tt electronics plc
clive house
12 – 18 queens road
weybridge
surrey kt13 9xb
regno87249
tel 44 0 1932 841310
fax 44 0 1932 836450
wwwttelectronicscom
tt electronics plc
annual report 2003
t omorrow’s t echnology
tt electronics plc  annual report 2003 who we are and what we do
tt electronics is a global supplier 
of high quality electronic and
electrical products to the world’s
major original equipment
manufacturers it is committed 
to the development of innovative
products for the automotive
telecom computer and 
industrial markets
the group has world class global
manufacturing presence with
factories employing over 8500
people in the united kingdom
continental europe usa and 
low labour cost countries
our vision
our vision is to be a global leader 
in the application of tomorrow’s
technology in the products 
we manufacture
contents
page
1 highlights and ﬁnancial information
2 chairman’s statement
5 tomorrow’ s t echnology
6 – product development
7 – breadth of markets
8 – operational efﬁciency
9 chief executive’s statement
12 financial review
14 directors and company secretary
15 directors’ report
20 directors’ remuneration report
24 consolidated proﬁt and loss account
25 consolidated balance sheet
26 consolidated cash ﬂow statement
27 statement of total recognised gains and losses
27 reconciliation of movements in shareholders’ funds
28 company balance sheet
29 accounting policies
31 notes to the ﬁnancial statements
53 report of the independent auditors
54 notice of meeting
56 group operations
58 historical record
59 form of proxy
ibc shareholder information
designed and produced by linnett webb jenkins printed by ctd capita limited
annual general meeting
the annual general meeting will be held on 19 may 2004 at 
12 noon at the ironmongers’ hall shaftesbury place barbican
london ec2y 8aa
results
announcement of 2004 half year results –  mid september 2004
preliminary announcement of 2004 results –  late march 2005
annual report 2004 – to be posted mid april 2005
dividends
the ﬁnal dividend in respect of the year to 31 december 2003
will be paid on 28 may 2004 to those shareholders on the
register on 21 may 2004 shares ex dividend on 19 may 2004
the interim dividend in respect of the year to 31 december 2004
will be paid in late october 2004
for those shareholders who currently receive their dividends 
by post arrangements can be made to pay your dividends
automatically into your bank or building society account
a registration form will be included with the ﬁnal dividend
this service has a number of beneﬁts
– there is no chance of the dividend cheque going missing 
in the post and
– the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without the
need to wait for the cheque to clear 
multiple accounts on the shareholder register
if you have received two or more copies of this document this
means that there is more than one account in your name on the
shareholder register this may be caused by either your name or
address appearing on each account in a slightly different way
for security reasons the registrars will not amalgamate the
accounts without your written consent so if you would like any
multiple accounts combined into one account please write to
lloyds tsb registrars at the address given below
share dealing services
shareview dealing is a telephone and internet service arranged
through lloyds tsb registrars and provides a simple and
convenient way of selling tt electronics plc shares
for telephone sales call 0870 850 0852 between 830am 
and 430pm monday to friday and for internet sales log 
on to wwwshareviewcoukdealing
a postal dealing service for buying and selling tt electronics plc
shares is also available and a form can be obtained by calling
0870 242 4244
shareholder information
sharegift
sharegift is a charity share donation scheme for shareholders
administered by the orr mackintosh foundation it is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomical to sell on a commission
basis further information can be obtained at
wwwsharegiftorg or from lloyds tsb registrars
shareholder enquiries
lloyds tsb registrars maintain the register of members of the
company if you have any queries concerning your shareholding
or if any of your details change please contact the registrars
lloyds tsb registrars
the causeway
worthing
west sussex
bn99 6da
telephone
0870 600 3970
fax
0870 600 3980 
textphone for shareholders with hearing difﬁculties 
0870 600 3950
lloyds tsb registrars also offer a range of shareholder
information on line at wwwshareviewcouk
website
information on the group’s activities share price and ﬁnancial
performance is available at wwwttelectronicscom tt electronics plc annual report 2003 1
highlights
• proﬁt before goodwill amortisation exceptional items and taxation 
was £200 million 2002 – £192 million
• group turnover on continuing activities of £5275 million 
2002 – £5125 million
• sales to the automotive market grew by 12 per cent which was ahead 
of the average market growththe group has received over £350 million
new automotive orders spread over the lives of the product lines
• the acquisition of optek t echnology for £303 million signiﬁcantly
expanded our sensor activities and will contribute to group 
proﬁtability in 2004
• the board is recommending a maintained ﬁnal dividend of 636p per
share bringing the total for the year to 1005p 2002 – 1005p
financial information
2003 2002
£million £million
t urnover – continuing activities 5275 5125
– discontinued activities 64 78
t urnover – total 5339 5203
operating proﬁt before impairment provisions and goodwill amortisation 221 224
interest 21 32
proﬁt before impairment provisions goodwill amortisation exceptional items and taxation 200 192
proﬁt on ordinary activities after taxation on continuing activities 108 96
earnings per share basic and fully diluted 01p 36p
earnings per share before impairment provisions goodwill  amortisation and exceptional items 104p 101p
ordinary dividends per share 1005p 1005p 2 tt electronics plc annual report 2003
turnover for 2003 on continuing activities was £5275 million
compared with £5125 million in the previous year  an increase
of 3 per cent proﬁt before taxation impairment provisions
goodwill amortisation and exceptional items was £200 million
2002 – £192 million no impairment provisions were made
this year 2002 – £104 million goodwill amortisation was
£18 million 2002 – £21 million and exceptional items
totalled £150 million 2002 – £12 million creditafter these
items the proﬁt before taxation amounted to £32 million
2002 – £79 million
the exceptional items totalling £150 million 2002 – £12 million
credit comprise reorganisation costs of the group’s magnetic
businesses of £37 million goodwill in respect of these
magnetic businesses of £101 million which had previously
been writtenoff to reserves in 1995 the loss on sale of the
business of air transport avionics limited of £04 million 
and associated goodwill writtenoff to reserves in 1994 of 
£08 milliona taxation charge of £32 million has been incurred
being at an effective rate of 23 per cent 2002 – 27 per cent
interest costs have reduced to £21 million from £32 million 
in 2002 earnings per share before impairment provisions
goodwill amortisation and exceptional items were 104p
compared with 101p in 2002
after a difﬁcult ﬁrst halfyear i am pleased to report that the
group achieved a 19 per cent growth in proﬁt over the ﬁrst half
of 2003 operating proﬁt before goodwill amortisation increased
to £120 million from £101 million in the ﬁrst half of 2003 and
compares with £93 million in the second half of 2002
the group ended the year with net borrowings of £782 million
compared with £558 million in 2002the increase in borrowings
was mainly due to the us513 million £303 million
consideration for the acquisition of optek technology inc
the reduction in the borrowings before the acquisition of
optek technology conﬁrms the strong cash management
of the group
during the year tt electronics has beneﬁted from a continuing
growth in the requirement for electronic products by the
automotive industryautomotive sales have grown by 12 
per cent and the group has received substantial new orders
amounting to over £350 million spread over the lives of the
product lines we are supplying sales to the telecom industry
have continued to suffer from lack of demand order intake
however  has recently shown signs of improvementas stated
in my halfyear chairman’s statement we have discontinued 
our laminations business and closed our ferrite manufacturing
in the usa and united kingdomwe are transferring our ferrite
manufacturing to india and are in the course of expanding 
our indian factory to handle the increased volumes
within the electrical sector we continue to concentrate on those
business areas which in the future will have the ability to meet
the group’s ﬁnancial requirements during the year we ceased
the manufacture of generator sets in the united kingdom and
these are now only manufactured in our mexican facility
we have continued to follow our policy of seeking to acquire
businesses at sensible prices which will strengthen our position
in the marketplaceas reported in my interim statement the
net assets of demo tableaux de commande sa with a book
value of £44 million were purchased for £17 million on
14 march 2003 demo manufactures electromechanical climate
controls which complement our electronic climate control units
in recent months there has been an
improvement in the group’s order
intake and as a result tt electronics
looks forward with conﬁdence to
better trading conditions
the acquisition of optek t echnology
is a signiﬁcant expansion of our
successful sensor activities
john newman
chairman’s statement tt electronics plc annual report 2003 3
on 3 december 2003 optek technology inc was acquired 
for a consideration of us513 million £303 million subject 
to completion accountsthe company has its engineering 
and administrative centre at carrolltontexas usa and its
manufacturing facility in juarez mexico the other side of the
usa border to el pasothis acquisition represents a signiﬁcant
expansion of the group’s sensor activities in the year to 
31 january 2003 optek technology made proﬁts before goodwill
amortisation interest and tax of us40 million £24 million
on a turnover of us686 million £404 million prior to 
the acquisition optek technology closed its silicon wafer
manufacturing facility and consolidated all manufacturing 
in juarez mexico resulting in a signiﬁcant improvement 
in proﬁtability optek technology is a leading supplier of
infrared light emitting diodesthese components are used in
marketplaces served by the group including the ofﬁce equipment
market where the products are used for photocopiers and mail
handling devices to monitor the edge of a moving sheet of
paper  optek technology also manufactures sensors for the
automotive industry particularly used for cam and crankshafts
the reputation of optek technology in the marketplace leads us 
to believe that there will be opportunity for good future growth
on 11 march 2004tt electronics announced the acquisition
of sensopad technologies ltd for a cash consideration of 
£14 million together with the payment of future royalties
sensopad technologies has developed an inductive sensor
technology that has both position and angle capabilities
the group believes that this is the technology which will enable 
it to secure orders from the automotive industry in the year
2006 onwards when we commence to replace products based
on the hall effect technologythis acquisition will ensure the
group’s future growth in the automotive market
tt electronics holds a 244 per cent shareholding in pressac plc
a manufacturer of relays electronic and plastic components
for the automotive and telecom accessories markets on 
7 january 2004 sheridan comonte joined the board of pressac
in 2003 we did not have a signiﬁcant inﬂuence on the affairs 
of pressac and have therefore treated this shareholding as an
investment pressac has a strong presence in the european
automotive industry particularly in france
the board recommends a ﬁnal dividend of 636p per share
this brings the total dividend for the year to 1005p the same
as last year the dividend will be paid to shareholders on the
register on 21 may and will be payable on 28 may 2004
the requirement to adopt international financial reporting
standards comes into effect with our 2005 accountswe are
keeping the matter under review to ensure that the adoption 
of these standards runs smoothly
the board continues to address the issues of corporate
governance including the revised code based on the 
reports of sir derek higgs and sir robert smith mr timothy
reed a nonexecutive director of tt electronics plc comes up
for reelection as an independent nonexecutive director at the
forthcoming annual general meeting and annually thereafter 
timothy reed aged 63 has been a nonexecutive director for
more than the nine year term recommended for guidance in the
revised code he is a former corporate lawyer who has
presented a strong independent voice on the board since his
appointment he has seen the group evolve over recent years
and it is the opinion of the whole board that as an independent
nonexecutive director his continuing involvement in the 
group will be beneﬁcial to the future of tt electronics plc
group turnover by market 
automotive 42
industrial 14
telecom  6
computer  4
power generation 10
power transmission 24
group turnover by product 
sensors and electronic systems 31
electronic components 29
electronic manufacturing services 6
power and data transmission 24
power systems 10 4 tt electronics plc annual report 2003
the executive and nonexecutive directors recommend that
shareholders vote in favour of timothy reed being reelected 
as an independent nonexecutive director at the annual 
general meeting
the board will be seeking shareholder approval as set out in 
the accompanying circular  at the annual general meeting on
19 may 2004 for the adoption of two new share option plans
to replace the existing schemes one of which expires in may
2004 and the other in 2006 and amendments to the current
share option schemes to allow the use of treasury shares due
to the economic downturn particularly in the telecom industry
the group’s proﬁts have been at lower levelsas a result the
performance criteria of the share incentive schemes have not 
in recent years been metthe board considers that share option
plans have two principal objectives ﬁrstly to make senior
managers of operating companies feel part of tt electronics
and share in its success and secondly to provide senior staff
based at head ofﬁce with an incentive to achieve above average
performance for the beneﬁt of shareholdersthe board intends
to discuss these proposals with major shareholders and subject
to their support the share option plan resolutions set out on
page 55 will be submitted to shareholders at the annual general
meetingthe board of tt electronics is recommending that
shareholders vote in favour of these resolutions
the past two years have been a difﬁcult trading period for
manufacturers supplying the electronics industriesthe group’s
workforce has responded well despite in many companies some
of their colleagues having to accept redundancy i would like to
thank them for their perseveranceas the trading environment
continues to improve the business outlook becomes better
which in turn will beneﬁt all the group’s employees
i would like to pay tribute to sheridan comonte who retires 
on 5 april having reached the age of 65 over the past sixteen
years sheridan’s considerable knowledge and experience 
has made an immense contribution to tt electronics
as announced in my halfyear statement neil rodgers 
will take over as chief executive on sheridan’s retirement
the weakening of the us dollar against other currencies
creates its own challenges but also opportunities for the last
two years we have been cautious and whilst there has been
encouraging news we have in retrospect been rightly guarded
in believing it was sustainable in recent months we have
experienced an improvement in order intake which we believe
will be maintained and as a result now look forward with
conﬁdence to better trading conditions in the current year 
john w newman
executive chairman
29 march 2004
chairman’s statement continued
robert a fletcher
divisional chief executive
graham m entwistle
divisional chief executive
thomas moore
divisional chief executive
john w newman 
executive chairman
neil a rodgers
chief executive  april 2004
roderick w weaver
finance director
james w armstrong
corporate development director
management team tt electronics plc annual report 2003 5
tt electronics has invested in
development and production
processes to ensure that our
technologically advanced products
meet customers’ requirements
the group is committed to
manufacturing and supplying 
high quality innovative electronic
products for tomorrow’s technology
the following pages highlight
products we have developed
the breadth of the markets 
we serve and our world class
manufacturing capability
t omorrow’s t echnology 6 tt electronics plc annual report 2003
tt electronics works closely with
customers ensuring that its products
provide the features of innovation
and cost effectiveness needed 
to keep in the forefront of current
technology
our technologies cover a range of
electronic products many of which
are patentedthese are continually
updated and added to by the group’s
skilled design and development
engineers
product development
1 filament light bulbs are becoming 
old technology and being replaced by
lightemitting diodes led’s which do
not suffer the same reliability problem
our specially developed aluminium
substrate circuit patent applied for 
is used as a mounting for high intensity
led’san initial development is for 
use on emergency services vehicles
3 the lighter the car the less fuel it
uses heavy copper cabling currently
used in vehicles is being replaced by
the much lighter weight ﬁbre optic
alternative our range of ﬁbre optic
tranceivers has been used for some
years in the telecom industry and has
now been engineered for specialist
automotive applications
2 the intelligent accelerator pedal
incorporates speed limiting functions
and will utilise data provided by gps
navigation systems to reduce a car’s
speed in conformity with speed limits
unless overridden by the driver this
will help improve road safety
1 2
3 tt electronics plc annual report 2003 7
4 5
breadth of markets electronic devices are now a 
major part of our everyday life
a large proportion of our sales are
to the automotive telecom and
computer marketswe are currently
expanding into other markets 
and are allocating additional
engineering resources to develop
products for the ofﬁce equipment
defence and medical sectors
the group’s sales engineers are
based in all the major industrial
countries giving global coverage
4 many of our resistive products are
incorporated into a range of ofﬁce
equipment including telephone systems
photocopiers pc’s laptops and servers
the acquisition of optek technology
has added its range of sensors to the
groupthis will enable us to increase
our sales into these markets
6 many of our products are used in the
civil and military aerospace industry
the products include electronic modules
specialised potentiometers for wing
ﬂap control and complex switches that
control the cabin air conditioning
5 sales to the automotive industry
represent 63 per cent of our electronics
sector turnover  where we specialise 
in a range of sensor products and
assemblies used for driver and passenger
comfort and engine management
systems over 60 per cent of all cars
produced in europe and north america
have at least one of our products built
into them
copyright bmw
6
copyright airbus 8 tt electronics plc annual report 2003
9
7 8
operational efﬁciency the group has manufacturing
locations around the world with 
a number in low labour cost areas
we achieve our world class
manufacturing standards using 
a team of experts who are trained
in a range of modern techniques
we maintain our manufacturing
efﬁciencies by investing in
appropriate new equipment
7 our customer base of global oem’s
demand the highest level of quality with
a failure rate not to exceed a few parts
per million our companies are qualiﬁed
to iso 9001 with many having already
received the even more demanding
ts 16949 standard
