonstrating respect for the environment and working continuously to improve business processes and
practices to reduce the impact of our operations; and
• managing our financial performance to maximise long-term value for our shareholders.
This policy statement is the foundation on which we build and conduct our business and we expect all Volex employees to
support all elements of the policy.
The Policy Statement is based on the commitments set out above and outlines specific minimum standards in respect of five
particular areas. These deal with corporate conduct regarding our employees; health and safety; the environment; relationships
with various stakeholder groups; and the personal conduct of everyone employed by the Group. The Policy Statement concludes
with the outline of a compliance process, which reflects our normal management structures.
Corporate conduct and employment practices
In all aspects of our business we seek to operate in compliance with the law, rules and regulations of the country of operation and
this applies to all areas of our Policy Statement. However, in a number of areas we look to establish specific minimum standards,
which will override any lower legal requirements. For example, in our employment practices we will not use indentured or forced
labour, we will not employ anyone below 16 years old and we do not discriminate on the basis of sex, colour, race, religious belief,
disability, sexual orientation or marital status.
Health and safety
In matters of health and safety we will provide a safe and clean working environment with systems and procedures of a standard
at least equivalent to those of comparable manufacturing companies of good reputation in the geographical area of operation. 
The Board receives reports on health and safety performance throughout the Group. Our regional operations have adopted formal
health and safety policy statements and are implementing specific health and safety programmes to improve identified risks. We
collect and review various performance data ranging from monthly key performance indicators to annual insurance claims records
and use these to identify areas for further improvement.
Environment
We are committed to meeting the needs of our customers in an environmentally sound and sustainable manner through
continuous improvement in all activities, using the best available technology not entailing excessive cost. 
At Volex we work towards the requirements stated in the ISO 14001 Environmental Management System. As part of this system
we review our environmental objectives and targets on a regular basis and ensure continuous improvement. Our plan is to achieve
the international environmental standard ISO 14001 in all our manufacturing locations over a number of years. At the date of this
report, certification has been achieved at each of our 3 facilities in China, at our 2 facilities in Indonesia, at facilities in Vietnam,
Croatia, Poland, Ireland and at 3 facilities in the UK. These sites are now maintaining and improving their environmental
management systems to retain their ISO 14001 certification status. A number of other locations are developing their systems with
a view to applying for certification in the future.
In the electronics industry the production of environmentally friendly products has become increasingly important with the
forthcoming implementation of the Restriction of Hazardous Substances (RoHS) directive on 1 July 2006 and the future
implementation of the Waste Electrical and Electronic Equipment (WEEE) directive. Both of these directives are aimed at reducing
the hazardous materials content in electronic products as well as increasing the recycling of these products. In preparation for
complying with RoHS, Volex initiated a management project working with its customers and its extensive supply base to   Volex Group plc Annual Report & Accounts 2006 61
Social, Ethical and Environmental Report (continued)
ensure that, as a minimum, it conformed with legislative requirements.  In addition, the design of our products is aimed at reducing
their environmental impacts in terms of production, product usage and disposal, which will assist producers in their compliance
with the WEEE directive either prior to or upon implementation. 
Relationships with stakeholder groups
The standards we set ourselves in our relationships with our various groups of stakeholders are typified by the values of honesty,
respect, integrity, diligence and professionalism. These values are the common thread linking our communications with
shareholders, our business relationships with customers, suppliers, sub-contractors and agents, our interaction with local
communities around the world and all our dealings with employees.
Standards of personal conduct
The Group relies on its employees as individuals to practise the highest moral and ethical standards in all their business activities.
While we fully respect the privacy of employees’ personal lives, we expect all employees to conduct their personal affairs so that
the performance of their obligations to the Group is not prejudiced and the reputation of the Group is maintained.  Strict
adherence to the Policy Statement is a condition of employment in the Group. 62
Directors’ Remuneration Report
Introduction
This report has been prepared in accordance with Schedule 7A to the Companies Act 1985 (the “Act”).  The report also meets the
relevant requirements of the Listing Rules of the Financial Services Authority and the FRC Combined Code.  A resolution to
approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be
approved.
Schedule 7A to the Act requires the auditors to report to the Company’s members on the "auditable part" of the Directors’
remuneration report and to state whether in their opinion that part of the report has been properly prepared in accordance with the
requirements under the Act.  The report has therefore been divided into separate sections, for unaudited and audited information.
Unaudited information
Remuneration Committee
The Remuneration Committee is a well-established part of the Company’s governance structures.  On 2 April 2006 the members
of the Committee were Mr Beever and Mr Arkle and the Remuneration Committee was constituted in accordance with the
recommendations of the FRC Combined Code.  During the year Mr Molloy and Mr Roberts were also Committee members until
resigning as Directors on 30 June and 8 September 2005 respectively and during that time the constitution of the Remuneration
Comittee had not been in compliance with the FRC Combined Code in view of the fact  Mr Molloy was not an independent non-
executive Director as he was previously employed as Group Chief Executive (section A.3.1 and B.2.1).  Following the appointment
of Mr Arkle as Company Chairman, Mr Beever is now the only independent non-executive Director of the Remuneration
Committee and as such the constitution does not comply with section B.2.1 of the FRC Combined Code.  The composition of the
Board of Directors and the Remuneration Comittee will be reviewed during the Financial Year 2006/07 with a view to fulfiling
compliance. Mr Beever chairs the Committee and the Company Secretary acts as Secretary to the Committee.  During the year
the Remuneration Committee met seven times and all members of the Committee were present at each meeting with the
exception that Mr Beever was unable to attend one meeting.
None of the Committee members have any personal financial interest or conflicts of interests arising from cross-Directorships or
day-to-day involvement in running the business and no Director plays a part in any discussion about his own remuneration.
