1 Financial Highlights
2 Chairman’s Statement
3 Group CEO’s Operating Review
7 Financial Review
10 Directors
11 Directors’ Report
15 Corporate Governance Statement
20 Directors’ Assessment of Risk
21 Remuneration Report
26 Statement of Directors’ Responsibilities
27 Independent Auditors’ Report
28 Consolidated Proﬁt and Loss Account
29 Consolidated Balance Sheet
30 Consolidated Cash Flow Statement
31 Notes to the Consolidated Cash Flow Statement
32 Consolidated Statement of Total Recognised Gains and Losses
32 Consolidated Reconciliation of Shareholders’ Funds
33 Company Balance Sheet
34 Accounting Policies
36 Notes to the Financial Statements
61 Subsidiaries
62 Corporate Directory
63 Shareholder Information
Filtronic plc Annual Report 2005
Contents Financial Highlights
2005 2004
Sales £262.9m *£245.1m
Operating profit £6.8m *£4.8m
Profit before tax £5.5m *£0.9m
Basic earnings/(loss) per share 7.10p *(2.38)p
Diluted earnings/(loss) per share 7.09p *(2.38)p
Dividend per share 2.70p 2.70p
Net debt £43.4m £51.3m
Equity shareholders’ funds £105.8m £101.1m
Gearing 41% 51%
Filtronic plc Annual Report 2005 1
*Restated (see note 2 to the ﬁnancial statements)
  Chairman’s Statement
I am pleased to report that over the year the group has returned to growth, with sales for the year ended 31 May 2005
increased by 7% to £262.9m (2004 £245.1m) and operating proﬁt increased by 42% to £6.8m (2004 £4.8m). The proﬁt
before tax was £5.5m (2004 £0.9m) and the proﬁt after tax was £5.3m (2004 £1.8m loss).
The Board is therefore proposing to maintain a ﬁnal dividend of 1.80p (2004 1.80p) payable on 1 November 2005 to
shareholders on the register at 23 September 2005.
This year, it has been satisfying to observe the progress made in both the Wireless Infrastructure and Integrated Product
divisions. Wireless Infrastructure achieved sales growth of 16% and with continuing attention to manufacturing costs
increased operating proﬁt by 68%, year on year. The Integrated Products division, where sales grew by 26% (after the
exclusion of the business sold in December 2003), again continued the trend of reducing operating losses achieving 26%
reduction year on year.
In July 2005, the company arranged an amended bank facility with Barclays and ABN AMRO, rescheduling these facilities
over a ﬁve year term with revised ﬁnancial covenants. 
The focus during the main part of the year for the Handset Products division has been its preparation for disposal. I am
now pleased to announce that exclusive negotiations are progressing.
The year has also been active for the company in strengthening the Board. The role of Chairman and Group CEO has
been divided. John Roulston joined as Group CEO on 6 September 2004 and Charles Hindson as Group Finance
Director on 14 December 2004. Iain Gibson joined on 21 February 2005 and became CEO of the Integrated Products
division on 6 April 2005. 
During the coming year, the Board intends to appoint new non-executive directors and has engaged external advisors
to assist with the appointments. I am, though, gratiﬁed that current non-executive directors are willing to offer
themselves for re-election at the annual general meeting until their successors are appointed and, for this interim period,
to bring their independent advice to the company’s affairs. 
Looking to the coming year, we see continued growth prospects for the group. Wireless Infrastructure is experiencing a
substantial market recovery and the strategic efforts undertaken over the past few years in power ampliﬁers are
increasing our presence in this important market sector. In Integrated Products, we have acquired volume contracts in
compound semiconductors for our foundry at Newton Aycliffe, which now requires to meet the ramp up in its
production, and strengthened our defence position in the United States through a contract for supply of sub-systems
for upgrade of widely deployed airborne electronic countermeasures equipment.
I would also like to thank all of our employees across our different operations throughout the world for their continued
dedication and contribution to the business, reﬂecting in particular on the difﬁcult changes that have take place in
reducing manufacturing at the Shipley site in the UK. For the coming year, the group is well positioned for growth, due
to strengthening markets in the communications sector.
Professor J David Rhodes CBE FRS FREng
Chairman
1 August 2005
2 Filtronic plc Annual Report 2005 Group CEO’s
Operating Review
Summary
My ﬁrst year with Filtronic plc has been one of growth and consolidation within the group, supported by returning
markets.
Wireless Infrastructure has shown sustained above market growth for its ﬁlter-based transmit-receive modules and made
further progress in establishing itself as a force in the base-station power ampliﬁer market, a strategic objective in which
we have invested. The inherent technical and manufacturing strengths in the division continue to serve it in maintaining
margins, combating price pressure with design innovation and opening new product opportunities through increased
integration of base-station functions.
Integrated Products has continued to make progress on semiconductor process technology and merchant market
offerings from its compound semiconductor foundry at Newton Aycliffe while reducing losses and preparing for the start
of high volume manufacture of switches for mobile handsets in the coming ﬁnancial year. Sales in the merchant arena
have been slow leading us to review our sales approach to this market. The volume switch market, which has taken
longer than forecast to mature, is showing strength.
The division has relocated its businesses at Merrimack and Natick in the US into a larger facility at Hudson, New
Hampshire, from which it is servicing a major new defence contract with ITT. The improved facilities will allow us to bid
competitively for larger contracts, consistent with the strategy of developing business opportunities we perceive in the
large US defence market. 
At the annual general meeting in September 2004, the Chairman announced the Board’s decision to dispose of the
Handset Products division, preferably by means of an IPO on the Finnish stock exchange. Preparations were put in hand
to achieve this, but by January it was clear that the market conditions had deteriorated to the point where the
contemplated IPO would not realise appropriate value. The decision was announced in January that the company would
seek a buyer for the business and in June we informed the market that we entered into detailed negotiations. These
exclusive negotiations are progressing. 
The segmental analysis of the operating results is as follows:
Sales Operating proﬁt
Year ended 31 May 2005 *2004 2005 *2004
£m £m £m £m
Wireless Infrastructure 168.4 145.2 18.1 10.7
Handset Products 50.0 60.2 3.6 11.2
Integrated Products 43.6 38.4 (9.9) (13.4)
Central Services 3.6 3.9 (5.0) (3.7)
Inter segment (2.7) (2.6) – –
1 1 1 1
262.9 245.1 6.8 4.8
5 5 5 5
* The results for the year ended 31 May 2004 have been restated using the revised accounting policy described in note 2
to the ﬁnancial statements. The average rate of exchange for the year is now used to translate the results of the
overseas subsidiaries.
Wireless Infrastructure
This business segment under the leadership of Alan Needle, divisional CEO, dominates the independent global market
in ﬁlter-based components and sub-systems for cellular base-stations and is using its established position with OEMs
(Original Equipment Manufacturers) to expand into the adjacent product area of power ampliﬁers. The market has been
Filtronic plc Annual Report 2005 3 Group CEO’s
Operating Review
under continual price pressure which has forced investment in global low-cost manufacturing from Filtronic and its
competitors. The value of this transition is nearly exhausted shifting emphasis towards superior product design and
technology insertion throughout product life, areas where Wireless Infrastructure can differentiate itself and achieve
competitive advantage. 
The wide design competence of the division allows economies to be gained through integration of functions, typical
opportunities arriving through embedded digital processing for signal conditioning and for computer interface to
base-station software. By maintaining in-house expertise and capacity in ferrites, ceramics and digital processing
to complement its ﬁlter technology, the product offerings can be optimised for performance and value. 
In the case of power ampliﬁers, the company’s compound semiconductor facility holds the transistor technology for
providing performance levels beyond the reach of standard market components. There is a growing appreciation of the
need for higher performance ampliﬁers as new data transmission formats are required in 3G WCDMA networks and as
network loading increases spectral occupancy. We see this as creating an additional growth impetus to our power
ampliﬁer business.
The business has capitalised on the ongoing improvements in the overall market worldwide, with the ﬁlter-based
transmit-receive modules growing sales 15% over the year, which we consider outperformed the overall expansion of the
market estimated to be in the range of 12% to 14%. The market continues to be dynamic, with more OEMs sourcing
supply from the sector and discontinuing in-house production. During the year we consolidated our position by
supplying production quantities to all the major OEMs thereby providing the platform for revenue growth in the coming
year. We estimate that we currently hold 28% of our addressable market in ﬁlter-based product while our efforts in power
ampliﬁers give us longer-term potential to achieve similar penetration in this area, particularly if the performance
emphasis we predict comes to pass.
Deliveries of integrated power ampliﬁers incorporating fully digital interfaces for signal and control commenced at the
end of the ﬁrst half of the ﬁnancial year. This sophisticated product integrates a full transmit and receive radio function
with a multi-carrier power ampliﬁer. Variants of the product are in development to cover additional frequency bands and
higher powers. 
During the year, we continued to consolidate production activities in China, resulting in the closure of ﬁlter manufacture
in the UK, although ﬁnal assembly for the integrated power ampliﬁers has been retained. The transfer has been carried
out with limited additional capital expenditure, contributing to proﬁtability and continuing cash generation.
Integrated Products
I am very pleased to welcome Iain Gibson, who joined the division in February from SELEX Sensors and Airborne
Systems (SELEX SAS), formerly BAE SYSTEMS Avionics and became its CEO in April. Iain brings a wealth of general and
commercial management experience from the defence sector which will continue to improve the operational
performance of this technologically and product diverse business.
This division engages activities covering the semiconductor and defence and security sectors and point to point
microwave links. Sales in the year grew 26% (2004 £34.5m to 2005 £43.6m) after excluding the contribution of the
electronic warfare business of Filtronic Solid State, which was sold in December 2003. The sequential growth rate in sales
comparing half-year on half-year during the ﬁnancial year was 14% and the comparative half year growth for the second
half of the ﬁnancial year compared with the same period last ﬁnancial year was 20%. Operating loss for the ﬁnancial year
was reduced by £3.5m to £9.9m, split £5.7m in the ﬁrst half and £4.2m in the second. This was achieved while adding
staff and upgrading facilities to accommodate high volume output at Newton Aycliffe to service demands from our
strategic customer, R.F. Micro Devices (RFMD). At the end of the ﬁnancial year the foundry moved into round-the-clock,
seven-day week production for the ﬁrst time.
4 Filtronic plc Annual Report 2005 The semiconductor foundry at Newton Aycliffe has now established itself as a leading source for six-inch gallium
arsenide wafers using the pHEMT process. In April 2005, it started to supply wafers in volume to RFMD for use in
front-end modules for mobile handsets, a world market in excess of 750 million units per year and growing at 7%. 
The defence activities have beneﬁted from the start of production supply of sub-systems to ITT in the US and continuing
production supply to Elettronica of Italy and EADS of Germany of sub-system assemblies for the Euroﬁghter Defensive
Aids system. The Euroﬁghter production will reduce to low level in the coming year as a major portion of our work fell
outside UK national work-share and will, as a result of the delays to the second tranche, be subsumed into Italy and
Germany. This leaves the US defence and security market as the best opportunity for our continuing growth in the short
term. Consequently, we have relocated our businesses in the US to support growth and, in June 2005, brought Filtronic
Sigtek into the Integrated Products segment where we intend to focus on acquiring external business, while formerly it
has mainly supported in-house projects. These moves in the US were accompanied by a management reorganisation,
simplifying the reporting structures and creating a single management team to lead all our US activities.
Filtronic Broadband provides point-to-point microwave link transceivers to OEM customers. During the year the
customer base was expanded on the basis of new qualiﬁed product which entered production in November 2004 using
our gallium arsenide integrated circuits. This product is selling to three OEMs in expanding volumes and a further design
iteration awaiting qualiﬁcation uses more complex multi-function integrated circuits further reducing component count.
The point-to-point radio market is exhibiting strong growth and our customers are well positioned to beneﬁt. Our
technology in this market is recognised to be superior and we conﬁdently expect an increasing market share. 
Handset Products
This division is a market leader in the provision of internal antennas for mobile handsets, with a market share of about
18%. Sales declined 17% year on year reﬂecting lower than anticipated levels of activity in the second half of the ﬁnancial
year with reduced levels of activity with the division’s principal customer. Antenna volumes in the ﬁnancial year were
104 million units (2004 121 million units), of which over 50% were manufactured in China. The operating margin reﬂected
this reduced level of activity and with the impact of the ﬁxed nature of depreciation on automated lines in Finland,
operating margins for the year reduced to 11% before goodwill amortisation, 7% after goodwill amortisation. 
Central Research and Development
Central Research and Development effort has continued on integrated power ampliﬁers leading to a solution of the
problem of digitally compensating for the distortion products of the gallium arsenide multi-carrier base-station ampliﬁer.
This solution lies in the semiconductor technology used and is compatible with existing digital-predistortion processors.
This breakthrough has led to increased effort on low-cost packaging to achieve an attractive high-performance module
price. 
Strategic projects include WiMAX basestation hardware and software and WiMAX mobile transceiver modules. 
In the defence sector, effort was expended on a digital integrated frequency measurement module to succeed our very
successful product range now in production and on a demonstration “man-pack” ESM receiver which is being evaluated
by potential customers. 
Finance
The business has been ﬁnanced by bank facilities during the year, and although covenants were breached, the group’s
lending banks continued support. These breaches of covenants resulted in additional ﬁnance charges in the year of
approximately £0.5m. The capital repayments of £6m due in the year were met.
Filtronic plc Annual Report 2005 5 Filtronic plc Annual Report 2005 5 Filtronic plc Annual Report 2005 5
Group CEO’s
Operating Review
Filtronic plc Annual Report 2005 5 After the year end, the bank facilities were amended through new arrangements with Barclays and ABN AMRO, and they
now provide term facilities over the next ﬁve years with no capital repayment due in the ﬁnancial year ending 31 May
2006. The banks have also reconﬁrmed the overdraft of £9m until end of July 2006.
The recognition as revenue of the outstanding deferred licence fee from BAE SYSTEMS (now SELEX SAS) was changed
with effect from 1 June 2004 to be equally spread over the remaining period to 1 May 2008 for which the Filtronic group
is liable to provide supply of product. This has increased the annual revenue recognition from £0.8m to £2.3m.
Capital expenditure
Capital expenditure in the year was limited to £13.0m (2004 £11.7m), reﬂecting additional capacity for Wireless
Infrastructure in China and its preparation for production of integrated power ampliﬁers, funding of replacement
capacity within Handset Products, and ongoing plant requirements for defence contracts and high volume compound
semiconductor demand in Integrated Products.
Employees
At the end of the ﬁnancial year the group employed 3,863 people, an increase of 273 (8%) since May 2004. The principal
changes were that China increased employees by 555 people, whilst UK employment reduced by 406 people.
Outlook
Wireless Infrastructure foresees continued overall market growth, estimated to be approximately 8% to 10%, with
potential to gain modest increase in its market share in ﬁlter-based products as a result of the new OEM customers
secured during the year. It expects to maintain historic margins through continuing low cost manufacturing, before
transfer of central research and development costs. Further growth is expected in integrated power ampliﬁers. Following
market demand, we are supplying Silicon LDMOS power ampliﬁers for speciﬁc customer requirements complementing
the high performance gallium arsenide ampliﬁers. 
A further lower cost manufacturing site will be established during the year in Hungary, initially to provide additional
capacity for ﬁlter production and to reduce dependence on China as a sole low-cost manufacturing base. The division
will also cease operations in Australia.
