Volex plc Annual Report 2023

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FY2023 Annual Report · Volex plc

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Delivering
Critical
Connections

Annual Report and Accounts
for the year ended 2023

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Welcome to Volex's
2023 Annual Report

Why we exist

Our purpose:
Delivering best-in-class critical connections.

Our vision:
To be a leading global supplier of diverse high-quality
power and data connectivity-related solutions, with
customers, engineering and people at our core, and
renowned for our adaptability and customer service.

Our mission:
To deliver safe, sustainable high-quality critical power
and data connectivity-related solutions in our chosen
markets. Enabling our customers to succeed in an
era of rapid technological acceleration through our
manufacturing excellence, global footprint and
stringent quality assurance.

Our culture

Our culture fills us with pride and underpins our
approach and the way we operate. Our people
are passionate about our customers and, through
collaboration and hard work, commit to delivering on-
time solutions that are right the first time, every time.

Through collaboration and teamwork we harness the
power of our people through kaizen and operational
excellence.

Volex is a leading
specialist integrated
manufacturer of
critical power and data
transmission products.

We serve a diverse range of markets and
customers, with particular expertise in
cable assemblies, higher-level assemblies,
data centre power and connectivity, electric
vehicles and consumer electricals power
products.

With sales teams located around the globe,
combined with authorised distribution
partners, we have the ability to service our
customers’ needs and deliver our products
to Original Equipment Manufacturers
(‘OEMs’) and Electronic Manufacturing
Services (‘EMS’) companies worldwide.

The critical products and services that
we offer are integral to the increasingly
complex digital world in which we live,
providing power and connectivity from
the most common household items to the
most complex medical equipment.

We are headquartered in the UK and
operate from 19 manufacturing locations
with a global workforce of over 8,000
employees across 22 countries.

Sustainable
ratings

UN sustainable
development goals

Links to more
Volex content

Sustainability supplement
https://www.volex.com/wp-content/
uploads/2023/06/FY2023-Supplemental-
Sustainability-Disclosure-Report.pdf

https://www.volex.com/

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Financial highlights

Revenue ($M)

2023

2022
2021

2020

2019

Underlying operating profit
($M)1

$722.8m
$614.6m
$443.3m

$391.4m

$372.1m

2023

2022

2021

2020

2019

$67.3m
$56.2m

$42.9m

$31.6m

$21.6m

Profit before tax ($M)

Net debt/(cash) ($M)

2023

2022
2021

2020

2019

$45.8m
$36.2m
$29.4m

$15.9m

$11.6m

2023

2022
2021

2020

2019

$103.7m
$95.3m
$27.3m

$(21.2)m

$(14.9)m

Free cash flow ($M)2

Underlying basic earnings
per share (cents)3

2023

2022

2021

2020

2019

$38.1m
$4.1m

$31.3m

$47.4m

$(10.9)m

2023

2022
2021

2020

2019

30.2cents
26.9cents
32.1cents

18.2cents

13.1cents

Underlying operating profit, free cash flow and underlying basic earnings per share
are alternative performance measures. More details on alternative performance
measures can be found on pages 188 to 189.
1 Underlying operating profit is operating profit before adjusting items and share-

based payment charges – see note 7 on pages 142 to 143.

2 Free cash flow is net cash flow before financing activities and the acquisition of

businesses, net of cash acquired.

3 Based on profit before adjusting items and share-based payments, net of tax –

see note 11 on page 146.

Non-financial highlights

Employee Safety (accident
frequency rate, reportable
accidents per million hours worked)

Carbon Intensity (tonnes of scope
1 and 2 emissions produced per
$M revenue)

2023

2022
2021

2020

2019

1.24
1.78
2.00

1.07

2.25

2023

2022
2021

2020

2019

27.7
32.1

34.2

35.3

Our five-year strategy
Our ambitious five-year strategy, launched in June 2022, sets out
our target to grow revenues to $1.2 billion by the end of FY2027,
including $200 million from new acquisitions. We intend to maintain
our operating margins in the range of 9-10%. A year on, we are
comfortably on track, delivering great progress in attractive markets
with structural growth drivers.

Organic growth, investment & acquisitions
In recent years we have increased our investment in organic
opportunities in order to drive growth. This approach has been highly
successful with revenue growing organically by 11.4% in FY2023.
Acquisitions also remain a core element of the Volex strategy, with
one additional business added to the Group during the year.

Acquisition of RDS
At the end of October 2022, we completed
the acquisition of the Review Display Systems
Group (‘RDS’) for initial consideration of $5.5
million. RDS is based in Westerham, United
Kingdom, focusing on display systems and
complements our existing UK business.

Net zero commitment
We are committed to becoming net zero on Scope 1 and 2 emissions
by 2035. As part of this journey, we will set science-based emission
reduction targets aligned with the SBTi’s target setting criteria.

Contents

Business overview
Highlights

Delivering Critical Connections
Executive Chairman’s Statement

Strategic report
Our Markets

Business Model

Strategy

Key Performance Indicators

Operational Review

Performance Review

Financial Review

Group Risk Management

Sustainability at Volex

TCFD

A Responsible Business

A Trusted Business

Stakeholder Engagement

Section 172(1) Statement

Governance
Board of Directors

Executive Chairman’s Introduction

Corporate Governance Report

Audit Committee Report

Nominations Committee Report
Safety, Environmental and Sustainability
Committee Report

Remuneration Committee Report

Directors’ Report

Statement of Directors’ Responsibilities
Independent Auditors’ Report
to the Members of Volex plc

Financials
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity

Consolidated Statement of Cash Flows
Notes to the Consolidated Financial
Statements
Company Statement of
Financial Position
Company Statement of
Changes in Equity
Notes to the Company
Financial Statements

Alternative Performance Measures

Five Year Summary

Shareholder Information

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28
30
33
38
44
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58
68
72
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90
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96
98
114
117

118

126

127

128

129
130

131

174

175

176
188

190
191

Sustainability supplement

https://www.volex.com/wp-content/

uploads/2023/06/FY2023-Supplemental-

Sustainability-Disclosure-Report.pdf

https://www.volex.com/

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Delivering
critical connections

We make this
a reality through:

Delivering
customer focus
Our worldwide customer service representatives
and sales teams are located in close proximity
to our customers, providing them with an
enhanced experience. We manage the sourcing
of components for complex solutions, ensuring
our global supply chain experts understand our
customers’ requirements.

Delivering
successful innovation
Our world-class process engineers give us
the ability to deliver increasingly complex
manufacturing services successfully by partnering
with customers. Volex’s design teams create
unique solutions to complex engineering
challenges, resulting in several new patents being
registered each year.

Delivering
excellent performance
Volex has delivered excellent revenue progression
with strong organic growth. Over the last three
years, underlying operating margins have
remained within our target range despite the
supply chain and inflation challenges that all
manufacturers have faced.

At Volex, we’re passionate about
our customers. That’s why all of
our employees put in extra effort
to ensure that the products and
solutions they deliver are of the
highest quality – every time. We
are proud to provide our customers
with solutions that allow diverse
technologies to operate efficiently
and safely.

We are a global company with
complex supply chains, so the
effectiveness of how our multicultural
and multilingual teams work
together is critical to our success. It’s
all about people!

Strong financial track record
Over the past five years we have increased our
revenues by compound annual growth rate of 18%
whilst improving underlying operating margins
from 5.8% in FY2019 to 9.3% in FY2023. Our strong
financial position and healthy cash generation allows
us to continue to invest in the future growth of the
business. The majority of the investment projects we
identify pay for themselves within two years – and
many do so in less time than that.

Read more about
our Track Record
on page 190

Well positioned in growing,
sustainable markets
Our chosen markets all demonstrate structural,
sustainable growth and are highly fragmented.
We partner with customers in the Electric Vehicles,
Consumer Electricals, Medical and Complex Industrial
Technology markets. Through the relationships with
our customers, we develop new products based
on the evolving needs of their markets. By staying
abreast of trends, we can continue growing our
business while delivering optimal products that satisfy
customer demands. We are committed to providing
quality products and services that meet or exceed our
customers’ expectations.

Read more about
our Growing Markets
on pages 10 to 11

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Our Investment Proposition
Our investment
proposition

Global presence and scale
With 19 manufacturing sites, and sales and technical
support teams across three continents and 22
countries, we are available when, and where, our
customers need us. Partnering with us allows our
customers to take advantage of the economies of
scale and purchasing power we have throughout our
business.

Read more about
our Global Presence and Scale
on page 17

Operational excellence
Continuous improvement is embedded in our culture
which, alongside our advanced manufacturing assets,
allows us to strive for operational excellence. Our
brand is synonymous with quality and reliability so
our customers know they can always count on us to
deliver products that meet their high standards. This
is why we invest in rigorous testing and certifications
to ensure that every product meets the highest
standards. We strive for continuous improvement
through innovation, creativity and collaboration. This
allows us to remain at the forefront of our industry.

Read more about
our Approach to Operational Excellence
on page 26

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Successful acquisitive approach
Acquisitions remain a key pillar of our strategic
approach. We have a proven track record of successful
acquisitions, with 11 completed over the past five
years. These not only helped us expand capabilities
but also delivered significant operational, financial
and geographic success. We carefully assess the
suitability of new acquisition targets based on their
alignment with our strategic focus areas and long-
term goals. We consider opportunities that offer
geographic expansion, technological advancement
and increased diversification so we can deliver more
value to our stakeholders.

Read more about
our Successful Acquisitive Approach
on page 36 to 37

Remarkable talent
We value the exceptional talents of our employees,
who work together to achieve results on a local
level while also supporting each other across
organisational borders. The leadership team creates
an environment where collaboration can flourish by
nurturing talent and encouraging development. We
promote a culture of accountability, responsibility and
ownership that empowers everyone to do the right
thing. We value the strengths of each individual and
team.

Read more about
our Remarkable Talent
on page 6

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Delivering
critical connections

The Volex portfolio of products,
capabilities and solutions include:

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We provide market-
leading products that
enable our customers
to succeed
Bringing connectivity and
power to high-tech equipment
that is changing how we
live, work, and communicate
demonstrates our dedication
to improving the quality of life
around the world.
We invest in developing our production
Maintaining advanced manufacturing
assets to meet the evolving demands of our
customers through our capital investment
programmes, we offer them integrated
solutions by assembling a diverse range
of capabilities that we have designed to
overcome manufacturing challenges.

Product design
Partnering with customers, we design
solutions that meet their power and
connectivity needs, while also addressing
the challenges our customers face with
their next-generation products.

New product introduction
We help clients develop products by
working with them from the beginning
of the product development process. This
collaborative approach helps us meet our
customers’ needs and reduce costs.

Intellectual property
Our design teams develop novel solutions
to engineering challenges, allowing us to
register a small number of patents each
year. This augments our manufacturing
know-how that has been developed over
many years.

Electric vehicle charging
solutions
Offering a comprehensive portfolio of
charging products for electric vehicles,
we have developed products for all
applications from private AC home
charging to public DC fast charging.

Power cords, plugs,
connectors, receptacles
We are a leading low cost
manufacturer and supplier of power
cords, plugs and receptacles. Our
products are sold to manufacturers
for a broad range of electrical and
appliance applications.

Integrated manufacturing
services (IMS)
Taking a customer’s complete
performance-critical design we can
build the entire product, including
PCB assembly, box build and complex
cable assemblies.

High-speed data cables
Our market-leading high-speed data
cables are crucial to leading-edge data
centres to support faster processing,
greater bandwidth and increased
density.

Vertically
integrated solutions

With the increasing
complexities in our
demanding end markets,
we can draw on our
manufacturing expertise
from across the globe. Our
integrated approach allows
us to take our clients further.

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Delivering
customer
focus

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Vertically

integrated solutions

Integrated
manufacturing services (IMS)

Our services include
f High Level Assembly

(HLA) Manufacturing and
Integration

f Box Builds

f Electromechanical

Assemblies and Systems

f Custom Wiring and Cable

Harnesses

f Printed Circuit Board
Assemblies (PCBA)

That serve four
customer end markets
f Electric Vehicles

f Consumer Electricals

f Medical

f Complex Industrial

Technology

These end markets
serve our submarkets
f Electric Vehicles

f IT & Electronics

f Domestic Appliances

f Medical

f Aerospace & Defence

f Industrial Manufacturing

f Data Centres

f Commercial and Other

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Delivering
critical connections

A culture that
drives success

Kaizen
Kaizen is a Japanese philosophy that emphasises
continuous improvement in all aspects of
life, including in business. In manufacturing
businesses, kaizen programmes help to improve
quality, efficiency and productivity by enabling
organisations to identify and eliminate waste,
reduce costs and increase employee engagement.
Through the Volex Excellence System, we
encourage our employees to find ways to improve
our processes and systems. Kaizen fosters a culture
of innovation and creativity, boosting morale and
team unity. Kaizen helps us to stay competitive
in a rapidly changing market by continuously
improving our operations and delivering high-
quality products and services to our customers.

Innovating standards to meet
the requirements of evolving clients
We foster a culture of innovation and collaborate
with our customers to understand their current
and future challenges. We encourage employees
to experiment with new ideas, provide resources
for innovation and recognise and reward
innovation efforts. Collaborating with technology
partners also helps us access new technologies
and ideas, expand our networks and accelerate
innovation.

Read more about
our Business
Model
on pages 22 to 23

Read more about
our Markets
on pages 16 to 21

Advanced manufacturing
assets across three continents
With operational capabilities across three
continents, we have the right combination of
facilities, products and services to ensure we
provide our customers with an outstanding
experience. We coordinate the procurement of
all materials required for our customers’ complex
solutions, sourcing them from all over the world
to obtain the best quality components at the
lowest cost.

Best-in-class processes and quality
assurance
Our commitment to quality permeates our
organisation and influences every aspect of
manufacturing. This enables us to keep focused on
continuous improvement so that we can maximise
efficiency while remaining cost competitive.
Our product experts conduct rigorous testing to
ensure that quality standards are maintained. All
of our sites have ISO 9001, and many have other
sector-specific certifications, such as IATF 16949,
providing assurance to our customers.

Optimised from a cost and tariff
perspective
Our global manufacturing footprint is optimised to
operate in the most cost-efficient way to support
our customers. We identify the most appropriate
matrix of skills and capabilities in our sites
corresponding with our customers’ requirements.
With operations in multiple countries, we can
supply from tariff-free and lower tariff locations.

Read more about
Stakeholder
Engagement
on pages 74 to 75

Accreditations

We publish data on our
sustainability performance
through globally recognised
platforms to provide
independent verification and
assurance of our disclosures.

Water: B-
Climate: C

EcoVadis
Silver Medal

ISO 9001
ISO 14001
ISO 45001

Remarkable talent
Our employees are our most important asset.

Onboarding, training and retention
We support our employees from the time they join the company
until they have fully mastered their roles. We use trainers and buddy
systems to ensure new colleagues get the support they need in
their early days as we recognise that developing talent is essential to
support our business growth.

Reward and recognition
Reward and recognition are important for employees because they
boost motivation, engagement and job satisfaction, leading to
improved performance and retention. All our sites are encouraged to
operate recognition programmes locally and as a Group we celebrate
kaizen teams and site excellence on an annual basis.

Impact
Talented people are central to our business because they drive
innovation. Through collaboration, and the sharing of knowledge,
they enable us to stay competitive helping to create a positive
culture that attracts top talent.

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Delivering
successful
innovation

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Supported by our values:

Be trusted
Putting our customers first, we work to
understand them deeply and to exceed their
expectations. Our customers trust us to deliver
their critical projects.

Be tenacious
We get things done, we drive for results, we
never give up. Continuous improvement means
the whole team working together to seize every
opportunity to be better.

Be challenging
Our policy is to speak up, being direct and
honest with each other. By working together and
challenging constructively we develop the best
solutions.

Be respected
A belief in quality runs through our organisation.
We keep our promises and take accountability for
our commitments. We take pride in what we do.

Be focused
We establish clear goals, objectives and
performance standards for our people, products
and processes. We communicate these
exceptionally well and we play to our strengths by
focusing on distinct solutions for our customers.

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Delivering
critical connections

A year ago, we set out our ambitious
new five-year plan, to grow our
revenues to $1.2 billion by FY2027.
Our results demonstrate the
value added by our investment
programme and our ongoing ability
to deliver against this plan.

We are confident that our strategy and operating
model provides us with the opportunity to
deliver long-term organic growth alongside
complementary, earnings-enhancing acquisitions.

Our strong performance, clear strategy and
pipeline of customer opportunities underpins
our confidence to deliver on our ambitious five-
year plan.

Resilient and well positioned
for continued growth and success
We have built a strong, resilient and diverse
business, aligned to fragmented market sectors
with long-term structural growth characteristics.

