LPA Group PLC
P R O V I D I N G S O L U T I O N S 
A N N U A L R E P O R T & A C C O U N T S 2 0 0 6
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T H E L P A G R O U P
LPA Group is a designer, manufacturer and distributor 
of electronic and electromechanical components, 
systems and equipment for the rail, aerospace, defence, 
infrastructure and general industrial markets. 
With origins at the beginning of the last century, LPA 
companies employ 200 people at four locations in the 
UK. The Group is a public limited company listed on the 
London Stock Exchange. It is headquartered close to the 
university city of Cambridge. 
LPA companies are ISO 9001 and 9002 certified by the 
British Standards Institute and are committed to the highest 
standards of quality, reliability and service. They have a 
reputation for innovation, finding solutions to customers’ 
electronic and electro-mechanical problems in benign and 
hostile environments worldwide.
• To be our customers first choice for the supply of our 
products and services
• To become a significant electronic and electro-
mechanical industrial group based on the rail, 
aerospace, defence, infrastructure and general 
industrial markets
• To grow profitably both through the development of  
our existing businesses and by acquisition
• To increase the value of the Company for our 
shareholders 
• To conduct our business honestly and ethically
• To be a good employer investing in our people for  
the long term
The Group 
Group objectives
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1
F I N A N C I A L H I G H L I G H T S
For the year ended 30 September 2006
 
