abacus group plc annual report and accounts  2003
abacus group plc
annual report  accounts  2003
abacus house
bone lane
newbury
berkshire
rg14 5sf
wwwabacusgroupcouk abacus group
uk and ireland
aylesbury
basingstoke
bolton
boston spa
cambridge
dunmow
leighton buzzard
limerick
livingston
maidenhead
newbury
newcastleunderlyme
redhill
r
s
s
s
b
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d
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local offices
the abacus group is a leading franchise distributor of electronic components flatpanel
displays printers and related products and provides additional value added services
including technical support cable and electromechanical subassembly together with the
design and build of display systems
following the purchase of 60 of ecc an italian electronic components distributor the
group employs approximately 800 people and has 9 principal trading businesses operating
in the uk ireland nordic and italy as well as a strategic alliance with rutronik which
operates in germany france and several other european countries
the group’s philosophy is to offer as wide a product range as possible in order to be in
tune with the widespread market trend towards supply chain management and vendor
reduction to work at design level with both existing and new customers in order to be
involved in the proliferation of new products that typifies the electronics industry and to
combine these features with an unusually high level of personal service and commitment
this philosophy has enabled the group to grow its uk market share and to achieve a return
to shareholders well above the industry average
the group has a continual programme of investment to ensure that the logistics and
systems are in place to support and further these aims
contents
financial and operational highlights 1
abacus group at a glance 2
chairman’s statement 4
chief executive’s review 5
financial review 8
the board of directors secretary and advisers 11
directors’ report 12
corporate governance statements 14
corporate social responsibilities 18
remuneration report 20
statement of directors’ responsibilities 27
auditors’ report 28
financial statements 29
five year summary 50
notice of annual general meeting 51
geographic coverage 53
0 front cover 88732  121203  340 pm  page 2 last year we stated “market conditions remain tough” and that “management will
continue to direct its attention to the fundamentals of the business – sales and
gross profit inventory and cash generation” that focus and commitment has
enabled the group to achieve a return to shareholders well above the average 
for our industry to maintain its excellent service and to grow its market share
abacus group plc   1
financial and operational highlights
l £80m pbt and goodwill of £04m strong performance in
tough market 2002 £95m pbt and goodwill of £28m
l turnover of £1470m maintained through expanded market
share 2002 £1550m
l basic earnings per share before goodwill of 135p 
2002 166p
l basic earnings per share after goodwill of 125p 2002 98p 
l gearing reduced to 44 2002 45
l dividend increase of 5 to 102p 2002 97p
the five year summary is shown on page 50
99 00 01 02 03
72
80
88
97
102
dividend per share
pence
99 00 01 02 03
1073
1526
1550
1470
turnover
£m
99 00 01 02 03 99 00 01 02 03
59
158
171
95
80
142
270 271
98
125
profit before tax and
goodwill
£m
earnings per share after
goodwill
pence
99 00 01 02 03
109
268
287
166
135
earnings per share before
goodwill
pence
2015 abacus polar has been at the forefront of electronic
component distribution for over 30 years the sales operation
is run through a network of regional sales offices offering local
customer support it currently has 20 sales operations in 
11 locations covering the uk and ireland a wide range of
market leading franchises are represented across all product
technologies abacus polar prides itself on its high level of
customer service
micromark ccd is based in maidenhead and distributes
products across the uk and eire micromark was formed in
1970 combining with ccd in 2000 micromark ccd is a
narrow line broadbased technology electronic component
distributor the company is dedicated to providing excellent
technical support alongside a high level of 
personal service
silicon concepts are based in maidenhead their market
coverage is the uk and eire established in 1988 they 
have over 10 years experience in taking ‘state of the art’
semiconductor products to customers in all industries they
provide solutions to customers’ demands for increased
performance integration and differentiation 
abacus group at a glance
2 abacus group plc
promax is headquartered in them in denmark and was
established in 1985 from its original base it now markets its
services through a network of 8 sales offices in all four nordic
countries promax offers a complete range of electronic
technologies from the world’s leading suppliers offering a
high level of technical support through its highly trained and
qualified workforce has enabled promax to become a leading
distributor in the nordic region
ecc which is 60 owned by the abacus group from
october 2003 is headquartered in milan italy it covers italy
through a network of regional offices the company has three
divisions itc which sells it peripherals components which
acts as a manufacturer’s representative for a number of ‘blue
chip’ manufacturers and distribution which holds franchises
across all product groups
electronic component distribution
abacus has continued to
invest in new product and
market opportunities such
as gsm gps and microsoft
windows embedded
software pictured is
windows ce which is
especially suited for
embedded designs of 
hand held equipment ctl is based in stonehouse gloucestershire and markets its
services across the uk and eire ctl offers a range of sub
contract manufacturing services to the electronics industry
including standard cable assemblies electromechanical 
subassembly through to complex box build and associated
testing the 40000 sq ft facility in gloucestershire employs 
a cell manufacturing technique to utilise space and processes
most efficiently automated and semiautomated equipment is
extensively used and where hand assembly is required the
technicians are highly trained and qualified the facility holds
approval to iso and babt and an iip award
ccs is based in runcorn and offers cost efficient wiring and
box build solutions from design through to complete project
management ccs markets its services in the uk and eire
and is approved to iso and ul 
abacus group plc   3
off the shelf module
available to make existing
designs bluetooth enabled
dubilier is headquartered in dunmow essex and has been
supplying products for the electronics industry for over 50
years originally a uk manufacturer dubilier now has its
products manufactured globally dubilier’s comprehensive
range of passive products has in recent years been
supplemented by electromechanical products such as fans
connectors fuses and more recently batteries the dubilier
name is synonymous with quality and value dubilier markets
its products through europe selling both direct and through
its distribution network 
the trident microsystems group was formed in 1967 and
has grown to become the leading flatpanel displays and
printer specialist in the uk in addition it has a benelux
operation and is currently expanding into the nordic region
and italy
its expertise has been earned by successfully managing
customer projects through signing key franchises and by
investing in skilled people the group has products for oem
industrial medical retail instrumentation and automotive
designers as well as the capability to develop bespoke
display and manmachineinterface systems according to
customer need trident’s products and expertise are available
through field sales engineers a network of comprehensive
websites and through its inhouse technicians and product
specialists all ready to find solutions for customers needing
display printer industrial computer and card reader products 
v
value added distribution services i have said before that the abacus response to the tough
trading conditions in its industry has been consistent the
primary task has been to maintain a robust financial model
which would continue to deliver profits and generate cash and
dividends for shareholders over a weak trading period in our
operations it has been essential to provide excellent customer
service supplier support inventory management and logistics
we have seen success in all these areas and as a result our
largest subsidiary abacus polar has continued to increase its
market share furthermore the group has benefited from its
diversified product offering particularly so at trident the
display and related products specialist which has continued
to grow
since the year end we have added to our holding of 9 in
ecc distribution limited and we now hold 60 of the share
capital with an option to buy the balance in the future this is
the uk holding company of ecc elettronica spa a milan
based electronic components distributor with a network of
regional offices in italy sales in the year to 30 september
2003 were f404 million £274 million
outlook
the industry is not yet showing signs of a sustained recovery
there are however some positive indications that the
deterioration has been arrested since the year end the level
of order intake has improved and exceeds sales afdec the
industry association is predicting a modest upturn of 3 in
the uk in the calendar year 2004 against an expected
downturn in excess of 5 for the calendar year 2003 
at present we do not anticipate that such a recovery will take
place early in the year and accordingly we would not expect a
sharp upturn to be seen in our financial year to 30 september
2004 our current view is that the outlook for the coming
twelve months will be broadly similar to that of the period
under review
everyone in abacus has given great support over the past
twelve months and i thank them for their hard work
harry westropp
chairman
25 november 2003
chairman’s statement
i am pleased to report that abacus has shown great resilience during an exceedingly
difficult trading period there has now been a period of two and a half years over
which prices have fallen in our industry and margins have been under constant
pressure despite these conditions the abacus group has achieved the market’s
expectations of a profit of £8 million before goodwill of £04 million and tax of £24
million on sales of £147 million whilst this represents a reduction in pregoodwill
profitability of 15 compared with the previous year considerable investment has
been made in the infrastructure of the business balance sheet strength has been
maintained and the dividend is being increased by 5
4 abacus group plc 
ecc’s headquarters in the
cusago district of milan
italy ecc brings to the
group a presence in the
italian distribution market
estimated to be f12 billion
in 2002 power rectifier – power
management plays an
increasing role in the
design of portable
equipment such as 
laptop computers 
abacus group plc   5
general review
the year under review was challenging for the group in all 
its markets the industry problems in our territories were
characterised by reduced volume demand from customers
continued price pressure on commodity products and
transfer of business by global customers to lower cost
manufacturing regions
it is impossible to avoid the consequences of lower volumes
and prices but our strategy of focusing on regional rather
than global customers has minimised the impact on the group
in the uk our sales fell by 54 and in nordic markets by
11 in local currency our staffing levels recognise that overall
workloads do not reduce to the same degree as volumes and
price and this combined with our reputation for high quality
customer service and supplier support has enabled the group
to grow its market share despite fierce competition afdec
statistics show that our market share has grown in the uk to
140 from 129 and has been maintained at 54 in 
the nordic region this increase in share reflects our focus 
on customers more likely to remain committed to local
manufacturing the width and strength of our product offering
and the commitment to keeping the number of skilled staff
required to provide a consistent level of service
component volumes average selling prices and workloads
as measured by the number of line items shipped are a good
reflection of market activity and are measures we closely
monitor comparing this year to last in our uk distribution
businesses volumes fell by 1 and average selling prices 
by 8 but workloads rose by 23 in the nordic region 
the tougher market showed a different picture with volumes
falling by 65 average selling prices by 6 and workloads
by 85
we reduced operating costs by 86 in 2003 through a
carefully managed programme of natural wastage and
selective redundancy we have reduced our distribution
headcount from 548 to 516 whilst achieving the service
standards required by the group’s customers the initial phase
of our programme to upgrade our uk facilities was the
opening in november 2001 of the new warehouse which 
has contributed to this improved efficiency its initial period of
operation required that new staff unaccustomed to this
industry be trained and their skills and job knowledge raised 
to our expected standard in its second year of operation the
total transaction workload increased by 96 the error rate
reduced by 35 and the headcount by 11 the final phase
was to enlarge our office facilities and this was completed
during the summer of 2003 this project transformed our
newbury freehold headquarters from the original abacus
warehouse into an efficient office block these modern facilities
have been completed at a capital cost of £15 million a far
more cost effective option than a move to different premises
individual company review
all our distribution businesses pursue a similar philosophy
which is to offer as wide a product range as possible in order
to be in tune with the widespread market trend towards
supply chain management and vendor reduction to work at
design level with both existing and new customers in order to
be involved in the proliferation of new products that typifies
the electronics industry and to combine these features with
an unusually high level of personal service and commitment
abacus polar our largest subsidiary has strengthened its uk
market position this has been achieved primarily by giving
customer service the highest priority through our established
structure of local offices and dedicated sales staff we provide
highly qualified technical support for the majority of products
and have continued to invest in new product and market
opportunities such as gsm gps modules and microsoft
windows embedded software
chief executive’s review
abacus polar our largest subsidiary has strengthened its uk market position
this has been achieved primarily by giving customer service the highest priority
through our established structure of local offices and dedicated sales staff 6 abacus group plc
the migration of global customers has had a minimal 
direct impact on sales revenue but has led to our major
competitors seeking to refocus on our traditional customer
base whilst this is putting some pressure on our gross
margins we believe that our long standing relationships
combined with an ability to demonstrate high service levels
have enabled us to maintain sales however we will not
stand still and we follow a path of continuous improvement
to ensure our service and product offering meets our
customers’ expectations 
micromark ccd has also performed well justifying our
strategy of having more than one business in the major
markets we introduced the maxim dallas franchise during
the previous financial year and this franchise has brought
new customers and sales revenue to the group during the
year silicon concepts was integrated into micromark
resulting in significantly lower operating costs 
promax our nordic distribution business has faced tough
markets and experienced the sharpest sales decline of our
group companies due to the historic significance of the
telecoms sector in sweden and finland however we have
continued to seek opportunities to expand its product offering
and believe it is in an improved position to take advantage of
any market growth the business has maintained its gross
margin of 21 whilst operating costs have been reduced
during the year promax returned a small loss but as a result
of recent cost reductions we are confident that it will return to
profit once market conditions improve
trident the display and related products specialist performed
well and despite its distribution business being affected by
the market as much as our other divisions achieved growth
of 109 by comparison to the previous year this came
from the billing of its system build projects particularly in the
military area whilst opportunities in the medical industry
have not billed as quickly as anticipated we remain confident
that this focus on system build opportunities is becoming 
a significant contributor to growth the benelux operation 
has established itself well and our expansion into the 
nordic region is under way with the support of major
franchises such as toshiba and microsoft we see this 
as a good growth opportunity
it is our intention during the coming year to similarly expand
our displays business into the italian market using the existing
presence of ecc microsoft have already confirmed their
support in this respect
our electromechanical assembly businesses ctl and ccs
have both suffered from the difficulties of the uk market but
have continued to contribute significantly to the overall
profitability of the group they remain strategically important
offering customers differentiation from our competition and in
addition will provide a valuable service to the system build
division of trident as it develops in the future
chief executive’s review continued
automotive 3
customer sectors
industrial control 14
other 11
security 9
instrumentation 7
distribution 5
communication 5
audio visual 5
printer 3
power 3
contract manufacturi
global 4
contract 
manufacturing 
local 31 abacus group plc   7
dubilier our “own brand” component business largely sells
commodity products and has continued to experience price
reductions particularly in the passive component area
however we have successfully expanded these products into
the nordic region since our acquisition of promax and intend
to repeat this in other european countries such as in italy
through ecc
during the year the group purchased 9 of ecc and
subsequent to the year end purchased a further 51 ecc is
a distributor of a broad range of electronic components and
computer products based in milan and has a network of
regional sales offices throughout italy with a similar market
approach to abacus polar and promax
ecc brings to the group a presence in the italian distribution
market estimated by europartner consultants to be 12 billion
in 2002 and a number of exclusive franchises in passive and
