ANNUAL REPOR T 2005
P .O. Box 25, South Marston Park,
Swindon, Wiltshire, SN3 4TR, UK
Tel: +44 (0)1793 827000
Fax: +44 (0) 1793 827578
E-mail: info@intelek.plc.uk
Web site: www.intelek.plc.uk
INTELEK Annual Report 2005 49
INTELEK Report and Accounts 2005
Group Company Addresses
Registered Office
Intelek plc
PO Box 25, Spitfire Way, South Marston Park, 
Swindon, Wiltshire, SN3 4TR
Tel: (01793) 827000  
Fax: (01793) 827578
E-mail: info@intelek.plc.uk
Website: www.intelek.plc.uk
Trading Subsidiaries
CML Group Limited*
Price Street, Birkenhead, 
Wirral, CH41 3PT
Tel: (0151) 647 5531   
Fax: (0151) 650 0668
E-mail: enquiries@cml-group.com
Website: www.cml-group.com
Labtech Limited*
Labtech Circuits
Broadaxe Business Park, 
Presteigne, Powys, LD8 2UH
Tel: (01544) 260093   
Fax: (01544) 260310
Labtech Microwave
8 Vincent Avenue, 
Crownhill, Milton Keynes, MK8 0AB
Tel: (01908) 261755   
Fax: (01908) 261788
E-mail: ptfe@labtech.ltd.uk
Website: www.labtechcircuits.com
* Held directly by Intelek plc.
Paradise Datacom
Paradise Datacom Ltd*
1 Wheaton Road, Witham,
Essex, CM8 3UJ
Tel: (01376) 515636   
Fax: (01376) 533762
E-mail: sales@paradise.co.uk
Paradise Datacom LLC
328 Innovation Boulevard, 
Suite 100, State College, 
PA 16803, USA
Tel: (001) 814 238 3450   
Fax: (001) 814 238 3814
E-mail: sales@paradisedata.com
Website: www.paradisedata.com
Printed by Jones & Palmer Limited, Birmingham. tel: (0121) 236 9007 1
INTELEK Report and Accounts 2005
Contents
INTELEK designs and manufactures electronic components
and equipment for satellite and wireless communications and
advanced military applications. Intelek also provides specialist
manufacturing services for the aerospace market.
Group Highlights 2
Chairman’s Statement 3
Directors and Advisers 4
Chief Executive’s Review 5
Financial Review 12
Corporate Governance Report 13
Remuneration Report 15
Nomination Committee Report 18
Audit Committee Report 19
Directors’ Report 20
Statement of Directors’ Responsibilities 21
Independent Auditors’ Report 22
Group Profit and Loss Account 23
Balance Sheets 24
Group Cash Flow Statement 25
Notes to the Group Cash Flow Statement 26
Notes to the Financial Statements 27
Five Year Summary 46
Notice of Meeting 47
Group Company Addresses 49 2
2001 2002 2003 2004 2005
2.5 –
2.0 –
1.5 –
1.0 –
0.5 –
0.0 –
Headline Profit (£m)
Continuing Operations
(before tax, goodwill and exceptional items)
Group Highlights
•
Acquired microwave design and build operation for
£0.4 million in March 2005
•
Sales £37.3 million (2004: £38.9 million)
•
Headline profit (before tax, goodwill and exceptional items)
on continuing operations up 27% to £1.9 million
•
Headline EPS on continuing operations increased to
1.49p (2004: 1.47p)
•
Full year dividend unchanged at 0.36p
•
Net debt reduced by 65% to £2.3 million
•
Disposal of non-core business (Pascall Electronics)
for £4.8 million
2001 2002 2003 2004 2005
2001 2002 2003 2004 2005
Sept 02 Mar 03 Sept 03 Mar 04 Sept 04 Mar 05
Interest cover
Gearing
Sales (£m)
Continuing Operations
Interest Cover & Gearing
40  –
30  –
20  –
10  –
0  –
10 –
8 –
6 –
4 –
2 –
0 –
5.0  –
4.0  –
3.0  –
2.0  –
1.0  –
0.0  –
– 35%
– 30%
– 25% 
– 20%
– 15%
– 10%
– 5%
– 0%
Net Debt (£m) 3
INTELEK Report and Accounts 2005
Chairman’s Statement
dividend for the year to 0.36 pence
(2004: 0.36 pence). If approved, this
final dividend will be paid on
30 September 2005, to shareholders
on the register at close of business
on 2 September 2005.
Strategy
Our strategy remains firm and our
performance on track. In last year’s
Chairman’s Statement, I explained
that we intended to dispose of non-
core assets at prices which give fair
strategic value to shareholders and
to focus our resources on niche
areas of microwave and wireless
communications through increased
market penetration, product development and acquisition. During
the past twelve months we have already put into place three
initial, but fundamental, parts of that strategy, namely: the
disposal of our power supply company, Pascall Electronics; the
acquisition, for Labtech, of the assets of Filtronic Components at
Milton Keynes; and the product launch of Paradise Datacom’s
exciting new generation of high data rate modems.
We shall continue to seek vigorously further means of pursuing
our declared strategy in the next 12 months.
People
We were very pleased to announce the appointment of David
Bramwell as a non-executive Director with effect from 1 October
2004. David’s experience has already proved to be very beneficial
to the Group on a broad front.
As ever, the progress made during the year is largely down to our
employees’ dedicated commitment, skill and expertise. I would
like to pass on to all employees my sincere thanks.
Prospects
In the past year we have seen an encouraging performance in
both Paradise Datacom and Labtech. Their markets are holding
up well, with satellite communications benefiting from the
continued growth of investment by the government sector. Both
companies have recently received the benefit of new products: in
Labtech’s case by acquisition, and in Paradise’s case by the
launch, after two years in development, of their new high data
rate modem and the broadening of amplifier power levels and
frequency ranges. I am confident that, after an initial market
acceptance period, our new products will find favour in the
marketplace and will lead to encouraging growth over the next 12
months. On the aerospace side, CML had an excellent final
quarter and will benefit from the increased production levels on
their main programmes.
To conclude, we remain committed to our strategy and expect to
see an overall improvement in performance for the year to March
2006.
Nigel L Mills
Chairman
6 June 2005
I am pleased to report that Intelek made substantial progress
during the year. In line with our stated strategy, we completed on
the sale of a non-core business, introduced several new products
at our satellite communications company and purchased a
components product line to broaden the base of our microwave
circuits business.
Operating profits from our continuing businesses increased
significantly in 2004/05 on sales which were 1.4% lower than the
previous year. Growth at Labtech and in Paradise Datacom’s high
power amplifiers, together with continuing recovery at CML, offset
the planned reduction in Paradise Datacom’s low margin block-up
converters. With improvement in margins, the headline profit (i.e.
profit before tax, amortisation of goodwill and exceptional items)
for our continuing operations increased by 27% to £1.9 million
(2004: £1.5 million). This improvement in profit is despite the
worsening of the dollar exchange rate which reduced the profit on
conversion of our US operating results by £0.1 million in the year.
Headline earnings per share on continuing businesses increased
slightly to 1.49p. This increase was somewhat lower than the
increase in the headline profit as 2004 benefited from the
accumulation of US tax credits.
The successful sale of Pascall Electronics, our non-core power
supply company, was completed on 18 March 2005 and resulted
in final net proceeds of £4.6 million prior to a related £0.9 million
contribution into the Defined Benefit Pension Scheme. Pascall
Electronics recorded sales for the 11
1
/ 2 months before disposal of
£5.8 million (2004: £6.9 million) and an operating loss of £0.1
million compared with a profit in the previous year of £0.3 million.
In the same month we acquired from Filtronic Components
Limited the assets of their Milton Keynes microwave components
design and manufacturing facility. Since its acquisition on
11 March, the new operation, renamed Labtech Microwave,
contributed £0.1 million sales and a small operating profit to our
March results.
Net positive cash flow from continuing businesses, combined with
proceeds on the sale of Pascall Electronics, reduced borrowings
to £2.3 million (2004: £6.6 million).
Dividend
The Board is recommending a maintained final dividend of 0.24
pence (2004: 0.24 pence) per ordinary share, bringing the total
Design team responsible for the new Evolution Series Modem
Nigel Mills 4
Directors and Advisers
Nigel L Mills
Non-Executive Chairman. Age 44.
Appointed to the Board in 2001 as an Executive Director on acquisition of
Paradise Datacom Ltd by Intelek. Became Non-Executive on 1 October
2004. Founder of Paradise Datacom in 1988, Nigel has a BSc (Hons) in
Electrical & Electronic Engineering, is a Chartered Engineer, and a Fellow
of the Institute of Electrical Engineers. 
Ian D Brodie 
Chief Executive. Age 53.
Appointed Chief Executive of the Group in 1999 after joining the Board as
Group Finance Director in 1992. Held senior operational finance
appointment within the Plessey and Chloride Group. Ian is a member of
the Institute of Chartered Accountants of Scotland having trained at
Binder Hamlyn and obtained post qualifying experience with Touche Ross
& Co. London.
Kevin N Edwards
Finance Director/Company Secretary. Age 48.
Appointed to the Board in May 2000. Previously Finance Director of
Textron Fastening Systems Limited, a subsidiary of Textron Inc., and
Finance Director of several subsidiaries within the GEC Group, having
qualified as a Chartered Accountant with Ernst and Young.
Donald Wilson
Senior Independent Non-Executive Director. Age 72.
Appointed to the Board in 1995. Previously Managing Director of Rank
Xerox (UK) Limited, and Chairman of Rank Xerox, Sweden, Norway,
Denmark and Ireland.
David M Bramwell
Independent Non-Executive Director. Age 56.
Appointed to the Board in October 2004. Deputy Chairman of Rights and
Issues Investment Trust plc and Chairman of several venture capital
backed businesses. Previously Chief Executive of the Peterhouse Group
plc and Managing Director of two engineering companies. David has a
First Class Honours Degree and a Doctorate in Business Management.
Auditors 
RSM Robson Rhodes LLP
Chartered Accountants
Centre City Tower, 7 Hill Street, 
Birmingham, B5 4UU
Solicitors
DLA
Victoria Square House, 
Victoria Square, Birmingham, B2 4DL
Bankers
Barclays Bank PLC 
Park House, Stoke Gifford, 
Bristol, BS34 8TN
Fortis Bank
The Imperium, Imperial Way, 
Worton Grange, Reading, RG2 0TD
Sovereign Bank
2790 West College Avenue, 
Suite 800, State College,
PA 16801, USA
Stockbrokers
Williams de Broë Plc 
1st Floor, Innovation Court,
121 Edmund Street,
Birmingham, B3 2HJ
Registrars and Transfer Office 
Lloyds TSB Registrars
The Causeway, 
Worthing,
West Sussex, BN99 6DA 5
INTELEK Report and Accounts 2005
Chief Executive’s Review
Intelek has continued to deliver on our stated
corporate strategy including the disposal of
non-core assets and the development and
acquisition of new products. In addition, we
have seen encouraging performances from our
communications businesses, Paradise Datacom
and Labtech, with a continued improvement in
the performance of our aerospace subsidiary,
CML. As a consequence, the continuing
operations recorded an increase of 27% to £1.9
million in headline profit (i.e. profit before tax,
goodwill amortisation and exceptional items).
Net debt reduced by £4.3 million to £2.3 million,
the lowest level for over seventeen years. £0.5
million of this reduction was generated by the
underlying businesses after the annual £1.4
million financing of the deferred benefit pension
deficit. The balance was derived from the net
cash proceeds of the Pascall Electronics
disposal, of £4.6 million, less £0.8 million of the
associated special pension contribution.
Ian Brodie
Disposal of Pascall Electronics
The sale of Pascall Electronics for a gross consideration
of £4.8 million, represented good value for Intelek’s
shareholders. The company’s main activity was design
and manufacture of power supplies for the avionics and
defence markets and was no longer core to the Group’s
strategy of developing its communications businesses.
Pascall Electronics’ trading for the 11
1
/ 2 months to 18
March 2005, is consolidated in Intelek’s 2004/05 results.
This showed a decline in sales to £5.8 million for the
period (2004: £6.9 million), recording an operating loss of
£0.1 million compared with the previous year’s profit of
£0.3 million. Pascall Electronics had been affected by
delayed programmes as evidenced by the high level of
closing order book of £3.9 million, up from £3.0 million
last year. They have a good technical reputation and a
strong relationship with their major customers. We wish
them well for the future.
SAAB Gripen — features components from Labtech Microwave
© Gripen International 6
Paradise Datacom, with facilities in Essex, UK and
Pennsylvania, USA, produces an extensive line of RF and
modem products used in the Satellite Communications
Industry. The worldwide satellite communications
market is estimated at $20 Billion USD according to
various industry sources.
Satellite communications equipment is used
extensively on a worldwide basis to provide
internet/intranet, video, voice and other data services
for corporations, governments and the general
population. Paradise Datacom’s products are
incorporated in all facets of Satcoms from credit card
authorisation services to ruggidised military
applications. Solid state power amplifiers (SSPAs) are
used in the majority of satellite ground station
terminals and Paradise Datacom produces a wide
range of products to service this rapidly expanding
market segment. In addition, Paradise Datacom
produces satellite modems which are designed to
provide high capacity connections from multiple
locations to centralised hub stations. GSM back haul
services, internet trunking services, military
communications and disaster services are a few of
the market segments in which Paradise Datacom
products are applied.
Satellite communications is unique compared to fibre,
microwave and other technologies in that global
coverage can be initiated almost instantaneously by just
placing into service small inexpensive earth station
terminals. These types of terminals which incorporate
Paradise Datacom products are used where rapid
deployment of video, voice and data services are
essential and/or for locations that are remote and do not
have an adequate communications infrastructure.
In an increasing global economy, satellite
communications will continue to grow to meet the
telecommunications needs of corporations,
governments and the military where there is a lack of
telecommunications infrastructure.
Paradise Datacom’s modem products consist of the
P300 series, designed to transmit duplex data signals
at rates up to 5 Mb/s (mega-bits per second), and the
new Evolution series of modems, recently introduced
at the Satellite 2005 Show in Washington DC. The
Evolution modems, which will ultimately replace the
P300 series, utilise the latest firmware device
technology, are rich with features currently in demand
by commercial and government customers and
operate at data rates up to 52 Mb/s. 
Paradise Datacom’s RF product range is one of the most
extensive available in the industry. The range consists of
Solid State Power Amplifiers (SSPAs) with output power
levels from 2 watts to 1,100 watts, Block Up Converter
modules (BUCs), Low-Noise Amplifiers (LNAs) and a host
of redundancy and combining systems.
Satellite Communications Equipment
Paradise Datacom
The latest compact outdoor SSPAs in 1 for 2
switchover system 7
INTELEK Report and Accounts 2005
Paradise Datacom has performed well under its new
management. The company has maintained its position as
one of the world market leaders in high power amplifiers
for the satellite communications industry achieving 33%
growth in sales. Their recognised expertise in this
technology was rewarded by the placement of the first
tranche of an important multi-year programme for the US
National Oceanographic and Atmospheric Administration
(NOAA) for satellite earth station equipment. The first
element of this order was successfully delivered in 
March 2005.