Integrated Products is planning rapid turnover growth through the challenging ramp up of volume semiconductor
production for RFMD and supply to additional volume customers. Filtronic Broadband is moving to volume radio
production from the new business gained in the year ending 31 May 2005. This is beneﬁcial in sales and proﬁt to the
division and also further increases foundry loading. Growth in defence revenues in the US will be offset by run-down of
Euroﬁghter production in the UK towards the end of the year. Overall, the division is expected to reach run rate
breakeven in the year ending 31 May 2006, this being dependent on achieving production targets for the foundry.
Handset Products should see a strong recovery in revenue in the ﬁnancial year as projects acquired and product qualiﬁed
over the past nine months reach production ramp-up. The longer term outlook is supported by efforts in ceramic
antennas for cellular and non-cellular applications and extruded metal structures for integrated assemblies.
John Roulston FREng FIEE CEng
Group CEO
1 August 2005
6 Filtronic plc Annual Report 2005 6 Filtronic plc Annual Report 2005 6 Filtronic plc Annual Report 2005
Group CEO’s
Operating Review
6 Filtronic plc Annual Report 2005 Financial Review
Results
The group’s sales were £262.9m (2004 £245.1m) resulting in an operating proﬁt of £6.8m (2004 £4.8m). The proﬁt before
tax was £5.5m (2004 £0.9m), and the proﬁt after tax was £5.3m (2004 £1.8m loss). The operating results are discussed in
the Group CEO’s Operating Review.
Change of accounting policy
The accounting policy for the translation of the results of the group’s overseas subsidiaries has been changed as
described in note 2 to the ﬁnancial statements. The average rate of exchange for the year is now used to translate the
results of the overseas subsidiaries. The comparative ﬁgures for the year ended 31 May 2004 have been restated using
the revised accounting policy. There is no change to the group balance sheet at 31 May 2004.
Research and development costs
The group’s policy is to charge all research and development costs to the proﬁt and loss account as they are incurred.
The research and development costs were £31.1m (2004 £28.7m), which was 11.8% (2004 11.7%) of sales.
Exceptional profit on disposal of tangible fixed assets
The group sold two properties during the year located in Brisbane, Australia and Merrimack, New Hampshire, USA. The
proceeds totalled £6.3m resulting in an exceptional proﬁt of £2.3m. The former property was leased back on a
commercial lease for ten years, with an annual rent of £0.4m.
Net interest payable and similar charges
Net interest payable and similar charges were reduced to £4.1m (2004 £5.5m) as a result of repaying the 10% Senior
Notes in February 2004, and further reducing net debt this year. 
Taxation
The net taxation charge of £0.2m (2004 £2.7m) results from a current tax charge of £2.4m (2004 £2.8m) less a deferred
tax credit of £2.2m (2004 £0.1m). The current tax charge arises primarily from the group’s operations in China and Finland,
where taxable proﬁts cannot be relieved by losses available in other jurisdictions. The deferred tax credit this year is due
to the recognition of a proportion of the tax losses carried forward by the group’s operations in the United States of
America as a deferred tax asset in the balance sheet.
Capital expenditure
Capital expenditure was £13.0m (2004 £11.7m), which was an increase of £1.3m compared to last year. The total capital
expenditure for the year to 31 May 2005 comprised Wireless Infrastructure £6.2m, Handset Products £4.5m, Integrated
Products £2.0m and Central Services £0.3m.
Impairment review
In accordance with Financial Reporting Standard 11 “Impairment of Fixed Assets and Goodwill”, the Board has carried
out an impairment review in respect of the compound semiconductor operation at Newton Aycliffe, because of the
operating loss being incurred. The review was based on a series of forecasts of operating results and cash ﬂows. This
review takes into account the broadened strategic direction for the foundry along with the activities it supports within
the group. It covers activities that support divisional business in areas such as power ampliﬁer modules and transceiver
modules, along with third party customers in defence and high volume applications including SELEX SAS and RFMD
respectively, and newer areas for the ongoing development of the group. 
Filtronic plc Annual Report 2005 7 Financial Review
A discounted cash ﬂow forecast calculation was prepared using a discount rate of 10%. The discounted cash ﬂow
forecast was compared to the current carrying value of the assets concerned. Sensitivity analysis was applied to the key
underlying assumptions including the discount rate. The most important assumptions are those related to the timing
and extent of future sales, where changes in assumptions would result in material movements in the discounted cash
ﬂow calculation.
The areas of activity included in the plan are assessed in individual project plans that include assessment of operational,
technical and market-related performance requirements. Progress in achieving these requirements is reviewed regularly
to monitor developments, which are fundamental to the assumptions underlying the forecast operating results. If some
or all of these do not achieve progress as expected, then the Board may ﬁnd it necessary to review and possibly change
some of the assumptions used. By their nature these assumptions are subjective, and contain signiﬁcant levels of
judgement related to operational and technical matters as well as to broader market issues, as referred to in the
Chairman’s Statement and the CEO’s Operating Review.
Having taken all of these areas of judgement and their related assumptions into account, the Board has determined that
no impairment has taken place.
Deferred income
Deferred income comprised government grants and the licence fee paid by BAE SYSTEMS Avionics Limited (now
SELEX SAS) in connection with the Supply and Development Agreement dated 30 November 2001. This agreement
contains a number of terms and obligations, of which the principal ones are described in note 29 to the ﬁnancial
statements. The fee was being recognised in the proﬁt and loss account from 1 May 2003 until 31 December 2015. It is
now being recognised over a shorter period to 1 May 2008, as described in note 29 to the ﬁnancial statements. This
increased the amount recognised as revenue in the year ended 31 May 2005 by £1.5m to £2.3m.
A regional selective assistance grant of £5.0m was negotiated in 1999 in respect of Newton Aycliffe. This is receivable
over ﬁve years if certain employment and capital expenditure targets are met. At 31 May 2005 a total of £4.4m of this
grant had been received.
Working capital
Tight control over working capital during the ﬁnancial year resulted in working capital cash consumption being only
£0.8m (2004 £6.3m). During the year debtors increased by £13.3m and creditors increased by £10.4m, reﬂecting the
growth in the group’s operations. At the ﬁnancial year end stocks were £34.8m (2004 £36.6m) and comprised raw
materials £19.5m (2004 £22.6m) and work in progress and ﬁnished goods £15.3m (2004 £14.0m).
Costs of £0.8m incurred to 31 May 2005 for professional fees related to the preparation of the Handset Products division
for disposal are being held in prepayments pending successful completion of negotiations. In the event that the disposal
is not completed, these costs will be expensed as an operating cost in the ﬁnancial year ending 31 May 2006.
Cash flow and net debt
Cash generated from operations was £19.6m (2004 £16.9m), and net cash ﬂow before ﬁnancing was £7.4m (2004 £1.7m).
The £6.0m loan repayments made during the year reduced the bank term loan from £50.0m to £44.0m. During the year
net debt was reduced by £7.9m from £51.3m to £43.4m, and gearing fell from 51% to 41%.
8 Filtronic plc Annual Report 2005 Financial Review
Financing 
In July 2005, we amended our bank debt facilities with Barclays and ABN AMRO. The term loan is £44.0m and its
repayment starts in the year ending 31 May 2007 and will continue over the following three years. The term loan bears
interest at LIBOR plus 2.50%. Barclays have renewed the overdraft facility of £9.0m until July 2006. An arrangement fee
of £0.5m is payable for the new facilities.
International Financial Reporting Standards (“IFRS”)
During the year, the Board has continued to consider the effect of implementing IFRS in the year ended 31 May 2006 on
its ﬁnancial statements and ﬁnancial reporting functions. The transition project is progressing satisfactorily, and the likely
impact of IFRS has been analysed. As a result, further review is continuing on the approach to be adopted for the
treatment of research and development costs and pension matters.
Charles Hindson BA FCCA MCT
Group Finance Director
1 August 2005
Filtronic plc Annual Report 2005 9 Directors
Executive directors
Professor J David Rhodes CBE FRS FREng BSc PhD DSc DEng (Hon) DSc (Hon) FIEE FIEEE (aged 61) has been
Chairman since founding Filtronic in 1977 and also served as Chief Executive Ofﬁcer until John Roulston was appointed
on 6 September 2004. Professor Rhodes is Emeritus Professor of electronic and electrical engineering at Leeds University
and is an internationally recognised ﬁgure in the ﬁeld of circuit theory and microwave engineering. He has written over
130 technical papers and books on the subject and has received several international awards. In the 1992 New Year’s
Honours List he was made an Ofﬁcer, Order of the British Empire, for his contribution to science and technology and in
1993 he was elected a Fellow of the Royal Society. In the 2000 New Year’s Honours List he was made a Commander,
Order of the British Empire, for his contribution to engineering, research and industry. In 2003, Professor Rhodes
was awarded the Prince Phillip Medal by the Royal Academy of Engineering. He became a Foreign Associate of the
United States National Academy of Engineering in 2005. Professor Rhodes is a non-executive director of Polar Capital
Technology Trust PLC.
John Roulston FREng FIEE CEng (aged 57) was appointed Chief Executive Ofﬁcer on 6 September 2004. Prior to
joining Filtronic he held board positions at BAE SYSTEMS Avionics Limited and its antecedent companies for some
ﬁfteen years.
Charles Hindson BA FCCA MCT (aged 46) was appointed Group Finance Director on 14 December 2004. Prior to
joining Filtronic he was Finance Director of Eutelsat SA. Previously he held ﬁnance positions with British Gas plc,
PricewaterhouseCoopers and 3i plc.
Alan Needle MBA FIEE CEng (aged 50) is Chief Executive Ofﬁcer of Wireless Infrastructure. Prior to the reorganisation
of the business segments in 2003 he was Managing Director of the group’s operations apart from Compound
Semiconductors. He joined Filtronic in 1986.
Iain Gibson BA (aged 50) was appointed as a director on 21 February 2005 and Chief Executive Ofﬁcer of Integrated
Products on 6 April 2005. Prior to joining Filtronic he was Executive Vice President for Euroﬁghter Typhoon and Radar
with BAE SYSTEMS Avionics Limited.
Dr Christopher Mobbs BSc PhD MIEEE (aged 43) has been Director of Engineering since 2002. He has served as Chief
Technical Ofﬁcer since 1997. He joined Filtronic Components as an engineer after graduating from Leeds University
in 1982.
Non-executive directors
Rhys Williams (aged 71) is the senior non-executive director. He has been a non-executive director and chairman of the
remuneration committee since 1994. A graduate engineer, Mr Williams worked in several GEC companies during his
career, in the UK, South Africa and Canada, before becoming an executive director of GEC, Chairman of Marconi and
latterly responsible for research and development group wide. For twelve years he was Pro Chancellor and Chairman of
the University of Warwick. He is currently Chairman of Radstone Technology plc and a non-executive director of Acal plc.
Richard Blake (aged 69) has been a non-executive director since 1994 and has been chairman of the audit committee
since 1995. Mr Blake was a partner in Baker Tilly from 1964 until his retirement in 1993. Mr Blake is a non-executive
director of YooMedia plc.
Professor Stephen Burbank (aged 58) has been a non-executive director since 1994. Professor Burbank is currently the
David Berger Professor for the Administration of Justice at the University of Pennsylvania. He is Chairman of the
American Academy of Political and Social Science and the American Judicature Society. One of the pre-eminent scholars
of litigation procedure and judicial administration in the United States, Professor Burbank is also an authority on issues
of judicial independence and accountability, having served on the National Commission on Judicial Discipline and
Removal by appointment of the Speaker of the United States House of Representatives. He currently serves as Special
Master of the National Football League (NFL) by appointment of a federal judge on the joint recommendation of the
NFL Players Association and NFL Management Council.
Ian Hardington (aged 41) has been a non-executive director since 1999. Mr Hardington is a Principal with Mansﬁeld
Partners, Inc., an investment advisory ﬁrm located in the United States.
Graham Meek (aged 58) has been a non-executive director since 1999. Previously he was a director of Beeson Gregory
Limited. He is Chairman of ICM Computer Group plc and a non-executive director of Capital Gearing Trust plc.
10 Filtronic plc Annual Report 2005 Directors’ Report
The directors present their report and the audited ﬁnancial statements for the year ended 31 May 2005.
Principal activities
The principal activities of the group are the design and manufacture of microwave products and compound
semiconductors for wireless telecommunications systems and military applications.
Review of the business and state of the group’s affairs
The Group CEO’s Operating Review and the Financial Review on pages 3 to 9 inclusive contain a review of the group’s
business.
The directors are satisﬁed with the state of affairs of the company and the group and believe it is well positioned to grow
through opportunities offered by the worldwide wireless telecommunications and military markets.
Financial results and dividend
The results for the year are set out in the proﬁt and loss account on page 28. The position at the end of the year is shown
in the balance sheet on page 29.
Following an interim dividend of 0.90p (2004 0.90p) per ordinary share, the directors are recommending payment of a
ﬁnal dividend of 1.80p (2004 1.80p), making a full year dividend of 2.70p (2004 2.70p) per ordinary share.
Research and development
Research and development costs amounted to £31.1m (2004 £28.7m). All such costs are written off to the proﬁt and loss
account as incurred.
Directors and their interests
The directors of the company during the year were as follows:
Professor J David Rhodes CBE FRS FREng BSc PhD DSc DEng (Hon) DSc (Hon) FIEE FIEEE
John Roulston FREng FIEE CEng (appointed 6 September 2004)
Charles Hindson BA FCCA MCT (appointed 14 December 2004)
Professor Christopher Snowden FREng BSc MSc PhD CEng FIEE FIEEE (resigned 6 April 2005)
Alan Needle MBA FIEE CEng
Iain Gibson BA (appointed 21 February 2005)
Dr Christopher Mobbs BSc PhD MIEEE
John Samuel BA FCA (resigned 10 June 2004)
Rhys Williams
Richard Blake
Professor Stephen Burbank
Ian Hardington
Graham Meek
Details of their interests in the share capital of the company are set out in the remuneration report on pages 21 to 25.
Professor J David Rhodes and Ian Hardington retire by rotation and, being eligible, offer themselves for re-election at
the annual general meeting. Richard Blake, Professor Stephen Burbank and Rhys Williams, each having served on the
Board for more than ten years, retire and being eligible, offer themselves for re-election at the annual general meeting.
Charles Hindson and Iain Gibson retire and, being eligible, offer themselves for election at the annual general meeting.
Filtronic plc Annual Report 2005 11 Directors’ Report
Substantial shareholdings
The following shareholders have indicated a holding of 3% or more of the issued share capital of 74,841,853 10p ordinary
shares as at 22 July 2005.
Number of % of issued
10p ordinary shares share capital
Prudential plc 13,042,418 17.4
Fidelity International Limited 9,916,266 13.2
Goldman Sachs International 5,768,581 7.7
Deutsche Asset Management 4,802,964 6.4
Legal & General Investment Management Limited 3,816,611 5.1
Professor J David Rhodes CBE FRS FREng 3,730,001 5.0
Wellcome Trust 2,622,592 3.5
Canada Life Group 2,370,432 3.2
Barclays PLC 2,246,002 3.0
1 1
48,315,867 64.5
5 5
Employees
The group is committed to a policy of equal opportunities in employment by which the group ensures that all aspects
of selection and retention are based on merit and suitability for the job regardless of sex, marital status, colour, race,
ethnicity, sexual orientation or disability.
