premier farnell plc
annual report and accounts 2005
premier farnell plc
group headquarters
2528 old burlington street
london w1s 3an
united kingdom
t 44 0 20 7851 4100
f 44 0 20 7851 4110
150 armley road
leeds ls12 2qq
united kingdom
t 44 0 870 129 8606
f 44 0 870 129 8611
wwwpremierfarnellcom
premier farnell plc annual report and accounts 2005
00 at a glance 
02 financial highlights
05 what drives our business
08 talent
10 technology
11 t otal service 
12 chief executive’s review – strategy for growth
14 chairman’s statement
16 operating review
marketing and distribution division
19 industrial products division
21 human resources report
22 social responsibility report
27 finance director’s report
31 investor relations report
32 board of directors and officers
32 advisers
33 directors’ report
34 directors’ responsibilities
35 corporate governance
37 remuneration report
43 consolidated profit and loss account
43 statement of total recognised gains and losses
44 consolidated balance sheet
45 company balance sheet
46 consolidated statement of cash flows
47 statement of accounting policies
48 notes to the accounts
67 auditors’ report
68 shareholder information
69 five year record
contents premier farnell plc
annual report and accounts 2005
premier farnell plc
group headquarters
2528 old burlington street
london w1s 3an
united kingdom
t 44 0 20 7851 4100
f 44 0 20 7851 4110
150 armley road
leeds ls12 2qq
united kingdom
t 44 0 870 129 8606
f 44 0 870 129 8611
wwwpremierfarnellcom
premier farnell plc annual report and accounts 2005
00 at a glance 
02 financial highlights
05 what drives our business
08 talent
10 technology
11 t otal service 
12 chief executive’s review – strategy for growth
14 chairman’s statement
16 operating review
marketing and distribution division
19 industrial products division
21 human resources report
22 social responsibility report
27 finance director’s report
31 investor relations report
32 board of directors and officers
32 advisers
33 directors’ report
34 directors’ responsibilities
35 corporate governance
37 remuneration report
43 consolidated profit and loss account
43 statement of total recognised gains and losses
44 consolidated balance sheet
45 company balance sheet
46 consolidated statement of cash flows
47 statement of accounting policies
48 notes to the accounts
67 auditors’ report
68 shareholder information
69 five year record
contents marketing and distribution division 
five closely related businesses serving the
small order and highly mixed product and service
requirements of electronic design engineers small
scale production units procurement specialists
and maintenance engineers in industry and the
public sector our customers share a common
need for a broad product range fast and reliable
delivery and specialist technical support
markets and distributes
electronic components test
equipment maintenance and
repair products in europe and
the asia pacific region the
business also provides
procurement services and
technical support tailored to
individual customer needs
wwwfarnellinonecom
a marketer and distributor of
electronic components through
call centres via the web and
through a network of sales
offices across the us and in
canada mexico and brazil
wwwnewarkinonecom
a uk marketer and distributor
of tools consumables and
health and safety equipment
typically needed in industrial
working environments a
specialist in supply chain
management and vendor
managed inventory
wwwbuckhickmaninonecom
a north american distributor
of quality electronic equipment
and related products to
engineers who install and
repair consumer electronics
and similar equipment
wwwmcminonecom
a distributor of electrical and
electronic equipment
components and accessories
to smaller companies across
the uk a specialist in the
promotion of new products
and special offers through
direct mail and via the web
wwwcpccouk
a manufacturer and distributor
of highperformance firefighting
equipment for fire truck
manufacturers public fire
services and industrial facilities
wwwakronbrasscom
a paneuropean distributor of
highperformance ownbrand
consumables including tools
adhesives and chemicals for
the automotive servicing and
crashrepair markets
wwwkenteuropecom
a distributor of high
performance electrical cable
and connector assemblies for
use in hostile or heavyduty
industrial environments
customers include the steel
and automotive industries in
north america
wwwtpcwirecom
a distributor of electrical and
industrial automation products
and engineered solutions to
manufacturers in the
united states
wwwcadillacelectriccom
industrial products division
a group of businesses that supply
highperformance products to specialist
industrial markets in europe and
north america marketing and distribution division 
five closely related businesses serving the
small order and highly mixed product and service
requirements of electronic design engineers small
scale production units procurement specialists
and maintenance engineers in industry and the
public sector our customers share a common
need for a broad product range fast and reliable
delivery and specialist technical support
markets and distributes
electronic components test
equipment maintenance and
repair products in europe and
the asia pacific region the
business also provides
procurement services and
technical support tailored to
individual customer needs
wwwfarnellinonecom
a marketer and distributor of
electronic components through
call centres via the web and
through a network of sales
offices across the us and in
canada mexico and brazil
wwwnewarkinonecom
a uk marketer and distributor
of tools consumables and
health and safety equipment
typically needed in industrial
working environments a
specialist in supply chain
management and vendor
managed inventory
wwwbuckhickmaninonecom
a north american distributor
of quality electronic equipment
and related products to
engineers who install and
repair consumer electronics
and similar equipment
wwwmcminonecom
a distributor of electrical and
electronic equipment
components and accessories
to smaller companies across
the uk a specialist in the
promotion of new products
and special offers through
direct mail and via the web
wwwcpccouk
a manufacturer and distributor
of highperformance firefighting
equipment for fire truck
manufacturers public fire
services and industrial facilities
wwwakronbrasscom
a paneuropean distributor of
highperformance ownbrand
consumables including tools
adhesives and chemicals for
the automotive servicing and
crashrepair markets
wwwkenteuropecom
a distributor of high
performance electrical cable
and connector assemblies for
use in hostile or heavyduty
industrial environments
customers include the steel
and automotive industries in
north america
wwwtpcwirecom
a distributor of electrical and
industrial automation products
and engineered solutions to
manufacturers in the
united states
wwwcadillacelectriccom
industrial products division
a group of businesses that supply
highperformance products to specialist
industrial markets in europe and
north america premier farnell plc annual report and accounts 2005 01
400000 products in stock talent
technology
t otal service
2000000 customer contacts
  group overview
02   premier farnell plc annual report and accounts 2005
group operating profit
£765m
£65m
3
2
gross margin
405
402
2004
basic earnings
per share
110p
90p
2004
operating margin
98
97
2004
2
4
adjusted earnings 
per share
117p
102p
2004
5
dividend
per share
90p
90p
2004
group sales
£7767m
64
1 divisional overview
operating profit
£135m
£08m
3
2
operating profit
£718m
£72m
3
2
premier farnell plc annual report and accounts 2005 03
americas
sales £2898m
growth 117
operating profit £277m
europe and asia pacific
sales £3902m
growth 24
operating profit £441m
notes
1 year on year sales per day growth for continuing 
businesses at constant exchange rates
2 before goodwill amortisation 
3 year on year increase before oneoff rebranding 
costs in 20034 and goodwill amortisation at 
constant exchange rates 
4 before oneoff rebranding costs and goodwill
amortisation
5 before oneoff rebranding costs and gain on business 
disposal in 20034 and goodwill amortisation
group
customer contacts 2000000

products in stock 400000
suppliers 3000
countries with offices 21
countries selling into 100
employees 4020 employees 960
industrial products division
sales
£967m
74
1
marketing  distribution division
sales
£6800m
63
1
1 1
2 talent
we are committed to internal career
development since 2002 approximately
60 per cent of managerial and professional
vacancies have been filled internally  our aim is
to increase that to over 70 per cent in the next
two years this year we have launched
360degree reviews for senior management
all 5000 employees have participated in
three hour workshops to consider how our
core values improve our business
technology
through our investment for growth
programme we have invested in leading
edge information systems that are driving
flexibility and effectiveness across the
business we can now add new products
to our online catalogues weekly  rather than
monthly it has helped grow our sales via
ecommerce by 56 per cent this year 
t otal service
premier farnell has consistently offered
service in line with the best available in our
market it has helped us increase our active
customer base this year  this year we
launched a programme to set new
standards in service for ourselves and a new
benchmark for the industry
premier farnell plc annual report and accounts 2005 06
what drives our business
  talent
we are committed to internal career
development since 2002 approximately
60 per cent of managerial and professional
vacancies have been filled internally  our aim is
to increase that to over 70 per cent in the next
two years this year we have launched
360degree reviews for senior management
all 5000 employees have participated in
three hour workshops to consider how our
core values improve our business
technology
through our investment for growth
programme we have invested in leading
edge information systems that are driving
flexibility and effectiveness across the
business we can now add new products
to our online catalogues weekly  rather than
monthly it has helped grow our sales via
ecommerce by 56 per cent this year 
t otal service
premier farnell has consistently offered
service in line with the best available in our
market it has helped us increase our active
customer base this year  this year we
launched a programme to set new
standards in service for ourselves and a new
benchmark for the industry
premier farnell plc annual report and accounts 2005 06
what drives our business
  talent
we are committed to internal career
development since 2002 approximately
60 per cent of managerial and professional
vacancies have been filled internally  our aim is
to increase that to over 70 per cent in the next
two years this year we have launched
360degree reviews for senior management
all 5000 employees have participated in
three hour workshops to consider how our
core values improve our business
technology
through our investment for growth
programme we have invested in leading
edge information systems that are driving
flexibility and effectiveness across the
business we can now add new products
to our online catalogues weekly  rather than
monthly it has helped grow our sales via
ecommerce by 56 per cent this year 
t otal service
premier farnell has consistently offered
service in line with the best available in our
market it has helped us increase our active
customer base this year  this year we
launched a programme to set new
standards in service for ourselves and a new
benchmark for the industry
premier farnell plc annual report and accounts 2005 06
what drives our business
  talent
we are committed to internal career
development since 2002 approximately
60 per cent of managerial and professional
vacancies have been filled internally  our aim is
to increase that to over 70 per cent in the next
two years this year we have launched
360degree reviews for senior management
all 5000 employees have participated in
three hour workshops to consider how our
core values improve our business
technology
through our investment for growth
programme we have invested in leading
edge information systems that are driving
flexibility and effectiveness across the
business we can now add new products
to our online catalogues weekly  rather than
monthly it has helped grow our sales via
ecommerce by 56 per cent this year 
t otal service
premier farnell has consistently offered
service in line with the best available in our
market it has helped us increase our active
customer base this year  this year we
launched a programme to set new
standards in service for ourselves and a new
benchmark for the industry
premier farnell plc annual report and accounts 2005 06
what drives our business
  8 brian lewis achieved three inter continental transfers of senior managers
symptomatic of a breakthrough in the group’ s globalisation process
9 hilary wingfield developed and launched a new performance review
process and our first 360degree reviews10 matt toogood led a
programme in which each of our 5000 employees spent three hours each
considering how our core values improve our customers’ experience and hence
our business 11ken palframan trained 75 per cent of key managers in
europe and asia pacific in interviewing techniques to ensure that new
employees are aligned with our core values12 joe daprile provided 18
training sessions across the group covering contracts data protection and
intellectual property rights 13 raymond kernagis completed 25 facilities
improvements projects identified by employees to improve working
environments across the group with a total spend of £250000
14 ken jochum controlled cost and improved service in the us healthcare
scheme benefiting all north american employees
talented people are the key to premier
farnells future last year the quality of our
business and its readiness for the future
were materially improved by the many
achievements of our senior leaders and their
teams across the group some of these
achievements are listed here
over the last five years premier farnell has
invested in leading edge information systems
upon which to develop its business the
benefit of this investment is being recognised
by customers suppliers and technology
partners alike
“with a vision of leveraging product information
as a strategic asset premier farnell has gained
huge benefits by creating a global product
repository across all inone companies it is
a prime example of innovative thinking within
its industry
“by creating a clear data structure and global
data synchronisation the inone companies
are now enabled to provide customers with
access to a global offering and identity across
a multitude of channels in print on cd and
in electronic channels their ability to deliver
information in a fast flexible and effective
manner results in a bestinclass solution that
continues to evolve” 
dan korsgaard ceo stibo catalog
“premier farnell has proved itself a flexible
partner with an excellent eprocurement
solution the fully customised web site provided
for us is delivering clear benefit enabling us
to control spending better and allowing our
staff to focus on their core job responsibilities
rather than the ordering process selecting
buckhickman inone alongside farnell inone
made perfect sense as the service from both
can be integrated into the same procurement
solution” 
fiona digbygrant head of corporate
commercial uk atomic energy authority
“premier farnell is an approved supplier of mro
and electronics products to bae systems
working together with them to develop a ‘round
trip’ et rading solution has provided us with a
controlled customised environment with all
the advantages of premier farnells web site
technology  although in its early stages of use
within our business it is already proving
beneficial in terms of process savings and the
ability to view realtime information premier
farnell has been a supportive and effective
supplier to our business over the last twelve
months and we look forward to growing our
relationship in the future” 
kathy mckenzie commodity lead 
bae systems
t echnology
10   premier farnell plc annual report and accounts 2005
“as a preferred supplier to uk universities and
the research councils premier farnell has not
only recognised the unique requirements of this
sector but also worked closely in partnership
with nuwpec to develop this unique service
offering that links farnell inone cpc and
buckhickman inone
‘ ‘the state of the art bespoke onecall web site
is a ‘onestop shop’ solution it provides vendor
reduction cost efficiencies and a dedicated
onecall contact centre demonstrating the
capabilities and flexibility of premier farnell as
a true purchasing partner ” 
david johnson chairman national
universities working party on electronic
components nuwpec
“premier farnell’ s deployment of endeca’ s
search and guided navigation platform is
worldclass premier farnell uses endeca to
bring together their exceptionally broad and
deep product catalogue and rich technical
content to deliver unparalleled value through
the online channel
“using endeca premier farnell’ s customers
get easy online access to over 2 million
products their attributes and related product
information enabling the entire purchasing
process for their demanding customer base
on the backend premier farnell leverages
endeca’s flexible architecture to power their
online presence globally on a single efficient
platform that will scale as their business
continues to grow” 
steve gurney  director of sales europe
endeca t echnologies inc
“buckhickman inone’ s ability to provide a
tailored eprocurement solution and fulfilment
using its local branch network was key to
them winning this supplier agreement since 
its implementation the individual branch
managers have been working very closely with
our sites to suggest and help them manage
their own tooling requirements and help prevent
inappropriate purchasing
“using the solution developed by buckhickman
inone has given us vital management
information to help us manage a diverse cost
centre this allows us to plan future efficiencies
and costdown programmes” 
howard reed procurement contracts
manager  rwe thames water
1
8
9
10 11 12
13 14
15
20 21 22 23
24 25 26
16 17 18
2
3 45 6 7
39
29 30 31 32
33 34 35 36
4142
43
44
3738
49 50 51 52 53
40
27 28
45 46 47 48
19
t alent
1 matt palmer secured contract renewals from rollsroyce plc and nuwpec and
tripled business from uk atomic energy authority 2 rob rospedzihowski created the
blueprint for a global accounts business and won a motorola global super supplier
award 3 rory boyes achieved the strongest sales and profit growth in australia for four
years 4 simon whitaker championed the asia service improvement plan and leveraged
both farnell inone and newark inone brands into asia 5 joan irving secured a
55 per cent increase in supplier investment in joint marketing activity 6 marianne culver
achieved significant improvement in relationships with key suppliers along with increased
understanding of our compelling value proposition 7 diane sweeney established a new
supplier management approach that assures resource allocation is aligned and prioritised
according to the needs of our customers 
15 bill maurer completed the consolidation of all europe and
asia pacific business units onto one back office system orbit
16 david abbott led the cpc team through the
implementation of the orbit back office system minimising
customer interruption 17 paul horton renegotiated the
group global telecommunications contract achieving an annual
saving of 700000 per annum 18 joanne hutchinson
created a global programme management team which has
successfully delivered over 92 medium and large scale projects
19 tom kartheiser launched a best practice initiative for it
service delivery across our global computer networks
20 stephen paterson delivered a truly global customer
relationship management capability that enhances customer
experience 21 graham johnson delivered 87 per cent of
core systems projects on time the ecommerce service level
agreement at 99 per cent – all under budget 22 robert
knight rolled out a common web platform to 21 countries
and a world class search engine to 25 web sites
23 gary niemand launched the ‘more time more selling’ project that is increasing sales
capability in newark inone branches 24 jim nichols achieved doubledigit growth in sales
in newark inone this year while significantly improving gross margins 25 paul tallentire
helped people across the newark inone business focus on gross margin resulting in a fourth
quarter rate 18 per cent higher than the fourth quarter last year 26 rick haning worked
with a team to reduce slow moving inventory by over 3 million 27 twyla gray led the
newark inone west region with california sales up 20 per cent 28 robin dye partnered
with key vendors like tyco vishay tektronix and fluke in the north east and canada and
drove the region to exceed sales and profit plan 
45 bernard j gizzi visited 18 cities in the us and met over 300 customers suppliers and
premier farnell employees in first five months in the job 46 steve canham delivered a strong
uplift in profits in the marketing and distribution division europe and asia pacific driven by
particularly strong growth outside the uk 47 neil harrison led buckhickman inone through
a difficult year and put in place a firm foundation for recovery 48 stephen makepeace
delivered significant uplift in operating profits in farnell inone uk 49 james bell encouraged
all the general managers within farnell inone southern europe to share best practice sales
were up 11 per cent this year 50 robert ainsworth led the project in the marketing and
distribution division europe and asia pacific to improve gross profit 51 ferdinand leicher
achieved highest sales ever in farnell inone germany with 12 per cent growth in the year
52 paul jennings reduced controllable costs and improved cash flow in buckhickman inone
branches through a reduction in stocks 53 andrew verey grew sales in mcm’s chosen
segments by 14 per cent
40 peter costello all north america
industrial products division businesses
identified and entered new market segments
generating sales and profit growth
41 tom dietz led new market initiatives
which contributed to record breaking sales for
tpc in september 2004 42 john burton
improved kent europe’s cash collection
performance freeing up £06 million working
capital 43 dan peters successfully
integrated the £26 million acquisition of
gfe manufacturing into akron brass and
generated profits ahead of expectations
44 paul barlak worked with akron brass on
financial issues relating to the successful
acquisition and integration of
gfe manufacturing 
37 paul callaghan developed the plan to reduce
shipment defects by 20 per cent across all europe and
asia pacific next year building on the progress in our
european warehouses this year 38 chris haworth drove
service levels at farnell inone to the highest level on record
39 tom walkowiak created the team vision and
commitment to achieve a breakthrough in service levels
with the group total service project 
08   premier farnell plc annual report and accounts 2005
29 kevin yapp established farnell inone as industry leaders in rohs
winning customer accolades for our userfriendly help 30 steven webb
continued alignment between the legal function and the business by
focusing on our customers and measuring performance 31 andrew lewis
worked with the businesses to reduce group inventories by £85 million in
the fourth quarter 32 fabio ferrari introduced a new range of abrasives
which has generated sales of £13 million and repeat business in a new
product segment for kent 33 steven hopkins over the last two years
worked with my team to add over 80000 new products to the newark
inone range 34 james garthwaite transformed many of the group’s
internal and external corporate communications materials including this
report 35 philip thomas increased the frequency of risk reporting to the
executive team improving the company’s risk control environment
36 david gaskin reduced average interest rate on the group’s main
borrowings from 66 per cent to 63 per cent
t otal service
premier farnell is a service business it is the
foundation on which customer loyalty is built
we ship over 6 million orders each year  each
order is like a relay race with the order being
passed from sales order entry and product
availability to warehouse pick accuracy to
forwarder on time delivery to name but a few
t o deliver our service standards we require
excellence in every leg of that race and in the
handovers
across the group we measure a variety of
service metrics that cover all aspects of our
customers experience this year  across our
major businesses newark inone in north
america and farnell inone in europe
error rates have been reduced
our industrial products division also recognises
the importance of service and measures it
closely tpc wire  cable sets our internal
benchmark with the lowest error rate anywhere
in the group and kent achieved the greatest
improvement in the group reducing its error
rate by 57 per cent
premier farnell aims consistently to offer
service in line with the best available in our
markets this year we have launched a
programme to set new standards in service
for ourselves and for the industry 
we were delighted that a continuous
improvement auditor at one of our major
customers recently reported that the spare
parts management systems that we run for
them was almost perfect the better our
service the more opportunities we unlock as
customers gain the confidence to rely on us
premier farnell plc annual report and accounts 2005 11 premier farnell plc annual report and accounts 2005 09 8 brian lewis achieved three inter continental transfers of senior managers
symptomatic of a breakthrough in the group’ s globalisation process
9 hilary wingfield developed and launched a new performance review
process and our first 360degree reviews10 matt toogood led a
programme in which each of our 5000 employees spent three hours each
considering how our core values improve our customers’ experience and hence
our business 11ken palframan trained 75 per cent of key managers in
europe and asia pacific in interviewing techniques to ensure that new
employees are aligned with our core values12 joe daprile provided 18
training sessions across the group covering contracts data protection and
intellectual property rights 13 raymond kernagis completed 25 facilities
improvements projects identified by employees to improve working
environments across the group with a total spend of £250000
14 ken jochum controlled cost and improved service in the us healthcare
scheme benefiting all north american employees
talented people are the key to premier
farnells future last year the quality of our
business and its readiness for the future
were materially improved by the many
achievements of our senior leaders and their
teams across the group some of these
achievements are listed here
over the last five years premier farnell has
invested in leading edge information systems
upon which to develop its business the
benefit of this investment is being recognised
by customers suppliers and technology
partners alike
“with a vision of leveraging product information
as a strategic asset premier farnell has gained
huge benefits by creating a global product
repository across all inone companies it is
a prime example of innovative thinking within
its industry
“by creating a clear data structure and global
data synchronisation the inone companies
are now enabled to provide customers with
access to a global offering and identity across
a multitude of channels in print on cd and
in electronic channels their ability to deliver
information in a fast flexible and effective
manner results in a bestinclass solution that
continues to evolve” 
dan korsgaard ceo stibo catalog
“premier farnell has proved itself a flexible
partner with an excellent eprocurement
solution the fully customised web site provided
for us is delivering clear benefit enabling us
to control spending better and allowing our
staff to focus on their core job responsibilities
rather than the ordering process selecting
buckhickman inone alongside farnell inone
made perfect sense as the service from both
can be integrated into the same procurement
solution” 
fiona digbygrant head of corporate
commercial uk atomic energy authority
“premier farnell is an approved supplier of mro
and electronics products to bae systems
working together with them to develop a ‘round
trip’ et rading solution has provided us with a
controlled customised environment with all
the advantages of premier farnells web site
technology  although in its early stages of use
within our business it is already proving
beneficial in terms of process savings and the
ability to view realtime information premier
farnell has been a supportive and effective
supplier to our business over the last twelve
months and we look forward to growing our
relationship in the future” 
kathy mckenzie commodity lead 
bae systems
t echnology
10   premier farnell plc annual report and accounts 2005
“as a preferred supplier to uk universities and
the research councils premier farnell has not
only recognised the unique requirements of this
sector but also worked closely in partnership
with nuwpec to develop this unique service
offering that links farnell inone cpc and
buckhickman inone
‘ ‘the state of the art bespoke onecall web site
is a ‘onestop shop’ solution it provides vendor
reduction cost efficiencies and a dedicated
onecall contact centre demonstrating the
capabilities and flexibility of premier farnell as
a true purchasing partner ” 
david johnson chairman national
universities working party on electronic
components nuwpec
“premier farnell’ s deployment of endeca’ s
search and guided navigation platform is
worldclass premier farnell uses endeca to
bring together their exceptionally broad and
deep product catalogue and rich technical
content to deliver unparalleled value through
the online channel
“using endeca premier farnell’ s customers
get easy online access to over 2 million
products their attributes and related product
information enabling the entire purchasing
process for their demanding customer base
on the backend premier farnell leverages
endeca’s flexible architecture to power their
online presence globally on a single efficient
platform that will scale as their business
continues to grow” 
steve gurney  director of sales europe
endeca t echnologies inc
“buckhickman inone’ s ability to provide a
tailored eprocurement solution and fulfilment
using its local branch network was key to
them winning this supplier agreement since 
its implementation the individual branch
managers have been working very closely with
our sites to suggest and help them manage
their own tooling requirements and help prevent
inappropriate purchasing
“using the solution developed by buckhickman
inone has given us vital management
information to help us manage a diverse cost
centre this allows us to plan future efficiencies
and costdown programmes” 
howard reed procurement contracts
manager  rwe thames water
1
8
9
10 11 12
13 14
15
20 21 22 23
24 25 26
16 17 18
2
3 45 6 7
39
29 30 31 32
33 34 35 36
4142
43
44
3738
49 50 51 52 53
40
27 28
45 46 47 48
19
t alent
1 matt palmer secured contract renewals from rollsroyce plc and nuwpec and
tripled business from uk atomic energy authority 2 rob rospedzihowski created the
blueprint for a global accounts business and won a motorola global super supplier
award 3 rory boyes achieved the strongest sales and profit growth in australia for four
years 4 simon whitaker championed the asia service improvement plan and leveraged
both farnell inone and newark inone brands into asia 5 joan irving secured a
55 per cent increase in supplier investment in joint marketing activity 6 marianne culver
achieved significant improvement in relationships with key suppliers along with increased
understanding of our compelling value proposition 7 diane sweeney established a new
supplier management approach that assures resource allocation is aligned and prioritised
according to the needs of our customers 
15 bill maurer completed the consolidation of all europe and
asia pacific business units onto one back office system orbit
16 david abbott led the cpc team through the
implementation of the orbit back office system minimising
customer interruption 17 paul horton renegotiated the
group global telecommunications contract achieving an annual
saving of 700000 per annum 18 joanne hutchinson
created a global programme management team which has
successfully delivered over 92 medium and large scale projects
19 tom kartheiser launched a best practice initiative for it
service delivery across our global computer networks
20 stephen paterson delivered a truly global customer
relationship management capability that enhances customer
experience 21 graham johnson delivered 87 per cent of
core systems projects on time the ecommerce service level
agreement at 99 per cent – all under budget 22 robert
knight rolled out a common web platform to 21 countries
and a world class search engine to 25 web sites
23 gary niemand launched the ‘more time more selling’ project that is increasing sales
capability in newark inone branches 24 jim nichols achieved doubledigit growth in sales
in newark inone this year while significantly improving gross margins 25 paul tallentire
helped people across the newark inone business focus on gross margin resulting in a fourth
quarter rate 18 per cent higher than the fourth quarter last year 26 rick haning worked
with a team to reduce slow moving inventory by over 3 million 27 twyla gray led the
newark inone west region with california sales up 20 per cent 28 robin dye partnered
with key vendors like tyco vishay tektronix and fluke in the north east and canada and
drove the region to exceed sales and profit plan 
45 bernard j gizzi visited 18 cities in the us and met over 300 customers suppliers and
premier farnell employees in first five months in the job 46 steve canham delivered a strong
uplift in profits in the marketing and distribution division europe and asia pacific driven by
particularly strong growth outside the uk 47 neil harrison led buckhickman inone through
a difficult year and put in place a firm foundation for recovery 48 stephen makepeace
delivered significant uplift in operating profits in farnell inone uk 49 james bell encouraged
all the general managers within farnell inone southern europe to share best practice sales
were up 11 per cent this year 50 robert ainsworth led the project in the marketing and
distribution division europe and asia pacific to improve gross profit 51 ferdinand leicher
achieved highest sales ever in farnell inone germany with 12 per cent growth in the year
52 paul jennings reduced controllable costs and improved cash flow in buckhickman inone
branches through a reduction in stocks 53 andrew verey grew sales in mcm’s chosen
segments by 14 per cent
40 peter costello all north america
industrial products division businesses
identified and entered new market segments
generating sales and profit growth
41 tom dietz led new market initiatives
which contributed to record breaking sales for
tpc in september 2004 42 john burton
improved kent europe’s cash collection
performance freeing up £06 million working
capital 43 dan peters successfully
integrated the £26 million acquisition of
gfe manufacturing into akron brass and
generated profits ahead of expectations
44 paul barlak worked with akron brass on
financial issues relating to the successful
acquisition and integration of
gfe manufacturing 
37 paul callaghan developed the plan to reduce
shipment defects by 20 per cent across all europe and
asia pacific next year building on the progress in our
european warehouses this year 38 chris haworth drove
service levels at farnell inone to the highest level on record