In the current high-inflationary environment, we have shown that
we are capable of managing supply chain and inflationary pressures
effectively, while simultaneously continuing to win new projects and
expand opportunities with existing customers.

We continue to report strong organic sales growth, building on the
momentum generated last year whilst maintaining our margins
within our target range and demonstrating our ability to effectively
pass through inflationary increases.

Five-year summary FY2019-FY2023

800

700

600

500

400

372.1

391.4

300

200

100

443.3

Revenue

722.8

614.6

2019

2020

2021

2022

2023

Five-year plan FY2023-FY2027

Revenue

Underlying
operating margin

$1,200m

9-10%

Revenue
from acquisitions

$200m

by end of FY2027

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Delivering
excellent
performance

Acquisition of Review Display
Systems Limited (‘RDS’)

RDS specialises in offering a complete display and
embedded solutions service including custom displays,
embedded boards, firmware engineering support,
prototypes and a full manufacturing service. It operates
from a ISO 13485 Medical Devices accredited production
facility based in Westerham, Kent and also has a sales
presence in the United States.

Overview
The acquisition of RDS will combine with, and complement,
our existing successful and growing UK-based business,
GTK, to create an increasingly complete customer solution.
GTK specialises in the manufacture and provision of
customised electronic solutions including complex
cable assemblies, custom displays and integrated box
build solutions for global blue chip customers. The two
businesses will be managed under a single leadership
structure to identify and deliver synergy opportunities.

How will this benefit Volex?
f Combined RDS and GTK business has a complementary
product offering, with an enhanced footprint in the UK

f Significant cross-selling opportunities

f Potential synergies in IT, freight, suppliers and

warehousing

f Offers a more complete customer solution with
increased design and engineering support

f US presence of RDS creates further global opportunities

f Internet of Things (‘IoT’) expertise

RDS has a high-quality design and support team which
guides customers through the entire process, partnering
to understand the specifications in order to design the
solution, create prototypes, all the way through to full scale
production. With around 200 active clients worldwide,
of which the majority provide ongoing repeat business,
RDS serves a diverse range of end markets including
Medical and Complex Industrial Technologies. As a strong
strategic fit with our existing UK business, there are exciting
opportunities in this region.

$14.5m

Annual revenues based on
12 months to March 2023

$1.9m

Annual operating profit based on
12 months to March 2023

41 years

Experience of manufacturing
custom displays

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Delivering
critical connections

Our reputation
for quality has
been recognised
in the industries
in which we
operate

f Volex was recently recognised by

ASEFA, a certification body for electric
vehicle charging stations, plugs and
sockets, as one of the few charging
cable assembly suppliers to include
the E.V. READY® Mark.

f Ambition for Net Zero Journey to
achieve net zero on scope 1 and 2
emissions by 2035.

f MedAccred has accredited Volex’s
Tijuana, Mexico manufacturing
facility for meeting the rigorous cable
and wire harness manufacturing
requirements established by ten
of the leading medical device
companies.

Read more about
our Markets
on pages 16 to 21

Growth FY2023

Revenue FY2023

+33%

Electric Vehicles
demand and revenue
growing strongly
$138m

Consumer Electricals
continued success
with new project wins
0%
$262m

Performance
f Strong momentum continued in Electric Vehicles

Performance
f New projects offset the macroeconomic headwinds

responding to increasing demand

experienced during the year

f Our customer base has diversiﬁed and we have
successfully developed our range of products

f With customers localising supply chains we are able to

utilise our global footprint to support them

f Our major customers are reporting significant increases

f Data centre customers are transitioning to 400Gbps

in order books

network equipment

f We also provide solutions to support faster modes of
charging both domestically and out of the home

f We have safety approvals covering every major market

and follow ISO 9001 procedures, ensuring the highest
standards on all electric cords produced

Opportunity

Expected market growth over ﬁve years of 17%1

Expected market growth over ﬁve years of 12%2

Expected market growth over ﬁve years of 5%3

Expected industrial automation market growth over seven

Impact
The major beneﬁt of electric cars is the contribution that
they can make towards improving air quality in towns and
cities. With no exhaust, pure electric cars produce no carbon
dioxide emissions when driving. This reduces air pollution
considerably.

Impact
Consumer demand for enhanced and updated technology
results in continual appliance design evolution.
Manufacturers develop the technology of appliances,
enriching features and improving the efﬁciency of
products, making them desired consumer items.

Put simply, electric cars give us cleaner streets making our
towns and cities a better place to be for pedestrians and
cyclists. In over a year, just one electric car on the roads
can save an average 1.5 million grams of CO2. That’s the
equivalent of four return ﬂights from London to Barcelona.

The development of ‘smart’ appliances allows users to
monitor their appliances in order to obtain better control
and information and to save them time and money.

Medical revenues

strong as supply chain

challenges improve

$145m

Revenue FY2023

Performance

+13%

Growth FY2023

Complex Industrial

Technology showing

strong growth

$178m

Revenue FY2023

Performance

+48%

Growth FY2023

f Strong revenue from Medical customers as supply chain

f Demand increasing for core industrial business

challenges begin improving

reflecting improving supply chain

f Momentum expected to be sustained over the medium

f Next-generation data centre products have been

term with near-shoring benefit

qualified with key customers

Opportunity

Impact

Opportunity

years of 10%4

Impact

Medical solutions will provide faster and more accurate

Drives economic growth and innovation, creating new

diagnoses, leading to improved patient outcomes and

industries and jobs. Industrial automation improves

reduced healthcare costs. Electronic health records (EHRs)

manufacturing processes, leading to increased

enable better coordination and continuity of care, and

productivity and cost savings. This diverse sector also

telemedicine services expand access to medical expertise for

serves transportation, aerospace and defence as well as

those in remote or underserved areas.

commercial applications.

Electronic medical equipment also allows for non-invasive

The increased requirements for cloud computing storage

monitoring and treatment, reducing the need for more

has created a need for ever faster infrastructure within

invasive procedures and promoting faster recovery times.

Data Centres to support this. We are at the forefront of this

These advancements have the potential to improve overall

fast-moving cutting edge technology, with a dedicated

patient outcomes and contribute to a more efﬁcient and

research and development team working on the latest

effective healthcare system.

advanced technology.

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1 Source: Statista research on global electric vehicles 2023-2027

2 Source: Statista research on global consumer electronics 2023-2028

3 Source: Statista research on global medical technology 2023-2027

4 Source: Fortune Business Insights research on industrial

automation 2022-2029

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Delivering
excellent
performance

Electric Vehicles

demand and revenue

growing strongly

$138m

Revenue FY2023

Performance

+33%

Growth FY2023

Consumer Electricals

continued success

with new project wins

$262m

Revenue FY2023

Performance

Growth FY2023

f Strong momentum continued in Electric Vehicles

f New projects offset the macroeconomic headwinds

responding to increasing demand

experienced during the year

Medical revenues
strong as supply chain
challenges improve
$145m

+13%

Revenue FY2023

Growth FY2023

Complex Industrial
Technology showing
strong growth
$178m

Revenue FY2023

+48%

Growth FY2023

f Our customer base has diversiﬁed and we have

f With customers localising supply chains we are able to

f Our major customers are reporting significant increases

f Data centre customers are transitioning to 400Gbps

successfully developed our range of products

utilise our global footprint to support them

in order books

network equipment

f We also provide solutions to support faster modes of

charging both domestically and out of the home

f We have safety approvals covering every major market

and follow ISO 9001 procedures, ensuring the highest

standards on all electric cords produced

f Momentum expected to be sustained over the medium

f Next-generation data centre products have been

term with near-shoring benefit

qualified with key customers

Opportunity

Expected market growth over ﬁve years of 17%1

Expected market growth over ﬁve years of 12%2

Expected market growth over ﬁve years of 5%3

Expected industrial automation market growth over seven
years of 10%4

Performance
f Strong revenue from Medical customers as supply chain

Performance
f Demand increasing for core industrial business

challenges begin improving

reflecting improving supply chain

Impact

The major beneﬁt of electric cars is the contribution that

Consumer demand for enhanced and updated technology

they can make towards improving air quality in towns and

results in continual appliance design evolution.

cities. With no exhaust, pure electric cars produce no carbon

Manufacturers develop the technology of appliances,

dioxide emissions when driving. This reduces air pollution

enriching features and improving the efﬁciency of

considerably.

products, making them desired consumer items.

Put simply, electric cars give us cleaner streets making our

The development of ‘smart’ appliances allows users to

towns and cities a better place to be for pedestrians and

monitor their appliances in order to obtain better control

cyclists. In over a year, just one electric car on the roads

and information and to save them time and money.

can save an average 1.5 million grams of CO2. That’s the

equivalent of four return ﬂights from London to Barcelona.

Impact
Medical solutions will provide faster and more accurate
diagnoses, leading to improved patient outcomes and
reduced healthcare costs. Electronic health records (EHRs)
enable better coordination and continuity of care, and
telemedicine services expand access to medical expertise for
those in remote or underserved areas.

Impact
Drives economic growth and innovation, creating new
industries and jobs. Industrial automation improves
manufacturing processes, leading to increased
productivity and cost savings. This diverse sector also
serves transportation, aerospace and defence as well as
commercial applications.

Electronic medical equipment also allows for non-invasive
monitoring and treatment, reducing the need for more
invasive procedures and promoting faster recovery times.
These advancements have the potential to improve overall
patient outcomes and contribute to a more efﬁcient and
effective healthcare system.

The increased requirements for cloud computing storage
has created a need for ever faster infrastructure within
Data Centres to support this. We are at the forefront of this
fast-moving cutting edge technology, with a dedicated
research and development team working on the latest
advanced technology.

1 Source: Statista research on global electric vehicles 2023-2027

2 Source: Statista research on global consumer electronics 2023-2028

3 Source: Statista research on global medical technology 2023-2027

4 Source: Fortune Business Insights research on industrial

automation 2022-2029

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Executive
Chairman’s Statement
Chairman’s Statement

Our focus on innovation,
Our focus on innovation,
Our focus on innovation,
quality and continuous
quality and continuous
quality and continuous
improvement has made
improvement has made
improvement has made
Volex an incredibly
Volex an incredibly
Volex an incredibly
competitive business.
competitive business.

Nathaniel
Rothschild
Executive
Chairman

Read more
about our
Strategic Aim
on pages
24 to 27

Introduction
The Group has delivered another year of excellent
progress, sustaining double-digit organic revenue
growth and further improving underlying
operating margins.

Our success is a combination of targeted
investment into the business and a strategic
focus on key market sectors which have and will
continue to deliver significant growth. It is also a
clear indication of our teams’ abilities to harness the
structural growth drivers in our chosen markets.

The last three years have been challenging for
global manufacturing, and yet with margins
sustainably within our target range, we have
proven that we have a robust business, capable
of navigating logistical challenges and exceeding
customer expectations.

Our focus on building a business based on
innovation, service and quality continues to be the
key differentiator in our market. Price is a factor,
but it is not the only consideration. Whilst we
remain committed to providing exceptional value
to our customers and supporting their growth
through our unrivalled global footprint, we are
equally focused on providing our shareholders
with an attractive investment opportunity.

We continued to invest in our business as we
delivered revenue growth of 17.6% in FY2023
and an increase in underlying operating profit
of 19.8%. We also achieved significant constant
currency organic revenue growth of 11.4%, giving
us a three-year average constant currency organic
annual rate of 12.9%. Operating margins rose
to 9.3% (FY2022: 9.1%), reflecting the strength
and consistency of our commercial proposition.
Our covenant leverage has improved ahead of
expectations to 1.0x in the past year and is now 0.2x
lower than it was at the beginning of FY2023. It is
these strong performance metrics that make us

believe we are well positioned for future growth as
we continue to innovate and expand globally.

Our renewed competitiveness fuelled by our
investment in vertical integration, manufacturing
efficiency and continuous improvement initiatives,
is accelerating new contract wins and increasing
market share. These awards have been secured
by our ability to offer best-in-class products and
services, underpinned by a global supply chain
that is lean and responsive.

Strategic focus
We are benefitting from very significant structural
changes in the manufacturing landscape as
our customers reconfigure their supply chains.
For a combination of logistical and geopolitical
reasons, there is a marked increase in initiatives
to reduce complexity and bring the source of
critical components nearer to the point of final
assembly. This plays to our strengths given our
expertise in delivering reliable, resilient and flexible
manufacturing solutions.

Our investments in new capacity are helping to
meet the demand for localisation. In particular, we
are expanding our sites in India, Mexico, Poland
and Indonesia following positive feedback from
existing and potential customers.

We are already seeing the benefits arising from this
strategy having announced a major Electric Vehicles
(“EV”) power products contract win for our site in
Tijuana, Mexico in May. We have a detailed plan to
successfully onboard EV products into Mexico, and
the opportunity to grow this business while still
maintaining attractive margins is significant.

Success in markets with significant
structural growth drivers
There are significant growth drivers that support
our expansion plans in key markets. Electrification

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is transforming the automotive industry and contributing to
carbon reduction targets around the globe.

Adoption of Electric Vehicles is accelerating as consumers
recognise the advantages. As the market grows, we are
broadening our product suite, utilising our specialist
manufacturing expertise to encompass on-car assemblies
as well as a variety of charging infrastructure products.

The growth we have seen in the Medical sector is
underpinned by continued innovation, with healthcare
providers improving patient outcomes through cutting-
edge imaging and diagnostic technology. Customers in our
diverse Complex Industrial Technology sector are also experts
in delivering transformational technology through advanced
engineering. Our specialist manufacturing locations support
this progress by delivering mission critical assemblies.

We continued to win market share as the Consumer
Electricals market experienced a period of normalisation
off the back of higher demand in the previous two years.
This was achieved because we have highly competitive
operations with an unparalleled global footprint.

People and culture
Volex has made tremendous progress since I joined the
business in 2015, having first become a Volex shareholder
in 2008.

We have grown into an ambitious, successful organisation
with a clear strategic focus and this has been achieved
through the creation of an exceptional team who
understand every aspect of our operations and work
tirelessly to deliver exceptional results to our customers.

We operate with agility, empowering our people to make
decisions and think entrepreneurially, allowing us to
demonstrate leadership in our chosen markets.

We are an international business with a global perspective
and a solution focused mindset. We believe that our people
are at the heart of everything we do, so we aim to provide
them with the opportunity to be successful in every aspect
of their career.

By being open and collaborative, we create an environment
where everyone can thrive and contribute. Our performance
culture is designed to allow a group of remarkably talented
people to work together, contributing to alignment and
accountability within a decentralised operating model. This
is supported by a leadership team who nurture talent and
encourage development, creating an environment where
collaboration can flourish.

Delivering our strategic ambitions
A year ago, we set out an ambitious five-year plan, to double
our revenues to $1.2 billion by the end of FY2027, through a
combination of acquisitions and organic growth.

Our compelling performance this financial year further
supports our confidence in achieving these objectives while
our key positioning in attractive markets with structural
growth drivers is a major element of this strategy.

At the same time, we need to scale our operations to ensure
continued efficiency in our business. We are enhancing our
capabilities to deliver more to our customers and support
their increasing requirements.

It is difficult to replicate these capabilities which supports
the long-term profitable relationships we maintain with
our customers. We believe that our business model is a
competitive advantage, which will allow us to continue
growing and providing value to all stakeholders.

Acquisitions
The execution of our acquisition strategy has significantly
enhanced our business, bringing diversification, value-add
capabilities and significant new global customer relationships.

We maintain a disciplined acquisition strategy by
concentrating on businesses that provide access to
compelling markets, connect us to new customers, enhance
our geographic footprint or enable us to consolidate within
fragmented sectors. During the year, we acquired RDS,
a specialist designer and manufacturer of digital display
solutions, enhancing our capabilities in the European market.

Sustainability
As a responsible business, we recognise the impact that
we have on the world around us. We take sustainability
seriously and we are focused on reducing our
environmental impact. This has seen us reduce our carbon
intensity by 21% over the last three years.

We have launched an ambitious new plan to achieve net
zero on scope 1 and 2 emissions by 2035. This is creating a
framework for action at every level of the organisation as we
identify and implement meaningful changes to be cleaner
and greener.

We are improving our energy efficiency and reducing the
amount of waste we create by increasing recycling, reusing
materials and finding alternative uses for waste. We are
also actively working to reduce our water consumption by
increasing water recycling and optimising the use of grey
water in our facilities.

Dividend
Having delivered another year of strong growth, and with a
robust balance sheet, the Board is pleased to propose a final
dividend of 2.6 pence per share. Together with the interim
dividend payment of 1.3 pence, this gives rise to a total
dividend for the year of 3.9 pence, an increase of 8.3% on the
prior year. The Board considers this to be an appropriate and
sustainable level of dividend that reflects our confidence in
the Company’s ability to deliver sustained growth.