The group is conscious of its obligations towards disabled persons and tries to ensure that they receive equal
opportunities. So far as particular disabilities permit, the group will continue to provide employment for any existing
employee who becomes disabled. The group will also provide relevant training, career development and promotion for
disabled employees where this is appropriate.
Corporate & social responsibility
(i) Health and safety
The Board is committed to ensuring the health and safety of the group’s employees worldwide and applies high
standards throughout the group in the control and management of its operations. The group analyses its practices
and processes using systematic health and safety management techniques and auditing regimes. A group-wide
health and safety audit showed a 24% reduction in reportable accidents in year ended 31 May 2005 compared with
the previous year (22 reportable accidents in year ended 31 May 2005 compared with 29 reportable accidents in year
ended 31 May 2004).
(ii) Employee development
The group operates internationally and its employment policies are designed to meet local regulations and
requirements. Employee development has been established as one of the group’s key objectives. A training
management system is being implemented globally thus underlying the group’s commitment to ongoing employee
development and training.
12 Filtronic plc Annual Report 2005 Directors’ Report
(iii) Employee communications
The group believes in keeping employees fully informed on matters which affect them through communication
procedures including staff meetings, a group-wide newsletter and a culture which encourages openness and
interaction between all members of staff. All European sites have put in place works councils that are important for
raising and sharing certain issues that affect employees. In addition, the group’s United Kingdom sites are in the
process of implementing a forum for information and consultation (“ICON forum”). The ICON forum is designed to
be a gathering at which employee representatives can review group progress and discuss speciﬁc issues and
concerns with senior management.
(iv) The environment
Care for the environment is an integral part of the group’s business activities worldwide. It is the group’s policy to
ensure that its facilities throughout the world are safe and acceptable to the communities in which they operate. The
group is committed to ensure that their impact on the environment is minimised. The group supports and trains its
personnel to act responsibly in matters relating to the environment. The group takes account of relevant legislation
and regulations and analyses its practices, processes and products to reduce their environmental impact, and works
with its customers and suppliers to achieve a high standard of product stewardship. The group’s major
manufacturing sites have established environmental management systems and have achieved ISO 14001
certiﬁcation.
Wherever possible, components and materials are reused or recycled. The reuse, utilisation and recycling of
packaging is subject to monitoring. The group continues to work with its customers to implement programmes to
design products for disassembly and recycling, and in particular so as to ensure compliance with the European Union
directive on waste electrical and electronic equipment and the European Union and Chinese initiatives in relation to
the restriction of certain hazardous substances in electrical and electronic equipment. The group has introduced
focused management teams throughout its business to ensure that compliance with these requirements is achieved
within the required implementation timescales.
(v) Social and ethical code of conduct
A social and ethical code of conduct was drafted during the year and adopted by the Wireless Infrastructure
segment of the group to ensure good working conditions throughout its supply chain. The code sets out the
standards we demand both of ourselves and of our suppliers. A plan for implementation of the code has been
agreed with the individual Wireless Infrastructure sites globally. The code is being actively considered for adoption
by the remainder of the group.
Political and charitable contributions
No contributions were made for political purposes. The group donated £26,000 (2004 £26,000) to various charities.
Supplier payment policy
It is the group’s policy to abide by the terms of payment agreed with suppliers in respect of the goods and services
properly invoiced to the group. At 31 May 2005 trade creditors of £37.9m represented 77 days’ purchases, calculated in
accordance with the requirements of the Companies Act.
Filtronic plc Annual Report 2005 13 Directors’ Report
Special business at the annual general meeting
Remuneration report
Pursuant to the Directors’ Remuneration Report Regulations 2002 the Board proposes the remuneration report which is
set out on pages 21 to 25, for approval (resolution 11 in the notice of annual general meeting). No entitlement of a
director to remuneration is conditional on the resolution being passed but the result of the vote will be taken into
account in considering the development and operation of the company’s remuneration policy.
Authority to allot shares
The Companies Act 1985 requires that the authority of the directors to allot relevant securities shall be subject to the
approval of shareholders in general meeting or to an authority set out in the company’s Articles of Association.
Accordingly, an ordinary resolution (resolution 12 set out in the notice of annual general meeting) will be proposed at
the annual general meeting to renew the authority granted at the annual general meeting held on 24 September 2004
and thereby authorise the directors to allot unissued ordinary shares of the company up to a total nominal value of
£2,494,728 (representing one third of the nominal value of the company’s issued share capital).
The Companies Act 1985 also requires that any equity shares issued wholly for cash must be offered to existing
shareholders in proportion to their existing holdings. This requirement was disapplied to a limited extent by a resolution
passed at the annual general meeting held on 24 September 2004 and a special resolution (resolution 13 set out in the
notice of annual general meeting) will be proposed at the annual general meeting to renew the directors’ authority to
allot equity shares for cash other than on a pro rata basis. This will be limited to equity shares having a nominal value of
up to £374,093 (representing 5% of the issued share capital of the company). This authority will terminate no later than
ﬁfteen months after the passing of the special resolution.
Auditors
A resolution to re-appoint KPMG Audit Plc as auditors will be proposed at the annual general meeting.
By order of the Board
M Moynihan
Company Secretary
1 August 2005
14 Filtronic plc Annual Report 2005 The Combined Code on Corporate Governance
The Board supports the highest standards of corporate governance. The Financial Reporting Council approved a revised
Combined Code on Corporate Governance which became effective for companies’ ﬁnancial periods beginning on or
after 1 November 2003. For the year ended 31 May 2005 the directors conﬁrm that the company has been in compliance
with the provisions of section 1 of the Combined Code effective for that accounting period except in respect of Professor
J David Rhodes’ combined role as Chairman and Chief Executive Ofﬁcer. John Roulston was appointed as Group Chief
Executive Ofﬁcer on 6 September 2004 and from that date the company was compliant with section 1 of the code.
The company has ﬁve non-executive directors, two of whom (Ian Hardington and Graham Meek) meet all of the speciﬁc
criteria for independence set out in the Combined Code. The other three directors (Richard Blake, Professor Stephen
Burbank and Rhys Williams) do not meet all of the requirements for independence set out in the Code since they have
been directors since 1994 but yet are considered to be independent and to provide, ﬁrstly, valuable advice to the
company given its international reach and complexity and, secondly, continuity during a period of change at Board level.
Internal control
The Board has overall responsibility for establishing and maintaining the company’s system of internal control. Internal
control systems are designed to be relevant to the company and the risks to which is exposed and, by their nature, can
provide reasonable but not absolute assurance against material misstatement or loss. The key procedures established
by the directors with a view to providing effective internal control are as follows:
(a) Control environment and monitoring systems
The Board usually meets each month and has adopted schedule of matters which are required to be brought to it
for decision, thus ensuring that it maintains full and effective control over appropriate strategic, ﬁnancial, operational
and compliance issues. The Board has put in place an organisational structure with clearly deﬁned lines of
responsibility and delegation of authority. Additionally, the Board has established an Executive Management Board
that is responsible for operational matters within the company.
The division of responsibilities between the Chairman and the Group Chief Executive Ofﬁcer has been set out in
writing and agreed by the Board.
The audit committee, which comprises all of the non-executive directors, reviews the effectiveness of the system of
internal control. The external auditors are engaged to express an opinion on the company’s annual ﬁnancial
statements. They test the system of internal ﬁnancial control and the information contained within the annual report
and ﬁnancial statements to the extent necessary for expressing their opinion.
(b) Major information systems
The directors have delegated to executive management implementation of the system of internal control
throughout the company. This includes ﬁnancial controls that enable the Board to meet its responsibilities for the
integrity and accuracy of the company’s accounting records.
The Board approves, in aggregate, budgets and other performance targets, the components of which form the
ﬁnancial objectives for individual operating units. Performance against these targets is reported monthly. Financial
forecasts are updated and reviewed monthly and include cash ﬂow forecasts.
Filtronic plc Annual Report 2005 15
Corporate Governance
Statement
  Corporate Governance
Statement
(c) Main control procedures
In addition to matters reserved for Board decisions, the company has established a system whereby authority to take
decisions is distributed throughout the company. This distribution of authority deﬁnes procedures for authorisation
and approval and sets appropriate levels of responsibility.
An accounting policies and procedures manual sets out the company’s declared statement of policy in all ﬁnancial
areas and established the control procedures, including segregation of duties, to ensure that these policies are
implemented.
(d) Identiﬁcation and evaluation of business risks
The company has clear principles and procedures that are appropriate to a multinational electronics business. These
principles are designed to provide an environment of central leadership but with devolved operating responsibility
as the framework for the exercise of accountability and control by the Board, its committees and executive
management. The Board directs activities in and allocates resources to the key areas of business development,
product strategy, research and development, manufacture and ﬁnancial practice.
The Board has appointed a Technology Advisory Board to provide strategic technical advice to the company. This
Board comprises leading, internationally respected electronics experts together with outstanding engineering talent
from within the company.
Through these ongoing procedures, the Board is able to identify, evaluate and manage the signiﬁcant risks that the
group faces from time to time.
The Board has reviewed its approach to the identiﬁcation and evaluation of business risks and has put in place a
programme to review the main areas of risk identiﬁed for the company on an annual basis at the Board.
The Board conﬁrms that it has carried out a review of the effectiveness of the system of internal control as it operated
during the year. The Board undertakes, on an ongoing basis, a review of all aspects of the company’s internal control
procedures. The review is undertaken by the Board through the receipt and consideration of regular monthly and
other reports prepared by management on operational, strategic, organisational and ﬁnancial issues. The system of
ﬁnancial internal audit continued in which a programme of internal audit work is carried out at the company’s various
locations by staff employed at other locations. The programme is designed to focus on key controls and procedures
in the ﬁnancial system. Additionally, areas of operations other than ﬁnance are audited periodically either by external
agencies or through peer review to ensure compliance with group policies.
Constitution of the Board
The Board comprises six executive and ﬁve independent, non-executive directors. Short biographies of all of the
directors are set out on page 10. John Roulston was appointed as a director and Group Chief Executive Ofﬁcer on
6 September 2004. Charles Hindson was appointed as a director and Group Finance Director on 14 December 2004. Iain
Gibson was appointed as a director on 21 February 2005 and as Chief Executive Ofﬁcer of Integrated Products on 6 April
2005. The Board considers that its constitution brings both independence and an appropriate balance of experience in
judging matters of strategy, performance, resources, investor relations, internal control and corporate governance. Rhys
Williams is the senior non-executive director. Each of the directors is proposed for re-election at the annual general
meeting at least every three years. Those non-executive directors who have served longer than nine years on the Board
will be subject to annual re-election.
16 Filtronic plc Annual Report 2005 Corporate Governance
Statement
Mr Williams, Mr Blake and Professor Burbank each joined the company in 1994. The Board has considered the
independence of these directors with particular care. All three directors contribute signiﬁcantly through their individual
skills (operational, ﬁnancial and legal expertise respectively) and their considerable knowledge of both the company and
the industry. During the current period of transition for the executive members of the Board, they provide continuity
as well as contributing to the overall balance of the Board. All three directors continue to demonstrate strong
independence of management of the Board in the manner in which they discharge their duties as directors. Accordingly
the Board has decided that in the absence of any other relevant factors that Mr Williams, Mr Blake and Professor Burbank
are independent non-executive directors. However being mindful of the desire to refresh the skills and experiences of
the directors, the Board has instructed a ﬁrm of professional recruitment consultants to identify suitable candidates with
the intention of making appropriate appointments of non-executive directors during the current ﬁnancial year.
The Board has introduced a formal annual system of performance review of the Board, its committees and of all
individual directors. This has been implemented in the year by way of a written questionnaire completed by all Board
members and the resulting report has been reviewed by the Board. The performance of individual directors was
reviewed by the Chairman. The senior non-executive director led an evaluation of the performance of the Chairman.
Board members visited the company’s operations in Suzhou, China and the entire Board visited the company’s facilities
in Finland and the foundry facilities at Newton Aycliffe, United Kingdom during the year and the company provided its
new directors in the year with an induction programme.
Board committees
The Board has an audit committee, a remuneration committee and a nominations committee. The audit and
remuneration committees comprise all of the non-executive directors. The nominations committee comprises the
Chairman and all of the non-executive directors and is chaired by Professor J David Rhodes. Each of these committees
operates under terms of reference which have been established by the Board.
The audit committee
The audit committee is chaired by Richard Blake. The other members are the other independent non-executive
directors: Rhys Williams, Professor Stephen Burbank, Ian Hardington and Graham Meek. Mr Blake has recent and
relevant ﬁnancial experience. The audit committee meets at least three times a year. The committee reviewed its terms
of reference during the ﬁnancial year and the revised terms of reference were agreed by the Board. They are consistent
with the current best practice for the size of the company and are available on request from the company secretary or
on the company’s web site.
Filtronic plc Annual Report 2005 17 Corporate Governance
Statement
The committee met three times during the ﬁnancial year with management and, following each meeting, the committee
met with the external auditors in private. The chairman of the committee also met privately with the auditors regularly
during the year. The committee reviewed the following matters and reported its conclusions to the Board:
l the ﬁnancial statements contained in the company’s annual and interim reports to shareholders
l various accounting matters, including the company’s accounting policies, raised by management and the external
auditors in the context of the ﬁnancial statements e.g. change of accounting policy for translation of the results of
overseas subsidiaries, and accelerated recognition of the deferred licence fee income
l the effectiveness of internal controls and the group’s internal controls manual
l the annual external audit plan for the group’s auditors. This review included the audit objectives, auditor
independence and objectivity policies, audit scope, team, timetable, deliverables and fee proposal
l authorisation of the amount and purposes of non-audit fees and, in particular in light of the support provided to
prepare for the possible disposal of the Handset Products division, ensuring that auditor objectivity and
independence were not compromised
l the external auditors’ year end report and the ﬁndings of their work and conﬁrmation that all signiﬁcant matters had
been satisfactorily treated
l a full and careful consideration of the performance of the external auditors since their appointment two years ago,
which found their work satisfactory and contribution effective, as a result of which the committee resolved to
recommend the re-appointment of KPMG Audit Plc as auditors to the company
l a review of the functioning of the internal audit process, the reports from the assignments completed in the year and
the plan proposed for the coming year, from which the committee concluded that the approach of peer review audit
within the ﬁnance function was operating effectively and represented a realistic allocation of resources within both
ﬁnance and the group; it therefore resolved that this approach should continue to be followed
l review of its terms of reference and recommendation of revised terms of reference for the committee that were
approved by the Board.
The Board has reviewed the position and is satisﬁed that the committee has members who have recent and relevant
ﬁnancial experience.
The remuneration committee
The remuneration committee is chaired by Rhys Williams. The other members are the other independent non-executive
directors: Richard Blake, Professor Stephen Burbank, Ian Hardington and Graham Meek. The remuneration committee’s
responsibilities include ensuring that the remuneration and service contract terms of the executive directors and senior
management are appropriate. The committee approves the grant of all share options.
The nominations committee
The nominations committee is chaired by Professor J David Rhodes. The other members are the independent
non-executive directors: Rhys Williams, Richard Blake, Professor Stephen Burbank, Ian Hardington and Graham Meek.
The nominations committee’s duties are confined to the approval, support or otherwise of appointments,
re-appointments and termination of employment or engagement of directors and the company secretary.
During the year, the nominations committee appointed external advisors to assist with the appointment of new directors.
The nominations committee has in place succession plans which have been developed with the assistance of external
recruitment advisors.
