wwwabacusgroupcouk
abacus group plc
annual report  accounts 2006 the abacus group is one of the leading distributors of electronic components in europe
with directly owned companies located in every major european electronics market
established in 1972 the group has local offices in 11 countries across europe employing
in excess of 1100 staff
the abacus group offers electronic component distribution own brand product specialist
distribution of displays embedded computing and wireless communications and value
added services including electromechanical sub contract manufacture the groups
philosophy is to offer an alternative approach to its competitors by focusing on highly
personalised local service and strong technical support this approach provides an efficient
and effective service through the provision of quality products and support from a highly
motivated workforce
in addition to the 44 local sales offices and five local warehouses across europe the group
has an office in asia providing its european customers with a robust supply chain to their
manufacturing operations in the far east
it is abacus’ aim to be a strategic supplier in every market in which it operates by offering a
broad and diversified product range that satisfies local market demands
contents
financial and operational highlights 1
abacus group at a glance 2
chairman’s statement 4
chief executive’s review 6
financial review 10
the board of directors secretary and advisors 13
directors’ report 14
corporate governance statements 17
corporate social responsibility 22
directors’ remuneration report 24
statement of directors’ responsibilities in
relation to the financial statements 32
auditors’ report 33
consolidated income statement 34
consolidated balance sheet 35
consolidated cash flow statement 36
statement of significant accounting policies 37
critical accounting judgements and key sources
of estimation uncertainty 43
notes to the accounts 44
five year summary 81
auditors’ report 82
company balance sheet 83
statement of significant accounting policies 84
notes to the accounts 85
notice of annual general meeting 88
geographic coverage ibc
world class service
local values financial and operational highlights
1 annual report  accounts 2006
turnover
£m
04 03 02
2571
1470
1878
1788
profit before tax intangibles
and exceptionals
05 04 03 02
80
100
81
earnings per share before intangibles and
exceptionals
pence
03
earnings per share after intangibles and
exceptionals 2006nil
pence
135
125
159
142
05
119
06 04 03 05 04 03 05 04 03 06
136
61
06
136
£m
1816
existing operations
aquisitions
the five year summary is shown on page 81
2003 and 2004 results are reported under uk gaap  2005 and 2006 under international
financial reporting standards
the group now has a broader operations base a wider mix of product and
a greater depth of management the geographical spread has also changed
radically during the past year in 2007 the abacus group sales will no longer
be dominated by the uk with nearly half the business being overseas all
these factors considerably enhance the opportunities for abacus going forward
as well as delivering a more cost effective and higher margin business
in these circumstances the board has confidence for the future
■ turnover increased by 44 to £2571 million 2005 £1788 million
■ gross profit increased by 48 to £647 million before exceptionals 59 increase to £639 million
after exceptionals
■ gross margin at 252 increased from 244 before exceptionals 249 compared to 225 in 2005
after exceptionals – reflecting axess and deltron acquisitions
■ profit before tax amortisation and exceptionals increased by 47 to £119 million 2005 £81 million
loss before tax after amortisation and exceptionals was £01 million 2005 profit of £40 million
■ £120 million amortisation and exceptional charge of which £80 million integration costs £14 million
trident restructuring and £26 million amortisation of intangibles
■ earnings per share of 136p same as 2005 pre amortisation and exceptionals 00p compared to 61p
in 2005 post amortisation and exceptionals
■ dividend unchanged at 72p per share dividend expected to increase in future years as benefits from
integration of recent acquisitions materialise 2 abacus group plc
abacus group
at a glance

distribution
abacus has a portfolio of over 180 franchises with 15 trading
operations providing technical distribution services through
locally based sales offices across europe the division’s
extensive portfolio covers a vast range of products including
electromechanical components semiconductors passives
batteries displays wireless communications embedded
computing and opto devices
abacus is focused on delivering exceptional designin and
technical support to a full spectrum of customers from the
small entrepreneur to the multinational corporation by
working in partnership with suppliers abacus ensures that
its team of application engineers and product specialists are
fully trained to provide technical support at every stage of the
product development the groups diverse product portfolio
is complimented by world class supply chain management
services helping customers improve efficiency and profitability 3 annual report  accounts 2006
own brand
abacus group’s own brand component businesses
represent an extensive portfolio of high quality internationally
approved costeffective products encompassing passives
electromechanical components batteries and switches
available throughout europe all abacus own brand products
are supported by extensive locally held inventory and a robust
supply chain the product range is continually evaluated to
ensure that the changing demands of the electronics market
continue to be supported
alpha 3 manufacturing group
alpha 3 manufacturing group created in sept 2006 as a
separate standalone business unites abacus’ three
manufacturing operations dem manufacturing previously
deltron emcon ctl manufacturing and ccs electronics
in providing ‘total customer satisfaction’ through exceptional
quality products and electromechanical manufacturing
services for low medium and high volumes alpha 3 operates
a lean manufacturing and continuous improvement philosophy
focused on improving efficiency service quality cycle
times and costs in all of its processes in order to pass the
benefits directly on to its customers thereby providing the
most competitive solution i am pleased to report that abacus group plc’s performance
in the year ended 30 september 2006 outperformed
expectations expressed at the time of our interim report
two acquisitions and their successful integration ahead
of schedule have been the most significant events in the
year turnover amounted to £2571 million an increase of
£783 million over the previous year although the annual
comparisons are enhanced by the acquisition of deltron
electronics plc in january 2006 and by the subsequent
purchase of axess technology group in april these new
subsidiaries contributed £755 million to the total group sales
and £65 million to the group operating profit for the year
which totalled £147 million pre amortisation and exceptionals
£27 million post amortisation and exceptionals they were
also responsible for the improvement in gross margin pre
exceptional items which increased from 244 of sales in
2005 to 252 in 2006 post exceptional 249 compared to
225 in 2005 we expect some further margin enhancement
in 2007 as the result of a full year’s contribution from both
deltron and axess it was anticipated at the time of the
acquisitions that earnings would reduce in the short term but
in the event there was no earnings dilution in 2006 compared
to 2005 with earnings per share pre exceptionals and
amortisation remaining at 136p per share post exceptional
and amortisation 00p per share 2005 61p at the year
end net borrowings at £661 million including £46 million
deferred consideration loan notes were in line with
expectations
the integration of the deltron and axess businesses and the
accompanying reorganisation have been completed ahead
of schedule and have delivered the target of £55 million
annualised cost savings in the 2006 financial year the benefit
of integration savings was some £16 million in order to
secure these savings including the reorganisation of trident
to exit the higher risk finished product business and refocus
on distribution and value added opportunities a oneoff
exceptional cost of £94 million has been incurred however
as shown above the benefits going forward will be material
the dividend will remain unchanged for 2006 with a proposed
final dividend of 36p making a total for the year of 72p
2005 72p looking to the future we intend to return to a
policy of increasing the dividend as cash flow improves and
debt is reduced
trading in 2006
the uk market for electronic components was sluggish in
the early months of our financial year but appeared to have
stabilised by march and thereafter an improvement was seen
which continued through the summer months for abacus this
resulted in a sales increase of 2 for our total uk business
although the figure would have been higher but for the
decision to withdraw from trident’s finished product business
in italy our team at ecc was successful in growing sales by
4 but in nordic promax sales fell by 14 some of which
can be attributed to the decision to close the business in
chairmans statement
“
the integration of the deltron and axess businesses and the accompanying reorganisation
have been completed ahead of schedule and have delivered the target of £55 million annualised
cost savings
”
4 abacus group plc finland in 2005 however the 2005 reorganisation of promax
and its integration with the deltron businesses in sweden
and norway will result in a larger and much more solid
organisation indeed the prospects for all the european
territories look promising with the strengthening of the existing
abacus companies and the additions of france and germany
where previously we had no presence since the year end
germany has not only been reorganised but also considerably
enlarged by the recruitment of a high quality team from within
the industry
in the far east our operation in hong kong has been
reinforced with stronger management and we are seeing the
benefits of maintaining business with customers who move
offshore we have been successful in growing the value of
shipments to mainland china and other territories in asia
outlook
the group now has a broader operations base a wider mix of
product and greater depth of management the geographical
spread has also changed radically during the past year in
2007 the abacus group sales will no longer be dominated by
the uk with nearly half the business being overseas all these
factors considerably enhance the opportunities for us going
forward as well as delivering a more cost effective and higher
margin business in these circumstances the board has
confidence for the future
this year i am particularly grateful to the management 
and staff and congratulate them on an outstanding
performance in acquiring and integrating two complex
businesses while maintaining a strong performance from 
the existing businesses i also welcome our new colleagues
who have also made such a valuable contribution
a h westropp
chairman
30 november 2006
5 annual report  accounts 2006 general review
this year has seen significant positive changes to the abacus
group the acquisition of deltron electronics plc in january
and axess technology in april gave abacus a position in
germany and france the 1st and 4th largest markets in
europe respectively according to europartners report 2005
and in the smaller markets of austria and benelux as well as
a strengthened position in the uk scandinavia and italy
axess further strengthened the group’s position in france
and enhanced the sales of displays and wireless modules
product areas that are a key part of the growth strategy of
abacus the abacus group now has a position in all of the
major markets within europe and according to europartners
is the 5th largest distributor of electronic components to the
industrial market whilst we are delighted to have a presence
in the major markets which we believe will bring over time
additional benefits to the group with regard to customer and
franchise coverage we do not intend to portray ourselves as
a pan european distributor that creates an impression of a
business trying to be the same as our major competitors the
usa based global distributors something we are definitely not
our strategy is driven by a recognition that the countries in
europe and the regions within those countries have different
languages and cultures and to be successful one must work
with these differences in order to continue to grow and
increase our penetration of these markets abacus must
create differences between itself and its competitors that
the customers and suppliers recognise as being of benefit to
them abacus will therefore continue with its policy of having
regionally based sales offices supported by regionally based
product experts offering comprehensive technical and design
in support and local warehouses to fulfil the demands of each
individual market our goal is to be seen as the leading strong
local distributor in all the markets in which we operate the
differences detailed above combined with our approach
of selling to all customers irrespective of their size or their
sector we have approximately 20000 trading customers
across europe and our broad diversified product range
approximately 180 different franchises across the group
are key to abacus achieving this and creating a differentiated
platform on which the group can grow both organically and
through further acquisition
we are confident that the industry is now recognising our
market position and our differentiated model and at the recent
european electronics industry awards we were delighted to be
chosen as distributor of the year 2006
we have set ourselves a target of having a minimum 5
market share in all of the major countries as we believe that
at this level abacus will be a significant player on the market
whereby customers will wish to consider us as a strategic
supplier and franchisors will want to speak to us because
of our customer coverage
review by region
uk  ireland
we have a very strong presence on this market with
according to europartners 2005 a 136 market share
putting us firmly in the top 3 distribution businesses the
deltron operation was integrated into the abacus business
at the end of may 2006 and this opened up the opportunity
for the combined company to sell all products the abacus
group product offering covers a very broad range of electronic
chief executive’s review
abacus group stand – electronica 2006
“
the abacus group now has in excess of 3 of the total european component market for distribution
and a position in all the major markets that will create opportunities for organic growth through
crossselling of products and geographic franchise expansion however the top 10 distribution
companies in europe of which abacus is number 5 only take 61 of the market and we believe that
there exists a good opportunity for further consolidation within the distribution market and that the
abacus group is well positioned to take advantage of these opportunities
”
6 abacus group plc components wireless modules displays and software
enabling us to supply a multitude of customers across a
wide range of industrial sectors we maintain the different
businesses within this market abacus micromark tdc
trident to ensure we bring the appropriate level of technical
expertise to the different products but increasingly all
products are being sold by each business creating significant
opportunities for organic growth we combine this opportunity
with a regular review of technology development within
the electronic component market and within the end user
industrial sectors to ensure our product offering is kept up to
date and meets the needs of existing and future customers
this applies not only to the uk but to the entire group
the acquisition of deltron also enhanced our existing
manufacturing operations and these have all been combined
into one business unit for sales and marketing purposes and
rebranded alpha 3 manufacturing these businesses and our
own brand businesses dubilier existing abacus brand eledis
and emcon deltron brand are another part of our strategy to
create differences to our major competitors
france
the abacus group gained a presence in the french market
through the acquisition of deltron in january 2006 this was
quickly enhanced by the acquisition of axess technology
comprising two companies axess and rdi in april 2006
creating a position of being the 5th largest distribution
business in france with a market share of 56 according
to europartners 2005
these three companies have a strong product offering
with abacus deltron representing a broad range of
electromechanical products abacus rdi being a passive
specialist and axess supplying an excellent range of display
wireless modules and niche semiconductors the axess
business is very similar in the products it sells and its
approach to the market of the uk based trident and tdc
businesses and these companies work closely together
with regard to product and industry sector development
all three businesses in france are now using the same
it platform and the warehouses have been integrated
into one based on the outskirts of paris
during the quarter ending march 2007 the sales and
marketing teams of rdi and deltron will be combined
creating crossselling opportunities and a stronger business
which over time can be enhanced with the addition of a
number of new franchises currently held by the abacus
group in other regions
customer sectors
power 2
contract manufacturing global 3
defence 1
automotive 3
consumer 2
lighting 1
avionics 1
navigation 1
thermoregulation 1
others 3
contract manufacturing local 28
ind control 18
instrumentation 7
fire  security 6
printer peripheral 4
comms 5
audio visual 5
medical 4
distribution 5
7 annual report  accounts 2006 scandinavia
the acquisition of deltron in january 2006 had a major
impact on the presence of the existing abacus business in
scandinavia enhancing its product offering with the addition
of a number of leading electromechanical manufacturers and
strengthening its position on the market to the 6th largest
distribution business with a market share across the region
of 4 according to europartners 2005
in sweden and norway the two businesses were integrated
in august 2006 under the banner of abacus scandinavia
creating a much wider portfolio of products to be sold to all
customers the it system is the same as that utilised in the
uk and denmark creating efficiencies in support functions
such as purchasing all scandinavian warehouses have been
integrated into one facility in denmark today the largest sales
region in scandinavia for abacus
in denmark the existing abacus promax business has also
been renamed abacus scandinavia and using the same it
platform as sweden and norway has enhanced its product
offering with access to the deltron products from those
regions today the existing deltron business conelec has
remained separate to the abacus scandinavia companies in
terms of it and sales and marketing as its approach to the
market is one of selling more customer specific assemblies
rather than single components and we believe this
specialisation is worth maintaining and developing
we have during the year continued to develop the trident
business in scandinavia and our wireless module and software
sales through the abacus business increasingly these
businesses work more closely together and the trident
personnel are located in the abacus offices creating as we
have in other regions a broad product offering that is available
to all customers giving many opportunities for organic growth
italy
the situation in italy is very similar to that of scandinavia the
acquisition of deltron has improved our position on the market
to that of the 5th largest distribution business with a market
share of 3 according to europartners 2005 we have
completed the integration of the deltron business into the
existing abacus operation and now have a common sales
and marketing team it system and warehouse creating a
business with a stronger product offering that goes to market
under the brand of abacus ecc
we are also continuing to develop the sale of display wireless
modules and software and this combined with our stronger
position on the market will bring opportunities to further
strengthen our product offering creating a good environment
for organic growth
germany
the europartners 2005 report shows that the german market
for industrial electronic component distribution is the largest
within europe being twice the size of the 2nd the uk and
representing 27 of the total available market
the acquisition of deltron brought us a small presence in this
market with a business that has two offices in munich and
stuttgart and a market share of some 1
the products sold by abacus deltron are from a small number
of leading electromechanical component manufacturers
some of which have an existing relationship in other countries
with the original abacus group and our primary focus during
the coming year will be to seek opportunities to develop in
this market to move towards our goal of achieving a minimum
5 market share
just after the year end abacus announced that it had
recruited a new general manager for abacus deltron
germany and had enhanced the sales and marketing team
with the recruitment of an additional 14 people all of whom
had previously worked together within the component
distribution industry these people are located across
germany and abacus is in the process of opening an
additional 3 regionally based sales offices in line with
the group’s strategy to give an improved coverage of
the total market
abacus group plc
chief executive’s review continued
abacus group – distributor of the year elektra award 2006
8 it is believed that this wider coverage of the market will create
organic growth opportunities from the existing product offering
but over time combined with the much improved position 
of the abacus group within europe will also bring new
franchises to the german market
abacus will also continue to seek further acquisition
opportunities in this market
austria
austria is a small but important market within europe and the
deltron acquisition brought us a sales and marketing presence
through an office based in vienna being served by the
warehouse in munich
abacus has enhanced its team by the recruitment after the
year end of a new general manager and two additional sales
personnel all of whom previously worked with the new team
in germany this will bring the company a number of organic
growth opportunities that will improve the approximately 1
market share that abacus has today
benelux
benelux is the 8th largest market in europe and the abacus
group had an existing presence with a trident sales office in
holland the acquisition of deltron brought an additional sales
office in holland served by the uk warehouse
the abacus deltron office has been converted to use the
same it platform as that used in the uk and scandinavia in
june 2006 and during the early part of 2007 abacus will move
both trident and abacus deltron into the same office and onto
the same it system creating a wider product portfolio for the
sales team to sell to all customers giving us the opportunity 
to organically improve the current 1 market share
hong kong
the office in hong kong established at the beginning of 2006
has been a significant contributor to the success abacus has
had in continuing to supply components to the customers
who design and purchase in europe but manufacture in the
asia pacific region we believe this trend will continue albeit 
at a slower rate than previous years and the company 
remain confident that the european market for component
distribution estimated in 2005 at €114 billion by europartners
will continue to be a good market in which to operate
it
our objective is to have all abacus group companies other
than our alpha 3 manufacturing division on the same it
platform to enable us to take advantage of the efficiencies 
and synergies that this brings today this is clearly not the
case and achieving this objective is a major focus for abacus
senior management
we will continue with the upgrade of our existing uk system
so that when the roll out is complete this system will meet all
the needs of the growing business including operating in the
local language
staff
this year has seen a number of positive changes to the
abacus group and in recognition of this we have during the
year taken the opportunity to strengthen the management
team in all areas of the business creating a structure that is
extremely well positioned to take advantage of the growth
opportunities that we are creating
market
we measure on a daily basis the bookings across the group
through a long established management reporting system 
as these are a key indicator of what is happening within our
customers and the markets in which we operate as detailed
in the chairman’s report the uk market in 2006 had a
sluggish start but improved as we moved into the 2nd and 3rd
quarters of our year and overall our book to bill ratio for the
complete year stood at 109
we start the new year with our book to bill ratio remaining
positive and with our daily rate above that of 2005
the abacus group now has in excess of 3 of the total
european component market for distribution and a position in
all the major markets that will create opportunities for organic
growth through crossselling of products and geographic
franchise expansion
however the top 10 distribution companies in europe of
which abacus is number 5 only take 61 of the market
according to europartners 2005 and we believe that there
exists a good opportunity for further consolidation within 
the distribution market and that the abacus group is well
positioned to take advantage of these opportunities
m kent
chief executive officer
30 november 2006
9 annual report  accounts 2006 the year has been characterised by the successful integration
of the deltron and axessrdi businesses into the abacus
group and the implementation of ifrs
the integration of the deltron businesses in the uk italy
sweden and norway with the abacus operations in those
countries took place between january and the end of the
financial year and in each case was completed ahead of
schedule the integration of deltron in france into axessrdi
took place during the summer and has also been successfully
completed the acquisition of deltron gave the group for 
the first time a presence in germany and this has been
substantially reorganised and enlarged since the year end
the manufacturing business of deltron deltron emcon now
known as dem has been combined with the two abacus
manufacturing divisions ctl and ccs and rebranded as
alpha 3 manufacturing trident has been reorganised primarily
in the uk to refocus its activities on distribution and value
added solutions it is now working closely with axess in
france to provide a comprehensive european distribution
service for displays and related components
all of the integration and reorganisation activities have
absorbed a significant amount of management time but 
have been completed ahead of schedule and should 
deliver annualised cost savings of some £55 million in line
with the indications given at the time the acquisitions were
announced the benefit of integration savings in the period to
30 september 2006 amount to some £16 million the cost of
securing the savings has been £94 million including the cost
of withdrawal of trident from its finished product business of
this amount £54 million cash outlay has already been incurred
and £16 million represents balance sheet provisions and write
downs which will not involve cash outlay
the ifrs accounts format was initially presented in the 
interim results and the accounting policies used for 2006 
are consistent with those used at that time the principal
differences between ifrs and gaap presentation in the
income statement concern the “share based payment”
treatment of share options which amounts to a charge of 
£05 million in 2006 2005 £02 million
turnover
the results for the year reflect 12 months’ trading for the
existing abacus group 9 months’ trading for the deltron
group and 6 months’ trading for axessrdi for this reason
the 2006 results show an incomplete view of the group’s
future financial profile although the second half of 2006
reflects the combination of businesses throughout the period
albeit with only a small part of the future savings included
total turnover for the 12 months amounted to £2571 million
2005 £1788 million the figures include £550 million 
£354 million in the second half in respect of deltron and
£205 million in respect of axess the existing abacus sales
for the full year of £1816 million showed an increase of 2
over 2005 but in the second half of the year the increase was
5 over the same period in 2005 this was notwithstanding
the expected reduction in turnover in 2006 in abacus promax
which operates in scandinavia following the closure in
summer 2005 of the abacus finnish operation and the
restructuring of the swedish and danish activities this loss 
of turnover was compensated by increased sales by trident 
in scandinavia for the uk and italy existing abacus sales for
the year grew by 2 and 4 respectively and by 5 and
18 respectively in the second half of the year deltron sales
for the 12 months to september were £714 million in line
with market forecasts for the company at the time of the
acquisition by the abacus group with effect from the end of
the financial year the deltron activities in sweden italy and uk
have been fully integrated into abacus’ businesses in these
countries and the transparency of performance will be blurred
going forward as the positive crossselling opportunities are
exploited the performance of the finished product business 
in trident had a detrimental impact on the abacus turnover 
in the uk for the year recording turnover of only £04 million
2005 £77 million
within the above figures the manufacturing business for 
the year reported turnover of £178 million including a 
9 month contribution of £51 million from dem deltron’s 
uk manufacturing division a small underlying reduction
compared to 2005 £132 million
gross margin
the gross profit for the group pre exceptional items for the
period ended september 2006 improved from £437 million 