Outlook
We entered the new financial year with good momentum,
with high levels of customer demand. Our supply chains are
now much improved and are therefore enabling us to step up
production, particularly for high value-add complex products.

With a diverse offering, proven success in attracting and
retaining customers, and extensive experience operating in
our highly attractive markets, we believe that Volex has the
potential to grow significantly.

We are confident that with a strong strategy, clear demand
for our products and solutions, and ambitious team
members, we will continue to make excellent progress
towards our five-year plan financial targets.

Our manufacturing sites are well-invested, with key processes
vertically integrated and well-defined quality assurance
procedures. This allows us to sustain high levels of customer
satisfaction while maintaining price competitiveness.

Nathaniel Rothschild
Executive Chairman

21 June 2023

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Strategic
report

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Consumer Electricals
wire harness capability
Volex has established itself as a leading manufacturer
and distributor of wire harnesses for Consumer
Electricals products. We are well positioned to take
advantage of ongoing growth opportunities due to
our strong regional relationships with major appliance
manufacturers.

Wire harnesses are integral to a
wide range of domestic appliances.
We have significant experience in
the manufacture of these products
through the acquisitions of DEKA,
in February 2021, and Prodamex, in
January 2022, in addition to existing
capability in Batam, Indonesia. These
acquisitions provided us with the
scale to provide a global wire harness
offering for domestic appliances in
addition to cross-selling opportunities.

Volex wire harness capability
f Global footprint allows us to

support customer localisation
initiatives

f Existing capability in North
America, Europe and Asia

f Scale to achieve preferential

pricing for standard connectors

f Strong relationships with global

blue chip customers

f Opportunities to vertically
integrate cable production

Volex is well positioned, with a range
of capabilities that meet customers’
complex requirements. We are an
expert manufacturer of consumer
cable harnesses and power products
for the global domestic appliances
market.

Highly regarded for state-of-the-art
manufacturing facilities, and superb
quality systems, Volex is consistently
ranked as a top provider of custom
consumer cable harnessing and
power solutions.

Our wire harnesses offer outstanding
reliability and performance with
manufacturing services that
cover the entire process, from
analysing customer drawings and
conducting feasibility tests, to
bespoke manufacture throughout
our regionally-based dedicated wire
harness assembly and power products
manufacturing facilities.

We also have the expertise to
recommend performance-related
modifications to enhance connectivity
and durability, to giving a competitive
edge to the global OEMs that we
partner with.

facilities offering wire harnesses
for domestic appliances

acquisitions in this space
since FY2020

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Contents

Strategic report
Our Markets
Business Model
Strategy
Key Performance Indicators
Operational Review
Performance Review
Financial Review
Group Risk Management
Sustainability at Volex
TCFD
A Responsible Business
A Trusted Business
Stakeholder Engagement
Section 172(1) Statement

16
22
24
28
30
33
38
44
50
58
68
72
74
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Our Markets

We are focused on critical markets that are vital to societal and technological
advancement.

Why we focus on these markets

Electric Vehicles

With a continued focus to reduce the
environmental impact of transport,
and with rising fuel prices, demand for
Electric Vehicles (“EVs”) is flourishing.
The growth in adoption of EVs is being
supported by increased investment in
charging infrastructure.

Partnerships with new customers
allow for diversification of our
customer base providing growth in

both the short and long term. Further
growth opportunities lie in public
charging where Volex has a product
range to suit consumer needs.

Volex is developing and innovating
its product range and, along with
increased capabilities and capacity, is
able to meet the demands of current
and new customers.

Adoption of EVs is prevalent in China,
America and Europe, all of which
are serviced by local sales teams. All
our sites provide quality assurance
throughout the manufacturing
process with global safety approvals.

Consumer Electricals

The Consumer Electricals market
has experienced a period of demand
normalisation in FY2023 due to a
number of macroeconomic factors,
including geopolitics and pressure
on consumer spending from higher
energy costs. However, as appliance
design evolves, smart technology
becomes part of our everyday lives and

connected devices gain in popularity,
the market continues to develop.

As a world-class manufacturer of
mains power cords, globally supplying
to the biggest brands in the world, we
have the expertise and manufacturing
capacity to support future growth in
the market.

By vertically integrating our
production sites and further
automating the manufacturing
process, we are able to decrease
the cost base and lead times for our
customers.

Medical

The medical equipment market saw
further growth in FY2023 as healthcare
providers responded to the backlog
of demand created by the Covid-19
pandemic. Future growth of the
market is expected due to the ageing
global population and healthcare
providers focusing on early diagnosis
and treatment.

The medical products we manufacture
are complex, with specified bills of

materials and must be manufactured
in accredited sites. With our expertise
in quality assurance and a global
footprint, we are a trusted partner for
medical manufacturers and OEMs and
have built deep relationships with long-
standing customers

customers as they advance the
medical devices available to the
market today and in the future. With
the ability to automate production
and recent investment in increased
capacity, we can fulfil the market
demand in a quick turnaround time.

From printed circuit board (“PCB”)
assembly to integrated manufacturing
services, we are able to provide
complete solutions to support

Complex Industrial Technology

Complex Industrial Technology is an
innovative market sector, experiencing
growth where businesses are creating
and delivering new technologies:

f The expansion in cloud computing,
streaming and demand for ever-
increasing cable speeds are driving
growth in Data Centre markets.

f With rising geopolitical tensions,
defence spending has hit its
highest ever level.

f Robotics and automation are
being developed to improve
efficiency and reduce costs to
give manufacturers a competitive
advantage.

By spanning a diverse set of sub-
markets, our team has the industry
knowledge and experience to provide
innovative solutions through processes
that optimise efficiency and conform
to industry standards.

Expansion through the acquisition of
RDS has increased Volex’s engineering
capabilities in the sector and will allow
for future cross-selling opportunities.

The ability to continue to grow
organically is dependent upon being
able to keep up with the rapidly
changing technology. For Data
Centres, development is underway
for further 400Gbps products and
800Gbps products.

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Our unique position and capabilities
Volex is well positioned to serve and engage with customers around the globe. We maintain production and distribution
facilities across three continents in order to be a ‘local partner’ to customers, better supporting their global operational
requirements and the trend towards localisation.

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North America
Revenue
$339.8m

(FY2022: $272.1m)

Europe
Revenue
$211.6m

(FY2022: $199.8m)

Asia
Revenue
$171.4m

(FY2022: $142.7m)

With high investment by
manufacturers and federal investment
by the US government in Electric
Vehicles and charging infrastructure,
North America continues to be an
important region for Electric Vehicles.

Our partnerships with industry-
leading technology companies
situated in America help to enable
their push for technological
advancement.

The US has the highest spending in
the defence market in the world. We
have long established relationships
with our defence customers in the
region where they require a trusted
and experienced partner due to the
nature of the work.

With the higher energy prices
impacting consumer spending,
demand for domestic appliances has
slowed from the peaks seen during
the pandemic.

The medical sector has seen an
increase in demand, driven by
increased access to hospitals and
ongoing backlog following recent
component shortages. As a highly
regulated market, manufacturing
must occur in accredited sites - our
sites in Poland and Slovakia meet
the requirements and are highly
experienced in supporting the medical
sector.

The medical market in Asia includes
multinational conglomerates which
are increasing their presence in
emerging markets such as India. We
have invested in expansion to support
increased customer demand, and
have sites in close proximity where
customers are localising their supply
chain.

Asia is home to major consumer
electrical manufacturers with whom
we have deep regional relationships.
Volex is positioned strongly, with
integrated manufacturing and a range
of capabilities that meet customer
requirements and demand.

Read more about
our Performance Review on page 33 to 37

Strong geographical diversity across our Group

Keys

Countries/Territories
Factories/Warehouses
FY2023 Acquisitions

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Our Markets
(continued)

Macroeconomic trends
Trends in our markets
By having a deep understanding of the sectors we operate in and strong relationships
with our customers, we are able to respond to changes in macroeconomic trends.
This allows us to provide cost-effective and innovative solutions to our customers.

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Climate change

Technological advancement

Increasing and ageing population

Relevant markets
All sectors

Market drivers
f Increasing emissions are driving governments,
businesses, and consumers to reduce their
environmental footprints.

Relevant markets
Electric Vehicles and Complex Industrial Technology

Market drivers
f Technology is ever-evolving, this requires innovative

solutions to cater for a whole spectrum of
applications.

f Environmental regulations and policies are

f To create and deliver new technologies, OEMs

driving the demand for electric vehicles. The rising
popularity of EVs is driving demand for charging
infrastructure, making it easier for consumers to
charge their EVs while on the go.

f Environmental concerns, coupled with the rising
cost of fuel and energy, are driving technological
advancements in product efficiency.

f Energy security is incentivising countries to reduce
their dependence on imported oil, which is a major
driver of energy security concerns. Electric vehicles
can help to reduce this dependence by using
domestically produced electricity.

require a partner with the agility and capabilities to
help them stay ahead of the technology curve.

f Robotics and automation systems are becoming
increasingly sophisticated, therefore it is vital that
manufacturers have a proven process for assembly.

f Data centres are expected to transition from

100Gbps high-speed cables to 400Gbps, 800Gbps
and beyond - creating demand for ever-increasing
data processing speeds.

How we are responding to these trends
f With a global footprint, we are able to manufacture
products in close proximity to customers, reducing
a product’s carbon footprint and supporting
customers’ localisation efforts.

f Through experienced engineers, Volex is able to

develop new product offerings which are suitable for
the climate conscious.

How we are responding to these trends
f Strengthened our combined design and

engineering capabilities in display solutions through
the acquisition of RDS.

f A global team of engineers provide solutions that
can speed up the design and creation of new
products.

f Focus on Data Centre product development and

f Volex offers a growing portfolio of charging products

investment in increased sales capability.

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for use with electric vehicles, from private AC home
charging to public DC fast charging.

f The Group has adopted TCFD reporting in the

current year and announced our aim to achieve net
zero scope 1 and scope 2 emissions by FY2035.

f Further investment has been made in research

and development to drive product development
programmes.

31371 Volex AR2023 Strategic.indd 18

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Globalisation

Relevant markets

All sectors

Market drivers

Relevant markets

Medical

Market drivers

f A global market place of trade liberalisation and

f Around the world life expectancy is increasing

market integration is facilitating the desire for

connectivity and ease of services between both

customers and consumers.

– in turn driving an increased requirement

for equipment to treat and care for an ageing

population.

f Global inflation and the cost-of-living crisis in the

f With a focus on early diagnosis and treatment, there

western world have in part caused a decrease in

is a need for innovative medical equipment to cater

demand for consumer product power cords where

for the Medical sector.

there has been a reduction in global consumer

spending.

f Innovation, such as robotic surgery, can improve

patient outcomes, speed up procedures and remove

f Supply chain issues in recent years are making

bottlenecks in the provision of care.

manufacturers rethink their supplier structure and

localise their supply chain.

How we are responding to these trends

f With a shift towards reshoring and near sourcing

f Volex has built relationships with medical customers

to prevent future supply chain delays, our global

presence, customer proximity and resources allow

us to get our products to our customers when and

where they need them.

f Volex has sites across the globe which have

experience in manufacturing products to meet

specific safety approvals, ensuring the highest

standards on all products.

f Through automation and vertical integration, we are

a leading low-cost manufacturer.

and is relied upon to deliver products with market-

leading quality.

f Our medical standard quality processes provide

exceptional levels of traceability and quality

assurance throughout the manufacturing process.

f Our global safety approvals mean we can be

a trusted partner for medical manufacturers

and OEMs.

Climate change

Relevant markets

All sectors

Market drivers

Technological advancement

Electric Vehicles and Complex Industrial Technology

Relevant markets

Market drivers

f Increasing emissions are driving governments,

f Technology is ever-evolving, this requires innovative

businesses, and consumers to reduce their

solutions to cater for a whole spectrum of

environmental footprints.

applications.

f Environmental regulations and policies are

f To create and deliver new technologies, OEMs

driving the demand for electric vehicles. The rising

require a partner with the agility and capabilities to

popularity of EVs is driving demand for charging

infrastructure, making it easier for consumers to

charge their EVs while on the go.

f Environmental concerns, coupled with the rising

cost of fuel and energy, are driving technological

advancements in product efficiency.

f Energy security is incentivising countries to reduce

help them stay ahead of the technology curve.

f Robotics and automation systems are becoming

increasingly sophisticated, therefore it is vital that

manufacturers have a proven process for assembly.

f Data centres are expected to transition from

100Gbps high-speed cables to 400Gbps, 800Gbps

and beyond - creating demand for ever-increasing

their dependence on imported oil, which is a major

data processing speeds.

driver of energy security concerns. Electric vehicles

can help to reduce this dependence by using

domestically produced electricity.

How we are responding to these trends

f With a global footprint, we are able to manufacture

f Strengthened our combined design and

products in close proximity to customers, reducing

engineering capabilities in display solutions through

a product’s carbon footprint and supporting

the acquisition of RDS.

customers’ localisation efforts.

f A global team of engineers provide solutions that

f Through experienced engineers, Volex is able to

can speed up the design and creation of new

develop new product offerings which are suitable for

products.

the climate conscious.

f Focus on Data Centre product development and

f Volex offers a growing portfolio of charging products

investment in increased sales capability.

for use with electric vehicles, from private AC home

charging to public DC fast charging.

f Further investment has been made in research

and development to drive product development

f The Group has adopted TCFD reporting in the

programmes.

current year and announced our aim to achieve net

zero scope 1 and scope 2 emissions by FY2035.

Globalisation

Relevant markets
All sectors

Market drivers
f A global market place of trade liberalisation and
market integration is facilitating the desire for
connectivity and ease of services between both
customers and consumers.

f Global inflation and the cost-of-living crisis in the
western world have in part caused a decrease in
demand for consumer product power cords where
there has been a reduction in global consumer
spending.

f Supply chain issues in recent years are making

manufacturers rethink their supplier structure and
localise their supply chain.

Increasing and ageing population

Relevant markets
Medical

Market drivers
f Around the world life expectancy is increasing
– in turn driving an increased requirement
for equipment to treat and care for an ageing
population.

f With a focus on early diagnosis and treatment, there
is a need for innovative medical equipment to cater
for the Medical sector.

f Innovation, such as robotic surgery, can improve

patient outcomes, speed up procedures and remove
bottlenecks in the provision of care.

How we are responding to these trends
f With a shift towards reshoring and near sourcing
to prevent future supply chain delays, our global
presence, customer proximity and resources allow
us to get our products to our customers when and
where they need them.

f Volex has sites across the globe which have

experience in manufacturing products to meet
specific safety approvals, ensuring the highest
standards on all products.

f Through automation and vertical integration, we are

a leading low-cost manufacturer.

How we are responding to these trends
f Volex has built relationships with medical customers
and is relied upon to deliver products with market-
leading quality.

f Our medical standard quality processes provide
exceptional levels of traceability and quality
assurance throughout the manufacturing process.

f Our global safety approvals mean we can be
a trusted partner for medical manufacturers
and OEMs.

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Our Markets
(continued)

The interconnection of global and local needs
Our customers require flexibility and responsiveness, and we are driven to meet
these ever-evolving needs by leveraging our global footprint through our integrated
manufacturing, localised services and global sales teams.

Localisation of services

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The drivers

Our response

Following recent disruption to supply
chains, as well as emerging environmental
and political considerations, customers are
seeking localised manufacturing solutions
to minimise risk and complexity, and reduce
lead times.

As customers are looking to reduce supply chain complexity,
this creates opportunities for Volex to leverage its extensive
logistics and manufacturing footprint.

Our responsiveness towards customers’ needs
Volex’s diverse market capabilities and global manufacturing
footprint has put us in a position of strength when
responding to the disruption to supply chains and the macro
environment during the year, allowing us to support our
customers when and where they need us.

Having manufacturing facilities on three continents means
that support is provided locally from our global sales and
customer service teams to our diverse customer base. Our
global presence is a differentiator from our competition.

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Volex has the infrastructure to source components for
customers’ solutions using our global logistics team,
minimising supply chain complexity for customers.

Having experienced sites across the world, we are able to
move production of components to the site which suits the
needs and requirements of our customers as they look to
localise supply chains.

Our global manufacturing footprint
Production is allocated to Volex sites based on their
strengths, customer proximity, and supply chain availability.
We are experts in fulfilment and have the knowledge and
resources to get our products to our customers when and
where they need them.

The inYantra acquisition has allowed us to expand our
presence in Asia and support our customer base in this
region.

With operations in multiple countries, we are able to supply
from tariff-free and lower tariff locations, helping to support
our customers achieve cost-efficient solutions.

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Integrated services and solutions

The drivers

Our response

Customers have an increasing need for
efficiency, quality designs, and seamlessly
executed projects, driving the need for
integrated solutions and design capabilities.