18 Filtronic plc Annual Report 2005 Corporate Governance
Statement
Attendance at Board meetings and committee meetings during the year ended 31 May 2005 was as follows:
Audit Remuneration
Board committee committee
Meetings held 1432
Directors’ attendance
Executives
Professor J David Rhodes 14 n/a n/a
John Roulston (appointed 6 September 2004) 9 n/a n/a
Charles Hindson (appointed 14 December 2004) 6 n/a n/a
Professor Christopher Snowden (resigned 6 April 2005) 9 n/a n/a
Alan Needle 14 n/a n/a
Iain Gibson (appointed 21 February 2005) 3 n/a n/a
Dr Christopher Mobbs 13 n/a n/a
John Samuel (resigned 10 June 2004) 1 n/a n/a
Non-executives
Rhys Williams 14 2 2
Richard Blake 13 32
Professor Stephen Burbank 13 2 1
Ian Hardington 12 2 2
Graham Meek 13 22
Relations with investors
Communications with investors are given high priority. There is regular dialogue with institutional investors including
presentations after the company’s preliminary announcement of the year-end results and at the half year, which are
attended by non-executive directors. Analyst reports and feedback from shareholders are discussed at Board meetings.
The Board uses the annual general meeting to communicate with private and institutional investors and welcomes their
participation. The Chairman aims to ensure that the chairmen of the audit and remuneration committees are available
at the annual general meeting to answer questions. Information is also available to all investors by way of the company’s
web site at www.ﬁltronic.com.
Going concern
As explained in note 1 of the ﬁnancial statements, the directors have reviewed the budgeted cash ﬂow and other
relevant information and have a reasonable expectation that the group has adequate resources to continue in
operational existence for the foreseeable future. For this reason, the directors continue to adopt the going concern basis
in preparing these ﬁnancial statements.
Filtronic plc Annual Report 2005 19 Directors’ Assessment
of Risk
Introduction
More than 85% of the company’ s revenue arises from the global communications market through the supply of technology
based electronic equipment that is produced in high volume at low prices. This business sector has demanding
performance standards that are set through international competition, resulting in risks to continued operations. 
In our communications activities, we develop products largely at the company’s risk in anticipation of customer
requirements; these may represent substantial investment in the context of the individual divisions’ operations. In the other
part of our activities, covering the defence sector, there is a much higher level of customer funded product development.
Market
Our principle market depends on the capital spending plans of the cellular telephone operators and reﬂects demand
for both network coverage and the introduction of new network facilities, for example 3G technologies. Over the
medium term, these operators have shown a cycle in their levels of demand, and this affects our level of activity. In
addition, we have seasonal variations in demand arising from the purchasing proﬁle of our OEM customers. As well as
these factors that may result in decreased revenue and earnings, we may also fail to forecast market movements correctly
so missing opportunities or wrongly predicting product longevity.
Other activities in the group, including antenna production by Handset Products and semiconductor components within
Integrated Products, depend on consumer demand for mobile handsets. This market may not continue its past
substantial growth and demand for our products depends on the market shares achieved by the OEMs we supply for
their mobile telephone models.
Manufacturing
In our communications market, production is demand led and customers may vary their requirements from the business
at short notice, so leading to changes in levels of goods supplied. Customers expect reducing prices, to satisfy which
we depend upon ongoing adequate control of our manufacturing cost base and provision of the correctly designed
technological solutions. Non-performance in these areas may diminish our market position. 
Achieving proﬁtability in the Integrated Products division depends on our production growing rapidly to meet the
current customer demand which, if not met, would lead to delays or reduction in potential output. 
Technology
Our product competitiveness is strongly inﬂuenced by technology choices at the product concept stage and throughout
execution of design to product launch. For products in the production cycle, technology insertion is often required as a
means of achieving price reductions, which underpin sales. The market is time sensitive and opportunities may be lost
if the technology we develop is not appropriate or ready for exploitation to match market demand, so having an adverse
effect on business performance.
Financial management
We have organised the business with an important part of our manufacturing based in low cost areas, using, where
possible, the linkage of currencies to reduce the risk of currency exposures. As a signiﬁcant part of our activities support
markets that are US dollar denominated, and the majority of our production activity across the group is based in China,
signiﬁcant weakening of the US Dollar or strengthening of the Chinese Yuan would unsettle this structure for our
production resources that is broadly neutral and could result in losses.
The ﬁnancial facilities of the group are considered adequate for its operations, whilst a substantial variation in operating
performance and working capital outside of the usual levels of activities may not be covered within the level of the
currently agreed debt facilities.
20 Filtronic plc Annual Report 2005 Composition of the remuneration committee
During the period 1 June 2004 to 31 May 2005 the remuneration committee consisted of the following non-executive
directors:
R J Williams (Chairman)
R J B Blake
Professor S B Burbank
I J Hardington
E G Meek
The committee receives advice in its deliberations concerning the remuneration of the executive directors from
Professor J D Rhodes. The committee’s recommendations have been accepted by the Board without amendment.
Compliance
The company has complied with the provisions in the Code of Best Practice relating to Directors’ Remuneration. In
preparing this report, the provisions in Schedule B to the Combined Code have been followed.
Policy on remuneration of executive directors and senior executives
(a) Total level of remuneration
The committee aims to ensure that remuneration packages offered are competitive and designed to attract, retain
and motivate executive directors and senior executives.
(b) The main components
The company’s policy is to structure remuneration packages so that an appropriate element comprises the grant of
share options which enables the company to align the interests of employees with those of shareholders.
The main components of remuneration payable are:
(i) Salary
Salary for each executive is determined by the remuneration committee taking into account the performance and
responsibilities of the individual. Electronic and electrical engineering is an international industry within which there
is a clear market in executive talent. The overriding factor in determining executive remuneration is market forces.
Salaries are normally reviewed on 1 July each year.
(ii) Bonuses
No bonuses were paid to any of the company’s executive during the year ended 31 May 2005 as in prior years. Under
the terms of their service contracts, J F Roulston and I A Gibson become entitled to deferred joining bonuses if they
are employed by the group until 31 May 2006. The amounts of the bonuses are J F Roulston £100,000 and I A Gibson
£70,000, and would be payable on 31 May 2006.
(iii) Share options
The directors believe that the opportunity to participate in the company’s shareholding is a key factor in attracting
and retaining executives of the right calibre and that share ownership by executive directors and senior executives
strengthens the link between their personal interests and those of the shareholders. The company’s policy is to grant
options at the point of recruitment or promotion. All grants of options are determined by the committee. The
committee takes account of guidelines issued by the Association of British Insurers and the National Association of
Pension Funds when making awards of options. Pursuant to resolutions of the shareholders passed at the
extraordinary general meeting held on 17 February 1999, the committee is authorised in exceptional cases to grant
options to a value of up to eight times an executive’s salary.
The remuneration committee has determined that the vesting of options granted under the Approved, Unapproved
and 1997 Schemes will be conditional upon adjusted operating proﬁt targets for the ﬁve ﬁnancial years following the
Filtronic plc Annual Report 2005 21
Remuneration Report
for the year ended 31 May 2005
Filtronic plc Annual Report 2005 21 Remuneration Report
for the year ended 31 May 2005
grant of options being achieved. These targets will be determined by the remuneration committee annually,
principally by reference to the budget set for the relevant year, and will be set at a level which the remuneration
committee determines will be challenging to those concerned. Adjusted operating proﬁt for this purpose is deﬁned
as operating proﬁt before goodwill amortisation and share compensation. The adjusted operating proﬁt target for
the year ended 31 May 2005 was not achieved and accordingly no options vested.
The terms of vesting and exercise of directors’ share options are the same as those which apply to all option holders
under the Approved, Unapproved and 1997 Schemes.
(c) Company policy on contracts of service
All the executive directors, except for J F Roulston, have rolling service contracts under which the notice period for
termination by either party is 6 months. J F Roulston has a rolling service contract under which the notice period
for termination by either party is 12 months reducing to 9 months on 6 September 2005, and to 6 months on
6 September 2006. There are no speciﬁc compensation commitments for early termination.
(d) Company pensions policy
The company’s policy is to offer UK executives membership of the Filtronic plc Retirement Beneﬁts Scheme. UK
executive directors who participate in the scheme do so on the same basis as all other employees of the company. 
The scheme is a funded, Inland Revenue approved, ﬁnal salary, occupational pension scheme. Its main features are:
(i) a normal pension age of 65;
(ii) pension at normal pension age of 1/60th of ﬁnal pensionable salary for each complete year of service;
(iii) death in service beneﬁt of four times pensionable salary;
(iv) pensions payable in the event of ill health; 
(v) spouse’s pension on death;
(vi) long term disability insurance.
Pensionable salary is deﬁned as the member’s basic annual salary excluding all bonuses and beneﬁts.
All scheme beneﬁts are subject to Inland Revenue limits.
Under the terms of their service contracts, J F Roulston and I A Gibson have a right to limited additional pension
contributions from the company to protect the expected values of their pensions on transfer to the scheme.
Under the terms of his service contract, C Hindson is eligible to join the scheme or the company will pay the
equivalent of the employer’s contribution, currently 10.5% of pensionable salary, into a personal pension plan of his
choice.
For Finnish employees including executives, the Finnish subsidiaries contribute to deﬁned contribution plans in
accordance with Finnish regulations and practices.
For US employees including executives, the US subsidiaries contribute to a deﬁned contribution plan under section
401(k) of the Internal Revenue Code.
For Australian employees including executives, the Australian subsidiary contributes to a deﬁned contribution
superannuation fund.
(e) Company policy on external appointments
The remuneration committee reviews any request by an executive director with regard to a proposed external
appointment and deals with each request on its individual merits. The overriding requirement is for each executive,
as a term of his contract, to devote substantially the whole of his time, skill and attention to the affairs of the group.
Remuneration of non-executive directors
The non-executive directors have rolling agreements for services with the company. These are terminable by the
company or the non-executive director, as the case may be, on three months notice and are reviewed annually by
the Board.
The Board determines the remuneration of the non-executive directors.
22 Filtronic plc Annual Report 2005 Remuneration Report
for the year ended 31 May 2005
The information on pages 23 and 24 has been audited.
Directors’ remuneration
Total remuneration
Salary Car excluding pension
or fees allowance Beneﬁts contributions
2005 2005 2005 2005 2004
£000 £000 £000 £000 £000
Executives
Prof J D Rhodes 245 – 27 272 214
J F Roulston (appointed 6 September 2004) 186 1 2 189 –
C Hindson (appointed 14 December 2004) 70 3 – 73 –
Prof C M Snowden (resigned 6 April 2005) 148 – 17 165 167
A R Needle 197 – 12 209 176
I A Gibson (appointed 21 February 2005) 49 – 1 50 –
Dr C I Mobbs 171 6 1 178 142
J Samuel (resigned 10 June 2004) 13 – 2 15 162
C E Schoﬁeld (resigned 2 April 2004) – – – – 73
Non-executives
R J Williams 30 – – 30 24
R J B Blake 30 – – 30 24
Prof S B Burbank 30 – – 30 24
I J Hardington 30 – – 30 24
E G Meek 30 – –30 24
1111 1
Total 2005 1,229 10 62 1,301 1,054
5555 5
Total 2004 977 10 67 1,054
5555
Beneﬁts incorporate all assessable tax beneﬁts arising from employment by the company and relate in the main to the
provision of a fully expensed company car and private medical insurance.
Directors’ pension benefits
Deﬁned beneﬁts scheme
Transfer value
of increase
in accrued
Increase in Increase in Increase in pension
accrued accrued transfer excluding
pension pension value less inﬂation less
excluding including directors’ directors’
Accrued inﬂation inﬂation Transfer Transfer contributions contributions
pension at during the during the value at value at during the during the
31 May 2005 year year 31 May 2005 1 June 2004 year year
£000 £000 £000 £000 £000 £000 £000
Prof J D Rhodes 97 12 15 1,506 1,210 284 165
J F Roulston 2 2 2 27 – 18 18
Prof C M Snowden 17 3 3 135 105 22 16
A R Needle 53 6 8 474 399 64 42
I A Gibson 1 1 1 6 –5 5
Dr C I Mobbs 53 7 8 324 270 45 29
As C Hindson has not joined the deﬁned beneﬁts scheme, he has accrued contributions of £7,000 (2004 nil), which the
company will pay into his personal pension plan. The company paid contributions of £2,000 (2004 £15,000) into a deﬁned
contribution scheme for J Samuel (resigned 10 June 2004), who is not a member of the deﬁned beneﬁts scheme.
Non-executive directors are not entitled to any pension beneﬁts.
Filtronic plc Annual Report 2005 23 Remuneration Report
for the year ended 31 May 2005
Directors’ shareholdings
31 May 2005 31 May 2004
Prof J D Rhodes 3,730,001 3,730,001
J F Roulston – –
C Hindson – –
A R Needle 257,202 257,202
I A Gibson – –
Dr C I Mobbs 295,617 295,617
R J Williams 102,609 102,609
R J B Blake 8,500 8,500
Prof S B Burbank 900 900
I J Hardington – –
E G Meek 75,000 75,000
11
4,469,829 4,469,829
55
All of the above shareholdings are held beneﬁcially.
Prof C M Snowden held no shares in the period 1 June 2004 until his resignation on 6 April 2005. J Samuel held 370,459
shares in the period 1 June 2004 until his resignation on 10 June 2004.
Directors’ interests in share options
Granted Exercised
Exercise Option 31 May during during 31 May
Executive Share Option Scheme period price 2004 the year the year 2005
J F Roulston 1/10/2006 – 29/10/2014 148p – 300,000 – 300,000
C Hindson 1/10/2006 – 14/12/2014 198p – 200,000 – 200,000
I A Gibson 1/10/2006 – 29/4/2015 200p – 150,000 – 150,000
Prof C M Snowden 1/10/1999 – 5/10/2008 383p 240,000 – – 240,000
1111
Total all directors 240,000 650,000 – 890,000
5555
Under the terms of his service contract, subject to certain conditions, if C Hindson remains employed by the group until
14 December 2005 from that date he will have the right to relinquish his share options in exchange for either 85,000
shares or a £200,000 cash payment.
The closing middle market share price on 31 May 2005 was 197p, and on 31 May 2004 it was 301p. The range of closing
middle market share prices during the year ended 31 May 2005 was 142p – 320p.
There were no changes to the directors’ interests between 31 May 2005 and 1 August 2005. The company’s register of
directors’ interests which is open to inspection at the registered ofﬁce contains full details of directors’ shareholdings
and share options.
24 Filtronic plc Annual Report 2005 Remuneration Report
for the year ended 31 May 2005
Performance graph
This graph illustrates the performance of the company’s shares measured by Total Shareholder Return (TSR) relative to
a broad equity market index over the past ﬁve years. The FTSE All Share is considered to be the most appropriate index
against which to measure performance, as the company has been a constituent of the FTSE All Share throughout the
ﬁve-year period and the index is widely used. TSR is the measure of the returns that a company has provided for its
shareholders, reﬂecting share price movements and assuming reinvestment of dividends.
