tt electronics plc annual report and accounts 2014
refocus
rebuild
sustainable growth
tt electronics plc annual report and accounts 2014 strategic report
1–25
tt electronics at a glance 2
market review 4
our strategic framework and business model 5
chairman’s statement 6
chief executive officer’s statement 8
divisional review 
 sensing and control 12 
 components 14 
 integrated manufacturing services 16
financial review 18
key performance indicators 19
risk management 20
corporate responsibility 22
directors’ report
26–53
board of directors and company secretary 26
governance 27
directors’ report 28
nominations committee 32
audit committee 33
directors’ remuneration report 36
directors’ remuneration policy 38
annual report on remuneration 42
other statutory disclosures 50
statement of directors’ responsibilities in respect  
of the annual report and the financial statements 53
financial statements
54–96
independent auditor’s report to the  
members of tt electronics plc only 54
consolidated income statement 57
consolidated statement of comprehensive income 58
consolidated balance sheet 59
consolidated statement of changes in equity 60
consolidated cash flow statement 61
notes to the consolidated financial statements 62
company balance sheet 91
notes to the company financial statements 92
fiveyear record 96
glossary 97
shareholder information 99
see page 9 for more detail
see page 5 for more detail
tt electronics is a global provider  
of engineeredelectronics for  
performance critical applications
contents
position
people
potential
strategic 
framework
great people great potential
tt electronics is a business of 
great people we have some 
excellent technology and good 
market positions by harnessing 
our core capabilities we are  
well positioned to deliver highly 
engineered electronics that 
help our customers to achieve 
their aims and get ahead
clear priorities to  
unlock potential
we have started our journey  
to transform our business 
performance focusing on  
our six strategic priorities will 
enable us to rebuild a platform 
to drive sustainable growth 
going forward  01 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
for more information on our 
business please visit 
wwwttelectronicscom
2014 highlights
revenue
£5243m
up 3
2
operating profit
1
£292m
flat
2
free cash flow
£225m
down 4600
net debt
£143m
down 150
2
eps
1
129p
down 5
2
dividend
55p
up 2
1 underlying before restructuring acquisition costs and 
asset impairment
2 change at constant currency
financial headlines
– revenue broadly unchanged in a challenging year
– underlying operating profit down 5 per cent including 
c £5m benefit from nonrecurring trading items 
– mixed divisional performance
– components strong operating profit progression 
driven by improvement in product mix and 
underlying cost base
– sensing and control poor performance in 
transportation sensors partially offset by strong 
performance in industrial sensors and controls and 
transportation controls businesses
– integrated manufacturing services weaker than 
expected customer demand and start up issues 
from transfer of manufacturing to romania
– balance sheet remains strong
– good second half cash performance
– £143m of net debt at the year end
– final dividend maintained to give overall increase for 
year of 2 per cent
strategic and operational progress
– new ceo and cfo appointed new senior 
management team in place
– operational improvement plan reset restructured 
and making progress
– comprehensive review of the business completed 
strategic direction clear executive planning underway
– new strategic plan to improve the performance of the 
business based on
– building marketleading positions
– enhanced customer focus
– targeted and efficient rd spend
– driving operational efficiency
– lean agile and learning organisation
– financial discipline and performance 
management
see pages 8–18 for more detail 02 tt electronics plc annual report and accounts 2014
operating proﬁt £m 2014
sensing and control £142m
components £95m
ims £55m
revenue £m 2014
sensing and control £2893m
components £988m
ims £1362m
our businesses
sensing and control
tt’s sensing and control business provides sensing 
and control solutions for critical applications  
which require high levels of expertise precision  
and reliability for leading customers globally  
the sensing and control business is operated 
under the following brands – ab elektronik  
ab mikroelektronik bi technologies and optek 
technology
components
our components portfolio includes fixed  
resistors discrete semiconductors microelectronic 
solutions magnetics and connectors with  
a focus on medical defence and aerospace 
industrial transportation and energy markets  
the components business operates under  
a number of brands – ab connectors bi 
technologies irc semelab and welwyn
integrated manufacturing services
tt’s ims division delivers a full suite of  
endto end electronic manufacturing solutions at 
strategically located sites combining collaborative 
design and engineering skills with a robust global 
supply chain to support our customers’ global 
ambitions the ims business works closely  
with oems who require low volume high mix 
manufacturing solutions
revenue
£2893m
revenue
£988m
revenue
£1362m
operating  
profit
£142m
operating  
profit
£95m
operating  
profit
£55m
tt electronics at a glance
our purpose harnessing our leading 
expertise to engineer electronics that 
put our customers ahead
tt electronics is a global provider of leading expertise in highly 
engineered electronics components that operate in harsh 
environments for critical applications tt works closely with its 
market leading customers in sectors such as transportation 
industrial aerospace and defence as well as medical  03 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
revenue by region 2014
rest of europe 49
americas 20
uk 16
asia 14
rest of the world 1 
sales to european customers for their global markets are  classiﬁed as european sales 
therefore the actual share of sales to non european markets is higher
revenue by market 2014
passenger car 41 
industrial 27
aerospace 
defence 12
other 
transportation 10
medical 7
other 3
suzhou china
kuantan malaysia
manesar india
bangalore india
werne germany
klingenberg germany
timisoara romania
salzburg austria
uk
9 sites
barbados
fullerton usa
carrollton usa
juarez mexico
mexicali mexico
corpus christi usa
perry usa
boston usa
we operate globally with a sales engineering and 
manufacturing presence in all major regions making us 
wellpositioned to serve our customers in our focus markets
where we operate
bedlington
lutterworth
bramley fairford
rogerstone
abercynon
cambridge
sheffield
weybridge 04 tt electronics plc annual report and accounts 2014
market review
harnessing our capabilities 
across our markets
automotive
the automotive sector is at the core of the 
group’s dna demand for tt’s sensing and 
control products are directly influenced by the 
automotive production levels across all vehicle 
categories eg passenger car trucks commercial 
vehicles and twowheelers
in 2014 global vehicle assembly continued on a 
positive trend showcased by the 59 per cent year 
on year growth achieved within the light vehicle 
category this positive outlook is particularly 
driven by the north america and asia pacific 
regions us light vehicle sales reached 164 million 
and registered the fifth straight year on year 
increase whilst chinese light vehicle assembly 
grew by nearly 95 per cent in 2014
looking forward developing markets in asia 
pacific are expected to generate over 60 per cent 
of the global automotive growth until 2021 
driven by china and india where tt already has 
some presence
furthermore demand for sensors in the 
automotive sector is supported by a range of 
positive trends including more stringent safety 
requirements demand for features for users’ 
comfort vehicles connectivity and fuel efficiency 
all of these factors set out positive market 
conditions for tt’s sophisticated sensing and 
control solutions
industrial
tt’s sensing and control and components 
divisions are present in multiple industrial end 
verticals through a large variety of products and 
applications these include aerospace and 
defence medical equipment metal processing 
and oil and gas applications
overall the proliferation of more sophisticated 
sensing and control solutions in these key 
markets offer attractive growth fundamentals for 
the group
for example between 2011 and 2016 the sensor 
market value is estimated to grow at 113 per cent 
in medical applications and 6 per cent pa in the 
oil and gas sector
tt’s businesses are positively supported by 
steady growth rates in the passive and connectors 
markets particularly within our target industrial 
sectors some of the subsegments are expected 
to see strong single digit growth within the 
aerospace and defence sector for instance 
commercial aircraft production had another year 
of solid growth performance increasing over 
8 per cent from 2013 to 2014 however 
production of defence related electronic 
equipment declined from 2013 to 2014
ems
our ims business supports customers in the 
aerospace and defence medical and high 
technology industrial sectors by offering 
advanced design and manufacturing services in 
multiple locations across the globe
its position in these markets is strengthened by 
its established expertise in low volumehigh mix 
manufacturing specialised quality standards and 
relevant accreditations
the global ems market is maintaining healthy 
growth rates 5–6 per cent pa within the end 
verticals most relevant to tt as the outsourcing 
trend is set to continue
at a regional level the ims operations are heavily 
influenced by the prevailing manufacturing 
activity in the geography in europe the market 
saw some declines in the industrial sector caused 
by regional economic challenges and significant 
delays in new programmes launch asian 
operations on the other hand witnessed good 
growth as a result of intensified manufacturing 
activity led by global oems in sectors such as 
medical device manufacturing
tt electronics operates in a sizeable global market with ample 
opportunities for growth the continued growth in demand for more 
sophisticated features and stronger performance of the end products 
provides a positive background for the demand growth of tt’s services  
and electronics solutions  05 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
a lean agile and learning organisation
financial discipline and performance management
market leading 
position
enhanced
customer focus
efﬁcient rd spend
targeted and
efﬁciency
operational
return to sustainable growth
2014 2015 2016 2017 2018 2019 2020
refocus
rebuild
sustainable growth
our strategic framework and business model
unlocking  
our potential
tt has strong experience in multiple end use  
markets and a wide range of performancecritical 
applications this unique combination provides a 
strong platform for the businesses to harness their 
expertise and help customers solve their challenges 
the global network of tt also enables us to work with 
customers across different geographies with agility 
market leading position
focus on our key strengths  
in end use markets products  
and applications positioning 
ourselves where we can best 
serve our customers
enhanced customer focus
being closer to customers 
generate opportunities 
proactively and build a more 
balanced customer base 
operational efficiency
build share and develop best 
practice to strengthen overall 
competitiveness cost efficiency 
and quality of output
targeted and efficient  
rd spend
targeted investment in rd 
robust management to ensure 
on time and on budget delivery 
of quality output
business model strategic framework
the business review conducted in late 2014 has enabled us to refocus the 
group on the key issues and opportunities we face we have developed a 
clear strategic plan to rebuild the performance of the business and deliver 
sustainable growth
three phases
our journey to transform our business performance has 
three phases underpinned by six priorities as we are 
working together to deliver three outcomes
these six priorities underpin our strategic plan we are focusing on these  
areas to rebuild a platform for sustainable growth as part of this plan we are 
implementing a series of process standardisations and enhancements to drive 
improvement in the overall business performance
market 
leading position
targeted  
 efficient  
rd spend
operational 
efficiency
financial discipline 
 performance 
management
enhanced 
customer focus
a lean agile 
and learning 
organisation
six priorities
three outcomes
the delivery of our strategy will be measured by three outcomes improved 
customer performance improved operational performance and improved 
returns and cash generation creating a better quality business with stronger 
returns to shareholders
improved 
customer 
performance
improved returns 
and cash 
generation
improved 
operational 
performance 06 tt electronics plc annual report and accounts 2014
chairman’s statement
sean watson chairman
2014 was a year of challenges and significant 
change following the appointment of richard 
tyson as chief executive officer in july we 
undertook a comprehensive review of the 
business and have now developed a clear 
strategic plan to stabilise the business and  
deliver sustainable growth 
it was regrettable that we had to announce in 
november 2014 that issues identified by the 
business review and delays in execution of certain 
elements of the operational improvement plan 
would impact our 2014 and 2015 performance 
this led to a fall in our share price however we 
have moved swiftly commencing the necessary 
improvement actions making changes to  
our senior management team reshaping our 
organisational structure and appointing mark 
hoad as chief financial officer this has allowed 
us to enter 2015 with a clear understanding of 
what needs to be done and the confidence that 
we have the right people in place to move our 
business forward
2014 results
group revenue was £5243 million from 
continuing operations 2013 £5322 million  
on an organic basis revenue increased by  
2 per cent excluding the effects of foreign 
exchange £226 million and the £37 million 
revenue contribution from the acquisition of 
roxspur measurement and control limited 
“roxspur” in july 2014 this organic revenue 
increase was largely related to a onetime order 
within sensing and control
underlying operating profit from continuing 
operations declined by 5 per cent to £292 million 
2013 £308 million with the reduction 
principally related to a £17 million negative 
foreign exchange impact partially offset by the 
£04 million in operating profit delivered by the 
acquisition of roxspur the underlying operating 
profit performance benefited from the £4 million 
one time order referred to above and £1 million  
of last time buys related to the closure of our 
operations at the smithfield usa facility
our closing net debt position of £143 million 
reflects investment in the acquisition of roxspur 
for £80 million net capital expenditure of  
£28 million and a working capital outflow of 
£168 million due to significant supplier payments 
made during the first half
 2014 was a year of change 
where hard decisions have 
been taken to provide us 
with a platform for 
progress  07 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
dividend
the board is recommending an unchanged final 
dividend of 38 pence which when combined  
with the interim dividend of 17 pence gives  
a total of 55 pence per share for the full year 
2013 54 pence per share representing an 
increase of 2 per cent
strategic and operational progress
we have conducted a comprehensive review of 
the business and have developed a strategy for 
sustainable growth in his statement richard 
tyson outlines his priorities for 2015 and the 
actions being taken to simplify the organisation 
and to create a culture of clear accountability 
progress is being made but more work is needed 
to embed these governance processes and 
cultural changes across tt
board changes
we have made a number of changes to the board 
and senior management team richard tyson 
joined from cobham plc as chief executive 
officer in july 2014 and mark hoad was 
appointed as chief financial officer in january 
2015 mark previously held the position of group 
finance director at bba aviation plc at the senior 
management level we have implemented a 
number of organisational changes and refreshed 
the leadership team further details are set out  
in the chief executive’s statement
the board through the remuneration 
committee is committed to ensuring that  
the group operates in accordance with best 
practice regarding both the disclosure of 
directors’ remuneration and the development  
of an effective executive remuneration strategy 
the alignment between our strategic goals  
kpis and executive remuneration is set out  
in the remuneration report 
our people
the delivery of our strategic goals would not be 
possible without the hard work and dedication  
of our people across all of our business units 
worldwide 2014 was challenging for our staff 
not only as a result of the changes we made to 
our executive management team and which 
have now filtered through the management 
layers of our business units but also arising  
from the need to make headcount reductions  
at a number of our sites on behalf of the board  
i would like to thank all of our employees who 
have worked through this period of uncertainty 
and made a valued contribution to the business 
and our wider customer initiatives during 2014
looking forward
the group has undergone significant change 
during the second half of the year we have a new 
management team in place and a clear plan to 
improve the performance of the business 2015 
will be an important year of transition as this new 
plan is implemented and we create a sustainable 
platform for growth
sean watson
chairman
11 march 2015
“on behalf of the board  
i would like to thank all of  
our employees who have 
worked through this period of 
uncertainty and made a valued 
contribution to the business 
and our wider customer 
initiatives during 201 4” 08 tt electronics plc annual report and accounts 2014
chief executive officer’s statement
richard t yson chief executive officer
2014 results
group revenue from continuing operations was 
£5243 million 2013 £5322 million on an 
organic basis revenue increased by 2 per cent 
excluding the effects of foreign exchange  
£226 million and a £37 million contribution 
from roxspur measurement and control limited 
“roxspur” which was acquired in july 2014  
the organic revenue increase was largely related 
to a onetime order within sensing and control
underlying operating profit from continuing 
operations declined by 5 per cent to £292 million 
2013 £308 million with the reduction 
principally related to a £17 million negative 
foreign exchange impact partially offset by  
the £04 million in operating profit from the 
acquisition of roxspur at constant currency 
underlying operating profit was broadly 
unchanged the underlying operating profit 
performance included circa £4 million of profit 
from the oneoff order referred to above and  
circa £1 million of profit from nonrecurring orders 
related to the smithfield usa facility closure
there was a £09 million increase in the net  
interest expense to £16 million 2013 £07 million 
primarily as a result of a lower net credit from  
the retranslation of foreign currency borrowings 
underlying profit before tax declined by 8 per cent 
to £276 million 2013 £301 million representing  
a 3 per cent reduction on a constant currency basis
the underlying effective tax rate of  
257 per cent was slightly higher than the  
prior year 2013 236 per cent and basic 
underlying earnings per share decreased by  
12 per cent to 129 pence 2013 146 pence  
and by 5 per cent at constant currency
the reported loss for the period amounted to 
£105 million 2013 profit £130 million after a 
charge for items excluded from underlying profit 
of £335 million 2013 £118 million included 
within this charge were restructuring costs of 
£222 million 2013 £102 million which related 
principally to the operational improvement plan 
and asset impairments of £94 million 2013 £nil 
which related largely to an accounting writedown 
of capitalised intangible development costs 
following a review of expected returns
2014 was a year of challenges 
and significant change we 
have closely reexamined our 
business and strategy and 
reshaped our management 
teams and organisational 
structure  09 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
“whilst our order book remains 
sound our markets continue 
to look challenging especially 
in europe where headwinds 
remain we therefore remain 
cautious in our outlook for 
201 5 with the benefits of  
the new strategic plan not 
expected to be seen until 
2016 however we are putting 
in place a solid platform for a 
return to sustainable profitable 
growth and to restore value  
for shareholders”
there was a free cash outflow in 2014 of  
£225 million 2013 inflow of £05 million with a 
free cash inflow of £125 million in the second half 
of the year compared with a £350 million outflow 
in the first half net capital expenditure increased 
as planned to £280 million 2013 £239 million 
and capitalised development expenditure 
amounted to £68 million 2013 £52 million 
equivalent in total to 16 times underlying 
depreciation and amortisation there was  
a working capital outflow of £168 million  
2013 £94 million due to significant supplier 
payments made during the first half of the year
total acquisition and disposal expenditure in the 
year amounted to £85 million 2013 £125 million 
including the acquisition of roxspur for £80 million 
net of cash in the acquired business total dividend 
payments in the year amounted to £87 million 
2013 £80 million and we ended the year with  
a closing net debt position of £143 million  
2013 net cash £269 million
dividend
the board is recommending an unchanged final 
dividend of 38 pence which when combined  
with the interim dividend of 17 pence gives  
a total of 55 pence per share for the full year 
2013 54 pence per share representing an 
increase of 2 per cent 
my first task on joining  
tt was to understand our 
business and to identify the 
opportunities for growth
position
people
potential
we are present in attractive end markets 
geographies product categories and 
applications the markets have strong 
structural demand drivers ranging from 
regulatory and product development  
in some cases to macro drivers we also 
have long term relationships with our 
customers many of which are global 
leaders of their end markets and  
value tt as a technological partner  
tt has years of experience and expertise 
in engineering and delivering electronics 
for applications in the harshest 
environments the reliability and 
performance of our products is 
something we are proud of our global 
presence enables us to be close to our 
customers in geographies with good 
growth opportunities
we have a great team full of  
talented people who have strong 
expertise and extensive experience  
our 5800 employees are committed  
to deliver the best to our customers 
over the years many have developed  
a strong and trusted relationship with 
our customers 
tt is a business with a strong position 
excellent people and great potential 
the key is unlocking it through
– enhancing customer engagement 
building on established relationships 
– harnessing core capabilities 
targeting and delivering the  
rd programmes 
– improving operational and  
financial performance 10 tt electronics plc annual report and accounts 2014
chief executive officer’s statement continued
drive operational excellence through our global 
operations and supply chain candy bowles has 
been appointed as group evp of corporate 
development and strategy
strategic and 
operational progress
we have conducted a comprehensive review  
of the business the review solidified our 
understanding of the business and confirmed 
that we enjoy some strong positions in attractive 
growth markets that we have loyal customers 
who respect and value what we do and we have 
strong technically robust products that perform 
well in demanding environments during the 
review we completed a number of immediate 
actions to simplify and stabilise the business 
including the strengthening in capability and 
experience of the senior management as outlined 
above and organisational changes designed  
to improve customer focus and enhance 
transparency accountability and pace 
we have identified good opportunities in our 
industrial sensing and control and advanced 
components businesses based on favourable 
market dynamics and our current position 
transportation sensing and control also has  
good structural growth characteristics and we 
have had success in a number of areas however 
the performance of our transportation sensors 
business has been disappointing we now  
have a clear plan to turn the business around 
operationally by ensuring our rd resources are 
targeted on the right opportunities and that our 
processes are more effective 
our ims business which focuses on more 
challenging lower volume high specification 
segments will continue to deliver at a similar level 
of performance and we will support the business 
with appropriate levels of investment 
the operational improvement plan oip first 
launched in june 2013 is a large and complex 
restructuring programme targeted at improving 
our longterm competitive position whilst also 
reducing overheads relocating certain 
manufacturing lines from werne germany to 
timisoara romania is a key aspect of this 
programme and progress was delayed during 
2014 agreement on the overall shape of the 
programme was reached with the workers’ council 
and trade union in late 2014 and the transfer is 
now making progress 
board and senior 
management changes
we have made a number of changes to the board 
and senior management team i joined from 
cobham plc as chief executive officer in july 
2014 and mark hoad was appointed as chief 
financial officer in january 2015 mark previously 
held the position of group finance director at 
bba aviation plc
at a senior management level we have 
implemented a number of organisational 
changes and reformed the leadership team 
within the sensing and control division we have 
created two distinct customer facing segments to 
provide greater market focus and accountability 
we appointed amrei drechsler as executive  
vice president evp transportation sensing  
and control tim roberts as evp industrial 
sensing and control and tc chan as evp of the 
integrated manufacturing services ims division 
our components division has been renamed 
advanced components and gareth mycock  
has been appointed the evp of that division
we have also strengthened other key areas of  
the business michael robinson has assumed  
the role of evp operations and supply chain to 
executive management board
left to right lynton boardman group general counsel  company secretary tim roberts evp industrial sensing and control john leightonjones 
evp human resources amrei drechsler evp transportation sensing and control richard tyson chief executive officer mark hoad chief financial 
officer tc chan evp ims candy bowles evp corporate development  strategy gareth mycock evp advanced components michael robinson 
evp operations  supply chain  11 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the cost of the oip programme in europe is 
anticipated to be approximately £240 million with 
projected full year run rate cost improvements of 
£35 million we expect to see the first benefits 
from the programme in the 2016 financial year 
this programme is a necessary step to underpin 
future competitiveness
detailed plans under the oip to move production 
are in place and monitored continually to ensure 
progress against critical milestones the first 
production line transfer from werne was 
completed in january as planned and the 
qualification of that line in romania is now in 
progress an additional ten lines are planned to 
move in 2015 with the remainder of the lines 
scheduled to be moved throughout 2016 we 
expect all elements of the programme to be 
completed in the first half of 2017
the closure of sales offices in japan france and 
italy was completed on schedule with the full year 
benefits of £13 million per annum largely realised 
in the year as previously announced the transfer 
of manufacturing from our fullerton california 
site to mexicali mexico has been put on hold in 
order to fulfil a significant customer order agreed 
in the first half of 2014 we continue to anticipate 
that the transfer will be completed in 2015 
as a result of the business review we have 
developed a strategic plan  
our focus is now on the execution of this plan  
and a return to sustainable profitable growth 
the strategy is one of refocusing rebuilding 
and generating momentum in the business 
supported by six main strategic priorities
– marketleading position in attractive niches 
by harnessing our expertise in electronics for 
performancecritical applications
– enhanced customer focus and more 
effective crossselling to make the most  
of the knowledge of and access to markets 
and customers across our businesses
– targeted and efficient rd to drive  
greater balance across our markets and  
a more efficient and effective new product 
development process to meet customer needs
– operational efficiency through greater 
collaboration across our businesses to leverage 
best practice procurement and economies of 
scale across our operations – including 
successful delivery of the oip
– a lean agile and learning organisation 
supporting the development of and 
investment in our people’s capabilities  
and improving decision making with  
greater transparency and accountability
– financial discipline and performance 
management to drive rigorous datarational 
decision making focused on value based 
investment decisions and emphasis on 
cash generation
this plan is designed to enhance and refine  
our existing strategy with three key outcomes 
improved customer performance improved 
operational performance and improved returns 
and cash generation our priority will be driving  
a ‘step change’ in execution deployment  
and engagement 
outlook
the overall operational and financial 
performance for 2014 was disappointing 
however the group has undergone significant 
change during the second half of the year we 
have a new management team in place and a 
clear strategic plan to improve the performance 
of the businesses 2015 will be an important year 
of transition as this new plan is implemented
whilst our order book remains sound our markets 
continue to look challenging especially in europe 
we therefore remain cautious in our outlook for 
2015 and we expect profits to be more secondhalf 
weighted than in the prior year the benefits of the 
new strategic plan are expected to be seen from 
2016 we are putting in place a solid platform from 
which to return to sustainable profitable growth 
and to improve value for shareholders
richard tyson
chief executive officer
11 march 2015
rebuilding the platform 
six strategic priorities
1 marketleading position 
2 enhanced customer focus
3 targeted and efficient rd
4 operational efficiency
5 a lean agile and learning organisation
6 financial discipline and  
performance management tt electronics plc annual report and accounts 2014 12
divisional review 
sensing and control
cleaner 
safer  
better
cleaner air through the effective reduction of vehicle 
emissions remains a key focus of the automotive oems 
for a better environment building on our expertise in 
clean air systems technology we have won our first 
programme for the defadblue
®
 fluid quality sensor 
for audi 
this fluid quality integrated sensor will be supplied to our tier1 
partner with full production starting in our klingenberg germany 
facility in q3 2015 we are delighted to be chosen to be a partner 
with a leading tier1 supplier and audi vw group for the latest  
diesel engine generation leading to a cleaner safer environment
this fluid quality sensor strengthens our position in this legislation 
driven market for larger diesel engines where selective catalytic 
reduction scr is used to reduce the nox content in the exhaust gas  
a key function of the scr system is the dosing of urea solution named 
adblue
®
 or diesel exhaust fluid def into the exhaust stream this 
fluid quality sensor provides feedback on the quality of the solution to 
ensure optimum performance of the system and it is now a requirement 
for selling vehicles into euro6 and tier 4 legislated countries   13 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
divisional review sensing and control
performance
revenue for the year ended 2014 was £2893 million 
2013 £2852 million an increase of 5 per cent on 
an organic basis excluding an adverse foreign 
exchange impact of £151 million and a £37 million 
contribution from roxspur measurement and 
control limited “roxspur” acquired in july 2014 
roughly half of the organic increase was due to a 
significant oneoff order for steering position 
sensors which is not expected to recur in 2015
underlying operating profit for the year declined  
by 19 per cent to £142 million 2013 £175 million 
and declined by 13 per cent on a constant currency 
basis giving an operating margin of 49 per cent 
2013 61 per cent this reduction was driven by 
poor performance in our transportation sensors 
business related to pricedowns and adverse 
product mix investment in product development 
and inefficiencies resulting from the movement to 
romania from our werne location this was partly 
offset by circa £4 million profit from the oneoff 
order for steering position sensors and growth in  
our transportation controls business there was a 
negative foreign exchange impact of £10 million 
and the acquisition of roxspur added £04 million  
to operating profit
key achievements and progress
a key focus for the sensing and control division  
was the implementation of the operational 
improvement plan oip the oip is designed  
to improve the efficiency of the operation  
overall and our competitiveness to our customers  
a number of external supplier processes were 
established in our romanian facility to protect  
the supply chain with all moves progressing to  
plan as suppliers into the automotive industry  
our high quality levels are fundamental and all of 
our automotive sites successfully maintained their 
isots and environmental certifications in 2014 
we completed our first full year in our new manesar 
facility in india and are starting to see the benefits 
of having established local manufacturing to serve 
the growing market a key focus for both our 
transportation and industrial sensing and control 
businesses will be improving rd investment 
efficiency and processes during 2015 
the division provides sensing and control solutions including speed position 
temperature accelerator pedal pressure fluid condition and flow sensors 
together with microcircuits and intelligent power modules for critical 
applications which require high levels of expertise precision and reliability 
the division’s principal manufacturing operations are located in germany austria romania uk india 
china and mexico and are supported by additional engineering and development teams in the usa  
and uk the division now has two customer facing segments transportation sensing and control and 
industrial sensing and control with a sales presence in all major markets the division is well positioned 
to serve our global customer base
2014 2013 change
revenue £2893m £2852m 1
underlying operating profit
1
£142m £175m 19
operating profit margin
1
49 61 120bps
1 excluding restructuring costs asset impairments and acquisition related costs
the sensing and control business launched several 
new sensor products including a new technology 
based on simspad
®
 our newest noncontacting 
sensor platform which is designed to detect 
nonlinear positions through nonferromagnetic 
walls our new overmoulded speed sensor was 
officially launched in 2014 which simplifies 
production and provides cost savings on  
assembly processing the business launched  
a new magnetorque
®
 sensor incorporating the 
latest technology for combining position and 
torque in a smaller package improving our ability 
to serve the growing area of electronic power 
steering eps applications
our transportation controls business grew 
significantly in 2014 buoyed by increased 
penetration of front led lighting into a broader 
range of vehicles and the increased usage of  
petrol engines where the increase in demand for 
engines experienced in year benefited our supply  
of intelligent electrical water pumps used in engine 
cooling systems the business expanded the supply 
of intelligent electrical water pumps regionally 
having won business with our first korean customer 
additionally we continued to develop technology 
to address customer needs in the area of both  
led lighting and intelligent power modules our 
patented approach to led placement helps our 
customers to enhance the light’s appearance on 
the road and will be used for the next generation  
of “intelligent” headlights we also patented a  
“chip stacking” technology which enables higher 
power density in smaller packages increasing the 
number and type of applications we can serve in 
transportation systems requiring power electronics
we experienced a number of delays in the launch 
of new product platforms during 2014 in our 
industrial sensing business and we are taking 
steps to reorganise the engineering function and 
review core processes in order to improve future 
execution despite this a number of new products 
were launched during the year including an 
optical sensor designed to monitor seeds as they 
are dispensed in agricultural planting equipment 
a number of new products are due to be launched 
in 2015 and these are expected to deliver modest 
benefits in the second half of the year
the acquisition of roxspur in july strengthened 
our sensors offering for industrial pressure 
temperature and flow sensors together with 
service and calibration whilst small the 
acquisition provides a platform for future growth 
in industrial applications a number of activities 
have been identified to expand the business’ 
product range and support growth in the  
medium term these include utilising the group’s 
electronics expertise to develop an enhanced 
range of pressure sensors with improved 
performance and configurability in addition  
we are evaluating a number of manufacturing 
process improvements leveraging skills from other 
parts of the group tt electronics plc annual report and accounts 2014 14
divisional review 
components
efficient 
versatile  
reliable
tt was selected by controls and data services part  
of the rollsroyce group to be its strategic supplier  
of hybrid microcircuits
we have been a partner of controls and data services since 2009  
this latest agreement extends our long term agreement to include 
the supply of high performance engine control modules for the latest 
rollsroyce engines including the trent xwb and trent 1000 for the 
next ten years 
the agreement is the result of close partnership between the two 
businesses and provides a solid platform for ongoing technology 
development partnership
our expertise in designing low mass high reliability  
power resistors has enabled us to work with moog to  
find new applications for our products in both commercial 
and military aircraft where the stainless steel based 
components act as fail safe for electrical brakes 
moog inc is a worldwide designer manufacturer and integrator  
of precision motion control products and systems
by enabling the safely controlled movement of flight surfaces  
our products are a crucial part of the flybywire systems which  
in turn are key to reducing net aircraft weight  15 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
divisional review components
performance
revenue for the year was £988 million  
2013 £1004 million on an organic basis 
revenue for the year increased by 1 per cent 
excluding a foreign exchange reduction of  
£25 million
underlying operating profit for the year more than 
doubled to £95 million 2013 £43 million driven 
by favourable product mix improvements in the 
underlying cost base and a circa £1 million oneoff 
benefit of nonrecurring orders associated with the 
closure of the smithfield usa facility there was  
a £02 million adverse foreign exchange impact 
operating margins increased by 530 basis points 
to 96 per cent 2013 43 per cent
key achievements and progress
2014 proved to be a successful year for the 
components division across nearly all markets 
and regions
the power and hybrid business had a strong  
year with increased sales and profitability and 
prior improvements in the strength of the team 
making an impact all product areas in the 
business performed well from all three of their 
sites power and hybrid announced a major 
landmark for their microcircuit products 
manufactured at the bedlington uk site with  
the signing of a long term supply agreement  
with rollsroyce subsidiary cds to supply its  
new range of multichip modules used in the 
control of fuel supply for a wide range of 
rollsroyce engines the power and hybrid 
business celebrated with nasa in the successful 
launch and flight of the orion space mission 
having supplied hybrid circuits for the vehicle 
management computer and the inertial 
measurement unit components also supplied 
precision resistors for the same systems
the components division comprises our resistors power and hybrid magnetics 
and connectors businesses each of these individual businesses operated with 
their own leadership structures during 201 4 to manage global sales operations 
and research and development allowing a greater focus on success in their 
respective product sets 
we serve customers in the industrial automotive aerospace defence and medical markets and focus 
on creating value by delivering innovative electronic solutions our highly engineered component 
solutions include fixed resistor products magnetics connectors power modules and control circuitry  
for harsh and difficult environments
2014 2013 change
revenue £988m £1004m 2
underlying operating profit
1
£95m £43m 121
operating profit margin
1
96 43 530bps
1 excluding restructuring costs asset impairments and acquisition related costs
smart meter technology
the pace of smart meter production  
is continuing to rise globally as local 
governments seek to reduce emissions  
and energy utility companies look to better 
manage load anticipating this trend we have 
focused on gaining design approvals with all 
major meter manufacturers in france the 
linky communicating meter rollout is set to 
utilise our protective high performance line 
input resistors in 20 million meters over the 
next five years
we have also secured major design wins  
in asia for example supplying into china’s 
industrial metering our component design 
expertise also enabled wins to be achieved  
in japan where liberalisation of electricity 
retail markets combined with the need to 
differentiate services has led to 75 million 
installations forecast for 2015 approximately 
double the number for 2014
the resistors business enjoyed a significant 
increase in sales across all product lines and 
managed a number of major projects a new 
customer service centre opened in bedlington  
uk and the corpus christi usa service centre  
was expanded corpus christi installed and 
commissioned a major new production facility 
after a year long multimillion dollar investment 
programme the new facility produces the new 
range of win moisture resistant precision thin 
film chip resistors mainly focused on industrial 
markets and product was successfully shipped  
in the second half of the year the resistors  
team also successfully managed the closure  
of the smithfield usa site without interruption  
to customers
the magnetics business enjoyed a successful  
year with solid performance and progress on a 
number of fronts gaining new programmes and 
launching new products the magnetics business 
based in kuantan malaysia continued to expand 
their automotive sales launched a new initiative 
to grow industrial sales and continued to expand 
their new range of moulded inductors including 
the launch of new high temperature aecq200 
qualified parts in december the magnetics team 
also celebrated the tremendous milestone of 
working for more than four million hours without  
a lost time accident
the connectors business achieved a solid year  
of sales and profitability continuing to support 
their loyal customer base in military and rail 
markets the connectors team took a major  
step forward with the launch of the new mil pp 
and mabac connectors for military use in land 
based applications tt electronics plc annual report and accounts 2014 16
divisional review 
integrated 
manufacturing 
services
accredited 
reputable  
reliable
tt is pleased to be selected by exelis as one of its 
preferred manufacturing partners exelis is a diversified 
global aerospace defence and information solutions 
company specialising in the delivery of affordable 
missioncritical solutions for global customers 
following a competitive tender process we were selected as a preferred 
manufacturing partner to exelis defence ltd in the uk to provide 
printed circuit board assembly for the enhanced hcdr enhcdr 
product tt has been chosen for our reputation as a global leader in 
manufacturing electronics for the aerospace and defence market
throughout 2014 we secured multiple new business awards with 
exelis in support of nato customer radio programmes we provide  
a competitive advantage for exelis’ regional operations through an 
enhanced service offering which includes specialised capabilities like 
environmental testing and design support all housed within our 
nadcap accredited uk facility  17 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
divisional review integrated manufacturing services
performance
revenue for the year was £1362 million  
2013 £1466 million with an organic decline of 
4 per cent excluding a foreign exchange reduction 
of £50 million the decline was driven by weaker 
than expected demand from some of our key 
customers in europe and was partially offset  
by increased revenue from our suzhou  
china operations
underlying operating profit for the year declined 
by 39 per cent to £55 million 2013 £90 million 
and by 33 per cent on a constant currency basis 
operating margins reduced by 210 basis points  
to 40 per cent 2013 61 per cent due to  
the impact of lower revenues as well as cost 
increases in romania in anticipation of  
volumes which have not yet been realised 
foreign exchange movements accounted  
for £05 million of the decline
a key focus for the business in 2015 will be  
to achieve stabilisation and growth at our 