2006
£'000
2005
£'000
TURNOVER 13,737 13,469
OPERATING (LOSS) / PROFIT (205) 289
(LOSS) / PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (143) 299
BASIC (LOSS) / EARNINGS PER SHARE (1.26p) 2.06p
ADJUSTED (LOSS) / EARNINGS PER SHARE (0.40p) 2.92p
DIVIDENDS PER SHARE 0.50p 0.50p
GEARING 38.8% 41.3% 
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C O N T E N T S
FINANCIAL HIGHLIGHTS .................................................................................................................................... 1 
COMPANY INFORMATION  ................................................................................................................................ 3 
CHAIRMAN’S STATEMENT  .................................................................................................................................. 4 
CHIEF EXECUTIVE’S REVIEW  ............................................................................................................................... 6
FINANCIAL REVIEW  ........................................................................................................................................... 8 
CORPORATE GOVERNANCE  .......................................................................................................................... 10 
REMUNERATION REPORT  ............................................................................................................................... 12 
REPORT OF THE DIRECTORS  .......................................................................................................................... 16 
INDEPENDENT AUDITORS' REPORT  ................................................................................................................. 18 
CONSOLIDATED PROFIT AND LOSS ACCOUNT  ............................................................................................. 20 
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES  ............................................................................. 20
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS  .................................................................... 21 
CONSOLIDATED NOTE OF HISTORICAL COST PROFITS AND LOSSES  ............................................................ 21 
CONSOLIDATED AND COMPANY BALANCE SHEETS  ....................................................................................... 22 
CONSOLIDATED CASH FLOW STATEMENT  ..................................................................................................... 23 
NOTES TO THE FINANCIAL STATEMENTS  ........................................................................................................ 24 
FIVE YEAR SUMMARY  ...................................................................................................................................... 48 
NOTICE OF MEETING  .................................................................................................................................... 49 
FORM OF PROXY  ........................................................................................................................................... 51
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Directors
Michael Rusch (Non-Executive Chairman), 61, joined 
the Company in 1966, five years after its inception. He 
has been on the Board since 1967. He relinquished his 
executive duties in 2000. 
Peter G Pollock (Chief Executive), 60, is a chartered 
accountant, with over thirty years industrial experience.  
He joined LPA Group in April 1997. Previous positions 
include Chairman of Lionheart plc, non-executive 
director of Mentmore Abbey plc and Menvier Swain 
plc, Chairman of Valetmatic Ltd, Chief Executive of ML 
Holdings plc, Finance Director UK of Fisher Controls 
International Inc. and Financial Director of Hawker 
Siddeley Power Transformers Ltd.
Stephen K Brett (Finance Director), 50, qualified as a 
chartered accountant in 1982 with Ernst & Whinney in 
London. Before joining LPA Group in December 2000 
he held a number of financial appointments in the 
manufacturing sector, most recently as Vice President 
Finance for the Environmental Control Division of 
Invensys plc. 
John A C Goodger (Non-Executive Director), 59, is 
a director of N W Brown Corporate Finance Limited, 
British Business Angels Association Limited and The 
Great Eastern Investment Forum Limited and has 
been a director of a number of quoted and unquoted 
companies.
Secretary Stephen K Brett
Registered 
office
Tudor Works 
Debden Road 
Saffron Walden 
Essex  
CB11 4AN 
Registered 
number 
686429
Auditors RSM Robson Rhodes LLP 
Daedalus House  
Station Road 
Cambridge  
CB1 2RE 
Bankers Bank of Scotland plc 
123 St Vincent Street 
Glasgow  
G2 5EA 
Registrars Capita Registrars 
The Registry 
34 Beckenham Road 
Beckenham  
Kent HD8 0LA
Nominated 
adviser and 
brokers
Teather & Greenwood Limited 
Beaufort House  
15 St Botolph Street 
London 
EC3A 7QR
Solicitors Eversheds LLP 
115 Colmore Row 
Birmingham  
B3 3AL
C O M P A N Y I N F O R M A T I O N
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Results
In my Statement accompanying the interim figures I 
remarked that the Board expected only limited progress 
during the remainder of the year, following the loss 
before tax of £149,000 incurred in the first half.  The 
Group’s performance improved during the second half 
and this has continued in to the first quarter of the 
current year. The loss before tax for the year amounted 
to £143,000 (2005: profit of £299,000) equating to a 
loss per share of 1.26p (2005: earnings per share of 
2.06p). 
Dividends
Given the encouraging start to the current year and the 
improved cash position your directors recommend the 
payment of a maintained final dividend of 0.35p per 
share. This, together with the interim dividend of 0.15p, 
will make a total for the year of 0.50p per share (2005: 
0.50p). It should be noted that these dividends disclosed 
do not represent amounts recognised in the year under 
FRS21 but rather the dividends paid and proposed on 
the basis of the results for the year. Subject to approval 
by shareholders at the Annual General Meeting of 
the Company to be held at 10.00 am on Monday 26 
February 2007 at the offices of Teather and Greenwood 
Limited, 15 St Botolph Street, London, EC3A 7QR 
the final dividend will be paid on 16 March 2007, to 
shareholders registered at the close of business on 23 
February 2007. 
Authority to allot shares and authority to buy 
shares
The Agenda for the Annual General Meeting includes 
three resolutions relating to the limited authority of the 
directors to allot shares, and for the Company to make 
market purchases of its own shares:  
a. The first is a resolution to renew the authority of 
the directors to allot shares generally, as defined in 
section 80 of the Companies Act 1985; 
b. The second is a resolution to renew the authority 
of the directors to allot equity securities for cash 
without first offering them to existing shareholders, 
pursuant to section 95 of the Companies Act 1985; 
and
c. The third is a resolution to permit the Company to 
make market purchases, as defined in section 163 
of the Companies Act 1985, of its own shares. 
These authorities are part of the portfolio of powers 
commonly granted to directors to ensure flexibility, 
should appropriate circumstances arise, to either allot 
shares, or make purchases of the Company’s own 
shares in the best interests of shareholders. Each 
authority will run through until the next Annual General 
Meeting. The directors have no present intention of 
using such authorities.
Board
My letter of appointment as Chairman of the Group was 
due to expire at the conclusion of the Annual General 
Meeting, however the Board have asked, and I have 
consented, to my appointment being extended to the 
conclusion of the Annual General Meeting in 2010. 
John Goodger, whose letter of appointment was due to 
expire at the conclusion of this meeting has consented 
to serve another year on the Board and he will now 
retire at the conclusion of the Annual General Meeting 
in 2008. John Goodger is the director retiring by 
rotation at the forthcoming Annual General Meeting 
and, being eligible, offers himself for re-election.
The directors intend to strengthen the board 
through the appointment of at least one new non-
executive director.  Discussions are under way and an 
announcement will be made in due course.
Brief curricula vitae of all the directors are shown on 
page 3.
C H A I R M A N ' S S T A T E M E N T 
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C H A I R M A N ' S S T A T E M E N T ( C O N T I N U E D )
Employees and share option schemes
Our people are our most valuable asset and contribute 
in many positive ways to the Group’s progress. 
The existing employee share option schemes were 
introduced in 1997 and were designed to have a 
life of ten years which will expire in April 2007. An 
employee share option scheme is one of a number 
of remuneration tools commonly used to attract and 
retain good quality people. The Company has found the 
existing schemes extremely useful in this respect and 
relatively simple to administer. The Board proposes to 
introduce a replacement scheme, summary details of 
which will be circulated to shareholders with the Annual 
Report. A resolution to implement the new scheme will 
be put to the Annual General Meeting.
Tender Offer by Mr Andrew Perloff
Shareholders will be aware that on 26 October 2006 
Mr Andrew Perloff made a Tender Offer to acquire, 
together with his existing holding, up to 29.99% of the 
Group’s issued share capital. As a result Mr Perloff now 
holds 17.85% of the Group’s issued share capital. The 
Board welcomes Mr Perloff as a new large shareholder 
of the Group.
Strategy
Management remains focussed on delivering 
shareholder value. Restoring the Group to profitability 
and financial stability has been the first priority, which 
now achieved must be sustained and strengthened. 
The Group is seeking to reduce its dependence on large 
long-term contracts by developing standard proprietary 
products, and to reduce manufacturing costs through 
low cost country sourcing. Opportunities exist to realise 
the development potential of the Saffron Walden site 
in the medium term, and to grow the Group both 
organically and through acquisition. Repositioning the 
Group’s products at the higher end of the technology 
spectrum, with the attendant reappraisal of the 
Group’s potential by the market, is also a medium term 
objective.
Outlook
The start to the new financial year has been the 
strongest for many years and sales output in the 
first quarter is the highest on record. The second 
quarter, while not as strong, should also contribute 
to considerable progress in the first half of the year. 
Although the load in the second half is not yet all 
secured, parts of the business are experiencing record 
demand and prospects for most of the activities look 
good. There are still contracts for which we have 
been selected, but for which the orders have not yet 
been placed. There are many significant prospects, 
particularly for the Group’s LED lighting products, which 
are very exciting indeed.  
I expect to be able to report further progress at the 
Annual General Meeting and in the Interim Statement. 
Michael Rusch 
Chairman 
24 January 2007
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Trading results
After a disappointing first half the Group recovered in 
the final months of the year. This was unfortunately 
insufficient, despite the cost reduction in the first half, 
to offset the losses already incurred and this resulted 
in a pre-tax loss for the year of £143,000 (2005: profit 
of £299,000). Orders entered have exceeded sales for 
the fourth successive year, the order book increased 
by 2.7% over the year to £9.1m, while sales grew 
2.0% to £13.7m. The net cash inflow before financing 
amounted to £277,000 (2005: £304,000) and gearing 
was reduced by 2.5% to 38.8%. The interim and final 
dividends were maintained. 
Markets
Rail
The Group remains the UK’s leading designer, 
integrator and supplier of auxiliary battery power 
systems, a position, which has been strengthened in 
the year by our appointment as exclusive European 
distributor for a range of batteries for train use.  The 
Group is similarly positioned for inter-vehicle electrical 
connection systems. In lighting the Group holds a world 
class position in LED drive and lensing technology 
integration, and supplies lighting systems to UK, 
European and Asian based rail vehicle builders. 
Following a period of unprecedented demand for 
new rail vehicles, the UK is currently in consolidation 
mode. The number of new trains being built has fallen 
sharply and the focus is now on refurbishment of 
surface stock and the upgrade of London Underground 
metro vehicles. There is some new build demand, 
notably Electrostar, where the Group has only limited 
involvement, and Javelin (the high speed Channel 
Tunnel Rail Link vehicle) for which the Group will supply 
lighting and electrical shore supply systems. Orders 
for Turbostar, where the Group is well represented, 
are likely to be delayed while a new, environmentally 
friendly, diesel engine is procured. In addition to these 
there is a strong possibility that the fleet of West Coast 
Mainline Pendolino trains will have additional cars 
added to each train set, and in this event the Group as 
supplier of the original equipment will be well placed 
to exploit the opportunity: this would be expected to 
benefit the end of this, and the whole of next, financial 
year. The Group has been selected for, or awarded, 
contracts for the upgrade of Victoria Line vehicles where 
initial deliveries have been completed: there is now an 
evaluation and test period until 2008/9, when series 
production will commence. The Group is currently 
heavily involved in the supply of inter-vehicle electrical 
connection equipment for Taiwan. 
Much of the UK market for new vehicles is satisfied 
by imports with the main suppliers being Alstom, 
Bombardier, Hitachi and Siemens: we are established as 
suppliers to all four.   
Our commitment to quality, reliability and low life cycle 
cost has resulted in significant interest in our range of 
LED lighting products, particularly from France, where 
we have won some initial contracts with further major 
opportunities available. 
Train building capacity in Europe exceeds demand and 
is under threat from new facilities in Asia, which will 
have the capacity to satisfy at least some European 
demand. At present the Asian philosophy of lowest 
possible initial cost does not lend itself to the European 
environment, which puts a premium on reliability and 
low life cycle costs. However it is only a matter of time 
before Asian manufacturers raise their game and we 
must prepare for that event. 
We have enjoyed some limited success in the Asian 
market. However until the local cost of maintenance 
increases, through higher wage costs, opportunities for 
our products will be limited. We do though continue to 
have discussions with Asian companies who wish to be 
our partners in the region. 
We continue to secure contracts in Australia, Hong 
Kong, Singapore, Japan for re-export, and elsewhere 
including South Africa. 
C H I E F E X E C U T I V E ' S R E V I E W
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C H I E F E X E C U T I V E ' S R E V I E W ( C O N T I N U E D )
Markets (continued)
Aerospace and Defence 
Major aerospace projects have a long gestation period 
and are usually global collaborative projects. Equipment 
we have supplied to the UK Aerospace industry in the 
past is now the subject of pan-national bidding from 
which we are largely precluded.  While this market 
remains important and challenging to the Group we 
will continue to concentrate our resources on the 
subcontract and spares market where our approach to 
quality and service are better rewarded. 
The more fragmented UK defence market presents the 
Group with similar opportunities to supply equipment: 
it is a growing market where the Group has enjoyed 
success particularly with components and LED lighting.
Infrastructure and General Industrial
The Group is a leading player in the global market, 
excluding the US, for aircraft Ground Power connectors 
and harnesses. These provide power to aircraft on the 
ground enabling them to run essential services when 
the engines are switched off, and are used for both civil 
and military applications. 
The Group manufactures and distributes a range 
of electrical connection products, which are used in 
infrastructure, telecoms and general industry. London 
Underground station refurbishment is proving to be 
an exciting market which is expected to continue for 
several years: in addition it is likely that our LED lighting 
technology will have a part to play.  
The Group’s specialist metal forming activities have 
achieved a remarkable turnaround. A number of 
competitors have withdrawn from the industry as 
volume production has moved offshore. Focussed on 
high quality, service and short production runs, the 
business is experiencing a period of major growth and 
is producing very much improved results.
Structure and costs
The sales structure is kept under review and modified 
to reflect changing market conditions. The growth in 
LED lighting demand requires that we continue to put 
additional resources in to this activity. Operational costs 
were reduced during and at the end of the year and 
responsibilities redistributed. Customer satisfaction, 
quality and delivery remain most important goals. 
Information technology is an important opportunity for 
the Group. 
Design and development
Resources have been focussed on the development of 
standard proprietary products and the development of 
LED lighting applications. Standard products can be 
combined to provide bespoke customer solutions, lend 
themselves to increased batch sizes and sourcing from 
low cost countries. LED lighting products have led to 
a major increase in interest in the Group’s products in 
Europe and Asia.
Prospects
The start to this financial year has been remarkably 
good although the second quarter has a less 
spectacular load.  There are gaps in the electrical 
equipment manufacturing and distribution programmes 
yet to be filled, but there is time to allow this to happen 
and resources have been focussed on these objectives.  
Metal forming, electronics and lighting are buoyant. 
Prospects for the Group have improved such that the 
next couple of years should see significant progress.
Peter Pollock 
Chief Executive 
24 January 2007
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Financial performance
Turnover increased to £13.74m up £0.27m (2.0%) 
from £13.47m last year. However trading conditions 
were difficult so that despite higher sales the Group’s 
gross margin fell by 3.3%, from 26.1% to 22.8%, as 
a consequence of (i) margin pressures experienced 
across all areas of the Group, (ii) an adverse sales 
mix resulting from reduced volumes of higher margin 
projects this year compared to last, combined with 
the sales growth being in lower margin areas, and 
(iii) a fall in the labour and overhead content of stock. 
Total operating expenses at £3.34m were £122,000 
above last year, with higher pension costs of £57,000 
and termination costs of £72,000 being included in 
this increase. As a consequence an operating loss of 
£205,000 resulted compared to an operating profit of 
£289,000 last year. 
Net finance income increased to £62,000 (2005: 
£10,000) with interest costs falling to £181,000 (2005: 
£194,000) reflecting both lower average borrowings 
and interest rates, and the net return on pension 
increasing to £243,000 (2005: 204,000). There was 
a tax credit of £6,000 in the period (2005: charge of 
£74,000). 
The loss after tax was £137,000 (2005: earnings of 
£225,000) representing basic loss per share of 1.26p 
(2005: earnings per share of 2.06p). The adjusted loss 
per share, which excludes goodwill amortisation from 
the calculation, was 0.40p (2005: earnings of 2.92p). 
At the end of the year shareholders funds were £5.72m 
(2005: £5.81m) giving a net asset value per ordinary 
share of 52.5p (2005: 53.3p).  
The Group obtained an independent valuation of its 
freehold properties at 30 September 2006 prepared 
on an existing use basis as detailed in the note below. 
The valuation of £1.91m compared to the properties’ 
net book value of £0.86m provides an uplift of £1.05m 
equivalent to a net asset value per ordinary share 
of 9.6p. The results of the valuation have not been 
included in the financial statements. 
Pensions
The Group has adopted the accounting standard FRS17 
“Retirement Benefits” in full for the first time, and this 
has had a significant affect on the balance sheet, and 
the recognition of costs and pension returns in the profit 
and loss account. 
The balance sheet now includes the final salary scheme 
pension surplus, shown as pension asset, of £1.74m 
(2005: £1.56m) which is the difference between the 
market value of scheme assets and the present value 
of scheme liabilities net of deferred tax. Previously the 
September 2005 balance sheet included a net pension 
liability of £64,000 comprising an accrual of £92,000 
(which was the difference between amounts charged to 
the profit and loss account and contributions paid to the 
scheme) less deferred tax of £28,000.  
Included within operating profit are current pension 
costs of £233,000 (2005: £176,000), with a net 
pension return of £243,000 (2005: 204,000), which 
recognises that the scheme is in surplus, shown in net 
finance income. Thus a net pension credit of £10,000 
(2005: £28,000) is now shown at the profit before tax 
level. Previously, as reported in 2005, a pension cost of 
£95,000 (pension costs of £69,000 and life assurance 
costs of £26,000) was included in operating profit. 
Cash flow and debt
Cash generated from operating activities in the 
year was £648,000 (2005: £787,000) the fall being 
explained by the reduced profit performance, in part 
offset by a decrease in working capital during the 
year as compared to a small increase in the previous 
year. Capital expenditure which remains focused in 
production and engineering fell to £143,000 (2005: 
£248,000) reducing to net expenditure of £137,000 
(2005: £223,000) after asset disposals. After payments 
of interest £171,000 (2005: £183,000), tax £8,000 
(2005: £28,000), and dividends £55,000 (2005: 
£49,000), the net cash inflow before financing 
amounted to £277,000 (2005: £304,000). Debt 
repayments in the year were £385,000 (2005: 
£448,000) such that there was a net decrease in the 
cash position of £108,000 (2005: £144,000). 
F I N A N C I A L R E V I E W
Note: Basis of freehold property valuation
The freehold interests in the property holdings of the Group were valued as at 30 September 2006 by N S Booton MA MRICS of King Sturge 
LLP , acting as an External Valuer. This is the first time that either King Sturge LLP or N S Booton MA MRICS have valued these properties for the 
Company. The valuation was carried out in accordance with the requirements of the Appraisal and Valuation Standards published by the Royal 
Institution of Chartered Surveyors. The valuation was prepared in accordance with the requirements of FRS 15 “Tangible Fixed Assets”. The 
three properties valued are all held freehold and valued using the Existing Use Value basis of valuation (“EUV”), assuming that the property 
would be sold as part of the business for continued use. The Valuer’s opinion of EUV was primarily derived using comparable recent market 
transactions on arms length terms.
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F I N A N C I A L R E V I E W ( C O N T I N U E D )
In the year net debt fell to £2.22m (2005: £2.40m), 
gearing fell to 39% (2005: 41%) and at the year-
end there were £0.7m (2005: £0.7m) of un-drawn 
committed facilities available to the Group. 
Subsequent to the year end the Group has negotiated 
(i) a £0.60m increase in its term loan facility to £1.75m, 
repayable in 24 quarterly instalments of £73,000, 
with the first payment being in January 2007, and (ii) 
a £0.50m reduction in its working capital facility to 
£1.25m available through to November 2007. The 
renewal of the working capital facility after this date 
is expected. Interest is payable on both facilities at 
between 1.50% and 1.75% over base rate.
Treasury
The Group’s treasury policy, which operates within 
approved Board guidelines and has not changed since 
2005, seeks to ensure that adequate financial resources 
are available for the development of the Group’s 
business whilst managing its foreign currency, interest 
rate, liquidity and credit risks. 
The Group’s principal financial instruments comprise 
sterling bank loans and overdrafts, and obligations 
under hire purchase contracts together with trade 
debtors and trade creditors that arise directly from its 
operations. The main risks arising from the Group’s 
financial instruments can be analysed as follows:
Currency risk - the Group has transactional currency 
exposure arising from normal trading activity. Such 
exposure arises from sales or purchases in currencies 
other than sterling, the functional currency of the 
Group. The Group hedges the foreign currency risk 
associated with significant future sales and purchases 
using forward exchange contracts. Experience to date 
is that any un-hedged exposure has not led to major 
exchange gains or losses. The main foreign currencies 
in which the Group operates are the euro and the US 
dollar.
Interest rate risk - the only financial liabilities of the 
Group which are subject to interest charges are bank 
loans and overdrafts (floating rate liabilities which bear 
interest at market rates) and obligations under hire 
purchase contracts (fixed rate liabilities which bear 
interest at the negotiated market rate prevailing at the 
time the commitment is made). The directors monitor 
the overall level of borrowings and interest costs to limit 
any adverse effects on financial performance of the 
Group. 
Liquidity risk - the Group’s policy has been to ensure 
continuity of funding through acquiring an element of 
its fixed assets under hire purchase agreements, and 
arranging funding for its operations through medium-
term bank loans with short-term flexibility achieved 
through the use of overdraft facilities.
Credit risk - the Group’s credit risk is primarily 
attributable to its trade debtors. Credit risk is managed 
by monitoring the aggregate amount and duration 
of exposure to any one customer depending upon 
their credit rating. The amounts presented in the 
balance sheet are net of allowances for doubtful debts, 
estimated by the Group’s management based on 
prior experience and their assessment of the current 
economic environment.
The Group does not trade in derivatives or make 
speculative hedges.  
Going concern
The directors have a reasonable expectation that 
the Group has adequate resources to continue in 
operational existence for the foreseeable future and 
therefore the accounts have been prepared on a going 
concern basis.
Stephen Brett 
Finance Director 
24 January 2007
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As an AIM listed company LPA Group plc is not required 
to comply with the corporate governance principles 
contained in the Combined Code, however the 
Company has regard to those principles and its activities 
in the area of corporate governance are discussed in 
the Board’s report on corporate governance below and 
in its remuneration report on pages 12 to 15.
Board composition and responsibility
The Board has four members comprising two non-
executive directors, including the Chairman, and 
two executive directors. There is a clear division of 
responsibility between the non-executive Chairman and 
the Chief Executive. 
The two non-executive directors are not regarded as 
independent; Michael Rusch was an executive director 
before he became non-executive Chairman in June 
2000, and John Goodger has served on the Board for 
ten years. The non-executive directors are from varied 
backgrounds and bring with them a range of skills and 
experience in commerce and industry. 
The Board meets at least six times during the year, 
with additional meetings being convened as necessary. 
The principal responsibilities of the Board are to agree 
overall strategy and investment policy, to approve the 
annual budget, to monitor the performance of the 
senior management and to ensure that there are proper 
internal financial controls in place. There is a formal 
schedule of matters reserved for Board approval. The 
nature and size of the Group ensures that the Board 
considers all major decisions. 
Directors are subject to election by shareholders at the 
first opportunity after their appointment, and to re-
election thereafter at intervals of no more than three 
years.
All directors have access to the advice and services 
of the company secretary, who is also responsible for 
ensuring that Board procedures are followed. There 
is also a procedure in place for any director to take 
independent professional advice if necessary, at the 
Company’s expense.
The Board has operated with no independent non-
executive directors, as opposed to a minimum of two 
independent non-executive directors required by the 
Combined Code. The Board considered its present 
composition, and that of its standing committees, to be 
appropriate to its circumstances during the year, and 
that the cost of further non-executive directors would 
be disproportionate to the potential benefits. One non-
executive director will retire at the Annual General 
Meeting in 2008 and the Board intends to appoint at 
least one new non-executive director during the present 
financial year.  
Board committees
The Board has two standing committees, the Audit 
Committee and the Remuneration Committee. These 
comprise the Board’s two non-executive directors, John 
Goodger (who is Chairman of both) and Michael Rusch. 
The Audit Committee has written terms of reference 
and meets at least twice a year. It is responsible for 
reviewing a range of financial matters including the 
interim and final accounts, monitoring the controls 
which ensure the integrity of the financial information 
reported to the shareholders, making recommendations 
to the Board in relation to the appointment of the 
external auditor, and approving the remuneration and 
terms of reference for the external auditor. It also meets 
with the external auditor who attends its meetings when 
required to do so. 
The Remuneration Committee’s responsibilities are 
described in the Board’s remuneration report on page 
12. 
The composition of the Audit and Remuneration 
Committees is not in accord with the Combined Code 
which requires that they each comprise a minimum of 
two independent non-executive directors.  
Board nominations
The Combined Code recommends that the Board 
establish a Nominations Committee to make 
recommendations to it on all new Board appointments. 
Given its size the Board has not established such a 
committee, the function being performed by the Board 
itself. The need for a Nomination Committee will 
continue to be reviewed annually. 
C O R P O R A T E G O V E R N A N C E
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C O R P O R A T E G O V E R N A N C E ( C O N T I N U E D )
Internal control
The Board has overall responsibility for the Group’s 
system of internal control, which is designed to provide 
reasonable but not absolute assurance against material 
misstatement or loss. The Board confirms that the 
system of internal control accords with the Turnbull 
Committee Guidance.
The Board has considered the establishment of 
procedures to implement the Turnbull Committee 
Guidance on internal control and in response assigned 
day-to-day responsibility for the continuous review of 
risk management to the executive directors. The Board 
received a report on risk issues and reviewed the 
effectiveness of the Group’s systems of internal controls 
in relation to financial, operational and compliance 
controls and risk management. Risk management is 
discussed formally at each Board meeting.
In addition the Board reviewed the requirement for an 
internal audit function and having regard to the size of 
the Group, the costs of such a function versus the likely 
benefit, sufficient assurance as to the functioning of the 
system of internal control, and that the circumstances 
confronting the Group remain unchanged, considered 
there was no such requirement at this time.
In relation to business risk a continuous process of 
risk assessment and reporting has been adopted. The 
executive directors report regularly to the Board on 
major business risks faced by individual operating 
units and by the Group and how it is proposed that 
those risks be managed. Through this business risks 
are assessed according to their nature and urgency 
and the Board considers what would be an appropriate 
response. 
The Board has defined a formal schedule of matters 
specifically reserved for decision by it and the delegated 
authorities of its committees and the executive directors. 
The Group has a clear organisation structure and 
reporting framework. Whilst the management of 
operating units exercise autonomy in the day-to-day 
running of their businesses, given the size of the Group, 
the executive directors remain close to the decisions 
made at each operating unit. 
The Group has a system of budgeting, forecasting and 
reporting which enables the Board to set objectives and 
monitor performance. Each operating unit prepares 
a budget annually, which includes projections for the 
next two years. These budgets are reviewed in detail 
by the executive directors and consolidated for review 
by the Board. Forecasts are updated twice annually. 
The Group’s performance against budget and forecast 
is continuously monitored by the executive directors, 
reviewed formally by the executive directors who 
regularly attend local management meetings, and by 
the Board at least quarterly. 
The Group operates an investment approval process. 
Board approval is required for all acquisitions and 
divestments.
Through the procedures outlined above the Board has 
considered all significant aspects of internal control for 
the year to September 2006 and up to the date of this 
Annual Report.
Shareholder relationships
The Board regards the Annual General Meeting as 
an important opportunity to meet and communicate 
with shareholders in general and private investors 
in particular. Directors make themselves available to 
shareholders both before and after the Annual General 
Meeting and on an ad hoc basis during the year 
subject to normal disclosure rules. In addition to the 
Annual Report, the Company issues an Interim Report 
to shareholders and has its own website at ‘www.lpa-
group.com’.  
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12
Remuneration Committee
The composition of the Remuneration Committee is 
described in the Board’s corporate governance report 
on page 10. The committee meets at least twice a year 
and its principal function is to determine executive 
remuneration policy on behalf of the Board. In addition 
the committee is responsible for supervising the various 
share option schemes and for the granting of options 
under them.
Remuneration policy
The Company’s policy is to design prudent executive 
remuneration packages to attract, motivate and retain 
directors of a high calibre and to reward them for 
enhancing value to shareholders. The performance 
measurement of the executive directors and key 
members of senior management and the determination 
of their annual remuneration package are undertaken 
by the Remuneration Committee. 
There are four main elements of the remuneration 
packages of the executive directors: 
• Basic annual salary and benefits; 
• Annual bonus payments; 
• Share option incentives; and
• Pension arrangements
The Company’s policy is that a proportion of the 
remuneration of the executive directors should be 
performance related. Executive directors may earn 
annual incentive payments, based on achievement of 
budgeted projections for the financial year, together 
with the benefits of participation in share option 
schemes. The Company does not operate any long-term 
incentive schemes other than the share option schemes 
noted. 
Executive directors are entitled to accept appointments 
outside the Company providing that the Chairman’s 
permission is sought. 
Executive directors’ remuneration and terms of 
appointment
Executive directors’ basic salaries are reviewed by the 
Remuneration Committee annually, usually in December 
for implementation in January, and are set to reflect the 
directors’ responsibilities, experience and marketability. 
Regard is also given to the level of rewards made in the 
year to staff. The objectives that must be met for the 
financial year if a bonus is to be paid are confirmed at 
the same time. 
Peter Pollock has a service contract dated 19 January 
2007, with a rolling notice period of one year, with 
an entitlement to twelve months compensation in 
the event of early termination by the Company, and 
which provides that employment under the agreement 
will automatically terminate on his 65th birthday. As 
at 1 January 2007 Peter Pollock’s annual salary was 
£146,400 and he is entitled to the provision of a car or 
allowance and private health insurance. In addition he 
may also be granted options under the various Group 
share schemes and, subject to the achievement of the 
Group’s growth objectives, be entitled to payments 
under the Company’s discretionary bonus scheme. The 
Company makes a contribution of 12% of salary to 
Peter Pollock’s personal pension arrangement. 
Stephen Brett has a service contract dated 19 January 
2007, with a rolling notice period of one year, with 
an entitlement to twelve months compensation in the 
event of early termination by the Company, and which 
provides that employment under the agreement will 
automatically terminate on his 60th birthday. As at 
1 January 2007 his annual salary was £99,750 and 
he is entitled to the provision of a car or allowance 
and private health insurance. In addition he may 
also be granted options under the various Group 
share schemes and, subject to the achievement of the 
Group’s growth objectives, be entitled to payments 
under the Company’s discretionary bonus scheme. He 
is a member of the Group’s defined benefit pension 
scheme. 
 