in 2005 244 of sales to £647 million 252 of sales
£639 million in 2006 compared to £402 million post
exceptional items the improvement in the margin percentage
was due to the higher margins earned in axessrdi and 
more particularly deltron in the second half the gross profit
of the existing abacus business grew by 7 more than
compensating for a reduction in the first half the overall
abacus group gross profit of £377 million in the second 
half represented an increase of 75 on the previous year 
10 abacus group plc
financial review the deltron accounting treatment of expenditure has been
aligned to that of abacus which has resulted in some costs
being moved from operating expenses to cost of sales this
has led to a reduction of some 15 in the deltron gross
margin to 294 in the 9 months to september 2006
notwithstanding this realignment of expenditure deltron
group has a higher margin compared to the existing abacus
business because it distributes a different mix of products it is
therefore expected that the margin for abacus group for the
full year 2007 with deltron and axessrdi included for the full
12 months is likely to be somewhat higher than in the past
the great part of the integration savings achieved will in future
affect the operating expenses rather than cost of sales 
operating expenses
the abacus board maintains a tight discipline over headcount
and expenditure in 2006 in order to ensure strong
management control over the enlarged group certain new
managers were recruited at the newbury head office 
although this has increased costs the improved control and
management guidance has significantly assisted with the
integration of the acquisitions in the year
a key element of the deltron acquisition rationale was the
opportunity to save costs through combining its infrastructure
and support services with those of abacus these savings
which were estimated at £5 million have been realised quicker
than forecast due to the speed of the integration process 
in total £55 million annualised savings have been achieved
including those from the integration of deltron france with
axessrdi the full year effect of these savings will be
substantially available from the beginning of the 2007 
financial year the cost of realising these savings has 
totalled £80 million
during the year the board took the decision to refocus the
trident business on distribution and value added activities and
to withdraw from the higher risk profile of its finished product
business as a consequence 9 staff were made redundant
and certain provisions were made against inventory and
receivables on the balance sheet the charge associated 
with this reorganisation has amounted to £14 million 
which because of its size and nature has been treated 
as exceptional in the income statement
the group headcount at 30 september 2006 was 1147
compared to 762 the previous year at the date of acquisition
the deltron group had 360 staff and axessrdi had 88 staff
during the integration process there has thus been a net
decrease of 63 in the total number employed by abacus
group the manufacturing business headcount included in
these numbers was 239 at 30 september 2006 2005 172
with 84 included in the deltron number at the date of
acquisition
amortisation of acquired intangibles and 
exceptional items
the change to ifrs from 2006 has necessitated changes to
the treatment of goodwill in the past this has been amortised
through the profit and loss account together with amortisation
of intangible assets under ifrs goodwill is not amortised 
but rather is subject to an annual impairment review by
management no impairment has been identified during this
review in respect of 2006 also under ifrs an intangible 
asset should be recognised for abacus in respect of the
measurable value of a short term order book and customer
relationships taken on as the result of an acquisition this 
is then subject to short term amortisation the amortisation 
so recognised in 2006 of £23 million nil in 2005 has been
analysed separately on the income statement to assist with
the identification of the underlying trading performance of
abacus group
similarly as previously highlighted the board has identified
£94 million of exceptional charges including £80 million
arising from the acquisition and integration of deltron and
axessrdi and £14 million from the restructuring of trident
following its withdrawal from the finished product business
these charges are “one off” and not expected to recur
net finance costs and profit
net finance costs in 2006 increased from £13 million in 2005
to £28 million as explained later in the working capital
section the principal reason for this was the increase in debt
levels following the two acquisitions in the year the interest
cover based on operating profit before amortisation and
exceptionals as measured for the group’s bank covenants
remained above 5 times in this year of significant change 
7 times in 2005 the group has not sought to apply hedge
accounting under ias39 for its hedging derivatives rather
“commercial” forward exchange cover is used that provides
protection and certainty for future exchange rates even
though under ias39 a gain or loss on these derivatives 
has to be recognised at the end of the accounting period
£03 million loss at 30 september 2006 £nil in 2005
the profit before tax amortisation and exceptionals of 
£119 million 2005 £81 million was after £05 million 
11 annual report  accounts 2006 2005 £02 million of share based payments after
amortisation and exceptional charges the current year 
results before tax show a loss of £01 million against 
£40 million profit in 2005
with the group now profitable in all its major operating
subsidiaries deferred tax assets can now be recognised 
this has had the effect of reducing the effective tax rate 
pre amortisation and exceptionals in 2006 to 28 just below
that for 2005 the tax rate is expected to remain at this level
for at least the next year
the basic earnings per share pre amortisation and
exceptionals has remained at 136p the same as 2005
post amortisation and exceptionals 00p against 61p in
2005 this is a most satisfactory outcome given the major
acquisitions made in the year and the expected benefits that
are still anticipated from 2007
cash flow and working capital
the net debt position of abacus group was £661 million 
at 30 september 2006 2005 £291 million included in this
figure was euro 7 million £46 million loan notes issued in 
the year to the vendors of axess technology group as part 
of the consideration paid these are repayable equally in 
april 2007 and april 2008 the net bank debt is £614 million
at 30 september 2006 the increase in the year is partly
accounted for by £121 million and £18 million net debt
acquired with deltron and axess technology respectively and
£69 million cash paid as consideration for axess technology
in addition “exceptional” payments to date connected with 
the transaction and integration costs of the acquisitions as
explained previously amounted to £54 million
the remaining increase in bank borrowings results from a
significant increase in working capital the deltron business 
in particular had minimised working capital in the years prior
to acquisition to such an extent that it was unable to fully
satisfy the requirements of customers stock was not always
available to meet orders and credit terms were uncompetitive
since the half year the enlarged group’s receivables have
increased by £91 million and inventory by £23 million this
partly reflects the increased “tempo” of business in the group
and partly a conscious effort to more fully meet the needs of
former deltron customers because abacus group is able to
borrow under its bank “invoice discounting” facilities which
are based on the total level of debtors there is reduced
pressure to minimise the trade debtors’ level the debtors’
days outstanding at september 2006 for the group were 72
2005 69 days whilst stock turn at 30 september 2006 was
59 times 2005 52 times both performance indicators show
that working capital movements have been contained within
previous abacus group kpi parameters
notwithstanding this increase in working capital the board is
comfortable with the level of borrowings which are inline with
expectations and are well within the group’s bank covenants
total facilities available to the group at 30 september 2006
were £82 million further tight control is exercised over
working capital and it is expected to return to lower levels 
in 2007 as the integrated businesses settle down
treasury
the group’s treasury function is managed centrally from
newbury providing a service to the operating businesses 
with regular reporting to the board the group’s treasury
policy is to ensure that adequate financial resources are
available to the group for its business operations and that 
this is provided in a costeffective fashion no speculative
transactions are undertaken in that all foreign currency
purchases are related to current or projected transactions
capital expenditure
as a result of the adoption of ifrs the investment project to
replace the abacus business it system has been recategorised
as an intangible asset some £81 million has been spent to
date on this project £60 million at 30 september 2005 and it
continues to progress in line with the board’s expectations
following the deltron and axessrdi acquisitions the need for
such a system is further enhanced although as a consequence
of the significant increase in business locations it will not now
be fully operational until 2008
dividend
as announced at the interims in may 2006 the board is
proposing a final dividend for 2006 of 36p per share the
same as the interim dividend and the 2005 equivalent
making 72p for the year this will be paid on 2 february
2007 to shareholders on the register on 5 january 2007
£42 million dividends have been paid in 2006 £53 million
dividends have been declared out of 2006 profits
p allen aca
chief financial officer
30 november 2006
12 abacus group plc
financial review continued current board directors
martin r kent chief executive officer
aged 55 has been ceo of the group since november 2000
he has been in the industry since 1969 he joined abacus 
in 1975 was the marketing director for the group from
december 1987 and was a member of the buyout team
peter v allen chief financial officer
aged 50 a chartered accountant joined the board in 
april 2005 he was previously the deputy chief executive  
and chief financial officer of celltech group plc a uk
listed biotechnology company he is also a nonexecutive
director of prostrakan group plc and chairman of chroma
therapeutics limited
martin brooks technical director
aged 37 having started his career as an electronics design
engineer moved into distribution in 1994 and joined the
abacus group in 1998 martin was appointed to the board 
in july 2006 
patrick journo executive director
aged 49 created axess technology in 1989 specialists in
display and wireless technology he was appointed to the
board in july 2006 he is now responsible for the display 
and wireless companies in europe
anthony henry westropp nonexecutive chairman
aged 61 has been chairman of the company since 1994 
he is a nonexecutive director of the throgmorton trust plc
and also a director of a number of other private companies
robert e lambourne nonexecutive director
aged 54 a chartered accountant joined the board in june
2004 he is the chairman of analyst investment management
plc and chairman of sokao sa in belgium he has held a
number of public company directorships both in an executive
and nonexecutive capacity including appointments as
finance director of foseco plc hepworth plc and rmc
group plc
david weir nonexecutive director
aged 59 was chief executive of caird group plc a waste
management company from 1993 to 1999 he currently has a
number of nonexecutive roles including dee valley group plc
and property recycling group plc he joined the board in
january 2006
graham mcbeth managing director ecd europe
aged 44 developed his career within national semiconductor
for 11 years before moving to abacus in 1995 he was
appointed to the board in 1997 he is now responsible 
for the ecd companies in the group
the board of directors secretary and advisors 
13 annual report  accounts 2006
the board of directors
the board currently comprises three nonexecutive directors and five executive directors 
secretary
andrew bateman
registered office
abacus house bone lane
newbury berkshire rg14 5sf
stockbrokers and financial advisors
hoare govett limited abn amro
250 bishopsgate london ec2m 4aa
auditors
ernst  young llp 
chartered accountants  registered auditors
apex plaza reading berkshire rg1 1ye
solicitors
charles russell llp
7600 the quorum oxford business park north
oxford ox4 2jz
principal bankers
hsbc bank plc
70 pall mall london sw1y 5es
registrars
computershare investor services plc
po box 82 the pavilions
bridgwater road bristol bs99 7nh
website
wwwabacusgroupcouk
registered number
2278260
retirements from the board during the year
graham j grover managing director trident
aged 51 joined trident in 1978 before becoming sales
director in 1983 he was appointed managing director 
in 1987 and joined the board in march 2004 he resigned
from the board on 30 june 2006
jerry vaughan executive director
aged 59 joined deltron in february 2004 with over 27 years
experience in the electronics industry he joined the board 
on 17 january 2006 and resigned on 31 march 2006
mrs margaret ricejones nonexecutive director
aged 45 joined the board of abacus in january 2003 
and retired in january 2006 the directors present their annual report on the affairs of the group the financial statements and auditors’ report for the year
ended 30 september 2006
principal activities
the abacus group distributes and manufactures electronic and electromechanical components
business review and future developments
the chairman’s statement chief executive’s review and the financial review comment on the results for the year and future
developments they also refer to performance indicators used by the directors to monitor the business
results and dividends
the results for the year ended 30 september 2006 are shown in the consolidated income statement on page 34
the directors recommend a final ordinary dividend of 36 pence per share which together with the interim dividend of 
36 pence makes a total for the year of 72 pence 2005 72 pence if approved the company will pay the final ordinary
dividend on 2 february 2007 to shareholders on the register at the close of business on 5 january 2007 the ex dividend 
date will be 3 january 2007
directors
the names of the current directors and those who retired during the year are given on page 13 all the current board 
directors served at 30 september 2006 and throughout the year except d weir who was appointed on 17 january 2006 
and p journo and m brooks who were appointed on 1 july 2006 the interests of all the directors who served at any time in 
the year in the share capital of the company at 30 september 2006 or at the time of their resignation are given in the directors’
remuneration report 
h westropp and r lambourne who retire at every annual general meeting “agm” and every third agm respectively being
eligible offer themselves for reelection d weir p journo and m brooks who were appointed by the board during the year 
offer themselves for reappointment at the agm all of the executive directors’ service contracts can be terminated by either 
party giving in writing not less than twelve months’ notice and h westropp’s r lambourne’s and d weir’s service contracts 
can be terminated by either party giving in writing not less than six months’ notice
the group agrees to indemnify the directors of the company against liability in respect of proceedings brought by third parties
subject to the provision of the companies act 1985 the indemnity has been in force throughout the year and continues at the
date of this report the group maintains directors’ and officer’s liability insurance to mitigate the impact of any such proceedings
employee benefit trust
the abacus group ebt is a discretionary trust established in 2005 for the benefit of staff of the group it has a professional
independent trustee appleby trust jersey limited the trust is intended to be financed by loans from the group and its
administration costs and trustee fees are charged to the consolidated income statement when incurred the trust will purchase
the company’s shares for use in connection with the group’s performance share plan psp the remuneration committee will
make recommendations on behalf of the board to the trust regarding grants under the psp to members of staff as appropriate
the trust will then borrow money to purchase shares in the company to satisfy such grants
the ebt did not hold shares in abacus group plc at 30 september 2006 but in accordance with best practice when it does 
the trust will waive its right to dividends and has been requested to abstain from voting at any general meeting
events since the balance sheet date
there have been no significant events since 30 september 2006
14 abacus group plc
directors’ report  substantial shareholdings
the company has been advised of the following interests in 3 per cent or more of the ordinary shares in issue at 
17 november 2006
no of shares
million 
unicorn asset management 116 158
aberforth partners 57 78
old mutual asset managers 39 54
aegon asset management 34 46
henderson global investors 32 44
jp morgan asset management 32 44
capital group 32 43
gartmore investment management 28 39
topfib ltd 28 39
morley fund management 23 32
supplier payment policy
group policy is to set terms of payment when agreeing contracts with suppliers which clearly explain payment procedures and
to settle bills within those contract terms the group operates systems for promptly advising suppliers of and resolving queried
and contested items
trade creditors of the group at 30 september 2006 were equivalent to 30 days purchases 2005 30 days the company has
no trade creditors
charitable donations
the group contributed £1828 2005 £1762 to charities primarily local during the year
there were no political donations
fixed assets
in the opinion of the directors the current open market value of the group’s interests in freehold land and buildings is equal 
to its fair value
auditors
in accordance with section 384 of the companies act 1985 a resolution reappointing ernst  young llp as auditors of the
company for the ensuing year will be proposed at the company’s forthcoming annual general meeting 
directors’ statement as to disclosure of information to auditors
the directors who were members of the board at the time of approving the directors’ report are listed on page 13 having
made enquiries of fellow directors and of the company’s auditors each of these directors confirms that
■ to the best of each director’s knowledge and belief there is no information relevant to the preparation of their report of which
the company’s auditors are unaware and
■ each director has taken all the steps a director might reasonably be expected to have taken to be aware of relevant audit
information and to establish that the company’s auditors are aware of that information
15 annual report  accounts 2006 annual general meeting
the notice of the annual general meeting on 31 january 2007 follows the report and accounts and a proxy voting form 
is enclosed 
ordinary resolutions 1 to 8 constitute the ordinary business of the meeting to approve the financial statements appoint
directors and auditors and to approve the directors’ remuneration report 
resolutions 9 to 11 constitute special business
ordinary resolution 9 authorises the directors to issue ordinary shares up to a nominal value of £1221479 being one third 
of the issued share capital as at 30 september 2006
special resolution 10 allows the directors to issue ordinary shares for cash without applying the preemptive rights set out in
section 89 of the companies act 1985 it empowers the directors to make rights issues and issue shares up to a total nominal
value of £183222 being 5 of the issued share capital as at 30 september 2006 the authority expires within 15 months or 
at the end of the annual general meeting for the year ending 30 september 2007 if earlier
special resolution 11 sets out the framework in which the company may purchase its own shares it limits a purchase to 
a maximum of 15 percent of the issued share capital and sets the upper and lower prices to be paid the directors intend 
to exercise this power only if in the light of market conditions prevailing at the time they believe that a purchase will increase
earnings per share and be in the best interest of shareholders generally in reaching their decision they will consider other
investment opportunities appropriate gearing levels and the overall position of the group
shareholders may inspect copies of the directors’ service contracts and the register of directors’ interests at any time 
these documents are held at the registered office which is open during normal business hours 
by order of the board
abacus house bone lane newbury andrew bateman
berkshire rg14 5sf registered office secretary
30 november 2006
16 abacus group plc
directors’ report continued abacus group plc is committed to business integrity ethical values and professionalism as an essential part of this commitment
the company develops and maintains high standards of corporate governance these statements describe how the company
applies and complies with the principles of the combined code annexed to the listing rules of the financial services authority
and for which the board is accountable to its shareholders 
statement of compliance with code of best practice
the company has complied throughout the year with the provisions set out in the combined code on corporate governance 
as applicable to smaller listed companies issued by the financial reporting council 
the board of directors
the board currently has eight members comprising a nonexecutive chairman h westropp a chief executive officer m kent
four other executive and two other nonexecutive directors including a senior independent director r lambourne to whom
shareholder concerns may be conveyed during the year g grover resigned and p journo and m brooks were appointed 
as executive directors in addition j vaughan was appointed and stepped down as an executive director and d weir was
appointed and m ricejones resigned as a nonexecutive director
all nonexecutive directors who served during the year were considered by the board to be independent of management
although h westropp has been a board member for more than ten years he is considered to be independent as he has never
had business or personal relationships with the company is not a significant shareholder does not hold crossdirectorships
receives only fixed directors’ fees has never been an employee of the company and is considered to be of sufficient calibre 
and experience that he can exercise judgement free from undue influence of management 
the company believes it has a balance of executive and nonexecutive directors appropriate for a business of its size 
each individual executive director’s performance is formally appraised at an annual review by the ceo whose performance 
in turn is appraised by the nonexecutive chairman the chairman’s performance is appraised by the nonexecutive directors
who in turn are appraised by the chairman ceo and chief financial officer 
the company secretary is responsible to the board for ensuring that the board in conducting its business follows its procedures
and best practice whilst complying with applicable rules and regulations all directors have access to the advice and services of
the company secretary
conduct of board meetings
the board in general meets each month to consider matters specifically reserved to it for decision during the year the board 
had 10 such monthly meetings and details of attendance are given on page 19 when required the board convenes between
the regular meetings
at least seven days prior to each meeting all members receive up to date reports on key areas of the business and information 
to support decisions where information is insufficient to enable the board to discharge its duties board members may make
further enquiries
a part of each meeting is devoted to strategy and planning and in dealing with issues of strategy risk performance resource
allocation key appointments and standards of conduct board members use their independent judgement in carrying out their
duties board members may also take independent professional advice at the company’s expense
retirement of directors
the articles of association of abacus group plc require that
a the directors must submit themselves for election by shareholders at the next annual general meeting after appointment
b nonexecutive directors who have served nine years or less on the board and all executive directors are required to retire
every three years and 
c nonexecutive directors who have served more than nine years on the board are required to retire annually
the names of directors retiring at the next annual general meeting are given on page 14 and biographical details of the 
directors on page 13
corporate governance statements
17 annual report  accounts 2006 the board has established three committees namely the nominations committee the remuneration committee and the 
audit committee the terms of reference for which are available from the company details of and attendees at each of 
these committees are as follows
nominations committee
abacus group plc has developed formal and transparent procedures for appointing new directors to the board these duties are
discharged through the nominations committee which h westropp chairs its other members are m kent and r lambourne
and d weir from and m ricejones until january 2006 if appropriate the committee instructs external professional consultants to
ensure a wide range of candidates is put forward before appointing suitable candidates the board considers the recommendations
of the committee the committee met once during the year to discuss the appointments of m brooks and p journo d weir 
was appointed as part of the deltron acquisition and his appointment was considered by the entire board in selecting the 
newly appointed candidates the committee identified the skills and experience needed for the positions and determined that 
the internal candidates most closely matched these requirements
newly appointed directors undertake appropriate training to enable them to discharge the responsibilities of their office
remuneration committee
to avoid potential conflicts of interest the board has delegated responsibility for defining remuneration policy for executive
directors and senior management to the remuneration committee its members are r lambourne chairman and d weir 
from and m ricejones until january 2006 the committee met seven times during the year to
a discuss the terms of the performance share plan psp and bonus arrangements
b approve the grant of options under the sharesave scheme 2006
c approve the ltip and bonus awards to senior management
d approve the severance package of j vaughan
e approve the severance package of g grover
f approve the directors’ remuneration for 2006 and
g approve the new salary of p journo and pension increase and salary increase of m brooks
the board as a whole is responsible for establishing the fees and responsibilities of the nonexecutive directors and takes into
account relevant market information
the remuneration report on pages 24 to 31 describes the company’s remuneration policy and the procedures for developing 
it and for determining remuneration
minutes of the committee’s proceedings are copied to the board and discussed by it where appropriate
audit committee and accountability
r lambourne chairman served on the committee for the whole year and d weir from and m ricejones until january 2006 
r lambourne is a chartered accountant who qualified with pricewaterhousecoopers and has previously been group finance
director of three listed companies the committee has clear terms of reference under which the board gives it authority to
examine matters concerning the financial affairs of the group internal and external audit reports annual and interim financial
statements internal control procedures accounting policies and other matters referred to it by the board including
arrangements for whistleblowing
periodically the audit committee reviews the independence and objectivity of the auditors and the level of nonaudit services
in assessing whether the auditors should be appointed to carry out nonaudit services the committee will consider whether they
are the most appropriate and costeffective provider of the nonaudit service and that the service is appropriate for the auditors
to undertake eg provision of internal audit services or risk management would be excluded in addition the board ensures 
that the level of fees and importance of the work is considered alongside the audit work in such a way that nonaudit services
are provided without detriment to the auditors’ independence for the year ending 30 september 2006 the audit committee
considered that although the level of nonaudit fees was £350000 principally in respect of due diligence work in connection with
the acquisitions during the year compared to the audit fee of £320000 this did not prejudice the independence of the auditors
18 abacus group plc
corporate governance statements continued the committee met three times during the year to
a approve the 2005 annual financial statements and consider the accounting and internal control points in the management
letter raised by the auditors
b approve the interim 2006 financial statements the auditors’ fees and the 2006 yearend audit plan including accounting
and judgemental issues which the auditors believed required its attention and
c approve the international financial reporting standards ifrs and accounting policies adopted by the group for its interim
and annual 2006 financial statements
minutes of the committee’s proceedings are copied to the board and discussed by it where appropriate
attendees at board and committee meetings 
number convened board nominations remuneration audit
attended by directors meetings committee committee committee
number convened 10 1 7 3
executive director
martin kent 10 1 na na
peter allen 10 na na na
graham mcbeth 7 na na na
patrick journo 2 na na na