rogerstone and romanian facilities
key achievements and progress
key wins specifically within the aerospace and 
defence markets have demonstrated success 
against our market strategies and operational 
investments in capital and quality systems have 
underpinned this achievement
the division draws on its design engineering capabilities global facilities 
and world class quality standards to provide highly complex electronic 
manufacturing solutions to customers in the aerospace and defence 
medical and high technology industrial sectors the business has broad 
capabilities ranging from printed circuit board assembly to environmental 
test and full systems integration this global suite of endtoend solutions  
is focused exclusively on low volume high mix business
the division supports its customers with a global infrastructure of skills and technologies combined  
with local support from manufacturing operations in china usa and europe
2014 2013 change
revenue £1362m £1466m 7
underlying operating profit
1
£55m £90m 39
operating profit margin
1
40 61 210bps
1 excluding restructuring costs asset impairments and acquisition related costs
partnership with spi lasers
we engaged with spi lasers a leading 
designer and manufacturer of optical 
fibrebased lasers to provide printed circuit 
board assembly pcba and box build services 
to support increased customer demand for 
several variants of a highpowered industrial 
laser we were selected based on our 
reputation for strong manufacturing and  
test support in the uk backed by the ability 
to facilitate a seamless transfer to our 
manufacturing location in romania
as the partnership grows we will provide 
additional electronics manufacturing 
services from our facilities in europe and 
asia from pcbas box builds and cable 
assemblies to customised functional  
testing solutions we are proud to provide  
an enhanced value offering a consistent 
global manufacturing experience and 
ultimately a cost reduction
in april the division was awarded nadcap 
accreditation in its perry ohio facility the 
nadcap accreditation was awarded in the 
category of electronics – ac7120 for the 
company’s printed circuit board assembly pcba 
demonstrating its ongoing commitment to 
quality by satisfying customer requirements  
and industry specifications with the certification 
in its perry ohio operation ims has achieved 
nadcap accreditation in its factories across 
europe asia and north america at the time  
of award ims facilities accounted for three of 
only 53 companies worldwide holding nadcap 
printed circuit board assembly accreditation  
this achievement demonstrates execution of  
an ongoing global quality roadmap designed  
to meet the needs of customers in the high 
reliability high technology aerospace sector
in may ims was named thermo fisher  
scientific’s supplier of the year this prestigious 
award recognises ims’ excellence in quality 
responsiveness valueadded services and overall 
contributions to mutual success as a strategic 
partner in 2014
throughout the year the ims division continued 
expanding its suite of endtoend solutions by 
globalising cable harness and environmental  
and reliability testing services following the  
prior year’s consolidation of technologies and 
operations of ab interconnect inc in the usa 
and new chapel electronics ltd in the uk  
ims opened a new engineering office in cary 
north carolina in addition to the primary 
manufacturing facilities across north america 
europe and asia a dedicated team of engineers 
located at the new ims office in the usa will 
provide aerospace and defence customers with 
specialised technical expertise and extended 
product support 18 tt electronics plc annual report and accounts 2014
2014 financial performance
the 2014 financial performance for the group  
is detailed in the chief executive officer’s 
statement on pages 8 to 11
exchange rates
the exchange rates used to translate the key 
nonsterling flows and balances were
2014 2013 2012
euro – average rate 124 118 122
euro – closing rate 128 120 122
usd – average rate 165 157 159
usd – closing rate 156 166 162
restructuring costs asset 
impairments and acquisition 
related costs
total restructuring costs asset impairments  
and acquisition related costs amounted to  
£335 million 2013 £118 million included 
within this charge were restructuring costs of 
£222 million 2013 £102 million which related 
principally to the operational improvement plan 
footprint changes within the ims division and 
costs related to organisational and leadership 
team changes
acquisition related costs amounted to £19 million 
2013 £16 million and included noncash 
amortisation of acquisition intangibles 
contingent consideration on the roxspur 
acquisition and deal costs 
asset impairments of £94 million were 
recognised 2013 £nil which largely relates  
to an accounting writedown of capitalised 
intangible development costs following a review 
of the returns expected to be generated from 
each programme 
acquisitions and disposals
on 14 july 2014 the group announced the 
acquisition of roxspur measurement and  
control limited “roxspur” for a consideration  
of £84 million with £04 million of cash in the 
business deferred consideration of £25 million 
will be settled in 2016 if performance conditions 
are achieved
roxspur is a leading supplier of temperature  
flow pressure and level sensors together  
with calibration services for a range of critical 
measurement and control applications for global 
industrial customers and is being integrated into 
our sensing and control division the fair value  
of assets acquired was £62 million including 
intangible assets of £45 million resulting in 
goodwill of £21 million recognised on acquisition 
interest
there was a £09 million increase in the net 
interest expense to £16 million 2013 £07 
million primarily as a result of a lower net credit 
from the retranslation of foreign currency 
borrowings
tax and earnings per share 
the underlying effective tax rate of 257 per cent 
was slightly higher than the prior year  
2013 236 per cent and basic underlying 
earnings per share decreased by 12 per cent to 
129 pence 2013 146 pence and by 5 per cent  
at constant currency
the basic loss per share from continuing 
operations was 66 pence 2013 profit 88 pence
dividends
the board is recommending an unchanged final 
dividend of 38 pence which when combined  
with the interim dividend of 17 pence gives  
a total of 55 pence per share for the full year 
2013 54 pence per share representing an 
increase of 2 per cent
pensions
the group operates one significant defined 
benefit scheme in the uk and one overseas 
defined benefit scheme in the usa both of these 
schemes are closed to new members and are 
closed to future accrual the assets and liabilities 
of the group’s defined benefit schemes are 
summarised below
£million 2014 2013
fair value of assets 4582 3881
liabilities 4687 4079
deficit – uk scheme 105 198
overseas schemes 19 07
total group deficit 124 205
the triennial valuation of the uk scheme as  
at april 2013 showed a deficit of £191 million 
compared with £394 million at april 2010 
representing a funding level of 96 per cent 
compared with 89 per cent previously it was 
agreed with the trustee that the existing  
recovery plan is sufficient to address the deficit 
contributions of £41 million were paid during the 
year and will increase by £02 million each year to 
£45 million in 2016 in addition the company 
has set aside £30 million over the last three years 
to be utilised in agreement with the trustee for 
reducing the longterm liabilities of the scheme 
financial review
principal risks
cash flow and debt
net debt at the end of the year was £143 million 
2013 net cash £269 million at the yearend 
£211 million of the total longterm borrowing 
commitments of £707 million remained 
undrawn since the yearend the uk revolving 
credit facility commitment has been increased 
from £450 million to £650 million giving total 
longterm committed facilities of £907 million 
these facilities mature in august 2017 net debt 
to underlying ebitda for 2014 was 03 times 
the main financial covenants in the longterm 
bank facilities restrict net debt to below 275 
times ebitda before exceptional items and 
ebitda before exceptional items is required to 
cover net finance charges by 40 times 
covenant
december 
2014
net debtunderlying 
ebitda  275 03
underlying ebitdanet 
finance charges  400 644
in addition to the main group revolving credit 
and us bilateral facilities the group maintains 
uncommitted facilities for daily working capital 
fluctuation purposes  19 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
2
6
4
0
36
37
44
2012 2013 2014
43
41
45
44
42
40
428
443
na
2012 2013 2014
2014 fourth quartile
2012 third quartile
2013 second quartile
10
–10
20
0
–20
105
193
116
2012 2013 2014
6
8
2
10
4
0
60
58
56
group
2012 2013 2014
6
8
2
10
4
0
54
43
96
2012 2013 2014
components
6
8
2
10
4
0
64
61
49
sensing and control
2012 2013 2014
6
8
2
10
4
0
58
61
40
2012 2013 2014
ims
60
20
80
40
0
73
53
3
2012 2013 2014
4
2
–4
–2
6
0
–6
43
49
21
2012 2013 2014
key performance indicators
financial
nonfinancial
an employee survey was not 
performed in 2014 due to the 
organisational restructuring that 
occurred in the second half of  
the year
we are committed to a target of  
zero injuries the total number of 
injuries increased from 2013 to 2014 
a healthy safe working environment 
for our employees is the highest 
priority for tt electronics as a result 
of our safety performance in 2014 
we have revised our approach to 
make improvements in this area as 
outlined on page 25
safety performance employee engagement
the ims division operating margins 
decreased due to weaker revenues 
for key customers and romanian 
facility startup costs
operating profit margin
for 2014 the conversion was 
positive 3 per cent reflecting  
the investment made in capital 
equipment and the expansion  
of facilities in best cost regions
operating cash conversion
organic revenue increased in 2014 
by 21 per cent reflecting new 
business won through existing  
and new customers
organic revenue growth
the group’s tsr for 2014 was  
negative 348 per cent compared  
to the median of the comparator 
group of negative 15 per cent
relative total shareholder return tsr
eps from continuing operations 
decreased from 146 pence in  
2013 to 129 pence in 2014 
underlying earnings per share eps  growth
see page 97 for definitions
the reduction of operating margins 
in sensing and control was driven  
by poor performance in our 
transportation sensors business  
as discussed on page 13 
the components operating margins 
increased based on improved mix 
reduced costs and the onetime 
benefit resulting from last time buys 
our kpis were first established in 2009 and are in the process of being reviewed for 2015 onwards 20 tt electronics plc annual report and accounts 2014
corporate level steering
“topdown” oversight set risk appetite
monitor signiﬁcant risks alignment with strategic
objectives at corporate level
operational steering and implementation
“bottomup” identiﬁcation
assessment and mitigation of risk
at operational level
board of directors
primary responsibility for
risk oversight setting 
strategic objectives and 
deﬁning risk appetite
audit committee
oversee risk
management and internal 
control processes
risk committee
provides framework for 
managing risks regular 
reviews of principal risks and 
risk management processes
divisional level steering and reporting
risk identiﬁcation assessment and
implementation of risk management
action plans and actions
business unitssite level
steering and reporting
implement and embed risk management
at operational level
risk and
assurance
function
risk management
risk management
risk management framework
the board of directors is responsible for risk 
management and internal controls supported  
by the audit committee and informed by the 
executive risk committee the board defines  
risk appetite and monitors the management of 
significant risks to ensure that the nature and 
extent of significant risks taken by the company 
are aligned with overall goals and strategic 
objectives the risk committee supports the 
board and the audit committee in monitoring  
the exposure through regular reviews and has 
been delegated responsibility for reviewing the 
effectiveness of risk management processes and 
controls the risk and assurance function assists 
the risk committee by advising management on 
improvements to the overall risk management 
framework and facilitating the risk review process
risk management processes and internal control 
procedures are established within business 
practices across all levels of the organisation  
risk identification assessment and mitigation  
are performed both “bottomup” with more 
detailed assessment at operational level as well 
as through “topdown” assessment of strategic 
and market risk at the executive management 
and board level
risk management and internal controls provide 
reasonable but not absolute protection against 
risk risk appetite is not static and is regularly 
assessed to ensure it continues to be aligned  
with goals and strategy
risk profile
new and existing risks were identified and  
assessed during 2014 executive management  
the risk committee and the board of directors 
performed further analysis to prioritise these  
risks with a focus on those principal risks posing  
the highest current risk to the achievement of 
company objectives risks assessed as higher 
priority were consolidated onto a risk heat map 
risks included on the heat map are monitored  
more closely by executive management the risk committee and the board of directors whilst these 
principal “top risks” represent a significant portion of the group’s overall risk profile executive management 
and the risk committee continue to monitor the entire universe of risks to identify new or emerging risks as 
well as any changes in risk exposure the overall group risk profile continued to evolve during the year high 
level trends include a reduced exposure to external threats such as a macro economic downturn with key 
indicators such as order book intake remaining stable or positive in key markets whilst internally the group 
continued to intensify efforts to transform operations by consolidating manufacturing sites and setting  
up manufacturing and engineering capability in lower cost regions thereby increasing the potential risk of 
customer service disruption or the delay of planned cost savings impacting medium term financial results
risk management developments during 2014
one of the key areas of focus for the risk committee during 2014 arose from the announcement that 
the group’s performance in 2015 would be materially lower than previously forecast driven principally 
as a result of poor forecasting processes and slower than anticipated progress in implementing the 
operational improvement plan within the sensing and control business as a result of this event and 
the resulting improvement action the risk committee under the direction of the audit committee 
has initiated a high level review of all of the principal risk factors and processes having the potential to 
impact the group which includes areas such as the underlying economic outlook of the business and 
product development and launch processes this has also resulted in a detailed review of the proposed 
2015 audit plan to ensure that internal audit resource is directed at the key risk factors for the group’s 
operations additional areas of focus included the following
developments during  
2014 include
benefits for our  
stakeholders
1 continued  
to improve 
management 
understanding 
of risk exposure 
and appetite
the structured approach for risk 
identification and assessment 
incorporating a “topdown” and 
“bottomup” perspective on risk 
continues to improve visibility and 
monitoring of risk exposure trends 
and developments supporting 
management to prioritise and 
implement required actions to 
mitigate associated risks
supports the board audit committee 
and executive management  
with an improved mechanism for 
understanding risk exposure defining 
the risk appetite and prioritising action 
plans as well as linking significant risks 
to company strategy and objectives
2 embedding  
the risk culture 
throughout 
the group
risk management is an evolving 
process this is recognised by  
ongoing training and advice by 
divisional and business unit risk 
representatives supported by the 
central risk and assurance team  
best practice sharing gap analysis  
and internal benchmarking
successful training and 
communication help build a culture 
and ability to further embed  
processes and procedures throughout 
the organisation a more deeply 
embedded risk management culture 
supports longterm value creation for 
all stakeholders  21 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
how we are managing our risks
principal risks
outlined in the table below are the “principal risks” which could have an adverse impact on the group’s financial performance and position
risk description potential impact mitigating actions
commercial
research and development
delay in new product  
development which is intended  
to support revenue growth
– increased costs to 
develop products
– delay in achieving 
projected revenues
– close collaboration with key customers
– active monitoring of costs and milestones
– targeting rd more effectively
– implementation of standard project management disciplines
margin erosion
pricedown nature of  
contracts particularly in  
the automotive market
– reduction in revenues 
profitability and cash generation
– focus on product design improvement to optimise product cost
– annual material cost reductions through local optimisation supported by 
broader procurement and operational improvement initiatives
– transfer of operations to best cost manufacturing locations
operational
operational 
improvement plan
delayed execution of operational 
improvement plan
– potential business disruption
– delayed delivery of target 
cost savings
– increased costs to execute 
– new project team in place dedicated sending and receiving teams 
established for europe project
– executive monitoring of progress and robust project management 
disciplines and controls implemented
health and safety
risk of a health and safety  
incident in the workplace
– potential injury to our employees 
or visitors
– regulatory action and 
legal claims
– reputational impact
– reduction in profitability
– we adopt a zero tolerance attitude for safety related incidents at all  
levels we continued training to raise awareness and regular audits  
of facilities to ensure high standards are met
– cross group health and safety committee established with executive 
sponsorship reporting to executive management board emb incident 
reports regularly reviewed by the emb 
– the health and safety committee supported by local teams enables 
companywide best practice sharing monitoring and rollout
people and capability
ability to attract and retain  
high quality and capable people
– loss of key personnel
– potential business disruption
– remuneration structure designed to support retention
– succession planning processes embedded within the businesses  
with active emb sponsorship and engagement
supplier resilience 
and continuity
potential failure of critical suppliers
– product delivery delays
– inability to meet customer 
commitments
– reduction in revenues 
profitability and cash generation
– regular review of key supplier financial health and product quality
– monitoring of the trending of relevant commodity and precious 
metals pricing
laws  regulation
product quality 
product liability and 
contractual risk
potential liabilities from 
defects in performancecritical 
products that often operate in 
extreme environments
– reputational impact
– deterioration in customer 
relationships
– liability claims
– reduction in revenues 
profitability and cash generation
– quality control procedures and systems in place and appropriate levels  
of insurance carried for key risks
– group guidelines on acceptable levels of contractual liability are 
reinforced by legal and regulatory risk training specific to each  
division’s business and geographical needs
legal and regulatory 
compliance
intentional or inadvertent 
noncompliance with legislation 
including laws and regulations 
covering export control 
antibribery and competition
– reputational impact
– civil or criminal liabilities leading 
to significant fines and penalties 
or restrictions being placed upon 
our ability to trade
– reduction in revenues 
profitability and cash generation
– crossdivision export compliance group established across the business 
supported by the group legal counsel with external adviser participation
– an antibribery programme is in place which includes risk assessment 
policy training review and monitoring
– whistleblower process in place to ensure issues can be raised 
investigated and managed as appropriate 
it should be noted that the group is exposed to additional risks that are not considered material but which could have an adverse impact 22 tt electronics plc annual report and accounts 2014
corporate responsibility
communities
2014 has seen our employees develop further their relationships with the 
local communities in which they work in the uk we continued our charity  
of the year partnership with macmillan cancer support raising £50843 
making a total contribution of more than £100000 in two years
all of our uk sites have contributed this year with events including christmas 
hamper raffles easter bake sales sweepstakes movember and several sites 
took part in the world’s biggest coffee morning
notable team efforts included the connectors business unit raising more 
than £20000 over 18 months in support of mark edwards and dean o’brien 
on their kilimanjaro trek and teams from ims and power and hybrid business 
units raising more than £7000 between them by completing bike rides
salzburg
students visiting our  
salzburg facility
timisoara
employees in timisoara 
taking gift bags to their 
local children’s hospital
community 
responsibility  
contribution  23 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
globally our businesses support a variety 
of charities and they have collected for 
food banks and taken part in events 
including “carve a pumpkin” and “wear  
a christmas ugly sweater” our juarez 
mexico employees took part in a blood 
donation campaign for their local 
children’s cancer hospital donating 
enough blood between them to save 
148 lives and our timisoara romania 
employees raised money and donated 60 
gift bags to their local children’s hospital
our commitment to supporting education 
remains an important part of our cr and 
community programme in bangalore employees 
from our engineering centre supported the 
creation of science labs in two schools for 
underprivileged children employees visited the 
schools and provided technical talks and taught 
classes along with funding for computers 
teaching aids and books in october the first of 
the science labs was inaugurated at the royal 
english school near bangalore enabling 110 
students to enhance their interest in science 
and technology
two further institutes in india are being 
supported by employees in manesar 
shakuntalam helps underprivileged children’s 
education creating awareness in villages and 
preparing and educating children to a level  
where they can gain admission to regular schools 
whilst khushboo provides specialist therapy and 
supports the education of autisticspecial needs 
children and creates awareness in society by 
educating parents and others and encouraging 
equal treatment
we also supported schools in china 
romania and the usa employees in 
suzhou china provided 120 sets of new 
desks and chairs 10 laptops and a variety 
of books and stationery to huangzui 
elementary school in suzhou shunhe 
anhui province in timisoara romania 
the local school remetea mare received 
educational equipment and in carrollton 
usa employees “adopted” a class of 
20 at a preschool for underprivileged 
children and visited them at christmas 
with presents chosen especially
additionally our salzburg austria facility provided 
local students with an insight into working for  
tt hosting a series of visits by more than 160 
students from the technical high school and 
university of salzburg it was the first visit of its 
kind and provided an opportunity to showcase 
the company and give local students a view  
inside the electronics industry
our employees’ efforts make a huge difference  
to the locations in which we operate and to  
those people projects and charities we are able 
to support the initiative provides a platform for  
our employees to connect with and contribute  
to their local communities which is of mutual 
benefit the board would like to put on record  
our thanks to all of our employees for their 
commitment and contribution and we will 
continue to support both them and the 
communities throughout 2015
corporate responsibility “cr” assists us  
in managing our business accountably and  
sustainably in accordance with the expectations  
of multiple stakeholders cr reflects our culture  
we seek to attract and retain good people  
and maintain our reputation cr is a dynamic 
discipline to manage risk enhance our culture  
and maximize global opportunity our cr policies 
are focused on four key areas
– workplace – we invest in the development of 
skills in health and safety and motivating our 
employees to create a more sustainable business
– marketplace – we act to improve the 
environmental performance and impact of  
our products and of our suppliers to better 
 serve our customers
kilimanjaro
mark edwards and dean 
o’brien completing their 
kilimanjaro trek to raise 
funds for macmillan
bangalore
our sensing and control 
team supporting the local 
orphanage in bangalore 24 tt electronics plc annual report and accounts 2014
corporate responsibility continued
this law is extraterritorial in scope with broad 
application not only to british companies citizens 
and residents but also to all foreign companies 
doing business in the uk regardless of whether 
the act or omission constituting bribery occurs 
within or outside the uk all companies within the 
group operate within the terms of the act and 
associated guidelines as well as local laws which 
have direct effect and are rigorously enforced  
in all of our global facilities all employees  
have access to an explanatory guide to the act 
contained within our worldwide anticorruption 
and bribery policy which sets out the behaviours 
expected by the group this policy is reinforced 
with an online training programme which  
is compulsory for a significant proportion of  
staff regardless of location particularly those  
in salesfocused roles or having the ability to 
commit the business to material liabilities or 
contractual commitments an internal audit of 
the adequacy of our procedures in 2014 led to 
improvements in training and accountability and 
increased the number of employees required to 
participate whistleblowing issues are reported 
directly to management or through the group’s 
multilingual anonymous ethics and integrity 
portal all approaches are carefully investigated 
at a senior management level but are also 
notified to and reviewed by the audit committee 
during the past year the audit committee 
received details of three cases each of which  
was investigated and appropriate action taken  
in one instance evidence was discovered that  
the division concerned had failed to follow  
the proper “change management” procedures 
contained in the group’s processes as a result of 
this whistleblower event the relevant customers 
were informed of the specific areas of default  
and corrective action was taken at both an 
operational and managerial level
given the increase in defence and aerospace 
business in the group particularly in our advanced 
components and integrated manufacturing 
services divisions we are ensuring that our 
operations meet applicable export controls 
requirements in each location and our cr policies 
generally this is a particular issue for products 
which may have specific military and potential 
“dualuse” applications which are subject to a 
complex regulatory regime particularly in the  
us where the itar rules apply the group meets 
its obligations by applying procedures supported 
by dedicated training events and advice is also 
sought from specialist external providers on a 
regular basis in addition we have tightened  
our internal policies relating to the potential 
acquisition of companies as part of our  
“due diligence” processes
our intention in 2015 is to develop an integrated 
approach to governance risk and compliance 
the risk committee and internal audit function 
will assess the adequacy of compliance and 
appropriate mitigations in addition we will  
revise our group delegations matrix to ensure 
that compliance issues are properly integrated 
into our financial control systems including our 
group financial controls framework as  
described in more detail in the audit committee 
review as well as our commercial policies and 
communication processes
ethics
one of our key competitive strengths is that we 
are an ethical company operating with integrity 
and to one standard worldwide we do not 
tolerate corruption or bribery in any form and  
are committed to maintaining the fundamental 
principles of fairness honesty and common sense 
which lie at the heart of the group’s philosophy 
values and corporate standards we operate 
effective systems and processes to counter 
corrupt practices including an anonymous 
“whistleblower” reporting facility where 
individuals can notify us of concerns
strong business ethics form the basis for our 
relationships with all of our key stakeholders 
including employees customers partners 
competitors and suppliers our statement  
of values and business ethics code sets out  
the operating principles to which we adhere 
which cover a diverse range of issues including 
antibribery information assurance intellectual 
property protection fair competition the working 
environment including standards of behaviour 
expected from our employees hospitality
entertainment and avoiding conflicts of interest 
this is supported by our membership of the  
eicc as described above
daytoday oversight of ethics and compliance
related matters is undertaken through  
our corporate and social responsibility 
committee which is supported by a dedicated 
environmental health and safety committee 
under the leadership of our evp operations 
michael robinson
workplace
employees
we believe that our 5850 employees are  
our key assets 507 per cent are male and  
493 per cent are female the table opposite 
provides a further breakdown
creating a good working environment at all of our 
locations is of paramount importance we strive 
to build a supportive diverse and engaging 
workplace whilst nurturing a high performance 
corporate culture built around our core values
human rights
we are committed to upholding the human rights 
of our workers and to treating them with dignity 
and respect as understood by the international 
community our human rights code is contained 
within the eicc code of conduct and covers  
all workers including permanent temporary 
migrant student contract direct and indirect 
our code details expected labour standards 
covering freely chosen employment child labour 
avoidance working hours wages and benefits 
humane treatment freedom of association and 
– environment – we act to improve the 
environmental impact of our operations  
and the efficiency of our products and
– community – we proactively engage with  
the communities within which we operate
we have global standards in place for the areas  
of workplace marketplace and environment 
respectively community initiatives are driven 
predominantly by local issues this enables the 
businesses to support causes relevant to their 
location we also identify the behaviours  
we expect to be associated with our brand 
internally and externally our reputation rests 
with our brand
the corporate and social responsibility 
committee chaired by the chief executive 
officer is responsible for defining our strategic  
cr priorities monitoring our cr performance  
and ensuring that our cr activity remains directly 
related to our overall business objectives
electronics industry  
citizenship coalition
we maintain an active involvement with the 
electronics industry citizenship coalition “eicc” 
this involvement helps to ensure that our ethical 
standards align with the industry in which we 
operate the eicc is an alliance of the world’s 
leading electronics companies and membership 
enables us to share and benefit from best  
practice and to work collaboratively with peer 
organisations on issues of common concern 
facing our industry
the vision of the eicc is to create a global  
supply chain that consistently operates with 
social environmental and economic responsibility 
in doing so members adhere to a common  
code of conduct this code of conduct provides 
guidelines for performance and compliance in  
five critical areas environment ethics health  
 safety labour and management systems  
in particular the code establishes standards  
to ensure that working conditions are safe that 
workers are treated with respect and dignity and 
that business operations are environmentally 
responsible and conducted ethically
all of our manufacturing facilities are required  
to complete an eicc survey on a two yearly  
basis which measures performance and social 
practices as well as the performance of social 
and environmental management systems the 
last evaluation exercise in 2013 showed that our 
sites demonstrated high levels of adherence to 
the code of conduct leading to them all being 
assessed as either “low” or “medium” risk
some of the principal themes of how we conduct 
our cr activities are set out below
compliance
as a uk listed company we are bound by and 
adhere to the laws of england and wales 
including the uk bribery act 2010 “the act”    25 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
nondiscrimination the group does not engage 
in discrimination based on race colour age 
gender sexual orientation ethnicity disability 
pregnancy religion political affiliation union 
membership or marital status in hiring or in 
employment practices such as promotions 
rewards or access to training
training and development
we employ more than 5800 people globally  
and will continue to invest in their training and 
development we strongly believe in equipping 
our people with the skills to do their jobs 
effectively encouraging them to develop to  
their full potential by providing a variety of 
tailored training and development opportunities
employee engagement
an engaged workforce significantly enhances 
company performance engaged employees 
perform strongly positively promote our business 
and are loyal they are also more likely to 
enhance our relationships with our customers 
stakeholders and the communities within which 
we operate
employee engagement begins with fostering a 
culture that is open transparent and collaborative 
at all levels we are committed to encouraging a 
high degree of openness and equality which will 
continue to enhance our culture where possible  
a number of our facilities have removed walls and 
offices in favour of an open plan environment
we strive to maintain engagement of employees 
at all points from the application process to  
the retirement process we approach every 
interaction with openness honesty and integrity 
strong relationships built on trust are at the  
core of what we do collaboration across the 
group and beyond assists our ability to gather 
important insights and ideas improving the way 
we conduct our business and serve our customers
in 2014 we continued to make significant progress 
to connect with our employees at all levels and we 
see this as a critical component of engagement 
throughout the group we provide numerous open 
transparent and twoway communication channels 
all employees are encouraged to promote and 
live our corporate values collectively making our 
people feel proud to be part of our organisation 
in 2014 over 1000 “thank you” cards were 
issued through our global recognition programme 
“inspire” which acknowledges individual and 
team contributions through monthly recognition 
awards quarterly exceptional awards and 
biannual chief executive officer awards
environmental health and safety
the environmental health and safety 
committee is now led by michael robinson  
evp operations and supply chain who reports  
to the executive management board monthly  
on progress our goal is an injury free work 
environment in 2014 the trend of reported 
injuries resulting in a greater than three day 
absence and the total injuries reported were 
worse than in 2013 at 27 and 52 respectively
the dedicated environmental health and safety 
committee was created to reverse this trend  
it is fully supported by four regional teams with 
representation from all sites regular regional 
meetings are focused on improving corrective 
actions with a standard process escalating the 
near miss campaign better training and disciplined 
health and safety system implementation
marketplace
our social and environmental practices are 
important in embedding sustainability into  
our supply chain we require our suppliers to 
ensure that their employees operate in a safe 
environment with a strong code of conduct  
and a culture which promotes effective business 
ethics we also expect them to adhere to relevant 
legislation both globally and within their region 
we adhere to eicc and relevant industry codes  
of conduct such as zvei which represents the 
economic technological and environmental policy 
interests of many of our european suppliers we 
continue to work with our supply chain to ensure 
adherence to best practices all major suppliers 
completed eicc selfassessment questionnaires 
or had eicc risk assessment ra1 reviews carried 
out during 2013 we continue to work closely  
and directly with the eicc and our vendors in 
terms of ongoing assessment and development
environment
tt electronics strives to ensure that all of our 
facilities worldwide meet or exceed local and 
regional guidelines for environmental protection  
we are a registered participant in the uk’s carbon 
reduction commitment crc energy efficiency 
scheme during 2014 we continued to consolidate 
our position in terms of optimised energy 
consumption we collect data monthly on  
the key carbon emission drivers from all of our 
manufacturing sites worldwide we also monitored 
other greenhouse gases methane nitrous oxide 
hfcs pfcs and sulphur hexafluoride the 
investigations revealed that emissions resulting from 
our operations are not material accordingly they 
are reported under ‘other statutory disclosures’ on 
page 50 our processes in terms of data collection 
and verification are auditable and robust
our uk smart metering programme was 
completed in 2013 and all our uk manufacturing 
sites now benefit from visibility of real time data 
with which to reduce their gas and electricity 
consumption in the uk we continue to work  
with our energy provider to take advantage of its 
extensive web based targeting and monitoring 
information all our uk manufacturing sites now 
actively engage in these processes as part of their 
energy reduction programmes
we have been successful in meeting the latest 
cca milestone targets in two of our major uk 
plants ab connectors and welwyn components 
we are in the process of adopting this prescribed 
regime in our other uk operations in an effort to 
reduce our carbon usage and to improve our 
carbon footprint year on year 
we have embraced the new esos regulations and 
with our newly appointed lead auditor expect to 
be compliant in q2 2015
approved by the board on 11 march 2015 and 
signed on its behalf by
richard tyson
chief executive officer
11 march 2015
mark hoad
chief financial officer 
11 march 2015
employees
2013 2014
employees full time equivalent male female male female
main board directors 7 0 7 0
executive management board 9 0 6 2
senior managers 36 8 30 8
austria 205 88 201 90
barbados 27 86 27 86
china 418 475 424 502
germany 482 529 482 493
india 171 19 140 25
malaysia 50 440 60 347
mexico 420 410 392 428
romania 150 96 181 142
uk 633 403 699 409
usa 300 366 318 359
all employees 2856 2912 2967 2883 26 tt electronics plc annual report and accounts 2014
board of directors and company secretary
sean watson 66
chairman
committees 
nominations chairman 
corporate governance chairman 
remuneration
joined tt 2007 as an independent 
nonexecutive director chairman since 
may 2010
experience a former partner and head 
of corporate finance with cms cameron 
mckenna llp was a nonexecutive 
director of informa plc from 2000 to 
2009 a trustee of princess alice hospice
richard tyson 44
chief executive officer
committees 
corporate and social responsibility 
chairman
risk chairman
joined tt july 2014
experience president of the aerospace 
 security division of cobham plc from 
2008 to 2014 and a member of their 
executive committee previously 
responsible for trw aeronautical 
systems formerly part of lucas 
industries european aftermarket 
business before joining cobham plc in 
2003 to run its flight refuelling division
mark hoad 44
chief financial officer
committees 
corporate governance
risk
joined tt january 2015
experience a chartered accountant 
mark was group finance director of bba 
aviation plc a ftse 250 company from 
2010 to 2014 prior to joining bba as 
group financial controller in may 2005 
he spent nine years in a variety of 
management roles at rmc group plc 
with periods in germany croatia  
and australia
john shakeshaft 60
senior independent nonexecutive 
director
committees 
remuneration chairman
audit
nominations
corporate and social responsibility
joined tt 2007
experience currently chairman of 
ludgate environmental fund limited 
chairman of the economy bank nv 
chair of the investment committee of 
corestone ag director and chairman  
of the audit committee of kinnevik ab 
chairman of valiance investment funds 
deputy chairman of the council of 
cambridge university formerly a 
managing director at abn amro and 
lazard brothers having held senior 
positions within barings morgan stanley 
and morgan grenfell joined the city in 
1986 following a number of overseas 
postings with hm foreign and 
commonwealth office
michael baunton cbe 64
independent nonexecutive director
committees 
audit
nominations
remuneration
joined tt 2010
experience currently chairman of the 
board of smmt industry forum limited 
the society of motor manufacturers and 
traders’ industry forum nonexecutive 
chairman of vtl group and a 
nonexecutive director of acal energy 
ltd awarded a cbe in 2004 for services 
to the automotive and engineering 
industries in the uk previously held 
senior executive roles with companies 
including caterpillar inc perkins engines 
company limited and tenneco inc
stephen king 54
independent nonexecutive director
committees 
audit chairman
nominations
corporate governance
joined tt 2011
experience currently group finance 
director of caledonia investments plc 
and chairman of the audit committee of 
the board of bristow group inc formerly 
nonexecutive director and chairman of 
the audit committee of the weir group 
plc group finance director of de la rue 
plc from 2003 to 2009 and prior to that 
finance director of aquila networks plc 
formerly midlands electricity plc a 
chartered accountant stephen has also 
held senior financial positions in lucas 
industries plc and seeboard plc and was 
also a nonexecutive director of camelot 
plc from 2008 to 2009
lynton boardman 48
general counsel  company 
secretary
committees 
risk
corporate governance
joined tt 2012 
experience a qualified solicitor having 
practiced with simmons  simmons 
macfarlanes and burges salmon llp 
formerly head of legal europe middle 
east and africa at syngenta crop 
protection and then general counsel and 
company secretary of qinetiq group plc 
from 2002 to 2011
pictured from left to right 
lynton boardman john shakeshaft 
sean watson richard tyson mark hoad  
michael baunton cbe stephen king  27 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
governance
introduction
the board is committed to ensuring high standards of corporate 
governance which is of fundamental importance to the future success of the 
group we recognise however that 2014 was a challenging year in terms of 
the assessment and communication of financial and performance targets 
for 2015 and beyond since then we have been taking steps to improve our 
core processes and governance of controls particularly in the area of 
financial management
considerable changes were made during the year in strengthening the 
executive management team at an executive director level richard tyson 
replaced geraint anderson as group chief executive officer on 1 july  
and mark hoad succeeded shatish dasani as chief financial officer on  
1 january 2015 the board is delighted with the drive and energy that both 
richard and mark have brought to the business since their appointments  
as reflected in the new strategic initiatives which are contained elsewhere  
in this report in addition 2014 saw a significant amount of change at the 
executive management board “emb” level as described in more detail  
in the chief executive officer’s statement driven in large part by the 
restructuring of the sensing and control division to create two distinct 
customer facing segments transportation sensing and control and 
industrial sensing and control
the board continues to take the view that is effective wellbalanced and 
includes a group of nonexecutives who collectively draw on a wealth and 
variety of experience thus providing for meaningful discussion constructive 
challenge and decision making nevertheless as part of our continuing 
commitment to facilitate a regular refreshing of core skills and diversity of 
experience we expect to elect another independent director to the board  
in 2015 as in previous years the board continued with its approach of early 
engagement in the strategic planning cycle with two separate meetings 
during 2014 being devoted exclusively to consideration of the strategic 
direction of the business in the coming years with a further two such 
meetings having already taken place during 2015
diversity in its widest sense is considered to be a key business enabler across 
the group and the board seeks to ensure that equal opportunity is afforded 
to all regardless of gender age ethnic background or religious belief the 
board also believes that of equal importance is the need to ensure that all 
staff skills and competencies are matched to the strategic and operational 
needs of the business in our core markets the emb now comprises some five 
different nationalities from three different continents