The Remuneration Committee agrees with the Board of Directors of the Company the broad policy for the remuneration of the
executive Directors and those other senior executives of the Group reporting directly to the Chief Executive (together the "Senior
Executive Team").  In the context of that broad policy the Remuneration Committee then determines and reviews, at least annually,
the specific remuneration packages of each of the Senior Executive Team.  In addition, the Remuneration Committee approves the
terms of all service agreements for the Senior Executive Team and determines the grant of all discretionary share options within
the Group.
During the year New Bridge Street Consultants LLP provided advice and services to the Remuneration Committee. In determining
the executive Directors’ remuneration for the year, the Remuneration Committee used a benchmarking report produced by New
Bridge Street Consultants LLP which showed market comparatives and acted to achieve median levels of remuneration.
Ordinarily, it would be the Remuneration Comittee which would determine the Chairman’s fees; however, given the circumstances,
Mr Arkle’s fees were reviewed by Mr Beever who consulted with the Group Chief Executive and New Bridge Street Consultants LLP .
The balance of this Report deals solely with the remuneration and terms of service of the Board of Directors of the Company.
Remuneration policy
The policy of the Remuneration Committee in relation to the executive Directors is to maintain remuneration packages sufficient to
attract, retain and motivate executives of the calibre and experience necessary to provide a successful future for the Group. 
The Remuneration Comittee also determines and reviews, at least annually, on behalf of the Board the level of fees payable to the
Chairman.
The objective is to provide a balanced remuneration package, which includes an appropriate level of basic salary and benefits in
kind (including pension provision where appropriate), together with both short-term and long-term incentives.  Short-term
incentives are linked to challenging targets, which support and reinforce the objectives of the Company.  The standard long-term  Volex Group plc Annual Report & Accounts 2006 63
Directors’ Remuneration Report (continued)
incentives, currently being options granted under the Company’s share option schemes, focus the executives on the sustained
development of the Company and align their interests with those of the shareholders.  The remuneration of the non-executive
Directors is determined by the Board of Directors of the Company within limits set out in the Articles of Association.
There are four main elements of the remuneration package for executive Directors:
- basic annual salary (including Directors’ fees) and benefits;
- annual bonus payments;
- long-term share related incentives; and
- pension arrangements.
The Company’s policy is that a substantial proportion of the remuneration of the executive Directors should be performance
related.  
The Remuneration Committee has considered the future provision of long-term share related incentives and has determined that a
long-term incentive plan (“LTIP”) would in future be more appropriate than the current share option scheme.  A resolution
proposing the adoption of a LTIP will be put to the 2006 Annual General Meeting and will be detailed in a circular which will be
issued with the Notice of the forthcoming Annual General Meeting.
Basic salary
In deciding and reviewing appropriate remuneration packages, the Remuneration Committee considers:
- the positioning of the Group relative to other companies;
- the positioning of individual Directors relative to positions in other companies;
- remuneration expectations in the geographical area of operation;
- surveys published by leading remuneration consultants supplemented by occasional specific advice and benchmarking
exercises by external consultants and the knowledge and experience of the members of the Remuneration Committee;
- remuneration relativities within the Group;
- the competition, risks, challenges, complexity, diversity and international spread of the Group’s business; and
- the particular expertise and understanding required of the Director concerned.
The Remuneration Committee determines executive Directors’ basic salaries annually, with adjustments being made with effect
from 1 April and when an individual changes position or responsibility.   
In addition to basic salary and pension benefits, the executive Directors receive certain benefits-in-kind, principally a car allowance
and fuel costs (or a fully expensed Company car), private medical insurance, permanent health insurance and life assurance.
Bonus arrangements
A discretionary annual cash bonus scheme represents the short-term incentive element of the overall remuneration package for
executive Directors.  The Remuneration Committee establishes the objectives that must be met in each financial year if a cash
bonus is to be paid, reflecting the strategic objectives set by the Board for the year in question. The bonus plan for the financial
year to 2 April 2006 rewarded performance relative to financial targets, the achievement of the equity raising exercise in June
2005; and specific personal objectives.  Details of the bonuses payable in respect of performance during the financial year ended
2 April 2006 are set out in the table on page 68.  Maximum bonus levels are set annually, currently at 100% of basic salary for the
Group Chief Executive and 60% of basic salary for the Group Finance Director.  Whilst Mr May was Executive Chairman, he was
eligible to earn a 40% bonus upon the targeted operating profit for the Year being achieved.  In addition, on 7 July 2005, a special
bonus arrangement was agreed whereby the Company would make a one-off payment of £159,000 to Mr Chae, provided that on
4 July 2008 the ordinary share price is not less than £1.00 and that Mr Chae is still an employee of the Company. The special
bonus was agreed as a further incentive, Mr Chae having already been granted share options equivalent to three times his salary.
The bonus is not pensionable.
Share options
The executive Directors hold options to purchase ordinary shares granted pursuant to the Volex 1994 Share Option Scheme (the
1994 scheme) and the Volex 2001 Share Option Plan (the 2001 plan) (together the “Option Schemes”).  These Option Schemes
are the Company’s standard long-term incentive schemes for executive Directors and other senior executives.  They are
discretionary share option schemes and are intended to align executives’ financial interests directly with those of the shareholders.
Executives are encouraged to retain shares after exercise of options, save for sales for the provision of the exercise price and
associated costs and for taxes.   64
Directors’ Remuneration Report (continued)
Subject to the aggregate and individual limits built into the rules of the Option Schemes, the Committee’s policy is to grant options
to executive Directors on an annual basis, thereby building option holdings progressively over a period of time.  Executive Directors
are not normally granted in any one-year options over shares with a market value greater than 100% of basic salary.  However, in
exceptional circumstances grants of up to 3 times basic salary may be made. In addition, executive Directors are encouraged to
retain shares following the exercise of options, after allowing for sales to fund the exercise and related tax liabilities.
The exercise of options granted under the Option Schemes is subject to the satisfaction of a financial performance condition set
by the Remuneration Committee at the time of each grant.