39 tom walkowiak created the team vision and
commitment to achieve a breakthrough in service levels
with the group total service project 
08   premier farnell plc annual report and accounts 2005
29 kevin yapp established farnell inone as industry leaders in rohs
winning customer accolades for our userfriendly help 30 steven webb
continued alignment between the legal function and the business by
focusing on our customers and measuring performance 31 andrew lewis
worked with the businesses to reduce group inventories by £85 million in
the fourth quarter 32 fabio ferrari introduced a new range of abrasives
which has generated sales of £13 million and repeat business in a new
product segment for kent 33 steven hopkins over the last two years
worked with my team to add over 80000 new products to the newark
inone range 34 james garthwaite transformed many of the group’s
internal and external corporate communications materials including this
report 35 philip thomas increased the frequency of risk reporting to the
executive team improving the company’s risk control environment
36 david gaskin reduced average interest rate on the group’s main
borrowings from 66 per cent to 63 per cent
t otal service
premier farnell is a service business it is the
foundation on which customer loyalty is built
we ship over 6 million orders each year  each
order is like a relay race with the order being
passed from sales order entry and product
availability to warehouse pick accuracy to
forwarder on time delivery to name but a few
t o deliver our service standards we require
excellence in every leg of that race and in the
handovers
across the group we measure a variety of
service metrics that cover all aspects of our
customers experience this year  across our
major businesses newark inone in north
america and farnell inone in europe
error rates have been reduced
our industrial products division also recognises
the importance of service and measures it
closely tpc wire  cable sets our internal
benchmark with the lowest error rate anywhere
in the group and kent achieved the greatest
improvement in the group reducing its error
rate by 57 per cent
premier farnell aims consistently to offer
service in line with the best available in our
markets this year we have launched a
programme to set new standards in service
for ourselves and for the industry 
we were delighted that a continuous
improvement auditor at one of our major
customers recently reported that the spare
parts management systems that we run for
them was almost perfect the better our
service the more opportunities we unlock as
customers gain the confidence to rely on us
premier farnell plc annual report and accounts 2005 11 premier farnell plc annual report and accounts 2005 09 8 brian lewis achieved three inter continental transfers of senior managers
symptomatic of a breakthrough in the group’ s globalisation process
9 hilary wingfield developed and launched a new performance review
process and our first 360degree reviews10 matt toogood led a
programme in which each of our 5000 employees spent three hours each
considering how our core values improve our customers’ experience and hence
our business 11ken palframan trained 75 per cent of key managers in
europe and asia pacific in interviewing techniques to ensure that new
employees are aligned with our core values12 joe daprile provided 18
training sessions across the group covering contracts data protection and
intellectual property rights 13 raymond kernagis completed 25 facilities
improvements projects identified by employees to improve working
environments across the group with a total spend of £250000
14 ken jochum controlled cost and improved service in the us healthcare
scheme benefiting all north american employees
talented people are the key to premier
farnells future last year the quality of our
business and its readiness for the future
were materially improved by the many
achievements of our senior leaders and their
teams across the group some of these
achievements are listed here
over the last five years premier farnell has
invested in leading edge information systems
upon which to develop its business the
benefit of this investment is being recognised
by customers suppliers and technology
partners alike
“with a vision of leveraging product information
as a strategic asset premier farnell has gained
huge benefits by creating a global product
repository across all inone companies it is
a prime example of innovative thinking within
its industry
“by creating a clear data structure and global
data synchronisation the inone companies
are now enabled to provide customers with
access to a global offering and identity across
a multitude of channels in print on cd and
in electronic channels their ability to deliver
information in a fast flexible and effective
manner results in a bestinclass solution that
continues to evolve” 
dan korsgaard ceo stibo catalog
“premier farnell has proved itself a flexible
partner with an excellent eprocurement
solution the fully customised web site provided
for us is delivering clear benefit enabling us
to control spending better and allowing our
staff to focus on their core job responsibilities
rather than the ordering process selecting
buckhickman inone alongside farnell inone
made perfect sense as the service from both
can be integrated into the same procurement
solution” 
fiona digbygrant head of corporate
commercial uk atomic energy authority
“premier farnell is an approved supplier of mro
and electronics products to bae systems
working together with them to develop a ‘round
trip’ et rading solution has provided us with a
controlled customised environment with all
the advantages of premier farnells web site
technology  although in its early stages of use
within our business it is already proving
beneficial in terms of process savings and the
ability to view realtime information premier
farnell has been a supportive and effective
supplier to our business over the last twelve
months and we look forward to growing our
relationship in the future” 
kathy mckenzie commodity lead 
bae systems
t echnology
10   premier farnell plc annual report and accounts 2005
“as a preferred supplier to uk universities and
the research councils premier farnell has not
only recognised the unique requirements of this
sector but also worked closely in partnership
with nuwpec to develop this unique service
offering that links farnell inone cpc and
buckhickman inone
‘ ‘the state of the art bespoke onecall web site
is a ‘onestop shop’ solution it provides vendor
reduction cost efficiencies and a dedicated
onecall contact centre demonstrating the
capabilities and flexibility of premier farnell as
a true purchasing partner ” 
david johnson chairman national
universities working party on electronic
components nuwpec
“premier farnell’ s deployment of endeca’ s
search and guided navigation platform is
worldclass premier farnell uses endeca to
bring together their exceptionally broad and
deep product catalogue and rich technical
content to deliver unparalleled value through
the online channel
“using endeca premier farnell’ s customers
get easy online access to over 2 million
products their attributes and related product
information enabling the entire purchasing
process for their demanding customer base
on the backend premier farnell leverages
endeca’s flexible architecture to power their
online presence globally on a single efficient
platform that will scale as their business
continues to grow” 
steve gurney  director of sales europe
endeca t echnologies inc
“buckhickman inone’ s ability to provide a
tailored eprocurement solution and fulfilment
using its local branch network was key to
them winning this supplier agreement since 
its implementation the individual branch
managers have been working very closely with
our sites to suggest and help them manage
their own tooling requirements and help prevent
inappropriate purchasing
“using the solution developed by buckhickman
inone has given us vital management
information to help us manage a diverse cost
centre this allows us to plan future efficiencies
and costdown programmes” 
howard reed procurement contracts
manager  rwe thames water
1
8
9
10 11 12
13 14
15
20 21 22 23
24 25 26
16 17 18
2
3 45 6 7
39
29 30 31 32
33 34 35 36
4142
43
44
3738
49 50 51 52 53
40
27 28
45 46 47 48
19
t alent
1 matt palmer secured contract renewals from rollsroyce plc and nuwpec and
tripled business from uk atomic energy authority 2 rob rospedzihowski created the
blueprint for a global accounts business and won a motorola global super supplier
award 3 rory boyes achieved the strongest sales and profit growth in australia for four
years 4 simon whitaker championed the asia service improvement plan and leveraged
both farnell inone and newark inone brands into asia 5 joan irving secured a
55 per cent increase in supplier investment in joint marketing activity 6 marianne culver
achieved significant improvement in relationships with key suppliers along with increased
understanding of our compelling value proposition 7 diane sweeney established a new
supplier management approach that assures resource allocation is aligned and prioritised
according to the needs of our customers 
15 bill maurer completed the consolidation of all europe and
asia pacific business units onto one back office system orbit
16 david abbott led the cpc team through the
implementation of the orbit back office system minimising
customer interruption 17 paul horton renegotiated the
group global telecommunications contract achieving an annual
saving of 700000 per annum 18 joanne hutchinson
created a global programme management team which has
successfully delivered over 92 medium and large scale projects
19 tom kartheiser launched a best practice initiative for it
service delivery across our global computer networks
20 stephen paterson delivered a truly global customer
relationship management capability that enhances customer
experience 21 graham johnson delivered 87 per cent of
core systems projects on time the ecommerce service level
agreement at 99 per cent – all under budget 22 robert
knight rolled out a common web platform to 21 countries
and a world class search engine to 25 web sites
23 gary niemand launched the ‘more time more selling’ project that is increasing sales
capability in newark inone branches 24 jim nichols achieved doubledigit growth in sales
in newark inone this year while significantly improving gross margins 25 paul tallentire
helped people across the newark inone business focus on gross margin resulting in a fourth
quarter rate 18 per cent higher than the fourth quarter last year 26 rick haning worked
with a team to reduce slow moving inventory by over 3 million 27 twyla gray led the
newark inone west region with california sales up 20 per cent 28 robin dye partnered
with key vendors like tyco vishay tektronix and fluke in the north east and canada and
drove the region to exceed sales and profit plan 
45 bernard j gizzi visited 18 cities in the us and met over 300 customers suppliers and
premier farnell employees in first five months in the job 46 steve canham delivered a strong
uplift in profits in the marketing and distribution division europe and asia pacific driven by
particularly strong growth outside the uk 47 neil harrison led buckhickman inone through
a difficult year and put in place a firm foundation for recovery 48 stephen makepeace
delivered significant uplift in operating profits in farnell inone uk 49 james bell encouraged
all the general managers within farnell inone southern europe to share best practice sales
were up 11 per cent this year 50 robert ainsworth led the project in the marketing and
distribution division europe and asia pacific to improve gross profit 51 ferdinand leicher
achieved highest sales ever in farnell inone germany with 12 per cent growth in the year
52 paul jennings reduced controllable costs and improved cash flow in buckhickman inone
branches through a reduction in stocks 53 andrew verey grew sales in mcm’s chosen
segments by 14 per cent
40 peter costello all north america
industrial products division businesses
identified and entered new market segments
generating sales and profit growth
41 tom dietz led new market initiatives
which contributed to record breaking sales for
tpc in september 2004 42 john burton
improved kent europe’s cash collection
performance freeing up £06 million working
capital 43 dan peters successfully
integrated the £26 million acquisition of
gfe manufacturing into akron brass and
generated profits ahead of expectations
44 paul barlak worked with akron brass on
financial issues relating to the successful
acquisition and integration of
gfe manufacturing 
37 paul callaghan developed the plan to reduce
shipment defects by 20 per cent across all europe and
asia pacific next year building on the progress in our
european warehouses this year 38 chris haworth drove
service levels at farnell inone to the highest level on record
39 tom walkowiak created the team vision and
commitment to achieve a breakthrough in service levels
with the group total service project 
08   premier farnell plc annual report and accounts 2005
29 kevin yapp established farnell inone as industry leaders in rohs
winning customer accolades for our userfriendly help 30 steven webb
continued alignment between the legal function and the business by
focusing on our customers and measuring performance 31 andrew lewis
worked with the businesses to reduce group inventories by £85 million in
the fourth quarter 32 fabio ferrari introduced a new range of abrasives
which has generated sales of £13 million and repeat business in a new
product segment for kent 33 steven hopkins over the last two years
worked with my team to add over 80000 new products to the newark
inone range 34 james garthwaite transformed many of the group’s
internal and external corporate communications materials including this
report 35 philip thomas increased the frequency of risk reporting to the
executive team improving the company’s risk control environment
36 david gaskin reduced average interest rate on the group’s main
borrowings from 66 per cent to 63 per cent
t otal service
premier farnell is a service business it is the
foundation on which customer loyalty is built
we ship over 6 million orders each year  each
order is like a relay race with the order being
passed from sales order entry and product
availability to warehouse pick accuracy to
forwarder on time delivery to name but a few
t o deliver our service standards we require
excellence in every leg of that race and in the
handovers
across the group we measure a variety of
service metrics that cover all aspects of our
customers experience this year  across our
major businesses newark inone in north
america and farnell inone in europe
error rates have been reduced
our industrial products division also recognises
the importance of service and measures it
closely tpc wire  cable sets our internal
benchmark with the lowest error rate anywhere
in the group and kent achieved the greatest
improvement in the group reducing its error
rate by 57 per cent
premier farnell aims consistently to offer
service in line with the best available in our
markets this year we have launched a
programme to set new standards in service
for ourselves and for the industry 
we were delighted that a continuous
improvement auditor at one of our major
customers recently reported that the spare
parts management systems that we run for
them was almost perfect the better our
service the more opportunities we unlock as
customers gain the confidence to rely on us
premier farnell plc annual report and accounts 2005 11 premier farnell plc annual report and accounts 2005 09 8 brian lewis achieved three inter continental transfers of senior managers
symptomatic of a breakthrough in the group’ s globalisation process
9 hilary wingfield developed and launched a new performance review
process and our first 360degree reviews10 matt toogood led a
programme in which each of our 5000 employees spent three hours each
considering how our core values improve our customers’ experience and hence
our business 11ken palframan trained 75 per cent of key managers in
europe and asia pacific in interviewing techniques to ensure that new
employees are aligned with our core values12 joe daprile provided 18
training sessions across the group covering contracts data protection and
intellectual property rights 13 raymond kernagis completed 25 facilities
improvements projects identified by employees to improve working
environments across the group with a total spend of £250000
14 ken jochum controlled cost and improved service in the us healthcare
scheme benefiting all north american employees
talented people are the key to premier
farnells future last year the quality of our
business and its readiness for the future
were materially improved by the many
achievements of our senior leaders and their
teams across the group some of these
achievements are listed here
over the last five years premier farnell has
invested in leading edge information systems
upon which to develop its business the
benefit of this investment is being recognised
by customers suppliers and technology
partners alike
“with a vision of leveraging product information
as a strategic asset premier farnell has gained
huge benefits by creating a global product
repository across all inone companies it is
a prime example of innovative thinking within
its industry
“by creating a clear data structure and global
data synchronisation the inone companies
are now enabled to provide customers with
access to a global offering and identity across
a multitude of channels in print on cd and
in electronic channels their ability to deliver
information in a fast flexible and effective
manner results in a bestinclass solution that
continues to evolve” 
dan korsgaard ceo stibo catalog
“premier farnell has proved itself a flexible
partner with an excellent eprocurement
solution the fully customised web site provided
for us is delivering clear benefit enabling us
to control spending better and allowing our
staff to focus on their core job responsibilities
rather than the ordering process selecting
buckhickman inone alongside farnell inone
made perfect sense as the service from both
can be integrated into the same procurement
solution” 
fiona digbygrant head of corporate
commercial uk atomic energy authority
“premier farnell is an approved supplier of mro
and electronics products to bae systems
working together with them to develop a ‘round
trip’ et rading solution has provided us with a
controlled customised environment with all
the advantages of premier farnells web site
technology  although in its early stages of use
within our business it is already proving
beneficial in terms of process savings and the
ability to view realtime information premier
farnell has been a supportive and effective
supplier to our business over the last twelve
months and we look forward to growing our
relationship in the future” 
kathy mckenzie commodity lead 
bae systems
t echnology
10   premier farnell plc annual report and accounts 2005
“as a preferred supplier to uk universities and
the research councils premier farnell has not
only recognised the unique requirements of this
sector but also worked closely in partnership
with nuwpec to develop this unique service
offering that links farnell inone cpc and
buckhickman inone
‘ ‘the state of the art bespoke onecall web site
is a ‘onestop shop’ solution it provides vendor
reduction cost efficiencies and a dedicated
onecall contact centre demonstrating the
capabilities and flexibility of premier farnell as
a true purchasing partner ” 
david johnson chairman national
universities working party on electronic
components nuwpec
“premier farnell’ s deployment of endeca’ s
search and guided navigation platform is
worldclass premier farnell uses endeca to
bring together their exceptionally broad and
deep product catalogue and rich technical
content to deliver unparalleled value through
the online channel
“using endeca premier farnell’ s customers
get easy online access to over 2 million
products their attributes and related product
information enabling the entire purchasing
process for their demanding customer base
on the backend premier farnell leverages
endeca’s flexible architecture to power their
online presence globally on a single efficient
platform that will scale as their business
continues to grow” 
steve gurney  director of sales europe
endeca t echnologies inc
“buckhickman inone’ s ability to provide a
tailored eprocurement solution and fulfilment
using its local branch network was key to
them winning this supplier agreement since 
its implementation the individual branch
managers have been working very closely with
our sites to suggest and help them manage
their own tooling requirements and help prevent
inappropriate purchasing
“using the solution developed by buckhickman
inone has given us vital management
information to help us manage a diverse cost
centre this allows us to plan future efficiencies
and costdown programmes” 
howard reed procurement contracts
manager  rwe thames water
1
8
9
10 11 12
13 14
15
20 21 22 23
24 25 26
16 17 18
2
3 45 6 7
39
29 30 31 32
33 34 35 36
4142
43
44
3738
49 50 51 52 53
40
27 28
45 46 47 48
19
t alent
1 matt palmer secured contract renewals from rollsroyce plc and nuwpec and
tripled business from uk atomic energy authority 2 rob rospedzihowski created the
blueprint for a global accounts business and won a motorola global super supplier
award 3 rory boyes achieved the strongest sales and profit growth in australia for four
years 4 simon whitaker championed the asia service improvement plan and leveraged
both farnell inone and newark inone brands into asia 5 joan irving secured a
55 per cent increase in supplier investment in joint marketing activity 6 marianne culver
achieved significant improvement in relationships with key suppliers along with increased
understanding of our compelling value proposition 7 diane sweeney established a new
supplier management approach that assures resource allocation is aligned and prioritised
according to the needs of our customers 
15 bill maurer completed the consolidation of all europe and
asia pacific business units onto one back office system orbit
16 david abbott led the cpc team through the
implementation of the orbit back office system minimising
customer interruption 17 paul horton renegotiated the
group global telecommunications contract achieving an annual
saving of 700000 per annum 18 joanne hutchinson
created a global programme management team which has
successfully delivered over 92 medium and large scale projects
19 tom kartheiser launched a best practice initiative for it
service delivery across our global computer networks
20 stephen paterson delivered a truly global customer
relationship management capability that enhances customer
experience 21 graham johnson delivered 87 per cent of
core systems projects on time the ecommerce service level
agreement at 99 per cent – all under budget 22 robert
knight rolled out a common web platform to 21 countries
and a world class search engine to 25 web sites
23 gary niemand launched the ‘more time more selling’ project that is increasing sales
capability in newark inone branches 24 jim nichols achieved doubledigit growth in sales
in newark inone this year while significantly improving gross margins 25 paul tallentire
helped people across the newark inone business focus on gross margin resulting in a fourth
quarter rate 18 per cent higher than the fourth quarter last year 26 rick haning worked
with a team to reduce slow moving inventory by over 3 million 27 twyla gray led the
newark inone west region with california sales up 20 per cent 28 robin dye partnered
with key vendors like tyco vishay tektronix and fluke in the north east and canada and
drove the region to exceed sales and profit plan 
45 bernard j gizzi visited 18 cities in the us and met over 300 customers suppliers and
premier farnell employees in first five months in the job 46 steve canham delivered a strong
uplift in profits in the marketing and distribution division europe and asia pacific driven by
particularly strong growth outside the uk 47 neil harrison led buckhickman inone through
a difficult year and put in place a firm foundation for recovery 48 stephen makepeace
delivered significant uplift in operating profits in farnell inone uk 49 james bell encouraged
all the general managers within farnell inone southern europe to share best practice sales
were up 11 per cent this year 50 robert ainsworth led the project in the marketing and
distribution division europe and asia pacific to improve gross profit 51 ferdinand leicher
achieved highest sales ever in farnell inone germany with 12 per cent growth in the year
52 paul jennings reduced controllable costs and improved cash flow in buckhickman inone
branches through a reduction in stocks 53 andrew verey grew sales in mcm’s chosen
segments by 14 per cent
40 peter costello all north america
industrial products division businesses
identified and entered new market segments
generating sales and profit growth
41 tom dietz led new market initiatives
which contributed to record breaking sales for
tpc in september 2004 42 john burton
improved kent europe’s cash collection
performance freeing up £06 million working
capital 43 dan peters successfully
integrated the £26 million acquisition of
gfe manufacturing into akron brass and
generated profits ahead of expectations
44 paul barlak worked with akron brass on
financial issues relating to the successful
acquisition and integration of
gfe manufacturing 
37 paul callaghan developed the plan to reduce
shipment defects by 20 per cent across all europe and
asia pacific next year building on the progress in our
european warehouses this year 38 chris haworth drove
service levels at farnell inone to the highest level on record
39 tom walkowiak created the team vision and
commitment to achieve a breakthrough in service levels
with the group total service project 
08   premier farnell plc annual report and accounts 2005
29 kevin yapp established farnell inone as industry leaders in rohs
winning customer accolades for our userfriendly help 30 steven webb
continued alignment between the legal function and the business by
focusing on our customers and measuring performance 31 andrew lewis
worked with the businesses to reduce group inventories by £85 million in
the fourth quarter 32 fabio ferrari introduced a new range of abrasives
which has generated sales of £13 million and repeat business in a new
product segment for kent 33 steven hopkins over the last two years
worked with my team to add over 80000 new products to the newark
inone range 34 james garthwaite transformed many of the group’s
internal and external corporate communications materials including this
report 35 philip thomas increased the frequency of risk reporting to the
executive team improving the company’s risk control environment
36 david gaskin reduced average interest rate on the group’s main
borrowings from 66 per cent to 63 per cent
t otal service
premier farnell is a service business it is the
foundation on which customer loyalty is built
we ship over 6 million orders each year  each
order is like a relay race with the order being
passed from sales order entry and product
availability to warehouse pick accuracy to
forwarder on time delivery to name but a few
t o deliver our service standards we require
excellence in every leg of that race and in the
handovers
across the group we measure a variety of
service metrics that cover all aspects of our
customers experience this year  across our
major businesses newark inone in north
america and farnell inone in europe
error rates have been reduced
our industrial products division also recognises
the importance of service and measures it
closely tpc wire  cable sets our internal
benchmark with the lowest error rate anywhere
in the group and kent achieved the greatest
improvement in the group reducing its error
rate by 57 per cent
premier farnell aims consistently to offer
service in line with the best available in our
markets this year we have launched a
programme to set new standards in service
for ourselves and for the industry 
we were delighted that a continuous
improvement auditor at one of our major
customers recently reported that the spare
parts management systems that we run for
them was almost perfect the better our
service the more opportunities we unlock as
customers gain the confidence to rely on us
premier farnell plc annual report and accounts 2005 11 premier farnell plc annual report and accounts 2005 09 john hirst
group chief executive
in recent years the focus of premier farnell’ s
business has evolved from managing just the
physical flow of goods from supplier to
customer to exploiting the vast amount of
knowledge and data available to us through the
use of sophisticated information technology 
many of our activities are increasingly integrated
with those of our customers and suppliers and
together we are creating seamless purchase
and supply processes
we now offer all our customers greater
ease of doing business and more reliable
service for example we enable customers to
reduce significantly the expense of managing
sometimes hundreds or even thousands of
small orders placed with us for many  we can
now offer a new source of value visibility and
confidence in what is being purchased by
designers maintenance engineers and
procurement professionals across their
organisations
the understanding of customer needs is
enabling us to offer suppliers a clearer view of
their markets we can help new products find
their target market quicker and more effectively 
major suppliers now consider us an extension
of their marketing activities
thus our potential depends more than ever 
upon the quality of our relationships with
customers and suppliers the talent of our
people our use of information technology and
our total service will determine our success
these three areas have been the focus of our
investment over recent years
talent
t alent provides the only basis for longterm
success month by month we improve the
quality and effectiveness of our operations
through disciplined management and the
sharing of expertise across the group
we work hard to attract and retain the very best
people we have transformed many of our
practices for recruitment development and
reward we share four core values – totally
reliable resourceful intuitive and with
integrity – that underpin everything we do in the
organisation identified by our customers they
are an enduring point of reference for all
employees
technology
over several years we have invested some
£40 million in leading edge information systems
– customer relationship management
systems give us insight into the composition
of our customer base and the needs and
behaviours of individual customers and
groups we give them better service because
the information that we need is at our
fingertips
– global product database and publishing
systems make the management of our
portfolio of some 400000 individual products
far more effective we can now add new
products weekly  a single system now
manages publication of product details to our
catalogues flyers cds and to the web the
process is fast accurate and flexible –
essential attributes in the dynamic markets
in which we operate
chief executive’s review
strategy for growth
12 premier farnell plc annual report and accounts 2005
  – robust back office systems now give us
complete visibility of the inventories that we
carry  they enable us to improve our service
and are crucial in the effective management of
our inventories and logistics processes
– a single ecommerce platform we are
progressively migrating all our ecommerce
services onto a single platform as the
platform develops it supports all of our
web sites as well as a growing number of
bespoke eprocurement solutions the rollout
of a common web search engine across the
group was an important step this year 
the rapid growth in our ecommerce sales
up 56 per cent this year in the marketing and
distribution division is testament to the
quality of the service that we can already offer 
in the fourth quarter of the year  ecommerce
accounted for 17 per cent of sales in that
division
t otal service
t otal service is the core of our proposition
having an enormous range of products in
stock coupled with quick and reliable delivery 
is only the start
premier farnell aims consistently to offer service
in line with the best available in our markets
this year we have launched a programme to
set new standards in service for ourselves and
for the industry  the programme is based upon
a variety of metrics that cover all aspects of our
customers’ experience we expect this
programme to create a new benchmark within
our industry 
we are also building our valueadded services
for customers of particular focus this year  we
aim to be the first place our customers turn to
for help to navigate through the complexities
arising from the european directive restricting
the use of certain hazardous substances in
electrical and electronic equipment rohs
directive and similar requirements in a number
of our other key markets
the better our service the more opportunities
we unlock as customers gain the confidence to
rely on us
market opportunities
most markets in which we currently operate
are highly fragmented although one of the
leaders we typically have small market shares
and considerable opportunity for market
share growth
the growing insight we have into our customer
base enables us to define and target new
market segments tailoring the right product
range and service to appeal to them for
example in the uk we have captured a large
share of the higher education market through a
bespoke service for that market in north
america we have dramatically increased
product ranges to meet the needs of electronic
design engineers
our international distribution networks
mean that we can build a presence in new
geographic markets without heavy investment
in further warehousing and inventory  the ability
to utilise existing assets across a growing
business has been demonstrated through the
opening of our offices in italy and spain in
recent years
increasingly  our largest customers want us to
support their operations internationally  we are
happy to help servicing their needs is helping
us create a foundation from which to expand
into growth markets such as china
acquisitions
whilst organic growth is fundamental to our
strategy we will use selected acquisitions to
accelerate our growth and develop our
proposition we look for acquisitions that
increase our capability in selected countries
add valuable product and service knowledge or
reach attractive market segments
the measures of our success
we aim to
– grow our market share consistently in order
to achieve the number one or two position in
our markets
– operate only in markets that value high
service sufficiently to sustain our pricing
proposition
– establish global coverage to support our key
customers and suppliers
– deliver a superior return on sales sufficient to
provide investment to fuel growth
– act as responsible corporate citizens
in this way  we are confident that we will deliver
superior growth profitability and shareholder
value
john hirst
group chief executive
premier farnell plc annual report and accounts 2005 13 chairman’s statement
14 premier farnell plc annual report and accounts 2005
sir malcolm bates
chairman retired 280205 
john r hirst
group chief executive 
d john s roques
nonexecutive director
laurence bain 
group chief operating officer 
william b korb
nonexecutive director
board of directors and officers
for full biographies of the board of directors and
officers see page 32
the group has continued to make good progress this year we achieved growth in sales and profit before
tax has increased by 10 per cent on last year despite the continued weakness of the us dollar and