9 this innovative patented product 
was developed from our ‘thick ﬁlm 
on steel’ technology and acts as a
heater to enable a ﬂow of material 
at a constant temperature in plastic
moulding machines
8 high performance sensor
technologies have been developed
by our facility in werne germany to
meet the demands of modern exhaust
emission regulations this automatic
production equipment is for the
programmable camshaft sensors ﬁtted
in bmw 4 6 8 and 12 cylinder engines tt electronics plc annual report 2003 9
we continue to respond rapidly 
to the changing demands of 
our customers for new technical
developments improving factory
efﬁciencies and moving more
production to our factories 
in low labour cost areas
sheridan comonte
overview
it is with mixed emotions that i am writing my last report as
chief executive having joined tt electronics plc in 1987 over
the last 16 years the group has been changed signiﬁcantly 
and is now focussed on its electronic and electrical businesses
the group has a global presence servicing major customers
including the majority of the world’s major original equipment
manufacturers “oem” in the automotive telecom computer
and general industrial markets working with them on the
development of new product linesthe group has built up 
a reputation amongst this blue chip customer base as being
innovative cost effective and a high quality manufacturer 
of a range of electronic and electrical products
the global economy in 2003 was generally sluggish with a number
of the world’s developed countries near to recessionthe ﬁrst
quarter gave rise to some optimism in the electronic sector but
this was dashed by the sars outbreak and the iraq war and the
second and third quarters produced a difﬁcult economic climate
there were some positive signs in the fourth quarter of a
strengthening of demand in certain markets which has been
maintained so far in 2004
sales to the automotive market grew by 12 per cent over last
year this success was due to the strength of our product range
and to the successful range of vehicles using our components
electronic component sales were reduced as a result of
downsizing the reorganisation of our unproﬁtable magnetics
operations and lower sales to the still depressed telecom and
computer markets sales of our electronic manufacturing services
business were also reduced following the decision by one large 
customer to take assembly work back in housethere was little
sign of a recovery in the telecom data infrastructure or computer
markets during the year but currently there is generally more
optimism for the sector during 2004the power transmission
and generation markets remained highly competitive imports
from low labour cost countries had an adverse effect on
margins and our export business to the far east was held 
back in the early part of the year due to the sars virus
we continue to respond rapidly to the changing demands 
of our customers for new technical developments improving
factory efﬁciencies and moving more production to our factories
in low labour cost areas will enable satisfactory proﬁt margins
to be achievedwe have continued the introduction of cost
reduction programmes and to streamline our administration
we continue to take a longterm view of our markets and have
increased resources appropriately in both product development
and technical sales where we see opportunities for growth
whilst the group emphasises the importance of organic 
growth to all our businesses we actively seek suitable acquisitions
at the right price provided they enhance our technologies 
and product range for the markets we servethe acquisition 
of optek technology in december 2003 a £40 million turnover
company based in dallastexas with a large manufacturing
unit located just across the border in juarez mexico met our
acquisition criteria and is successfully being fully integrated
into the sensor and electronic systems subsector 
chief executive’s statement 10 tt electronics plc annual report 2003
electronic sector
the electronics’ market continues to change rapidly not only
from a technological standpoint but also as the large oems
move from one country to another to take advantage of the
most cost competitive manufacturing base as well as to serve
the rapidly growing customer demand in developing countries
we continue to monitor and respond to these dynamics
automotive market – represents 63 per cent of the
electronic sector turnover
over the last decade the electronic content of cars has increased
annually at an average of 6 per cent and this trend is forecast 
to continue it is pleasing to note that our sales growth to this
market was 12 per cent and above the average market growth
we recognised the potential of this market some years ago and
have developed a range of technologies and products which
satisfy this demand currently 60 per cent of all cars produced
in europe and north america incorporate at least one of our
productsthe demand for electronics is driven by three main
features and our technologies and products are used in all 
three of these growth areas
demand for enhanced vehicle performance and better fuel efﬁciency
a key aspect of reducing exhaust pollutants is to improve fuel
efﬁciencies which is achieved by a combination of better
engine management systems and lighter weight cars
tt electronics has developed a number of sensors which form 
a part of the complex electronics required in today’s engine
management systems as well as being a pioneer in driveby
wire technologies for accelerator  brake and steering systems
currently all new bmw and mercedes benz cars use our
accelerator pedal sensor modules which are produced on
dedicated automated production lines at one of our german
plants electronic steering is taking over from the currently 
used hydraulic systems as this saves weight improves fuel
consumption and reduces costtt electronics was one of the
ﬁrst to market sensors for an electrically powered system and
these are now incorporated into a growing number of european
and north american cars sales of these sensors grew by 
20 per cent last year 
demand for improvements to car safety 
a car’s stability on the road is paramount and we produce 
a range of sensors for chassis height control as well as abs
braking sensors other sensors and systems include hybrid
circuits for controlling high intensity discharge headlamps
demand for improved driving comfort
at our automotive engineering centre in wales we specialise in
the design of complex climate control systems which control
the different zones in a vehicle’s passenger compartment as
well as incorporating incar entertainment systems such
systems can take up to 12000 engineering hours to develop
due to the need for the software to interface with other
electronic and electrical systems within the car as well as
designing the appropriate style of the unit incorporated into
the dashboardthese products are manufactured in wales and
the usa and following the acquisition of demo in france and
brazil last year the total number of our units sold increased
to over two million units
t elecom market – represents 9 per cent of the
electronic sector turnover
the telecom market had in the past shown steady growth
which peaked during the boom year of 2000 subsequently
in part due to the ﬁnancial difﬁculties of many of the world’s
largest service providers and equipment manufacturers the
demand for the wide range of components we manufacture 
for this industry collapsed sales this year reduced by 16 per cent
from 2002 and by over 60 per cent from 2000telecom products
attracted a good proﬁt margin and this reduction in demand
has adversely affected proﬁtability
currently there are signs that investment in both wireless and
wireline infrastructures will increase as service providers and
equipment manufacturers repair their balance sheets and the
world’s spare capacity becomes more utilised driven by the
demand for new technologieswe expect some growth in this
market in 2004
due to the reduction in demand and increasing competition
from china sales of our magnetic components have been badly
affectedwe have responded by a major reorganisation of our
operationsthis included closing our manufacturing plants for
laminations in the united kingdom and exiting this market
our ferrite manufacturing plants in the united kingdom and
usa have been closed and production transferred to our low
labour cost factory in india which is being enlarged to handle
the additional equipment and turnover 
computer market – represents 6 per cent of the
electronic sector turnover
our range of inductors and resistors continue to be designed
into assemblies by the world’s leading computer manufacturers
however  the rapid move of the production of pc’s and laptops
to china has impacted on the sales which have reduced by
34 per cent from 2002 and over 60 per cent from 2000these
factors have caused us to reevaluate our supply chain into 
this market during the year we increased our presence
in china by opening a technical centre based at our sales ofﬁce
in shenzhen and set up a manufacturing facility in southern
mainland chinathis has the effect of bypassing import duties
chief executive’s statement continued tt electronics plc annual report 2003 11
into china and giving us a more competitive base to offset 
the rapid rise in local chinese competition
industrial market – represents 22 per cent of the
electronic sector turnover
this market includes a wide range of industries and a large
number of companies from large international to more niche
specialist companiesthe majority of our sales have been to 
the control instrumentation and aerospace sectors which have
been stagnant during the year  our marketing departments
continually analyse the opportunities and focus our technical
sales and engineering on growth areas or where we have 
a technological advantage
optek technology sales to the ofﬁce equipment market
represent 32 per cent of their turnover and it is our intention
to use their contacts and expertise to increase sales of our
existing products into this market
electrical sector
power generation – represents 29 per cent of the
electrical sector turnover
the majority of the generator sets we manufactured in the
united kingdom were for export to africa the middle east and
the far eastthis market has been depressed for some years
and made worse by the strength of sterling against the us
dollar this year proﬁtability was adversely affected by technical
problems on a large complex project for north africato enable
us to remain competitive we have withdrawn from production
in the united kingdom and transferred business to our efﬁcient
and proﬁtable factory in mexico which has undergone an
expansion and upgrade programme over the last three years
we continue to run a maintenance and overhaul service for
both the united kingdom and selected overseas customers
our uninterruptible power supply business which has suffered
due to the telecom downturn won a number of new orders 
for our product incorporated into mobile base stations 
in singapore and thailand
power transmission – represents 71 per cent of the
electrical sector turnover
we have been successful in winning the subsea cable
contracts for both of the offshore wind farms constructed in 
the united kingdom to date and have expectation of winning
future ordersthe wind farm cable delivered in the middle 
of 2003 whilst achieving an acceptable margin due to its
technical complexity caused other production disruptions and
delaysthe general industrial cable market is still oversupplied
and is open to competition from low cost imports from eastern
european countries which has the effect of depressing margins
the specialist cable contract which we won in the second half
of 2003 for new naval vessels currently under construction 
will commence delivery shortly and further orders are 
expected later this year 
outlook
i stated in my review in march last year that 2003 would be 
a demanding environment in which to grow sales in the early
stages of 2004 there is generally more optimism for the recovering
worldwide economy and demand for our products is increasing
tt electronics is well prepared to beneﬁt from such a recovery
our policy has and will be to continue to manage the group 
in the longterm interest of shareholders and employees
i am pleased to be handing over my role to neil rodgers
who joined the group 12 years ago and has for the last 7 years
been divisional chief executive responsible for our successful
automotive businesses i wish him and the management
teams who have supported me over the years good fortune
and an improving marketplace
sheridan w a comonte
chief executive
29 march 2004 12 tt electronics plc annual report 2003
results
the group has undergone major changes during the year  in
particular the acquisition of optek technology at a cost of 
£306 million and the reorganisation of the magnetics business
the reorganisation of magnetics involved the discontinuance of
the united kingdom based laminations operation and the transfer
of ferrite production from the usa and united kingdom to
indiathe group also acquired the business of demo t ableaux
de commande sa “demo” for £17 million and sold the
business of air transport avionics for £11 million
the results of the acquisitions being turnover of £94 million
and operating proﬁt before goodwill amortisation of £02 million
and the discontinued activities being sales of £64 million and
an operating loss of £05 million are shown separately on the
proﬁt and loss account
there are exceptional items of £150 million which include 
£109 million of goodwill in respect of the reorganisation of the
magnetics businesses and the disposal of air transport avionics
the group’s turnover from continuing activities including
acquisitions increased to £5275 million 2002 – £5125 million
and operating proﬁt before goodwill amortisation was
£226 million 2002 – £240 million
the electronic sector has beneﬁted from a strong demand for
automotive products particularly from european customers
but the demand from other markets remains weakturnover 
for electronics including acquisitions was £3493 million 
2002 – £3412 million and operating proﬁt before goodwill
amortisation was £169 million 2002 – £173 million
the electrical sector turnover was £1782 million 2002 –
£1713 million and operating proﬁt was £57 million
2002 – £67 millionthere were no exceptional items 
or goodwill amortisation affecting the electrical sector 
the reduced proﬁtability was mainly due to manufacturing
problems experienced on a subsea cable contract and the 
very demanding speciﬁcation of a power generating project
supplied to north africa both these problems related to the
ﬁrst half of 2003 production of complex power generating
installations has now ceased in the united kingdom and sales
of generator sets are now focussed on more straightforward
designsthese will be manufactured at our plant in mexico
which has been successful in supplying this type of product
acquisitions
in early december the group acquired optek technology at a
cost of £306 million optek technology is based in texas usa
with its manufacturing plant in mexico where it manufactures
speed and position sensors which are used in the automotive
ofﬁce machinery and industrial equipment markets in the
month since acquisition it was proﬁtable on a turnover of 
£26 million in march 2003 the group purchased demo which
designs and manufactures automotive climate control units
this cost £17 million and since acquisition has generated
turnover of £68 million but is not yet proﬁtable it is planned 
to build on the strength of our united kingdom climate 
control operation and develop a strong base to address the
continental european and particularly the french market
exceptional items
the exceptional items comprise the loss on disposal of the
business of air transport avionics the cost of discontinuing 
roderick weaver 
financial review
geographical analysis 
of net assets
united kingdom 44
rest of europe 14
north america 38
rest of the world 4
geographical analysis 
of turnover by origin
united kingdom 49
rest of europe 26
north america 19
rest of the world 6 tt electronics plc annual report 2003 13
the laminations business and transferring the manufacture 
of ferrites from the united kingdom and usa to the group’s
factory in india in previous years the magnetics businesses were
a signiﬁcant part of the group’s activitiesthese costs include the
writeoff and loss on disposal of ﬁxed assets provision for
obsolete stock and redundancy and other costs associated with
the termination of employment exceptional items also include a
charge of £109 million through this year’s proﬁt and loss account
for the goodwill which arose on the acquisition of air transport
avionics and the laminations businessthis goodwill had already
been writtenoff to reserves in 1995 or before and this therefore
has no effect on the group’s shareholders’ funds
finance costs
the interest charge for the year was £21 million 
2002 – £32 millionthe reduction from the prior year is due
to lower interest rates during 2003 particularly in respect 
of us dollars and lower borrowings for the majority of the 
year the interest rate on us65 million of borrowings has 
been ﬁxed by the use of interest rate swaps at an average 
rate of 27 per cent until june 2005
taxation
the effective rate of tax was 23 per cent 2002 – 27 per cent
this low rate of tax reﬂects the utilisation of losses some of
which have been carried back for relief against the tax charge
of prior years and the tax efﬁcient corporate structurethe
charge through the proﬁt and loss account for the goodwill
previously writtenoff has no effect on taxation
cash ﬂow and net borrowings
the group has generated £452 million 2002 – £426 million
from operations which continues to reﬂect the high priority given
to control over working capital in 2003 the investment in capital
expenditure totalled £235 million 2002 – £265 million in
december the borrowings increased by £302 million as a result
of the acquisition of optek technology excluding this acquisition
the group’s borrowings would have reduced by £78 million to
£480 million and a gearing of 24 per cent 2002 – 27 per cent
following the acquisition at 31 december 2003 the gearing was
40 per cent 2002 – 27 per cent with total debt of £782 million
2002 – £558 million
earnings and dividends
the group has generated earnings per share before goodwill
amortisation and exceptional items of 104p per share 
2002 – 101p per sharethe loss for the year is £01 million
2002 – £56 million proﬁt which is attributable to the charge
though the proﬁt and loss account of £109 million of goodwill
which had previously been writtenoff to reservesthe board
proposes that the ﬁnal dividend is held at 636p per share
giving an unchanged total dividend for the year of 1005p 
per sharea dividend of 1005p per share will result in a
distribution of £156 million which is covered by proﬁt before
charging the exceptional items and goodwill amortisation
t reasury and foreign currency
treasury policy is controlled centrally and the group’s
borrowing requirements are predominantly provided by 
three clearing banks in the united kingdom borrowings are
funded by overdraft arrangements and an unsecured £50 million
multicurrency loan facility which expires in 2006there are
also facilities with local banks in other countries the group’s
policy is to avoid the risk of the effect of movements in foreign
currency exchange rates known and anticipated future
transactions are hedged using appropriate forward currency
contractsthe exchange differences arising from the translation 
of assets and proﬁt streams denominated in nonsterling
currencies are also hedged by the use of matched borrowings 
and forward currency contractsthe overall effect of the
strengthening euro and weakening us dollar against sterling
has not had a material impact on the group resultsthere are
no off balance sheet borrowing arrangements and the use
of derivatives is restricted to reducing the group’s exposure
to price and cost including interest rate ﬂuctuations
pensions
the group has made the appropriate disclosures for pensions
as required by frs 17 in note 34 to the accountsthe shortfall
between the pension funds’ assets and liabilities has reduced
due to the recovery in the market value of equities as measured
at 31 december 2003 offset by the lower bond yield used 