The performance condition attached to options granted since June 1995 is that the growth in Earnings Per Share (EPS) over the
initial three-year vesting period is equal to or in excess of the movement in the Retail Prices Index (RPI) plus 2% per annum. With
effect from July 1998 this was adjusted to growth in EPS over the vesting period equal to or in excess of RPI plus 3% per annum.
The performance condition attached to options granted in July 2002 is that the growth in EPS over the performance period is
equal to or in excess of 30p per share, increased by the movement in RPI plus 3% per annum measured from April 2003 to the
end of the performance period.
The performance condition attached to options granted in July 2003 is that the growth in EPS over the performance period is
equal to or in excess of 13p per share, increased by the movement in RPI plus 3% per annum measured from April 2004 to the
end of the performance period.
The performance condition attached to options granted in June 2004 is that the growth in EPS over the performance period is
equal to or in excess of 22p per share, increased by the movement in RPI plus 6% per annum measured from April 2005 to the
end of the performance period.
The performance condition attached to options granted in July 2005 and January 2006 is that the growth in EPS over the
performance period is equal to or in excess of 5p per share, increased by the movement in RPI plus 3% per annum measured
from April 2006 to the end of the performance period, in order for 50% of the options to be exercisable. In order for 100% of the
options to be exercisable the growth in EPS of the performance period is equal to or in excess of 5p per share increased by the
movement in RPI plus 6% per annum measured from April 2006 to the end of the performance period. Where the performance is
between 3% and 6% a sliding scale will apply.
At the time of the grant of the relevant options the Remuneration Committee considered that the performance condition selected
represented good practice for such schemes generally and were appropriate given the Company’s size and business.  In the case
of the 2002, 2003, 2004, 2005 and 2006 grants of options the Remuneration Committee adapted its previous practice in view of
the negative EPS for the financial years 2002 to 2006.  EPS here means the adjusted earnings per share published in each Annual
Report and Accounts of the Company subject to the discretion of the Remuneration Committee to make such adjustments to
"normalise" the figures as it sees fit.  This approach to the calculation of EPS has been chosen since the base figure is
independently audited and transparent, whilst reserving to the Remuneration Committee the appropriate level of discretion.  
Options granted up to and including 2001 allow for annual re-testing of the performance condition from the fixed base of the date
of grant.  Options granted in 2002 and 2003 allow for such testing only in the third, fourth and fifth years after grant.  Options
granted in 2004, 2005 and 2006 did not allow for re-testing but have a single testing period of 3 years.  Once the performance
condition attaching to any of the options has been satisfied, the option may be exercised at any time during the rest of its ten-year
life without further test.  
The exercise price of each of the options granted under the Option Schemes is equal to the market value of the Company’s
shares at the time when the options are granted. 
Mr Walter and Mr Chae each participates in the 2001 Plan.  Mr Molloy participated in the 1994 Scheme; however, these options
subsequently lapsed six months following his retirement, in accordance with the Scheme rules.  Mr Ashcroft participated in the
Volex 1994 Share Savings Scheme, the 1994 Scheme and the 2001 Plan.  Mr Corcoran participated in the 1994 Scheme and the
2001 Plan.  Both Mr Ashcroft and Mr Corcoran are able to exercise their share options within 12 months following their respective
dates of termination of employment. Mr May also participated in the 2001 Plan; however, these options lapsed upon his
resignation, in accordance with the Scheme rules. 
Up until 2001 the executive Directors were eligible to apply for options pursuant to the Volex 1994 Share Savings Scheme which
was open to all UK employees upon general invitation by the Company.  This was an all employee Scheme to which performance
conditions do not apply.  Since this Scheme was closed no further invitations are possible under it. Volex Group plc Annual Report & Accounts 2006 65
Directors’ Remuneration Report (continued)
The Company does not currently operate any long-term incentive schemes for Directors, other than the share option schemes
described above, the share appreciation rights issued to Branison Group LLC and the special bonus awarded to Mr. Chae.
However, the Remuneration Committee has made proposals to establish a new LTIP and a resolution relating to this is to be put to
the 2006 Annual General Meeting, details of which will be provided in a seperate circular which will be issued with the notice of the
Annual General Meeting. No significant amendments are proposed to be made to the terms and conditions of any entitlement of a
Director to existing share options.
Pension arrangements
The provision of pension benefits for executive Directors is considered in the context of the overall remuneration package and in
the light of each executive Director’s particular circumstances. Mr Corcoran, accrued defined contribution benefits via an Irish
pension arrangement with a Company contribution of 20% of basic salary.  Since April 2003 Mr Ashcroft accrued defined
contribution pension benefits via a UK approved pension arrangement with a Company contribution of 20% of basic salary.  In
addition he has deferred pension benefits within two contributory defined benefit schemes in respect of earlier periods of service.
These are the Volex No.1 Pension Scheme (30ths of final salary accrual rate) and the Volex Executive Pension Scheme (60ths of
final salary accrual rate) both of which closed to future accrual of pension benefits on 31 March 2003.  Mr Corcoran’s pension
benefits are affected by the pensions cap applied by the Irish Revenue Authorities.  None of the other Directors’ pension benefits
are affected by the HM Revenue and Customs’ pensions cap.  Mr Walter received pension contributions to a UK approved
pension arrangement equivalent to 20% of his basic salary. Mr Chae is a member of the Volex Inc., 401K Employee Retirement
Plan and Mr Payzant was also a member of this plan during his executive employment.  The Group contributed up to 1.5% of Mr
Payzant’s and Mr Chae’s basic salary.  Only basic salary is pensionable in all cases. Mr May did not receive any pension benefits
from the Company.
Performance graph
The following graph shows the Company’s performance, measured by total shareholder return, compared with the performance of
the FTSE All Share Index and the FTSE Electronic and Electrical Equipment sector, both also measured by total shareholder
return.  These indices have been selected for this comparison because they represent the general and specific markets/sectors in
which the Company is listed on the London Stock Exchange.