Delivering quality
We are a world-class manufacturer of mains power cords,
globally supplying to the biggest brands in the world.
All our products are designed to meet specific customer
requirements.

Our products are used in sectors where there is no room for
error and must meet certifications and approvals. Products
for the aerospace, military, and space sectors must perform
well right down to individual components; medical sector
products must achieve product quality and compliance
requirements in order to meet safety critical standards.

Serving a diverse customer base requires Volex to provide a
range of products and services from manufacture and test
of complex PCB assemblies all the way through to complete
box builds.

Cross-functional teams of experts work closely with
customers to optimise programme delivery and implement
the long-term strategy, helping customers realise the full
potential of their products and designs.

Volex has sites across the globe which meet Medical
accreditations, including MedAccred, reflecting the
importance Volex places in ensuring production meets the
highest quality standards and makes us a suitable partner to
our Medical customers.

We have built long-term relationships with customers where
they can rely on us to deliver high-quality products which
meet their design requirements. By developing relationships
over time, we have a deep understanding of how our
customers operate and work with them to develop products
which meet their end needs.

We are a vertically integrated business
As part of our vertical integration, we have developed and
scaled up the cable extrusion operations of the business.
In early FY2023, we completed the transfer of our Ta Hsing
cable extrusion business to Suzhou.

Copper is a significant component in the product
offering for Consumer Electricals and Electric Vehicles. By
completing this process in-house, we are able to ensure the
supply and quality needed for our customers as demand
continues to grow.

By producing the power cable in-house, this simplifies the
supply chain and enables us to limit our costs – allowing us
to remain a cost leader in power cord manufacturing.

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Value creation that makes a difference
Business model

Led by our purpose:
Delivering best-in-class critical
connections.

That drives our mission:
To deliver safe, sustainable, high-quality critical power
and connectivity-related solutions in our chosen
markets. Enabling our customers to succeed in an
era of rapid technological acceleration through our
manufacturing excellence, global footprint and
stringent quality testing.

Key
resources

Our financial
model

Our operating
model

f Vertical integration and continuous
process improvements beneﬁt
margins

Understand
design
requirement

Profitable growth
We are well positioned in growing,
sustainable and fragmented markets.

This is driving expansion in attractive
markets that maintain robust margins
and allow opportunities to increase
market share.

Consistent operating margins

f Margins in our target range of

9-10% since FY2021

f Margins maintained despite

signiﬁcant inﬂation

Disciplined capital
allocation approach
Investment and innovation

f Capital expenditure focused on

high-growth areas

f Majority of capital expenditure

investments deliver cash payback
within two years

f Investment in innovation results in
incremental customer projects

Successful acquisitive approach

f Targeted approach to acquire

quality businesses at attractive
valuations

f Enhances our capabilities and
grows our customer base

Enhanced shareholder value

f Sustainable through-cycle

dividend

f Surplus capital returned to

shareholders

Engineering and design
capabilities
Our world-class product and
process engineering employees,
with many years of experience in
our markets, streamline the new
product development process for
customers and continuously optimise
manufacturing. Our design teams
identify and develop unique solutions
to engineering challenges, allowing us
to register several patents each year,
with an increasing proportion of our
sales dependent on Volex designs.

Remarkable talent
We have incredibly talented teams,
who are focused on exceeding
our customers’ expectations. With
decentralised decision-making, local
management implement plans to
optimise performance within our
production facilities. Our management
team has a deep understanding of our
business and how we can best support
our customers, helping us define the
optimal strategy for our organisation.

Globalised business
Our global brand is renowned for
quality and reliability. We have a global
manufacturing base and international
sales team, allowing us to operate on a
cost-efficient basis with local support
for our customers and to utilise our
global footprint to maximise cross-sell
opportunities. We are able to leverage
our global supply chain scale to secure
favourable pricing for the components
our customers require.

Market expertise
As a trusted long-standing
manufacturing partner to global blue-
chip customers, we have significant
expertise in the complex requirements
of our markets. These long-term
relationships are a testament to our
exceptional customer service and the
value customers place on our deep
market knowledge.

Supporting customers
through the project
life cycle
Customers choose
Volex for our
significant experience
in specialist areas.

Optimise for

manufacturing

Delivering full
production

Life cycle
revisions and
improvements

Partner to
optimise cost
of product

Read more about this
on pages 96 to 97

Operation of the Board
The Board is responsible for setting the Company’s
business objectives, oversight of risk, strategic
development and effective corporate governance.
It holds regular, scheduled meetings throughout
the year to review the Group’s financial and
operational performance and to consider any other
matters as appropriate, including potential merger
and acquisition opportunities, risk management
and shareholder feedback. When issues requiring
the attention of the Board arise outside the regular
schedule, the Directors will action agreement via
minuted ad hoc Board calls or written resolutions.

Board focus in FY2023
The main focus this year was to maintain the
progress made by the business in recent years and
execute on the Group’s new five-year strategic
plan announced in June last year, while continuing
to navigate the impacts of the global supply chain
challenges effectively. The Board has focused on
ensuring the financial position of the Group is
secured while also looking forward to the longer-
term strategic options for the Group, including
the acquisition of RDS and identifying potential
further acquisitions that could bring additional
value. In particular, this year the Board:

All the Directors receive comprehensive briefing
packs in advance of Board and Committee meetings.
They have access to the services of external advisers
and can take independent professional advice at the
Company’s expense if needed.

f Approved (and continued to monitor the
Company’s delivery of) a new, ambitious
plan to increase revenues to $1,200 million by
FY2027 with underlying operating margins in
the range of 9-10%;

f Oversaw the Group’s response to global

supply chain challenges, including responding
dynamically to meet customers’ expectations;

f Monitored inflationary cost pressures, and

the Group’s ability to pass through increased
costs to customers to protect profitability while
maintaining competitiveness;

f Approved capital expenditure to expand the
capacity of the Group’s operations in Batam
and Suzhou; and

f Approved the acquisition of RDS.

Matters reserved for the Board
The Board delegates day-to-day management of
the Company to the Executive Directors who, as
appropriate, delegate to executive management.
However, certain matters are formally reserved for
decision by the Board, including:

f Approval of the annual budget;

f Approval of the Company’s objectives and

setting its long-term strategy;

f Approval of material capital expenditure projects;

f Approval of acquisitions;

f Approval of half-yearly reports, trading updates,
the preliminary announcement of year-end
results and the Annual Report and Accounts;

f Internal control and risk management; and

f Material contracts, expenditure and Group

borrowings.

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Attendance at meetings
The Board met for scheduled discussions eight times during the year, following a timetable set at the
start of the year and based around the calendar of key upcoming events for the Company. The four Board
Committees met 11 times in total. The size of the Board allows it the flexibility to meet at short notice
on a more ad hoc basis in response to the needs of the business, and Non-Executive Directors are also
encouraged to communicate directly with Executive Directors and executive management between
Board meetings.

Directors attended all meetings of the Board and of those Committees of which they are members.
Directors’ attendance at the Board and Committee meetings during the financial year:

Number of meetings

Executive Directors

Nathaniel Rothschild

Jon Boaden

Non-Executive Directors

Dean Moore

Jeffrey Jackson

Sir Peter Westmacott

Amelia Murillo

Full Board
(8 meetings)

Audit
Committee
(4 meetings)

Remuneration
Committee
(4 meetings)

Nominations
Committee
(1 meeting)

Safety,
Environmental
and Sustainability
Committee
(2 meetings)

8/8

–

4/4

–

4/4

–

4/4

–

4/4

1/1

–

1/1

–

1/1

–

2/2

–

2/2

–

Representatives from the Internal Audit function
and from the Company’s external auditors,
PricewaterhouseCoopers LLP, usually attend
meetings of the Audit Committee.

Committees of the Board
The Board has delegated certain responsibilities to
the following Committees:

– succession planning and recommending suitable
candidates for membership of the Board when
such posts arise. In appointing a new Board
member, the Committee evaluates the balance
of skills, knowledge and experience of the Board
and prepares a clear description of the role and
the capabilities and strengths required to fulfil a
particular appointment.

f the Nominations Committee;

f the Audit Committee;

f the Remuneration Committee; and

f the Safety, Environmental and Sustainability

Committee.

Each of the above Committees operates under
defined terms of reference, which are available on
the Company’s website. To ensure independent
oversight of the audit and remuneration functions,
only the Company’s independent Non-Executive
Directors serve on those Committees. Nathaniel
Rothschild sits on both the Nominations
Committee and the Safety, Environmental and
Sustainability Committee, but both are chaired by
a Non-Executive Director. The Company Secretary
acts as secretary to each Committee, other than
the Safety, Environmental and Sustainability
Committee where the Group HR Director acts as
secretary.

Nominations Committee
The members of the Nominations Committee are Sir
Peter Westmacott (Chair), Nathaniel Rothschild and
Dean Moore.

The Committee met once during the year.

The Committee is responsible for reviewing the
size and composition of the Board – including
whether the balance of Executive Directors and
Non-Executive Directors continues to be appropriate

Details of the Nominations Committee’s activities are
contained in the Nominations Committee Report on
pages 94 and 95.

Audit Committee
The members of the Audit Committee are Dean
Moore (Chair) and Amelia Murillo.

The Committee met four times during the year.

The Committee is responsible for monitoring the
integrity of the Company’s financial statements,
including its annual and half-yearly results, as well
as for keeping the Company’s internal controls
under review and overseeing the relationship with
the external auditors.

Details of the Committee’s activities are contained
in the Audit Committee Report on pages 90 to 93.

Remuneration Committee
The members of the Remuneration Committee
are Amelia Murillo (Chair), Dean Moore and Jeffrey
Jackson.

The Committee met four times during the year.

The Committee is charged with determining
and agreeing the remuneration of the Executive
Directors as well as recommending and
monitoring the structure of remuneration for
senior management and approving grants under
the Company’s share incentive scheme.

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Corporate
Governance Report
(continued)

Details of the Committee’s activities are contained
in the Remuneration Committee Report on pages
98 to 113.

Safety, Environmental and
Sustainability Committee
The members of the Safety, Environmental and
Sustainability Committee are Jeffrey Jackson
(Chair) and Nathaniel Rothschild.

The Committee met two times during the year.

The Committee aims to ensure appropriate
governance is applied to the management of
health and safety within the Group. It monitors the
effectiveness of controls relating to health, safety
and environmental risks, and monitors the overall
compliance around labour-related risks within
the business. The Committee also oversees the
Company’s sustainability activities and governance.

Details of the Committee’s activities are contained
in the Safety, Environmental and Sustainability
Committee Report on pages 96 and 97.

Board effectiveness
Composition, independence and
diversity on the Board
The Board comprises the Executive Chairman, the
Chief Financial Officer and four Non-Executive
Directors, such that the QCA Code requirement
for at least two independent Non-Executive
Directors has been met. Jeffrey Jackson, Dean
Moore, Amelia Murillo and Sir Peter Westmacott
are considered by the Board to be independent, as
is required by the QCA Code, of management and
free from any business or other relationship that
could materially interfere with the exercise of their
judgement.

Our Board comprises an executive leadership team
with extensive commercial knowledge, supported
by experienced Non-Executive Directors who bring
strong governance disciplines and a valuable
external perspective to our business.

The Company embraces diversity and is dedicated
to encouraging inclusion. The Board membership
comprises individuals who have a wide range of
diverse experience and skills and each bring a
unique perspective to debate at Board level.

Board Diversity
The Board recognises the importance of diversity
in the Company and is committed to promoting
diversity throughout the organisation at all levels.
While the Board does not have a formal board
diversity policy, diversity considerations are a key
aspect of appointment decisions. The Board plans
to continue to review the need for such a policy
annually, taking into account the size of the Board
and skills required. Further information on our
diversity, including with respect to the total female
representation in our workforce, is provided in the
‘Social Impact’ section of the Sustainability Report
on pages 68 to 70.

Executive Directors are expected to attend all
meetings of the Board, and of the Committees on
which they sit, and to devote sufficient time to the

Group’s affairs to enable them to fulfil their duties
as Directors. Details of the time commitment
expected of each Non-Executive Director are
included in their letters of appointment.

Re-election of Directors
Directors are elected by shareholders at the first
Annual General Meeting after any appointment by
the Board and, thereafter, may offer themselves up
for re-election by shareholders at regular intervals
and in any event at least once every three years.
Dean Moore will be offered for re-election this year
as it will be three years since he was last re-elected
to the Board.

Conflicts of interest
Under the Companies Act 2006, a Director must
avoid a situation where a direct or indirect conflict
of interest may occur and procedures are in place
to manage any circumstance where a conflict
may be perceived. The Company’s Articles of
Association prevent Directors from voting on
issues where they have, or may have, a conflict of
interest, other than in exceptional and specific
circumstances.

Performance evaluation
The Non-Executive Directors have the opportunity
to meet separately with the Executive Chairman
and the Chief Financial Officer during the year to
discuss Board member performance.

In addition, all Board members took part in a
Board performance evaluation review, covering
a number of important topics. The results of the
review, which were considered in detail by the
Directors, show a well-structured and effective
Board. The Board recognises that a robust
performance evaluation is important to maximise
Board effectiveness. Further information on the
Board performance evaluation is provided in the
Nominations Committee report on pages 94
and 95.

Development
All new Directors receive an induction programme
tailored to their background and experience,
organised by the Company Secretary and the
Company’s Nominated Adviser. In addition, all
Directors are informed of changes to relevant
legislation or regulations and receive updates and
briefings on areas such as Directors’ duties and
corporate governance guidelines and best practice.

Individual Directors, with the support of the
Company Secretary, are also expected to
take responsibility for identifying their own
training needs and to ensure that they are
adequately informed about the Group and their
responsibilities as a Director.

Accountability for financial reporting
The Board is responsible for presenting a fair,
balanced and understandable assessment of the
Company. The Company has a comprehensive
annual budgeting process, to which all its global
subsidiary entities contribute directly and which
culminates in formal approval of the annual
budget by the Board. Regular forecasts and

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updates on financial performance are presented
to the Board during the year. The reasons why the
Directors continue to adopt the going concern
basis for preparing the financial statements are
given in the Directors’ Report on pages 114 to 116.

Internal controls and risk management
The Board has overall responsibility for the Group’s
system of internal control and risk management,
which is designed to identify, evaluate and control
the significant risks associated with delivering
the Group’s strategy with a view to safeguarding
shareholders’ investments and the Group’s assets.
The compliance hotline process, ‘Speak Up’, was
further embedded within the business to ensure
that all employees have a confidential route to
report concerns in relation to ethics, conduct and
compliance.

An ongoing process for identifying, evaluating and
managing the significant risks faced by the Group
has been in place for the year up to and including
the date of approval of this report, based on a
combination of site-by-site risk reporting to create
individual risk registers and an annual risk survey
of all senior management across the Group. Read
more about Volex’s risk management processes
and outcomes in the Risk Management section of
the Strategic Report on pages 44 to 49.

Key features of the Company’s system
of internal controls
Key elements of the Company’s system of internal
controls which have operated throughout the
year are:

f A system of regular reports from management

setting out key performance and risk
indicators;

f Rigorous short-term management and

forecasting of cash flow;

f A schedule of specific, key matters reserved for

decision by the Board;

f A framework for reporting and escalating

matters of significance;

f Group-wide procedures, policies and standards
which incorporate statements of required
behaviour;

f Continuous review of operating performance
and monitoring of monthly results against
annual budgets, and periodic forecasts;

f Risk-based reviews of sites and/or

business processes, with observations and
recommendations to improve controls being
reported to management to ensure timely
action, with oversight provided by the Audit
Committee; and

f A process and policy for employees to raise

concerns and regular reports to the Audit
Committee of all material disclosures made,
the results of investigations and actions taken.

Through its risk management process and
the review of effectiveness of the system of
internal controls, the Board believes the control
environment is adequate for a group the size
of Volex.

Relations with shareholders
The Board is responsible for effectively engaging
with shareholders. The Board achieves this
through regular dialogue with brokers, analysts
and shareholders themselves, with the Executive
Chairman and Chief Financial Officer taking a lead
in those relationships.

The Board takes steps to understand the
views of major shareholders of the Company,
including through receiving feedback from any
shareholder meetings and through analyst/
broker briefings. The Board takes account of the
corporate governance guidelines of institutional
shareholders and their representative bodies such
as the Investment Association and the Pensions
and Lifetime Savings Association. The Executive
Chairman and Chief Financial Officer are available
to meet with major and prospective shareholders.
The Non-Executive Directors are available to attend
shareholder meetings as necessary.

Annual General Meeting (“AGM”)
The Notice of AGM will be dispatched to
shareholders, together with explanatory notes
or a circular on items of special business, at
least 21 clear days before the meeting. Separate
resolutions will be proposed on each substantive
issue, including a resolution relating to the Annual
Report and Accounts.