Primarily due to the anticipated decline in the ageing low
margin block up converters, turnover reduced by 12%.
Margins improved as the management team tightened the
cost base and focused on higher margin opportunities.
Consequently, we were able to hold trading profit at £2.0
million, the 2003/04 level, despite a £0.1 million reduction
in profit from further weakening of the US dollar. The USA
operations produced US$ profits 38% ahead of last year
after restructuring the business for the anticipated
reduction in demand for low power amplifiers. The
business finished the year very strongly and now that a
move to a new production facility at Penn State University
is complete, the company is well placed to take advantage
of the growing number of opportunities in the satellite
communications market.
Sales of solid state power amplifiers and low noise
amplifiers climbed 33%. The US operation continued to
invest in RF research and development, with several new
products coming through. Paradise Datacom is well
positioned to capitalise on the increasing migration from
tube-based high power amplifiers to superior solid state
technology by operators of satellite transmission facilities
worldwide. Year on year results have served to prove our
strategy of capturing market share through technical
innovation at a competitive price.
In the UK, R&D investment continued apace, culminating
after a 2 year programme in the March 2005 product
launch of the new Evolution modem series. As previously
reported, sales of the older P300 technology modems
declined reducing overall modem sales by 17% to £6.2
million. We expect the new Evolution series of modems to
have a significant impact on the worldwide marketplace for
several years to come.
The US and various international governments continued
to invest heavily in Paradise Datacom products in support
of military and national security projects. Mobile satellite
communications continues to be one of the most effective
solutions for rapidly deployable telecommunication
systems for the military and disaster service groups.
Additionally, the increased roll-out of GSM and 3G wireless
technologies has provided growth to both our modem and
amplifier product lines. These technologies require
satellites to transfer traffic from voice and data circuits to
base station locations for eventual trunking onto national
telephone and data networks. Our strategy of increased
global presence has resulted in the appointment of a new
sales director for the Asia region with appointments of a
number of new sales and distribution partners in Latin
America, Africa and the Middle East.
New Penn State University Innovation Park site (ground floor)
Sales £13.7m (2004: £15.5m)
Operating Profit £2.0m (2004: £2.0m)
John Restivo
President
New Products, 
New Markets 8
The Labtech Microwave team
Labtech Circuits is one of the world leaders in
advanced microwave printed circuit processing
technology and MMIC (Monolithic Microwave
Integrated Circuit) packaging and multi-chip
interconnect, used extensively at component and
sub-system level within the Telecommunications
market. Microwave circuit boards are manufactured
in prototype and high volumes for major
telecommunications, military and space system
customers worldwide. 
Labtech Circuits’ technology is based on processing
high performance PTFE microwave substrates with
plated through holes. Circuits can be bonded
together in a multi-layer construction and include
precision machined metal backing for high
frequency applications such as broadband digital
radio links and microwave power amplifiers. A “Chip
& Wire” assembly clean room provides fully
assembled and packaged MMIC circuits which
enable very high levels of integration to be achieved
whilst utilising Labtech’s cost-effective
manufacturing techniques.
The combination of precision circuit machining,
now including laser technology, advanced
automatic chemical processing and MMIC
packaging and assembly, gives Labtech Circuits a
leading world-class capability in the microwave
printed circuit board market.
Labtech Microwave exploits its 15 years’ experience
to manufacture a range of high-end broadband
microwave components mainly for the European
defence market. Using high accuracy thin film
ceramic circuit manufacturing capability, Labtech
Microwave concentrates on designing and
manufacturing multi-octave microwave amplifiers,
switches and detector log video amplifiers (DLVAs).
The division operates out of a highly equipped
modern factory in Milton Keynes, which also
includes a 4,000 sq. ft. clean room. Labtech
Microwave and Labtech Circuits are working
together to design and develop a new range of
microwave products, including DLVAs and low cost
gain modules.
Microwave Circuits and Components
Labtech
Typical Labtech Microwave products 
— amplifier gain modules
Examples of Labtech Circuits’ boards and MMIC
Packaging 9
INTELEK Report and Accounts 2005
Labtech’s encouraging performance reflects a period of
investment and sales growth into its major market of
telecommunications. Turnover grew strongly with new
projects and customers more than replacing the planned
drop off in existing programmes. Sales grew by £1.2
million (14%) in the year but the operating profit
responded even more strongly, up by 41%, and now
stands at 13% of sales (2004: 10% of sales). Labtech
benefited from a higher than expected increase in
demand from their largest customer whose business is
the supply of radio links for GSM and 2
1
/ 2/3G mobile
telephone systems. Operating cash flow was also strong
at £1.5m.
The Labtech Microwave acquisition was completed in
mid-March and therefore its contribution to the year-end
figures, although positive, was very limited. This
acquisition of the trade and assets of Filtronic
Components’ microwave division in Milton Keynes, with
completion three months later, represents an opportunity
well taken. This will enable Labtech to broaden its
manufacturing expertise from being service based to one
which incorporates product design, assembly and test.
New development programmes have, within the first
month of Labtech’s ownership, been launched to address
key market opportunities.
The complexity of Labtech’s product is increasing which
is differentiating Labtech from their lower technology,
lower margin competitors. This is having a positive effect
on margins which are also benefiting from key investment
programmes. During 2004/05, Labtech Circuits invested
£0.5 million in a new high accuracy photoplotter,
automatic optical inspection equipment and various
chemical process lines. During the coming year Labtech
intends to invest further in key areas such as laser
profiling and the manufacture of highly complex
multilayer circuits.
Using its laser machining capabilities, Labtech Circuits
has extended its product offering and business levels in
the emerging MMIC (Monolithic Microwave Integrated
Circuit) packaging market, a critical element of the new
designs of radio links. With the addition of Labtech
Microwave, the company is now in a position to offer its
customers the added value services of microwave design
and test to complement the existing manufacturing
services. The acquisition from Filtronic included an
opening order book of £0.8 million for 2005/06 and, when
added to the ongoing business at Labtech Circuits, this
will result in the Filtronic Group becoming Labtech’s
second largest customer.
Following the recruitment of a Sales Manager based in
the USA, the company has seen increased market
penetration in North America. The success of this venture
has prompted Labtech also to recruit a Sales Manager
for Scandinavia, based in Stockholm. Labtech Circuits is
now involved in a number of new custom radio link circuit
designs for major OEMs in Europe and North America.
This type of complex and specialist circuit manufacturing
technology helps Labtech differentiate itself from other
PCB suppliers who are increasingly subject to lower cost
competition from the Far East.
Sales £9.1m (2004: £7.9m)
Operating Profit £1.2m (2004: £0.8m)
Dr Brian Mazonas
Managing Director
Strong Earnings Growth 10
CML provides a comprehensive service in the
manufacture of aircraft structures and system
components from the supply of individual machined
or composite components through to complete sub-
assemblies or kits of parts.
With a strong pedigree in precision machining for the
aerospace industry since the 1940s, CML’s customers
have benefited from the subsequent integration of
composites, surface treatments, sheet detail
fabrication and assembly into its range of services.
Project and supply chain management have also
become integral parts of this offering.
Precision Machining is focused on 4 and 5-axis
machining of aluminium and hard metals. Principal
products, covering the full range of Airbus aircraft,
include interspar ribs, landing gear ribs, sidestay
wing attachments, wing access panels, engine thrust
fittings and aft mounting brackets. Similar complex
structural components are also supplied for military
and rotary wing aircraft.
Composites predominantly supplies components and
assemblies for the Raytheon Hawker 800XP. Products
include various wing and fuselage fairings, covers,
panels, nose and tail cone assemblies. Spares
and new build requirements for a variety of civil
and military customers are successfully combined
in our comprehensive composites facility.
Fabrication manufactures fuselage and wing stringers
for the Raytheon Hawker 800XP build programme. It
also supports Airbus with a broad range of spare
parts, including AOG (aircraft on ground)
requirements for the entire in-service fleet.
Aerostructures
CML  
Sales £8.8m (2004: £8.6m)
Operating Profit £0.4m (2004: £0.2m)
Geoff Stewart
Managing Director
Airframe components for the Airbus
A320 family, clockwise from LHS:  
Wing Access Panel; Main Undercarriage
Door; Landing Gear Rib; Interspar Rib
Kits and completed assemblies are supplied in a
finished state to customers after passing through CML’s
metal and composites treatments facility, which also
provides a similar service to a growing external
customer base.
We have seen strong recovery within CML. Confidence
has returned to the aerospace market and CML achieved
growth through the year including, in particular, a strong
final quarter with sales 26% higher than the equivalent
quarter in 2003/04 and profit for the year 47% ahead.
Sales gradually increased throughout the year as demand
from the aerospace market began to increase. Growth
was somewhat hampered in the first nine months by
severe shortages in the global supply of aluminium and
the limits to UK aerospace capacity after the reductions
of recent years.
With build rates set to increase further, particularly at
Airbus, CML’s largest customer, our strategy is to
continue to consolidate CML, to strengthen its position
in the marketplace as a strategic supplier of precision
components and to develop further opportunities for the
supply of composite details and assemblies.
During the next twelve months, we will continue to seek
the expansion of capacity and capability through
strategic alliances enabling us to meet customers’
requirements for a total design, manufacturing and
project management solution. 
Aerospace in Recovery 11
INTELEK Report and Accounts 2005
We consider that the worldwide government sector of
the satellite communications market will continue to
grow in the next twelve months and beyond. We also see
our extended representation in more distant parts of the
world offering additional scope, particularly through
representation in Eastern Europe and the Far East. The
launch of the Evolution series of high data rate modems
will give us the ability to win market share in the second
half of the year, particularly in Europe. The Evolution
series will provide us with a new platform for future
development, enabling significant new product releases,
including additional feature sets for existing products, at
regular intervals over the next few years. We expect to
build on our recognised technical expertise in the high
power amplifier market, particularly outdoor products.
At Labtech, we expect some of our principal, older
technology programmes to decline over time. These will
be replaced by new technology, more complex circuits in
smaller volumes, requiring greater manufacturing
flexibility and expertise. Our ability to respond to these
changes will enable us to maintain our leading market
position in the face of Far Eastern competition. We move
forward into 2005/06 with a much increased product
offering. Still concentrating on the global microwave
market, the company is now able to offer its customers
proven design and test capability of microwave
components complementing its successful circuit
manufacturing business. Although telecommunications
will still be the dominant market in 2005/06, sales to the
defence industry offer significant potential.
CML’s final quarter of the last financial year reflected a
considerable increase in activity over previous quarters.
We have moved into the new financial year at a higher
production level than last year and one that should be
maintained. Airbus’s increase in production levels is only
part of the story of the increased confidence emerging in
the aerospace market, sustained not only by the
recovery of passenger traffic but also by the progress
made in key development projects such as the Airbus
A380 and the Boeing 787. CML should continue to make
good progress during the year.
The Group’s finances are now substantially improved on
the position at March 2004. With an agreed Schedule of
Contributions in place with the Pension Trustees, our
annual deficit funding has been catered for within the
Group’s net cash flow. The Group is now able to look
with more confidence at the future, enabling us to
capitalise on the opportunities which will arise to
increase market share through organic growth or, indeed,
through carefully selected acquisitions.
Ian D Brodie
Chief Executive
6 June 2005
Outlook
The new ‘Evolution Series’ Satellite Modem capable of up to 52 Mb/s The Evolution Series’ unique web-based test
facility for customers
Confidence Increasing 12
Financial Review
Results
The Group achieved sales of £37.3 million (2004: £38.9 million) and
profit before tax, exceptional items and goodwill amortisation of £1.8
million (2004: £1.8 million). This includes the results of the
discontinued business, Pascall Electronics, being sales of £5.8 million
(2004: £6.9 million) and a loss of £(0.1) million (2004: profit of
£0.3 million).
Acquisition
On 11 March 2005, Labtech completed the acquisition of the Milton
Keynes facility of Filtronic Components Ltd. The consideration was
£0.4 million, to be paid in two tranches, 70% in May 2005 and the
balance in August 2005. The consideration was equivalent to the
tangible assets acquired at fair value and no goodwill arose on
consolidation. The facility contributed sales of £0.1 million and a small
profit to Labtech’s results in 2004/05.
Research and development costs
In 2004/05, Paradise Datacom incurred research and development
costs of £1.7 million, 12% of sales, of which £1.6 million was charged
to profit.
Operating exceptional items
Further steps were taken during the year in reshaping the Group’s
operations at CML and Paradise Datacom to reduce overhead costs
and prepare the businesses for growth. A charge of £0.3 million was
incurred. 
Interest costs
Interest costs reduced further during the year, notwithstanding the
increase in base rates, as the Group reduced its net debt. Interest
cover, measured against operating profit before exceptional items and
goodwill amortisation, increased to 4.5✕ (2004: 4.2✕ ).
Exceptional profit on disposal of business
The Group completed the sale of Pascall Electronics on 18 March
2005 for a total cash consideration of £4.7 million. The price is linked
to the valuation of Pascall’s net assets at completion, which is
currently under review. The Directors estimate that an additional £0.1
million will be payable. Taking this into account, the sale produced an
exceptional profit of £1.8 million. In accordance with accounting
standard FRS10, goodwill previously written off against reserves in
respect of Pascall Electronics is reinstated and shown as written off in
the profit and loss account, amounting to £3.6 million.
T axation
The taxation charge of £0.4 million arises as the exceptional items
associated with the disposal of Pascall Electronics have no net tax
effect and only a small part of the goodwill amortisation is eligible for
tax deduction. The effective rate for continuing operations, before
exceptional items and goodwill amortisation, was 34%, a more
normal level than last year’s 18% which benefited from a catch-up of
US tax credits.
Capital expenditure
The Group invested £1.5 million in new capital (2004: £1.0 million).
This includes £0.2 million for Pascall Electronics. £0.5 million was
invested at Labtech Circuits, including optical inspection equipment
and new drill and routing machines. £0.5 million was invested at
Paradise Datacom, primarily in test equipment. CML invested £0.3
million, with the major item being a new vertical machining centre.
Pension
During the year, the Group agreed with the defined benefit scheme
trustee a schedule of contributions to the scheme of £1.4 million a
year to 2016, including scheme expenses. An additional contribution
was agreed in recognition of Pascall Electronics’ withdrawal from
responsibility for the scheme, amounting to £0.9 million, plus the
benefit of any tax savings obtained by the Group on that sum. This
contribution is to the general fund and will be to the benefit of all
members of the pension scheme. In total, cash contributions in
2004/05 amounted to £2.2 million,
with £0.1 million of the Pascall
Electronics’ contributions paid in
April 2005.
The scheme has been revalued as at
31 March 2005 under FRS 17,
Retirement Benefits. This shows an
increase in the deficit from £12.4
million (£8.7 million after tax) to
£12.9 million (£9.0 million after tax).