This report has not been prepared in accordance with 
the Directors’ Remuneration Report Regulations 2002 
because as an AIM listed company LPA Group plc does 
not fall within the scope of the Regulations. 
Unaudited Information
R E M U N E R A T I O N R E P O R T
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R E M U N E R A T I O N R E P O R T ( C O N T I N U E D )
Non-executive directors’ remuneration and terms 
of appointment
The remuneration of the non-executive directors is 
determined by the Board as a whole and the policy is 
to pay an appropriate level of remuneration for their 
work on the Board and its committees. Non-executive 
directors are normally appointed for an initial period 
of three years. Appointments are made under a letter 
of appointment subject to retirement by rotation or 
removal under the Company’s articles of association. 
Non-executive directors do not participate in the 
Group’s share option arrangements.
Michael Rusch (non-executive chairman) has a three-
year term of office, as set out in his letter of re-
appointment dated 19 January 2007, which expires 
at the conclusion of the Company’s Annual General 
Meeting to be held in the spring of 2010. As at 1 
January 2007 he received fees of £21,100 per annum 
and he is entitled to the provision of a car or allowance 
and private health insurance. 
John Goodger (non-executive director) has a one-year 
term of office, as set out in his letter of re-appointment 
dated 19 January 2007, which expires at the conclusion 
of the Company’s Annual General Meeting to be held 
in the spring of 2008. As at 1 January 2007 he received 
fees of £18,300 per annum. 
Information Subject to Audit
Directors’ remuneration
Directors’ remuneration for the year was as follows: 
 
 
Salaries 
and fees
£'000
 
 
 
Bonus
£'000
 
 
 
Benefits
£'000
Money  
purchase 
pension 
contribution
£'000
 
 
Total 
2006
£'000
 
 
Total 
2005
£'000
Peter G Pollock 138 - 17 1 156 149
Stephen K Brett 94 - 15 - 109 106
232 - 32 1 265 255
Michael Rusch 20 - 16 - 36 32
John A C Goodger 17 - - - 17 17
Michael A Edmonds - - - - - 11
 
269 - 48 1 318 315
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Pension entitlement
The pension scheme entitlements under the defined benefit scheme (excluding inflation and directors' contribution) are  
as follows:
 
Accrued pension at 
30 September
Increase in 
accrued 
 pension in 
 
Transfer value of accrued 
pension at 30 September
Increase 
in transfer 
value over 
2006
£'000
2005
£'000
the year
£'000
2006
£'000
2005
£'000
the year
£'000
Peter G Pollock 33 29 4 652 556 92
Stephen K Brett 21 17 4 278 169 105
Peter Pollock retired from the scheme on 6 September 2006. 
Directors’ shareholdings
Shareholdings of those serving at the year end were:
Number of ordinary shares
1 October 
2005
30 September 
2006
31 December 
2006
Michael Rusch 808,000 808,000 808,000
Peter G Pollock 250,000 250,000 270,000
John A C Goodger 101,540 101,540 101,540
Stephen K Brett 10,000 10,000 10,000
R E M U N E R A T I O N R E P O R T ( C O N T I N U E D )
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15
No options were granted, exercised or lapsed in the 
period. Details of the share option schemes in operation 
during the year are given below.
1. The Peter G Pollock Option.  Peter Pollock has an 
option to purchase up to 750,000 shares at 40p. 
For the option to be exercised the performance 
criteria required that the aggregate growth in the 
Group’s normalised earnings per share over the 
five years to September 2001 exceeded the growth 
in the Retail Price Index by 90%. The performance 
criteria were satisfied and the option can be 
exercised up until 20 April 2007. 
2. The Unapproved Share Option scheme. There were 
no options outstanding under this scheme.  
3. Enterprise Management Incentives (EMI). In October 
2000 the rules of the Unapproved Share Option 
scheme were amended to allow it to be used as a 
basis for the grant of EMI options. The option price 
for grants under this scheme is the average of the 
market price on the three consecutive dealing days 
preceding the date of the grant. Stephen Brett and 
Peter Pollock hold options under this scheme. No 
performance criteria apply. 
4. The Approved Share Option scheme. The option 
price for grants under this scheme is the average of 
the market price on the three consecutive dealing 
days preceding the date of the grant.  No directors 
hold options under this scheme. 
The market price of the Company’s shares on 30 
September 2006 was 20.0p per share (2005: 23.0 per 
share) and the price range during the year was 16.0p 
to 24.0p (2005: 16.5p and 39.5p). 
R E M U N E R A T I O N R E P O R T ( C O N T I N U E D )
Directors’ interests in share options
 