last year saw a material change in the regulatory and reporting landscape 
for uk listed companies which included the introduction of the new 
strategic report structure enhanced environmental audit and remuneration 
disclosure requirements and an obligation placed on the board to ensure 
that the annual report presents a “fair balanced and understandable” 
assessment of the company’s financial position and future prospects
we remain committed to improving our risk management processes 
however the announcement in november 2014 that the performance of the 
group’s business would be materially lower in 2015 demonstrated that these 
improvements are not yet as robust as we would like as a result the board 
through the audit committee has initiated a high level review of the 
principal risk factors and processes having the potential to impact the group 
these are set out in detail in the risk section of this report and are of the 
utmost importance to the board and the new executive team
sean watson
chairman 28 tt electronics plc annual report and accounts 2014
directors’ report
the company is committed to achieving and maintaining the highest 
standards of corporate governance the main and supporting principles of 
good corporate governance set out in the uk corporate governance code 
2012 “code” have been complied with throughout the year ended 
31 december 2014 details and explanations of the application of the 
principles of corporate governance are set out below
the board
subject to the company’s articles of association uk legislation and any 
directions given by special resolution the business of the company is 
managed by the board the board’s main roles are to provide leadership to 
the management of the group determine the group’s strategy and ensure 
that the agreed strategy is implemented the board has also reserved 
certain specific matters to itself for decision these include financial policy 
and acquisition and disposal policy the board appoints its members and 
those of its principal committees having received the recommendations  
of the nominations committee it also reviews recommendations of the 
board committees and the financial performance and operation of the 
group’s businesses it regularly reviews the identification evaluation and 
management of the principal risks faced by the group and the effectiveness 
of the group’s system of internal control
during 2014 the board comprised three executive directors and four 
nonexecutive directors all of the directors served throughout the year with 
the exception of geraint anderson who stepped down from his position of 
group chief executive on 30 june 2014 and richard tyson who succeeded 
geraint anderson as chief executive officer and member of the board on  
1 july 2014 john shakeshaft is the senior independent nonexecutive 
director on 18 november 2014 it was announced that shatish dasani was 
to step down from his position as group finance director on 31 december 
2014 mark hoad joined the group as chief financial officer and member  
of the board on 1 january 2015 as announced on 10 december 2014  
on 18 november 2014 it was also announced that tim roberts would step 
down from his position as group business development director with effect 
from 31 december 2014 to take up the newlycreated role of evp industrial 
sensing and control
board and committee meetings are scheduled in line with the financial 
calendar of the company thereby ensuring that the latest operating data  
is available for review and sufficient time and focus can be given to matters 
under consideration during the year there were seven principal board 
meetings on scheduled dates for which full notice was given
beyond these principal meetings the board held two strategy meetings 
during the year both of which were fully attended additional meetings are 
held as and when required and during 2014 four such meetings took place 
the board has held two principal meetings to date during 2015 full details 
of each director’s board and committee meeting attendance are given on 
page 30 and in the relevant committee report
directors
directors’ biographies including the committees on which they serve and 
chair are shown on page 26 at the time of his appointment as chairman 
sean watson was considered to be independent in accordance with the 
provisions of the code all the remaining nonexecutive directors are also 
considered to be independent as defined by the code
in accordance with the company’s articles of association each director is 
required to offer himself for reelection at the first annual general meeting 
held following his initial appointment and thereafter every three years 
however continuing the best practice first adopted at the 2013 agm all 
directors will retire and being eligible offer themselves for reelection at the 
forthcoming agm following formal performance evaluation the board has 
concluded that the performance of each director continues to be effective 
and to demonstrate commitment to the role
directors’ interests
the directors of the company at 31 december 2014 held interests in the 
following numbers of the company’s ordinary shares of 25 pence each on 
1 january 2014 31 december 2014 and 9 march 2015
9 march 
2015 
ordinary 
shares
31 december 
2014 
ordinary 
shares
1 january 
2014 
ordinary 
shares
sean watson 216100 216100 190000
richard tyson 14880 14880 –
shatish dasani – 560244 829144
tim roberts – 137011 174303
john shakeshaft 57142 57142 51206
michael baunton 81554 81554 72717
stephen king 100000 100000 100000
 shatish dasani and tim roberts both ceased to be directors on 31 december 2014
mark hoad was appointed on 1 january 2015 and held 40000 shares on 
appointment
the interests of the directors in the company’s share options and long term 
incentive plan are shown in the directors’ remuneration report on pages 44 
to 47
the company is committed to 
achieving and maintaining the 
highest standards of corporate 
governance   29 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the chairman and chief executive officer
the division of responsibilities between the chairman and the chief 
executive officer has been defined formalised in writing and approved by 
the board
the chairman maintains responsibility for the leadership and effectiveness 
of the board and setting its agenda ensuring that all directors receive 
accurate timely and clear information on financial business and corporate 
matters to enable them to participate effectively in board decisions 
facilitating the effective contribution of nonexecutive directors in 
particular ensuring constructive relations between executive and non
executive directors and ensuring effective communication with 
shareholders he is also responsible for ensuring that the performance of 
individual directors the board as a whole and its committees is evaluated at 
least once a year
the chief executive officer is responsible for the operations of the group in 
particular he is responsible for developing group objectives and strategy 
having regard to the group’s responsibilities to its shareholders customers 
employees and other stakeholders and following presentation to and 
approval by the board for the successful implementation and achievement 
of those strategies and objectives his other areas of responsibility include 
managing the group’s risk profile including its health and safety 
performance ensuring that the group’s businesses are managed in line with 
strategy and approved business plans and comply with applicable legislation 
and group policy ensuring effective communication with shareholders and 
setting group human resource policies including management development 
and succession planning for the senior executive team
board procedures
all directors have access to the advice and services of the group general 
counsel  company secretary and are offered training to fulfil their role as 
directors both on appointment and subsequently there is an agreed 
procedure for any individual director to take independent professional 
advice at the company’s expense if he considers it necessary
in accordance with the provisions on conflicts of interest in the companies 
act 2006 the company has put in place procedures for the disclosure and 
review of any conflicts or potential conflicts of interest which the directors 
may have and for the authorisation of such conflicts by the board in 
deciding whether to authorise a conflict or potential conflict the directors 
must have regard to their general duties under the companies act 2006 
the authorisation of any conflict and the terms of authorisation may be 
reviewed at any time and in accordance with best practice a review of 
directors’ conflicts of interests is conducted annually
each member of the board including the senior independent director has 
the right to include items on the board agenda or the agenda of the 
committees on which they sit
board and committee performance evaluation
in accordance with the code the board conducted an evaluation of its 
performance and that of its principal committees during 2014 the potential 
use of external facilitation of the board performance evaluation process was 
considered during the year but was not considered appropriate in light of the 
changes made to the executive directors external evaluation will remain on 
the agenda for consideration by the board during 2015
the board performance evaluation programme was led by the chairman 
and each director completed a questionnaire which was used to score and 
comment on a number of performance criteria these individual responses 
were then compiled into a single report by the group general counsel  
company secretary and this was circulated to the board for discussion and 
detailed review it was concluded that following what had been a 
challenging year
– we should add to the board with new areas of expertise and diversity so 
as to broaden its knowledge base
– increased scrutiny should be applied to the consideration of key strategic 
initiatives with particular focus to be given and evidence provided as to 
the execution risks involved and to making improvements to the content 
of certain management information presented to the board
– increased focus should be given to those material risks which had the 
potential to impact the business in the future so as to allow the board to 
consider and drive implementation of highlevel risk mitigation plans
– a new emphasis would be given to the inclusion of core kpis new product 
introductions investments and change management process within the 
financial reporting process together with more frequent presentations by 
senior business leaders
– increased focus should be given to the forecasting process adopted 
across the business
directors’ performance evaluation
in accordance with the code the performance of individual directors was 
also evaluated
each of the nonexecutive directors completed a selfassessment 
questionnaire which required them to score their own performance against a 
number of criteria the chairman then held private discussions with each 
nonexecutive director and this provided an opportunity to discuss any 
issues which had arisen in respect of either their individual assessments or 
those of the board and its principal committees in respect of the 
chairman’s performance the other nonexecutive directors led by the 
senior independent nonexecutive director and with input from the chief 
executive officer met privately to discuss this with the outcomes being fed 
back to the chairman by the senior independent nonexecutive director for 
discussion and action
at the beginning of the year each executive director was set challenging 
performance objectives progress against which was then reviewed as the 
year progressed this also took place upon the appointment of richard 
tyson as chief executive officer in july 2014 all the executive directors take 
part in the group’s performance management programme under which they 
each receive detailed feedback from their colleagues this together with a 
review of progress against agreed goals and objectives is used to assess 
performance and to set clear objectives and developmental plans for the 
following year which are closely aligned with the group’s strategic priorities 
and values the chief executive officer meets with the other executive 
director at the beginning of each year to discuss and review performance 
against objectives the performance evaluation of the chief executive 
officer was conducted by the chairman taking account of the output from 
the group’s performance management programme together with feedback 
provided by the other nonexecutive directors at a private meeting held to 
discuss this and any other matters which the nonexecutive directors wished 
to raise 30 tt electronics plc annual report and accounts 2014
board committees
the board has established a number of committees each with its own 
delegated authority defined in terms of reference these terms are reviewed 
periodically and the board receives reports and copies of minutes of 
committee meetings the board appoints the members of all principal 
board committees having received the recommendations of the 
nominations committee
principal committees
the principal committees are the nominations audit and remuneration 
committees details of the nominations and audit committees including 
brief descriptions of their terms of reference full details of which are 
available for inspection by shareholders at the annual general meeting and 
on the group’s website and duties together with a summary of significant 
events which have taken place during the year can be found on pages  
32 to 35 and should be read as part of the directors’ report details of  
the remuneration committee and its activities are contained within the 
remuneration report on pages 36 to 49
board meeting attendance 2014
seven principal board meetings were held during 2014 details of attendance 
are set out below
sean watson 7 of 7
geraint anderson 3 of 3
richard tyson 4 of 4
shatish dasani 7 of 7
tim roberts 7 of 7
michael baunton 7 of 7
stephen king 7 of 7
john shakeshaft 7 of 7
additional meetings of the board and its principal committees take place as 
and when required throughout the year during 2014 there were four such 
meetings by necessity these meetings are often convened at shorter notice 
than would be the case for principal meetings all of these meetings were 
fully attended with the exception of one which john shakeshaft was unable 
to attend
beyond the principal board meetings the board held two strategy meetings 
during the year both of which were fully attended
directors’ attendance at meetings of the principal committees on which 
they serve are detailed in the nominations audit and remuneration 
committee reports on pages 32 33 and 36
other committees
corporate governance committee
the corporate governance committee is responsible for monitoring the 
group’s compliance with good corporate governance during the year it  
was chaired by the chairman and included an independent nonexecutive 
director the group finance director the group business development 
director and the group general counsel  company secretary the 
committee’s duties are as follows to review regularly the corporate 
governance procedures of the company to ensure that they are uptodate 
and effective and are communicated to those employees officers andor 
directors of the company or its subsidiaries to whom they are relevant to 
make recommendations to the board from time to time on any procedures 
or processes that may need changing in order to ensure that the company 
is compliant with relevant legislation including but not limited to the 
companies act 2006 to ensure that the company is compliant with the 
standards and disclosures required by the code and the listing prospectus 
and disclosure and transparency rules of the uk listing authority and  
to receive reports or any views expressed by shareholders stakeholders 
government or other regulatory bodies and any other interested parties  
in relation to corporate governance
the committee met twice during 2014 during which time it reviewed the reports 
and agm voting recommendations from various investor bodies as well as 
individual shareholder feedback and noted suggested areas for improvement 
particularly in relation to matters related to remuneration policy
the committee also considered how forthcoming changes to the uk 
corporate governance code would affect the disclosures required in the 
annual report and accounts and the management measures needed in 
order to achieve compliance with the new requirements
corporate and social responsibility committee
the corporate and social responsibility committee is chaired by the  
chief executive officer and also comprises one independent nonexecutive 
director and up to three senior executives from within the group the 
committee met four times during 2014 no meetings have been held to 
date during 2015 the board regularly receives reports on its activities  
in 2015 it is proposed that the remit of the committee will be amended 
such that issues relating to ethics and compliance are conducted by the 
committee with health safety and environmental considerations to be 
reviewed under the remit of a separate committee under the chairmanship 
of the evp operations michael robinson
further information on the activities of the corporate and social 
responsibility committee is given in the corporate responsibility section  
on pages 22 to 25
risk committee
the risk committee assists the board and the audit committee in  
fulfilling their responsibilities by providing a framework for managing  
risks throughout the group monitoring risk appetite and exposure  
through regular reviews of principal risks reviewing the effectiveness  
of risk management processes and controls and providing an appropriate 
level of reporting on the status of risk management within the group
this is achieved by promoting awareness of risk management and ensuring 
that a robust risk management framework is in place to enable risks to be 
identified quantified managed monitored and reported
during the year the committee was chaired by the chief executive officer 
and included the group finance director group business development 
director group general counsel  company secretary group head of  
risk and assurance group human resources director group it director 
group marketing director group purchasing director and divisional chief 
executives the committee met eight times during 2014 no meetings have 
been held to date in 2015
further information on the group’s risk management activities and 
framework is given in the risk management framework and risk profile 
section on pages 20 and 21 and in the review of internal controls below
review of internal controls
the directors have overall responsibility for the group’s systems of internal 
control and for reviewing their effectiveness these systems have been  
in place for the full financial year but were reviewed in detail both by the 
board and the audit committee in the latter part of the year following the 
announcement in november 2014 that the performance of the group’s 
business would be materially lower in 2015 the group remains committed  
to a policy of maintaining appropriate internal control over all of its activities 
controls are designed to provide the directors with reasonable assurance  
that assets are safeguarded transactions are properly authorised and that 
material errors and irregularities are prevented or if controls are failing  
are discovered and mitigated on a timely basis the systems of control are 
reviewed regularly and improved where necessary to meet the group’s 
requirements as described above business risk evaluation takes place at 
operating company divisional and group levels through regular performance 
reviews and as part of the annual budget preparation process having 
identified risks operating companies and divisions then monitor review  
and update the associated controls to mitigate the risks appropriately
directors’ report continued  31 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
further details of the group’s exposure to risk and processes in place to 
manage the same are set out on pages 20 and 21
the risk management procedures and systems of internal control are designed 
to identify and assess principal risks which the group faces and to manage 
them appropriately however such systems can only provide reasonable  
and not absolute protection against material misstatement or loss
principal features of the system of internal control
the directors meet as a board at least every other month to monitor 
financial performance give direction on significant strategic and financial 
issues and review the principal risks of the group
the chief executive officer chairs a committee “executive management 
board” consisting of the executive directors divisional chief executives  
and other senior functional roles eg operations legal hr and corporate 
developmentstrategy the executive management board which was 
formerly known as the operating board meets on a monthly basis and 
reviews the historical performance and the outlook for the group as a whole 
and agrees and implements any actions as necessary in addition it is 
responsible for monitoring and driving delivery of the group’s key priorities 
and acts as a forum to raise and debate significant operational issues  
a number of changes were made to the executive management board 
during 2014 arising from the appointments of a new chief executive officer 
and chief financial officer the creation of a new divisional structure and 
certain new functional roles eg candy bowles’ appointment as evp 
corporate development and strategy in november 2014
each operating company within the group operates within the policies rules 
and procedures determined by the directors and communicated through  
an internet based group policies hub the directors exercise control over 
operating companies through divisional senior executives who monitor and 
oversee the activities financial performance and controls of each operating 
company and seek to ensure that these companies comply with group 
accounting policies in the process for preparation of consolidated financial 
statements the directors of operating companies and heads of business 
units are held accountable for the effectiveness of the implementation and 
maintenance of controls within their companies this provides constant and 
consistent management
during the year a comprehensive control framework for key business 
processes was implemented by a groupwide project team each business 
unit performed a selfassessment evaluating controls against the control 
framework the results of the assessment contribute to the internal audit 
plan as well as ongoing control and business improvement initiatives across 
the group
the group has financial planning and reporting systems management 
accounts are prepared monthly by each operating company comparing 
actual performance with budget the financial performance of each 
business unit is subjected to indepth formal review at monthly meetings  
a key purpose of these reviews is the early identification of potential 
business risks and agreement on suitable and prompt courses of action 
operating companies prepare strategic plans and annual budgets which  
are consolidated up to a divisional and group level and are reviewed and 
approved by the divisional senior executives group management and  
the board
the board intends to review and improve the processes surrounding the 
group’s forecasting
the group enforces its comprehensive control and approval procedures 
which incorporate definitions of appropriate authorisation levels capital 
investment and other major items of expenditure are made only after 
compliance with appraisal procedures and if above set levels only with  
the approval of the executive directors and the board
accounting and reporting policies and practices require that the group’s 
accounting records are prepared accurately and in compliance with group 
policy and relevant accounting standards
the risk and assurance department reviews the internal control environment 
according to the annual internal audit plan agreed with the audit committee
certain key functions including treasury taxation pensions provision of 
legal advice risk and insurance are controlled at the group’s head office and 
are monitored by the executive directors
the directors have reviewed the effectiveness of the systems of risk 
management and internal control during the year to 31 december 2014  
and during the period since then to the date of this report they have made 
and will continue to make improvements where necessary
financial risk management objectives and policies are set out under 
financial risk management on pages 79 to 84
investor relations
the chief executive officer and chief financial officer meet institutional 
investors immediately after publication of the annual and interim results 
and on an ongoing basis as required in 2014 this included investor 
roadshows held over a total of 13 days in london and scotland in respect  
of the annual and interim results sean watson as chairman and john 
shakeshaft as senior independent nonexecutive director and chairman  
of the remuneration committee also undertake consultation on certain 
matters with major shareholders from time to time through these directors 
the company maintains a regular dialogue with institutional shareholders 
and analysts feedback is reported to the board so that all directors develop 
an understanding of the views of major shareholders about the company 
trading updates and press releases are issued as appropriate and the 
company’s brokers provide briefings on shareholder opinion and compile 
independent feedback from investor meetings information offered at the 
analysts’ meetings together with our financial press releases are available  
on the group’s website the annual general meeting is used by the directors 
to communicate with both institutional and private investors
going concern
the directors have reviewed the budgets for 2015 and the projections  
for 2016 developed during the 2014 annual strategic planning cycle the 
directors have assessed the future funding requirements of the group and 
compared them with the level of available borrowing facilities recognising 
that the main committed facility was renegotiated during 2012 for a period 
of five years to august 2017 based on this the directors are satisfied that 
the group has adequate resources to continue in operational existence for 
the foreseeable future for this reason they continue to adopt the going 
concern basis in preparing the financial statements
approved by the board on 11 march 2015 and signed on its behalf by
lynton boardman
group general counsel  company secretary
11 march 2015 32 tt electronics plc annual report and accounts 2014
john shakeshaft
michael baunton
stephen king
first three year term first additional three year term second additional three year term
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
remit
the nominations committee’s remit includes the structure size and 
composition of the board as a whole the overall leadership needs of the 
organisation consideration of succession planning for directors having due 
regard to the length of service of nonexecutive directors and evps formerly 
divisional chief executives and the search for and selection of suitable 
candidates for the appointment of replacement or additional directors
committee meetings in 2014
during 2014 the committee held three formal meetings
the committee has held no formal meetings to date during 2015
2014 review
the committee seeks to ensure that the board of tt electronics is balanced 
and effective with diverse skills knowledge and experience diversity and 
gender inclusiveness span the whole group and are important and enduring 
considerations in the search for and selection of board members
during 2014 the focus of the committee was primarily directed towards the 
process of integrating the new chief executive officer richard tyson into 
the business as well as the appointment process for the new chief financial 
officer mark hoad and several additional members of the executive 
management board as described below
the committee is rigorous in seeking talent and is focused on ensuring that 
the group has the best possible board available to promote its interests 
during 2014 the committee engaged external search consultants to assist  
in the specification of the chief financial officer role and the selection of 
prospective candidates to ensure a robust measurable and orderly process 
this resulted in the appointment of mark hoad who met with members of 
the committee as part of the selection process mark was group finance 
director of bba aviation plc a ftse 250 company from 2010 to 2014 and 
the committee believes that his extensive experience will significantly 
enhance the composition of the board
the committee also paid particular attention to group succession issues 
during the year and had oversight of the key appointments made at the 
executive management board level during 2014 including tim roberts’ 
appointment as evp industrial sensing and control amrei drechsler’s 
appointment as evp transportation sensing and control and candy bowles’ 
appointment as evp corporate development and strategy
the committee continues to consider that diversity quotas at board level  
are inappropriate and is committed to recruiting the best talent available 
based on merit and assessed against objective criteria of skills knowledge 
independence and experience its primary objective is to ensure that tt 
electronics maintains the strongest possible leadership
the board attaches a high degree of importance to diversity at all levels 
across the group although of equal importance is the need to ensure that 
staff skills and competencies are matched to the strategic and operational 
needs of the business in its core markets details of the number of employees 
senior managers and directors of each gender are given in the corporate 
responsibility section on page 25
during 2014 the committee considered the new group organisational 
design resulting from the strategic review process currently underway 
together with the composition of the board of directors resulting in a 
reduction in the number of executive directors length of service of the 
nonexecutive directors was also reviewed and as part of our commitment 
to facilitate a regular refreshing of core skills and diversity of experience  
a succession review will be undertaken in 2015 to look at bringing new talent 
onto the board at a nonexecutive level
performance evaluation
the committee carried out an assessment of its performance in 2014 based 
on a review of its activities during the year against its terms of reference  
it was concluded that the committee had performed satisfactorily and is 
structured appropriately to provide effective support to the board
nominations committee
membership
• sean watson chairman
• michael baunton
• stephen king
• john shakeshaft
committee meeting attendance 2014
sean watson 3 of 3
michael baunton 3 of 3
stephen king 3 of 3
john shakeshaft 2 of 3
nonexecutive directors’ lengths of service  33 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
remit
the committee’s duties include reviewing and advising the board on
– the integrity of the financial statements
– the appointment and remuneration of external auditors and their 
effectiveness in line with the requirements of the code
– the nature and extent of nonaudit services provided by the auditors  
to ensure that their independence and objectivity are maintained
– changes to accounting policies and procedures decisions of judgement 
affecting financial reporting compliance with accounting standards and 
with the companies act 2006
– internal control and risk management processes including principal risks 
and internal control findings highlighted by management or internal and 
external audit
– the content of the auditors’ transparency report concerning auditor 
independence in providing both audit and nonaudit services
– the scope performance and effectiveness of the internal audit and other 
internal control functions and the auditors’ assessment thereon and
– the company’s procedures for responding to any allegations made  
by whistleblowers
the code requires that at least one member of the audit committee has 
recent and relevant financial experience stephen king fulfils this requirement
committee meetings in 2014
during 2014 the committee held four scheduled meetings
the committee met twice with the group’s auditors kpmg llp without 
executives of the company being present during the year the committee also 
met once with the group head of risk and assurance the head of the internal 
control function without other executives of the company being present
the committee has held one meeting to date during 2015
2014 review
in order that the audit committee fulfils its duties regarding the integrity  
of the financial statements and other financial data the group finance 
director and the director of group financial control attend committee 
meetings presenting reports and providing analysis and explanations for 
queries raised the external auditors are also attendees and present reports 
on their audits they address such matters as an overview of the financial 
statements key accounting judgements accounting policies audit 
differences and internal control matters
the group head of risk and assurance also attends meetings to update  
the audit committee on progress on the internal audit plan findings and 
recommendations and team and methodology improvements a formal 
review of the effectiveness of the internal control function is undertaken as 
part of the year end process the committee also regularly receives reports 
from the risk committee to allow members to review principal risks and the 
effectiveness of risk management processes
in addition to standing agenda items during 2014 the committee also 
reviewed and considered matters including
– sap implementation
– the introduction of a new controls framework
– auditor independence with specific reference to the appointment  
of makinson cowell
– the risk programme going forward
– changes to reporting requirements including the impact of the 
forthcoming viability statement requirement on the company and
– cyber security
one of the key areas of focus for the committee during 2014 arose  
from the announcement that the group’s performance in 2015 would  
be materially lower than previously forecast driven principally as a result  
of poor forecasting processes and slower than anticipated progress in 
implementing the operational improvement plan within the sensing and 
control business as a result of this event and the resulting improvement 
action the committee has initiated a high level review of all of the principal 
risk factors and processes having the potential to impact the group which 
includes areas such as the underlying economic outlook of the business  
and product development and launch processes this has also resulted in  
a detailed review of the proposed 2015 audit plan to ensure that internal 
audit resource is directed at the key risk factors for the group’s operations
whistleblowing matters reported through the group’s multilingual 
anonymous ethics and integrity portal are reported to and considered by 
the committee during the year the committee received details of three 
cases each of which was investigated with appropriate action taken
in the most significant instance evidence was discovered that the division 
concerned had failed to follow the proper “change management” procedures 
contained in the group’s processes as a result of the whistleblower event 
the relevant customers were informed of the specific areas of default and 
appropriate corrective action was taken at both an operational and 
managerial level
audit committee
membership
• stephen king chairman
• michael baunton
• john shakeshaft 
committee meeting attendance 2014
stephen king 4 of 4
michael baunton 4 of 4
john shakeshaft 4 of 4 34 tt electronics plc annual report and accounts 2014
the committee has reviewed and challenged the form and content of the 
group’s annual report and accounts and financial statements for 2014  
in conducting its review the committee considered reports prepared by 
management and the external auditors these reports covered analyses of 
the judgements and sources of estimation uncertainty involved in applying 
the accounting policies as described in note 1h to the financial statements 
the committee considered and challenged the assumptions relating to 
goodwill the carrying value of capitalised development costs the level  
of provisions held on the balance sheet as detailed below and the going 
concern statement on page 31 the committee also considered and 
challenged items excluded from underlying profit and whether these  
were consistent to the accounting policy of the group
significant issues considered in relation to the 
financial statements
the main areas of judgement and estimation are set out in the accounting 
policies on pages 62 to 67
the committee received and reviewed reports from management and the 
external auditors setting out the significant issues in relation to the 2014 
financial statements which related to
– underlying profit
– provisions including taxation and product warranties
– carrying value of capitalised development costs and
– carrying value of goodwill
these issues which are considered in more detail below were discussed with 
management during the year and with the external auditors at the time the 
committee reviewed and agreed the external auditors’ group audit plan 
when the external auditors reviewed the half year results in august 2014 
and also at the conclusion of the audit of the financial statements
underlying profit
as further explained in note 8 to the financial statements the group reports 
nontrading income or expenditure outside of underlying profit when the 
size nature or function of an item or aggregation of similar items is such 
that separate presentation is relevant to an understanding of its financial 
position the committee challenged the items that were excluded from 
underlying profit and were satisfied that these were in accordance with  
the group’s disclosed accounting policy and gave a true and fair view of  
the group’s underlying financial position
the auditors explained to the committee the work they had conducted and 
the results of their audit procedures on significant items recorded outside 
underlying profit on the basis of their audit work the auditor reported no 
inconsistencies or misstatements to the group’s disclosed accounting policy 
that were material in the context of the financial statements as a whole
provisions
i taxation
provisions held in respect of tax risks are included within current and deferred 
tax liabilities depending on the underlying circumstances of the provision 
management confirmed to the committee that the provisions recorded at 
31 december 2014 represent their best estimate of the potential financial 
exposure faced by the group the committee reviewed each significant 
provision and challenged the basis of management‘s judgement and 
concurred with the estimates
the auditors explained to the committee the work they had conducted 
during the year including how their audit procedures were focused on  
those provisions with the highest level of judgement on recognition criteria 
andor measurement on the basis of its audit work the auditors reported 
no inconsistencies or misstatements that were material in the context of the 
financial statements as a whole
ii product warranty legal and restructuring
as further explained in note 2u to the financial statements a provision is 
recognised in the financial statements when the group has a present legal or 
constructive obligation as a result of a past event and it is probable that an 
outflow of resources that can be reliably measured will be required to meet 
the obligation 
provisions are recognised at an amount equal to management’s best 
estimate of the expenditure required to meet the group’s liability taking into 
account the time value of money where this is considered material on legal 
and contractual exposures the committee received periodic reports from 
the group general counsel  company secretary outlining the open legal 
and contractual disputes and best estimate of the expected costs associated 
with such matters
management has confirmed to the committee that the provisions recorded 
at 31 december 2014 represent their best estimate of the potential financial 
exposure faced by the group the committee reviewed each significant 
provision and challenged the basis of management’s judgement and 
concurred with management’s estimates
the auditors explained to the committee the work they had conducted 
during the year including how their audit procedures were focused on those 
provisions with the highest level of judgement on recognition criteria andor 
measurement on the basis of their audit work the auditors reported no 
inconsistencies or misstatements that were material in the context of the 
financial statements as a whole
further information about the specific categories of provisions held by the 
group is set out in note 19
carrying value of capitalised development costs
as further explained in note 2l the group capitalises costs for development 
activity when certain criteria under the relevant accounting standard have 
been met accounting standards require management to assess capitalised 
development costs for impairment indicators at each balance sheet date
following a detailed review performed by management of each significant 
development project an impairment charge of £84 million has been booked as 
an exceptional item see note 8 for further details the committee challenged 
the basis of the impairment charge and concurred with management that 
there is insufficient certainty to support the carrying value of significant 
development projects that have been impaired
the auditor explained to the committee the results of their audit procedures 
and their assessment of the impairment review performed by management 
on the basis of their audit work the auditors reported no inconsistencies or 
misstatements that were material in the context of the financial statements  
as a whole
carrying value of goodwill
as more fully explained in note 14 the total carrying amount of goodwill at  
31 december 2014 is £694 million for a certain period at the end of 2014  
the book value of the group’s net assets exceeded its market capitalisation 
this position has recovered in the post balance sheet event period 
management has assessed the carrying value of goodwill using detailed 
calculations of value in use for each significant cash generating unit to ensure 
that the carrying values are supported by forecast future discounted cash 
flows no impairment charges were required as a result of the impairment 
assessment the committee reviewed and challenged management’s 
assessment of value in use the basis of key assumptions and sensitivities  
as outlined in note 14 and concurred with management’s assessment
the auditor explained to the committee the results of their review of the 
estimate of value in use for each significant cash generating unit including 
their challenge of management’s underlying cash flow projections the key 
growth assumptions discount rates and sensitivity analysis on the basis of 
audit committee continued  35 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
their audit work no impairments that were material in the context of the 
financial statements as a whole were identified by the auditors
internal control
the committee considered reports from internal and external audit 
summarising their respective recommendations on internal control and 
requested that management provide an update including their proposed 
action plans
 
going concern
the committee considered the reports provided by management setting out 
the basis upon which the directors provided the going concern statement
misstatements
management has confirmed to the committee that they were not aware of 
any material misstatements or immaterial misstatements made intentionally 
to achieve a particular presentation the external auditors reported to the 
committee the misstatements that they had found in the course of their work 
and that no material amounts remain unadjusted the committee confirms 
that it is satisfied that the external auditors have fulfilled their responsibilities 
with diligence and professional scepticism
after reviewing the presentations and reports from management and 
consulting where necessary with the auditors the audit committee is satisfied 
that the financial statements appropriately address the critical judgements and 
key estimates both in respect of the amounts reported and the disclosures 
the committee is also satisfied that the significant assumptions used for 
determining the value of assets and liabilities have been appropriately 
scrutinised challenged and are sufficiently robust
future ifrs and uk gaap developments
the committee has received a report from management and discussed future 
accounting developments likely to affect the presentation of the group’s 
financial statements
fair balanced and understandable
in accordance with the 2012 uk corporate governance code the board 
requested that the committee advise them on whether it believed that the 
group’s annual report taken as a whole is fair balanced and understandable 
and provides the information necessary for shareholders to assess the 
company’s performance business model and strategic plan procedures are  
in place to facilitate the appropriate and timely review of the drafts of the 
annual report and for input and challenge from all independent nonexecutive 
directors external auditors and other external advisers on careful review of 
the annual report for the year ended 31 december 2014 and the basis for  
the statement made by the board on “fair balanced and understandable”  
on page 53 the audit committee recommended to the board that taken as  
a whole the annual report is fair balanced and understandable and provides 
the information necessary for shareholders to assess the company’s 
performance business model and strategic plan
auditors’ independence objectivity and effectiveness
the independence of the auditors is assessed annually by the audit committee 
in order to ensure that suitable policies and procedures are in place to 
safeguard the auditors’ independence and objectivity having regard to length 
of tenure provision of nonaudit services and the existence of any conflicts of 
interest kpmg were appointed in july 2010 at which time their independence 
had been considered at the time of the latest annual assessment the provision 
of nonaudit services was reviewed together with kpmg llp’s transparency 