the disappointing performance of buckhickman inone the north american electronics market was
strong in the first half of the year but the rate of growth started to slow in the third quarter and
was very limited by the yearend nonetheless we grew sales in our marketing and distribution
division in north america by 117 per cent in the year and continued to improve gross margins sales
at farnell inone reached record levels despite the slow down of european markets in the second half
sales were particularly strong in mainland europe buckhickman inone had a difficult trading year
but sales levels stabilised towards the end of the year
profit before tax in the year was £603 million 2004 £548 million profit
before tax and goodwill amortisation was £630 million 2004 £573 million
before goodwill amortisation and gain on business disposal
earnings per share for the year were up 22 per cent to 110 pence
2004 90 pence adjusted earnings per share for the year before
amortisation of goodwill were 117 pence 2004 102 pence before
amortisation of goodwill rebranding costs and gain on business disposal
the board is recommending a final dividend of 50 pence 2004 50 pence
making a total for the year of 90 pence 2004 90 pence the dividend is
covered 12 times by profit attributable to ordinary shareholders and
13 times by profit attributable to ordinary shareholders before goodwill
amortisation the final dividend is payable on 22nd june 2005 to
shareholders on the register on 27th may 2005
financial results
group sales for the year were £7767 million 2004 £7646 million
this comprised sales of £6800 million in the marketing and distribution
division and sales of £967 million in the industrial products division
operating profit for the year was £738 million 2004 £690 million
producing an operating margin of 95 per cent 2004 90 per cent
adjusted operating profit for the year was £765 million before goodwill
amortisation of £27 million 2004 £740 million before rebranding costs
of £24 million and goodwill amortisation of £26 million producing an
adjusted operating margin of 98 per cent 2004 97 per cent operating
profit was affected by a reduction in the net pension credit of £13 million
and a £08 million increase in depreciation following the rollout of the
customer relationship management software premier farnell plc annual report and accounts 2005 15
michael lester
nonexecutive director 
andrew c fisher
group finance director 
cary j nolan
nonexecutive director 
sir peter gershon 
chairman
steven webb
company secretary and general counsel 
balance sheet and cash flow
the group’ s financial position is sound net debt at 30th january 2005
was £2007 million 1st february 2004 £2019 million and interest was
covered 57 times by operating profit before goodwill amortisation net
cash flow from operating activities was £725 million 2004 £700 million
working capital increased by £199 million driven by investment in
inventory to support an expansion of our product range and sales
growth in the year  net cash outflow after dividends and £26 million
of acquisitions was £70 million
acquisition
in february 2004 we acquired the business of gfe manufacturing inc
an illinoisbased supplier of lighting systems and water flow test
equipment for the firefighting industry  for £26 million this acquisition
which expanded akron brass’ s product range has exceeded
expectations for sales and profit
business progress
we continue to make good progress on our strategic priorities during the
year  we have focused on developing our business with larger corporate
accounts expanding our presence with smaller customers improving
product ranges and providing industryleading service through our
ecommerce capability and our more traditional marketing channels
the operating review on pages 16 to 20 provides the details of our
achievements in these areas
staff
since joining the board in june 2004 i have been impressed by the
quality and excellent commitment of our staff on behalf of the board
i would like to thank all our employees for their continued hard work
during another demanding year 
sir malcolm bates retired as chairman in february after eight years during
which he steered the group through significant change and led the
transformation of the business on behalf of all the group’ s shareholders
directors and employees i would like to thank him for his wise advice
counsel and guidance and wish him a long and happy retirement
outlook
we have prepared our plans for the coming year in the expectation that
the north american market will show no growth in the first half and may
only begin to strengthen in the second half of the year  despite weaker
underlying markets in the uk and mainland europe there are specific
opportunities for the group to grow market share the actions we have
taken should lead to a better performance from buckhickman inone
the impending legislation on the restriction of the use of certain
hazardous substances rohs will have a significant impact in a number
of our main markets premier farnell has been working closely with
suppliers to provide leadership in assisting customers prepare for the
legislation we believe that we are well placed to offer our customers and
suppliers the information support and product choice they require to
comply with the legislation
the quality of our service to both customers and suppliers is increasingly
underpinned by the technology infrastructure that has been put in place
the significant operational improvements and increased marketing
effectiveness built into the business over recent years give us confidence
that we can continue to improve our performance and our market shares
sir peter gershon
chairman 16 premier farnell plc annual report and accounts 2005
the marketing and distribution division
comprises five closely related businesses
t ogether they represent 88 per cent of the
group’ s sales and 84 per cent of the group’ s
operating profit t ypically  these businesses
distribute a wide range of electronic components
and other maintenance repair and operations
products into private and public sector markets
our businesses are high service small order
distributors they buy from a large number of
suppliers some 3000 in total perform the
traditional role of managing the physical flow of
goods and increasingly  add significant value to
customers and suppliers alike through the
management of information flows
they serve the lower volume and highly mixed
needs of designers small scale production
units procurement specialists and maintenance
and repair engineers in industry and the public
sector in these areas service is the key
differentiator  they are not positioned to supply
the high volumes of components that are fed
into mass production processes
we have over 2 million customer contacts who
are attracted by a common need for a broad
product range met by our inventory of around
400000 stocked products fast and reliable
delivery and specialist technical support
geographical reach
although the majority of our sales are currently
in the americas 43 per cent and the uk
39 per cent we are increasingly a global
business this year  sales in the rest of europe
and asia pacific represented 18 per cent of the
division’ s total sales we are able to deliver
products to anywhere in the world in a
few days
most of the markets in which we operate are
highly fragmented and while market shares are
relatively small newark inone in the us and
farnell inone in the uk are well known names in
the markets they serve both businesses are
leaders in the high service distribution markets
for electronic components
our assets
we have sales offices in 21 countries and the
capability to distribute products worldwide
we hold around 400000 products in stock
available for same day despatch
our multiple sales channels – paper catalogues
transactional web sites inbound and outbound
call centres field sales and branch networks –
provide customers with a choice to suit their
specific needs
we offer technical information and support via
our technical data sheets web sites and teams
of engineers
we hold supplier franchises for market leading
product brands and offer ranges of our own
brand products
our market proposition
t o our customers we offer real economic
benefit and peace of mind
– reduced stockholding costs through easy
access to a huge range of products in the
quantities required
– reduced transaction costs through
eprocurement efficient processes and
supplier reduction
– secure reliable and rapid supply of products
which are easy to identify  select and order
– technical information and support
through technical data sheets and our
technical helplines
– wide choice of sales channels to match
their needs
– supply chain management solutions
t o our suppliers we represent the most
effective means of reaching a valuable and
diverse customer base
– effective multichannel marketing to
customers they wish to reach
– market intelligence and feedback
– product launches
– reliable and swift global distribution
– product and application related technical
support to their customers
t rends in our market
customers require a variety of product ordering
channels to suit their specific needs along with
fast and easy access to products and services
increasingly they are reducing inventory and
ordering closer to their point of need – so
requiring reliable supply  late order capability
and next day service
many large and small manufacturing
companies are focusing on their core
processes and streamlining or outsourcing
the procurement of their maintenance repair
and operations mro product requirements to
reduce costs of purchasing and manage the
supply chain more effectively
the consolidation of electronic component
manufacturers and reduction in the number of
distributors they want to work with is favouring
companies like us with high brand recognition
and global reach
as manufacturing migrates to low cost
economies such as china mexico and eastern
europe and the infrastructure grows in these
countries the requirement for the mro
products we supply will continue to increase in
these regions however  the requirements of
researchanddesignsmallscalemanufacturing
and maintenance also continue to create
demand for our products and services in our
traditional geographic markets
european directives restricting the use of
certain hazardous substances rohs and
imposing obligations in respect of waste
electronic and electrical equipment weee are
currently being implemented the rohs
directive prohibits the use of substances such
as lead mercury and cadmium in electronic and
electrical products unless specific exemptions
apply similar legislation is also pending in a
number of states in the us and in china
managing within the supply chain the
introduction of compliant products which in
many cases will replace current products is
creating significant demands upon and
opportunities for  suppliers distributors and
customers alike
operating review
marketing and distribution division  premier farnell plc annual report and accounts 2005 17
sales strategy
we have a wider choice of channels than many
of our competitors and continue to invest to
ensure that we stay ahead of customer needs
we are increasingly serving larger national and
international customers with the combined
product and service offer of our major brands
we have improved our capabilities in the
provision of eprocurement solutions for our
large customers we have created clear
differentiation in our market through our ability
to link to almost any purchasing or enterprise
resource planning system our customers may
have the flexibility and robustness of our
solutions has won us valuable and important
agreements with many large companies
eprocurement which enables the automation
of most of the commercial mechanics from the
ordering process to invoicing and payment
delivers significant customer benefits including
– reducing the cost of administering and
processing orders
– shortening the purchasing process
– reducing errors in ordering
– eliminating rogue purchasing and ensuring
only approved or contracted suppliers are
used
– minimising the risk of buying inferior products
offcontract
– increasing transparency of purchasing data
we have 378 live eprocurement agreements
and eprocurement sales grew by 73 per cent
year on year and accounted for 6 per cent of
total division sales by the end of the year 
the customer relationship management
system which has now been fully operational
in newark inone in the us and farnell inone in
the uk for some 18 months has significantly
strengthened our marketing capabilities these
have helped increase catalogue distribution
stimulate customer recruitment and drive sales
campaigns t argeted telemarketing campaigns
helped us stimulate growth in sales amongst
our smaller customers and contributed to the
55 per cent growth in the active customer base
in these businesses year on year 
our customers rely on our ability to supply
products quickly and accurately  farnell inone
customer metropolis av  fx ltd were
approached by cartier  the world famous
watchmakers and jewellers as part of their
150th anniversary celebrations to make the
exterior of their new y ork store glitter with
replica tiaras and a giant bow metropolis
specialises in the design and installation of
audiovisual equipment lighting and special
effects farnell inone supplied them on time
and in full with the many thousands of light
emitting diodes needed to make their design
a reality
mcm an inone company  continues to
develop its business through market
segmentation success has been achieved
by utilising customer relationship management
eprocurement solutions and customised
web sites
major wins
we have been selected again by the national
universities working party on electronic
components nuwpec to be the preferred
supplier for the uk higher education sector
and research councils the nuwpec
agreement covers a new threeyear period with
an anticipated sales value of £20 million over
that time we have retained the agreement
through two reviews since we first won it in
1999 the service provides a single point of
ordering for over 250000 products and
significantly cuts administration time and
costs reduces paperwork and assists in the
reduction of rogue purchasing within
participating institutions
farnell inone has won an agreement with
robert bosch gmbh for the supply of
electronic and electromechanical components
to all of bosch’ s european sites major benefits
to bosch include an online eprocurement
solution to increase purchasing control as well
as supplier reduction bosch purchasers have
access to a specifically tailored product range of
80000 electronic and electromechanical
components
buckhickman inone has won a contract to
supply the uk atomic energy authority
ukaea with all their tooling requirements
this is in addition to the existing contracts with
ukaea for the supply of personal and
protective equipment from buckhickman
inone and for electrical and electronic
equipment from farnell inone ukaea are
provided with a tailored online catalogue and a
bespoke web site of approximately 100000
products enabling them to streamline
purchasing better control spending and ensure
their employees buy from approved suppliers
buckhickman inone has secured a supplier
agreement with rwe thames water  providing
them with a tailored eprocurement solution and
the fulfilment of the buckhickman inone local
branch network branch managers have been
working very closely with the rwe thames
water sites to assist in the management of their
tooling requirements the benefits to the
customer are better management information
and cost control
newark inone’ s five year agreement secured in
2002 from the general services administration
gsa means the company is eligible to provide
us government agencies with more than
400000 products sales to the government
sector grew in the year by 16 per cent
service to customers
we have developed additional services to
strengthen our basic proposition which enable
us to build stronger and deeper relationships
with our customers
a major area of concern for design engineers
is the speed with which components become
obsolete and the risk of designing these into
new products our productwatch service
alerts the customer if the components they
have specified or are using are scheduled to
become obsolete and advises them of a
suitable replacement
we have developed software and systems
which enable us to extend our inventory
management skills into our customers’
premises vauxhall outsourced the supply of all
the mro product requirements of its ellesmere
port manufacturing plant to buckhickman
inone in 2002 we have established a sales
branch on site and supply direct to the
production line through 150 cabinets located
throughout the plant
newark inone has expanded its technical
support capability it now has a team of
engineers able to provide design customers
with expert product and applicationrelated
assistance
farnell inone has developed a dedicated
web site to assist customers in understanding
the impact of the rohs and weee legislation
monthly updates have been emailed to the
85000 customers who receive our regular
news alert service the industry’ s first
stepbystep guide to the rohs legislation
has been published in conjunction with
era t echnology and the first catalogue of
rohs compliant product was distributed to
customers early in 2005 customers can also
search on the web site using rohs as the
attribute to locate any of the 12000 compliant
products listed this number will be added to
continuously throughout the coming year  farnell inone’ s head of product market
strategy chairs the rohs subcommittee
of the uk’ s principal trade association the
association of franchised distributors of
electronic components afdec and has
spoken at a number of major international
conferences through an active public relations
campaign the group has successfully raised
the profile of the issues around rohs and
weee in the industry 
working with our suppliers
t o our suppliers we represent a very effective
means of reaching a valuable and diverse
customer base our multichannel marketing
facilitates the launch of new products targeted
at specific types of customers this year we
have run global product launches for electronics
suppliers molex targeted at the industrial sector
and microchip targeted at electronic design
engineers the microchip launch was
supported by newark inone and farnell
inone’ s technical support teams
product range
our inone businesses keep around 400000
products in stock and make a further 43 million
available to our customers via our supplier
relationships
as we use our customer relationship
management systems to understand better the
specific requirements of our customers we are
increasing the depth and relevance of our
product offer 
at newark inone in order to compete more
effectively in the design engineers’ segment we
added 28000 new products to the catalogue
published in september 
we were the first catalogue distributor in north
america to offer a free of charge rereeling
service on custom length reels of passive
component tape with same day shipping –
a service which is of particular value to
manufacturers of small quantities – saving them
time and money
upgrading our systems
we are constantly improving the effectiveness
of our marketing and levels of service through
our increasing understanding of our customers’
buying patterns and requirements
the prime source of this market intelligence is
the millions of transactions and other contacts
with our customers and suppliers our
investment in information technology enables
us to take our product and customer data
interpret it and identify new ways in which to
improve and differentiate our offer from that of
our competitors
our new publication management system
enables the global management of product
data and allows new products to be added and
launched weekly  it also makes the publication
of web pages catalogues flyers and other
marketing materials faster  more accurate and
more responsive to market changes
our new web site search engine has been rolled
out successfully  it is easy to use and gives fast
online access to over 2 million products the
intelligent searching enables customers to
‘search as they think’ drilling down into
information logically  using specific product
attributes to find what they need a
‘breadcrumb trail’ means buyers can retrace
one or more steps without having to begin an
entirely new search invaluable when looking for
products with similar characteristics t otal
ecommerce sales through our web sites
and eprocurement arrangements increased
56 per cent over last year and now account
for 18 per cent of sales in the americas and
17 per cent of those in the europe and
asia pacific region
farnell inone buckhickman inone and cpc
are all now operating on the same transactional
system allowing them to make the complete
product offer of all three businesses available to
customers more easily 
our warehouse in liège belgium has
continued to maintain high service levels while
increasing order volumes liège utilises our
most advanced warehouse technology  we are
able to achieve some of our highest levels of
productivity  accuracy and efficiency through
our investment in state of the art pick and pack
technology
geographic expansion
we have developed our presence in china in
response to demand from our global customers
with operations there we have a representative
office in beijing and a sales office and
warehouse in shanghai shortly after the
yearend we appointed a new experienced
managing director for farnellnewark inone in
china to spearhead our growth in this rapidly
developing market
looking ahead
in the coming year our principal areas of focus
will be
– providing our customers with an
industryleading product range and supplier
portfolio
– leveraging our information technology
investments in customer relationship
management and webenabling technologies
to expand our presence with small and
medium size customers
– providing information technical support and
an increasing range of rohs compliant
products to our customers
– further developing our service and
segmentation proposition through
complementary ecommerce and traditional
marketing channels including for the first time
global and panregional new product launch
campaigns targeting the industrial sector  and
increasingly  electronic design engineers
the continued transformation of our business
into a world leading marketing and distribution
business is our primary objective through the
strength of our team the power of our
technology and the quality of our service we
believe we can build market share and deliver
superior levels of profitability 
operating review
marketing and distribution division continued
18 premier farnell plc annual report and accounts 2005 the industrial products division is a group
of businesses supplying high performance
products to specialist industrial markets the
division accounts for 12 per cent of sales and
16 per cent of operating profits the markets in
which these businesses operate are distinct
and varied
akron brass
akronbrassisamarketleaderinthemanufacture
and sale of high performance firefighting
equipment for fire truck manufacturers public
fire services and industrial facilities its products
are designed to improve the safety and
efficiency of personnel and equipment engaged
in the suppression of fire it sells through its own
field sales force and distributors to customers
all over the world
our assets
our offices warehouse and manufacturing are
located in wooster ohio we also have a sales
and distribution facility in canada and a second
manufacturing facility in washington illinois we
have a direct sales force operating throughout
the world and a worldwide distribution network
our market proposition
we offer our customers
– a complete range of products which is
continually being updated
– total service in the selection of the product
best suited to the customer’ s specific needs
and after sales support
– fast and efficient handling of product orders
and special requests
– web site access to detailed product
information
– field support with onsite demonstrations
hands on product training and
demonstration vehicles with the latest
equipment on board
– technical assistance including product repair
seminars repairs and rebuilding of equipment
t rends in our market
market conditions in the us fire truck
manufacturing sector remain stable while
demand from europe and asia is strong
our customers are increasingly using the
worldwide web as a source of information in the
process of specifying their requirements web
sites supported by international distributors are
creating a globally competitive market
new markets for industrial products and
systems are creating significant opportunities
for growth
sales strategy
we continue to pursue the opportunities
presented by our first class range of products
and many years of experience to expand our
sales operations into new markets
we have successfully expanded into new
geographies and have made significant
progress in asia where we recently appointed
a new distributor 
we are applying our expertise in fire control to
the new area of vapour control and expanding
our activities into the mining industry and sales
to the us federal government
major wins
we continue to make good progress in the
industrial market and are building our
relationship with exxon mobil corporation to
whom we have sold a second vapour mitigation
system for their chalmette louisiana facility
t wo major european truck manufacturers have
converted to our roof turrets used on airport
emergency trucks instead of building their own
this represents an opportunity for us going
forward
product range
the acquisition of gfe manufacturing inc in
the first quarter of the year has extended our
product range into lighting products and
enabled us to increase our penetration of a
new market
industrial products and systems including
remote controlled monitoring systems are
allowing us to develop opportunities in new
industries and new geographies
our saberjet nozzle which enables firefighters
to deliver a straight stream of water to tackle the
base of a fire while gaining the personal
protection of highly effective fog spray and our
mercury quick attack monitor  which is quick to
set up delivers a high flow of water and can be
left unmanned both continue to sell well and
consolidate our position in our core market
building our capabilities
we have made significant investment this year
in our new product development capability  we
have expanded our machine shop and added
several new work centres to enable us to
increase capacity and improve flexibility in the
design of new products we have also
restructured the marketing and engineering
departments in order better to meet the
demand for product innovation
tpc wire  cable
tpc wire  cable is a marketer and supplier of
high performance electrical and electronic wire
cable and connectors designed for heavy duty
or harsh industrial environments
our assets
our offices are located in independence ohio
with a warehouse facility in mentor  ohio in
addition we have a sales office and warehouse
in mexico we operate in the united states
canada and mexico and have a fieldbased
sales organisation working alongside a central
officebased sales team we also have
specialised teams focused on servicing
particular customer segments
our market proposition
we offer our customers
– product innovation to ensure we are highly
responsive to their evolving needs
– a range of products held in stock and
available for immediate delivery
– complete ordering flexibility with products
sold by the foot metre or piece to meet their
precise requirements
– a choice of sales channels orders can be
placed by phone or online via edi or
ecommerce
– onsite support from fieldbased engineers
who specialise in wire cable and connectors
and work with customers to determine their
specific needs and develop tailored solutions
– technical and product design assistance
provided by a central products team
t rends in our market
the requirement to reduce production
downtime and lower overall maintenance costs
continues to be the primary driver in our market
while our traditional customer base in the us
automotive and steel industries face economic
challenges the overall market conditions have
improved during the year 
new markets for our range of products and
services are developing in offshore drilling
platform construction mining utilities and the
shipbuilding industry
operating review
industrial products division 
premier farnell plc annual report and accounts 2005 19 sales strategy
we are focused on developing a range
of products with superior performance
characteristics that ensure they meet our
customers’ requirements for longerlasting
safer products and longterm cost reduction
at the core of our sales strategy is the
development of our team of experienced and
knowledgeable people which enables us to
offer customers design and technical expertise
and customised solutions to their specific
application we are known in our industry for
our expertise and creativity in problem solving
for our customers we have recently added
resources to our team in the engineered
products department
we are expanding our operations into new
geographies as the demand for our products
and services increases alongside the growth of
industrial manufacturing in central and south
america sales in mexico are up 40 per cent on
last year 
reactivating customers who have not
purchased during a twelvemonth period has
been an active goal throughout the year  these
accounts were targeted in a direct mail
campaign with special incentives and a follow
up sales call over 400 accounts have been
reactivated and the resultant sales exceeded
our expectations
new markets
we are expanding our business through the
development of new customers in offshore
drilling platform construction mining utilities
and the shipbuilding industries
major wins
tpc was awarded a general services
administration gsa contract under the
federal supply schedule in 2003 to provide all
federal state and local government facilities
with access to the entire tpc product range
investment has been made in the new systems
which will enable the business to market
effectively to all government facilities and
contractors sales under the gsa are over
200 per cent up on last year 
20 premier farnell plc annual report and accounts 2005
product range
our team of product managers is working to
expand our capacity so that we can deal with
more suppliers and develop new supplier
relationships in order to enhance further our
product range this year we have added
275 new products to our range sales of which
accounted for 18 per cent of total sales
custom mechanical connectors have been
a growing segment for us we continue to
expand our product offering and capabilities
sales have increased by 33 per cent this year 
kent
kent specialises in the sale and distribution of
products aimed at professional customers in
the automotive aftermarket and industrial
repair markets
our assets
we operate throughout europe and have a
fieldbased sales organisation of 350 people
supported by officebased sales teams
our market proposition
we offer our customers
– technology led product solutions with a range
of 3000 products held in stock
– high levels of customer service
– online material safety data sheets for all
products
– a choice of sales channels orders can be
placed by phone or with our fieldbased sales
people products are accessed by paper and
electronic catalogues
– an extensive programme of onsite customer
training
t rends in our market
the european union has a stated objective to
reduce significantly the number of accidents in
all countries through active traffic restrictions
and passive vehicle design measures these
have resulted in a downturn in the automotive
repair market
changes to european block exemption
regulations relating to the original equipment
manufacturers market has brought about
significant changes in the structure of the
market with rapid consolidation of customers
into larger economic units and multibrand
dealerships becoming commonplace
sales strategy
despite unfavourable market conditions we
have increased our sales and market share in
both the automotive and the industrial
maintenance markets through our focus on
– developing strategic partnerships with key
suppliers to ensure our products retain their
performance advantage
– the ongoing recruitment of field sales
executives to expand geographic reach
in europe
– strengthening our key account management
in order to support large multinational
customers
– working with original equipment
manufacturers to build our presence in
this market
– maintaining our investment in developing the
skills of our selling teams through inhouse
training programmes
new markets
we are expanding our business following the
appointment of new distributors in greece
and hungary
we have identified a significant opportunity in
the marine leisure market and have a developed
a full product range and catalogue targeted at
this sector 
major wins
t rading relationships have been reached with a
number of oem customers across europe to
sell approved products in the aftermarket
product range
we have this year improved our product
development processes sales from new
products accounted for 85 per cent of total
sales with major contributions coming from the
launch of a new windscreen adhesive and the
distribution of a new range of abrasives which
offer considerable benefits over current
market leaders
operating review
industrial products division continued premier farnell plc annual report and accounts 2005 21
at its heart premier farnell is essentially a
people business it is a business that is
dependent upon ongoing and effective
relationships between our employees and our
customers and suppliers it is our employees
who translate our product and service offering
into reality every day by meeting and exceeding
both customer and supplier expectations the
key is the consistent delivery of our proposition
through the appropriate behaviours and actions
of all employees it is for this reason that the
group places so much emphasis on the need
to have an appropriate talent base
in 2003 the group began a programme of
familiarisingall5000employeeswithcorevalues
essential to the provision of good service these
values totally reliable resourceful intuitive
and with integrity were identified by our
customers this introductory phase was
completed in 2004 and is being reinforced by
new recruitment appraisal and development
processes designed to embed the requisite
behaviours into the organisation
members of the human resources function
together with a wide range of managers and
supervisors have been trained in competency
based interviewing techniques this is helping
to ensure that only new recruits who can
demonstrate behavioural patterns consistent
with our core values are hired the introduction
of these techniques in parts of the group has
already demonstrated they can have a dramatic
effect on labour turnover 
employees throughout the group receive
feedback on their performance and over
60 per cent of employees are covered by the
annual group performance review process
which serves three vital purposes
– it ensures that employees are clear about their
responsibilities and that their objectives for the
year are aligned with the business strategy
– it addresses the technical professional and
managerial development needs of each
employee for the first time the identification
of developmental needs has been augmented
by the introduction of formal 360degree
feedback in 2004 this enables participants
to receive direct feedback on how their
behaviours are perceived by their peers and
subordinates in addition to their manager 
although restricted to some 60 managers this
year  we intend to increase the number of
employees covered by this process
significantly over the next two years
– performance reviews form the basis for
functional regional and group ‘people days’ –