Total Shareholder Return
1 June 2000 to 31 May 2005 Weekly Indexed
Approved by the Board on 1 August 2005 and signed on its behalf by
M Moynihan
Company Secretary
2000 2001 2002 2003 2004 2005
0
20
40
60
80
100
120
140
Filtronic – Total Return Indexed
FTSE All Share – Total Return Indexed
Source: Datastream
Filtronic plc Annual Report 2005 25 Company law requires the directors to prepare ﬁnancial statements for each ﬁnancial period which give a true and fair
view of the state of affairs of the company and the group and of the proﬁt or loss for that period. In preparing those
ﬁnancial statements, the directors are required to:
a) select suitable accounting policies and then apply them consistently;
b) make judgements and estimates that are reasonable and prudent;
c) state whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the ﬁnancial statements; and
d) prepare the ﬁnancial statements on the going concern basis unless it is inappropriate to presume that the company
and group 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 to enable them to ensure that the accounts comply with the Companies Act.
They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
group and to prevent and detect fraud and other irregularities.
26 Filtronic plc Annual Report 2005
Statement of Directors’
Responsibilities
26 Filtronic plc Annual Report 2005 Report of the independent auditors, KPMG Audit Plc, to the members of Filtronic plc
We have audited the ﬁnancial statements on pages 28 to 60. We have also audited the information in the directors’
remuneration report that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report and the directors’ remuneration report. As described on
page 26, this includes responsibility for preparing the ﬁnancial statements in accordance with applicable United Kingdom
law and accounting standards. Our responsibilities, as independent auditors, are established in the United Kingdom by
statute, the Auditing Practices Board, the Listing Rules of the Financial Services Authority, and by our profession’s ethical
guidance.
We report to you our opinion as to whether the ﬁnancial statements give a true and fair view and whether the ﬁnancial
statements and the part of the directors’ remuneration report to be audited have been properly prepared in accordance
with the Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent with the
ﬁnancial statements, if the company has not kept proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information speciﬁed by law regarding directors’ remuneration and
transactions with the group is not disclosed.
We review whether the statement on pages 15 to 19 reﬂects the company’s compliance with the nine provisions of the
2003 FRC code speciﬁed for our review by the Listing Rules, and we report if it does not. We are not required to consider
whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness
of the group’s corporate governance procedures or its risk and control procedures.
We read the other information contained in the annual report, including the corporate governance statement and the
unaudited part of the directors’ remuneration report, and consider whether it is consistent with the audited ﬁnancial
statements. We consider the implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the ﬁnancial statements.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the ﬁnancial statements
and the part of the directors’ remuneration report to be audited. It also includes an assessment of the signiﬁcant
estimates and judgements made by the directors in the preparation of the ﬁnancial statements, and of whether the
accounting policies are appropriate to the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements and the part of
the directors’ remuneration report to be audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in
the ﬁnancial statements and the part of the directors’ remuneration report to be audited.
Opinion
In our opinion:
i) the ﬁnancial statements give a true and fair view of the state of affairs of the company and the group as at
31 May 2005 and of the proﬁt of the group for the year then ended; and
ii) 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.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Leeds
1 August 2005
Filtronic plc Annual Report 2005 27
Independent Auditors’
Report Consolidated Profit and
Loss Account
for the year ended 31 May 2005
Restated
2005 2004
note £000 £000
Sales 5 262,865 245,076
5 5
Operating proﬁt 6 6,779 4,804
1 1
Exceptional proﬁt on disposal of tangible ﬁxed assets 11 2,356 –
1 1
Exceptional proﬁt on disposal of business 12 – 4,842
1 1
Net interest payable and similar charges 13 (4,104) (5,550)
Currency exchange gains/(losses) 14 522 (644)
Exceptional loss on repayment of debt 15 – (2,498)
1 1
(3,582) (8,692)
1 1
1 1
Proﬁt on ordinary activities before taxation 5,553 954
Taxation on proﬁt on ordinary activities 16 (241) (2,730)
1 1
Proﬁt/(loss) on ordinary activities after taxation 5,312 (1,776)
Dividends 17 (2,021) (2,015)
1 1
Proﬁt retained/(deﬁcit) for the year 32 3,291 (3,791)
5 5
Earnings/(loss) per share
Basic 18 7.10p (2.38)p
Diluted 18 7.09p (2.38)p
Dividend per share 17 2.70p 2.70p
All the results relate to continuing operations.
28 Filtronic plc Annual Report 2005 Consolidated Balance Sheet
at 31 May 2005
2005 2004
note £000 £000
Fixed assets
Intangible assets 19 29,195 30,902
Tangible assets 21 79,793 86,300
1 1
108,988 117,202
1 1
Current assets
Stocks 22 34,802 36,618
Debtors 23 67,924 54,480
Deferred tax asset 24 2,309 –
Cash at bank and in hand 25 6,563 2,070
1 1
111,598 93,168
Creditors: amounts falling due within one year 26 70,417 51,767
1 1
Net current assets 41,181 41,401
1 1
Total assets less current liabilities 150,169 158,603
Creditors: amounts falling due after one year 27 33,000 44,000
Provision for deferred tax 28 661 582
Deferred income 29 10,730 12,908
1 1
Net assets 105,778 101,113
5 5
Capital and reserves
Called up share capital 30 7,484 7,465
Share premium account 31 139,172 137,641
Shares to be issued 31 – 2,255
Revaluation reserve 31 106 106
Other reserve 31 5,584 2,020
Proﬁt and loss account 32 (46,568) (48,374)
1 1
Equity shareholders’ funds 105,778 101,113
5 5
Approved by the Board on 1 August 2005 and signed on its behalf by
Professor J D Rhodes CBE FRS FREng
Chairman
Filtronic plc Annual Report 2005 29 Consolidated Cash Flow
Statement
for the year ended 31 May 2005
Restated
2005 2004
note £000 £000
Net cash ﬂow from operating activities A 19,595 16,951
1 1
Returns on investment and servicing of ﬁnance
Interest received 85 95
Interest paid (4,189) (4,852)
Bank loan arrangement fee paid – (500)
Premium paid on repayment of debt – (1,517)
1 1
Net cash ﬂow from returns on investment and servicing of ﬁnance (4,104) (6,774)
1 1
Tax paid (1,846) (2,811)
1 1
Capital expenditure
Purchase of tangible ﬁxed assets (12,963) (11,718)
Sale of tangible ﬁxed assets 1,555 305
Exceptional sale of tangible ﬁxed assets (note 11) 6,349 –
Government grants received 1,000 1,297
Government grants repaid (150) –
1 1
Net cash ﬂow from capital expenditure (4,209) (10,116)
1 1
Disposals (note 12)
Cash consideration received – 6,970
Disposal costs paid – (471)
1 1
Net cash ﬂow from disposals – 6,499
1 1
Equity dividends paid (2,018) (2,008)
1 1
1 1
Net cash ﬂow before ﬁnancing 7,418 1,741
1 1
Financing
Issue of shares – 275
Loans taken out – 60,000
Loans repaid (6,000) (66,947)
1 1
Net cash ﬂow from ﬁnancing (6,000) (6,672)
1 1
1 1
Increase/(decrease) in cash B 1,418 (4,931)
5 5
30 Filtronic plc Annual Report 2005 Notes to the Consolidated
Cash Flow Statement
for the year ended 31 May 2005
A Reconciliation of operating profit to net cash flow from operating activities
Restated
2005 2004
£000 £000
Operating proﬁt 6,779 4,804
Goodwill amortisation 2,222 2,256
Share compensation 43 232
Depreciation 14,572 17,542
Proﬁt on disposal of tangible ﬁxed assets (235) (44)
Licence fee released (2,335) (789)
Government grants released (693) (743)
Movement in stocks 2,107 (4,901)
Movement in debtors (13,249) (7,541)
Movement in creditors 10,384 6,135
1 1
Net cash ﬂow from operating activities 19,595 16,951
5 5
B Reconciliation of net cash flow to movement in net debt
Restated
2005 2004
£000 £000
Increase/(decrease) in cash 1,418 (4,931)
Cash ﬂow from debt 6,000 6,947
1 1
Change in net debt from cash ﬂows 7,418 2,016
Non-cash movement – (1,274)
Currency exchange movement 486 3,379
1 1
Movement in net debt 7,904 4,121
Opening net debt (51,299) (55,420)
1 1
Closing net debt (43,395) (51,299)
5 5
C Analysis of movement in net debt
At Currency At
1 June Cash exchange 31 May
2004 ﬂow movement 2005
£000 £000 £000 £000
Cash at bank and in hand 2,070 4,007 486 6,563
Bank overdraft (3,369) (2,589) – (5,958)
111 1
Net (overdraft)/cash (1,299) 1,418 486 605
111 1
Loan due within one year (6,000) (5,000) – (11,000)
Loan due after one year (44,000) 11,000 – (33,000)
111 1
Loan (50,000) 6,000 – (44,000)
111 1
111 1
Net debt (51,299) 7,418 486 (43,395)
555 5
Filtronic plc Annual Report 2005 31 Consolidated Statement of
Total Recognised Gains
and Losses
for the year ended 31 May 2005
Restated
2005 2004
£000 £000
Proﬁt/(loss) on ordinary activities after taxation 5,312 (1,776)
Currency exchange movement arising on consolidation 1,331 (9,011)
Currency exchange movement on loan (note 40) – 4,249
1 1
Total recognised gains and losses for the year 6,643 (6,538)
5 5
32 Filtronic plc Annual Report 2005
Consolidated Reconciliation
of Shareholders’ Funds
for the year ended 31 May 2005
Restated
2005 2004
£000 £000
Proﬁt/(loss) on ordinary activities after taxation 5,312 (1,776)
Dividends (2,021) (2,015)
1 1
Proﬁt retained/(deﬁcit) for the year 3,291 (3,791)
Currency exchange movement arising on consolidation 1,331 (9,011)
Currency exchange movement on loan (note 40) – 4,249
Issue of shares 2,298 2,573
Shares to be issued – shares issued (2,298) (2,298)
Shares to be issued – share compensation 43 232
1 1
Movement in shareholders’ funds 4,665 (8,046)
Opening shareholders’ funds 101,113 109,159
1 1
Closing shareholders’ funds 105,778 101,113
5 5 Company Balance Sheet
at 31 May 2005
2005 2004
note £000 £000
Fixed assets
Tangible assets 21 9,502 9,711
Investments 20 126,764 28,276
1 1
136,266 37,987
1 1
Current assets
Debtors 23 123,542 216,092
Cash at bank and in hand 25 4,000 5
1 1
127,542 216,097
Creditors: amounts falling due within one year 26 49,049 17,044
1 1
Net current assets 78,493 199,053
1 1
Total assets less current liabilities 214,759 237,040
Creditors: amounts falling due after one year 27 33,000 44,000
1 1
Net assets 181,759 193,040
5 5
Capital and reserves
Called up share capital 30 7,484 7,465
Share premium account 31 139,172 137,641
Shares to be issued 31 – 2,255
Proﬁt and loss account 32 35,103 45,679
1 1
Equity shareholders’ funds 181,759 193,040
5 5
Approved by the Board on 1 August 2005 and signed on its behalf by
Professor J D Rhodes CBE FRS FREng 
Chairman
Filtronic plc Annual Report 2005 33 Accounting Policies
Basis of accounting
The ﬁnancial statements have been prepared on the historical cost basis of accounting and in accordance with
applicable United Kingdom accounting standards. The following accounting policies have been applied consistently in
accounting for material items in the ﬁnancial statements.
Consolidation
The ﬁnancial statements consolidate the proﬁt and loss accounts, balance sheets and cash ﬂow statements of the
company and all of its subsidiaries.
The proﬁt and loss accounts and cash ﬂow statements of overseas subsidiaries are translated at the average rate of
exchange for the year (see note 2). The balance sheets of overseas subsidiaries are translated at the rate of exchange
ruling at the balance sheet date. Currency exchange movements arising on overseas subsidiaries’ net assets, long term
intra group loans and intra group dividends are taken directly to reserves.
Sales
Sales represents amounts receivable, excluding value added tax and overseas sales taxes, in respect of goods provided
in the ordinary course of business.
Research and development expenditure
Research and development expenditure is charged to the proﬁt and loss account as incurred.
Operating leases
Operating lease rentals are charged to the proﬁt and loss account on a straight line basis over the lease term.
Share compensation
Share compensation due to employees is charged to the proﬁt and loss account over the vesting period of the shares.
Debt issue costs
Costs incurred in issuing debt are amortised over the term of the loan.
Government grants
Government grants which are related to revenue expenditure are recognised in the proﬁt and loss account so as to match
the expenditure to which they relate. Capital grants are shown as deferred income and credited to the proﬁt and loss
account over the expected useful economic life of the related asset in line with the depreciation policy set out below.
Foreign currency
Sales and purchases in foreign currencies are translated at the rate of exchange ruling at the time of the transaction.
Monetary assets and liabilities are translated at the rate of exchange ruling at the balance sheet date.
Currency exchange movements are included in the proﬁt and loss account for the year, except for those arising on long
term loans. The currency exchange movements on long term loans are taken directly to reserves to the extent that they
are offset by the currency exchange movements arising on the net assets of overseas subsidiaries and long term intra
group loans that they ﬁnance. Any currency exchange movements which are not offset are included in the proﬁt and loss
account for the year.
34 Filtronic plc Annual Report 2005 Accounting Policies
Goodwill
Goodwill arising on acquisitions is capitalised in the consolidated balance sheet as intangible ﬁxed assets. Goodwill is
amortised in equal instalments over the lower of 20 years or its estimated economic life. Goodwill is reviewed for
impairment at the end of the ﬁrst full ﬁnancial year following the acquisition, and in other periods if there are indications
that the carrying value may not be recoverable. Goodwill that arose on acquisitions prior to 1 June 1998 was set off
directly against reserves.
Tangible fixed assets
Fixed assets are included in the ﬁnancial statements at cost less accumulated depreciation.
Depreciation is provided in order to write off the cost of tangible ﬁxed assets in equal instalments over their useful lives
as follows:
Freehold land Not depreciated
Freehold buildings 50 years
Plant and machinery 2–10 years
Fixtures and ﬁttings 2–10 years
Motor vehicles 3–5 years
The carrying values of tangible ﬁxed assets are reviewed for impairment if there are indications that the carrying values
may not be recoverable.
Stocks and work in progress
Stocks and work in progress are stated at the lower of cost and estimated net realisable value. Cost comprises the
weighted average cost of raw materials and components together with direct labour and attributable overheads.
Estimated net realisable value is based on the estimated selling price less further costs expected to be incurred to
completion and sale.
Deferred taxation
Deferred tax is recognised as a liability or an asset if the transactions or events that give rise to an obligation to pay more
tax in the future or a right to pay less tax in the future have occurred by the balance sheet date. Deferred tax assets are
recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable
proﬁts from which the underlying timing differences can be deducted. Deferred tax is not provided on unremitted
earnings of overseas subsidiaries where there is no commitment to remit these earnings. Deferred tax is measured on
an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse,
based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Pension schemes
The company operates a deﬁned beneﬁts pension scheme for United Kingdom employees. The contributions to the
scheme are charged to the proﬁt and loss account so as to spread the cost over the employees’ working lives with the
company. The company’s overseas subsidiaries operate deﬁned contribution pension schemes for their employees.
Contributions are charged to the proﬁt and loss account as they become payable.
Filtronic plc Annual Report 2005 35 Notes to the
Financial Statements
for the year ended 31 May 2005
1 Basis of preparation
Accounting policies
The ﬁnancial statements have been prepared in accordance with the accounting policies set out on pages 34
and 35.