martin brooks 2 na na na
graham grover 6 na na na
jerry vaughan 1
non executive director
harry westropp 9 1 na na
robert lambourne 9 1 7 3
margaret ricejones 2 na 1 na
david weir 8 1 6 3
external auditors
ernst  young llp na na na 3
 p journo and m brooks were appointed to the board on 1 july 2006 and d weir on 17 january 2006
 g grover and m ricejones resigned from the board on 30 june 2006 and 27 january 2006 respectively
 j vaughan was appointed to the board on 17 january 2006 and resigned on 31 march 2006
maintenance of a sound system of internal control
the board has applied principle c2 of the combined code by establishing a continuous process for identifying evaluating 
and managing the significant risks which the group faces the board regularly reviews the process which has been in place
throughout the year and up to the date of approval of this report and which is in accordance with “internal control guidance 
for directors on the combined code” published in september 1999 the board is responsible for the group’s system of internal
control and for reviewing its effectiveness such a system is designed to manage rather than eliminate the risk of failure to
achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss
in compliance with provision c21 of the combined code the board continuously reviews the effectiveness of the group’s
system of internal control the board’s monitoring covers all controls including financial operational and compliance controls
and risk management it is based principally on reviewing reports from management to consider whether significant risks are
identified evaluated managed and controlled and whether any significant weaknesses are promptly remedied and indicate a
need for more extensive monitoring in addition a regular assessment is carried out to identify and evaluate all significant risks
and consider all significant aspects of internal control in place to manage them
the audit committee assists the board in discharging its review responsibilities
19 annual report  accounts 2006 managing business risk
discussed below are the group’s five major business risks together with the systems and initiatives in place to address them
market
the european electronic component market is subject to fluctuations of demand by customers these fluctuations are linked
to the economic cycle of each country and also to the migration abroad of manufacturing activity the group actively seeks
to manage its exposure to these fluctuations by monitoring stock levels restricting its dependence on large customers and
maintaining close working relationships with suppliers
operational
this relates to the risk of financial loss and damage to reputation resulting from inadequate or failed internal processes and
systems and from the actions of people or external events the group manages this risk through appropriate controls and loss
mitigation actions examples include
a a bespoke business system providing comprehensive management reporting
b taking sufficient insurance cover including for business interruption
c maintaining a detailed disaster recovery plan for all major sites
d maintaining rigorous data backup procedures
e performing regular risk assessments at each of the group’s locations
f carrying out a regular review of the principal suppliers and customers of the group and how each impacts on the 
group’s business
g regularly reviewing actual performance against budgets and forecasts
h establishing clearly defined procedures for the authorisation of major new investments and commitments
in addition specialist support functions provide expertise in ensuring the group adheres to local regulatory and legal
requirements
credit
the group assesses the creditworthiness of new customers before commencing trade with them based on this and the
customer’s capital base authorised limits of credit are set a proactive approach to the identification and control of bad and
doubtful debts is maintained and significant credit risks are highlighted to the board
liquidity
this relates to the risk that the group is unable to fund its requirements either because of insufficient banking facilities or because
it is constrained by the risk of breaching banking covenants following the significant reorganisation of borrowings during the
year the majority of the group’s bank facilities were and are available on a committed basis rather than as an overdraft
the group funds its day to day operations and short term assets through a mixture of retained profits creditors and shortterm
bank overdraft and invoice discounting facilities and its long term assets through bank term loans the group’s policy on liquidity
is to ensure that there are sufficient medium and longterm committed borrowing facilities to meet funding requirements it is
group policy not to trade in or enter into speculative transactions except for finance leases loan notes a euro loan and 50 of
an £8 million commercial mortgage loan the group pays interest on all debt financing arrangements at an agreed margin over
current bank base rates the remaining £4 million of the commercial mortgage loan is covered by a four year fixed interest rate
swap the majority of the cash comprises bank balances with hsbc bank plc and a number of european banks institutions
which the group considers creditworthy the group complied with all the relevant bank covenants during the year 
foreign currency risk
the group has significant transactional currency exposures such exposures arise from sales and purchases by operating 
units in currencies other than the unit’s functional currency when appropriate the group seeks to cover net foreign exchange
exposures with forward contracts which are arranged centrally and by negotiating sales and purchases in the same currency
where appropriate the group however has not effectively documented its forward exchange contracts and hence any
exchange gains and losses have been recognised in the consolidated income statement
20 abacus group plc
corporate governance statements continued key performance indicators
the senior management of the group focus on three key indicators of financial performance bookings billings and gross 
profit margin these are monitored daily across the geographic business units with explanation sought for variances against
expectations which are based on budget and previous years’ experience
in addition on a monthly basis detailed management accounts are prepared for senior management including non executive
directors these provide analysis in detail by geographic area of bookings billings cost of sales gross profit operating
expenses each measured against budget and prior years
working capital is monitored monthly against budget and prior year with particular focus on group borrowings to ensure that
bank covenants are fully complied with receivables and inventories are also monitored in detail to ensure that credit terms 
are being respected and enforced and that stock turn is appropriate
finally other non financial indicators monitored on a monthly basis include order processing matrices delivery times and
accuracy staff numbers and turnover
internal audit
the board has formally reviewed the need for an internal audit function at the current time a formal internal audit function is
not considered necessary for a number of reasons the size of the group widespread executive involvement in the group’s 
day to day business the depth of management reporting from all subsidiary managers to the board the level of variance 
analysis during the review of the monthly management accounts by both senior management and the board directors and 
robust internal controls 
dialogue with institutional shareholders
the directors seek to build on a mutual understanding of objectives between the company and its institutional shareholders 
the ceo and cfo are the main contacts in addition all shareholders have the opportunity to meet with the executive and 
nonexecutive directors after the annual general meeting to discuss any issues they may have and are available upon request 
at all other times robert lambourne is the senior independent director and shareholders at all times may contact him on
matters of concern
the company maintains regular dialogue with institutional investors and presents the interim and preliminary results to them
the board is regularly briefed on feedback from institutional visits
shareholder relations
the company encourages participation by and communication with its shareholders it welcomes and responds to all contacts
by shareholders on a wide range of issues and uses the annual general meeting to communicate with private investors the
chairmen of the audit remuneration and nominations committees attend the annual general meeting and are available along
with operational management to answer questions from shareholders at the meeting
the annual general meeting is conducted in accordance with the combined code this includes informing members present 
at the meeting of proxy votes for and against resolutions once the resolutions have been voted on by a show of hands the
results of voting by proxy and show of hands on the proposed resolutions are announced on the company’s website shortly 
after the agm
the group’s annual and interim results are circulated to shareholders and the financial press the group’s share price is listed
in the financial times investor relations information and news releases are made available on the company’s website 
address wwwabacusgroupcouk
going concern
on the basis of current financial projections and the facilities available the directors have a reasonable expectation that the
company and the group have adequate resources to continue in operational existence for the foreseeable future for this 
reason they continue to adopt the going concern basis in preparing the financial statements
21 annual report  accounts 2006 general
whilst the board’s primary accountability is to its shareholders it also tries to maximise value for all its other “stakeholders”
including employees customers suppliers and the community at large as well as considering the impact of its actions on health
safety and the environment overall responsibility for each of these areas ultimately resides with the full board however specific
responsibility for employeerelated and environmental issues resides with the cfo peter allen and external stakeholder issues
with the ceo martin kent the group’s social environmental and ethical risk management procedures are currently being
implemented and will be subject to a process of regular reviews
management at all levels in the organisation is committed to taking account of its corporate social responsibility in its actions
endeavours to show due respect for human rights and works to high standards of integrity and ethical propriety as a
multinational organisation abacus takes account of cultural differences between the various territories in which it operates
through its continuing commitment to corporate social responsibility abacus group is a member of the ftse4 good 
series index
employee consultation
the group values the involvement of its employees it has continued to inform employees through meetings noticeboards and
the intranet of matters affecting them and of group performance the group consults employee representatives regularly on a
wide range of matters affecting their current and future interests all eligible employees in the uk may join the sharesave scheme
at periodic intervals
employee development
the group places great importance on the development and retention of staff it operates a formal appraisal scheme whereby 
the employee and manager provide each other with performance feedback after commencement of employment and at annual
intervals thereafter at each of these meetings objectives against which performance is regularly measured are set for the
coming period and training needs identified
over the last few years a formal and structured training programme has been established for uk employees promoting such
areas as communication skills appraisal training train the trainer and management development the group adopts practices to
encourage promotion from within including notifying employees via email of any vacancies and identifying individuals for certain
positions as part of its formal succession planning graham mcbeth managing director ecd europe holds overall responsibility
for training throughout the group
equal opportunities
group companies are committed to providing equal opportunities to all employees irrespective of sex gender orientation 
marital status creed colour race religious belief ethnic origin or disability the group’s philosophy is that all discrimination on
any of the above grounds is abhorrent and it will condone no discrimination whatsoever whether negative positive or of any
other nature the commitment covers recruiting training career development performance appraisal and social interaction 
both in and outside the workplace the group continues to monitor its application of this policy and its compliance with
legislation and codes of best practice
disabled employees
the group gives full consideration to applications for employment from disabled persons where the requirements of the job can
be adequately fulfilled by a handicapped or disabled person
where existing employees become disabled it is the group’s policy to provide continuing employment under normal terms and
conditions and to provide training career development and promotion to disabled employees wherever appropriate
ethical conduct
we expect our staff to act according to the highest standards of ethical behaviour covering such areas as fraud conflict of
interest internet abuse bribery and corruption this is reinforced through written policies the inclusion of an antiharassment
clause in contracts of employment and the application of disciplinary procedures the group does not make corporate political
donations and prohibits the use of bribery and facilitation payments 
22 abacus group plc
corporate social responsibility  health and safety
the maintenance and improvement of working standards to safeguard the health and well being of staff is a continuing priority
this is achieved through a documented health and safety policy annual risk assessments carried out at the group’s main
locations and training staff in areas such as ‘manual handling’ which all warehouse staff receive on their induction and ‘hotwork
handling’ all sites maintain accident books the data from which is collected centrally every quarter and reviewed by the health
and safety committee any actions identified are implemented wherever possible the group complies with all local health and
safety regulations 
in the interests of staff health smoking inside company premises is permitted only in designated areas
fire wardens and first aiders are appointed at each location and receive periodic training
the group requires company car drivers to comply with the laws on the use of mobile telephones whilst driving and pays for 
the cost and installation of hands free kits informs staff by email of the latest legislation and penalties for contravening it and
includes guidance on the use of telephones in the group’s car policy document 
suppliers and customers
the group believes that long term relationships founded on trust and mutual advantage are vital to abacus’ success to foster
these relationships the group promptly advises suppliers and customers of queries and contested items it always endeavours 
to resolve any queries through dialogue and adopts a commercial stance in their resolution contract terms are clearly explained
and payment terms are only extended with prior agreement the group has iso approval which covers procedures such as
dealing with customer queries supplier assessments customer contract review sales order entry and logistics the group’s
business systems monitor delivery performance and these statistics are studied closely with corrective action being implemented
where appropriate customers and suppliers frequently tour company warehouses and factories and conduct their own
competence audits of the group’s performance in various different areas of its operations the results of these audits are
discussed with the appropriate management with a view to continuous improvement in the group’s performance
the environment
it is group policy to operate in a responsible manner with regard to the environment the group wherever possible uses
recycled and recyclable packaging materials and it recycles waste paper 
examples of current initiatives include
a reusing approximately 20 of outer packaging from incoming warehouse deliveries for outbound shipments
b segregating compacting and baling waste cardboard and paper packaging before dispatching to recycling mills
c encouraging customers to return empty specialist antistatic packaging for reuse
d using durable returnable pallet box containers for intercompany shipments
e dispatching empty printer and photocopier cartridges and waste office paper for recycling
f disposing of electronics components and waste cable via registered scrap merchants which recycle the product where possible
g encouraging suppliers to send data electronically rather than using paper 
the group sets objectives to reduce waste and engages with its staff customers and suppliers with the mandate continually to
find ways to minimise the use of resources
the group operates a continual review of its energy and resource utilisation with a view to minimising the impact of the group’s
activities on the environment an example is the newbury office in which the most energy efficient lighting boilers and air
conditioning units are installed 
assisted by the change in emphasis in legislation in the uk to an emissions based tax on company cars the group continues
actively to encourage employees to downsize cars the board also continues to encourage the use of bicycles as commuter
transport
although the group uses minimal environmentally damaging or hazardous material it ensures that all personnel receive
appropriate training in its handling and all material is properly disposed of
23 annual report  accounts 2006 introduction
this report has been prepared so as to comply with the requirements of schedule 7a of the companies act 1985 the report
covers all directors both executive and nonexecutive 
the regulations require the auditors to report to the company’s members on the ‘auditable part’ of the directors’ remuneration
report and to state whether in their opinion that part of the report has been properly prepared in accordance with the
companies act 1985 the report has therefore been divided into two separate sections audited and nonaudited information
as required by the regulations a resolution to approve the report will be proposed at the annual general meeting of the
company at which the financial statements will be approved
unaudited information
composition of the remuneration committee
the members of the remuneration committee comprised r lambourne chairman and d weir from and m ricejones 
until january 2006 none of them had any personal financial interest in decisions other than as shareholders and no 
crossdirectorships or participation in any incentive schemes
the composition of the remuneration committee and its operation comply with the combined code
during the year the committee consulted the ceo and cfo on its proposals
terms of reference
the board agrees the terms of reference of the remuneration committee its principal functions are to determine on behalf 
of the board and shareholders
1 remuneration and incentives for the executive directors senior managers and other key staff of the group
2 targets for performance related bonuses for the executive directors the committee also monitors performance against 
these targets
3 contractual terms of service agreements including termination pension arrangements and other benefits
remuneration policy
in framing policy the committee seeks and will continue to seek to balance the cost of packages which attract retain and
motivate directors senior managers and key staff of the highest quality whilst avoiding paying more than is necessary
the remuneration package of each executive director reflects the principles of the combined code in setting remuneration 
and takes into account group objectives and personal achievement
the committee seeks to balance the amount of remuneration paid to an individual director within the overall package these
packages are aimed to provide a competitive reward having regard to the remuneration paid by comparable public companies
and relative performance in determining pay increases the committee is sensitive to pay and employment conditions of all 
staff in the group staff pay is determined by market conditions and by both the group’s and the individual’s performance
performancerelated elements of the remuneration packages are established as a significant proportion of total pay these
elements are designed both to motivate executive directors to perform at the highest levels and to align their interests with 
those of shareholders
there are no provisions in any of the directors’ service contracts for compensation on early termination compensation payments
for early termination would be tailored within legal constraints to avoid rewarding poor performance and to deal equitably with
the director
whilst the company has stated its current and future remuneration policy of offering competitive and cost effective packages
which incorporate a significant performance related element it is conscious that any remuneration policy needs to be flexible
any changes to this policy will be stated in subsequent annual reports 
24 abacus group plc
directors’ remuneration report 
for the year ended 30 september 2006 in evaluating the remuneration packages for 2006 and beyond the committee sought advice in september 2005 from its
independent and appointed advisor new bridge street consultants llp  which also acted as the remuneration benchmarking
advisor in 2004 and as consultants on the 2003 share option scheme and 2004 sharesave scheme the main conclusions 
of this review which are described more fully on the next page were that
1 abacus group’s current executive share option scheme should be replaced with a new performance related share incentive 
plan psp
2 the annual bonus maximum should be reduced from 120 of salary to no more than 75 and that it should not be subject 
to deferral and 
3 executive directors should build share ownership worth in aggregate a minimum of 100 of base salary
components of the policy for executive directors’ remuneration
1 basic salary an executive director’s basic salary review is carried out by the committee prior to the beginning of the year 
and when an individual changes position or responsibility in deciding appropriate levels the committee takes into account 
the individual’s responsibilities and performance and if considered necessary will take external advice in june 2004 the
board undertook an extensive benchmarking exercise with the assistance of new bridge street consultants in addition to
basic salary the executive directors receive certain benefitsinkind including a car or car allowance business and private
fuel permanent health insurance life assurance and private medical insurance
2 annual bonuses the chief executive officer the chief financial officer and the managing director ecd europe participate 
in the annual bonus scheme
the ceo and the executive directors receive bonuses of 50 and 40 respectively of basic salaries for achievement of
personal objectives the bonuses are then subject to a further ratchet of 125 times if the budgeted eps before exceptional
items and amortisation of acquired intangibles and goodwill is achieved and 15 times if it is exceeded by over 5 the
ceo’s and other executive directors’ maximum bonuses are therefore 75 and 60 of basic salary respectively the bonus
plan is tailored to incentivise management with less focus on the volatile annual eps growth and more focus on the net
margin profit divided by turnover and meeting targets both financial and nonfinancial set specifically for each director
3 long term incentives the committee seeks to encourage share ownership by executive directors and senior staff through
share arrangements the committee may consider making awards to individual executive directors as part of an overall
remuneration and incentive package in establishing share schemes the committee determines the scope of participation 
of the executive directors and appropriate performance targets
the abacus group performance share plan 2005 the “psp” was approved at the 2006 agm awards ordinarily take the form 
of a nil or nominal cost option over a fixed number of shares where a participant can decide when to exercise his award during
a period of 12 months after it has vested all awards are subject to performance conditions based on growth in eps before
exceptional items and amortisation of acquired intangibles and goodwill and are tested on only the third anniversary from date
of grant
in addition executive directors are expected over the next five years to acquire and hold shares including existing holdings
worth in aggregate a minimum of 100 of base salary after allowing for sales of shares to pay the tax or financing costs on 
the vesting or exercise of awards and options
following adoption of the psp options may no longer be granted under the 2003 scheme 1993 executive share option scheme
approved and the 1996 unapproved share option scheme all schemes other than the psp allow for the grant of two types of
options those approved by the uk inland revenue approved and those not unapproved
25 annual report  accounts 2006 details of each of the current schemes and the 2005 performance share plan ‘psp’ scheme are as follows
approved unapproved executive share optionperformance 
1993 1996 scheme 2003 share plan
approved  unapproved 2005
type of scheme share option share option share option nil or nominal cost 
option over a fixed 
number of shares
vesting period from date 3 or 5 years 3 or 5 years 3 years only 3 years only
of grant
lapse period from date 10 years 7 years 10 years 4 years
of grant
maximum award lower of
absolute limit £30000 none approved £30000 none
unapproved   none
limit as a  of salary the total of options held under grant at any one the total of option grants the total of awards 
time across both schemes is not to exceed issued in any one year granted in any one year 
400 of salary under the 2003 scheme is not to exceed 
is not to exceed 200 100 of salary under 
of salary the ‘psp’
eps growth required in 100 of award vests 100 of award vests options vest on a awards vest on a 
excess of rpi between on real eps growth on real eps growth straight  line basis straightline basis 
date of grant and vesting exceeding 1 per exceeding 3 per between real eps between real eps
annum annum growth of 4 50 of growth of 3 33 of 
award vests and 6 award vests and 7
per annum full vesting per annum full vesting
retesting retested from date of grant to any anniversary if targets not met in none
falling between vesting date and lapse date 3 years retested 
on fourth and fifth 
anniversaries of grant
period in which option options can be exercised only in the period in to the extent that the to the extent that the 
can be exercised which eps growth is met performance condition performance condition 
following eps criteria has been satisfied that has been satisfied that 
being met part of the option that part of the option 
can be exercised may that can be exercised 
be exercised irrespective may be exercised 
of future eps perform irrespective of future 
ance until lapse of option eps performance until
lapse of option
dilution limits no longer no longer 10 of the ordinary 10 of sc over 10 years 
the cumulative number applicable applicable share capital sc over for all employee share 
of unlapsed options 10 years for all option schemes and 
which can be granted employee share option 5 of sc over 10 years 
over a period as schemes including for the psp and any 
constrained by set  sharesave scheme other executive share 
limits of issued share plan only if new shares
capital issued
cash alternative no discretion of approved no discretion of 
remuneration unapproved discretion remuneration
committee of remuneration committee although 
committee it does not currently
intend to do so
 share options granted under the 2003 scheme to peter allen on 26 may 2005 did not allow for any retesting
26 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2006 4 pensions the executive directors participate in personal pension schemes or the group’s pension plans all pension
schemes are money purchase pension contributions details of the uk based executive directors’ pension contributions
which are based on a  of each executive director’s basic salary are summarised below
age company contribution as a director
 of basic salary
under 45 15 g mcbeth
m brooks
45 to 50 20 –
above 50 25 m kent
p allen
should an executive director’s age cross one of the above thresholds then the 5 increase in contribution is effective from 
the month following his birthday p journo’s pension contribution is nil and g grover’s until his resignation was 20 of his 
basic salary
5 contracts of service the required notice for terminating an executive director’s service contract is twelve months 
the committee considers this period of notice to be appropriate
details of the executive directors’ contracts are summarised below
contract date notice period
m kent 1 february 2004 one year
p allen 10 june 2005 one year
g mcbeth 1 february 2004 one year
m brooks 1 july 2006 one year
p journo 1 july 2006 one year
nonexecutive directors’ remuneration and contracts
the board has delegated the responsibility for determining the remuneration and services of the nonexecutive directors to a
subcommittee whose members are the ceo and the cfo 
details of the nonexecutive directors’ contracts which have no automatic renewal provisions are summarised below
contract
commencement date expiry date notice period
h westropp 1 january 2004 each agm 6 months
r lambourne 1 june 2004 january 2007 agm 6 months
d weir 17 january 2006 january 2007 agm 6 months
the nonexecutive directors’ remuneration packages are
a set to attract motivate and retain the appropriate level of nonexecutive talent
b proportional to their contribution towards the interest of the business
c consistent with recognised best standards