 
Scheme
At 1 
October 
 2005
At 30 
 September 
 2006
 
Option 
 price
Earliest 
 exercise  
date
Latest  
exercise   
date
Peter G Pollock PP Option 750,000 750,000 40p 1 Jan 2002 20 Apr 2007
EMI 100,000 100,000 59p 29 Mar 2004 28 Mar 2011
EMI 75,000 75,000 32p 31 Jan 2005 30 Jan 2012
Stephen K Brett EMI 100,000 100,000 59p 29 Mar 2004 28 Mar 2011
EMI 75,000 75,000 32p 31 Jan 2005 30 Jan 2012
EMI 75,000 75,000 13p 20 Feb 2006 19 Feb 2013
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16
The directors present their annual report together with 
the audited financial statements for the year ended 30 
September 2006.
Results and dividends
The loss on ordinary activities after taxation amounted 
to £137,000 (2005: profit of £225,000). The directors 
recommend the payment of a final ordinary dividend of 
0.35p (2005: 0.35p), which makes a total for the year 
of 0.50p per share (2005: 0.50p). 
Principal activities of the Group and business 
review
The principal activities of the Group continue to be 
the design, manufacture and marketing of industrial 
electrical accessories. The Group’s business is reviewed 
on pages 4 to 9. 
Principal risks and uncertainties 
The principal risks confronting the Group are its 
dependence upon the rail sector in general, and UK rail 
in particular, and the competitiveness of the markets it 
operates in. 
Key performance indicators
The Group uses the following key performance 
indicators to assess the progression in its business:- (i) 
Orders to sales (orders for the year expressed as a 
multiple of sales) as a measure of prospective growth 
being 1.03 in the current year (2005: 1.07, 2004: 
1.18), (ii) Sales growth (the increase in year on year 
sales as a percentage of prior year sales) as a measure 
of current growth being 2.0% for the current year 
(2005: -0.5%, 2004: 7.7%), (iii) Gross margin (gross 
profit as a percentage of turnover) as a measure of 
profitability being 22.8% in the current year (2005: 
26.1%, 2004: 25.0%), and (iv) Net cash flow (net 
cash inflow before financing) as a measure of cash 
generation being £277,000 for the current year (2005: 
£304,000 and 2004: £564,000). 
Substantial shareholdings 
As far as the directors are aware the only shareholders 
with a beneficial interest as at 31 December 2006 
representing 3 per cent or more of the issued share 
capital were:
Percentage
Mr Andrew Perloff 17.85%
Mr Michael Rusch 7.38%
Mrs Ellen Rusch 7.34%
Mrs Marilyn I Porter 4.85%
Mrs Susan Thynne 3.90%
HSBC Global Custody Nominee (UK) 3.88%
Directors and their interests
The current directors of the Company and brief 
biographical details are given on page 3. All directors 
served throughout the year. A statement of their 
remuneration and interests in the ordinary shares of 
the Company and share options are set out in the 
remuneration report. No director had any material 
interest in any contract with the Group. In accordance 
with the articles of association John Goodger retires 
by rotation and, being eligible offers himself for re-
election. 
Research and development 
The Group is committed to research and development 
activities to ensure its position as a market leader in 
the manufacture of electrical components in its market 
sectors.
Charitable contributions
Contributions for charitable purposes during the year 
amounted to £776 (2005: £440).
Disabled employees
Applications for employment by disabled persons are 
always fully considered, bearing in mind the aptitudes 
of the applicant concerned. In the event of members of 
staff becoming disabled every effort is made to ensure 
that their employment with the Group continues and 
that appropriate training is arranged. It is the policy 
of the Group that the training, career development 
and promotion of disabled persons should, as far as 
possible, be identical with that of other employees. 
R E P O R T O F T H E D I R E C T O R S
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17
R E P O R T O F T H E D I R E C T O R S ( C O N T I N U E D )
Payment policy 
The Group agrees payment terms with its suppliers 
when it enters into binding purchase contracts. The 
Group seeks to abide by the payment terms agreed with 
suppliers whenever it is satisfied that the supplier has 
provided the goods or services in accordance with the 
agreed terms and conditions.  The Group does not have 
a formal standard which deals specifically with payment 
to suppliers. The Group had 74 days (2005: 67 days) 
purchases outstanding at 30 September 2006. The 
Company has minimal third party creditors. 
Statement of directors’ responsibilities for the 
financial statements 
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 are 
required to: 
• select suitable accounting policies and then apply 
them consistently; 
• make judgements and estimates that are 
reasonable and prudent; 
• state whether applicable United Kingdom 
accounting standards have been followed, subject 
to any material departures disclosed and explained 
in the financial statements; and 
• prepare the financial statements on the going 
concern basis unless it is inappropriate to presume 
that the Company will continue in business.
The directors are responsible for keeping 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 taking reasonable steps 
for the prevention and detection of fraud and other 
irregularities. 
The Annual Report is available on the Company’s 
web site. The maintenance and integrity of LPA Group 
plc’s web site is the responsibility of the directors; 
the work carried out by the auditors does not involve 
consideration of these matters and, accordingly, the 
auditors accept no responsibility for any changes that 
may have occurred to the information contained in the 
financial statements since they were initially presented 
on the web site.
Legislation in the United Kingdom governing the 
preparation and dissemination of the financial 
statements and other information included in annual 
reports may differ from legislation in other jurisdictions.
Disclosure of information to auditors
At the date of making this report each of the 
Company’s directors, as set out on page 3, confirm the 
following:
• so far as each director is aware, there is no relevant 
information needed by the Company’s auditors in 
connection with preparing their report of which the 
Company’s auditors are unaware, and
• each director has taken all the steps that he ought 
to have taken as a director in order to make himself 
aware of any relevant information needed by the 
Company’s auditors in connection with preparing 
their report and to establish that the Company’s 
auditors are aware of that information.
Auditors 
RSM Robson Rhodes LLP are willing to continue in office 
and a resolution to reappoint them will be proposed at 
the forthcoming Annual General Meeting.
By order of the Board 
Stephen Brett  
Secretary 
24 January 2007 
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18
We have audited the financial statements of LPA Group 
plc for the year ended 30 September 2006 which 
comprise the consolidated profit and loss account, 
the consolidated and Company balance sheets, the 
consolidated cash flow statement, the statement of total 
recognised gains and losses and the related accounting 
policies and notes. These financial statements have 
been prepared under the accounting policies set out 
therein. We have also audited the information in the 
Directors’ Remuneration report that is described as 
having been audited.
This report is made solely to the Company’s 
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 an auditors’ report and for no other purpose.  
To the fullest extent permitted by law, we do not accept 
or assume responsibility to anyone other than the 
Company and the Company’s 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 and International Standards on 
Auditing (UK and Ireland).
We report to you our opinion as to whether the 
financial statements give a true and fair view 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 company has not kept proper accounting 
records, if we have not received all the information and 
explanations we require for our audit, or if information 
specified by law regarding directors’ remuneration and 
other transactions is not disclosed.
We read other information contained in the Annual 
Report, and consider whether it is consistent with the 
audited financial statements. The other information 
comprises only the Directors’ Report, the unaudited part 
of the Directors’ Remuneration Report, the Chairman’s 
Statement, the Chief Executive's Review, the Financial 
Review and the Corporate Governance Statement. 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.
We report to you whether in our opinion the 
information given in the Directors’ Report is consistent 
with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with 
International Standards on Auditing (UK and Ireland) 
issued by the Auditing Practices Board.  An audit 
includes examination, on a test basis, of evidence 
relevant to the amounts and disclosures in the financial 
statements and the part of the Directors’ Remuneration 
Report 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 and Company’s circumstances, 
consistently applied and adequately disclosed.
We planned and performed our audit so as to 
obtain all the information and explanations which 
we considered necessary in order to provide us with 
sufficient evidence to give reasonable assurance that 
the financial statements and the part of the Directors’ 
Remuneration Report 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.
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF LPA GROUP PLC
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19
Opinion
In our opinion:
• the financial statements give a true and fair view, of 
the state of affairs of the Group and the Company 
as at 30 September 2006 and of the Group’s loss 
for the year then ended;
• 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;and
• the information given in the Directors’ Report is 
consistent with the financial statements.
RSM Robson Rhodes LLP 
Chartered Accountants and Registered Auditors 
Cambridge, England 
24 January 2007
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF LPA GROUP PLC
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Note
2006
£'000
Restated
2005
£'000
Turnover 2 13,737 13,469
Cost of sales (10,600) (9,960)
Gross profit 3,137 3,509
Net operating expenses 3 (3,342) (3,220)
Operating (loss) / profit 4 (205) 289
Net finance income 6 62 10
(Loss) / profit on ordinary activities before taxation (143) 299
Tax on (loss) / profit on ordinary activities 7 6 (74)
(Loss) / profit on ordinary activities after taxation (137) 225
(Loss) / earnings per share 9
Basic (1.26p) 2.06p
Diluted (1.26p) 2.05p
All activities are continuing.
S T A T E M E N T O F T O T A L R E C O G N I S E D G A I N S A N D L O S S E S
Note
2006
£'000
Restated
2005
£'000
(Loss) / profit after tax for the year (137) 225
Actuarial gain recognised in the pension scheme 144 556
Deferred tax attributable to actuarial gain (43) (167)
Total recognised (losses) / gains (36) 614
Prior year adjustement 26 1,622
Total gains recognised since last annual report 1,586
For the year ended 30 September 2006
For the year ended 30 September 2006
C O N S O L I D A T E D P R O F I T A N D L O S S A C C O U N T
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21
For the year ended 30 September 2006
For the year ended 30 September 2006
R E C O N C I L I A T I O N O F M O V E M E N T S I N S H A R E H O L D E R S ’ F U N D S
Group Company
2006
£’000
2005
£’000
2006
£’000
2005
£’000
Opening equity shareholder's funds  
as previously reported
 