a process for matching our skill base with the
strategic needs of the business in 2004 one
result of this annual process was the
intercontinental transfer of three senior
managers as part of our aim to build a truly
global operation
the group places strong emphasis on
individual and team performance this is
reinforced by pay for performance in 2004
not only were field sales staff covered by
incentive plans but almost half of nonsales
staff had an element of variable performance
related remuneration
an analysis of development needs highlighted in
performance reviews provides the raw data
upon which two major training programmes are
based during the year more modules were
added to the management and supervisory
programme and over 1500 man days of
training were delivered in 2004 in addition
the premier farnell online learning centre
now makes 26 programmes available to
4000 employees directly over their
personal computers
another successful initiative incorporating the
online learning centre was the creation this
year of a consistent groupwide induction
process the premier farnell welcome
programme
management continues to focus on reducing
labour turnover  particularly in the typically high
incidence areas of distribution centres and call
centres during the year the labour turnover rate
was reduced by 11 per cent on a year on year
basis this year’ s target of achieving an
86 per cent retention rate at management and
supervisory levels was exceeded it is our
intention to improve further our performance in
this area by setting ourselves the challenging
target of filling over 70 per cent of managerial
and professional vacancies from internal
sources by 2007
the group is actively encouraging open
communications at all levels during the year
a bespoke diagnostic technique to measure
the degree of employee commitment and
engagement with the company was piloted in
seven departments this diagnostic enables
employees to express clearly their views on
aspects of their working environment that
aid or hinder performance then working
with local management solutions to issues
raised are identified and implemented as a
result of these pilot exercises we are now
making the diagnostic technique available
across the group
building on the positive experience of working
with employee members of the premier farnell
european forum established in 1999 the group
is establishing a uk forum in accordance with
the information and consultation of employees
regulations 2004 the uk forum will meet for
the first time in 2005
operating review
human resources report this is the fourth consecutive year we have prepared a social
responsibility report every year we find that the report helps raise
awareness of relevant issues within the group we were pleased to win
the pricewaterhousecoopers y orkshire annual report award for last
year’s report the second year in succession we have won this award
references to years throughout this social responsibility report are to
calendar years rather than the company’ s financial year 
health and safety
our health and safety commitment remains the simple one of minimising
workplace injuries and illnesses our occupational injury and illness rate in
2004 was 090 per 100000 hours worked while this rate is 46 per cent
lower than the average for our industry see figure 1 it represents an
increase on the previous year due to relatively poor results from
buckhickman inone and our liège warehouse the management
focus on health and safety in these areas will therefore be increased
for 2005
while we will continue to strive for improvement in the absolute rate our
immediate aim will be to meet our longterm goal of an injury and illness
rate less than 50 per cent of our industry average
in our next social responsibility report we intend to provide information
on the number of injuries and illnesses that result in absence from work
we believe this is becoming the more commonly used measure and gives
a better indication of the effect of injuries and illnesses on the group
our occupational injury rate remains very low when compared to rates for
other industries see figure 2
fig 2 comparing the group’s occupational injury and illness rate with
rates for other industries
insurance agentsbrokers 060
legal services 065
banking 075
premier farnell group’ s injury and illness rate in 2004 090
electrical goods – wholesale 115
chemical industry 170
paper 240
electronic equipment 275
aircraft 280
all manufacturing 340
trucking 340
rubberplastics 370
food production 430
steel 525
motor vehicles 760
ironsteel foundries 760
shown is the group’ s occupational injury and illness rate for 2004 it is compared
to occupational illness and injury rates for other industry segments as compiled
and published by the us department of labor  bureau of labor statistics for 2003
being the latest statistics available
operating review
social responsibility report
22 premier farnell plc annual report and accounts 2005
health and safety
premier farnell’s
accident rate 46 per cent
lower than our industry
average
environment
working with customers
and suppliers on the
implementation of the
rohs and weee
directives
community
employees encouraged
to give time to good
causes
industry average
premier farnell
shown are the rates at which accidents which involve more than basic first aid
treatment and occupational illnesses occurred per 100000 hours worked the
industry average figures were computed by taking the averages for the industry
segments in which premier farnell operates source of industry segment
averages us occupational health and safety administration bureau of
labor statistics
fig 1 occupational injury and illness rate per 100000 hours worked
050 000 100 150 200 250
1998
1999
2000
2001
2002
2003
2004 business segment safety risks and actions routinely taken
to address them
the group’ s principal business activity is the distribution of electronic
components and other maintenance repair and operations products
primary activities at our distribution centres include product receiving
putaway  order picking packing shipping and maintenance common
accidents and injuries known to occur at these types of facilities include
cuts contusions muscle strains slipstripsfalls forklift truck and
maintenance related accidents
the acquisition of buckhickman inone in 2001 brought with it a
fleet of companyowned trucks used in transporting products this
transport fleet brings with it the usual safety risks principally from road
traffic accidents
the group also has a small number of manufacturing facilities located
in the us each manufacturing facility has its own unique activities
where a potential for injury exists and these are assessed and
addressed accordingly
our major distribution and manufacturing facilities are required to chart
both ‘near miss’ and ‘actual’ workplace injuries they must also conduct
regular health and safety audits our goal is to identify and address any
safety concerns before accidents occur  each major facility has a health
and safety committee these committees meet regularly to discuss
and respond to ‘near miss’ incidents workplace injuries and safety
audit findings
in the us where large numbers of safety regulations impact our
operations our facilities are required to prepare annually and follow
sitespecific safety compliance calendars the calendars list the safety
compliance and employee training activities each facility must take during
the year  these calendars not only help to assure compliance but also
provide a safety focus throughout the year 
in the uk and at our warehouse in liège in belgium we conduct risk
assessments risk surveys and health and safety audits
safety training is provided to all affected employees in an effort to prevent
and reduce injuries t ypes of training provided include injuryillness
reporting first aid safe lifting ergonomics chemical awareness
transportation of dangerous goods spill clean up use of fire
extinguishers forklift operation emergency evacuation confined space
entry  electrical isolation and the use of personal protective equipment in
the uk our logistics management team also undergoes training in health
and safety responsibilities including risk assessment
during the year driver assessment and training where required was
provided to almost 400 users of group vehicles
a large proportion of the group’ s employees are officebased and training
is provided in the correct use of display screens and workstations
performance against 2004 safety targets
target result
additional actions planned in 2005 to prevent and minimise injuries
actions planned in 2005 to emphasise safety encourage prosafety
attitudes and reduce injuries
1 t o achieve a recordable injury and illness rate of less than 50 per cent
of our industry average
2 t o ensure that employees at all group business units are aware of and
begin utilising the safety and environmental training and compliance
materials provided on the company’ s new online learning centre we
will seek input on what additional items we can add to meet the needs of
business units
3 t o implement safety training in the uk as part of the induction process
for all new employees temporary staff and colleagues on secondment
refresher training will also be provided in first aid forklift truck use
ergonomic lifting and awareness of hazardous materials essential fire
safety training will be provided for fire wardens and risk assessment
training for all first line managers
process complete pending final
assessment by certifying body
achieve osha 18001
accreditation at one major
facility in the uk
established and meets quarterly  issues
discussed during the year include
group safety goals us lithium battery
shipping regulations emergency
response procedures and a
demonstration of the company’ s new
global online learning centre and its
new safety and environmental
training aids
establish a safety committee
for the americas region
programme not fully implemented in
any other facilities but mcm personnel
have made presentations covering the
key elements of their programme to
safety coordinators at other us
business units our akron brass
operation supervisors and employees
are performing safe behaviour
observations that encourage and
assure safe work practices
adopt mcm an inone
company’ s ‘behaviourbased
safety’ programme in another
major facility in the us
premier farnell plc annual report and accounts 2005 23
premier farnell has 
been a member of the
ftse4 good index
since july 2001 the environment
we are committed to reducing the impact of our activities on the
environment
we collect data on the amount of energy used employee business travel
waste disposed waste recycled water used and greenhouse gas
emitted by group operations in order to assess our environmental impact
the data is presented in this report in two ways total quantity of
usagegeneration and unit rates based on sales turnover ie quantity
per £1000 of sales
in order to ensure that we have representative and reliable environmental
data we review new data each quarter and compare it to data from prior
years this continual review and comparison allows us to detect and
correct any errors we have restated some of the figures for earlier years
for energy use business travel solid waste and water use totals this
data has been restated in this year’ s report
business segment environmental concerns and actions routinely
taken to address them
as previously stated the group’ s principal business activity is the
distribution of electronic components and other maintenance repair
and operations products significant environmental concerns associated
with this activity include the proper handling storage shipping and
disposal of the chemical products we distribute and the creation of
packaging waste
returned damaged and discontinued chemical products eg electrical
cleaners solders batteries must be properly handled and disposed of
supplier packaging must also be properly disposed of chemical
products must be packaged and shipped in compliance with hazardous
materials transportation laws all uk business units are fully compliant
with the user responsibility packaging waste regulations and
submit all relevant information to the environment agency via a
compliance scheme
the group’ s small number of manufacturing facilities in the us generate
industrial process waste that must be properly handled and disposed of
one of these facilities is a brass foundry that requires special air handling
equipment and air emission permits
we provide environmental training to affected employees to assure they
comply with relevant laws and act in an environmentally responsible
manner  this includes hazardous waste spill prevention and hazardous
materials transportation training
in the us where large numbers of environmental regulations impact our
operations our operations are required to prepare annually and follow
business unit environmental compliance calendars the calendars list the
environmental compliance and employee training activities that must be
undertaken during the year 
energy used t otal amount unit rate
2004 2003 2002 2004 2003 2002
t otal used 000 amount used per £1000
electricity kwh 36627 38026 38058 47 50 49
natural gas cubic metres 1726 1888 2739 22 25 36
propane kilograms 5 5 5 0007 0006 0006
fuel oil litres 78 25 3 0101 0033 0004
petrol for company
carstrucks litres 829 886 933 1 1 1
diesel fuel litres 1559 1602 1750 2 2 2
fuel oil is used principally at our liège warehouse and increased as this facility
became fully operational
employee business t otal amount unit rate
travel 2004 2003 2002 2004 2003 2002
kilometres 000 kilometres per £1000
business use of cars
trucks 901681518908 12 11 12
business use of rented
carstrucks 2680 1862 2256 3 2 3
t rain use 223 329 351 03 04 05
short intracontinent
airline flights 6647 5175 13841 9 7 18
long intercontinent
airline flights 6207 8942 12725 8 12 16
total 247732445938081323324495
waste disposed t otal amount unit rate
2004 2003 2002 2004 2003 2002
kilograms 000 kilograms per £1000
hazardous waste 221 281 212 03 04 03
industrial process waste 13 7 3 0017 0009 0003
solid waste 2264 2242 2595 29 29 34
total 249825302810323337
operating review
social responsibility report continued
24 premier farnell plc annual report and accounts 2005
premier farnell received
five us national safety
council awards for
safety excellence in 2004 waste recycled t otal amount unit rate
2004 2003 2002 2004 2003 2002
kilograms 000 kilograms per £1000
hazardous waste 33 8 3 0043 0010 0004
industrial process waste 1491 1207 1295 19 16 17
solid waste 1003 1153 821 13 15 11
total 252723682119323128
water used t otal amount unit rate
2004 2003 2002 2004 2003 2002
litres 000 litres per £1000
water used 57479 52658 56491 74 69 73
greenhouse gas t otal amount used metric tons
emissions 000 co
2
emitted
t ype of energy used 2004 2003 2002 2004 2003 2002
electricity for facilities
kwh 36627 38026 38058 22416 23272 23291
natural gas for facilities
cubic metres 1726 1888 2739 3719 4068 5902
propane for lift trucks
kilograms 5 5 5 13 11 11
fuel oil for facilities
litres 78 25 3 266 86 11
petrol for company
carstrucks litres 829 886 933 1555 1662 1750
diesel fuel litres 1559 1602 1750 4163 4276 4671
petrol for rented cars
trucks litres 1114 954 1063 2089 1788 1994
total 34221 35163 37630
conversion factor used 0612 kg co2kwh
equals usa 199899 average per us dept of energy reference
httpwwweiadoegovcneafelectricitypageco2reportco2emisspdf
assumed 105 kilometreslitre of gasoline consumed
performance against 2004 environmental targets
target result
as part of the process for improving our environmental performance last
year we introduced the concept of ‘green’ offices and facilities a rating
sheet covering the main environmental impacts of our business enables
individual sites be they offices distribution centres or sales branches to
selfassess their performance points are earned for environmental
practices that conserve energy minimise waste disposal encourage
recycling and minimise water use sites achieving a target score are
recognised and awarded a certificate confirming their ‘green’ status
three sites achieved green status in 2004 we will challenge additional
facilities to achieve green status in 2005 we believe that encouraging our
facilities to take responsibility for their own environmental performance will
capitalise on the enthusiasm of individuals within premier farnell for
sound environmental practices
t wo significant pieces of european environmental legislation will affect the
group’ s electronic component distribution businesses in the near future
these are the european directives dealing with the restriction of the use
of certain hazardous substances rohs and the disposal of waste
electronic and electrical equipment weee the directives require
implementation into the national laws of the eu member states
the rohs directive effectively prohibits the use of certain undesirable
substances including lead cadmium and mercury in electronic and
electrical products beginning in july 2006 the weee directive imposes
obligations relating to the collection recycling and disposal of waste
electronic and electrical equipment the primary purpose of both
directives is the protection of human health and the environment
similar legislation has been proposed in some us states canadian
provinces japan and in china a large number of the items distributed by
the group will be affected as will the products manufactured or
assembled by many of the group’s customers
the group has dedicated areas of its web sites that provide more
information regarding rohs and weee requirements and these can be
accessed via wwwfarnellinonecom and wwwnewarkinonecom
programmes established and added to
the company’ s online learning centre
see further details below
establish computer based
safety and environmental
training programmes and add
them to the company’ s
online learning centre
process complete for the distribution
centres in preston and liège both
awaiting final assessment visits these
are in addition to the accreditations
achieved for newark inone’ s gaffney
distribution centre in march 2003 and
farnell inone’ s leeds operations in
january 2004
achieve iso 14001
accreditation for another major
distribution centre
farnell inone achieved two ‘industry
firsts’ during the year – a step by step
guide to rohs compliance and the first
catalogue of rohs compliant products
work with customers
and suppliers on the
implementation of the rohs
and weee directives see
further information below
achieved at offices in leeds munich
and independence ohio
achieve ‘green’ status at three
sites see further information
below
premier farnell plc annual report and accounts 2005 25 additional actions planned in 2005 to manage environmental
concerns
we will take four additional actions in 2005 to manage environmental
concerns and reduce environmental impacts
1 we intend to role out our green facility programme across the group
and target the achievement of ‘green’ status at three additional facilities
during the year 
2 we plan to achieve a five per cent reduction in energy use at our main
distribution centre in leeds
3 we will introduce battery recycling facilities for employees at our
leeds site
4 we will continue to take a proactive stance regarding the
implementation of the rohs and weee directives
contribution to the community
the group contributes to the wider community in a number of ways
cash donations are made each year to a number of charities and this
year these amounted to £38000 equally important are the contributions
in kind which are made by the group employees are encouraged to
participate in charitable fundraising events and to give time both in and
outside working hours to good causes this has been formalised during
the year in the form of a group policy on charitable giving this policy
covers the provision of matching funds from the company where
employees raise money for charity  the donation of stock to good causes
and the opportunity for employees to use limited amounts of time during
the working day for fundraising activities
the following are just a few of many examples of the group’s involvement
in the community
in the uk farnell inone has been a longterm sponsor of the great
yorkshire bike ride which has now raised over £12 million for a variety
of charities as well as the group’ s sponsorship a number of employees
take part every year  this year the event raised £110000 for a variety of
charities and the farnell inone team taking part raised the highest group
total in sponsorship
the group regularly donates equipment to various charitable and
educational organisations to assist in training programmes these have
ranged from the provision of an oscilloscope to the science department
of a local school in y orkshire to the donation of a range of components to
enable a group of dutch students to participate in a project for the design
of a racing car 
in the us all of the group’ s businesses participate in united way  a
communitybased umbrella organisation supporting various human
services organisations group employees have taken leadership roles
in united way’ s fundraising activities newark inone was specifically
recognised by united way this year for reaching total donations in
excess of 20000
akron brass and newark inone managers are involved in a junior
achievement programme by teaching business practice to local high
school students newark inone also participated in the american cancer
society’ s relay for life raising 21000 through a combination of
employee donations and a company contribution
many group employees responded to the tsunami disaster in asia with
imaginative and effective ways of providing cash or products to assist in
the aid efforts the company matched funds raised by employees
significant awards and achievements in 2004
we are delighted to report that the us national safety council again
presented its green cross for safety excellence achievement awards
to five premier farnell companies these awards recognised exemplary
safety records at newark inone mcm akron brass tpc wire  cable
and cadillac electric sites
we are also pleased to report that we were presented with the
pricewaterhousecoopers social responsibility reporting award for
yorkshire for last year’ s social responsibility report
we remain a member of the ftse4 good index of corporate and social
responsibility we are also among a small number of companies that
have participated in the business in the environment survey of corporate
environmental engagement for every year since its inception and shown
continual progress increasing our overall score by seven per cent in the
latest survey
audit of this report
as part of the process of ensuring that we have robust data as a
reference point our internal audit department assessed the processes
used to collect and collate the information contained in this report last
year and their proposals for improvement were taken into account in its
production this year  the internal audit department have also carried out
a review of the key data presented in this year’ s report
26 premier farnell plc annual report and accounts 2005 26 premier farnell plc annual report and accounts 2005
operating review
social responsibility report continued
premier farnell is a long
term participant in the
bie index of corporate
environmental
engagement premier farnell plc annual report and accounts 2005 27
at constant exchange rates the group generated a 93 per cent increase
in operating profit from a 65 per cent increase in sales reflecting an
improvement in gross margins and effective cost control this was
achieved notwithstanding a reduction in profit contribution from
buckhickman inone on the same basis adjusted earnings per share
rose 206 per cent assisted by a low tax charge and the existence of the
fixed preference dividend which adds gearing to the earnings attributable
to ordinary shareholders
group sales for the year  based on year on year sales per day for
continuing businesses and at constant exchange rates increased
by 64 per cent peaking at 94 per cent in the second quarter assisted by
strong market conditions particularly in north america and slowing to
47 per cent in the fourth quarter 
group year on year sales growth rates 
based on sales per day for continuing businesses at constant exchange rates
the marketing and distribution division contributed 875 per cent of the
group’ s sales in the americas sales per day were 117 per cent above
prior year  with sales per day increasing by 136 per cent in the first half
and 98 per cent in the second half notwithstanding the softening of the
market in the second half of the year  sales growth was maintained in the
third and fourth quarters at 98 per cent representing a stronger
performance in the fourth quarter relative to the market this has been
achieved through effective use of the group’ s customer relationship
management systems increased targeted catalogue distribution and
extension of the product range over the last two years
in europe and asia pacific year on year sales per day increased by
24 per cent
uk sales declined 15 per cent in the year reflecting a strong performance
from farnell inone which continued to develop good growth from
corporate accounts eprocurement and web sales and weaker
performances from cpc and buckhickman inone farnell inone uk
sales growth slowed from a peak of 60 per cent in the second quarter to
parity in the fourth quarter  outperforming a market which deteriorated
through the second half and showed a year on year decline in the fourth
quarter  cpc experienced a sales decline of 16 per cent in the year
because of weak demand from those customers exposed to the
consumer electronics retail market sales at buckhickman inone were
down 58 per cent in the year  reflecting the deterioration in customer
service following the rapid expansion of its business in 20034 service
levels were restored at the end of the first half and the fourth quarter year
on year decline in sales was reduced to 06 per cent
mainland europe and asia pacific year on year sales grew 107 per cent
although markets slowed during the second half fourth quarter sales
were up 73 per cent because of continued market share gain with little
or no assistance from the market
200304 200405
00
q1 q2 q3 q4 q1 q2 q3 q4
50
100
150
operating review
finance director’s report
group sales and operating profit
group sales for the financial year were £7767 million 2004 £7646 million
profit before taxation in the year was £603 million 2004 £548 million
restated from £546 million to reflect the impact of the adoption of
uitf 38 accounting for esop t rusts profit before taxation and goodwill
amortisation was £630 million 2004 £597 million before the oneoff
rebranding cost of £24 million profit on disposal of business and
goodwill amortisation
the group’ s results were impacted by the continued weakness of the
us dollar and euro against sterling the impact of exchange rates is
illustrated in the following table which compares the year on year results
at constant exchange rates
20045 20034
improvement
reported reported exchange at cer at cer
sales 7767 7646 355 7291  65
operating profit  765 740 40 700  93
pretax profit  630 597 27 570  105
adjusted eps  117p 102p 05p 97p  206
average exchange rates
 184 166 184
c 147 144 147
 cer constant exchange rates
 excluding rebranding costs and disposals in 20034 and amortisation of goodwill
andrew fisher
group finance director the industrial products division achieved year on year sales per day
growth for continuing businesses of 74 per cent sales at akron brass
which manufactures and distributes highperformance firefighting
equipment increased 128 per cent assisted by the acquisition of
gfe manufacturing inc sales at tpc wire  cable a distributor of
high specification cable to the north american automotive and steel
industries increased by 103 per cent through the introduction of new
products and expansion into mexico and canada sales at kent  which
distributes highperformance consumable products to the automotive
repair industry  increased by 28 per cent
the group’ s gross margin has improved steadily during the year reflecting
the impact of tight management control and margin improvement
initiatives notwithstanding the upward cost pressure from certain
product categories and global freight rates
gross margin 
the group’ s operating margin before goodwill amortisation was
98 per cent up from 97 per cent in the prior year 
operating margin 
based on operating profit before goodwill amortisation and rebranding costs
200304 200405
50
70
90
110
130
150
q1 q2 q3 q4 q1 q2 q3 q4
380
q1 q2 q3 q4 q1 q2 q3 q4
385
390
395
400
405
410
415
420
200304 200405
acquisition
on 6th february 2004 the group acquired the business and assets of
gfe manufacturing inc a company based in illinois us involved in the
manufacture of lighting rigs for the firefighting industry  for a cash
consideration of £26 million this acquisition extends the product range
available to akron brass customers in north america gfe contributed
sales of £31 million in the year 
interest and fixed charges
the net interest charge of £135 million 2004 £143 million was covered
57 times by operating profit before goodwill amortisation
fixed charge interest plus preference dividends cover was 34 times
interest payments relate predominantly to fixed rate us dollar borrowings
the effective interest rate on the group’ s fixed rate borrowings was
63 per cent 2004 66 per cent
taxation
the group’ s effective tax charge represented 219 per cent
2004 272 per cent of the profit before tax and goodwill amortisation
the underlying tax rate excluding the impact of tax credits arising from
the favourable settlement of earlier years’ liabilities was 260 per cent
2004 291 per cent this rate compares favourably with the corporate
tax rates of 300 per cent in the uk and 350 per cent in the us the
territories in which the group earns most of its profits
dividends
the board is recommending a final dividend of 50 pence which
together with the interim dividend amounts to a total dividend per share
of 90 pence unchanged from the previous year  at a total cost for
the financial year of £326 million the dividend is covered 13 times
2004 11 times by attributable profits adjusted for goodwill amortisation
earnings per share
basic earnings per share were 110 pence 2004 90 pence adjusted
earnings per share before amortisation of goodwill were 117 pence
2004 102 pence before rebranding costs amortisation of goodwill and
gain on disposal of business
cash flow and net debt
free cash flow attributable to ordinary shareholders is summarised
below
2005 2004
£m £m
cash flow from operating activities 725 700
capital expenditure 133 204
sale of fixed assets 10 26
interest and preference dividends 200 206
tax 121 145
free cash flow 281 171
cash flow from operating activities represented a conversion rate of
95 per cent 2004 98 per cent of operating profit before goodwill
amortisation and reflects continued tight control of working capital
across the group inventories increased by £88 million in the year to
support expansion of the product ranges throughout the marketing and
distribution division receivable days have been maintained at similar
levels to last year  with a year end group average of 51 days
28 premier farnell plc annual report and accounts 2005 28 premier farnell plc annual report and accounts 2005
operating review
finance director’s report continued capital expenditure of £133 million included £80 million on computer
systems principally to enhance existing systems
t otal capital expenditure in the coming year is estimated to be between
£150 million and £180 million
the change in net debt is summarised below
£m
opening net debt 2019
free cash flow 281
ordinary dividends 326
acquisition of business 26
issue of ordinary shares 01
net cash outflow 70
exchange movement 82
closing net debt 2007
the group’ s net debt comprises the following
£m
cash at bank and in hand 279
bank loans and overdrafts 243
us 380 million senior notes due 2006 2010 and 2013 2021
other loans 22
net debt 2007
the resulting profile of the group’ s loan finance and committed bank
facilities is illustrated in the chart below this shows sound mediumterm
funding and headroom of almost £100 million
debt profile £m
t reasury operations
the group is exposed to a number of different market risks including
movement in interest rates and foreign currency exchange rates the
group has established policies and procedures within the treasury
function to monitor and manage the exposures arising from volatility in
these markets with derivative instruments being entered into when
considered appropriate by management
the group t reasury function is responsible for sourcing and structuring
borrowing requirements managing interest rate and foreign exchange
exposure and managing any surplus funds which are invested mainly in
shortterm deposits with financial institutions that meet the credit criteria
approved by the board in addition monthly reports are produced by the
group t reasury function which are used to monitor treasury activities
important treasury management decisions are approved by the board
and an annual report detailing the group’ s debt cash and hedging
activity is reviewed by the board
group policy prohibits speculative arrangements in that transactions in
financial instruments are matched to an underlying business requirement
such as forecast debt and interest repayments and expected foreign
currency revenues the group uses derivatives only to manage its foreign
currency and interest rate risks arising from underlying business activities
the group t reasury function is subject to periodic independent reviews
by the internal audit department controls over interest rate and foreign
exchange exposures and transaction authenticity are in place and
dealings are restricted to those banks with the relevant combination of
geographic presence and suitable credit rating
the group monitors the credit ratings of its counterparties and credit
exposure for each counterparty 
the group hedges transactions primarily related to the purchase and
sale of inventories denominated in foreign currencies through foreign
exchange forward contracts these contracts reduce currency risk from
exchange rate movements with respect to these transactions and cash
flows gains and losses are deferred and accounted for as part of the
underlying transactions
the group does not hedge profit translation exposure unless there is a
corresponding cash flow since such hedges provide only a temporary
deferral of the effect of movements in exchange rates similarly  whilst a
significant proportion of the group’ s borrowings is denominated in
us dollars the group does not specifically hedge all of its longterm
investments in overseas assets
pension accounting
the group accounts for pensions in accordance with ssap 24
the group’ s net assets include a pension asset of £819 million
2004 £796 million which is included in debtors due after more than
one year the consolidated profit and loss account includes a net
pension credit of £16 million 2004 £29 million in relation to all of
the group’ s pension schemes
premier farnell plc annual report and accounts 2005 29
0
324
226
100
200
300
2002 2004 2006 2008 2010 2012
bilateral bank facilities to 2006 at libor 05
155m 72 senior notes repayable 2006
66m 53 senior notes repayable 2010
159m 59 senior notes repayable 2013
gross debt at 30th january 2005 the group operates defined benefit schemes in the uk which was
closed to new entrants in 1998 and north america as a result of the
april 2002 triennial valuation of the uk scheme contributions are made at
a rate of £07 million per annum a contribution holiday will continue for
the foreseeable future in relation to the overfunded us scheme
the results do not reflect the full adoption of frs 17 retirement benefits
because under uk gaap  this is not required until the group’ s financial
year ending 29th january 2006 if the standard had been fully adopted in