report and kpmg llp confirmed that no conflicts of interest existed of which 
the audit committee should be aware
the committee has formally reviewed the independence of the auditors as 
part of the 2014 review kpmg llp have provided a letter to the committee 
confirming that they remain independent within the meaning of the 
regulations on this matter and in accordance with their professional standards
the committee also reviewed the effectiveness of the auditors during the 
year the use of an evaluation questionnaire and an auditor assessment 
survey completed by heads of finance across the group’s operations 
together with information provided by the auditors assisted in ensuring  
that a comprehensive assessment was undertaken areas for improvement 
were identified and communicated to the auditors for action
the audit committee has recommended to the board that kpmg llp 
continue in office as auditors
in accordance with its own internal procedures kpmg llp has notified the 
committee that this year’s audit programme will be the last one to be 
headed by the current lead audit partner anthony j sykes kpmg llp has 
already implemented a process to transition to a new lead audit partner  
well in advance of year end 2015
policy on nonaudit services
the company has an established policy regarding the provision of nonaudit 
services by external auditors this states that nonaudit services may be 
obtained from the most appropriate source having regard to expertise 
availability knowledge and cost nonaudit services where fees are expected 
to exceed £25000 should be approved in advance by the chairman of  
the audit committee or in his absence by another member of the audit 
committee there is also a restriction such that fees for nonaudit services 
will not exceed those for audit services paid to the same service provider for 
more than two consecutive years unless specifically recommended by the 
audit committee and agreed by the board the overriding preference of  
the committee is not to engage the auditors for additional nonassurance 
services unless there are compelling reasons to the contrary such as 
capability time or cost
in 2014 the committee considered the proposed appointment of makinson 
cowell acquired by kpmg in 2013 to provide advisory services to the 
group following discussions with both makinson cowell and kpmg  
and having received confirmation that makinson cowell would not be 
representing the group in any “management capacity” and that appropriate 
chinese walls were in place between that business and kpmg’s audit 
function both the committee and the board were satisfied that the 
proposed appointment of makinson cowell did not present any 
independence issues or ethical concerns it was also noted that the  
level of nonaudit fees as a proportion of audit fees paid to kpmg  
would increase upon the appointment of makinson cowell
in 2014 audit service fees paid to kpmg llp were £08 million whilst 
nonaudit service fees paid to kpmg totalled £06 million of this £06 million 
£04 million 67 per cent related to projects covering pensions and other 
advisory services whilst the balance of £02 million 33 per cent comprised 
nonaudit service fees principally relating to the provision of taxation services 
including taxation compliance advice
during 2014 nonaudit fees paid to kpmg llp represented 75 per cent of 
audit fees paid to kpmg llp during the same period up from 38 per cent  
in 2013 this increase was primarily a result of a oneoff pensions project 
and other advisory services provided by kpmg llp and was considered and 
approved by the audit committee as detailed above the committee 
believes that for these particular areas kpmg llp were best placed to 
provide a comprehensive and effective service to the company
performance evaluation
the committee carried out an assessment of its performance in 2014 based 
on a review of its activities during the year against its terms of reference  
it was concluded that the committee had performed effectively and is 
structured appropriately to provide effective support to the board areas  
for development which emerged from the performance assessment were 
identified and appropriate focus will be given to these during the 
forthcoming year 36 tt electronics plc annual report and accounts 2014
directors’ remuneration report
remuneration committee report
committee meeting attendance 2014
during 2014 the committee held five scheduled meetings
given the significant changes at the executive level five additional meetings 
of the committee took place during the year all of which were fully attended 
except one which john shakeshaft was unable to attend the committee 
has held two meetings to date during 2015
the chief executive officer and the evp human resources also attend 
committee meetings and provide internal support and advice on market 
and regulatory developments in remuneration practice and employee share 
plans their attendance ensures that the committee is kept fully abreast of 
general pay policies throughout the group which it then takes into account 
when determining the remuneration of executive directors and our most 
senior executives no individual is allowed to participate in any matter 
concerning the details of their own remuneration
annual statement
dear shareholder
aligning our remuneration policy with evolving strategic objectives remains 
the priority for the committee we continued to strengthen alignment 
during 2014 in line with the shareholder approved remuneration policy 
introduced at last year’s agm through some additional measures in our 
incentive schemes and by increasing the focus of our executive’s 
remuneration towards total shareholder return
in 2014 the external macro environment continued to be challenging our 
performance in 2014 resulted in only minimal annual bonus payouts for 
executive directors based on the achievement of predefined strategic 
objectives performance against earnings per share and total shareholder 
return ltip targets in respect of performance periods ending in 2014 was 
below threshold
richard tyson was appointed last year on a salary belowmarket with an 
intention to increase his pay to market levels contingent on performance 
following strong performance during his first six months the committee 
considered it appropriate to align mr tyson’s salary to market the 
committee believe that this approach is in the best interests of the 
company and shareholders mr tyson’s increase was effective from 
1 january 2015
during the course of the year we sought feedback on a number of issues 
from our larger investors which we have considered the committee’s role is 
to balance these individual investor perspectives with our responsibility to 
ensure our remuneration arrangements continue to enable us to attract 
motivate and retain a team which is of the required quality
this report has been divided into three sections
– this annual statement which summarises and explains the major 
decisions and changes in respect of directors’ remuneration
– a directors’ remuneration policy which sets out the remuneration policy 
for the company’s directors which was approved by shareholders at the 
2014 agm and
– an annual report on remuneration which provides details of the 
remuneration earned by the company’s directors in relation to the year 
ended 31 december 2014
the directors’ remuneration policy was approved by shareholders at the 
annual general meeting held on 9 may 2014 and is subject to a binding 
shareholder vote every three years or sooner if changes are made to the 
policy the committee believes the remuneration policy continues to 
incentivise the delivery of strong and sustainable financial results and the 
creation of shareholder value so no changes are proposed to the policy  
for ease of reference the policy is repeated in full on pages 38 to 41 and is 
also available to view at the corporate governance section of our website  
wwwttelectronicscom
membership
• john shakeshaft chairman
• michael baunton
• sean watson 
scheduled committee meeting attendance 2014
john shakeshaft 5 of 5
michael baunton 5 of 5
sean watson 5 of 5  37 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
performance evaluation
the committee assessed its performance constitution and terms of 
reference during 2014 based on a questionnaire completed by members 
the committee was deemed to have performed satisfactorily
emphasis in 2014
the committee considers carefully every decision around executive 
remuneration some of the main decisions made during the year were
– termination package for geraint anderson who stepped down as group 
chief executive and a director of tt electronics plc on 30 june 2014
– remuneration package for richard tyson who joined the group as chief 
executive officer and a director of tt electronics plc on 1 july 2014
– termination package for shatish dasani who stepped down as group 
finance director and a director of tt electronics plc on 31 december 2014
– remuneration package for mark hoad who joined the group on 
29 december 2014 and became chief finance officer and a director of 
tt electronics plc on 1 january 2015
– assessment of annual bonus levels for executive directors for 2013 
payable in 2014
– review of the cash targets for bonus arrangements for 2014
– evaluation of targets for the 2015 executive directors’ annual bonus plan
– review of total remuneration levels for executive directors and the next 
level of senior executives
– review of the linkage between risk and reward in relation to remuneration 
structure
– review of nonexecutive chairman’s fees
– vesting of 2011 grant under the ltip
– 2014 grant under the ltip including a review of performance targets
– review of the ltip structure and the current dilution position
– review of the committee’s external advisers
– issuance of performance based awards under our restricted share plan 
rsp to key individuals below executive directors awards were based on 
profit revenue and roce measures
– review of feedback received from shareholders relating to the 
remuneration policy
– consideration of an ltip post vesting holding period
the year ended 31 december 2014 has been a challenging year in a number 
of our markets revenue for the year was £5243 million compared to  
£5322 million in the prior year this included the benefit of the roxspur 
measurement and control limited business acquired in july 2014 and 
unfavourable foreign exchange movements the underlying growth 
excluding these factors was 2 per cent operating profit before exceptional 
items was £292m compared to £308 million in 2013 
our remuneration principles
the committee tries to ensure that the remuneration policy and practices 
drive behaviour aligned to the longterm interests of the company and  
our shareholders we offer competitive and equitable rates of pay and 
benefits to ensure it promotes the attraction motivation and retention of 
high quality executives who are key to delivering the company’s strategy 
and who will be key to delivering sustainable earnings growth and 
shareholder return
the committee’s most recent conclusions are that the existing senior 
executive remuneration policy is appropriate and should continue to operate 
for 2015 without major changes the committee concluded that
– basic salary levels remain appropriately positioned in the market
– the structure and quantum of the annual bonus continues to be 
appropriate for 2015 and
– the longterm incentive grant policy where awards are granted annually 
based on earnings per share relative total shareholder return 
performance conditions and continued service aligns the senior 
executive team with shareholders this alignment is strengthened by the 
operation of share ownership guidelines
in conclusion the committee believes that the remuneration policy 
continues to incentivise the delivery of strong and sustainable financial 
results and the creation of shareholder value
assessment of risk
the remuneration committee is continually aware and mindful of any 
potential risk associated with our remuneration programmes we seek to 
provide a structure that encourages acceptable level of risk taking through 
optimal remuneration mix key performance metrics calibration and timing 
annual third party evaluations are undertaken in order to ensure our reward 
programmes achieve the optimal balance and do not encourage excessive 
risk taking the committee has considered the risk involved in the short and 
long term incentive schemes and is satisfied the design elements and 
associated governance procedures mitigate the risks appropriately
the committee continues to have appropriate dialogue with our 
shareholders we are delighted that last year proxy votes cast in relation  
to the remuneration report were 9691 per cent in favour we sincerely hope 
to receive your continued support at the agm on 12 may 2015
john shakeshaft
chairman of the remuneration committee
11 march 2015 38 tt electronics plc annual report and accounts 2014
in formulating the remuneration policy full consideration was given to the 
principles set out in the uk corporate governance code the committee 
regularly reviews the policy to ensure it takes account of best practice and 
the particular circumstances of the company the directors’ remuneration 
policy was approved by shareholders at the annual general meeting held on 
9 may 2014 and is subject to a binding shareholder vote every three years 
no changes are currently proposed to the policy
policy overview
the group is committed to the objective of maximising shareholder return  
in the longer term and ensuring that a strong link is maintained between 
performance and reward the remuneration policy aims to be competitive 
performance based aligned with shareholder interests and relatively simple 
and transparent
the committee aims to approve base salaries commensurate with 
experience around market levels coupled with highly competitive total 
rewards linked to performance and aligned with shareholder interests 
remuneration packages must meet the objectives of attracting retaining 
and motivating executives of the highest quality in a challenging business 
environment in recommending a mix of fixed and variable remuneration 
the committee is mindful of avoiding excessive risks in the pursuit of 
performance metrics
following a review of the current total remuneration policy for executive 
directors and senior managers the committee concluded that the following 
principles remain appropriate for 2015
competitive through a combination of base salaries and competitive 
performancerelated incentive mechanisms the group aims to provide 
individuals with competitive total remuneration in return for superior 
performance base salaries are designed to reflect the requirements of  
the role and responsibility together with the overall level of individual 
performance in ascertaining appropriate salary adjustments account  
is also taken of prevailing market and economic conditions together  
with salary levels across the group
performance related the majority of the executive directors’ and senior 
business unit leaders’ remuneration packages are determined based on the 
performance of the group a significant proportion of this is aligned with 
shareholder interests based on earnings growth “eps” and total shareholder 
return “tsr” failure to reach set performance thresholds leads to no payout 
under the group’s annual bonus or longterm incentive arrangements  
in order to provide further alignment with the achievement of strategic 
objectives and delivery of value to shareholders executive directors have 
agreed to maintain a minimum holding of the group’s shares equal to  
100 per cent of their base salary
transparency in order to engender a fair and collaborative culture  
total remuneration frameworks are clear and openly communicated
components of total remuneration
executive directors’ total remuneration packages comprised
– fixed pay including base salary pension contribution car or car 
allowance and private medical insurance life assurance and
– variable pay comprising annual bonus opportunity participation  
in a share based long term incentive plan and participation in an  
all employee share scheme
consideration of shareholder views
the remuneration committee considers shareholder feedback received  
in connection with the annual general meeting each year at a meeting 
immediately following the agm and at other times during the year  
this feedback is considered as part of the company’s annual review of 
remuneration policy in addition the remuneration committee engages 
directly with major shareholders and their representative bodies should any 
material changes be proposed to the remuneration policy details of votes 
cast for and against the resolution to approve last year’s remuneration 
report and any matters discussed with shareholders during the year are  
set out in the annual report on remuneration
consideration of employment conditions elsewhere 
in the group
the committee considers the general basic salary increase for the broader 
employee population when determining the annual salary increases  
and remuneration for the executive directors employees have not been 
consulted on the design of the company’s senior executive remuneration 
policy although the committee will keep this under review
directors’ remuneration policy  39 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
summary remuneration policy
the table below summarises the directors’ remuneration policy for 2014 and 2015
element of 
remuneration
purpose and  
link to strategy operation maximum performance targets
salary
– reflects the value of the 
individual and their role
– reflects skills and 
experience over time
– provides an appropriate 
level of basic fixed income
– avoids excessive risk arising 
from over reliance on 
variable income
– reviewed annually effective 
1 january
– takes periodic account of 
practices of companies with 
similar characteristics and 
sector comparators
– there is no prescribed 
maximum annual increase  
the committee is guided by 
the general increase for the 
broader employee population 
but on occasions may need  
to recognise for example  
an increase in the scale  
scope or responsibility of a role
– current base salary levels are 
set out on page 42
– not applicable
benefits
– to aid retention  
and recruitment
– company car allowance the 
provision of private medical 
insurance life assurance 
and critical illness cover
– not applicable – not applicable
bonus
– incentivises annual  
delivery of financial  
and strategic goals
– maximum bonus only 
payable for achieving 
demanding targets
– paid in cash
– not pensionable
– 100 per cent of salary – a combination of growth  
in group profit before tax 
and other financial metrics 
majority weighting  
and personal objectives 
minority weighting
– clawback provisions apply
long term 
incentive 
plan
– aligned to main strategic 
objectives of delivering 
sustainable profit growth 
and shareholder return
– annual grant of nil cost 
options or performance 
shares which normally vest 
after three years subject  
to continued service and 
performance targets
– 100 per cent of salary  
normal limit
– discretion to provide awards  
up to 200 per cent of salary in 
exceptional circumstances such 
as recruitment or retention
– divided equivalents may also 
be payable
– ltip performance measured 
over three years based on 
financial eg eps andor 
share price measures 
eg relative tsr
– clawback provisions apply
saye
– to encourage employee 
share ownership and 
therefore increase 
alignment with shareholders
– all employee saving and 
share purchase plan 
approved by hmrc
– executives are also eligible 
to participate in the group 
saye on the same terms  
as other employees
– in line with prevailing  
hmrc limits
– not applicable
share 
ownership 
guidelines
– to provide alignment 
between executives and 
shareholders
– executive directors are 
required to build and 
maintain a shareholding 
equivalent to one year’s 
base salary
– not applicable – not applicable
pension
– provides modest  
retirement benefits
– opportunity for executives 
to contribute to their own 
retirement plan
– defined contributionsalary 
supplement
– company contributes 
approximately 15 per cent 
of salary
– executives salary exchange on 
same terms as other employees
– not applicable
non
executive 
director fees
– reflects time commitments 
and responsibilities of  
each role
– reflects fees paid by 
similarly sized companies
– cash fee paid
– fees are reviewed on an 
annual basis
– fee increases for nonexecutive 
directors will not normally 
exceed the average salary 
increase awarded to executive 
directors although increases 
may be above this level if there 
is an increase in the time 
commitment andor 
responsibility level
– not applicable non
executive directors do not 
participate in variable pay 
arrangements 40 tt electronics plc annual report and accounts 2014
notes
1 a description of how the company intends to implement the policy set out in this table for 2015 is set out in the annual report on remuneration on page 42
2 the following differences exist between the company’s policy for the remuneration of executive directors as set out above and its approach to the payment of employees generally
– a lower level of maximum annual bonus opportunity may apply to employees other than the executive directors and certain senior executives
– benefits offered to other employees generally comprise life assurance pension applicable benefits to the global territories in which the company operates
– uk employees participate in the same arrangements as the directors
– participation in the ltip is limited to the executive directors and certain selected senior managers certain other employees are eligible to participate in the company’s share option schemes details 
of which are provided on pages 87 and 88
 in general these differences arise from the development of remuneration arrangements that are market competitive for the various categories of individuals and the country in which they are employed 
they also reflect the fact that in the case of the executive directors and senior executives a greater emphasis tends to be placed on performancerelated pay
3 the choice of the performance metrics applicable to the annual bonus scheme reflect the committee’s belief that any incentive compensation should be appropriately challenging and tied to the 
delivery of financial metrics and specific individual objectives
4 the tsr and eps performance conditions applicable to the ltip further details of which are provided on page 45 were selected by the remuneration committee on the basis that they reward the 
delivery of longterm returns to shareholders and the group’s financial growth and are consistent with the company’s objective of delivering superior levels of longterm value to shareholders the tsr 
performance condition is monitored on the committee’s behalf by new bridge street “nbs” whilst the group’s eps growth is derived from the audited financial statements
5 the committee operates the ltip in accordance with the plan rules and the listing rules and the committee consistent with market practice retains discretion over a number of areas relating to the 
operation and administration of the plan
6 allemployee share plans do not operate performance conditions executive directors are eligible to participate in the group saye on the same terms as other employees
7 as highlighted above the company has a share ownership policy which requires the executive directors to build up and maintain a target holding equal to 100 of base salary details of the extent to 
which the executive directors had complied with this policy as at 31 december 2014 are set out on page 47
8 for the avoidance of doubt in approving this directors’ remuneration policy authority was given to the company to honour any commitments entered into with current or former directors such as the 
payment of a pension or the vestingexercise of past share awards that have been disclosed in previous remuneration reports details of any payments to former directors will be set out in the annual 
report on remuneration as they arise
illustrations of application of remuneration policy
the chart below illustrates how the composition of the executive directors’ remuneration packages varies at different levels of performance under the 2015 
policy both as a percentage of total remuneration opportunity and as a total value
minimum
richard tyson
fixed pay annual bonus ltip
mark hoad
ontarget maximum minimum ontarget maximum
£504150
£929150
£1354150
0
£500000
£1000000
£1500000
100 5426 3722
2287
2287
3139
3139
£389150
£714150
£1039150
100 5450 3744
2275
2275
3128
3128
notes
1 the base salary is at 1 january 2015
2 the value of benefits receivable under these scenarios is taken to be the value of benefits received in 2014 as calculated under the single total figure of remuneration set out on page 49
3 the ontarget level of bonus is taken to be 50 per cent of the maximum bonus opportunity 100 per cent of salary for executive directors
4 the ontarget level of vesting under the ltip is taken to be 50 per cent being half of the maximum vesting of the face value of the award at grant
5 the maximum value of the ltip is taken to be 100 per cent of the face value of the award at grant ie the values above do not incorporate any exceptional award or share price appreciation assumption
directors’ remuneration policy continued  41 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
approach to recruitment and promotions
the remuneration package for a new executive director – basic salary 
benefits pension annual bonus and longterm incentive awards – would  
be set in accordance with the terms of the company’s prevailing approved 
remuneration policy at the time of appointment
salary would be provided at such a level as is required to attract the most 
appropriate candidate and may be set initially at a below midmarket level 
on the basis that it may progress towards the midmarket level once 
expertise and performance have been proven and sustained annual bonus 
potential will be limited to 100 per cent of salary and longterm incentives 
will be limited to 100 per cent of salary up to 200 per cent in exceptional 
circumstances in addition the committee may offer additional cash andor 
sharebased elements when it considers these to be in the best interests of 
the company and therefore shareholders to take account of remuneration 
relinquished when leaving a former employer and would reflect the  
nature time horizons and performance requirements attaching to that 
remuneration shareholders will be informed of any such payments at the 
time of appointment
for an internal executive director appointment any variable pay element 
awarded in respect of their prior role may be allowed to pay out according  
to its terms adjusted as relevant to take into account the appointment  
in addition any other ongoing remuneration obligations existing prior to 
appointment may continue provided that they are put to shareholders  
for approval at the next general meeting of shareholders
for external and internal appointments the committee may agree that the 
company will meet certain relocation expenses as appropriate
if appropriate on the recruitment of a new executive the committee  
may agree to an initial notice period in excess of 12 months reducing  
to 12 months over a specified period
service contracts for executive directors
the service agreements of the executive directors are not fixed term and  
are terminable by either side on 12 months’ notice they include 12 month 
noncompete clauses and standard provisions for summary termination 
these contracts make provision at the board’s discretion for early 
termination by way of payment in lieu of 12 months’ notice in calculating 
the amount payable to a director on termination of employment the board 
would take into account the commercial interests of the company and apply 
usual common law and contractual principles the remuneration committee 
reviews the contractual terms for new executive directors to ensure these 
reflect best practice in summary the contractual provisions are
provision detailed terms
notice period 12 months
termination 
payment
common law and contractual principles apply
remuneration 
entitlements
a bonus may be payable prorated where relevant 
and outstanding share awards may vest see below
change of control no executive director’s contract contains additional 
provisions in respect of change of control
the annual bonus may be payable with respect to the period of the financial 
year served although it will be prorated and paid at the normal payout date
any sharebased entitlements granted to an executive director under the 
company’s share plans will be determined based on the relevant plan rules 
the default treatment under the ltip is that any outstanding awards lapse 
on cessation of employment however in certain circumstances such as 
death disability redundancy retirement sale or transfer of employer or 
other circumstances at the discretion of the committee ‘good leaver’ status 
may be applied for good leavers awards will normally vest on the normal 
vesting date subject to the satisfaction of the relevant performance 
conditions and reduced prorata to reflect the proportion of the vesting 
period actually served however the remuneration committee has 
discretion to determine that awards vest at cessation eg death andor  
to disapply time prorating
the executive directors may accept outside appointments with prior board 
approval provided these opportunities do not negatively impact on the 
individual’s ability to perform his duties at the company whether any 
related fees are retained by the individual or are remitted to the company 
will be considered on a case by case basis
nonexecutive directors
the fees of each of the nonexecutive directors are determined by the chairman 
and the executive directors reflecting the time commitment required  
the responsibility of each role and the fees paid in comparable companies 42 tt electronics plc annual report and accounts 2014
implementation of the remuneration policy for the 
year ending 31 december 2015
a summary of how the directors’ remuneration policy will be applied during 
the year ending 31 december 2015 is set out below
basic salary and benefits
current base salary levels and those which applied from appointment are 
as follows
2015 2014  increase
richard tyson £425000 £375000 133
mark hoad £325000 – na
richard tyson was appointed on 1 july 2014 on a below market salary on 
the understanding that his salary would be moved to the market level once 
performance in the role had been assessed following an assessment of 
richard tyson’s performance in the role during his first six months his salary 
was increased to £425000 from 1 january 2015 mark hoad’s salary was set 
at £325000 from appointment
the group’s employees in general are receiving pay rises ranging from  
0 per cent to 10 per cent depending on local geography and inflation 
dynamics location promotional increases and individual performance
pension arrangements
the company will strive to contribute approximately 15 per cent of salary 
either to a defined contribution arrangement or as a salary supplement for 
each executive director
annual bonus
the maximum bonus potential for the year ending 31 december 2015 will 
remain at 100 per cent of salary for executive directors and the split of 
targets continues to be based on the group’s financial results being group 
operating profit up to 50 per cent of maximum group operating free cash 
flow up to 25 per cent of maximum and specific personal objectives up to 
25 per cent of maximum as set at the beginning of the 2015 financial year 
specific targets relating to these objectives are considered commercially 
sensitive but will be disclosed where appropriate in the annual report for 
2015 in april 2016
longterm incentives
consistent with past awards the extent to which ltip awards which  
will be granted in 2015 will vest will be dependent on two independent 
performance conditions with 50 per cent determined by reference to the 
company’s total shareholder return “tsr” and 50 per cent determined  
by reference to the group’s earnings per share “eps” 
award levels and the tsr and eps targets for the 2015 award have yet to  
be determined but will be disclosed in the rns issued shortly after grant
nonexecutive directors
the company’s approach to nonexecutive directors’ remuneration is set by 
the board with account taken of the time and responsibility involved in each 
role including where applicable the chairmanship of board committees  
a summary of current fees is as follows
2015 2014  increase
chairman £151870 £151870 0
base fee £41100 £41100 0
additional fees 
 audit committee chair fee £7000 £7000 0
 remuneration committee chair fee £7000 £7000 0
annual report on remuneration  43 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
implementation of the remuneration policy for the year ended 31 december 2014
remuneration received by directors audited
directors’ remuneration for the year ended 31 december 2014 was as follows
£’000 salaryfees
1
benefits
2
pension
3
bonus
4
other
5
incentives
6
total
executive directors
richard tyson 2014 188 7 28 46 132 401
chairman
sean watson 2014 152 – – – – 152
2013 148 – – – – 148
nonexecutive directors
michael baunton 2014 41 – – – – 41
2013 40 – – – – 40
stephen king 2014 48 – – – – 48
2013 47 – – – – 47
john shakeshaft 2014 48 – – – – 48
2013 47 – – – – 47
former directors
geraint anderson 2014 206 12 31 249
2013 400 24 60 213 457 1154
2012 389 25 58 194 1018 1684
shatish dasani 2014 282 25 44 351
2013 274 25 42 146 313 800
2012 266 26 41 133 698 1164
tim roberts 2014 237 11 39 30 317
2013 231 11 35 123 192 592
2012 210 11 32 105 273 631
1 salaryfees
richard tyson was appointed as ceo on a salary of £375000 per annum the amount shown in the above table is prorated from his 1 july 2014 start date
geraint anderson stepped down from the board on 30 june 2014 his base salary was not increased in the 2014 annual pay review
shatish dasani stepped down from the board and left the group on 31 december 2014
tim roberts stepped down from the board on 31 december 2014 albeit he remains an employee of the group
mark hoad joined the group on 29 december 2014 and became cfo on 1 january 2015
2 taxable benefits
the directors taxable benefits consist of company car or allowance and private medical cover
3 pensions
employer contributions are paid at 15 per cent of base salary
4 annual bonus payments for 2014
the annual bonus payments presented in the table below were based on performance against increase in group operating profit up to 50 of maximum 
group operating cash flow up to 25 of maximum and specific personal objectives up to 25 of maximum as measured over the 2014 financial year
details of actual performance against targets is as follows
potential
required for  
threshold bonus 
£m
required for  
maximum bonus 
£m
actual  
result £m
actual  
payout  of 
salary
group profit 50 302 358 292 0
group cash target
1
25 see
1
– 0
personal and strategic objectives
2
25 personal and strategic targets set at the joining 
date based on strategy development and senior 
team development
see
2
25
total  of salary 100 25
1 based on performance against budget for group operating cash flow group working capital to sales  and group stock turns as the profit trigger was not achieved no payment is due for this part  
of the bonus
2 following an assessment of the personal objectives at the end of 2014 the remuneration committee concluded that an award based on personal contribution was appropriate for richard tyson and 
tim roberts based on the attainment of their strategic objectives 44 tt electronics plc annual report and accounts 2014
5 other
richard tyson was compensated £132000 in respect of lost annual bonus potential in respect of his previous employment details of the compensation 
awarded in respect of share awards is set out on page 47
6 vesting of ltip
the figures included in the incentives figure show the value of awards in the year where the achievement of the performance condition is known it therefore 
includes the shares vested on achievement of the tsr condition that vested during the year and the shares to vest on achievement of the eps condition as at 
the financial year end
metric threshold target stretch target actual  vesting
2012 award earnings per share 1604p 2056 129p –
2011 award total shareholder return 125 median ranking 50 upper quartile ranking below median ranking –
2011 award earnings per share 130p 147p 142p 396
2010 award total shareholder return 125 median ranking 50 upper quartile ranking upper quartile ranking 50
the details of the performance criteria are set out in the ltip performance criteria section below
executive
year of award 
and measure
number of 
shares at 
grant
number of 
shares 
vested 
to vest
number of 
shares 
lapsedto 
lapse
estimated
value of 
vesting
vested shares 
£’000
geraint anderson 2012 – eps 106443 – 106443 –
2011 – tsr 108143 – 108143 –
2014 performance period 214586 – 214586 –
2011 – eps 108143 85692 22451 169
2010 – tsr 165095 165095 – 288
2013 performance period 273238 250787 22451 457
2010 – eps 165095 146521 18574 255
2009 – tsr 437500 437500 – 763
2012 performance period 602595 584021 18574 1018
shatish dasani
2012 – eps 73014 – 73014 –
2011 – tsr 74054 – 74054 –
2014 performance period 147068 – 147068 –
2011 – eps 74054 58680 15374 116
2010 – tsr 113208 113208 – 197
2013 performance period 187262 171888 15374 313
2010 – eps 113208 100472 12736 175
2009 – tsr 300000 300000 – 523
2012 performance period 413208 400472 12736 698
tim roberts 2012 – eps 57534 – 57534 –
2011 – tsr 54071 – 54071 –
2014 performance period 111605 – 111605 –
2011 – eps 54071 42846 11225 84
2010 – tsr 61911 61911 – 108
2013 performance period 115982 104757 11225 192
2010 – eps 61911 54946 6965 96
2009 – tsr 101334 101334 – 177
2012 performance period 163245 156280 6965 273
the value of vested shares is based on actual share prices at the date of vesting
annual report on remuneration continued  45 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
ltip performance criteria
in 2014 ltip allocations equal to 100 per cent of base pay were awarded to executive directors the performance measures attaching to the outstanding 
and recently vested ltip awards are shown in the table below
vesting criteria 2010 2011 2012 2013 2014
one half on eps growth in excess of rpi
full vesting  14 pence 15 20 20 12
zero vesting if below  12 pence 10 10 10 7
vesting will increase on a straight line basis between 25 and 
100 between the above points
one half on tsr performance against the ftse small cap excluding investment trusts
full vesting upper quartile ranking
zero vesting if below median ranking
vesting will increase on a straight line basis between 25 and 
100 between the above points
in addition to the tsr targets the committee will consider the company’s underlying performance to ensure that vesting percentages under this part of an 
award are appropriate
awards are measured over a three year period
the ltip awards granted in 2011 vested at 396 on 28 april 2014 the market price on date of vesting was £205
longterm incentives granted during the year
on 9 may 2014 the following ltip awards were granted to executive directors
executive basis of award granted
share price at
date of grant
1
number of 
shares over 
which award 
was granted
face value  
of award 
£
 of face 
value that 
would vest at 
threshold 
performance
vesting determined by 
performance over
tsr three years from grant 
eps three financial years to 
31 december 2016
shatish dasani 100 of salary £214 131572 281564 25
tim roberts 100 of salary £214 110912 237352 25
1 the share price used to determine the number of shares to be granted was the closing market price on the day prior to grant ie £214
on 22 august 2014 the following ltip award was granted to richard tyson following his appointment
executive basis of award granted
share price at
date of grant
number of 
shares over 
which award 
was granted
face value  
of award 
£
 of face 
value that 
would vest at 
threshold 
performance
vesting determined by 
performance over
tsr and eps  
three financial years to 
31 december 2016
richard tyson 100 of salary £171 223214 381696 25
on 29 december 2014 the following ltip awards were granted to mark hoad as an employee of the group
executive basis of award granted
share price at
date of grant
number of 
shares over 
which award 
was granted
face value  
of award 
£
 of face 
value that 
would vest at 
threshold 
performance
vesting determined by
performance over
tsr three financial years  
from grant
mark hoad 100 of salary £101 330452 333757 25 46 tt electronics plc annual report and accounts 2014
outstanding share awards
the table below sets out details of outstanding share awards held by executive directors
as at 31 december 2014 directors’ interests under the ltip were as follows
date of grant
1 january 
2014
granted 
during the 
year lapsed vested
31 december 
2014
market  
value at  
31 december 
2014 
£
market price 
at grant date 
pence vesting date
richard tyson 22 aug 2014 – 223214 – – 223214 229910 17100 22 aug 17
mark hoad 29 dec 2014 – 330452 – – 330452 340366 10100 1 jan 18
geraint anderson
27 april 2011 216285 130593 85692 – 17525 27 apr 14
25 april 2012 212885 212885 – – 18250 25 apr 15
17 april 2013 242528 242528 – – 16475 17 apr 16
671698 586006 85692 –
shatish dasani
27 april 2011 148108 89428 58680 – 17525 27 apr 14
25 april 2012 146027 146027 – – 18250 25 apr 15
17 april 2013 166079 166079 – – 16475 17 apr 16
9 may 2014 131572 131572 – – 21400 9 may 17
460214 131572 533106 58680 –
tim roberts
27 april 2011 108142 – 65297 42845 17525 27 apr 14
25 april 2012 115068 – – – 115068 226684 18250 25 apr 15
17 april 2013 140000 – – – 140000 230650 16475 17 apr 16
9 may 2014 110912 – – 110912 237352 21400 9 may 17
363210 110912 65297 42845 365980 694686
1  the performance conditions for the 2011 awards were met 7924 per cent satisfied on the eps target and in nil on the tsr target in total 3962 per cent of the maximum award
 the company settled the awards with new issue shares in respect of the net balance after tax and national insurance the market price on the date of vesting was 20250 pence
2  the targets for the 2012 awards are as set out above under the “long term incentive plan 2005” based on these accounts subject to committee review it is anticipated that the awards will vest in part  
0 per cent in respect of the eps target the tsr performance condition will be measured at 25 april 2015
3  the market value at 31 december 2014 represents the total number of shares awarded multiplied by 103 pence being the share price on 31 december 2014 the calculation does not take into account 
the likelihood of vesting
tt electronics plc sharesave scheme
date of grant
1 january 
2014
granted 
during the 
year lapsed exercised
31 december 
2014
potential  
gain at 
31 december 
2014 
£
option price 
pence
exercisable between 
exercised on
g anderson 1 oct 10 13552 – – – 13552 – 114 1 nov 15–30 apr 16
13552 – – – 13552 –
s d dasani – –
1 oct 13 6040 – – 6040 – 149 1 nov 16–30 apr 17
1 oct 14 6617 6617 – 136 1 nov 17–30 apr 18
12657 – 12657
t h roberts 1 oct 13 6040 – – 6040 – 149 1 nov 16–30 apr 17
6040 – 6040 –
annual report on remuneration continued  47 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
statement of directors’ shareholdings and share interests audited
beneficially 
owned at 
1 january 
2014
beneficially 
owned at 
31 december 
2014
outstanding 
ltip awards
outstanding 
share awards 
under  
allemployee 
share plans
shareholding 
as a  of 
salary at 31 
december 
2014
value of 
beneficially 
owned at 
31 december 
2014 
£
basic  
salary at 
31 december 
2014 
£
executive directors
richard tyson
1
– 14880 223214 – 408 15326 375000
former directors
g anderson 725156 – – 13552
s d dasani 829144 560244 – 12657
t h roberts 174303 137011 365980 6040 595 141121 237352
nonexecutive directors
s m watson 190000 216100 – – –
j c shakeshaft 51206 57142 – – –
m j baunton 72717 81554 – – –
s a king 100000 100000 – – –
1 excludes the share award made to compensate mr tyson for cobham share awards forfeited on joining the company as detailed below
executives are required to hold shares in the company worth 100 per cent of salary and must retain 50 per cent of the net of tax value of any vested ltip 
shares until the guideline is met
the closing middle market prices for an ordinary share of 25 pence of the company on 31 december 2013 and 2014 as derived from the stock exchange 
daily official list were 197 pence and 1035 pence respectively during 2014 the middle market price of tt electronics plc ordinary shares ranged between 
9775 pence and 22275 pence
board changes
group chief executive
departure of geraint anderson
geraint anderson stepped down as group chief executive and a director of tt electronics plc on 30 june 2014 consistent with his contractual provisions  
he received a payment in lieu of his notice period of £411411 in addition mr anderson retained the use of his company car and benefited from ongoing 
medical cover to 31 december 2014 no payments were made in respect of pension provision or other benefits notwithstanding that mr anderson was 
potentially eligible for good leaver treatment under the annual bonus and long term incentive plan ltip the committee determined that there should be 
no entitlement to an annual bonus payment in respect of the year ending 31 december 2014 and all unvested share awards held under the ltip should lapse 
in full at cessation
appointment of richard tyson
richard tyson was appointed ceo from 1 july 2014 a summary of the key elements of his ongoing remuneration package which is consistent with the 
existing executive director remuneration policy is as follows
– base salary £375000 per annum increased to £425000 from 1 january 2015
– annual bonus 100 of base salary maximum potential reduced prorata for 2014
– ltip 100 of base salary up to 200 in exceptional circumstances and
– pension contribution andor cash supplement of 15 of annual base salary
a payment of £132000 was made to richard tyson relating to compensation for lost annual bonus in respect of his previous employment additionally  
in order to facilitate his recruitment as an external hire in unusual circumstances and in accordance with the discretion reserved to the company under the 
existing executive director remuneration policy to make such awards the remuneration committee agreed to compensate mr tyson for cobham share 
awards forfeited on joining the company the forfeited awards were valued at £441624 on a fair value basis
nonperformancelinked share awards were compensated on a like for like basis for those awards with performance targets performance was measured  
on the basis of publicly available information available when mr tyson joined the company as a result of the remuneration committee estimating that 
relevant performance targets were unlikely to be met in full mr tyson was not compensated for forfeiture of performancelinked share awards over 142700 