4,153
 
4,068
 
3,892
 
4,409
FRS17 prior year adjustement (note 26) 1,622 1,148 - -
FRS21 prior year adjustement (note 8) 39 33 39 33
Opening shareholders’ funds as restated 5,814 5,249 3,931 4,442
(Loss) / profit for the financial year (137) 225 (479) (462)
Actuarial gain recognised in the pension scheme 101 389 - -
Dividends (55) (49) (55) (49)
Closing equity shareholders’ funds 5,723 5,814 3,397 3,931
C O N S O L I D A T E D N O T E O F H I S T O R I C A L C O S T P R O F I T S A N D L O S S E S
In both the current and the preceding financial year, there is no material difference between the profit before 
taxation and the profit after taxation as shown in the profit and loss account and their historical cost equivalent.
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Group Company
Note
2006
£’000
Restated
2005
£’000
2006
£’000
Restated
2005
£’000
Fixed assets 
Intangible assets 10 1,234 1,327 - -
Tangible assets 11 2,100 2,235 500 505
Investments 12 - - 6,159 6,159
3,334 3,562 6,659 6,664
Current assets
Stocks 13 2,632 2,604 - -
Debtors 14 3,114 3,085 2,567 2,977
Cash at bank and in hand 4 3 2 2
5,750 5,692 2,569 2,979
Creditors: Amounts falling due within one year 15 (4,143) (3,743) (4,686) (4,275)
Net current assets / (liabilities) 1,607 1,949 (2,117) (1,296)
Total assets less current liabilities 4,941 5,511 4,542 5,368
Creditors: Amounts falling due after more than one year 16 (956) (1,211) (1,132) (1,426)
Provisions for liabilities and charges 19 (5) (44) (13) (11)
Net assets excluding pension asset 3,980 4,256 3,397 3,931
Pension asset 26 1,743 1,558 - -
Net assets 5,723 5,814 3,397 3,931
Capital and reserves
Called up share capital 20 1,090 1,090 1,090 1,090
Share premium account 21 254 254 254 254
Revaluation reserve 21 313 313 313 313
Merger reserve 21 230 230 784 784
Profit and loss reserve 21 3,836 3,927 956 1,490
Equity shareholders’ funds 5,723 5,814 3,397 3,931
The financial statements were approved by the Board on 24 January 2007 and signed on its behalf by:
S K BRETT P G POLLOCK 
Director Director
C O N S O L I D A T E D A N D C O M P A N Y B A L A N C E S H E E T S
At 30 September 2006
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C O N S O L I D A T E D C A S H F L O W S T A T E M E N T
For the year ended 30 September 2006
Note
2006
£’000
2005
£’000
Net cash inflow from operating activities 22 648 787
Returns on investments and servicing of finance
Interest paid (163) (169)
Interest element of hire purchase payments (8) (14)
(171) (183)
Taxation (8) (28)
Capital expenditure
Payments to acquire tangible fixed assets (143) (248)
Receipts from sale of other fixed assets 6 25
(137) (223)
Equity dividends paid to shareholders (55) (49)
Net cash inflow before financing 277 304
Financing
Repayment of loans 24 (305) (306)
Capital element of hire purchase payments 24 (80) (142)
(385) (448)
Decrease in cash 23 (108) (144)
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
1. Accounting Policies
Basis of accounting
The financial statements are prepared in 
accordance with applicable accounting standards 
under the historical cost convention modified 
to include the revaluation of certain freehold 
properties. As permitted by section 230 of the 
Companies Act 1985, the profit and loss account 
of the parent company has not been separately 
presented in the financial statements.
Change in accounting policy
The Company has adopted FRS17 “Retirement 
Benefits” for the first time in full in place 
of SSAP24 “Pension Costs” and accounted for 
dividends in line with FRS21 “Events after the 
Balance Sheet Date” for the first time in these 
financial statements. The adoption of these 
standards represents a change in accounting 
policy and the comparatives have been restated 
accordingly. Details of the effects of the prior 
year adjustments on the adoption of FRS17 and 
FRS21 are given in note 21. 
The adoption of the presentational requirements 
of FRS25 “Financial Instruments: Disclosure and 
Presentation” has had no impact in these financial 
statements.  
Basis of consolidation 
The consolidated accounts include the accounts 
of LPA Group plc and all its subsidiaries as at 30 
September 2006 using acquisition accounting. 
The results of subsidiary undertakings acquired 
during the financial year are included from the 
effective date of acquisition.
Goodwill 
Goodwill is the excess of the cost of an acquired 
entity over the aggregate of the fair values of 
that entity’s identifiable assets and liabilities. 
Goodwill relating to acquisitions made after 30 
September 1999 is shown in the balance sheet as 
an asset and amortised over its estimated useful 
economic life up to a maximum of 20 years. In 
the opinion of the directors, this represents a 
reasonable estimate of the period over which 
the Group will derive economic benefit from 
the goodwill acquired as part of the business. 
In addition to systematic amortisation, the book 
value is written down to the recoverable amount 
when any impairment is identified. 
As permitted by FRS10 goodwill relating to 
earlier acquisitions continues to be eliminated 
against reserves and will be expensed in the 
profit and loss account on any future disposal or 
closure of the acquired business.  
Investments
Investments in subsidiaries are shown at cost less 
any provision for impairment. 
Tangible fixed assets and depreciation 
Depreciation is provided on all tangible fixed 
assets at rates calculated to write-off the cost 
or valuation of each asset evenly to its residual 
value over its expected useful life. Where there is 
evidence of impairment, fixed assets are written 
down to recoverable amounts. Any such write 
down would be charged to operating profit. No 
depreciation is provided on freehold land. The 
principal annual rates used are as follows:
Freehold buildings 2%
Plant, machinery and equipment 7% - 15%
Motor vehicles 20%
Furniture, fittings and office equipment 10% - 15%
Computers 20% - 33%
The part of the annual depreciation charge of 
revalued assets which relates to the surplus over 
cost is transferred from the revaluation reserve to 
the profit and loss reserve.
Stocks and work in progress 
Stocks and work in progress are valued at 
the lower of cost and estimated net realisable 
value. Cost is determined on a first-in-first-out 
basis. The cost of work in progress and finished 
goods comprises materials, direct labour and 
attributable production overheads. Net realisable 
value is based on the estimated sales price after 
allowing for all further costs of completion and 
disposal.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
1. Accounting Policies (continued)
Turnover
Turnover represents amounts invoiced for 
products sold excluding VAT. 
Research and development 
Research and development expenditure is written 
off in the year in which it is incurred.
Deferred taxation
Deferred tax is recognised, except as noted 
below, on timing differences that have originated 
but not reversed at the balance sheet date, 
where they 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 FRS19 deferred tax is not 
provided for revaluation gains on land and 
buildings, unless there is a binding agreement to 
sell them at the balance sheet date. 
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 and law enacted or substantively enacted at 
the balance sheet date. Deferred tax assets and 
liabilities are not discounted. 
Pension contributions
The Group operates both defined benefit and 
defined contribution pension schemes.
Defined benefit pension scheme surpluses (to 
the extent they are recoverable) or deficits are 
recognised in full on the balance sheet, net 
of deferred tax. The movement in the surplus/
deficit arising from employee service in the year 
is charged to operating profit. The expected 
return on the schemes’ assets and the increase 
during the year in the present value of the 
schemes’ liabilities arising from the passage of 
time are recognised in other finance income. 
Actuarial gains and losses are recognised in the 
consolidated statement of total recognised gains 
and losses.  
The employees of the Company are members 
of the LPA Industries Limited Pension Scheme. 
The scheme is a multi-employer defined benefit 
scheme and as such it is not possible to identify 
the share of underlying assets and liabilities 
belonging to individual participating employers. 
In the Company, the contributions to the scheme 
are therefore accounted for as if it were a defined 
contribution scheme.
Contributions in respect of defined contribution 
schemes are charged to the profit and loss 
account in the year to which they relate.
Foreign currencies
Monetary assets and liabilities expressed in 
foreign currencies are translated at the rate 
of exchange ruling at the balance sheet date 
or, if appropriate, at the forward contract rate. 
Transactions in foreign currencies are recorded 
at the rate ruling at the date of the transaction 
or, if hedged, at the forward contract rate.  All 
differences are taken to the profit and loss 
account.
Leased assets
Assets obtained under finance leases and hire 
purchase contracts are capitalised in the balance 
sheet and are depreciated over their useful lives. 
The interest element of rental obligations is 
charged to the profit and loss account over the 
period of the lease.  
Rentals paid under operating leases are charged 
to income on a straight line basis over the term 
of the lease.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
2. Turnover Analysis
An analysis of turnover by geographical market is given below:
2006
£’000
2005
£’000
United Kingdom 11,924 11,455
Rest of Europe 1,212 1,339
Rest of World 601 675
13,737 13,469
All turnover originates in the UK. Disclosure of segmental information is not given as the directors believe that 
to do so would be seriously prejudicial to the interests of the Group.
3. Net Operating Expenses
2006
£’000
Restated
2005
£’000
Sales and distribution costs 1,229 1,188
Administrative expenses 2,131 2,059
Other operating income (18) (27)
3,342 3,220
Net operating expenses in 2005 have been increased by £101,000 following the full adoption of FRS17. In 
addition £335,000 of administrative expenses in 2005 have been reclassified as cost of sales following a review 
of the classification of expenditure in order to give a more appropriate cost analysis.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
4. Operating (Loss) / Profit
Operating (loss) / profit is arrived at after charging / (crediting):
2006
£’000
2005
£’000
Depreciation on owned assets 329 337
Depreciation on assets held under hire purchase contracts 33 52
Profit on disposal of fixed assets (6) (13)
Amortisation of positive goodwill 93 93
Operating lease rentals
 - plant and machinery 121 111
 - land and buildings 178 174
Research and development expenditure 328 363  
Auditors’ remuneration
 - in respect of the Company 7 7
 - in respect of subsidiary companies 28 27
 - other services relating to taxation 16 15
5. Employees
Average monthly number of employees, including directors:
2006
No
2005
No
Production 135 145
Sales and distribution 26 27
Administration 22 23
183 195
Staff costs, including directors:
2006
£’000
Restated
2005
£’000
Wages and salaries 3,987 3,955
Social security costs 390 389
Other pension costs (see note 26) 302 243
4,679 4,587
Detailed information concerning directors’ emoluments, shareholdings and options is shown in the Board’s 
remuneration report. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
6. Net Finance Income 
2006
£’000
Restated
2005
£’000
Interest payable and similar charges
Bank loans and overdrafts (163) (169)
Hire purchase contracts (8) (14)
Amortisation of debt finance costs arising on acquisition (10) (11)
Interest payable (181) (194)
Other finance income
Net return on pension scheme (see note 26) 243 204
Net finance income 62 10
Other finance income for 2005 now includes the net pension scheme return of £204,000 following the full 
adoption of FRS17.
7. Taxation
2006
£’000
2005
£’000
United Kingdom Corporation Tax
Corporation tax at 30% (2005: 30%) - 8
Over-provision in previous years - (9)
Current taxation - (1)
Deferred taxation
Net origination and reversal of timing differences (note 19) (42) 33
Deferred taxation on increase in pension surplus recognised in the 
profit and loss account (note 26)
36 42
(6) 75
Tax on (loss) / profit on ordinary activities (6) 74
The impact of adopting FRS17 in full was to increase the deferred tax charge in 2005 by £38,000. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
7. Taxation (continued)
Current tax reconciliation
2006
£’000
Restated
2005
£’000
(Loss) / profit on ordinary activities before taxation (143) 299
Theoretical tax at UK corporation tax rate of 30% (2005: 30%) (43) 90
Effects of:
- Goodwill amortisation 28 28
- Utilisation of tax losses (6) (54)
- Depreciation in excess of capital allowances / (accelerated capital 
- allowances) 
 