5 Year Return Index against the FTSE All Share Index and 
FTSE Electronic and Electrical Equipment Sector
160
140
120
100
80
60
40
20
0
2001 2002 2003 2004 2005
VOLEX GROUP
FTSE ALL SHARE
FTSE ALL SHARE ELTRO/ELECC EQ £
2006 66
Directors’ Remuneration Report (continued)
Directors’ contracts
It is the Company’s policy that service contracts for each executive Director continues until the Director’s contractual retirement
date (or such date as agreed between the Director and the Company) unless terminated earlier by either party, subject to the
contractual notice period of no more than one year.  However, it may be necessary occasionally to offer longer notice periods or
initial terms to new Directors.  Mr Chae and Mr Walter have service contracts which are subject to twelve months notice from
either party.  
The Company’s policy for non-executive Directors is to have contracts for services with an initial period of appointment of 3 years,
renewable by agreement for successive periods.  
Under the Articles of Association of the Company at each annual general meeting any Director then in office who has been
appointed by the Board since the previous annual general meeting, and any Director then in office who at the date of the notice
convening the annual general meeting had held office for more than 30 months since he was appointed or last re-appointed by
the Company in general meeting, is required to retire from office but is eligible for re-appointment.  Mr Goulandris, a non-executive
Director, having been appointed since the last Annual General Meeting and Mr Beever, a non-executive Director, having been re-
appointed more than 30 months since, offer themselves for election and re-election respectively at the 2006 Annual General
Meeting.
The details of the Directors’ contracts are summarised in the table below:
Name of Director Date of contract Unexpired Notice
or letter of term
1
period
appointment
Executive Directors
Mr M Ashcroft 06.06.01 N/A 12 months
2
Mr HR Chae 30.06.05 N/A 12 months
Mr J Corcoran 10.07.02 N/A 12 months
3
Mr MK May 10.01.06 N/A 12 months
4
Mr DC Payzant 01.06.05 N/A 6 months
5
Mr DEP Walter 22.10.04 N/A 12 months
Non-executive Directors
Mr RM Arkle 20.04.05 1 year 10 months 3 months
Mr DMM Beever 08.07.05 2 years 1 month 3 months
Mr D Goulandris 06.05.05 2 years 11 months 3 months
Mr MK May 08.09.03 - N/A
6
Mr DJ Molloy 16.07.02 - N/A
7
Mr C Mullett 30.06.05 2 years 3 months
Mr JE Roberts 21.04.05 - N/A
8
1
Measured from the date of this report.  Term is subject to re-election by the shareholders from time to time in accordance with
the Articles of Association of the Company.
2
Contract terminated upon Mr Ashcroft’s resignation on 25 October 2005.
3
Contract terminated upon Mr Corcoran’s resignation on 29 November 2005.
4
Upon the appointment of Mr Chae as Group Chief Executive, Mr May’s service contract automatically terminated and his letter
of appointment as non-executive Chairman was reinstated.
5
Contract terminated upon Mr Payzant’s resignation on 21 September 2005.
6
Contract terminated on Mr May’s resignation on 5 May 2006.
7
Contract terminated on Mr Molloy’s resignation on 30 June 2005. 
8
Contract terminated on Mr Roberts retiring on 8 September 2005.
The Directors’ contracts do not include any specific provisions relating to compensation in the event of early termination.  In the
event of early termination of an executive Director’s service agreement, the Company would serve notice on the executive Director
and/or make payment in lieu of notice, with due allowance in appropriate circumstances for the Director’s duty to mitigate his loss. Volex Group plc Annual Report & Accounts 2006 67
Directors’ Remuneration Report (continued)
The Company made a payment to Mr Payzant in lieu of notice upon termination of his service agreement in the sum of £114,142
representing six months salary and benefits.
The Company made a payment to Mr Ashcroft, in lieu of notice, upon termination of his service agreement in the sum of £100,580
(representing six months salary and benefits).   A further sum of £94,000 (representing a further six months salary and benefits)
has been paid into an escrow account and will be payable between May and October 2006 to the extent that Mr Ashcroft has not
been able to mitigate his loss by finding suitable alternative employment.
The Company made a payment to Mr Corcoran, in lieu of notice, upon termination of his service agreement in the sum of
£310,750.
Executive Directors’ contracts of service (and/or memoranda of the main terms thereof) which include details of remuneration
together with copies of the non-executive Directors’ letters of appointment, will be available for inspection at the Annual General
Meeting.
Outside appointments
Prior to his appointment and whilst Chairman of Volex, Mr May, was also Executive Chairman of Cape Plc. None of the other
executive Directors hold outside Director appointments.
Non-executive Directors
All non-executive Directors have specific terms of engagement and their fees are determined by the Board within the limits set by
the Articles of Association and based on independent surveys of fees paid to non-executive Directors of similar companies.  The
fee paid to each non-executive Director in the year is set out in the table on page 68. Non-executive Directors cannot participate
in any of the Company’s share option schemes and are not eligible to join the Company’s pension scheme.  Options were granted
to Mr May during his period of executive employment, although these options have now lapsed following Mr May’s resignation.
Options granted to Mr Molloy during his period of executive employment remained in place until his retirement and have
subsequently lapsed. 68
Directors’ Remuneration Report (continued)
Audited Information
Directors’ emoluments
Details of those Directors who were in office during the financial period ended 2 April 2006 are detailed below.