cobham shares with only the balance of the performancelinked share awards being compensated
subject to continuing employment with the company on the relevant vesting date and typical good leaverchange of control provisions £251726 of the 
compensation 57 will be delivered in april 2015 and £189898 43 will be delivered in april 2016 to reflect the original vesting periods of the awards 
forfeited the compensation will be delivered through an initial share award granted on 22 august 2014 comprising two tranches – a first award of 124617 
shares vesting on 27 april 2015 and a second award of 94009 shares vesting on 27 april 2016 amounts will also be receivable in respect of dividends paid 
on the relevant number of shares from the date of award to the date of vesting the award is not pensionable and clawback arrangements are in place  
the maximum entitlement under the arrangement and the adjustment terms in the event of a rights issue etc may not be amended other than in minor 
respects without shareholder approval to the extent that the value of the first and second awards at the respective vesting dates is less than £251726  
and £189898 respectively additional share awards will be granted to cover any shortfall to ensure that mr tyson is no worse off 48 tt electronics plc annual report and accounts 2014
group finance director
departure of shatish dasani
shatish dasani stepped down as group finance director and a director of tt electronics plc on 31 december 2014 consistent with his contractual provisions 
he received a payment in lieu of his notice period of £271566 no payments were made in respect of pension provision mr dasani benefited from ongoing 
medical cover to 31 december 2015 and retained the use of his company car to 31 december 2015 or until such time as he finds full time alternative 
employment if earlier
the committee determined that there should be no entitlement to an annual bonus payment in respect of the year ending 31 december 2014 and all 
unvested share awards under the ltip should lapse in full at cessation
appointment of mark hoad
mark hoad joined the company on 29 december 2014 and was appointed group finance director from 1 january 2015 a summary of his ongoing 
remuneration package which is consistent with the existing executive director remuneration policy is as follows
– base salary £325000 per annum
– annual bonus 100 of base salary maximum potential
– ltip 100 of base salary up to 200 in exceptional circumstances and
– pension contribution andor cash supplement of 15 of annual base salary
additionally in order to facilitate his recruitment mr hoad was granted a share award over 100 of salary equating to an award over 330452 shares  
under the ltip upon joining the company the award will normally vest on 1 january 2018 subject to achievement of a three year performance condition 
ending 31 december 2017 based on total shareholder return performance targets against the ftse smallcap excluding investment trusts 25 per cent  
of the shares subject to this award will vest at median performance increasing on a straightline basis to 100 per cent vesting at the upper quartile of the 
comparator group
performance graph and table
the following graph shows the cumulative total shareholder return of the company over the last six financial years relative to the ftse smallcap index  
the ftse smallcap index has been selected for consistency as it is the index against which the company’s total shareholder return is measured for the 
purposes of the ltip in addition the company is a constituent of the index
this graph shows the value by 31 december 2014 of £100 invested in tt electronics plc on 31 december 2008 compared with the value of £100 invested in the ftse smallcap index 
excluding investment trusts the other points plotted are the values at intervening ﬁnancial year ends
source thomson reuters datastream
31 dec 08 31 dec 09 31 dec 10 31 dec 11 31 dec 12 31 dec 13 31 dec 14
tt electronics plc
0
100
300
200
700
600
500
400
value £
ftse smallcap excluding investment trusts
total shareholder return 
annual report on remuneration continued  49 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
total remuneration for chief executive
the total remuneration figures for the chief executive during each of the last five financial years are shown in the table below geraint anderson was in this 
position for the first fi ve years shown richard tyson joined the group as ceo on 1 july 2014 the total remuneration figure includes the annual bonus based 
on that year’s performance and ltip awards based on three year performance periods ending in the relevant year the annual bonus payout and ltip 
vesting level as a percentage of the maximum opportunity are also shown for each of these years
2009 2010 2011 2012 2013
2014 
geraint anderson
2014 
richard tyson
total remuneration £’000 516 771 1576 1684 1154 249 401
annual bonus  30 96 96 50 53 0 25
ltip vesting  na 0 100 94 896 3963 na
percentage change in chief executive’s remuneration
the table below shows the percentage change in the chief executive’s total remuneration excluding the value of any ltip and pension benefits receivable in  
the year between the financial year ending 31 december 2013 and 31 december 2014 compared to that of the average for all eligible employees of the group
geraint anderson 
 change from 2013 to 2014
salary benefits annual bonus
chief executive 0 0 –
average of other employees
1
–38 –04 –
1 based on constant exchange rates
relative importance of spend on pay
the following table shows the company’s actual spend on pay for all employees relative to dividends
2013 2014  change
staff costs £’m 1523 1520 0
dividends £’m 80 87 88
the dividends figures relate to amounts payable in respect of the relevant financial year
external appointments
the executive directors are encouraged to pursue outside appointments provided that such appointments do not in any way prejudice their ability to 
perform their duties the extent to which any executive director is allowed to retain any fees payable in respect of such outside appointments or whether 
such fees are remitted to the company will be assessed on a casebycase basis
consideration by the directors of matters relating to directors’ remuneration
the company’s approach to the chairman’s and executive directors’ remuneration is determined by the board on the advice of the remuneration committee 
the members of the remuneration committee all of whom were independent nonexecutive directors during the year under review were as follows
– john shakeshaft remuneration committee chairman
– michael baunton
– sean watson
biographical information on the committee members is set out on page 26
external advisers
in order to enable the committee to make informed decisions on executive remuneration the committee retained the services of new bridge street “nbs” 
independent external consultants to advise on senior executive remuneration matters nbs which is part of aon plc provides no other services to the 
company although another part of the aon plc provides insurance broking and consultancy services the committee is entirely comfortable that the 
provision of these services does not in any way prejudice nbs’ position as independent advisers to the committee nbs is a member of the remuneration 
consultants group and abides by the remuneration consultants group code of conduct which requires its advice to be objective and impartial
the fees paid to nbs for providing advice in relation to executive remuneration over the financial year under review amounted to £54336
shareholder voting at agm
the committee encourages dialogue with shareholders and will endeavour to consult with major shareholders ahead of any significant changes to our 
remuneration policy
at the annual general meeting held on 9 may 2014 resolutions pertaining to the directors’ remuneration policy and directors’ remuneration report were 
passed on a show of hands proxy votes cast in respect of these resolutions were as follows
number of votes for discretionary against withheld total vote
remuneration report 103417935 123467 3133297 39008 106713707
remuneration policy 92585908 124322 13943242 60235 106713707 50 tt electronics plc annual report and accounts 2014
directors’ report
this annual report includes the directors’ report and the audited financial 
statements for the year ended 31 december 2014 certain information 
required to be disclosed in the directors’ report is provided in other sections 
of this annual report this includes the overview the operating and financial 
reviews the corporate governance and remuneration reports and specific 
elements of the financial statements noted below and accordingly these 
are incorporated into the directors’ report by reference
strategic report
details of the group’s activities and future plans are set out in the strategic 
report on pages 1 to 25 of this report the principal operating subsidiaries 
are listed on page 95
results and dividends
the group’s loss on ordinary activities after taxation was £105 million 
2013 £130 million the audited financial statements of the group and  
the company are set out on pages 54 to 96 further details of the group’s 
activities are set out in the strategic report on pages 1 to 18
the directors are recommending a final dividend of 38 pence per share for 
the year ended 31 december 2014 2013 38 pence to be paid on 4 june 
2015 to shareholders on the register at 22 may 2015 which together with 
the interim dividend of 17 pence per share paid on 30 october 2014  
2013 16 pence makes a total for the year of 55 pence 2013 54 pence
acquisitions and disposals
on 11 july 2014 the group acquired roxspur measurement and control 
limited
directors
rules for the appointment and replacement of directors are set out in the 
company’s articles of association directors are appointed by the board on 
the recommendation of the nominations committee directors may also be 
appointed or removed by the company by ordinary resolution at a general 
meeting of holders of ordinary shares the office of a director shall be 
vacated if his resignation is requested by all the other directors not being 
fewer than three in number further details of the activities of the 
nominations committee are set out on page 32
there are no agreements between the company and its directors or 
employees providing for compensation for loss of office or employment that 
occurs as a result of a takeover bid except that provisions of the company’s 
share plans may cause options and awards granted under such schemes to 
vest on takeover subject to the satisfaction of any performance conditions 
further details of the executive directors’ service contracts can be found in 
the directors’ remuneration report on page 41 copies of the executive 
directors’ service contracts and letters of appointment of the nonexecutive 
directors are available for inspection by any person at the company’s 
registered office during normal business hours on any weekday public 
holidays excepted and at the annual general meeting from 15 minutes 
before the start of the agm until its conclusion
the group maintains directors’ and officers’ liability insurance the 
directors of the company also benefit from a qualifying third party 
indemnity provision in accordance with section 234 of the companies  
act 2006 and the company’s articles of association the company has 
provided a pension scheme indemnity within the meaning of section 235  
of the companies act 2006 to directors of associated companies
auditors
kpmg llp have expressed their willingness to continue in office as  
auditors and a resolution will be proposed to reappoint them at the  
annual general meeting
the auditors’ responsibilities are set out on page 56 and should be read in 
conjunction with those of the directors as set out at the end of this report
annual general meeting
the annual general meeting of the company will be held on 12 may 2015  
at the city centre formerly city marketing suite 80 basinghall street 
london ec2v 5ar at 1130 am the notice of the company’s annual 
general meeting accompanies this document
research and development
the group carries out research and development in order to develop new 
products and processes and to substantially improve existing products  
and processes further details are given in note 15 to the consolidated 
financial statements
significant agreements relating to change of control
the group has a number of borrowing facilities provided by various banking 
groups some of these facility agreements include change of control 
provisions which in the event of a change in ownership of the company 
could result in renegotiation or withdrawal of these facilities
there are a number of other agreements that may be renegotiated upon  
a change of control of the company none is considered to be significant  
in terms of their potential impact on the business of the group as a whole
greenhouse gas emissions
for the year ended 31 december 2014 the group’s greenhouse gas 
emissions detailed below were calculated via the group’s management 
accounting system verified by third party supplier invoicing using the 
factors for converting energy usage to carbon dioxide equivalent emissions 
published by defra in june 2013
carbon dioxide equivalent 
tonnes
2014 2013
emissions resulting from operations and 
combustion of fuel 3406 3277
emissions resulting from the purchase of 
electricity heat steam or cooling 37736 39340
total 41142 42617
 these figures represent all material emissions greenhouse gases emitted as a result of the 
manufacturing process are not included within this figure since these represent a negligible 
proportion less than 125 per cent of our emissions overall for ease of calculation combustion 
of fuel from vehicles owned or operated by the group company cars has been calculated based 
on the presumption that all company cars fall within the ‘large’ category and as a result has 
potentially been overstated
intensity ratio
the group has chosen to adopt emissions per £1 million of revenue as its 
intensity ratio
for 2014 emissions were 7847 tonnes of carbon dioxide equivalent per 
£1 million of revenue 2013 8008
 2013 figures have been restated to account for an understatement made in the annual report 
for the year ended 2013
further details are given under environment on page 25
other statutory disclosures  51 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
employment
the group is committed to the fair and equal treatment of all its employees regardless of gender race age religion disability or sexual orientation  
where existing employees become disabled the policy of the group is to provide continuing employment and training wherever practicable
the group makes significant efforts to ensure that high standards of employee welfare are maintained worldwide in all its operations irrespective of 
geography and local market conditions together with many other global companies operating in its sector the group is a member of the electronic  
industry citizenship coalition a leading industry organisation promoting best practices in corporate responsibility which is committed to raising standards  
of employee welfare in all jurisdictions and at all levels of the supply chain for electronic products further details on the group’s policies relating to its 
employees are given on pages 24 and 25
political contributions
no political contributions were made by the group during the year
share capital
the company’s issued share capital comprises a single class of share capital which is divided into ordinary shares of 25 pence each all issued shares are fully 
paid the share capital during the year is shown in note 24 to the consolidated financial statements the rights and obligations attaching to the company’s 
ordinary shares are set out in the company’s articles of association a copy of which can be obtained from companies house in the united kingdom or by 
writing to the group general counsel  company secretary subject to applicable statutes shares may be issued with such rights and restrictions as the 
company may by ordinary resolution decide or if there is no such resolution or so far as it does not make specific provision as the board may decide 
holders of ordinary shares are entitled to speak at general meetings of the company to appoint one or more proxies and if they are corporations to appoint 
corporate representatives and to exercise voting rights holders of ordinary shares may also receive a dividend and on a liquidation may share in the assets 
of the company in addition holders of ordinary shares are entitled to receive the company’s annual report and accounts subject to meeting certain 
thresholds holders of ordinary shares may require a general meeting of the company to be held or the proposal of resolutions at annual general meetings
authority to allot shares and disapply statutory preemption rights
the directors will be seeking to renew their authorities to allot unissued shares and to disapply statutory preemption rights at the annual general meeting  
to be held on 12 may 2015
purchase of own shares
at the annual general meeting held on 9 may 2014 the company was given authority to purchase up to 15862213 of its ordinary shares until the date of 
its next agm other than market purchases made by the employee benefit trust which are disclosed in note 25 no purchases were made during the year  
by the company the directors will be seeking a new authority for the company to purchase its ordinary shares at the forthcoming annual general meeting
further details regarding the authority to allot shares and disapply statutory preemption rights and the purchase of own shares are set out in the notice of 
the annual general meeting which accompanies this document and is available to view on the company’s website
shares held by the employee benefit trust
the company has established an employee benefit trust “ebt” the trustee of which is sanne trust company limited part of sanne group as at 
31 december 2014 the trustee held 101116 shares with a nominal value of £2527900 and an aggregate purchase price of £146 per share representing 
006 per cent of the total issued share capital at that date these shares will be used to satisfy awards made under the tt electronics plc restricted share 
plan “rsp” the tt electronics plc long term incentive plan “ltip” or other employee share schemes the maximum number of shares held by the ebt 
during the year was 389814 of which 288698 were used to satisfy awards under the ltip the voting rights in relation to these shares are exercisable by  
the trustee however in accordance with investor protection guidelines the trustee abstains from voting a dividend waiver is in place under which the trustee 
waived its right to receive dividends on the shares it held during the year and any future dividends the executive directors as employees of the company  
are potential beneficiaries of shares held by the ebt
substantial shareholding notifications
the company had been notified of the following voting rights attaching to tt electronics plc shares in accordance with the disclosure and transparency 
rules at 9 march 2015 and 31 december 2014
9 march 2015 31 december 2014
number  number 
aberdeen asset managers limited 17465400 109 17465400 109
aberforth partners llp 15862203 99 15954203 100
ubs global asset management 9301055 58 9301055 58
norges bank 8493820 53 8493820 53
tameside mbc re greater manchester police 8108219 51 8108219 51
fil limited fidelity international 8064855 50 8064855 50
tweedy browne company llc 7664336 49 7664336 49
delta lloyd nv and group companies 6455120 40 4856698 30
so far as has been ascertained no other person or corporation holds or is beneficially interested in any substantial part of the share capital of the company 52 tt electronics plc annual report and accounts 2014
voting rights and restrictions on transfer of shares
on a show of hands at a general meeting of the company every holder of 
ordinary shares present in person or by proxy and entitled to vote has one 
vote and on a poll every member present in person or by proxy and entitled 
to vote has one vote for every ordinary share held further details regarding 
voting at the annual general meeting can be found in the notice of the 
annual general meeting which accompanies this document none of the 
ordinary shares carry any special rights with regard to control of the 
company electronic and paper proxy appointments and voting instructions 
must be received by the company’s registrars not later than 48 hours before 
a general meeting a shareholder can lose his entitlement to vote at a 
general meeting where that shareholder has been served with a disclosure 
notice and has failed to provide the company with information concerning 
interests in those shares
the directors may refuse to register a transfer of a certificated share which  
is not fully paid provided that the refusal does not prevent dealings in  
shares in the company from taking place on an open and proper basis the 
directors may also refuse to register a transfer of a certificated share unless 
the instrument of transfer i is lodged duly stamped if stampable at the 
registered office of the company or any other place decided by the directors 
accompanied by the certificate for the share to which it relates andor such 
other evidence as the directors may reasonably require to show the right  
of the transferor to make the transfer ii is in respect of only one class of 
shares iii is in favour of a person who is not a minor bankrupt or a person in 
respect of whom an order has been made on the grounds that such person is 
suffering from a mental disorder or is otherwise incapable of managing their 
affairs or iv is in favour of not more than four transferees
transfers of uncertificated shares must be carried out using crest and  
the directors can refuse to register a transfer of an uncertificated share  
in accordance with the regulations governing the operation of crest
the directors may decide to suspend the registration of transfers for up to 
30 days a year by closing the register of shareholders the directors cannot 
suspend the registration of transfers of any uncertificated shares without 
obtaining consent from crest
there are no other restrictions on the transfer of ordinary shares in the 
company except certain restrictions may from time to time be imposed  
by laws and regulations for example insider trading laws pursuant to the 
company’s share dealing code whereby the directors and certain employees 
of the group require approval to deal in the company’s shares and where  
a shareholder with at least a 025 per cent interest in the company’s 
certificated shares has been served with a disclosure notice and has failed to 
provide the company with information concerning interests in those shares
the company is not aware of any agreements between shareholders that 
may result in restrictions on the transfer of ordinary shares or on voting rights
articles of association
the company’s articles of association may only be amended by special 
resolution approved at a general meeting of the shareholders
uk corporate governance code
the code is available to view at the website of the financial reporting 
council wwwfrcorguk
disclosure of information to auditors
to the best of each director’s knowledge and belief there is no audit 
information relevant to the preparation of the auditors’ report of which the 
auditors are unaware and each director has taken all the steps which might 
be expected to be aware of such relevant information and to establish that 
the auditors are also aware of that information
cross reference to information required to be 
disclosed by listing rule 984r
for the purposes of listing rule 984r the table below details where to find 
applicable information within this annual report
listing rule description location
9844 details of long term incentive 
schemes
page 47 appointment of 
richard tyson
98413 current and future dividend 
waiver
page 51 shares held by the 
employee benefit trust
approved by the board on 11 march 2015 and signed on its behalf by
lynton boardman
group general counsel  company secretary
other statutory disclosures continued  53 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the directors are responsible for preparing the annual report and the group 
and parent company financial statements in accordance with applicable law 
and regulations
company law requires the directors to prepare group and parent company 
financial statements for each financial year under that law they are  
required to prepare the group financial statements in accordance with  
ifrss as adopted by the eu and applicable law and have elected to  
prepare the parent company financial statements in accordance with  
uk accounting standards
under company law the directors must not approve the financial statements 
unless they are satisfied that they give a true and fair view of the state of 
affairs of the group and parent company and of their profit or loss for that 
period in preparing each of the group and parent company financial 
statements the directors are required to
– select suitable accounting policies and then apply them consistently
– make judgements and estimates that are reasonable and prudent
– for the group financial statements state whether they have been 
prepared in accordance with ifrss as adopted by the eu
– for the parent company financial statements state whether applicable 
uk accounting standards have been followed subject to any material 
departures disclosed and explained in the parent company financial 
statements and
– prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the group and the parent company will 
continue in business
the directors are responsible for keeping adequate accounting records that 
are sufficient to show and explain the parent company’s transactions and 
disclose with reasonable accuracy at any time the financial position of the 
parent company and enable them to ensure that its financial statements 
comply with the companies act 2006 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
under applicable law and regulations the directors are also responsible  
for preparing a strategic report directors’ report directors’ remuneration 
report and a directors’ report on corporate governance that complies with 
that law and those regulations
the directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company’s website 
legislation in the uk governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions
responsibility statement of the directors in respect of 
the annual report
we confirm that to the best of our knowledge
– the financial statements prepared in accordance with the applicable set 
of accounting standards give a true and fair view of the assets liabilities 
financial position and profit or loss of the company and the undertakings 
included in the consolidation taken as a whole and
– the strategic report and directors’ report on pages 1 to 53 include a fair 
review of the development and performance of the business and the 
position of the issuer and the undertakings included in the consolidation 
taken as a whole together with a description of the principal risks and 
uncertainties that they face
we consider that the annual report and accounts taken as a whole  
is fair balanced and understandable and provides the information  
necessary for shareholders to assess the group’s performance business 
model and strategy
the coordination and review of groupwide input into the annual report is  
a key element of the control process upon which the directors rely and is an 
exercise which spans a period wider than the timetable for compiling the 
annual report itself this control process incorporates the controls the group 
operates throughout the year to identify key financial and operational issues 
and includes
– strategy meetings held at least twice a year at which the entire board  
is present resulting in a clear agreement of the group’s strategy  
this includes the identification of the key milestones and the related  
key performance indicators to be monitored and measured throughout  
the period
– monthly reviews of business performance conducted by executive 
management in consultation with divisional management supplemented 
by reports highlighting key issues and analysis of the main variances from 
budget and prior year
– preparation of a detailed budget reviewed and agreed by management 
and then the board which is used to calibrate strategy implementation 
and against which actual performance is measured
– a timetabled process coordinating input from each division identifying 
significant market issues and key elements of performance for each 
business area and appropriately incorporating them into the structure of 
the annual report
– the identification of key risks from the risk management process for 
inclusion within the annual report ensuring a consistency of approach 
with regard to the risks and the ongoing review programme
– a planned audit committee signoff process which incorporates 
meetings of the chairman of the audit committee with the executive 
directors the head of risk and assurance and external auditors to 
identify and timetable potential issues of significance to be addressed
– a process for internal distribution and comment on the annual report 
including those of the members of the board the executive management 
board key advisers and external auditors
by order of the board
lynton boardman
group general counsel  company secretary
11 march 2015
statement of directors’ responsibilities in respect of the annual report  
and the financial statements 54 tt electronics plc annual report and accounts 2014
independent auditor’s report to the members of tt electronics plc only
opinions and conclusions arising from our audit
1 our opinion on the financial statements is unmodified
we have audited the financial statements of tt electronics plc for the year ended 31 december 2014 set out on pages 57 to 96 in our opinion
– the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 december 2014 and  
of the group’s loss for the year then ended
– the group financial statements have been properly prepared in accordance with international financial reporting standards as adopted by the  
european union
– the parent company financial statements have been properly prepared in accordance with uk accounting standards and
– the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the group financial 
statements article 4 of the ias regulation
2 our assessment of risks of material misstatement
in arriving at our audit opinion above on the financial statements the risks of material misstatement that had the greatest effect on our audit were as follows
the presentation of ‘underlying’ profit £292 million
refer to pages 33 to 35 audit committee section of the directors’ report and notes 1d and 8 accounting policy and financial disclosures
the risk the group discloses its earnings in accordance with the requirements of adopted ifrs it also presents a measure of underlying earnings as defined 
in note 1d which excludes a number of separately disclosed items of income and expenditure in 2014 this mainly related to restructuring of the group’s 
manufacturing operations acquisition related costs and asset impairments
alternative performance measures can provide readers with appropriate additional information if properly used and presented which can assist them in 
gaining a better understanding of the group’s financial performance and strategy however if improperly used and presented such measures might mislead 
readers by disguising the real financial position and results
our response our audit procedures included an assessment of whether underlying earnings have been determined in accordance with the group’s policy 
and disclosures given in the financial statements by comparing a sample of the items excluded to supporting documentation to assess if they have been 
described appropriately
we considered whether the policy has been applied consistently between periods by comparing the items excluded in the two years ended 31 december 
2014 and on the basis of our understanding of the results gained throughout the audit process
we also assessed i the extent to which the relative prominence given to underlying financial information and related commentary and adopted ifrs 
financial information could be misleading ii whether the adopted ifrs and underlying financial information are reconciled with sufficient prominence given 
to that reconciliation and iii whether the underlying financial information is not otherwise misleading in the form and context in which it appears
product related and restructuring provisions included within provisions of £191 million
refer to pages 33 to 35 audit committee section of the directors’ report and notes 2a and 19 accounting policy and financial disclosures
the risk the group’s products are used in a variety of complex applications and if they do not perform in the manner specified the group may be exposed 
to claims from customers assessing if such claims are valid and if so estimating the likely outflow of economic benefit which could be material to the 
financial statements requires judgment and involves making estimates and assumptions which may prove to have been inaccurate
the group is also reorganising a number of its operations giving rise to material redundancy and other restructuring charges the timing of recognition of the 
associated provisions in accordance with the requirements of the relevant accounting standard also involves judgment
our response our audit procedures over the timing of recognition and measurement of product related claims included discussions with the directors the 
group’s legal counsel and business unit management to identify actual and potential customer claims a consideration of the available information used  
to assess their validity and challenging the basis of the estimates used to determine the provisions with reference to the latest available corroborative 
information such as communications with customers external legal advisors and our understanding of the business gained throughout the audit process
our audit procedures over the timing of recognition of redundancy and restructuring provisions included challenging the evidence available to support the 
existence of an obligation at the balance sheet date
we also assessed whether the group’s disclosures in respect of these provisions and the movements in the year were appropriate
capitalisation and recoverability of development costs as intangible assets £49 million
refer to pages 33 to 35 audit committee section of the directors’ report and notes 2l and 15 accounting policy and financial disclosures
the risk the group incurs costs in developing its products which are capitalised when they meet the recognition criteria set out in the relevant accounting 
standard which requires inter alia that the group demonstrates the technical feasibility of and its intention to complete the development of an intangible 
asset and how the intangible asset will generate probable future economic benefits
there is a risk that costs are capitalised as intangible assets before these criteria are satisfied the majority of the development costs capitalised as intangible 
assets arise in the sensing and control division and relate to products for use by the automotive industry a highly competitive sector there is therefore also 
a risk that once capitalised events or circumstances change such that the future economic benefits on which these assets’ carrying values rely are no longer 
likely to be realised in which case they should be written down  55 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
our response our audit procedures included testing a sample of items to assess whether development costs are only capitalised once the criteria set out in 
the relevant accounting standard have been satisfied
we challenged the key assumptions made in the projections for future economic benefits supporting the carrying values of these assets in the impairment 
calculations including volume pricing and cost assumptions
we assessed the historical accuracy of the group’s estimates and compared the assumptions made in the projections to our understanding of the 
commercial prospects of key programmes and the impact on these programmes of changes to the group’s strategic focus
we also considered the adequacy of the group’s disclosures in respect of the judgement involved in capitalising development costs in note 1h
carrying value of goodwill £694 million
refer to pages 33 to 35 audit committee section of the directors’ report and notes 2k and 14 accounting policy and financial disclosures
the risk the group has generated significant goodwill on acquisitions whose recoverability is dependent on the ability of the businesses to which it relates  
to generate sufficient future economic benefits there is a risk that either due to competitive forces or a slowdown in customer demand for products using 
components supplied by the group this will not be the case which could result in an impairment being required as set out in note 14 the most significant risk 
of impairment relates to the carrying value of goodwill associated with new chapel where the recoverable amount exceeds the book value of £34 million by 
£15 million
impairment reviews are based on discounted cash flow projections reflecting a number of assumptions and estimates which require judgment and are 
inherently uncertain
our response our audit procedures included testing the principles and mathematical integrity of the group’s discounted cash flow model and assessing  
the sensitivity of the impairment calculations to changes in the key assumptions we challenged the key assumptions in the impairment calculations driving 
projected future economic benefits relating to sales and margins during the projection period long term growth rates and discount rates
our challenge was based on our assessment of the historical accuracy of the group’s impairment calculations a comparison of the group’s assumptions  
to externally derived data as well as our own assessments we also assessed whether the group’s disclosures set out in note 14 about the sensitivity of the 
outcome of the impairment assessment to changes in key assumptions reflected the risks inherent in the valuation of goodwill
tax provisioning included within income tax payable of £100 million
refer to pages 33 to 35 audit committee section of the directors’ report and notes 2f and 9 accounting policy and financial disclosures
the risk accruals for tax contingencies require the directors to make judgments and estimates in relation to tax issues and exposures given that the group 
operates in a number of tax jurisdictions the complexities of transfer pricing and other international tax legislation and the time taken for tax matters to be 
agreed with the tax authorities
our response our audit procedures included the use of our own international and local tax specialists to assess the group’s tax positions to inspect its 
correspondence with the relevant tax authorities and to analyse and challenge the assumptions used to determine tax provisions based on our knowledge 
and experiences of the application of the international and local legislation by the relevant authorities and courts
we also considered the adequacy of the group’s disclosures in respect of tax and uncertain tax positions
3 our application of materiality and an overview of the scope of our audit
the materiality for the group financial statements as a whole was set at £14 million determined with reference to a benchmark of group profit before tax  
of £257 of which it represents 54 normalised to exclude restructuring costs of £222 million and asset impairments of £94 million as disclosed in note 8
we report to the audit committee any corrected or uncorrected identified misstatements exceeding £01 million for items impacting the income statement and 
£02 million for items in respect of balance sheet misclassifications in addition to other identified misstatements that warranted reporting on qualitative grounds
of the group’s 121 reporting components we subjected 65 to audits for group reporting purposes and 15 to specified riskfocused audit procedures the 
latter were not individually financially significant enough to require an audit for group reporting purposes but did present specific individual risks that needed 
to be addressed
the components within the scope of our work accounted for the following percentages of the group’s results
number of 
components
group 
revenue
group profit 
before tax
total  
assets
audits for group reporting purposes 65 81 87 83
specified risk focused audit procedures 15 12 8 10
total 80 93 95 94
the remaining 7 of total group revenue 5 of group profit before tax and 6 of total group assets is represented by 41 reporting components none of 
which individually represented more than 5 of any of total group revenue group profit before tax or total group assets for these remaining components 
we performed analysis at an aggregated group level to reexamine our assessment that there were no significant risks of material misstatement within these
independent auditor’s report to the members of tt electronics plc only continued 56 tt electronics plc annual report and accounts 2014
the group audit team instructed component auditors as to the significant areas to be covered including the relevant risks detailed above and the 
information to be reported back the group audit team approved the component materialities which ranged from £002 million to £12 million having regard 
to the mix of size and risk profile of the group across the components
the group audit team visited components in the usa germany austria and uk telephone conference meetings were also held with these component 
auditors and the majority of the others that were not physically visited at these visits and meetings the findings reported to the group audit team were 
discussed in more detail and any further work required by the group audit team was then performed by the component auditor
4 our opinion on other matters prescribed by the companies act 2006 is unmodified
in our opinion
– the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the companies act 2006 and
– the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent 
with the financial statements and
5 we have nothing to report in respect of the matters on which we are required to report by exception
under isas uk and ireland we are required to report to you if based on the knowledge we acquired during our audit we have identified other information 
in the annual report that contains a material inconsistency with either that knowledge or the financial statements a material misstatement of fact or that is 
otherwise misleading
in particular we are required to report to you if
– we have identified material inconsistencies between the knowledge we acquired during our audit and the directors’ statement that they consider that the 
annual report and financial statements taken as a whole is fair balanced and understandable and provides the information necessary for shareholders to 
assess the group’s performance business model and strategy or
– the audit committee section of the director’s report of the annual report describing the work of the group audit and risk committee does not 
appropriately address matters communicated by us to the audit committee
under the companies act 2006 we are required to report to you if in our opinion
– adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from branches not 
visited by us or
– the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the accounting 
records and returns or
– certain disclosures of directors’ remuneration specified by law are not made or
– we have not received all the information and explanations we require for our audit
under the listing rules we are required to review
– the directors’ statement set out on page 31 in relation to going concern and
– the part of the corporate governance statement on pages 28 to 31 relating to the company’s compliance with the ten provisions of the 2012 uk 
corporate governance code specified for our review
we have nothing to report in respect of the above responsibilities
scope and responsibilities
as explained more fully in the directors’ responsibilities statement set out on page 53 the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view a description of the scope of an audit of financial statements is provided on the 
financial reporting council’s website at wwwfrcorgukauditscopeukprivate this report is made solely to the company’s members as a body and is subject 
to important explanations and disclaimers regarding our responsibilities published on our website at wwwkpmgcomukauditscopeukco2014a which are 
incorporated into this report as if set out in full and should be read to provide an understanding of the purpose of this report the work we have undertaken 
and the basis of our opinions
anthony sykes senior statutory auditor
for and on behalf of kpmg llp statutory auditor
chartered accountants
15 canada square
london
e14 5gl
11 march 2015
independent auditor’s report to the members of tt electronics plc only continued  57 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
£million unless otherwise stated note 2014 2013
continuing operations
revenue 3a 5243 5322
cost of sales 4443 4321
gross profit 800 1001
distribution costs 297 337
administrative expenses 560 490
other operating income 14 16
operating lossprofit 43 190
 analysed as
 underlying operating profit 3a 292 308
 restructuring 8 222 102
 asset impairments 8 94 –
 acquisition related costs 8 19 16
finance income 6 11 28
finance costs 6 27 35
lossprofit before taxation 59 183
taxation 9 46 45
lossprofit from continuing operations 7 105 138
discontinued operations
loss from discontinued operations 5 – 08
lossprofit for the year attributable to owners of the company 105 130
eps attributable to owners of the company – basic
from continuing operations p 11 66 88
from discontinued operations p 11 – 05
66 83
eps attributable to owners of the company – diluted
from continuing operations p 11 66 87
from discontinued operations p 11 – 05
66 82
 represented to exclude acquisition related items from underlying operating profit see note 1d
consolidated income statement
for the year ended 31 december 2014 58 tt electronics plc annual report and accounts 2014
£million note 2014 2013
lossprofit for the year 105 130
other comprehensive incomeloss for the year after taxation
items that are or may be reclassified subsequently to the income statement
exchange differences on translation of foreign operations 19 16
loss on hedge of net investment in foreign operations 06 09
lossgain on cash flow hedges taken to equity less amounts taken to income statement 17 03
items that will never be reclassified to the income statement
remeasurement of defined benefit pension schemes 23 46 129
remeasurement of other postemployment benefits 03 03