d in the form of cash fees payable monthly 
e never received in the form of share options in order to maintain independence 
details of the remuneration options and interests of the directors are given later in this report
27 annual report  accounts 2006 performance graph
the regulations require this remuneration report to contain a graph showing the performance of the company and a ‘broad
equity index’ over the past five years the comparative index chosen is the ftse small cap index excluding investment trusts
as the company is a constituent of the ftse small cap index the regulations require that performance is measured by total
shareholder return share price growth with dividends deemed to be reinvested gross on the exdividend date 
this graph shows the value over the 5 year period ending on 30 september 2006 of £100 invested in abacus group plc on 
30 september 2001 compared with the value of £100 invested in the ftse small cap index excluding investment trusts
audited information
the total amounts for directors’ remuneration were as follows
2006 2005
£’000 £’000
emoluments 1376 814
pension contributions 200 266
compensation for loss of office 392 280
1968 1360
the 2005 compensation for loss of office related to mr p griffithjones who received a pension payment of £280000 under a
compromise agreement made upon his resignation from the board on 31 march 2005
28 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2006
0
50
100
150
200
2006 2005 2004 2003 2002 2001
abacus group
ftse small cap index excluding investment trusts
value £ emoluments
details of individual emoluments in respect of qualifying services of each person who served during the year were as follows 
compensation
salary taxable expense for loss total total
or fees benefit allowances bonus of office 2006 2005
£’000 £’000 £’000 £’000 £’000 £’000 £’000
current
executive
m kent 269 4 14 168 – 455 282
p allen 203 6 12 101 – 322 114
g mcbeth 167 20 – 84 – 271 164
m brooks 27225 – 36 –
p journo 24 3––– 27 –
nonexecutive
h westropp chairman 65–––– 65 65
r lambourne 32–––– 32 25
d weir 19–––– 19 –
retired
p griffithjones executive ––––– – 282
g grover executive 94 1 9 – 174 278 137
j vaughan executive 45––– 218 263 –
m ricejones ––––– – 25
total 945 36 37 358 392 1768
2005 totals 754 28 32 – 280 1094
pensions and bonuses are calculated in line with the relevant scheme rules
 p griffithjones m ricejones and g grover retired from the board on 31 march 2005 27 january 2006 and 30 june 2006
respectively m brooks and p journo joined the board on 1 july 2006 and d weir on 17 january 2006 j vaughan joined and
retired from the board on 17 january 2006 and 31 march 2006 respectively p allen joined on 1 april 2005 so the 2005
comparative is for 6 months only
p allen received remuneration from his other nonexecutive roles for the year totalling £71000 2005 £20300
m brooks’ and p journo’s emoluments before they were appointed as directors were £105000 and £82000 respectively
there were no share options exercised and sold in the year
pension contributions
all the executive directors are members of money purchase pension schemes contributions payable by the company are 
given below
2006 2005
£’000 £’000
current
m kent 66 66
p allen 44 13
g mcbeth 28 34
m brooks 3 –
p journo – –
retired
p griffithjones – 130
j vaughan – –
g grover 59 23
200 266
 p griffithjones’ pension in 2005 comprised emoluments sacrifice and £23000 company contributions
29 annual report  accounts 2006 share options and psp awards
aggregate emoluments on the previous page do not include the value of options to acquire ordinary shares granted to or held 
by the directors these are given in the table below
1 oct 30 sept 
2005 granted lapsed 2006 exercise earliest date last date
number number number number price for exercise for exercise
current
m kent 100000 – – 100000 3920p 21122003 21122007
m kent 92550 – – 92550 2215p 20052006 20052013
m kent 121871 – – 121871 2285p 19112005 19112009
m kent 13129 – – 13129 2285p 19112005 19112012
m kent 182758 – – 182758 2320p 01122006 01122013
m kent
†
– 184991 – 184991 00p 02022009 02022010
m kent – 20125 – 20125 800p 27012011 27072011
p allen 219178 – 219178 1825p 26052008 25052015
p allen
†
– 139616 – 139616 00p 02022009 02022010
p allen – 11687 – 11687 800p 27012009 27072009
g mcbeth 75000 – 75000 – 975p 04012004 04012006
g mcbeth 20000 – – 20000 3920p 21122003 21122007
g mcbeth 1054 – 1054 – 3200p 20122005 20062006
g mcbeth 61850 – – 61850 2215p 20052006 20052013
g mcbeth 125000 – – 125000 2320p 01122006 01122013
g mcbeth 3077 – 3077 – 2450p 19022007 19082007
g mcbeth
†
– 115183 – 115183 00p 02022009 02022010
g mcbeth – 20125 – 20125 800p 27012011 27072011
m brooks
†
– 37522 – 37522 00p 02022009 02022010
m brooks 27069 – – 27069 2320p 01122003 01122013
m brooks – 20125 – 20125 800p 27012011 27072011
retired
g grover 3846 – – 3846 2450p 19022007 19082007
g grover
†
– 88656 – 88656 00p 02022009 02022010
j vaughan 32160 – – 32160 1096p 06042007 06042014
j vaughan 32160 – – 32160 1345p 19112007 19112014
j vaughan 32160 – – 32160 840p 27072008 27072015
1142862 638030 79131 1701761
details of the share option schemes in which the directors participate are given earlier in the directors’ remuneration report
the market price at 30 september 2006 was 1665p and the range during the year was 99p to 173p
none of the directors during their tenure of directorship exercised any share options during the year however j vaughan
exercised all 96480 of his options at a market price of 160p subsequent to his resignation as a director
 these options are held by the directors under the sharesave scheme
 options shown are at the dates of appointment or resignation as board directors as applicable
 these options are phantom options which are settled in cash
†
psp awards under the 2005 performance share plan
30 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2006 directors’ interests in shares
2006 2005
beneficial beneficial
h westropp 27000 17300
p allen 50000 50000
m kent 53462 53462
g mcbeth 31861 31861
g grover – –
r lambourne 5000 5000
m brooks 13080 –
p journo 922486 –
j vaughan 16427 –
d weir 39587 –
 interests are shown as at 30 september 2005 and 2006 or as at the dates of resignation as board directors if earlier
there have been no changes to the interests of the directors between 30 september 2006 and the date of these 
financial statements
directors’ interests in contracts
during the year none of the directors had a material interest in any contract which was of significance in relation to the business
of the group
approval
this directors’ remuneration report has been approved by the board and signed on its behalf by
abacus house bone lane newbury r lambourne
berkshire rg14 5sf registered office chairman of the remuneration committee
30 november 2006
31 annual report  accounts 2006 the directors have chosen to prepare the financial statements for the group in accordance with international financial
reporting standards “ifrs” as adopted by the european union and for the company in accordance with united kingdom
generally accepted accounting practice “uk gaap”
in the case of uk gaap financial statements united kingdom company law requires the directors to prepare financial
statements for each financial period which give a true and fair view of the state of affairs of the company as at the end
of the financial period and of the profit or loss of the company for that period in preparing those financial statements the
directors are required to
■ select suitable accounting policies and then apply them consistently
■ make judgements and estimates that are reasonable and prudent
■ state whether applicable accounting standards have been followed and
■ prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will
continue in business
in the case of ifrs financial statements ias 1 requires that the financial statements present fairly for each financial period
the group’s financial position financial performance and cash flows this requires the faithful representation of the effects of
transactions other events and conditions in accordance with the definitions and recognition criteria for assets liabilities income
and expenses set out in the international accounting standards board’s ‘framework for the preparation and presentation of
financial statements’ in virtually all circumstances a fair presentation will be achieved by compliance with all applicable ifrs
directors are also required to
■ properly select and apply accounting policies consistently
■ present information including accounting policies in a manner that provides relevant reliable comparable and
understandable information and
■ provide additional disclosures when compliance with the specific requirements in ifrs is insufficient to enable users
to understand the impact of particular transactions other events and conditions on the entity’s financial position and
financial performance
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that the financial statements comply with the companies act
1985 they are also responsible for the system of internal controls for safeguarding the assets of the company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities
32 abacus group plc
statement of directors’ responsibilities in relation to the financial
statements independent auditors’ report 
to the shareholders of abacus group plc
33 annual report  accounts 2006
we have audited the group financial statements the “financial statements” of abacus group plc for the year ended 
30 september 2006 which comprise the consolidated income statement consolidated statement of recognised income and
expense consolidated balance sheet consolidated cash flow statement and the related statement of significant accounting
policies critical accounting judgements and key sources of estimation uncertainty and the notes 1 to 28 these group
financial statements have been prepared under the accounting policies set out therein
we have reported separately on the parent company financial statements of abacus group plc for the year ended 30 september
2006 and on the information in the director’s remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state
to them in an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors and auditors
the directors are responsible for preparing the annual report and the group financial statements in accordance with applicable
united kingdom law and international financial reporting standards “ifrs” as adopted by the european union as set out in the
statement of directors’ responsibilities
our responsibility is to audit the group financial statements in accordance with relevant legal and regulatory requirements and
international standards on auditing uk and ireland
we report to you our opinion as to whether the group financial statements give a true and fair view the group financial
statements have been properly prepared in accordance with the companies act 1985 and article 4 of the ias regulation and
whether the information given in the directors’ report is consistent with the financial statements the information given in the
directors’ report includes that specific information presented in the business review and financial review that is cross referred
from the business review section of the directors’ report
we also report to you if we have not received all the information and explanations we require for our audit or if information
specified by law regarding directors’ remuneration and other transactions is not disclosed
we review whether the corporate governance statements 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 
form an opinion on the effectiveness of the group’s corporate governance procedures or its risk and control procedures
we read other information contained in the annual report and consider whether it is consistent with the audited group 
financial statements the other information comprises only the chairman’s statement chief executive’s review financial
review corporate governance statements corporate social responsibility and directors’ remuneration reports we consider
the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the group
financial statements our responsibilities do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing practices
board an audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the group financial
statements it also includes an assessment of the significant estimates and judgements made by the directors in the preparation
of the group financial statements and of whether the accounting policies are appropriate to the group’s circumstances
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the group financial statements 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 group financial statements
opinion
in our opinion
■ the group financial statements give a true and fair view in accordance with ifrs as adopted by the european union 
of the state of the group’s affairs as at 30 september 2006 and of its result for the year then ended and
■ the group financial statements have been properly prepared in accordance with the companies act 1985 and article 4 
of the ias regulation and
■ the information given in the directors’ report is consistent with the group financial statements
ernst  young llp
registered auditor
reading
30 november 2006 before amortisation before amortisation
amortisation of acquired amortisation of acquired
of acquired intangibles of acquired intangibles
intangibles and intangibles and
and exceptional and exceptional
exceptional items exceptional items
items 2006 total items 2005 total
notes 2006 note 5 2006 2005 note 5 2005
continuing operations £’m £’m £’m £’m £’m £’m
revenue
existing operations 1816 – 1816 1788 – 1788
acquisitions 755 – 755 –––
continuing operations 1 2571 – 2571 1788 – 1788
cost of sales 1924 08 1932 1351 35 1386
gross profit 647 08 639 437 35 402
other operating expenses 2 500 112 612 343 06 349
operating profit
existing operations 82 14 68 94 41 53
acquisitions 65 106 41 –––
continuing operations 147 120 27 94 41 53
finance income 3 03 – 03 01 – 01
finance costs 3 31 – 31 14 – 14
profit loss before taxation 4 119 120 01 81 41 40
income tax expense credit 7 33 34 01 23 09 14
profit for the year attributable 
to equity holders of the parent 86 86 – 58 32 26
earnings per share pence 8
basic earnings loss per share 136p 136p 00p 136p 75p 61p
diluted earnings loss per share 134p 134p 00p 136p 75p 61p
consolidated statement of recognised income and expense
for the year ended 30 september 2006
note 2006 2005
£’m £’m
foreign exchange and translation differences 03 –
actuarial gains on defined benefit pension plans 02 –
net income and expense recognised directly in equity 01 –
profit for the year – 26
total recognised income and expense relating to the year 01 26
effects of changes in accounting policy
net loss on cash flow hedges on first time application of ias 39 03 –
total recognised income and expense for the year 21 04 26
 amortisation of acquired intangibles and exceptional items have been disclosed separately in note 5 in order to give an
indication of the underlying earnings of the group further information is provided within the statement of significant accounting
policies on pages 37 to 42
the accompanying statement of significant accounting policies critical accounting judgements and key sources of estimation
uncertainty and notes to the financial statements are an integral part of the consolidated income statement and consolidated
statement of recognised income and expense
34 abacus group plc
consolidated income statement 
for the year ended 30 september 2006 notes 2006 2005
£’m £’m
noncurrent assets
property plant and equipment 10 176 143
goodwill 11 500 109
intangible assets 11 214 73
deferred tax assets 7 06 –
896 325
current assets
trade and other receivables 13 675 361
inventories 14 388 268
other financial assets 15 01 –
income tax receivables 19 02
cash at bank 22 16 13
1099 644
total assets 1995 969
current liabilities
trade and other payables 16 430 201
financial liabilities 17 471 227
income tax payable 09 06
provisions 19 02 02
912 436
noncurrent liabilities
financial liabilities 17 210 77
other payables 06 –
deferred tax liabilities 7 32 01
provisions 19 19 12
defined benefit pension plan deficit 26 14 –
281 90
total liabilities 1193 526
net assets 802 443
equity
calledup share capital 20 37 21
share premium account 21 476 92
capital redemption reserve 21 04 04
merger reserve 21 33 33
share option reserve 21 08 03
hedging and translation reserve 21 06 –
retained earnings 21 250 290
total equity available to the shareholders of the parent 21 802 443
the accompanying statement of significant accounting policies critical accounting judgements and key sources of estimation
uncertainty and notes to the financial statements are an integral part of the consolidated balance sheet
the financial statements were approved by the board of directors on 30 november 2006 and signed on their behalf by
m r kent p v allen
director director
consolidated balance sheet 
as at 30 september 2006
35 annual report  accounts 2006 notes 2006 2005
£’m £’m
cash flows from operating activities
operating profit from continuing operations 27 53
depreciation of property plant and equipment 11 13
impairment loss on property plant and equipment 05 –
fair value loss on derivative financial instruments 03 –
loss on disposal of fixed assets 05 –
amortisation of intangible assets 27 01
sharebased payment 05 02
operating cashflows before changes in working capital 83 69
increase decrease in inventories 23 88
increase decrease in trade and other receivables 91 36
increase decrease in trade and other payables 41 61
movement in provisions 04 03
cash generated from operations 14 135
income tax paid 24 31
operating cash flow 10 104
cash flows from investing activities
interest received – 01
sale of property plant and equipment 01 01
acquisition of subsidiary undertaking 69 –
purchase of subsidiary undertakings other costs 15 –
purchase of property plant and equipment 14 05
payments to acquire intangible fixed assets 21 38
net cash flow from investing activities 118 41
cash flows from financing activities
interest paid 25 14
exercise of share options 13 01
new loan 170 80
issue costs of new loan 02 –
repayment of loans 133 76
repayment of loan notes 02 02
repayment of capital element of finance leases 02 02
dividends paid 42 46
net cash flow from financing activities 23 59
net movement in cash and cash equivalents 151 04
effects of exchange rates 22 01 01
cash and cash equivalents at the beginning of the period 22 195 200
cash and cash equivalents at the end of the period 22 345 195
the accompanying statement of significant accounting policies critical accounting judgements and key sources of
estimationuncertainty and notes to the financial statements are an integral part of the consolidated cash flow statement
36 abacus group plc
consolidated cash flow statement 
for the year ended 30 september 2006 1  authorisation of financial statements and statement of compliance with international financial reporting
standards ifrs
the group’s financial statements of abacus group plc the ‘company’ for the year ended 30 september 2006 were authorised
for issue by the board of the directors on 30 november 2006 and the balance sheets were signed on the board’s behalf by 
m r kent and p v allen abacus group plc is a public limited company incorporated and domiciled in england  wales the
company’s ordinary shares are traded on the london stock exchange
the group’s financial statements have been prepared in accordance with international financial reporting standards ifrs 
as adopted by the european union and as applied in accordance with the provisions of the companies act 1985 the principal
accounting policies adopted by the group and by the company are set out in the following note
2  accounting policies
basis of preparation
this is the first year in which the group has prepared its financial statements under ifrs and the comparatives have been
restated from uk generally accepted accounting practice uk gaap to comply with ifrs the group issued its interim 
financial statements in may 2006 incorporating its preliminary ifrs financial statements for 31 march 2006 and comparatives
the reconciliations to ifrs from the previously published uk gaap financial statements are summarised in note 28
the accounting policies which follow set out those policies which apply in preparing the financial statements for the year 
ended 30 september 2006 where the group has applied different policies for part of the period since its transition to ifrs 
on 1 october 2004 this is explained in note 28
the group financial statements are presented in sterling and all values are rounded to the nearest hundred thousand pounds
£’m except where otherwise indicated
the financial statements have been prepared under the historical cost convention except for derivative financial instruments
which are stated at their fair value
first time adoption
the standard ifrs 1 “first time adoption of international financial reporting standards” requires that companies apply ifrs
retrospectively for all periods the standard does however contain certain transitional provisions exempting full retrospective
application in certain areas the group has opted to take the following exemptions
■ application of ifrs 3 “business combinations” has not been applied to those combinations taking place prior to 1 october
2004 as provided by ifrs 1
■ application of the provisions of ias 32 and 39 relating to financial instruments has not been applied to the comparative
periods instead these provisions are applied from 1 october 2005 as allowed by ifrs 1
■ application of ifrs 2 “sharebased payment” has not been applied to grants of equity awards made prior to 7 november
2002 as provided by ifrs 1
basis of consolidation
the group financial statements consolidate the financial statements of abacus group plc and the entities it controls 
its subsidiaries
subsidiaries are consolidated from the date of their acquisition being the date on which the group obtains control and continue
to be consolidated until the date that such control ceases the financial statements of subsidiaries are prepared for the same
reporting year as the parent company using consistent accounting policies all intercompany balances and transactions
including unrealised profits arising from them are eliminated
foreign currency translation
individual entity accounts in preparing the financial statements of each individual entity transactions in foreign currencies 
are initially recorded in the entity’s functional currency by applying the spot exchange rate ruling at the date of the transactions
monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange
ruling at the balance sheet date all differences are taken to the income statement except i when hedge accounting is applied
ii for differences on monetary assets and liabilities that form part of the group’s net investment in foreign operations these
are taken directly to equity until the disposal of the net investment at which time they are recognised in profit or loss
statement of significant accounting policies 
30 september 2006
37 annual report  accounts 2006 nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates 
as at the dates of the initial transactions nonmonetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value was determined
consolidation transactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange
rate ruling at the date of the transaction monetary assets and liabilities denominated in foreign currencies are retranslated at
the functional currency rate of exchange ruling at the balance sheet date all differences are taken to the income statement
except when hedge accounting is applied and for differences on monetary assets and liabilities that form part of the group’s 
net investment in a foreign operation these are taken directly to equity until the disposal of the net investment at which time
they are recognised in profit or loss
on consolidation the assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the
balance sheet date income and expenses are translated at monthly average exchange rates the resulting exchange differences
are taken directly to a separate component of equity on disposal of a foreign entity the deferred cumulative amount recognised
in equity relating to that particular foreign operation is recognised in the income statement
goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate
goodwill
business combinations on or after 1 october 2004 are accounted for under ifrs 3 using the purchase method the cost of 
the acquisition is measured as the aggregate of the fair values at the completion date of the consideration paid and equity
instruments issued by the group in exchange for control of the acquiree plus any costs directly attributable to the business
combination the acquiree’s identifiable assets liabilities and contingent liabilities are recognised at their fair values at the
acquisition date except for noncurrent assets or disposal groups that are classified as held for sale which are recognised
and measured at fair value less costs to sell
any excess of the cost of the business combination over the group’s interest in the net fair value of the identifiable assets
liabilities and contingent liabilities is recognised in the balance sheet as goodwill to the extent that the net fair value of the
acquired entity’s identifiable assets liabilities and contingent liabilities is greater than the cost of the investment a gain is
recognised immediately in the income statement goodwill recognised as an asset as at 1 october 2004 is recorded at its
carrying amount under uk gaap and is not amortised any goodwill asset arising on the acquisition of equity accounted 
entities is included within the cost of those entities
after initial recognition goodwill is stated at cost less any accumulated impairment losses with the carrying value being reviewed
for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may be
impaired an impairment loss recognised for goodwill can never be reversed in a subsequent period 
the carrying amount of goodwill is taken into account when determining the gain or loss on disposal of the unit or of an
operation within it however goodwill arising on acquisitions prior to 31 december 1997 remains set off directly against 
reserves even if the related investment becomes impaired or the business is disposed of
intangible assets
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses
intangible assets acquired separately from a business are carried initially at cost an intangible asset acquired as part of a
business combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and
its fair value can be measured reliably expenditure on internally developed intangible assets excluding development costs is
taken to the income statement in the year in which it is incurred development expenditure including software development 
is recognised as an intangible asset only after its technical feasibility and commercial viability can be demonstrated
all intangible assets have finite lives and are amortised on a straight line basis over their expected useful lives as follows
■ computer software – 3 years
■ customer relationships and marketing information – 712 years
■ commercial system software development expenditure – 8 years
■ order books – 025 years
38 abacus group plc
statement of significant accounting policies continued
30 september 2006 the carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the
carrying value may not be recoverable in addition the carrying value of capitalised software development expenditure is reviewed
for impairment annually before being brought into use
property plant and equipment
property plant and equipment including land and buildings are stated at cost less accumulated depreciation and accumulated
impairment losses such cost includes costs directly attributable to making the asset capable of operating as intended
depreciation is provided on all property plant and equipment other than freehold land the rates calculated to write off the cost
less estimated residual value based on prices prevailing at the balance sheet date of each asset evenly over its expected useful
life are as follows
leasehold land and buildings – over the lease term
freehold buildings – 50 years
plant and machinery – over 3 to 10 years
computer equipment – 3 to 4 years
the carrying values of property plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable
the gain or loss arising on the disposal or retirement of an item of property plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss
leases
assets held under finance leases which transfer to the group substantially all the risks and benefits incidental to ownership of
the leased item are capitalised at the inception of the lease with a corresponding liability being recognised for the fair value
of the leased asset or if lower the present value of the minimum lease payments lease payments are apportioned between 
the reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on
the remaining balance of the liability assets held under finance leases are depreciated over the shorter of the estimated useful
life of the asset and the lease term
leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating
leases and rentals payable are charged in the income statement on a straight line basis over the lease term
financial assets
the group has two classes of financial assets in the scope of ias 39 namely a financial assets at fair value through profit or
loss and b loans and receivables the group determines the classification of its financial assets at initial recognition and
reevaluates this designation at each financial yearend when financial assets are recognised initially they are measured at fair
value being the transaction price plus in the case of loans and receivables directly attributable transaction costs the group
has not restated comparative amounts on first applying ias 32 and ias 39 as permitted by ifrs 1
a financial assets at fair value through profit or loss
derivatives such as forward exchange contracts are carried in the balance sheet at fair value realised and unrealised gains 
or losses arising from changes in the fair value of the derivatives which are not effectively hedged are recognised in the income
statement in the period in which they arise
b loans and receivables
loans and receivables trade receivables other debtors and bank deposits are nonderivative financial assets with fixed or