Financial position and market conditions
The group is currently experiencing increases in demand across its operating divisions, from both existing and new
customers in the Wireless Infrastructure division, arising from new product allocations from the principal customer in
the Handset Products division and from the new defence contract and active ramp up of volume semiconductors
supply within the Integrated Products division, as discussed in the Group CEO’s Operating Review.
Global markets, particularly the technology and telecoms sector, continue to experience a high degree of volatility.
It remains difﬁcult to predict total volumes and timing with certainty. Securing lower costs of production, through
greater output from the group’s Chinese facility and commencement of activities in Hungary and other cost
reduction programmes remain important areas. In addition, the Newton Aycliffe foundry is required to operate
successfully to meet the substantial increases in the volume of semiconductor wafers it is expected to produce to
meet current and ongoing customer demand. This is critical to ensuring its expected contribution to the group.
The Board has built all of these circumstances into their working capital forecasts and has modelled various business
scenarios, including both retention and disposal of the Handset Products division. The Board has recognised the
uncertainties referred to above and taken into account the support received from the banks providing the
renegotiated debt facilities, including the renewal of the group’s overdraft facility of £9,000,000 until 31 July 2006.
Thus the Board has concluded, based on these scenarios, that the group’s funding remains adequate and therefore
that it is appropriate for the ﬁnancial statements to be prepared on a going concern basis.
36 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
2 Change of accounting policy
The accounting policy for the translation of the proﬁt and loss accounts and cash ﬂow statements of overseas
subsidiaries has been changed. Under the previous policy the proﬁt and loss accounts and cash ﬂow statements of
the overseas subsidiaries were translated at the rate of exchange ruling at the balance sheet date. From 1 June 2004
the  proﬁt and loss accounts and cash ﬂow statements of the overseas subsidiaries are translated at the average rate
of exchange for the year. The balance sheets of the overseas subsidiaries continue to be translated at the rate of
exchange ruling at the balance sheet date. The directors consider that the revised accounting policy provides a fairer
view of the group’s results as a signiﬁcant proportion of the group’s operations are overseas.
The results for the year ended 31 May 2004 have been restated using the revised accounting policy. There is no
change to the consolidated balance sheet at 31 May 2004. The effect of the change in accounting policy on the
results for the year ended 31 May 2004 is as follows:
As previously Prior year
reported adjustment Restated
2004 2004 2004
£000 £000 £000
Sales 237,203 7,873 245,076
555
Operating proﬁt 3,707 1,097 4,804
555
(Loss)/proﬁt on ordinary activities before taxation (409) 1,363 954
555
Loss on ordinary activities after taxation (3,007) 1,231 (1,776)
555
Currency exchange movement arising on consolidation (7,780) (1,231) (9,011)
555
Filtronic plc Annual Report 2005 37 Notes to the
Financial Statements
for the year ended 31 May 2005
3 Geographical origin segment analysis
Restated
2005 2004
£000 £000
Sales
United Kingdom 106,447 92,486
Finland 54,434 63,479
United States of America 65,880 52,523
Australia 4,300 4,982
China 86,988 50,887
Inter segment (55,184) (19,281)
1 1
262,865 245,076
5 5
Operating proﬁt
United Kingdom (23,082) (15,896)
Finland (1,841) 2,216
United States of America 9,356 2,963
Australia (2,329) (1,418)
China 24,675 16,939
1 1
6,779 4,804
5 5
Operating proﬁt is after charging goodwill amortisation:
Finland 2,028 2,046
United States of America 194 210
1 1
2,222 2,256
5 5
Net operating assets
United Kingdom 64,207 66,062
Finland 45,807 48,166
United States of America 32,018 26,616
Australia 997 4,716
China 7,723 10,079
1 1
Net operating assets 150,752 155,639
Non-operating net liabilities (1,579) (3,227)
Net debt (43,395) (51,299)
1 1
Net assets 105,778 101,113
5 5
38 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
4 Business segment analysis
Restated
2005 2004
£000 £000
Sales
Wireless Infrastructure 168,425 145,219
Handset Products 49,974 60,154
Integrated Products 43,593 38,450
Central Services 3,575 3,857
Inter segment (2,702) (2,604)
1 1
262,865 245,076
5 5
Operating proﬁt
Wireless Infrastructure 18,062 10,753
Handset Products 3,589 11,180
Integrated Products (9,857) (13,392)
Central Services (5,015) (3,737)
1 1
6,779 4,804
5 5
Operating proﬁt is after charging goodwill amortisation:
Handset Products 2,028 2,046
Integrated Products 194 210
1 1
2,222 2,256
5 5
Net operating assets
Wireless Infrastructure 72,902 72,384
Handset Products 37,293 42,074
Integrated Products 41,020 42,199
Central Services (463) (1,018)
1 1
Net operating assets 150,752 155,639
Non-operating net liabilities (1,579) (3,227)
Net debt (43,395) (51,299)
1 1
Net assets 105,778 101,113
5 5
Filtronic plc Annual Report 2005 39 Notes to the
Financial Statements
for the year ended 31 May 2005
5 Sales analysis by destination
Restated
2005 2004
£000 £000
United Kingdom 11,447 15,714
Europe 140,253 125,520
Americas 59,612 35,461
Asia Paciﬁc 51,553 68,381
1 1
262,865 245,076
5 5
6 Operating profit
Restated
2005 2004
£000 £000
Income
Sales 262,865 245,076
Increase in stocks of ﬁnished goods and work in progress 1,179 3,455
1 1
264,044 248,531
5 5
Costs
Raw materials and consumables 126,966 114,713
1 1
Staff costs:
Wages and salaries 62,131 61,245
Social security costs 6,589 6,286
Other pension costs 3,975 4,076
Share compensation (note 8) 43 232
1 1
72,738 71,839
1 1
Depreciation 14,572 17,542
1 1
Goodwill amortisation 2,222 2,256
1 1
Other operating charges 40,767 37,377
1 1
1 1
257,265 243,727
5 5
1 1
Operating proﬁt 6,779 4,804
5 5
40 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
7 Profit and loss account items
Restated
2005 2004
£000 £000
Operating proﬁt is stated after charging/(crediting):
Research and development costs 31,082 28,682
Proﬁt on disposal of tangible ﬁxed assets (235) (44)
Operating lease rentals – land and buildings 1,166 1,001
– other 1,885 1,948
Licence fee released (2,335) (789)
Government grants released (693) (743)
Auditors’ remuneration – audit services – statutory audit 216 203
– audit related regulatory reporting 44 50
– tax services – compliance 22 28
– advisory 20 –
– further assurance services 75 10
5 5
Included in the group statutory audit fee is £63,000 (2004 £40,000) for the company.
8 Share compensation
2005 2004
£000 £000
Share compensation 43 232
5 5
As a result of the acquisition of Filtronic Sigtek, Inc. on 22 August 2000, a cumulative charge of £4,284,000,
comprising the issue to certain employees of Filtronic Sigtek, Inc. of 364,067 ordinary shares of 10p each in Filtronic
plc, arose over the four year period following the acquisition. This share compensation was contingent on Filtronic
Sigtek, Inc. maintaining the number and quality of its engineers over that period.
9 Employees
The monthly average number of people, including executive directors, employed by the group comprised:
2005 2004
Number Number
Geographical segment
United Kingdom 1,194 1,315
Finland 568 543
United States of America 461 443
Australia 108 107
China 1,586 960
Japan 1 1
1 1
3,918 3,369
5 5
Business segment
Wireless Infrastructure 2,163 1,756
Handset Products 1,019 861
Integrated Products 669 690
Central Services 67 62
1 1
3,918 3,369
5 5
Filtronic plc Annual Report 2005 41 Notes to the
Financial Statements
for the year ended 31 May 2005
10 Directors’ remuneration
Details of the remuneration, pension entitlements and share options of the directors are set out in the remuneration
report on pages 21 to 25.
11 Exceptional profit on disposal of tangible fixed assets
During the year two freehold properties were sold:
2005 2004
£000 £000
Disposal proceeds 6,349 –
5 5
Cost 4,821 –
Depreciation (828) –
1 1
Net book value 3,993 –
Exceptional proﬁt on disposal of tangible ﬁxed assets 2,356 –
1 1
6,349 –
5 5
12 Exceptional profit on disposal of business
On 31 December 2003 the electronic warfare business of Filtronic Solid State was sold. The disposal is analysed
as follows:
Restated
2005 2004
£000 £000
Consideration
Cash – 6,970
Disposal costs – (471)
1 1
– 6,499
5 5
Net assets disposed
Tangible ﬁxed assets – 864
Stocks – 535
Debtors – 677
Creditors – (419)
1 1
– 1,657
Exceptional proﬁt on disposal of business – 4,842
1 1
– 6,499
5 5
The electronic warfare business of Filtronic Solid State was located in the United States of America and formed part
of the Integrated Products business segment. For the seven months up to its disposal on 31 December 2003 the
disposed business had sales of £3,891,000 resulting in an operating loss of £36,000.
42 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
13 Net interest payable and similar charges
2005 2004
£000 £000
Interest receivable
Interest on bank deposits 85 95
1 1
Interest payable and similar charges
Interest on bank borrowings (4,189) (1,233)
Interest on other loans – (3,619)
Bank loan arrangement fee – (500)
Debt issue costs amortisation – (293)
1 1
(4,189) (5,645)
1 1
1 1
Net interest payable and similar charges (4,104) (5,550)
5 5
14 Currency exchange gains/(losses)
Restated
2005 2004
£000 £000
Currency exchange gains/(losses) 522 (2,664)
Currency exchange gain on loan (note 40) – 2,020
1 1
522 (644)
5 5
15 Exceptional loss on repayment of debt
2005 2004
£000 £000
Premium paid on repayment of debt – (1,517)
Debt issue costs written off on repayment of debt – (981)
1 1
– (2,498)
5 5
Filtronic plc Annual Report 2005 43 Notes to the
Financial Statements
for the year ended 31 May 2005
16 Taxation on profit on ordinary activities
Restated
2005 2004
£000 £000
Current taxation
United Kingdom 11 27
Overseas 2,424 2,820
1 1
2,435 2,847
1 1
Deferred taxation
Overseas origination and reversal of timing differences (2,194) (117)
1 1
1 1
241 2,730
5 5
The current taxation charge for the year arises primarily from the group’s operations in China and Finland, where
taxable proﬁts cannot be relieved by losses available in other jurisdictions.
The deferred taxation credit arises from the group’s operations in the United States of America, where a proportion
of deferred tax assets relating to tax losses carried forward has been recognised.
The exceptional items had no effect on the taxation charge.
The current taxation charged for the period is higher than the standard rate of corporation tax in the United
Kingdom. The difference is analysed below:
Restated
2005 2004
£000 £000
Proﬁt on ordinary activities before taxation 5,553 954
1 1
Proﬁt on ordinary activities multiplied by standard rate of
corporation tax in the UK of 30% (2004 30%) 1,666 286
Effect of:
Disallowable items 96 256
Disallowable goodwill amortisation 497 600
Depreciation in advance of capital allowances 3,496 2,817
Tax allowance on impaired goodwill (319) (501)
Other timing differences (272) (541)
Tax losses carried forward 5,977 7,338
Tax losses brought forward (2,564) (1,583)
Start-up years proﬁt exemption and rate reduction in China (2,509) (1,422)
Overseas tax rate differences (3,633) (2,798)
Foreign exchange differences – (1,605)
1 1
Current taxation 2,435 2,847
5 5
The group taxation charge is expected to be primarily the taxation charge on proﬁts arising in China and Finland.
44 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
17 Dividends
2005 2004 2005 2004
per share per share £000 £000
Interim dividend – paid 0.90p 0.90p 674 671
Final dividend – proposed 1.80p 1.80p 1,347 1,344
1 1 1 1
2.70p 2.70p 2,021 2,015
5 5 5 5
18 Earnings/(loss) per share
Restated
2005 2004
£000 £000
Proﬁt/(loss) on ordinary activities after taxation 5,312 (1,776)
5 5
000 000
Weighted average number of shares in issue 74,797 74,508
Dilution effect of share options 84 –
Dilution effect of contingently issuable shares 45 –
1 1
Diluted weighted average number of shares 74,926 74,508
5 5
Basic earnings/(loss) per share 7.10p (2.38)p
5 5
Diluted earnings/(loss) per share 7.09p (2.38)p
5 5
Filtronic plc Annual Report 2005 45 Notes to the
Financial Statements
for the year ended 31 May 2005
19 Intangible fixed assets
The group
Goodwill
£000
Cost
At 1 June 2004 73,863
Currency exchange movement 883
1
At 31 May 2005 74,746
5
Amortisation
At 1 June 2004 42,961
Charge for the year 2,222
Currency exchange movement 368
1
At 31 May 2005 45,551
5
Net book value at 31 May 2005 29,195
5
Net book value at 31 May 2004 30,902
5
The net book value of goodwill at 31 May 2005 comprises £26,598,000 (2004 £28,123,000) relating to the Handset
Products operations in Finland and £2,597,000 (2004 £2,779,000) relating to the Integrated Products operations in
the United States of America. The goodwill is amortised over its estimated economic life of 20 years.
20 Investments
The company
Subsidiaries
£000
Cost
At 1 June 2004 36,006
Group transfers 120,736
Capital repaid (21,648)
1
At 31 May 2005 135,094
5
Amount provided
At 1 June 2004 7,730
Amount provided in the year 600
1
At 31 May 2005 8,330
5
Net book value at 31 May 2005 126,764
5
Net book value at 31 May 2004 28,276
5
The amount provided of £8,330,000 is primarily against the cost of the investment in Filtronic Sigtek, Inc.
Group transfers and capital repaid relate to a group reorganisation undertaken during the year to prepare for the
potential disposal of the Handset Products division.
A complete list of the company’s subsidiaries, all of which are wholly owned, can be found on page 61.
46 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
21 Tangible fixed assets
Freehold Plant & Fixtures Motor
land & buildings machinery & ﬁttings vehicles Total
£000 £000 £000 £000 £000
The group
Cost
At 1 June 2004 47,544 122,507 11,583 335 181,969
Additions 77 11,007 1,856 23 12,963
Disposals (5,170) (3,911) (163) (67) (9,311)
Currency exchange movement 264 752 158 3 1,177
11111
At 31 May 2005 42,715 130,355 13,434 294 186,798
55555
Depreciation
At 1 June 2004 6,580 81,028 7,787 274 95,669
Charge for the year 966 12,178 1,405 23 14,572
Disposals (500) (3,317) (119) (62) (3,998)
Currency exchange movement 51 590 116 5 762
11111
At 31 May 2005 7,097 90,479 9,189 240 107,005
55555
Net book value at 31 May 2005 35,618 39,876 4,245 54 79,793
5 5555
Net book value at 31 May 2004 40,964 41,479 3,796 61 86,300
5 5555
The company
Cost
At 1 June 2004 10,867 632 84 60 11,643
Additions 32 71 72 – 175
11111
At 31 May 2005 10,899 703 156 60 11,818
55555
Depreciation
At 1 June 2004 1,470 399 53 10 1,932
Charge for the year 271 90 8 15 384
1 1 1 11
At 31 May 2005 1,741 489 61 25 2,316
5 5 555
Net book value at 31 May 2005 9,158 214 95 35 9,502
55555
Net book value at 31 May 2004 9,397 233 31 50 9,711
55555
Filtronic plc Annual Report 2005 47 Notes to the
Financial Statements
for the year ended 31 May 2005
21 Tangible fixed assets (continued)
An impairment review has been carried out in respect of certain of the group’s tangible ﬁxed assets. Following this
review, the Board has concluded that no impairment has taken place.