electromechanical products which give it a strong presence in
the major italian customers sales in the year to 30 september
2003 were f404 million £274 million
outlook
last year we stated “market conditions remain tough” and
that “management will continue to direct its attention to the
fundamentals of the business – sales and gross profit inventory
and cash generation” that focus and commitment has
enabled the group to achieve a return to shareholders well
above the average for our industry to maintain its excellent
service and to grow its market share
our attention to these aspects of the business is key to our
success and we intend that it should always be so irrespective
of the market conditions currently conditions remain
extremely competitive although many of the semiconductor
industry manufacturers and forecasters are encouraged by
the strength of the market since the summer holiday season
and are talking of double digit growth globally with customer
demand for calendar year 2004 being particularly strong in
the asiapacific region
the postsummer period has traditionally been strong due to
the increased demand for pc mobile phone and consumer
products for the christmas season we still remain cautious
and will wait to see a sustained increase in our own order
booking rate before endorsing this optimism however the
lack of investment in new semiconductor manufacturing
capacity during the last three difficult years should mean that
a reasonable increase in demand anywhere in the world will
quickly use up available capacity the global nature of the
industry means that this will drive increasing unit prices for
everyone from which we should see a direct benefit in both
sales and returns
martin kent
chief executive
25 november 2003 8 abacus group plc
turnover
in the year to 30 september 2003 sales declined by 5 to
£1470 million compared with the previous year the decline
was sharper in the first half down 8 with a 2 reduction 
in the second half the greater first half decline reflects the
weaker than expected sales in spring 2003 traditionally the
strongest quarter during a year in which sales declined all
operations continued to deliver profit with the exception of
promax the group’s distributor in the nordic region which
suffered a drop in sales of 11 in local currency terms 3 
in sterling
looking at the geographical markets 79 2002 80 and
15 2002 14 of the group’s turnover arises in the uk 
and nordic regions respectively the group increased its uk
market share in 2003 to 140 from 129 in 2002 and
maintained its nordic share at 54
gross margins
margins came under pressure during the year particularly so
in the second half as evidenced by a drop in gross profit from
240 in the first half to 224 in the second half – making a
gross profit percentage of 232 for the year 2002 247 
operating expenses and goodwill
the group has continued to be successful in controlling
overheads other operating expenses excluding goodwill of
£04million for the year ended 30 september 2003 were
£255million as compared to £279million in 2002 and
£304million in the previous year including goodwill operating
expenses were £259million £308million and £311million
respectively this demonstrates the group’s ability to control
its cost base despite insurance premiums increasing by
£04milllion £12million in 2003 from £08million in 2002 and
the 1 increase in national insurance contributions resulting in
£02million additional annualised costs
year end distribution headcount reduced from 548 in 2002 to
516 in 2003 this has been achieved by focusing on operational
efficiencies whilst ensuring that our customer service levels
and franchise support have not diminished 
all acquired goodwill is written off over a 20 year period on a
straightline basis subject to investment impairment reviews
in the year ending 30 september 2002 such a review led to 
a £21million write down of goodwill arising on the acquisition
of silicon concepts in 2003 the remaining balance of
£07million of silicon concepts goodwill was reduced to nil
following a £06milllion reduction in the acquisition purchase
price and a further £01million write down the group’s
goodwill amortisation charge decreased to £03million in 2003
compared to £07million in the previous year this decrease
reflects the reduction in deferred consideration which is based
on trident’s 2002 and 2003 results by £18million in the year
following the delay in the new medical contracts business
finance charges 
finance charges decreased by £03million to £06million in
2003 this reduction reflects the global fall in interest rates
and our strategy to utilise lower rates on yen euro and us
borrowings this enabled the group to maintain a robust
interest cover of fifteen times based on profit before interest
and goodwill fourteen times after goodwill amortisation
taxation
the group’s effective tax rate for the year based on profits
before taxation and goodwill was 294 against 266 in
the previous year 310 and 380 respectively after
goodwill this increase primarily resulted from a £02million
prior year adjustment charge in 2003 compared to a
£02million credit in 2002 this was partially offset by a
£02million increase in capital allowances over depreciation
resulting mainly from £23million of software costs which
have not yet been depreciated 
financial review
the abacus distribution
centre adc into which five
former uk warehouses
were consolidated the
adc has the ability to
expand to 250000 square
feet and is located at
newcastleunderlyme
the directors are recommending a final dividend of 68p giving a total dividend
for the year of 102p this 5 increase on 2002 reflects the group’s confidence in
effectively managing its working capital and in its ability to generate cash even
during a downturn in the market the abacus distribution
centre’s automated
conveyer system which
carries goods in optically
read totes
abacus group plc   9
working capital and cash flow
the group retains its key focus throughout each business on
maintaining tight management of working capital 
the group’s cash flow varies both during the course of each
month and seasonally across the year debt tends to be
highest at the month end dipping sharply during the first ten
days of each month as some debtors pay a few days late it
is the group’s policy to pay its creditors on time and the bulk
of these payments are due at the end of each month during
the course of the year cash flow tends to improve during the
latter part of the summer which coincides with the group’s
year end in addition both at the half year mark and at the
end of the year the group’s credit control departments make
extra efforts to resolve outstanding issues and this tends to
lead to the debtors’ figure being lower than in the preceding
few months
net cash outflow for the year was £02million compared to
an inflow of £71million in 2002 this change was primarily
due to lower cash inflow from operating activities of
£107million in 2003 compared to £169million in 2002 and
higher capital expenditure of £48million 2002 £09million
these adverse movements were partly offset by the
repayment of a £10million loan by ecc distribution limited
and a reduction of £06million against the purchase price of
silicon concepts limited looking at each of these in turn
operating activities 
in 2003 cash outflow on debtors was £03million against an
inflow of £49million in 2002 the 2002 inflow was mainly due
to a decrease in trade debtors following a 23 decrease in
year on year sales whilst the slight increase in 2003 reflected
the tightening in market conditions and consequent pressures
on debt collection the group’s year end debtors’ days were
62 in 2003 against an unusually low 58 in 2002 in addition
operating profit before depreciation and goodwill fell by
£16million to £98million in 2003 from £114million in 2002 
however the above was partly offset by a £34million 2002
£16million cash inflow from a reduction in stock the group’s
trade creditor days at year end based on the last 2 months’
cost of sales were 37 2002 36 days the company has no
trade creditors at either year end
capital expenditure 
during the year the group’s capital expenditure amounted 
to £48million 2002 £09million whilst depreciation was
£12million 2002 £11million during the year we invested
£23million in upgrading our business system whilst
refurbishment of the group’s main building in newbury was
completed at a cost of £15million and involved transforming
what was originally the group’s main warehouse into offices
a further £03 million was spent on completing the fire
sprinkler system and other works at adc the abacus
distribution centre this brings to a conclusion the total
capital investment of £56 million we have made in
consolidating five of our uk warehouses into the adc with
90000 square feet currently in use and a further 160000
square feet available for further expansion 
it is the group’s policy that its larger properties be acquired
on a freehold basis in order to optimise our use of each
property although if circumstances would indicate leasing to
be more appropriate in certain specific situations then such a
route would be considered
financial investment
in line with the terms of the agreement ecc distribution
limited which owns 100 of the share capital of ecc
elettronica spa repaid its £1million loan from abacus
electronics holdings limited aehl during the year 
acquisitions
as part of the acquisition price for the trident microsystems
limited group which was acquired in october 2000 an
element of consideration was deferred until after april 2004
based upon the profit performance of trident during the two
years ending 30 september 2003 this deferred consideration
is now expected to be £19million
in january 1999 the group sponsored a management buyout
of ecc elettronica spa in august 2003 the group purchased
9 of ecc distribution limited the parent company of ecc
elettronica spa for £159000 and subsequent to the year
end the group purchased a further 51 on 3 october 2003
at a cost of £09million 
during the year an agreement was reached with the
vendors of silicon concepts limited acquired in november
2000 to repay £06million of the purchase consideration 10 abacus group plc
debt
net debt at the end of the year was £187million as against
£185 million at the end of the previous year after including
deferred consideration of £19million which is scheduled to
be paid after april 2004 gearing at the end of the year was
48 2002 54 
treasury
the group’s treasury function is managed centrally from
newbury providing a service to the operating businesses
with regular reporting to the board the group’s treasury
policy is to ensure that adequate capital is available to the
group for its business operations and that this is provided in
a costeffective fashion no speculative transactions as such
are undertaken in that all foreign currency purchases are
related to current or projected transactions however the
nature of treasury management is such that the timing and
extent of currency hedging will of necessity always involve 
a degree of speculation as to the future movement of rates 
the group’s practice is to review its hedging programme
continually with a policy of increasing the use of hedging at 
a time of substantial currency movements
an explanation of the group’s objectives policies and
strategies for the role of derivatives and other financial
instruments in creating and changing the risks of the group
can be found in the corporate governance report details of
the group’s debt currency and interest rate structure can be
found in note 24 to the accounts 
currency translation and exposure
the results of the group’s overseas subsidiaries are translated
into sterling at the month end exchange rates for the relevant
year the balance sheets of these subsidiaries are translated
into sterling at the spot exchange rates at the end of each
year any gain or loss arising from such translations from one
year to the next is recorded in reserves the principal currencies
to which the group is exposed are the us dollar the danish
kroner the euro and the japanese yen 
pensions
the group operates a number of staff pension schemes all of
which are of a defined contribution nature the group has
never operated a defined benefits scheme
balance sheet
the group’s balance sheet continues to be strong
shareholders’ funds at 30 september 2003 were £424million
2002 £408million the increase mainly comprising the 2003
retained earnings of £10million and foreign exchange reserve
movements of £05million the return on capital employed
before goodwill profit before interest taxation and goodwill
divided by shareholders’ funds and net debt was 141
2002 175 and after goodwill was 134 2002 127 
dividend
the directors are recommending a final dividend of 68p
giving a total dividend for the year of 102p this 5 increase
on 2002 reflects the group’s confidence in effectively
managing its working capital and in its ability to generate cash
even during a downturn in the market the final dividend will
be paid on 30 january 2004 to those shareholders on the
register at the close of business on 12 december 2003
subject to shareholder approval at the annual general meeting
on 27 january 2004
dividend cover before and after goodwill for the year ending
30 september 2003 is 13 times 2002 17 and 12 times
2002 10 respectively
earnings per share
basic earnings per share before goodwill were 135p 2002
166p and after goodwill were 125p 2002 98p 
peter griffithjones
finance director
25 november 2003
financial review continued
the new training and
conference facilities
following the £15 million
recent refurbishment of its
headquarters at newbury abacus group plc 11
the board of directors secretary and advisers
secretary p  l griffithjones ma aca
registered office abacus house bone lane 
newbury berkshire rg14 5sf
stockbrokers hoare govett limited 
250 broadgate london ec2m 4aa
auditors deloitte  touche llp
chartered accountants  registered auditors
abbots house abbey street
reading berkshire rg1 3bd
solicitors cms cameron mckenna
mitre house 160 aldersgate street
london ec1a 4dd
hammonds
rutland house 148 edmund street
birmingham b3 2jr 
financial advisers hoare govett limited
250 bishopsgate
london ec2m 4aa
principal bankers hsbc bank plc
83 pall mall street
london sw1y 5es
registrars and transfer office computershare services plc
po box 82 the pavilions
bridgwater road 
bristol bs99 7nh
web site wwwabacusgroupcouk
registered number 2278260
a h westropp nonexecutive chairman
aged 58 has been chairman of the company since 1994 he
is executive chairman of norbain plc and a nonexecutive
director of the throgmorton trust plc he is also a director of
a number of other companies
b r murdoch ma deputy chairman
aged 57 has worked in electronics distribution since 1970 he
joined abacus in 1987 as managing director and led the
management buyout in february 1989 he was chief
executive until november 2000 at which time he became
deputy chairman
g kibblewhite nonexecutive director
aged 63 joined the board of abacus in 1991 and has worked
within the electronic components industry for over 30 years he
is chairman of afdec in the uk and the international
distribution of electronics association in milan also he is a
partner in europartners consultants specialised consultants to
the electronics industry
mrs m ricejones nonexecutive director
aged 42 joined the board of abacus in january 2003 she has
considerable experience as a senior executive in major
companies in the electronics industry she is a vicepresident of
motorola gtss and is regional manager for europe middle
east and africa
m r kent chief executive
aged 52 has been chief executive of the group since
november 2000 he has been in the industry since 1969 he
joined abacus in 1975 was the marketing director for the
group from december 1987 and was a member of the buyout
team
p l griffithjones ma aca finance director and secretary
aged 49 qualified as a chartered accountant with arthur
andersen he spent three years working in the semiconductor
test industry before moving to digital research a software
company for four years he joined abacus as finance director
in 1987 and was a member of the buyout team
g mcbeth managing director ecd uk
aged 41 developed his career within national semiconductor
for 11 years before moving to abacus in 1995 he was
appointed to the board in 1997 he is now responsible for
sales and marketing of abacus polar and micromark in the uk
and ireland
s e wotherspoon commercial director
aged 56 joined polar electronics in 1983 and was appointed
to its board in 1984 he was part of the team which launched
polar plc on the usm in 1989 he is now commercial director
involved in front line sales and responsible for developing
abacus polar gold a division focused on sales to bluechip
customers
the board of directors
the board comprises three nonexecutive directors and five executive directors the directors present their annual report on the affairs of the group the accounts and auditors’ report for the year ended
30 september 2003
principal activity 
the abacus group distributes electronic components
business review and future developments
the chairman’s statement chief executive’s review and the financial review comment on the results for the year and future
developments
results and dividends
the results for the year ended 30 september 2003 are shown in the consolidated profit and loss account on page 29
the directors recommend a final ordinary dividend of 68 pence per share which with the interim dividend of 34 pence makes a
total for the year of 102 pence 2002  97 pence if approved the company will pay the final ordinary dividend on 30 january
2004 to shareholders on the register at the close of business on 12 december 2003
directors
the names of the directors who served at 30 september 2003 and during the year except m ricejones who was appointed on
21 january 2003 are shown on page 11 their interests in the share capital of the company at 30 september 2003 are given in
the directors’ remuneration report 
ah westropp and g kibblewhite retire by rotation at the annual general meeting and being eligible offer themselves for re
election m ricejones who was appointed by the board as a director in january 2003 offers herself for reappointment at the
annual general meeting all three directors’ service contracts can be terminated by either party giving not less than six months
notice in writing
events since the balance sheet date
on 3 october 2003 abacus electronics holdings limited aehl a wholly owned subsidiary of abacus group plc exercised its
option to acquire 51 of the share capital of ecc distribution limited bringing its total holding in the company to 60 under the
terms of the purchase agreement both aehl and the shareholders of ecc distribution limited have callput options on the
remaining 40 of shares in four further tranches between january 2006 and january 2009
ecc distribution limited owns 100 of the share capital of ecc elettronica spa an italian electronics components distributor 