Name of Director Fees/Basic Benefits Annual Compensation 2006 2005
salary in kind bonuses for loss of office Total Total
££ £ £ £
Executive
Mr HR Chae 154,974 12,583 75,000 - 242,557 -
(appointed 30.06.2005)
Mr DEP Walter
1
175,000 16,048 63,000 - 254,048 84,568
(appointed 22.10.2004)
Mr M Ashcroft
2
87,000 9,552 34,800 100,580 231,932 145,361
(resigned 13.10.2005)
Mr J Corcoran
3
189,423 25,530 75,000 310,750 600,703 330,656
(resigned 29.11.2005)
Mr DC Payzant
4
118,346 1,540 45,657 114,142 279,685 89,405
(resigned 21.09.2005)
Mr MK May
6
80,000 237 - - 80,237 -
Non-Executive
Mr DMM Beever 26,000 - - - 26,000 26,000
Mr RM Arkle 24,633 - - - 24,633 -
(appointed 20.04.2005)
Mr C Mullett
5
19,428 - - - 19,428 -
Mr DJ Molloy 18,750 15,224 - - 33,974 75,000
(resigned 30.06.2005)
Mr JE Roberts 13,000 - - - 13,000 26,000
(resigned 08.09.2005)
Mr DC Payzant
4
-- - - - 15,166
Mr MK May
6
53,750 - - - 53,750 -
(resigned 05.05.2006)
Aggregate emoluments 960,304 80,714 293,457 525,472 1,859,947 792,156
(1) Included in 2005 remuneration is an amount of £11,032  which was received by Mr Walter in lieu of pension contributions.
With effect from 4 April 2005 the Company has contributed directly to Mr Walter’s pension arrangements, the amounts of which
are disclosed at page 70.
(2) Upon termination Mr Ashcroft received directly from the Company a lump sum payment of £100,580.  A further £94,000 has
been paid into an escrow bank account which will be paid to Mr Ashcroft in the period May to October 2006 to the extent that
he has not been able to mitigate his loss for that period.  Mr Ashcroft was also entitled to medical and life assurance for a
maximum period of 12 months after his resignation.  Costs of £2,801 has been incurred in 2006 to provide these benefits.
(3) Mr Corcoran resigned as a Director on 29 November 2005, although his employment did not terminate until 21 December
2005.  The salary paid to Mr Corcoran includes the remuneration paid between 30 November and 21 December 2005.
(4) Mr Payzant held executive employment for the period from 5 November 2004 until his resignation on 21 September 2005.  Prior
to 5 November 2004 he had served the Company in a non-executive capacity. For a period of 6 months after his termination
date the Company provided medical and life assurance benefits to Mr Payzant at a cost to the Company of £3,611.
(5) Fees in respect of Mr Mullett’s services as a non-executive Director of the Company are paid to Branison Group LLC.  
(6) Upon appointment Mr May assumed the role of non-executive Chairman and payments in respect of those services were paid
to M&J Associates: upon his assuming the Executive Chairman role on 29 November 2005 he became an employee of the
Company and his remuneration was remitted directly to him.
The Directors do not receive general expense allowances but are reimbursed specific reasonable expenses incurred in connection
with the Company’s business. Volex Group plc Annual Report & Accounts 2006 69
Directors’ Remuneration Report (continued)
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the
Company granted to or held by the Directors. Details of options for Directors who served during the year and granted since the
date of their appointment, are set out below:
Name of Director Option 4 April Granted Lapsed 2 April Exercise Date from Expiry
Scheme 2005 2006 price (£) which date
(or date of exercisable
resignation
/retirement
if earlier)
Mr HR Chae Scheme 2 - 600,000 - 600,000 1.00 04.07.08 04.07.15
Mr DEP Walter
1
Scheme 2 - 20,000 - 20,000 1.00 04.07.08 04.07.15
Mr M Ashcroft
2
Scheme 1 20,000 - - 20,000 7.88 18.06.04 18.06.11
Scheme 2 10,000 - - 10,000 1.38 23.07.05 23.07.12
Scheme 2 37,500 - - 37,500 0.87 20.06.06 20.06.13
Scheme 3 962 - - 962 6.31 01.09.06 28.02.07
Scheme 2 40,000 - - 40,000 1.475 21.06.07 21.06.14
108,462 - - 108,462
Mr J Corcoran
2
Scheme 2 20,000 - - 20,000 1.38 23.07.05 23.07.12
Scheme 2 100,000 - - 100,000 0.87 20.06.06 20.06.13
Scheme 2 50,000 - - 50,000 1.475 21.06.07 21.06.14
Scheme 2 - 150,000 - 150,000 1.00 04.07.08 04.07.15
170,000 150,000 - 320,000
Mr MK May
3
Scheme 2 - 223,255 - 223,255 1.075 04.01.09 04.01.16
Mr DJ Molloy
4
Scheme 1 50,000 - - 50,000 4.55 23.07.99 23.07.06
Scheme 1 12,000 - - 12,000 4.10 14.07.00 14.07.07
Scheme 1 8,000 - - 8,000 4.855 18.12.00 18.12.07
Scheme 1 28,500 - - 28,500 6.10 21.07.01 21.07.08
Scheme 1 30,000 - - 30,000 6.225 08.07.02 08.07.09
Scheme 1 30,225 - - 30,225 14.75 03.07.03 03.07.10
Scheme 1 30,000 - - 30,000 7.88 18.06.04 18.06.11
188,725 - - 188,725
Option Schemes:
Scheme 1 = Volex 1994 Share Option Scheme
Scheme 2 = Volex 2001 Share Option Plan 
Scheme 3 = Volex 1994 Share Savings Scheme
(1) Since 2 April 2006, Mr Walter was awarded 122,530 share options at an option price of 126.5p exercisable between 3 April
2009 and 2 April 2016.
(2) Upon Mr Ashcroft and Mr Corcoran resigning as Directors on 25 October 2005 and 29 November 2005 respectively, they each
became eligible to exercise their share options within 12 months from the date their employment terminated.
(3) Since 2 April 2006, Mr May has resigned from the Company and consequently his share options have now lapsed.
(4) In accordance with the scheme rules, Mr Molloy was entitled to exercise his options within six months following his retirement
on 30 June 2005. These options have subsequently lapsed.
There were no exercises of options by Directors during the year and therefore no gains were made by the Directors.  There have
been no variations to the terms and conditions or performance criteria for share options during the financial year.
Details of performance conditions and periods of testing and exercise are set out on page 64.
No options were held during the year by Mr Beever, Mr Arkle or Mr Mullett.