by the independent actuary to discount future pension fund
liabilities during the year the contribution rate paid by the
employees increased by one percentage point for all deﬁned
beneﬁt schemes which with higher employer contributions 
will address this shortfall over the coming yearsthe group’s
deﬁned beneﬁt schemes are closed to new members
risk management
the group maintains strict ﬁnancial control over its operations
through detailed internal control systemsthe adequacy of 
all aspects of internal control systems are reviewed formally 
by the audit committee twice a year and the board as a whole
reviews the signiﬁcant risks to which the group is exposed
during the course of its operations
financial reporting
the accounts for 2003 have been prepared using accounting
policies which are unchanged from 2002the group will be
required to adopt international financial reporting standards
‘ifrs’ for the results of 2005the ﬁnalisation of the new
standards in march 2004 enables the group to determine 
its most appropriate accounting policies under ifrs and the
group is currently undertaking a review of the impact on its
reported results
roderick w w eaver
finance director 
29 march 2004 14 tt electronics plc annual report 2003
1 john w newman 58
executive chairman  
appointed to the board in 1986
a chartered accountant who is also
chairman of send group limited
and the newship group of companies
2 sheridan wa comonte 65
chief executive 
appointed to the board in 1987
previously an executive director 
of newship group limited
retiring on 5 april 2004
3 neil a rodgers 50
chief executive 
appointed to the board in 2003 and
became chief executive on 5 april 2004
a chartered management accountant
who joined tt electronics plc in 1992
previously with bodycote international
plc and siebe plc
4 roderick w weaver fca 53
finance director 
appointed to the board in 1995
a chartered accountant who 
was previously with ab electronic
products group plc
5 james w armstrong 56
corporate development director
appointed to the board in 1998
a chartered accountant previously 
with newship group limited
joined tt electronics plc in 1988
6timothy h reed 63
nonexecutive director   
appointed to the board in 1973
nonexecutive chairman from 1974
to 1995 previously a senior partner 
of dla – solicitors also a non
executive director of a number 
of private companies
7 sir laurence magnus 48
nonexecutive director 
appointed to the board in 2001
an investment banker vice chairman 
of lexicon partners nonexecutive
chairman of xchanging inssure
holdings limited a nonexecutive
director of the jp  morgan fleming
income  capital investment trust plc
and an elected member of the council
of the national trust and chairman 
of its finance committee
8 mark s evans 70
nonexecutive director
appointed to the board in 1997
formerly a director of credit lyonnais
laing currently a director of merrill
lynch european investment trust plc
and heavitree brewery plc
will retire before the end 
of 2004
9 david ea crowe 64
nonexecutive director  
appointed to the board in 1993
served as an executive director to
30 april 2000 and is now a nonexecutive
director  previously a senior partner
of gouldens – solicitors
10 martin g leigh  acma 59
group company secretary 
directors and company secretary
1 2 3
4 5 6
7 8 9
10
 senior independent nonexecutive director
independent nonexecutive director tt electronics plc annual report 2003 15
directors’ report
the directors submit their report and the audited ﬁnancial
statements for the year ended 31 december 2003
business review
the operational and ﬁnancial reviews are set out on pages 
5 to 13 of this annual report and should be read as part of 
the directors’ report
activities
tt electronics plc is a holding company providing management
services to the groupthe principal operating subsidiaries
which are listed on pages 56 and 57 operate in the electronic
and electrical sectors
results
the group’s proﬁt on ordinary activities before taxation 
was £32 million 2002 – £79 million after taxation and
minority interests the group made a loss of £01 million 
2002 – £56 million proﬁtthe audited ﬁnancial statements
of the group are set out on pages 24 to 52
acquisitions
the group acquired on 14 march 2003 the business of demo
t ableaux de commande sa for a consideration of £15 million
and on 3 december 2003 optek technology inc for a
consideration of £303 million subject to completion accounts
further details are set out in note 27 to the ﬁnancial statements
disposal
the business of air transport avionics limited was sold for
a cash consideration of £11 million during the year  further
details are set out in note 28 to the ﬁnancial statements
fixed assets
no professional valuation of land and buildings has been
carried out during the year  but in the opinion of the directors
the market value on an existing use basis is considered to be
not materially different from net book value
research and development 
the group carries out research and development in order 
to develop new products and processes and to improve
substantially existing products and processes
ordinary dividends
the directors recommend a ﬁnal dividend of 636p per 
share 2002 – 636p to be paid on 28 may 2004 to ordinary
shareholders on the register at 21 may 2004 which together
with the interim dividend paid on 30 october 2003 makes 
a total of 1005p for the year 2002 – 1005p after this
distribution of £156 million there is a retained loss of
£157 million to be taken from group reserves
future prospects
the future prospects of the group are referred to in the
chairman’s statement and chief executive’s statement
on pages 4 and 11 respectively
directors 
the directors set out below held ofﬁce during the year 
in accordance with the articles of association j w newman
and j w armstrong and in accordance with the revised code
on corporate governancet h reed retire by rotation
messrs newmanarmstrong and reed being eligible
offer themselves for reelection
n a rodgers was appointed on 4 september 2003 and this
being an appointment since the previous annual general
meeting retires in accordance with the articles of association
and being eligible offers himself for reelection
directors’ interests
the directors of the company held beneﬁcial interests in the
following numbers of the company’s ordinary shares of 25p
each on 1 january 2003 or date of appointment if later 
31 december 2003 and 19 march 2004
31 dec 2003 and 1 jan 2003 or date of
19 mar 2004 appointment if later
ordinary shares ordinary shares
j w newman 16212627 16112627
s w a comonte 64500 64500
na rodgers 10000 –
r w weaver 12500 12500
j w armstrong 14582 14582
t h reed 118634 118634
m s evans 20000 20000
d e a crowe 48454 48454
sir laurence magnus 16685 16685
the following director of the company held nonbeneﬁcial
interests in the following numbers of the company’s ordinary
shares of 25p each on 1 january 2003 31 december 2003 
and 19 march 2004
31 dec 2003 and
19 mar 2004 1 jan 2003
ordinary shares ordinary shares
j w newman 10182437 10182437
the ordinary shares in which j w newman held nonbeneﬁcial
interests comprised part of the holding in which he held
beneﬁcial interests 16 tt electronics plc annual report 2003
directors’ report continued
share capital
the share capital during the year and the number of 
ordinary shares reserved for issue are shown in note 24 
to the ﬁnancial statements
annual general meeting 
the notice of the company’s 2004 annual general meeting 
is set out on pages 54 and 55
resolutions will be proposed at the annual general meeting 
to renew for a further year the authority of the directors to 
allot and grant rights over the unissued share capital and to
authorise the directors to allot and grant rights over ordinary
shares or sell shares held in treasury see below for cash 
up to a maximum nominal amount representing 5 per cent 
of the issued ordinary share capital without ﬁrst making 
a pro rata offer to all existing ordinary shareholders
a resolution will be proposed authorising the company to
make market purchases of its own shares of up to 10 per cent 
of the issued ordinary share capitalthe company will only
make purchases of its own shares if the directors are satisﬁed
that it would be in the best interests of the company to do 
so and that such purchases would result in an increase in the
earnings per share attributable to ordinary shareholders
pursuant to changes to the companies act 1985 that came
into force on 1 december 2003 shares purchased out of
distributable proﬁts by the company under the power granted 
by the resolution may be held in treasury for later sale
cancellation or  providing listing rule requirements are met
transfer to an employee share scheme instead of being
cancelled immediately providing that certain statutory
requirements are met and to the extent that such shares held 
in treasury do not exceed 10 per cent of the company’s issued
share capital
shares repurchased by the company and held in treasury can
be held indeﬁnitely pending for example a suitable time to
place them back on the marketthis would enable the company
if the board believed the circumstances to be appropriate to
sell shares held in treasury to take advantage of capital growth
in its own shares sales of treasury shares must be for cash and
are subject to statutory preemption rights
shares repurchased by the company may in light of the
circumstances existing at the time of the repurchase also 
be immediately cancelledthe effect of any cancellation would
be to reduce the number of shares in issue for most purposes
while held in treasury shares are treated as if they had been
cancelled for example shares held in treasury carry no voting
rights and do not rank for dividends
a resolution will be proposed to approve the directors’
remuneration report for the year ended 31 december 2003
subject to the support of major shareholders resolutions will 
be proposed for the amendment of the current share option
schemes for the utilisation of treasury shares and the adoption
of new approved and unapproved share option plans to be
effective following the annual general meetinga letter from
the executive chairman setting out the background to the
proposed changes is enclosed with the annual report
substantial shareholdings 
at 19 march 2004 the company had been notiﬁed of the
following disclosable interests which represented 3 per cent 
or more of the existing issued ordinary share capital
number 
j  w newman
1
16212627 104
fmr corp
2
10962387 70
tweedy browne company llc 10245227 66
newship industries limited
1
10182437 65
newship investments limited
1
9903250 63
legal  general investment
management limited 4776549 31
the tt electronics shares in which newship industries limited
is interested are as to 9903250 such shares the same as
those in which newship investments limited is interested and
comprise part of the holding of tt electronics shares in which
j w newman is interested
fmr corp fidelity international limited and edward c johnson 3d
have notiﬁed an interest in the same shares
so far as can be ascertained no other person or corporation
holds or is beneﬁcially interested in any substantial part 
of the share capital of the company
charitable donations 
during the year the group contributed £50000 
2002 – £50000 for charitable purposesthere were 
no political contributions
employees 
every company in the group is encouraged to develop and
implement employment policies and remuneration schemes
which are designed to identify employees with that company’s
achievements and the ways by which their knowledge 
and skills can best contribute towards its successthe 
directors recognise the importance of employee involvement
throughout the group and this is fostered by the development
of communications through the normal subsidiary company
reporting proceduresthe group gives equal opportunities 
to disabled persons whenever possible both in recruitment 
and career development
2
1 tt electronics plc annual report 2003 17
auditors
a resolution will be proposed at the annual general meeting 
to reappoint grant thornton as auditors to the company and 
to authorise the directors to ﬁx their remuneration
corporate governance 
the company is committed to high standards of corporate
governancethis statement describes how the board has
applied the principles of good governance set out in the
combined code the code issued by the hampel committee
on corporate governancethe code is part of the listing rules
of the financial services authority it applied to the company
and the company complied with it throughout the year 
in july 2003 the financial reporting council revised the code
the revised code based on reports of sir derek higgs and
sir robert smith published in january 2003the revised code
is not applicable to the company in the year under review
but the company formalised its procedures in march 2004 
to enable the board to report on its compliance as required
under the revised code in the 2004 ﬁnancial year 
the paragraphs below and in the remuneration report on
pages 20 to 23 set out how the company has applied the
principles laid down by the codethey also explain certain
procedural changes that have been made in anticipation 
of and in response to the revised code
the board
the board of tt electronics plc currently comprises ﬁve executive
directors and four nonexecutive directorsthe nonexecutive
directors with the exception of d e a crowe are considered by
the board to be independent of the companys management
and free from any business or other relationship which could
interfere with the exercise of their independent judgement
under the revised code the position of t h reed has been
reviewed and the board have concluded that in their view
t h reed has consistently been a strong independent voice 
on the boardthis conclusion is supported by his background
as a practising lawyer in the ﬁelds of company and commercial
law in addition he has never been ﬁnancially dependent on 
the company during his period on the boardthe group has
evolved and changed substantially during his period of ofﬁce
and his knowledge of the company and its subsidiaries and 
the history of corporate activity leading to the present structure
of the group provide a valuable independent resource to the
other nonexecutive directorsthis conﬁrms the board’s
opinion that he is an independent nonexecutive director 
t h reed will be subject to annual reelection at the company’s
annual general meetingall directors with the exception 
of t h reed are subject to reelection every three years 
and on appointment at the ﬁrst annual general meeting 
after appointment
the board meets every other month and has adopted a
schedule of matters speciﬁcally reserved to itself for decision
strategies proposed by the executive directors are fully
discussed at board meetings
t h reed has been designated senior independent nonexecutive
director and chairs the audit and remuneration committees
discussions on all matters at board meetings are based on
timely distribution of written information to all directors
the executive chairman is responsible for ensuring
constructive relations are maintained between executive 
and nonexecutive directors
all directors have access to the advice and services of 
the company secretary and are offered such training as is
considered necessary to fulﬁl their role as directors both on
appointment and at any subsequent timethere is an agreed
procedure for directors to take independent professional
advice at the company’s expense if necessary
s w a comonte will retire on 5 april 2004 and n a rodgers will
assume the role of chief executive and be responsible for the
running of the group’s operating companies
j w newman as executive chairman takes the leading role in
strategic planning he is also primarily responsible for liaison
with the company’s institutional investors and relationships
with the group’s bankers
j w newman s w a comonte n a rodgers and r w weaver
meet institutional investors immediately after publication 
of the annual and interim resultsthey are also available at
other times to enter into dialogue with institutional investors
information provided at these meetings together with ﬁnancial
press releases are available on the group’s websitethe annual
general meeting is used to communicate with private investors
nominations committee
the appointment of n a rodgers was made by the board
following a review of possible candidateswith effect from
march 2004 the board has established a nominations
committee comprising the three independent nonexecutive
directors and the executive chairman to make recommendations
to the board on the appointment of executive or nonexecutive
directors and the appointment of members to the audit and
remuneration committeesthe chairman of the committee 
is the executive chairman 18 tt electronics plc annual report 2003
directors’ report continued
audit committee
during the year the audit committee met three times and 
the four nonexecutive directors attended all the meetings
at two of these meetings the committee met with the auditors
without the executives of the company being presentthe
committee carried out its duties including keeping under
review the scope and results of the audit and its cost
effectiveness and the independence and objectivity of the
auditors reviewing any changes in accounting policies and
practices major judgmental decisions affecting interim and
annual results and compliance with accounting standards 
and with the companies act and considering the auditors’
comments on internal controls and management’s response
the audit committee also keeps under review the nature 
and extent of nonaudit services provided by the auditors
the register of principal risks has been reviewed twice during
the year by the audit committeethe audit committee reviews
the effectiveness of the group’s internal control systems and
monitors the performance of the internal control function
in march 2004 following the introduction of the revised 
code the membership and role of the audit committee were
reviewed by the boardas a result the membership now
comprises the three independent nonexecutive directors
being t h reed m s evans and sir laurence magnusthe
principal duties were reconﬁrmed as set out above and it was
the board’s opinion that the audit committee as a whole has 
the required ﬁnancial experience to meet the revised code
requirement the chairman of the committee is t h reed
review of principal risks and internal controls 
the directors acknowledge that they are responsible for the
group’s systems of internal control and for reviewing their
effectiveness in accordance with the guidance of the turnbull
committee and following the introduction of the revised code
the board has identiﬁed and set out procedures for managing
risks faced by the groupthese procedures have been in place
for the full ﬁnancial year and up to the date the ﬁnancial
statements were approvedthe risk management procedures
and systems of internal control are designed to manage 
rather than eliminate the risk of failure to achieve the group’s
strategic objectives it should be recognised that such systems
can only provide reasonable and not absolute protection
against material misstatement or loss
risk management and evaluation takes place as part of the
annual budget preparation cycle and the monthly management
meetings of operating companies having identiﬁed the risks
each operating company then monitors and reviews them on 
a regular basisthe board reviews at each board meeting the
current positiona further review is carried out twice annually
by the audit committee
the group’s internal control manager monitors and reports
formally biannually to the audit committee with appropriate
reports to the executive directors during the course of the
review procedure on the risks set out in the register of 
principal risks
the group is committed to a policy of maintaining strict internal
ﬁnancial control over all its activities controls are designed 
to provide the directors with reasonable assurance that assets
are safeguarded transactions are properly authorised and that
material errors and irregularities are either prevented or are
discovered on a timely basisthe system of control itself is well
established it is reviewed regularly and enhanced to meet the
requirements of the group’s development
principal features of the system of internal ﬁnancial 
control include