2005 profit before tax would have been reduced by £13 million
2004 £22 million representing the net of £68 million which would be
charged to operating profit and £55 million which would be credited to
interest the credit to interest reflects the income attributable to the
substantial surplus which exists in the us scheme
consolidated net assets would have been reduced by £334 million and
the value of the net surplus of the uk and us defined benefit schemes
would have been £309 million 2004 £441 million based on the market
value of scheme assets at 30th january 2005 comprising a surplus in the
us scheme of £491 million and a deficit in the uk scheme of £182 million
restriction of the use of certain hazardous substances rohs
the european directive dealing with the restriction of the use of certain
hazardous substances rohs takes effect from july 2006 and effectively
prohibits the use of certain substances including lead cadmium and
mercury in electronic and electrical products from july 2006 the group
has been working closely with suppliers to provide leadership in assisting
customers to prepare for the legislation and to establish its precise impact
on the group’ s sales potential and inventory position this is likely to
become clearer as the year progresses and an update will be included as
part of the group’ s quarterly announcements
post balance sheet events
at an extraordinary general meeting held on 9th february 2005 the
company amended its articles of association to give the company’ s
directors the ability to limit the number of us residents holding ordinary
or preference shares in the company  in particular  the directors are now
able to require us shareholders whether holding directly or through
nominees to sell their ordinary shares or preference shares in order to
be satisfied that the number of us shareholders is less than 300 in
respect of each of the ordinary shares and preference shares
on 9th december 2004 the company applied to delist its ordinary
shares and preference shares from the new y ork stock exchange and
the delisting took effect by sec order on 16th february 2005 notice
of termination of the american depositary receipt or adr programmes
in respect of premier farnell plc’ s ordinary shares and preference
shares was given to american depositary share or ads holders on
9th december 2004 t ermination of the adr programmes has taken
effect and on 18th april 2005 the bank of new y ork as depositary for
the adr programmes will commence selling the shares underlying any
adss not surrendered by the relevant ads holders and distribute the
net proceeds of sale to the relevant ads holders
international financial reporting standards ifrs
in june 2002 the european union approved the application of ifrs for all
listed groups for periods commencing on or after 1st january 2005 as a
result the group will apply ifrs in its financial statements for the year
ending 29th january 2006 the primary effects of ifrs on the group are
expected to be the following
– the reclassification of the company’ s preference shares from
shareholders’ funds to debt
– the introduction of pension accounting rules which broadly follow
frs 17
– the requirement to reflect a charge in the profit and loss account relating
to sharebased incentives
– the cessation of amortisation of goodwill which will become subject to
an annual test for impairment
– the requirement to account for ordinary dividends in the period in which
they are approved as opposed to the period to which they relate
the company will announce the impact of the transition to ifrs
including a restatement of its financial results for the year ended
30th january 2005 in accordance with ifrs on 4th may 2005
andrew fisher
group finance director
operating review
finance director’s report continued
30 premier farnell plc annual report and accounts 2005 premier farnell is committed to establishing a frequent and open
dialogue with the investment community  the senior management
team in particular john hirst group chief executive andrew fisher 
group finance director  and james garthwaite group director 
communications devote considerable time to ensuring that premier
farnell’ s strategy  businesses and markets are well understood and that
the company is fairly valued by the market
t o ensure a consistent information flow premier farnell communicates
with financial audiences by means of results presentations meetings site
visits conference calls and its corporate web site which is updated daily 
quarterly reporting
premier farnell has reported its results quarterly since 1999 to ensure the
market is informed of progress in a regular and timely manner 
first quarter and third quarter announcements the day we announce
our first and third quarter results we host a conference call for us and
european investors recordings of these calls are also made accessible
via audio webcasts on the group’ s web site
interim second quarter and preliminary fourth quarter and full year
announcements presentations for investors and broking analysts are
held in london on the mornings that the group’ s interim and preliminary
results are announced these are typically attended by over 50 analysts
and investment managers in addition the group hosts a conference call
on the afternoon of the results to ensure that us investors have the
opportunity to interact directly with senior management many uk
investors also participate webcasts of the presentation and conference
calls are made available later the same day on the group’ s web site
investor meetings
immediately after the announcement of interim and preliminary results
the group conducts a programme of investor meetings during the
financial year ended 30th january 2005 over 120 onetoone meetings
were held with investors and potential investors in london edinburgh
frankfurt paris and in north america
investor days
the group regularly hosts investor days during the year the group
hosted five visits which were attended by a total of 21 institutional
investors and analysts
analyst coverage
as at 30th january 2005 premier farnell was actively covered by
15 sellside analysts during the year  the senior management team
presented at three investor conferences hosted by leading banks
in addition the team regularly presents to the equity sales teams of
such institutions
annual report
premier farnell’ s annual report is posted in may in preparation for the
annual general meeting this year to be held on 14th june at the mayfair
conference centre in london
last year  premier farnell’ s annual report 2004 won three of
pricewaterhousecoopers’ y orkshire annual report awards for ‘best
social reporting’ ‘best larger quoted company’ and ‘best overall annual
report’
online communications
premier farnell maintains a web site to provide uptodate information on
the company for the investment community wwwpremierfarnellcom
this includes comprehensive background on the group its board
corporate governance businesses and strategy  premier farnell regularly
issues news releases announcing important developments around its
businesses these are all distributed via an email alert service with which
investors are encouraged to register the web site also provides an
archive of news announcements and financial publications
shareholder base
the concentration of the register was largely unchanged over the year
with the top 20 shareholders in aggregate continuing to account for just
less than two thirds of the register 
the market for premier farnell’ s shares remains very liquid during the
year ended 30th january 2005 the average daily trading volume in
premier farnell’ s ordinary shares on the london stock exchange was
42 million shares this represents a year on year rise of 24 per cent
closure of the american depositary receipt adr programme
and deregistration from the sec
during the financial year  the board undertook a review of the cost and
benefits of premier farnell’ s listing on the new y ork stock exchange and
its registration with the us securities and exchange commission sec
it concluded that the expense of complying with us reporting and
registration obligations was out of proportion to the benefits derived by
the company  in december  it therefore announced the closure of the
group’ s adr programmes with the bank of new y ork for both ordinary
and preference shares the adr programmes were closed and
premier farnell was delisted from the new y ork stock exchange on
16th february 2005
in addition the board intends to terminate the company’ s reporting
obligations under the us securities exchange act of 1934 by
deregistering from the sec further details regarding this intention are
set out in shareholder information on page 68
feedback
the group welcomes feedback on all aspects of its investor relations
activities enquiries should be directed to james garthwaite group
director  communications jgarthwaitepremierfarnellcom
operating review
investor relations report 
premier farnell plc annual report and accounts 2005 31 32 premier farnell plc annual report and accounts 2005
board of directors and officers
advisers
sir peter gershon cbe freng
chairman aged 58
appointed chairman 1st march 2005
currently chairman of symbian software
limited and a member of bt plc’ s
european advisory board he is also a
nonexecutive director of hm t reasury  a
member of the advisory board of the uk
defence academy  a member of the court
and council of imperial college and a
member of council of the royal academy
of engineering  formerly chief executive
of the office of government commerce a
chief operating officer of bae systems
plc managing director of marconi
electronic systems and a member of the
gec plc board
john hirst ba fca act  ccmi
aged 52
appointed group chief executive 1998
appointed nonexecutive director of
hammerson plc february 2004 formerly
with ici plc where he held a number of
senior posts including divisional chief
executive of ici performance chemicals
and group t reasurer 
andrew fisher  ba fca
aged 47
appointed group finance director 1994
previously a partner at price waterhouse
laurence bain ca
aged 51
appointed group chief operating officer
july 2002 and joined the board as an
executive director in july 2003 previously
vice president and director of operations
for motorola in europe middle east and
africa
nonexecutive director
d john s roques ca
aged 66
appointed nonexecutive director 1999
chairman portman building society 
nonexecutive director  bba group plc
and hhg plc formerly senior partner
deloitte  t ouche
william b korb bsie
aged 65
appointed nonexecutive director january
2003 formerly president and ceo of
gilbarco incorporated nonexecutive
director of cambrex corporation
michael lester ma oxon
solicitor  aged 65
appointed nonexecutive director 1998
director  bae systems plc formerly a
director and vicechairman the general
electric company plc
cary j nolan ba bsee
aged 62
appointed nonexecutive director 1999
formerly president ceo picker
international inc president cooper
surgical and president xerox medical
systems division nonexecutive director
of t oshiba medical and t omotherapy inc
steven webb llb
solicitor  aged 42
appointed company secretary and
general counsel december 2000
previously company secretary and
general counsel of kelda group plc and
company secretary of kalon group plc
committees
membership at march 2005
audit committee
john roques chairman
michael lester
cary nolan
william korb
nominations committee
sir peter gershon chairman
michael lester
john roques
remuneration committee
michael lester chairman
william korb
cary nolan
john roques
independent auditors
pricewaterhousecoopers llp
benson house
33 wellington street
leeds ls1 4jp
bankers
hsbc
47 market street
bradford bd1 1lw
stockbrokers
cazenove  co ltd
20 moorgate
london ec2r 6da
abn amro
hoare govett limited
250 bishopsgate
london ec2m 4aa principal activities and business review
a detailed review of the group’ s activities the development of its
business and an indication of likely future developments are dealt with
on pages 16 to 20
the principal activity of the group remains unchanged and is the
distribution of electronic electrical and industrial products to the design
maintenance and repair sectors
profit and dividends
the profit for the financial year attributable to ordinary shareholders was
£399 million 2004 £326 million restated the directors recommend
that a final dividend of 50 pence 2004 50 pence per ordinary share be
paid on 22nd june 2005 to those shareholders on the register of
members at the close of business on 27th may 2004 an interim dividend
of 40 pence per ordinary share was paid on 22nd october 2004 making
a total for the year of 90 pence 2004 90 pence per ordinary share
acquisitions
in february 2004 the group purchased the business and certain
assets of gfe manufacturing inc a supplier of lighting systems and
water flow test equipment for the firefighting industry for a consideration
of £26 million
further details of the acquisition are given in note 2 to the financial
statements
share capital
details of changes in the issued share capital of the company during the
year are set out in note 20 on page 58
at the forthcoming annual general meeting the company will be seeking
authority to purchase its ordinary and preference shares authorities were
previously granted at the annual general meeting in 2004 but expire at
the close of the forthcoming meeting
directors
the names and biographical details of the directors who held office at the
date of this report appear on page 32 sir robert horton and sir malcolm
bates retired from the board on 15th june 2004 and 28th february 2005
respectively
in accordance with the company’ s articles of association mr michael
lester and mr john hirst will retire at the forthcoming annual general
meeting of the company and offer themselves for reelection sir peter
gershon who was appointed during the year will retire and offer
himself for election mr hirst is an executive director and has a service
contract with the company  further details of which are provided in the
remuneration report on page 39 sir peter gershon and mr michael
lester are nonexecutive directors and do not have service contracts
following a formal board evaluation process that was carried out during
the course of the year  the board considers that the performance of
mr lester and mr hirst continues to be effective and that they each
continue to demonstrate commitment to their respective roles
additional information relating to directors’ remuneration service
contracts and interests in the company’ s shares is given in the
remuneration report on pages 37 to 42 the details of directors’
interests in the company’ s shares form part of this report
supplier payment policy
the group’ s operating companies are responsible for agreeing terms
and conditions under which business transactions with their suppliers are
conducted payments to suppliers are made in accordance with those
terms provided that suppliers also comply with all relevant terms and
conditions at 30th january 2005 the amount the group owed its
suppliers represented 33 working days’ purchases 2004 36 working
days the company is a holding company and does not have any
trade creditors
research and development
the group’ s research and development activities are restricted to the
development of new or enhanced products for akron brass and are not
significant in the context of the group as a whole
charitable and political donations
in the us the group has an ongoing policy of donating certain items of
stock to charitable organisations in addition during the year the group
made charitable donations in cash of £38000 2004 £24000 further
details of the group’ s charitable activities appear in the social
responsibility report on page 26
the group continues its policy of not making contributions to
political parties
employment
the group places great emphasis on optimising the contribution made
by employees at all levels around the world a groupwide performance
review and annual management audit process are in their sixth year of
operation the group continues to develop new people development
programmes during the year the management skills programme was
enhanced with a custom made module in competency based
interviewing aimed at improving managers’ and supervisors’ selection
skills access to the highly successful online learning centre was
increased to enable 4000 employees to participate in the range of
programmes it provides
a formal job grading system exists across the group to assist
remuneration practices as well as career development and organisational
planning processes
employees are informed of the performance of the group and a
structured communication programme allows factors affecting their
employment to be discussed
working in close cooperation with elected representatives from its
european operating companies the group’ s european works council
the premier farnell european forum is in its fifth year of operation the
forum provides an arena for the exchange of relevant and appropriate
information and constructive dialogue between management and
employees on european issues a similar forum specific to the uk has
been negotiated and will meet for the first time in 2005the uk forum has
been established in accordance with the information and consultation of
employees regulations 2004
the group gives full and fair consideration to applications for employment
from disabled persons with regard to their particular aptitudes and
abilities efforts are made to continue the employment of those who
become disabled during their employment t raining career development
and promotion are as far as practicable identical for all employees
according to their skills and abilities the group consistently seeks to
recruit develop and employ throughout the organisation suitably
qualified capable and experienced people irrespective of age race
religion or sexual orientation
employees’ participation in the group’s performance is encouraged
through the group’ s uk savingsrelated share option scheme
directors’ report
premier farnell plc annual report and accounts 2005 33
  environment
the group recognises the importance of responsible environmental
management and its obligation to protect the environment the group
therefore gives high priority to all environmental matters further
information appears in the social responsibility report on pages 24
to 26
substantial shareholdings
at 10th april 2005 the company had been notified of the following
interests amounting to 3 per cent or more of the company’ s issued
ordinary share capital

prudential plc 1076
the capital group co inc 900
fidelity investments 601
lloyds tsb 390
royal and sun alliance insurance group plc 369
independent auditors
resolutions to reappoint pricewaterhousecoopers llp as auditors and
to authorise the directors to determine their remuneration will be
proposed at the forthcoming annual general meeting of the company 
annual general meeting
the notice convening the company’ s 2005 annual general meeting at
the mayfair conference centre marble arch london on 14th june 2005
at 1030 am is set out in a separate document issued to shareholders
by order of the board
steven webb
secretary
farnell house
forge lane
leeds ls12 2ne
17th march 2005
directors’ report continued
34 premier farnell plc annual report and accounts 2005
directors’ responsibilities
the following statement which should be read in conjunction with the
auditors’ report is made with a view to distinguishing for shareholders
the respective responsibilities of the directors and of the auditors in
relation to the accounts
the directors are required by the companies act 1985 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 as at the end of the financial year
and of the profit or loss of the group for the financial year  the directors
consider that in preparing the accounts on pages 43 to 66 the company
has used appropriate accounting policies consistently applied and
supported by reasonable and prudent judgements and estimates and
that all applicable accounting standards have been followed
the directors have responsibility for ensuring that the company keeps
accounting records which disclose with reasonable accuracy 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 have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the company and
the group and to prevent and detect fraud and other irregularities
the 2005 annual report and accounts will be published on the
company’ s web site in addition to the normal paper version the
maintenance and integrity of the company’ s web site is the responsibility
of the directors and the work carried out by the auditors does not involve
consideration of these matters
legislation in the uk governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions the company is committed to high standards of corporate governance
throughout the group the board is accountable to the company’ s
shareholders for good governance and this statement describes how the
principles identified in the combined code on corporate governance
issued in july 2003 are applied by the company 
the board confirms that the company has complied with all of the
provisions set out in section 1 of the combined code throughout the
year apart from the chairman discussing governance and strategy with
major shareholders and the attendance of other nonexecutive directors
at meetings with major shareholders this point is explained below
directors
the board consists of a nonexecutive chairman four nonexecutive
directors all of whom are considered by the board to be independent
and three executive directors john roques is the company’ s senior
independent nonexecutive director and is available to shareholders if
they have concerns which contact through the normal channels cannot
resolve or where the normal channels are inappropriate
biographies of the board members appear on page 32 these indicate
the high level and broad range of experience that they possess the
directors’ knowledge of the group’ s business and of legal accounting
and market developments is frequently updated by presentations made
at board and board committee meetings
the appointment letters for nonexecutive directors include the time
commitment expected of nonexecutive directors and confirmation
that they have sufficient time available to meet this commitment
nonexecutive directors are required to inform the board of any
changes to their other appointments
after the date of his appointment to the board sir peter gershon
became chairman of symbian software limited and a member of
bt plc’ s european advisory board
the board
the role of the board is to maximise the longterm performance of the
group through the development of a strategy designed to create
shareholder value the board reviews strategic issues on a regular basis
and exercises control over the performance of each operating company
within the group by agreeing budgetary targets and monitoring
performance against those targets
the roles of the chairman and group chief executive are separate and
clearly defined the group chief executive is responsible for the
executive management of the group’ s business while the chairman who
has no executive management responsibilities runs the board
the board has five scheduled meetings each year and others as
required the board has a schedule of matters reserved to it for decision
including major capital expenditure significant investments or disposals
and treasury policy  in certain areas specific responsibility is delegated to
committees of the board within defined terms of reference
the audit and remuneration committees have respectively five and four
scheduled meetings each year  although additional meetings may be held
where required the nominations committee meets as required
during the year  all directors attended the five board meetings that were
held apart from sir robert horton and michael lester  who were each
absent for one meeting all of the members of the respective committees
attended the five audit committee and five remuneration committee
meetings that were held except for one meeting each of the audit and
remuneration committees that mr lester was unable to attend
complete copies of the terms of reference of the audit remuneration
and nominations committees are available on the company’ s web site at
wwwpremierfarnellcom the membership of the committees appears
on page 32
there is an agreed procedure for directors to take independent
professional advice at the company’ s expense if necessary in the
performance of their duties this is in addition to the access which every
director has to the company secretary  the company secretary is
charged by the board with ensuring that board procedures are followed
the board has adopted a number of corporate governance policies
including a group code of ethics covering issues such as conflicts of
interest fraud whistleblowing and share dealing a copy of the code is
also available on the company’s web site the company has implemented
arrangements with an independent organisation to receive information
from employees for whistleblowing purposes
t o enable the board to function effectively and assist directors to
discharge their responsibilities full and timely access is given to all
relevant information in the case of board meetings this consists of a
comprehensive set of papers including regular business progress reports
and discussion documents regarding specific matters in addition
individual directors meet with senior management and are encouraged to
make periodic site visits including overseas where appropriate senior
managers are regularly invited to board meetings and make business
presentations
a formal and comprehensive induction process is in place for new
directors this includes presentations from management and site visits
during the year a performance evaluation was carried out covering the
board each of the principal board committees and individual directors
the evaluation process consisted of the completion by each director of a
questionnaire devised for the purpose the responses were collated by
the company secretary  the results were considered by the chairmen of
the board and the relevant committees and by the board as a whole the
evaluation of individual directors was considered by the chairman and
the evaluation of the performance of the chairman was considered by the
senior independent director  in each case appropriate action was taken
during the year 
any director appointed during the year is required under the provisions
of the company’ s articles of association to retire and seek election by
shareholders at the next annual general meeting the articles also
require that every director must retire and seek reelection at least every
three years
remuneration
the composition and role of the remuneration committee is set out in
the remuneration report on pages 37 to 42
full details of directors’ remuneration and a statement of the company’ s
remuneration policy also appear in the remuneration report
each executive director abstains from any discussion or voting at full
board meetings on remuneration committee recommendations where
the recommendations have a direct bearing on his own remuneration
package the details of each executive director’s individual package are
fixed by the remuneration committee in line with the policy adopted by
the full board
nominations committee
the nominations committee comprising the chairman the senior
independent director and mr lester  meets as necessary 
the committee’ s principal function is to provide advice and
recommendations to the board on any appointments to the board
the committee also keeps the composition and balance of the board
under review
during the year the committee was involved in the appointment of
sir peter gershon to the board and his subsequent appointment as
chairman as well as making recommendations to the board as a whole
committee members consulted nonexecutive and executive directors
individually on these appointments sir peter’ s other commitments
appear in his biography on page 32
premier farnell plc annual report and accounts 2005 35
corporate governance 36 premier farnell plc annual report and accounts 2005
audit and internal control
the primary role of the audit committee is to keep under review the
group’ s financial and other systems and controls and its financial
reporting procedures in fulfilling this role the committee receives and
reviews work carried out by the internal and external auditors and their
findings the company’ s internal audit department works to an annual
programme developed in consultation with the committee as well as
covering specific matters arising during the year 
the audit committee’ s terms of reference are available on the
company’ s web site in addition and following a recommendation from
the smith report the committee has also adopted and implemented a
groupwide policy restricting the appointment of former employees of the
external auditors
the committee keeps the scope and cost effectiveness of both the
internal and external audit functions under review this now includes an
annual review of the effectiveness of the external auditors including their
quality control procedures during the year an independent review of the
internal audit function was carried out by deloitte  t ouche and the
results reported to the committee these were regarded by the
committee as very satisfactory 
the independence and objectivity of the external auditors is also
considered on a regular basis with particular regard to the level of
nonaudit fees the split between audit and nonaudit fees for the year to
30th january 2005 and information on the nature of the nonaudit fees
incurred appear in note 5 to the financial statements the nonaudit fees
were paid in respect of assurance work including taxation and are
considered by the committee not to affect the independence or
objectivity of the auditors
the external auditors’ appointment is subject to review every two years
by the committee and the lead audit partner is rotated at least every
five years the committee also maintains a formal policy on the provision
of nonaudit services by the auditors which is reviewed each year  this
policy prohibits the provision of certain services and requires that others
are subject to prior approval by the committee or its chairman this
policy allows specific tax compliance services within defined monetary
limits to be preapproved by the committee at the beginning of the year 
all other permitted nonaudit services are considered on a case by case
basis
at each of its meetings the committee is provided with information on
all nonaudit services provided by the auditors and the estimated cost
of such services the committee monitors such costs in the context of
the audit fee for the year in order to ensure that the value of nonaudit
services does not increase to a level where it has the potential to affect
the auditors’ objectivity and independence
the committee also receives an annual confirmation of independence
from the auditors
throughout the year the group has been in full compliance with the
applicable provisions on internal control contained in the combined code
the board has overall responsibility for the group’ s system of internal
controls and risk management the audit committee reviews and
monitors the system’ s effectiveness on behalf of the board at least
annually  while responsibility for the system rests with the executive
directors the system includes an ongoing process for identifying
evaluating and managing significant business risks however any system
can provide only reasonable and not absolute assurance of meeting
internal control objectives
the board regularly reviews the group’ s strategic direction at the
business unit level strategic objectives annual plans and performance
targets are set by the executive team in the context of the group’ s overall
objectives there is a defined process for identifying and evaluating the
significant risks faced by the group
in addition to this process businesses are subject to
– a quarterly  comprehensive review by the executive team
– independent internal and external audits which focus on areas of high
risk which are reported to the executive team and the audit committee
– an extensive budget and targetsetting process
– a monthly reporting and forecasting process reviewing performance
against agreed objectives
– appropriate delegated authority levels which prescribe the limits to
which the group can be committed
– established financial policies and procedures including a detailed
quarterly checklist completed as part of the company’ s quarterly
financial reporting process
– other risk management policies and procedures such as health and
safety  environmental and quality assurance
an executive management committee the disclosure and risk
committee monitors and reviews disclosure and risk management
processes and reports to the audit committee the audit committee
considers these reports alongside other reports from the internal audit
department and the external auditors to arrive at a balanced
assessment of control effectiveness across the group the disclosure
and risk committee also reviews disclosures made by the company to
regulators and the investment community before they are considered by
the board the audit committee reports to the board on its activities and
all board members receive copies of the minutes of audit committee
meetings
the statement of the directors’ responsibilities in relation to the accounts
appears on page 34
going concern
after making enquiries 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
communication with stakeholders
the company places a great deal of importance on communication with
its stakeholders
there is regular dialogue with individual institutional shareholders as well
as general presentations after the interim and preliminary results in 1999
the company introduced quarterly financial reporting in order to improve
the level of information available to all shareholders all company
announcements are published on the company’ s web site together with
presentation materials
the board regards the discussion of the company’ s strategy as primarily
part of the role of the chief executive and this forms part of his regular
meetings with institutional shareholders feedback from these meetings
is provided to the board both by the group director  communications
and by the company’ s financial public relations advisers the board also
regularly receives copies of analysts’ reports on the company 
the chairman is available to shareholders at any time to discuss strategy
and governance matters while other nonexecutive directors do not
ordinarily attend meetings with major shareholders they would do so if
this was requested by shareholders
all ordinary shareholders have the opportunity to ask questions at the
company’ s annual general meeting at which the group chief executive
makes a business presentation summarising the progress of the group
during the year  all directors are usually available to take questions at the
meeting
as discussed in the directors’ report employee communication is given
high priority  this has included the establishment of european and
uk works councils the uk works council was established in
accordance with the information and consultation of employees
regulations 2004
corporate governance continued remuneration report
this report provides information on directors’ remuneration a resolution
will be put to shareholders at the company’ s annual general meeting
inviting them to approve this report
remuneration policy
the company’ s overall policy aims are to
– attract develop motivate and keep talented people at all levels
throughout the group
– pay competitive salaries and benefits to all of its people
– encourage the holding of shares in the company as an effective way
of aligning the interests of employees with those of shareholders
– focus remuneration arrangements to help each business in the group