The liabilities increased by £2.1
million, of which £0.7 million was
due to changes in assumptions for
the scheme membership (mortality
etc.) and £1.4 million was due to
changes in valuation assumptions,
primarily for inflation and discount
rates. This increase was significantly
offset by a net £1.6 million increase in the scheme assets. Overall
funding (assets to liabilities) improved by 3% to 48%.
Cash flow and net debt
Net debt reduced by 65% to £2.3 million (2004: £6.6 million), a
gearing ratio to net assets of 10.8% (2004: 33.3%). Net cash flow
from continuing operating activities (see Note C1) increased from £2.3
million to £3.2 million, net of the annual contribution towards the
defined benefit pension deficit. This reflected both improved operating
results and continuing control of working capital. The discontinued
business had a net operating cash outflow (Note C1) of £1.2 million,
including the special £0.8 million pension contribution. This was in
part due to completion of the disposal in the middle of Pascall’s
busiest trading month of the year. The overall debt reduction was after
the £0.1 million interim dividend payment, which was brought forward
from April to January 2005.
International Standards
Intelek is required to adopt International Standards for the financial
year ending 31 March 2006. The first report incorporating the
Standards will be the Interim Report as at 30 September 2005. An
examination of the implications for the Group has been undertaken
and, although there is more detailed analysis required, the main
impact is expected to be in respect of:
IAS 19 Employment Benefits, which will bring the net defined benefit
pension deficit onto the Balance Sheet, at similar values to those
disclosed for FRS 17;
IAS 38 Intangible Assets, which is likely to lead to further capitalisation
of research and development at Paradise Datacom, especially in
respect of the new Evolution Series modem;
IAS17 Leases, which may require some property lease elements to be
capitalised, as for finance leases;
IFRS 3 Business Combinations, under which goodwill will no longer
be amortised, although it will be subject to annual review for
impairment.
The effect of net assets and headline earnings for 2004/05 is
estimated to be:
£ million Net Assets Headline earnings
IAS 19 Pension (11.2) (0.1)
IAS 38 R&D 1.3 0.6
IAS 17 Leases Nil Nil
IFRS 3 Goodwill 0.8 Nil
Estimated total change (9.1) 0.5
Kevin N Edwards
Finance Director
6 June 2005
Kevin Edwards 13
INTELEK Report and Accounts 2005
Corporate Governance Report
COMBINED CODE
In June 1998, the Combined Code on Corporate Governance was
issued by the London Stock Exchange, and this was revised in
July 2003 (‘the Code’). Section 1 of the Code is applicable to
companies. A statement on how the Company has applied the
principles and a statement explaining the extent to which it has
complied with the provisions of the Code appear below. The
Code contains fourteen principles of governance, which are
divided into the following four areas:
1. Directors
The Company is controlled through a Board of Directors, which
presently comprises two executive and three non-executive
Directors. Nigel Mills is non-executive Chairman, Ian Brodie is Chief
Executive and Kevin Edwards is Finance Director. Don Wilson is the
Senior Independent non-executive Director and David Bramwell is
an Independent non-executive Director. The Board strongly
believes that shareholders derive considerable benefit from the
presence on the Board of Don Wilson who has many years senior
executive experience. Despite being over 70, Don has agreed to
return to the Board, although he will submit himself for re-election
at each AGM. All other Directors will submit themselves for re-
election at least every three years. Appointments to the Board are
made on the recommendation of the Nomination Committee.
The Board has a formal schedule of matters reserved to it and
meets at least eleven times a year. It is responsible for overall
Group strategy, policy on corporate governance issues,
acquisition policy, approval of major capital expenditure and
consideration of significant financial and operational matters. It
monitors the exposure to key business risks and reviews the
strategic direction of the trading subsidiaries, their annual
budgets and progress towards the achievement of those budgets
and their investment programmes. It also considers legislative,
environmental, health and safety and employment issues. The
Board has approved a written statement of the division of key
responsibilities between the Chairman and the Chief Executive.
The Chairman leads the Board, ensuring that each Director is able
to make an effective contribution. He also monitors the
information provided to the Board to ensure it is sufficient, timely
and clear, and from time to time the Board reviews the adequacy
of this information.
The Board held twelve meetings during 2004/05, other than those
required for specific approvals (for example, bank mandates and
annual accounts). The attendances were:
Nigel Mills 11
David Bramwell (appointed 1 October 2004) 6
Ian Brodie 12
Kevin Edwards 12
Don Wilson 12
Roger Fletcher (resigned 27 May 2004) 2
Five of the meetings were combined with visits to subsidiary
company operations and one included presentations by senior
executives on their areas of responsibility. Individual visits to
operational sites by non-executive Directors also occurred. In
addition to the regular Board meetings, key financial information
is circulated to Directors outside of meetings. The Chief Executive
has regular direct contact with the non-executive Directors and
keeps them informed of material developments between Board
meetings.
All Directors have direct access to the Company Secretary and
are able to take independent professional advice in the
furtherance of their duties if necessary. The Company maintains
Directors & Officers’ insurance in respect of the risk of claims
against Directors.
The Chairman held two meetings during the year with the non-
executive Directors, without the executive Directors being
present. The Senior Independent Director held one meeting
during the year with the other Directors, without the Chairman
being present, to review the Chairman’s performance, as
described in more detail below.
The Board has adopted an induction process for new Directors
and this is facilitated by the Chief Executive and the Company
Secretary. The Chairman ensures that all Directors receive
appropriate training on appointment and then subsequently as
needed, taking into account their need to update their skills and
their knowledge of the Company's business. 
The Board has established three standing committees, the Audit
Committee, the Remuneration Committee and the Nomination
Committee, which operate within defined terms of reference.
Details may be obtained from the Company Secretary. The
minutes of committee meetings are available to all the Directors.
During the year, the Remuneration Committee met three times,
the Audit Committee twice and the Nomination Committee twice.
All committee meetings were attended by all members of the
relevant committee. The reports of the Remuneration Committee,
the Nomination Committee and the Audit Committee are on
pages 15 to 17, 18 and 19 respectively.
Since 1 April 2004, the Board has undertaken an evaluation of its
performance and the performance of its committees and the
individual Directors. This comprised:
 Appraisal of the Finance Director by the Chief Executive
 Appraisal of the Chief Executive by the Senior Independent
non-executive Director
 Appraisal of the Chairman by the Senior Independent non-
executive Director
 Appraisal of the other non-executive Directors and of the
Board as a whole collectively by the Board
The appraisals focused on performance against objectives set for
the past year, on establishing objectives for the new financial year
and, for the Board, on its operation and effectiveness. The Board
was satisfied that the process showed that the Board and its
committees worked effectively. Nevertheless, the Board agreed a
number of measures aimed at further enhancing its performance,
in particular in the following areas:
 Renewed emphasis on non-financial objectives, such as
succession planning; 
 Enhancement of investor relations strategy 14
Corporate Governance Report
2. Directors’ remuneration
The Remuneration Committee consists of the two independent
non-executive Directors and meets at least two times a year. Its
responsibilities include a review of the performance of executive
Directors and other senior executives prior to determining their
remuneration. The remuneration of the non-executive Directors is
determined by the Board of Directors as a whole. No Director
plays a part in the discussion about his own remuneration. 
The Remuneration Report is set out on pages 15 to 17. 
3. Accountability and audit 
A review of the performance of the Group’s trading subsidiaries,
of the financial position of the Group and of the Group’s
prospects is included in the Chairman’s statement, the Chief
Executive's review and the Financial Review set out on pages 3, 5
to 11 and 12. The Directors’ responsibilities for the financial
statements are described on page 21. 
INTERNAL CONTROL
The Board of Directors is responsible for the Group’s system of
internal control and for reviewing its effectiveness. In designing
the system of internal control, consideration is given to the
significant risks to the business, the probability of these risks
manifesting themselves and the overall cost of controlling them.
The system is designed to manage rather than eliminate the risk
of failing to achieve business objectives and therefore can only
provide reasonable, and not absolute, assurance against material
misstatement or loss.
The implementation and day-to-day operation of the system of
internal controls has been delegated to executive Directors and
senior management, but the effectiveness of the system is
regularly reviewed by the Board in a process that accords with the
Turnbull Report. As part of its corporate governance procedures,
the Board has received regular reports on specific areas of risk. If
appropriate, these reports include recommendations for
improvement in controls or for the management of those risks.
Furthermore, steps continue to be taken to integrate risk
management procedures into the Group’s operations, to extend
awareness of the importance of the management of risk and to
ensure that recommended improvements brought to the attention
of the Board are implemented. In conjunction with the Audit
Committee, the Board has carried out an annual review of the
overall effectiveness of the system of internal control and risk
management procedures during the year and up until the date of
approval of the annual report.
AUDIT COMMITTEE AND AUDITORS
The report of the Audit Committee is set out on page 19.
4. Relations with shareholders
The Company encourages two-way communication with both its
institutional and private investors and responds promptly to all
enquiries received orally or in writing. During the year the
Chairman, Chief Executive and the Finance Director, either
separately or together, attended a number of meetings with
analysts, and with major shareholders. The independent Directors
also attended one such meeting in the year. Written reports about
the Company by analysts or brokers are circulated to all
Directors.
All shareholders receive at least twenty working days’ notice of
the Annual General Meeting at which all Directors are available for
questions. Each substantive issue is the subject of a separate
resolution. The numbers of proxy votes for and against each
resolution are announced at the meeting, after the voting has
taken place.
GOING CONCERN
After making enquiries, the Directors have formed a judgement at
the time of approving the financial statements that there is a
reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
CORPORATE GOVERNANCE COMPLIANCE STATEMENT
The Company is pleased to report that it has complied throughout
the year ended 31 March 2005 with the provisions set out in
Section 1 of the Code, except:
A2.2 The Chairman did not meet the independence criteria on
appointment, having been an employee of the Group within the
previous five years. The Board considers that the Chairman’s
position as the Group’s largest shareholder and as founder of the
Group’s largest subsidiary ensures that shareholder interests are
well represented on the Board.
A3.1 The Senior Independent Director, Don Wilson, has been
on the Board for more than nine years, having been appointed on
14 July 1995. The Board considers that Don continues to provide
independent and valuable input to the Board, bringing to bear his
extensive experience as a senior executive at Rank Xerox and
elsewhere.
D1.1 The Senior Independent Director does not attend
meetings with major shareholders as a matter of routine.
However, he is available should he be required and is present at
the AGM. The Chairman attends the six-monthly announcements
to shareholders and, with a 12.1% shareholding, has a close
affinity with shareholders’ interests. 15
INTELEK Report and Accounts 2005
Remuneration Report
The Directors present the Remuneration Report for the financial year ended 31 March 2005.
This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002. The
report also meets the relevant requirements of the Listing Rules of the Financial Services Authority.
As required by the Directors’ Remuneration Report Regulations 2002, a resolution to approve this Directors’
Remuneration Report will be proposed at the Company’s Annual General Meeting.
The auditors are required to report to the shareholders on the “auditable part” of the Directors’ Remuneration
Report and to state whether in their opinion the “auditable part” of the Directors’ Remuneration Report has
been properly prepared in accordance with the Companies Act 1985. This Report therefore has separate
sections containing unaudited and audited information.
UNAUDITED INFORMATION
Remuneration Committee
The Remuneration Committee is responsible for determining the remuneration and other terms of employment of
the executive Directors. No external advisors have been used. In determining remuneration for the year, the
Committee has given full consideration to the requirements of the Combined Code. 
The Remuneration Committee consists wholly of independent non-executive Directors who have no day-to-day involvement in the running
of the Group’s business. The following independent non-executive Directors served as members of the Remuneration Committee during the
year and to the date stated:
Don Wilson (Chairman of the Remuneration Committee) (to 6 June 2005)
Roger Fletcher (to 27 May 2004)
David Bramwell (from 1 October 2004 to 6 June 2005)
Remuneration policy
The key objectives of the Committee in determining the remuneration packages of executive Directors for 2005 and subsequent years are:
1. The recruitment, retention and incentivisation of Executive management. 
2. The alignment of Executive management and shareholder interests.
The remuneration packages of executive Directors comprise the following elements:
Basic salary and benefit
Basic annual salaries for executive Directors are reviewed annually having regard to individual performance and market practice. Benefits
provided to executive Directors vary but may comprise the provision of a company car and health insurance. 
Annual bonus
The targets for annual bonus are set each year by the Committee. The maximum bonus is 100% of basic salary. Bonus in excess of 10% of
basic salary is payable 25% in shares and 75% in cash. Bonus at 10% or below is payable in cash. The bonus for 2004/05 comprised three
elements based respectively on: (a) Headline Profit Before Tax in the first half of the year at or exceeding the prior year; (b) Net debt at the year
end being below the prior year; (c) Headline EPS for the full year with bonus commencing at 90% of the prior year EPS.
Share options and Long-Term Incentive Plan
The Company has the following share options schemes: an Executive Scheme, a SAYE Scheme and an International Sharesave Scheme.
The Executive Scheme is designed to promote long-term improvement in the performance of the Company, sustained increase in
shareholder value and clear linkage between Executive reward and the Company’s performance. There are two sections of the scheme still
operative, 1995 and 2000. The 1995 and 2000 sections are conditional upon achieving headline EPS growth in the aggregate of 6% above
RPI in the 3 years prior to exercise. 
The Chief Executive has been granted separate options over 700,000 shares at an option price of 17p per share, being the mid-market price
on the date of his appointment, with the same performance conditions as the 1995 Plan. These options are now exercisable with the
performance conditions having already been satisfied. These shares will be provided out of the Employee Share Ownership Plan. The
difference between the option price and the cost of the shares to the Plan was charged to profit in the year to 31 March 2000 and is
recorded as a provision against investment in own shares. In addition, the Chief Executive is entitled to a bonus on 50,000 shares issued
under the 1995 scheme equal to the difference between the grant price of the shares and the price existing on the initial allocation to him.
The total bonus payable amounts to £8,000, which was charged to profit in the year to 31 March 2000.
Directors’ shareholdings
These are as set out in the Directors’ Report on pages 20 to 21.
Pension Contributions
The Company makes annual contributions to the Intelek and Paradise Datacom Pension Schemes for the executive Directors. The Schemes
are funded, Inland Revenue approved, contributory occupational pension schemes.
Don Wilson 16
Remuneration Report
Service contracts and letters of appointment
The executive Directors are provided with service contracts, none of which exceeds one year.
Ian Brodie and Nigel Mills have notice entitlements of one year. Nigel Mills relinquished his role as executive director on 30 September 2004
upon his appointment being confirmed as non-executive Chairman. Kevin Edwards has a notice entitlement of six months. In the event of
the Company being taken over and the Executives leaving the Company, the notice periods are as follows: Ian Brodie, two years; Kevin
Edwards and Nigel Mills, one year. Don Wilson and David Bramwell have contracts with notice entitlements of three months.
The Committee considers the Directors’ notice
entitlements to be appropriate as they are in line with
the market and take account of the Directors’
knowledge and experience.
Non-Executive Directors
The fees of non-executive Directors are determined
by the full Board to an amount not exceeding
£200,000, as set out in the Memorandum and
Articles of Association. The non-executive Directors
are not eligible for bonuses or pension benefits.