– the directors meet every other month as a board to monitor
ﬁnancial performance and to maintain overall control 
of signiﬁcant strategic and ﬁnancial issues
– the group is structured so as to enable each operating
company to be an autonomous unit but subject to the policies
rules and procedures determined by the directorsthe
directors exercise control over operating companies through
senior executives who monitor and oversee the ﬁnancial
performance and controls of each operating companythe
directors of operating companies are held accountable for
the effectiveness of the implementation and maintenance of
controls within their companiesthis provides constant and
consistent management appropriate to a devolved structure
– the group has detailed ﬁnancial planning and reporting
systems detailed management accounts are prepared
monthly by each operating company comparing actual
performance with budgetthe ﬁnancial performance of each
operating company is subjected to detailed formal review 
at monthly meetingsan important aspect of these reviews 
is the early identiﬁcation of potential business risks and
agreement on suitable and prompt courses of action
operating companies prepare strategic plans and annual
budgets which are implemented following review and
approval by the directors tt electronics plc annual report 2003 19
– the group has comprehensive control and approval
procedures which are rigorously enforcedthere are clear
deﬁnitions of appropriate authorisation levels capital
investment and other major items of expenditure are made
only after compliance with detailed appraisal procedures and
if above a set level only with the approval of the directors
– accounting and reporting policies and practices require 
that the group’s accounting records are prepared with
consistency accuracy and prudence
– adherence to procedures is reviewed and supported by 
an internal control manager who reports to the finance
director the framework for maintaining control procedures
is also monitored by the audit committee and the internal
control manager 
– certain key functions including funding taxation
provision of legal advice insurance and treasury are
controlled at the group’s head ofﬁce and are monitored 
by executive directors
the directors have reviewed the effectiveness of the system 
of internal control during the period covered by the accounting
year to 31 december 2003 and the period since then to the
date of this report
supplier payments policy 
the group’s policy in relation to the payment of its suppliers 
is to agree its terms of payment with each supplier when
negotiating the terms of each business transaction it is group
practice to abide by the agreed terms of payment unless the
supplier defaults under its own obligationstrade creditors 
at the year end amount to 49 days of average supplies for 
the year 2002 – 56 days
environmental policy 
companies in the group adopt a responsible attitude towards
the protection of the environmentthe group strives to meet
requirements of all applicable environmental laws and
regulations to improve continuously environmental performance
and to contribute to longterm economic environmental and
social sustainability each site is encouraged to attain the latest
quality accreditation such as iso 14001 where appropriate
group companies develop energy efﬁcient means of manufacture
seek to reduce reuse and recycle waste and arrange for
disposal of other waste responsibly
statement of directors’ responsibilities in relation 
to ﬁnancial statements 
the directors are required by the companies act 1985 to
prepare ﬁnancial statements for each ﬁnancial year which 
give a true and fair view of the state of affairs of the company
and the group as at the end of the ﬁnancial year and of the
group proﬁt or loss for the ﬁnancial year 
the directors in preparing the ﬁnancial statements are 
required to use suitable accounting policies and to apply them
consistently to make reasonable and prudent judgements and
estimates and to state whether the accounting standards
which they consider to be applicable have been followed
the directors have responsibility for ensuring that the
company and the group prepare and maintain accounting
records which disclose with reasonable accuracy at any time
the ﬁnancial position of the company and the group at that
time and which enable them to ensure that the ﬁnancial
statements comply with the companies act 1985
the directors have a general responsibility for taking such 
steps as are reasonably open to them to safeguard the assets 
of the company and the group and to prevent and detect 
fraud and other irregularities
going concern 
the directors conﬁrm after making appropriate enquiries
that they have a reasonable expectation that the group has
adequate resources to continue in operational existence for 
the foreseeable future for this reason they continue to adopt
the going concern basis in preparing the ﬁnancial statements
the auditors’ responsibilities are set out on page 53 and
should be read in conjunction with this statement
approved by the board on 29 march 2004 and signed on 
its behalf by
mg leigh
secretary 20 tt electronics plc annual report 2003
directors’ remuneration report
the board submits its directors’ remuneration report for the
year ended 31 december 2003 which has been prepared in
accordance with the directors’ remuneration report regulations
2002 ‘regulations’ and meets the relevant requirements of
the listing rules of the financial services authorityas required
by the regulations a resolution to approve the report will be
proposed at the annual general meeting of the company 
to be held on 19 may 2004
the regulations require the auditors to report to the company’s
members on the auditable section 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 as amended by the regulations
the report has therefore been divided into separate sections 
for audited and unaudited information
unaudited information
remuneration committee
during the year the remuneration committee comprised four
nonexecutive directors met three times and all members were
present in march 2004 following the introduction of the revised
code on corporate governance the role of the committee 
was reviewed by the board and with effect from that date the
committee consists of independent nonexecutive directors
t h reed m s evans and sir laurence magnusthe role of the
committee is to establish the remuneration policy and to
consider and approve on behalf of the board the terms and
conditions of service of the executive directors including
pensions performance related pay and share incentive plans
the committee reviews remuneration trends across the group
and monitors any major changes in employee beneﬁt structures
fees payable to nonexecutive directors are determined by the
boardthe committee consults the executive chairman
concerning its proposals and has access to internal and
external professional advicethe chairman of the committee 
is t h reed
remuneration policy
the current remuneration policy was established by the
remuneration committee following a review carried out by
inbucon the salary research group commissioned by the
remuneration committee inbucon have not provided any
other services to the companythe report prepared in july
2001 found that the current rates of salary were at or about
the current market levels when compared with organisations
with similar market capitalisationthe survey compared the
directors’ remuneration against a comparative group of 12
companies above and 12 below the company’s market
capitalisation in the ftse electronic and electrical sector and
similar criteria in the ftse 350 since july 2001 salary increases
have been limited to increasing in 2001 the remuneration of 
a then recently appointed director into line where it had been
slightly below the level in the inbucon report or awarding
increases in line with inﬂation and similar to the average 
award made to other group executives it is envisaged that 
this policy will continue and it is likely that outside consultants
will be asked for a report in the future
the remuneration package provided to s w a comonte 
includes an annual bonus which is capped at 100 per cent 
of salary that has been calculated on a pro rata payment of
£10000 for each one million pounds of pretax pregoodwill
proﬁt in accordance with the company’s management accounts
above 90 per cent of the budgeted pretax pregoodwill proﬁt
for the year  r w weaver and j w armstrong are each entitled 
to a discretionary bonus determined by the remuneration
committeethere were no bonuses paid or payable in respect
of the proﬁts earned in years to 31 december 2002 and 31
december 2003the remuneration package for n a rodgers
on his appointment on 4 september 2003 consisted of a base
salary only and will be reassessed  on his appointment 
as chief executive on 5 april 2004
share options
in accordance with the remuneration policy the remuneration
committee generally grants options following the announcement
of the group results to a value representing 50 per cent of basic
salary at full market value to executive directors under the
terms of the 1994 and 1996 executive share option schemes
options under these schemes are generally exercisable not less
than three and not more than ten years after their grant and
then only if a performance criterion has been achieved prior 
to 2001 the group must have experienced annual growth in 
its earnings per share of at least 2 per cent over and above 
the retail price index for a period of three years following the
grant of the optionsamendments to the tt group plc 1996
unapproved executive share option scheme were approved at
an egm held on 10 may 2001 it was explained in the circular
seeking that approval that meis executive compensation
consulting had carried out a review of performance targets
and conditions currently in place within ftse 350 companies
that had adopted new share option schemes or amended
existing share option schemes during 2000 following receipt
of that review the board determined that in future options
granted under share option schemes would carry a performance
condition stating that the group must have experienced annual
growth in its earnings per share of at least 4 per cent over and
above the retail price index for a period of three years following
the grant of the optionsthe constituent parts of the condition
are calculated each year to see if the performance condition
has been metthe board believes that the conditions selected
are appropriate for the reasons set out in the meis report meis
have not provided any other services to the company it is the
board’s intention subject to shareholder approval to implement tt electronics plc annual report 2003 21
new share option plans following the annual general meeting
in may 2004a letter from the executive chairman setting out
the proposed changes is enclosed with the annual report
as s w a comonte is no longer eligible under the rules of the
share option schemes to be granted further options he has been
granted a bonus calculated so that if the pretax pregoodwill
proﬁts of the group to 31 december 2002 and 31 december
2003 each year are 4 per cent per annum over the retail price
index above the published pretax pregoodwill proﬁts 
for the year to 31 december 2001 he will be paid the difference
between the share price on 31 march 2004 and 165 pence
multiplied by 70000this condition has been chosen because
it links the beneﬁt to similar conditions to those applying 
to share options granted to other executive directorsthe
performance criterion has not been achieved and therefore 
no bonus will be payable
service contracts
the company’s policy is not to grant service contracts
terminable on notice of longer than three months to executive
directors and that the executives should be satisﬁed with 
the working relationship and if dissatisﬁed should be able 
to leave without restraint no termination payments arise
under any contract
longterm incentive plan
on 9 september 1999 the remuneration committee
established a longterm incentive plan for executive directors
and senior executivesthe plan allows the participant subject
to a preexercise condition to transfer up to 50 per cent of any
bonus entitlements into a trust established by the company
this would be used to purchase shares in the company at
market value and be matched by a similar amount paid by the
company into the trust to buy a matching number of shares
the shares acquired by the contribution from the company may
not generally be transferred to the participant until the expiry 
of three years from the date of the matching awardat the date
of this report there are no participants in the plan
nonexecutive directors
the inbucon report found that nonexecutive directors’ fees
within the group were comparable with current market levels
and organisations since the date of the report the fees have
increased by the inﬂationary percentage payment applied to the
executive directors and other group executivesthe remuneration
of the nonexecutive directors is decided by other members 
of the board no beneﬁts in kind are provided for non
executive directors
pensions
the company operates a deﬁned beneﬁt scheme for employees
including executive directors which was closed to new entrants
in march 2002all executive directors that served throughout
the year are members of the scheme beneﬁts are based on
years of accrued service and ﬁnal average pensionable salary
policy on relative importance of performance 
linked and nonperformance linked pay
the remuneration policy is to provide executive directors 
with a basic salary that is competitive with the basic salary 
paid to directors in comparable companies as envisaged 
in the inbucon report in addition the performance linked
element of remuneration is intended to provide the executive
directors with an opportunity to receive increased remuneration
subject to meeting conditions which show that the group’s
ﬁnancial performance has been enhanced
performance graph
for shareholders’ information the company’s total  shareholder
return performance assuming dividends are reinvested for the
ﬁve years to 31 december 2003 is shown on the graph below
compared with the return performance achieved by the ftse
all share companiesthe ftse all share has been selected 
as a broad equity market index comparison
key
tt electronics plc
ftse all share
0
20
40
60
80
100
120
140
160
dec
1998
dec
1999
dec
2000
dec
2001
dec
2002
dec
2003 22 tt electronics plc annual report 2003
audited information
aggregate directors’ emoluments
set out below are tables of remuneration of the directors who
served throughout the year ended 31 december 2003 except
where statedthe amount of each element in the remuneration
received by the directors in the year or from date of appointment
including basic salary and fees and beneﬁts in kind was
2003 2002
salaryfees beneﬁts total total
£000 £000 £000 £000
executive directors
j w newman 444 44 488 469
s w a comonte 244 38 282 272
n a rodgers 54 7 61 –
appointed 4 sept 2003
r w weaver 183 21 204 195
j w armstrong 141 21 162 156
nonexecutive directors
t h reed 33 – 33 32
m s evans 25 – 25 24
d e a crowe 25 – 25 24
sir laurence magnus 25 – 25 24
m j mallett
retired 8 may 2002 ––– 8
1174 131 1305 1204
the value of beneﬁts in kind received during the year comprised
principally company car beneﬁts and medical cover  no directors
received expense allowances during the year 
directors’ share options
share options granted in the period exercisable between
march 2006 and march 2013 at a price of 80p
options
j w newman 273180
n a rodgers 58500
r w weaver 112455
j w armstrong 86662
share options outstanding at 31 december 2003 and the date
of this report
weighted
average
price
options pence exercise period
exercise price above year
end closing price
j w newman 593785 2215 apr 1998 – apr 2012
s w a comonte 267889 2391 apr 1998 – may 2011
n a rodgers 115791 2226 jun 1999 – mar 2013
r w weaver 319162 1877 apr 1998 – apr 2012
j w armstrong 167929 1654 apr 1998 – apr 2012
exercise price below year 
end closing price
j w newman 420238 996 sep 2002 – mar 2013
s w a comonte 147058 1360 sep 2002 – sep 2009
n a rodgers 104401 851 mar 2003 – mar 2013
r w weaver 221744 857 mar 2003 – mar 2013
j w armstrong 195951 864 mar 2003 – mar 2013
t h reed m s evans d e a crowe and sir laurence magnus 
have not been granted share options
the closing middle market prices for an ordinary share of 25p
of the company on 31 december 2002 and 2003 as derived
from the stock exchange daily ofﬁcial list were 1055p and
1420p respectively during the year the middle market price 
of  tt electronics plc ranged between 800p and 1420p
directors’ remuneration report continued tt electronics plc annual report 2003 23
executive directors’ pensions
each executive director during the year was a member of 
the company’s pension scheme which covers most senior
employees of the company
transfer
value at
31 dec 2002
increase in accrued t ransfer increase or date of
accrued pension at value at in transfer appointment
pension 31 dec 2003 31 dec 2003 value if later
£000 £000 £000 £000 £000
j w newman 9 197 1868 217 1627
s w a comonte 5 119 1623 209 1401
n a rodgers 2 25 176 8 165
r w weaver 4 63 547 80 457
j w armstrong 6 43 412 80 324
notes
a members of the scheme have the option to pay additional
voluntary contributions neither these contributions nor the
resulting beneﬁts are included in the above table
b the increase in accrued pension during the year excludes
any increases for inﬂation
c the increase in transfer value during the year is net of
employee contributions made to the scheme
d each executive director has a normal retirement date of 
his sixtyﬁfth birthday
e no actuarial reduction is made in respect of early retirement
between the ages of 60 and 65
f accrued pension is that which would be paid annually on
retirement at normal retirement date based on service and 
ﬁnal pensionable salary to 31 december 2003
g transfer values are calculated in accordance with
‘retirement beneﬁt schemes – t ransfer values gn 11’
published by the institute of actuaries and the faculty of
actuaries and dated 4 august 2003
h pensions in payment accrued post 1 january 1989 for 
j w newman s w a comonte and j w armstrong and in total
for r w weaver  are increased annually in line with the annual
rise in the all items index of retail prices subject to a maximum
of 5 per cent per annum
i in the event of the death of an executive director  a pension
equal to one half of the director’s pension will become payable
to a surviving spouse
approved by the board on 29 march 2004 and signed on its
behalf by
mg leigh
secretary consolidated proﬁt and loss account
for the year ended 31 december 2003
2003 2002
continuing discontinued continuing discontinued 
activities activities activities activities
acquisitions ongoing total total total
note £million £million £million £million £million £million £million £million
turnover 1 94 5181 5275 64 5339 5125 78 5203
cost of sales 82 4259 4341 61 4402 4247 109 4356
gross proﬁt 12 922 934 03 937 878 31 847
operating expenses 2 11 715 726 08 734 733 15 748
operating proﬁt 01 207 208 05 203 145 46 99
operating proﬁt before impairment provisions 
and goodwill amortisation 02 224 226 05 221 240 16 224
impairment provisions ––––– 74 30 104
goodwill amortisation 01 17 18 – 18 21 – 21
operating proﬁt 01 207 208 05 203 145 46 99
cost of reorganisation – magnetics 3 – 30 30 108 138 –––
loss on sale of business 3 – 12 12 – 12 –––
proﬁt on sale of ﬁxed asset investment 3 ––––– 12 – 12
proﬁt on ordinary activities before interest 01 165 166 113 53 157 46 111
interest 4 01 20 21 – 21 28 04 32
proﬁt on ordinary activities before taxation 5 – 145 145 113 32 129 50 79
taxation 6 – 37 37 05 32 33 12 21
proﬁt on ordinary activities after taxation – 108 108 108 – 96 38 58
minority interests – 01 01 – 01 02 – 02
lossproﬁt for the year – 107 107 108 01 94 38 56
dividends 7 – 156 156 – 156 156 – 156
retained loss – 49 49 108 157 62 38 100
earnings per share 8
– basic 01p 36p
– fully diluted 01p 36p
– before impairment provisions goodwill 
amortisation and exceptional items 104p 101p
24 tt electronics plc annual report 2003 2003 2002
note £million £million
fixed assets
intangible assets 12 449 302
t angible assets 13 1435 1421
investments 14 53 51
1937 1774
current assets
property 15 18 20
stocks 16 985 982
debtors 17 1087 1097