determinable payments that are not quoted in an active market do not qualify as trading assets and have not been designated
as either fair value through profit and loss or available for sale such assets are carried at amortised cost using the effective
interest method if the time value of money is significant gains and losses are recognised in income when the loans and
receivables are derecognised or impaired as well as through the amortisation process
39 annual report  accounts 2006 impairment of financial assets
if there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred the
amount of the loss is measured as the differences between the asset’s carrying amount and the present value of estimated future
cash flows excluding future credit losses that have not been incurred discounted at the financial asset’s original effective interest
rate ie the effective interest rate computed at initial recognition the carrying amount of the asset is reduced with the amount
of the loss recognised in other operating costs
if in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised the previously recognised impairment loss is reversed any subsequent reversal 
of an impairment loss is recognised in the income statement to the extent that the carrying value of the asset does not exceed
its amortised cost at the reversal date
inventories
inventories are stated at the lower of cost and net realisable value cost includes all costs incurred in bringing each product to 
its present location and condition as follows
raw materials consumables and goods for resale – purchase cost on a weighted average basis
work in progress and finished goods – cost of direct materials and labour based on a normal level 
of activity excluding borrowing costs
net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal
trade and other receivables
trade receivables which generally have 3090 day terms are recognised and carried at the lower of their original invoiced value
and recoverable amount where the time value of money is material receivables are carried at amortised cost provision is made
when there is objective evidence that the group will not be able to recover balances in full balances are written off when the
probability of recovery is assessed as being remote
cash and cash equivalents
cash and shortterm deposits in the balance sheet comprise cash at banks and in hand and shortterm deposits with an original
maturity of three months or less for the purpose of the consolidated cash flow statement cash and cash equivalents consist of
cash and cash equivalents as defined above net of outstanding bank overdrafts
interest bearing loans and borrowings
all loans and borrowings are initially recognised at fair value less directly attributable transaction costs after initial recognition
interestbearing loans and borrowings are subsequently measured at amortised cost using the effective interest method
gains and losses arising on the repurchase settlement or otherwise cancellation of liabilities are recognised respectively in
finance income and finance expense
income taxes
current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date
deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements with the following exceptions
■ where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that
is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss
■ in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal 
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future or
■ deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences carried forward tax credits or tax losses can be utilised
deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply
when the related asset is realised or liability is settled based on tax rates and laws enacted or substantively enacted at the
balance sheet date
40 abacus group plc
statement of significant accounting policies continued
30 september 2006 income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity otherwise income
tax is recognised in the income statement
provisions
a provision is recognised when the group has a legal or constructive obligation as a result of a past event and it is probable that
an outflow of economic benefits will be required to settle the obligation if the effect is material expected future cash flows are
discounted using a current pretax rate that reflects where appropriate the risks specific to the liability
derecognition of financial liabilities
a financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires
where an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an
existing liability are substantially modified such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability such that the difference in the respective carrying amounts together with any costs or fees
incurred are recognised in profit or loss
derivative financial instruments and hedging
the group uses derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its risks
associated with foreign currency and interest rate fluctuations from 1 october 2005 such derivative financial instruments 
are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured
at fair value derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative
before 1 october 2005 the group complied with frs 13 under which the fair values of financial instruments were disclosed 
but not recognised
the fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar
maturity profiles the fair value of interest rate swap contracts is determined by reference to market values for similar instruments
any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken to the
income statement 
pensions and other postretirement benefits
contributions to money purchase schemes are recognised in the income statement in the period in which they become payable
the group operates one defined benefit pension plan the cost of providing benefits of which is determined using the projected
unit credit method past service costs are recognised in profit or loss on a straightline basis over the vesting period or
immediately if the benefits have vested when a settlement eliminating all obligations for benefits already accrued or a
curtailment reducing future obligations as a result of a material reduction in the scheme membership or a reduction in future
entitlement occurs the obligation and related plan assets are remeasured using current actuarial assumptions and the resultant
gain or loss recognised in the income statement during the period in which the settlement or curtailment occurs
the interest element of the defined benefit cost represents the change in present value of scheme obligations resulting from the
passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking
into account material changes in the obligation during the year the expected return on plan assets is based on an assessment
made at the beginning of the year of longterm market returns on scheme assets adjusted for the effect on the fair value of plan
assets of contributions received and benefits paid during the year the difference between the expected return on plan assets
and the interest cost is recognised in the income statement as other finance income or expense
all actuarial gains and losses are recognised in equity in the period in which they arise
the defined benefit pension asset or liability in the balance sheet comprises the present value of the defined benefit obligation
using a discount rate based on high quality corporate bonds less any past service cost not yet recognised and less the fair
value of plan assets out of which the obligations are to be settled directly fair value is based on market price information and
in the case of quoted securities is the published bid price the value of a net pension benefit asset is restricted to the sum of
any unrecognised past service costs and the present value of any amount the group expects to recover by way of refunds 
from the plan or reductions in the future contributions
41 annual report  accounts 2006 revenue recognition
revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be
reliably measured revenue is measured at the fair value of the consideration received excluding discounts rebates vat and
other sales taxes or duty revenue from the sale of goods is recognised when the significant risks and rewards of ownership 
of the goods have passed to the buyer usually on the buyer’s receipt of the goods
sharebased payment
the group issues equitysettled and cashsettled sharebased payments to certain employees equitysettled sharebased
payments are measured at fair value at the date of grant the fair value determined at the grant date of the equitysettled share
based payments is expensed on a straightline basis over the vesting period based on the group’s estimate of the shares that
will eventually vest and adjusted for the effect of non marketbased vesting conditions for cashsettled sharebased payments a
liability equal to the portion of the services received is recognised at the current fair value determined at each balance sheet date
fair value is measured using the blackscholes pricing model the expected life used in the model has been adjusted based on
management’s best estimate for the effects of nontransferability exercise restrictions and behavioural considerations
exceptional items
the group presents as exceptional items on the face of the income statement those material items of income and expense
which because of the nature and expected infrequency of the events giving rise to them merit separate presentation to allow
shareholders to understand better the elements of financial performance in the year this facilitates comparison with prior 
periods and better trend analysis in financial performance
new standards and interpretations not applied
during the year the iasb and ifric have issued the following standards and interpretations with an effective date relating 
to the accounting periods starting on or after the effective dates referred to below
international accounting standards iasifrs effective date
ifrs 7 financial instruments disclosures 1 january 2007
ias 1 amendment – presentation of financial statements capital disclosures 1 january 2007
ias 19 amendment – actuarial gains and losses group plans and disclosures 1 january 2006
ias 39 fair value option 1 january 2006
ias 39 amendments to ias 39 – transition and initial recognition 1 january 2006
of financial assets and financial liabilities day 1 profits
ias 39 cash flow hedge accounting 1 january 2006
ias 39 amendment to ias 39 and ifrs 4 – financial guarantee contracts 1 january 2006
international financial reporting interpretations committee ifric
ifric 4 determining whether an arrangement contains a lease 1 january 2006
ifric 6 liabilities arising from participating in a specific market – waste electrical and 
electronic equipment 1 december 2005
ifric 8 scope of ifrs 2 1 may 2006
ifric 9 reassessment of embedded derivatives 1 june 2006
ifric 10 interim financial reporting and impairment 1 november 2006
ifric 11 ifrs 2 – group and treasury transactions 1 january 2007
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the
group’s financial statements in the period of initial application
upon adoption of ifrs 7 the group will have to disclose additional information about its financial instruments their significance
and the nature and extent of risks that they give rise to more specifically the group will need to disclose the fair value of its
financial instruments and its risk exposure in greater detail there is not expected to be any effect on reported income or 
net assets
42 abacus group plc
statement of significant accounting policies continued
30 september 2006 the following areas are those that the directors consider to be the main critical accounting judgements and key sources of
estimation uncertainty
impairment of noncurrent assets
determining whether a noncurrent asset is impaired requires an estimation of the “value in use” andor the “fair value less costs
to sell” of the cash generating unit cgu to which the noncurrent asset has been allocated the “value in use” calculation
requires an estimate of the future cash flows expected to arise from the cgu and a suitable discount rate in order to calculate
present value the key assumptions for these “value in use” calculations are those regarding discount rates growth rates and
expected changes to selling prices and direct costs the directors estimate discount rates using pre tax rates that reflect current
market assessments of the time value of money and the risks specific to the individual cgu
cash flow forecasts are prepared using the following year’s operating budget approved by the directors and an appropriate
extrapolation of cash flows for the next twenty years
the carrying amount of noncurrent assets at 30 september 2006 was £896 million 2005 £325 million 
postemployment benefits
the group operates one defined benefit pension scheme all postemployment benefits associated with this scheme have been
accounted for in accordance with ias 19 “employee benefits” as detailed within the statement of significant accounting policies
on page 41 and in accordance with ias 19 all actuarial gains and losses have been recognised immediately through the
consolidated statement of recognised income and expense
the pension valuation has been performed using specialist advice obtained from an independent qualified actuary in performing
this valuation judgements assumptions and estimates have been made these assumptions have been disclosed within note 26
on page 76
impairment of inventories and trade receivables
using information available at the balance sheet date the directors make judgements based on experience on the level of
provision required to account for potential uncollectible receivables and to account for the potential for unsaleable inventories
critical accounting judgements and key sources of 
estimation uncertainty
30 september 2006
43 annual report  accounts 2006 1 revenue and segmental reporting
revenue
all the revenue is derived from the sale of goods by continuing operations 
geographical and business segments
the primary segment reporting format is determined to be business segments as the group’s risks and rates of return are
affected predominantly by differences in the products provided secondary segment information is reported geographically 
the operating businesses are organised and managed separately according to the nature of the products and services provided
with each segment representing a strategic business unit that offers different products and serves different markets
the electronic component distribution segment comprises entities which are leading suppliers of electronic components
electromechanical products flatpanel displays printers and related products the manufacturing segment comprises entities
mainly involved in cable and electromechanical subassembly
transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties
segment revenues segment expenses and segment results include transfers between business segments these transfers are
eliminated in consolidation
the group’s geographical segments are based on the location of the group’s assets sales to external customers disclosed in
geographical segments are based on the country of origin as exports represent less than 10 of each segment
44 abacus group plc
notes to the accounts
30 september 2006 1 revenue and segmental reporting continued
primary reporting format – business segments
the following tables present revenue and profit and certain asset and liability information regarding the group’s business
segments for the years ended 30 september 2006 and 2005
year ended 30 september 2006 electronic
component
distribution manufacturing unallocated eliminations total
£’m £’m £’m £’m £’m
revenue
sales to external customers 2440 131 – – 2571
intersegment sales 40 47 – 87 –
segment revenue 2480 178 – 87 2571
results
operating profit before amortisation and exceptionals 126 19 02 – 147
exceptionals 91 03 – – 94
operating profit before amortisation 35 16 02 – 53
amortisation of intangibles 23 03 – – 26
operating profit 12 13 02 – 27
net finance costs 28
loss before taxation 01
income tax credit 01
net result for the year –
assets and liabilities
segment assets 1926 61 08 – 1995
segment liabilities 964 21 208 – 1193
other segment information
capital expenditure
property plant and equipment
– acquisition of subsidiaries 35 04 – – 39
– additions 15 01 – – 16
intangible assets
– acquisition of subsidiaries 121 25 – – 146
– additions and internal development 23 – – – 23
goodwill
– acquisition of subsidiaries 371 21 – – 392
noncash expenditure
depreciation 10 01 – – 11
impairment loss 05 – – – 05
inventories’ provision 29 01 – – 30
amortisation of intangibles 23 04 – – 27
45 annual report  accounts 2006 1 revenue and segmental reporting continued
year ended 30 september 2005 electronic
component
distribution manufacturing unallocated elimination total
£’m £’m £’m £’m £’m
revenue
sales to external customers 1701 87 – – 1788
intersegment sales – 45 – 45 –
segment revenue 1701 132 – 45 1788
operating profit before amortisation 
and exceptionals 97 14 17 – 94
exceptionals 40 – – 40
operating profit before amortisation 57 14 17 – 54
amortisation of intangibles 01 – – – 01
operating profit 56 14 17 – 53
net finance costs 13
profit before taxation 40
income tax expense 14
net profit for the year 26
assets and liabilities
segment assets 935 31 03 – 969
segment liabilities 502 – 24 – 526
other segment information
capital expenditure
property plant and equipment 09 – – – 09
intangible assets 22 – – – 22
noncash expenditure –
depreciation 09 01 03 – 13
amortisation of intangibles 01 – – – 01
inventories’ provision 20 – – – 20
46 abacus group plc
notes to the accounts continued
30 september 2006 1 revenue and segmental reporting continued
secondary reporting format – geographical segments
the following tables present revenue expenditure and certain asset information regarding the group’s geographical segments for
the years ended 30 september 2006 and 2005
year ended 30 september 2006 germany rest of
uk scandinavia italy  austria france europe unallocated total
£’m £’m £’m £’m £’m £’m £’m £’m
sales to external customers 1500 319 278 172 267 35 – 2571
segment assets 1117 204 212 117 335 10 – 1995
segment liabilities 820 67 147 35 121 03 – 1193
other segment information
capital expenditure
property plant and equipment
– acquisition of subsidiaries 09 08 02 03 17 – – 39
– additions 10 02 01 02 01 – – 16
intangible assets
– acquisition of subsidiaries 37 20 03 11 75 – – 146
– additions and internal development 23–––––– 23
goodwill
– acquisition of subsidiaries 129 76 45 59 80 03 – 392
year ended 30 september 2005 germany rest of
uk scandinavia italy  austria france europe unallocated total
£’m £’m £’m £’m £’m £’m £’m £’m
sales to external customers 1345 188 230 – – 25 – 1788
segment assets 781 65 121 – – 02 – 969
segment liabilities 365 46 115 –––– 526
other segment information
capital expenditure
property plant and equipment 07 – 02–––– 09
intangible assets 22–––––– 22
2 other operating expenses
other operating expenses are analysed as follows
2006 2005
£m £m
administrative expenses 86 51
distribution expenses 414 292
amortisation of intangibles arising on acquisitions see note 5 26 01
exceptional items see note 5 86 05
612 349
47 annual report  accounts 2006 3 finance income and finance costs
2006 2005
£m £m
finance income
interest on bank deposits – 01
expected returns on pension scheme assets 02 –
finance income before hedge ineffectiveness 02 01
fair value gains on forward exchange contract hedge ineffectiveness 01 –
total finance income 03 01
finance costs
on bank loans overdrafts and other items 25 14
finance charge on pension scheme liabilities 02 –
total finance costs before hedge ineffectiveness 27 14
fair value loss on forward exchange contracts hedge ineffectiveness 04 –
total finance costs 31 14
net finance costs 28 13
4 profit before taxation
2006 2005
£’m £’m
net foreign exchange gain loss 03 03
cost of inventories recognised as an expense 1868 1387
depreciation of property plant and equipment
owned 10 11
held under finance leases and hire purchase agreements 01 02
impairment loss of property plant and equipment 05 –
amortisation of acquired intangibles included in operating expenses 27 01
sharebased payment 05 02
operating lease rentals
land and buildings 10 06
plant and machinery 11 09
auditors’ remuneration for audit services
group excluding company 03 01
company – –
nonaudit fees 04 01
writedown of inventories 09 19
increase in debtors provision 01
increase in provision for inventories 30 20
staff costs including sharebased payment charge – note 6 375 260
 excludes gains and losses incurred as a result of adopting ias 39 “financial instruments recognition and measurement”
48 abacus group plc
notes to the accounts continued
30 september 2006 4 profit before taxation continued
a more detailed analysis of the auditors’ remuneration is provided below
2006 2005
–––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––
ernst  other ernst  other
young llp audit firms total young llp audit firms total
£’000 £’000 £’000 £’000 £’000 £’000
audit services
audit of the financial statements 210 – 210 85 – 85
local statutory audits for subsidiaries 40 – 40 15 11 26
ifrs implementation 70 – 70 –––
320 – 320 100 11 111
taxation services ––– 47 11
corporate finance services 350 – 350 –––
other services ––– –3737
total 670 – 670 104 55 159
 £33000 2005 £13000 of this relates to the company the remainder to subsidiary audits
ernst  young llp were appointed sole group auditors in 2005 which continued for 2006 the pension schemes are not
audited by ernst  young llp 
5 amortisation of acquired intangibles and exceptional items
2006 2005
£’m £’m
amortisation of intangibles arising on acquisition of eurodis marketing information 03 01
amortisation of intangibles arising on acquisitions of deltron and axess 23 –
provision for excess and obsolete stock in anticipation of the introduction 
of restriction of hazardous substances rohs legislation in july 2006 – 35
provision for restructuring abacus nordic business – 05
restructuring and other costs following deltron and axess acquisitions
provision for empty property costs 13 –
assets write downwrite offs 11 –
redundancy costs 40 –
other costs 16 –
restructuring costs and write downs on inventory and receivables following exit from 
trident finished products business
provision for empty property costs 02 –
assets write downswrite offs 06 –
redundancy costs 05 –
other costs 01 –
120 41
the above is analysed £08 million 2005 £35 million in cost of sales and £112 million 2005 £06 million in other operating
expenses
 rohs legislation is an eu directive that took effect on 1july 2006 and states that no electronic equipment may be sold into
the market containing any more than 01 of six different hazardous substances including lead
 a rationalisation of the deltron and axess businesses was carried out following their acquisitions this resulted in the closure
of a number of locations and a reduction and relocation of headcount due to duplication of activities
 deltron had a policy of capitalising some of its inhouse group it development activities this was written off as a
consequence of the decision taken to move the deltron businesses on to the abacus it systems in addition fixed assets
such as fixtures and fittings in vacated properties have also been written off
 the directors have decided that trident will concentrate on its core business which is the sale and distribution of displays
as a consequence the facilities for the design and subcontract manufacture of bespoke systems were closed with
subsequent redundancy costs and write down of excess and obsolete assets and working capital
49 annual report  accounts 2006 6 staff costs and directors’ emoluments
a staff costs including directors are shown below 
2006 2005
£’m £’m
wages and salaries excluding sharebased payment charge 308 214
social security costs 43 26
other pension costs 19 18
370 258
the sharebased payment charge for the year was £05 million 2005 £02 million
the average monthly number of employees during the year was made up as follows
2006 2005
number number
electronic component distribution 789 584
manufacturing 244 178
1033 762
b directors’ emoluments
details of the individual director’s emoluments are given in the directors’ remuneration report on page 29 extracts of which are
shown below
2006 2005
£’000 £’000
directors’ emoluments excluding sharebased payment charge 1376 814
pension contributions 200 266
compensation for loss of office 392 280
total 1968 1360
number of directors accruing benefits under defined contribution schemes 5 5
the sharebased payment charge for the year was £03 million 2005 £01 million
none of the directors exercised share options or received compensation under long term incentive plans during their tenures of
directorships j vaughan exercised all 96480 options subsequent to his resignation as a director
other than the directors no other staff is considered key management personnel
7 taxation
a tax on profit on ordinary activities
2006 2005
£’m £’m
tax credited charged in the income statement of continuing operations comprises
uk corporate tax – 18
foreign tax 12 02
current income tax charge 12 20
amounts overprovided in previous years 07 02
total current income tax 05 18
deferred tax 06 04
tax credit charge in the income statement 01 14
50 abacus group plc
notes to the accounts continued
30 september 2006 7 taxation continued
b reconciliation of the total tax charge
2006 2005
£’m £’m
loss profit from continuing operations before taxation 01 40
accounting profit multiplied by the uk standard rate of corporation tax of 30 2005 30 – 12
unprovided deferred taxation – 02
expenses not deductible for tax purposes 03 02
higher taxes on overseas earnings 01 –
unrelieved losses in foreign subsidiaries 03 02
utilisation of brought forward losses – 02
recognition of a deferred tax asset not previously recognised 07 –
tax overprovided in previous years 01 02
total tax credit expense reported 01 14
c deferred tax
the deferred tax included in the consolidated income statement is as follows
2006 2005
£’m £’m
deferred tax in the income statement
accelerated capital allowances 05 04
timing differences 02 08
tax losses carried forward 12 –
sharebased payment 01 –
deferred income tax credit 06 04
the deferred tax included in the balance sheet is as follows
2006 2005
£’m £’m
deferred tax asset
accelerated capital allowances 03 –
timing differences 15 09
tax losses carried forward 15 –
sharebased payment 01 –
net deferred tax offset 28 09
deferred tax asset 06 –
deferred tax liability
accelerated capital allowances 17 10
timing differences 40 –
revaluations of land and buildings arising on acquisition 03 –
net deferred tax offset 28 09
deferred tax liability 32 01
net deferred tax liability 26 01
51 annual report  accounts 2006 7 taxation continued
the net deferred tax liability of £26 million 2005 £01 million after offset comprises
2006 2005
£’m £’m
accelerated capital allowances 01 01
timing differences 25 –
revaluation of land and buildings arising on acquisition 03 –
sharebased payment 01 –
net deferred tax liability 26 01
the movement during the year in the net deferred tax liability was as follows
2006 2005
£’m £’m
beginning of year 01 05
arising on acquisition of subsidiaries 31 –
credited to profit and loss 06 04
end of year 26 01
the group has not recognised deferred tax assets of £22 million 2005 £08 million comprising 
i uk tax losses arising on the acquisition of the deltron group of £04 million 2005 £nil netherlands of £07 million and
scandinavia of £08 million 2005 £06 million which are available indefinitely for offset against future taxable profits of
the companies in which the losses arose deferred tax assets have not been recognised in respect of these losses as
they may not be used to offset taxable profits elsewhere in the group and they have arisen in subsidiaries that have
historically been lossmaking
ii £03 million 2005 £02 million of capital losses which cannot be utilised until a capital gain is made
d temporary differences associated with group investments
at 30 september 2006 there was no recognised deferred tax liability 2005 £nil for taxes that would be payable on the
unremitted earnings of certain of the group’s subsidiaries as
■ the group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future and
■ subsidiaries’ profits cannot be distributed without the consent of the group the parent company does not foresee giving such
consent at the balance sheet date
there are no income tax consequences attaching to the payment of dividends by the group to its shareholders
8 earnings per share
2006 2005
£’m £’m
profit after taxation exceptionals and amortisation of intangibles – 26
amortisation of intangibles post taxation 19 01
exceptional items post taxation 67 31
profit after taxation but before exceptionals and amortisation of intangibles 86 58
weighted average number of shares ‘000 63267 42569
employee share options ‘000 683 104
diluted weighted average number of shares ‘000 63950 42673
after exceptionals and amortisation of intangibles
basic earnings per share 00p 61p
diluted earnings per share 00p 61p
before exceptionals and amortisation of intangibles
basic earnings per share 136p 136p
diluted earnings per share 134p 136p
52 abacus group plc
notes to the accounts continued
30 september 2006 9 dividends paid and proposed
2006 2005
£’m £’m
amounts recognised in the year 
interim dividend for the year ending 30 september 2006 – 36p 27 –
final dividend for the year ended 30 september 2005 – 36p 15 –
final dividend for the year ended 30 september 2004 – 70p – 30
interim dividend for the year ended 30 september 2005 – 36p – 16
42 46
amounts determined after the balance sheet date
final dividend for the year ending 30 september 2006 – 36p 26 –
final dividend for the year ending 30 september 2005 – 36p – 15
10 property plant and equipment
land plant
and property and
buildings equipment total
£’m £’m £’m
cost
at 1 october 2004 134 43 177
additions 02 07 09
disposals – 05 05
at 30 september 2005 136 45 181
additions 01 15 16
acquisition of subsidiaries 21 18 39
disposals – 22 22
at 30 september 2006 158 56 214
depreciation and impairment
at 1 october 2004 14 15 29
provided during the year 03 10 13
disposals – 04 04
at 30 september 2005 17 21 38
provided during the year 03 08 11