Performance Graph
This graph shows the Company’s performance for
the last five years, as measured by the Total
Shareholder Return (TSR) (with dividends reinvested),
for equity shareholders of Intelek plc, compared with the TSR of the Techmark 100 index.
This index was chosen as it represents a broad indication of performance in the sector in which the Company operates.
AUDITED INFORMATION
Details of the Directors’ emoluments are as follows:
Directors’ emoluments and share interests
Current year Previous year
Salary/ Pension Salary/ Pension
Directors’ fees Benefits Bonus contributions Total fees Benefits Bonus contributions Total
emoluments £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Nigel Mills 58 2 3 18 81 96 2 23 19 140
David Bramwell
(appointed 1Oct. 2004)12 — — — 12 —————
Ian Brodie 136 14 14 30 194 131 14 66 32 243
Kevin Edwards 100 10 10 15 135 97 9 48 23 177
Roger Fletcher
(to 27 May 2004) 17 — — — 17 42 — — — 42
Don Wilson 24 — — — 24 21 — — — 21
Total 347 26 27 63 463 387 25 137 74 623
Benefits comprise primarily car allowances and medical care.
No Director was materially interested either at the year end or during the year in any contract of significance to the Group.
2005 2004
Directors’ pensions No. No.
The number of Directors who are accruing benefits under:
— money purchase schemes (including Nigel Mills to 30 September 2004) 3 3
— defined benefit schemes (further accrual terminated 1 October 2002) 1 1 
160
140
120
100
80
60
40
20
0
April 00
 October 00
April 01
October 01
April 02
October 02
April 03
October 03
April 04
October 04
April 05
Return
Intelek
FTSE Techmark 100
5 Year Shareholder Return 17
INTELEK Report and Accounts 2005
Directors’ defined benefit pension entitlement excluding additional voluntary contributions:
Increase in accrued Transfer value of Accumulated total Accumulated total 
annual pension increase less Directors’ accrued pension at accrued pension at
excluding inflation contributions 31 March 2005 31 March 2004
£000 £000 £000 £000
Ian Brodie — — 18 17
The transfer value of the Directors’ accrued benefit at the end of the financial year is shown below. (Note that the transfer value 
represents a liability of the Company, not a sum paid or due to an individual).
Ian Brodie £000
Transfer value at 31 March 2004 214
Increase in transfer value (less Director’s contributions) 25
Transfer value at 31 March 2005 239
Directors’ share options
Ordinary shares under the Executive Scheme
Granted Exercised Expired
31 March during during during 1 April Option price
Scheme 2005 year year year 2004 £ Expiry date
Ian Brodie 1995 A — — — (50,000) 50,000 0.160 13.01.05
1995 A 50,000 — — — 50,000 0.330 29.01.07
1995 B 250,000 — — — 250,000 0.360 29.07.07
Special A 700,000 — — — 700,000 0.170 20.09.07
2000 B 250,000 — — — 250,000 0.190 11.02.12
Total 1,250,000 — — (50,000) 1,300,000
Kevin Edwards 1995 B 150,000 — — — 150,000 0.350 28.07.07
2000 B 250,000 — — — 250,000 0.190 11.02.12
2000 B 100,000 — — — 100,000 0.105 07.01.13
Total 500,000 — — — 500,000 
Nigel Mills 2000 B 50,000 — — — 50,000 0.105 07.01.13
Total 50,000 — — — 50,000
Ordinary shares under the Savings Related Scheme
Granted Exercised Expired
31 March during during during 1 April Option price
2005 year year year 2004 £ Expiry date
Ian Brodie B 6,529 — — — 6,529 0.340 01.03.07
Total 6,529 — — — 6,529 
Shares under option at the end of the year are designated as:
A where the options are exercisable
B where the options are not yet exercisable as performance conditions have not yet been met.
The options for Ian Brodie are discussed in more detail on page 15.
The mid-market price at 31 March 2005 was 12.5p. The highest mid-market price during the year was 13.0p and the lowest mid-market
price during the year was 8.25p.
The performance criteria for annual bonuses and share options are set out in the unaudited section of this report.
Approval
The Directors’ Remuneration Report was approved by the Board on 6 June 2005 and signed on its behalf by:
D Wilson
Director
Chairman of the Remuneration Committee
6 June 2005  18
Nomination Committee Report
The principal role of the Nomination Committee is to identify and
nominate, for Board approval, candidates to fill Board vacancies
as and when they arise. It is required to prepare a description of
the role, and capabilities required, for any appointment, and to
maintain contact with major shareholders about appointments to
the Board. It also reviews the induction process for newly
appointed Directors, reviews annually the time required of Non-
Executive Directors, keeps the structure, size and composition of
the Board under review, and considers Board succession
planning for both Executive and Non-Executive Directors.
Following Roger Fletcher’s resignation in May 2004, the remaining
four members of the Board took over the duties of the
Nomination Committee, leading to the appointment of David
Bramwell in October 2004. In November 2004, the committee was
re-established, comprising Don Wilson (Chairman), David
Bramwell, both Independent Non-Executive Directors, and Ian
Brodie, Chief Executive. 
For David Bramwell’s appointment, the Board sought advice and
recommendations from the Group’s lawyers, corporate finance
advisors and auditors.
During the year, the committee reviewed the balance of
experience on the Board and recommended to the Board that no
additional appointments were required.
The Chairman of the Nominations Committee will be available at
the Annual General Meeting to answer any questions about the
work of the committee.
D  Wilson
Chairman, Nominations Committee
6 June 2005 19
INTELEK Report and Accounts 2005
Role of the audit committee
The Audit Committee is responsible for:
 Monitoring the integrity of the financial statements of the
Company and any formal announcements relating to the
Company’s financial performance, and reviewing significant
financial reporting judgements contained therein;
 Reviewing the Company’s internal financial controls and,
unless expressly addressed by the Board itself, the
Company’s internal control and risk management systems;
 Monitoring and reviewing the effectiveness of the Company’s
internal audit operation;
 Making recommendations to the Board, for a resolution to be
put to the shareholders for their approval in general meeting,
in relation to the appointment of the external auditors and the
approval of the remuneration and terms of engagement of
the external auditors;
 Reviewing and monitoring the external auditors’
independence and objectivity and the effectiveness of the
audit process, taking into consideration relevant UK
professional and regulatory requirements; 
 Developing and implementing a policy on the engagement of
the external auditors to supply non-audit services, taking into
account relevant guidance regarding the provision of non-
audit services by the external audit firm.
The Audit Committee is required to report its findings to the
Board, identifying any matters in respect of which it considers
that action or improvement is needed, and make
recommendations as to the steps to be taken.
Composition of the audit committee
Roger Fletcher chaired the Audit Committee until his resignation
in May 2004. He was succeeded as Chairman by David Bramwell
who joined the committee in October 2004. The other member of
the audit committee is Don Wilson who served throughout the
year. Both members of the committee are considered to be
independent. David Bramwell has relevant financial experience.
Meetings and attendance
The committee met twice during 2004/05 to consider inter alia, the
annual results, the interim results and the independence, objectivity
and reappointment of the Auditors. Internal financial control
systems were also considered at each meeting. The Chairman of
the committee also invited the Chief Executive and the Finance
Director to attend each meeting and the internal auditor and
external auditors to attend the meeting for the year’s results. During
the latter meeting, the external auditors were given the opportunity
to talk with the committee without the presence of management.
Main activities of the committee during the year
At its meeting in May, the committee reviewed the annual financial
statements of the Company and received reports from the internal
auditors on control matters and from the external auditors on the
conduct of their audit, their review of accounting policies, areas of
judgement and the financial statements and their comments on
risk and internal control. A similar review was undertaken at its
November meeting when the interim statements were considered.
At these meetings, the committee also dealt with the following
particular matters:
 It reviewed the role and processes of the internal auditor and
his effectiveness;
 It reviewed the policy on engagement of the external auditors
for non-audit work, as referred to below;
 It established policies on the appointment and removal of
internal and external auditors;
 It reviewed the plans presented by the external auditors for
conduct of the year-end audit.
External auditors
The Company places great
importance on the effectiveness and
independence of its external
auditors and, together with them, is
careful to ensure their objectivity is
not compromised. At its May
meeting, the auditors presented to
the committee the findings from their
audit, together with details of how
they ensure that their objectivity and
independence are not compromised.
It is the role of the committee to
ensure compliance with the Board’s
policy in respect of services
provided by, and fees paid to, the
auditors. Audit fees are negotiated
by the Finance Director and
approved by the Audit Committee. For other services that may be
provided by the auditors, the Company’s policy is:
Audit related services
The auditors are invited by the Company to undertake those
services that they are required to and are most suited to perform.
Such work would include stock exchange related reporting and
where appropriate, assistance with acquisitions.
Taxation
The external auditors assist the Group to meet general tax
compliance requirements as well as providing advice on
acquisitions and tax planning. Should opportunities arise for them
to advise on special tax projects, their suitability is assessed at
the time to ensure it would not compromise their audit
independence, with the work being tendered where appropriate.
Consulting
To avoid any possible conflict of interest the Group’s policy is not
to employ its auditors for general consulting work. Following its
May 2005 meeting, the committee recommended to the Board
that a resolution be put to shareholders at the Annual General
Meeting for the reappointment of the external auditors, and to
authorise the Directors to fix their remuneration.
Internal audit
The internal audit work is contracted out to Norris Small,
Chartered Accountants. The firm has no association with the
external auditors. As well as its reviews of the internal auditor’s
role and processes, as described on page 22, during its meeting
in 2004/05, the committee received presentations from the
internal auditor and the results of work undertaken by him and his
plan for work in 2005. The committee considered the need for an
internal audit function and decided that, in view of the size of the
Group, a full-time resource could not be justified and that the
service should continue to be contracted-out.
Overview
As a result of its work during the year, the Audit Committee has
concluded that it has acted in accordance with its terms of
reference and has ensured the independence and objectivity of
the external auditors.
The Chairman of the Audit Committee will be available at the
Annual General Meeting to answer any questions about the work
of the committee.
D M Bramwell
Chairman, Audit Committee
6 June 2005
Audit Committee Report
David Bramwell 20
The Directors present their Report and Accounts for the year
ended 31 March 2005.
Principal activities
The principal activities of the Group are the design, manufacture
and supply of precision products and sub-systems primarily for
the Communications and Aerospace markets. Details of the
activities, developments and progress of the Group are contained
in the Chairman’s Statement, the Chief Executive’s Review and
the Financial Review.
Research and development activities
The Group continued to invest in new product development,
primarily in satellite communications, power supplies and RF
electronics.
Results and dividends
The results for the year are set out on page 23. The loss on
ordinary activities before taxation amounts to £1,179,000 (2004:
profit of £722,000). An interim dividend of 0.12p (2004: 0.12p) per
Ordinary Share was paid on 26 January 2005. A final dividend of
0.24p (2004: 0.24p) per share is recommended for approval at the
Annual General Meeting on 16 September 2005. It is proposed
that this should be paid on 30 September 2005 to shareholders
on the register at the close of business on 2 September 2005.
Directors
The Directors listed on page 4 served throughout the year, with
the exception of Dr D M Bramwell who was appointed to the
Board on 1 October 2004 and offers himself for re-election. Mr 
D Wilson retires having reached the statutory retirement age and,
being eligible, he offers himself for re-election. Mr I D Brodie
retires by rotation and, being eligible, he offers himself for 
re-election.
Details of the interests of the Directors and their families in the
Ordinary Shares of the Company are set out below:
Directors’ shareholdings 
The interests of the Directors and their families in the Ordinary
Shares at the beginning and end of the year were as follows:
31 March 1 April 
2005 2004
Nigel Mills 10,416,550 10,416,550
David Bramwell 1,250,000 —
Ian Brodie 336,437 236,437
Kevin Edwards 100,000 100,000
Roger Fletcher (to 27 May 2004) — 4,896,081
Don Wilson 258,592 258,592
There are no non-beneficial interests. There have been no
changes in the above Directors’ interests in the period to 6 June
2005. 
The Directors’ options to subscribe for shares under the
Executive, Savings Related and other share option schemes, are
set out in the Remuneration Report on pages 15 to 17.
Share capital
As at 6 June 2005, the Directors have been notified of the
following interests amounting to 3% or more of the issued share
capital of the Company:
N L Mills 10,416,550 — 12.10%
R B Fletcher                       7,781,250 — 9.03%
Herald Investment Trust Plc            5,000,000 — 5.81%
Framlington Investment Management Ltd. 4,850,000 — 5.63%
Payment of creditors
The Group’s policy for the year ending 31 March 2006, for all
suppliers, is to fix terms of payment for each business
transaction, to ensure that the supplier is aware of those terms,
and to abide by the agreed terms of payment. The Company had
no trade creditors.
Donations
The Group did not make any political or charitable donations in
the year (2004: £Nil).
Employee involvement
During the year the Group has continued its policy of full
involvement of employees wherever possible. This has taken
place through the provision of information, consultation on policy
issues where appropriate, and the mutual setting of objectives
against which performance is measured. The Group takes the
approach of maximising performance through the heightening of
awareness of corporate objectives and policies.
Disabled persons
It is the Group’s policy to offer equal opportunities to disabled
persons applying for vacancies, having regard to their abilities in
relation to the job for which they apply. It is also Group practice,
wherever possible, to continue the employment of any employees
who become disabled during the course of their employment.
Corporate governance
The Board’s formal statement of Compliance with the Combined
Code is given on page 13 and its Remuneration Report on
page 15.
Special business
A resolution will be proposed at the Annual General Meeting to
renew the existing authority of the Directors, conferred by a
resolution passed in September 2004, to allot unissued shares in
the Company. The authority (resolution 9 in the Notice of Meeting)
will extend until the earlier of the Annual General Meeting for 2006
and fifteen months from the date of the Annual General Meeting
for 2005.
Directors’ Report 21
INTELEK Report and Accounts 2005
Statement of Directors’ Responsibilities
Company law in the United Kingdom requires the Directors to
prepare financial statements for each financial year which give a
true and fair view of the state of affairs of the Company and the
Group and of the profit or loss of the Group for that period. In
preparing these financial statements, the Directors have:
 selected suitable accounting policies and applied them
consistently;
 made judgements and estimates that are reasonable and
prudent; and
 followed applicable United Kingdom accounting standards; 
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Legislation in the United Kingdom governing the preparation and
dissemination of the financial statements and other information
included in the annual reports may differ from legislation in other
jurisdictions.
On behalf of the Board
K N Edwards 
Director and Secretary, Swindon 
6 June 2005
The Company was authorised at the Annual General Meeting in
September 2004 to purchase up to 10% of its issued Ordinary
Shares, subject to certain restrictions. This authority has not yet
been exercised, but the Directors consider that purchases by the
Company of its Ordinary Shares for cancellation could in certain
circumstances be advantageous to Shareholders, and are
accordingly seeking the renewal of the authority (resolution 10 in
the Notice of Meeting) to extend until the earlier of the Annual
General Meeting for 2006 and fifteen months from the date of the
Annual General Meeting for 2005. This authority will only be
exercised if to do so would result in an increase in earnings per
share. Under the proposed authority, the maximum price payable
for the purchase of shares shall not exceed 5% above the
average of the middle market quotations taken from The London
Stock Exchange Official List for the five business days before a
purchase is made, and the minimum price shall be 5p per share.