investments 18 01 01
cash 85 51
2176 2151
creditors falling due within one year 19 1472 1210
net current assets 704 941
t otal assets less current liabilities 2641 2715
creditors falling due after more than one year 20 609 572
provisions for liabilities and charges 22 42 58
minority interests 23 29 28
t otal net assets 1961 2057
capital and reserves
share capital 24 387 387
share premium account 25 560 560
capital redemption reserve 25 44 44
merger reserve 25 230 121
proﬁt and loss account 25 740 945
equity shareholders’ funds 1961 2057
approved by the directors on 29 march 2004 and signed on their behalf by
j w newman r w weaver
director director
tt electronics plc annual report 2003 25
consolidated balance sheet
at 31 december 2003 consolidated cash ﬂow statement
for the year ended 31 december 2003
2003 2002
note £million £million
net cash inﬂow from operating activities 26 452 426
returns on investments and servicing of ﬁnance
dividends received – 03
interest paid 26 40
interest received 05 05
net cash outﬂow from returns on investments and servicing of ﬁnance 21 32
taxation 29 29
capital expenditure and ﬁnancial investment
sale of tangible ﬁxed assets 22 12
government grants received 08 10
sale of ﬁxed asset investment – 106
purchase of ﬁxed asset investments 02 40
purchase of tangible ﬁxed assets 235 265
net cash outﬂow from capital expenditure and ﬁnancial investment 207 177
acquisitions and disposals
purchase of businesses 27 310 –
sale of business 28 11 –
net cash outﬂow from acquisitions and disposals 299 –
ordinary dividends paid 156 156
net cash outﬂowinﬂow before liquid resources and ﬁnancing 260 32
net cash outﬂow from management of liquid resources – –
financing
new loans 67 22
loan repayments 04 16
finance lease repayments – 03
net cash inﬂow from ﬁnancing 63 03
decreaseincrease in cash 29 197 35
26 tt electronics plc annual report 2003 2003 2002
£million £million
lossproﬁt for the year 01 56
exchange differences on net foreign currency investments 48 64
t otal recognised gains and losses 49 08
tt electronics plc annual report 2003 27
statement of total recognised gains and losses
for the year ended 31 december 2003
reconciliation of movements in shareholders’ funds
for the year ended 31 december 2003
2003 2002
£million £million
lossproﬁt for the year 01 56
exchange differences on net foreign currency investments 48 64
t otal recognised gains and losses 49 08
dividends 156 156
goodwill included in exceptional items 109 –
net change in shareholders’ funds 96 164
opening shareholders’ funds 2057 2221
closing shareholders’ funds 1961 2057 company balance sheet
at 31 december 2003
2003 2002
note £million £million
fixed assets
t angible assets 13 26 03
investments 14 1406 1404
1432 1407
current assets
property 15 09 15
debtors 17 1543 1573
cash 01 –
1553 1588
creditors falling due within one year 19 455 484
net current assets 1098 1104
t otal assets less current liabilities 2530 2511
creditors falling due after more than one year 20 490 464
provisions for liabilities and charges 22 02 02
t otal net assets 2038 2045
capital and reserves
share capital 24 387 387
share premium account 25 560 560
capital redemption reserve 25 44 44
merger reserve 25 703 703
proﬁt and loss account 25 344 351
equity shareholders’ funds 2038 2045
approved by the directors on 29 march 2004 and signed on their behalf by
j w newman r w weaver
director director
28 tt electronics plc annual report 2003 the ﬁnancial statements have been prepared under the historical cost convention in accordance with applicable accounting
standardsthe group continues to account for pension schemes using ssap 24 ‘ accounting for pension costs’ and makes the
disclosures required under the transitional arrangements of frs 17 ‘retirement beneﬁts’the principal accounting policies 
of the group are summarised below and have remained unchanged from the previous year 
basis of consolidation
the group’s ﬁnancial statements consolidate the ﬁnancial statements of tt electronics plc and all of its subsidiary undertakings 
of which the principal ones are shown on pages 56 and 57
subsidiary undertakings acquired are consolidated for the periods from the effective dates of acquisition and subsidiary
undertakings sold or otherwise disposed of are consolidated up to the effective dates of disposaltransactions between 
group companies are eliminated on consolidation
goodwill
goodwill arising on the acquisition of subsidiary undertakings representing the difference between the cost of acquisition and
the fair value of the separable net assets acquired is capitalised and amortised on a straight line basis over its expected useful
economic life up to a maximum of 20 years goodwill on acquisitions made before 1 january 1998 was taken directly to reserves
in the year in which it arose on the subsequent disposal or discontinuance of a previously acquired business the relevant
goodwill is dealt with in the proﬁt and loss account
foreign currencies
assets and liabilities of overseas subsidiaries are translated into sterling at the rate of exchange ruling at the balance sheet date
the results and cash ﬂows of overseas subsidiaries are translated into sterling using the average rates of exchange for the year
exchange movements on the restatement of the net assets of overseas subsidiaries foreign currency loans held for the purpose
of ﬁnancing overseas investments and the adjustment between the proﬁt and loss account translated at the average rate and
the closing rate are taken directly to reservesall other exchange differences are dealt with through the proﬁt and loss account
turnover
turnover is the invoice value of goods and services supplied to external customers excluding value added tax and other sales
related taxestransactions are recorded as sales when the delivery of products or performance of services takes place in
accordance with the contract terms of sale
tangible ﬁxed assets and depreciation
tangible ﬁxed assets are stated at cost less a provision for depreciation depreciation is calculated so as to writeoff the cost less
estimated residual value of tangible ﬁxed assets in equal instalments over their expected useful lives no depreciation is provided
on freehold landthe depreciation rates for the major categories of asset are given in note 13the carrying values of ﬁxed assets
are reviewed for impairment when there is an indication that the assets may be impaired
stocks
stocks and work in progress are valued at the lower of cost including related overheads and net realisable value
tt electronics plc annual report 2003 29
accounting policies accounting policies continued
deferred taxation
deferred taxation is the taxation attributable to timing differences between results computed for taxation purposes and results
as stated in the ﬁnancial statements it is recognised on all timing differences where the transaction or event which gives the
group an obligation to pay more tax or the right to pay less tax in the future has occurred by the balance sheet date deferred tax
assets are recognised when it is more likely than not that they will be recovered deferred tax on deﬁned beneﬁt pension scheme
surpluses or deﬁcits is adjusted against the surplus or deﬁcit deferred tax is measured using the rates of tax enacted or
substantively enacted by the balance sheet date
investments
fixed asset investments are included at cost less amounts writtenoff
current asset investments are included at the lower of cost and net realisable value
leases
assets acquired under ﬁnance leases which confer substantially all the risks and rewards of ownership of an asset are capitalised
and outstanding instalments net of interest are shown in creditorsassets held under ﬁnance leases are depreciated over the
shorter of the lease terms and the expected useful lives of the assets
payments on operating leases are charged to the proﬁt and loss account on a straight line basis over the lease term
derivative ﬁnancial instruments
monetary assets and liabilities which are hedged by forward currency exchange contracts are translated at the contract rate
forward currency contracts are also used to hedge the translation exposures of the proﬁt and loss account and gains or losses 
on these contracts are recognised in the proﬁt and loss account as incurred derivative instruments are used in order to minimise
the risk of the effect of ﬂuctuations in the cost of key raw materials and in rates of interestthese instruments are treated as an
economic hedge
pension costs
pension costs for the deﬁned beneﬁt schemes are charged to the proﬁt and loss account so as to spread the costs over the
expected average service lives of employees in accordance with the recommendations of independent actuaries
pension costs for the deﬁned contribution schemes represent the amount of contributions payable in respect of the accounting period
government grants
government grants relating to tangible ﬁxed assets are treated as deferred income and credited to the proﬁt and loss account by
equal instalments over the anticipated useful lives of the assets to which the grants relate other grants are credited to the proﬁt
and loss account over the period of the project to which they relate
research and development
research and development costs are incurred in the development of new products and processes and in the substantial
improvement of existing products and processesthis expenditure is charged to the proﬁt and loss account as incurred
30 tt electronics plc annual report 2003 1 analysis of turnover
2003 2002
£million £million
by sector
electronic 3493 3412
electrical 1782 1713
continuing activities 5275 5125
discontinued activities 64 78
5339 5203
the results of optek technology inc and the business of demo tableaux de commande sa acquired during the year are reported in
the electronic sector air transport avionics limited up to its disposal is reported as a continuing activity within the electrical sector 
the magnetics businesses except for laminations are reported as continuing activities within the electronic sector 
the result of the laminations business formerly part of the electronic sector  is reported as a discontinued activity
2003 2002
£million £million
by origin
united kingdom 2586 2631
rest of europe 1362 1129
north america 1020 1063
rest of the world 307 302
continuing activities 5275 5125
discontinued activities 64 78
5339 5203
by destination
united kingdom 1558 1563
rest of europe 2065 1799
north america 1015 1080
rest of the world 637 683
continuing activities 5275 5125
discontinued activities 64 78
5339 5203
the turnover of discontinued activities originates in the united kingdomt urnover of discontinued activities by destination was
£47 million 2002 – £61 million to the united kingdom £07 million 2002 – £04 million to the rest of europe £09 million
2002 – £12 million to north america and £01 million 2002 – £01 million to the rest of the world
tt electronics plc annual report 2003 31
notes to the ﬁnancial statements notes to the ﬁnancial statements continued
2 operating expenses
2003 2002
£million £million
sales and distribution costs 417 416
administration expenses 348 346
other operating income 39 29
continuing activities 726 733
discontinued activities 08 15
operating expenses 734 748
administration expenses include £18 million 2002 – £21 million of goodwill amortisation and £nil million 2002 – £26 million
of goodwill impairment all of which relate to continuing activities
3 exceptional items
2003 2002
note £million £million
cost of reorganisation – magnetics 28 138 –
loss on sale of business 28 12 –
proﬁt on sale of ﬁxed asset investment – 12
150 12
the group has carried out a major reorganisation of its magnetics businesses which in previous years were a signiﬁcant part of the
group’s activitiesthis reorganisation resulted in a charge of £138 million including £101 million of goodwill previously writtenoff to
reserves see note 28 on 11 june 2003 the group sold the business of air t ransport avionics limited at a loss of £12 million including
£08 million of goodwill previously writtenoff to reserves see note 28
the cost of reorganisation comprises £108 million in respect of discontinued activities and £30 million in respect of 
continuing activities
on 19 december 2002 the group disposed of its entire holding in johnston group plc at a proﬁt of £12 million
4 interest
2003 2002
£million £million
interest payable on bank loans and overdrafts 26 40
bank and other interest receivable 05 05
investment income receivable – 03
21 32
32 tt electronics plc annual report 2003 5 analysis of proﬁt on ordinary activities before taxation
2003 2002
£million £million
proﬁt on ordinary activities before taxation is stated after chargingcrediting
depreciation
– tangible assets owned 260 260
– tangible assets under ﬁnance leases 01 –
amortisation
– intangible assets 18 21
fees to auditors
– statutory audit 08 07
– audit related regulatory reporting 01 01
– tax compliance services 01 01
operating lease rentals
– plant and machinery 06 04
– other 27 24
research and development expenditure net of customer funding 86 81
government grants credited 08 10
by sector
electronic 169 173
electrical 57 67
continuing activities 226 240
discontinued activities 05 16
operating proﬁt before impairment provisions and goodwill amortisation 221 224
impairment provisions – 104
goodwill amortisation 18 21
total operating proﬁt 203 99
exceptional items 150 12
proﬁt on ordinary activities before interest 53 111
interest 21 32
proﬁt on ordinary activities before taxation 32 79
tt electronics plc annual report 2003 33 notes to the ﬁnancial statements continued
5 analysis of proﬁt on ordinary activities before taxation continued
2003 2002
£million £million
by origin
united kingdom 20 07
rest of europe 142 125
north america 44 56
rest of the world 20 52
continuing activities 226 240
discontinued activities 05 16
operating proﬁt before impairment provisions and goodwill amortisation 221 224
impairment provisions – 104
goodwill amortisation 18 21
total operating proﬁt 203 99
exceptional items 150 12
proﬁt on ordinary activities before interest 53 111
interest 21 32
proﬁt on ordinary activities before taxation 32 79
continuing activities include acquired activities see note 1 discontinued activities are deﬁned in note 1 exceptional items are
shown in note 3the loss on discontinued activities originates in the united kingdom goodwill amortisation is in respect of 
the electronic sector 
6taxation
2003 2002
£million £million
united kingdom corporation tax at 30 2002 – 30 based on the taxable proﬁts for the year – 01
overseas taxation 69 30
adjustment to tax charge in respect of previous periods 30 11
current taxation 39 20
deferred taxation 07 01
32 21
the tax charge for the year represents an effective rate of 23 2002 – 27 after taking account of the utilisation of tax losses
available within the group
there is tax relief in respect of exceptional items of £05 million 2002 – £nil millionthe current tax charge is explained as follows
2003 2002
£million £million
proﬁt on ordinary activities before tax 32 79
proﬁt on ordinary activities multiplied by standard rate of corporation tax in the uk
of 30 2002 – 30 10 24
effects of
charges to proﬁt not deductible for tax purposes 33 33
capital allowances less thanin excess of depreciation 20 11
utilisation of tax losses 09 19
higher tax rates on overseas earnings 15 04
adjustment to tax charge in respect of previous periods 30 11
current tax charge for period 39 20
34 tt electronics plc annual report 2003 7 dividends
2003 2002 2003 2002
pence per share pence per share £million £million
equity
ordinary dividends
– interim paid 369 369 57 57
– final proposed 636 636 99 99
1005 1005 156 156
8 earnings per share
2003 2002
pence per share pence per share
earnings per share
basic and fully diluted 01 36
before impairment provisions goodwill amortisation and exceptional items 104 101
earnings per share has been calculated by dividing the proﬁt attributable to shareholders by the weighted average number of
shares in issue during the periodthe numbers used in calculating basic and fully diluted earnings per share are reconciled below
an adjusted earnings per share has also been presented based on the proﬁt attributable to shareholders before impairment
provisions goodwill amortisation and exceptional itemsthe effect of these items on earnings is reconciled below
2003 2002
£million £million
net lossproﬁt for the period attributable to shareholders
earnings basic and fully diluted 01 56
goodwill amortisation 18 21
impairment provisions net of tax relief – 91
exceptional items net of tax relief 145 12
earnings before impairment provisions goodwill amortisation and exceptional items 162 156
2003 2002
million million
weighted average number of shares in issue
basic 1548 1548
adjustment for share options 06 04
fully diluted 1554 1552
tt electronics plc annual report 2003 35 notes to the ﬁnancial statements continued
9 employees
the average number of employees including directors during the year was
2003 2002
number number
by function
production 6818 7003
sales and distribution 750 768
administration 523 524
8091 8295
by sector
electronic 5695 5865
electrical 2337 2335
continuing activities 8032 8200
discontinued activities 59 95
8091 8295
discontinued activities are deﬁned in note 1
2003 2002
£million £million
the aggregate emoluments including those of directors for the year were
wages and salaries 1340 1315
employers’ social security charges 187 165
employers’ pension costs 62 59
1589 1539
remuneration in respect of the directors was as follows
emoluments 13 12
further details of individual directors’ remuneration pension beneﬁts and share options are shown in the directors’
remuneration report on pages 20 to 23
10 related party transactions
all related party transactions are with entities in which j w newman was interested during the year  goods and services were
supplied and purchased on normal credit terms valued at the aggregate of £84000 2002 – £91000 and £21000 2002
– £19000 respectivelythe group in the ordinary course of business leased premises to related parties and provided normal
services in respect of such premisesthe annual rentals and service charges aggregated £77000 2002 – £53800 and were
calculated on open market bases and paid to the agreed termsthe group also in the ordinary course of business leased premises
from related partiesthe rental and service charges aggregating £286000 2002 – £271000 were calculated on open market
bases and paid to the agreed termsas part of the demerger from tt electronics on 14 may 2001 loans totalling £80 million
repayable in 2004 and 2008 were made to send group limited subsequently send group limited became a related party 
on 15 november 2002 interest on the loans amounted to £271000 2002 – £33000
36 tt electronics plc annual report 2003 11 analysis of net assets
2003 2002
£million £million
shareholders’ funds 1961 2057
loans and ﬁnance leases
– falling due within one year 11 15
– falling due after more than one year 500 468
2472 2540
bank overdrafts less cash and liquid resources 271 76
2743 2616
by sector
electronic 1927 1762
electrical 809 798
continuing activities 2736 2560
discontinued activities 07 56
2743 2616
by location
united kingdom 1201 1210
rest of europe 375 345
north america 1038 896
rest of the world 122 109
continuing activities 2736 2560
discontinued activities 07 56
2743 2616
discontinued activities are deﬁned in note 1
12 intangible ﬁxed assets
goodwill
£million
group
cost at 1 january 2003 387
acquisitions see note 27 206
exchange translation differences 48
cost at 31 december 2003 545
amortisation and impairment at 1 january 2003 85
charge for the year 18
exchange translation differences 07
amortisation and impairment at 31 december 2003 96
net book amounts
at 31 december 2003 449
at 31 december 2002 302
the expected useful economic life of the goodwill carried on the balance sheet is considered to be 20 years from the date 
of acquisition
tt electronics plc annual report 2003 37 notes to the ﬁnancial statements continued
13tangible ﬁxed assets
freehold land leasehold land plant equipment
and buildings and buildings and vehicles t otal
£million £million £million £million
group
cost at 1 january 2003 651 91 3255 3997
additions 11 03 221 235
acquisitions 42 – 163 205
disposals 02 13 335 350
business sold – – 06 06
t ransfer to current assets 07 – – 07
reclassiﬁcation 14 14 – –