tax on remeasurement of defined benefit pension schemes 22 11 39
tax on remeasurement of other postemployment benefits 22 01 01
total comprehensive lossincome for the year 76 196
total comprehensive lossincome is entirely attributable to the owners of the company
consolidated statement of comprehensive income
for the year ended 31 december 2014  59 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
£million note 2014 2013
assets
noncurrent assets
property plant and equipment 13 940 886
goodwill 14 694 639
other intangible assets 15 183 181
deferred tax assets 22 56 73
total noncurrent assets 1873 1779
current assets
inventories 16 789 800
trade and other receivables 17 707 744
income taxes receivable 09 –
derivative financial instruments 04 08
cash and cash equivalents 394 545
total current assets 1903 2097
total assets 3776 3876
liabilities
current liabilities
borrowings 20 537 39
derivative financial instruments 13 –
trade and other payables 18 816 1048
income taxes payable 100 104
provisions 19 189 100
total current liabilities 1655 1291
noncurrent liabilities
borrowings 20 – 237
deferred tax liability 22 56 47
pensions 23 124 205
provisions 19 02 02
other noncurrent liabilities 18 61 61
total noncurrent liabilities 243 552
total liabilities 1898 1843
net assets 1878 2033
equity
share capital 24 398 397
share premium 24 15 14
share options reserve 19 12
hedging and translation reserve 21 169 173
retained earnings 1257 1417
equity attributable to owners of the company 1858 2013
noncontrolling interests 20 20
total equity 1878 2033
approved by the board of directors on 11 march 2015 and signed on their behalf by
richard tyson mark hoad
director director
consolidated balance sheet
at 31 december 2014 60 tt electronics plc annual report and accounts 2014
£million
share  
capital
share 
premium
share  
options 
reserve
hedging 
reserve
translation 
reserve
retained 
earnings subtotal
non
controlling 
interest total
at 1 january 2013 392 07 15 120 315 1282 1891 20 1911
profit for the year – – – – – 130 130 – 130
other comprehensive income
exchange differences on translation of foreign 
operations – – – – 16 – 16 – 16
net loss on hedge of net investment in foreign 
operations – – – – 09 – 09 – 09
net gain on cash flow hedges taken to equity 
less amounts taken to income statement – – – 03 – – 03 – 03
remeasurement of defined benefit pension 
schemes – – – – – 129 129 – 129
remeasurement of other postemployment 
benefits – – – – – 03 03 – 03
tax on remeasurement of defined benefit 
pension schemes – – – – – 39 39 – 39
tax on remeasurement of other  
postemployment benefits – – – – – 01 01 – 01
total other comprehensive income – – – 03 25 88 66 – 66
transactions with owners recorded directly 
in equity
equity dividends paid by the company – – – – – 80 80 – 80
change in fair value of noncontrolling interest – – – – – 01 01 – 01
sharebased payments – – 01 – – – 01 – 01
deferred tax on sharebased payments – – 02 – – – 02 – 02
new shares issued 05 07 – – – 02 10 – 10
at 31 december 2013 397 14 12 117 290 1417 2013 20 2033
loss for the year – – – – – 105 105 – 105
other comprehensive income
exchange differences on translation of foreign 
operations – – – – 19 – 19 – 19
net loss on hedge of net investment in foreign 
operations – – – – 06 – 06 – 06
net loss on cash flow hedges taken to equity 
less amounts taken to income statement – – – 17 – – 17 – 17
remeasurement of defined benefit pension 
schemes – – – – – 46 46 – 46
remeasurement of other postemployment 
benefits – – – – – 03 03 – 03
tax on remeasurement of defined benefit 
pension schemes – – – – – 11 11 – 11
tax on remeasurement of other  
postemployment benefits – – – – – 01 01 – 01
total other comprehensive income – – – 17 13 33 29 – 29
transactions with owners recorded directly 
in equity
equity dividends paid by the company – – – – – 87 87 – 87
sharebased payments – – 08 – – – 08 – 08
deferred tax on sharebased payments – – 01 – – – 01 – 01
new shares issued 01 01 – – – 01 01 – 01
at 31 december 2014 398 15 19 134 303 1257 1858 20 1878
consolidated statement of changes in equity
for the year ended 31 december 2014  61 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
£million note 2014 2013
cash flows from operating activities
lossprofit for the year 105 130
taxation 46 45
net finance costs 16 07
restructuring 222 102
acquisition related costs 19 16
asset impairments 94 –
loss from discontinued operations – 08
underlying operating profit 292 308
adjustments for
depreciation of property plant and equipment 13 165 168
amortisation of intangible assets 15 58 38
impairment of property plant and equipment and intangible assets 13 15 – 04
other items 10 04
decreaseincrease in inventories 26 138
decreaseincrease in receivables 55 72
decreaseincrease in payables 249 116
underlying operating cash flow 357 428
special payments to pension funds 41 39
restructuring and acquisition related costs 130 61
net cash generated from operations 186 328
net income taxes paid 54 25
net cash flow from operating activities 132 303
cash flows from investing activities
interest received 01 01
purchase of property plant and equipment 13 249 203
proceeds from sale of property plant and equipment and grants received 12 06
development expenditure 15 68 52
purchase of other intangibles 15 43 42
acquisitions of businesses 84 83
cash with acquired businesses 4 04 –
disposal of subsidiaries – 41
deferred consideration paid 05 01
net cash flow from investing activities 432 415
cash flows from financing activities
issue of share capital 24 01 09
interest paid 10 08
repayment of borrowings – 08
proceeds from borrowings 249 174
other items 25 05 12
finance leases 01 01
dividends paid by the company 87 80
net cash flow from financing activities 147 74
net decrease in cash and cash equivalents 153 38
cash and cash equivalents at beginning of year 26 545 591
exchange differences 26 02 08
cash and cash equivalents at end of year 26 394 545
cash and cash equivalents comprise
cash at bank and in hand 394 545
bank overdrafts 20 – –
394 545
 represented to exclude acquisition related items from underlying operating profit see note 1d
the consolidated cash flow statement includes cash flows from both continuing and discontinued operations
consolidated cash flow statement
for the year ended 31 december 2014 62 tt electronics plc annual report and accounts 2014
1 basis of preparation
a basis of accounting
the consolidated financial statements have been prepared on a historical cost basis modified by the revaluation of financial assets and derivatives held  
at fair value and by the revaluation of certain property plant and equipment at the transition date to international financial reporting standards ifrs  
the consolidated financial statements have been prepared in accordance with ifrs as issued by the international accounting standards board iasb  
and interpretations issued by the international financial reporting interpretations committee ifric of the iasb as adopted by the european union  
and in accordance with the provisions of the companies act 2006
the consolidated financial statements set out on pages 57 to 61 have been prepared using consistent accounting policies
adoption of new and amendments to published standards and interpretations effective for the group for the year ended 31 december 2014 did not have 
any impact on the financial position or performance of the group
b basis of consolidation
the consolidated financial statements set out the group’s financial position as at 31 december 2014 and the group’s financial performance for the year 
ended 31 december 2014
subsidiaries are those enterprises controlled by the group control exists when the group is exposed or has rights to variable returns from its involvement 
with the subsidiary and has the ability to affect those returns through its power over the subsidiary subsidiaries are consolidated from the date on which 
control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the group
all intercompany balances and transactions including unrealised profits arising from intragroup transactions have been eliminated in full unrealised losses 
are eliminated in the same way as unrealised gains except that they are only eliminated to the extent that there is no evidence of impairment
c underlying measures
to assist with the understanding of underlying performance the group has included within its published consolidated financial statements nongaap 
measures including underlying operating profit and underlying earnings per share these are considered by the board to be the most meaningful measures 
under which to assess the true operating performance of the group
d underlying profit
this has been defined as operating profit from continuing operations excluding the impacts of business acquisition and divestment related activity 
restructuring costs and impairments of intangible assets business acquisition and divestment related items excluded from underlying profit and underlying 
earnings per share include the amortisation of intangible assets recognised on acquisition the writing off of the preacquisition profit element of inventory 
written up on acquisition other direct costs associated with business combinations and adjustments to contingent consideration related to acquired 
businesses
this measure of underlying profit represents an amendment to the previous measure of headline earnings since amortisation of intangible assets recognised 
on acquisition had previously been included in headline profit as a result comparative financial information has been represented for the year ending 
31 december 2013 to reclassify these items to acquisition related costs the effect on profit or loss was to increase underlying operating profit by £06 million 
and increase acquisition related costs by £06 million the effect on the cash flow statement was to increase the underlying operating profit and decrease the 
acquisition related cost reconciling item by £06 million the effect on eps was to increase underlying earnings per share by 04 pence per share
e going concern
the group’s business activities together with the factors likely to affect its future development performance and position are set out within the strategic 
report on pages 1 to 25 the strategic report analyses the financial position of the group its cash flows liquidity position and borrowing facilities in addition 
note 21 to the financial statements includes the group’s objectives policies and processes for managing its capital its financial risk management objectives 
details of its financial instruments and hedging activities and its exposures to credit risk and liquidity risk
the group had a net debt balance of £143 million at 31 december 2014 2013 net cash £269 million with available financial headroom of £1506 million 
given the considerable financial resources available together with longterm partnerships with a number of key customers and suppliers across different 
geographic areas and industries the directors believe that the group is well placed to manage its business risks successfully
the directors have a reasonable expectation that the company has adequate resources and financial headroom to continue in operational existence for the 
foreseeable future thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements further details are 
contained in the directors’ report on page 31
f new standards and interpretations not yet adopted
the group does not consider that any standard amendment or interpretation issued by the iasb but not yet applicable will have a significant impact on the 
financial statements
g change in accounting policies
aside from underlying profit as defined in note 1d there have been no changes to accounting policies during the year adoption of new and amendments to 
published standards and interpretations effective for the group for the year ended 31 december 2014 did not have any impact on the financial position or 
performance of the group
notes to the consolidated financial statements  63 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
h significant accounting judgements and estimates
judgements
determining many of the amounts included in the consolidated financial statements involves the use of judgements these judgements are based on 
management’s best knowledge of the relevant facts and circumstances having regard to prior experience but actual results may differ from the amounts 
included in the consolidated financial statements other than the key sources of estimation uncertainty shown below the directors believe that there were 
no material transactions or events during the year which required critical judgements in applying the group’s accounting policies
estimation uncertainty
the preparation of the consolidated financial statements in conformity with ifrs requires management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the 
reporting period actual outcomes could differ from these estimates in particular information about significant areas of estimation uncertainty made by 
the directors in preparing the consolidated financial statements is shown below
– note 9 – taxation accruals for tax contingencies require management to make judgements and estimates in relation to tax audit issues and exposures 
amounts accrued are based on management’s interpretation of countryspecific tax law and the likelihood of settlement tax benefits are not recognised 
unless the tax positions are probable of being sustained once considered to be probable management reviews each material tax benefit to assess 
whether a provision should be taken against full recognition of the benefit on the basis of potential settlement through negotiation andor litigation  
all such provisions are included in current liabilities
– note 14 – impairment of goodwill the carrying amount of goodwill has been tested for impairment by estimating the value in use of the cash generating 
units to which it has been allocated note 14 outlines the significant assumptions made in performing the impairment tests
– note 15 – other intangible assets the recoverability of capitalised development costs is dependent on assessments of the future commercial viability of 
the relevant products and processes
– note 19 – provisions the group makes appropriate provision on a consistent basis for risks of product liability litigation restructuring credit risk and other 
normal trading exposures with estimates being made regarding the timing of future payments
– note 22 – deferred tax the recognition of deferred tax assets is dependent on assessments of future taxable income in the relevant countries concerned and
– note 23 – defined benefit pension obligations the defined benefit pension obligations are calculated using a number of assumptions including future 
inflation salary increases and mortality and the obligation is then discounted to its present value using an assumed discount rate the pension deficit has 
been calculated using the assumptions set out in note 23
2 summary of significant accounting policies
the following significant accounting policies have been applied in the preparation of the consolidated financial statements these accounting policies have 
been consistently applied across the group
a revenue
revenue is measured at the fair value of the right to consideration usually the invoiced value for the provision of goods and services to external customers 
excluding value added tax and other sales related taxes and is recognised when the significant risks and rewards of ownership have transferred to the 
customer in most cases this coincides with the transfer of legal title of the goods revenue for services is recognised as the services are rendered
b finance income
finance income comprises interest income on funds invested and foreign exchange gains interest income is recognised as it accrues
c finance costs
finance costs comprise interest expense on borrowings which are not capitalised under the borrowing costs policy the calculated interest income on pension 
assets net of the calculated interest expense on pension liabilities and foreign exchange losses
d discontinued operations
the group reports a business as a discontinued operation when it has been disposed of in a period or its future sale is considered to be highly probable at the 
balance sheet date and results in the cessation of a major line of business or geographical area of operation
e dividends
dividends are recognised as a liability in the period in which they are approved by shareholders dividends receivable are recognised when the group’s right 
to receive payment is established
f business combinations
business combinations are accounted for using the acquisition method goodwill on business combinations is recognised as the fair value of the 
consideration transferred less the fair value of the identifiable assets and liabilities acquired and is recognised as an asset in the consolidated balance sheet 
costs relating to the acquisition are recognised as expenses in the consolidated income statement as incurred
acquisitions and disposals of noncontrolling interests that do not result in a change of control are accounted for as transactions with owners in their capacity 
as owners and therefore no goodwill is recognised as a result of such transactions the adjustments to noncontrolling interests are based on a proportionate 
amount of the net assets of the subsidiary any difference between the price paid or received and the amount by which noncontrolling interests are adjusted 
is recognised directly in equity and attributed to the owners of the parent
g property plant and equipment
initial measurement
property plant and equipment is stated at cost less accumulated depreciation and impairment losses the cost of a tangible fixed asset comprises its 
purchase price and any costs directly attributable to bringing it into working condition for its intended use the cost of self constructed assets includes the 
cost of materials direct labour and an appropriate proportion of production overheads
1 basis of preparation continued 64 tt electronics plc annual report and accounts 2014
depreciation
the cost of each item of property plant and equipment is depreciated over its useful life depreciation is charged to the income statement so as to writeoff 
the cost less estimated residual value on a straightline basis over the estimated useful life of the asset depreciation commences on the date the assets are 
ready for use within the business and the asset carrying values are reviewed for impairment when there is an indication that they may be impaired freehold 
land is not depreciated
the depreciation rates of assets are as follows
freehold buildings 2
leasehold buildings 2 or over the period of the lease if less than 50 years
plant and equipment 10 to 33
1
3
borrowing costs directly attributable to the acquisition construction or production of qualifying assets that take a substantial period of time to get ready for 
their intended use are capitalised as part of the cost of the respective asset
h investment property
property held to earn rental income rather than for the purpose of the group’s principal activities is classified as investment property investment property is 
recorded at cost less accumulated depreciation and any recognised impairment loss the depreciation policy is consistent with those described for other 
group properties the assets’ residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date
investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and 
no future economic benefit is expected from its disposal the difference between the net disposal proceeds and the carrying amount of the asset is 
recognised in the income statement in the period of derecognition
i leases
finance leases which transfer to the group substantially all the risks and rewards of ownership of the leased items are capitalised at the commencement  
of the lease plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the 
minimum lease payments at inception of the lease less accumulated depreciation and impairment losses the capital elements of future obligations  
under leases and hire purchase contracts are included as liabilities in the balance sheet lease payments are apportioned between the finance charge and 
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability finance charges are charged directly 
against income capitalised lease assets are depreciated over the shorter of the estimated useful life of the asset or the lease term all other leases are 
treated as operating leases and the cost is expensed to the income statement as incurred
j government grants
government grants relating to noncurrent assets are treated as deferred income and credited to the income statement by equal instalments over the anticipated 
useful lives of the assets to which the grants relate other grants are credited to the income statement over the period of the project to which they relate
k goodwill
goodwill arising on the acquisition of a business representing the difference between the cost of acquisition and the fair value of the identifiable net assets 
acquired is capitalised and is tested annually for impairment goodwill is not amortised and any impairment losses are not subsequently reversed the net 
book value of goodwill at the date of transition to ifrs has been treated as deemed cost on the subsequent disposal or discontinuance of a previously 
acquired business the relevant goodwill is dealt with in the consolidated income statement except for the goodwill already charged to reserves
negative goodwill arising on the acquisition of a business is credited to the consolidated income statement on acquisition as part of acquisition costs 
reported outside underlying profit
l other intangible assets
intangible assets acquired as part of a business combination are stated in the balance sheet at their fair value at the date of acquisition less  
accumulated amortisation
expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognised in the income 
statement as incurred expenditure on development activities whereby research findings are applied to a plan or design for the production of new or substantially 
improved products and processes is capitalised if the product or process is technically and commercially feasible and the group has sufficient resources to 
complete development the expenditure capitalised includes the cost of materials direct labour and an appropriate proportion of overheads other development 
expenditure is recognised in the income statement as incurred capitalised development expenditure is stated at cost less accumulated amortisation and 
impairment losses the carrying values of intangible assets are tested for impairment whenever there is an indication that they may be impaired
acquired computer software licences for use within the group are capitalised as an intangible asset on the basis of the costs incurred to acquire and bring to 
use the specific software costs that are directly associated with the implementation of identifiable and unique software products controlled by the group 
and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets capitalised software development 
expenditure is stated at cost less accumulated amortisation
the amortisation rates for intangible assets are
acquired patents and licences up to 10 years
product development costs 5 years
customer relationships 3 to 8 years
software 3 to 5 years
amortisation is charged on a straightline basis
2 summary of significant accounting policies continued
notes to the consolidated financial statements continued  65 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
m deferred taxation
deferred taxation is provided on taxable temporary differences between the carrying amounts of assets and liabilities in the financial statements and their 
corresponding tax bases no provision is made for deferred tax which would become payable on the distribution of retained profits by overseas subsidiaries 
where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the 
foreseeable future deferred tax is measured using the tax rates expected to apply when the asset is realised or the liability settled based on tax rates 
enacted or substantively enacted by the balance sheet date however deferred tax is not provided on the initial recognition of goodwill nor on the initial 
recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised  
or that they will reverse deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised
deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred 
taxes relate to the same taxable entity and the same taxation authority
n inventories
inventories are valued at the lower of cost including related overheads and net realisable value cost comprises direct materials and where applicable direct 
labour costs and the overheads incurred in bringing inventories to their present location and condition cost is calculated on a weighted average cost basis
o trade and other receivables
trade receivables are carried at original invoice price which is the fair value of the consideration receivable less provision made for impairment of these 
receivables a provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all 
amounts due according to the original terms of the receivables the amount of the provision is the difference between the original carrying amount and  
the recoverable amount being the present value of expected cash flows receivable the amount of the provision is recognised in the income statement
p financial instruments
recognition
the group recognises financial assets and liabilities on its balance sheet when it becomes a party to the contractual provisions of the instrument
financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to set off the 
recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously
measurement
when financial assets and liabilities are initially recognised they are measured at fair value being the consideration given or received plus directly 
attributable transaction costs
in determining estimated fair value investments are valued at quoted bid prices on the trade date
loans and receivables comprise loans and advances other than purchased loans originated loans and receivables are initially recognised in accordance  
with the policy stated above and subsequently remeasured at amortised cost using the effective interest method allowance for impairment is estimated  
on a casebycase basis
the group uses derivative financial instruments such as forward foreign exchange contracts and interest rate derivatives to hedge risks associated with 
foreign exchange fluctuations and interest rate risk these are designated as cash flow hedges at the inception of the hedge relationship the group 
documents the relationship between the hedging instrument and the hedged item along with its risk management objectives and its strategy for 
undertaking various hedge transactions furthermore at the inception of the hedge and on an ongoing basis the group documents whether the hedging 
instrument that is used in a hedging relationship is highly effective in offsetting changes in cash flows of the hedged item
the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in equity the gain or loss 
relating to the ineffective portion is recognised immediately in the income statement
amounts deferred in equity are recycled in the income statement in the periods when the hedged item is recognised in the income statement in the same 
line of the income statement as the recognised hedged item however when the forecast transaction that is hedged results in the recognition of a non
financial asset or a nonfinancial liability the gains and losses previously deferred in equity are transferred from equity and included in the initial 
measurement of the cost of the asset or liability
hedge accounting is discontinued when the group revokes the hedging relationship the hedging instrument expires or is sold terminated or exercised  
or no longer qualifies for hedge accounting any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast 
transaction is ultimately recognised in the income statement when a forecast transaction is no longer expected to occur the cumulative gain or loss that 
was deferred in equity is recognised immediately in the income statement
derecognition
a financial asset is derecognised when the group loses control over the contractual rights that comprise that asset this occurs when the rights are realised 
expire or are surrendered a financial liability is derecognised when it is extinguished originated loans and receivables are derecognised on the date they are 
transferred by the group
2 summary of significant accounting policies continued 66 tt electronics plc annual report and accounts 2014
impairment of financial assets
the group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired a financial 
asset or group of financial assets is deemed to be impaired if and only if there is objective evidence of impairment as a result of one or more events that has 
occurred after the initial recognition of the asset an incurred “loss event” and that loss event has an impact on the estimated future cash flows of the financial 
asset or group of financial assets that can be reliably estimated
q cash and cash equivalents
cash and cash equivalents comprise cash at bank and in hand shortterm deposits held on call or with maturities of less than three months at inception and 
highly liquid investments that are readily convertible into known amounts of cash and are subject to insignificant risk of changes in value and bank overdrafts
r borrowings
borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs after initial recognition 
borrowings are subsequently measured at amortised cost using the effective interest method
s trade payables
trade payables are carried at the amounts expected to be paid to counterparties
t income tax
income tax for the year comprises current and deferred tax income tax is recognised in the income statement except to the extent that it relates to items 
charged or credited directly to equity in which case it is recognised in equity current tax expense is the expected tax payable on the taxable income for the 
year and any adjustment to tax payable in respect of previous years
u provisions
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event and it is probable that an outflow of resources 
will be required to settle the obligation and a reliable estimate can be made of the amount if the effect of the time value of money is material provisions are 
determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and where 
appropriate the risks specific to the liability where discounting is used the increase in the provision due to the passage of time is recognised as a finance cost
v employee benefits
defined benefit plans
the group operates defined benefit postretirement benefit schemes and defined contribution pension schemes
the liability recognised in the balance sheet for defined benefit schemes is the present value of schemes’ liabilities less the fair value of schemes’ assets the 
operating and financing costs of defined benefit schemes are recognised separately in the income statement operating costs comprise the current service cost 
any gains or losses on settlement or curtailments and past service costs where benefits have vested net interest income and expense on net defined benefit 
assets and liabilities is determined by applying discount rates used to measure defined benefit obligations at the beginning of the year to net defined benefit 
assets and liabilities at the beginning of the year and is included in finance income and costs remeasurements arising from defined benefit plans comprise 
actuarial gains and losses the return on plan assets excluding interest and the effect of the asset ceiling if any excluding interest the group recognises them 
immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses in profit or loss
defined contribution plans
a defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or 
constructive obligation to pay further amounts obligations for contributions to defined contribution pension plans are recognised in the income statement 
in the periods during which services are rendered by employees
termination benefits
termination benefits are recognised as an expense when the group is committed demonstrably without realistic possibility of withdrawal to a formal 
detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to 
encourage voluntary redundancy termination benefits for voluntary redundancies are recognised as an expense if the group has made an offer of voluntary 
redundancy it is probable that the offer will be accepted and the number of acceptances can be estimated reliably
shortterm employee benefits
shortterm employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided a liability is recognised 
for the amount expected to be paid under shortterm cash bonus or profitsharing plans if the group has a present legal or constructive obligation to pay this 
amount as a result of past service provided by the employee and the obligation can be estimated reliably
sharebased payments
certain employees of the group receive part of their remuneration in the form of sharebased payment transactions whereby employees render services in 
exchange for shares or rights over shares equitysettled transactions the cost of equitysettled transactions with employees is measured at fair value at the 
date at which they are granted the fair value of share awards with marketrelated vesting conditions is determined by an external consultant and the fair value 
at the grant date is expensed on a straightline basis over the vesting period based on the group’s estimate of the number of shares that will eventually vest the 
estimate of the number of awards likely to vest is reviewed at each balance sheet date up to the vesting date at which point the estimate is adjusted to reflect 
the actual outcome of awards which have vested no adjustment is made to the fair value after the vesting date even if the awards are forfeited or not exercised
w own shares
own equity instruments which are reacquired own shares are recognised at cost and deducted from equity no gain or loss is recognised in the income 
statement on the purchase sale issue or cancellation of the group’s own equity instruments any difference between the carrying amount and the 
consideration paid to acquire such equity instruments is recognised within equity
2 summary of significant accounting policies continued
notes to the consolidated financial statements continued  67 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
x foreign currency translation
the functional currency for each entity in the group is determined with reference to the currency of the primary economic environment in which it operates 
transactions in currencies other than the functional currency are initially recorded at the functional currency rate ruling at the date of the transaction 
monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date exchange gains 
and losses on settlement of foreign currency transactions translated at the rate prevailing at the date of the transactions or the translation of monetary 
assets and liabilities at period end exchange rates are taken to the income statement nonmonetary assets and liabilities denominated in foreign currencies 
that are stated at historical cost are translated to the functional currency at the foreign exchange rate ruling at the date of the transaction
on consolidation income statements of subsidiaries are translated into sterling at average rates of exchange balance sheet items are translated into 
sterling at period end exchange rates exchange differences on the retranslation are taken to equity exchange differences on foreign currency borrowings 
financing those net investments are also dealt with in equity and are reported in the statement of comprehensive income all other exchange differences are 
charged or credited to the income statement in the year in which they arise on disposal of an overseas subsidiary any cumulative exchange movements 
relating to that subsidiary held in the translation reserve are transferred to the consolidated income statement
3 segmental reporting
during the year ended 31 december 2014 the group was organised into three divisions as shown below according to the nature of the products and services 
provided each of these divisions represents an operating segment in accordance with ifrs 8 “operating segments” and there is no aggregation of segments 
the chief operating decision maker is the board of directors the operating segments are
– sensing and control – the provision of integrated and intelligent solutions meeting customer requirements comprising sensors which convert physical 
variables into electronic signals and controls that process input from the sensor and instruct systems
– components – specialist resistive and magnetic components and microcircuits connectors and interconnection systems and
– integrated manufacturing services – the provision of global electronics manufacturing capability with logistics and integrated solutions
the accounting policies of the reportable segments are the same as the group’s accounting policies as shown in note 2
as part of the organisational change announced in november 2014 in order to provide greater market focus and accountability sensing and control was 
reorganised into two customer segments transportation sensing and control and industrial sensing and control with effect from 1 january 2015
the key performance measure of the operating segments is underlying operating profit the group reports nontrading income or expenditure outside 
underlying profit when the size nature or function of an item or aggregation of similar items is such that separate presentation is relevant to an 
understanding of its financial position see accounting policy in note 1d segment operating profit represents the profit earned by each segment after 
allocation of central head office administration costs and is reviewed by the chief operating decision maker
group financing including finance costs and finance income and income taxes are managed on a group basis and are not allocated to operating segments
goodwill is allocated to the individual cash generating units which are smaller than the segment which they are part of
a income statement information – continuing operations
2014
£million
sensing and 
control components
integrated 
manufacturing 
services total
sales to external customers 2893 988 1362 5243
segment underlying operating profit 142 95 55 292
adjustments to underlying operating profit note 8 335
operating loss 43
net finance costs 16
loss before taxation 59
2013
£million
sensing and 
control components
integrated 
manufacturing 
services total
sales to external customers 2852 1004 1466 5322
segment underlying operating profit 175 43 90 308
adjustments to underlying operating profit note 8 118
operating profit 190
net finance costs 07
profit before taxation 183
 represented to exclude acquisition related items from underlying operating profit see note 1d
there are no significant sales between segments
2 summary of significant accounting policies continued 68 tt electronics plc annual report and accounts 2014
b segment assets and liabilities
assets liabilities
£million 2014 2013 2014 2013
sensing and control 1947 1947 609 585
components 572 517 163 154
integrated manufacturing services 794 784 296 472
segment assets and liabilities 3313 3248 1068 1211
pensions and other postemployment benefits – – 124 205
unallocated assets and liabilities 463 628 706 427
total assetsliabilities 3776 3876 1898 1843
capital expenditure depreciation and amortisation
£million 2014 2013 2014 2013
sensing and control 237 217 166 151
components 78 45 37 37
integrated manufacturing services 45 35 20 18
total continuing operations 360 297 223 206
 represented to exclude acquisition related items from underlying operating items
c geographic information
revenue by destination
the group operates on a global basis revenue from external customers by geographical destination is shown below management monitor and review 
revenue by region rather than by individual country given the significant number of countries where customers are based
£million 2014 2013
united kingdom 864 1041
rest of europe 2560 2601
north america 1010 944
central and south america 34 39
asia 745 688
rest of the world 30 09
total continuing operations 5243 5322
no individual customer directly accounts for more than 10 of group revenue revenue from services is less than 5 of group revenues all other revenue is 
from the sale of goods
noncurrent assets
the carrying amount of noncurrent assets excluding deferred tax assets and financial assets analysed by the geographical area in which the assets are 
located is shown below
£million 2014 2013
united kingdom 371 278
rest of europe 490 572
north america 772 695
central and south america 46 43
asia 138 118
total noncurrent assets 1817 1706
3 segmental reporting continued
notes to the consolidated financial statements continued  69 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
4 acquisitions
on 14 july 2014 the group announced the acquisition of roxspur initial net consideration of £84 million was paid in cash with subsequent adjustments due 
to the determination of net asset values acquired bringing consideration to £83 million a further amount of up to £25 million is payable in cash in 2016 
based on the performance of the business in the period from completion to 31 december 2015 and subject to continuing employment of employees
from the date of acquisition to the year end the business contributed £37 million of revenue an operating profit of £04 million to the group’s results  
and an operating cash flow of £03 million if the acquisition had occurred on 1 january 2014 it is estimated that group revenue would have increased  
by £82 million and group operating profit would have increased by £09 million
the fair values of the identifiable assets and liabilities acquired are as follows
2014
£million
book value  
at date of 
acquisition
fair value 
adjustments 
provisional
fair value  
at date of 
acquisition 
provisional
noncurrent assets
property plant and equipment 02 – 02
indentifiable intangible assets – 45 45
current assetsliabilities
inventory 09 – 09
trade and other receivables 23 – 23
cash 04 – 04
trade and other payables 10 01 11
income tax payable 01 – 01
noncurrent liabilities
deferred tax – 09 09
27 35 62
consideration paidpayable
cash 83
goodwill 21
as consideration payable exceeds the fair value of the net assets acquired goodwill of £21 million has been recognised on the balance sheet the goodwill 
represents technical knowhow acquired with the business the knowhow is used in the day to day activities of roxspur and is essential for the manufacturing 
and sale of their products including temperature pressure and flow sensors and calibration services roxspur has expertise in packaging sensors and 
producing customised products tailored to customer requirements
a deferred tax liability of £09 million has been recognised on the fair value adjustment to the assets and liabilities acquired
on 1 february 2013 the group completed the acquisition of the 49 minority interest in padmini tt electronics private limited for a consideration of 
£83 million cash the deferred consideration of £05 million was paid in the year ended 31 december 2014
5 discontinued operations
on 7 december 2012 the group disposed of ottomotores sa de cv and ottomotores do brasil energia ltda for a total consideration of 465 million 
£290 million in cash before costs during 2013 the completion balance sheet including net debt was agreed with the buyer and £41 million was paid  
as a result £08 million additional cost was included within discontinued items for the year ended 31 december 2013
6 finance income and finance costs
£million 2014 2013
interest expense 10 08
foreign exchange losses 07 10
net interest on employee obligations 08 15
amortisation of arrangement fees 02 02
finance costs 27 35
interest income 01 01
foreign exchange gains 10 27
finance income 11 28
net finance costs 16 07 70 tt electronics plc annual report and accounts 2014
7 profit for the year
lossprofit from continuing operations for the year is stated after chargingcrediting
£million 2014 2013
depreciation of property plant and equipment 165 168
amortisation of intangible assets 65 44
net foreign exchange gains 01 22
cost of inventories recognised as an expense 4443 4321
research and development 188 169
staff costs excluding restructuring see note 12 1520 1523
restructuring excluded from underlying operating profit 222 102
contingent consideration and ma related costs excluded from underlying operating profit 12 14
impairment of property plant and equipment and intangibles 96 04
remuneration of group auditors
– audit of these financial statements 03 02
– audit of financial statements of subsidiaries of the company 05 06
– taxation compliance services 02 02
– other tax advisory services 01 01
– other advisory services 03 –
government grants credited 03 06
sharebased payments 13 11
profit on disposal of property plant and equipment 02 –
included within amortisation of intangible assets is £07 million 2013 £06 million reported within items excluded from underlying operating profit included 
within impairment of property plant and equipment and intangibles is £96 million 2013 £nil reported within items excluded from underlying profit
8 underlying measures
to assist with the understanding of earnings trends the group has included within its published financial statements nongaap measures including 
underlying profit and underlying earnings
these are considered by the board to be the most meaningful measures under which to assess the true operating performance of the group
underlying operating profit
this has been defined as operating profit from continuing operations excluding restructuring costs asset impairments and acquisition related costs as 
detailed below
£million 2014 2013
restructuring
operational improvement plan 150 31
other restructuring costs 48 59
costs relating to the closure of boone usa plant – 12
charges associated with management changes 24 –
222 102
asset impairments
impairment charges associated with capitalised development costs 84 –
other impairments 10 –
94 –
acquisition related costs
contingent consideration 08 –
release of surplus fair value inventory provision – 04
amortisation of intangible assets arising on business combinations 07 06
ma costs included aborted deals 04 14
19 16
total 335 118
notes to the consolidated financial statements continued  71 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
for the year ended 31 december 2014 items excluded from underlying operating profit relate to
restructuring costs £222 million
operational improvement plan £150 million
the operational improvement plan relates to a fundamental reorganisation of the manufacturing and sales footprint of the transportation sensing and 
control and industrial sensing and control divisions announced in june 2013 the charge in the year relates to the closure of the facility at fullerton usa 