In addition, the Directors consider it advisable that they continue
to have power to make allotments of Ordinary Shares in the
Company for cash, up to a maximum of 4,303,803 Ordinary
Shares, being 5% of the issued Ordinary Share Capital of the
Company at 31 March 2005. The authority (resolution 11 in the
Notice of Meeting) will extend until the earlier of the Annual
General Meeting for 2006 and fifteen months from the date of the
Annual General Meeting for 2005.
Auditors
The Auditors, RSM Robson Rhodes LLP , offer themselves for
reappointment in accordance with Section 385 of the Companies
Act 1985.
Approval
The Report of the Directors was approved by the Board on 
6 June 2005 and signed on its behalf by:
K N Edwards
Director and Secretary
6 June 2005 22
Independent Auditors’ Report 
to the Shareholders of Intelek plc
We have audited the financial statements on pages 23 to 45. 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 shareholders, 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 shareholders those matters we are required to state to
them in the 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 shareholders, 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 United Kingdom Accounting
Standards are set out in the Statement of Directors’
Responsibilities.
Our responsibility is to audit the financial statements and the part
of the Directors’ Remuneration Report to be audited in
accordance with relevant legal and regulatory requirements,
United Kingdom Auditing Standards and the Listing Rules of the
Financial Services Authority. We report to you our opinion as to
whether the financial statements give a true and fair view and
whether the financial statements and the part of the Directors’
Remuneration Report to be audited have been properly prepared
in accordance with the Companies Act 1985. We also report to
you if, in our opinion, the Directors’ Report is not consistent with
the financial statements, if the Company has not kept proper
accounting records, if we have not received all the information
and explanations we require for our audit, or if information
specified by law or the Listing Rules regarding Directors’
remuneration and transactions with the Company and other
members of the Group is not disclosed.
We review whether the Corporate Governance Report reflects the
Company’s compliance with the nine provisions of the July 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 other information contained in the Annual Report and
consider whether it is consistent with the audited financial
statements. The other information comprises the Directors’ Report,
the unaudited part of the Directors’ Remuneration Report, the
Chairman’s Statement, the Chief Executive’s Review and the
Financial Review, the Corporate Governance Report, the
Nomination Report, the Audit Committee Report, the Five Year
Summary and the Notice of Meeting. We consider the implications
for our report if we become aware of any apparent misstatements
or material inconsistencies with the financial statements. Our
responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom
Auditing standards issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant
to the amounts and disclosures in the financial statements and
the part of the Directors’ Remuneration Report to be audited. It
also includes an assessment of the significant estimates and
judgements made by the Directors in the preparation of the
financial statements, and of whether the accounting policies are
appropriate to the Group’s circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable
assurance that the financial statements and the part of the
Directors’ Remuneration Report to be audited are free from
material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements and the part of the Directors’ Remuneration Report to
be audited.
Opinion
In our opinion:
 the financial statements give a true and fair view of the
state of affairs of the Company and the Group as at     
31 March 2005 and of the Group’s loss for the year 
then ended; and
 the financial statements and the part of the Directors’
Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985.
RSM Robson Rhodes LLP
Chartered Accountants and Registered Auditors
Birmingham, England 
6 June 2005 23
INTELEK Report and Accounts 2005
2005 2004
Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
Note £000 £000 £000 £000 £000 £000
Turnover 4 31,523 5,769 37,292 31,965 6,926 38,891 
Cost of sales (23,952) (4,882) (28,834) (24,729) (5,770) (30,499)
Gross profit 7,571 887 8,458 7,236 1,156 8,392 
Distribution expenses (1,507) (592) (2,099) (1,444) (455) (1,899)
Administrative expenses (4,827) (461) (5,288) (4,653) (487) (5,140)
Other operating income 23 109 132 102 121 223 
Operating profit / (loss) before goodwill
and exceptional items 5 2,358 (57)2,301 2,035 335 2,370 
Amortisation of goodwill (789) — (789) (794) — (794)
Exceptional items: Restructuring of operations (309) — (309) —— —
Operating profit / (loss) 1,260 (57)1,203 1,241 335 1,576 
Non-operating exceptional items:
Profit on disposal of subsidiary — 1,759 1,759 —— —
Adjustment for goodwill previously written off — (3,635) (3,635) —— —
Loss on disposal of discontinued operations — (1,876) (1,876) —— —
Loss on disposal of property —— — (289) — (289)
Profit / (loss) on ordinary activities before
interest and taxation 1,260 (1,933) (673) 952 335 1,287 
Interest 6 (447) (59) (506) (527) (38) (565)
Profit / (loss) on ordinary activities before taxation 813 (1,992)(1,179) 425 297 722 
Taxation 8 (441) 82 (359) (140) (69) (209)
Profit / (loss) on ordinary activities after taxation 372 (1,910)(1,538) 285 228 513 
Dividends 9 (305) (305)
Transfer (from) / to reserves 21 (1,843) 208 
Earnings / (loss) per Ordinary share 10
Headline 1.49 (0.06) 1.43p 1.47 0.27 1.74p
Basic 0.44 (2.26)(1.82)p 0.34 0.27 0.61p
Diluted 0.44 (2.26)(1.82)p 0.34 0.27 0.61p
Dividends per Ordinary share 9
Interim 0.12p 0.12p
Final 0.24p 0.24p
Total 0.36p 0.36p
2005 2004
£000 £000
(Loss) / profit on ordinary activities after taxation (1,538) 513
Exchange rate movement (62) (449)
Total gains and losses recognised relating to this year (1,600) 64
Group Profit and Loss Account
year ended 31 March 2005
Statement of Total Recognised Gains and Losses 
year ended 31 March 2005
2005 2004
£000 £000
(Loss) / profit on ordinary activities before taxation (1,179) 722
Realisation of property valuation gains of prior years — 639
Historical cost profit on ordinary activities before taxation (1,179) 1,361
Historical cost retained profit / (loss) after taxation and dividends (1,843) 847
Note on Historical Cost Profit and Losses 
year ended 31 March 2005 24
Group Company
2005 2004 2005 2004
Restated Restated
(Note 28) (Note 28)
Note £000 £000 £000 £000
Fixed assets
Intangible assets 11 12,970 13,738 — —
Tangible assets 12 5,729 6,545 11 16 
Investments 13 — — 10,031 9,955 
18,699 20,283 10,042 9,971 
Current Assets
Stock and work in progress 14 3,479 4,252 — —
Debtors — amounts due within one year 15 9,108 9,266 8,266 20,723 
— amounts due after more than one year 15 — — 7,587 — 
Cash at bank and in hand 1,091 946 2,106 118 
13,678 14,464 17,959 20,841 
Creditors
Amounts falling due within one year 16 (7,608) (11,332) (5,645) (7,723)
Net current assets 6,070 3,132 12,314 13,118 
Total assets less current liabilities 24,769 23,415 22,356 23,089 
Creditors
Amounts falling due after more than one year 17 (2,100) (2,637) (1,766) (2,312)
Provisions for liabilities and charges 18 (954) (741) (444) (193)
Deferred income 19 (100) (152) — —
Net assets 21,615 19,885 20,146 20,584
Capital and reserves
Called up share capital 20 4,304 4,304 4,304 4,304 
Share premium account 21 9,104 9,104 9,104 9,104 
Investment in own shares 28 (326) (326) (326) (326)
Capital redemption reserve 21 955 955 955 955 
Merger reserve 21 3,411 3,411 — —
Other reserves 21 — — 604 604 
Profit and loss account 21 4,167 2,437 5,505 5,943 
Equity shareholders’ funds 22 21,615 19,885 20,146 20,584 
Approved by the Board of Directors and signed on their behalf on 6 June 2005, by:
I D Brodie
K N Edwards
Directors
}
Balance Sheets
as at 31 March 2005 25
INTELEK Report and Accounts 2005
Group Cash Flow Statement
year ended 31 March 2005
Cash flow 2005 2004
Notes £000 £000
Net cash flow from operating activities before exceptional items C1 2,926 2,910 
Exceptional items (182) —
Special pension contribution on disposal of subsidiary (800) —
Net cash flow from operating activities C1 1,944 2,910 
Return on investment and servicing of finance
Interest paid:
Bank loans and overdrafts (361) (402)
Finance leases (62) (60)
Other loans (34) (56)
Facility arrangement costs (49) (46)
(506) (564)
Taxation
Corporation tax received 16 181 
Overseas tax received / (paid) 66 (99)
82 82 
Capital expenditure and financial investment
Purchase of tangible fixed assets, net of finance leases (926) (463)
Expenditure on intangible fixed assets (78) (224)
Sale of tangible fixed assets 116 1,708 
(888) 1,021 
Acquisitions and disposals
Disposal of subsidiary 3 4,587 —
Equity dividends paid (407) (287)
Net cash flow before financing 4,812 3,162 
Financing
Debt repaid in the year (497) (2,617)
Repayment of finance leases (602) (510)
(1,099) (3,127)
Increase in cash C2 3,713 35  26
Notes to the Group Cash Flow Statement
year ended 31 March 2005
C1. Reconciliation of operating profit to net cash flow from operating activities 2005 2004 
£000 £000
Operating profit 1,203 1,576 
Add back: Exceptional items 309 —
Depreciation 1,520 1,697 
Amortisation of goodwill 789 794 
Amortisation of pension deficit 381 381 
Pension contribution paid towards deficit (1,371) (1,290)
Deferred income (31) (78)
Profit on disposal of tangible fixed assets (11) (117)
(Increase) / decrease in stocks and work in progress (278) 1,351 
Decrease / (increase) in debtors 152 (580)
Increase / (decrease) in creditors 263 (824)
Net cash flow before exceptional items 2,926 2,910 
Exceptional items (982) —
Net cash flow from operating activities 1,944 2,910 
Being: Continuing operations 3,167 2,253 
Discontinued operation (1,223) 657 
Other cash flow in respect of the discontinued operation was:
Return on investment and servicing of finance (58) (40)
Taxation — (150)
Capital expenditure and financial investment (185) (98)
C2. Reconciliation of net cash flow to movement in net debt 2005 2004
£000 £000
Increase in cash 3,713 35 
Repayment of finance leases 602 510 
Cash outflow from debt 497 2,617 
Changes in net debt resulting from cash flows 4,812 3,162 
New finance leases (526) (533)
Net movement in debt 4,286 2,629 
Opening debt (6,630) (9,259)
Closing debt (2,344) (6,630)
C3. Analysis of net debt Analysis of movements in the year
At 31 At 31
Other non- March March
Cash Flow cash changes 2005 2004 
£000 £000 £000 £000
Cash at bank 145 — 1,091 946 
Debt due after one year — 547 (1,766) (2,313)
Debt due within one year 4,065 (547) (988) (4,506)
Finance leases 602 (526) (681) (757)
Debt 4,667 (526) (3,435) (7,576)
Total net debt 4,812 (526) (2,344) (6,630)
Other non-cash changes relate to the inception of new finance leases. 27
INTELEK Report and Accounts 2005
Notes to the Financial Statements
year ended 31 March 2005
1. Accounting Policies
a) Accounting convention
The consolidated financial statements are prepared in accordance with applicable accounting standards under the historical cost
convention as modified for the revaluation of certain freehold land and buildings.
b) Basis of consolidation
The consolidated financial statements include the accounts of Intelek plc and its subsidiary undertakings, made up to the balance
sheet date in each year. The results of subsidiary undertakings acquired during a year are included from their effective dates of
acquisition, and the results of subsidiary companies and businesses sold during a year are included to their effective date of sale.
c) Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired. The cost of acquisition
includes estimated deferred purchase consideration. Positive goodwill is capitalised in the year in which it arises and amortised
evenly over 20 years. In addition to systematic amortisation, the book value will be written down to its recoverable amount when
any impairment is identified. 
d) Turnover
Turnover is the amount receivable for goods and services supplied, excluding value added tax and transactions between Group
undertakings.
e) Exceptional items
Exceptional items are those that need to be disclosed by virtue of their size and incidence. Such items are included within
operating profit unless they represent profits and losses on the sale or termination of an operation, costs of a fundamental
reorganisation or restructuring having a material effect on the nature and focus of the Group, or profits or losses on the disposal of
fixed assets. In these cases, separate disclosure is provided on the face of the Profit and Loss Account after operating profit.
f) Depreciation
Depreciation is provided to write down the cost or valuation of tangible fixed assets to their residual value over their estimated
useful lives on the following bases:
Freehold land Nil
Freehold properties 2% straight line
Leasehold properties in equal instalments over the lease period
Plant and equipment       7%–33% straight line 
Where there is evidence of impairment, fixed assets are written down to their recoverable amount.
g) Government grants
Government capital grants are credited to a deferred income account and transferred to the profit and loss account over the
estimated useful life of the related asset.
h) Leased assets
Fixed assets subject to finance leases are capitalised and depreciated in accordance with the depreciation policy stated above.
The corresponding liability for the capital element is included in creditors and the interest, calculated on the basis of the amount
outstanding, is charged against profits over the period of the lease. The rental and operating lease costs of all other assets are
charged against profit before interest on a straight line basis over the lease terms.
i) Stock and work in progress
Stock and work in progress are stated at the lower of cost and net realisable value. Cost comprises direct material and labour,
and, where appropriate, includes attributable overheads. Net realisable value is based on estimated selling price less further costs
expected to be incurred to completion and disposal. 28
Notes to the Financial Statements
year ended 31 March 2005
j) Deferred taxation
Deferred tax is provided, except as noted below, on timing differences that have arisen but not reversed by the balance sheet
date where the timing differences result in an obligation to pay more tax, or a right to pay less tax, in the future. Timing
differences arise because of differences between the treatment of certain items for accounting and taxation purposes.
In accordance with FRS 19 deferred tax is not provided for:
i) revaluation gains on land and buildings, unless there is a binding agreement to sell them at the balance sheet date;
ii) gains on the sale of non-monetary assets, if the taxable gain will probably be rolled over; 
iii) extra tax payable if the overseas retained profits of subsidiaries and associates are remitted in the future; and
iv) fair value adjustment gains to fixed assets and stock to uplift prices to those ruling when an acquisition is made.
Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the periods when the timing differences are expected to
reverse, based on tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets and liabilities are
not discounted.