exchange translation differences 06 01 33 38
cost at 31 december 2003 703 68 3265 4036
depreciation and impairment at 1 january 2003 170 45 2361 2576
charge for the year 14 03 244 261
acquisitions 21 – 107 128
disposals – 07 328 335
business sold – – 04 04
t ransfer to current assets 01 – – 01
reclassiﬁcation 05 05 – –
exchange translation differences 04 01 19 24
depreciation and impairment at 31 december 2003 205 35 2361 2601
net book amounts
at 31 december 2003 498 33 904 1435
at 31 december 2002 481 46 894 1421
the ﬁgures stated above for freehold land and buildings include assets held under ﬁnance leases with a net book amount 
of £08 million 2002 – £nil million
the net book amount of freehold land and buildings includes £153 million 2002 – £150 million in respect of land
the net book amount of leasehold land and buildings comprises long leasehold over 50 years of £13 million 2002 – £26 million
and short leasehold of £20 million 2002 – £19 million
depreciation is provided other than on freehold land at the following annual rates on a straight line basis
freehold buildings 2
leasehold land and buildings 2 or over the period of the lease if less than 50 years
plant equipment and vehicles 10 to 33
38 tt electronics plc annual report 2003 13tangible ﬁxed assets continued
freehold land plant equipment
and buildings and vehicles t otal
£million £million £million
company
cost at 1 january 2003 02 11 13
additions – 01 01
t ransfer from group companies 30 – 30
disposals 02 02 04
cost at 31 december 2003 30 10 40
depreciation at 1 january 2003 – 10 10
charge for the year – 01 01
t ransfer from group companies 05 – 05
disposals – 02 02
depreciation at 31 december 2003 05 09 14
net book amounts
at 31 december 2003 25 01 26
at 31 december 2002 02 01 03
14 fixed asset investments
uk listed
£million 
group
at 1 january 2003 51
additions 02
at 31 december 2003 53
uk listed subsidiary
at cost undertakings t otal
£million £million £million
company 
at 1 january 2003 51 1353 1404
additions 02 – 02
at 31 december 2003 53 1353 1406
the group’s principal operating subsidiary undertakings and the location of their principal operations are shown on pages 56
and 57
tt electronics plc owns 100 of the ordinary share capital or equivalent and 100 of voting rights of all group subsidiary
undertakings other than rodco limited which is nontrading and is 60 owned shareholdings are held indirectly for all 
principal operating subsidiary undertakings
tt electronics plc owns 244 of the equity share capital of pressac plc in 2003 tt electronics plc did not exercise signiﬁcant
inﬂuence over the ﬁnancial or operating policies of pressac plc and this holding was accounted for as an investment on 7 january
2004 swa comonte was appointed to the board of pressac plc in its latest audited accounts at 31 december 2002 the consolidated
net assets of pressac plc were £150 million and its loss for the year after exceptional charges of £144 million and taxation 
was £152 million
the market value of uk listed investments at 31 december 2003 was £48 million 2002 – £44 million
tt electronics plc annual report 2003 39 notes to the ﬁnancial statements continued
15 property
£million 
group
at 1 january 2003 20
t ransfer from ﬁxed assets 06
disposal 08
at 31 december 2003 18
£million 
company
at 1 january 2003 15
disposal 06
at 31 december 2003 09
properties which are no longer used for the purpose of the trade and are being held for sale are classiﬁed as current assets and
carried at the lower of cost and net realisable value
16 stocks
2003 2002
£million £million
group
raw materials 336 326
work in progress 272 256
finished goods 377 400
985 982
17 debtors
group group company company
2003 2002 2003 2002
£million £million £million £million
amounts falling due within one year
t rade debtors 856 855 03 02
amounts owed by subsidiary undertakings 1451 1485
other debtors 47 35 – –
loan to send group limited 60 – 60 –
prepayments and accrued income 73 99 02 02
corporation tax – – 04 –
pension prepayment 18 18 03 04
1054 1007 1523 1493
amounts falling due after more than one year
other debtors 02 02 – –
loan to send group limited 20 80 20 80
pension prepayment 11 08 – –
33 90 20 80
1087 1097 1543 1573
40 tt electronics plc annual report 2003 18 current asset investments
group uk listed
£million 
at 1 january 2003 and 31 december 2003 01
the uk listed investments are all listed on the london stock exchange and are classiﬁed as liquid resources
the market value of investments at 31 december 2003 is £01 million 2002 – £01 million
19 creditors falling due within one year
group group company company
2003 2002 2003 2002
£million £million £million £million
bank overdrafts 357 127 01 01
bank loans 10 15 – 03
amounts due under ﬁnance leases 01 – – –
t rade creditors 555 622 02 05
amounts owed to subsidiary undertakings 316 337
corporation tax 140 112 – 07
t axation and social security 57 45 11 09
other creditors 10 12 – 03
accruals and deferred income 243 178 26 20
dividends 99 99 99 99
1472 1210 455 484
20 creditors falling due after more than one year
group group company company
2003 2002 2003 2002
£million £million £million £million
bank loans 495 468 490 464
amounts due under ﬁnance leases 05 – – –
accruals and deferred income 39 29 – –
pension accrual 70 75 – –
609 572 490 464
tt electronics plc annual report 2003 41 notes to the ﬁnancial statements continued
21 borrowings and ﬁnancial instruments
the group’s borrowings are funded mainly through bank overdrafts and a committed unsecured £500 million multicurrency
revolving bank loan facility which expires in june 2006 under this facility funds can be drawn in either sterling us dollars or
euros or a combination thereof at ﬁxed rates of interest for periods varying from one month to a year  interest rates are at a ﬁxed
margin over the appropriate inter bank borrowing rate at the date the funds are drawnthe group has entered into interest rate
swaps to ﬁx the average interest rate applicable to 65 million of borrowings at 27 per cent for the period to 30 june 2005
the group’s treasury and foreign currency policy is set out on page 13
the group has designated 835 million 2002 – 65 million of its borrowings as a currency hedge of its us dollar related assets
this currency hedge was increased to  105 million in january 2004 utilising existing borrowingsthe exchange gains or losses 
on this borrowing offset the group’s gains or losses on translation of its us dollar denominated net assetsthe net result is dealt
with through reserves and reported in the statement of total recognised gains and losses together with the exchange
difference arising from the translation of the group’s other overseas subsidiaries mainly in continental europe
currency exposure on the translation of proﬁts earned in euros and dollars has been reduced by forward foreign exchange contracts
to sell these currencies maturing in december 2004there is a currency exposure on the translation of proﬁts earned by other
overseas subsidiariesthe group seeks to avoid currency exposures on sales and purchasing transactions by the use of forward
currency contracts and uses forward contracts to manage the cost of key raw materials
shortterm debtors and creditors have been excluded from the following disclosures other than in respect of currency risk disclosures
financial liabilities
the interest rate proﬁle of the group’s ﬁnancial liabilities at 31 december 2003 was
weighted average period for which
ﬁxed interest rate rate is ﬁxed in fixed rate floating rate t otal
 years £million £million £million
2003
sterling 47 03 127 188 315
us dollar 27 15 363 101 464
euro 32 39 11 77 88
other – – – 01 01
501 367 868
2002
sterling 47 03 58 01 59
us dollar 29 15 406 80 486
euro 26 18 06 59 65
other – – – – –
470 140 610
the ﬂoating rate debts in sterling and us dollars bear interest based on the united kingdom base rate and the 30 day us dollar
libor rate respectivelythe us dollar average ﬁxed interest rate and the period for which it is ﬁxed include the effect of the interest
rate swaps
42 tt electronics plc annual report 2003 21 borrowings and ﬁnancial instruments continued
maturity proﬁle of ﬁnancial liabilities
group group company company
2003 2002 2003 2002
£million £million £million £million
in less than one year or on demand
bank borrowings 367 142 01 04
finance leases 01 – – –
between one and two years
bank borrowings 04 – – –
finance leases 01 – – –
between two and ﬁve years
bank borrowings 491 468 490 464
finance leases 04 – – –
868 610 491 468
undrawn committed borrowing facilities at 31 december 2003 amounted to £60 million 2002 – £101 million
fair values
the fair values of ﬁnancial assets and liabilities have been determined in accordance with the guidance set out in frs 13 and 
are shown below
2003 2002
book value fair value book value fair value
£million £million £million £million
financial assets
fixed asset investments 53 53 51 51
current asset investments 01 01 01 01
cash 85 85 51 51
financial liabilities
bank overdrafts 357 357 127 127
bank loans due within one year 10 10 15 15
finance leases due within one year 01 01 ––
bank loans due after one year 495 495 468 468
finance leases due after one year 05 05 ––
interest rate swaps 2004 and 2005 – 01 ––
729 730 507 507
tt electronics plc annual report 2003 43 notes to the ﬁnancial statements continued
22 provisions for liabilities and charges
other provisions deferred tax t otal
£million £million £million
group
at 1 january 2003 22 36 58
acquisitions – 11 11
t ransfer tofrom proﬁt and loss account 05 07 02
exchange translation differences – 03 03
at 31 december 2003 27 15 42
2003 2002
£million £million
the deferred tax provision comprises
accelerated capital allowances 47 26
other shortterm timing differences 23 10
unrelieved tax losses 09 –
15 36
no provision is made for any liability which may arise in the event that any reserves of overseas subsidiary undertakings 
are distributed
the company has a deferred tax liability of £02 million 2002 – £02 million arising from shortterm timing differences
other provisions are mainly for environmental costs and onerous contracts
23 minority interests
minority interests comprise a 40 per cent equity interest in rodco limited which is nontrading
24 share capital
2003 2002
£million £million
authorised
226000000 2002 – 226000000 ordinary shares of 25p each 565 565
issued called up and fully paid
154798103 2002 – 154798103 ordinary shares of 25p each 387 387
ordinary shares of 25p each are equity share capital
share option schemes
at 31 december 2003 options were exercisable over 6645738 2002 – 4908158 ordinary shares under the group share
option schemes up to 2013 subscription prices range from 800p to 3590p with a weighted average of 1478p subsequent
to 31 december 2003 no options have been exercised or have lapsed
44 tt electronics plc annual report 2003 24 share capital continued
1994 executive scheme 
this scheme for senior executives was approved at the annual general meeting on 24 may 1994 on 26 march 2003 options
over 670125 ordinary shares exercisable at 800p were grantedthe options outstanding at the date of this report are over
2548373 ordinary shares and such options are
exercisable subscription
on or after options price p
04041998 142988 2410
15041999 91225 3190
22042000 65221 3590
24032001 112335 3000
31032002 195281 1775
28032003 407114 915
18042004 386495 1630
03042005 496839 1650
26032006 650875 800
1996 executive scheme
this scheme for senior executives was approved at the annual general meeting on 14 may 1996 on 26 march 2003 options
over 1310547 ordinary shares exercisable at 800p were grantedthe options outstanding at the date of this report are over
4097365 ordinary shares and such options are
exercisable subscription
on or after options price p
06061999 136200 3530
22042000 206587 3590
24032001 129088 3000
31032002 145569 1775
15092002 514703 1360
28032003 603531 915
18042004 198710 1630
23052004 472227 1660
03042005 406328 1650
26032006 1284422 800
options issued under the 1994 and 1996 executive share option schemes may not generally be exercised for a period of three
years from the date of grant and are conditional on there being an increase in earnings per share over any consecutive three year
period between the date of grant and the date of exercise of an average of 2 per cent per annum for options granted prior to
2001 and 4 per cent for options granted after 2000 above the increase in the all items index of retail prices over the same period
for this purpose earnings per share on any relevant date is that derived from the audited ﬁnancial statements of the company
and its subsidiaries last published prior to such date
tt electronics plc annual report 2003 45 notes to the ﬁnancial statements continued
25 reserves
share capital
premium account redemption reserve merger reserve proﬁt and loss account
£million £million £million £million
group
at 1 january 2003 560 44 121 945
retained loss for the year – – – 157
goodwill relating to exceptional items – – 109 –
exchange translation differences – – – 48
at 31 december 2003 560 44 230 740
the goodwill arising on the acquisition of subsidiary undertakings charged to merger reserve at 31 december 2003 amounts to
£473 million 2002 – £582 million
share capital
premium account redemption reserve merger reserve proﬁt and loss account
£million £million £million £million
company
at 1 january 2003 560 44 703 351
retained loss for the year – – – 07
at 31 december 2003 560 44 703 344
in accordance with the exemption allowed by section 230 of the companies act 1985 the company has not presented its own
proﬁt and loss accounta proﬁt of £149 million 2002 – £52 million has been dealt with in the ﬁnancial statements of the company
26 reconciliation of group operating proﬁt to net cash inﬂow from operating activities
2003 2002
£million £million
total operating proﬁt 203 99
depreciation 261 260
amortisation 18 21
charge for impairment – 104
government grants credited to proﬁt 08 10
proﬁt on sale of tangible ﬁxed assets 07 01
closure and other costs 15 10
decrease in property current assets 08 20
decrease in stocks 15 09
decrease in debtors 86 22
decrease in creditors 89 40
movement on pension prepayments and accruals 09 12
exchange translation differences 11 36
net cash inﬂow from operating activities 452 426
46 tt electronics plc annual report 2003 27 acquisitions
a the group acquired optek technology inc a sensor manufacturer  on 3 december 2003
assets acquired
book value valuation adjustments fair value
£million £million £million
t angible ﬁxed assets 49 03
i
52
stocks 32 – 32
debtors 47 – 47
cash 04 – 04
t rade and other creditors 47 – 47
deferred tax 12 01
i
11
total net assets 97 02 99
goodwill 207
cost of acquisition 306
notes
i the value of plant and machinery has been increased by £03 million based on the lower of depreciated replacement cost 
and recoverable amount deferred tax relating to the valuation adjustment to plant and equipment has been providedthe fair
value adjustments are provisional and the consideration is subject to the agreement of completion accounts
ii in the year ended 31 january 2003 optek technology generated earnings before goodwill amortisation interest and taxation
of £24 million on turnover of £404 million
satisﬁed by
£million
consideration – cash 303
costs – cash 03
306
b on 14 march 2003 the group acquired the business of demo tableaux de commande sa a manufacturer of automotive
climate control units
assets acquired
book value valuation adjustments fair value
£million £million £million
fixed assets – tangible 27 02
i
25
– intangible 09 09
ii
–
stocks 10 03
iii
07
debtors 30 01
iv
29
cash 02 – 02
creditors 28 11
v
39
finance leases 06 – 06
44 26 18
goodwill 01
cost of acquisition 17
notes
i valuation of plant and equipment at lower of depreciated replacement cost and recoverable amount
ii elimination of goodwill arising preacquisition
iii valuation of stocks at lower of cost and net realisable value
iv valuation of maintenance spares at recoverable amount
v provisions for loss making contracts
tt electronics plc annual report 2003 47 notes to the ﬁnancial statements continued
27 acquisitions continued
satisﬁed by
£million 
consideration – cash 08
– deferred 07
15
costs – cash 02
17
cash outﬂows in respect of acquisitions
optek  t echnology demo t otal
£million £million £million
cash consideration 303 08 311
cash costs 03 02 05
cash acquired 04 02 06
302 08 310
28 reorganisation and disposals
cost of reorganisation – magnetics
the group has carried out a major reorganisation of its magnetics businessesthe laminations business has been discontinued
manufacture of ferrites in the united kingdom and the usa has ceasedthe production of certain ferrites has been transferred 
to the group’s factory in indiathe cost of the reorganisation was
£million 
redundancy 10
stock writtenoff 14
provisions for future pension costs 08
fixed assets losses and write downs net of impairment –
site closure and clearance costs 05
goodwill previously writtenoff to reserves 101
138
ferrites 30
laminations including goodwill 108
138
loss on sale of business
on 11 june 2003 the group disposed of the business of air transport avionics limited for a cash consideration of £11 million
the net book value of the ﬁxed assets and stock sold was £11 millionthe loss on disposal comprises
£million 
redundancy and site closure costs 02
provision for future pension costs 02
goodwill previously writtenoff to reserves 08
12
48 tt electronics plc annual report 2003 29 reconciliation of net cash ﬂow to movement in net debt
loans
and ﬁnance
cash at bank net cash shortterm lease
bank overdrafts overdraft investments obligations net debt
£million £million £million £million £million £million
balance at 31 december 2001 88 204 116 01 520 635
cash ﬂow 21 56 35 – 03 32
exchange differences 16 21 05 – 40 45
balance at 31 december 2002 51 127 76 01 483 558
cash ﬂow 66 263 197 – 63 260
acquisition –––– 06 06
exchange differences 32 33 01 – 41 42
balance at 31 december 2003 85 357 272 01 511 782
30 guarantees and ﬁnancial commitments
financial commitments relating to bank loans are set out in notes 19 20 and 21the company has no guarantees or contingent
ﬁnancial commitments
31 contingent liabilities
the group has contingent liabilities amounting to £35 million 2002 – £09 million in respect of performance bonds and
guarantees entered into during the normal course of businessthe company and the group have no other contingent liabilities
which could have a material adverse effect on their ﬁnancial position
32 capital commitments
2003 2002
£million £million
group
commitments were
contracted 58 69
authorised but not contracted 103 127
the company had no capital commitments at 31 december 2003 and 31 december 2002
tt electronics plc annual report 2003 49 notes to the ﬁnancial statements continued
33 obligations under operating leases
the operating lease payments due within one year to which the group and the company were committed at 31 december 2003 were
land and 2003 land and 2002
buildings other total buildings other total
£million £million £million £million £million £million
group
on leases expiring
within one year 02 01 03 02 01 03
between two and ﬁve years 08 02 10 09 01 10
over ﬁve years 19 01 20 16 01 17
29 04 33 27 03 30
company
on leases expiring
within one year ––– – 01 01
between two and ﬁve years – 01 01 – 01 01
over ﬁve years 04 – 04 04 – 04
04 01 05 04 02 06
34 pension schemes
at the year end the group operated in the united kingdom nine deﬁned beneﬁt schemes closed to new members and two deﬁned
beneﬁt pension schemes which have no active membersthe assets of all eleven schemes are held under trusts and are therefore
independent of the groupthese schemes will incur an increase in the current service cost under the projected unit cost method
as the members of the schemes approach retirementthe schemes were broadly associated with each of the principal subsidiary
undertakings of the companythe group also operated in the united kingdom two active money purchase schemes to provide
beneﬁts for eligible employees
ssap 24 ‘ accounting for pension costs’ disclosures
deﬁned beneﬁt schemes
actuarial valuations of the various schemes were carried out by independent qualiﬁed actuaries between april 2000 and april
2002 principally using the projected unit cost methodthe principal assumptions used were that investment returns would be