impairment loss – 05 05
disposals – 16 16
at 30 september 2006 20 18 38
net book values
at 1 october 2004 120 28 148
at 30 september 2005 119 24 143
at 30 september 2006 138 38 176
the net book value of plant and machinery includes an amount of £01 million 2005 £01 million financed by hire purchase
contracts and finance leases freehold land at cost amounting to £22 million 2005 £17 million has not been depreciated 
the impairment arose following a review of the deltron group’s redundant fixed assets following the closure of certain facilities
53 annual report  accounts 2006 intangible assets
order customer development marketing other
books relationships expenditure information intangibles goodwill total
£’m £’m £’m £’m £’m £’m £’m
cost
at 1 october 2004 – – 38 – 02 109 149
internal development – – 22––– 22
acquisition – – – 16 – – 16
at 30 september 2005 – – 60 16 02 109 187
exchange differences – 01 – – – 01 02
internal development – – 21––– 21
additions –––– 02 – 02
acquisition of subsidiaries 
note 12 13 131 – – 02 392 538
at 30 september 2006 13 130 81 16 06 500 746
depreciation and impairment
at 1 october 2004 – – 03 – 01 – 04
amortisation during the year – – – 01 – – 01
at 30 september 2005 – – 03 01 01 – 05
amortisation during the year 13 10 – 03 01 – 27
at 30 september 2006 13 10 03 04 02 – 32
net book values
1 october 2004 – – 35 – 01 109 145
30 september 2005 – – 57 15 01 109 182
30 september 2006 – 120 78 12 04 500 714
intangibles
the ‘order book’ ‘customer relationships’ and ‘brands’ are acquired intangibles these arise as a result of applying ifrs 3
which requires the separate recognition of acquired intangibles from goodwill as detailed in the statement of significant
accounting policies abacus group plc has elected not to apply ifrs 3 retrospectively to acquisitions which took place 
before 1 october 2004 prior to 1 october 2004 the group owned purchased intangible assets comprising
a marketing information of eurodis electronics uk limited which is being written off over 5 years
b internally developed software which when in operation will be written off over 8 years
the amortisation period for each category of acquired intangible asset is disclosed in the statement of significant accounting
policies on page 38
impairment of goodwill
goodwill acquired through business combinations have been allocated for impairment testing purposes to seven cashgenerating
units which are represented by the manufacturing segment and the electronic component distribution ecd segment split into
the six geographic reportable segments
these represent the lowest level within the group at which goodwill is monitored for internal management purposes
54 abacus group plc
notes to the accounts continued
30 september 2006
11 11 intangible assets continued
the recoverable amount of each unit has been determined based on a “value in use” calculation using cash flow projections
based on financial budgets covering the year to 30 september 2007 and approved by the board the discount rate applied to
cash flow projections is 10 2005 10 and cash flows beyond the budget are extrapolated for a remaining 19 years at 2
this rate is based on afdec’s view of the uk market for 2007 which is a lower expected growth rate than the historical
average
carrying amount of goodwill and intangibles allocated to cashgenerating units cgu’s
goodwill development costs other intangibles total
2006 2005 2006 2005 2006 2005 2006 2005
£’m £’m £’m £’m £’m £’m £’m £’m
united kingdom ecd 216 109 78 57 24 15 318 181
united kingdom 
manufacturing 22 – – – 21 – 43 –
scandinavia 76 – – – 17 – 93 –
italy 45 – – – 03 01 48 01
germany  austria 59 – – – 09 – 68 –
france 79 – – – 62 – 141 –
rest of europe 03 – – – – – 03 –
500 109 78 57 136 16 714 182
key assumptions used in “value in use” calculations
the calculation of “value in use” for both electronics and the manufacturing units is most sensitive to the following assumptions
which are the same for all cgu’s other than the growth rates
■ gross margin
■ discount rates
■ market share during the budget period and 
■ growth rate used to extrapolate cash flows beyond the budget period
gross margins are based on the budgeted margins of each cgu these are in line with the margins attained in the last few years
modified by the increased margins of the deltron and axess groups which have historically achieved higher margins than the
abacus group
discount rates are based on the group’s weighted average cost of capital wacc based on the group’s borrowing and equity
profile the directors do not expect any significant change in wacc
market share assumptions are important because as well as using industry data for growth rates as noted below management
assess how the unit’s relative position to its competitors might change over the budget period management expects the group’s
share of each territory to be stable over the projected period
growth rate estimates for all countries are based on published industry research for the united kingdom
sensitivity to changes in assumptions
management believes that no reasonable potential change in any of the above key assumptions would cause the carrying value
of any unit to exceed its recoverable amount
55 annual report  accounts 2006 12 business combinations
principal group investments
the company and group have investments in the ordinary equity share capital or local equivalent of the subsidiary undertakings
listed below which principally affected the profits and net assets of the group all companies distribute electronic components
except a innovative electronic components group limited which provides central administrative support and b deltron
emcon limited and ctl and ccs divisions of abacus electronics holdings limited which manufacture cable assemblies
country of incorporation proportion of shares
and operation held by
company group
existing
abacus electronics holdings limited united kingdom 100
promax denmark as denmark 100
promax sweden ab sweden 100
promax norway as norway 100
innovative electronic components group limited united kingdom 100
trident microsystems limited united kingdom 100
ecc elettronica srl italy 100
acquired
deltron electronics limited formerly plc united kingdom 100
deltron france sa france 100
deltron emcon limited united kingdom 100
deltron components gmbh germany 100
deltron conelec as denmark 100
axess technology sas france 100
realisations et diffusion pour l’industrie sas france 100
voting rights in each of the above subsidiaries are equal to the proportion of ordinary shares held
on 16 january 2006 the group acquired 100 of the share capital of deltron electronics plc a uk public company distributing
an extensive range of electromechanical products in the uk nordic region italy germany france and benelux consideration
comprised £345 million of abacus group plc shares 266 million shares at a closing price on 15 january 2006 of 1295p per
share £14 million of other costs and £02 million fair value of deltron share options exercised or exchanged for abacus shares
on acquisition
on 12 april 2006 the group acquired 100 of the share capital of axess technology sas and its wholly owned 
subsidiary rdi sas the axess technology group is a privately owned distributor in france specialising in display and 
wireless communication products and components the consideration was €230 million satisfied by the immediate issue of
€60 million abacus shares 285 million shares based on an average share price for 5 days of 14635p per share €100 million
in cash and €7 million in loan notes the loan notes are redeemable in €35 million in cash in april 2007 and €35 million in 
cash in april 2008
a number of the trade assets and liabilities of the subsidiaries of deltron electronics plc have been transferred to existing
subsidiaries during the year dormant holding and smaller subsidiaries have been omitted to avoid a statement of 
excessive length
56 abacus group plc
notes to the accounts continued
30 september 2006 12 business combinations continued
2006 acquisitions summary fair value table is as follows
deltron group axess group
––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––
book fair value fair book fair value fair
value adjustments value value adjustments value total
£’m £’m £’m £’m £’m £’m £’m
noncurrent assets
property plant and equipment 28 03 25 06 08 14 39
intangible assets 02 – 02––– 02
goodwill 173 162 335 10 47 57 392
deferred taxation – 20 20 – 01 01 19
203 179 382 16 54 70 452
current assets
inventories 95 29 66 34 03 31 97
trade and other receivables 136 05 131 96 01 95 226
cash 24 – 24 04 – 04 28
total assets 458 145 603 150 50 200 803
liabilities
bank overdrafts 28 – 28––– 28
corporation tax 03 – 03 03 – 03 06
deferred taxation 03 – 03––– 03
pension deficit – 16 16––– 16
other liabilities 239 06 245 84 – 84 329
total liabilities 273 22 295 87 – 87 382
net assets 185 123 308 63 50 113 421
intangible assets
customer relationships 71 60 131
order books 06 07 13
deferred taxation on intangible assets 24 22 46
total consideration 361 158 519
represented by
fair value of shares issued 345 42 387
fair value of share options exercised or exchanged 02 – 02
cash consideration – 69 69
loan notes – 46 46
other costs of acquisitions settled in cash 14 01 15
total consideration 361 158 519
acquisition cash flows during the year
cash paid for acquisitions during the year 14 70 84
net cash and cash equivalents acquired 04 04 –
net cash outflow from acquisitions 18 66 84
total consideration including assumed debt net 
of cash and cash equivalents acquired
total consideration as above 361 158 519
debt acquired 117 22 139
cash and cash equivalents acquired 04 04 –
total consideration including assumed debt 482 176 658
57 annual report  accounts 2006 12 business combinations continued
due to the proximity of the timing of some of the integration activity close to the year end the directors have made a provisional
assessment of the fair value of axess net assets acquired any further adjustments relating to conditions which existed at the
acquisition date arising will be accounted for in 2007
included within goodwill are the following assets which are specially excluded by ifrs 2 in the identification of intangible assets
on acquisition
■ assembled workforce and
■ strategic acquisition synergies
consolidation of the deltron group and the axess group
the three months’ preacquisition revenue and operating profit for the deltron group amounted to £164 million and £02 million
respectively the 2006 consolidated income statement includes the following amounts in respect of the deltron group revenue
£550 million costs of sales £389 million and operating expenses £117 million giving an operating profit of £44 million after
exceptionals and amortisation see note 5 operating expenses were £210 million giving an operating loss of £49 million
the six months’ preacquisition revenue and operating profit for the axess group amounted to £156 million and £11 million
respectively the 2006 consolidated income statement includes the following amounts in respect of the axess group revenue
£205 million cost of sales £156 million and operating expenses £28 million giving an operating profit of £21 million after
exceptionals and amortisation see note 5 operating expenses were £38 million giving an operating profit of £11 million
13 trade and other receivables
2006 2005
£’m £’m
amounts falling due within one year
trade debtors 658 356
prepayments and accrued income 17 05
675 361
the write down in the trade receivables during the year was £03 million 2005 £01 million
14 inventories
2006 2005
£’m £’m
raw materials 10 09
work in progress 06 05
finished goods and goods for resale 372 254
388 268
the value of inventories is shown net of inventory provisions inventories with a carrying amount of £294 million have been
pledged as security for certain of the group’s bank overdraft and loan facilities
15 other financial assets
2006 2005
£’m £’m
forward currency contracts 01 –
an explanation of this financial asset is given in note 24
58 abacus group plc
notes to the accounts continued
30 september 2006 16 trade and other payables
2006 2005
£’m £’m
trade payables 282 136
vat and payroll taxes 48 30
accruals and deferred income 100 35
430 201
17 financial liabilities
2006 2005
£’m £’m
current
bank overdrafts 150 99
invoice discounting 211 109
obligations under finance leases and hire purchase agreements 01 01
current instalments due on bank loans 81 16
loan notes 24 02
forward currency contracts 04 –
471 227
noncurrent
noncurrent instalments due on bank loans 188 77
loan notes 22 –
210 77
for the purpose of the consolidated cash flow statement cash and cash equivalents at year end comprise
2006 2005
£’m £’m
cash at bank and in hand 16 13
bank overdrafts 150 99
invoice discounting 211 109
345 195
bank loans comprise the following
2006 2005
£’m £’m
£170 million variable rate loan 20062010 167 –
£80 million variable rate loan 20062020 77 80
€12 million 37 loan 20062009 06 –
€12 million variable rate loan 20062009 08 –
€08 million variable rate loan 2006 06 –
dkr 20 million variable rate loan 20062008 01 02
skr 60 million 34 loan repayable on demand 04 –
€10 million variable loan 2006 – 06
£05 million variable loan 2006 – 05
269 93
less current instalments due on bank loans 81 16
188 77
59 annual report  accounts 2006 17 financial liabilities continued
£170 million variable loan
the loan can be drawn in multiple currencies secured against the assets or shares of the group companies and is repayable 
in instalments of £24 million in april 2007 and £37 million annually thereafter from september 2007 to september 2010 
interest is payable at between 1 and 15 over libor depending on covenant ratios
£80 million variable loan
this commercial mortgage loan is secured against the uk freehold property market value £100 million and is repayable in
equal quarterly instalments until 2020 and bears interest at uk libor plus 09
€12 million 37 loan
the loan is secured against the assets of the axess group is repayable in monthly instalments between february 2006 and
january 2009 and is at a fixed rate of 37 the fair value of the loan approximates to €12 million
€12 million variable rate loan 20062009
the loan is secured against the assets of the axess group is repayable in annual instalments of €04 million between 
january 2007 and january 2009 and bears interest at euribor 3 months plus 085
€08 million variable rate loan 20062009
the loan is secured against the assets of the axess group is repayable in full in december 2006 and bears interest at 
euribor 3 months plus 085
dkr 20 million variable rate loan 20062008
the loan which is repayable in equal instalments of dkr60000 until june 2008 attracts interest at a variable rate of daily 
danish libor rate plus 07
skr 60 million variable rate loan
the loan which is repayable at abacus’s instigation is secured against a freehold building and bears interest at a fixed rate of 34 
€10 million variable rate loan
this comprised two loans one of €05 million which was repayable in equal instalments of €025 million until may 2006 the
other of €05 million repaid in full in may 2006 both of which attracted interest based on the daily euribor rate
£05 million variable loan 2006
the loan was unsecured and was repaid in full in june 2006 and attracted interest based on the daily uk libor rate plus 075
within each country all bank accounts of the same currency are pooled which practice the group actively utilises to minimise
interest charges the group has entered into a 5 year interest rate swap fixed at 473 based on the value of 50 of its
commercial mortgage loan outstanding at any one time
loan notes are guaranteed and denominated in euros only the current loan notes which mature on 17 april 2007 bear 
interest at 35 per annum plus 1 guarantee charge noncurrent loan notes which mature on 17 april 2008 do not bear
interest and fair valuing these resulted in a £02 million credit to the consolidated income statement
the uk group operating companies have granted fixed and floating charges over their assets to secure bank loans 
and overdrafts totalling £492 million 2005 £225 million in addition abacus group plc has guaranteed £31 million 
2005 £37 million of bank loans and overdrafts to overseas subsidiary companies finance leases are secured against 
specific assets 
the directors consider the carrying amounts of current and noncurrent liabilities approximate to their fair values other than the
noncurrent loan notes
18 obligations under leases and hire purchase contracts
the group leases a small number of its fixtures and equipment under finance leases with the right by the lessee to purchase at
the end of the contract further minimum lease payments all of which fall due within one year are as follows
2006 2005
£’m £’m
within one year 01 01
there is no material difference between the minimum lease payments and their present value
60 abacus group plc
notes to the accounts continued
30 september 2006 19 provision for liabilities and charges
employment
and agency maintenance 2006 2005
termination warranties other total total
£’m £’m £’m £’m £’m
beginning of year 12 02 – 14 11
acquisition of subsidiary undertakings – – 02 02 –
charged to profit and loss 02 – 04 06 04
utilised in the year 01 – – 01 01
end of year 13 02 06 21 14
analysed as
2006 2005
£’m £’m
current 02 02
noncurrent 19 12
21 14
employment and agency termination
the termination provisions related to ecc elettronica srl and are payable by law on the termination of employment or agency
contracts during the year £01 million 2005 £01 million was paid in connection with the former
maintenance warranties
a warranty provision was recognised for trident’s systems sold during the years ending 30 september 2005 and 2006 it is
expected that all costs will be incurred within one year of the balance sheet date 
contingent liabilities
iq group “iq”
trident microsystems limited “trident” supplied touch screens and associated pc’s for installation in hairdressing salons
failures occurred in some of the products and iq refused to pay trident’s invoices trident has issued proceedings against iq to
recover the amounts outstanding iq has counterclaimed against trident in respect of its damages and costs allegedly incurred 
in rectifying products supplied trident is vigorously resisting iq’s counterclaim which the board believes is without merit
international rectifier corporation “ir”
abacus electronics holdings limited “abacus” has made a claim against ir’s uk trading entity to recover a trading debt 
ir has indicated that it intends to defend the claim but the board does not believe that the defence will have any merit
abacus also has a dispute with ir over termination of its distribution agreement with abacus this agreement is governed by us
law and is subject to us arbitration the board believes and has been so advised by us counsel that abacus is validly entitled
to return certain stock under the terms of the agreement and to set this off against amounts owing to ir ir disputes this both
as to the entitlement and quantum
61 annual report  accounts 2006 20 calledup share capital
2006 2005
£’m £’m
authorised share capital
100000000 2005 70000000 ordinary shares of 5p each 50 35
allotted calledup and fullypaid
73288744 2005 42583507 ordinary shares at 5p each 37 21
during the year 30705237 shares were allotted with a nominal value of £16 million 2005 £nil for a consideration of 
£400 million 2005 £01 million
the movement in the number of ordinary shares of the share capital is analysed as follows
2006 2005
number number
opening share capital 42583507 42536007
issued on acquisitions of the deltron group and axess group 29484615 –
deltron options exercised on acquisition 679044 –
other options exercised 541578 47500
73288744 42583507
during the year 30705237 ordinary shares of 5p each were issued for a total consideration of £400 million the following options
were outstanding at 30 september 2006 and 30 september 2005
number of number number of exercise
options at granted number number options at exercise price per 
option scheme 1 oct 2005 acquired exercised lapsed 30 sept 2006 period share
existing schemes
2003 25862 – – – 25862 20062013 2320p
approved 16438 – – – 16438 20082015 1825p
2003 233400 – – – 233400 20062013 2215p
unapproved 462930 – – – 462930 20062013 2320p
202740 – – – 202740 20082015 1825p
1996 11429 – –11429 – 20012005 1050p
unapproved 75000 – – 75000 – 20022006 1205p
75000 – – 75000 – 20022006 975p
370000 – – 10000 360000 20032007 3890p
240000 – – 20000 220000 20032007 3920p
263492 – – – 263492 20052012 2285p
1993 20000 – – 20000 – 19982005 2000p
approved 11000 – – 11000 – 19992006 2710p
26258 – – – 26258 20052012 2285p
38571 – 8571 – 30000 20012008 1050p
2005 psp – 793827 – 102007 691820 20092010 00p
sharesave 21398 – – 21398 – 20032006 3200p
267757 – – 230133 37624 20072009 2450p
– 1271348 – 118386 1152962 20092011 800p
phantom options 220000 – – – 220000 20052012 3030p
54138 – – – 54138 20062013 2320p
2635413 2065175 8571 694353 3997664
62 abacus group plc
notes to the accounts continued
30 september 2006 20 calledup share capital continued
number of number number of exercise
options at granted number number options at exercise price per 
1 oct 2005 acquired exercised lapsed 30 sept 2006 period share
acquired schemes
1996 –536650330565 – 206085 20052012 1143p
share option scheme – 32160 32160 – – 20072014 1096p
– 302304 115776 – 186528 20072014 1345p
– 180096 32160 – 147936 20072014 1104p
– 32160 32160 – – 20072014 1104p
– 339478 300680 2042 36756 20082015 980p
– 287123 255347 – 31776 20052012 1042p
– 32160 32160 – – 20052012 1197p
– 16077 – 6432 9645 20022009 1710p
– 33438 – 567 32871 20012008 1765p
– 28272 – 7206 21066 20022009 1803p
– 51607 – 3213 48394 20042011 2177p
– 10933 – 10933 – 19992006 980p
1993
share option scheme – 81043 81043 – – 19992006 771p
– 1963501 1212051 30393 721057
total 2635413 4028676 1220622 724746 4718721
 deltron share options were exchanged for abacus options in the ratio of 106432 with an equivalent adjustment to the option
price in accordance with ifrs “sharebased payment” all options were fair valued as at the date of acquisition the acquisition
consideration was adjusted by any pre acquisition expense with any post acquisition expense being recognised in the
consolidated income statement 
details of the above option schemes may be found in the ‘share options’ section of the directors’ remuneration report and in
note 23 
21 consolidated statement of change in equity
hedging
called up share capital share and
share premium redemption merger option translation retained total
capital account reserve reserve reserve reserve profits equity
£’m £’m £’m £’m £’m £’m £’m £’m
at 1 october 2004 – 
uk gaap 21 91 04 33 – – 293 442
ifrs adjustments 
see note 28
reverse proposed dividend – – –––– 30 30
other – – –––– 02 02
deferred tax – – –––– 02 02
employee benefits – – –––– 01 01
goodwill impairment – – –––– 15 15
ifrs 2 “sharebased payment” – – – – 01 – 01 02
at 1 october 2004 – ifrs 21 91 04 33 01 – 310 460
63 annual report  accounts 2006 21 consolidated statement of change in equity continued
hedging
called up share capital share and
share premium redemption merger option translation retained total
capital account reserve reserve reserve reserve profits equity
£’m £’m £’m £’m £’m £’m £’m £’m
total recognised income and
expense for the year – – – – – 26 26
dividends – – –––– 46 46
new share capital issued – 01 ––––– 01
sharebased payment – – – – 02 – – 02
at 30 september 2005 – ifrs 21 92 04 33 03 – 290 443
total recognised income and 
expense for the year – – – – – 06 02 04
dividends – – –––– 42 42
new share capital issued 16 384 ––––– 400
sharebased payment – – – – 05 – – 05
at 30 september 2006 37 476 04 33 08 06 250 802
the share option reserve represents the cumulative share option charge under ifrs 2 less the value of any share options that
have been exercised
the hedging and translation reserve represents movements in the consolidated balance sheet as a result of movements in
exchange rates which are taken directly to reserves as detailed in the statement of significant accounting policies on page 38
22 analysis and reconciliation of net debt
debt other
1 october cash acquired with noncash exchanges 30 september
2005 flow acquisitions changes differences 2006
£’m £’m £’m £’m £’m £’m
cash at bank 13 25 28 – – 16
bank overdrafts and invoice 
discounting 208 126 28 – 01 361
195 151 – – 01 345
debt due after 1 year 77 114 17 02 210
debt due within 1 year 18 02 71 14 – 105
finance leases due within 1 year 01 02 – 02 – 01
291 151 185 33 01 661
 including loan notes issued
64 abacus group plc
notes to the accounts continued
30 september 2006 22 analysis and reconciliation of net debt continued
increase of net debt
2006 2005
£’m £’m
reduction increase in net debt resulting from cashflows 151 04
translation differences on cash and cash equivalents 01 01
movement in net debt resulting from cashflows 150 05
movement in loan balances 33 –
loans and finance leases acquired with subsidiary 139 –
issue of new loan notes to purchase subsidiary undertaking 46 –
new finance leases 02 –
noncash movements 02 02
translation differences on loan balances 02 –
net debt at the beginning of the period 291 294
net debt at the end of the period 661 291
exceptional items
net cash outflow from operating activities of £54 million in 2006 are in respect of restructuring and other costs 2005 £05 million
23 sharebased payment
the group had six sharebased payment schemes in existence during the year ended 30 september 2006 the group
recognised a charge of £01 million 2005 £nil in the year relating to cashsettled only the phantom option scheme in f on
page 69 and £04 million 2005 £02 million relating to equitysettled sharebased payment transactions the latter for only
those issued after 7 november 2002 with corresponding entries to other payables or the share option reserve no market
conditions apply to any of the schemes for all schemes the expected volatility was determined by calculating the historical
volatility of the group’s share price over the previous three years the expected percentage of total options exercised is based
upon the directors’ best estimate for effects of behavioural conditions and if applicable the probability that the performance
criteria will be met all of the options are equity settled other than as indicated below details of each of the schemes are
provided below
a save as you earn “saye” scheme
the company operates a saye scheme within the uk which is open to all uk employees and is linked to monthly savings
contracts over three and fiveyear periods options have been granted to scheme participants at 80 of the prevailing market
price the market price is taken approximately one month prior to the official grant date there are no performance conditions
attached to the exercise of these options these options may be exercised within a fixed sixmonth period three or five years
from the date of grant
saye options – as at 30 september 2006
weighted
average exercise 
options price p
outstanding at beginning of year 289155 2505
granted during the year 1271348 800
lapsed during the year 369917 1965
outstanding at end of year 1190586 852
none of the above share options outstanding at the end of the year are exercisable at 30 september 2006
65 annual report  accounts 2006 23 sharebased payment continued
the saye options outstanding at 30 september 2006 had a weighted average exercise price of 852p and a weighted average
remaining contractual life of 37 years the directors have assumed all shares will vest at the earliest available date
the assumptions used in the blackscholes model are as follows
saye 2004 2006
share price on date of official grant 3065p 19 february 2004 100p 27 january 2006
exercise price 245p 80p
expected volatility 34 34
expected life years 3 and 5 3 and 5
risk free rate 46 43
dividend yield 28 28
expected percentage of options exercised versus granted
– 3 years 100 85
– 5 years 100 80
b executive share option schemes “esos”
under the 2003 esos for which the last options were granted in 2005 executives can be awarded an annual grant of share
options at market price provided that the total amount granted under the esos in any one year does not exceed twice the 
base salary
share options under the esos are exercisable between three and ten years the options vest on a straightline basis if the
group’s eps growth exceeds the percentage increase in the retail price index by between 4 50 of awards vest and 6
100 vest per annum the target is tested on the third anniversary from date of grant and if not met retested on the fourth
and fifth anniversaries
esos – as at 30 september 2006
weighted
average exercise 
options price p
outstanding at beginning and end of year 941370 2179
none of the above share options outstanding at the end of the year are exercisable at 30 september 2006
no esos options were granted in 2006 the options outstanding at 30 september 2006 had a weighted average remaining
contractual life of 45 years the directors have assumed all shares vest 18 months after the earliest available date
the assumptions used in the blackscholes model are as follows
21 may 1 december 25 may
2003 esos 2003 2003 2005
share price on date of official grant 2215 2320p 1825p
exercise price 2215 2320p 1825p
expected volatility 34 34 34
expected life years 10 65 50
risk free rate 42 47 44
dividend yield 28 28 28
expected percentage of options exercised versus granted 10 100 100
66 abacus group plc
notes to the accounts continued
30 september 2006 23 sharebased payment continued
c 1993 and 1996 executive share option plan “esop”
under the existing esop for which the last options granted were in 2002 executives can be awarded an annual grant of share
options at market price provided that the total amount granted under the esop does not exceed four times base salary
share options under esop are exercisable between three and ten years and five and ten years for the hm revenue and customs
“approved” scheme and between three and seven years and five and seven years for the “unapproved” scheme from the date of
grant the award would vest in full if between date of grant and exercise the growth in the group’s eps is 1 and 3 higher
than the percentage increase in the retail price index for the approved and unapproved schemes respectively testing of the
condition can be performed between three years from date of grant and the lapse date
esop – as at 30 september 2006 weighted
average exercise 