The Board welcomes questions from shareholders,
and they will have the opportunity to raise issues
before or after the meeting if circumstances
prevent active attendance.

For each resolution, the proxy appointment forms
provide shareholders with the option to direct their
proxy vote either for or against the resolution, or
to withhold their vote. As with last year, we will be
encouraging shareholders to switch to paperless
voting.

The Company will ensure that the proxy form and
any announcement of the results of a vote will
make it clear that a ‘vote withheld’ is not a vote
in law and will not be counted in the calculation
of the proportion of the votes for and against the
resolution.

All valid proxy appointments are properly recorded
and counted. For each resolution, after the vote
has been taken, information on the number of
proxy votes for and against the resolution, and
the number of shares in respect of which the vote
was withheld, are given at the meeting and are
made available on the Company’s website at www.
volex.com.

Jon Boaden
Chief Financial Officer
21 June 2023

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Audit
Committee Report

The Audit Committee plays
a crucial role in ensuring
financial transparency,
accountability and the
integrity of financial
reporting for the benefit
of stakeholders.

Dean Moore
Chair of
the Audit
Committee

Key responsibilities

f Overseeing the financial reporting

process and ensuring the accuracy and
completeness of financial statements

f Establishing and overseeing the Group’s
systems of internal control and risk
management

f Appointing and overseeing the external
auditor to ensure their independence
and objectivity in conducting audits

I am pleased to present this year’s report on the
activity of the Volex Audit Committee during the
course of another successful year for the Company.
Over the course of the year, the Committee has
continued its regular work reviewing financial
systems and controls and published financial
statements while liaising with external auditors,
PricewaterhouseCoopers (‘PwC’).

The Committee received and discussed
updates from the Group Finance team, PwC
representatives and the Internal Audit function
during the year. We made changes to the Internal
Audit function and process in FY2022. During
FY2023, the function has continued to evolve as we
address new challenges and keep pace with the
growth of the business.

As the Group continues to grow through
acquisition and investment, the Finance and Legal
functions review and update Company policies

and procedures to ensure that they are up-to-
date. The Committee will continue to oversee and
coordinate that work, and to report and make any
necessary recommendations on matters within its
area of responsibility to the full Board.

Key objectives
The Committee establishes and oversees the
Group’s systems of internal control and risk
management, monitors the integrity of financial
information published externally for use by
shareholders and ensures the integrity of the
financial statements is supported by an effective
external audit.

Composition of the Audit Committee
The members of the Audit Committee were:

Committee
member

Date of
appointment

Dean Moore (Chair)

18 April 2017

Amelia Murillo

26 January 2021

Appointments are for a period of three years and
are extendable by no more than two additional
three-year terms. The Committee must consist
of at least two members, all of whom should
be independent Non-Executive Directors. All
current Committee members are independent
Non-Executive Directors and all have the
appropriate range of financial, commercial and
risk-management experience to fulfil their duties.
The Audit Committee Chairman has recent and
relevant financial experience, in line with the QCA
Corporate Governance Code and Committee terms
of reference. Biographical details are set out on
pages 80 and 81.

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Main activities of the Committee during
the year
Financial reporting
The primary role of the Audit Committee in
relation to financial reporting is to review with
both management and the external auditors, PwC,
the appropriateness of the half-year and annual
financial statements, concentrating on, among
other matters:

f The quality and acceptability of accounting

policies and practices;

f The clarity of the disclosures and compliance

with financial reporting standards and relevant
governance reporting requirements;

f Material areas in which significant judgements
or estimates have been applied or there has
been discussion with PwC; and

f The processes to ensure that the Annual

Report and Accounts, taken as a whole, are fair,
balanced and understandable and provide the
information necessary for shareholders.

To aid its review, the Committee considers reports
from the Chief Financial Officer, from the Internal
Audit function and from the external auditors.

Following its review of the Annual Report
and Accounts, the Committee challenges
management on the content to ensure that
the report as a whole is fair, balanced and
understandable.

The Committee has reviewed the paper on the
critical judgements and estimates outlined in note
2 to the financial statements on pages 138 and 139.
The primary areas of judgement and estimates
considered and discussed by the Committee in
relation to the FY2023 financial statements and
how these have been addressed are listed below.

Going concern
The Committee reviewed the Group’s budget and
trading position, the potential impact of possible
future disruption, including further challenges
due to supply chain issues, and considered its
compliance with banking facility covenants.

The Committee has reviewed and approved the
disclosures and concluded that the financial
statements should continue to be prepared on a
going concern basis.

Meetings
The Audit Committee met four times in the
year, with the meetings and agendas linked
to events in the Group’s financial calendar.
The Audit Committee invites the Group Chief
Financial Officer, senior representatives of the
external auditors, the internal audit co-source
provider and other staff to attend its meetings as
required. It reserves the right to request any of
these individuals to withdraw for specific items of
discussion.

Governance
The Audit Committee’s terms of reference can be
found on the Volex website.

The Committee is responsible for:

f Monitoring the integrity of the Group’s

financial statements and any other formal
announcements relating to the Group’s
financial performance, and reviewing
significant financial reporting judgements
contained in them;

f Reporting to the Board on the processes in

place to confirm that the Annual Report and
Accounts, when taken as a whole, are fair,
balanced and understandable and contain the
information necessary to allow shareholders
to assess the Group’s performance, business
model and strategy;

f Reviewing and challenging where necessary

the appropriateness of accounting policies and
the manner in which they are applied across
the Group;

f Reviewing the Group’s internal financial
controls and the Group’s internal risk-
management systems;

f Monitoring and reviewing the effectiveness
of the Group’s Internal Audit function in
the context of the Group’s overall risk-
management system;

f Reviewing the Group’s procedures for

detecting and responding to fraud and
bribery and for handling allegations made
by employees with respect to financial
malpractice or other forms of whistleblowing,
and oversight of any and all reports on such
incidents; and

f Oversight of the relationship with the external

auditors, including, where appropriate,
the recommendation of appointment or
reappointment of the external auditors.

The Audit Committee reports its findings to
the Board, identifying any matters on which it
considers that action or improvement is needed,
and makes recommendations on the steps to
be taken.

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Audit
Committee Report
(continued)

Adjusting items
Management has presented a breakdown of
adjusting items, and explanations as to why
they should be categorised as such. The Audit
Committee has reviewed the disclosures and
discussed this analysis with management. Details
are shown in note 4 on page 141. Adjusting items
during the year amounted to $9.8 million (FY2022:
$10.8 million).

Inventory provisions
The Committee reviewed the level of provision
held against inventory in conjunction with the
Group’s provisioning policy, the ageing of the stock
and forecast future demand. Management review
inventory provisions regularly and the reviews
require the use of judgements and estimates. The
Committee believes the provision is reasonable.

Accounting for business combinations
The Committee reviewed the principal
assumptions and judgements applied in
accounting for business combinations that
occurred during the year.

Accounting for income and deferred taxes
The Committee reviewed the principal
assumptions and judgements applied in
accounting for the Group’s uncertain tax positions
and the recognition of deferred tax assets.

Internal control, risk and compliance
The Audit Committee is required to assist the Board
in its annual assessment of the effectiveness of the
Volex risk management and internal control systems.
To fulfil these duties, the Committee reviewed:

f The results of the annual Certificate of

Compliance exercise and survey, involving all
senior personnel in the organisation;

f The reports issued during the year by Internal
Audit following their risk-based review of sites
and processes;

f The annual risk survey conducted among
the executive team and other senior
management; and

f Investigations performed in the event of

whistleblowing, control breakdowns or fraud
issues.

Details of our internal controls and risk
management systems, including controls over the
financial reporting process, can be found on page
89 in the Corporate Governance Report with our
risk factors in full in the Strategic Report on pages
44 to 49.

Internal audit
The Audit Committee is responsible for ensuring
the adequacy of resourcing and plans for the
Internal Audit function.

To fulfil these duties, the Committee:

f Establishes the function’s terms of reference,

reporting lines and access to the Audit
Committee;

f Approves the appointment and removal of the

Internal Auditor;

f Reviews and assesses the annual internal audit
plan in the context of the Group’s overall risk
management system; and

f Reviews promptly the internal audit reports
produced from the site and process reviews
and monitors management’s responsiveness to
the findings and recommendations included
therein.

Following a comprehensive review of the Internal
Audit function and approach involving external
specialists, a number of recommendations were
implemented in FY2022. This has enhanced the
role of internal audit during FY2023, providing
valuable insight into key aspects of the Group’s
operations.

During the year, internal audit reviews took place
at two production sites, conducting an assessment
of key control procedures. In addition, there was a
review in respect of cybersecurity considerations,
as well as a review of the process and approach
in relation to the implementation of the Group’s
new enterprise resource planning (ERP) system.
No serious issues for concern were raised and
the reviews identified a number of areas for
improvement. Management has agreed to make
those improvements, this includes a number of
suggestions in relation to cybersecurity which
will form part of a Group-wide improvement
programme in this area.

The Group’s “Speak Up” Policy contains
arrangements for the Audit Committee to review
all complaints in confidence.

External audit
The Audit Committee is responsible for the
monitoring of the independence, objectivity
and compliance with ethical and regulatory
requirements of the external auditors. Details of
the total remuneration for the auditors for the
year can be found in note 8 on page 143 of the
consolidated financial statements.

The auditors’ independence and objectivity are
safeguarded by limiting the value and nature of
external services provided by the auditors. The
Group also has a policy of not recruiting employees
of the external auditors who have worked on the
audit in the last two years to senior positions in
the Group. There is a rotation policy for the lead
engagement partner and, as part of this policy,
the lead engagement partner changed at the
beginning of FY2022.

Non-audit services provided by the
auditors
The Audit Committee maintains a non-audit
services policy which sets out the categories of
non-audit services that the external auditors will
and will not be allowed to provide to the Group,
including those that are pre-approved by the
Audit Committee and those that require specific
approval before they are contracted for, subject to
de minimis levels.

There were no non-audit fees during the year
(FY2022: $nil).

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Audit tender
The Audit Committee considers the
reappointment of the external auditors each year.
PwC have been the Group’s auditors since their
appointment on 4 April 2010 following a tender
process. There are no contractual obligations
that restrict the Committee’s choice of external
auditors.

To fulfil its responsibility regarding the
independence and effectiveness of the external
auditors, the Audit Committee:

f Reviewed the external auditors’ plan for the

current year and agreed the scope of the audit
work to be performed;

f Agreed the fees to be paid to PwC for their

audit of the FY2023 financial statements and
other non-audit fees;

f Reviewed a report from PwC describing their
arrangements to identify, report and manage
any conflicts of interest and confirming the
basis of their independence;

f Assessed PwC’s fulfilment of the agreed audit
plan and any variations from that plan; and

f Assessed the robustness and perceptiveness

of PwC in their handling of the key accounting
and audit judgements.

The Audit Committee, having considered the
length of PwC’s audit tenure and the results
of the above, continues to consider PwC to be
independent and therefore has provided the
Board with its recommendation that PwC be
reappointed as external auditors for the 52 weeks
ending 31 March 2024.

This will continue to be assessed on an annual
basis in light of any guidance on external audit
tendering.

Summary
As a result of its work during the year, the Audit
Committee has concluded that it has acted in
accordance with its terms of reference and has
ensured the independence and objectivity of the
external auditors.

We would welcome feedback from shareholders
on this report.

On behalf of the Audit Committee

Dean Moore
Chair of the Audit Committee
21 June 2023

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Nominations
Committee Report

The results of the Board
review, which were
considered in detail by
the Directors, continue to
show a well-structured,
dynamic and effective
Board.

Sir Peter
Westmacott
Chair of the
Nominations
Committee

I am pleased to present the Nominations
Committee report for the year ended 2 April 2023.

As such, two-thirds (67%) of the current Committee
are independent (myself and Dean Moore).

During the year, the Nominations Committee has
successfully carried out its primary purpose of
reviewing the structure, size and composition of
the Board, including:

f Reviewing the Board structure, size and

composition, and making recommendations
to the Board with regard to any adjustments
deemed necessary;

f Giving consideration to succession planning for
Directors and other senior executives, taking
into account the skills and expertise needed on
the Board in the future; and

f Keeping under review the leadership needs
of the organisation, both executive and
non-executive, with a view to ensuring the
continued ability of the organisation to
compete in the marketplace.

This year, the Nominations Committee carried
out a board effectiveness review using a third
party digital board evaluation platform. All of the
members of the Board participated in the review
and the results were shared with, and considered
by, the Board.

Composition of the Nominations
Committee
The members of the Nominations Committee
are myself (as Chair), Dean Moore and Nathaniel
Rothschild.

Appointments are for a period of three years.
On expiry of the term, the Director may have his
or her term extended for an additional period
in circumstances where the Director meets the
relevant membership criteria. The Committee shall
consist of at least three members, including two
independent Non-Executive Directors of the Board.

Meetings
The Nominations Committee met once in the year.
The Nominations Committee invites other staff to
attend its meetings as required, although it reserves
the right to request any of these individuals
withdraw for specific items of discussion.

Governance
The Nominations Committee’s Terms of Reference
can be found on the Volex website.

The Committee’s responsibilities include:

f Reviewing the Board structure, size and

composition (including the skills, knowledge,
experience and diversity of the Board) and
making recommendations to the Board with
regard to any adjustments that are deemed
necessary;

f Giving full consideration to succession planning
for Directors and other senior executives, taking
into account the challenges and opportunities
facing the Company, and what skills and
expertise are needed on the Board in the future;

f Keeping under review the leadership needs
of the organisation, both executive and non-
executive, with a view to ensuring the continued
ability of the organisation to compete in the
marketplace;

f Identifying and nominating for approval of the
Board candidates to fill Board vacancies (as
necessary);

f Before making a Board appointment, evaluating
the balance of skills, knowledge, experience
and diversity on the Board and, in light of this
evaluation, preparing a description of the
role and capabilities required for a particular
appointment and the time commitment
required;

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Diversity policy

Recruitment of Board candidates is
conducted, and appointments made, on
merit and suitability against objective
selection criteria with consideration of,
amongst other things, the benefits of
diversity on the Board, including gender. The
Board currently has six members and the
gender ratio of the Board throughout the
year was 17% female and 83% male.

f Prior to the appointment of a Director, requiring
the proposed appointee to disclose (i) any other
business interests that may result in a conflict
of interest and to report any future business
interests that could result in a conflict of interest,
and (ii) any significant commitments, with an
indication of the time involved;

f Reviewing the time commitment of Non-
Executive Directors and, where necessary,
assessing (through performance evaluation)
fulfilment of their duties;

f Reviewing the results of the Board performance
evaluation process that relate to the composition
of the Board and succession planning; and

f Keeping under regular review any authorisations

granted by the Board in connection with a
Director’s conflict of interest.

The Nominations Committee reports its findings
to the Board, identifying any matters on which it
considers that action or improvement is needed,
and makes recommendations on the steps to
be taken.

Main activities of the Nominations
Committee during the year
The Nominations Committee carried out a Board
performance evaluation review during the year,
covering a number of important topics. All of the
members of the Board took part. Overall, the Board
scored consistently well, as the following table
demonstrates:

Topic

Value creation and
strategy

Board agenda and
meetings

Talent and culture

Board composition
and dynamics

Chair

Information,
reporting and risk
management

Our committees

Volex score
(Out of 100)

Benchmark
(Out of 100)

The results of the Board review, which were
considered in detail by the Directors, continue
to show a well-structured, dynamic and effective
Board – with an overall result of 93/100 which
compares favourably to the benchmark of 85/100.

The review’s strategic index, which measures
strategic aspects such as Board competence,
agility, alignment and time allocation scored
93/100, against the benchmark of 84/100.

The ESG index, which measures ESG aspects such
as culture, diversity, transparency, innovation and
sustainable value creation, scored 85/100 which
also compares well to the benchmark of 76/100.

On behalf of the Nominations Committee

Sir Peter Westmacott
Chair of the Nominations Committee
21 June 2023

Board Effectiveness Evaluation

95%

Board composition
and dynamics

96%

Our committees

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Safety, Environmental and Sustainability
Committee Report

We are committed to
becoming a net zero
business by 2035. We will
now set science-based
targets and quantify our
Scope 3 emissions.

Jeffrey
Jackson
Chair of
the Safety,
Environmental
and
Sustainability
Committee

Key responsibilities

The responsibilities of the Committee are to
ensure that the Board has an understanding
and oversight of the:

f Materiality of sustainability-related risks

to the business;

f Impact of climate-related risks to the
business over the short, medium and
long term;

f Extent, ambition and progress of the

Company’s response to the climate
agenda in order to ensure compliance
with the obligations under the Paris
Agreement;

f Monitoring of the Company’s progress

against its climate-related goals, targets
and metrics;

f Current performance and trend

information for non-climate related
sustainability performance indicators in
the areas of health, safety, environment,
human rights, modern slavery, diversity
and inclusion and other labour-related
areas across the Group;

f Effectiveness of the Group’s specific and

tailored policies and systems to control
health, safety, environmental and labour-
related risks;

f Emerging ESG and climate-related trends

and international standards; and

f Financial implications (including costs
and benefits) of any decision of the
Committee.