between 20 to 30 per cent higher than the growth in annual salaries and that pensions in the course of payment could increase by
up to 5 per centthe combined actuarial valuation of the assets of the schemes operated by the group at their actuarial dates was
£168 millionthese actuarial valuations represented between 73 per cent and 116 per cent of the beneﬁts accrued on an ongoing
basisthe surpluses take account of the improvements to beneﬁts agreed by the trustees of certain schemes following the actuarial
valuationsthe group’s intention is that any deﬁcits will be eliminated by the payment of increased employer contributions which
are reviewed annually employee contributions were increased by a percentage point with effect from 1 june 2003the ongoing
pension costs are based on the advice of the schemes’ independent actuarythe total united kingdom contributions charged by
the group in respect of the year ended 31 december 2003 were £50 million 2002 – £48 millionthe differences between the
accumulated charge and payments made to the schemes is dealt with in debtors and creditors as appropriate
deﬁned contribution schemes
the assets of the schemes were in funds administered by trustees independent from those of the groupthe total united kingdom
contributions charged by the group in respect of the year ended 31 december 2003 were £03 million 2002 – £02 million
50 tt electronics plc annual report 2003 34 pension schemes continued
frs 17 ‘retirement beneﬁts’ disclosures
this accounting standard which is fully effective for the 2005 ﬁnancial year  requires certain disclosures in the transition period
these disclosures are set out belowthe calculations used for these disclosures are based on the most recent actuarial valuations
updated by the actuaries to assess the assets and liabilities of the schemes at 31 december 2003
pension scheme assets are stated at market value at 31 december 2003 pension scheme liabilities have been calculated using
the projected unit cost method and the following ﬁnancial assumptions
2003 2002
 
discount rate 58 60
inﬂation rate 25 23
increases to pensions in payment 25 – 30 23 – 30
salary increases 31 29
the expected longterm rates of return on the main asset classes net of expenses at 31 december 2003 were
2003 2002
 
equities 70 70
bonds 50 52
gilts and cash 40 37
on the above basis the assets and liabilities of the pension schemes were
2003 2002
£million £million
equities 1435 1206
bonds 123 176
gilts and cash 250 173
1808 1555
present value of liabilities 2429 2192
deﬁcit 621 637
related deferred tax 187 191
net pension liability 434 446
the amounts charged to the proﬁt and loss account under frs 17 would have been
2003 2002
£million £million
current service cost 50 54
expected return on pension scheme assets 101 126
interest on pension scheme liabilities 132 127
proﬁt and loss charge 81 55
tt electronics plc annual report 2003 51 notes to the ﬁnancial statements continued
34 pension schemes continued
2003 2002
£million £million
the amount that would have been included in the statement of total recognised gains and 
losses under frs 17 is
actual return less expected return on pension scheme assets 143 450
experience gains and losses arising on the scheme liabilities 40 25
changes in the assumptions underlying the present value of the scheme liabilities 153 66
actuarial gainloss 30 409
deferred tax movement 04 123
actuarial gainloss net of deferred tax 26 286
2003 2002
difference between expected and actual return on scheme assets
amount £million 143 450
percentage of scheme assets 8 29
experience gains and losses on scheme liabilities
amount £million 40 25
percentage of present value of scheme liabilities 1 1
total actuarial gains and losses
amount £million 30 409
percentage of present value of scheme liabilities 2 19
2003 2002
£million £million
the movement in the deﬁcit in the year under frs 17 would have been
deﬁcit at 1 january 2003 net of deferred tax 446 158
current service cost 50 54
contributions 63 60
other ﬁnance cost 31 01
actuarial gainloss net of deferred tax 26 286
exchange rate differences 04 07
deﬁcit at 31 december 2003 net of deferred tax 434 446
2003 2002
£million £million
the effect on the group’s proﬁt and loss reserve if frs 17 had been adopted early is shown below
proﬁt and loss account as stated in the ﬁnancial statements at 31 december 2003 740 945
ssap 24 prepayment 29 26
ssap 24 accrual 71 77
net pension liability 434 446
proﬁt and loss account as adjusted at 31 december 2003 348 550
tt electronics plc is a member of a multiemployer scheme the disclosures for which are included above
35 post balance sheet event
on 11 march 2004 tt electronics plc announced the acquisition of sensopad technologies ltd a technology development
company for a cash consideration of £14 million together with the payment of future royalties
52 tt electronics plc annual report 2003 we have audited the ﬁnancial statements of tt electronics plc for the year ended 31 december 2003 which comprise the accounting
policies the consolidated proﬁt and loss account the balance sheets the consolidated cash ﬂow statement the statement of
total recognised gains and losses the reconciliation of movements in shareholders’ funds and notes 1 to 35these ﬁnancial
statements have been prepared under the accounting policies set out thereinwe have also audited the information in the
directors’ remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985 our audit
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditors’ report and for no other purposeto 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 ﬁnancial statements 
in accordance with united kingdom law and accounting standards are set out in the statement of directors’ responsibilities
our responsibility is to audit the ﬁnancial statements and the part of the directors’ remuneration report to be audited in accordance
with relevant legal and regulatory requirements and united kingdom auditing standards
we report to you our opinion as to whether the ﬁnancial statements give a true and fair view and whether the ﬁnancial statements
and the part of the directors’ remuneration report to be audited have been properly prepared in accordance with the companies
act 1985we also report to you if in our opinion the directors’ report is not consistent with the ﬁnancial statements if the
company has not kept proper accounting records if we have not received all the information and explanations we require for 
our audit or if information speciﬁed by law regarding directors’ remuneration and transactions with the group is not disclosed
we review whether the corporate governance statement reﬂects the company’s compliance with the seven provisions of the
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 ﬁnancial
statementsthis other information comprises only the highlights and ﬁnancial information page the chairman’s statement the
chief executive’s statement the financial review the directors’ report the unaudited part of the directors’ remuneration report
the group operations pages and the historical recordwe consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the ﬁnancial statements our responsibilities do not extend to any other information
basis of opinion
we conducted our audit in accordance with united kingdom auditing standards issued by the auditing practices boardan audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the ﬁnancial statements and the
part of the directors’ remuneration report to be audited it also includes an assessment of the signiﬁcant estimates and judgments
made by the directors in the preparation of the ﬁnancial statements and of whether the accounting policies are appropriate to
the group’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary
in order to provide us with sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements and the part of the
directors’ remuneration report to be audited are free from material misstatement whether caused by fraud or other irregularity
or error  in forming our opinion we also evaluated the overall adequacy of the presentation of information in the ﬁnancial
statements and the part of the directors’ remuneration report to be audited
opinion
in our opinion the ﬁnancial statements give a true and fair view of the state of affairs of the company and the group at 31 december
2003 and of the loss of the group for the year then ended and the ﬁnancial statements and the part of the directors’ remuneration
report to be audited have been properly prepared in accordance with the companies act 1985
grant thornton
registered auditors chartered accountants
london 29 march 2004
tt electronics plc annual report 2003 53
report of the independent auditors to the members of tt electronics plc notice of meeting
notice is hereby given that the annual general meeting of tt electronics plc will be held at the ironmongers’ hall shaftesbury
place barbican london ec2y 8aa on wednesday 19 may 2004 at 12 noon for the following purposes
1 to receive the financial statements for 2003 the directors’ report and the auditors’ report
2 to approve the directors’ remuneration report for the year ended 31 december 2003
3 to declare a dividend of 636p per ordinary share
4 to reelect j w newman a director 
5 to reelect j w armstrong a director 
6 to reelect t h reed a director 
7 to reelect n a rodgers a director 
8 to reappoint grant thornton as auditors and to authorise the directors to ﬁx the auditors’ remuneration
as special business to consider and if thought ﬁt to pass the following resolutions of which resolutions 9 12 13 and 14 will
be proposed as ordinary resolutions and resolutions 10 and 11 will be proposed as special resolutions
general allotment authority
9 that the directors of the company in substitution for all authorities previously conferred upon them save to the extent
that the same may already have been exercised be and they are hereby authorised generally and unconditionally for the
purposes of section 80 of the companies act 1985 the ‘ act’ to allot relevant securities within the meaning of section 802
of the act up to a maximum aggregate nominal amount of £12899841 such authority to expire on 30 june 2005 save
where the directors exercise such authority pursuant to an offer or agreement made prior to that date
disapplication of preemption rights
10 that the directors of the company be and they are hereby empowered in accordance with section 95 of the companies act
1985 the ‘ act’ to allot equity securities as deﬁned in section 94 of the act for cash pursuant to the general authority
conferred by resolution 9 above andor to sell equity securities held as treasury shares for cash pursuant to section 162d of
the act or partly in one way and partly the other  in each case as if subsection 1 of section 89 of the act did not apply to any
such allotment or sale provided that the power conferred by this resolution shall be limited to
i any such allotment andor sale of equity securities in connection with an issue or offering by way of rights in favour 
of holders of equity securities and any other persons entitled to participate in such issue or offering where the equity
securities respectively attributable to the interests of such holders and persons are proportionate as nearly as may be
to the respective number of ordinary shares held by them on the record date of such allotment andor sale subject only
to such exclusions or other arrangements as the directors may consider necessary or expedient to deal with fractional
entitlements or legal or practical problems arising in any overseas territory or the requirements of any regulatory body 
in any territory or any other matter whatsoever and
ii any such allotment andor sale otherwise than pursuant to subparagraph i of this resolution of equity securities 
up to an aggregate nominal value not exceeding £1934976
and this power  unless renewed or revoked shall expire on 30 june 2005 but shall extend to the making before such expiry
of any offer or agreement which would or might require equity securities to be allotted or equity securities held as treasury
shares to be sold after such expiry and the directors may allot securities andor sell equity securities held as treasury shares in
pursuance of such offer or agreement as if the authority conferred hereby had not expired and so that all previous authorities
of the directors pursuant to section 89 of the act save to the extent to which any such previous authorities have already
been exercised be and they are hereby revoked
54 tt electronics plc annual report 2003 purchase of own shares
11 that the company be and is hereby generally and unconditionally authorised pursuant to the provisions of article 74 of the
company’s articles of association and for the purposes of section 166 of the companies act 1985 the ‘ act’ to make one
or more market purchases within the meaning of section 1633 of the act on the london stock exchange plc the ‘exchange’
of ordinary shares of 25p each in the capital of the company ‘ordinary shares’ provided that
i the maximum aggregate number of ordinary shares hereby authorised to be purchased is 15479810 representing
approximately 10 per cent of the company’s issued ordinary share capital
ii the minimum price which may be paid for such ordinary shares is 25p per ordinary share exclusive of expenses
iii the maximum price exclusive of expenses which may be paid for an ordinary share is not more than 5 per cent above
the average of the market values for an ordinary share as derived from the stock exchange daily ofﬁcial list for the ﬁve
business days immediately preceding the day on which the ordinary share is purchased
iv unless previously revoked or varied the authority hereby conferred shall expire on 30 june 2005 and
v the company may make a contract or contracts to purchase ordinary shares under the authority hereby conferred prior
to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may
make a purchase of ordinary shares in pursuance of any such contract or contracts
share option plans
12 that the directors be and are hereby authorised to adopt the rules of the tt electronics plc 2004 inland revenue approved
company share option plan substantially on the terms set out in appendix 1 to the letter from the chairman dated 16 april 2004
subject to any amendments as may be required to obtain approval from the inland revenue
13 that the directors be and are hereby authorised to adopt the rules of the tt electronics plc 2004 unapproved company share
option plan substantially on the terms set out in appendix 1 to the letter from the chairman dated 16 april 2004
14 that the rules of the tt group plc 1994 executive share option scheme and the rules of the tt group plc 1996 unapproved
executive share option scheme the amended rules in draft form of which are produced to this meeting and signed by the
chairman for the purpose of identiﬁcation be amended to allow share options to be satisﬁed by the company using treasury
shares and that the directors be authorised to take all actions which they consider necessary or expedient in connection with
the implementation of the amendments
by order of the board
m g leigh
secretary
16 april 2004
pursuant to regulation 41 of the uncertiﬁcated securities regulations 2001 the company speciﬁes that only those shareholders
registered in the register of members of the company by 6pm on 17 may 2004 shall be entitled to attend or vote at the meeting
in respect of the number of shares registered in their name at that time changes to entries on the register after 6pm on 17 may
2004 will be disregarded in determining the rights of any person to attend or vote at the meeting
members are entitled to appoint one or more proxies to attend and on a poll to vote for thema proxy need not be a member 
of the company proxies to be effective must be lodged with lloyds tsb registrarsthe causewayworthingwest sussex 
bn99 6zl at least 48 hours before the time ﬁxed for the meeting
no service contract exists or is proposed between any director of the company and the company or any subsidiary undertaking
of the company which is terminable on notice of longer than three months
a form of proxy is on page 59
tt electronics plc annual report 2003 55 group operations
electronic sector
sensors and 
electronic systems
turnover
£1610 million
products
pedal sensor modules
throttle position sensors
engine management sensors
mass airﬂow sensors
steering sensors
chassis position sensors
abs sensors
pressure sensors and switches 
climate control systems
body control systems
global operations
united kingdom germany france
ukraineusamexicobrazil
applications
cars trucks and sports utility vehicles
industrial equipment and white goods
major customers
bmwdaimlerchryslerdelphiford
general motors psa rover valeo
vwaudi
principal operating subsidiaries
ab automotive electronics limited
ab automotive inc usa 
ab electronic limited
ab elektronik gmbh germany
optek t echnology inc usa
56 tt electronics plc annual report 2003
electronic components
and magnetics
turnover
£1532 million
products
resistors and resistor networks
resistor capacitor diode networks 
blower motor resistors
headlight power hybrids
hybrids and microcircuits
potentiometers and trimmers 
printed circuit boards
inductors and chokes
ferrite beads and toroids
magnets
global operations
united kingdomaustria usa mexico
barbadosmalaysiaitalysingapore
japangermanyfranceindiachina
applications
telecomcomputerautomotive
aerospace medical and industrial
equipment consumer and white goods
major customers
applebmwdaimlerchryslerdell
delphi ford general motors
hewlettpackardibmintelrover
valeovwaudi
principal operating subsidiaries
ab mikroelektronik gmbhaustria
bi t echnologies usa united kingdom
mexico and malaysia
international resistive company inc usa
mmg india private limited india
prestwick circuits limited
welwyn components limited
electronic 
manufacturing services
turnover
£351 million
products
pcb assemblies
finished box build 
circuit layout design
global operations
united kingdom 
applications
telecomcomputerautomotive
industrial equipment consumer 
and white goods
major customers
bae systems bt  fuji harris marconi
panasonictoshibaultra
principal operating subsidiaries
tt electronic manufacturing 
services limited electrical sector
power systems
turnover
£521 million
products
standby and continuous power generation
aircraft ground power units
uninterruptible power supplies
global operations
united kingdom mexico
applications
banks public and commercial buildings
hospitals airports telecom base stations
and general industrial
major customers
british airways halliburton hyundai
ministry of defence mobile one
tmobile
principal operating subsidiaries
dale power solutions plc
erskine systems limited
houchin aerospace limited
ottomotores sa de cv  mexico
power and data transmission
turnover
£1261 million
products
power and data transmission cables
subsea cables 
power transmission accessories
electrical connectors and harnesses
insulation technology 
global operations
united kingdom usa south africa
applications
power utilities building and civil 
construction electrical support systems
railways mining and general industrial
major customers
abbalstombombardier
china light  power 
crown agents
london underground
shell southern electricity
principal operating subsidiaries
ab connectors limited
aei cables limited
aei compounds limited
wst pty limited south africa
wt henley limited
notes
– companies are located in the united
kingdom except where indicated
– addresses and telephone numbers 
are shown on the tt electronics plc
websitewwwttelectronicscom
– only those subsidiaries whose results
principally affected these ﬁnancial
statements are shown above
tt electronics plc annual report 2003 57 historical record
accounting year
2003 2002 2001 2000 1999
turnover £million 5339 5203 6579 7460 6124
proﬁt before taxation £million 32 79 258 407 380
earnings £million 01 56 189 297 273
basic earnings per ordinary share p 01 36 122 187 164
earnings before impairment provisions goodwill amortisation 
and exceptional items £million 162 156 247 332 270
earnings per ordinary share before impairment provisions
goodwill amortisation and exceptional items p 104 101 160 210 162
ordinary dividend £million 156 156 156 156 163
ordinary dividend per share p 1005 1005 1005 1005 979
average ordinary shares in issue million 1548 1548 1548 1584 1664
shareholders’ funds £million 1961 2057 2221 2445 2385