45
 
(6)
- Expenditure that is not tax-deductible 13 13
- Pension credit (32) (37)
- Other differences (5) (26)
- Adjustments relating to prior year - (9)
Actual current taxation - (1)
8. Dividends – All Equity 
Dividends paid in the year were as follows:
2006
£’000
2005
£’000
Final – in respect of preceding year 0.35p per share (2005: 0.30p) 39 33
Interim – in respect of current year 0.15p per share (2005: 0.15p) 16 16
55 49 
The directors proposed the below dividends after the balance sheet date: they have not been recognised as a 
liability in the accounts. 
2006
£’000
2005
£’000
Proposed - final 0.35p per share (2005: 0.35p) 39 39 
Change in accounting policy
The Group has changed its accounting treatment of proposed dividends. FRS21 “Events after the Balance Sheet 
Date” no longer permits proposed dividends to be included as an expense in the profit and loss account, with 
the corresponding liability in the balance sheet. Dividend distributions are not recognised in the profit and loss 
account, they are disclosed as a component of the movement in shareholders’ funds. A liability is recorded for 
a final dividend when the dividend is approved by the Company’s shareholders, and for an interim dividend 
when the dividend is paid. The net impact of this change in the accounts is to increase net assets at September 
2005 by £39,000. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
9. Earnings Per Share
The calculation of earnings per share is based upon the loss after tax of £137,000 (2005: profit of £225,000) 
and the weighted average number of ordinary shares in issue during the year of 10.903m (2005: 10.903m). 
Due to losses in the current year no dilution arises and diluted earnings per share is therefore shown as the 
same as basic earnings per share. Last year the weighted average number of ordinary shares diluted for the 
effect of outstanding share options was 11.0m. Adjusted earnings per share, which is disclosed to reflect the 
underlying performance of the Company, has been calculated on a loss of £44,000 (2005: profit of £318,000) 
being the profit after tax for the year before the amortisation of goodwill. Details are as follows:
£’000
2006 
Basic 
pence 
per 
share
Diluted 
pence 
per 
share £’000
2005 
Basic 
pence 
per 
share
Diluted 
pence 
per 
share
Basic earnings (137) (1.26) (1.26) 225 2.06 2.05
Amortisation of goodwill 93 0.86 0.86 93 0.86 0.84
Adjusted earnings (44) (0.40) (0.40) 318 2.92 2.89
10. Intangible Fixed Assets 
Goodwill 
£’000
Cost
At 1 October 2005 and 30 September 2006 1,841
Amortisation
At 1 October 2005 514
Charged in the year 93
At 30 September 2006 607
Net book value
At 30 September 2006 1,234
At 1 October 2005 1,327
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
11. Tangible Fixed Assets 
Group
Freehold 
land &  
buildings
£‘000
Plant, 
 vehicles & 
equipment
£‘000
 
 
Total
£‘000
Cost or valuation
At 1 October 2005 1,014 7,050 8,064
Capital expenditure - 227 227
Disposals - (101) (101)
At 30 September 2006 1,014 7,176 8,190
Depreciation
At 1 October 2005 140 5,689 5,829
Charged in year 14 348 362
Disposals - (101) (101)
At 30 September 2006 154 5,936 6,090
Net book value
At 30 September 2006 860 1,240 2,100
At 1 October 2005 874 1,361 2,235
Included within plant, vehicles and equipment are assets with a net book value of £131,000 (2005: £380,000) 
which are held under hire purchase contracts.  
Cost or valuation as at 30 September 2006 is represented by:
Freehold  
land & 
 buildings
£‘000
Plant, 
 vehicles & 
equipment
£‘000
 
 
Total
£‘000
Valuation 1980 - 423 423
  1996 544 - 544
Cost 470 6,753 7,223
1,014 7,176 8,190
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
11. Tangible Fixed Assets (continued)
Company
Freehold 
land & 
 buildings 
£‘000
Plant,  
vehicles & 
equipment 
£‘000
 
 
Total 
£‘000 
Cost or valuation
At 1 October 2005 and 30 September 2006 544 3 547
Represented by:
Valuation 1996 544 - 544
Cost - 3 3
544 3 547
Depreciation
At 1 October 2005 40 2 42
Charged in year 4 1 5
At 30 September 2006 44 3 47
Net book value
At 30 September 2006 500 - 500
At 1 October 2005 504 1 505
Freehold properties
On an historical cost basis freehold land and buildings would have been included at the following amounts:
Group Company
2006
£‘000
2005
£‘000
2006
£‘000
2005
£‘000
Cost 746 746 276 276
Accumulated depreciation (199) (185) (89) (85)
547 561 187 191
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
12. Investments 
Group
Details of the investments, which are all registered in England and Wales, in which the Group holds directly and 
indirectly 20% or more of the nominal value of any class of share capital are as follows:
 
 
Name of company
 
 
Holding
Proportion of  
voting rights & 
shares held
 
 
Nature of business
Subsidiary undertakings
Channel Electric Equipment Holdings Limited Ordinary shares 100% Holding company
Channel Electric Equipment Limited Ordinary shares 100% Electrical components
LPA Industries Limited Ordinary shares 100% Electrical components
Haswell Engineers Limited Ordinary shares 100% Metal fabrication
Excil Electronics Limited Ordinary shares 100% Electrical components
The Group also holds 100% of the ordinary share capital of the following dormant companies: Niphan Limited, 
Light and Power Accessories Company Limited, W M Engineering (Ramsden) Limited and Lazell Bros. Engineers 
Limited. 
All of the above investments are held directly by LPA Group plc with the exception of Channel Electric Equipment 
Limited (which is held by Channel Electric Equipement Holdings Limited) and Lazell Bros. Engineers Limited 
(which is held by Light and Power Accessories Company Limited). 
LPA Group plc is the sole member of LPA Industries Pension Trustees Limited, a company limited by guarantee, 
which acts as trustee to two pension schemes operated within the Group. 
Company Subsidiary 
 undertakings 
£’000
Cost
At 1 October 2005 and 30 September 2006 6,159
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
13. Stocks 
Group
2006
£’000 
2005
£’000 
Raw materials and consumables 712 614
Work in progress 939 1,207
Finished goods and goods for resale 981 783
2,632 2,604
There is no material difference between the balance sheet value of stocks and their replacement cost.
14. Debtors 
Group Company
2006
£’000
2005
£’000
2006
£’000
2005
£’000
Trade debtors 2,932 2,895 - -
Amounts due from subsidiary undertakings - - 2,561 2,958
Other tax - 13 - 13
Other debtors 8 5 - -
Prepayments and accrued income 171 172 6 6
Deferred taxation (note 19) 3 - - -
3,114 3,085 2,567 2,977
15. Creditors: Amounts Falling Due Within One Year 
Group Company
2006
£’000
Restated
2005
£’000
2006
£’000
Restated
2005
£’000
Debt (note 17) 1,269 1,196 2,869 2,478
Trade creditors 2,030 1,714 10 15
Amounts owed to subsidiary undertakings - - 1,743 1,731
Other tax and social security costs 432 414 1 -
Other creditors 71 87 2 2
Accruals 341 324 61 49
Corporation tax - 8 - -
4,143 3,743 4,686 4,275
The impact of adopting FRS21 is to exclude dividends payable of £39,000 as at September 2005.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
16. Creditors: Amounts Falling Due After More Than One Year
Group Company
2006
£’000
2005
£’000
2006
£’000
2005
£’000
Debt (note 17) 956 1,211 887 1,181
Amounts owed to subsidiary undertakings - - 245 245
956 1,211 1,132 1,426
17. Borrowing Analysis
Group Company
2006
£’000
2005
£’000
2006
£’000
2005
£’000
Due within one year
Bank loans 294 295 294 295
Bank overdraft 941 832 2,575 2,183
Hire purchase obligations 34 69 - -
1,269 1,196 2,869 2,478
Due after more than one year
Bank loans 887 1,181 887 1,181
Hire purchase obligations 69 30 - -
956 1,211 887 1,181
Total borrowings 2,225 2,407 3,756 3,659
Add: Loan issue costs 41 51 41 51
2,266 2,458 3,797 3,710
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
17. Borrowing Analysis (continued)
Group Company
2006
£’000
2005
£’000
2006
£’000
2005
£’000
Repayable
Within one year 1,281 1,207 2,881 2,489
Between one and two years 333 324 305 305
Between two and five years 652 927 611 916
2,266 2,458 3,797 3,710
Repayment profile, interest and security
The £1.2 million bank loan (originally advanced in July 2000) is repayable in 16 quarterly instalments of 
£76,000 the first payment being in October 2005. Interest is payable at 1.75% over base rate.
The following security is provided to the bank:
(i)  First and only legal charge over each freehold and leasehold property owned by the Group;
(ii)  First debenture from each Group company;
(iii)  A Composite Guarantee by each Group company (as guarantor) in favour of the Bank on account of each 
Group company; and
(iv)  An assignment of Keyman Insurance on the life of Peter Pollock of £250,000.
The overdraft is secured by a fixed and floating charge on the Group’s assets. Interest is payable at 1.75% over 
base rate.
Changes to the Group’s facilities after the year end are detailed within the Financial Review on page 9.
Loan issue costs
Under FRS4 the bank loan is stated net of £41,000 of issue costs (2005: £51,000). The initial issue costs of 
£108,000 are being amortised over the 10 year life of the loan.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
18. Financial Instruments 
The Group’s financial instruments comprise borrowings, cash and 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. 
As permitted by FRS13 the Company has chosen to exclude short term debtors and creditors when disclosing 
details of financial instruments, other than the currency disclosures. 
Further information on the Group’s objectives and policies for using financial instruments, and strategies for 
managing risk are given within the Financial Review on page 9. 
Financial liabilities: excluding non-debt current liabilities
Interest rates are managed by using fixed and floating rate borrowings. The only financial liabilities of the 
Group which are subject to interest charges are bank loans and overdrafts and obligations under hire purchase 
contracts. Floating rate liabilities comprise bank loans and overdrafts which bear interest at 1.75% over base 
rate. Fixed rate liabilities comprise hire purchase contracts which bear interest at the negotiated market rate 
prevailing at the time the commitment is made. In the year the weighted average interest rate of the fixed rate 
financial liabilities was 7.2% (2005: 7.6%). The interest rate profile of the Group’s financial liabilities, all of 
which are denominated in sterling at 30 September was:
2006
£’000
2005
£’000
Floating rate financial liabilities 2,163 2,359
Fixed rate financial liabilities 103 99
2,266 2,458
Maturity of financial liabilities
The maturity profile of financial liabilities is shown in note 17. 
Un-drawn committed facilities
The Group’s only un-drawn committed borrowing facility at 30 September 2006 and 30 September 2005 was 
its bank overdraft expiring in one year or less. The un-drawn amount at 30 September 2006 was £0.7 million 
(2005: £0.7 million).
Fair value of financial instruments
The fair value of the Group’s financial instruments is not materially different from their book value.
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
18. Financial Instruments (continued)
Currency exposures
The tables below show the Group’s currency exposure; in other words, those transactional exposures that give 
rise to the net currency gains and losses recognised in the profit and loss account.  Such exposures comprise the 
monetary assets and liabilities of the Group that are not denominated in sterling. The tables show the Group’s 
currency exposure after taking into account the effect of any currency hedges entered into to manage these 
currency exposures:
Exposure at 30 September 2006
Cash 
balances  
£’000
Other net 
monetary 
 assets and 
 liabilities 
£’000
Total net 
 monetary 
 assets and 
 liabilities 
£’000
Euro 466 (466) -
US Dollar 28 (42) (14)
Australian Dollar - - -
494 (508) (14)
Exposure at 30 September 2005
Cash 
balances  
£’000
Other net 
monetary 
 assets and 
 liabilities 
£’000
Total net 
 monetary 
 assets and 
 liabilities 
£’000
Euro 236 (236) -
US Dollar 21 (21) -
Australian Dollar - 3 3
257 (254) 3
At 30 September 2006 the Group had commitments under non-cancellable forward exchange contracts totalling 
£605,000 (2005: £1,227,000) taken out to hedge expected future foreign currency sales and purchases. 
Unrecognised gains on forward exchange contracts at 30 September 2006 were £1,000 (2005: losses of 
£7,000). The gains are expected to be recognised in one year or less. The fair value of forward exchange 
contracts is an estimate of the amount the Group might expect to pay or receive on unwinding these contracts 
at 30 September 2006. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
19. Provisions for Liabilities and Charges 
Group 
Dilapidations 
provision 
£’000
 
Deferred 
 taxation 
£’000
 
 
Total 
£’000
At 1 October 2005 - as previously stated 5 11 16
FRS17 prior year adjustment - 28 28
At 1 October 2005 - restated 5 39 44
Credit to profit and loss account - (42) (42)
Deferred tax asset shown within debtors (note 14) - 3 3
At 30 September 2006 5 - 5
The dilapidations provision arises out of a contractual obligation in relation to the property out of which Haswell 
Engineers Limited operates. 
Deferred taxation provided in the accounts and amounts unrecognised are as follows:
Group 
Provided
Not available for set-off 
till future periods
2006 
£’000
Restated
2005 
£’000
2006 
£’000
2005 
£’000
Capital allowances in advance of 
depreciation
 