In carrying out an impairment review under Financial Reporting Standard 11 “Impairment of Fixed Assets and
Goodwill”, the Board has reviewed value in use calculations for the compound semiconductor activities at Newton
Aycliffe. In these calculations a discount rate of 10% has been applied to the projected cash ﬂows. The period over
which discounted cash ﬂows were calculated was 10 years. No cash ﬂows were assumed from that point forward. This
is deemed appropriate as the sales revenue projections were based upon both internally generated forecasts and
independent data extending through that period.
22 Stocks
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Raw materials 19,539 22,632 – –
Work in progress 7,969 7,447 – –
Finished goods 7,294 6,539 – –
1 1 1 1
34,802 36,618 – –
5 5 5 5
23 Debtors
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Trade debtors 60,838 48,978 – –
Amounts due from group companies – – 122,601 216,025
Current tax – 420 – –
Other taxation 1,765 1,683 28 25
Prepayments and accrued income 5,321 3,399 913 42
1 1 1 1
67,924 54,480 123,542 216,092
5 5 5 5
Included in prepayments and accrued income is £845,000 (2004 nil) for costs incurred to 31 May 2005 for professional
fees relating to the preparation of the Handset Products division for disposal. This includes £220,000 (2004 nil) of
such fees paid to the group auditors, KPMG. If the disposal is completed these costs will be deducted from the
proceeds of the transaction in accounting for the disposal, otherwise they will be charged as an operating cost in
the year ending 31 May 2006.
48 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
24 Deferred tax asset
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Trading losses available for relief against
future trading proﬁts 2,309 – – –
5 5 5 5
At 1 June 2004 – –
Deferred tax credit 2,264 –
Currency exchange movement 45 –
11
At 31 May 2005 2,309 –
55
Deferred tax assets which have not been recognised:
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Depreciation in advance of capital allowances
– United Kingdom 10,050 7,928 – –
Amortisation in advance of tax allowances
– Overseas 3,255 6,023 – –
Other timing differences
– Overseas 903 752 – –
Trading losses available for relief against future
trading proﬁts
– United Kingdom 14,962 8,710 6,023 3,976
– Overseas 8,902 13,658 – –
1 1 1 1
38,072 37,071 6,023 3,976
5 5 5 5
The deferred tax assets have not been recognised where the directors consider that it is unlikely that the underlying
timing differences will reverse in the foreseeable future.
25 Cash at bank and in hand
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Restricted cash 4,000 – 4,000 –
Unrestricted cash 2,563 2,070 – 5
1 1 1 1
6,563 2,070 4,000 5
5 5 5 5
Following the sale of freehold property in Australia during the year, £4,000,000 of the sale proceeds was transferred
to a separate bank account, in the name of Filtronic plc, pending the renewal of the bank borrowing facilities in
July 2005. This restricted cash could only be used to make additional repayments of the bank loan, until the bank
borrowing facilities were renewed in July 2005.
Filtronic plc Annual Report 2005 49 Notes to the
Financial Statements
for the year ended 31 May 2005
26 Creditors: amounts falling due within one year
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Bank overdraft 5,958 3,369 6,022 3,643
Bank loan 11,000 6,000 11,000 6,000
Trade creditors 37,875 27,817 – –
Amounts due to group companies – – 27,391 3,096
Current tax 1,880 1,721 1,487 1,487
Other taxation and social security 1,111 1,313 746 847
Accruals and deferred income 11,246 10,203 1,056 627
Dividend payable 1,347 1,344 1,347 1,344
1 1 1 1
70,417 51,767 49,049 17,044
5 5 5 5
27 Creditors: amounts falling due after one year
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Bank loan falling due between:
one and two years 33,000 11,000 33,000 11,000
two and three years – 33,000 – 33,000
1 1 1 1
33,000 44,000 33,000 44,000
5 5 5 5
The bank loan repayment terms were renegotiated in July 2005 so that no repayments are due in the year ending
31 May 2006. Quarterly repayments of £3,000,000 commence on 31 August 2006. In addition, commencing on
31 August 2007, further annual repayments are required by the 31 August each year equal to 50% of the group’s free
cash ﬂow for the preceding ﬁnancial year ending 31 May. The quarterly and annual repayments will continue until
the bank loan is repaid in full.
The bank loan and the bank overdraft are secured by ﬁxed and ﬂoating charges over material assets of the group,
including ﬁxed charges over the group’s freehold property and book debts in the United Kingdom and shares in
subsidiaries.
28 Provision for deferred tax
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Capital allowances in advance of depreciation 661 582 – –
5 5 5 5
At 1 June 2004 582 –
Deferred tax charge 70 –
Currency exchange movement 9 –
11
At 31 May 2005 661 –
55
50 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
29 Deferred income
The group
Deferred Deferred Total
licence government deferred
fee grants income
£000 £000 £000
At 1 June 2004 9,145 3,763 12,908
Received during the year – 1,000 1,000
Repaid during the year – (150) (150)
Released during the year (2,335) (693) (3,028)
111
At 31 May 2005 6,810 3,920 10,730
555
Deferred licence fee comprises the cash fee paid by BAE SYSTEMS Avionics Limited (“BAE”) (now SELEX SAS) to
Filtronic Compound Semiconductors Limited (“FCSL”) under the terms of a Supply and Development Agreement
dated 30 November 2001 between Filtronic plc, FCSL (together “Filtronic”) and BAE. The whole fee was received
during the year ended 31 May 2002.
The fee has been paid by BAE in consideration of Filtronic entering into the agreement to enable BAE to utilise the
Newton Aycliffe facility by inter alia maintaining the availability of the Newton Aycliffe facility for the supply of
gallium arsenide (“GaAs”) products for defence applications and performing the other obligations of Filtronic under
the agreement. The agreement provides for its continuance until 31 December 2015 but may be extended at the
option of BAE until 31 December 2025. In the event that BAE is unable, other than for reasons within the control of
BAE, to utilise the Newton Aycliffe facility as described above, the agreement provides that Filtronic will repay the
fee. If such an event occurs, the fee becomes repayable pro rata on a declining linear scale between 1 May 2003 and
1 May 2008. The agreement makes no provision for the repayment of the fee beyond that date.
The agreement contains a number of obligations on both parties including obligations upon Filtronic to accept and
perform purchase orders from BAE in accordance with a schedule of agreed commercial terms, to supply GaAs
products to BAE, to maintain the availability of the Newton Aycliffe facility for the continuance of the agreement, to
develop and qualify certain processes between March 2003 and July 2004 and to make such processes available to
BAE for the design and supply of certain GaAs products for defence applications. All of the product supply
obligations within the agreement will be fulﬁlled on normal commercial terms. As part of the agreement, Filtronic
agreed to supply, and has supplied to BAE, generic design data for the creation of GaAs products for defence
applications using the Newton Aycliffe facility. Filtronic has granted to BAE a worldwide, royalty free, irrevocable,
sole, non-transferable licence to use this intellectual property. The intellectual property over which the licence has
been granted remains the property of Filtronic. The agreement also contains other obligations on the parties
including some relating to collaboration on the development and production of T/R Modules for application in
active array radar, some relating to the manufacture of microwave modules for BAE’s defence requirements and
some relating to the development of other new compound semiconductor materials and processes which are
considered to be appropriate for military applications.
The fee revenue was being recognised in the proﬁt and loss account in equal monthly amounts from 1 May 2003
until 31 December 2015. The balance at 31 May 2004 of £9,145,000 is now being recognised as revenue in the proﬁt
and loss account in equal monthly amounts from 1 June 2004 to 1 May 2008. This represents a shortening of the
period over which the fee is being recognised as revenue from 31 December 2015 to 1 May 2008 so that the period
for the recognition of revenue does not extend beyond the obligations for repayment of the fee by Filtronic. The
change in the period of revenue recognition reﬂects the directors’ assessment of the feasibility for Filtronic to
implement its rights under the agreement to terminate the agreement after 1 May 2008 without ﬁnancial penalty.
This results in an increase of the amount recognised as revenue in the year ended 31 May 2005 of £1,546,000 to
£2,335,000.
Filtronic plc Annual Report 2005 51 Notes to the
Financial Statements
for the year ended 31 May 2005
30 Share capital
2005 2004 2005 2004
Number Number £000 £000
Authorised
Ordinary shares of 10p each 100,000,000 100,000,000 10,000 10,000
5 5 5 5
Allotted, called up and fully paid
Ordinary shares of 10p each
Opening share capital 74,646,582 74,304,443 7,465 7,430
Allotted during the year 195,271 342,139 19 35
1 1 1 1
Closing share capital 74,841,853 74,646,582 7,484 7,465
5 5 5 5
The ordinary shares of 10p each allotted during the year comprised:
Shares Share Share Proﬁt and Total
allotted capital premium loss account consideration
Number £000 £000 £000 £000
Acquisition consideration 131,149 13 1,531 – 1,544
Share compensation 64,122 6 – 748 754
11111
195,271 19 1,531 748 2,298
55555
31 Reserves
The group and
the company The group
Share premium Shares to Revaluation Other
account be issued reserve reserve
£000 £000 £000 £000
At 1 June 2004 137,641 2,255 106 2,020
Issue of shares 1,531 (2,298) – –
Share compensation – 43 – –
Transfer from proﬁt and loss account – – – 3,552
Currency exchange movement – – – 12
1 1 1 1
At 31 May 2005 139,172 – 106 5,584
5 5 5 5
The other reserve is an undistributable surplus reserve and additional capital of the Chinese subsidiary, Filtronic
(Suzhou) Telecommunications Products Co. Limited.
52 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
32 Profit and loss account
The group The company
£000 £000
At 1 June 2004 (48,374) 45,679
Proﬁt retained/(deﬁcit) for the year 3,291 (11,324)
Issue of shares – share compensation 748 748
Transfer to other reserve (3,552) –
Currency exchange movement arising on consolidation 1,319 –
11
At 31 May 2005 (46,568) 35,103
55
Of the proﬁt on ordinary activities after taxation for the year, a loss of £9,303,000 (2004 £8,218,000) is dealt with in the
proﬁt and loss account of Filtronic plc. A proﬁt and loss account for the company alone has not been presented in
accordance with the exemptions allowed under S230 of the Companies Act 1985.
The cumulative goodwill set off directly against reserves at 31 May 2005 was £11,917,000 (2004 £11,917,000).
33 Reconciliation of shareholders’ funds
The group The company
Restated
2005 2004 2005 2004
£000 £000 £000 £000
Proﬁt/(loss) on ordinary activities after taxation 5,312 (1,776) (9,303) (8,218)
Dividends (2,021) (2,015) (2,021) (2,015)
1 1 1 1
Proﬁt retained/(deﬁcit) for the year 3,291 (3,791) (11,324) (10,233)
Currency exchange movement arising on consolidation 1,331 (9,011) – –
Currency exchange movement on loan (note 40) – 4,249 – –
Issue of shares 2,298 2,573 2,298 2,573
Shares to be issued – shares issued (2,298) (2,298) (2,298) (2,298)
Shares to be issued – share compensation 43 232 43 232
1 1 1 1
Movement in shareholders’ funds 4,665 (8,046) (11,281) (9,726)
Opening shareholders’ funds 101,113 109,159 193,040 202,766
1 1 1 1
Closing shareholders’ funds 105,778 101,113 181,759 193,040
5 5 5 5
Filtronic plc Annual Report 2005 53 Notes to the
Financial Statements
for the year ended 31 May 2005
34 Share options
The share options outstanding at 31 May 2005 were:
Executive Share Option Schemes
Exercise period Exercise price Number of Options
9/9/1999 – 9/9/2006 231p 7,014
30/9/1999 – 30/9/2006 181p 14,930
1/10/2000 – 2/12/2006 250p 400,000
30/4/2000 – 30/4/2007 309p 55,000
4/8/2000 – 4/8/2007 375p 455,150
1/10/1999 – 23/1/2008 439p 146,000
1/10/1999 – 26/6/2008 291p 12,265
1/10/1999 – 26/6/2008 318p 1,560
1/10/1999 – 26/6/2008 399p 38,840
1/10/1999 – 3/8/2008 413p 173,500
1/10/1999 – 3/8/2008 414p 852,950
1/10/1999 – 10/8/2008 537p 60,000
1/10/1999 – 17/9/2008 149p 58,205
1/10/1999 – 17/9/2008 450p 582,000
1/10/1999 – 5/10/2008 383p 504,000
1/10/1999 – 9/11/2008 461p 65,000
1/10/2000 – 1/1/2009 612p 45,000
1/10/2000 – 4/3/2009 805p 75,000
1/10/2000 – 10/5/2009 602p 40,000
1/10/2000 – 1/6/2009 732p 10,000
1/10/2000 – 14/6/2009 727p 117,415
1/10/2000 – 1/7/2009 745p 95,000
1/10/2000 – 18/7/2009 827p 20,000
1/10/2000 – 2/8/2009 823p 309,000
1/10/2000 – 27/8/2009 831p 40,000
1/10/2000 – 13/9/2009 903p 15,000
1/10/2000 – 27/9/2009 897p 15,000
1/10/2000 – 4/10/2009 899p 15,000
1/10/2000 – 11/10/2009 953p 15,000
1/10/2000 – 1/11/2009 1131p 45,300
1/10/2001 – 21/1/2010 1758p 17,500
1/10/2001 – 15/5/2010 1020p 58,021
1/10/2001 – 1/6/2010 946p 29,598
1/10/2001 – 4/12/2010 346p 282,772
1/10/2002 – 30/3/2011 149p 20,000
1/10/2003 – 14/3/2012 404p 712,487
1/10/2004 – 5/6/2012 191p 30,000
1/10/2004 – 7/4/2013 346p 3,600
1/10/2005 – 1/3/2014 451p 210,000
1/10/2006 – 29/10/2014 148p 300,000
1/10/2006 – 14/12/2014 198p 200,000
1/10/2006 – 30/12/2014 190p 45,000
1/10/2006 – 29/4/2015 200p 200,000
1
6,392,107
1
54 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
34 Share options (continued)
Savings Related Share Option Schemes
Exercise period Exercise price Number of Options
1/4/2005 – 1/10/2005 429p 272
1/10/2005 – 1/4/2006 412p 757
1/4/2006 – 1/10/2006 680p 10,211
1/10/2006 – 1/4/2007 655p 952
1
12,192
1
1
Total number of options outstanding at 31 May 2005 6,404,299
5
35 Financial commitments
Annual commitments under non-cancellable operating leases which expire:
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Land and buildings
In two to ﬁve years 857 866 – –
In over ﬁve years 672 99 – –
1 1 1 1
1,529 965 – –
5 5 5 5
Other
In two to ﬁve years 1,779 1,300 39 31
5 5 5 5
36 Capital commitments
The group The company
2005 2004 2005 2004
£000 £000 £000 £000
Capital expenditure contracted for but not provided
in the ﬁnancial statements 4,130 3,462 – 92
5 5 5 5
37 Post balance sheet event
In July 2005 the company commenced the closure of its Wireless Infrastructure operations in Australia.