The market price of the ordinary shares at 2 April 2006 was 126.5p (3 April 2005: 76.5p) and the range during the year was 71p
to 134.5p. 70
Directors’ Remuneration Report (continued)
Directors’ pension entitlements
As at the end of the year Mr Ashcroft had deferred pension entitlements under the Volex No.1 Pension Scheme and under the
Volex Executive Pension Scheme, which are both defined benefit schemes, and had accrued entitlements under the schemes as
follows:
Accrued Accrued
annual pension Increase in accrued annual pension
3 April pension in the year 2 April
2005 excluding inflation* 2006
££ £
Mr M Ashcroft 31,064 39 31,942
* This amount reflects the difference in inflation factors used for the purposes of the Guaranteed Minimum Pension element of the
pension entitlement arising from the Executive Pension Scheme compared with the Limited Price Indexation rate otherwise
used for the purposes of this note.
The pension entitlement shown above is that which would be paid annually on retirement based on service and final pensionable
salary at the end of the year.
The following table sets out the transfer value of the Director’s accrued benefits under the schemes calculated in a manner
consistent with "Retirement Benefit Schemes – Transfer Values (GN 11)" published by the Institute of Actuaries and the Faculty of
Actuaries.
Transfer value Contributions Increase in transfer Transfer value
3 April made by the value in the year 2 April
2005 Director net of contributions 2006
££ £ £
Mr M Ashcroft 237,471 - 43,880 281,351
The transfer value disclosed above does not represent a sum paid or payable to the individual Director.  It represents a potential
liability of the pension scheme and cannot meaningfully be added to annual remuneration.
The Volex No.1 Pension Scheme and the Volex Executive Pension Scheme were both closed to future accrual of benefits on 31
March 2003.  They have been replaced by defined contribution pension arrangements with the individuals concerned, with a
Company contribution of 20% of basic salary in the case for the executive Director.  Members of the scheme have the option to
pay Additional Voluntary Contributions; neither the contributions nor the resulting benefits are included in the above tables.
Mr Chae and Mr Walter are members of the money purchase schemes. Mr Corcoran, Mr Ashcroft and Mr Payzant were members
of such schemes. The contributions paid or payable during the year by the Group in respect of those individuals were as follows:
2006 2005 
£ £
Mr HR Chae 1,678 -
Mr DEP Walter 35,000 -
Mr M Ashcroft 16,396 23,600
Mr J Corcoran 35,689 46,000
Mr DC Payzant 1,910 1,544
90,673 71,144
As noted on page 68, Mr Walter received £11,032 in 2005 in lieu of employer pension contributions during the year equivalent to
20% of basic salary.  With effect from 5 April 2005, the Company contributed to Mr Walter’s pension arrangement. Volex Group plc Annual Report & Accounts 2006 71
Directors’ Remuneration Report (continued)
Directors’ interests
The interests in the share capital of the Company of those Directors who were in office at 2 April 2006, together with their
shareholding at 3 April 2005, or date of appointment if later, are detailed below.  The table details separately beneficial interests
and share options issued to the Directors (both prior to and upon their appointment), under the Company’s discretionary and 
all-employee share option schemes. All interests relate solely to 25p ordinary shares. 
Shares Shares Options Options
2006 2005 2006 2005
Mr MK May
1
- - 223,255 -
Mr R Arkle 34,000 - - -
Mr DMM Beever 25,263 20,000 - -
Mr HR Chae 1,090,000 - 600,000 -
Mr C Mullett 68,000 - - -
Mr DEP Walter
2
6,800 - 20,000 -
(1) Since 2 April 2006 Mr May’s options have lapsed, following his resignation as non-executive Chairman.
(2) Since 2 April 2006 Mr Walter’s interest has increased following the award of a further 122,530 share options on 3 April 2006.
Mr Goulandris, who was appointed a non-executive Director on 6 May 2006, has a beneficial interest in 12,387,610 ordinary
shares through his position as partner of Cycladic Capital LLP .
None of the Directors held any other non-beneficial interests, apart from the share options disclosed.
No Director had at any time during the year an interest in the share capital of any of the Company’s subsidiary undertakings.
Save as disclosed on page 74 of the Directors’ report none of the Directors had a material interest in any contract of significance
with the Company or with any other related party.
Consultancy services
In addition to his non-executive role, Mr Mullett has also provided consultancy services through Branison Group LLC (“Branison”).
These services related to specific designated projects and were not related to his role as a non-executive Director. Under the
consultancy agreement with Branison, Branison is entitled to certain payments on each of 4 July 2006, 2007 and 2008. In each
case the payments will equal to the difference between 73.5p and the actual share price on the relevant date, multiplied by
180,000. In the event of any sub-division of shares, the initial share price of 73.5p would be adjusted on a pro-rata basis. Should
there be a change of control of the Company, Branison may be entitled to an accelerated immediate payment in aggregate of any
outstanding payments.
Approval
This report was approved by the Board of Directors on 13 June 2006 and signed on its behalf by:
Wendy Tate
Company Secretary
13 June 2006 72
Directors’ Report
The Directors present their annual report on the affairs of the Group together with the accounts and independent auditors’ report
for the financial year ended 2 April 2006.
Principal activities and business review
(a) Activities
Volex Group is a leading independent producer of electronic and fibre optic cable assemblies and electrical power cords.  The
Group currently operates from facilities located strategically in Asia, Europe and North and South America, providing global
support to leading producers of computers, telecommunication systems and networking devices.  The Group assembles wiring
assemblies and harnesses for consumer electronics and appliances, medical and industrial applications and for transportation,
defence and aerospace industries.
The Company operates through overseas subsidiary companies in Asia, Europe, North and South America and through a
divisional structure for its UK based Wiring Harness businesses.  The subsidiary and associated undertakings principally affecting
the profits or net assets of the Group in the year are listed in note 17 to the Accounts. 