options price p
outstanding at beginning of year 1130750 2943
lapsed during the year 222429 1630
exercised during the year 8571 1050
outstanding at end of year 899750 3286
none of the above share options outstanding at the end of the year are exercisable at 30 september 2006 the share price at the
date of exercise was 1605p 
the options outstanding at 30 september 2006 had a weighted average remaining contractual life of 17 years the directors have
assumed all shares will vest 18 months after the earliest available date
20 november 20 november
2002 2002
esop unapproved approved
share price on 20 november 2002 2285 2285
exercise price 2285 2285
expected volatility 34 34
expected life years 7 45
risk free rate 45 44
dividend yield 28 28
expected percentage of options exercised 20 100
d performance share plan psp
under the psp executives can be awarded an annual grant of nil cost options over a fixed number of shares provided that the
total amount granted under the psp does not exceed base salary
share options under psp are exercisable between three and four years the awards vest on a straightline basis if the group’s 
eps growth exceeds the percentage increase in the retail price index by between 3 33 of awards vest and 7 100 vest
per annum the target is tested on the third anniversary from date of grant only any shares awarded are acquired by the trustee
of the plan see page 14 in the open market with funds provided by the abacus group
psp – as at 30 september 2006 weighted
average exercise
options price p
outstanding at beginning of year – –
granted during the year 793827 00
lapsed during the year 102007 00
outstanding at end of year 691820 00
none of the above share options outstanding at the end of the year are exercisable at 30 september 2006
67 annual report  accounts 2006 23 sharebased payment continued
the options outstanding at 30 september 2006 had a weighted average remaining contractual life of 37 years the directors
have assumed 439790 shares vest 18 months after the earliest available date the remainder at the earliest available date
the assumptions used in the blackscholes model are as follows
psp 2 may 2005
share price on date of official grant 14325
exercise price 00
expected volatility 34
expected life 3  4 years
risk free rate 43
dividend yield 28
expected percentage of options exercised versus granted 100
e deltron share option schemes
under the terms of the deltron acquisition options over deltron shares were either exercised or exchanged for those over
abacus shares in the ratio of 106432 and the new option prices were derived by multiplying the deltron share option price 
by 15547 the rules of the deltron shares scheme remained unchanged being the options can be exercised between three 
and five years from date of grant there are no exercise conditions
deltron share option schemes – as at 30 september 2006
weighted 
average exercise
options price p
outstanding at beginning of year – –
acquired during the year 1963501 1163
lapsed during the year 30393 1471
exercised during the year 1212051 1074
outstanding at end of year 721057 1299
349837 of the above share options outstanding at the end of the year are exercisable at 30 september 2006 the weighted
average share price at the date of exercise was 1431p 
the options outstanding at 30 september 2006 had a weighted average remaining contractual life of 66 years the directors
have assumed 501696 shares relating to former directors of deltron electronics plc vest between 6 months and one year after
the earliest available date the remainder vest at the earliest available date
the assumptions used in the blackscholes model are as follows
deltron share option schemes
share price on date of official grant after scaling up by 15547 9802177p
exercise price 9802177p
expected volatility 34
expected life 34 years
risk free rate 43
dividend yield 28
expected percentage of options exercised versus granted 100
68 abacus group plc
notes to the accounts continued
30 september 2006 23 sharebased payment continued
f phantom option scheme cashsettled transaction
under the scheme for which the last options were granted in 2003 executives can be awarded an annual grant of share options
at market price
share options under the scheme are exercisable between after three and ten years or five and ten years from the date of grant
the awards vest in full if the growth in the group’s eps is 5 higher than the percentage increase in the retail price index
phantom options – as at 30 september 2006
weighted 
average exercise
options price p
outstanding at beginning and end of year 274138 289
the options outstanding at 30 september 2006 had a weighted average exercise price of 289p and a weighted average
remaining contractual life of 58 years the directors have assumed all shares will vest at the earliest available date
the assumptions used in the blackscholes model are as follows
2003 phantom options 1 december 2003 8 march 2002
share price on date of official grant 232p 303p
exercise price 232p 303p
expected volatility 34 34
expected life 4 years 10 years
risk free rate 47 4652
dividend yield 28 28
expected percentage of options exercised versus granted 100 0
the expected lives of 10 years and 4 years above are based on the best estimate of the eps criteria being met
the liability of cashsettled options is remeasured at each reporting date with changes in the fair value recognised in the profit
or loss
24 financial instruments
an explanation of the group’s financial instrument risk management objectives policies and strategies is set out in the corporate
governance statements the 2006 figures have been presented in accordance with ias 32 and ias 39 whilst the 2005
comparatives with frs 13
interest rate and currency and borrowing profiles
the interest rate and currency profile of the group’s financial liabilities at 30 september after taking account of interest rate and
currency derivative financial instruments with the exception of the short term currency swaps noted after the table were as below
the other financial assets and liabilities of the group which are not included in the tables below are noninterest bearing and are
therefore subject to interest rate risk
in both 2006 and 2005 the interest rates on the main floating rate financial liabilities are linked to uk european us japanese or
danish daily base rates for overdrafts and libor or euribor rates for loans
69 annual report  accounts 2006 24 financial instruments continued
year ended 30 september 2006
weighted
effective average
fixed time for
floating fixed interest which rate amount amount
total rate rate rate is fixed secured unsecured
currency £’m £’m £’m  years £’m £’m
assets
cash euro 15 15 –––– 15
cash other 01 01 –––– 01
total assets 16 16 –––– 16
liabilities
commercial mortgage loan sterling 77 38 39 47 39 77 –
– other loan sterling 167 167 – – – 167 –
other loans euro 20 14 06 37 12 20 –
other loans dkr 01 01 –––– 01
other loans skr 04 – 04 34 – 04 –
finance lease sterling 01 – 01 00 – 01 –
loan notes euro 46 – 46 19 025 – 46
other borrowings sterling 247 247 – – – 247 –
other borrowings euro 105 105 – – – 105 –
other borrowings yen 02 02 – – – 02 –
other borrowings usother 07 07 – – – 07 –
total liabilities 677 581 96 32 21 630 47
in addition to the currency exposures above the group has entered into 24 million and €276 million short term currency
derivative contracts amounting to an asset value of £01 million and liability value of £04 million these contracts are deemed
to have a net book value and fair value of £03 million all the contracts will expire by september 2007
cash and bank earns interest of floating rates based on daily bank deposit rates all cash facilities fall for review within one year
year ended 30 september 2005 weighted
effective average
fixed time for
floating fixed interest which rate amount amount
total rate rate rate is fixed secured unsecured
currency £’m £’m £’m  years £’m £’m
assets
cash euro 07 07 –––– 07
cash other 06 06 –––– 06
total assets 13 13 –––– 13
liabilities
commercial mortgage loan sterling 80 40 40 47 49 80 –
other borrowings sterling 122 122 – – – 117 05
finance lease sterling 01 – 01 56 06 01 –
loan notes sterling 02 – 02 40 – – 02
other borrowings euro 91 91 – – – 19 72
other borrowings yen 04 04 – – – 04 –
other borrowings other 04 04 – – – 04 –
total liabilities 304 261 43 46 49 225 79
70 abacus group plc
notes to the accounts continued
30 september 2006 24 financial instruments continued
credit risk
there are no significant concentrations of credit risk within the group the maximum credit risk exposure relating to financial
assets is represented by carrying value as at the balance sheet date
floating rate liabilities comprise
■ £40 million of a £80 million commercial mortgage loan not hedged by an interest rate swap but bearing interest 
based on the daily uk libor rate and fixed in advance for periods of between one and three months
■ euro sterling and danish kroner bank loans of £07 million euro 10 million £05 million and £02 million 
dkr 20 million respectively all being interest based on daily base rates and 
■ overdraft in multiple currencies totaling £207 million bearing interest based on daily base rates
fixed rate liabilities comprise
■ £40 million of the £80 million sterling mortgage loans hedged by an interest rate swap
■ £02 million of sterling loan notes and
■ £01 million outstanding obligations on finance leases
interest rates on floating rate assets and liabilities are based on the relevant national interbank rates
the table below shows the group’s currency exposures for 2005 these exposures give rise to currency gains and losses
recognised in the profit and loss account and arise from monetary assets and liabilities not denominated in the functional
currency of the operating unit
net foreign currency monetary assets liabilities
functional currency sterling euro us dollar yen other total
group operation £’m £’m £’m £’m £’m £’m
sterling – 32 126 12 01 147
danish kroner 02 17 – – 12 07
euro – – 04 – – 04
total 02 15 122 12 13 136
short term debtors and creditors have been included in the above disclosure as at 30 september 2005 the group had
outstanding commitments for forward exchange contracts of £126 million
maturity of financial liabilities
the maturity profile of the group’s financial liabilities as at 30 september 2005 was as follows
2005
£’m
on demand or within one year 227
between one and two years 07
between two and five years 70
304
71 annual report  accounts 2006 24 financial instruments continued
borrowing facilities
the group had £476 million 2004 £439 million of borrowing facilities at 30 september 2005 of which £175 million were
undrawn and £313 million were committed
the maturity of the borrowing facilities both drawn and undrawn at 30 september was as follows
2005
£’m
on demand or within one year 399
between one and two years 07
between two and five years 70
476
fair value of financial assets and financial liabilities
set out below is a comparison by category of carrying amounts and fair values of all the group’s financial instruments which are
carried in the financial statements other than short term receivables and payables the book values of which are regarded as
reasonable approximations to their fair values
book value fair value
2006 2005 2006 2005
£’m £’m £’m £’m
financial assets
cash 16 13 16 13
forward currency contracts 01 – 01 03
17 13 17 16
financial liabilities
bank overdrafts 150 99 150 99
invoice discounting 211 109 211 109
loan notes 46 02 46 02
interestbearing loans and borrowings
finance lease and hire purchase obligations 01 01 01 01
floating rate borrowings 259 93 259 93
fixed rate borrowings 10 – 10 –
forward currency contracts see hedging relationships 04 – 04 –
681 304 681 304
72 abacus group plc
notes to the accounts continued
30 september 2006 24 financial instruments continued
the fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at prevailing
interest rates the fair value of loan notes and other financial assets has been calculated using the market interest rates
the numbers as reported in the 2006 consolidated balance sheet and their 2005 comparatives were as follows 
2006 2005
£’m £’m
financial assets
cash 16 13
forward currency contracts see hedging relationships 01 –
17 13
financial liabilities
bank overdrafts 150 99
invoice discounting 211 109
loan notes 46 02
interestbearing loans and borrowings
finance lease and hire purchase obligations 01 01
floating rate borrowings 259 93
fixed rate borrowings 10 –
currency option contracts see hedging relationships 04 –
681 304
the abacus group has sales contracts in scandinavia and italy which allow the sales price to increase or decrease depending
on the foreign exchange movement of the currency of inventory purchase these types of contracts meet the definition 
of ‘embedded derivatives’ but are not considered as effective hedges any foreign exchange gain or loss on sales orders
outstanding at year end arising from converting the sales order values to functional currencies at a the rates on the date 
of the orders and b forward rates to date of deliveries is recognised in the consolidated income statement the value 
of these contracts was £nil 2005 £nil
hedging relationships
the group does not trade in derivative financial instruments for speculative purposes where the group can demonstrate 
an effective hedge relationship for cash flow hedges under the rules of ias 32 and ias 39 movements in the fair values 
of these derivative financial instruments will be recognised in the consolidated statement of recognised income and expense
where the group does not meet these rules movements in the fair value will be deemed as hedge ineffectiveness and will be
recognised in the consolidated income statement the group marks to market its financial instruments throughout the year
in order to manage the group’s exposure to interest rate and exchange rate changes the group utilises both currency 
and interest rate hedges
a cash flow hedges
forward currency contracts the main criteria for effective economic and accounting hedging of forward foreign currency
contracts are
■ the instrument must be related to a firm foreign currency commitment
■ it must involve the same currency as the hedged item
■ appropriate documentation of designation must be maintained
■ it must reduce the risk of foreign currency exchange movements on the group’s operations and
■ the effectiveness of the hedge must be regularly tested
73 annual report  accounts 2006 24 financial instruments continued
at 30 september 2006 the group held forward currency contracts designated as hedges of expected future purchases from
suppliers in euros and us for all the contracts including 2005 each amount below comprises twelve equal monthly contracts
the first contract is for currency purchase in october the last in september the terms of these contracts are as follows
2006 2005
average average
exchange exchange
amount rate amount rate
buy
us  12 million 188 9 million 183 
euro €96 million 147 €6 million 146 
none of the above were designated as effective cash flow hedges 
interest rate swap the criteria for effective hedging of interest rate swaps are
■ the instrument must be related to an asset or a liability
■ the effectiveness of the hedge must be regularly tested
■ appropriate documentation of designation must be maintained and
■ it must change the character of the interest rate by converting a variable rate to a fixed rate
at 30 september 2006 the group had entered into an interest rate swap with a notional amount of £38 million 
2005 £40 million being 50 of the commercial mortgage loan whereby it pays a fixed rate of interest of 473 
and receives a variable rate based on libor on the notional amount the swap is being used to hedge the cash flow
exposure of 50 of the interest payments on the commercial loan which has the same critical terms as the swap 
however the swap is deemed ineffective and therefore any fair value movement 2006 and 2005 £nil has been recognised 
in the consolidated income statement the swap expires in 2010 and the commercial mortgage loan in 2020
b fair value hedges
currency option contracts at 30 september 2006 the group held currency option contracts to hedge expected future
purchases in € and us for the period october 2006 to september 2007 each amount shown below is further divided 
into twelve equal monthly contracts for example the €6 million contract comprises twelve monthly contracts the first being
for the purchase of €05 million in october 2006 the last for €05 million in september 2007 each option contract as it
matures is tested between two predetermined foreign exchange rates the lower exchange rate being the ‘base’ and the
higher the ‘limit’ each monthly option will be effective if the spot rate which is tested monthly falls below the “base” at
which point the group purchases currency at the “base” rate the option lapses if the spot rate lies between the “base” 
and “limit” rates if the spot rate is higher than the “limit” the monthly tranche is purchased at the “base” rate the options
have been deemed ineffective and the fair value losses of the options below have been recognised in the consolidated
income statement
amount fair value
currency base limit m £’m
€ 1405 1495 6 01
€ 141 1491 3 01
€ 141 14777 6 01
€ 140 15033 3 01
us 184 199 12 –
04
at 30 september 2005 the group held a currency option for us6 million comprising twelve monthly contracts of 05 million
with a “base” of 181 and a “limit” of 1891 
74 abacus group plc
notes to the accounts continued
30 september 2006 25 financial commitments
capital commitments
the group had capital expenditure commitments of £nil 2005 £02 million at 30 september 2006
lease commitments 
finance lease
the group has entered into £01 million 2005 £01 million of finance lease commitments as at 30 september 2006 
operating lease
the group has entered into commercial leases on certain purchases and motor vehicles the former expire between 2006 and
2017 and the latter between 2006 and 2009 only certain property agreements contain an option for renewal at rental prices
based on market prices at the time of exercise
future minimum lease payments under noncancellable operating leases are as follows
land and buildings other
2006 2005 2006 2005
£’m £’m £’m £’m
operating leases which expire
within one year 12 04 07 02
between two and five years 30 14 17 12
after more than five years 07 03 – –
49 21 24 14
26 pensions and other postretirement benefits
defined benefits pension scheme
the group operates one final salary defined benefits pension scheme in the united kingdom stanplan f following the deltron
acquisition the scheme is funded by the payment of contributions to separately administered trust funds the deltron group
results were consolidated from 16 january 2006
30 september
2006 16 january 2006
fair value book value adjustments fair value
£’m £’m £’m £’m
scheme assets
equities 25 – 24 24
bonds 06 – 05 05
other 02 – 01 01
scheme assets 33 – 30 30
present value of scheme liabilities 47 – 46 46
unrecognised past service cost – –– –
net pension liability 14 – 16 16
book value is the amounts recognised in the deltron group’s accounts as at 15 january 2006
75 annual report  accounts 2006 26 pensions and other postretirement benefits continued
the amounts recognised in the consolidated income statement and in the consolidated statement of recognised income and
expenses all of which arose for the 9 months since consolidation of the deltron group results are as follows
year ended
30 september 
2006
£’m
recognised in the income statement
current service cost 01
recognised in arriving at operating profit 01
expected return on scheme assets 02
interest cost on scheme liabilities 02
net finance costs –
taken to the statement of recognised income and expense
actual return on scheme assets 02
less expected return on scheme assets 02
–
other actuarial gains and losses 02
actuarial gain recognised in the statement of recognised income and expense 02
pensions
pension contributions are determined with the advice of an independent qualified actuary jlt benefits solutions limited on the
basis of valuations using the projected unit credit method the last full actuarial valuation was at 1 december 2004 and updated
on an approximate basis to 16 january 2006 and 30 september 2006 scheme assets are stated at their market values at the
respective balance sheet dates the expected long term return on cash is equal to bank base rates at the balance sheet date
the expected return on bonds is determined by reference to uk long dated gilt and bond yields at the balance sheet date the
expected rate of return on equities and property have been determined by setting an appropriate risk premium above giltbond
yields having regard to market conditions at the balance sheet date
30 september 16 january
2006 2006

main assumptions
rate of salary increases 525 50
allowance for pension in payment increases of rpi or 25 pa if less 25 25
discount rate 485 455
expected rates of return on scheme assets
equities 75 75
bonds 475 425
other 52 55
inflation assumption 325 30
the postretirement mortality assumptions are based on the pa92 tables with the medium cohort mortality improvement rates
and as applicable to each individual’s year of birth
the employer contributions being paid to the scheme are 182 of pensionable earnings plus £6147 per month plus levies 
to the pension protection fund these are aimed at covering the cost of accruing benefits and expenses and to remove the
deficit on the scheme’s funding basis by 2015 the total employer contributions to the defined benefit plans in the year ending
30 september 2007 are estimated to be £108000 excluding pension protection fund levies the acquisition of the axess group
does not have an effect on the position of the group’s pension schemes as it only provides money purchase pensions benefits
76 abacus group plc
notes to the accounts continued
30 september 2006 26 pensions and other postretirement benefits continued
changes in the present value of the defined benefit pension obligations are analysed as follows
£’m
opening balance –
acquisition 46
as at 16 january 2006 – fair value 46
current service cost 01
interest cost 02
benefits paid –
contributions by employees –
actuarial gains and losses 02
as at 30 september 2006 – fair value 47
the defined benefits obligation comprises £47 million arising only from plans that are wholly or partly funded changes in the value
of plan assets are analysed as follows
£’m
opening balance –
acquisition 30
as at 16 january 2006 – fair value 30
expected return on plan assets 02
employer contributions 01
contributions by employees –
benefits paid –
actuarial gains and losses –
as at 30 september 2006 – fair value 33
the history of experience gains and losses all of which related to preacquisition is as follows
16 january
2006
£’m
fair value of scheme assets 30
present value of defined benefit obligation 46
deficit in the scheme 16
experience adjustments arising on plan liabilities 01
effect of changes in assumptions 10
total 09
the cumulative amount of actuarial gains and losses recognised since 16 january 2006 in the statement of recognised income
and expense is a £02 million gain
defined contribution pension schemes
in addition to the defined benefit pension scheme the group operates a number of defined contribution pension schemes 
the total contributions for the year were £19 million 2005 £18 million of which £nil 2005 £01 million was outstanding at
30 september 2006 following the acquisition of the deltron group the group operates an insured pension scheme for certain
employees in germany the amount charged to the profit and loss based on the insurer’s assessment was £nil 2005 £nil
77 annual report  accounts 2006 27 related party transactions
other than intercompany transactions and the remuneration of the directors which is disclosed in note 6 and shown in more
detail in the directors’ remuneration report there were no significant transactions with related parties during the year
28 explanation of transition to ifrs
this is the first year that the group has presented its annual report and accounts under ifrs the annual report and accounts
for the year ended 30 september 2005 were under uk gaap and the date of transition was therefore 1 october 2004 the
group’s interim report 2006 which can be found on abacus’ website wwwabacusgroupcouk provides analysis of the effect
of moving from uk gaap to ifrs and specifically contains
■ the restatement of 2005 comparative financial information from uk gaap to ifrs including a reconciliation of the balance
sheet from uk gaap to ifrs at the date of transition and 30 september 2005 and
■ a summary of significant accounting policies and a description of all ifrs adjustments made
a number of summary disclosures are provided in this note
reconciliation of equity at 1 october 2004 date of transition and 30 september 2005
30 september 1 october 
2005 2004
£’m £’m
total equity under uk gaap 434 442
ifrs adjustments see explanation further in this note
sharebased payment 01 02
employee benefits 01 01
goodwill impairment 15 15
goodwill amortisation 07 –
dividends 15 30
deferred tax – 02
other – 02
total equity under ifrs at 1 october 2005 443 460
reconciliation of profit after tax for the year ended 30 september 2005
30 september
2005
£’m
total profit after tax for the year under uk gaap 22
ifrs adjustments
sharebased payment 02
other 02
goodwill amortisation 07
income tax expense 03
profit after tax for the year under ifrs 26
under ias 7 ‘cash flow statements’ movements in cash and cash equivalents are reconciled whereas under uk gaap that
statement reconciles cash only the change in presentation of the consolidated cash flow statement under ias 7 makes no
difference to the cash flows of the group
78 abacus group plc
notes to the accounts continued
30 september 2006 28 explanation of transition to ifrs continued
explanations of ifrs adjustments
ifrs 1 “firsttime adoption of international financial reporting standards”
ifrs 1 requires that companies apply ifrs retrospectively for all periods the standard does however contain certain transitional
provisions exempting full retrospective application in certain areas the group has opted to take the following exemptions
■ application of ifrs 3 “business combinations” has not been applied to those combinations taking place prior to 
1 october 2004 as provided by ifrs 1
■ application of the provisions of ias 32 and 39 relating to financial instruments have not been applied to the comparative
periods these are applied from 1 october 2005 as allowed by ifrs 1
■ application of ifrs 2 “sharebased payment” has not been applied to grants of equity awards made prior to 
7 november 2002 as provided by ifrs 1
ifrs 2 “sharebased payment”
in accordance with ifrs 2 abacus has recognised an expense representing the fair value of outstanding employee share options
spread over their vesting periods as permitted by the transitional provisions abacus has taken the option to apply ifrs 2 only
to those equitysettled share options granted after 7 november 2002 that remained unvested as at 1 october 2005
abacus issues equitysettled sharebased payment options in respect of which a charge is required to be made in the
consolidated income statement at the date of grant these options are measured at fair value by using the blackscholes 
option pricing model the fair value of each option is then applied to the number of options which are expected to vest the
estimate of the number of options that might vest is adjusted over the vesting period to reflect actual experience the fair value
determined at the grant date is then expensed on a straight line basis over the vesting period
ias 19 “employee benefits”
ias 19 provides rules for the recognition of the expenseliability relating to short term benefits including holiday pay as a result
holiday pay including salaries and social security taxes has been accrued under ifrs which was not accrued under uk gaap 
ifrs 3 “business combinations”
the method of accounting for business combinations under ifrs is different to that applied under uk gaap the key differences
applicable to the group are the cessation of goodwill amortisation and the recognition and amortisation of intangible assets 
within acquired businesses which were previously subsumed within goodwill under uk gaap
under the transitional arrangement of ifrs 1 the group has taken the option to apply ifrs 3 to business combinations from 
the transition date only ie 1 october 2004 and therefore has not restated acquisitions prior to this date
ias 36 “impairment of assets”
uk gaap requires goodwill to be amortised over its estimated useful life which abacus had determined to be 20 years in
respect of business acquisitions where goodwill has been capitalised under ifrs goodwill is considered to have an indefinite 
life and so is not amortised instead it is subject to an annual test for impairment thus goodwill amortisation under uk gaap
for the year ended 30 september 2005 of £07 million has been reversed the annual impairment test under ifrs resulted 
in a reduction in carrying value of goodwill by £15 million as at 1 october 2004
annual report  accounts 2006 79 28 explanation of transition to ifrs continued
ias 10 “events after the balance sheet date”
under uk gaap the group accrued for dividends recommended by the directors in respect of each accounting year under
ifrs a dividend is only recognised when it has been declared as a result proposed dividends are not recognised in the
financial statements
ias 12 “income taxes”
because ifrs define deferred tax in relation to temporary differences being differences between carrying values and their 
related tax base rather than timing differences being the difference between accounting profit and taxable profit adjustments
are required to recognise a number of items for which no deferred tax was recognised under uk gaap
ias 32 and ias 39 “financial instruments disclosure and presentation” and “financial instruments recognition 
and measurement”
these standards address the accounting for and disclosure of financial instruments the general principle is that all financial
assets and liabilities be initially recognised at fair value with financial liabilities being subsequently measured at amortised cost
unless hedge accounting is achieved ifrs require movements in the fair value to be recognised directly in the consolidated
income statement