Where law or accounting standards require gains and losses to be recognised in the statement of total gains and losses, the
related taxation is also taken directly to the statement of total recognised gains and losses in due course.
k) Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction or, if hedged, at the
forward contract rate. Monetary assets and liabilities denominated in foreign currency are translated into sterling at the rates of
exchange ruling at the balance sheet date or the forward contract rate. The investment in overseas subsidiary undertakings is
partly funded by overseas currency borrowings. Exchange differences arising on the translation into sterling of its net assets,
less related borrowings, are shown as movements on reserves. All other exchange differences are recognised in the profit and
loss account.
l) Pensions
In accordance with SSAP 24, the pension deficit in the Group defined benefit pension scheme determined in the latest triennial
actuarial valuation is amortised to profit over the weighted average anticipated service life of active scheme members, on the
recommendation of a qualified actuary. Contributions to the Group’s defined contribution schemes are charged to profit as
they fall due. In accordance with the transitional requirements of FRS 17 “Retirement Benefits”, additional disclosures are
included in these Notes on the evaluation of the defined benefit pension scheme under FRS17.
m) Employee Share Trust
The Group operates an Employee Share Trust, the assets of which comprise shares in Intelek plc held in an independently
administered trust. The trust has been included with the Group’s financial statements. Shares are stated at cost less a
provision for any diminution in value which the directors consider to be permanent and are shown as a deduction from
shareholders’ funds as “Investment in own shares” in accordance with UITF 38.
n) Research and development
Research and development expenditure is charged to the profit and loss account as incurred, except for development projects
subcontracted to third parties where those projects are separately identifiable and for each of which the outcome can be
assessed with reasonable certainty. For each such project, the costs are capitalised as an intangible fixed asset. These costs
are amortised from the date of product release over a period not exceeding 36 months, representing the Directors’ view of the
maximum product life span within the market in which it operates.  29
INTELEK Report and Accounts 2005
2. Acquisitions
On 11 March 2005, Labtech Ltd, a wholly owned subsidiary of Intelek plc, completed the acquisition from Filtronics Components
Ltd of the trade and assets of Filtronics’ microwave components design manufacturing facility located in Milton Keynes, UK.
The total purchase price including expenses was £421,000 and is to be paid in two tranches, 70% in May 2005 and 30% in
August 2005. 
Fair Value
£000
Tangible fixed assets 253 
Stock 233 
486 
Provisions (65)
Total consideration (deferred) 421 
There were no fair value adjustments and there was no payment for goodwill. The facility is now known as Labtech Microwave
and contributed a profit of £8,000 to the Group’s results on sales of £128,000. As Labtech Microwave was acquired close to the
end of the financial year, the results and cash flows are not material to warrant separate disclosure under FRS3.
3. Disposals
On 18 March 2005, the Group completed the disposal of Pascall Electronics Holdings Ltd and its trading subsidiary Pascall
Electronics Ltd for an initial consideration of £4,700,000 and a deferred payment to be computed based on asset valuation at
completion. The contingent consideration is currently under negotiation and £100,000 has been included in the financial
statements as the Directors’ best estimate of the outcome. 
The profit on the disposal amounted to £1,759,000 as set out below.
Profit Cash
£000 £000
Net assets of Pascall Electronics Holdings Ltd and Pascall Electronics Ltd (2,806) —
Cash included in net assets — 41
Consideration 4,700 4,700
Contingent consideration 100 —
Total consideration 4,800 4,700
Expenses (235) (154)
Net proceeds 4,565 4,546
Profit / cash flow on disposal of subsidiary 1,759 4,587
In accordance with FRS10 “Goodwill and intangible assets”, goodwill previously written off to distributable reserves is required to
be reinstated and written off through the Profit and Loss account. This amounted to £3,635,000. 
The results of Pascall Electronics are shown separately in the Profit and Loss account as a discontinued operation.
Pascall Electronics was part of the Intelek multi-employer defined benefit pension scheme. In consideration for their withdrawal of
responsibility for the scheme, a contribution was required to the scheme equivalent to the scheme actuary’s evaluation of Pascall
Electronics’ share of the scheme deficit as calculated under the Minimum Funding Requirement (Pensions Act 1995). This
contribution amounted to £864,000 plus any tax savings by Intelek in making that contribution. £800,000 of this amount had been
paid as at 31 March 2005. 30
Notes to the Financial Statements
year ended 31 March 2005
4. Turnover and Operating Profit
Continuing Discontinued 2005 Continuing Discontinued 2004
operations operations Total operations operations Total
£000 £000 £000 £000 £000 £000
The geographical markets for direct sales by the Group were:
European Community (excluding UK) 10,928 153 11,081 11,830 158 11,988 
Rest of Europe 307 — 307 457 6 463 
North America 5,767 3,414 9,181 5,791 4,798 10,589 
Rest of World 2,353 745 3,098 3,144 881 4,025 
Total Overseas 19,355 4,312 23,667 21,222 5,843 27,065 
United Kingdom 12,168 1,457 13,625 10,743 1,083 11,826 
31,523 5,769 37,292 31,965 6,926 38,891 
2005 2004
£000 £000
Group sales by business segment were:
Satellite communications 13,710 15,496 
Microwave circuits and components 9,086 7,948 
Aerostructures 8,817 8,556 
Intra sales (90) (35)
Continuing operations 31,523 31,965 
Discontinued operations: Power supplies and RF electronics 5,769 6,926 
37,292 38,891 
Group operating profits by business segment were:
Satellite communications 1,956 1,985 
Microwave circuits and components 1,159 821 
Aerostructures 351 239 
Continuing operations 3,466 3,045 
Discontinued operations: Power supplies and RF electronics (57) 335 
Central costs (727) (629)
Amortisation of pension deficit (381) (381)
Amortisation of goodwill: Satellite Communications (789) (794)
Exceptional items: Satellite Communications (115) —
Aerostructures (194) —
Operating profit 1,203 1,576 
Non-operating exceptional items:
Loss on disposal of discontinued operations (1,876) —
Loss on disposal of property — (289)
(Loss) / profit on ordinary activities before interest and taxation (673) 1,287 31
INTELEK Report and Accounts 2005
5. Analysis of profit
2005 2004
The operating profit is stated after charging: £000 £000
Depreciation 1,520 1,697 
Auditors’ remuneration 60 58 
Auditors’ fees for non audit services 33 42 
Operating lease rentals: plant hire 544 453 
property 1,050 898 
Research and development (amounts amortised from deferred expenditure £Nil (2004: £Nil)) 2,225 2,141 
Net loss on sale of fixed assets 16 —
and after crediting:
Rental income 112 101 
Deferred income from government grants 26 77 
Net gain on sale of fixed assets 27 115 
In addition to the fees noted above, the auditors received £30,500 in 2005 (2004: £Nil) for services in connection with the disposal
of Pascall Electronics. These were expensed as part of the exceptional costs.
The audit fee of the Company was £16,000 (2004: £16,000) for the year ended 31 March 2005.
6. Interest
2005 2004
£000 £000
Bank loans and overdrafts 361 403 
Finance leases 62 60 
Other loans 34 56 
Amortisation of loan note arrangement fees 49 46 
506 565 
7. Employees
2005 2004
No. No.
The average monthly number of Group employees was:
Production 400 423 
Administration and sales 78 76 
478 499 
Costs in respect of these employees, including Directors, were: 2005 2004
£000 £000
Wages and salaries 11,724 11,950 
Social security costs 1,084 1,171 
Other pension costs 846 850 
13,654 13,971 
Other pension costs comprise:
Defined benefit scheme: amortisation of experience deficit 381 381 
Defined contribution scheme 465 469 
Amount of the pension charge under SSAP 24 846 850 
Directors’ emoluments are disclosed in the Remuneration Report on page 16. 32
Notes to the Financial Statements
year ended 31 March 2005
8. Taxation
2005 2004
£000 £000
United Kingdom Corporation Tax
Current tax on (loss) / profit for the year — —
Adjustment in respect of prior years (49) (51)
Total (49) (51)
Overseas Tax
Current tax on income for the year 294 42 
Adjustment in respect of prior years (39) (26)
Total 255 16 
Current taxation 206 (35)
Deferred taxation — originating timing differences 153 244 
Tax on (loss) / profit on ordinary activities 359 209 
Current tax reconciliation 2005 2004
£000 £000
Profit on ordinary activities before taxation (1,179) 722 
Theoretical tax at UK corporation tax rate 30% (2004: 30%) (354) 217 
Effects of:
different tax rates 124 56 
adjustments in respect of prior years— current taxation (83) (13)
— deferred taxation 83 (14)
USA export tax credit — current year (41) (112)
— prior year — (64)
research and development tax credit (79) (48)
costs and loss on disposal not allowable in respect of Pascall 522 —
goodwill amortisation — not tax deductible 153 146 
other expenditure that is not tax deductible/(income) that is not taxable 34 41 
deferred tax timing differences (153) (244)
Actual current taxation charge 206 (35)
Exceptional items
The taxation charge is stated after a tax credit of £110,000 (2004: tax charge £1,000) relating to the exceptional items.
Factors that may effect future tax charges
Research and development tax credits are reducing the UK tax charge in the period and these credits should be available in future
periods. The overseas tax charge has been reduced due to the availability of export tax credits in the USA. Export tax credits may
be withdrawn by the US government in the near future. If the credits are withdrawn this will increase future overseas tax charges. 33
INTELEK Report and Accounts 2005
9. Dividends
2005 2004
£000 £000
Interim dividend, paid 26 January 2005
0.12p (2004: 0.12p) on 86,076,072 Ordinary 5p shares 103 103 
Final, proposed for payment on 30 September 2005
0.24p (2004: 0.24p) on 86,076,072 Ordinary 5p shares 207 207 
Less: dividends paid and proposed as payable to employee share trust (5) (5)
Equity dividend 305 305 
The calculation of dividends paid and proposed shown above exclude dividends paid to the employee share trust in accordance
with FRS 14.
10. Earnings per Share
Headline Earnings Per Share is as recommended by the UK Society of Investment Professionals. It is calculated on earnings
adjusted as follows:
Earnings Earnings per Share
2005 2004 2005 2004
£000 £000 p p
Continuing operations:
Profit after taxation 372 285 0.44 0.34 
Non-operating exceptional items 309 289 0.36 0.34 
Goodwill amortisation 789 794 0.93 0.94 
Tax on exceptional items and goodwill amortisation (206) (124) (0.24) (0.15)
Headline earnings 1,264 1,244 1.49 1.47 
Discontinued operations:
Profit after taxation (1,910) 228 (2.26) 0.27 
Non-operating exceptional items 1,876 — 2.22 —
Tax on exceptional items and goodwill amortisation (18) — (0.02) —
Headline earnings (52) 228 (0.06) 0.27 
Total:
Profit after taxation (1,538) 513 (1.82) 0.61 
Non-operating exceptional items 2,185 289 2.58 0.34 
Goodwill amortisation 789 794 0.93 0.94 
Tax on exceptional items and goodwill amortisation (224) (124) (0.26) (0.15)
Headline earnings 1,212 1,472 1.43 1.74 
The earnings per share ratio has been calculated on the weighted average number of shares in issue, excluding those held by the
Employee Share Trust. This gives a weighted average number of 84,586,012 (2004: 84,586,012).
There were no exercisable share options in existence during the year (2004: Nil) that were below the average fair value of 9.9p per
share of the ordinary shares in issue during the year. There was therefore no dilution in shares (2004: Nil). 34
Notes to the Financial Statements
year ended 31 March 2005
11. Intangible Assets
£000
Goodwill
Cost
At 1 April 2004 15,792 
Exchange adjustment (66)
At 31 March 2005 15,726 
Amortisation
At 1 April 2004 2,319 
Exchange adjustment (9)
Charge for the year 789 
At 31 March 2005 3,099 
Net book value
At 31 March 2005 12,627 
At 31 March 2004 13,473 
Development 
Cost
At 1 April 2004 265
Additions 78 
Net book value
At 31 March 2005 343 
At 31 March 2004 265 
Total net book value
At 31 March 2005 12,970 
At 31 March 2004 13,738  35
INTELEK Report and Accounts 2005
12. Tangible Assets
Assets in the
Freehold Leasehold Plant and course of
properties properties Equipment construction Total
£000 £000 £000 £000 £000
The Group
Cost at 1 April 2004 106 1,115 18,678 — 19,899 
Exchange adjustment — (1) (38) — (39)
Additions — 55 1,317 80 1,452 
Disposals (94) — (1,536) — (1,630)
Disposal of subsidiary — (251) (3,534) — (3,785)
Acquisition of business — — 253 — 253 
Cost at 31 March 2005 12 918 15,140 80 16,150 
Depreciation at 1 April 2004 26 320 13,008 — 13,354 
Exchange adjustment — — (21) — (21)
Charge for the year — 56 1,464 — 1,520 
Disposals (25) 3 (1,346) — (1,368)
Disposal of subsidiary — (107) (2,957) — (3,064)
Depreciation at 31 March 2005 1 272 10,148 — 10,421 
Net book amount: 31 March 2005 11 646 4,992 80 5,729 
31 March 2004 80 795 5,670 — 6,545 
The Company
Cost at 1 April 2004 238 238 
Additions 2 2 
Cost at 31 March 2005 240 240 
Depreciation at 1 April 2004 222 222 
Charge for the year 7 7 
Depreciation at 31 March 2005 229 229 
Net book amount: 31 March 2005 11 11 
31 March 2004 16 16 
The net book amount of plant and equipment includes £1,925,000 (2004: £2,040,000) in respect of leased assets, the
depreciation charge on which amounted to £383,000 (2004: £351,000). Tangible assets are stated at cost. The net book amount
of leasehold properties includes £239,000 (2004: £245,000) in respect of a long leasehold property and £407,000 (2004:
£550,000) in respect of short leasehold property.  36
Notes to the Financial Statements
year ended 31 March 2005
13. Investments 
£000
Shares in subsidiary undertakings (Company)
Cost
At 1 April 2004 10,732 
Additions 76 
At 31 March 2005 10,808 
Provision
At 1 April 2004 and 31 March 2005 777 
Net book amount: At 31 March 2005 10,031
At 31 March 2004 9,955 
The Company’s principal subsidiary undertakings, all of which are wholly owned, are listed inside the back cover. Apart from
Paradise Datacom LLC, which is incorporated and operates in the United States of America, all the subsidiary undertakings are
registered in England and Wales, and operate in Great Britain. Their activities are detailed in the Chief Executive's Review on
pages 5 to 11.
14. Stock and Work in Progress
The Group
2005 2004
£000 £000
Work in progress 1,835 2,299 
Raw materials and components 1,644 1,953 
3,479 4,252 
In the Directors opinion, the replacement cost of stock and work in progress does not differ materially from the stated amounts.
15. Debtors
The Group The Company
2005 2004 2005 2004
£000 £000 £000 £000
Amounts falling due within one year
Trade debtors 5,349 6,967 — —
Amounts owed by subsidiary undertakings — — 5,523 19,516 
Taxation recoverable — 60 582 408 
Other debtors 93 131 48 33 
Prepayments and accrued income 558 612 19 36 
Pensions prepayment 3,108 1,496 2,094 730 
9,108 9,266 8,266 20,723 
Amounts falling due after more than one year
Amounts owed by subsidiary undertakings — — 7,587 —   37
INTELEK Report and Accounts 2005
16. Creditors — Amounts falling due within one year
The Group The Company
2005 2004 2005 2004
£000 £000 £000 £000
Bank loans and overdrafts 520 4,555 3,492 5,616 
Unamortised finance costs of bank loans (50) (49) (50) (49)
Loan notes 518 — 518 —
Finance leases 347 433 — —
Trade creditors 3,007 3,727 — —
Amounts owed to subsidiary undertakings — — 932 1,495 
Overseas tax 235 — — —
Other taxes and social security 515 601 42 40 
Other creditors 794 264 233 46 
Accruals  1,519 1,496 275 270 
Proposed dividends 203 305 203 305 
7,608 11,332 5,645 7,723 
Bank loans and overdrafts are fully secured on the assets of the Group.