(b) Business review
A review of the development and performance of the business of the Group, including the financial performance during the year,
key performance indicators and a description of the principal risks and uncertainties facing the Group, are set out in the Chief
Executive’s and the Finance Director’s Reviews, which can be found on pages 8 to 15 and also the Social Ethical and
Environmental Report which can be found on pages 60 to 61.
Cautionary statement
The purpose of the Annual Report is for the Company to provide information to its members. The Annual Report contains certain
forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature these
statements involve uncertainty since future events and circumstances can cause results and developments to differ from those
anticipated. Nothing in this Annual Report should be construed as a profit forecast.
(c) Summary review of operations
Summary results from operations were as follows: 2006 2005 
£’000 £’000 
Operating profit before major restructuring programme change 5,329 1,768
Major restructuring programme charge (8,598) (6,746)
Investment income 111 59
Finance costs :
- interest (2,761) (3,385)
- refinancing costs and amortisation of debt issue costs (739) (932)
Loss on ordinary activities before tax (6,658) (9,236)
Taxation (2,448) (4,424)
Loss for financial year (9,106) (13,660)
Assets employed by the Group were:
2006 2005 
£’000 £’000 
Non-current assets 13,837 15,498   
Net current assets 45,995 6,762
Non-current liabilities (33,737) (7,135)
Net assets 26,095 15,125
Gearing
1
51% 202%
(1) Net debt divided by net assets Volex Group plc Annual Report & Accounts 2006 73
Directors’ Report (continued)
(d) Research and development 
The Group has demonstrated competence in product design, especially where the functionality and design of the assembly is not
dependent on customer specified componentry.
The Group continues to place great emphasis on product and process research and development to satisfy its customer demands
and to ensure world class manufacturing standards are achieved.  Each operating unit allocates considerable time and financial
resources for these purposes.  Further details are set out in note 10 to the Accounts on page 28. 
(e) Continuous improvement
The Group continues to use a range of management tools to achieve a culture of continuous improvement throughout its operations.
Continuous improvement processes are in place throughout the Group.
Directors and their interests
(a) Directors
The Directors who served during the year were as follows:-
Mr RM Arkle (appointed 20.04.2005)
Mr HR Chae (appointed 30.06.2005)
Mr DMM Beever
Mr MK May (appointed 08.09.2005)
Mr C Mullett (appointed 30.06.2005)
Mr DEP Walter
Mr M Ashcroft (resigned 25.10.2005)
Mr J Corcoran (resigned 29.11.2005)
Mr DJ Molloy (resigned 30.06.2005)
Mr DC Payzant (resigned 21.09.2005)
Mr JE Roberts (resigned 08.09.2005)
Since the end of the financial year, Mr May resigned as non-executive Chairman with effect from 5 May 2006 and Mr Walter has
given notice of his resignation.  Mr Goulandris was appointed as a non-executive Director on 6 May 2006.
(b) Election and re-election of Directors
Mr Goulandris, having been appointed to the Board since the 2005 Annual General Meeting, will retire at the 2006 Annual General
Meeting in accordance with the provisions of the Articles of Association of the Company and being eligible, he offers himself for
election.  Mr Beever, having last been elected by the Company in general meeting more than 30 months prior to the proposed
date of notice of the 2006 Annual General Meeting retires in accordance with the Articles of Association of the Company at that
meeting.  Being eligible he offers himself for re-election.  Letters of appointment have been issued to Mr Beever and Mr
Goulandris, details of which can be found in the Directors’ remuneration report on page 66.
The biographical details of each of the Directors are available on page 16.
The Board makes its recommendation to appoint and re-appoint the Directors seeking election or re-election on the basis that it
considers that each Director brings business experience and expertise to the Board, which enhances the Board’s ability to
respond flexibly and promptly to the needs of the Company. 74
Directors’ Report (continued)
(c) Directors’ interests and remuneration
Details of the Directors’ remuneration and their interests in the share capital of the Company are disclosed in the Directors’
remuneration report on pages 68 to 71.
(d) Substantial contract
In July 2005, the Company entered into a consultancy services agreement (the “Agreement”) with Branison Group LLC, of which
Mr Mullett is a director and therefore Mr Mullett has a material interest in the Agreement.
(e) Third party indemnities
Following changes to the Companies Act 1985 (section 309C), which permits the indemnification of Directors by the Company in
respect of proceedings brought by third parties and applications for relief from liability, the Company has granted indemnities to
the executive and non-executive Directors, copies of which will be available for inspection at the 2006 Annual General Meeting.
Substantial shareholdings
As at 13 June 2006 the Company had been notified, in accordance with sections 198 to 208 of the Companies Act 1985, of the
following interests in the ordinary share capital of the Company.
Number of Percentage
Name of holder ordinary shares held
Bear Stearns International Trading Limited 3,140,000 5.7
Cadmus Capital Management LLC 4,675,000 8.4
Cycladic Capital LLP 12,387,610 22.3
Goldman Sachs Group Inc.
including the interests of:
Goldman Sachs International 8,383,789 15.1
Platinum Investment Trust plc 4,122,268 7.4
Sterling Strategic Value Limited 8,777,016 15.8
No other beneficial interest amounting to 3% or more of the ordinary share capital of the Company had been notified to the
Directors as at 13 June 2006.
In accordance with Listing Rule 9.8.6 of the UKLA, an updated schedule of substantial shareholdings will be issued at the time of
the Notice of the Annual General Meeting.
Charitable and political contributions
During the year the Group made charitable donations of £6,800 (2005: £10,114).  No political donations were made.
Disabled employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant
concerned.  In the event of an employee becoming disabled, every effort is made to ensure that his/her employment with the
Group continues and that, where necessary, appropriate re-training is arranged.  It is the policy of the Group that the training,
career development and promotion of disabled persons should, as far as possible in the circumstances of each particular case, be
the same as that of other employees.