meet its specific targets
the board’ s policy for executive remuneration is to
– pay a basic salary which is competitive with other companies of similar
size and complexity
– give executives the opportunity to increase their basic earnings by
meeting and outperforming key shortterm and longterm measures
thereby linking executive rewards to the group’ s performance and
shareholder interests
– encourage executives to hold shares in the company
– reward executives fairly and responsibly for their contribution to the
group’ s performance without paying more than is necessary to
achieve this objective
in framing this policy  the board has given full consideration to the
provisions of the combined code as updated in july 2003
it is the company’ s policy that executive directors be permitted to hold
one nonexecutive directorship with another company the fees payable
in respect of this directorship are retained by the executive director 
mr hirst is currently a nonexecutive director of hammerson plc for
which he receives an annual fee of £43500
this report sets out the company’ s policy on directors’ remuneration for
2005 and so far as practicable for subsequent years the committee
considers that a successful remuneration policy needs to be sufficiently
flexible to take account of future changes in the group’ s business
environment and remuneration practice any changes in policy for
years after 2005 will be described in future remuneration reports
all statements in this report in relation to remuneration policy for years
after 2005 should be read in the light of this paragraph
the remuneration committee and its role
the remuneration committee consists of mr michael lester chairman
mr william korb mr cary nolan and mr john roques all members of the
committee are independent nonexecutive directors the committee
met five times during the year covered by this report the chairman will
continue to ensure the company maintains contact as necessary  with
its principal shareholders about remuneration
the chief executive attends meetings of the committee to discuss the
performance of other executives and to make proposals where
necessary  but is not present when his own position is discussed
the committee makes recommendations to the board on the group’ s
framework of executive remuneration and its cost the committee
determines the specific remuneration packages for executive directors
and the other senior executives who form the group leadership t eam
during the year the committee received advice from the chief executive
in respect of the remuneration arrangements for other senior executives
and from mr brian lewis group hr director  in respect of remuneration
arrangements generally  the committee has also appointed kpmg
people services a division of kpmg llp  to provide independent advice
to the committee during the year kpmg people services carried out a
comprehensive review of the remuneration arrangements for executive
directors and other senior executives this review concluded that the
arrangements in place are consistent with the company’ s
remuneration policy
kpmg llp provide other services to the company  principally in relation
to tax matters
the current remuneration package
the current elements of remuneration for executive directors and senior
executives are as follows
salary and benefits
the committee reviews salaries each year taking account of group and
personal performance and against the salaries of companies of similar
size and complexity  the committee also takes account of the levels of
pay awarded elsewhere in the group
the value of noncash benefits for executive directors is included in the
table of remuneration on page 40 and for mr hirst and mr fisher  consists
of a fully expensed car and life and health insurance mr bain does not
have a company car  but instead receives a cash allowance which is
included in the salary figure disclosed in the table mr bain does receive
life and health insurance the values of which are included in benefits in
kind the value of these benefits is not pensionable for any executive
director  but is assessable to income tax
shortterm incentives
the company operates an annual performancerelated bonus scheme
for executive directors and senior executives the maximum bonus
payment under the scheme is 100 per cent of base salary for mr hirst
and 70 per cent of base salary for mr fisher and mr bain t o reach this
maximum requires that the company exceeds its budgeted profit as
well as achievement of clearly defined individual objectives the
remuneration committee is satisfied that the performance conditions
for the annual bonus are relevant and stretching and designed to
enhance shareholder value
longterm incentives
the company operates a longterm incentive plan and the share option
schemes described below
remuneration report
premier farnell plc annual report and accounts 2005 37 longterm incentives
under the longterm incentive plan executive directors and senior
executives are awarded rights to acquire ordinary shares each award
made under the plan is subject to performance conditions which will
determine how many if any of the shares under the award the participant
is entitled to acquire after the three year performance period the
maximum award which can be made to a participant in any year is equal
to 100 per cent of base salary 
the main performance condition compares the growth of the company’ s
total shareholder return or tsr share price growth and reinvested
dividends over a three year period to that of the companies in the ftse
mid250 index excluding investment trusts the company’ s ranking
amongst the comparator companies determines the percentage of
shares which a participant can acquire no shares may be acquired
where the company’ s ranking is below median and to acquire the full
number of shares awarded the company must rank in the top quartile of
the comparator group between these two points vesting is on a
straightline basis with 20 per cent of any award vesting where the
company’ s performance is at the median where performance over the
three year period does not reach the median ranking the relevant award
lapses and there is no retesting of performance
in addition shares can only be acquired under any award if the
committee is satisfied that the underlying performance of the company
during the performance period justifies the exercise of an award
the tsr performance condition was chosen as the committee believes
that tsr is an appropriate method of comparing the performance of
the company to that of its peers the ftse mid250 index excluding
investment trusts was chosen as the comparator group as there are a
limited number of companies which are directly comparable to the
company and the index was therefore felt to be a suitable yardstick of
relative performance
in assessing whether such performance condition has been met the
committee will rely on calculations of the company’ s tsr and that of
the ftse mid250 index carried out on their behalf by new bridge
street consultants the requirement that the committee must be
satisfied that the underlying performance of the company during the
performance period justifies the exercise of an award is intended to give
the committee a discretion as to whether or not to allow a particular
exercise notwithstanding the achievement of at least a median tsr
ranking the committee’ s view is that such circumstances are likely to be
exceptional and therefore they are difficult to determine before they have
arisen in addition the committee does not wish to limit its discretion in
any way by attempting to predetermine the circumstances in which it
might be exercised if the committee exercised this discretion it would be
in respect of all awards made on a particular date and not in respect of a
particular individual or individuals
benefits under the longterm incentive plan are not pensionable
the company currently operates an executive share option scheme
under which both inland revenue approved and unapproved options
may be granted and an saye option scheme benefits under these
plans are not pensionable
annual grants are made under the executive share option scheme with a
maximum grant equal to 100 per cent of the individual’ s annual salary 
exercise of options granted under the scheme is subject to a performance
condition this condition is that the growth in the company’ s adjusted
earnings per share eps over the three consecutive financial years
starting with the year of grant exceeds the growth in the uk retail price
index rpi over the same period by at least 9 per cent at this level of
performance half of the options granted are exercisable exercise of all
options granted requires that the company’ s eps growth exceeds rpi
over the period by at least 15 per cent with a sliding scale for performance
between 9 per cent and 15 per cent if the performance condition is not
met over this three year period options may also be exercised if the
company’ s eps growth exceeds rpi by a minimum of 12 per cent over
the four financial years starting with the year of grant the same sliding
scale for exercise applies for performance between 12 per cent and
20 per cent if the performance target is not met by the fourth year  the
relevant options lapse
eps was chosen as the appropriate measure of performance as it
provides an absolute benchmark of the company’ s performance and is
therefore a suitable balance with the relative performance measurement
used in the company’ s longterm incentive plan
options granted under earlier schemes operated by the company
remain outstanding executive options granted under such schemes
after 13th march 2001 may not be exercised unless the growth in the
company’ s eps over a period of three consecutive financial years
exceeds the growth in the uk retail price index rpi over the same
period by at least 9 per cent for options granted after 20th june 1996
but before 14th march 2001 exercise is subject to the growth in eps
over three consecutive years exceeding the growth in rpi over the same
period by at least 6 per cent for options granted before 20th june 1996
eps growth over three consecutive years must match the growth in rpi
over the same period before options can be exercised eps was chosen
as the appropriate measure of performance at the time the executive
share option schemes were first introduced and is the most common
measure used in traditional option schemes the company’ s eps
performance is reported quarterly in the company’ s results
announcements
the implementation of international financial reporting standards ifrs
will affect the calculation of the company’ s eps and the committee is
working to ensure a successful transition from uk gaap to the new
standards further details will be included in the next annual
remuneration report
in common with all eligible employees of the group executive directors
are entitled to participate in the company’ s saye option scheme these
options are not subject to the satisfaction of a performance condition as
this scheme is not restricted to executive directors and senior executives
the company’ s executive shareholding policy requires executive
directors and other senior executives to retain a number of the shares
acquired as a result of the exercise of executive share options or awards
under the longterm incentive plan until a shareholding with a value equal
to the executive’ s annual base salary is reached this level of shareholding
is then to be maintained
remuneration report continued
38 premier farnell plc annual report and accounts 2005 pension arrangements
the final salary section of the premier farnell uk pension scheme the
uk scheme was closed to new entrants during 1998 employees who
were entitled to final salary benefits as members of the uk scheme at
31st december 1998 now receive benefits through a combination of final
salary benefits funded by the uk scheme and the premier farnell corp
master pension plan the us plan in addition contributions are made to
the money purchase section within the uk scheme employees joining
the uk scheme since 1st january 1999 are entitled to money purchase
benefits only  and the uk scheme is no longer contracted out
mr john hirst and mr andrew fisher are each entitled to a combination
of final salary and money purchase benefits under the arrangements set
out above up to the limit of the inland revenue earnings cap currently
£102000 company contributions payable into the money purchase
arrangement on their behalf amount to 204 per cent of the earnings cap
for mr hirst and 158 per cent of the earnings cap for mr fisher  with each
making an employee contribution equal to 3 per cent of the earnings cap
the company makes further contributions on behalf of mr hirst and
mr fisher to funded unapproved retirement benefit schemes furbs
determined by reference to the excess of their salaries over the earnings
cap the cost to the company of these further contributions was £194292
2004 £208542 for mr hirst and £87523 2004 £83842 for mr fisher 
mr bain is entitled to money purchase benefits from a combination of the
uk scheme and an unapproved scheme furbs t otal contributions are
5 per cent of basic salary from mr bain all paid to the uk scheme and
27 per cent of basic salary from the company  of which 4 per cent of
basic salary is paid into the uk scheme and 23 per cent of basic salary
into the furbs the total cost to the company of these contributions
was £68378
the remuneration committee is currently reviewing pension policy in
the light of the proposed changes to pension legislation from april 2006
further details will be included in the next annual remuneration report
relative importance of remuneration elements
the committee’ s view is that the performance related elements of the
remuneration package for executive directors should be a significant
element of the total this serves to align the interests of such directors
with shareholders assuming full payment of all elements more than
twothirds of the total remuneration of executive directors ignoring
pension contributions would be performance related
service contracts
in accordance with the company’ s policy  mr hirst mr fisher and
mr bain have service agreements which are terminable by the company
on twelve months’ notice mr hirst’ s and mr bain’ s service agreements
dated 13th november 1998 and 23rd april 2004 respectively  allow the
company to make a payment of salary in lieu of the whole or part of their
notice periods and mr fisher’ s agreement dated 24th november 1994
contains provisions entitling him to a payment equal to 12 months’ salary
and benefits in the event of early termination the company’ s policy is
generally not to include a provision providing for payment of a fixed
sum on termination and to endeavour to minimise any payment on
early termination by insisting on mitigation of any loss the provisions
in mr fisher’ s agreement were included as part of the reduction in his
notice period from 24 months during 2001
nonexecutive directors
the fees for the nonexecutive directors are determined by the board
as a whole fees for the chairman are determined by the remuneration
committee business expenses are also reimbursed in addition to the
base fee an additional £5000 per annum is paid to the chairmen of the
audit and remuneration committees and an additional £2500 to the
senior independent director 
the nonexecutive directors do not have contracts of service but are
appointed pursuant to letters of appointment such appointments are
initially for a threeyear term it is normal that the appointment is renewed
for a second threeyear period thereafter  the company’ s policy is for
reappointments to be on an annual basis with expiry dates coinciding
with the company’ s annual general meeting in the relevant year 
nonexecutive directors are not eligible to participate in any incentive
plans share options schemes or company pension arrangements and
are not entitled to any payment in compensation for any early termination
of their appointment
the commencement dates for the current appointments of
nonexecutive directors are
sir peter gershon 21st june 2004 threeyear
w korb 21st january 2003 threeyear
m lester 14th june 2005 annual
c nolan 14th june 2005 annual
d j s roques 14th june 2005 annual
any director appointed by the board during the year holds office only
until the next annual general meeting and may then stand for election
thereafter  each director must retire from office at every third annual
general meeting since he last retired at which meeting he will be eligible
for reelection
premier farnell plc annual report and accounts 2005 39 directors’ remuneration audited
salary annual benefits t otal emoluments pension contributions
or fees bonus in kind 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000 £000
executive
j r hirst 402 42 27 471 501 215 228
a c fisher 264 62 20 346 357 104 99
lbain 2644813131866838
nonexecutive
sir malcolm bates chairman 110 – – 110 110 – –
sir peter gershon 33 – – 33 – –
sir robert horton 15 – – 15 40 – –
w korb 28 – – 28 28 – –
m lester 33 – – 33 33 – –
c j nolan 28 – – 28 28 – –
d j s roques 35 – – 35 33 – –
1212 152 48 1412 1316 387 365
sir malcolm bates retired from the board on 28th february 2005
sir peter gershon was appointed to the board on 21st june 2004
sir robert horton retired from the board on 15th june 2004
no expense allowances chargeable to uk income tax were paid
there were no amounts paid or receivable in respect of compensation for loss of office or in connection with the termination of any director
the following table sets out the final salary pension benefits accruing to relevant executive directors mr bain does not receive any final salary
benefits and therefore does not appear in this table
final salary additional final salary t ransfer value of final t ransfer value of final ba
pension accrued as at pension earned during the salary benefits as at salary benefits as at
30th january 2005 year including inflation 1st february 2004 30th january 2005
excluding inflation a b
£ pa £ pa £ ££
j r hirst 8594 1352 1127 74171 97097 22926
a c fisher 21557 1734 1119 149670 178087 28417
 no contribution is made by directors to the final salary pension arrangements
for each of the directors the main terms applying to their final salary pensions are
– payable from normal retirement age of 60
– the directors do not make any contribution to the final salary pension arrangements
– spouse’ s pension of 50 per cent of the director’ s pension payable on death
– pensions in payment increase in line with inflation to a maximum of 5 per cent each year
mr hirst is aged 52 and mr fisher is aged 47
the accrued final salary pension shown at 30th january 2005 is the combined figure for the uk scheme and us plan defined benefit accruals and is
the amount that the director would be entitled to from normal retirement age if he left service at the end of the year
the increase in final salary pension during the year is the increase over the figure disclosed in last year’ s accounts both including and excluding an
allowance for inflation during the year
all transfer values have been calculated on the basis of actuarial advice the transfer values of the accrued entitlement represent the value of assets
that the pension scheme would need to transfer to another pension provider on transferring the scheme’ s liability in respect of the director’ s final
salary pension benefits they do not represent sums payable to individual directors and therefore they cannot be added meaningfully to annual
remuneration
the table above shows transfer values at the beginning and the end of the year  as the transfer values are linked to investment market conditions a
slight fall in investment yields over the year has been a factor in the increase in transfer values which is shown members’ contributions paid during
the year were paid into the money purchase arrangement within the uk scheme and as such are not included in the transfer value
remuneration report continued
40 premier farnell plc annual report and accounts 2005 directors’ interests audited
the interests of the directors in the ordinary share capital of the company at the beginning and end of the financial year are set out below
30th january 1st february
2005 2004
sir peter gershon – beneficial 25000 –
sir malcolm bates – beneficial 35000 35000
a c fisher – beneficial 80000 80000
j r hirst – beneficial 66050 66050
l bain – beneficial 5000 –
sir robert horton – beneficial – 13000
w korb – beneficial 10000 10000
m lester – beneficial 30000 30000
c j nolan – beneficial 7000 7000
d j s roques – beneficial 10000 10000
 as at date of retirement for sir robert horton
 as at date of appointment for sir peter gershon
in addition to the above beneficial interests in the company’s ordinary shares the executive directors are regarded for companies act purposes
as being interested in 304000 ordinary shares held by the premier farnell executive trust all employees including executive directors are
potential beneficiaries of the trust it is not anticipated that any employee or executive director will be entitled to receive from the trust a greater
number of shares than that to which they are entitled on exercise of awards made to them under the longterm incentive plan
share options audited
at at
1st february 30th january exercise exercise
2004 granted exercised lapsed 2005 price pence period
j r hirst 300000 – – – 300000 3050 july 2001 to july 2008
70000 – – – 70000 1920 march 2002 to march 2009
125000 –– – 125000 1530 october 2005 to october 2012
147448 – – – 147448 2645 october 2006 to october 2013
– 197115 – – 197115 2080 september 2007 to september 2014
– 4858 – – 4858 1940 june 2007 to december 2007
a c fisher 57856 –– – 57856 5510 may 1998 to may 2005
30000 – – – 30000 6820 may 2000 to may 2007
73000 – – – 73000 1920 march 2002 to march 2009
75000 – – – 75000 1530 october 2005 to october 2012
97353 – –– 97353 2645 october 2006 to october 2013
– 128846 – – 128846 2080 september 2007 to september 2014
– 4858 – – 4858 1940 june 2007 to december 2007
l bain 75000 – – – 75000 1530 october 2005 to october 2012
92173 – – – 92173 2645 october 2006 to october 2013
– 125000 –– 125000 2080 september 2007 to september 2014
 saye share options which are not subject to any performance conditions the other options listed above are executive options which are subject to the performance
conditions described under the heading longterm incentives on page 38
no price was paid for any option there were no variations to the terms and conditions of any director’s options during the year
the market price of the company’s shares at 30th january 2005 was 1748p 1st february 2004 2655p and the range during the year was
1620p – 2725p
premier farnell plc annual report and accounts 2005 41 longterm incentive plan audited
interests of directors in the plan are
at awarded market price vested lapsed at end of
1st february at date of 30th january performance
2004 award pence 2005 period
j r hirst 94964 – 3475 – 94964 – january 2005
203804 – 2175 – – 203804 june 2006
– 153241 2545 – – 153241 april 2007
a c fisher
61870 – 3475 – 61870 – january 2005
135870 – 2175 – – 135870 june 2006
– 101178 2545 – – 101178 april 2007
l bain
148387 – 1550 – 148387 – january 2005
125000 – 2175 – – 125000 june 2006
– 95795 2545 – – 95795 april 2007
the conditions for the vesting of an award made under the plan are described under the heading longterm incentives on page 38
there were no variations made to the terms and conditions of any award during the year
performance graph
the graph below shows the total shareholder return for a holding of the company’s ordinary shares for the five financial years of the company of
which the year to 30th january 2005 is the last this is compared to the total shareholder return for a hypothetical holding in the ftse mid250
index excluding investment trusts this was chosen as it is the index of which the company is a constituent and the index used for the purposes
of the longterm incentive plan total shareholder return is the growth in value of a share plus the value of dividends paid assuming that the
dividends are reinvested in the company’s shares on the day on which they are paid
elements of report subject to audit
the information above under the headings directors’ remuneration directors’ interests share options and longterm incentive plan is auditable
all other information provided in the remuneration report is not subject to audit
approved by the board on 17th march 2005
signed on behalf of the board by
michael lester
chairman of the remuneration committee
0
25
50
75
100
125
150
2000 2001 2002 2003 2004 2005
value £
premier farnell ftse mid250 index excl investment trusts
remuneration report continued
42 premier farnell plc annual report and accounts 2005 premier farnell plc annual report and accounts 2005 43
consolidated profit and loss account
financial year ended 30th january 2005
2005 2004
restated
notes £m £m
turnover 1 7767 7646
cost of sales 4622 4576
gross profit 3145 3070
net operating expenses 1
– before rebranding costs and amortisation of goodwill 2380 2330
– rebranding costs – 24
– amortisation of goodwill 27 26
t otal net operating expenses 2407 2380
operating profit 1
– before rebranding costs and amortisation of goodwill 765 740
– rebranding costs – 24
– amortisation of goodwill 27 26
t otal operating profit 738 690
profit on disposal of business 3 – 01
net interest payable 4 135 143
profit before taxation 5 603 548
taxation 7 138 156
profit after taxation 465 392
preference dividends nonequity 9 66 66
profit attributable to ordinary shareholders 399 326
ordinary dividends equity 9 326 326
retained profit for the year 22 73 –
earnings per share 10
basic 110p 90p
diluted 110p 90p
earnings per share before rebranding costs amortisation of
goodwill and profit on disposal of business 10
basic 117p 102p
diluted 117p 101p
there is no material difference between the results as disclosed in the profit and loss account and the results on an unmodified historical cost basis
all of the group’s turnover and operating profit relates to continuing operations
full details of the 2004 restatement are given in note 22 to the accounts
statement of t otal recognised gains and losses
financial year ended 30th january 2005
2005 2004
restated
notes £m £m
profit after taxation 465 392
currency translation adjustments net of associated tax creditcharge 17 98
t otal recognised gains for the year 482 490
prior year adjustment on adoption of uitf 38 22 11
t otal recognised gains since last annual report 493 consolidated balance sheet
at 30th january 2005
2005 2004
notes £m £m
fixed assets
intangible assets 11 448 459
t angible assets 12 983 1072
1431 1531
current assets
stocks 14 1581 1510
debtors – due within one year 15 1314 1285
– due after more than one year 15 819 796
cash at bank and in hand 279 317
3993 3908
creditors – amounts falling due within one year 17 1498 1590
net current assets 2495 2318
t otal assets less current liabilities 3926 3849
creditors – amounts falling due after more than one year 18 2278 2307
provisions for liabilities and charges 19 432 421
net assets 1216 1121
capital and reserves
called up share capital 20 257 257
share premium account 22 202 201
capital redemption reserve 22 08 08
profit and loss account 22 749 655
t otal shareholders’ funds including nonequity interests 23 1216 1121
shareholders’ funds comprise
equity interests 03 97
nonequity interests 1219 1218
1216 1121
the financial statements on pages 43 to 66 were approved by the board on 17th march 2005 and signed on its behalf by
sir peter gershon
chairman
44 premier farnell plc annual report and accounts 2005 company balance sheet
at 30th january 2005
2005 2004
notes £m £m
fixed assets
investments 13 565 4900
current assets
debtors – due within one year 15 10 63
– due after more than one year 15 8713 4205
8723 4268
creditors – amounts falling due within one year 17 621 274
net current assets 8102 3994
t otal assets less current liabilities 8667 8894
creditors – amounts falling due after more than one year 18 2096 1962
net assets 6571 6932
capital and reserves
called up share capital 20 257 257
share premium account 22 202 201
capital redemption reserve 22 08 08
merger reserve 22 06 06
profit and loss account 22 6098 6460
t otal shareholders’ funds including nonequity interests 23 6571 6932
shareholders’ funds comprise
equity interests 5352 5714
nonequity interests 1219 1218
6571 6932
the financial statements on pages 43 to 66 were approved by the board on 17th march 2005 and signed on its behalf by
sir peter gershon
chairman
premier farnell plc annual report and accounts 2005 45 consolidated statement of cash flows
financial year ended 30th january 2005
2005 2004
notes £m £m
net cash inflow from operating activities 25 725 700
returns on investments and servicing of finance
interest received 03 04
interest paid 137 144
dividends paid on preference shares nonequity 66 66
net cash outflow from returns on investments and
servicing of finance 200 206
t axation paid 121 145
capital expenditure and financial investment
purchase of tangible fixed assets 133 204
sale of tangible fixed assets 10 26
net cash outflow from capital expenditure and 
financial investment 123 178
acquisitions and disposals
acquisition of subsidiary undertaking 2 26 –
disposal of subsidiary undertaking 24 – 05
net cash outflowinflow from acquisitions
and disposals 26 05
equity dividends paid 326 326
net cash outflow before use of liquid resources
and financing 71 150
financing
issue of ordinary share capital 20 01 09
purchase of own preference shares – 23
new bank loans 230 2066
repayment of bank loans 177 1887
net cash inflow from financing 54 165
decreaseincrease in net cash 17 15
reconciliation of net debt
opening net debt 2019 2092
decreaseincrease in net cash 17 15
increase in debt 53 179
exchange movement 82 237
closing net debt 25 2007 2019
46 premier farnell plc annual report and accounts 2005 46 premier farnell plc annual report and accounts 2005 statement of accounting policies
premier farnell plc annual report and accounts 2005 47 premier farnell plc annual report and accounts 2005 47
basis of accounting
the accounts have been prepared under the historical cost convention
and in accordance with applicable uk accounting standards a summary
of the more important group accounting policies which the directors
consider to be the most appropriate for the group is set out below
together with an explanation of where changes have been made
to previous policies on the adoption of new accounting standards in
the year
changes in accounting policies
the group has adopted uitf 17 revised 2003 employee share schemes
and uitf 38 accounting for esop t rusts in these accounts the
adoption of uitf 17 did not require any change in comparative figures
the adoption of uitf 38 represents a change in accounting policy and
the comparative figures have been restated accordingly note 22
basis of consolidation
the consolidated accounts incorporate the accounts of the company
and each of its subsidiary undertakings for the financial year ended
30th january 2005 results of subsidiary undertakings acquired or
disposed of are consolidated from or up to the date on which control
passes intergroup transactions are eliminated on consolidation
t urnover and revenue recognition
t urnover comprises the value of sales to outside customers excluding
value added and sales taxes t urnover is recognised when the risks and
rewards of ownership have passed to the customer 
expense classification
cost of sales comprises the cost of goods delivered to customers
including the cost of freight packaging and inventory adjustments
distribution costs represent all operating company expenses including
sales marketing product and purchasing warehousing information
technology and ecommerce
administrative expenses comprise the cost of central head office and the
group board
goodwill
goodwill comprising the amount by which the consideration for
acquisitions exceeds the fair value of the net assets acquired is
capitalised and amortised through the profit and loss account on a
straight line basis over its estimated useful life which has been
determined as 20 years
as permitted by frs 10 goodwill and intangible assets goodwill arising
on acquisitions prior to 1999 remains written off against reserves such
goodwill would be charged in the profit and loss account on subsequent
disposal of the related business
goodwill arising on acquisitions is reviewed for impairment in accordance
with frs 10 and frs 11 impairment of fixed assets and goodwill at
the end of the first full year after an acquisition and in other years if
events or changes in circumstances indicate that the carrying value may
not be recoverable any impairment arising being charged to the profit
and loss account
t angible fixed assets and depreciation
fixed assets are stated at cost interest is not capitalised
with the exception of motor vehicles which are depreciated on a
reducing balance basis at 25 per annum depreciation is calculated to
write off the cost of individual fixed assets from the time they become
operational by equal annual instalments over their estimated useful lives
which are principally as follows
plant and equipment between 5 and 10 years
computer equipment between 3 and 5 years
freehold buildings 50 years
no depreciation is provided on freehold land
fixed assets are reviewed for impairment in accordance with frs 11 if
events or changes in circumstances indicate that the carrying value may
not be recoverable any impairment arising being charged to the profit
and loss account
financial instruments
gains and losses on forward foreign exchange contracts entered into as
hedges of future purchases and sales denominated in foreign currency 
are carried forward and taken to the profit and loss account on maturity to
match the underlying transactions
amounts payable or receivable in respect of interest rate hedges are
recognised as adjustments to interest payable or receivable over the life
of the hedge
exchange gains and losses arising on foreign currency borrowings and
related financial instruments used to finance the group’ s foreign currency
investments are taken to reserves and reported in the statement of total
recognised gains and losses
stocks
stocks are stated at the lower of cost and net realisable value provision is
made against slow moving and obsolete stock based on analysis of
historical data
deferred taxation
full provision is made on an undiscounted basis for deferred taxation
resulting from timing differences between profits computed for taxation
purposes and profits stated in the accounts to the extent that there is an
obligation to pay more tax in the future as a result of the reversal of those
timing differences
deferred tax assets are recognised to the extent they are expected to be
recoverable
pensions and similar obligations
the group operates defined benefit and defined contribution schemes
pension schemes are accounted for in accordance with ssap 24
accordingly  the expected cost of providing pension benefits under
defined benefit schemes and other postretirement benefits is amortised
in the profit and loss account over the period benefiting from the
employees’ services costs with respect to defined contribution schemes
are charged to the profit and loss account as they fall due
the group has adopted the transitional arrangements of frs 17
retirement benefits details of which are given in note 28
foreign exchange
the results of overseas subsidiary undertakings are translated into
sterling at the average exchange rate ruling during the year  foreign
currency assets and liabilities are translated into sterling at the rates of
exchange ruling at the balance sheet date gains or losses arising in the
ordinary course of business are dealt with in arriving at operating profit
those arising on the translation of the assets and liabilities of overseas
subsidiary undertakings together with the exchange differences arising