and transfer of production to mexico the transfer of manufacturing at werne germany to our best cost facilities in romania and the release of excess 
provisions for the closure of sales offices in france italy and japan originally recognised at the end of 2013
other restructuring costs £48 million
other restructuring costs relate to site consolidation in the uk and the establishment of a romania facility for the ims division costs incurred in securing 
certain supply chain activities costs incurred in respect of the closure of our loss making connectors facility in the us and costs arising from the creation of 
our new organisation structure
charges associated with management changes £24 million
charges incurred in the year ended 31 december 2014 in respect of the recruitment of the new ceo and cfo and oneoff payments associated with 
changes in senior management
impairment charges £94 million
following a detailed appraisal of capitalised development expenditure undertaken as part of the wider strategic review described in more detail in the 
strategic report section on pages 8 to 18 the board has reevaluated the margin expectations of certain products in relation to which development costs 
have been previously capitalised as part of this assessment the group has recognised an impairment of £84 million to the carrying value of a number of 
development projects in addition an impairment of £10 million related to other assets where recoveries were dependent on continuing with certain strategic 
sourcing channels which will no longer form part of the group’s strategic focus together with the closure of our loss making connectors facility in the usa
acquisition related costs £19 million
acquisition costs relating to the amortisation of intangible assets arising on business combinations ma costs arising from the acquisition of roxspur in july 
2014 and other costs for potential acquisitions and disposals and contingent consideration associated with the acquisition of roxspur which is conditional 
on the employment services of the previous owners
for the year ended 31 december 2013 items excluded from underlying profit relate to
restructuring costs £102 million
operational improvement plan £31 million
charges relating to the closure of the facility at fullerton usa and transfer of production to mexico the closure of sales offices in france italy and japan 
and project consultancy costs of £05 million
other restructuring costs £59 million
costs relating to the closure of the lossmaking connectors business in the us the closure and relocation of the acw technology facilities from southampton 
to tonypandy in wales the transfer of production lines from germany and austria and startup costs in romania the relocation of ims production facilities 
in malaysia costs arising from the creation of the new organisation structure and costs incurred in securing certain supply chain activities
additional costs of £12 million relating to the boone property in the usa mainly comprise environmental cleanup costs
acquisition related costs £16 million
acquisition costs relating to the amortisation of intangible assets arising on business combinations negative goodwill arising on the release of a surplus fair 
value inventory provision created at the date of the acquisition of acw technology and ma costs arising from the acquisition of acw in december 2012 
and other costs for potential acquisitions and disposals
9 taxation
a analysis of the tax charge for the year
£million 2014 2013
current tax
current income tax charge 57 43
adjustments in respect of current income tax of previous year 17 16
total current tax charge 40 27
deferred tax
relating to origination and reversal of temporary differences 06 18
total tax charge in the income statement – continuing operations 46 45
uk tax is calculated at 215 2013 233 of taxable profits overseas tax is calculated at the tax rates prevailing in the relevant countries the group’s 
effective tax rate for the year from continuing operations was 780 257 underlying
included within the total tax charge above is a £25 million credit relating to items reported outside underlying profit 2013 £26 million
8 underlying measures continued 72 tt electronics plc annual report and accounts 2014
b reconciliation of the total tax charge for the year
£million 2014 2013
lossprofit before tax from continuing operations 59 183
lossprofit before tax multiplied by the standard rate of corporation tax in the uk of 215 2013 233 13 43
effects of
 overseas tax rate differences 03 04
 items not deductible for tax purposes or income not taxable 66 15
 adjustment to current tax in respect of prior periods 17 16
 impact on deferred tax arising from changes in tax rates 01 04
 recognition and utilisation of tax losses and other items not previously recognised 03 10
 current year tax losses and other items not recognised 21 05
 adjustment to value of deferred tax assets 04 08
total tax charge reported in the income statement – continuing operations 46 45
the uk corporation tax rate will reduce to 20 with effect from 1 april 2015 this rate reduction was substantively enacted in july 2013 and closing deferred 
tax assets in the uk have been calculated at this rate
10 dividends
2014 
pence  
per share
2014 
£million
2013 
pence  
per share
2013 
£million
final dividend for prior year 38 60 35 55
interim dividend for current year 17 27 16 25
55 87 51 80
the directors recommend a final dividend of 38 pence which when combined with the interim dividend of 17 pence gives a total dividend for the year  
of 55 pence per share the group has a progressive dividend policy the final dividend will be paid on 4 june 2015 to shareholders on the register on  
22 may 2015
11 earnings per share
basic lossearnings per share is calculated by dividing the lossprofit attributable to owners of the company by the weighted average number of shares in 
issue during the period
underlying earnings per share is based on lossprofit for the year from continuing operations before restructuring costs asset impairments and acquisition 
related costs and their associated tax effect
pence 2014 2013
basic lossearnings per share
continuing operations 66 88
discontinued operations – 05
total 66 83
pence 2014 2013
diluted lossearnings per share
continuing operations 66 87
discontinued operations – 05
total 66 82
the numbers used in calculating underlying basic and diluted earnings per share are shown below
underlying earnings per share
£million 2014 2013
continuing operations
lossprofit for the period attributable to owners of the company 105 138
restructuring 222 102
asset impairments 94 16
acquisition related costs 19 –
tax effect of above items see note 9a 25 26
underlying earnings 205 230
underlying earnings per share pence 129 146
 represented to exclude acquisition related costs from underlying operating items see note 1d
9 taxation continued
notes to the consolidated financial statements continued  73 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the weighted average number of shares in issue is as follows
million 2014 2013
basic 1583 1576
adjustment for share awards 05 03
diluted 1588 1579
12 employee information
the average number of full time equivalent employees including directors during the year from continuing operations was
number 2014 2013
by function
production 5380 4971
sales and distribution 333 344
administration 379 359
6092 5674
by division
sensing and control 2827 2503
components 1596 1615
integrated manufacturing services 1669 1556
total continuing operations 6092 5674
the aggregate emoluments including those of directors for the year excluding restructuring costs were
£million 2014 2013
wages and salaries 1207 1215
social security charges 289 287
employers’ pension costs 24 21
1520 1523
remuneration in respect of the directors was as follows
£million 2014 2013
emoluments 13 16
further details of individual directors’ remuneration pension benefits and share awards are shown in the directors’ remuneration report on pages 42 to 49
key management personnel
the remuneration of key management during the year was as follows
£million 2014 2013
shortterm benefits 33 41
termination payments 10 03
postemployment benefits – 02
share based payments 05 06
48 52
in accordance with ias 24 “related party disclosures” key management personnel are those persons having authority and responsibility for planning 
directing and controlling the activities of the group directly or indirectly key management personnel comprise the directors company secretary divisional 
chief executives and other members of the executive management board formerly the operating board their compensation is considered and 
recommended to the board by the remuneration committee
11 earnings per share continued 74 tt electronics plc annual report and accounts 2014
13 property plant and equipment
£million
land and 
buildings
plant and 
equipment total
cost
at 1 january 2013 543 2830 3373
additions 12 191 203
disposals 11 191 202
net exchange adjustment 02 04 02
at 1 january 2014 546 2826 3372
additions 26 223 249
businesses acquired – 02 02
disposals 20 52 72
net exchange adjustment 08 17 25
at 31 december 2014 544 2982 3526
depreciation and impairment
at 1 january 2013 193 2321 2514
depreciation charge 17 151 168
impairment – 03 03
disposals 10 186 196
net exchange adjustment 01 04 03
at 1 january 2014 201 2285 2486
depreciation charge 17 148 165
impairment 03 09 12
disposals 13 51 64
net exchange adjustment 04 09 13
at 31 december 2014 204 2382 2586
net book value
at 31 december 2014 340 600 940
at 31 december 2013 345 541 886
included within land and buildings are three 2013 three investment properties with a carrying value of £08 million 2013 £12 million the fair value of 
these properties is £40 million 2013 £45 million
included within the impairment charge for the year is £12 million 2013 £nil included within items excluded from underlying profit
14 goodwill
£million
cost
at 1 january 2013 652
net exchange adjustment 13
at 1 january 2014 639
additions 21
net exchange adjustment 34
at 31 december 2014 694
goodwill is attributed to the following cash generating units “cgus” in the divisions shown below
£million 2014 2013
sensing and control
variable components 246 231
optoelectronics 184 173
roxspur 21 –
components
power and hybrids 51 49
resistors 19 18
integrated manufacturing services
tt electronics integrated manufacturing services usa 81 76
tt electronics integrated manufacturing services suzhou 51 51
new chapel electronics uk 34 34
other 07 07
notes to the consolidated financial statements continued  75 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the group tests goodwill impairment annually or more frequently if there are indications that goodwill might be impaired the recoverable amounts of the 
cgus are determined from value in use calculations the key assumptions for the value in use calculations are those regarding the discount rates growth rates 
and operating cash projections during the period for which management have detailed plans management estimate discount rates using pretax rates that 
reflect current market assessments of the group’s time value of money and the risks specific to the cgu being measured
as part of the annual budgeting and strategic planning processes the group prepares cash flow forecasts for the following three years in 2014 the growth 
rate assumed after this threeyear period is based on longterm gdp projections capped at long term inflation rates of the primary market for the cgu in 
perpetuity the longterm inflation rates used are 2 for the uk and us businesses and 3 for the chinese businesses in prior year the growth rate after 
this three year period was based on long term gdp projections of the primary market for a further 10 years 25 for the uk business and 3 for the us  
and chinese businesses and a conservative 1  growth rate thereafter in perpetuity
the growth rates assume that demand for our products remains broadly in line with the underlying economic environment in the longterm future taking 
into account our expectation of future market conditions we believe that the evolution of selling prices and cost measures put into place will lead to a 
sustained improvement in profitability which is higher than in recent years
the pretax discount rates used to discount the forecast cash flows are
2014 2013
variable components 95 95
optoelectronics 95 95
power and hybrids 108 81
tt electronics integrated manufacturing services usa 95 95
tt electronics integrated manufacturing services suzhou 115 115
new chapel electronics uk 108 81
following detailed review no impairment losses have been recognised in the current or prior year
the goodwill allocated to each of variable components optoelectronics power and hybrids tt electronics integrated manufacturing services usa tt 
electronics integrated manufacturing services suzhou and new chapel electronics are considered to be individually significant after translation using year 
end foreign exchange rates these cgus represent 93 or £647 million of the total goodwill balance
the recoverable amounts exceed the total carrying value of assets for the cgus by the following amounts
£million 2014 2013
variable components 311 164
optoelectronics 498 324
power and hybrids 273 227
tt electronics integrated manufacturing services usa 205 145
tt electronics integrated manufacturing services suzhou 564 342
new chapel electronics uk 15 17
the recoverable amounts associated with these goodwill balances have been determined on a value in use basis using conservative assumptions a value in 
use test requires comparison of asset carrying values with pretax cash flows which exclude any tax benefit
a key assumption in the value in use test is the projected performance of the cash generating units based on cash flow forecasts the recoverable amounts 
associated with the goodwill balances are based on these performance projections and based on current forecast information do not indicate that any 
goodwill balance is impaired if a company’s actual performance does not meet these projections this could lead to an impairment of the goodwill in  
future periods
14 goodwill continued 76 tt electronics plc annual report and accounts 2014
other key assumptions and sensitivities are as follows
longterm growth rate
the budget and strategic review for these companies have been extrapolated in perpetuity using longterm gdp projections capped at long term inflation 
rates of the primary market for the cgu in perpetuity a key assumption in deriving the growth rate is that the businesses will grow in line with the underlying 
economic environment for the foreseeable future revenue would need to decrease annually by the following amounts for the carrying values to be impaired
2014 2013
variable components 200 70
optoelectronics 241 372
power and hybrids 182 140
tt electronics integrated manufacturing services usa 137 116
tt electronics integrated manufacturing services suzhou 272 288
new chapel electronics uk 22 35
discount rate
sensitivity analysis has determined that the discount rate is an influential assumption on the outcome of the recoverable amount calculation for the 
carrying values to be impaired the discount rate would need to increase to the following amounts
2014 2013
variable components 146 135
optoelectronics 213 259
power and hybrids 213 161
tt electronics integrated manufacturing services usa 173 163
tt electronics integrated manufacturing services suzhou 290 273
new chapel electronics uk 138 98
cash flows
sensitivity analysis has also been performed on the operating cash flow projections cash flows can be impacted by changes to sales projections sales prices 
direct costs and replacement capital expenditure in order for the carrying values to be impaired the expected cash flows for every year would need to reduce 
by the following
2014 2013
variable components 418 343
optoelectronics 624 624
power and hybrids 575 546
tt electronics integrated manufacturing services usa 526 460
tt electronics integrated manufacturing services suzhou 687 619
new chapel electronics uk 264 214
for a certain period in the last quarter of 2014 financial year the book value of the group’s net assets exceeded its market capitalisation this position has 
recovered in the post balance sheet period with the market capitalisation of the group at the date of the approval of this report being in excess of the book 
value of the group’s net assets based on a qualitative and quantitative assessment performed as of 31 december 2014 on a global level encompassing all 
assets we concluded that the fair value of our reporting units exceeded their carrying amount and there was no impairment of goodwill or other assets 
however if the market value of our shares declines for a prolonged period and if management’s judgements and assumptions regarding future industry 
conditions and operations diminish we will reconsider our goodwill impairment analysis
the directors have not identified any other likely changes in other significant assumptions that would cause the carrying value of recognised goodwill to 
exceed its recoverable amount
14 goodwill continued
notes to the consolidated financial statements continued  77 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
15 other intangible assets
£million
product 
development 
costs
patents 
licences  
and other
customer 
relationships total
cost
at 1 january 2013 219 69 35 323
additions 52 42 – 94
net exchange adjustment 01 01 – –
at 1 january 2014 272 110 35 417
additions 68 43 – 111
businesses acquired – – 45 45
net exchange adjustment 12 01 01 10
at 31 december 2014 328 154 81 563
amortisation
at 1 january 2013 129 37 25 191
charge for the year 31 10 03 44
impairment 01 – – 01
at 1 january 2014 161 47 28 236
charge for the year 41 18 06 65
impairment 84 – – 84
net exchange adjustment 07 01 01 05
at 31 december 2014 279 66 35 380
net book value
at 31 december 2014 49 88 46 183
at 31 december 2013 111 63 07 181
included within patents licenses and other are intangible assets under construction with a carrying value of £08 million 2013 £22 million
included within the amortisation charge for the year is £07 million 2013 £06 million included within items excluded from underlying profit
the impairment of product development costs followed a detailed appraisal of capitalised development expenditure undertaken as part of the wider 
strategic review described in more detail in the strategic report section on pages 8 to 18
16 inventories
£million 2014 2013
raw materials 421 368
work in progress 194 213
finished goods 174 219
789 800
inventories are stated after deduction of a provision for slow moving and obsolete items of £276 million 2013 £289 million
17 trade and other receivables
£million 2014 2013
trade receivables 586 582
prepayments 64 82
other receivables 57 80
707 744
trade receivables include £nil 2013 £25 million of receivables due after more than one year
provisions for impairment in respect of trade receivables are shown in note 21dii 78 tt electronics plc annual report and accounts 2014
18 trade and other payables
£million 2014 2013
current liabilities
trade payables 432 623
taxation and social security 40 27
other payables accruals and deferred income 344 393
financial liability to settle minority interest – 05
816 1048
£million 2014 2013
noncurrent liabilities
accruals and deferred income 61 61
61 61
19 provisions
£million
operational 
improvement 
plan reorganisation
legal and 
other total
at 1 january 2013 – 12 95 107
utilised 04 17 33 54
arising during the year 31 26 08 49
at 1 january 2014 27 21 54 102
utilised 18 07 10 35
released 03 – 01 04
arising during the year 116 07 05 128
at 31 december 2014 122 21 48 191
the operational improvement plan provision relates to fundamental restructuring of the manufacturing footprint and sales organisation of the sensing  
and control division the balance as at 31 december 2014 includes the directors’ best estimate of costs to complete the fundamental reorganisation of  
the manufacturing and sales footprint of the transportation sensing and control and industrial sensing and control divisions announced in june 2013  
the charge in the year relates to the closure of the facility at fullerton usa and transfer of production to mexico and the transfer of manufacturing at 
werne germany to our best cost facilities in romania the utilisation of provision is expected in the next 12 months
the reorganisation provision primarily relates to the restructuring programme associated with the closure of the boone usa operations costs on site 
consolidation in the uk and the establishment of a romania facility for the ims division the utilisation of provision is expected in the next 12 months
legal and other claims represent the best estimate for the cost of settling outstanding product and other claims and warranty provisions issued on the 
disposal of businesses the group has on occasion been required to enforce commercial contracts and similarly to defend itself against proceedings brought 
by other parties provisions are made for the expected costs associated with such matters based on past experience of similar items and other known 
factors taking into account professional advice received and represent management’s best estimate of the likely outcome the timing of utilisation of these 
provisions is frequently uncertain reflecting the complexity of issues and the outcome of various court proceedings and negotiations contractual and other 
provisions represent the directors’ best estimate of the cost of settling future obligations although there is a higher degree of judgement involved unless 
specific evidence exists to the contrary these provisions are shown as current
no provision is made for proceedings which have been or might be brought by other parties against group companies unless management taking into 
account professional advice received assesses that it is more likely than not that such proceedings may be successful contingent liabilities associated with 
such proceedings have been identified but the directors are of the opinion that any associated claims that might be brought can be resisted successfully 
and therefore the possibility of any material outflow in settlement in excess of amounts provided is assessed as remote
the total provisions are analysed between current and noncurrent as follows
£million 2014 2013
noncurrent 02 02
current 189 100
191 102
notes to the consolidated financial statements continued  79 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
20 borrowings
£million maturity
currency of 
denomination current noncurrent total
31 december 2014
£45 million multicurrency revolving credit facility 2017 gbp 180 – 180
2017 eur 78 – 78
30 million usd bilateral revolving credit facility 2017 usd 45 – 45
10 million usd bilateral revolving credit facility 2017 usd 193 – 193
ab mikroelektronik gmbh loan 2015 eur 45 – 45
finance leases 01 – 01
loan arrangement fee 05 – 05
total 537 – 537
31 december 2013
£45 million multicurrency revolving credit facility 2017 gbp – 10 10
30 million usd bilateral revolving credit facility 2017 usd – 181 181
10 million usd bilateral revolving credit facility 2017 usd – 42 42
ab mikroelektronik gmbh loan 2015 eur 40 08 48
finance leases 01 01 02
loan arrangement fee 02 05 07
total 39 237 276
in august 2012 the group agreed a new five year committed revolving credit facility of £707 million and a further incremental accordion facility of 
£429 million with a club of four banks comprising hsbc the royal bank of scotland santander uk and barclays bank as well as two separate bilateral 
agreements with fifth third bank and comerica bank both within the usa at 31 december 2014 £496 million of the revolving credit facility was drawn 
down and the accordion facility was undrawn arrangement fees with a gross cost before amortisation of £09 million and amortised cost of £05 million 
have been netted off against these borrowings
in march 2015 it was agreed with the club of four banks above that the committed facility be increased by £20 million to £907 million by way of reducing 
the incremental accordion facility to £229 million
the interest margin payable on the facility is based on the group’s compliance with financial covenants net debtebitda before exceptional items and is 
payable on a floating basis above £libor €libor or libor depending on the currency of denomination of the loan
the loan in ab mikroelektronik gmbh is an export facility loan and used for working capital purposes within that business £42 million £38 million utilised 
and a research loan £07 million fully utilised
undrawn facilities
at 31 december 2014 the total borrowing facilities available to the group amounted to £1653 million 2013 £1433 million at 31 december 2014  
the group had available £361 million 2013 £459 million of undrawn committed borrowing facilities and £751 million 2013 £693 million of undrawn 
uncommitted borrowing facilities representing overdraft lines and the accordion facility
under the five year revolving credit there is a limit on intergroup lending outside the guarantee group this limit was exceeded during the year causing the 
outstanding loan balance of £496 million at the year end to become technically repayable on demand it has therefore been disclosed as a current liability
since the year end the company has agreed an increase in this limit with the lending banks and completed actions to remedy the issue subject only to 
certain steps required to bring two of the group’s romanian subsidiaries into the guarantor group the banks have given a twomonth waiver in relation to 
the outstanding steps expiring 25 april 2015 these steps are underway and expected to be complete within the twomonth waiver period and the loan 
facilities remain in place with ultimate maturity in august 2017
following the date of these accounts the steps were completed and the two romanian subsidiaries became part of the guarantor group
21 financial risk management
the main risks arising from the group’s financial instruments are foreign exchange risk interest rate risk credit risk liquidity risk and commodity price risk 
these risks arise from exposures that occur in the normal course of business and are managed by the group’s treasury department in close co operation with 
the group’s business divisions and operating companies under the oversight of a tax and treasury committee which is chaired by the chief financial officer 
the responsibilities of the group’s treasury department include the monitoring of financial risks management of cash resources debt and capital structure 
management approval of counterparties and relevant transaction limits and oversight of all significant treasury activities undertaken by the group the 
group treasury department operates as a service centre to the business divisions of the group and not as a profit centre
a group treasury policy has been approved by the board of directors and is periodically updated to reflect developments in the financial markets and the 
financial exposure facing the group
the group’s principal financial instruments comprise borrowings cash and cash equivalents and derivatives used for risk management purposes the group’s 
borrowings surplus liquidity and derivative financial instruments are monitored and managed centrally by the group’s treasury department
the group’s accounting policies with regard to financial instruments are detailed in note 2p 80 tt electronics plc annual report and accounts 2014
a derivatives financial instruments and risk management
the group uses derivative financial instruments to manage certain exposures to fluctuations in exchange rates interest rates and commodity prices  
the group does not hold any speculative financial instruments
the group is exposed to transactional and translation foreign exchange risk transactional foreign exchange risk arises from sales or purchases by a group 
company in a currency other than that company’s functional currency translational foreign exchange risk arises on the translation of profits earned in 
overseas currencies into gbp and the translation of net assets denominated in overseas currencies into gbp the group’s functional currency
to mitigate transactional foreign exchange risk wherever possible group companies enter into transactions in their functional currencies with customers  
and suppliers when this is not possible then hedging strategies are undertaken through the use of forward currency contracts for up to one year ahead
the group uses average rate forward currency hedges to mitigate translational foreign exchange risk taking into account the level of forecast profits in 
foreign currencies natural hedges and the cost of taking out cover during 2014 the group took out average rate forward contracts hedging gbp against a 
portion of euro forecast cash flows for 2014 in 2014 the group generated a gain of £01 million 2013 loss of £04 million on the hedges that matured in 
2014 there were no average rate forward contracts outstanding at 31 december 2014
the group’s interest rate management policy is to maintain a balance between fixed and floating rates of interest on borrowings and deposits and to use 
interest rate derivatives when appropriate and preapproved by the tax and treasury committee to meet this objective the group has entered into a 30 
million interest rate swap from floating to fixed in 2014 maturing in 2019
during 2014 the group took out hedges against a portion of the commodity purchases for 2014 in 2014 the group generated no gain or loss on the hedges 
that matured during 2014 2013 loss of £01 million
the forward currency contracts interest rate swaps and commodity hedges have been designated as cash flow hedges and the mark to market valuation of 
these derivatives at 31 december 2014 is taken to the hedging reserve within equity at 31 december 2014 the group had a net derivative financial liability 
of £09 million 2013 £08 million asset
b foreign exchange risk
the group’s exposure to foreign currency is shown below
£million gbp usd euro other total
31 december 2014
trade and other receivables 01 67 28 02 98
cash and cash equivalents – 68 81 05 154
borrowings – 238 78 – 316
trade and other payables 43 51 07 08 109
42 154 24 01 173
31 december 2013
trade and other receivables 04 66 24 01 95
cash and cash equivalents 04 112 16 09 141
borrowings – 223 – – 223
trade and other payables 26 82 11 19 138
18 127 29 09 125
a 10 strengthening of gbp against the following currencies at 31 december would have increaseddecreased equity and profit after tax by the amounts 
shown below this analysis assumes that all other variables in particular interest rates remain constant
£million 2014 2013
us dollar 09 08
euro 02 03
a 10 weakening of gbp against the above currencies at 31 december would have had an equal but opposite effect on the above currencies to the amount 
shown above on the basis that all other variables remain constant
21 financial risk management continued
notes to the consolidated financial statements continued  81 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
21 financial risk management continued
c interest rate risk
the group has financial assets and liabilities which are exposed to changes in market interest rates changes in interest rates primarily impact borrowings  
by changing their future cash flows floating rate debt or their fair value fixed rate debt and deposits the group’s objective is to manage this interest rate 
exposure through the use of interest rate derivatives
the exposure of the group’s financial assets and liabilities to interest rate risk is as follows
£million
floating  
rate
fixed  
rate
noninterest 
bearing
2014 
total
financial assets
trade and other receivables – – 623 623
cash and cash equivalents 394 – – 394
derivative financial instruments – – 04 04
total financial assets 394 – 627 1021
financial liabilities
borrowings including interest effects of derivatives 336 201 – 537
trade and other payables – – 863 863
derivative financial instruments – – 13 13
total financial liabilities 336 201 876 1413
at 31 december 2014 37 2013 3 of total debt was at a fixed rate when including the effect of derivatives and the balance was at floating rate
£million
floating  
rate
fixed  
rate
noninterest 
bearing
2013 
total
financial assets
trade and other receivables – – 649 649
cash and cash equivalents 545 – – 545
derivative financial instruments – – 08 08
total financial assets 545 – 657 1202
financial liabilities
borrowings 267 09 – 276
trade and other payables – – 1107 1107
total financial liabilities 267 09 1107 1383
the interest charged on floating rate financial liabilities is based on the relevant benchmark rate such as libor interest on financial instruments classified 
as fixed rate is fixed until the maturity of the instrument
considering the net debt position of the group at 31 december 2014 any increase in interest rates would result in a net loss in the consolidated income 
statement and any decrease in interest rates would result in a net gain the effect on profit after tax of a 1  movement in £libor based on the year end 
floating rate net cash and with all other variables held constant is estimated to be £03 million 2013 £02 million
d credit risk
exposure to credit risk arises as a result of transactions in the group’s ordinary course of business and is applicable to all financial assets investments in cash 
and cash equivalents and derivative financial instruments are with approved counterparty banks and other financial institutions counterparties are assessed 
prior to during and after the conclusion of transactions to ensure exposure to credit risk is limited to an acceptable level the maximum exposure with 
respect to credit risk is represented by the carrying amount of each financial asset on the balance sheet
credit risk relating to trade receivables
the group’s major exposure to credit risk is in respect of trade receivables given the number and geographical spread of the group’s ultimate customers and 
the solvency of major trade debtors credit risk is believed to be limited the group is not reliant on any particular customer in the markets in which it operates 
and there is no significant concentration of credit risk the group regularly monitors its exposure to bad debts in order to minimise this exposure
the group has strict procedures in place to manage the credit risk on trade receivables customer credit risk is managed by each operating company within  
a division but is subject to group oversight to ensure that each division’s customer credit risk management system operates in a prudent and responsible 
manner credit evaluations are performed for all customers and credit limits are established based on internal or external rating criteria the credit quality  
of the group’s significant customers is monitored on an ongoing basis and receivables that are neither past due nor impaired are considered of good credit 
quality letters of credit or payments in advance are obtained where customer credit quality is not considered strong enough for open credit
trade receivables are denominated in the currencies in which the group trades the group’s policy is that receivables and payables not in the functional 
currency of the subsidiary concerned are covered by forward foreign currency exchange contracts the exchange risk at group level is therefore restricted  
to the risk on the translation of overseas assets liabilities and cash flows into gbp which can be hedged using foreign exchange hedges
there were no material impairments of trade receivables as at 31 december 2014 or 2013 the solvency of the debtor and their ability to repay the 
receivables were considered in assessing the impairment of such assets 82 tt electronics plc annual report and accounts 2014
i risk for trade receivables by geographical regions
the maximum exposure to credit risk for trade receivables at 31 december by geographic areas was
£million 2014 2013
europe including uk 362 382
north america 108 94
central and south america 02 02
asia 112 100
rest of the world 02 04
586 582
ii impairment losses
the ageing of trade receivables at 31 december was
2014 2013
£million gross impairment gross impairment
not past due 480 – 489 –
past due 0 – 60 days 96 – 73 03
past due 61 – 120 days 13 03 25 03
more than 120 days 01 01 08 07
590 04 595 13
the movement in the provision for impairment in respect of trade receivables during the year was as follows
£million 2014 2013
at 1 january 13 14
credited to income statement 02 01
utilised 07 –
at 31 december 04 13
iii credit risk related to other financial assets and cash deposits
credit risk relating to the group’s other financial assets principally comprising cash and cash equivalents other receivables and derivative financial 
instruments arises from the potential default of counterparties credit risk arising from balances with banks and financial institutions is monitored by the 
group’s treasury department investment of cash and deposits are made only with approved counterparties of high credit worthiness and are reviewed  
on a regular basis to take account of developments in financial markets
no material exposure is considered to exist by virtue of the possible nonperformance of the counterparties to derivative financial instruments and other 
receivables
the carrying amount of financial assets represents the maximum credit exposure the maximum exposure to credit risk at 31 december was
£million 2014 2013
other receivables 37 67
cash and cash equivalents 394 545
derivative financial instruments current assets 04 08
e liquidity risk
the group maintains a balance between availability of funding and maximising investment return on cash balances through the use of shortterm cash 
deposits credit facilities and longer term debt instruments management regularly reviews the funding requirements of the group
the group’s policy is to centrally manage debt and surplus cash balances
at 31 december 2014 the group had £356 million of undrawn committed borrowing facilities 2013 £459 million
21 financial risk management continued
notes to the consolidated financial statements continued  83 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
maturity of financial assets and liabilities
the table below analyses the group’s financial assets and liabilities which will be settled on a gross basis into relevant maturity groups based on the remaining 
period at the balance sheet date to the contractual maturity date the amounts disclosed in the table are the contractual undiscounted cash flows
£million
on  
demand
less than  
3 months
3 to 12 
months
1 to 5 
 years
over  
5 years total
31 december 2014
trade and other receivables 09 590 24 – – 623
cash and cash equivalents 388 06 – – – 394
derivative financial instruments – – 04 – – 04
397 596 28 – – 1021
borrowings 537 – – – – 537
trade and other payables 05 728 85 17 28 863
derivative financial instruments – – 12 01 – 13
542 728 97 18 28 1413
at 31 december 2014 the group had derivative financial instruments hedging a notional contractual amount of £717 million of foreign exchange 
commodity and interest rate cash flows of this total amount £524 million matures within one year
£million
on  
demand
less than  
3 months
3 to 12 
months
1 to 5  
years
over  
5 years total
31 december 2013
trade and other receivables 01 593 30 25 – 649
cash and cash equivalents 539 06 – – – 545
derivative financial instruments – – 08 – – 08
540 599 38 25 – 1202
borrowings – 42 06 261 – 309
trade and other payables – 978 89 34 06 1107
derivative financial instruments – – – – – –
– 1020 95 295 06 1416
f fair value of financial assets and liabilities
the group has adopted ifrs 13 “fair value measurement” which requires an analysis of those financial instruments that are measured at fair value at the 
end of the year in a fair value hierarchy in addition ifrs 13 requires financial instruments not measured at fair value but for which fair value is disclosed to  
be analysed in the same fair value hierarchy
– level 1 – quoted prices unadjusted in active markets for identical assets or liabilities
– level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly ie as prices or indirectly  
ie derived from prices and
– level 3 – inputs for the asset or liability that are not based on observable market data ie unobservable inputs
set out below is a comparison by class of the carrying amounts and fair value of the group’s financial instruments that are carried in the financial statements
2014 2013
fair value 
hierarchy
carrying 
value fair value
carrying 
value fair value
held at amortised cost
cash and cash equivalents na 394 394 545 545
trade and other receivables na 624 624 649 649
trade and other payables na 863 863 1107 1107
borrowings na 537 537 276 276
held at fair value
derivative financial instruments assets 1 and 2 04 04 08 08
derivative financial instruments liabilities 1 and 2 13 13 – –
held at depreciated cost
investment properties 2 08 40 12 45
the fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between 
willing parties other than in a forced or liquidation sale the following methods and assumptions were used to estimate the fair values
– cash and cash equivalents trade and other receivables trade and other payables approximate to their carrying amounts largely due to the shortterm 
maturities of these instruments
– the fair value of borrowings is estimated by discounting future cash flows using rates currently available for debt and remaining maturities
– the fair value of derivative financial instrument assets £04 million and liabilities £13 million are estimated by discounting expected future cash flows 
using current market indices such as yield curves and forward exchange rates over the remaining term of the instrument level 1 and level 2 and
– the fair value of investment properties are based on market valuations obtained through third party valuations level 2
21 financial risk management continued 84 tt electronics plc annual report and accounts 2014
g capital management
the overriding objectives of the group’s capital management policy are to safeguard and support the business as a going concern through the business 
cycle and to maintain an optimal capital structure by reducing the group’s overall cost of capital the board considers equity shareholders’ funds as capital
the group maintains a balance between availability of funding and maximising investment return on cash balances through the use of shortterm cash 
deposits credit facilities and longer term debt instruments and management regularly reviews the funding requirements of the group
dividends are paid when the board consider it appropriate to do so taking into account the availability of funding the group has a progressive dividend policy
the group is in a net debt position of £143 million 2013 net cash £269 million included within the debt facilities are certain financial covenants related  
to net debtebitda before exceptional items and ebitda before exceptional itemsnet finance charges for which compliance certificates are produced on a 
12 month rolling basis every half year all financial covenants were fully complied with during the year and up to the date of approval of the financial statements
22 deferred tax
the amounts of deferred taxation assetsliabilities provided in the financial statements are as follows
£million
as at  
1 january 
2014
continuing 
operations
recognised 
on 
acquisition
recognised 
in  
equityoci
net 
exchange 
translation
as at  
31 december 
2014
intangible assets 48 03 09 – 03 63
property plant and equipment 17 06 – – 01 12
deferred development costs 33 19 – – – 14
retirement benefit obligations 44 08 – 10 – 26
inventories 25 06 – – 02 21
provisions 51 16 – – 02 37
tax losses 08 06 – – – 14
unremitted overseas earnings 09 02 – – – 11
sharebased payments 01 01 – 01 – 01
shortterm timing differences 04 01 – – – 03
deferred tax assetliability 26 06 09 11 – –
£million
as at  
1 january 
2013
continuing 
operations
recognised  
in  
equityoci
net  
exchange 
translation
transfer to 
current tax
as at  
31 december 
2013
intangible assets 43 05 – – – 48
property plant and equipment 14 04 – 01 – 17
deferred development costs 28 05 – – – 33
retirement benefit obligations 93 10 38 01 – 44
inventories 20 05 – – – 25
provisions 34 18 – 01 – 51
tax losses 40 09 – 01 22 08
unremitted overseas earnings 09 – – – – 09
sharebased payments 10 07 02 – – 01
shortterm timing differences 04 01 – 01 – 04
deferred tax assetliability 107 16 40 03 22 26
certain deferred tax assets and liabilities have been offset the following is the analysis of the deferred tax balances
£million 2014 2013
deferred tax assets 56 73
deferred tax liabilities 56 47
net deferred tax asset – 26
the group has recognised deferred tax assets of £02 million in a number of entities which have incurred losses in 2013 or 2014 such assets have been 
recognised due to the availability of suitable taxable profits in future periods to support their recovery
the gross amount and expiry date of losses available for carry forward are as follows
£million
expiring 
within  
5 years
expiring 
within  
6–10 years unlimited total
31 december 2014
losses for which a deferred tax asset has been recognised – 12 43 55
losses for which no deferred tax asset has been recognised 11 11 353 375
deferred tax asset 11 23 396 430
21 financial risk management continued
notes to the consolidated financial statements continued  85 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
£million
expiring 
within  
5 years
expiring 
within  
6–10 years unlimited total
31 december 2013
losses for which a deferred tax asset has been recognised 01 07 27 35
losses for which no deferred tax asset has been recognised 08 07 296 311
deferred tax asset 09 14 323 346
included within the £375 million 2013 £311 million of unrecognised tax losses in the table above is £232 million 2013 £235 million of tax losses within 
the company since uk tax legislation does not allow the utilisation of brought forward tax losses of one uk entity against the current year tax profits of 
another uk entity the use of these tax losses is limited
£million 2014 2013
other temporary differences 111 142
at the balance sheet date the aggregate unrecognised deferred tax liability in respect of undistributed earnings of overseas subsidiaries is £11 million  
2013 £09 million this is in respect of undistributed earnings in respect of a chinese subsidiary of £138 million 2013 £96 million
23 retirement benefit schemes
defined contribution schemes
the group operates 401k plans in north america and defined contribution arrangements in the rest of the world the assets of these schemes are held 
independently of the group the total contributions charged by the group in respect of defined contribution schemes were £24 million 2013 £21 million
defined benefit schemes
during the year the group operated a significant defined benefit scheme in the uk and an overseas defined benefit scheme in the usa which includes a post 
retirement medical benefit element the group’s main scheme is the uk plan which commenced in 1993 and increased in size in 2006 and 2007 through the 