substantial shareholdings
the company has been advised of the following interests in 3 per cent or more of the ordinary shares in issue at 25 november
2003 
no of 
shares
insight investment management 3506477 832
topfib ltd 3230500 766
morley fund management 3057962 725
m  g investment management 2435895 578
aegon asset management 2289360 543
threadneedle asset management 1832000 434
scottish widows investment partnership 1705875 405
supplier payment policy
group policy is to set terms of payment when agreeing each transaction with suppliers clearly explain payment procedures
consistently settle bills within contract terms and only extend terms with prior agreement the group operates systems for
promptly advising suppliers of and resolving queried and contested items
trade creditors of the group at 30 september 2003 were equivalent to 37 days purchases 2002 36 days the company has no
trade creditors
charitable donations
the group contributed £1957 2002 £1395 to charities during the year
fixed assets
in the opinion of the directors the current open market value of the group’s interests in freehold land and buildings is equal to its
fair value
12 abacus group plc
directors’ report auditors
on 1 august 2003 deloitte  touche transferred their business to deloitte  touche llp  a limited liability partnership incorporated
under the limited liability partnerships act 2000 the company gave its consent to treating the appointment of deloitte  touche
as extending to deloitte  touche llp with effect from 1 august 2003 and accordingly the financial statements have been signed
in the name of deloitte  touche llp  a resolution for the reappointment of deloitte  touche llp will be proposed at the
forthcoming annual general meeting deloitte  touche were first appointed as the group’s auditors in july 2002
annual general meeting
the notice of the annual general meeting on 27 january 2004 follows the report and accounts and a proxy voting form is
enclosed 
ordinary resolutions 1 to 7 constitute the ordinary business of the meeting to approve the accounts appoint directors and
auditors and a new item of business approve the directors’ remuneration report 
resolutions 8 to 13 constitute special business
ordinary resolution 8 authorises the directors to issue ordinary shares up to a nominal value of £702817 one third of the
issued share capital at 30 september 2003
ordinary resolution 9 authorises the directors to adopt the abacus group plc sharesave scheme 2004 the current abacus
group plc sharesave scheme established in 1993 has expired therefore resolution 9 proposes the establishment of a new
scheme a summary of the scheme is contained in the enclosed circular
special resolution 10 allows the directors to issue ordinary shares for cash without applying the preemptive rights in section 89
of the companies act 1985 it empowers the directors to make rights issues and issue shares up to a total nominal value of
£105422 5 of the issued share capital at 30 september 2003 the authority expires within 15 months or at the end of the
annual general meeting in the year 2005 if earlier
special resolution 11 sets out the framework in which the company may purchase its own shares it limits a purchase to a
maximum of 15 percent of the issued share capital and sets the upper and lower prices to be paid the directors intend to
exercise this power only if in the light of market conditions prevailing at the time they believe that a purchase will increase
earnings per share and be in the best interest of shareholders generally in reaching their decision they will consider other
investment opportunities appropriate gearing levels and the overall position of the group abacus group plc shall cancel shares
purchased in this way and reduce the number of shares in issue
special resolution 12 proposes that the articles of association be amended to conform with a71 and a72 provisions of the
july 2003 combined code so that
i each nonexecutive director who has served nine years or less on the board and each executive director shall retire from
office at every third annual general meeting and
ii each nonexecutive director who has served more than nine years on the board shall retire from office at every annual general
meeting
rather than the current requirement that one third of the directors should retire each year 
special resolution 13 proposes that the articles of association be amended so that the normal retirement age of a director shall
be reduced from seventy to sixty five years on reaching sixty five years the director shall be reelected annually thereafter
shareholders may inspect copies of the directors’ service contracts and the register of directors’ interests at any time from the
date of the notice of annual general meeting until the end of the annual general meeting these documents are held at the
registered office which is open during normal business hours 
by order of the board
abacus house bone lane newbury pl griffithjones ma aca
berkshire rg14 5sf registered office secretary
25 november 2003
abacus group plc 13 abacus group plc has for several years been committed to maintaining high standards of corporate governance and remains so
committed these statements describe how the company applies and complies with the principles of the combined code
annexed to the listing rules of the financial services authority and for which the board is accountable to its shareholders 
following the higgs and smith reports into the roles of nonexecutive directors and audit committees the code was superceded
and replaced in july 2003 the revised code will apply to the group from 1 october 2004 
statement of compliance with code of best practice
following the appointment of an additional independent nonexecutive director onto the board on 21 january 2003 and onto the
nomination remuneration and audit committees on 29 may 2003 the company has been in compliance with the code
provisions set out in section 1 of the combined code on corporate governance issued by the financial services authority prior to
this it did not comply with
a paragraph a31 which recommends that more than one third of the directors on the board should be nonexecutive directors
and
b paragraph d31 which recommends that the audit committee should be constituted with at least three nonexecutive
directors 
it should be noted that the company would have complied with the july 2003 combined code which recommends that for
companies outside the ftse 350 only two nonexecutive directors are required to sit on the board and the audit committee
the board of directors
throughout the year the board included a nonexecutive chairman harry westropp a chief executive martin kent a senior
independent director sid gary kibblewhite to whom concerns may be conveyed and four other executive directors on 21
january 2003 margaret ricejones was appointed as a third nonexecutive director all three nonexecutive directors were
considered by the board to be independent of management although mr westropp and mr kibblewhte have been board
members for more than nine years they are considered to be independent as they have never had business or personal
relationships with the company are not significant shareholders do not hold crossdirectorships receive only fixed directors’ fees
have never been employees of the company and are considered to be of sufficient calibre and experience that they can exercise
judgement free from undue influence of management 
the company believes it has a balance of executive and nonexecutive directors appropriate for a business of its size 
each individual executive director’s performance is formally appraised at an annual review by the chief executive whose
performance in turn is appraised by the nonexecutive chairman the chairman’s performance is appraised by the nonexecutive
directors who in turn are appraised by the chairman chief executive and finance director 
the company secretary is responsible to the board for ensuring that the board in conducting its business follows its procedures
and best practice whilst complying with applicable rules and regulations all directors have access to the advice and services of
the company secretary
conduct of board meetings
the board meets each month to consider matters specifically reserved to it for decision during the year the board had eleven
such monthly meetings when required the board convenes between the regular meetings
within seven days of each meeting all members receive up to date reports on key areas of the business and information to support
decisions where information is insufficient to enable the board to discharge its duties board members may make further
enquiries
a part of each meeting is devoted to strategy and planning and in dealing with issues of strategy performance resource
allocation key appointments and standards of conduct board members use their independent judgement in carrying out their
duties board members may also take independent professional advice at the company’s expense
retirement by rotation
the articles of association of abacus group plc require that the directors must submit themselves for reelection by shareholders
at the next annual general meeting after appointment
currently the articles provide that one third of the directors retire annually by rotation and are eligible to submit themselves for re
election at the annual general meeting the directors who have served the longest since their last election retire in this way
however a special resolution is to be proposed at the 27 january 2004 agm replacing this requirement in the articles of
association with one whereby
a nonexecutive directors who have served nine years or less on the board and all executive directors are required to retire
every three years and 
b nonexecutive directors who have served more than nine years on the board are required to retire annually
the names of directors retiring at the next annual general meeting are given on page 51 and biographical details of the directors
on page 11
14 abacus group plc
corporate governance statements
for the year ended 30 september 2003 the board has established three committees namely the nominations committee the remuneration committee and the audit
committee whose terms of reference are available from the company secretary and will also be available at the annual general
meeting details of each of these committees are as follows 
nominations committee
abacus group plc has developed formal and transparent procedures for appointing new directors to the board these duties are
discharged through the nominations committee which harry westropp chairs its other members are gary kibblewhite martin
kent peter griffithjones and with effect from 29 may 2003 margaret ricejones if appropriate the committee instructs external
professional consultants to ensure a wide range of candidates is put forward before appointing suitable candidates the board
considers the recommendations of the committee the committee did not meet during the year as there were no nominations or
changes to the board margaret ricejones was nominated as a nonexecutive director prior to the commencement of the
financial year
newly appointed directors undertake appropriate training to enable them to discharge the responsibilities of their office
remuneration committee
to avoid potential conflicts of interest the board has delegated responsibility for defining remuneration policy for executive
directors and senior management to the remuneration committee gary kibblewhite is chairman with its other members being
harry westropp and with effect from 29 may 2003 margaret ricejones the committee met four times during the year all of
which were attended by those members eligible to do so
the board is responsible for establishing the fees and responsibilities of the nonexecutive directors and takes into account
relevant market information
the remuneration report on pages 20 to 23 describes the company’s remuneration policy and the procedures for developing it
and for determining remuneration
audit committee and accountability
harry westropp is chairman of the audit committee its other members are gary kibblewhite and with effect from 29 may 2003
margaret ricejones gary kibblewhite has extensive financial experience gained through his chairmanships of afdec and
europartners and has received formal financial training the committee has clear terms of reference in which the board gives it
authority to examine matters concerning the financial affairs of the group internal and external audit reports annual and interim
accounts internal control procedures accounting policies and other matters referred to it by the board including arrangements for
‘whistleblowing’ whilst the group endorses the general view that ‘whistleblowing’ procedures need to be implemented across all
sectors of the commercial and public world to date the group’s internal controls and personal grievance procedures have not
indicated any such need however in the changed world of corporate governance the group will shortly be formulating formal
procedures sufficient to cover this regulatory need
periodically the audit committee reviews the cost effectiveness of the audit the independence and objectivity of the auditors and
the level of nonaudit services the board’s practice when contracting for nonaudit services is to ensure that the level of fees and
importance of the work is considered alongside the audit work in such a way that nonaudit services are provided without
detriment to the auditors’ independence for the year ending 30 september 2003 the audit committee considered that the level
of nonaudit fees of £25000 compared to the audit fee of £80000 did not prejudice the independence of the auditors
the committee met four times during the year ending 30 september 2003 harry westropp and gary kibblewhite were present for
three and four of these meetings respectively and margaret ricejones at the two meetings following her appointment in addition
the external auditors and the group finance director later joined respectively two and four of these meetings to answer questions
on the annual and interim financial statements and specific areas of internal control minutes of the committee’s proceedings are
copied to the board and discussed by it where appropriate
maintenance of a sound system of internal control
the board has applied principle d2 of the combined code by establishing a continuous process for identifying evaluating and
managing the significant risks which the group faces the board regularly reviews the process which has been in place
throughout the year and up to the date of approval of this report and which is in accordance with internal control guidance for
directors on the combined code published in september 1999 the board is responsible for the group’s system of internal
control and for reviewing its effectiveness such a system is designed to manage rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss
in compliance with provision d21 of the combined code the board continuously reviews the effectiveness of the group’s system
of internal control the board’s monitoring covers all controls including financial operational and compliance controls and risk
management it is based principally on reviewing reports from management to consider whether significant risks are identified
evaluated managed and controlled and whether any significant weaknesses are promptly remedied and indicate a need for more
extensive monitoring the board has also updated a specific risk assessment performed for the purpose of last year’s annual
report this assessment identified and evaluated all significant risks and considered all significant aspects of internal control in
place to manage them
the audit committee assists the board in discharging its review responsibilities
abacus group plc 15 managing business risk
discussed below are the group’s five major business risks together with the systems and initiatives in place to address them
market
the year under review was challenging for the group in all its markets characterised by reduced volume demand from customers
continued price pressure on commodity products and by transfers of business by global customers to lower cost manufacturing
regions it is virtually impossible to avoid the consequences of lower volumes and prices but the group’s strategy of focusing on
regional rather than global customers has minimised the impact on the group this customer focus together with the width and
strength of its product offering and the commitment to keeping the levels of skilled staff required to provide a consistent level of
service have allowed the group to grow its uk market share by 11 to 14 and maintain its nordic share at 54
operational
this relates to the risk of financial loss or impairment to reputation resulting from inadequate or failed internal processes and
systems and from the actions of people or external events such as a catastrophic disaster the group’s business units manage
this risk through appropriate controls and loss mitigation actions examples include
a bespoke business system providing comprehensive management reporting
b taking sufficient insurance cover including for business interruption
c maintaining a detailed disaster recovery plan for all major sites and installing sprinkler systems in the main uk warehouse
d maintaining rigorous data backup procedures
e performing regular risk assessments at each of the group’s locations
f carrying out a regular review of the principal suppliers and customers of the group and how each impacts on the group’s
business
g regularly reviewing actual performance against budgets and forecasts
h establishing clearly defined procedures for the authorisation of major new investments and commitments
in addition specialist support functions provide expertise in ensuring the group adheres to local regulatory and legal requirements
credit
the group credit scores the creditworthiness of any new major customers before commencing trade with them based on this and
the customer’s capital base authorised limits of trade are set a proactive approach to the identification and control of bad and
doubtful debts is maintained and significant credit risks are highlighted to the board
liquidity
this relates to the risk that the group is unable to fund its requirements either because of insufficient banking facilities or because it
is constrained by the risk of breaching banking covenants the group funds its day to day operations and short term assets
through a mixture of retained profits shortterm bank overdraft facilities and creditors and its long term assets and acquisitions
through bank term loans the group’s policy on liquidity is to ensure that there are sufficient medium and longterm committed
borrowing facilities to meet funding requirements debt is principally raised centrally and then lent to operating subsidiaries on
commercial terms it is group policy not to trade in or enter into speculative transactions except for finance leases loan notes and