when the profit and loss accounts are translated at average rates and
compared to the rate ruling at the balance sheet date are dealt with as
movements in reserves
the principal exchange rates used to translate the group’ s overseas
subsidiaries were as follows
2005 2004
average yearend average yearend
us dollar 184 188 166 182
euro 147 145 144 147
catalogue and advertising costs
catalogue costs are expensed over the life of the catalogue up to a
maximum period of one year advertising costs are expensed as incurred
leased assets
payments under operating leases are charged to the profit and loss
account as they fall due
longterm incentive plan
the consolidated profit and loss account includes the costs relating to the
premier farnell performance share plan and the consolidated and
company balance sheets include the appropriate assets and liabilities of
the plan shares in the company held by the trust established to
administer the plan are deducted in arriving at shareholders’ funds
where options over shares are awarded to employees the value of the
expected award is charged on a straight line basis over the performance
period to which the award relates
investments in subsidiary undertakings
investments in subsidiary undertakings are included at cost provision is
made where in the opinion of the directors a permanent diminution in
value has occurred
research and development
research and development costs are expensed in the profit and loss
account in the year in which they arise 48 premier farnell plc annual report and accounts 2005
notes to the accounts
1 segmental information
i t urnover  operating profit and net operating assets
a business segments
net operating assets
t urnover operating profit excluding goodwill
2005 2004 2005 2004 2005 2004
restated
£m £m £m £m £m £m
marketing and distribution division
americas
– before rebranding costs 2898 2861 277 270 1146 1114
– rebranding costs – – – 12 – –
2898 2861 277 258 1146 1114
europe and asia pacific
– before rebranding costs and amortisation
of goodwill 3902 3821 441 406 1555 1516
– rebranding costs – – – 12 – –
– amortisation of goodwill – – 26 26 – –
3902 3821 415 368 1555 1516
t otal marketing and distribution division 6800 6682 692 626 2701 2630
industrial products division notes 2 and 3
– before amortisation of goodwill 967 964 135 137 257 243
– amortisation of goodwill – – 01 – – –
967 964 134 137 257 243
head office costs – – 88 73 – –
7767 7646 738 690 2958 2873
b geographical segments by origin
net operating assets
t urnover operating profit excluding goodwill
2005 2004 2005 2004 2005 2004
restated
£m £m £m £m £m £m
americas 3464 3432 395 388 1094 1052
uk 2678 2706 345 317 1338 1314
rest of europe and asia pacific 1625 1508 113 84 526 507
head office costs – – 88 73 – –
amortisation of goodwill – – 27 26 – –
7767 7646 738 690 2958 2873
amortisation of capitalised goodwill is in respect of the acquisition in the uk of buckhickman inone £26 million and the acquisition in the us of gfe manufacturing inc
note 2 £01 million
the geographical analysis of turnover by destination is not significantly different from that shown above turnover between segments is not significant
ii reconciliation of net operating assets with net assets is as follows
2005 2004
£m £m
net operating assets excluding goodwill 2958 2873
net debt 2007 2019
goodwill
– marketing and distribution division europe and asia pacific uk 433 459
– industrial products division americas 15 –
pension fund prepayment 819 796
t ax dividends and other 1002 988
net assets 1216 1121
iii net operating expenses
2005 2004
restated
£m £m
distribution costs 2282 2271
administrative expenses 115 99
research and development expenditure 10 10
2407 2380
distribution costs in 2004 include oneoff rebranding costs of £24 million
administrative expenses include amortisation of goodwill of £27 million 2004 £26 million notes to the accounts continued
2 acquisition
on 6th february 2004 the group acquired the business and certain assets of gfe manufacturing inc a us company involved in the manufacture
of lighting rigs for the firefighting industry for a cash consideration including costs of £26 million the book and fair value of net assets acquired
was £10 million comprising tangible fixed assets of £06 million and working capital of £04 million with the resulting goodwill of £16 million being
amortised over a period of 20 years which management considers to be the best estimate of its useful economic life
gfe manufacturing contributed £31 million of sales and £07 million of operating profit to the industrial products division in the year since
acquisition
3 profit on disposal of business
2005 2004
£m £m
profit on net assets sold net of costs – 05
goodwill previously written off to reserves – 04
profit on disposal of businesses in the year note 24 – 01
the business sold in the year ended 1st february 2004 part of the industrial products division contributed £07 million of sales and £01 million of
operating profit in the period prior to disposal
4 net interest payable
2005 2004
£m £m
interest receivable on shortterm deposits 03 04
interest payable on bank overdrafts and loans repayable within 5 years 68 97
interest payable on loans repayable after 5 years 70 50
135 143
5 profit before taxation
profit before taxation is stated after chargingcrediting
2005 2004
£m £m
staff costs note 6 1410 1343
amortisation of goodwill 27 26
depreciation of tangible fixed assets 197 204
profit on sale of tangible fixed assets 01 11
restructuring costs – 08
operating lease rentals
plant and machinery 36 39
other 55 59
fees paid to the group’ s auditors
statutory audit 06 06
further assurance services 01 01
t ax compliance services 01 01
t ax advisory services – 01
the audit fees and fees for further assurance services paid to the group’ s auditors shown above include £01 million 2004 £01 million in respect
of the company
t ax and other fees paid to the group’ s auditors pricewaterhousecoopers llp   are in respect of assignments carried out on a worldwide basis it is
the group’s policy to employ pricewaterhousecoopers llp on assignments additional to their statutory duties where their expertise and experience
of the group are important or where they are awarded assignments on a competitive basis pricewaterhousecoopers llp is not engaged in
assignments that are prohibited under rules introduced pursuant to the us sarbanes oxley act 2002
t ax services are in respect of tax compliance and tax advice in a number of territories
premier farnell plc annual report and accounts 2005 49 notes to the accounts continued
6 employees and directors
2005 2004
£m £m
staff costs during the year were as follows
wages and salaries 1209 1171
social security costs 204 201
other pension costs note 28 16 29
postretirement medical benefits note 28 09 –
performance share plan 04 –
1410 1343
the average monthly number of persons including executive directors employed was as follows
2005 2004
number number
marketing and distribution division
americas 1597 1618
europe and asia pacific 2485 2448
4082 4066
industrial products division 977 952
head office 45 43
5104 5061
directors’ remuneration
a detailed analysis of directors’ remuneration including salaries performancerelated bonuses and longterm incentives is provided under the
headings directors’ remuneration share options and longterm incentive plan in the remuneration report on pages 37 to 42 the total
remuneration of the directors comprises
2005 2004
£m £m
aggregate emoluments 14 13
company contributions to money purchase pension schemes 04 04
18 17
number of directors to whom retirement benefits are accruing under
– a defined benefit scheme and a money purchase scheme 2 2
– a money purchase scheme 1 1
details of the highest paid director are given on page 40 under the heading directors’ remuneration
7 t axation
2005 2004
£m £m
uk corporation tax at 30 2004 30
current tax for the year 66 71
current tax in respect of prior years 01 08
overseas corporate tax
current tax for the year 70 67
current tax in respect of prior years 23 02
deferred taxation
current year 28 29
prior year 02 01
138 156
the rate of the current tax charge on profit before tax goodwill amortisation and profit on disposal of business is lower than the standard rate of
corporation tax in the uk the differences are explained below
2005 2004
 
standard rate of uk tax 300 300
overseas tax rates 16 28
timing differences 44 49
other current year items 56 38
prior year items 38 17
effective rate of tax 178 224
50 premier farnell plc annual report and accounts 2005 notes to the accounts continued
8 premier farnell plc – profit and loss account
premier farnell plc has not presented its own profit and loss account as permitted by section 230 of the companies act 1985 the profit for the
financial year dealt with in the accounts of the company is £30 million 2004 loss of £02 million restated
9 dividends
2005 2004
£m £m
preference dividends nonequity
paid july 2004 july 2003 33 33
paid january 2005 january 2004 33 33
66 66
ordinary dividends equity
interim paid of 40p 2004 40p per share 145 145
final proposed of 50p 2004 50p per share 181 181
326 326
further details of dividends on preference shares are given in note 20
dividends amounting to £27360 2004 £27360 in respect of the company’ s ordinary shares held by the premier farnell executive trust note 21
have been deducted in arriving at the aggregate of ordinary dividends paid and proposed
10 earnings per share
basic earnings per share are based on the profit attributable to ordinary shareholders for the year and the weighted average number of ordinary
shares in issue during the year excluding those shares held by the premier farnell executive trust note 21 for diluted earnings per share the
weighted average number of ordinary shares in issue is adjusted to assume issue of all dilutive potential ordinary shares being those share options
granted to employees where the exercise price is less than the average market price of the company’ s ordinary shares during the year
reconciliations of earnings and the weighted average number of ordinary shares used in the calculations are set out below
basic diluted basic diluted
per share per share per share per share
earnings amount amount earnings amount amount
2005 2005 2005 2004 2004 2004
restated restated restated
£m pence pence £m pence pence
profit attributable to ordinary shareholders 399 110 110 326 90 90
rebranding costs –– – 24 07 06
t ax attributable to rebranding –– – 07 02 02
amortisation of goodwill 27 07 07 26 07 07
profit on disposal of business – – – 01 – –
profit attributable to ordinary shareholders before
rebranding costs amortisation of goodwill and profit on
disposal of business 426 117 117 368 102 101
number number
weighted average number of shares 362664115 362329619
dilutive effect of share options 1042844 1025010
diluted weighted average number of shares 363706959 363354629
adjusted earnings per share before rebranding costs amortisation of goodwill and profit on disposal of business have been provided in order to
facilitate year on year comparison
premier farnell plc annual report and accounts 2005 51 notes to the accounts continued
11 intangible fixed assets
goodwill
£m
group
cost
at 2nd february 2004 526
additions note 2 16
at 30th january 2005 542
amortisation
at 2nd february 2004 67
charge for the year 27
at 30th january 2005 94
net book amount
at 30th january 2005 448
at 1st february 2004 459
12 t angible fixed assets
freehold land plant and
and buildings equipment t otal
£m £m £m
group
cost
at 2nd february 2004 646 1349 1995
additions 05 119 124
acquisition 05 01 06
disposals 20 13 33
currency translation adjustment 08 16 24
at 30th january 2005 628 1440 2068
depreciation
at 2nd february 2004 176 747 923
charge for the year 21 176 197
disposals 12 12 24
currency translation adjustment 04 07 11
at 30th january 2005 181 904 1085
net book amount
at 30th january 2005 447 536 983
at 1st february 2004 470 602 1072
plant and equipment includes computer hardware and software with a cost of £1004 million 2004 £936 million and accumulated depreciation of
£623 million 2004 £489 million
capital commitments authorised and contracted at 30th january 2005 amounted to £01 million 2004 £11 million
52 premier farnell plc annual report and accounts 2005 notes to the accounts continued
13 fixed asset investments
group group company company
2005 2004 2005 2004
£m £m £m £m
shares in subsidiary undertakings – – 565 4900
shares in subsidiary undertakings
£m
company
at 2nd february 2004 4900
disposals 4335
at 30th january 2005 565
disposals in the year relate to the internal reorganisation of the group’ s legal structure
the principal trading subsidiary undertakings of premier farnell plc are as follows
country of
incorporation
and operation
premier farnell uk ltd uk
farnell electronic components pty ltd australia
farnell electronic components limited new zealand
farnell inone gmbh germany
farnell danmark as denmark
oy farnell finland ab finland
farnell components ab sweden
farnell ag switzerland
farnell components ireland limited eire
farnell france sas france
farnell netherlands bv netherlands
farnellnewark inone distribuidora de componentes electronicos ltda brazil
farnell components pte ltd singapore
farnell components m sdn bhd malaysia
farnell components hk ltd hong kong
farnell components sl spain
farnell italia srl italy
farnell belgium nv belgium
farnell newark inone shanghai co ltd china
newark corporation usa
newark electronics corporation usa
mcm electronics inc usa
premier farnell llc usa
premier farnell canada limited canada
nv premier industrial belgium srl belgium
premier industrial deutschland gmbh germany
premier industrial holland bv holland
premier industrial france sarl france
premier industrial italia srl italy
premier industrial uk ltd uk
premierco españa sl spain
premier farnell electronics de mexico srl mexico
tpc wire  cable de mexico srl mexico
all of the above are wholly owned
companies incorporated in the uk are registered in england
all companies are involved in distribution activities premier farnell llc is also involved in manufacturing activities
the directors consider that to list all subsidiary undertakings would lead to a statement of excessive length a full list of subsidiary undertakings will
be annexed to the company’ s next annual return
premier farnell plc annual report and accounts 2005 53 notes to the accounts continued
14 stocks
group group company company
2005 2004 2005 2004
£m £m £m £m
raw materials 21 14 – –
work in progress 41 43 – –
finished goods and goods for resale 1519 1453 – –
1581 1510 – –
15 debtors
group group company company
2005 2004 2005 2004
£m £m £m £m
amounts falling due within one year
t rade debtors 1125 1029 – –
deferred tax asset note 19 – – 01 01
other debtors 57 126 07 59
prepayments and accrued income 132 130 02 03
1314 1285 10 63
amounts falling due after more than one year
amounts owed by subsidiary undertakings – – 8713 4205
pension fund prepayment note 28 819 796 – –
819 796 8713 4205
16 financial instruments and derivatives
an explanation of the group’s objectives policies and strategies in the use of derivatives and other financial instruments is included in the finance
director’ s report under the heading treasury operations on page 29 the following detailed disclosures with regard to the use of financial
instruments and derivatives exclude shortterm trade debtors and creditors where permitted by frs13 financial instruments
1 foreign currency risk
the group hedges transactions primarily related to the purchase and sale of inventories denominated in foreign currencies through foreign
exchange forward contracts these contracts reduce currency risk from exchange rate movements with respect to these transactions and related
cash flows gains and losses are deferred and accounted for as part of the underlying transactions
the group does not hedge profit translation exposure unless there is a corresponding cashflow since such hedges provide only a temporary
deferral of the effects of movements in exchange rates similarly whilst a significant proportion of the group’ s borrowings are denominated in
us dollars the group does not specifically hedge all of its longterm investments in overseas assets currency translation gains amounting to
£17 million 2004 £98 million in the year ended 30th january 2005 have been credited to reserves in relation to the translation of net assets in
foreign currencies
at 30th january 2005 the gross notional amount of foreign exchange forward contracts to sell foreign currencies all of which had maturities of less
than one year totalled £722 million 2004 £642 million and can be analysed as follows
commitments to sell foreign currency
sterling equivalent unrecogniseddeferred
gains and losses
2005 2004 2005 2004
£m £m £m £m
euros 176 109 01 01
australian dollars 35 06 – –
us dollars 511 527 – –
722 642 01 01
the commitment to sell us dollars and approximately half of the commitment to sell euros are linked to the group’ s us dollar and euro denominated
borrowings referred to below which provide a hedge against the group’ s us dollar and euro investments the unrealised exchange gains on these
commitments have been reflected in the statement of t otal recognised gains and losses
in addition at 30th january 2005 the group had entered into foreign exchange forward contracts to buy £09 million 2004 £09 million of
us dollars on which there was no unrecognised loss 2004 loss of £01 million
the unrecogniseddeferred gains and losses in respect of foreign exchange forward contracts are estimated by reference to the amounts not yet
recognised that the group would receive or pay to terminate the contracts based on year end rates
during the financial year the group has not used any other financial instruments to hedge trading foreign exchange rate exposures
54 premier farnell plc annual report and accounts 2005 notes to the accounts continued
note 16 continued
the group’ s primary translation exposure relates to the relative values of the pound sterling and us dollar although the us business generates
significant us dollar trading cash flows the group’ s borrowings are predominantly us dollar denominated management anticipates that the
ongoing us dollar interest and dividend obligations together with us dollar trade payments in the uk should continue to preclude the need to enter
into any significant hedging of us dollar cash flows
at 30th january 2005 the group had the equivalent of £90 million 2004 £45 million of predominantly euro denominated net financial assets in
nonfunctional currencies in relation to which future movements in foreign currencies could have a limited impact on consolidated profit
2 interest rate risk
the group finances its operations through a combination of retained cash flow equity and nonequity shares and short and mediumterm borrowings
procedures are in place to monitor and manage interest rate risk with derivatives being entered into when considered appropriate by management
financial liabilities
the maturity profile of the group’ s borrowings is as follows
2005 2004
fixed floating total fixed floating total
£m £m £m £m £m £m
due within one year 01 07 08 01 28 29
due between one and two years 825 236 1061 01 – 01
due between two and five years 02 – 02 855 200 1055
due over five years 1210 05 1215 1249 02 1251
2038 248 2286 2106 230 2336
the group’s borrowings are denominated in us dollars with the exception of the floating rate debt due within two years of £243 million of which
£185 million is denominated in euros and £58 million is denominated in sterling
the group has multicurrency bilateral bank facilities of £1216 million which are committed until mid 2006 the facilities carry a libor based
floating rate of interest at the year end £236 million was drawn on these facilities 2004 £200 million
the weighted average interest rate attributable to fixed rate borrowings was 63 2004 66 and the weighted average duration of fixed rate
borrowings was 50 years 2004 60 years
the group’ s other financial liabilities comprise provision for dilapidation costs of £10 million 2004 £15 million note 19
nonequity shares
a proportion of the group’ s share capital is attributable to nonequity interests in the form of cumulative convertible redeemable preference shares
the rights and restrictions attaching to the preference shares are described in note 20
financial assets
cash at bank and in hand of £279 million 2004 £317 million relates principally to overnight deposits and current account balances held in
trading operations worldwide and comprises £nil 2004 £34 million in sterling £157 million 2004 £145 million in euros £52 million
2004 £74 million in us dollars and £70 million 2004 £64 million in other currencies all significant balances earn interest based on local
market rates appropriate for the currency concerned
3 fair value of financial assets and liabilities
an analysis of the fair values and book values of the group’ s financial assets and liabilities is provided below
book value fair value book value fair value
2005 2005 2004 2004
£m £m £m £m
assets
cash at bank and in hand 279 279 317 317
liabilities and derivatives
creditors – due within one year 08 08 29 29
– due after more than one year 2278 2329 2307 2342
commitments to sellbuy foreign currency 01 02 ––
provision for dilapidation costs 10 10 15 15
2295 2345 2351 2386
nonequity interests 1219 1010 1218 1106
the fair value of borrowings is based on estimates of the current fixed interest rates available for debt of the same remaining maturity the fair value
of nonequity interests is based on the quoted market price as at the financial year end
premier farnell plc annual report and accounts 2005 55 notes to the accounts continued
note 16 continued
4 credit risk
the group monitors its positions with and the credit quality of the financial institutions which are counterparties to its forward exchange contracts
and does not anticipate nonperformance by the counterparties the group would not realise a material loss in the event of nonperformance by
counterparties at 30th january 2005 neither the group nor the counterparties were required to collateralise their respective obligations under
these financial instruments
17 creditors – amounts falling due within one year
group group company company
2005 2004 2005 2004
£m £m £m £m
bank overdrafts unsecured 07 28 125 45
unsecured loans note 18 01 01 – –
t rade creditors 493 538 – –
corporate taxes 406 448 17 17
payroll and other taxes including social security 89 61 03 02
other creditors 84 124 02 07
accruals and deferred income 237 209 293 22
proposed ordinary dividend 181 181 181 181
1498 1590 621 274
18 creditors – amounts falling due after more than one year
group group company company
2005 2004 2005 2004
£m £m £m £m
unsecured loans 2278 2307 1403 1403
amounts owed to subsidiary undertakings – – 693 559
2278 2307 2096 1962
unsecured loans comprise
bank loans 236 200 206 166
72 us dollar guaranteed senior notes payable 2006 824 852 – –
53 us dollar guaranteed senior notes payable 2010 351 363 351 363
59 us dollar guaranteed senior notes payable 2013 846 874 846 874
other loans 22 19 – –
2279 2308 1403 1403
less amount due within one year 01 01 – –
2278 2307 1403 1403
group group company company
2005 2004 2005 2004
£m £m £m £m
bank overdrafts and unsecured loans are repayable as follows
within one year 08 29 125 45
between one and two years 1061 01 – –
between two and five years 02 1055 206 166
after five years 1215 1251 1197 1237
2286 2336 1528 1448
details of the group’ s borrowing facilities are given in note 16
56 premier farnell plc annual report and accounts 2005 notes to the accounts continued
19 provisions for liabilities and charges
group group company company
2005 2004 2005 2004
£m £m £m £m
deferred taxation 367 359 – –
overseas postretirement obligations note 28 55 47 – –
dilapidation costs 10 15 – –
432 421 – –
1 deferred taxation
at beginning of year 359 366 01 03
charge in the year note 7 26 28 – 02
currency translation adjustment 18 35 – –
provisionasset at end of year 367 359 01 01
deferred tax provisionsassets comprise
accelerated capital allowances 126 129 – –
shortterm timing differences 62 66 01 01
pension prepayment 303 296 – –
367 359 01 01
no provision has been made for deferred uk taxation and foreign withholding taxes relating to unremitted earnings of overseas subsidiaries where
remittance of these earnings is not anticipated in the foreseeable future
2 overseas postretirement obligations note 28
at beginning of year 47 52 – –
profit and loss account 09 – – –
currency translation adjustment 01 05 – –
at end of year 55 47 – –
3 dilapidation costs
at beginning of year 15 15 – –
utilised in the year 01 – – –
profit and loss account 04 – – –
at end of year 10 15 – –
provision for dilapidation costs represents the estimated cost of dilapidation work on leased properties prior to the properties being vacated at the
end of their lease term the average length of the remaining lease term on these properties is seven years
premier farnell plc annual report and accounts 2005 57 notes to the accounts continued
20 called up share capital
company company
2005 2004
nominal value nominal value
£m £m
authorised
attributable to equity interests
500000000 ordinary shares of 5p each 2004 500000000 250 250
attributable to nonequity interests
32000000 cumulative convertible redeemable preference shares of £1 each 2004 32000000 320 320
570 570
allotted called up and fully paid
ordinary shares of 5p each equity interests
at 2nd february 2004 362948230 shares 181 181
allotted under share option schemes 37000 shares – –
at 30th january 2005 362985230 shares 181 181
cumulative convertible redeemable preference shares of £1 each nonequity interests
at 2nd february 2004 7575221 shares 76 78
preference share purchase and cancellation – 02
at 30th january 2005 7575221 shares 76 76
allotments during the year
on various dates during the year allotments were made under the company’ s executive share option schemes totalling 37000 ordinary shares
nominal value £1850 for a cash consideration of £64140
the rights and restrictions attaching to the us135 cumulative convertible redeemable preference shares of £1 each
the ‘us preference shares’ and the 892p cumulative convertible redeemable preference shares of £1 each the ‘sterling preference
shares’ and together with the us preference shares the ‘preference shares’ are as follows
1 currency
holders of preference shares are entitled to receive a preferential dividend a distribution on a winding up and a payment on redemption holders of
us preference shares receive such payments in us dollars holders of sterling preference shares receive such payments in sterling
2 changeover
a holder of us preference shares may serve notice on the company requiring that some or all of his us preference shares be changed to sterling
preference shares
3 income
a each holder has a right to receive a fixed cumulative preferential dividend at the rate of us135 per annum for every £1 of nominal value for the
us preference shares and at the rate of 892p per annum for every £1 of nominal value for the sterling preference shares dividends on the us and
sterling preference shares are payable halfyearly in arrears in equal amounts on 26th january and 26th july
b the fixed cumulative preferential dividends payable in respect of the us preference shares and sterling preference shares are paid in priority to any
dividend payable to the holders of ordinary shares and in priority to or pari passu with the holders of any other class of preference shares in the
capital of the company
c if a holder of us preference shares has elected to changeover his us preference shares to sterling preference shares then the fixed cumulative
preferential dividend and any arrears payable after the changeover date will be paid at the sterling rate set out above
4 conversion
a each holder of us preference shares and sterling preference shares is entitled to convert all or any of his fully paid preference shares into fully paid
ordinary shares at the rate of 103432p in nominal amount of ordinary share capital for every £1 in nominal amount of preference share capital so
converted the ‘conversion rate’
b the preference shares may be converted on any date at the option of the holder on and from the date of issue up to and including 22nd april 2016
c if at any time 75 per cent or more of all the preference shares have been converted into ordinary shares but assuming for this purpose only that
any preference shares which have been converted into ordinary shares pursuant to the special conversion right referred to above had never been
issued or converted the company may give written notice to the remaining holders of us preference shares and sterling preference shares to
convert the remaining us preference shares and sterling preference shares into ordinary shares
d the conversion rate may be subject to adjustment if inter alia the company makes an issue of ordinary shares by way of capitalisation of profits
or reserves a rights issue or another offer to ordinary shareholders or if there is a change of control in the company following a takeover offer or if a
capital distribution is made
58 premier farnell plc annual report and accounts 2005 notes to the accounts continued
note 20 continued
5 redemption
the company shall subject to any statutory restrictions on 29th april 2016 redeem all the us preference shares in issue at us25 for every £1 of
nominal value and all the sterling preference shares in issue at £16518 for every £1 of nominal value
6 voting
each preference share entitles the holder to receive notice of but not to attend or vote at general meetings of the company save in limited
circumstances subject to being entitled to vote on any resolution each holder of preference shares has one vote on a show of hands and on a poll
every such holder has one vote for every ordinary share to which he would be entitled on conversion of his preference shares
7 winding up
subject to the rights attached to any shares issued on any special terms and conditions on a return of capital on a windingup of the company the
assets available for distribution will be applied first in paying to each holder of a preference share any arrears and accruals of the preferential
dividend second in repaying us25 for every £1 of nominal value for the us preference shares and £16518 for every £1 of nominal value for the
sterling preference shares third in repaying the capital paid up on each ordinary share and fourth in distributing the remainder rateably among the
members of the company according to the amounts paid up on their respective holdings of shares in the company each preference share being
treated for this purpose as if converted at the conversion rate applicable into fully paid ordinary shares immediately prior to the commencement of
the windingup
21 share options
during the year options were exercised on 7000 5p ordinary shares at 192p 12000 5p ordinary shares at 193p and on 18000 5p ordinary shares
at 153p under the terms of the 1984 senior executive share option scheme as subsequently amended
at 30th january 2005 the aggregate number of shares covered by options is 11465715 2004 8418045 and the total consideration of
£269 million 2004 £211 million is made up as follows
number total
of shares option consideration
date of grant outstanding price £m
may 1995 78894 551p 04
november 1995 10519 631p 01
november 1996 171500 682p 12
november 1996 122500 688p 08
may 1997 40000 682p 03
july 1998 300000 305p 09
march 1999 1208500 192p 23
july 1999 25000 245p 01
december 1999 45000 368p 02
april 2000 475700 425p 20
june 2000 17000 468p 01
september 2000 25000 513p 01
december 2000 50000 377p 02
july 2001 40000 249p 01
september 2001 993750 193p 19
april 2002 50000 337p 02
october 2002 2039000 153p 31
december 2002 59700 199p 01
january 2003 10000 199p –
september 2003 60000 246p 01
october 2003 1928911 265p 51
january 2004 31797 262p 01
march 2004 40000 244p 01
april 2004 738341 194p 14
september 2004 2844603 208p 59
december 2004 40000 171p 01
january 2005 20000 177p –
11465715 269
savingsrelated share options
savingsrelated share options are exercisable within six months after the end of the savings contract being either three or five years from the date
of grant both approved and unapproved executive share options are exercisable between three and ten years from the date of grant
premier farnell plc annual report and accounts 2005 59 notes to the accounts continued
note 21 continued
in addition under the company’ s longterm incentive plan certain individuals have been granted rights which may result in the issue of the following
ordinary shares
end of
number of performance
date of grant ordinary shares period
june 2003 1637166 june 2006
april 2004 1401347 april 2007
3038513
the premier farnell executive trust acquires ordinary shares in the open market in order to meet anticipated obligations under the premier farnell
performance share plan the costs of administering the plan are charged to the profit and loss account of the company the trustees have waived
the right to receive dividends in respect of the ordinary shares held by the trust at 30th january 2005 and 1st february 2004 the trust held
234000 ordinary shares and 35000 adrs representing 70000 ordinary shares with a total nominal value of £15200 the market value of these
shares at 30th january 2005 was £530000 1st february 2004 £806000 after the year end and as a result of the closure of the company’ s adr
programmes note 30 the trustees surrendered the adrs held in the trust in return for the underlying ordinary shares giving the trust a total
holding of 304000 ordinary shares
22 reserves
share capital profit and
premium redemption merger loss
account reserve reserve account
£m £m £m £m
group
at 2nd february 2004 as previously reported 201 08 – 655
prior year adjustment uitf 38
– profit and loss account impact – – – 11
– representation of the balance sheet – – – 11
at 2nd february 2004 as restated 201 08 – 655
retained profit for the year – – – 73
credit in respect of employee share schemes – – – 04
premium on issue of ordinary shares under share option schemes note 20 01 – – –
currency translation adjustment net of associated tax creditcharge – – – 17
at 30th january 2005 202 08 – 749
company
at 2nd february 2004 as previously reported 201 08 06 6460
prior year adjustment uitf 38
– profit and loss account impact – – – 11
– representation of the balance sheet – – – 11
at 2nd february 2004 as restated 201 08 06 6460
retained loss for the year – – – 362
premium on issue of ordinary shares under share option schemes note 20 01 – – –
at 30th january 2005 202 08 06 6098
cumulative goodwill arising on acquisition of subsidiary undertakings which are still part of the group and which was charged directly against
reserves of the group amounted to £15936 million at 30th january 2005 2004 £15936 million
60 premier farnell plc annual report and accounts 2005 notes to the accounts continued
note 22 continued
prior year adjustment
uitf 38 accounting for esop trusts has been adopted with effect from 2nd february 2004 uitf 38 requires that investments in own shares
made in order to meet anticipated obligations under performance share plans be accounted for as a deduction from shareholders’ funds prior to
2nd february 2004 the group’ s accounting policy was to classify such investments as fixed assets and to amortise the cost over the performance
period of the plan to which they relate
the adoption of uitf 38 has been accounted for by way of a prior year adjustment the net impact on shareholders’ funds at 2nd february 2004
was nil reflecting the reversal of the cumulative amortisation charge at that date of £11 million and the representation of the cost of the esop
shares of £11 million as a deduction from shareholders’ funds the reversal of the cumulative amortisation charge is disclosed on the face of the
statement of total recognised gains and losses the representation of the esop shares as a deduction from shareholders’ funds is not a