merger of the uk former schemes the group is the principal employer in the uk plan the uk plan is governed by ttg pension trustees limited the “trustee” 
that has control over the operation funding and investment strategy in consultation with the group
the scheme exposes the group to actuarial risks such as longevity risk currency risk inflation risk interest rate risk and market investment risk the group is 
not exposed to any unusual entity specific or scheme specific risks although in view of the size of the scheme relative to the group it is crucial that the risks 
are effectively managed
the trustee’s investment strategy mitigates the majority of these risks market investment risk is addressed by diversification across asset classes and 
managers within those assets classes with regard to currency risk the trustees hedge around 50 of developed market equities 100 of alternatives and 
100 of bonds excluding local currency emerging market debt
in addition the trustee has a framework in place to hedge a proportion of the scheme’s interest rate and inflation exposures this framework is managed by 
investing in both physical and for efficiency derivative investments and currently has a target to hedge 75 of the interest rate and 80 of the inflation 
linked liabilities the target hedge level is kept under review and any change would be in consultation with the group
the trustee does not currently hedge the longevity risk although prudent assumptions are made regarding anticipated longevity for the purposes of the 
actuarial valuation and recovery plan
the trustee in conjunction with the group has a duty to ensure that the uk plan has an appropriate funding strategy in place that meets any local statutory 
requirements the objective which has been negotiated and agreed between the group and the trustee is that the uk plan should target 100 funding on 
a basis that should ensure benefits can be paid as they fall due any shortfall in the assets relative to the funding target will be financed over a period that 
ensures the contributions are reasonably affordable to the group
the weighted average duration of the uk defined benefit obligation is 17 years
uk legislation requires the trustee to carry out funding valuations at least every three years and to target full funding against a basis that prudently reflects 
the uk plan’s risk exposure
the trustee allocates the uk plan’s assets across a range of investments to help diversify and manage risks in particular a significant portion of the assets 
are in investments that aim to broadly match the term and nature of the liabilities
the triennial valuation of the uk scheme as at april 2013 showed a deficit of £191m against the trustee’s funding objective compared with £394 million  
at april 2010 it was agreed with the trustee that the existing recovery plan is sufficient to address the deficit namely contributions of £43 million and  
£45 million to be paid in respect of 2015 and 2016 £31 million was paid in respect of 2014 during the year and a further £1 million was paid early in 2015  
in respect of 2014 a further £1 million payment was made during the year to fund an exercise which offered scheme members with small pensions the 
opportunity to exchange their annual pensions for a oneoff lump sum payment in accordance with hmrc rules in addition the group has set aside  
£30 million to be utilised in agreement with the trustee for reducing the longterm liabilities of the scheme
both the uk and usa schemes are closed to new members and the uk scheme was closed to future accrual in 2010 the group also operated an overseas 
defined benefit scheme in japan which was wound up in 2013
22 deferred tax continued 86 tt electronics plc annual report and accounts 2014
an actuarial valuation of the usa defined benefit scheme was carried out by independent qualified actuaries in 2014 using the projected unit credit method 
pension scheme assets are stated at their market value at 31 december 2014
an analysis of the pension deficit by country is shown below
£million 2014 2013
uk 105 198
usa 19 07
124 205
the principal assumptions used for the purpose of the actuarial valuations for the group’s primary defined benefit scheme the uk scheme were as follows
 2014 2013
discount rate 36 46
inflation rate rpi 32 35
increases to pensions in payment lpi 5 pension increases 31 34
increases to deferred pensions cpi 22 25
the mortality tables applied by the actuaries at 31 december 2014 and 31 december 2013 were s1na tables adjusted by  one year with a 125 
longterm rate of improvement in conjunction with the cmi 2012 projections the assumptions are equivalent to expecting a 65year old to live for a number 
of years as follows
– current pensioner aged 65 87 years male 89 years female
– future retiree upon reaching 65 89 years male 92 years female
a decrease in the discount rate by 01  per annum increases the liabilities by approximately £82 million an increase by 01  per annum in the inflation rate 
increases the liabilities by approximately £55 million by £19 million for pensions in payment and £36 million for deferred pensions an increase in the life 
expectancy of 1 year increases the liabilities by approximately £150 million
the sensitivities above consider the impact of the single change shown with the other assumptions assumed to be unchanged the inflation sensitivities 
allow for the consequential impact on the relevant pension increase assumptions the sensitivity analyses have been determined based on a method that 
extrapolates the impact on the defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period
the amounts recognised in respect of the pension deficit in the consolidated balance sheet are
£million 2014 2013
equities
uk quoted 18 21
  unquoted 141 255
overseas quoted 345 299
  unquoted 711 750
government bonds
uk fixed 122 150
  indexlinked 207 168
overseas 189 219
corporate bonds 664 573
cash and cash equivalents 719 694
derivatives 1251 545
other 282 267
fair value of assets 4649 3941
present value of funded obligation 4773 4146
net liability recognised in the consolidated balance sheet 124 205
the schemes’ assets do not include the group’s financial instruments nor any property occupied by or other assets used by the group derivatives include 
liability driven instruments taken out to hedge part of the scheme inflation and interest rate risks
amounts recognised in the consolidated income statement are
£million 2014 2013
scheme administration costs 07 08
net interest on employee obligations 08 15
settlements and curtailments – 04
23 retirement benefit schemes continued
notes to the consolidated financial statements continued  87 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
the actual return on scheme’s assets was a gain of £840 million 2013 £207 million actuarial gains and losses are remeasured and reported in the 
consolidated statement of comprehensive income and since transition to ifrs amount to a net loss of £219 million
changes in the present value of the defined benefit obligation are
£million 2014 2013
defined benefit obligation at 1 january 4146 4243
interest on obligation 187 182
settlements and curtailments – 04
remeasurements
effect of changes in demographic assumptions – 74
effect of changes in financial assumptions 615 64
effect of experience adjustments – 99
benefits paid 175 186
defined benefit obligation at 31 december 4773 4146
uk 4687 4079
usa 86 67
4773 4146
changes in the fair value of the schemes’ assets are
£million 2014 2013
fair value of schemes’ assets at 1 january 3941 3875
interest income on defined benefit scheme assets 179 167
return on scheme assets excluding interest income 661 40
contributions by employer 50 51
pension scheme expenses 07 08
benefits paid 175 184
fair value of schemes’ assets at 31 december 4649 3941
24 share capital
£million 2014 2013
issued and fully paid
159008330 2013 158608324 ordinary shares of 25p each 398 397
during 2014 the company issued 278708 ordinary shares on the vesting of the long term incentive plan awards issued in 2011 the shares were then 
allocated to award holders via an employee benefit trust for nil consideration a charge of £01 million has been recognised in retained earnings accordingly
the company also issued 121298 ordinary shares as a result of share options being exercised under the 2004 unapproved plan the sharesave scheme and 
share purchase plans the aggregate consideration received was £01 million which resulted in an increase in share premium of £01 million
25 sharebased payment plans
the company has the following sharebased payment plans in operation at 31 december 2014
– share option schemes which are closed for future grants
– long term incentive plan “ltip” for senior executives
– restricted share plan for certain senior executives and
– sharesave plans for uk german and austrian employees and share purchase plans for us employees
a share option schemes
details of the share options outstanding during the year are as follows
2014 2013
number  
of share 
options
weighted 
average 
exercise price 
p
number  
of share 
options
weighted 
average 
exercise price 
p
at 1 january 37548 1450 346364 1005
forfeited – – 27480 1458
exercised 37548 1450 257586 910
expired – – 23750 800
at 31 december – – 37548 1450
exercisable at 31 december – – 37548 1450
23 retirement benefit schemes continued 88 tt electronics plc annual report and accounts 2014
the options exercisable at the prior year end over 37548 ordinary shares under the group share option schemes had a remaining contractual life of 033 
years and were exercised in 2014 at a subscription price of 145 pence these options are equity settled had a life of ten years and vested after three years 
exercise of the options is conditional on there being an increase in earnings per share over any consecutive three year period above the increase in the retail 
price index over the same period
following the approval of the long term incentive plan 2005 at the extraordinary general meeting held on 20 october 2006 all existing share option 
schemes were closed for future grants
b long term incentive plans
details of the ltip awards outstanding during the year are as follows
2014 2013
number of 
share awards
number of 
share awards
at 1 january 3629342 4184223
granted 1739150 1294107
forfeited 1565459 408562
vested 1259345 1440426
at 31 december 2543688 3629342
exercisable at 31 december – –
during 2013 and 2014 grants of awards were made under the ltip for the issue of shares in 2016 and 2017 respectively the award is a contingent right  
to receive shares in the future subject to continued employment and the achievement of predetermined performance criteria the performance targets 
attached to awards require the achievement of earnings per share “eps” and total shareholder return “tsr” targets as detailed in the directors’ 
remuneration report on page 45
on 9 may 22 august and 31 december 2014 grants of awards were made under the ltip for the issue of up to 1185484 shares 223214 shares and 330452 
shares in 2017 on 17 april 3 september and 15 october 2013 grants of awards were made under the ltip for the issue of up to 948607 shares 323500 
shares and 22000 shares in 2016
the fair value of the shares was estimated at the grant date using a monte carlo simulation model taking into account the terms and conditions upon which 
the shares were granted this model simulates the tsr and compares it against the group of comparator companies it takes into account historic dividends 
and share price fluctuations to predict the distribution of relative share price performance
the following table lists the inputs to the model
2014 2013
shares with a 
31 december 
2014  
grant date
shares with a 
22 august 
2014  
grant date
shares with a 
9 may  
2014  
grant date
shares with a 
3 september 
2013  
grant date
shares with a 
17 april  
2013  
grant date
number of awards 330452 223214 1185484 345500 948607
fair value at grant date 647p 1294p 1662p 1443p 1200p
share price at grant date 1015p 1688p 2168p 1900p 1610p
exercise price £nil £nil £nil £nil £nil
expected volatility 40 32 38 42 42
expected weighted average life at 31 december years 30 27 23 27 23
the award of shares is not affected by the risk free rate of interest since no investment is required by the recipient and therefore no interest could be earned 
elsewhere expected volatility is based on historic share price movements
on 9 may 2014 55000 3 september 2013 37500 notional share awards were granted to senior executives which will ultimately be settled in cash  
these awards are subject to the same vesting criteria as the 9 may 2014 3 september 2013 ltip grant
the ltip grants made in 2011 vested during 2014 achieving 396 of the performance conditions the weighted average exercise price was £nil
the group gave its 2011 ltip holders the option to receive shares net of the employee tax owed the employee tax of £05 million has been paid to the tax 
authorities in cash
25 sharebased payment plans continued
notes to the consolidated financial statements continued  89 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
c restricted share plan
on 24 september 2010 the group granted 259515 shares under a restricted share plan to certain senior executives the award vested over 131314 shares 
on 24 september 2013
on 31 october 2013 the group granted 481900 shares under a new restricted share plan to certain senior executives the award is a contingent right to 
receive shares with 40 vesting on completion of a three year period and the remaining 60 vesting six months later subject to continued employment 
with the group and the achievement of predetermined performance criteria the performance targets attached to the awards require the achievement of 
three equally weighted performance criteria revenue growth targets profit margin targets and return on capital employed
on 25 march 2014 the group granted 153800 shares under the restricted share plan the award is a contingent right to receive shares with 40 vesting  
on the third anniversary of the date of the grant and the remaining 60 vesting in april 2017 subject to continued employment with the group and the 
achievement of predetermined performance criteria the performance targets attached to the awards require the achievement of three equally weighted 
performance criteria revenue growth targets profit margin targets and return on capital employed the fair value of the shares at grant date 22 august 
2014 was 2020p
on 22 august 2014 the group granted 218626 shares under the restricted share plan the award is a contingent right to receive shares with 57 vesting  
on completion of a 066 year period and the remaining 43 vesting one year later subject to continued employment with the group the fair value of the 
shares at grant date 22 august 2014 was 1598p
details of the restricted share plan awards outstanding during the year are as follows
2014 2013
number of 
share awards
number of 
share awards
at 1 january 481900 207612
granted 372426 481900
forfeited 205000 76298
exercised – 131314
at 31 december 649326 481900
exercisable at 31 december – –
d sharesave schemes
the group operates sharesave schemes for participating employees in the uk germany and austria under a threeyear plan historically a five year plan  
was offered which was discontinued during 2013 employees may purchase the group’s shares at a 20 discount to the market price on the day prior to  
the commencement of the offer up to a maximum contribution value of £6000 uk or €7200 germanyaustria in any one year monthly contributions  
are saved with lloydstsb plc via equiniti ltd the registrars in the employee’s share savings plan and will only be released to employees who remain in the 
group’s employment for a period of either three or five years from commencement of the savings contract options become exercisable on completion of 
either the three or five year term or within six months of leaving in certain circumstances
date price set market price option price
options 
outstanding
uk 03 september 2010 1425p 1140p 478915
germanyaustria 19 april 2011 1690p 1360p 39308
uk 2 september 2011 1620p 1300p 175586
germanyaustria 31 may 2012 1620p 1300p 53116
uk 31 august 2012 1480p 1190p 85966
uk 30 august 2013 1860p 1490p 297751
germanyaustria 24 june 2014 1920p 1660p 53042
uk 30 september 2014 1670p 1360p 650914
the fair value of the shares at grant date was as follows
2014 2013
pence uk
germany
austria uk
3 year scheme 430 530 800
details of the sharesave awards outstanding during the year are as follows
2014 2013
number of 
share awards
number of 
share awards
at 1 january 1328505 1678514
granted 723452 348481
forfeited 131944 227536
exercised 85415 470954
at 31 december 1834598 1328505
exercisable at 31 december 127072 13850
25 sharebased payment plans continued 90 tt electronics plc annual report and accounts 2014
the group operates a stock purchase plan for participating us employees under which employees may purchase the group’s shares at a 15 discount to the 
market price at the date of acquisition up to a maximum of 6500 per annum employees save on a monthly basis and shares are purchased each quarter
the total sharebased payment charge for the year excluding social security credit of £01 million 2013 £03 million charge arising from the above share 
scheme plans was £13 million 2013 £11 million
26 reconciliation of net cash flow to movement in net fundsdebt
£million net cash
borrowings 
and finance 
leases
net debt
funds
at 1 january 2013 591 124 467
cash flow 38 165 203
noncash items – 01 01
exchange differences 08 14 06
at 1 january 2014 545 276 269
cash flow 153 249 402
noncash items – 02 02
exchange differences 02 10 08
at 31 december 2014 394 537 143
net cash includes overdraft balances of £nil 2013 £nil
27 contingent liabilities
the group has contingent liabilities amounting to £03 million 2013 £03 million in respect of performance bonds and guarantees entered into in the 
normal course of business the group is subject to claims which arise in the ordinary course of business other than those for which provisions have been 
made and included within note 19 the directors consider the likelihood of any other claims giving rise to a significant liability to be remote
28 capital commitments
£million 2014 2013
contractual commitments for the purchase of property plant and equipment 67 67
29 operating leases
operating lease payments charged to the income statement are as follows
£million 2014 2013
fixtures and equipment 06 05
land and buildings 28 31
the group has outstanding commitments under noncancellable operating leases which fall due as follows
£million 2014 2013
in less than one year 35 32
between one and five years 115 86
after five years 80 09
30 related party transactions
transactions between the company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note
no related party transactions have taken place in 2014 or 2013 that have affected the financial position or performance of the group
key management personnel and directors’ emoluments are disclosed in note 12
25 sharebased payment plans continued
notes to the consolidated financial statements continued  91 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
£million note 2014 2013
fixed assets
tangible assets 2 10 16
intangible assets 2 59 43
investments 3 496 900
deferred tax asset 11 21 41
586 1000
current assets
debtors 4 1470 1556
cash at bank and in hand 37 39
1507 1595
creditors amounts falling due within one year 5 114 310
net current assets 1393 1285
total assets less current liabilities 1979 2285
pension liability 10 105 198
net assets 1874 2087
capital and reserves
called up share capital 6 398 397
share premium account 8 15 14
profit and loss account 8 1461 1676
shareholders’ funds 1874 2087
approved by the board of directors on 11 march 2015 and signed on their behalf by
richard tyson mark hoad
director director
company balance sheet 92 tt electronics plc annual report and accounts 2014
1 significant accounting policies
basis of preparation
the financial statements of tt electronics plc the company are presented as required by the companies act 2006 and have been prepared under the 
historical cost convention as modified by the revaluation of financial assets and derivatives held at fair value and the revaluation of investment properties 
and in accordance with applicable united kingdom accounting standards and law
there were no new standards or amendments to existing standards that became effective in the year further there are no new standards or amendments  
to standards which are issued but not yet effective
the principal accounting policies are summarised below and have been applied consistently throughout the current and prior year
tangible fixed assets and depreciation
tangible fixed assets are stated at cost less a provision for depreciation depreciation is calculated so as to writeoff the cost less estimated residual value of 
tangible fixed assets in equal instalments over their expected useful lives no depreciation is provided on freehold land the depreciation rates for the major 
categories of asset are given in note 2 to the consolidated financial statements the carrying values of fixed assets are reviewed for impairment when there  
is an indication that the assets may be impaired
intangible fixed assets and amortisation
acquired computer software licences are capitalised as an intangible asset on the basis of the costs incurred to acquire and bring to use the specific software 
costs that are directly associated with the implementation of identifiable and unique software products controlled by the company and that will probably 
generate economic benefits exceeding costs beyond one year are recognised as intangible assets and amortised over a 3 to 5 year period capitalised 
software development expenditure is stated at cost less accumulated amortisation
investment properties
investment property is recorded at open market value as determined by independent valuers in accordance with the statement of standard accounting 
practice ssap 19 depreciation is not provided on investment property on the basis that such property is not held for consumption but for investment  
the directors believe therefore that this accounting policy is necessary for the accounts to give a true and fair view
changes in the market value of investment properties are not taken to the profit and loss account and are recognised within the revaluation reserve unless  
a deficit or its reversal on an individual investment property is expected to be permanent in which case it is charged or credited in the profit and loss 
account of the period
investments
fixed asset investments in subsidiaries are carried at cost less provision for impairment
deferred taxation
deferred taxation is the taxation attributable to timing differences between the results computed for taxation purposes and results as stated in the financial 
statements it is recognised on all timing differences where the transaction or event which gives the company an obligation to pay more tax or the right to 
pay less tax in the future has occurred by the balance sheet date deferred tax assets are recognised when it is more likely than not that they will be 
recovered deferred tax is measured using the rates of tax enacted or substantively enacted at the balance sheet date
pension costs
the company operates a pension scheme providing benefits based on final pensionable pay the assets of the scheme are held separately from those of  
the company
pension scheme assets are measured using market values for quoted securities the current bid price is taken as market value pension scheme liabilities are 
measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to 
the liability
the pension scheme deficit is recognised in full with the movement in the scheme deficit being split between operating charges finance items and in the 
statement of total recognised gains and losses actuarial gains and losses
foreign currencies
assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date
sharebased payments
certain employees of the company receive part of their remuneration in the form of sharebased payment transactions whereby employees render services 
in exchange for shares or rights over shares equitysettled transactions the cost of equitysettled transactions with employees is measured at fair value  
at the date at which they are granted the fair value of share awards with marketrelated vesting conditions is determined by an external consultant and the 
fair value at the grant date is expensed on a straightline basis over the vesting period based on the company’s estimate of shares that will eventually vest 
the estimate of the number of awards likely to vest is reviewed at each balance sheet date up to the vesting date at which point the estimate is adjusted to 
reflect the actual outcome of awards which have vested no adjustment is made to the fair value after the vesting date even if the awards are forfeited or 
not exercised
leases
payments under operating leases are charged to the profit and loss account on a straightline basis over the lease term
notes to the company financial statements  93 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
own shares held by employee benefit trust
transactions of the companysponsored employee benefit trust are treated as being those of the company and are therefore reflected in the company’s 
financial statements in particular the trust’s purchases of shares in the company are debited directly to equity
2 tangible and intangible fixed assets
£million
intangible 
assets
freehold 
land and 
buildings
plant 
equipment 
and vehicles
total 
tangible 
fixed assets
cost
at 1 january 2014 50 29 15 44
group transfers – – 07 07
disposals – 07 – 07
additions 27 – 10 10
at 31 december 2014 77 22 18 40
depreciation
at 1 january 2014 07 22 06 28
charge for the year 11 – 02 02
at 31 december 2014 18 22 08 30
net book value
at 31 december 2014 59 – 10 10
at 31 december 2013 43 07 09 16
included within intangible fixed assets are assets under construction with a carrying value of £08 million 2013 £22 million
3 fixed asset investments
£million
subsidiary 
undertakings
cost
at 1 january 2014 1294
return of capital 420
at 31 december 2014 874
provisions
at 1 january 2014 394
charge for the year 268
return of capital 284
at 31 december 2014 378
net book value
at 31 december 2014 496
at 31 december 2013 900
the company’s principal operating subsidiary undertakings and their locations are shown in note 14
the company owns 100 of the ordinary share capital or equivalent and 100 of voting rights of all subsidiary undertakings other than rodco limited 
which is nontrading and is 60 owned shareholdings are held indirectly for all principal operating subsidiary undertakings
during the year the company was part of a restructuring of entities within the tt electronics group as part of this restructuring the company’s subsidiaries 
magnetic materials group ltd deltight international ltd yerrus number three ltd and crystalate holdings ltd returned their capital invested by the 
company a gain of £27 million was realised on the transactions as the gross consideration received was £163 million and the carrying value of the 
investments was £136 million
in the opinion of the directors the investments in subsidiaries are not less than the value at which they are included in the balance sheet
4 debtors
£million 2014 2013
amounts falling due within one year
amounts owed by subsidiary undertakings 1461 1546
prepayments and accrued income 07 10
income tax receivable 02 –
1470 1556
1 significant accounting policies continued 94 tt electronics plc annual report and accounts 2014
5 creditors
£million 2014 2013
amounts falling due within one year
trade creditors 23 39
amounts owed to subsidiary undertakings 64 220
taxation and social security 02 05
accruals and deferred income 25 46
114 310
6 share capital
£million 2014 2013
issued called up and fully paid
159008330 2013 158608324 ordinary shares of 25p each 398 397
during 2014 the company issued 278708 ordinary shares on the vesting of the long term incentive plan awards issued in 2011 the shares were then 
allocated to award holders via an employee benefit trust for nil consideration a charge of £01 million has been recognised in retained earnings accordingly
the company also issued 121298 ordinary shares as a result of share options being exercised under the 2004 unapproved plan the sharesave scheme and 
share purchase plans the aggregate consideration received was £01 million which resulted in an increase in share premium of £01 million
7 sharebased payments
details of sharebased payments are shown in note 25 of the consolidated financial statements
8 shareholders’ funds
£million
share  
capital
share 
premium
profit and  
loss account
at 1 january 2014 397 14 1676
new shares issued 01 01 01
actuarial net gain on defined benefit pension schemes – – 23
tax on actuarial amounts in pension deficit movement – – 12
sharebased payments – – 08
deferred tax on sharebased payments – – 01
dividends paid by the company – – 87
loss for the year – – 145
at 31 december 2014 398 15 1461
9 profit for the year
as permitted by section 408 of the companies act 2006 the company has elected not to present its profit and loss account for the year the loss after tax 
of the company for the year was £145 million 2013 loss of £44 million the auditor’s remuneration for audit services is disclosed in note 7 to the 
consolidated financial statements
10 pension schemes
defined benefit scheme
the triennial valuation of the uk scheme as at april 2013 showed a deficit of £191m compared with £394 million at april 2010 it was agreed with the 
trustee that the existing recovery plan is sufficient to address the deficit namely contributions of £43 million and £45 million to be paid in respect of 2015 
and 2016 £31 million was paid in respect of 2014 during the year and a further £1 million was paid early in 2015 in respect of 2014 a further £1 million 
payment was made during the year to fund a trivial commutation exercise in addition the company has set aside £30 million to be utilised in agreement 
with the trustee for reducing the longterm liabilities of the scheme further details of the scheme are provided in note 23 to the group financial statements
defined contribution scheme
the company operates a group personal pension plan for employees and pays contributions to administered pension insurance plans the company has  
no further payment obligation once the contributions have been paid payments to the defined contribution scheme are charged as an expense as they are 
incurred the total contributions charged by the company including employee salary exchange contributions in respect of the year ended 31 december 2014 
were £06 million 2013 £06 million
11 deferred tax
the deferred tax asset of £21 million 2013 £41 million is made up of an asset of £21 million 2013 £40 million in respect of the pension liability the 
movement in which has been recognised in profit £07 million charge and equity £12 million charge and an asset of £nil 2013 £01 million in respect of 
sharebased payments the movement in which has been released through equity £01 million charge
at 31 december 2014 the company had recognised no deferred tax assets on gross tax losses of £232 million 2013 £235 million and gross property 
plant and equipment timing differences of £26 million 2013 £09 million
notes to the company financial statements continued  95 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
12 commitments under operating leases
annual commitments under noncancellable operating leases were £01 million expiring between two and five years 2013 £01 million expiring between 
two and five years
13 related party transactions
during 2014 and 2013 the company did not have any related party transactions other than with wholly owned subsidiaries
14 principal operating subsidiaries
the principal operating subsidiaries are
sensing and control
ab elektronik gmbh germany
ab elektronik sachsen gmbh germany
tt electronics sensing and control private limited india
ab elektronik sensors suzhou co ltd china
ab electronic manufacturing mexico
optek technology usa mexico
ab mikroelektronik gmbh austria
tt electronics sensing and control srl romania
tt electronics technology ltd
roxspur measurement and control limited
ab elektronik inc usa
bi technologies usa mexico
tt electronics asia pte ltd singapore
 also conducts components business
components
international resistive company usa barbados
semelab limited
welwyn components limited
ab connectors limited
ab electronics suzhou co ltd china
bi technologies malaysia
integrated manufacturing services
tt electronics integrated manufacturing services limited
tt electronics integrated manufacturing services suzhou co ltd china
tt electronics integrated manufacturing services inc usa
new chapel electronics limited
tt electronics integrated manufacturing services srl romania
abtest ltd
companies are located and incorporated in the uk except where indicated 96 tt electronics plc annual report and accounts 2014
£million unless otherwise stated 2014 2013
1
2012 2011 2010
revenue 5243 5322 4769 5096 5555
operating profit
2
292 308 287 287 249
profit before taxation
2
276 301 253 245 206
earningsloss
2
205 230 186 176 139
earningsloss per share p
2
129 146 119 114 90
dividends – paid and proposed 87 85 78 68 43
dividend per share – paid and proposed p 55 54 50 44 28
average number of shares in issue 1583 1576 1561 1549 1548
net cashdebt 143 269 467 152 99
total equity 1878 2033 1911 1914 1791
notes
1 results for 2013 have been represented to exclude acquisition related items from underlying profit
2 operating profit profit before taxation earnings and earnings per share exclude the impact of restructuring costs asset impairments and acquisition related costs
fiveyear record  97 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
glossary
organic revenue growth
definition
organic revenue growth is the percentage change in revenue from 
continuing group operations in the current year from the prior year the 
effects of currency movements divestments and acquisitions made during 
the current or prior financial year have been removed this kpi measures our 
strategy in growth markets
operating profit margin
definition
operating profit margin is defined as operating profit before exceptional 
items from continuing operations expressed as a percentage of revenue 
from continuing operations this kpi is appropriate because we are  
focused on increasing the proportion of revenue from those markets  
where we can make higher returns in addition to delivering an improvement 
in operational efficiency
operating cash conversion
definition
operating cash conversion is defined as cash generated from continuing 
operations after capital and development expenditure expressed as a 
percentage of operating profit before exceptional items from continuing 
operations cash conversion is an important metric to track the 
management of our working capital and capital expenditure
employee engagement
definition
we use our employee survey to measure how our employees feel about 
working in tt using a scale of 1 low to 7 high against eight factors  
as surveyed by best companies ltd
underlying earnings per share eps  growth
definition
eps is calculated as profit before exceptional items from continuing 
operations attributable to shareholders divided by the weighted average 
number of shares in issue during the year we have chosen eps growth  
as a kpi as it is a standard metric to determine corporate profitability for 
shareholders in addition it is a measure used as one of the performance 
conditions in the group’s long term incentive plan – see further details on 
page 45
safety performance 
definition
safety performance is defined as the number of occupational injuries 
resulting in three or more days’ absence per 1000 employees this kpi 
allows us to compare our performance with that of our peers we use  
a uk benchmark published by the health and safety executive and apply 
this to all of our facilities worldwide reflecting our commitment to raising 
standards globally
relative total shareholder return
definition
tsr is defined as capital growth plus dividends paid assuming dividends are 
reinvested over the period using a threemonth opening and closing average 
we believe that tsr is an important kpi because it measures the delivery of 
shareholder value as well as performance in addition it is a measure used 
as one of the performance conditions in the group’s long term incentive 
plan – see further details on page 45
key performance indicators 98 tt electronics plc annual report and accounts 2014
aecq200 an automotive electronics council document
agm annual general meeting
board of directors the board of directors of tt electronics plc
cca climate change agreement
ceo chief executive officer
cfo chief financial officer
cr corporate responsibility
crc carbon reduction commitment
csr corporate and social responsibility
def diesel exhaust fluid
defra department for environment food and rural 
affairs
ebt employee benefit trust
eicc electronics industry citizenship coalition
emb executive management board
enhcdr enhanced high capacity data radio
eps earnings per share or electronic power steering 
as the context requires
esos energy savings opportunity scheme
eu european union
euro6 european emissions standard 6
evp executive vice president
gdp gross domestic product 
hfc hydrofluorocarbons
ifrs international financial reporting standards
ims integrated manufacturing services
isots international organization for standardization 
technical specification
itar international traffic in arms regulations
kpi key performance indicator
led light emitting diode
llp limited liability partnership
ltip long term incentive plan
mabac micro abac ab aerospace connector
mil pp military pushpull
nadcap national aerospace and defense contractors 
accreditation program
nasa national aeronautics and space administration
nato north atlantic treaty organisation
nox nitrous oxide
oem original equipment manufacturer
oip operational improvement plan
pcba printed circuit board assembly
pfc perfluorocarbons
pmi purchasing managers index
rd research and development
roxspur roxspur measurement and control limited
rsp restricted share plan
sap systems applications and products
scr selective catalytic reduction
the board the board of directors of tt electronics plc
the code uk corporate governance code 2012
the company tt electronics plc
tsr total shareholder return
tt tt electronics plc
uk united kingdom of great britain and northern 
ireland
usa united states of america
other terms
glossary continued  99 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
annual general meeting
the annual general meeting will be held on 12 may 2015 at 1130am  
at the city centre formerly city marketing suite 80 basinghall street 
london ec2v 5ar
results
announcement of 2015 half year results – late august 2015
preliminary announcement of 2015 results – mid march 2016
annual report 2015 – to be posted mid april 2016
dividends
for the year ending 31 december 2014 the board has recommended a final 
dividend of 38p per share which will be paid on 4 june 2015 to shareholders 
on the register on 22 may 2015 2013 38p an interim dividend of 17p per 
share was paid on 30 october 2014 2013 16p
multiple accounts on the shareholder register
if you have received two or more copies of this document this means that 
there is more than one account in your name on the shareholder register 
this may be caused by either your name or address appearing on each 
account in a slightly different way for security reasons the registrars will 
not amalgamate the accounts without your written consent
if you would like any multiple accounts combined into one account  
please write to equiniti limited at the address given below
share dealing services
shareview dealing is a telephone and internet service provided by equiniti 
it offers a simple and convenient way of buying and selling tt electronics 
plc shares
log on to wwwshareviewcoukdealing or call 0845 603 7037 between 
800 am and 430 pm monday to friday except bank holidays for more 
information about this service and for details of the rates and charges 
please note that telephone lines remain open until 600 pm for enquiries
a weekly postal dealing service is also available and a form together with 
terms and conditions can be obtained by calling 0871 384 2248 
commission is 175 per cent with a minimum charge of £55
sharegift
sharegift is a charity share donation scheme for shareholders administered 
by the orr mackintosh foundation it is especially for those who may wish  
to dispose of a small parcel of shares whose value makes it uneconomical  
to sell on a commission basis further information can be obtained at  
wwwsharegiftorg or from equiniti
shareholder information
shareholder enquiries
equiniti maintain the register of members of the company if you have any 
queries concerning your shareholding or if any of your details change 
please contact the registrars
equiniti limited
aspect house
spencer road
lancing
west sussex
bn99 6da
telephone 0871 384 2396 or 44 121 415 7047 if calling from outside the 
united kingdom fax 0871 384 2100
textphone for shareholders with hearing difficulties 0871 384 2255
equiniti also offer a range of shareholder information online at  
wwwshareviewcouk
  uk calls to 0871 numbers cost 8p per minute plus network extras lines are open from 830 am to 
530 pm monday to friday except bank holidays
website
information on the group’s financial performance activities and share price 
is available at wwwttelectronicscom 100 tt electronics plc annual report and accounts 2014
notes  tt electronics plc annual report and accounts 2014
clive house 
12–18 queens road 
weybridge 
surrey kt13 9xb
reg no 87249
tel 440 1932 825300
fax 440 1932 836450
for more information on our business please visit
wwwttelectronicscom


Summary:
 06 tt electronics plc annual report and accounts 2014
chairman’s statement
sean watson chairman
2014 was a year of challenges and significant 
change following the appointment of richard 
tyson as chief executive officer in july we 
undertook a comprehensive review of the 
business and have now developed a clear 
strategic plan to stabilise the business and  
deliver sustainable growth 
it was regrettable that we had to announce in 
november 2014 that issues identified by the 
business review and delays in execution of certain 
elements of the operational improvement plan 
would impact our 2014 and 2015 performance 
this led to a fall in our share price however we 
have moved swiftly commencing the necessary 
improvement actions making changes to  
our senior management team reshaping our 
organisational structure and appointing mark 
hoad as chief financial officer this has allowed 
us to enter 2015 with a clear understanding of 
what needs to be done and the confidence that 
we have the right people in place to move our 
business forward
2014 results
group revenue was £5243 million from 
continuing operations 2013 £5322 million  
on an organic basis revenue increased by  
2 per cent excluding the effects of foreign 
exchange £226 million and the £37 million 
revenue contribution from the acquisition of 
roxspur measurement and control limited 
“roxspur” in july 2014 this organic revenue 
increase was largely related to a onetime order 
within sensing and control
underlying operating profit from continuing 
operations declined by 5 per cent to £292 million 
2013 £308 million with the reduction 
principally related to a £17 million negative 
foreign exchange impact partially offset by the 
£04 million in operating profit delivered by the 
acquisition of roxspur the underlying operating 
profit performance benefited from the £4 million 
one time order referred to above and £1 million  
of last time buys related to the closure of our 
operations at the smithfield usa facility
our closing net debt position of £143 million 
reflects investment in the acquisition of roxspur 
for £80 million net capital expenditure of  
£28 million and a working capital outflow of 
£168 million due to significant supplier payments 
made during the first half
 2014 was a year of change 
where hard decisions have 
been taken to provide us 
with a platform for 
progress  07 tt electronics plc annual report and accounts 2014
financial statements directors’ report strategic report
dividend
the board is recommending an unchanged final 
dividend of 38 pence which when combined  
with the interim dividend of 17 pence gives  
a total of 55 pence per share for the full year 
2013 54 pence per share representing an 
increase of 2 per cent
strategic and operational progress
we have conducted a comprehensive review of 
the business and have developed a strategy for 
sustainable growth in his statement richard 
tyson outlines his priorities for 2015 and the 
actions being taken to simplify the organisation 
and to create a culture of clear accountability 
progress is being made but more work is needed 
to embed these governance processes and 
cultural changes across tt
board changes
we have made a number of changes to the board 
and senior management team richard tyson 
joined from cobham plc as chief executive 
officer in july 2014 and mark hoad was 
appointed as chief financial officer in january 
2015 mark previously held the position of group 
finance director at bba aviation plc at the senior 
management level we have implemented a 
number of organisational changes and refreshed 
the leadership team further details are set out  
in the chief executive’s statement
the board through the remuneration 
committee is committed to ensuring that  
the group operates in accordance with best 
practice regarding both the disclosure of 
directors’ remuneration and the development  
of an effective executive remuneration strategy 
the alignment between our strategic goals  
kpis and executive remuneration is set out  
in the remuneration report 
our people
the delivery of our strategic goals would not be 
possible without the hard work and dedication  
of our people across all of our business units 
worldwide 2014 was challenging for our staff 
not only as a result of the changes we made to 
our executive management team and which 
have now filtered through the management 
layers of our business units but also arising  
from the need to make headcount reductions  
at a number of our sites on behalf of the board  
i would like to thank all of our employees who 
have worked through this period of uncertainty 
and made a valued contribution to the business 
and our wider customer initiatives during 2014
looking forward
the group has undergone significant change 
during the second half of the year we have a new 
management team in place and a clear plan to 
improve the performance of the business 2015 
will be an important year of transition as this new 
plan is implemented and we create a sustainable 
platform for growth
sean watson
chairman
11 march 2015
“on behalf of the board  
i would like to thank all of  
our employees who have 
worked through this period of 
uncertainty and made a valued 
contribution to the business 
and our wider customer 
initiatives during 201 4”