The loan notes were issued in connection with the Paradise Datacom acquisition. They carry interest at 5% per annum and are
secured by guarantee, to the extent of the principal amount, by the Group’s bankers. They are repayable on 30 April 2005.
The loan notes are held by a director, N L Mills, and J P Dixon. As at 31 March 2005, Mr Mills held £359,000 (2004: £359,000)
and Mr Dixon held £159,000 (2004: £159,000). During the year, Mr Mills earned £18,000 (2004: £33,000) interest on the loan
notes and Mr Dixon earned £8,000 (2004: £15,000).
17. Creditors — Amounts falling due after more than one year
The Group The Company
2005 2004 2005 2004
£000 £000 £000 £000
Bank loan 1,820 1,892 1,820 1,891 
Unamortised finance costs of bank loans (54) (97) (54) (97)
Loan notes — 518 — 518 
Finance leases 334 324 — —
2,100 2,637 1,766 2,312 
The maturity profile of loans and finance leases is shown in Note 26.  38
Notes to the Financial Statements
year ended 31 March 2005
18. Provisions for liabilities and charges
Deferred Taxation
The Group The Company
£000 £000
Provisions at 1 April 2004 741 193 
Exchange adjustment (8) —
Disposal of subsidiary 68 —
Profit and loss account 153 251 
Provisions at 31 March 2005 954 444 
The Group The Company
Deferred Taxation 2005 2004 2005 2004
Amount Amount Amount Amount
provided provided provided provided
£000 £000 £000 £000
Capital allowances 468 492 (7) (5)
Other timing differences, primarily pension prepayments 638 306 451 223 
Losses (152) (57) — (25)
954 741 444 193 
19. Deferred income
The Group The Company
2005 2004 2005 2004
£000 £000 £000 £000
Deferred income at 1 April 2004 152 230 — 37 
Disposal of subsidiary (21) — — —
Profit and loss account (31) (78) — (37)
Deferred income at 31 March 2005 100 152 — —
20. Called up Share Capital
2005 2004
£000 £000
Authorised:
110,000,000 (2004: 110,000,000) Ordinary 5p shares 5,500 5,500 
Allotted and fully paid:
86,076,072 (2004: 86,076,072) Ordinary 5p shares 4,304 4,304
At 31 March 2005 there were outstanding options under the Executive Option Scheme in respect of 2,072,500 ordinary shares,
exercisable between 2005 and 2013 at prices varying between 10.5p and 36p per share, outstanding options under the Savings
Related Scheme in respect of 391,555 ordinary shares, exercisable in 2006 at a price of 34p, and outstanding options under the
International Sharesave Scheme in respect of 70,732 ordinary shares, exercisable in 2007 at a price of 19p. Advantage has been
taken of the exemption under UITF 17 in respect of SAYE schemes. At 31 March 2005 options over a further 700,000 shares at a
price of 17p per share were outstanding from the Employee Share Trust and are exercisable at any time before 20 September
2007. No share options were granted in 2005 or 2004.
The movement in the year in respect of share options is analysed as follows:
Savings
Executive Related
Options Options
Outstanding options at 1 April 2004 3,597,954 746,745 
Options lapsed, closed or expired (825,454) (284,458)
Outstanding options at 31 March 2005 2,772,500 462,287  39
INTELEK Report and Accounts 2005
21. Reserves
Share Investment Capital
Premium in own Redemption Merger Profit &
Account shares Reserve Reserve Loss
£000 £000 £000 £000 £000
Group
Reserves at 1 April 2004 9,104 — 955 3,411 2,437
Prior year adjustment — (326) — — —  
Reserves restated at 1 April 2004 9,104 (326) 955 3,411 2,437 
Exchange adjustment ———— (62)
Reinstatement of goodwill previously written off on
disposal of subsidiary ———— 3,635 
Transfer from profit and loss account ———— (1,843)
Group reserves at 31 March 2005 9,104 (326) 955 3,411 4,167 
Share Investment Capital
Premium in own Other Redemption Profit &
Account shares Reserve Reserve Loss
£000 £000 £000 £000 £000
Company
Reserves at 1 April 2004 9,104 — 604 955 5,943
Prior year adjustment — (326) — — —  
Reserves restated at 1 April 2004 9,104 (326) 604 955 5,943 
Transfer from profit and loss account ———— (454)
Exchange adjustment ———— 16 
Company reserves at 31 March 2005 9,104 (326) 604 955 5,505
A loss of £149,000 (2004: profit £435,000), before payment of dividends of £305,000 (2004: £305,000), has been dealt with in the
accounts of the Company which has not presented its own profit and loss account under the exemption contained in Section
230 Companies Act 1985.
The cumulative Goodwill written off against Group reserves in prior periods has all been written back upon the disposal of a
subsidiary. The balance as at 31 March 2004 was £3,635,000.
Prior Year Adjustment
In accordance with UITF 38 “Accounting for ESOP trusts”, the investment in Intelek plc shares held by the Group Employee
Share Ownership Plan has been offset against shareholders’ funds. A presentational adjustment between investments and
shareholders’ funds has been made accordingly to the prior period results for the year to 31 March 2004. There is no impact on
the current profit and loss account as a result of this adjustment for either year. See Note 28 for further information.
22. Reconciliation of movements on Group shareholders’ funds
2005 2004
£000 £000
Shareholders’ funds at 1 April 2004 20,211 20,452 
Prior year adjustment (Note 21) (326) (326)
As restated at 1 April 2004 19,885 20,126 
Profit for the financial year (1,538) 513 
Equity dividends paid and proposed (305) (305)
Exchange adjustments (62) (449)
Reinstatement of goodwill previously written off on disposal of subsidiary 3,635 —
Shareholders’ funds at 31 March 2005 21,615 19,885  40
23. Commitments
The Group The Company
2005 2004 2005 2004
£000 £000 £000 £000
Capital expenditure contracted but not provided: 180 47 — — 
24. Operating Lease Commitments
The Group have the following commitments under non-cancellable operating leases within the next twelve months:
Total Total
Properties Plant 2005 Properties Plant 2004 
£000 £000 £000 £000 £000 £000
Expiring within one year — 13 13 220 47 267 
Expiring between one and five years 248 452 700 198 493 691 
Expiring after five years 369 — 369 504 — 504 
617 465 1,082 922 540 1,462 
The company had commitments under non-cancellable operating leases for property within the next twelve months of £100,000
(2004: £99,000). The leases expire after five years. 
25. Contingent Liabilities and Assets
The Group’s borrowing facilities are secured by a debenture over the Group’s assets and unlimited cross guarantees given by the
Company and certain subsidiary undertakings. 
The Company is guarantor for the lease of the property occupied by Pascall Electronics on the Isle of Wight. The lease expires in
2016 and is at a current rental of £245,000 per annum. As part of the disposal agreement for Pascall Electronics, the company
secured full indemnity for this guarantee from both the purchaser and the purchaser’s ultimate holding company. The Directors
consider it unlikely that there will be a default that affects the Group under this guarantee. Even if there were to be a default, the
Group would expect to be able to re-let the property and mitigate much of the liability.
Notes to the Financial Statements
year ended 31 March 2005 INTELEK Report and Accounts 2005 INTELEK Report and Accounts 2005
41
26. Financial Instrument Disclosures
The Group’s financial instruments comprise borrowings, cash at bank and various items such as trade debtors and creditors that
arise directly from its operations. The main purpose of these instruments is to raise finance for operations. The Group has not
entered into derivative transactions, with the exception of foreign exchange contracts in the normal course of trade, nor does it
trade in financial instruments as a matter of policy.  The main risks arising from the Group’s financial instruments are interest rate
risk, liquidity risk and foreign currency risk. The Board’s policy on interest rate and liquidity risk is described below, and on
foreign currency risk is as set out below and in Note 1k) on Accounting Policies.
Operations are financed through a mixture of retained profits, lease finance and bank borrowings. Other than finance leases and
loan notes, the Board’s policy is to use variable rate borrowings. To ensure continuity of debt funding the Group’s policy is to
keep a substantial part of debt as due in more than one year’s time. Short-term flexibility is achieved by overdraft facilities.  
The Group has taken advantage of the exemption in FRS 13 in respect of short-term debtors and creditors and these are
excluded from the disclosures below.
Interest rate risk profile of financial assets and financial liabilities
The only financial assets (other than short-term debtors) are cash at bank held at variable interest rates. Amounts held were:
2005 2004
£000 £000
Sterling 386 18 
US Dollars 520 823 
Euro 185 105 
1,091 946 
The interest rate profile of the Group’s financial liabilities (other than short-term creditors) was:
2005 2004
Fixed rate Floating rate Total Fixed rate Floating rate Total
£000 £000 £000 £000 £000 £000
Sterling 1,158 225 1,383 1,214 4,285 5,499 
US Dollars 41 2,011 2,052 61 2,016 2,077 
1,199 2,236 3,435 1,275 6,301 7,576 
The fixed rate financial liabilities have a weighted average interest rate of 6.6% (2004: 7.0%), a weighted average period for
which interest is fixed of 1.6 years (2004: 1.8 years) and a weighted average period until maturity of 1.6 years (2004: 1.8 years).
These are described in more detail in notes 16 and 17.
The floating rate financial liabilities comprise borrowings and overdrafts that bear interest at rates based on the LIBOR rate and
the Barclays Bank base rate.
Currency exposures and gains and losses on hedges
The Group has a US-based subsidiary company which can affect the sterling Group Balance Sheet as a result of movements in
the sterling / dollar exchange rate. The Group has partly hedged the US subsidiary companies net asset exposure at 31 March
2005 and the net currency movements on these net assets less related borrowings are recognised at each year end and
recorded through reserves.
The Group enters into forward foreign exchange currency contracts to eliminate the currency exposures on sales or purchases
denominated in foreign currency once a significant commitment has been made. There were no forward contracts at the year
end (2004: £1,539,000) and therefore there was no unrecognised exchange profit (2004: £2,000) when compared with the year
end exchange rate.
The profit of £2,000 carried forward at 31 March 2004 was recognised in the year to 31 March 2005. There are no significant
Group foreign currency monetary assets or liabilities that are not subject to foreign exchange contracts. 42
Notes to the Financial Statements
year ended 31 March 2005
26. Financial Instrument Disclosures (continued)
Maturity of financial liabilities
The maturity profile of the Group financial liabilities was as follows: 
Overdraft Finance Overdraft Finance
and loans leases 2005 and loans leases 2004
£000 £000 £000 £000 £000 £000
In one year or less or on demand 988 347 1,335 4,506 433 4,939 
In more than one year but not more than two years 470 212 682 1,416 255 1,671 
In more than two years but not more than five years 1,296 122 1,418 897 69 966 
2,754 681 3,435 6,819 757 7,576 
Borrowing Facilities
The Group has the following undrawn committed borrowing facilities: 2005 2004
£000 £000
Expiring in less than one year 2,132 590 
Expiring in more than one year but not more than two years — —
In more than two years 1,470 1,405 
3,602 1,995 
Fair value of financial liabilities and assets
The fair value of fixed rate financial liabilities at 31 March 2005 compared with the recorded book value was:
2005 2004
Book value Fair value Book value Fair value
£000 £000 £000 £000
Short-term borrowings 865 874 433 439 
Long-term borrowings 334 337 842 856 
1,199 1,211 1,275 1,295 
The fair value of other financial liabilities and assets is not considered to be materially different from recorded book values.
27. Pension Scheme 
The Group operates a pension scheme with both a defined benefit and a money purchase section for eligible employees of
participating Group undertakings.
SSAP 24 Valuation
The latest actuarial triennial valuation of the Group defined benefit pension scheme was prepared on the projected unit basis as
at 1 April 2002, when the market value of the Scheme assets amounted to £11.9 million. The principal assumption adopted was
that the long term rate of return on investments would exceed the average annual increases in pensionable earnings by 2% per
annum. At 31 March 2002 the assets of the Scheme were sufficient to cover 60% of its accrued liabilities, with full allowance for
future increases in earnings, including additional leavers’ benefits arising under the Social Security Act 1990, but making no
allowance for any increases in pensions in payment under that Act. 
The total pension costs for the Group, determined in accordance with the advice of qualified actuaries, consistent with SSAP 24,
are set out in Note 7, and include contributions amounting to £465,000 in respect of the Group’s money purchase schemes.
The defined benefit pension scheme owns the 999 year lease of the premises occupied by Labtech Ltd at Presteigne, Powys.
The premises are let under a 24 year lease expiring in 2018 at a current commercial rental of £72,000 per annum.
Minimum Funding Requirement (MFR)
The Group has agreed a Schedule of Contributions with the Trustee of the Group’s Defined Benefit Pension Scheme, as required
by the MFR regulations. Payment of £1,318,000 plus scheme expenses was made during the year. Payments of £1,318,000 plus
scheme expenses will to be made each year to 2016, subject to review of the Schedule during that period. A further special
contribution was agreed of £864,000 connected with the disposal of Pascall Electronics (Note 3) of which £800,000 was paid as
at 31 March 2005. In addition, the Group has arranged a £2.4 million guarantee in favour of the Scheme, based on certain of the
Group’s assets. 43
INTELEK Report and Accounts 2005
27. Pension Scheme (continued)
FRS 17
The profit and loss account charge for pension costs, the accounting policies and the disclosures above are given on the basis
of Statement of Standard Accounting Practice 24. SSAP 24 is going to be replaced by Financial Reporting Standard 17. The
additional disclosures that follow are given in preparation for FRS 17 being adopted. They are based on a full actuarial review at
1 April 2002 updated to give figures at 31 March 2005 on the projected unit basis and relate only to the defined benefit section.
a) Contributions
The defined benefit scheme employers’ contributions for the year were £2,182,000 plus scheme expenses.
b) FRS 17 Balance sheet information
Long-term rate of return
Value at 31 March expected at 31 March
2005 2004 2003 2005 2004 2003
£000 £000 £000 % %%
Equities 6,191 4,491 5,917 7.50 7.50 7.50 
Property 700 1,308 1,313 7.50 7.50 7.50 
Government Bonds 1,686 2,802 — 4.75 5.00 — 
Corporate Bonds 1,122 658 693 5.50 5.00 5.00 
Cash 2,408 1,188 924 4.50 3.75 3.75 
Fair value of assets 12,107 10,447 8,847 
Present value of scheme liabilities (25,025) (22,882) (22,680)
Actuarial deficit (12,918) (12,435) (13,833)
Deferred tax 3,875 3,731 4,150 
Actuarial deficit after deferred tax (9,043) (8,704) (9,683)
All of the £9,043,000 (2004: £8,704,000) would have been shown as a liability had the Group’s balance sheet been prepared
under FRS 17.
c) Profit and loss account reserve
2005 2004
£000 £000
As reported on SSAP 24 4,167 2,437 
SSAP 24 pensions prepayment (net of £932,000 (2004: £449,000) deferred tax) (2,176) (1,047)
Excluding SSAP 24 balance 1,991 1,390 
FRS 17 Actuarial deficit after deferred tax (9,043) (8,704)
On FRS 17 basis (7,052) (7,314)
The Directors have performed an initial review of the impact of the pending change to International Standards on Intelek plc’s
dividend capacity. These standards will include incorporation of the pension deficit on a basis expected to be similar to FRS 17.