the group has taken the option available under ifrs 1 that permits uk gaap to be applied in 2005 with ias 32 and ias 39
being adopted for the first time on 1 october 2005
ias 36 “intangible assets”
under uk gaap  all capitalised computer software is included within tangible fixed assets as plant and equipment under 
ifrs only computer software that is integral to a related item of hardware should be included as plant and equipment 
all other computer software should be recorded as an intangible asset there is no profit and loss account impact as a result 
of this reclassification since under both uk gaap and ifrs computer software is written down over its estimated useful life
80 abacus group plc
notes to the accounts continued
30 september 2006 uk gaap ifrs
2002 2003 2004 2005 2006
£’m £’m £’m £’m £’m
income statement
sales 1550 1470 1878 1788 2571
profit before taxexceptional items and amortisation 
of acquired intangibles and goodwill 95 80 100 81 119
amortisation of acquired intangibles and goodwill 29 04 07 01 26
profit before tax and exceptional items 66 76 93 80 93
exceptional items pre taxation – – – 40 94
tax expense credit 25 23 33 14 01
profit after tax 41 53 60 26 –
assets employed
fixed assets 252 251 302 325 890
other net assets 341 360 434 409 573
capital employed 593 611 736 734 1463
net debt 185 187 294 291 661
408 424 442 443 802
financed by
shareholders’ funds 408 424 442 443 802
cash flow
operating cash flow 169 25 131 135 14
free cash flow 108 25 73 64 70
dividends 38 42 44 46 42
sale of tangible fixed assets 01 01 – 01 01
acquisitions and investments – 14 140 16 269
equity financing 04 02 04 01 13
new finance leases – – 01 02 02
foreign exchange – 02 01 01 01
movement in net debt 75 02 107 03 370
net debt 185 187 294 291 661
statistics
average no of shares ‘000 41816 42035 42426 42569 63267
earnings per share basic pre excep  intangibles 166p 135p 159p 136p 136p
free cash flow per share 259p 58p 173p 150p 111p
dividends per share 97p 102p 105p 72p 72p
dividend cover pre excep  intangibles 17 13 15 19 16
gross profit pre excep  intangibles 247 232 229 244 252
return on sales pre excep  intangibles 61 55 53 45 46
effective tax rate pre goodwill 266 294 327 281 277
net gearing 453 440 665 657 767
return on capital employed 175 141 148 128 100
net gearing is defined as net borrowings excluding earnout consideration divided by shareholders’ funds and minority interests
return on capital is defined as profit before exceptional items interest tax and intangibles divided by shareholders’ funds
minority interest and net debt
five year summary
81 annual report  accounts 2006  company
accounts
prepared in accordance with uk gaap 84 abacus group plc
independent auditors’ report
to the members of abacus group plc
82
we have audited the parent company financial statements of abacus group plc for the year ended 30 september 2006 which
comprise the balance sheet the statement of significant accounting policies and the related notes 1 to 11 these parent
company financial statements have been prepared under the accounting policies set out therein we have also audited the
information in the directors’ remuneration report that is described as having been audited 
we have reported separately on the group financial statements of abacus group plc for the year ended 30 september 2006
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the directors’ remuneration report and the parent company
financial statements in accordance with applicable united kingdom law and accounting standards united kingdom generally
accepted accounting practice are set out in the statement of directors’ responsibilities
our responsibility is to audit the parent company financial statements and the part of the directors’ remuneration report to be
audited in accordance with relevant legal and regulatory requirements and international standards on auditing uk and ireland
we report to you our opinion as to whether the parent company financial statements give a true and fair view and whether the
parent company financial statements and the part of the directors’ remuneration report to be audited have been properly
prepared in accordance with the companies act 1985 we also report to you whether in our opinion the information given in 
the parent company directors’ report is consistent with the financial statements the information given in the directors’ report
includes that specific information presented in the chairman’s statement the chief executive’s review and the financial review
that is cross referred from the business review section of the directors’ report
in addition we report to you if in our opinion the company has not kept proper accounting records if we have not received 
all the information and explanations we require for our audit or if information specified by law regarding directors’ remuneration
and other transactions is not disclosed
we read other information contained in the annual report and consider whether it is consistent with the audited parent 
company financial statements the other information comprises only the unaudited part of the directors’ remuneration 
report the chairman’s statement the chief executive’s review the financial review corporate social responsibility 
and the corporate governance statement we consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the parent company financial statements our responsibilities do not extend 
to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing 
practices board an audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the
parent company financial statements and the part of the directors’ remuneration report to be audited it also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the parent company
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 parent company financial statements and the
part of the directors’ remuneration report to be audited are free from material misstatement whether caused by fraud or other
irregularity or error in forming our opinion we also evaluated the overall adequacy of the presentation of information in the parent
company financial statements and the part of the directors’ remuneration report to be audited
opinion
in our opinion
■ the parent company financial statements give a true and fair view in accordance with united kingdom generally accepted
accounting practice of the state of the company’s affairs as at 30 september 2006 
■ the parent company financial statements and the part of the directors’ remuneration report to be audited have been
properly prepared in accordance with the companies act 1985 and
■ the information given in the directors’ report is consistent with the parent company financial statements
ernst  young llp
registered auditor
reading
30 november 2006 83
company balance sheet
as at 30 september 2006
notes 2006 2005
restated
£’m £’m
fixed assets
investments 3 567 56
current assets
debtors amounts falling due after more than one year 4 105 127
cash at bank and in hand 27 16
132 143
creditors amounts falling due within one year 5 32 05
net current assets 100 138
total assets less current liabilities 667 194
creditors amounts falling due after more than one year 6 63 24
net assets 604 170
capital and reserves
equity share capital 7 37 21
share premium in respect of equity share capital 8 476 92
capital redemption reserve 8 04 04
share option reserve 8 05 02
profit and loss account 8 82 51
604 170
the accompanying statement of significant accounting policies and notes are an integral part of the balance sheet
the financial statements on pages 83 to 87 inclusive were approved by the board of directors on 30 november 2006 and
signed on their behalf by
m kent
p allen directors 86 abacus group plc
basis of accounting
the separate financial statements of the company are presented as required by the companies act 1985 they have been
prepared under the historical cost convention and in accordance with applicable united kingdom accounting standards
uk gaap and law
the principal accounting policies are summarised below they have all been applied consistently throughout the year and 
the preceding year with the exception of frs 20 frs 21 frs 25 and frs 26 see below
change in accounting policy in respect of new accounting standards
the company has adopted the following accounting standards in these financial statements
frs 20 – sharebased payment
frs 21 – events after the balance sheet date
frs 23 – the effects of changes in foreign exchange rates
frs 25 – financial instruments disclosure and presentation and 
frs 26 – financial instruments measurement
the adoption of these standards represents a change in accounting policy as such the comparative information has been
restated to comply with these new accounting standards of which only frs 20 and frs 21 resulted in adjustments 
the impact of adopting these new accounting standards had the following impact on the retained profit of the company balance
sheet as at 1 october 2004 date of transition and 30 september 2005
30 september 1 october 
2005 2004
£’m £’m
total retained profit under uk gaap 38 05
ifrs adjustments see explanation further in this note
sharebased payment 03 01
deferred tax on sharebased payment 01 –
dividends 15 30
total retained profit under ifrs 51 34
financial instruments
the accounting policy for financial instruments mirrors that of the group’s accounting policy under ias 32 and ias 39 as detailed
on page 41
investments
fixed asset investments in subsidiaries are shown at cost less provision for impairment
foreign currency
in preparing the financial statements transactions in foreign currencies are initially recorded in the company’s functional currency
sterling by applying the spot exchange rate ruling at the date of the transactions monetary assets and liabilities denominated in
foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date all differences are
taken to the income statement except i when hedge accounting is applied ii for differences on monetary assets and liabilities
that form part of the company’s net investment in foreign operations these are taken directly to equity until the disposal of the
net investment at which time they are recognised in profit or loss
nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates 
as at the dates of the initial transactions nonmonetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value was determined
other
the company’s accounting policies mirror those of the group’s for sharebased payment page 42 money purchase pension schemes
page 41 cash and cash equivalents page 40 income taxes page 40 and interest bearing loans and borrowings page 40
statement of significant accounting policies
30 september 2006
84 1 profit for the year
as permitted by section 230 of the companies act 1985 the company has elected not to present its own profit and loss
account for the year abacus group plc reported a profit for the financial year ended 30 september 2006 of £73 million 
2005 £63 million the auditor’s remuneration for audit services to the company was £33000 2005 £13000
dividends for the year and preceding year are shown below
2006 2005
£’m £’m
amounts recognised in the year 
interim dividend for the year ending 30 september 2006 – 36p 27 –
final dividend for the year ended 30 september 2005 – 36p 15 –
final dividend for the year ended 30 september 2004 – 70p – 30
interim dividend for the year ended 30 september 2005 – 36p – 16
42 46
amounts determined after the balance sheet date
final dividend for the year ending 30 september 2006 – 36p 26 –
final dividend for the year ending 30 september 2005 – 36p – 15
2 sharebased payment
the company had six sharebased payment schemes including the deltron option scheme in existence during the year ended 
30 september 2006 the company recognised a total charge of £03 million 2005 £01 million in the year relating to equitysettled
sharebased payment transactions for only those issued after 7 november 2002 sharebased payment charges of £02 million
2005 £01 million were transferred to subsidiary undertakings of the company the total amount transferred to the share option
reserve in the year amounted to £03 million 2005 £01 million details of the valuations of each of the six sharebased payment
schemes can be found in note 23 to the group financial statements on pages 65 to 69
details of the options held by employees of the company at either year end and during the year are as follows
option scheme number of number of exercise
options at number number number options at exercise price per
1 oct 2005 granted exercised lapsed 30 sept 2006 period share
existing schemes
2003 13129 – – – 13129 20052012 2285p
approved 16438 – – – 16438 20082015 1825p
2003 121871 – – – 121871 20052012 2285p
unapproved 154400 – – – 154400 20062013 2215p
307758 – – – 307758 20062013 2320p
202740 – – – 202740 20082015 1825p
1996 75000 – –75000 –20022006 975p
unapproved 120000 – – – 120000 20032007 3920p
2005 psp – 439790 – – 439790 20092010 00p
sharesave 1054 – – 1054 – 20032006 3200p
3077 – – 3077 – 20072009 2450p
– 51937 – – 51937 20092011 800p
total 1015467 491727 – 79131 1428063
weighted average
exercise price 2284p 84p – 1062p 1594p
85
notes to the accounts 
30 september 2006 88 abacus group plc
notes to the accounts continued
30 september 2006
2 sharebased payment continued
none of the company’s share options outstanding at the end of the year is exercisable at 30 september 2006 the weighted
average remaining contractual life of all the company’s options at 30 september 2006 was 38 years for the 491727 options
granted during the year the weighted average fair value at the measurement date was 1166p per share
3 fixed asset investments
fixed asset investments comprise investments in subsidiary undertakings as follows
2006 2005
£’m £’m
cost
beginning of year 56 56
additions 511 –
end of year 567 56
provisions at the beginning and end of year – –
net book value beginning of year 56 56
net book value end of year 567 56
in january 2006 and april 2006 the company acquired 100 of the shares of deltron electronics plc and axess technology
sas for £361 million and €230 million respectively further details and details of the company’s principal trading subsidiaries
may be found on page 56
4 debtors
2006 2005
£’m £’m
amounts falling due after more than one year 
amounts owed by subsidiary undertaking 104 127
deferred tax asset sharebased payment 01 –
105 127
5 creditors amounts falling due within one year
2006 2005
£’m £’m
loan notes 24 02
accruals and deferred income 08 03
32 05
the 2005 loan notes were nonguaranteed attracted interest at 4 per annum were redeemable at par and were repaid in 2006
the 2006 loan notes are guaranteed denominated in euros redeemable at par and attract interest at 35 plus 1 guarantee 
fee per annum the 2006 loan notes are repayable in april 2007 other than loan notes total book value £48 million and fair 
value £46 million the fair and book values of all financial liabilities were the same
6 creditors amounts falling due after more than one year 
2006 2005
£’m £’m
amounts owed by subsidiary undertakings 41 24
loan notes 22 –
63 24
the noncurrent loan notes are not guaranteed do not carry interest and are redeemable at par they are repayable in 2008
86 7 calledup share capital
2006 2005
£’m £’m
authorised share capital
100000000 2005 70000000 ordinary shares of 5p each 50 35
allotted calledup and fullypaid
73288744 2005 42583507 ordinary shares of 5p each 37 21
during the year 30705237 shares were allotted with a nominal value of £15 million for a consideration of £400 million of which
£387 million represented consideration for the acquisitions of the deltron and axess groups
8 reconciliation of movements on reserves and shareholders’ funds
nondistributable distributable total
calledup share capital shares profit
share premium redemption option and loss shareholders’
capital account reserve reserve account funds
£’m £’m £’m £’m £’m £’m
at beginning of year as previously stated 21 92 04 – 38 155
transitional adjustment to adopt frs 20 
and frs 21 – – – 02 13 15
at beginning of year as restated 21 92 04 02 51 170
proceeds on allotments 16 384 – – – 400
sharebased payment – – – 03 – 03
profit for the year – – – – 73 73
dividends – – – – 42 42
37 476 04 05 82 604
details of the company’s share capital can be found in note 20 of the group financial statements on page 62
9 guarantees and other financial commitments
a guarantees
the company has cross guaranteed bank loans and overdrafts of subsidiary undertakings amounting to £31million 
2005 £37 million
b commitments
the company has no capital expenditure or operating lease commitments as at 30 september 2006 2005 £nil
c committed borrowing facilities
the company is a member of the uk borrowing facility arrangement which comprised overdraft and short term loan facilities
of £561 million 2005 £324 million
10 directors’ emoluments
details of the emoluments share options and ltip interests of the directors are disclosed in the directors’ remuneration report
on pages 24 to 31 all of the directors are members of defined contribution pension schemes only there were nil 2005 £nil
outstanding or prepaid contributions at year end
11 related party disclosures
the company has taken advantage of the exemption granted by paragraph 3b of frs 8 not to disclose transactions with 
other group companies
87 90 abacus group plc
notice is hereby given that the annual general meeting of abacus group plc “the company” will be held at abacus
house bone lane newbury berkshire rg14 5sf on wednesday 31 january 2007 at 1000 am the meeting will consider 
and if thought fit pass the following resolutions which are to be proposed in the case of resolutions 1 to 9 as ordinary
resolutions and in the case of resolutions 10 and 11 as special resolutions of the company 
resolutions
1 to receive and adopt the report of the directors and the accounts for the year ended 30 september 2006 and the auditors’
report thereon
2 to reelect as a director a h westropp who now retires every year the board proposes this reelection following the chief
executive officer’s formal performance evaluation with input from the board which concludes that mr westropp continues to
provide sufficient commitment and effective contribution to his role as nonexecutive chairman of the board and chairman of
the nominations committee he attended nine out of ten board meetings and a number of other ad hoc meetings throughout
the year aided by his directorships of other companies mr westropp provides effective input in determining the policies of
the group monitoring the group’s performance and contributing to the formulation of its strategy mr westropp is considered
to be independent by the board for the reasons outlined in the corporate governance section of the annual report
3 to reelect as a director r lambourne who retires from the board every third year
4 to elect as a director p journo following his appointment to the board on 1 july 2006
5 to elect as a director m brooks following his appointment to the board on 1 july 2006
6 to elect as a director d weir following his appointment to the board on 17 january 2006
7 to approve the directors’ remuneration report 
8 to reappoint ernst  young llp as auditors and to authorise the directors to fix their remuneration 
9 that the directors be and they are hereby generally and unconditionally authorised to exercise all the powers of the
company to allot relevant securities within the meaning of section 80 of the companies act 1985 “the act” up to an
aggregate nominal amount of £1221479 one third of the issued share capital at 30 september 2006 provided that such
authority shall expire on the earlier of the date of the next annual general meeting of the company after the passing of this
resolution or fifteen months after the passing of this resolution save that the company may before such expiry or the expiry
of any renewal of this authority make an offer or agreement which would or might require relevant securities to be allotted
after such expiry and the directors may allot relevant securities in pursuance of such offer or agreement as if this authority
had not expired and provided further that this authority shall supersede and revoke any other such authorities 
10 that subject to the passing of resolution 9 the directors be and they are hereby empowered pursuant to section 95 of the
act to allot equity securities as defined for the purposes of sections 89 to 96 of the act for cash pursuant to the general
authority conferred on them by resolution 9 for the purposes of section 80 of the act as if section 891 of the act did not
apply to any such allotment provided that this power shall be limited
i to the allotment of equity securities in connection with an issue or offer by way of rights in favour of holders of ordinary
shares where the equity securities respectively attributable to the interests of such holders of ordinary shares on a fixed
record date are proportionate as nearly as may be to the respective numbers of shares held by them but subject to such
exclusions or other arrangements as the directors may deem necessary or expedient to deal with any legal or practical
problems under the laws of any overseas territory or the requirements of any regulatory body or any other stock
exchange in any territory or in relation to fractional entitlements and
ii to the allotment otherwise than pursuant to paragraph i of this resolution of equity securities having in the case of
relevant shares a nominal amount or in the case of other equity securities giving the right to subscribe for or convert
relevant shares having a nominal amount not exceeding in aggregate the sum of £183222 5 of the issued share
capital at 30 september 2006
and shall expire on the earlier of the date of the next annual general meeting of the company after the passing of this resolution
or fifteen months after the passing of this resolution save that the company may before such expiry make an offer or agreement
which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in
pursuance of such offer or agreement as if the power conferred hereby had not expired
notice of annual general meeting
88 11 that the company be generally and unconditionally authorised to make market purchases as defined in section 1633 of
the act of its ordinary shares provided that
i the maximum number of ordinary shares hereby authorised to be acquired is 10993311 15 of the issued share
capital at 30 september 2006
ii the minimum price which may be paid for any such ordinary shares is 5 pence
iii the maximum price which may be paid for any such ordinary share is an amount equal to 105 per cent of the average
middle market quotations for an ordinary share according to the london stock exchange daily official list for the five
business days immediately preceding the day on which the ordinary share is contracted to be purchased and
iv this authority shall expire at the close of the next annual general meeting of the company to be held after the date
hereof but a contract of purchase may be made before such expiry which will or may be executed wholly or partly
thereafter and a purchase of ordinary shares may be made in pursuance of any such contract
by order of the board
andrew bateman 21 december 2006
abacus group plc registered office abacus house bone lane newbury berkshire rg14 5sf
notes
1 any member entitled to attend and vote at the above meeting may appoint a proxy to attend and on a poll only vote on
hisher behalf a proxy need not be a member of the company
2 to be valid the enclosed replypaid form of proxy together if appropriate with the power of attorney or other authority 
if any under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of
computershare investor services plc registrar’s department po box 82 the pavilions bridgwater road bristol bs99 7nh
at least fortyeight hours before the time appointed for holding the meeting
3 completion and return of the form of proxy will not preclude ordinary shareholders from attending the meeting and voting in
person if they wish to do so
4 documents for inspection  copies of the directors’ service contracts and register of directors’ interests will be available for
inspection at the registered office of the company abacus house bone lane newbury berkshire rg14 5sf during normal
business hours on any weekday excluding public holidays from the date of the notice of the annual general meeting until
the conclusion of the annual general meeting and any adjournment thereof 
5 as permitted by regulation 41 of the uncertificated securities regulations 2001 only those shareholders who are registered
on the company’s share register at 6 pm on 29 january 2007 shall be entitled to attend the meeting and to vote in respect
of the number of shares registered in their names at that time changes to entries on the share register after 6 pm on 
29 january 2007 shall be disregarded in determining the rights of any person to attend andor vote at the meeting
89 90 abacus group plc
shareholder notes china
distribution centre
sales office
sales office
distribution centre
local offices
abacus group
uk and ireland
basingstoke
bolton
boston spa
cambridge
dunmow
leighton buzzard
limerick
livingston
maidenhead
newbury
newcastleunderlyme
redhill
runcorn
scunthorpe
southampton
stroud
austria
vienna
denmark
arhus
copenhagen
them
finland
helsinki
france
lyon
paris 3
rennes
germany
dortmund
hamburg
holzmaden
munich
stuttgart
hong kong
italy
ascoli piceno
florence
milan 2
parma
rome
venice
netherlands
amsterdam 2
norway
oslo
sweden
gothenburg
malmo
stockholm
annual report  accounts 2006 wwwabacusgroupcouk
abacus house bone lane newbury berkshire rg14 5sf


Summary:
 i am pleased to report that abacus group plc’s performance
in the year ended 30 september 2006 outperformed
expectations expressed at the time of our interim report
two acquisitions and their successful integration ahead
of schedule have been the most significant events in the
year turnover amounted to £2571 million an increase of
£783 million over the previous year although the annual
comparisons are enhanced by the acquisition of deltron
electronics plc in january 2006 and by the subsequent
purchase of axess technology group in april these new
subsidiaries contributed £755 million to the total group sales
and £65 million to the group operating profit for the year
which totalled £147 million pre amortisation and exceptionals
£27 million post amortisation and exceptionals they were
also responsible for the improvement in gross margin pre
exceptional items which increased from 244 of sales in
2005 to 252 in 2006 post exceptional 249 compared to
225 in 2005 we expect some further margin enhancement
in 2007 as the result of a full year’s contribution from both
deltron and axess it was anticipated at the time of the
acquisitions that earnings would reduce in the short term but
in the event there was no earnings dilution in 2006 compared
to 2005 with earnings per share pre exceptionals and
amortisation remaining at 136p per share post exceptional
and amortisation 00p per share 2005 61p at the year
end net borrowings at £661 million including £46 million
deferred consideration loan notes were in line with
expectations
the integration of the deltron and axess businesses and the
accompanying reorganisation have been completed ahead
of schedule and have delivered the target of £55 million
annualised cost savings in the 2006 financial year the benefit
of integration savings was some £16 million in order to
secure these savings including the reorganisation of trident
to exit the higher risk finished product business and refocus
on distribution and value added opportunities a oneoff
exceptional cost of £94 million has been incurred however
as shown above the benefits going forward will be material
the dividend will remain unchanged for 2006 with a proposed
final dividend of 36p making a total for the year of 72p
2005 72p looking to the future we intend to return to a
policy of increasing the dividend as cash flow improves and
debt is reduced
trading in 2006
the uk market for electronic components was sluggish in
the early months of our financial year but appeared to have
stabilised by march and thereafter an improvement was seen
which continued through the summer months for abacus this
resulted in a sales increase of 2 for our total uk business
although the figure would have been higher but for the
decision to withdraw from trident’s finished product business
in italy our team at ecc was successful in growing sales by
4 but in nordic promax sales fell by 14 some of which
can be attributed to the decision to close the business in
chairmans statement
“
the integration of the deltron and axess businesses and the accompanying reorganisation
have been completed ahead of schedule and have delivered the target of £55 million annualised
cost savings
”
4 abacus group plc finland in 2005 however the 2005 reorganisation of promax
and its integration with the deltron businesses in sweden
and norway will result in a larger and much more solid
organisation indeed the prospects for all the european
territories look promising with the strengthening of the existing
abacus companies and the additions of france and germany
where previously we had no presence since the year end
germany has not only been reorganised but also considerably
enlarged by the recruitment of a high quality team from within
the industry
in the far east our operation in hong kong has been
reinforced with stronger management and we are seeing the
benefits of maintaining business with customers who move
offshore we have been successful in growing the value of
shipments to mainland china and other territories in asia
outlook
the group now has a broader operations base a wider mix of
product and greater depth of management the geographical
spread has also changed radically during the past year in
2007 the abacus group sales will no longer be dominated by
the uk with nearly half the business being overseas all these
factors considerably enhance the opportunities for us going
forward as well as delivering a more cost effective and higher
margin business in these circumstances the board has
confidence for the future
this year i am particularly grateful to the management 
and staff and congratulate them on an outstanding
performance in acquiring and integrating two complex
businesses while maintaining a strong performance from 
the existing businesses i also welcome our new colleagues
who have also made such a valuable contribution
a h westropp
chairman
30 november 2006
5 annual report  accounts 2006