a danish kroner loan the group pays interest on all debt financing arrangements at an agreed margin over bank base rates the
majority of the cash comprises bank balances with hsbc bank plc and unibank as institutions which the group considers
creditworthy the group complied with all the relevant bank covenants during the year 
foreign currency risk
the group has significant transactional currency exposures such exposures arise from sales and purchases by operating units in
currencies other than the unit’s functional currency when appropriate the group seeks to cover net foreign exchange exposures
with forward contracts which are arranged centrally and by negotiating sales and purchases in the same currency where possible
the net assets of the group’s nonsterling operations represent only 10 of the group’s total assets the group does not
consider it significant enough to justify borrowing any foreign currency to mitigate any structural currency exposure that may arise
from the translation of the foreign currency assets the group finance director appraises the board of any significant movement in
the group’s foreign currency exposure 
internal audit
the board has formally reviewed the need for an internal audit function at the current time a formal internal audit function is not
considered necessary for a number of reasons the size of the group widespread executive involvement in the group’s day to day
business the depth of management reporting from all subsidiary managers to the board the level of variance analysis during the
review of the monthly management accounts by both senior management and the board directors robust internal controls and the
annual indepth review of the group’s subsidiary companies’ accounting functions by a senior group accountant 
16 abacus group plc
corporate governance statements continued
for the year ended 30 september 2003 dialogue with institutional shareholders
the directors seek to build on a mutual understanding of objectives between the company and its institutional shareholders the
chief executive deputy chairman and finance director are the main contacts in addition the sid has sought opinions from
certain institutional shareholders whilst all shareholders have the opportunity to meet with the executive and nonexecutive
directors after the annual general meeting to discuss any issues they may have and are available upon request at all other times
the company maintains regular dialogue with institutional investors and presents the interim and preliminary results to them
the board is regularly briefed on feedback from institutional visits
shareholder relations
the company encourages participation by and communication with its shareholders it welcomes and responds to all contacts by
shareholders on a wide range of issues and uses the annual general meeting to communicate with private investors the
chairmen of the audit remuneration and nomination committees attend the annual general meeting and are available along with
operational management to answer questions from shareholders at the meeting
the annual general meeting is conducted in accordance with the combined code this includes informing members present at
the meeting of proxy votes for and against resolutions once the resolution has been voted on by a show of hands
the group’s annual and interim results are circulated to shareholders and the financial press the group’s share price is listed in
the financial times the daily telegraph and the times investor relations information and news releases are made available on the
company’s website address wwwabacusgroupcouk
going concern
on the basis of current financial projections and the facilities available the directors have a reasonable expectation that the
company and the group have adequate resources to continue in operational existence for the foreseeable future for this reason
they continue to adopt the going concern basis in preparing the accounts
abacus group plc 17 general
whilst the board’s primary accountability is to its shareholders it also tries to maximise value for all its other “stakeholders”
including employees customers suppliers and the community at large as well as considering the impact of its actions on health
safety and the environment overall responsibility for each of these areas ultimately resides with the full board however specific
responsibility for employeerelated and environmental issues resides with the group finance director peter griffithjones and
external stakeholder issues with the deputy chairman brian murdoch the group’s social environmental and ethical risk
management procedures are currently being implemented and will be subject to a process of regular reviews
management at all levels in the organisation is committed to taking account of its corporate social responsibility in its actions
endeavours to show due respect for human rights and works to high standards of integrity and ethical propriety as a multinational
organisation abacus takes account of cultural differences between the various territories in which it operates
through its continuing commitment to corporate responsibility abacus group is a member of the ftse4 good series index
employee consultation
the group values the involvement of its employees it has continued to inform employees through meetings noticeboards and the
intranet of matters affecting them and of group performance the group consults employee representatives regularly on a wide
range of matters affecting their current and future interests all eligible employees may join the sharesave scheme at periodic
intervals
employee development
the group places great importance in the development and retention of staff it operates a formal appraisal scheme whereby the
employee and manager provide each other with performance feedback after commencement of employment and at annual
intervals thereafter at each of these meetings objectives against which performance is regularly measured are set for the coming
period and training needs identified 
over the last two years a formal and structured training programme has been established for uk employees promoting such
areas as communication skills appraisal training train the trainer and management development the group adopts practices to
encourage promotion from within including notifying employees via email of any vacancies and identifying individuals for certain
positions as part of its formal succession planning 
equal opportunities
group companies are committed to providing equal opportunities to all employees irrespective of sex gender orientation marital
status creed colour race religious belief ethnic origin or disability the group’s philosophy is that all discrimination on any of the
above grounds is abhorrent and it will condone no discrimination whatsoever whether negative positive or of any other nature
the commitment covers recruiting training career development performance appraisal and social interaction both in and outside
the workplace the group continues to monitor its application of this policy and its compliance with legislation and codes of best
practice
disabled employees
the group gives full consideration to applications for employment from disabled persons where the requirements of the job can be
adequately fulfilled by a handicapped or disabled person
where existing employees become disabled it is the group’s policy to provide continuing employment under normal terms and
conditions and to provide training career development and promotion to disabled employees wherever appropriate
ethical conduct
we expect our staff to act according to the highest standards of ethical behaviour covering such areas as fraud conflict of interest
internet abuse bribery and corruption this is reinforced through written policies the inclusion of an antiharassment clause in
contracts of employment and the application of disciplinary procedures the group does not make corporate political donations
and prohibits the use of bribery and facilitation payments 
health and safety
the maintenance and improvement of working standards to safeguard the health and well being of staff is a continuing priority
this is achieved through a documented health and safety policy endorsed by the chief executive annual risk assessments
carried out at the group’s main locations and training staff in areas such as ‘manual handling’ which all warehouse staff receive on
their induction and ‘hotwork handling’ all sites maintain accident books the data from which is collected centrally every quarter
and reviewed by the health and safety committee any actions identified are implemented wherever possible the group complies
with all local health and safety regulations 
in the interests of staff health smoking inside company premises is permitted only in designated areas
fire wardens and first aiders are appointed at each location and receive periodic training 
18 abacus group plc
corporate social responsibility suppliers and customers
the group believes that long term relationships founded on trust and mutual advantage are vital to abacus’ success to foster
these relationships the group promptly advises suppliers and customers of queries and contested items it always endeavors to
resolve any queries through dialogue and adopts a commercial stance in their resolution contract terms are clearly explained and
payment terms are only extended with prior agreement the group has iso approval which covers procedures such as dealing
with customer queries supplier assessments customer contract review sales order entry and logistics
the environment
it is group policy to operate in a responsible manner with regard to the environment the group wherever possible uses recycled
and recyclable packaging materials and it recycles waste paper 
examples of current initiatives include
a reusing approximately 20 of outer packaging from incoming warehouse deliveries for outbound shipments
b segregating compacting and baling waste cardboard and paper packaging before dispatching to recycling mills
c encouraging customers to return empty specialist antistatic packaging for reuse
d using durable returnable pallet box containers for intercompany shipments
e dispatching empty printer and photocopier cartridges and waste office paper for recycling
f disposing of electronics components and waste cable via registered scrap merchants which recycle the product where
possible
g encouraging suppliers to send data electronically rather than using paper 
the group operates a continual review of its energy and resource utilisation with a view to minimising the impact of the group’s
activities on the environment a recent example is the refurbishment of the newbury office in which the most energy efficient
lighting boilers and air conditioning units were installed in addition the lighting is now activated by motion sensors thereby
reducing energy consumption 
assisted by the change in emphasis in state legislation in the uk to an emissions based tax on company cars the group has
been actively encouraging employees to downsize cars the board also encourages the use of push bikes as commuter transport 
the group actively encourages company car drivers to comply with the laws on the use of mobile telephones whilst driving by
paying for the cost and installation of hands free kits informing staff by email of the latest legislation and penalties for contravening
it and including guidance on the use of telephones in the group’s car policy document 
although the group uses minimal environmentally damaging or hazardous material it ensures that all personnel receive appropriate
training in its handling and all material is properly disposed of
abacus group plc 19 introduction
this report has been prepared so as to comply with requirements introduced by the “directors’ remuneration report regulations
2002” the report covers all directors both executive and nonexecutive 
the regulations require the auditors to report to the company’s members on the ‘auditable part’ of the directors’ remuneration
report and to state whether in their opinion that part of the report has been properly prepared in accordance with the companies
act 1985 the report has therefore been divided into two separate sections audited and nonaudited information
as required by the regulations a resolution to approve the report will be proposed at the annual general meeting of the
company at which the financial statements will be approved
unaudited information
composition of the remuneration committee
the members of the remuneration committee comprise the three nonexecutive directors whose names are given on page 15
and none of whom had any personal financial interest in decisions other than as shareholders and no crossdirectorships or
participation in any incentive schemes
during the year the committee consulted the chief executive and company secretary on its proposals
terms of reference
the board agrees the terms of reference of the remuneration committee its principal functions are to determine on behalf of the
board and shareholders
n remuneration and incentives for the executive directors senior managers and other key staff of the group
n targets for performance related bonuses for the executive directors the committee also monitors performance against these
targets
n contractual terms of service agreements including termination pension arrangements and other benefits
the composition of the remuneration committee and its operation comply with the combined code the members are the non
executive directors harry westropp gary kibblewhite and margaret ricejones following her appointment on 29 may 2003 
remuneration policy
in framing policy the committee seeks and will continue to seek to balance the cost of packages which attract retain and
motivate directors of the highest quality whilst avoiding paying more than is necessary
the package of each executive director reflects the principles of the combined code in setting remuneration and takes into
account group objectives and personal achievement
the committee seeks to balance the amount of remuneration paid to an individual director within the overall package these
packages are aimed to provide a competitive reward having regard to the remuneration paid by comparable public companies and
relative performance in evaluating the remuneration packages offered by comparable companies the committee sought advice
from an independent source new bridge street consultants which also acted as consultants on the 2003 share option scheme
and 2004 sharesave scheme in determining pay increases the committee is sensitive to pay and employment conditions of all
staff in the group staff pay is determined by market conditions and by both the group’s and the individual’s performance
performancerelated elements of the remuneration packages are established as a significant proportion of total pay these
elements are designed both to motivate executive directors to perform at the highest levels and to align their interests with those of
shareholders
there are no provisions in any of the directors’ service contracts for compensation on early termination compensation payments
for early termination would be tailored within legal constraints to avoid rewarding poor performance to deal equitably with the
director and to reflect the departing director’s obligations to mitigate loss
whilst the company has stated its current and future remuneration policy of offering competitive and cost effective packages
which incorporate a significant performance related element it is conscious that any remuneration policy needs to be flexible any
changes to this policy will be stated in subsequent annual reports 
20 abacus group plc
directors’ remuneration report
for the year ended 30 september 2003 abacus group plc 21
components of the policy for executive directors’ remuneration
n basic salary an executive director’s basic salary review is carried out by the committee prior to the beginning of the year and
when an individual changes position or responsibility in deciding appropriate levels the committee takes into account the
individual’s responsibilities and performance and if considered necessary will take external advice in march 2002 the board
undertook an extensive benchmarking exercise with the assistance of the monks partnership in addition to basic salary the
executive directors receive certain benefitsinkind including a car or car allowance business and private fuel permanent
health insurance life assurance and private medical insurance 
n annual bonuses in which the chief executive officer the finance director and managing director ecd uk participate are
based on minimum targets set by the committee being exceeded these bonuses are capped at 100 of basic salary level
and are based on actual profit before tax exceeding the company broker’s forecast set before commencement of the
performance year bonuses as a percentage of salary are earned as follows
actual exceeds forecast by formula bonus
 5 0 0
5 – 9 2 per complete 1 10 – 18
10 – 25 4 per complete 1 40 – 100
25  capped 100
50 of any bonus is payable in cash the remaining 50 of the bonus is deferred for three years all or some of the deferred
bonus may be invested in the company’s shares or taken as a cash amount the deferred elements will be delivered three
years after the end of the performance year subject to continued employment during those three years 
an additional maximum of 20 of basic salary can be earned for achieving predetermined personal objectives set at the outset
of the financial year 
no bonuses were paid during the year
n share options the committee seeks to encourage share ownership by executive directors and senior staff through share
option arrangements the committee may consider granting share options to individual executive directors as part of an overall
remuneration and incentive package in establishing share option schemes the committee determines the scope of
participation of the executive directors and appropriate performance targets it is an expectation that directors participating in
the share option scheme 2003 will build up personal shareholdings in the company amounting to a value between two and
three times their salary within five years of their first participation in the scheme 
at the annual general meeting in january 2003 the group adopted the executive share option scheme 2003 the scheme
allows for the grant of two types of share options those approved by the uk inland revenue approved and those not
unapproved the targets for the scheme were set after receiving independent external advice from new bridge street
consultants in consultation with the group’s major shareholders
following adoption of the 2003 scheme options may no longer be granted under the 1993 executive share option scheme
approved and the 1996 unapproved share option scheme  22 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2003
details of each of the schemes are as follows
n pensions the executive directors participate in personal pension schemes or the group’s pension plans all pension