99
 
137
 
-
 
-
Other timing differences (12) (13) - -
Unutilised losses (90) (85) (95) (106)
(3) 39 (95) (106)
At 30 September 2006 there are unrecognised timing differences in respect of unrelieved trading losses of 
£317,000 (2005: £353,000). 
Deferred tax assets are disclosed in note 14. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
19. Provisions for Liabilities and Charges (continued)
Company
The Company has the following deferred taxation provided in the accounts:
2006 
£’000
2005 
£’000
Capital allowances in advance of depreciation 13 13
Other timing differences - (2)
13 11 
20. Share Capital 
2006 
£’000
2005 
£’000
Authorised
15,000,000 ordinary shares of 10p each 1,500 1,500
Allotted and fully paid
10,903,229 ordinary shares of 10p each (2004: 10,903,229) 1,090 1,090
Share Options
Options to subscribe for ordinary shares of 10p each under the Company’s Share Option Schemes are as 
follows:
 
Scheme
Date of 
grant
 
Price
 
Dates when exercisable
Number of shares
2006 2005
The Peter Pollock Option Apr 1997 40p 01 Jan 2002 to 20 Apr 2007 750,000 750,000
1997 Approved Share
Option scheme Oct 2000 85p 05 Oct 2003 to 04 Oct 2007 10,000 10,000
Enterprise Management
Incentive scheme Oct 2000 85p 05 Oct 2003 to 04 Oct 2010 105,000 105,000
Mar 2001 59p 29 Mar 2004 to 28 Mar 2011 200,000 200,000
Jul 2001 56p 01 Aug 2004 to 31 Jul 2011 22,000 27,000
Jan 2002 32p 31 Jan 2005 to 30 Jan 2012 189,000 189,000
Feb 2003 13p 20 Feb 2006 to 19 Feb 2013 190,000 190,000
Mar 2003 15p 14 Mar 2006 to 13 Mar 2013 5,000 5,000
Feb 2006 19p 20 Feb 2009 to 19 Feb 2016 5,000 -
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
21. Reserves
Group Share 
premium 
account 
£’000
Revaluation 
reserve 
£’000
Merger 
 reserve 
£’000
Profit 
and loss 
reserve 
£’000
At 1 October 2005 - as previously reported 254 313 230 2,266
FRS17 prior year adjustment (note 26) - - - 1,622
FRS21 prior year adjustment (note 8) - - - 39
At 1 October 2005 - restated 254 313 230 3,927
Loss for the year - - - (137)
Acturial gain - - - 101
Dividends - - - (55)
At 30 September 2006 254 313 230 3,836
In accordance with FRS10 transitional rules, cumulative goodwill on acquisitions written off to reserves is 
£3,092,000 (2005: £3,092,000).
Company Share 
premium 
account 
£’000
Revaluation 
reserve 
£’000
Merger 
 reserve 
£’000
Profit 
and loss 
reserve 
£’000
At 1 October 2005 - as previously reported 254 313 784 1,451
FRS21 prior year adjustment (note 8) - - - 39
At 1 October 2005 - restated 254 313 784 1,490
Loss for the year - - - (479)
Dividends - - - (55)
At 30 September 2006 254 313 784 956
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
22. Reconciliation of Operating (Loss) / Profit to Net Cash Inflow from Operating Activities
2006 
£’000
Restated
2005 
£’000
Operating (loss) / profit (205) 289
Depreciation charges 362 389
Amortisation of goodwill 93 93
Profit on sale of tangible fixed assets (6) (13)
Increase in stocks (28) (113)
Increase in debtors (26) (305)
Increase in creditors 335 382
Adjustment for pension funding 123 65
Net cash inflow from operating activities 648 787
23. Reconciliation of Net Cash Flow to Movement in Net Debt 
2006 
£’000
2005 
£’000
Decrease in cash in the period (108) (144)
Cash outflow from decrease in debt and lease financing 385 448
Change in net debt resulting from cash flows 277 304
New hire purchase agreements (84) -
Amortisation of loan costs (10) (11)
Movement in net debt in the period 183 293
Opening net debt (2,404) (2,697)
Closing net debt (2,221) (2,404)
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
24. Analysis of Net Debt 
At 
1 October 
 2005 
£’000
Cash flow 
£’000
Non cash 
 changes 
£’000
At 30 
 September 
2006 
£’000
Cash in hand and at bank 3 1 - 4
Bank overdraft (832) (109) - (941)
(829) (108) - (937)
Bank loans (1,476) 305 (10) (1,181)
Hire purchase obligations (99) 80 (84) (103)
Net debt (2,404) 277 (94) (2,221)
25. Financial Commitments
Operating lease commitments
Annual commitments under non-cancellable operating leases are as follows:
Group Land and buildings Plant and machinery
2006 
£’000
2005 
£’000
2006 
£’000
2005 
£’000
Operating leases which expire:
Within one year - - 18 23
Within two to five years - - 97 55
After more than five years 178 174 - -
178 174 115 78
Company Plant and machinery
2006 
£’000
2005 
£’000
Operating leases which expire:
Within two to five years 8 8
Capital commitments
Contracted for but not provided in the accounts amounted to £Nil (2005: £Nil).
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
26. Pension Arrangements
Defined contribution schemes
The Group makes contributions to several defined contribution arrangements. The pension cost charged to the 
profit and loss account for the year in respect of these schemes was £69,000 (2005: £67,000). 
Defined benefit scheme
The Group also operates a defined benefit pension scheme. The last full actuarial valuation was carried out as 
at 1 April 2003 although the 1 April 2006 valuation is progressing and the data from this has been updated to 
30 September 2006 by an independent qualified actuary.
Contributions made by the employer over the year were £85,000 (2005: £85,000), plus an additional £25,000 
(2005: £26,000) in respect of life assurance premiums. The scheme is closed to new entrants and therefore 
under the projected unit method the current service cost as a percentage of pensionable payroll is likely to 
increase as the membership ages, although it will be applied to a decreasing pensionable payroll.
The assets of the scheme have been taken at market value and the liabilities have been calculated using the 
following principal actuarial assumptions:
2006 2005 2004
Inflation 3.30% pa 2.90% pa 3.00% pa
Salary increases 3.80% pa 3.40% pa 3.50% pa
Rate of discount 5.00% pa 5.00% pa 5.50% pa
Pension increases – post April 1997 3.25% pa 2.90% pa 3.00% pa
Pension increases – pre April 1997 non guaranteed minimum 0.00% pa 1.45% pa 1.50% pa
The fair value of the scheme assets, the present value of the scheme liabilities and the expected long term rates 
of return were as follows: 
2006 2005 2004
Return £’000 Return £’000 Return £’000
Equities 8.00% pa 5,783 8.00% pa 5,478 8.00% pa 6,006
Index Linked Gilts 4.45% pa 1,944 4.35% pa 3,063 4.85% pa 2,804
Gilts 5.00% pa 1,285 - - - -
Bonds 5.00% pa 1,911 5.00% pa 1,832 - -
Cash and other 3.75% pa 176 3.35% pa 277 3.75% pa 476
Market value of assets 11,099 10,650 9,286
Present value of liabilities (8,609) (8,424) (7,755)
Surplus in the scheme 2,490 2,226 1,531
Related deferred tax liability (747) (668) (459)
Net pension asset 1,743 1,558 1,072
The pension surplus is recoverable over the future working lifetime of the membership. 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
26. Pension Arrangements (continued)
The pension cost charged to operating profit was as follows: 
2006 
£’000
2005 
£’000
Current service cost 233 176
Past service cost - -
233 176
The analysis of the amounts credited to net finance income were as follows:
2006 
£’000
2005 
£’000
Expected return on pension scheme assets 656 626
Interest on pension scheme liabilities (413) (422)
Net credit to other finance income 243 204
The acturial gain in the statement of total recognised gains and losses is analysed below:
2006 
£’000
2005 
£’000
Actual return less expected return on pension scheme assets 317 960
Experience gains and losses arising on the scheme liabilities 190 82
Charges in assumptions underlying the present value of the 
scheme liabilities
(363) (486) 
144 556
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
26. Pension Arrangements (continued)
The movement in the scheme surplus during the year is as below:
2006 
£’000
2005 
£’000
Surplus at the beginning of the year 2,226 1,531
Current service cost (233) (176)
Contributions 110 111
Past service cost - -
Net finance income 243 204
Acturial gain 144 556
Surplus at the end of the year 2,490 2,226
Of the £79,000 (2005: £209,000) increase in the related deferred tax liability £36,000 (2005: £42,000) 
was charged to the profit and loss account and £43,000 (2005: £167,000) included in the statement of total 
recognised gains and losses.  
The history of experience gains and losses is as follows:
2006 2005 2004 2003 2002
Difference between the expected and actual 
return on scheme assets
Amount (£’000) 317 960 360 429 (1,791)
% of scheme assets 3 9 4 5 (22)
Experience gains and losses on scheme 
liabilities
Amount (£’000) 190 82 81 (459) -
% of the present value of scheme liabilities (2) (1) (1) 6 -
Total amount recognised in statement of 
total recognised gains and losses
Amount (£’000) 144 556 884 (235) (3,449)
% of the present value of scheme liabilities (2) (7) (11) 3 47
 
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
26. Pension Arrangements (continued)
Change in accounting policy
The Group previously accounted for its defined benefit pension scheme under SSAP24 “Pension Costs”. Under 
SSAP24 a regular pension cost was determined using actuarial methods and charged to the profit and loss 
account. Variations from the regular pension cost were spread over the average remaining service lives of 
employees. The cumulative difference between the profit and loss account expense and employer contributions 
was held in the balance sheet as either a prepayment or accrual. Under FRS17 “Retirement Benefits” pension 
scheme deficits or surpluses are recognised on the balance sheet. The profit or loss account comprises the 
current service cost, the appropriate proportion of any past service cost, the interest cost and the expected return 
on any plan assets. 
The net impact of this change in the accounts is to increase net assets as at September 2005 by £1,622,000 
and to increase earnings in the year to September 2005 by £85,000 as below.  
 
£’000
Increase in net assets as at September 2005
Creditors: Amounts falling due within one year - pension accrual 92
Provisions for liabilities and charges - deferred tax (28)
Pension asset 1,558
1,622
Increase in earnings in the year to September 2005
Cost of sales - pension cost 20
Operating expenses - pension cost (101)
Finance income - expected return on pension scheme assets 626
Finance income - interest on pension scheme liabilities (422)
Taxation - deferred (38)
85
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48
Restated
2002 
£‘000
Restated
2003 
£‘000
Restated
2004 
£‘000
Restated
2005 
£'000 
2006 
£'000 
Sales and results
Turnover 13,806 12,574 13,540 13,469 13,737
Operating profit / (loss) before goodwill 28 (47) 373 382 (112)
Amortisation of goodwill (108) (93) (93) (93) (93)
Operating profit / (loss) (80) (140) 280 289 (205)
Exceptional items
Profit on sale of tangible fixed assets - 106 - - -
Profit before interest and taxation (80) (34) 280 289 (205)
Net finance income (18) (137) (32) 10 62
Profit / (loss) before taxation (98) (171) 248 299 (143)
Taxation (99) 69 (41) (74) 6
Profit / (loss) after taxation (197) (102) 207 225 (137)
Net assets employed
Intangible fixed assets 1,606 1,513 1,420 1,327 1,234
Tangible fixed assets 3,320 2,651 2,388 2,235 2,100
Net current assets 2,026 1,946 1,955 1,949 1,607
6,952 6,110 5,763 5,511 4,941
Non-current liabilities (2,713) (2,011) (1,575) (1,211) (956)
Deferred taxation and provisions (106) (37) (11) (44) (5)
4,133 4,062 4,177 4,256 3,980
Pension asset 590 399 1,072 1,558 1,743
Equity shareholders’ funds 4,723 4,461 5,249 5,814 5,723
Ratios 2002 2003 2004 2005 2006
Operating profit to sales (0.6%) (1.1%) 2.1% 2.1% (1.5%)
Operating profit to net assets employed (1.7%) (3.1%) 5.3% 5.0% (3.6%)
Net assets per ordinary share 43.3p 40.9p 48.1p 53.3p 52.5p
Dividends per ordinary share 0.25p 0.25p 0.45p 0.50p 0.50p
Basic earnings per share (1.81p) (0.94p) 1.90p 2.06p (1.26p)
Earnings per share excluding goodwill 
amortisation
 