I am pleased to report on the work of the
Volex Safety, Environmental and Sustainability
Committee. This Committee was established in
2019 to improve the Board’s oversight of issues
relating to health and safety and the wider
environmental performance of the Group. In
2021 we expanded the scope of this Committee
to provide oversight to the broader topic of
sustainability and the Committee was renamed
accordingly.

As a Committee, our aim is to sharpen the Group’s
focus on these important issues and to provide an
effective channel for relevant information to feed
into the Board. Not only does Volex want to ensure
it adheres to best practices wherever possible,
but we also want to provide a safe and productive
working environment for our employees.
Increasingly, our customers want verifiable
assurances from their suppliers and business
partners on a broad range of environmental, social
and governance related matters. During the year,
we have made good progress in the development
of a long-term roadmap for sustainability for the
business and our net zero ambitions have been
established and approved by the Board.

The Committee is responsible for ensuring that
the Board is kept up to date with emerging ESG
and climate trends and relevant international
standards and for ensuring that the Board can
assess the likely impacts of developments in
these areas of the strategy and short, medium
and long-term performance of the Company. The
Committee is also responsible for ensuring that
the financial implications (including costs and
benefits) of any decision made by the Committee
are fully considered so as to balance the needs of
all stakeholders.

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How the Committee spent its time
f reviewing the TCFD findings and

recommendations;

and 2 by 2035 and to be zero emissions on our
Scope 3 emissions by 2050 (or earlier if required
by the international community);

f reviewing the safety performance across the

f establishing a commitment to work

Group; and

f discussing the company’s decarbonisation and

net zero ambitions.

As with the other Board Committees, the Safety,
Environmental and Sustainability Committee
reports its findings to the full Board, identifying
any matters on which it considers that action
or improvement is needed, and makes
recommendations on the steps to be taken. The
Committee shall consist of at least two members,
including one independent Non-Executive
Director of the Board. As such, 50% of the current
Committee is independent (myself).

Composition of the Safety, Environment
and Sustainability Committee
The members of the Safety, Environmental and
Sustainability Committee were:

Committee
member

Date of
appointment

Jeffrey Jackson (Chair)

15 October 2019

Nathaniel Rothschild

15 October 2019

Meetings and activities
The Committee met formally two times (November
and March) during FY2023 and received regular
updates on the impact of Covid-19 on the
workforce and on the Group’s health and safety
performance from the Group HR Director. This is
in line with our intention that the Committee will
meet at least annually.

The main activities undertaken by the Committee
during the year were:

f review of the approach being taken by the

Group to improve performance in the areas of
health, safety, environment and labour related
risks; and

f review and approval of the Company’s

emerging sustainability strategy and
decarbonisation ambitions.

A primary focus for the Committee this year has
been to oversee the development of a strategic
roadmap for sustainability. The Company has
completed a number of important workstreams
this year which the Committee has reviewed
before their review by the main Board. The
noteworthy workstreams include:

f the preparation of a materiality assessment;

f the completion of an independent review

of our TCFD-readiness to enable us to meet
these regulations a year ahead of the statutory
timetable;

f the commitment to our net zero goals which
require us to be zero emissions on Scope 1

in accordance with the Science Based
Targets initiative and to publish a granular
decarbonisation roadmap by the end of
FY2025;

f the development and publication of a

comprehensive environmental policy, including
16 principles against which we have made
commitments; and

f the establishment of a more robust

governance structure, including global and
regional sustainability steering committees
to ensure focus and accountability of the
sustainability agenda across the business.

Health and safety performance
At the year end we reported an accident frequency
rate of 1.24 (FY2022: 1.78) lost time accidents per
million hours worked. This is equivalent to 0.2
accidents per 200,000 worked hours. We had
24 lost time accidents during the year (FY2022:
30). 45% (FY2022: 43%) of these were caused by
employees coming into contact with moving
machinery.

The efforts of our management team to improve
the safety performance in our two Turkish sites,
acquired in FY2021, has delivered significant
improvements with accident levels improving
by 60% compared to the previous year. We will
continue to prioritise support to these sites until
they reach comparable levels of safety with the
rest of our operating units.

In FY2023 only 61% of our workforce worked within
an ISO 45001 accredited site so we have decided
to require all of our sites to achieve ISO 45001
accreditation by the end of FY2025.

For the coming year, I look forward to ensuring
the Group maintains and further improves on its
record in this regard.

On behalf of the Safety, Environmental and
Sustainability Committee

Jeffrey Jackson
Chair of the Safety, Environmental
and Sustainability Committee
21 June 2023

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Remuneration
Remuneration
Committee Report
Committee Report

We are continuously
We are continuously
We are continuously
striving for a fair and
striving for a fair and
striving for a fair and
competitive remuneration
competitive remuneration
competitive remuneration
policy and practice that
policy and practice that
policy and practice that
incentivises performance
incentivises performance
incentivises performance
aligned to our
aligned to our
shareholders’
shareholders’
interests.

Amelia
Murillo
Chair of the
Remuneration
Committee

Annual Statement
Overview from the Chair of the
Remuneration Committee
I am pleased to introduce the Remuneration
Report for the year ended 2 April 2023, which
includes my statement as Remuneration
Committee Chair, the Directors’ Remuneration
Policy and the Annual Report on Remuneration for
the year.

Composition of the Remuneration
Committee
The members of the Remuneration
Committee were:

Committee
member

Date of
appointment

Amelia Murillo (Chair)

26 January 2021

Dean Moore

Jeffrey Jackson

18 April 2017

18 March 2021

The Terms of Reference for the Committee
(available on the Company’s website) provide
that the Committee must consist of at least two
members, all of whom shall be independent
Non-Executive Directors. All three members of
the current Committee are independent Non-
Executive Directors and have the appropriate
range of experience to fulfil its duties.
Appointments to the Committee shall be for
a period of up to three years, which may be
extended for two further three-year periods,
provided the Director remains independent and
still meets the criteria for membership of the
Committee.

Overview
FY2023 was a year in which the Company
continued to demonstrate its resilience as the
disruptive effects of a global pandemic faded. As
with other global manufacturers the Company
still had much to contend with, including ongoing
supply chain challenges and the consequences of
the crisis in Ukraine. Despite these external factors
the business performed very well and we are
pleased to report that the Company has exceeded
the underlying operating profit and working
capital targets that we set out in last year’s Annual
Report.

Annual bonus for FY2023
We continue to prioritise financial metrics for our
Executive Directors and to incentivise them to
focus on generating shareholder value. We want
Volex to be a sustainable and cash-generative
Group that aims to pay regular dividends.
Financial measures make up 80% of the total
opportunity for Executive Directors. For FY2023 we
further strengthened the focus on maintaining
profitability and adjusted the weighting of the
underlying operating profit objective for senior
Executives to 70%. This ensures our relentless
focus on delivering profitable growth within
the business is maintained. To create alignment
through the organisation on cash generation,
we introduced the metric of ‘working capital
as a percentage of sales’ (weighted as 10%) to
the Group bonus framework to ensure that we
maintained focus on our working capital.

The FY2023 targets were challenging, and the
strong underlying profit performance reflects
the achievements of the Group over the year.
The management team was able to achieve both
targets during FY2023.

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of approximately 590% and 435% of salary,
respectively. The performance conditions relating
to these awards were defined to motivate our
Executives to outperform. To ensure that these
awards help to secure our strategic talent the
Committee decided that these awards would vest
over a total of six years, with 50% of the award
vesting five years after grant and 50% of the award
vesting six years after grant. This structure ensures
that a proportion of awards remain at risk beyond
the five-year performance period of the plan. In
light of the grant of these aggregated awards,
no further LTIP awards will be granted to the
Executive Directors before FY2026.

Bonus Policy for FY2024
In FY2024, Executive Directors will continue
to have the opportunity to earn up to 100% of
annual salary under the annual bonus plan. We
have maintained the emphasis on quantitative
financial targets. The Remuneration Committee
is continually aware and mindful of the risks
associated with executive remuneration. With
our remuneration policy we seek to provide a
structure that encourages an acceptable level of
risk-taking through key performance measures
and an optimal remuneration mix. The Committee
undertakes annual third-party evaluations to
ensure our reward programmes achieve the
correct balance, maintain competitiveness in the
market and do not encourage excessive risk-
taking. The Committee has considered the risk
involved in the short and long-term incentive
schemes and is satisfied that the governance
procedures mitigate these risks appropriately. The
Committee continues to welcome feedback from
shareholders, and I hope that we can continue
to receive your support in the future on the
remuneration-related votes at our AGM.

On behalf of the Remuneration Committee

Amelia Murillo
Chair of the Remuneration
Committee
21 June 2023

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Having reviewed this performance, the Committee
determined that bonuses of 100% of salary for the
Executive Chairman and 100% of salary for the
Chief Financial Officer were appropriate. During
FY2023 the Committee adjusted the bonus deferral
policy to provide greater flexibility in how earned
bonuses are paid. The Committee determined that
in future, bonuses may be paid fully in shares or
fully in cash in circumstances where an Executive
Director meets the shareholding requirements.

Base salary review during FY2023
During FY2023 the Committee completed its
annual review of the compensation levels for
the top 40 senior roles. This review ensures that
we maintain competitive and fair remuneration
practices whilst providing a mechanism for us
to reflect the increased size and complexity of
the Group as well as any changes in market
practices. As a result of this review the Committee
implemented base salary adjustments to a
number of senior positions in the Group. Each
year, base salaries are reviewed taking into
consideration inflationary pressures in each
country. In FY2023 the salaries of the Executive
Directors were reviewed and increased in line
with the UK employee salary increase of 7%.
An additional 7% was awarded for Nathaniel
Rothschild and 1% for Jon Boaden. These additional
increases are in line with the Company’s policy of
reviewing salaries on a regular basis reflecting the
growth in the size and complexity of the Company
and taking into account the sustained individual
performance and individual’s development in
role. Following these increases, which take effect
for FY2024, these salaries remain at or below the
lower quartile of similarly sized UK listed industrial
businesses. During the year, the Committee
reviewed the Remuneration Policy in order to
ensure that it remains both appropriate in light
of our strategy and effective in incentivising the
delivery of our strategy and the retention of our
senior talent. As a result the Committee approved
changes to the bonus deferral policy and made
changes to the long-term incentive arrangements
which took effect with the LTIP awards granted in
December 2023. The other elements of the policy
remain unchanged.

Long Term Incentive Plan awards
during FY2023
In June 2022 we announced an ambitious five-year
strategic plan and the Committee determined
that it would be important to align the LTIP awards
with both the successful delivery of the five-
year plan and to secure the long-term retention
of our strategic talent. On 21 December 2022,
Nathaniel Rothschild and Jon Boaden, together
with seven other senior executives, were granted
equity awards under the LTIP. As an alternative
to awarding shares annually under the LTIP
the Committee decided to aggregate awards
from FY2023, FY2024 and FY2025 into a single
up-front award with the proviso that no further
awards would be made before FY2026. Under
this aggregated award framework, Nathaniel
Rothschild and Jon Boaden received awards of
950,000 and 475,000 shares with a face value

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Remuneration
Committee Report
(continued)

Compliance statement
The Company is listed on the Alternative Investment Market
and therefore provides these remuneration disclosures on
a voluntary basis. As such, the charts and tables included
here are unaudited. We have incorporated some additional
information based on the remuneration reporting
regulations for main market listed companies where we
believe it provides additional relevant information for the
users of the financial statements. The Board is committed
to maintaining high standards of corporate governance
and the Directors intend, so far as is practicable given the
Company’s size and constitution of the Board, to comply
with the provisions of the Quoted Companies Alliance
Corporate Governance Code (the ‘QCA Code’).

Policy report
Volex’s Remuneration Policy for Executive Directors
The table below sets out our Remuneration Policy.

Introduction
The Company’s Remuneration Policy (‘Policy’) is
designed to reinforce the Company’s goals, providing
effective incentives for exceptional Group and individual
performance. The Committee regularly reviews the
remuneration structure in place at Volex to ensure it
remains aligned with our business strategy, reinforces our
success and aligns reward with the creation of shareholder
value. The Committee strives to ensure that shareholders’
interests are served, by creating an appropriate balance
between fixed and performance-related pay. A considerable
part of the reward package is linked to share-price
performance and is delivered in shares.

Operation

Opportunity

Performance metrics

Purpose and link
to strategy

Base salary
To reflect market
value of the role
and individual’s
performance and
contribution.

Reviewed on an annual basis,
with any adjustments taking
effect from 1 April.

The Committee reviews base
salaries which are payable in
cash, with reference to:

f The individual’s performance,
responsibility, skills and
experience; Company
performance and market
conditions;

f Salary levels for similar roles
at relevant comparators,
including companies of
similar market capitalisation
to Volex and companies in a
similar sector; and

f Wider pay levels and salary
increases across the Group.

Pension
To provide a market
competitive pension.

Executives participate in a money
purchase scheme or other
scheme as may be appropriate
from time to time according to
the country in which they are
employed.

Benefits
To provide market
competitive benefits.

Benefits may include fuel costs,
travel allowances, private medical
insurance, critical life and death-
in-service cover.

Other benefits may be awarded
as appropriate and include
relocation and other expatriate
benefits.

Company and individual performance
are considerations in setting Executive
Director base salaries.

Not performance-related.

Base salary increases are applied
in line with the outcome of
the review, as part of which
the Committee also considers
average salary increases across
the Group.

In respect of existing Executive
Directors, it is anticipated that
salary increases will be applied
consistently with the cost of
living increases applied to other
salaried employees employed in
the same country.

In exceptional circumstances
(including, but not limited to, a
material increase in job size or
complexity) the Committee has
discretion to make appropriate
adjustments to salary levels
to ensure they remain market
competitive.

Executive Directors receive a
contribution of up to 10% of
salary.

Benefits may vary by role and
individual circumstances and are
reviewed periodically.

Benefits are not anticipated to
exceed 10% of salary over three
financial years.

The Committee retains discretion
to approve a higher cost in
exceptional circumstances,
to support a relocation, or in
circumstances where factors
outside of the Company’s control
have materially changed, such
as with an increase in medical
insurance premiums.

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Purpose and link
to strategy

Annual bonus
To incentivise delivery
of the Group’s
annual financial and
strategic goals.

LTIP
To drive performance,
aid retention and
align the interests of
Executive Directors
with shareholders.

Operation

Opportunity

Performance metrics

Performance is measured
on an annual basis for each
financial year.

The maximum bonus for
Executive Directors is 100% of
salary per annum.

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For threshold performance, 20%
of the bonus is payable.

Threshold performance is set
just below our budgeted level for
each financial indicator.

For performance between
threshold and maximum, the
bonus payout will increase on
a straight-line basis up to the
maximum.

The KPIs selected and their respective
weightings may vary from year to
year depending on strategic priorities.
Measures may include financial and
non-financial metrics.

Corporate measures will be weighted
each year according to business
priorities. These will include a metric
for operating profit and other
financial performance objectives that
support our in-year goals. The range
of performance required under each
measure is calibrated with reference
to Volex’s internal budgets.

Financial measures will make up at
least 80% of the total opportunity. The
Committee has discretion to adjust
the formulaic bonus outcome both
upwards and downwards to ensure
alignment of pay with the underlying
performance of the business over the
financial year, and to take into account
personal performance over the course
of the year.

Further details of performance
conditions are provided in the Annual
Report on Remuneration on pages
106 to 110.

101

The LTIP provides for annual
awards of performance shares
of up to 680,000 shares for the
Executive Directors, or up to
750,000 shares in exceptional
circumstances. The normal
annual grant will be up to 200%
of salary. Under each measure,
threshold performance will result
in 30% of maximum vesting for
that element, rising on a straight-
line basis to full vesting.

Awards vest subject to continued
employment and Company
performance. The performance
measure applied to the LTIP awards
granted in December 2022 for the
Executive Directors is EBIT and these
are subject to a five-year performance
period.

Prior year awards, and awards made
to other senior employees in FY2023,
continue to utilise a three-year
performance period and have relative
Total Shareholder Return (‘TSR’) and
cumulative adjusted operating profit
as their performance metrics.

Further details of performance
conditions are provided in the Annual
Report on Remuneration pages 106
to 110.

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KPIs are established at the start
of the year that are directly
related to and reinforce the
business strategy. Stretch targets
are set for each KPI; at the end
of the year the Committee
determines the extent to which
these were achieved.