schemes are defined contribution details of the company’s pension contributions which are based on a  of each executive
director’s basic salary are summarised below
age company contribution as a
 of basic salary
under 45 15 graham mcbeth
45 to 50 20 peter griffithjones
above 50 25 martin kent
brian murdoch
stuart wotherspoon
should an executive director’s age cross one of the above thresholds then the 5 increase in contribution is effective from the
month following his birthday
executive share option scheme 2003 approved unapproved
approved unapproved
1993 1996
vesting period from date of grant 3 years 3 years 3 or 5 years 3 or 5 years
lapse period from date of grant 10 years 10 years 10 years 7 years
maximum award lower of 
absolute limit £30000 none £30000 none
limit as a  of salary
eps growth required in excess of
rpi between date of grant and
vesting
retesting
period in which option can be
exercised following eps criteria
being met
dilution limits
the cumulative number of
unlapsed options which can be
granted over a period as
constrained by set  limits of
issued share capital
cash alternative
the total of option grants issued in any one
year under the esop 2003 is not to
exceed 200 of salary 
the total of options held under grant at any
one time across both schemes is not to
exceed 400 of salary 
options vest on a straightline basis
between real eps growth of 4 50 of
award vests and 6 per annum full
vesting
100 of award
vests on real eps
growth exceeding
1 per annum
100 of award
vests on real eps
growth exceeding
3 per annum
if targets not met in 3 years retested on
fourth and fifth anniversies of grant
retested from date of grant to any
anniversary falling between vesting date
and lapse date 
to the extent that the performance
condition has been satisfied that part of
the option that can be exercised may be
exercised irrespective of future eps
performance until lapse of option
options can be exercised only in the period
in which eps growth is met
10 of ordinary share capital over 10
years for all employee share option
schemes including sharesave scheme
no longer applicable no longer applicable
no discretion of
remuneration
committee
no discretion of
remuneration
committee abacus group plc 23
n contracts of service the required notice for terminating an executive director’s service contract is twelve months the
committee considers this period of notice to be appropriate
details of the executive directors’ contracts are summarised below
contract date notice period
martin kent 19 february 1998 one year
peter griffithjones 19 february 1998 one year
graham mcbeth 1 june 1997 one year
brian murdoch 19 february 1998 one year
stuart wotherspoon 19 february 1998 one year
nonexecutive directors’ remuneration and contracts
the board has delegated the responsibility for determining the remuneration and services of the nonexecutive directors to a sub
committee whose members are the chief executive and the finance director the contracts of the nonexecutive directors run for
a term of 3 years subject to 6 months’ notice period and have no automatic renewal provisions
details of the nonexecutive directors’ contracts are summarised below
contract expiry date notice period
commencement date
harry westropp 1 january 2001 1 january 2004 6 months
gary kibblewhite 1 january 2001 1 january 2004 6 months
margaret ricejones 22 february 2003 22 february 2006 6 months
the nonexecutive directors’ remuneration packages are
a set to attract motivate and retain the appropriate level of nonexecutive talent
b proportional to their contribution towards the interest of the business
c consistent with recognised best standards
d in the form of cash fees payable monthly 
e never received in the form of share options in order to maintain independence 
details of the remuneration options and interests of the directors are given later in this report performance graph
the regulations require this remuneration report to contain a graph showing the performance of the company and a ‘broad
equity index’ over the past five years the comparative index chosen is the ftse small cap index excluding investment trusts as
the company is a constituent of the ftse small cap index but is not an investment trust the regulations require that
performance is measured by total shareholder return share price growth with dividends deemed to be reinvested gross on the ex
dividend date 
this graph shows the value over the 5 year period ending on 30 september 2003 of £100 invested in abacus group on
30 september 1998 compared with the value of £100 invested in the ftse small cap index excluding investment trusts
24 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2003
value £ audited information
the total amounts for directors’ remuneration were as follows
2003 2002
£’000 £’000
emoluments 868 769
money purchase pension contributions 168 175
gains on exercising share options 92 66
1128 1010
emoluments
details of individual emoluments in respect of qualifying services of each person who served during the year were as follows 
salary taxable bonus total total
or fees benefits 2003 2002
£’000 £’000 £’000 £’000 £’000
executive
br murdoch 94 16 – 110 110
pl griffithjones 172 11 – 183 147
mr kent 205 26 – 231 207
g mcbeth 129 17 – 146 130
se wotherspoon 82 15 97 100
nonexecutive
ah westropp chairman 55 – – 55 50
g kibblewhite 27 – – 27 25
m ricejones 19 – – 19 –
total 783 85 – 868
2002 totals 697 72 – 769
 g kibblewhite’s fees and services were billed by europartners for the full year 
pension contributions
all the executive directors are members of defined contribution pension schemes contributions payable by the company are
given below
2003 2002
£’000 £’000
br murdoch 28 19
pl griffithjones 39 79
mr kent 51 36
g mcbeth 29 29
se wotherspoon 21 12
168 175
abacus group plc 25 share options
aggregate emoluments on the previous page do not include the value of options to acquire ordinary shares granted to or held by
the directors these are given in the table below
30 sept
1 oct 2002 granted exercised 2003 exercise earliest date last date 
number number number number price for exercise for exercise
mr kent 100000 – – 100000 3920p 21122003 21122007
mr kent – 92550 – 92550 2215p 20032006 20032013
mr kent – 135000 – 135000 2285p 19112005 19112012
p l griffithjones 17952 – – 17952 940p 22122003 22062004
p l griffithjones 100000 – – 100000 3920p 21122003 21122007
p l griffithjones – 79000 – 79000 2215p 20032006 20032013
p l griffithjones – 134750 – 134750 2285p 19112005 19112012
g mcbeth 20000 – – 20000 2000p 22062000 22062005
g mcbeth 75000 – 75000 – 975p 4012002 4012006
g mcbeth 75000 – – 75000 975p 4012004 4012006
g mcbeth 14361 – – 14361 940p 22122003 22062004
g mcbeth 20000 – – 20000 392p 21122003 21122007
g mcbeth 1054 – – 1054 320p 2012200 20062006
g mcbeth – 61850 – 61850 2215p 20032006 20032013
br murdoch 17952 – – 17952 940p 22122003 22062004
s e wotherspoon 20000 – – 20000 392p 21122003 21122007
461319 503150 75000 889469
 these options are held by the directors under the sharesave scheme
no options lapsed during the year
details of the share option schemes in which the directors participate are given earlier in the directors’ remuneration report
the market price at 30 september 2003 was 226p and the range during the year was 180p to 268p
g mcbeth exercised his options when the market price was at 220p on 30 july 2003 giving rise to a gain of £92000 
directors’ interests in shares
2003 2003 2002 2002
beneficial nonbeneficial beneficial nonbeneficial
ahwestropp 17300 – 17300 –
br murdoch 1505111 – 1705111 –
pl griffithjones  1119300 273758 1123800 284758
mr kent 53462 – 53462 –
g kibblewhite 9071 – 9071 –
g mcbeth 17500 – 17500 –
se wotherspoon 20000 – 43167 –
 in addition this director is the beneficial owner of 527616 2002 – 527616 5p ordinary shares held by a pension scheme 
there have been no changes to the interests of the directors between 30 september 2003 and the date of these accounts
directors’ interests in contracts
during the year none of the directors had a material interest in any contract which was of significance in relation to the business of
the group
approval
this directors’ remuneration report has been approved by the board and signed on its behalf by
abacus house bone lane newbury pl griffithjones ma aca
berkshire rg14 5sf registered office secretary
25 november 2003
26 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2003 united kingdom company law requires the directors to prepare accounts for each financial year which give a true and fair view of
the state of affairs of the company and the group and of the profit or loss of the group for that period
in preparing the accounts the directors are required to select suitable accounting policies and apply them consistently make
judgements and estimates that are reasonable and prudent and state whether applicable accounting standards have been
followed 
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and the group and which enable them to ensure that the accounts comply with the companies
act 1985
the directors are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable
steps for preventing and detecting fraud and other irregularities 
abacus group plc 27
statement of directors’ responsibilities we have audited the financial statements of abacus group plc for the year ended 30 september 2003 which comprise the
consolidated profit and loss account the balance sheets the consolidated cash flow statement the consolidated statement
of total recognised gains and losses and the related notes numbered 1 to 28 together with the statement of accounting
policies these financial statements have been prepared under the accounting policies set out therein we have also audited the
information in the part of the directors’ remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body for our audit work for this report or for
the opinions we have formed
respective responsibilities of directors and auditors
as described in the statement of directors’ responsibilities the company’s directors are responsible for the preparation of the
financial statements in accordance with applicable united kingdom law and accounting standards they are also responsible for
the preparation of the other information contained in the annual report including the directors’ remuneration report our
responsibility is to audit the financial statements and the part of the directors’ remuneration report described as having been
audited in accordance with relevant united kingdom legal and regulatory requirements auditing standards and the listing rules of
the financial services authority
we report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the directors’ remuneration report described as having been audited have been properly prepared in accordance
with the companies act 1985 we also report to you if in our opinion the directors’ report is not consistent with the accounts if
the company has not kept proper accounting records if we have not received all the information and explanations we require for
our audit or if information specified by law or the listing rules regarding directors’ remuneration and transactions with the
company and other members of the group are not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the seven provisions of the
combined code specified for our review by the listing rules and we report if it does not we are not required to consider whether
the board’s statements on internal control cover all risks and controls or form an opinion on the effectiveness of the group’s
corporate governance procedures or its risk and control procedures
we read the directors’ report and other information contained in the annual report for the above year including the part of the
directors’ remuneration report and consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements
basis of opinion
we conducted our audit in accordance with united kingdom auditing standards issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements and the part
of the directors’ remuneration report described as having been audited it also includes an assessment of the significant
estimates and judgments made by the directors in the preparation of the financial statements and of whether the accounting
policies are appropriate to the circumstances of the company and the group consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the directors’ remuneration
report described as having been audited are free from material misstatement whether caused by fraud or other irregularity or
error in forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
and the part of the directors’ remuneration report described as having been audited
opinion
in our opinion the financial statements give a true and fair view of the state of affairs of the company and the group as at 30
september 2003 and of the group’s profit for the year then ended and the financial statements and part of the directors’
remuneration report described as having been audited have been properly prepared in accordance with the companies act
1985
deloitte  touche llp
chartered accountants and registered auditors
reading
25 november 2003
28 abacus group plc
independent auditors’ report
to the members of abacus group plc 2003 2002
notes £’000 £’000 £’000 £’000
before goodwill after
goodwill note 9 goodwill total
turnover 1 146980 – 146980 154963
cost of sales 112854 – 112854 116681
gross profit 34126 – 34126 38282
other operating expenses 25530 405 25935 30770
operating profit 8596 405 8191 7512
finance charges net 2 571 – 571 878
profit on ordinary activities before taxation 3 8025 405 7620 6634
tax on profit on ordinary activities 5 2359 – 2359 2522
profit on ordinary activities after taxation 5666 405 5261 4112
dividends paid and proposed on equity shares 6 4296 – 4296 4072
retained profit for the year 18 1370 405 965 40
earnings per share 8
basic before goodwill 135p 166p
basic after goodwill 125p 98p
diluted before goodwill 134p 162p
diluted after goodwill 124p 96p
all the activities of the group comprise continuing activities
consolidated statement of total recognised gains and losses
for the year ended 30 september 2003
2003 2002
£’000 £’000
profit for the financial year 5261 4112
profit on foreign currency translation 493 64
5754 4176
the accompanying notes are an integral part of the consolidated profit and loss account and consolidated statement of total
recognised gains and losses
abacus group plc 29
consolidated profit and loss account
for the year ended 30 september 2003 notes 2003 2002
£’000 £’000
fixed assets
intangible assets 9 9105 11939
tangible assets 10 15826 12246
investments 11 159 1000
25090 25185
current assets
stocks 12 31754 34645
debtors 13 28788 27994
cash at bank and in hand 1228 83
61770 62722
creditors amounts falling due within one year 14 34103 36937
net current assets 27667 25785
total assets less current liabilities 52757 50970
creditors amounts falling due after more than one year 15 8258 6281
44499 44689
provisions for liabilities and charges 16 2050 3865
net assets 42449 40824
capital and reserves
calledup share capital 17 2108 2100
share premium account 18 8783 8608
merger reserve 18 3323 3323
capital redemption reserve 18 428 428
profit and loss account 18 27807 26349
equity shareholders’ funds 19 42449 40808
minority interests 20 – 16
total capital employed 42449 40824
the accompanying notes are an integral part of the consolidated balance sheet
30 abacus group plc
consolidated balance sheet
30 september 2003 notes 2003 2002
£’000 £’000
fixed assets
investments 11 3604 3604
current assets
debtors amount falling due within one year 13 3 4262
debtors amount falling due after one year 13 10806 7154
cash at bank and in hand 2983 2758
13792 14174
creditors amounts falling due within one year 14 3452 6108
net current assets 10340 8066
total assets less current liabilities 13944 11670
creditors amounts falling due after more than one year 15 2399 –
net assets 11545 11670
capital and reserves
calledup share capital 17 2108 2100
share premium account 18 8783 8608
capital redemption reserve 18 428 428
profit and loss account 18 226 534
equity shareholders’ funds 11545 11670
the accompanying notes are an integral part of the balance sheet
the accounts on pages 29 to 49 inclusive were approved by the board of directors on 25 november 2003 and signed on their
behalf by
m r kent
p l griffithjones directors
abacus group plc 31
company balance sheet
30 september 2003 notes 2003 2002
£’000 £’000
net cash inflow from operating activities 21 10670 16890
returns on investments and servicing of finance 22 571 878
taxation 22 2893 4248
capital expenditure and financial investment 22 3683 833
3523 10931
acquisitions 22 441 –
equity dividends paid 4160 3802
net cash outflow inflow before financing 196 7129
financing 22 1803 10305
increase decrease in cash in the year 23 1607 3176
the accompanying notes are an integral part of the consolidated cash flow statement
32 abacus group plc
consolidated cash flow statement
for the year ended 30 september 2003 the principal accounting policies are summarised below they have all been applied consistently throughout the year and the
preceding year
basis of accounting
the accounts are prepared under the historical cost convention and in accordance with applicable uk accounting standards
basis of consolidation
the group accounts consolidate the accounts of abacus group plc and its subsidiary undertakings drawn up to 30 september
each year the results of subsidiaries acquired or sold are consolidated for the periods from or to the date at which control
passed acquisitions are accounted for under the acquisition method
intangible assets – goodwill
goodwill arises on the acquisition of subsidiary undertakings and businesses if the fair value of the consideration given exceeds
the fair value of the identifiable assets and liabilities acquired the difference goodwill is capitalised goodwill is written off on a
straightline basis over its useful economic life which is twenty years provision is made for any impairment
negative goodwill is similarly included in the balance sheet and is credited to the profit and loss account in the periods in which
the acquired nonmonetary assets are recovered through depreciation or sale negative goodwill in excess of the fair values of the
nonmonetary assets acquired is credited to the profit and loss account in the periods expected to benefit
goodwill arising on acquisitions in the year to 30 september 1997 and in earlier years was written off to reserves in accordance
with the accounting standard then in force as permitted by the current accounting standard the goodwill previously written off to
reserves has not been reinstated in the balance sheet
on disposal or closure of a previously acquired business the attributable amount of goodwill previously written off to reserves is
included in determining the profit or loss on disposal
investments
subsidiary undertakings and other fixed asset investments are stated at cost which includes the costs of acquisition less
provision for impairment current asset investments are stated at the lower of cost or net realisable value