(0.82p)
 
(0.08p)
 
2.75p
 
2.92p
 
(0.40p)
Gearing (net debt as a % of 
shareholders’ funds)
 
73.9%
 
72.9%
 
51.4%
 
41.3%
 
38.8%
F I V E Y E A R S U M M A R Y
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49
NOTICE IS HEREBY GIVEN that the Forty Fifth 
Annual General Meeting of LPA Group plc (“the 
Company”) will be held at the offices of Teather 
& Greenwood Limited, Beaufort House, 15 St 
Botolph Street, London EC3A 7QR on Monday 
26 February 2007 at 10.00am for the following 
purposes:
Routine business
1. To receive the accounts for the year ended 
30 September 2006, together with the 
reports of the directors and the auditors 
thereon.
2. To declare a final dividend of 0.35p per 
ordinary share for the year ended 30 
September 2006, payable on 16 March 
2007 to shareholders on the register at the 
close of business on 23 February 2007. 
3. To re-appoint John Goodger as a director of 
the Company. 
4. To appoint the auditors and to authorise the 
directors to fix the auditors’ remuneration.
Other business
To consider and if thought fit pass resolution 5 as 
an ordinary resolution: 
5. That the directors be generally and 
unconditionally authorised to exercise all 
powers of the Company to allot relevant 
securities (as defined in section 80 of the 
Companies Act 1985) up to an aggregate 
nominal amount of £364,000 to such 
persons at such times and on such terms 
and conditions as the directors see fit 
provided that this authority shall expire 
on the date of the next Annual General 
Meeting, except that the Company may 
before such expiry make an offer or 
agreement which would or might require 
relevant securities to be allotted after such 
expiry and the directors may allot relevant 
securities in pursuance of any such offer or 
agreement as if the authority conferred by 
this resolution had not expired, and that 
this authority shall be in substitution for 
all subsisting authorities to allot relevant 
securities previously granted to the directors 
which (to the extent that they remain in 
force and unexercised) are revoked.
To consider and if thought fit pass resolution 6 as 
a special resolution: 
6. That, subject to and conditional upon the 
passing of resolution 5 above, the directors 
be given power pursuant to section 95 of 
the Companies Act 1985 to allot equity 
securities (as defined in section 94 of the 
said Act) for cash pursuant to the authority 
conferred by resolution 5 above as if section 
89(1) of the said Act did not apply to any 
such allotment provided that this power 
shall be limited:
a. to the allotment of equity securities in 
connection with a rights issue, open offer 
or other pre-emptive offer in favour of 
shareholders where the equity securities 
respectively attributable to the interests 
of all shareholders are proportionate 
to the nominal value of shares held by 
them but subject to such exclusions or 
other arrangements as the directors 
may deem necessary or expedient to 
deal with fractional entitlements or legal 
or practical problems under the laws 
or the requirements of any recognised 
regulatory body in the territory; and
b. to the allotment (otherwise than pursuant 
to sub-paragraph (a) above) of equity 
securities up to an aggregate nominal 
value of £109,000 (representing 10% of 
the present issued share capital), 
and shall expire on the date of the next Annual 
General Meeting save that the Company may 
before such expiry make an offer or agreement 
which would or might require equity securities 
to be allotted after such expiry and the directors 
may allot equity securities in pursuance of any 
such offer or arrangement as if the power 
conferred hereby had not expired. 
N O T I C E O F M E E T I N G
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50
To consider and if thought fit pass resolution 7 as 
an extraordinary resolution: 
7. That the Company be and is hereby 
generally and unconditionally authorised 
to make market purchases (as defined in 
Section 163(3) of the Companies Act 1985) 
of any of its ordinary shares of 10p each 
(“ordinary shares”) provided that: 
a. The maximum number of ordinary shares 
hereby authorised to be purchased is 
1,095,000 representing 10% of the 
issued share capital; 
b. The minimum price which may be paid 
for an ordinary share is 10p (exclusive of 
expenses); 
c. The maximum price which may be paid 
for an ordinary share is an amount 
equal to 105% of the average of the 
middle market quotations for an ordinary 
share as derived from the London Stock 
Exchange Daily Official List for the five 
business days immediately preceding the 
day on which the ordinary shares are 
contracted to be purchased (exclusive of 
expenses); 
d. The authority hereby conferred shall, 
unless renewed prior to such time, expire 
on the date of the next Annual General 
Meeting. 
To consider and if thought fit pass resolution 8 as 
an ordinary resolution:
8. That:
a. the rules of the LPA Group plc Employee 
Share Option Scheme 2007 (“the 
Scheme”), the main features of which are 
summarised in a document enclosed with 
the Annual Report and Accounts, be and 
are hereby approved; and
b. the directors be and are hereby 
authorised to:
(i) do all such acts and things as they 
may consider necessary or desirable to 
implement the Scheme; and
(ii) vote and be counted in a quorum 
on any matter connected with the 
Scheme notwithstanding that they 
may be interested in the same, except 
that no director may be counted in 
a quorum or vote in respect of his 
own participation, and any provisions 
of the Articles of Association of the 
Company be and are hereby relaxed 
to that extent accordingly. 
N O T I C E O F M E E T I N G ( C O N T I N U E D )
Notes:
1. A member entitled to attend and vote at 
the meeting may appoint a proxy or proxies 
to attend and, on a poll, vote instead of 
him/her. A proxy need not be a member of 
the Company. Any instrument appointing a 
proxy must be received at Capita Registrars, 
Registrars for LPA Group PLC, Proxy 
Department, The Registry, 34 Beckenham 
Road, Beckenham, Kent BR3 4TU, not less 
than forty-eight hours before the time 
fixed for the meeting. A Form of Proxy is 
attached. 
2. The register of the interests of the directors 
and their families in the share capital of 
the Company, together with the service 
contracts of directors, and copies of the 
rules of the proposed LPA Group plc 
Employee Share Option Scheme 2007 will 
be available for inspection at the venue of 
the annual general meeting from 9.45 am 
until the meeting is concluded. The same 
documents are available for inspection at 
the Company’s registered office during 
normal business hours from the date of 
despatch of this document until the date of 
the Annual General Meeting.
By order of the Board 
Stephen Brett  
Secretary 
24 January 2007 
Registered office: 
Tudor Works, Debden Road 
Saffron Walden, Essex CB11 4AN
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51
For use at the Annual General Meeting to be held at 10.00 am on Monday 26 February 2007 at the offices of Teather 
& Greenwood Limited, Beaufort House, 15 St Botolph Street, London EC3A 7QR. 
I/We  ........................................................................................................................................................................
of  ............................................................................................................................................................................
being a member/members of LPA Group plc hereby appoint (note 1)  .......................................................................
or failing him the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the above 
mentioned meeting and at any adjournment thereof.  I/We wish this proxy to be used as shown below:
Signed ......................................................................................  Dated ......................................…………….... 2007
Please indicate with an “X” in the spaces below how you wish your votes to be cast.  This proxy will be used only in the 
event of a poll being directed or demanded.  If the form is returned without any indication as to how the proxy shall 
vote on any particular matter, the proxy will vote or abstain as he thinks fit.
Resolution For Against
1. To receive the accounts for the year ended 30 September 2006.
2.
To declare a final dividend of 0.35p per ordinary share for the year ended 30 
September 2006.
3. To re-appoint John Goodger as a director of the Company. 
4.
To appoint the auditors and to authorise the directors to fix the auditor’s 
remuneration.
5.
To authorise the directors to allot shares (as defined in section 80 of the 
Companies Act 1985) in the Company. 
6.
To authorise the directors (pursuant to section 95 of the Companies Act 1985) 
to allot shares in the Company for cash.
7.
To authorise the Company to make market purchases (as defined in section 
163(3) of the Companies Act 1985) of its own shares. 
8.
To approve the rules of the LPA Group plc Employee Share Option Scheme 
2007 (“the Scheme”), and authorise the directors to implement the Scheme.  
L P A G R O U P P L C - F O R M O F P R O X Y
Notes:
1. If you wish to appoint as your proxy any person(s) 
other than the Chairman of the meeting, please 
insert the full name(s) of the proxy or proxies (in 
block capitals) in the space above. A proxy need 
not be a member of the Company and may attend 
the meeting in person but may not vote except 
on a poll. Please note that a proxy may not speak 
at the meeting except with the permission of the 
Chairman of the meeting. 
2. To be effective a form of proxy must be in writing 
and signed by the member or his duly authorised 
attorney or, if the member is a corporation under its 
common seal or signed by a duly authorised
 
 officer or attorney. A corporation may appoint a 
representative to attend and vote at the meeting.
3. To be valid this proxy, together with any power of 
attorney under which it is signed, must be received 
at the Registrars of the Company, Capita Registrars, 
Registrars for LPA Group PLC, Proxy Department, 
The Registry, 34 Beckenham Road, Beckenham, 
Kent BR3 4TU not less than 48 hours before the 
time fixed for the meeting. 
4. In the case of joint holdings the vote of the first-
named holder in the register will be accepted to the 
exclusion of the other joint holders.
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FIRST FOLD 
SECOND FOLD
Capita Registrars
Registrars for LPA Group PLC
Proxy Department
PO Box 25
Beckenham
Kent 
BR3 4BR
BUSINESS REPLY SERVICE
Licence No. MB122
1
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G R O U P D I R E C T O R Y
LPA Channel Electric
Bath Road, Thatcham,
Berkshire, RG18 3ST. UK
Tel: +44 (0)1635 864866
Fax: +44 (0)1635 869178
Email: enquiries@lpa-channel.com
Website: www.lpa-group.com
• Connectors
• Relays & contactors
• Circuit breakers
• Fans & motors
• Switches
• Terminal assemblies
LPA Excil Electronics
Ripley Drive, Normanton,
West Yorkshire, WF6 1QT. UK
Tel: +44 (0)1924 224100
Fax: +44 (0)1924 224111
Email: enquiries@lpa-excil.com
Website: www.lpa-group.com
• Lighting systems (LED, dichroic & fluorescent)
• Emergency lighting systems
• Power supply units
• Inverters
• Electronic control & monitoring
• Contract electronics manufacturing
LPA Haswell Engineers
Oakwood Business Park, Stephenson Road West,
Clacton-on-Sea, Essex CO15 4TL. UK
Tel: +44 (0)1255 428424
Fax: +44 (0)1255 432963
Email: enquiries@lpa-haswell.com
Website: www.lpa-group.com
• Enclosures
• Fabrications
• Laser cutting
• Punch, form & weld
• Wet paint, powder coating & screenprint
LPA Niphan Systems
Tudor Works, Debden Road,
Saffron Walden, Essex, CB11 4AN. UK
Tel: +44 (0)1799 512800
Fax: +44 (0)1799 512828
Email: enquiries@lpa-niphan.com
Website: www.lpa-group.com
• Rail, aircraft & industrial connectors
• Auxiliary battery power systems
• Control panels & boxes
• Shore supply systems
• Batteries (gel lead acid)
• Cable management
LPA Group plc
Tudor Works, Debden Road
Saffron Walden, Essex, CB11 4AN. UK
Tel: +44 (0)1799 512800  
Fax: +44 (0)1799 526793  
Website: www.lpa-group.com
LPA cover black 2006.indd   3 13/01/2007   17:56:31 LPA Group plc, Tudor Works, Debden Road, Saffron Walden, Essex, CB11 4AN. UK
Tel: +44 (0)1799 512800  Fax: +44 (0)1799 526793  Website: www.lpa-group.com   
LPA Group PLC
P R O V I D I N G S O L U T I O N S 
Designed and produced by Hornett’s Design Ltd - 07071 780277
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