Annual bonus awards may be
delivered as a mix of cash and
shares which are deferred for
at least one year and subject to
continued employment, with
the extent of deferral depending
on the extent to which the
shareholding guidelines have
been achieved. Executives
who have not achieved the
shareholding guideline will
receive two-thirds of any bonus
above 25% of annual salary as an
award of deferred Volex shares.
Executives who have achieved
the shareholding requirements
may be paid their bonus entirely
in cash or in shares.

Annual bonus amounts paid and
vested deferred bonus awards are
subject to clawback. Malus may
be applied to the in-year bonus,
through either a reduction being
applied or the withdrawal of the
bonus, and to unvested deferred
bonus awards.

The Committee may grant annual
awards in the form of shares or
nominal value options which vest
after at least three years, subject
to performance conditions. The
award levels and performance
conditions are reviewed in
advance of grant to ensure they
remain appropriate and the
Committee has the discretion to
apply additional measures.

Where relative TSR performance
is used as a measure then the
Committee will review the
comparator group annually to
ensure it remains aligned with
shareholder interests.

Unvested awards under the
LTIP are subject to malus and
vested awards are subject to
clawback. LTIP awards will have
a performance period of at least
three years and a minimum
vesting period of three years.
If no entitlement has been
earned at the end of the relevant
performance period, the awards
will lapse.

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Remuneration
Committee Report
(continued)

Notes to the policy table
Performance measurement selection
The aim of the annual bonus plan is to reward key
executives over and above base salary for the achievement
of critical business objectives. The bonus criteria are
selected annually and are designed to encourage
continuous performance improvement for the Group.
Group financial performance targets relating to the annual
bonus plan are set from the Company’s annual budget,
which is reviewed and signed off by the Board prior to the
start of each financial year. Underlying operating profit
is used as a key performance indicator for the annual
bonus plan because it is a clear measure of the underlying
financial performance of the Group.

The long-term share-based incentive plan (‘LTIP’) is
designed to align the interests of key executives with
the longer-term interests of the Company’s shareholders
by rewarding them for delivering sustained increases
in shareholder value and financial growth. The vesting
of share awards is linked to performance conditions, in
particular to growth in the Company’s adjusted underlying
operating profit and relative total shareholder returns. EBIT,
defined as our underlying earnings before interest and
taxes in any financial year, has been selected as the sole
metric for the FY2023 awards to Executive Directors as it is
the key measure of successful delivery of the five-year plan
announced in June 2022. The five-year total performance
period and six-year total vesting period applied to the
FY2023 award for our Executive Directors fully aligns with
the five-year plan and is defined with multi-year targets
that end with the financial year end March/April 2027.

Typically awards made under the LTIP will contain
performance measures and targets that are reviewed by
the Committee ahead of each grant to ensure they are
challenging but achievable. Targets are reviewed annually,
based on a number of internal and external reference points
and will take into consideration the strategic priorities and
economic environment in any given year.

Shareholding guidelines
The Committee continues to recognise the importance
of Executive Directors aligning their interests with
shareholders through building up a significant
shareholding in the Company. Shareholding guidelines are
in place that require Executive Directors to acquire, over
time, a holding equivalent to 100% of base salary. Other
executive management are required to acquire a holding
over time equivalent to 50% of base salary. Executives are
expected to retain at least 50% of any LTIP shares acquired
on vesting (net of tax) until the guideline level is achieved.

Remuneration policy for other employees
Volex’s approach to annual salary reviews is consistent
across the Group, with consideration given to the levels of
experience and responsibility, to individual performance
and to salary levels in comparable companies. The
Company takes into account inflationary changes in each
country. The Company utilises a globally recognised job
evaluation system and each year externally benchmarks
the top 40 leadership positions. The Committee reviews the
recommendations that arise.

The majority of our employees (excluding those who
are shopfloor-based within our factories) are eligible
to participate in an annual bonus scheme. The top 50
managers participate in an annual cash bonus plan that is
linked directly with the Group’s financial performance in
the same way as it is for our Executive Directors. Typically
all of the top 100 managers in the Company will have a
financial measure with at least a 50% weighting linked to
the operating profit of either their factory or the Group.
All bonuses are payable subject to the discretion of the
Remuneration Committee and only become payable
once the Group has achieved its underlying operating
profit in any financial year. Bonus opportunity varies by
organisational level however all management bonus plans
utilise a consistent framework of financial and personal
objectives.

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Volex’s Remuneration Policy for Non-Executive Directors
The Board determines the Remuneration Policy and level of fees for the Non-Executive Directors within the limits set out in
the Articles of Association. The Remuneration Committee recommends the Remuneration Policy and level of fees for the
Non-Executive Directors. Non-Executive Directors are not eligible to participate in the annual bonus, LTIP or pension schemes.

The current policy is:

Purpose and link
to strategy

Fees
To reflect market
competitive rates
for the role, as
well as individual
performance and
contribution.

Performance
metrics

Not applicable.

Operation

Opportunity

Non-Executive Directors receive a
basic fee for their respective roles.

Additional fees are paid to Non-
Executive Directors for additional
services including chairing a Board
Committee or supporting the Board
on matters that require significant
time commitment over and above
that expected to fulfil their normal
duties.

Fee increases are applied in
line with the outcome of the
annual review.

There is no prescribed
maximum fee. It is expected
that increases to Non-
Executive Director fee levels
will be in line with salaried
employees over the life of the
policy.

Fees are reviewed annually with
reference to information provided by
remuneration surveys; the extent of
the duties performed; and the size
and complexity of the Company.

Fee levels are benchmarked against
sector comparators and FTSE-
listed companies of similar size and
complexity.

Fees are payable in cash.

However, in the event
that there is a material
misalignment with the
market or a change in the
complexity, responsibility or
time commitment required
to fulfil a Non-Executive
Director role, the Board
has discretion to make an
appropriate adjustment to
the fee level.

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Pay scenario charts
The charts below provide estimates of the potential future reward opportunity for the current Executive Directors, and the
potential split between the different elements of remuneration under three different performance scenarios: ‘Minimum’,
‘On-target/Threshold’ and ‘Maximum’.

Potential reward opportunities illustrated below are based on the Remuneration Policy, applied to the base salary as at
1 April 2023. For the annual bonus, the amounts illustrated are those potentially receivable in respect of performance for
FY2024. For the LTIP, the award opportunities are based on the annualised value of LTIP awards granted in FY2023 which
also replace the FY2024 and FY2025 awards. This approach is consistent with our remuneration policy and our rules around
annual limits. It should also be noted that LTIP awards granted to the Executive Directors in FY2023 vest on the fifth and
sixth anniversary of the date of grant.

Component

Minimum

On-target

Stretch target

Latest known base salary

Fixed

Pension contribution applied to latest base salary

Other benefits as provided in the single figure table

Annual
bonus

LTIP

No bonus payable

No LTIP vesting

20%

30%

100%

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Remuneration
Committee Report
(continued)

Executive Chairman – Nathaniel Rothschild

Chief Financial Officer – Jon Boaden

Maximum + 50% share
price appreciation

Maximum

On-Target/Threshold

Minimum

Maximum + 50% share
price appreciation

Maximum

On-Target/Threshold

Minimum

£0m

£0.5m

£1m

£1.5m

£2m

£0m

£0.4m

£0.8m

£1.2m

External appointment
In the cases of hiring or appointing a new Executive Director from outside the Company, the Committee may make use of
any or all of the existing components of remuneration, as follows:

Fixed

Annual Bonus

LTIP

Component

Approach

Base salary

The base salaries of new appointees will be determined by reference
to the individual’s role and responsibilities, experience and skills,
relevant market data, internal relativities and their current basic salary.
Where new appointees have initial basic salaries set below market, any
shortfall may be managed with phased increases over a period of one
to two years, subject to their development in the role.

New appointees will be eligible to participate in the Group’s defined
contribution pension plan or to receive a cash allowance.

New appointees will be eligible to receive benefits in line with the
policy.

The annual bonus described in the policy table will apply to new
appointees with the relevant maximum being prorated to reflect the
proportion of employment over the year. Targets for the individual
element will be tailored to the Executive.

Maximum value

Not applicable

Up to 100% of salary p.a.

Pension

Benefits

104

Annual bonus

LTIP

New appointees will be eligible for awards under the LTIP which
will normally be on the same terms as other Executive Directors, as
described in the policy table.

Up to 200% of salary p.a.

In determining an appropriate remuneration package,
the Remuneration Committee will take into consideration
all relevant factors (including quantum, nature of
remuneration and the jurisdiction from which the
candidate was recruited) to ensure that arrangements are
in the best interests of both Volex and its shareholders.
In addition to the above elements of remuneration, the
Committee may consider it appropriate to grant an
award under a different structure in order to facilitate the
recruitment of an individual, exercising the discretion
available to replace incentive arrangements forfeited on
leaving a previous employer. Such ‘buyout awards’ would
have a fair value no higher than that of the awards forfeited.
In doing so, the Committee will consider relevant factors,
including any performance conditions attached to these
awards, the likelihood of those conditions being met and
the proportion of the vesting period remaining.

Internal promotion
In cases of appointing a new Executive Director by way of
internal promotion, the Remuneration Committee will be
consistent with the policy for external appointees detailed
above.

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Non-Executive Directors
In the case of hiring or appointing a new Non-Executive
Director, the Committee will follow the Policy as set out in
the table on page 111. A base fee in line with the prevailing
fee schedule would be payable for Board membership,
with additional fees payable for additional services, such
as chairing a Board Committee or acting as a Senior
Independent Director.

Service contracts
The QCA Code and guidelines issued by institutional
investors recommend that notice periods of no more
than one year be set for Executive Directors and that any
payments to a departing Executive Director should be
determined having full regard to the duty of mitigation. It
is the Company’s intention to meet these guidelines, and
the Company policy is that Executive Directors’ service
contracts may be terminated by either party on not more
than 12 months’ notice.

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The Executive Directors are employed under contracts of employment with Volex plc. The principal terms of the Executive
Directors’ service contracts are as follows:

Executive Director

Position

Effective date
of contract

Nathaniel Rothschild

Executive Chairman

1 December 2015

Jon Boaden

Chief Financial Officer

12 November 2020

From Company

From Director

6 months

3 months

6 months

3 months

Notice period

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Letters of appointment are provided to the Non-Executive Directors. Non-Executive Directors have letters of appointment
effective for a period of three years. Non-Executive Directors’ letters of appointment are available to view at the Company’s
registered office.

Directors’ letters of appointment and the unexpired period of their appointments (where appropriate, after extension by re-
election) are set out below:

Non-Executive
Directors

Date of letter

Unexpired term as at
2 April 2023

Date of appointment

Notice period

Dean Moore

18.04.2017

1 month

19.04.2020

Jeffrey Jackson

30.07.2019

29 months

19.08.2022

Sir Peter Westmacott

12.11.2020

Amelia Murillo

26.01.2021

7 months

9 months

12.11.2020

26.01.2021

3 months

In addition to the contractual provisions regarding payment
on termination set out above, the table on page 106
summarises how the awards under the annual and deferred
bonus and LTIP are typically treated in different leaver
scenarios and a change of control. Although the Committee
retains overall discretion on determining ‘good leaver’
status, it typically defines a ‘good leaver’ in circumstances
such as injury or disability, death, redundancy, retirement
with the consent of the Company or any other reason as
the Committee decides. Final treatment is subject to the
Committee’s discretion.

105

Payment policy on exit and/or change of control
The Company’s policy is to limit any payment made to a
departing Director to contractual arrangements and to
honour any pre-established commitments. As part of this
process, the Committee will take into consideration the
Executive Director’s duty to mitigate their loss.

If employment is terminated by the Company, the
departing Executive Director may have a legal entitlement
(under statute or otherwise) to certain payments, which
would be met. In addition, the Committee retains discretion
to settle any other amounts reasonably due to the Executive
Director, for example to meet the legal fees incurred by
the Executive Director in connection with the termination
of employment, where the Company wishes to enter into
a settlement agreement (as provided for below) and the
individual must seek independent legal advice.

In certain circumstances, the Committee may approve
new contractual arrangements with departing Executive
Directors including (but not limited to) settlement,
confidentiality, restrictive covenants and/or consultancy
arrangements. These will be used sparingly and only
entered into where the Committee believes that it is in the
best interests of the Company and its shareholders to do so.

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Remuneration
Committee Report
(continued)

Event

Timing of vesting/award

Calculation of vesting/payment

Annual bonus

‘Good leaver’

Paid at the same time as
continuing employees.

Eligible for an award to the extent that performance targets
are satisfied and the award is prorated for the proportion of the
financial year served.

‘Bad leaver’

No annual bonus payable.

Not applicable.

Change of control Generally paid immediately on
the effective date of change of
control, with the Committee’s
discretion to treat otherwise.

Eligible for an award to the extent that performance targets are
satisfied up to the change of control, subject to Remuneration
Committee discretion, and the award is prorated for the
proportion of the financial year served to the effective date of
change of control.

Deferred bonus

‘Good leaver’

Continue until the normal
vesting date or earlier, at the
discretion of the Committee.
In the event of death of a
participant, the award would
vest immediately.

Outstanding awards vest in full.

‘Bad leaver’

Outstanding awards are
forfeited.

Not applicable.

Change of control Vest immediately on the

Outstanding awards vest in full.

effective date of change of
control.

LTIP

‘Good leaver’

Continue until the normal
vesting date or earlier, at the
discretion of the Committee.
In the event of death of a
participant, the award would
vest immediately.

Outstanding awards vest to the extent the performance
conditions are satisfied the time of vesting and the awards are
prorated to reflect the length of the vesting period served unless
the Board decides otherwise. In the event of the death of a
participant during the performance period, the award would vest
in full.

‘Bad leaver’

Outstanding awards are
forfeited.

Not applicable.

Change of control Vest immediately on the

effective date of change of
control.

Outstanding awards vest subject to the satisfaction of
performance conditions as at the effective date of change of
control, subject to Remuneration Committee discretion, and
the award is prorated for the proportion of the vesting period
served to the effective date of change of control unless the Board
decides otherwise.

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External appointments
With the approval of the Board in each case, and subject to
the overriding requirements of the Group, Executive Directors
may act as Non-Executive Directors to other companies and
retain any fees received.

Annual Report on Remuneration
The following section provides details of how the
Remuneration Policy was implemented during the year.

Remuneration Committee membership in FY2023
The Committee met four times during the year under review.
Attendance by individual Committee members at meetings
is below.

Committee
member

Dean Moore

Amelia Murillo

Jeffrey Jackson

Member
throughout
2022/2023

Number of
meetings
attended

Yes

4/4

During the year, the Committee sought internal support
from the Executive Chairman and Chief Financial Officer,
who attended Committee meetings by invitation from
the Chair to advise on specific questions raised by the
Committee and on matters relating to the performance
and remuneration of senior managers. No individuals are
involved in decisions relating to their own remuneration.
The Company Secretary attended each meeting as
Secretary to the Committee.

Agenda during FY2023
The agenda during FY2023 included:

f Approval of the FY2022 Remuneration Committee

Report;

f Approval of a five-year aggregated LTIP award

framework for our Executive Directors and key senior
managers that is aligned with the achievement and
outperformance of the Company’s five-year plan
announced in June 2022;

f Evaluation of share award proposals for Executive

Directors and senior managers for FY2023;

f Review of Executive Directors’ shareholdings;

f Review and approval of the vesting in full for the LTIP

FY2020 vesting;

f On appointment LTIP awards;

f Severance packages;

f Consideration of advisory bodies’ and institutional

investors’ current guidelines on executive compensation;

f Review and ratification of the Remuneration Policy and
remuneration packages for Executive Directors and the
fees payable to our Non-Executive Directors for FY2024,
incorporating institutional investor feedback;

f Evaluation of the proposal for the annual bonus plan for

FY2024;

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f Review of the succession planning status for the top 20

management positions; and

f Review and approval of updated Terms of Reference for

the Remuneration Committee.

Advisers
In undertaking its responsibilities, the Committee seeks
independent external advice as necessary. To this end, for
the year under review, the Committee continued to retain
the services of Mercer as the principal external advisers
to the Committee. The Committee evaluates the support
provided by its advisers annually and is comfortable that the
Mercer team provides independent remuneration advice
to the Committee and does not have any connections that
may impair independence.

Fees of £95,923 (FY2022: £86,440) were paid to advisers in
respect of work carried out for the year under review.

Summary of shareholder voting at the FY2022
AGM
It is the Remuneration Committee’s policy to consult
with major shareholders prior to any major changes
to its Executive Directors’ remuneration structure. The
table below shows the results of the vote on the FY2022
Remuneration Report at the AGM on 19 August 2022.