where appropriate and in accordance with sections 131 and 133 of the companies act 1985 the company records the cost of
investment as the nominal value of shares issued plus the costs of acquisition the resulting difference arising on consolidation is
taken to merger reserve
tangible fixed assets
tangible fixed assets are shown at cost net of depreciation and provision for impairment depreciation is provided on all tangible
fixed assets other than freehold land at rates calculated to write off the cost less estimated residual value of each asset over its
expected useful life as follows
straightline basis expected useful life
freehold buildings 50 years
leasehold improvements over the lease term
fixtures fittings and equipment 3 or 8 years
computer equipment 3 years
plant and tooling 10 years
reducing balance basis
motor vehicles at 25 per annum
residual value is calculated on prices prevailing at the date of acquisition
stocks 
stocks are stated at the lower of cost and net realisable value cost includes materials direct labour and an attributable proportion
of manufacturing overheads based on normal levels of activity on a weighted average basis net realisable value is based on
estimated selling price less further costs expected to be incurred to completion and disposal
provision is made for obsolete slowmoving and defective items where appropriate
debt
debt is initially stated at the amount of net proceeds after deduction of issue costs if material the carrying amount is increased by
the finance cost in respect of the accounting period and reduced by payments made in the period
taxation
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax
rates and laws that have been enacted or substantially enacted by the balance sheet date
deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax or a
right to pay less tax at a future date at rates expected to apply when they crystallise based on current tax rates and law timing
abacus group plc 33
statement of accounting policies
30 september 2003 differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in
which they are included in financial statements deferred tax is not provided on timing differences arising from the revaluation of
fixed assets where there is no commitment to sell the asset or on unremitted earnings of subsidiaries and associates where there
is no commitment to remit these earnings 
deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered deferred tax
assets and liabilities are not discounted
pension costs
the group offers pensions to all eligible employees including directors through defined contribution pension schemes the assets
of the schemes are held independently of the group
the amount charged to the profit and loss account for all defined contribution schemes is the total of the contributions payable in
the year
differences between contributions payable in the year and contributions actually paid are shown in the balance sheet as either
accruals or prepayments
foreign currency
trading activities denominated in foreign currencies are recorded in local currencies at the exchange rates effective on the dates of
the transactions or where appropriate at the rate of exchange of related forward currency contracts
monetary assets and liabilities denominated in foreign currencies at the year end are reported at the rates of exchange prevailing at
the year end or where appropriate at the rate of exchange of related forward currency contracts
the results of overseas operations are translated at the average exchange rate and their balance sheets at the rates of exchange
prevailing at the balance sheet date
exchange differences arising from retranslating opening net assets and results are dealt with through reserves all other differences
are included in the profit and loss account
forward foreign exchange contracts
the group uses forward foreign exchange contracts to reduce exposure to foreign exchange risk it does not hold or issue
derivative financial instruments for speculative purposes
a forward foreign exchange contract is treated as a hedge if the contract reduces exposure to exchange movements and is
related to actual assets liabilities or probable commitments denominated in the same or similar currency as the contract
gains or losses arising on these contracts are deferred until the hedged transaction itself is reflected in the group’s accounts at
this point the difference is recognised in the profit and loss account
turnover
turnover comprises the value excluding vat and other sales related taxes of goods sold in the normal course of business
leases
assets held under hire purchase contracts and finance leases are capitalised as tangible fixed assets and are depreciated over the
shorter of the lease term and their useful lives the capital elements of future lease obligations are recorded as liabilities while the
interest elements are charged to the profit and loss account over the period of the lease
rentals under operating leases are charged on a straightline basis over the lease term even if payments are not made on the
same basis
finance costs
finance costs of debt are recognised in the profit and loss account over the term of such instruments at a constant rate on the
carrying amount 
related party transactions
financial reporting standard 8 requires the group to disclose details of its related party transactions with ecc elettronica spa
through reason of the group’s influence see note 27 under the provisions of financial reporting standard 8 the company is not
required to disclose details of certain related party transactions between wholly owned subsidiaries
34 abacus group plc
statement of accounting policies continued
30 september 2003 1 results and operations
geographical segments
both the turnover and profit before taxation of the group are attributable to one class of business electronic component
distribution these are analysed below by geographical segment
united kingdom nordic group
2003 2002 2003 2002 2003 2002
£’000 £’000 £’000 £’000 £’000 £’000
turnover by origin 
sales to third parties 124738 131908 22242 23055 146980 154963
profit loss before taxation 7921 6488 301 146 7620 6634
net assets 37993 36561 4456 4263 42449 40824
2003 2002
£’000 £’000
turnover by destination
united kingdom 115699 124018
nordic 22296 22180
other european union 6813 5691
other 2172 3074
146980 154963
the directors have not presented further analysis of operating expenses as in their opinion a meaningful analysis is not available
2 finance charges net
2003 2002
£’000 £’000
other interest receivable and similar income 163 135
interest payable and similar charges
bank loans  overdrafts 727 986
finance leases and hire purchase contracts 7 27
734 1013
net interest payable 571 878
abacus group plc 35
notes to the accounts
30 september 2003 3 profit on ordinary activities before taxation
2003 2002
£’000 £’000
profit on ordinary activities before taxation is stated after charging or crediting
depreciation and other amounts written off tangible fixed assets
– owned 1131 931
– held under hire purchase agreements and finance leases 69 155
amortisation of goodwill 316 731
impairment of goodwill 89 2119
loss profit on disposal of fixed assets 37 10
operating lease rentals
– plant and machinery 838 1093
– other 460 677
auditors’ remuneration for
– audit services to abacus group plc 10 10
– audit services to group companies 70 60
– nonaudit services to abacus group plc 25 –
– nonaudit services to group companies – 19
4 staff costs
2003 2002
£’000 £’000
employee costs during the year were
wages and salaries 18175 19175
social security costs 1823 1758
other pension costs 1149 1115
21147 22048
the average monthly number of persons employed by the group during the year including executive directors was as follows
2003 number
number 2002
assembly 168 191
distribution 530 567
698 758
details of directors’ remuneration for the year are provided in the audited section of the directors’ remuneration report on pages
25 and 26
36 abacus group plc
notes to the accounts continued
30 september 2003 5 tax on profit on ordinary activities
2003 2002
£’000 £’000
current tax
the tax charge is based on the profit for the year and comprises
uk corporation tax at 30 2174 2625
overseas taxation – 60
2174 2685
adjustment in respect of prior periods
– uk corporation tax 187 187
– foreign tax 2 5
total current tax 2359 2503
deferred tax
origination and reversal of timing differences – 19
total tax on profit on ordinary activities 2359 2522
the difference between the total current tax shown above and the amount calculated by applying the standard rate of uk
corporation tax to the profit before tax is as follows
2003 2002
£’000 £’000
group profit on ordinary activities before tax 7620 6634
tax on group profit on ordinary activities at standard uk
corporation tax rate of 30 2002 – 30 2286 1990
effects of
goodwill amortisation and impairment 121 855
other expenses not deductible for tax purposes 128 23
timing differences on deferred tax asset not recognised 91 128
capital allowances in excess of depreciation 237 60
unrelieved losses in foreign subsidiaries 137 105
utilisation of brought forward losses 170 100
adjustments to tax charge in respect of previous periods 185 182
group current tax charge for year 2359 2503
the group earns its profits primarily in the uk and therefore the tax rate used for tax on profit on ordinary activities is the standard
rate for uk corporation tax currently 30
6 dividends paid and proposed on equity shares
2003 2002
£’000 £’000
equity shares
– interim paid of 34p per share 2002 – 32p 1429 1341
– final proposed of 68p per share 2002 – 65 p 2867 2731
4296 4072
7 profit attributable to abacus group plc
the profit for the financial year dealt with in the accounts of the parent company abacus group plc was £3988000 2002 –
£2790000
as permitted by section 230 of the companies act 1985 no separate profit and loss account is presented for the parent
company
abacus group plc 37 8 earnings per share
earnings per share in both years are calculated in accordance with frs 14 by dividing the earnings by the weighted average
number of shares outstanding in the year
basic diluted
2003 2002 2003 2002
£’000 £’000 £’000 £’000
earnings after goodwill 5261 4112 5261 4112
goodwill 405 2850 405 2850
earnings before goodwill 5666 6962 5666 6962
weighted average number of shares outstanding number 42035246 41816267 42372634 42907987
earnings per share after goodwill pence 125 98 124 96
effect on earnings per share resulting from goodwill pence 10 68 10 66
earnings per share before goodwill pence 135 166 134 162
weighted average number of shares 2003 2002
number number
of shares or shares
for basic earnings per share 42035246 41816267
exercise of options 337388 1091720
for diluted earnings per share 42372634 42907987
the directors have also presented earnings per share before goodwill as they believe it reflects the underlying performance of the
group
9 intangible fixed assets goodwill
group positive negative total
goodwill goodwill goodwill
£’000 £’000 £’000
cost
beginning of year 15482 1426 14056
disposals 15 – 15
reduction in goodwill 2429 – 2429
end of year 13038 1426 11612
amortisation
beginning of year 3543 1426 2117
provided during the year 316 – 316
impairment losses 89 – 89
disposals 15 – 15
end of year 3933 1426 2507
net book value
beginning of year 11939 – 11939
end of year 9105 – 9105
38 abacus group plc
notes to the accounts continued
30 september 2003 9 intangible fixed assets goodwill continued
the reduction in goodwill by £2429000 arose following
a a revision in the estimated earnout consideration payable on the acquisition of trident microsystems limited and the purchase
of the minority interest of asp uk limited both of which were made in the year ending 30 september 2001 the earnout
consideration of £1916000 2002 – £3745000 is based on trading results for the financial years ending 30 september 2002
and 2003 the total consideration payable is estimated at £11961000 2002 – £13790000
b a £600000 reduction in the acquisition cost of silicon concepts limited
goodwill on all acquisitions is amortised over the presumed useful economic lives of 20 years 
the £89000 impairment loss resulted from writing down to nil the goodwill arising on the group’s investment in silicon concepts
limited this write off is set against the background of the depressed telecommunications markets which the directors consider
will remain weak during 200304 with the prospects of growth in real terms thereafter yet to be determined 
10 tangible fixed assets
group land and buildings
freehold leasehold plant 
improvements machinery total
£’000 £’000 £’000 £’000
cost
beginning of year 11097 273 4061 15431
additions 776 16 3988 4780
disposals 42 87 838 967
transfers 14 – 14 –
difference on foreign currency translation 170 – 57 227
end of year 11987 202 7282 19471
depreciation
beginning of year 832 201 2152 3185
charge for the year 202 27 971 1200
disposals 5 87 708 800
transfers 1 – 1 –
difference on foreign currency translation 31 – 29 60
end of year 1059 141 2445 3645
net book value
beginning of year 10265 72 1909 12246
end of year 10928 61 4837 15826
freehold land at cost amounting to £1612000 2002 – £1612000 has not been depreciated the net book value of tangible
fixed assets includes £41000 2002 – £219000 financed by hire purchase contracts and finance leases
abacus group plc 39 11 fixed asset investments
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
subsidiary undertakings – – 3604 3604
other investments 159 – – –
other loans – 1000 – –
159 1000 3604 3604
group
other investments
during the year abacus electronics holdings limited purchased 9 of the share capital of ecc distribution limited which owns
100 of the share capital of ecc elettronica spa for £159000 
other loans
during the year ecc distribution limited repaid £1 million of loan stock to abacus electronics holdings limited the loan stock
bore interest at 5 
abacus electronics holdings limited has issued a loan guarantee in favour of ecc elettronica spa’s bankers to a maximum
amount of euro 1500000 £1049000 2002 – £390000
company
investments in subsidiary undertakings
£’000
cost
beginning and end of year 3604
provision for impairment
beginning and end of year –
net book value
beginning and end of year 3604
abacus group plc owns 100 of the share capital of abacus electronics holdings limited which in turn holds all other
investments in trading subsidiaries
principal group investments
the company and group have investments in the ordinary equity share capital or local equivalent of the subsidiary undertakings
listed below which principally affected the profits and net assets of the group all companies except innovative electronic
components group limited distribute electronic components innovative electronic components group limited provides central
administrative support
country of incorporation proportion of shares
and operation held by
company group
abacus electronics holdings limited united kingdom 100
promax denmark as denmark 100
promax sweden ab sweden 100
promax finland oy finland 100
promax norway as norway 100
innovative electronic components group limited united kingdom 100
micromark electronics limited united kingdom 100
trident microsystems limited united kingdom 100
silicon concepts limited united kingdom 100
voting rights in each of the above subsidiaries are equal to the proportion of ordinary shares held
on 1 august 2003 and 3 october 2003 the group exercised its options to acquire 9 and a further 5082 respectively of ecc
distribution limited’s share capital for considerations of £159000 and £890000 following the group’s acquisition of more than
51 of the shares both the group and the shareholders of ecc have callput options to buysell the remaining 4018 of shares
to abacus in four tranches between january 2006 and january 2009
40 abacus group plc
notes to the accounts continued
30 september 2003 11 fixed asset investments continued
the trade assets and liabilities of silicon concepts limited were transferred to micromark electronics limited on 1 september
2003
dormant and intermediate holding companies subsidiaries have been omitted to avoid a statement of excessive length
12 stocks
group
2003 2002
£’000 £’000
finished goods and goods for resale 31754 34645
there is no material difference between the replacement cost of stocks and the balance sheet values
13 debtors
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
amounts falling due within one year
trade debtors 27590 26593 – –
amounts owed by subsidiary undertaking – – – 4260
corporation tax recoverable 78 18 – –
prepayments and accrued income 1120 1383 3 2
28788 27994 3 4262
amounts falling due after more than one year
amounts owed by subsidiary undertaking – – 10806 7154
28788 27994 10809 11416
14 creditors amounts falling due within one year
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
bank loans and overdrafts secured 11373 11652 – –
obligations under finance leases and 
hire purchase contracts 9 136 – –
other loans 249 500 181 500
trade creditors 10893 10877 – –
amounts owed to subsidiary undertakings – – – 2399
corporation tax 978 1466 – –
value added tax 2571 2373 – –
payroll taxes and social security 464 465 27 23
accruals and deferred income 4699 6737 377 455
proposed dividend 2867 2731 2867 2731
34103 36937 3452 6108
group operating companies have granted fixed and floating charges over their assets to secure bank overdraft facilities of
£24065000 2002 – £29000000 of these facilities £11373000 2002 – £11700000 were utilised after taking into account
cash balances which may be offset
finance leases are secured against specific assets
other loans of £181000 comprise guaranteed loan notes which attract interest of 4 plus a 2125 bank guarantee charge all
loan notes are redeemable at par the date of repayment is subject to the resolution of outstanding tax issues 
abacus group plc 41 15 creditors amounts falling due after more than one year
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
obligations under finance leases and
hire purchase contracts – 31 – –
bank loans secured 8258 6250 – –
amounts owed to subsidiary undertakings – – 2399 –
8258 6281 2399 –
the borrowings of the group and company are repayable
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
on demand or within one year
hire purchase and finance leases 9 136 – –
loans and overdrafts 11622 12152 181 500
11631 12288 181 500
between one and two years
hire purchase and finance leases – 31 – –
loans 68 – – –
68 31 – –
between two and five years
loans 8190 6250 – –
total borrowings 19889 18569 181 500
16 provision for liabilities and charges
group deferred earnout total
taxation consideration
£’000 £’000 £’000
beginning of year 120 3745 3865
reduction in the year – 1829 1829
foreign exchange difference 14 – 14
end of year 134 1916 2050
deferred taxation 2003 2002
£’000 £’000
other timing differences 134 120
total provision for liabilities and charges 134 120
there was no unprovided deferred tax liability at either balance sheet date 