recognised gain or loss
the prior year adjustment is analysed below
adjustment to opening shareholders’ funds at 3rd february 2003 £m
– reversal of cumulative amortisation charge 09
– re presentation of esop shares 11
02
reversal of amortisation charge for the year ended 1st february 2004 02
prior year adjustment as at 2nd february 2004 –
23 reconciliation of movements in shareholders’ funds
group group company company
2005 2004 2005 2004
restated restated
£m £m £m £m
profitloss after taxation 465 392 30 02
dividends – preference 66 66 66 66
– ordinary 326 326 326 326
73 – 362 394
new share capital subscribed note 20 01 09 01 09
purchase of own preference shares – 23 – 23
credit in respect of employee share schemes 04 – – –
goodwill reinstated on disposal of business note 24 – 04 – –
currency translation on investments – – – 08
other currency translation adjustments 17 98 – 08
net change in shareholders’ funds 95 88 361 408
shareholders’ funds at the beginning of the year group 2004 originally £1035 million
before deducting prior year adjustment of £02 million company 2004 originally
£7342 million before deducting prior year adjustment of £02 million 1121 1033 6932 7340
shareholders’ funds at the end of the year 1216 1121 6571 6932
shareholders’ funds comprise
equity interests 03 97 5352 5714
nonequity interests 1219 1218 1219 1218
1216 1121 6571 6932
nonequity interests reflect the redemption cost of the cumulative convertible preference shares
premier farnell plc annual report and accounts 2005 61 notes to the accounts continued
62 premier farnell plc annual report and accounts 2005
24 disposals
2005 2004
£m £m
t angible fixed assets – 01
stocks – 01
goodwill previously written off against reserves – 04
– 06
profit on disposal note 3 – 01
net consideration see below – 07
cash consideration – 09
disposal costs – 02
net consideration – 07
cash flow in respect of prior year disposals – 02
net cash flow from disposals – 05
25 notes to the consolidated statement of cash flows
1 reconciliation of operating profit to net cash inflow from operating activities
2005 2004
restated
£m £m
operating profit 738 690
depreciation charge net of profit on disposals 196 193
amortisation of goodwill 27 26
pension credit 50 60
other noncash items 13 –
increase in stocks 88 99
increase in debtors 90 53
decreaseincrease in creditors 21 03
net cash inflow from operating activities 725 700
2 analysis of changes in net debt
debt due debt due
cash at bank bank within after net
and in hand overdraft one year one year cashdebt
£m £m £m £m £m
at 2nd february 2004 317 28 01 2307 2019
decreaseincrease in net cash 38 21 – – 17
decreaseincrease in debt – – 01 54 53
other changes – – 01 01 
exchange movement – – – 82 82
at 30th january 2005 279 07 01 2278 2007
26 contingent liabilities
the company has guaranteed the loans of certain subsidiary undertakings which at 30th january 2005 amounted to £859 million
2004 £887 million
27 operating leases
land and buildings other assets
2005 2004 2005 2004
£m £m £m £m
the group has annual commitments under noncancellable operating leases 
which expire
within one year 12 08 08 08
between one and five years 24 22 25 29
after five years 19 20 – 01
55 50 33 38 notes to the accounts continued
premier farnell plc annual report and accounts 2005 63
28 pension commitments and other postretirement obligations
1 pensions
the group operates pension plans throughout the world covering the majority of its employees these plans are devised in accordance with local
conditions and practices in the countries concerned and include defined contribution and defined benefit schemes the assets of the plans are
generally held in separately administered trusts the contributions to the plans are assessed in accordance with independent actuarial advice
principally using the projected unit method of valuation
the net credit for the year relating to all of the group’ s pension plans amounted to £16 million 2004 £29 million
the group’ s two principal plans operate in the uk and the us further disclosures of these plans are set out below
uk plan us plan
6th april 31st october
last valuation date 2002 2004
£m£m
market value of investments at last valuation date 531 1198
regular pension cost 03 19
interest on prepaid asset – 67
amortisation of variation 04 02
t otal pension costcredit 07 50
level of funding being the actuarial value of assets expressed as a percentage
of the accrued service liabilities 94 262
the principal assumptions used in the actuarial valuation of the uk plan were a weighted average projected investment return of 64 per annum
salary inflation of 43 per annum and pension increases of 28 per annum for the us plan the principal actuarial assumptions were a weighted
average projected investment return of 85 per annum and salary inflation of 50 per annum
variations from regular cost are spread over the remaining service lives of current employees in the plans
the final salary section of the uk plan was closed to new entrants in 1998 as a result of which under the projected unit method the current service
cost of the scheme will increase as the members of the scheme approach retirement members at that date now receive benefits funded through a
combination of the us plan and the uk plan including contributions to the money purchase section within the uk plan employees joining the uk
plan since 1st january 1999 are entitled to money purchase benefits only
an asset of £819 million 2004 £796 million is included in debtors due after more than one year representing the excess of the actuarial value of
the assets over the accrued service liabilities of the us plan
disclosures in accordance with financial reporting standard frs 17 retirement benefits
the following information is provided for disclosure purposes only in accordance with frs 17 pension costs have been recognised in these
accounts in line with statement of standard accounting practice no 24 accounting for pension costs as described above
the financial assumptions at 30th january 2005 used to calculate liabilities under frs 17 were as follows
uk plan uk plan uk plan us plan us plan us plan
2005 2004 2003 2005 2004 2003
 pa  pa  pa  pa  pa  pa
inflation 270 260 230 270 260 230
rate of increase in salaries 420 410 380 420 410 380
rate of increase in pensions 270 260 230 270 260 230
discount rate 530 550 550 550 610 650
the market value of assets the expected rate of return and the funding position at 30th january 2005 in accordance with frs 17 were
uk plan uk plan uk plan uk plan uk plan uk plan
longterm value longterm value longterm value
expected rate expected rate expected rate
of return of return of return
2005 2005 2004 2004 2003 2003
 pa £m  pa £m  pa £m
equities 80 314 80 299 89 250
bonds 46 209 49 191 45 182
cash 48 03 40 03 40 01
average returnt otal market value 66 526 68 493 70 433
present value of plan liabilities 708 630 580
deficit in the plan 182 137 147
related deferred tax asset 55 41 44
net pension liability 127 96 103 notes to the accounts continued
note 28 continued
1 pensions continued
disclosures in accordance with financial reporting standard frs 17 retirement benefits continued
us plan us plan us plan us plan us plan us plan
longterm value longterm value longterm value
expected rate expected rate expected rate
of return of return of return
2005 2005 2004 2004 2003 2003
 pa £m  pa £m  pa £m
equities 80 1253 80 1151 89 1071
cash –– –– ––
average returnt otal market value 80 1253 80 1151 89 1071
present value of plan liabilities 762 573 577
surplus in the plan 491 578 494
related deferred tax liability 182 218 187
net pension asset 309 360 307
analysis of amounts charged to the profit and loss account in respect of defined benefit schemes for the year ended 30th january 2005
i amounts charged to operating profit
uk plan uk plan us plan us plan
2005 2004 2005 2004
£m £m £m £m
current service cost 03 03 22 22
past service cost – – – –
t otal operating charge 03 03 22 22
ii amounts credited to exceptional items
gain on curtailments – – – –
iii amounts creditedcharged to other finance income
expected return on pension scheme assets 33 30 90 93
interest cost on pension scheme liabilities 34 31 34 36
net chargereturn 01 01 56 57
movements in deficitsurplus during the year
uk plan uk plan us plan us plan
2005 2004 2005 2004
£m £m £m £m
deficitsurplus at beginning of year 137 147 578 494
contributions paid by employer 06 03 – –
current service cost 03 03 22 22
past service cost – – – –
gain on curtailments – – – –
other finance costincome 01 01 56 57
t otal lossgain recognised in the statement of total recognised gains and losses 47 11 121 49
deficitsurplus at end of year 182 137 491 578
analysis of amount recognised in the statement of total recognised gains and losses
uk plan uk plan us plan us plan
2005 2004 2005 2004
£m £m £m £m
actual return less expected return on pension scheme assets 20 52 79 142
experience gainslosses arising on scheme liabilities 02 04 01 31
changes in the assumptions underlying the present
value of the scheme 69 37 183 63
actuarial lossgain recognised in the statement of total
recognised gains and losses 47 11 105 110
currency translation adjustment – – 16 61
t otal lossgain recognised in the statement of total
recognised gains and losses 47 11 121 49
64 premier farnell plc annual report and accounts 2005 notes to the accounts continued
note 28 continued
1 pensions continued
disclosures in accordance with financial reporting standard frs 17 retirement benefits continued
history of experience gains and losses
uk plan uk plan uk plan us plan us plan us plan
2005 2004 2003 2005 2004 2003
£m £m £m £m £m £m
difference between the actual and expected return on
scheme assets
amount 20 52 106 79 142 376
percentage of scheme assets 38 105 245 63 123 351
experience gainloss on scheme liabilities
amount 02 04 52 01 31 71
percentage of the present value of scheme liabilities 03 06 90 01 54 123
actuarial lossgain recognised in statement of total
recognised gains and losses
amount 47 11 59 105 110 331
percentage of the present value of scheme liabilities 66 17 102 138 192 574
reported net assets and profit and loss reserve can be reconciled to amounts in accordance with frs 17 as follows
net profit and net profit and
assets loss reserve assets loss reserve
2005 2005 2004 2004
£m £m £m £m
as reported 1216 749 1121 655
pension asset in accordance with ssap 24 819 819 796 796
associated deferred tax liability note 19 303 303 296 296
as reported excluding pension asset and associated deferred tax liability 700 233 621 155
net pension asset in accordance with frs 17 182 182 264 264
amounts in accordance with frs 17 882 415 885 419
the uk defined benefit pension plan includes certain employees of premier farnell plc however  the contributions by premier farnell plc are
accounted for as a defined contribution scheme as the company is unable to identify its share of the underlying assets and liabilities in the plan
2 postretirement medical benefits
in the us the group provides unfunded postretirement medical benefits to certain us employees the method of accounting for these obligations
is similar to that used to account for pension obligations the principal assumptions used in the most recent actuarial valuation undertaken at
30th january 2005 were a discount rate of 625 per annum and healthcare costs increasing by 90 per annum in the short term reducing to an
increase of approximately 50 per annum in the longer term at 30th january 2005 the provision for postretirement medical benefits based on
this valuation was £55 million 2004 £47 million
disclosures in accordance with financial reporting standard frs 17 retirement benefits
the following information is provided for disclosure purposes only in accordance with frs 17
the financial assumptions at 30th january 2005 used to calculate liabilities for postretirement medical benefits under frs 17 were as follows
discount rate 625 2004 70
medical inflation 90 decreasing by 05 each year to 50 over eight years 2004 90 decreasing by 05 each year to 50
over eight years
premier farnell plc annual report and accounts 2005 65 notes to the accounts continued
note 28 continued
2 postretirement medical benefits continued
disclosures in accordance with financial reporting standard frs 17 retirement benefits continued
analysis of amounts charged to the profit and loss account in respect of postretirement medical benefits for the year ended 30th january 2005
2005 2004
£m £m
amounts charged to operating profit – current service cost 02 02
amounts charged to other finance income – interest cost on liabilities 04 05
2005 2004
movements in deficit during the year £m £m
obligation at beginning of year 49 58
contributions paid 04 04
current service cost 02 02
finance cost 04 05
t otal lossgain recognised in the statement of total recognised gains and losses 04 12
obligation at end of year 55 49
2005 2004
analysis of amount recognised in the statement of total recognised gains and losses £m £m
experience lossgain on liabilities 01 13
loss on change of assumptions 05 07
actuarial lossgain recognised in the statement of total recognised gains and losses 06 06
currency translation adjustment 02 06
t otal lossgain recognised in the statement of total recognised gains and losses 04 12
history of experience gains and losses 2005 2004
experience lossgain on liabilities £m 01 13
percentage of liabilities 18 265
actuarial lossgain recognised in the statement of total recognised gains and losses £m 06 06
percentage of liabilities 109 122
had the provision for postretirement medical benefits been calculated in accordance with frs 17 reported net assets and the profit and loss
reserve as at 30th january 2005 would not have been affected 2004 reduction of £01 million
29 related party transactions
the company has taken advantage of the exemption under frs 8 related party transactions from disclosing transactions between the company
and other group undertakings as all such transactions have been eliminated fully on consolidation in these financial statements
30 post balance sheet events
at an extraordinary general meeting held on 9th february 2005 the company amended its articles of association to give the company’ s directors
the ability to limit the number of us residents holding ordinary or preference shares in the company  in particular the directors are now able to
require us shareholders whether holding directly or through nominees to sell their ordinary shares or preference shares in order to be satisfied that
the number of us shareholders is less than 300 in respect of each of the ordinary shares and preference shares
on 9th december 2004 the company applied to delist its ordinary shares and preference shares from the new york stock exchange and the
delisting took effect by sec order on 16th february 2005 notice of termination of the american depositary receipt or adr programmes in
respect of premier farnell plc’ s ordinary shares and preference shares was given to american depositary share or ads holders on 9th december
2004 t ermination of the adr programmes has taken effect and on 18th april 2005 the bank of new york as depositary for the adr programmes
will commence selling the shares underlying any adss not surrendered by the relevant ads holders and distribute the net proceeds of sale for the
relevant ads holders
66 premier farnell plc annual report and accounts 2005 66 premier farnell plc annual report and accounts 2005 66 premier farnell plc annual report and accounts 2005 premier farnell plc annual report and accounts 2005 67 premier farnell plc annual report and accounts 2005 67
independent auditors’ report to the members of
premier farnell plc
we have audited the financial statements which comprise the
consolidated profit and loss account the statement of total recognised
gains and losses the balance sheets the consolidated statement of cash
flows related notes and the accounting policies set out in the statement
of accounting policies we have also audited the disclosures required by
part 3 of schedule 7a to the companies act 1985 contained in the
remuneration report ‘the auditable part’
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the
financial statements in accordance with applicable united kingdom law
and accounting standards are set out in the statement of directors’
responsibilities on page 34 the directors are also responsible for
preparing the remuneration report
our responsibility is to audit the financial statements and the auditable
part of the remuneration report in accordance with the relevant legal
and regulatory requirements and united kingdom auditing standards
issued by the auditing practices board this report including the opinion
has been prepared for and only for the company’ s members as a body in
accordance with section 235 of the companies act 1985 and for no
other purpose we do not in giving this opinion accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing
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 auditable
part of the remuneration report have been properly prepared in
accordance with the united kingdom companies act 1985 we also
report to you if in our opinion the directors’ report is not consistent with
the financial statements if the company has not kept proper accounting
records if we have not received all the information and explanations we
require for our audit or if information specified by law regarding directors’
remuneration and transactions is not disclosed
we read the other information contained in the annual report and
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements the other information comprises only the chairman’ s
statement the chief executive’ s review the operating review the
finance director’ s report the directors’ report the unaudited part of the
remuneration report the corporate governance statement and the
social responsibility report
we review whether the corporate governance statement reflects the
company’ s compliance with the nine provisions of the 2003 frc
combined code specified for our review by the listing rules of the
financial services authority  and we report if it does not we are not
required to consider whether the board’ s statements on internal control
cover all risks and controls or to form an opinion on the effectiveness of
the company’ s or group’ s corporate governance procedures or its risk
and control procedures
basis of audit opinion
we conducted our audit in accordance with auditing standards issued
by the auditing practices board an audit includes examination on a test
basis of evidence relevant to the amounts and disclosures in the financial
statements and the auditable part of the remuneration report it also
includes an assessment of the significant estimates and judgements
made by the directors in the preparation of the financial statements and
of whether the accounting policies are appropriate to the company’ s
circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the financial
statements and the auditable part of the remuneration report 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
opinion
in our opinion
– the financial statements give a true and fair view of the state of affairs of
the company and the group at 30th january 2005 and of the profit and
cash flows of the group for the year then ended
– the financial statements have been properly prepared in accordance
with the companies act 1985
– those parts of the remuneration report required by part 3 of schedule
7a to the companies act 1985 have been properly prepared in
accordance with the companies act 1985
pricewaterhousecoopers llp
chartered accountants and registered auditors
leeds
17th march 2005
auditors’ report 68 premier farnell plc annual report and accounts 2005
shareholder information
annual general meeting
the 2005 annual general meeting will be held at the mayfair conference
centre 17 connaught place marble arch london w2 2el on
14th june at 1030 am
registrar
enquiries concerning shareholdings or dividends should be addressed in
the first instance to the company’ s registrar  capita registrars limited
northern house woodsome park fenay bridge huddersfield hd8 0la
united kingdom or telephone 44 0 870 1623131 or email
shareholderservicescapitaregistrarscom
share dealing service
a low cost telephone dealing service has been arranged with stocktrade
a division of brewin dolphin securities ltd which provides a simple way
of buying or selling premier farnell plc shares basic commission is
05 per cent up to £10000 reducing to 02 per cent thereafter subject to a
minimum commission of £15 for further information call 0845 601 0995
or 44 131 240 0414 from outside the uk and quote reference
lowco0195 please note that some transactions may be subject to
money laundering regulations and you may be required to provide certain
personal details to stocktrade prior to any sale or purchase of shares
shareholder enquiries
if you have any enquiries as a shareholder  please call james garthwaite
group director  communications on 44 0 870 129 8608 or
email jgarthwaitepremierfarnellcom
for other enquiries please email informationpremierfarnellcom
usshareholderscanalsocontactourusofficeon12165254263
additional information for us investors
the company applied to delist its ordinary shares and preference shares
from the new y ork stock exchange on 9th december 2004 and the
delisting took effect by sec order on 16th february 2005 notice of
termination of the american depositary receipt or adr programmes in
respect of premier farnell plc’ s ordinary shares and preference shares
was given to american depositary share or ads holders on
9th december 2004 t ermination of the adr programmes has taken
effect and on or about 18th april 2005 the bank of new y ork as
depositary for the adr programmes sold the shares underlying any
adss not surrendered by the relevant ads holders and is in the course of
distributing the net proceeds of sale to the relevant ads holders
the company intends when it is permitted by applicable sec regulation
to do so to terminate the registration of the ordinary shares and
preference shares with the sec the company will not be able to file
for deregistration from the sec unless and until the number of
us shareholders whether holding directly or through nominees falls
below 300 with respect to each of the ordinary shares and the preference
shares as separate classes furthermore the number of us shareholders
must remain below the 300 limit with respect to each of the ordinary
shares and the preference shares after deregistration to avoid
recommencement of sec reporting requirements deregistration will
occur 90 days after filing a certification with the sec that the number of
us shareholders is below 300 with respect to each of the ordinary shares
and the preference shares
at its extraordinary general meeting held on 9th february 2005 the
company amended its articles of association to give the company’ s
directors the ability to limit the number of us residents holding ordinary or
preference shares in the company  in particular  the directors are able to
require us shareholders whether holding directly or through nominees
to sell their ordinary shares or preference shares in order to be satisfied
that the number of us shareholders is less than 300 in respect of each of
the ordinary shares and preference shares
the company will continue to file with and submit to the sec an annual
report on form 20f and certain other reports on form 6k unless and
until its ordinary shares and preference shares are each deregistered
after such deregistration and for so long as the company remains
deregistered the company will be exempt from these reporting
requirements and will no longer file any reports with the sec
registrar and share transfer office
capita registrars limited
northern house
woodsome park
fenay bridge
huddersfield hd8 0la
20052006 financial calendar
quarter one results 2nd june 2005
annual general meeting 14th june 2005
quarter two and interim results 8th september 2005
quarter three results wc 5th december 2005
financial year end 29th january 2006
final ordinary dividend key dates interim ordinary dividend key dates
exdividend record payment exdividend record payment
ordinary shares 25th may 2005 27th may 2005 22nd june 2005 21st sept 2005 23rd sept 2005 19th oct 2005
halfyearly preference dividend key dates
exdividend record payment exdividend record payment
preference shares 29th june 2005 1st july 2005 26th july 2005 28th dec 2005 30th dec 2005 26th jan 2006 2005 2004 2003 2002 2001
restated restated restated restated
£m £m £m £m £m
turnover 7767 7646 7590 8064 8762
operating profit before rebranding costs and
amortisation of goodwill 765 740 832 888 1152
amortisation of goodwill 27 26 26 15 –
rebranding costs – 24 – – –
t otal operating profit 738 690 806 873 1152
profit before taxation amortisation of goodwill and
exceptional items 630 573 675 729 1023
amortisation of goodwill 27 26 26 15 –
exceptional items – 01 48 110 –
profit before taxation 603 548 601 604 1023
profit after taxation 465 392 419 390 715
preference dividends nonequity 66 66 108 261 253
profit attributable to ordinary shareholders 399 326 311 129 462
ordinary dividends 326 326 326 245 245
retained profitloss 73 – 15 116 217
shareholders’ funds – equity 03 97 234 3757 3757
– nonequity 1219 1218 1267 4867 4744
equity minority interests – – – – 03
t otal capital employed 1216 1121 1033 1110 990
dividend per share pence 90 90 90 90 90
basic earnings per share pence 110 90 94 47 170
exceptional items pence 07 12 19 46 –
adjusted earnings per share pence 117 102 113 93 170
note prior year figures have been restated to reflect the adoption of uitf 38 accounting for esop trusts further details are given in note 22 to the accounts
five y ear record
cautionary statement for the purposes of the ‘safe harbor’ provision of the united states private securities litigation reform act
of 1995 
the us private securities litigation reform act of 1995 provides a ‘safe harbor’ for forwardlooking statements this annual report contains certain
forwardlooking statements relating to the business of the group and certain of its plans and objectives including but not limited to savings to be
gained from certain programs targeted at the group’ s spend on goods and services for running operations the introduction of new it and
ecommerce platforms the expected benefits and future actions to be taken by the group in respect of certain sales and marketing initiatives
economies of scale operating efficiencies future capital expenditures including how such expenditures are to be funded future ordinary
expenditures and future actions to be taken by the group in connection with such capital and ordinary expenditures by their nature forwardlooking
statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future actual expenditures
made and actions taken as well as expected results may differ materially from the group’ s expectations contained in the forwardlooking statements
as a result of various factors many of which are beyond the control of the group these factors include but are not limited to the effect of legislative or
regulatory enactments the implementation of cost saving initiatives to offset current market conditions integration of new personnel employee
training programs and new information systems continued use and acceptance of ecommerce programs and systems and the impact on other
distribution systems the ability to expand into new markets and territories the implementation and customer acceptance of new sales and marketing
initiatives changes in demand for electronic electrical electromagnetic and industrial products rapid changes in distribution of our products and
customer expectations product availability  the ability to introduce and customers’ acceptance of new services products and product lines the
impact of competitive pricing fluctuations in foreign currencies changes in interest rates and the impact of changes in worldwide and national
economies we undertake no obligation to publicly update or revise any forwardlooking statements whether as a result of new information future
events or otherwise after the date of this annual report to conform them to actual results
merchant in collaboration with blast
typeset by pinnacle
printed by st ives westerham press
this report is printed on paper made from
pulps from sustainable forests using an
elemental chlorine free process
registered in england and wales no 876412
registered office farnell house
forge lane leeds ls12 2ne premier farnell plc
annual report and accounts 2005
premier farnell plc
group headquarters
2528 old burlington street
london w1s 3an
united kingdom
t 44 0 20 7851 4100
f 44 0 20 7851 4110
150 armley road
leeds ls12 2qq
united kingdom
t 44 0 870 129 8606
f 44 0 870 129 8611
wwwpremierfarnellcom
premier farnell plc annual report and accounts 2005
00 at a glance 
02 financial highlights
05 what drives our business
08 talent
10 technology
11 t otal service 
12 chief executive’s review – strategy for growth
14 chairman’s statement
16 operating review
marketing and distribution division
19 industrial products division
21 human resources report
22 social responsibility report
27 finance director’s report
31 investor relations report
32 board of directors and officers
32 advisers
33 directors’ report
34 directors’ responsibilities
35 corporate governance
37 remuneration report
43 consolidated profit and loss account
43 statement of total recognised gains and losses
44 consolidated balance sheet
45 company balance sheet
46 consolidated statement of cash flows
47 statement of accounting policies
48 notes to the accounts
67 auditors’ report
68 shareholder information
69 five year record
contents


Summary:
 chairman’s statement
14 premier farnell plc annual report and accounts 2005
sir malcolm bates
chairman retired 280205 
john r hirst
group chief executive 
d john s roques
nonexecutive director
laurence bain 
group chief operating officer 
william b korb
nonexecutive director
board of directors and officers
for full biographies of the board of directors and
officers see page 32
the group has continued to make good progress this year we achieved growth in sales and profit before
tax has increased by 10 per cent on last year despite the continued weakness of the us dollar and
the disappointing performance of buckhickman inone the north american electronics market was
strong in the first half of the year but the rate of growth started to slow in the third quarter and
was very limited by the yearend nonetheless we grew sales in our marketing and distribution
division in north america by 117 per cent in the year and continued to improve gross margins sales
at farnell inone reached record levels despite the slow down of european markets in the second half
sales were particularly strong in mainland europe buckhickman inone had a difficult trading year
but sales levels stabilised towards the end of the year
profit before tax in the year was £603 million 2004 £548 million profit
before tax and goodwill amortisation was £630 million 2004 £573 million
before goodwill amortisation and gain on business disposal
earnings per share for the year were up 22 per cent to 110 pence
2004 90 pence adjusted earnings per share for the year before
amortisation of goodwill were 117 pence 2004 102 pence before
amortisation of goodwill rebranding costs and gain on business disposal
the board is recommending a final dividend of 50 pence 2004 50 pence
making a total for the year of 90 pence 2004 90 pence the dividend is
covered 12 times by profit attributable to ordinary shareholders and
13 times by profit attributable to ordinary shareholders before goodwill
amortisation the final dividend is payable on 22nd june 2005 to
shareholders on the register on 27th may 2005
financial results
group sales for the year were £7767 million 2004 £7646 million
this comprised sales of £6800 million in the marketing and distribution
division and sales of £967 million in the industrial products division
operating profit for the year was £738 million 2004 £690 million
producing an operating margin of 95 per cent 2004 90 per cent
adjusted operating profit for the year was £765 million before goodwill
amortisation of £27 million 2004 £740 million before rebranding costs
of £24 million and goodwill amortisation of £26 million producing an
adjusted operating margin of 98 per cent 2004 97 per cent operating
profit was affected by a reduction in the net pension credit of £13 million
and a £08 million increase in depreciation following the rollout of the
customer relationship management software premier farnell plc annual report and accounts 2005 15
michael lester
nonexecutive director 
andrew c fisher
group finance director 
cary j nolan
nonexecutive director 
sir peter gershon 
chairman
steven webb
company secretary and general counsel 
balance sheet and cash flow
the group’ s financial position is sound net debt at 30th january 2005
was £2007 million 1st february 2004 £2019 million and interest was
covered 57 times by operating profit before goodwill amortisation net
cash flow from operating activities was £725 million 2004 £700 million
working capital increased by £199 million driven by investment in
inventory to support an expansion of our product range and sales
growth in the year  net cash outflow after dividends and £26 million
of acquisitions was £70 million
acquisition
in february 2004 we acquired the business of gfe manufacturing inc
an illinoisbased supplier of lighting systems and water flow test
equipment for the firefighting industry  for £26 million this acquisition
which expanded akron brass’ s product range has exceeded
expectations for sales and profit
business progress
we continue to make good progress on our strategic priorities during the
year  we have focused on developing our business with larger corporate
accounts expanding our presence with smaller customers improving
product ranges and providing industryleading service through our
ecommerce capability and our more traditional marketing channels
the operating review on pages 16 to 20 provides the details of our
achievements in these areas
staff
since joining the board in june 2004 i have been impressed by the
quality and excellent commitment of our staff on behalf of the board
i would like to thank all our employees for their continued hard work
during another demanding year 
sir malcolm bates retired as chairman in february after eight years during
which he steered the group through significant change and led the
transformation of the business on behalf of all the group’ s shareholders
directors and employees i would like to thank him for his wise advice
counsel and guidance and wish him a long and happy retirement
outlook
we have prepared our plans for the coming year in the expectation that
the north american market will show no growth in the first half and may
only begin to strengthen in the second half of the year  despite weaker
underlying markets in the uk and mainland europe there are specific
opportunities for the group to grow market share the actions we have
taken should lead to a better performance from buckhickman inone
the impending legislation on the restriction of the use of certain
hazardous substances rohs will have a significant impact in a number
of our main markets premier farnell has been working closely with
suppliers to provide leadership in assisting customers prepare for the
legislation we believe that we are well placed to offer our customers and
suppliers the information support and product choice they require to
comply with the legislation
the quality of our service to both customers and suppliers is increasingly
underpinned by the technology infrastructure that has been put in place
the significant operational improvements and increased marketing
effectiveness built into the business over recent years give us confidence
that we can continue to improve our performance and our market shares
sir peter gershon
chairman