Based on this review, the Directors are satisfied that Intelek plc will have sufficient distributable reserves to continue to be able to
pay dividends going forward. 
d) Net assets
2005 2004
£000 £000
As reported on SSAP 24 21,615 20,211 
SSAP 24 pensions prepayment (net of £932,000 (2004: £449,000) deferred tax) (2,176) (1,047)
Excluding SSAP 24 balance 19,439 19,164 
FRS 17 Actuarial deficit after deferred tax (9,043) (8,704)
On FRS 17 basis 10,396 10,460  44
27. Pension Scheme (continued)
e) Assumptions
The major assumptions used by the actuary in assessing scheme liabilities on a FRS 17 basis were: 
At 31 March At 31 March At 31 March
2005 2004 2003
% %%
Rate of increase in salaries 3.30 3.10 3.10 
Rate of increase in pensions in payment 2.80 2.60 2.60 
Discount rate 5.50 5.75 5.75 
Inflation assumption 2.80 2.60 2.60 
f) Other information
The following amounts would have been recognised in the performance statements under the requirements of FRS 17:
2005 2004
£000 £000
Operating profit
Current service cost — —
Past service cost — —
Curtailment gain / (loss) 51 —
Total 51 —
Other finance income
Expected return on pension scheme assets 653 618 
Interest on pension scheme liabilities (1,284) (1,304)
Net return / (cost) (631) (686)
Statement of total recognised gains and losses
Actual return less expected return on pension scheme assets (73) 1,108 
Experience gains and losses arising on scheme liabilities (715) (314)
Changes in assumptions underlying the present value of the scheme liabilities (1,295) —
Actuarial gains and losses recognised in STRGL (2,083) 794 
Movement in the deficit
Deficit in scheme at start of year (12,435) (13,833)
Movement in year:
Contributions (net of scheme expenses) 2,180 1,290 
Current service cost — —
Past service cost — —
Curtailment gain / (loss) 51 —
Other finance income (631) (686)
Actuarial (loss) / gain (2,083) 794 
Deficit at year end (12,918) (12,435)
Notes to the Financial Statements
year ended 31 March 2005 INTELEK Report and Accounts 2005 INTELEK Report and Accounts 2005
45
27. Pension Scheme (continued)
Details of experience gains and losses for the year
Difference between the expected and actual return on scheme assets:
Amount (£000) (73) 1,108 
Percentage of scheme assets -1% 11%
Experience gains and losses on scheme liabilities:
Amount (£000) (715) (314)
Percentage of present value of the scheme liabilities 3% 1%
Total amount recognised in statement of total recognised gains and losses:
Amount (£000) (2,083) 794 
Percentage of present value of the scheme liabilities 8% -3%
28. Employee Shares Trust
The Intelek plc Employees’ Trust (“the Trust”), was established by a deed on 7 November 1991 made between the Company and
EFG Reads Trustees Limited of Jersey. The Trust was established for the benefit of the bona fide employees or former employees
of the Company and other Group Companies (“the Beneficiaries”). The Trust is a Discretionary Trust whose assets are shares in
the Company and the Trustees have full authority and power to distribute such shares as they deem fit to the Beneficiaries. In
addition, the Trustees may satisfy options granted by the Company to participants in one or more of the Group’s Share Option
Schemes, should the Trustees in their absolute discretion and with the agreement of the Company, decide to do so.
Administration costs amount to £5,000 per annum.
In accordance with UITF 38, a prior year adjustment has been made to the investment in own shares, reclassifying from
investment to shareholders’ funds. See Note 21 for further information.
2005 2004
£000 £000
Cost 376 376
Provision (50) (50)
Net book value at 31 March 326 326
Market value at 31 March 186 178
As of 31 March 2005, the Trust held 1,490,060 (2004: 1,490,060) Ordinary shares of 5p each in the capital of the Company
(1.73% of the allotted share capital), the market value of which, at 31 March 2005, was £186,258 (2004: £178,807), i.e. 12.5p per
share (2004: 12.0p per share). Dividends on these shares have not been waived. As of 31 March 2005 3,234,787 (2004:
4,344,699) shares of the Company are under option to the participants in the Group’s Share Option Schemes and the Trustees
may, by agreement with the Company, use all or any of the shares in the Trust to satisfy such options. As of today’s date,
700,000 shares in the trust have been set aside for the options. 46
Five Year Summary
2005 2004* 2003* 2002* 2001*
£000 £000 £000 £000 £000
Turnover
Continuing operations 31,523 31,965 34,473 31,509 25,401 
Discontinued operations 5,769 6,926 7,121 9,231 10,519 
Total Turnover 37,292 38,891 41,594 40,740 35,920 
Operating Profit before goodwill and exceptional items 2,301 2,370 2,462 3,150 2,960 
Interest (506) (565) (745) (716) (558)
Headline Profit before tax 1,795 1,805 1,717 2,434 2,402 
Continuing operations 1,911 1,508 1,488 1,477 2,357 
Discontinued operations (116) 297 229 957 45
Amortisation of goodwill (789) (794) (803) (696) (57)
Exceptional items (2,185) (289) (415) (228) (273)
(Loss) / profit before taxation (1,179) 722 499 1,510 2,072 
Taxation (359) (209) (331) (484) (828)
(Loss) / profit after taxation (1,538) 513 168 1,026 1,244 
Dividends (305) (305) (288) (693) (605)
Transfer (from) / to reserves (1,843) 208 (120) 333 639 
Earnings / (loss) per Ordinary share (pence)
Headline: Continuing operations 1.49 1.47 1.21 1.52 3.79 
Total 1.43 1.74 1.41 2.37 3.87 
Basic (1.82) 0.61 0.21 1.34 2.81 
Diluted (1.82) 0.61 0.21 1.20 2.78 
Dividends per Ordinary share (pence) 0.36 0.36 0.34 0.90 0.90 
Net Borrowings (2,344) (6,630) (9,259) (8,123) (5,494)
Shareholders’ funds 21,615 19,885 20,126 21,859 24,498 
* These figures have been restated to comply with the requirements of UITF 38 “Accounting for ESOP Trusts”. 47
INTELEK Report and Accounts 2005
Notice of Meeting
Notice is hereby given that the 2005 Annual General Meeting of the Company will be held at the premises of Intelek plc, South
Marston Park, Swindon, Wiltshire, SN3 4TR on Friday, 16 September 2005 at 10.30 am for the following purposes:
Ordinary Business
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
1 To receive and adopt the Statement of Accounts for the year ended 31 March 2005 together with the Directors’ Report and
the Auditors’ Report on those accounts and the auditable part of the Directors’ Remuneration Report.
2 To approve the Directors’ Remuneration Report for the year ended 31 March 2005.
3 To declare a final dividend for the year ended 31 March 2005 of 24 pence per ordinary share in the capital of the Company,
to be paid on 30 September 2005 to shareholders whose names appear on the register at the close of business on 
2 September 2005.
4 To re-elect Mr Donald Wilson as a Director. Mr Wilson is currently 72.
5 To re-elect Dr David Matthew Bramwell as a Director.
6 To re-elect Mr Ian Duncan Brodie, who retires by rotation, as a Director.
7 To reappoint RSM Robson Rhodes LLP as Auditors to hold office from the conclusion of the meeting to the conclusion of
the next meeting at which the accounts are laid before the Company.
8 To authorise the Directors to fix the remuneration of the Auditors.
Special Business
To consider and, if thought fit, to pass Resolutions 9, 10 and 11, as to which 9 will be proposed and voted on as an Ordinary
Resolution, and 10 and 11 will be proposed and voted on as Special Resolutions.
9 That the Directors be and are hereby generally and unconditionally authorised pursuant to the provisions of Section 80 of
the Companies Act 1985 (“Act”) to exercise all the powers of the Company to allot relevant securities as defined by such
Section provided that:
a) the maximum nominal amount of such securities that may be allotted under this authority (within the meaning of that
Section) is £1,196,196; and
b) this authority shall, unless it is (prior to its expiry) duly revoked or is renewed, expire at the conclusion of the Annual
General Meeting of the Company to be held in 2006 or fifteen months from the date of passing this Resolution
(whichever shall occur first) save that the Company may, before such expiry, make an offer or agreement which will or
may require relevant securities to be allotted after such expiry and the Directors of the Company may allot relevant
securities in pursuance of such offer or agreement as if the power conferred hereby had not yet expired;
and provided also that the authority granted by this Resolution is in substitution for any existing authority to allot relevant
securities previously granted to the Directors which (to the extent that it remains in force and unexercised) is hereby
revoked.
10 That the Company be authorised pursuant to Section 166 of the Act to make market purchases (as defined by Section 163
of that Act) of Ordinary shares of 5p in the capital of the Company on such terms as the Directors of the Company may
determine, provided that such authority shall be limited as follows:
a) the Company shall purchase not more than 8,607,607 Ordinary Shares of 5p each (representing 10 per cent of the
Company’s issued ordinary share capital);
b) the price per Ordinary Share (exclusive of dealing and other incidental costs and stamp duty) to be paid by the
Company shall be:
i) not less than 5p; and
ii) not more than 105% of the average of the middle market quotations of the shares in question taken from The
London Stock Exchange daily official list for each of the five business days immediately preceding the date upon
which the purchase is made; 48
Notice of Meeting
c) the authority granted by this Resolution shall, unless it is (prior to its expiry) duly revoked, expire at the conclusion of the
Annual General Meeting to be held in 2006 or twelve months from the date of passing this Resolution (whichever shall
occur first). However, the Company may purchase its own shares of 5p each after this date provided that any such
purchase is made pursuant to a contract concluded before this authority expires, under which such purchase will or may
be completed or executed wholly or partly after such expiry, and provided also that the authority granted by this
Resolution is in substitution for any authority to purchase its own shares previously granted to the Company which (to
the extent that it remains in force and unexercised) is hereby revoked.
11 That, subject to and conditional upon the passing of Resolution 8 set out above, the Directors of the Company be and are
hereby empowered pursuant to Section 95 of the Act to allot equity securities (within the meaning of Section 94 of the Act)
for cash pursuant to Section 80 of the said Act as if Section 89(1) of the said Act did not apply to any such allotment,
provided that this power shall be limited to:
a) the allotment of equity securities in connection with a rights issue in favour of or general offer to Ordinary shareholders
where the equity securities respectively attributable to the interests of all the Ordinary shareholders are proportionate (as
nearly as may be) to the number of Ordinary shares held by them (but subject to such exclusion and other arrangements
as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements and any legal or
practical difficulties or the requirements of any regulatory body or stock exchange); and
b) the allotment, otherwise than pursuant to subparagraph a) above, of equity securities up to an aggregate nominal value
of £215,190;
and shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2006 or fifteen months from
the date of passing this Resolution, whichever shall occur first, save that the Company may before such expiry make an
offer or agreement which would or may require equity securities to be allotted after such expiry and the Directors of the
Company may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not
expired and provided also that the authority and power hereby conferred shall be in substitution for any previous authority
conferred upon the Directors pursuant to the said Section 95 prior to the date of passing this Resolution.
By Order of the Board
K N Edwards 
Director and Secretary
South Marston Park, Swindon, Wiltshire, SN3 4TR 
6 June 2005
Notes
1 To be entitled to attend and vote at the meeting (and for the purpose of the determination by the Company of the number of
votes they may cast), members must be entered on the Company’s register of members by close of business on
Wednesday, 14 September 2005.
2 A member entitled to vote at the above meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote
instead of the member. A proxy need not also be a member of the Company.
3 A form of proxy for the use of members is enclosed with this notice. To be effective the form of proxy must be deposited,
duly completed and signed, at the Company’s registrars, Lloyds TSB Registrars, SEA 10846, The Causeway, Worthing, West
Sussex, BN99 6ZL, not less than forty-eight hours before the time appointed for the holding of the meeting. Completion of
the proxy does not preclude a member from subsequently attending and voting at the meeting in person if he so wishes.
4 There will be available for inspection at the Registered Office of the Company during normal business hours from the date of
this notice until the date of the Annual General Meeting, and at the place of meeting from 9.30 am on 16 September 2005
until the conclusion of the meeting: a) the register of Directors’ interests in accordance with Section 325 of the Companies
Act 1985, and b) copies of the Directors’ service contracts.
5 Biographical details of all those Directors who are offering themselves for re-election at the meeting are set out on page 4. 49
INTELEK Report and Accounts 2005
Group Company Addresses
Registered Office
Intelek plc
PO Box 25, Spitfire Way, South Marston Park, 
Swindon, Wiltshire, SN3 4TR
Tel: (01793) 827000  
Fax: (01793) 827578
E-mail: info@intelek.plc.uk
Website: www.intelek.plc.uk
Trading Subsidiaries
CML Group Limited*
Price Street, Birkenhead, 
Wirral, CH41 3PT
Tel: (0151) 647 5531   
Fax: (0151) 650 0668
E-mail: enquiries@cml-group.com
Website: www.cml-group.com
Labtech Limited*
Labtech Circuits
Broadaxe Business Park, 
Presteigne, Powys, LD8 2UH
Tel: (01544) 260093   
Fax: (01544) 260310
Labtech Microwave
8 Vincent Avenue, 
Crownhill, Milton Keynes, MK8 0AB
Tel: (01908) 261755   
Fax: (01908) 261788
E-mail: ptfe@labtech.ltd.uk
Website: www.labtechcircuits.com
* Held directly by Intelek plc.
Paradise Datacom
Paradise Datacom Ltd*
1 Wheaton Road, Witham,
Essex, CM8 3UJ
Tel: (01376) 515636   
Fax: (01376) 533762
E-mail: sales@paradise.co.uk
Paradise Datacom LLC
328 Innovation Boulevard, 
Suite 100, State College, 
PA 16803, USA
Tel: (001) 814 238 3450   
Fax: (001) 814 238 3814
E-mail: sales@paradisedata.com
Website: www.paradisedata.com
Printed by Jones & Palmer Limited, Birmingham. tel: (0121) 236 9007 ANNUAL REPOR T 2005
P .O. Box 25, South Marston Park,
Swindon, Wiltshire, SN3 4TR, UK
Tel: +44 (0)1793 827000
Fax: +44 (0) 1793 827578
E-mail: info@intelek.plc.uk
Web site: www.intelek.plc.uk
INTELEK Annual Report 2005