the directors have not provided for a deferred tax asset of £298000 2002 – £453000 £263000 of this relates to losses
incurred in promax’s norwegian and finnish overseas subsidiaries the deferred tax asset would be recognised when the
directors could forecast with certainty that these operations would move into profit
42 abacus group plc
notes to the accounts continued
30 september 2003 16 provision for liabilities and charges continued
earnout consideration estimated maximum minimum earnout
earnout earnout earnout consideration
consideration consideration consideration payable
2003 2002
£’000 £’000 £’000 £’000 £’000
trident microsystems limited
 asp uk ltd 1916 3745 8750 – 2004
as stated in note 9 the provision for earnout consideration is in respect of the acquisitions of trident microsystems limited and the
purchase of a 49 minority interest of asp uk limited the actual amount payable is based on the profits of the companies for
the two years ending 30 september 2003
17 called–up share capital
company
2003 2002
£’000 £’000
authorised share capital
70000000 2002 – 70000000 ordinary shares of 5p each 3500 3500
allotted called–up and fully–paid
42169041 ordinary shares of 5p each 2002 – 42009041 2108 2100
during the year 160000 ordinary shares of 5p each were issued for a total consideration of £183500 the company has options
outstanding for the following shares
option scheme number of number number number number of exercise exercise
shares at granted exercised lapsed shares at period price per
1 oct 2002 30 sep 2003 share
2003 – 26258 – – 26258 2005–2012 2285p
approved
2003 – 263492 – – 263492 2005–2012 2285p
unapproved – 233400 – – 233400 2006–2013 2215p
1996 21429 – – – 21429 2001–2005 1050p
unapproved 150000 – 75000 – 75000 2002–2006 1205p
150000 – 75000 – 75000 2002–2006 975p
440000 – 50000 390000 2003–2007 3890p
240000 – – – 240000 2003–2007 3920p
1993 95000 – 10000 2500 82500 1998–2005 2000p
approved 16000 – – 5000 11000 1999–2006 2710p
48571 – – 5000 43571 2001–2008 1050p
sharesave 372668 – – 8257 364411 2003–2004 940p
117191 – – 27333 89858 2003–2006 3200p
total 1650859 523150 160000 98090 1915919
details of the above approved and unapproved option schemes may be found in the ‘share options’ section of the directors’
remuneration report
abacus group plc 43 18 reserves
non–distributable distributable
––––––––––––––––––––––––––––––––––––– ––––––––––––
share merger capital profit
premium reserve redemption and loss
account reserve account
£’000 £’000 £’000 £’000
group
beginning of year 8608 3323 428 26349
premium on share issue 175 – – –
profit on foreign current translation – – – 493
retained profit for the year – – – 965
8783 3323 428 27807
company
beginning of year 8608 – 428 534
premium on share issue 175 – – –
retained loss for the year – – – 308
8783 – 428 226
cumulative goodwill of £34642000 has arisen on the acquisition of subsidiary undertakings in the years to 30 september 1997
this goodwill has been written off to reserves in line with the group’s accounting policy as described on page 33
19 reconciliation of movement in group equity shareholders’ funds
2003 2002
£’000 £’000
profit for the year 5261 4112
dividends paid and proposed 4296 4072
965 40
new share capital subscribed 183 410
profit on foreign currency translation 493 64
new addition to equity shareholders’ funds 1641 514
opening equity shareholders’ funds 40808 40294
closing equity shareholders’ funds 42449 40808
20 minority interests
2003 2002
£’000 £’000
beginning of year 16 16
disposal of minority interest 16 –
end of year – 16
in october 2002 the group which had an 80 shareholding in trident systems limited disposed of its trade and net assets of
£78000 for a consideration of £1
44 abacus group plc
notes to the accounts continued
30 september 2003 21 reconciliation of operating profit to operating cash flows
2003 2002
£’000 £’000
operating profit 8191 7512
loss profit on disposal of fixed assets 37 10
depreciation 1200 1086
goodwill amortisation 316 731
goodwill impairment loss 89 2119
operating profit before depreciation and goodwill 9833 11438
decrease in stocks 3415 1551
increase decrease in debtors 309 4923
decrease in creditors 2269 1022
net cash inflow from operating activities 10670 16890
22 analysis of cash flows
2003 2002
£’000 £’000
returns on investments and servicing of finance
interest received 163 135
interest paid 727 986
interest element of hire purchase and finance lease contracts 7 27
net cash outflow 571 878
taxation
uk corporation tax paid 2847 3743
overseas tax paid 46 505
net cash outflow 2893 4248
capital expenditure and financial investment
purchase of tangible fixed assets 4780 938
repayment of loan 1000 –
sale of tangible fixed assets 97 105
net cash outflow 3683 833
acquisitions
purchase of other investments 159 –
repayment of acquisition consideration 600 –
net cash inflow 441 –
financing
issue of ordinary share capital 183 410
new loans 8380 –
repayment of loans 6316 7130
repayment of loan notes 319 3351
capital element of finance lease rental payments 125 234
net cash inflow outflow 1803 10305
abacus group plc 45 23 analysis and reconciliation of net debt
1 oct non–cash exchange 30 sept
2002 cash flow changes differences 2003
£’000 £’000 £’000 £’000 £’000
cash at bank 83 1142 – 3 1228
bank overdrafts 11652 465 – 186 11373
1607
debt due after 1 year 6250 1996 – 12 8258
debt due within 1 year 500 251 – – 249
finance leases all due within 1 year 167 125 33 – 9
1620
18486 13 33 195 18661
2003 2002
£’000 £’000
increase decrease in cash for the year 1607 3176
cash inflow outflow from increase decrease
in debt and lease financing 1620 10715
change in net debt resulting from cash flows 13 7539
finance leases disposed of with subsidiary undertaking 33 –
foreign exchange difference 195 33
movement in net debt in the year 175 7506
net debt at beginning of year 18486 25992
net debt at end of year 18661 18486
24 financial instruments
an explanation of the group’s objectives policies and strategies for the role of derivatives and other financial instruments in
creating and changing the risks of the group can be found in the ‘managing business risk’ section of the corporate governance
statements as permitted under frs 13 short term debtors and creditors have been excluded from all disclosures other than the
currency exposure disclosure
interest rate risk
the group’s interest charge and income primarily arise on bank loans overdrafts and loan notes which are mainly denominated in
sterling euro us dollars yen and danish kroner for overdrafts the interest charge and income is based on the daily base rate
plus or minus a fixed percentage for loans the group has committed facilities
a to borrow up to £8000000 which may be denominated in any currency at a forward libor rate for periods between
one week and six months and 
b of dkr3450000 which is repayable in equal instalments of dkr60000 until june 2008 and attracts interest at a fixed
rate of 563
all bank accounts of the same currency are pooled which the group actively utilises to minimise interest charges given the
group’s low materiality of its interest rate risk profile the group does not consider hedging instruments appropriate in managing
interest risk 
46 abacus group plc
notes to the accounts continued
30 september 2003 24 financial instruments continued
the interest rate profile of the financial liabilities excluding short term debtors and creditors of the group at 30 september was as
follows
financial assets and liabilities
excluding short term debtors and creditors floating rate fixed rate
–––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––
balance balance weighted weighted
outstanding outstanding average average
interest rate period
for which rates 
are fixed
£’000 £’000  years
2003
liabilities
sterling 10463 190 61 10
us dollar 780 – – –
euro 1304 – – –
yen 5444 – – –
other 1382 326 56 47
19373 516 58 34
2002
investments all sterling – 1000 50 03
liabilities
sterling 9712 667 61 06
us dollar 3653 – – –
euro 1496 – – –
yen 2134 – – –
other 907
17902 667 61 06
floating rate liabilities comprise sterling and yen bank loans £3381000 and £4619000 yen 850m respectively and overdrafts
in multiple currencies of £11373000 all bearing interest based on daily base rates fixed rate liabilities comprise a danish kroner
bank loan of £326000 dkr 3450000 outstanding obligations on finance leases £9000 and sterling loan notes £181000
interest rate on floating rate liabilities is based on the relevant national interbank rates
abacus group plc 47 24 financial instruments continued
currency exposures
as described in the ‘managing financial risk’ section of the corporate governance statements the group may enter into forward
foreign currency contracts to protect against the currency exposures that arise on purchase and sale transactions the table
below shows the group’s currency exposures these exposures give rise to currency gains and losses recognised in the profit
and loss account and arise from monetary assets and liabilities not denominated in the functional currency of the operating unit
net foreign currency monetary assets liabilities
functional currency sterling euro us dollar yen total
of group operation £’000 £’000 £’000 £’000 £’000
sterling – 1151 5614 4752 11517
danish kroner 5 1249 237 94 1101
total 2003 5 2400 5377 4846 12618
total 2002 203 5766 4895 2300 13164
short term debtors and creditors have been included in the above disclosure in addition the amounts above take into account
the effect of forward contracts to manage these currency exposures as at year end the group had outstanding commitments for
forward exchange contracts of nil 2002 – £1247000
maturity of financial liabilities
the maturity profile of the group’s financial liabilities as at 30 september was as follows
2003 2002
£’000 £’000
on demand or within one year 11632 12288
between one and two years 68 31
between two and five years 8189 6250
19889 18569
borrowing facilities
the group had £32391000 2002 – £41000000 of borrowing facilities at 30 september 2003 of which £12692000 2002 –
£22598000 were undrawn and £8326000 2002 – £12000000 were committed
the maturity of the borrowing facilities both drawn and undrawn at 30 september was as follows
2003 2002
£’000 £’000
on demand or within one year 24133 29000
between one and two years 68 –
between two and five years 8190 12000
32391 41000
the principal uk facilities were established in april 2003 with hsbc bank plc the overdraft facility repayable on demand is
£20000000 and is renewed every twelve months the loan facility is £8000000 repayable in annual instalments until january
2008 
the nordic facilities are with unibank as and comprise a total loan and overdraft limit of danish kroner 46500000 the overdraft
is rolled over every january for twelve months and the loan dkr3450000 at 30 september 2003 is repayable in equal monthly
instalments of dkr60000 until june 2008 
48 abacus group plc
notes to the accounts continued
30 september 2003 24 financial instruments continued
the maturity of the undrawn committed facilities available at 30 september in respect of which all conditions precedent had been
met at that date was as follows 
2003 2002
£’000 £’000
on demand or within one year 12692 17348
between two and five years – 5250
12692 22598
gains and losses on hedges
gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged materialises there
was no material difference on unrecognised gains and losses on hedges at 30 september 2003 between the carrying and
estimated fair values 2002 – nil
fair value
there was no material difference between the book and fair values of financial assets and liabilities at either 30 september 2003
or 30 september 2002
25 financial commitments
capital commitments
the group and company had capital expenditure commitments of £450000 2002 – nil and nil 2002 – nil respectively at
30 september 2003
operating lease commitments 
the group is committed to pay the following annual amounts under leases outstanding at 30 september the company has no
operating lease commitments
land and buildings plant  machinery
2003 2002 2003 2002
£’000 £’000 £’000 £’000
operating leases which expire
within one year 33 83 254 341
between two and five years 135 226 512 709
after more than five years 210 202 – –
378 511 766 1050
26 pension contributions
the group operates a number of defined contribution pension schemes the total cost of pension contributions for the year was
£1149000 2002 – £1115000
27 related party transactions
during the year the group did not enter into any significant transactions in the ordinary course of business with ecc elettronica
spa 
ecc elettronica spa is a related party as
a directors of abacus group plc are on the board of ecc distribution limited which owns 100 of the share capital of ecc
elettronica spa and 
b during the year the group had the option to acquire 51 of ecc distribution limited of which it exercised its right to
acquire 9
28 contingent liabilities and guarantees
as described in note 11 abacus electronics holdings limited a subsidiary undertaking has guaranteed the borrowings of ecc
elettronica spa a company incorporated in italy the guarantee amounts to euro 1500000 £1049000 2002 – £390000
which would become payable if ecc elettronica spa defaulted on loans to its bankers
abacus group plc 49 1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000
income statement
sales 107253 152607 201473 154963 146980
profit before tax goodwill and exceptional items 6316 15749 17125 9484 8025
goodwill 1360 59 681 2850 405
profit before tax and exceptional items 7676 15808 16444 6634 7620
exceptional items 457 – – – –
profit after tax and exceptional items 5877 11204 11324 4112 5261
assets employed
fixed assets 5482 5414 26995 25185 25090
other net assets 27126 31373 39307 34125 36020
capital employed 32608 36787 66302 59310 61110
net debt 8460 4478 25992 18486 18661
24148 32309 40310 40824 42449
financed by
shareholders’ funds 24148 32309 40294 40808 42449
minority interests – – 16 16 –
24148 32309 40310 40824 42449
cash flow
operating cash flow 4228 9328 18968 16890 10670
free cash flow 163 6470 5422 10826 2459
dividends 2809 3115 3418 3802 4160
sale of tangible fixed assets 58 4 114 105 97
acquisitions and investments 3926 – 23459 – 1441
equity financing 219 416 122 410 183
new finance leases – – 303 – –
foreign exchange 204 207 8 33 195
movement in net debt 6091 3982 21514 7506 175
net debt 8460 4478 25992 18486 18661
statistics
average no of shares ‘000 41296 41562 41688 41816 42035
earnings per share basic pre goodwill 109p 268p 287p 166p 135p
free cash flow per share 04p 156p 130p 259p 58p
dividends per share 72p 80p 88p 97p 102p
dividend cover pre excep  goodwill 18 33 33 17 13
gross profit 225 239 246 247 232
return on sales pre excep  goodwill 59 103 85 61 55
effective tax rate pre excep goodwill 286 292 299 266 294
net gearing 350 139 645 453 440
return on capital employed 244 436 288 175 141
net gearing is defined as net borrowings excluding earnout consideration divided by shareholders’ funds and minority interests
return on capital is defined as profit before exceptional items interest tax and goodwill divided by shareholders’ funds minority
interest and net debt
50 abacus group plc
five year summary notice is hereby given that the annual general meeting of abacus group plc “the company” will be held at abacus house
bone lane newbury berkshire rg14 5sf on 27 january 2004 at 1000 am the meeting will consider and if thought fit pass the
following resolutions which are to be proposed in the case of resolutions 1 to 9 as ordinary resolutions and in the case of
resolutions 10 to 13 as special resolutions of the company 
resolutions
1 to receive and adopt the report of the directors and the accounts for the year ended 30 september 2003 and the auditors’
report thereon
2 to declare and approve a final dividend of 68p per ordinary share for the year ended 30 september 2003
3 to reelect as a director ah westropp who retires by rotation the board proposes this reelection following the chief
executive’s formal performance evaluation with input from the board which concludes that mr westropp continues to provide
sufficient commitment and effective contribution to his role as nonexecutive chairman of the board and chairman of the audit
and nominations committees he attended nine of the eleven board meetings and a number of other ad hoc meetings
throughout the year aided by his directorships of other companies mr westropp provides effective input in determining the
policies of the group monitoring the group’s performance and contributing to the formulation of its strategy mr westropp is
considered to be independent by the board for the reasons outlined in the corporate governance section of the annual
report
4 to reelect as a director g kibblewhite who retires by rotation the board proposes this reelection following the chief
executive’s formal performance evaluation with input from the board which concludes that mr kibblewhite continues to
provide sufficient commitment and effective contribution to his role as a nonexecutive director and chairman of the
remuneration committee he attended eight of the eleven board meetings through his experience of over 30 years in the
electronics industry coupled with his knowledge of the european market mr kibblewhite makes an effective contribution to
board meetings and is an important source of advice when making strategic decisions  mr kibblewhite is considered to be
independent by the board for the reasons outlined in the corporate governance section of the annual report
5 to elect as a director m ricejones following her appointment to the board in january 2003
6 to approve the directors’ remuneration report 
7 to reappoint deloitte  touche llp as auditors and to authorise the directors to fix their remuneration on 1 august 2003
deloitte  touche transferred their business to deloitte  touche llp  a limited liability partnership incorporated under the
limited liability partnerships act 2000 the company gave its consent to treating the appointment of deloitte  touche as
extending to deloitte  touche llp with effect from 1 august 2003 and accordingly the financial statements have been signed
in the name of deloitte  touche llp  
8 that the directors be and they are hereby generally and unconditionally authorised to exercise all the powers of the company
to allot relevant securities within the meaning of section 80 of the companies act 1985 “the act” up to an aggregate
nominal amount of £702817 one third of the issued share capital at 30 september 2003 provided that such authority shall
expire on the date being five years after the passing of this resolution unless previously renewed varied or revoked by the
company in general meeting save that the company may before such expiry or the expiry of any renewal of this authority
make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors
may allot relevant securities in pursuance of such offer or agreement as if this authority had not expired and provided further