Employee consultation
The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters
affecting them as employees and on the various factors affecting the performance of the Group.  The Group has continued its
policy and practice of informing and consulting its employees through a system of regular joint meetings between members of the
operational management teams and the employees themselves and, where appropriate, employee representatives. Details of the
Group’s employees can be found in note 10 to the Accounts. Volex Group plc Annual Report & Accounts 2006 75
Directors’ Report (continued)
Supplier payment policy
The Group’s policy is to pay suppliers on settlement terms agreed with each supplier.  The average number of days outstanding
during the financial year ended 2 April 2006 in respect of trade creditors was approximately 61 days (2005: 54 days).
Audit and Auditors
Each Director confirms that so far as they are aware there is no relevant audit information of which the Company’s auditors are
unaware of and that all steps which ought to have been taken have been taken in order to make himself aware of any relevant
audit information and that the Company’s auditors have been made aware of such information.
In accordance with the recommendation of the Audit Committee as disclosed on page 57 and Section 384 of the Companies Act
1985, a resolution to re-appoint Deloitte & Touche LLP as the Company’s auditor will be proposed at the forthcoming Annual
General Meeting.
Financial Instruments
An indication of the Companys financial risk management objectives and policies and the exposure of the Company to price, credit,
liquidity and Cash Flow risks is set out in notes 19 and 21 to the Accounts and in the Finance Director’s Review on page 15.
Annual General Meeting
The 2006 Annual General Meeting of the Company will be held on Thursday 28 September 2006.  The Notice of Meeting and
form of proxy will be sent out with a separate circular to shareholders and posted at a time closer to the meeting.
In addition to the ordinary business which will be put to the Annual General Meeting, there will be three items of special business
put to the meeting, full details of which will be set out in the circular.  These will be proposed as separate resolutions relating to the
adoption of a new long term incentive plan and also separate resolutions enabling the Directors to allot relevant securities and to
allot ordinary shares for cash under sections 80 and 95 of the Companies Act 1985 respectively.
In accordance with the Articles of Association, and in view of the deferment of payment of dividends in respect of cumulative
preference shares, holders of cumulative preference shares are entitled to attend and vote, either in person or by proxy, at the
Annual General Meeting.
On behalf of the Board
Wendy Tate
Company Secretary
Dornoch House
Kelvin Close
Birchwood Science Park
Warrington WA3 7JX
13 June 2006 76
Five Year Summary
IFRS IFRS UKGAAP UKGAAP UKGAAP
2006 2005 2004 2003 2002
£’000 £’000 £’000 £’000 £’000
Revenue 250,378 244,551 238,353 230,066 275,696
Operating profit/(loss) before goodwill amortisation
and exceptional operating items
1
5,329 1,768 2,486 573 (548)
Goodwill amortisation - - (328) (933) (871)
Exceptional operating items
1
(8,598) (6,746) (6,680) (8,652) (1,033)
Operating loss (3,269) (4,978) (4,522) (9,012) (2,452)
Profit/(loss) on ordinary activities before taxation,
goodwill amortisation and exceptional 
operating items
1
1,940 (2,490) (1,337) (4,020) (5,868)
Exceptional items - - - - (6,278)
Loss on ordinary activities before taxation (6,658) (9,236) (8,345) (13,605) (14,050)
Loss on ordinary activities after taxation (9,106) (13,660) (11,206) (12,657) (10,143)
Assets employed:
Non-current assets 13,837 15,498 27,670 38,218 55,297
Net current assets 45,995 6,762 44,447 54,760 64,759
Non-current liabilities (33,737) (7,135) (39,586) (47,845) (60,741)
Net assets 26,095 15,125 32,531 45,133 59,315
Financed by:
Shareholders’ funds
2
26,095 15,125 32,531 45,133 59,315
Key statistics
Adjusted loss per share (1.0)p (23.4)p (14.7)p (10.8)p (12.7)p
Basic loss per share (18.5)p (46.2)p (39.1)p (44.3)p (35.5)p
Average number of ordinary shares 49,247,645 29,540,692 28,650,462 28,602,637 28,592,218
Dividend per share n/a n/a n/a n/a 5.5p
Gearing 51% 202% 94% 86% 85%
Return on average shareholders’ funds
3
(44%) (57%) (29%) (24%) (15%)
Return on average net assets
4
(16%) (21%) (12%) (18%) (4%)
Share price - high 134.5p 181p 200p 262p 830p
- low 71p 53p 41p 51p 155p
(1) Under IFRS, exceptional operating items equate to the major restructuring programme charge
(2) For 2002-2005 shareholders’ funds include non-equity interest of £80,000
(3) Loss for the financial year/average shareholders’ funds
(4) Operating loss/average of net assets excluding current asset investments
All activity has arisen from continuing operations. 77
Shareholder Information
Registered office
Dornoch House, Kelvin Close, Birchwood Science Park,
Warrington WA3 7JX
Registered number
158956 (Registered in England and Wales)
Registrars
Capita Registrars plc, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU
Auditors Deloitte & Touche LLP
Financial advisors Evolution Securities Limited
Bankers Barclays Bank plc
Bank of America
Royal Bank of Scotland plc
Stockbrokers Evolution Securities Limited
Solicitors Allen & Overy LLP
Registered Office and Advisors
Financial calendar
2005/2006
Final results announced 14 June 2006
Annual General Meeting 28 September 2006
2006/2007
Interim results published November 2006
Year end 1 April 2007
Final results announced June 2007
Useful web sites:
www.volex.com Includes Company news, press releases, Company information and latest
financial reports.
www.capita-irg.com The registrar’s site enables you to view details of your shareholding and
address.  You can also get guidance on the site, for example on how to
change your address, or request replacement documents.  You will need your
investor code to access your personal details.  This can be found on your
share certificate or a previously issued dividend tax voucher. Volex Group plc
Dornoch House
Kelvin Close
Birchwood Science Park
Warrington WA3 7JX
England
T +44 (0)1925 830101
F +44 (0)1925 830141
W www.volex.com