asset value per ordinary share in issue at 31 december p 127 133 143 158 143
58 tt electronics plc annual report 2003 tt electronics plc annual report 2003 59
tt electronics plc
form of proxy
please print your name and address below
names
address
for use by ordinary shareholders for the annual general meeting to be held on 19 may 2004 iwe being a holders of ordinary
shares of 25p each of tt electronics plc hereby appoint the duly appointed chairman of the meeting
or
as myour proxy at the annual general meeting of the company to be held on 19 may 2004 and at any adjournment thereof and 
to vote on myour behalf as directed
resolutions
please indicate how you wish your proxy to vote by placing a tick in the appropriate place
unless otherwise indicated the proxy will exercise his discretion as to how he votes and whether or not he abstains from voting
1 to receive the financial statements for 2003 the directors’ report and auditors’ report
2 to approve the directors’ remuneration report for the year ended 31 december 2003
3 to declare a dividend of 636p per ordinary share
4 to reelect j w newman as a director
5 to reelect j w armstrong as a director
6 to reelect t h reed as a director
7 to reelect n a rodgers as a director
8 to reappoint grant thornton as auditors and to authorise the directors to ﬁx the auditors’ remuneration
9 renewal of general allotment authority
10 renewal of disapplication of preemption rights
11 authority for purchase of own shares
12 adopt the rules of the tt electronics plc 2004 inland revenue approved company share option plan
13 adopt the rules of the tt electronics plc 2004 unapproved company share option plan
14 approve the amendments to the rules of the current share option schemes
signature
please mark this box if signing on behalf of the shareholder as power of attorney receiver  or third party
this form of proxy should not be used for any comments change of address or any other queries please send separate instruction
date
for against
✄ notes
1 pursuant to regulation 41 of the uncertiﬁcated securities regulations 2001 the company speciﬁes that only those shareholders
registered in the register of members of the company by 6pm on 17 may 2004 shall be entitled to attend or vote at the
meeting in respect of the number of shares registered in their name at that time changes to entries on the register after 
6pm on 17 may 2004 will be disregarded in determining the rights of any person to attend or vote at the meeting
2 this form of proxy together with the power of attorney or other authority if any under which it is signed or an ofﬁce or
notarially certiﬁed copy thereof must be deposited at lloyds tsb registrarsthe causewayworthingwest sussex bn99 6zl
not later than 12 noon on 17 may 2004 a prepaid envelope is enclosed
3 in the case of joint holders the signature of the ﬁrstnamed will be accepted to the exclusion of all others seniority will be
determined by the order in which names stand in the register of members
4 in the case of a corporation the form of proxy should be under its common seal or under the hand of an ofﬁcer or attorney
duly authorised
5 unless otherwise directed the proxy will abstain or vote as he thinks ﬁt
6 a proxy need not also be a member of the company
7 any alterations to this form of proxy should be initialled
8 the completion of this form of proxy will not preclude the holder from attending and voting in person if he so wishes
60 tt electronics plc annual report 2003
form of proxy continued who we are and what we do
tt electronics is a global supplier 
of high quality electronic and
electrical products to the world’s
major original equipment
manufacturers it is committed 
to the development of innovative
products for the automotive
telecom computer and 
industrial markets
the group has world class global
manufacturing presence with
factories employing over 8500
people in the united kingdom
continental europe usa and 
low labour cost countries
our vision
our vision is to be a global leader 
in the application of tomorrow’s
technology in the products 
we manufacture
contents
page
1 highlights and ﬁnancial information
2 chairman’s statement
5 tomorrow’ s t echnology
6 – product development
7 – breadth of markets
8 – operational efﬁciency
9 chief executive’s statement
12 financial review
14 directors and company secretary
15 directors’ report
20 directors’ remuneration report
24 consolidated proﬁt and loss account
25 consolidated balance sheet
26 consolidated cash ﬂow statement
27 statement of total recognised gains and losses
27 reconciliation of movements in shareholders’ funds
28 company balance sheet
29 accounting policies
31 notes to the ﬁnancial statements
53 report of the independent auditors
54 notice of meeting
56 group operations
58 historical record
59 form of proxy
ibc shareholder information
designed and produced by linnett webb jenkins printed by ctd capita limited
annual general meeting
the annual general meeting will be held on 19 may 2004 at 
12 noon at the ironmongers’ hall shaftesbury place barbican
london ec2y 8aa
results
announcement of 2004 half year results –  mid september 2004
preliminary announcement of 2004 results –  late march 2005
annual report 2004 – to be posted mid april 2005
dividends
the ﬁnal dividend in respect of the year to 31 december 2003
will be paid on 28 may 2004 to those shareholders on the
register on 21 may 2004 shares ex dividend on 19 may 2004
the interim dividend in respect of the year to 31 december 2004
will be paid in late october 2004
for those shareholders who currently receive their dividends 
by post arrangements can be made to pay your dividends
automatically into your bank or building society account
a registration form will be included with the ﬁnal dividend
this service has a number of beneﬁts
– there is no chance of the dividend cheque going missing 
in the post and
– the dividend payment is received quicker as the cash is paid
directly into your account on the payment date without the
need to wait for the cheque to clear 
multiple accounts on the shareholder register
if you have received two or more copies of this document this
means that there is more than one account in your name on the
shareholder register this may be caused by either your name or
address appearing on each account in a slightly different way
for security reasons the registrars will not amalgamate the
accounts without your written consent so if you would like any
multiple accounts combined into one account please write to
lloyds tsb registrars at the address given below
share dealing services
shareview dealing is a telephone and internet service arranged
through lloyds tsb registrars and provides a simple and
convenient way of selling tt electronics plc shares
for telephone sales call 0870 850 0852 between 830am 
and 430pm monday to friday and for internet sales log 
on to wwwshareviewcoukdealing
a postal dealing service for buying and selling tt electronics plc
shares is also available and a form can be obtained by calling
0870 242 4244
shareholder information
sharegift
sharegift is a charity share donation scheme for shareholders
administered by the orr mackintosh foundation it is especially
for those who may wish to dispose of a small parcel of shares
whose value makes it uneconomical to sell on a commission
basis further information can be obtained at
wwwsharegiftorg or from lloyds tsb registrars
shareholder enquiries
lloyds tsb registrars maintain the register of members of the
company if you have any queries concerning your shareholding
or if any of your details change please contact the registrars
lloyds tsb registrars
the causeway
worthing
west sussex
bn99 6da
telephone
0870 600 3970
fax
0870 600 3980 
textphone for shareholders with hearing difﬁculties 
0870 600 3950
lloyds tsb registrars also offer a range of shareholder
information on line at wwwshareviewcouk
website
information on the group’s activities share price and ﬁnancial
performance is available at wwwttelectronicscom tt electronics plc
clive house
12 – 18 queens road
weybridge
surrey kt13 9xb
regno87249
tel 44 0 1932 841310
fax 44 0 1932 836450
wwwttelectronicscom
tt electronics plc
annual report 2003
t omorrow’s t echnology
tt electronics plc  annual report 2003


Summary:
 tt electronics plc annual report 2003 9
we continue to respond rapidly 
to the changing demands of 
our customers for new technical
developments improving factory
efﬁciencies and moving more
production to our factories 
in low labour cost areas
sheridan comonte
overview
it is with mixed emotions that i am writing my last report as
chief executive having joined tt electronics plc in 1987 over
the last 16 years the group has been changed signiﬁcantly 
and is now focussed on its electronic and electrical businesses
the group has a global presence servicing major customers
including the majority of the world’s major original equipment
manufacturers “oem” in the automotive telecom computer
and general industrial markets working with them on the
development of new product linesthe group has built up 
a reputation amongst this blue chip customer base as being
innovative cost effective and a high quality manufacturer 
of a range of electronic and electrical products
the global economy in 2003 was generally sluggish with a number
of the world’s developed countries near to recessionthe ﬁrst
quarter gave rise to some optimism in the electronic sector but
this was dashed by the sars outbreak and the iraq war and the
second and third quarters produced a difﬁcult economic climate
there were some positive signs in the fourth quarter of a
strengthening of demand in certain markets which has been
maintained so far in 2004
sales to the automotive market grew by 12 per cent over last
year this success was due to the strength of our product range
and to the successful range of vehicles using our components
electronic component sales were reduced as a result of
downsizing the reorganisation of our unproﬁtable magnetics
operations and lower sales to the still depressed telecom and
computer markets sales of our electronic manufacturing services
business were also reduced following the decision by one large 
customer to take assembly work back in housethere was little
sign of a recovery in the telecom data infrastructure or computer
markets during the year but currently there is generally more
optimism for the sector during 2004the power transmission
and generation markets remained highly competitive imports
from low labour cost countries had an adverse effect on
margins and our export business to the far east was held 
back in the early part of the year due to the sars virus
we continue to respond rapidly to the changing demands 
of our customers for new technical developments improving
factory efﬁciencies and moving more production to our factories
in low labour cost areas will enable satisfactory proﬁt margins
to be achievedwe have continued the introduction of cost
reduction programmes and to streamline our administration
we continue to take a longterm view of our markets and have
increased resources appropriately in both product development
and technical sales where we see opportunities for growth
whilst the group emphasises the importance of organic 
growth to all our businesses we actively seek suitable acquisitions
at the right price provided they enhance our technologies 
and product range for the markets we servethe acquisition 
of optek technology in december 2003 a £40 million turnover
company based in dallastexas with a large manufacturing
unit located just across the border in juarez mexico met our
acquisition criteria and is successfully being fully integrated
into the sensor and electronic systems subsector 
chief executive’s statement 10 tt electronics plc annual report 2003
electronic sector
the electronics’ market continues to change rapidly not only
from a technological standpoint but also as the large oems
move from one country to another to take advantage of the
most cost competitive manufacturing base as well as to serve
the rapidly growing customer demand in developing countries
we continue to monitor and respond to these dynamics
automotive market – represents 63 per cent of the
electronic sector turnover
over the last decade the electronic content of cars has increased
annually at an average of 6 per cent and this trend is forecast 
to continue it is pleasing to note that our sales growth to this
market was 12 per cent and above the average market growth
we recognised the potential of this market some years ago and
have developed a range of technologies and products which
satisfy this demand currently 60 per cent of all cars produced
in europe and north america incorporate at least one of our
productsthe demand for electronics is driven by three main
features and our technologies and products are used in all 
three of these growth areas
demand for enhanced vehicle performance and better fuel efﬁciency
a key aspect of reducing exhaust pollutants is to improve fuel
efﬁciencies which is achieved by a combination of better
engine management systems and lighter weight cars
tt electronics has developed a number of sensors which form 
a part of the complex electronics required in today’s engine
management systems as well as being a pioneer in driveby
wire technologies for accelerator  brake and steering systems
currently all new bmw and mercedes benz cars use our
accelerator pedal sensor modules which are produced on
dedicated automated production lines at one of our german
plants electronic steering is taking over from the currently 
used hydraulic systems as this saves weight improves fuel
consumption and reduces costtt electronics was one of the
ﬁrst to market sensors for an electrically powered system and
these are now incorporated into a growing number of european
and north american cars sales of these sensors grew by 
20 per cent last year 
demand for improvements to car safety 
a car’s stability on the road is paramount and we produce 
a range of sensors for chassis height control as well as abs
braking sensors other sensors and systems include hybrid
circuits for controlling high intensity discharge headlamps
demand for improved driving comfort
at our automotive engineering centre in wales we specialise in
the design of complex climate control systems which control
the different zones in a vehicle’s passenger compartment as
well as incorporating incar entertainment systems such
systems can take up to 12000 engineering hours to develop
due to the need for the software to interface with other
electronic and electrical systems within the car as well as
designing the appropriate style of the unit incorporated into
the dashboardthese products are manufactured in wales and
the usa and following the acquisition of demo in france and
brazil last year the total number of our units sold increased
to over two million units
t elecom market – represents 9 per cent of the
electronic sector turnover
the telecom market had in the past shown steady growth
which peaked during the boom year of 2000 subsequently
in part due to the ﬁnancial difﬁculties of many of the world’s
largest service providers and equipment manufacturers the
demand for the wide range of components we manufacture 
for this industry collapsed sales this year reduced by 16 per cent
from 2002 and by over 60 per cent from 2000telecom products
attracted a good proﬁt margin and this reduction in demand
has adversely affected proﬁtability
currently there are signs that investment in both wireless and
wireline infrastructures will increase as service providers and
equipment manufacturers repair their balance sheets and the
world’s spare capacity becomes more utilised driven by the
demand for new technologieswe expect some growth in this
market in 2004
due to the reduction in demand and increasing competition
from china sales of our magnetic components have been badly
affectedwe have responded by a major reorganisation of our
operationsthis included closing our manufacturing plants for
laminations in the united kingdom and exiting this market
our ferrite manufacturing plants in the united kingdom and
usa have been closed and production transferred to our low
labour cost factory in india which is being enlarged to handle
the additional equipment and turnover 
computer market – represents 6 per cent of the
electronic sector turnover
our range of inductors and resistors continue to be designed
into assemblies by the world’s leading computer manufacturers
however  the rapid move of the production of pc’s and laptops
to china has impacted on the sales which have reduced by
34 per cent from 2002 and over 60 per cent from 2000these
factors have caused us to reevaluate our supply chain into 
this market during the year we increased our presence
in china by opening a technical centre based at our sales ofﬁce
in shenzhen and set up a manufacturing facility in southern
mainland chinathis has the effect of bypassing import duties
chief executive’s statement continued tt electronics plc annual report 2003 11
into china and giving us a more competitive base to offset 
the rapid rise in local chinese competition
industrial market – represents 22 per cent of the
electronic sector turnover
this market includes a wide range of industries and a large
number of companies from large international to more niche
specialist companiesthe majority of our sales have been to 
the control instrumentation and aerospace sectors which have
been stagnant during the year  our marketing departments
continually analyse the opportunities and focus our technical
sales and engineering on growth areas or where we have 
a technological advantage
optek technology sales to the ofﬁce equipment market
represent 32 per cent of their turnover and it is our intention
to use their contacts and expertise to increase sales of our
existing products into this market
electrical sector
power generation – represents 29 per cent of the
electrical sector turnover
the majority of the generator sets we manufactured in the
united kingdom were for export to africa the middle east and
the far eastthis market has been depressed for some years
and made worse by the strength of sterling against the us
dollar this year proﬁtability was adversely affected by technical
problems on a large complex project for north africato enable
us to remain competitive we have withdrawn from production
in the united kingdom and transferred business to our efﬁcient
and proﬁtable factory in mexico which has undergone an
expansion and upgrade programme over the last three years
we continue to run a maintenance and overhaul service for
both the united kingdom and selected overseas customers
our uninterruptible power supply business which has suffered
due to the telecom downturn won a number of new orders 
for our product incorporated into mobile base stations 
in singapore and thailand
power transmission – represents 71 per cent of the
electrical sector turnover
we have been successful in winning the subsea cable
contracts for both of the offshore wind farms constructed in 
the united kingdom to date and have expectation of winning
future ordersthe wind farm cable delivered in the middle 
of 2003 whilst achieving an acceptable margin due to its
technical complexity caused other production disruptions and
delaysthe general industrial cable market is still oversupplied
and is open to competition from low cost imports from eastern
european countries which has the effect of depressing margins
the specialist cable contract which we won in the second half
of 2003 for new naval vessels currently under construction 
will commence delivery shortly and further orders are 
expected later this year 
outlook
i stated in my review in march last year that 2003 would be 
a demanding environment in which to grow sales in the early
stages of 2004 there is generally more optimism for the recovering
worldwide economy and demand for our products is increasing
tt electronics is well prepared to beneﬁt from such a recovery
our policy has and will be to continue to manage the group 
in the longterm interest of shareholders and employees
i am pleased to be handing over my role to neil rodgers
who joined the group 12 years ago and has for the last 7 years
been divisional chief executive responsible for our successful
automotive businesses i wish him and the management
teams who have supported me over the years good fortune
and an improving marketplace
sheridan w a comonte
chief executive
29 march 2004