Filtronic plc Annual Report 2005 55 Notes to the
Financial Statements
for the year ended 31 May 2005
38 Pension schemes
For employees in the United Kingdom the company operates a funded pension scheme providing beneﬁts based
on ﬁnal pensionable pay. The assets of the scheme are held in a separate trustee fund administered by independent
professional investment managers. Contributions to the scheme are charged to the proﬁt and loss account so as to
spread the cost of pensions over employees’ working lives with the company. The contributions are determined by
a qualiﬁed actuary on the basis of annual valuations using the projected unit method. The most recent valuation was
at 1 July 2004. The assumptions which have the most signiﬁcant effect on the results of the valuation are those
relating to the rate of return on investments and the rates of increase in salaries and pensions. It was assumed that
the investment returns would be 2.0% per annum in excess of future salary increases and 4.4% per annum in excess
of future pension increases.
The pension cost for the year was £2,250,000 (2004 £2,294,000). The pension cost allowed for a deﬁcit variation to
be amortised over the working lifetimes of the active members. The amortisation was calculated to be £226,000. The
accrual at 31 May 2005 was £388,000 (2004 £388,000).
The most recent actuarial valuation showed that the market value of the scheme’s assets was £18,800,000 and that
the actuarial value of those assets represented 83% of the beneﬁts that had accrued to members after allowing for
expected future increases in earnings. In accordance with the actuary’s recommendations, contributions to the
scheme were increased with effect from 1 July 2005. Employer’s contributions were increased from 10.0% to 10.5%
of pensionable salaries and employees’ contributions were increased from 5.0% to 6.0% of pensionable salaries.
For employees in Finland contributions are made to a deﬁned contribution pension plan in accordance with Finnish
regulations and practices. The pension cost for the year, based on insurance companies’ charges, was £1,240,000
(2004 £1,303,000).
For employees in the United States of America contributions are made to a deﬁned contribution plan under section
401(k) of the Internal Revenue Code. The pension cost for the year was £274,000 (2004 £261,000).
For employees in Australia contributions are made to a deﬁned contribution superannuation fund operated by an
independent insurance company. The pension cost for the year was £209,000 (2004 £203,000).
39 Financial Reporting Standard 17
The company has accounted for pension costs in accordance with Statement of Standard Accounting Practice 24
(“SSAP24”). Financial Reporting Standard 17 (“FRS17”) requires certain transitional disclosures, which are set
out below.
The calculations have been based on the ﬁndings of the actuarial valuation carried out with effect from 1 July 2004.
The results of that valuation have been projected to 31 May 2005 and then recalculated based on the following
assumptions, which the directors consider to be appropriate.
2005 2004 2003
Rate of inﬂation 2.60% 3.10% 2.40%
Salary increase rate 4.10% 4.60% 3.80%
Increases for pensions in payment 2.40% 2.90% 2.40%
Revaluation of deferred pensions 2.60% 3.10% 2.40%
Liability discount rate 5.00% 5.80% 5.10%
56 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
39 Financial Reporting Standard 17 (continued)
The fair value of the pension scheme’s assets, which are not intended to be realised in the short term and may be
subject to signiﬁcant change before they are realised, and the present value of the pension scheme’s liabilities, which
are derived from cash ﬂow projections over long periods and are thus inherently uncertain, are set out below:
Long term
expected return Value
2005 2004 2003 2005 2004 2003
£000 £000 £000
Equities 6.50% 7.50% 6.50% 18,573 14,639 11,205
Bonds 4.80% 5.50% 4.50% 4,397 3,375 2,476
Cash 4.50% 5.00% 4.50% 260 288 255
111
Market value of pension scheme assets 23,230 18,302 13,936
Present value of pension scheme liabilities (39,379) (29,683) (25,486)
111
FRS17 pension scheme deﬁcit and
net FRS17 pension liability (16,149) (11,381) (11,550)
555
Related deferred tax asset not recognised 4,845 3,414 3,465
555
The pension scheme assets, the majority of which are equities, are potentially subject to signiﬁcant market
movements. FRS17 disclosures measure the value of these assets at a single point in time, namely 31 May each year.
The pension scheme’s liabilities are measured by reference to long-term AA corporate bond yields that can also
move signiﬁcantly and according to market conditions. FRS17 indicates a deﬁcit in relation to the pension scheme
at 31 May 2005. The Minimum Funding Requirement valuation at 1 July 2004 indicated a surplus with a funding level
of 113%.
If the group had adopted FRS17 early, the consolidated proﬁt and loss account reserve and net assets would have
been as follows:
2005 2004 2003
£000 £000 £000
Proﬁt and loss account reserve excluding FRS17 pension liability (46,568) (48,374) (39,377)
SSAP24 accrual 388 388 –
Net FRS17 pension liability (16,149) (11,381) (11,550)
1 11
Proﬁt and loss account reserve including FRS17 pension liability (62,329) (59,367) (50,927)
5 55
Net assets excluding FRS17 pension liability 105,778 101,113 109,159
SSAP24 accrual 388 388 –
Net FRS17 pension liability (16,149) (11,381) (11,550)
1 11
Net assets including FRS17 pension liability 90,017 90,120 97,609
5 55
Filtronic plc Annual Report 2005 57 Notes to the
Financial Statements
for the year ended 31 May 2005
39 Financial Reporting Standard 17 (continued)
If the group had adopted FRS17 early, the amounts recognised in the consolidated proﬁt and loss account would
have been as follows:
The amount that would have been (credited)/charged to operating proﬁt:
2005 2004 2003
£000 £000 £000
Current service cost 2,934 2,744 2,143
Past service credit (3,133) ––
Gain on curtailment (223) ––
1 11
Total operating (credit)/charge (422) 2,744 2,143
5 55
The amount that would have been charged as other ﬁnancial costs:
2005 2004 2003
£000 £000 £000
Expected return on pension scheme assets 1,381 928 979
Interest on pension scheme liabilities (1,816) (1,385) (1,188)
1 11
Net ﬁnancial return (435) (457) (209)
5 55
If the group had adopted FRS17 early the amounts recognised in the consolidated statement of total recognised
gains and losses would have been as follows:
2005 2004 2003
£000 £000 £000
Actual return less expected return on pension scheme assets 1,210 933 (2,935)
Experience (loss)/gain on pension scheme liabilities (357) 805 478
Impact of changes in assumptions relating to the present value of
pension scheme liabilities (7,637) (273) (3,672)
1 11
Actuarial (loss)/gain (6,784) 1,465 (6,129)
5 5 5
% pension scheme assets/liabilities
2005 2004 2003
£000 £000 £000
Actual return less expected return on pension scheme assets 5% 5% (21%)
Experience (loss)/gain on pension scheme liabilities (1%) 3% 2%
Impact of changes in assumptions relating to the present value of
pension scheme liabilities (19%) (1%) (14%)
Actuarial (loss)/gain (17%) 5% (24%)
58 Filtronic plc Annual Report 2005 Notes to the
Financial Statements
for the year ended 31 May 2005
39 Financial Reporting Standard 17 (continued)
The movement in FRS17 pension scheme deﬁcit during the year:
2005 2004 2003
£000 £000 £000
FRS17 pension scheme deﬁcit brought forward (11,381) (11,550) (4,867)
Current service cost (2,934) (2,744) (2,143)
Past service credit 3,133 ––
Gain on curtailment 223 ––
Contributions 2,029 1,905 1,798
Net ﬁnancial return (435) (457) (209)
Actuarial (loss)/gain (6,784) 1,465 (6,129)
1 11
FRS17 pension scheme deﬁcit carried forward (16,149) (11,381) (11,550)
5 55
40 Financial instruments
Interest rate risk and currency proﬁle of ﬁnancial assets
The interest rate risk and currency proﬁle of the group’s ﬁnancial assets, excluding short term debtors, was as follows:
Floating rate
ﬁnancial assets
2005 2004
£000 £000
Sterling 4,069 5
US dollar 265 514
Euro 113 734
Australian dollar 88 156
Chinese yuan 2,026 640
Japanese yen 2 21
1 1
6,563 2,070
5 5
Floating rate ﬁnancial assets comprise overnight money market deposits and bank deposit accounts.
Interest rate risk and currency proﬁle of ﬁnancial liabilities
The interest rate risk and currency proﬁle of the group’s ﬁnancial liabilities, excluding short term creditors, was as
follows:
Financial liabilities
2005 2004
£000 £000
Floating rate sterling 49,958 53,369
Interest free sterling 5,833 7,833
1 1
55,791 61,202
5 5
Floating rate ﬁnancial liabilities at 31 May 2005 comprise a £44,000,000 bank loan that bears interest at LIBOR plus
2.25% and a £5,958,000 bank overdraft that bears interest at LIBOR plus 1.75%. The company’s policy is not to hedge
the interest rate risk on the bank loan and overdraft.
The maturity proﬁle of ﬁnancial liabilities is shown in note 27.
Filtronic plc Annual Report 2005 59 Notes to the
Financial Statements
for the year ended 31 May 2005
40 Financial instruments (continued)
Fair values of ﬁnancial assets and liabilities
The fair values of ﬁnancial assets and liabilities were not materially different to their book values.
Borrowing facilities
At 31 May 2005 the company had a bank overdraft facility of £9,000,000 of which £3,042,000 was undrawn. This facility
was renewed in July 2005 and is due for review again in July 2006.
Subsequent to the amendment of the bank loan and overdraft facilities in July 2005, the £44,000,000 bank loan will
bear interest at LIBOR plus 2.50% and the overdraft will bear interest at LIBOR plus 2.25%.
The bank loan and the bank overdraft facility are secured by ﬁxed and ﬂoating charges over material assets of the
group, including ﬁxed charges over the group’s freehold property and book debts in the United Kingdom and shares
in subsidiaries.
Currency exchange movements
Currency exchange movements arising on the $103,573,000 10% Senior Notes that were offset by currency exchange
movements on the net assets, including goodwill, of overseas subsidiaries and intra group loans, that they ﬁnanced,
were taken directly to reserves. Currency exchange movements on the Senior Notes which were not offset were taken
through the proﬁt and loss account. The Senior Notes were repaid during the year ended 31 May 2004.
The currency exchange movement arising on the Senior Notes comprised:
2005 2004
£000 £000
Currency exchange gain taken directly to reserves – 4,249
Currency exchange gain taken through the proﬁt and loss account – 2,020
1 1
– 6,269
5 5
Foreign currency risk
The company’s policy is not to hedge against transactions which occur in any of the functional currencies of any of
the company’s subsidiaries. These currencies are sterling, US dollars, euro, Australian dollars and Chinese yuan.
Forward foreign exchange contracts may be used to hedge material sales and purchases which may occur in other
currencies. The company does not hedge against currency translation risk related to the translation of the proﬁt and
loss accounts and balance sheets of its overseas subsidiaries.
60 Filtronic plc Annual Report 2005 Subsidiaries
at 31 May 2005
Name of Country of Description of Proportion Activity
subsidiary incorporation equity held held
or registration
Owned by Filtronic plc
Filtronic Comtek (UK) Limited England & Wales 12.2787p 100% Design and manufacture
ordinary shares of microwave products
Filtronic Compound England & Wales £1 ordinary shares 100% Design and manufacture
Semiconductors Limited of compound
semiconductors
Filtronic Microtek Limited England & Wales £1 ordinary shares 100% Manufacture of
microwave products
Filtronic Broadband Limited England & Wales 1p ordinary shares 100% Design and manufacture
of microwave products
Filtronic Components Limited England & Wales £1 ordinary shares 100% Design and manufacture
of microwave products
Filtronic Properties Limited England & Wales £1 ordinary shares 100% Property company
Filtronic QUEST Trustees Limited England & Wales £1 ordinary shares 100% QUEST trustee company
Filtronic Executive Share Option England & Wales £1 ordinary shares 100% Dormant company
Trustees Limited
Filtronic Cable Communications England & Wales 1p ordinary shares 100% Dormant company
Limited
Filtronic (Overseas Holdings) England & Wales £1 ordinary shares 100% Holding company
Limited
LK Products Oy Finland 11 ordinary shares 100% Design and manufacture
of microwave products
Filtronic Sigtek, Inc. USA $1 common stock 100% Design and manufacture 
of digital signal 
processing products
Owned by subsidiaries
LK Products (Overseas Holdings) England & Wales £1 ordinary shares 100% Holding company
Filtronic Comtek Oy Finland 13,364 ordinary 100% Design and manufacture
shares of microwave products
Filtronic Pty Limited Australia A$1 ordinary shares 100% Design and manufacture 
of microwave products
Filtronic (Suzhou) China £1 ordinary shares 100% Manufacture of microwave
Telecommunication products
Products Co Limited
LK Products (Suzhou) China $1 ordinary shares 100% Manufacture of microwave
Telecommunication products
Components Co Limited
Filtronic Holdings, Inc. USA $1 common stock 100% Holding company
Filtronic Comtek, Inc. USA $1 common stock 100% Design and manufacture
of microwave products
Filtronic Compound USA $1 common stock 100% Design and sale of
Semiconductors, Inc. compound
semiconductors
Sage Laboratories, Inc. USA $0.10 common 100% Design and manufacture
stock of microwave products
Sage Laboratories USA $1 common stock 100% Design and manufacture
Active Microwave, Inc. stock of microwave products
Sage Laboratories USA $1 common stock 100% Investment company
Investment Corporation
Filtronic plc Annual Report 2005 61 Corporate Directory
Company secretary
M Moynihan
Company number
2891064
Registered office
Filtronic plc
The Waterfront
Salts Mill Road
Saltaire
Shipley
West Yorkshire
BD18 3TT
Tel: 01274 530622
Fax: 01274 531561
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Tel: 0870 162 3100
Stockbrokers
J P Morgan Cazenove
20 Moorgate
London
EC2R 6DA
Tel: 020 7588 2828
Auditors
KPMG Audit Plc
Chartered Accountants
1 The Embankment
Neville Street
Leeds
LS1 4DW
Bankers
Barclays Bank PLC
10 Market Street
Bradford
BD1 1NR
Financial public relations
Binns & Co Public Relations Limited
9th Floor, City Point
1 Ropemaker Street
London
EC2Y 9HT
Tel: 020 7786 9600
62 Filtronic plc Annual Report 2005 Shareholder Information
Annual general meeting
The annual general meeting of Filtronic plc will be held at the Marriott Hollins Hall Hotel, Hollins Hill, Baildon, Shipley,
BD17 7QW on Friday 30 September 2005 at 11 am. The notice of meeting, together with details of business to be
conducted at the meeting and a form of proxy, is being circulated to shareholders with this report.
Financial calendar
Provisional dates for the announcement of results:
Interim results to 30 November 2005 30 January 2006
Final results to 31 May 2006 31 July 2006
Unsolicited mail
The company is obliged by law to make its share register available to other organisations. Therefore, some shareholders
may receive unsolicited mail. Any shareholder who wishes to limit the receipt of such mail should contact:
The Mailing Preference Service
Freepost 22
London
W1E 7EZ
giving their name and full address, including postcode. 
Share price listings
The share price of Filtronic plc is listed in the following newspapers:
Financial Times Yorkshire Post
The Times Glasgow Herald
The Independent Bradford Telegraph & Argus
Daily Telegraph The Scotsman
It is also available by calling the Financial Times Cityline on 0906 003 4706. Calls are charged at premium rate. The
company receives no income from this service which is provided by a third party.
Web site
The company’s web site address is www.ﬁltronic.com
The web site includes company news and investor sections. The interim and annual reports of the company can be
downloaded from the web site. The company’s share price is also available on the web site.
Filtronic plc Annual Report 2005 63