that this authority shall supersede and revoke any other such authorities
9 that the rules of the abacus group plc sharesave scheme 2004 presented to the meeting and signed by the chairman for
the purposes of identification the main features of which are summarised in the additional information accompanying this
report be and are hereby approved and that the directors be and are hereby authorised to establish such future plans as
may be deemed appropriate for the benefit of employees based outside of the uk based on this plan but modified to take
account of local tax exchange control or securities laws outside the uk provided that any shares issued under such further
plans are treated as counting against the relevant individual or overall dilution limits in the abacus group plc sharesave
scheme 2004
10 that subject to the passing of resolution 8 the directors be and they are hereby empowered pursuant to section 95 of the
act to allot equity securities as defined for the purposes of sections 89 to 96 of the act for cash pursuant to the general
authority conferred on them by resolution 8 for the purposes of section 80 of the act as if section 891 of the act did not
apply to any such allotment provided that this power shall be limited 
i to the allotment of equity securities in connection with an issue or offer by way of rights in favour of holders of ordinary
shares where the equity securities respectively attributable to the interests of such holders of ordinary shares on a fixed
record date are proportionate as nearly as may be to the respective numbers of shares held by them but subject to such
exclusions or other arrangements as the directors may deem necessary or expedient to deal with any legal or practical
problems under the laws of any overseas territory or the requirements of any regulatory body or any other stock
exchange in any territory or in relation to fractional entitlements and
abacus group plc 51
notice of annual general meeting ii to the allotment otherwise than pursuant to paragraph i of this resolution of equity securities having in the case of
relevant shares a nominal amount or in the case of other equity securities giving the right to subscribe for or convert
relevant shares having a nominal amount not exceeding in aggregate the sum of £105422 5 of the issued share
capital at 30 september 2003
and shall expire on the earlier of the date of the next annual general meeting of the company after the passing of this
resolution or fifteen months after the passing of this resolution save that the company may before such expiry make an offer
or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity
securities in pursuance of such offer or agreement as if the power conferred hereby had not expired
11 that the company be generally and unconditionally authorised to make market purchases as defined in section 1633 of
the act of its ordinary shares provided that
i the maximum number of ordinary shares hereby authorised to be acquired is 6325356 15 of the issued share capital
at 30 september 2003
ii the minimum price which may be paid for any such ordinary shares is 5 pence
iii the maximum price which may be paid for any such ordinary share is an amount equal to 105 per cent of the average
middle market quotations for an ordinary share according to the london stock exchange daily official list for the five
business days immediately preceding the day on which the ordinary share is contracted to be purchased and
iv this authority shall expire at the close of the next annual general meeting of the company to be held after the date
hereof but a contract of purchase may be made before such expiry which will or may be executed wholly or partly
thereafter and a purchase of ordinary shares may be made in pursuance of any such contract
12 that the articles of association be amended to conform with a71 and a72 provisions of the july 2003 combined code so
that
i each nonexecutive director who has served nine years or less on the board and each executive director shall retire
from office at every third annual general meeting and
ii each nonexecutive director who has served more than nine years on the board shall retire from office at every annual
general meeting
rather than the current requirement that one third of all executive and nonexecutive directors should retire each year 
13 that the articles of association be amended so that a director’s normal retirement age be reduced from seventy to sixty five
years and that the director shall retire from office at every annual general meeting thereafter 
by order of the board
p l griffithjones ma aca 17 december 2003
abacus group plc registered office abacus house bone lane newbury berkshire rg14 5sf
notes
1 any member entitled to attend and vote at the above meeting may appoint a proxy to attend and on a poll only vote on his
behalf a proxy need not be a member of the company
2 to be valid the enclosed replypaid form of proxy together if appropriate with the power of attorney or other authority if
any under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of
computershare services plc registrar’s department po box 82 the pavilions bridgwater road bristol bs99 7nh at least
fortyeight hours before the time appointed for holding the meeting
3 completion and return of the form of proxy will not preclude ordinary shareholders from attending the meeting and voting in
person if they wish to do so
4 documents for inspection  copies of the directors’ service contracts and the register of directors’ interests will be available
for inspection at the registered office of the company abacus house bone lane newbury berkshire rg14 5sf during
normal business hours on any weekday excluding public holidays from the date of the notice of the annual general meeting
until the conclusion of the annual general meeting and any adjournment thereof
5 as permitted by regulation 41 of the uncertificated securities regulations 2001 only those shareholders who are registered
on the company’s share register at 6 pm on 23 january 2004 shall be entitled to attend the meeting and to vote in respect
of the number of shares registered in their names at that time changes to entries on the share register after 6 pm on 23
january 2004 shall be disregarded in determining the rights of any person to attend andor vote at the meeting
52 abacus group plc
notice of annual general meeting
imprima de bussy – c88732 the abacus group is a leading franchised distributor of electronic components flatpanel
displays printers and related products and additional value added services including
technical support cable and electromechanical subassembly and the design and build of
display systems
following the purchase of 60 of ecc an italian electronic components distributor the
group employs approximately 800 people and has 9 principal trading businesses operating
in the uk ireland nordic and italy as well as a strategic alliance with rutronik which
operates in germany france and several other european countries
the group’s philosophy is to offer as wide a product range as possible in order to be in
tune with the widespread market trend towards supply chain management and vendor
reduction to work at design level with both existing and new customers in order to be
involved in the proliferation of new products that typifies the electronics industry and to
combine these features with an unusually high level of personal service and commitment
this philosophy has enabled the group to grow its uk market share and to achieve a return
to shareholders well above the industry average
the group has a continual programme of investment to ensure that the logistics and
systems are in place to support and further these aims
contents
financial and operational highlights 1
abacus group at a glance 2
chairman’s statement 4
chief executive’s review 5
financial review 8
the board of directors secretary and advisers 11
directors’ report 12
corporate governance statements 14
corporate social responsibilities 18
remuneration report 20
statement of directors’ responsibilities 27
auditors’ report 28
financial statements 29
five year summary 50
notice of annual general meeting 51
geographic coverage 53
abacus group
uk and ireland
aylesbury
basingstoke
bolton
boston spa
cambridge
dunmow
leighton buzzard
limerick
livingston
maidenhead
newbury
newcastleunderlyme
redhill
runcorn
southampton
stroud
st just
benelux
amsterdam
denmark
copenhagen
them
finland
helsinki
oulo
norway
oslo
sweden
gothenburg
malmö
stockholm
ecc
italy
caserta
florence
milan
padua
bologna
rome
turin
osimo
rutronik
strategic alliance
bulgaria
sofia
germany
berlin
dresden
dortmund
erfurt
hamburg
heppenheim
hildesheim
ispringenpforzheim
munich
nurenburg
ratingen
switzerland
volketswil
france
aix en provence
bordeaux
grenoble
le mans
lille
lyon
paris
poitiers
rennes
strasbourg
toulouse
austria
vienna
wels
poland
zory
spain
barcelona 
madrid
benelux
dordrecht
ronserenaix
czech republic
brno
prague
hungary
budapest
local offices
abacus group plc   53 abacus group plc annual report and accounts  2003
abacus group plc
annual report  accounts  2003
abacus house
bone lane
newbury
berkshire
rg14 5sf
wwwabacusgroupcouk


Summary:
 power rectifier – power
management plays an
increasing role in the
design of portable
equipment such as 
laptop computers 
abacus group plc   5
general review
the year under review was challenging for the group in all 
its markets the industry problems in our territories were
characterised by reduced volume demand from customers
continued price pressure on commodity products and
transfer of business by global customers to lower cost
manufacturing regions
it is impossible to avoid the consequences of lower volumes
and prices but our strategy of focusing on regional rather
than global customers has minimised the impact on the group
in the uk our sales fell by 54 and in nordic markets by
11 in local currency our staffing levels recognise that overall
workloads do not reduce to the same degree as volumes and
price and this combined with our reputation for high quality
customer service and supplier support has enabled the group
to grow its market share despite fierce competition afdec
statistics show that our market share has grown in the uk to
140 from 129 and has been maintained at 54 in 
the nordic region this increase in share reflects our focus 
on customers more likely to remain committed to local
manufacturing the width and strength of our product offering
and the commitment to keeping the number of skilled staff
required to provide a consistent level of service
component volumes average selling prices and workloads
as measured by the number of line items shipped are a good
reflection of market activity and are measures we closely
monitor comparing this year to last in our uk distribution
businesses volumes fell by 1 and average selling prices 
by 8 but workloads rose by 23 in the nordic region 
the tougher market showed a different picture with volumes
falling by 65 average selling prices by 6 and workloads
by 85
we reduced operating costs by 86 in 2003 through a
carefully managed programme of natural wastage and
selective redundancy we have reduced our distribution
headcount from 548 to 516 whilst achieving the service
standards required by the group’s customers the initial phase
of our programme to upgrade our uk facilities was the
opening in november 2001 of the new warehouse which 
has contributed to this improved efficiency its initial period of
operation required that new staff unaccustomed to this
industry be trained and their skills and job knowledge raised 
to our expected standard in its second year of operation the
total transaction workload increased by 96 the error rate
reduced by 35 and the headcount by 11 the final phase
was to enlarge our office facilities and this was completed
during the summer of 2003 this project transformed our
newbury freehold headquarters from the original abacus
warehouse into an efficient office block these modern facilities
have been completed at a capital cost of £15 million a far
more cost effective option than a move to different premises
individual company review
all our distribution businesses pursue a similar philosophy
which is to offer as wide a product range as possible in order
to be in tune with the widespread market trend towards
supply chain management and vendor reduction to work at
design level with both existing and new customers in order to
be involved in the proliferation of new products that typifies
the electronics industry and to combine these features with
an unusually high level of personal service and commitment
abacus polar our largest subsidiary has strengthened its uk
market position this has been achieved primarily by giving
customer service the highest priority through our established
structure of local offices and dedicated sales staff we provide
highly qualified technical support for the majority of products
and have continued to invest in new product and market
opportunities such as gsm gps modules and microsoft
windows embedded software
chief executive’s review
abacus polar our largest subsidiary has strengthened its uk market position
this has been achieved primarily by giving customer service the highest priority
through our established structure of local offices and dedicated sales staff 6 abacus group plc
the migration of global customers has had a minimal 
direct impact on sales revenue but has led to our major
competitors seeking to refocus on our traditional customer
base whilst this is putting some pressure on our gross
margins we believe that our long standing relationships
combined with an ability to demonstrate high service levels
have enabled us to maintain sales however we will not
stand still and we follow a path of continuous improvement
to ensure our service and product offering meets our
customers’ expectations 
micromark ccd has also performed well justifying our
strategy of having more than one business in the major
markets we introduced the maxim dallas franchise during
the previous financial year and this franchise has brought
new customers and sales revenue to the group during the
year silicon concepts was integrated into micromark
resulting in significantly lower operating costs 
promax our nordic distribution business has faced tough
markets and experienced the sharpest sales decline of our
group companies due to the historic significance of the
telecoms sector in sweden and finland however we have
continued to seek opportunities to expand its product offering
and believe it is in an improved position to take advantage of
any market growth the business has maintained its gross
margin of 21 whilst operating costs have been reduced
during the year promax returned a small loss but as a result
of recent cost reductions we are confident that it will return to
profit once market conditions improve
trident the display and related products specialist performed
well and despite its distribution business being affected by
the market as much as our other divisions achieved growth
of 109 by comparison to the previous year this came
from the billing of its system build projects particularly in the
military area whilst opportunities in the medical industry
have not billed as quickly as anticipated we remain confident
that this focus on system build opportunities is becoming 
a significant contributor to growth the benelux operation 
has established itself well and our expansion into the 
nordic region is under way with the support of major
franchises such as toshiba and microsoft we see this 
as a good growth opportunity
it is our intention during the coming year to similarly expand
our displays business into the italian market using the existing
presence of ecc microsoft have already confirmed their
support in this respect
our electromechanical assembly businesses ctl and ccs
have both suffered from the difficulties of the uk market but
have continued to contribute significantly to the overall
profitability of the group they remain strategically important
offering customers differentiation from our competition and in
addition will provide a valuable service to the system build
division of trident as it develops in the future
chief executive’s review continued
automotive 3
customer sectors
industrial control 14
other 11
security 9
instrumentation 7
distribution 5
communication 5
audio visual 5
printer 3
power 3
contract manufacturi
global 4
contract 
manufacturing 
local 31 abacus group plc   7
dubilier our “own brand” component business largely sells
commodity products and has continued to experience price
reductions particularly in the passive component area
however we have successfully expanded these products into
the nordic region since our acquisition of promax and intend
to repeat this in other european countries such as in italy
through ecc
during the year the group purchased 9 of ecc and
subsequent to the year end purchased a further 51 ecc is
a distributor of a broad range of electronic components and
computer products based in milan and has a network of
regional sales offices throughout italy with a similar market
approach to abacus polar and promax
ecc brings to the group a presence in the italian distribution
market estimated by europartner consultants to be 12 billion
in 2002 and a number of exclusive franchises in passive and
electromechanical products which give it a strong presence in
the major italian customers sales in the year to 30 september
2003 were f404 million £274 million
outlook
last year we stated “market conditions remain tough” and
that “management will continue to direct its attention to the
fundamentals of the business – sales and gross profit inventory
and cash generation” that focus and commitment has
enabled the group to achieve a return to shareholders well
above the average for our industry to maintain its excellent
service and to grow its market share
our attention to these aspects of the business is key to our
success and we intend that it should always be so irrespective
of the market conditions currently conditions remain
extremely competitive although many of the semiconductor
industry manufacturers and forecasters are encouraged by
the strength of the market since the summer holiday season
and are talking of double digit growth globally with customer
demand for calendar year 2004 being particularly strong in
the asiapacific region
the postsummer period has traditionally been strong due to
the increased demand for pc mobile phone and consumer
products for the christmas season we still remain cautious
and will wait to see a sustained increase in our own order
booking rate before endorsing this optimism however the
lack of investment in new semiconductor manufacturing
capacity during the last three difficult years should mean that
a reasonable increase in demand anywhere in the world will
quickly use up available capacity the global nature of the
industry means that this will drive increasing unit prices for
everyone from which we should see a direct benefit in both
sales and returns
martin kent
chief executive
25 november 2003