FY2022 Remuneration
Report

Total
number of
votes

For (including discretionary)

88,335,758

Against

Total votes cast (excluding
withheld votes)1

Votes withheld

Total votes cast (including
withheld votes)

2,736,019

91,071,777

26,847

91,098,624

107

% of
votes cast

97.00%

3.00%

1 A withheld vote is not a vote in law and is not counted in the
calculation of the proportion of votes cast for and against a
resolution.

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Remuneration
Committee Report
(continued)

Single figure of Executive Director remuneration
The table below sets out a single figure for the total remuneration received by each Executive Director for the year ended
2 April 2023 and the prior year:

Deferred
annual
bonus
(restricted
shares)3

GBP

Total

GBP

–

£717,161

LTIP

GBP

–

Name

Year

Salary

Benefits1

Pension2

GBP

Annual
bonus3

GBP

Nathaniel
Rothschild

Jon Boaden

2023

2022

2023

2022

£341,810

£333,473

£244,157

£212,310

£2,973

£2,832

£3,404

£3,416

£30,568

£341,810

£33,347

£ 117,827

£831,300

£68,918

£1,387,697

£16,996

£244,157

£13,650

£75,016

–

£508,714

£43,877

£347,999

1 Taxable value of benefits received in the year by Executives includes healthcare and life assurance.

2 Pension: Jon Boaden participates in a money purchase scheme. Jon receives a contribution from the Company equivalent to 6% of salary.

Since FY2021 Nathaniel Rothschild has received an annual pension contribution equivalent to 10% of salary.

3 Annual bonus: The FY2023 targets were met and 100% of maximum bonuses were awarded. For FY2023 no bonus deferral has been been

applied.

Non-Executive Director

Dean Moore

108

Jeffrey Jackson

Sir Peter Westmacott

Amelia Murillo

Year

Base fee Committee fees

Additional Fee

Benefits

2023

2022

2023

2022

2023

2022

2023

2022

GBP

£55,000

GBP

£10,000

GBP

£10,0001

£10,000

–

GBP

–

Total

GBP

£75,000

£65,000

1 Dean Moore is the Senior Independent Director, and therefore receives this additional fee as per the fee table below.

The Non-Executive Directors are not eligible for bonuses or retirement benefits and cannot participate in any share plan
operated by the Company. The base fees during the year and for FY2024 are:

Non-Executive Director base fee

Senior Independent Director fee

Chair of Committee additional fee

Fee1

FY2024

£55,000

£10,000

FY2023

£55,000

£10,000

1 Remuneration comprises an annual fee for acting as a Non-Executive Director of the Company. Additional fees are paid to Non-Executive

Directors in respect of their service as Chair of a Board Committee.

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Incentive outcomes for the year ended 2 April 2023
Annual bonus in respect of FY2023 performance
For FY2023, the maximum bonus potential for the Executive Directors was set at 100% of basic annual salary with 70%
based on achieving an operating profit target, 10% linked to a working capital target and 20% based on achieving personal
objectives. Both the operating profit and working capital targets were defined to ensure the delivery of an operating
margin of between 9 and 10% in line with the Group’s five-year strategy. The Company delivered an improved operating
margin of 9.3%, achieving the level required for a 100% achievement and also reduced its working capital as a percentage of
sales by 110 basis points compared to the target.

The performance against the criteria, as defined, determined that bonuses would be earned under the annual bonus plan
at the level of 100% for Nathaniel Rothschild and 100% for Jon Boaden. Both Executive Directors are currently meeting the
minimum shareholding requirement. The Remuneration Committee has authorised that the bonus for Jon Boaden should
be paid fully in cash for FY2023 and that the bonus for Nathaniel Rothschild should be paid fully in shares with no deferral
period applied.

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Annual bonus target for FY2024 performance
Corporate targets set by the Committee require Executive Directors to deliver significant stretch performance. The
Committee reviews the financial targets and personal objectives for the Executive Directors and other members of the
Executive Team. The Committee has decided not to publish performance targets prospectively due to the information
being considered commercially sensitive.

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LTIPs
LTIP awards held by Nathaniel Rothschild of 680,000 shares vested on 10 September 2022 and LTIP awards held by Jon
Boaden of 75,000 shares vested on 1 December 2022 based on the TSR target being 100% met and the cumulative profit
target being 100% met. These awards were granted in FY2020 and were subject to performance conditions. 50% of the
award was based on relative TSR performance and 50% based on cumulative operating profit. The awards were also subject
to a potential multiplier based on absolute TSR performance whereby 100% growth in TSR over the three year performance
period would result in the awards being doubled. All targets were achieved. The annualised TSR performance over the
period was 47.8% per annum compared to 6.1% for the FTSE All-Share Index. The cumulative profit target required to result
in an award of 100% was set at $103 million and for the performance period the Company delivered a cumulative operating
profit of $130.7 million..

Scheme interests awarded in FY2023
The following awards were granted during the year under the LTIP:

Executive Chairman

Chief Financial Officer

LTIP award

Number
of shares

950,000

475,000

Market price
at date
of award

Face value

250.5p

£2,380,000

250.5p

£1,190,000

Date of grant

21 December 2022

In FY2023 the Committee determined that awards in FY2023, FY2024 and FY2025 would be replaced by a single award that
would align the Executive Directors and a small number of senior leaders to the achievement and outperformance of the
Company’s five-year plan announced in June 2022. Under this long-term award framework, 50% of the award would vest on
the fifth anniversary of grant and 50% on the sixth anniversary of grant, thus providing ongoing alignment with investors
and an effective retention element for our most senior talent beyond FY2027. This aggregated award was made on the basis
that no further LTIP awards would be granted to participating executives before FY2026.

109

The FY2023 awards will vest after the fifth anniversary of the grant date when 50% will vest. The remaining 50% will vest on
the sixth anniversary of the grant date. The performance condition is growth in EBIT measured over a total of five financial
years and is structured into three measurement periods. The first measurement period which applies to up to 25% of the
award runs to the financial year ending March 2025, the second measurement period which applies to up to 50% of the
award runs to the financial year ending March 2026 and the third and final measurement period applies to up to 100% of
the award and runs to the financial year ending March 2027. The first vesting occurs on 6 December 2027 (approximately
five years after grant) and the second vesting occurs on 6 December 2028 (approximately six years after the grant date).

The FY2023 awards to the Executive Chairman and to the Chief Financial Officer replaced annual awards that would have
been made in FY2023, FY2024 and FY2025. The FY2023 amounted to approximately 591% (197% on an annualised basis)
and 437% (146% on an annualised basis) of the FY2024 base salary, respectively, for each Executive Director. The value
of the award has been calculated on the date of grant by reference to the middle market quotation at the close of the
preceding day.

Specific targets for future operating profit are deemed to be commercially sensitive and will not be published until such
time that the Committee is confident there will be no adverse impact on the Company of such disclosure.

Non-Executive Director fees
There was no increase in the Non-Executive Director fees during FY2023. This continues to be reviewed by the Board on an
annual basis. The most recent increase to the Non-Executive Director fees occurred in FY2021.

Payments for loss of office
No Executive Director or PDMR lost their office during FY2023.

Payments to past Directors
No payments were made to past Directors during the year.

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Remuneration
Committee Report
(continued)

Seven-year TSR performance review and CEO single figure
The following graph charts the TSR of the Company and the FTSE All-Share, FTSE All-Share Electronic and Electrical
Equipment and FTSE AIM All-Share indices over the seven-year period from March 2016 to March 2023. In the opinion of the
Directors, these indices are the most appropriate against which the total shareholder return of Volex should be measured.

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100

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Volex

FTSE All-Share

FTSE All-Share Electronic & Electrical Equipment

FTSE AIM All-Share Index

Note: TSR is calculated on a common currency basis.

The table below details the single figure remuneration for the CEO and Executive Chairman over the same period.

2017

2018

2019

2020

2021

2022

Executive Chairman single figure of
remuneration (£’000)

Annual bonus payout (% of maximum)

PSP/LTIP vesting (% of maximum)

392

50%

534

74%

620

97%

88%

1,657

98%

100%

1,597

98%

100%

1,388

56%

100%

2023

717

100%

Implementation of Executive Director Remuneration Policy for FY2024
Base salary
Market positioning of base salary is approached on an individual basis, taking account of advice received from the
Committee’s independent advisers on the rates of salary for similar roles in selected groups of comparable companies, and
the individual performance and experience of each Executive. Each role has been independently evaluated and this job
evaluation reference provides the Committee with a more precise reference for assessing the competitiveness of Executive
compensation with consideration being given to base, total cash-based compensation and total direct compensation. The
aim is for overall levels of remuneration to be at or around market median through base salary and bonus that is set around
the lower quartile but with long-term incentives set above median.

The Committee reviewed salaries during the year and agreed that salaries for Nathaniel Rothschild and for Jon Boaden
should be increased in line with the UK workforce average of 7% plus an additional uplift as shown below to reflect their
performance and contribution. The approach taken for the Executive Directors is consistent with that for other high
performing employees whose salaries were found to be below market. As a result of these changes the current salaries
remain at or below the lower quartile for similarly-sized engineering businesses.

Nathaniel Rothschild

Jon Boaden

Base salary in place
prior to review

Base salary effective
from 1 April 2023

Percentage increase
from 1 April 2023:
Workforce +

341,810

244,157

390,000

263,520

7.1%

0.9%

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Pension
There were no material changes to Pension arrangements during FY2023. The Chief Financial Officer receives a pension
contribution of 6% of salary through a salary sacrifice arrangement and, in addition, the National Insurance savings for both
the employee and the employer are reinvested into the employee’s monthly contribution. This is a standard arrangement
for our UK-based employees. The Executive Chairman receives a pension contribution of 10% of salary.

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Annual bonus
The annual bonus for FY2024 will operate on the criteria set out in the Policy. The Committee has approved a maximum
annual bonus opportunity of 100% of salary for the Executive Directors. Proposed target levels have been set to be
challenging relative to the FY2024 business plan and will, as for FY2023, be weighted towards financial measures and will
retain an element for the achievement of personal objectives. As in FY2023, subject to the Directors continuing to meet the
share ownership guidelines it is intended that these will be paid in cash or fully vested shares without deferral.

LTIP
In FY2023 the Committee determined that awards in FY2023, FY2024 and FY2025 should be combined into a single award
that would align the Executive Directors and a small number of senior leaders to the achievement and outperformance of
the Company’s five-year plan announced in June 2022. Under this award framework, awards would vest over two successive
years commencing on the fifth anniversary of the award date to ensure that participants remain exposed to share price
movements following the vesting of awards and to support the retention of our most senior talent beyond FY2027. For
our Executive Directors and other participating individuals, the performance conditions will be linked solely to our EBIT
performance over three measurement periods. The first measurement period runs to the financial year ending March 2025,
the second measurement period runs to the financial year ending March 2026 and the third and final measurement period
runs to the financial year ending March 2027 with the first vesting date being 6 December 2027 and the second vesting
date being 6 December 2028.

Non-Executive Director fees
The Board determined that there would be no change to Non-Executive Director fees for FY2024 after previously increasing
them at the start of FY2022.

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Base fees

Chairman

Non-Executive Director

Additional fees

Audit Committee Chair

Remuneration Committee Chair

Nominations Committee Chair

Safety, Environmental and Sustainability Committee Chair

Senior Independent Director

FY2023
fees

FY2024
fees

–

£55,000

£10,000

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Remuneration
Committee Report
(continued)

Directors’ interests
The table below shows the Directors’ interests in shares and the extent to which Volex’s shareholding guidelines are achieved.

Number of shares
held as at 2 April
2023 (or date of
resignation)

Current
shareholding
(% salary/fees)

Shareholding1
guideline
(as % of salary)

Guideline met

Nathaniel Rothschild2

39,321,176

24,848%

Jon Boaden3

Dean Moore

Jeffrey Jackson

Sir Peter Westmacott

Amelia Murillo

15,054

15,000

12,500

5,900

–

13%

n/a

100%

n/a

Yes

n/a

1 The shareholding guidelines were approved by the Remuneration Committee in March 2014. The guidelines require the Executive

Chairman and the Chief Financial Officer to acquire over time (to the extent they have not already done so) and maintain an ownership
level of holdings of shares in Volex plc equal to gross basic salary. There is no time limit defined for achieving the target level. Senior
Executives, as defined by the Remuneration Committee, must (unless a waiver is obtained from the Committee) retain a minimum of 50%
of net shares (after statutory deductions) acquired under the relevant Employee Equity Plans until the relevant ownership level is met.

2 Nathaniel Rothschild’s shareholding is held directly and through NR Holdings Limited.

3 Jon Boaden meets the guidelines requirements based on the net of tax value of the vested but unexercised share options disclosed in the

table below.

The table below shows the Executive and Non-Executive Directors’ interests in shares which includes all shares owned
beneficially together with those interests in shares which have vested and are no longer subject to deferral or performance
conditions and may be included as an interest in shares under Volex’s shareholding guidelines plus those shares and
options over which future performance conditions remain.

Not subject to performance

Subject to performance

Shares held

Vested but
unexercised

Deferred
bonus
shares
(FY2023)

LTIP

Deferred
Shares

Nathaniel Rothschild

39,321,176

340,0001

29,389

1,332,500

Jon Boaden

Dean Moore

Jeffrey Jackson

Peter Westmacott

Amelia Murillo

15,054

15,000

12,500

5,900

–

225,000

18,711

672,500

–

Total

41,023,065

931,265

15,000

12,500

5,900

–

1 These awards were granted in 2019 and were subject to a multiplier. On exercise, Nathaniel Rothschild will be eligible to receive 680,000

shares.

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Directors’ interests in shares and options under Volex PSP and LTIP
Details of the Directors’ interests in long-term incentive schemes are set out below. Details, including an explanation of the
movements during FY2023, are set out on page 109 of this Remuneration Report.

Directors’ interest in shares and options under the Volex Long Term Incentive Plan (LTIP).

Number of
shares subject
to options held
at 3 April 2022

Number of
shares subject
to LTIP options
granted during
FY2023

Number of
shares subject
to LTIP options
exercised
during FY2023

Number of
shares subject
to LTIP options
lapsed during
FY2023

Number of
shares subject
to option held
at 2 April 2023

Exercise price
of shares
subject to LTIP
options (£)

Nathaniel
Rothschild

Jon Boaden

722,500

422,500

950,000

475,000

–

1,672,500

897,500

–

0 - 0.25

The Remuneration Committee Report was approved by the Board of Directors on 21 June 2023 and signed on its behalf by:

Amelia Murillo
Chair of the Remuneration Committee

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Directors’ Report

The Directors of the Company present their Annual
Report and audited consolidated financial statements
for the year ended 2 April 2023 in accordance with
section 415 of the Companies Act 2006.

Appointment and replacement of Directors
The Company’s approach to the appointment and
replacement of Directors is governed by its Articles
of Association (together with relevant legislation).

As permitted by Paragraph 1A of Schedule 7 to the
Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 certain
matters which are required to be disclosed in the
Report of the Directors have been omitted as they
are included in the Strategic Report on pages 16
to 76. These matters relate to a full review of the
performance of the Group for the year, current
trading and future outlook. The statement by the
Directors in performance of their statutory duties
in accordance with section 172(1) Companies Act
2006 is provided on page 76.

Results and dividend
Results for the year ended 2 April 2023 are set out
in the Consolidated Income Statement on page 126.

The Board is recommending payment of a final
dividend of 2.6 pence per share for the 52 weeks
ended 2 April 2023 (FY2022: 2.4 pence). Together
with the interim dividend of 1.3 pence per share paid
on 16 December 2022 (FY2022: 1.2 pence), this makes
a total for the year of 3.9 pence (FY2022: 3.6 pence).

Important events since the end of the
financial year
No important events have taken place in the
period between 3 April 2023 and 21 June 2023.

Directors
The Directors who were in office during the year
and up to the date the financial statements were
signed are as follows:

Executive Directors
Nathaniel Rothschild
Jon Boaden

Non-Executive Directors
Dean Moore
Jeffrey Jackson
Sir Peter Westmacott
Amelia Murillo

Biographical details of the Directors currently
serving on the Board and their dates of
appointment are set out on pages 80, 81 and 105.

Powers of Directors
The Directors may exercise all the powers of
the Company, subject to any restrictions in the
Company’s Articles of Association, any relevant
legislation and any directions given by the
Company, by passing a special resolution at a
general meeting.

In particular, the Directors may exercise all the
powers of the Company to borrow money, subject
to the limitation that the aggregate amount of
all money borrowed by the Group and owing
to persons outside the Group shall not, without
the sanction of an ordinary resolution of the
Company, exceed an amount equal to three times
the aggregate of the Group’s capital and reserves
calculated in the manner prescribed by the
Company’s Articles of Association.

The number of Directors should be no fewer than
three and no more than 15. Directors may be
appointed by the Company by ordinary resolution
or by the Board of Directors.

At each Annual General Meeting, all Directors
who (i) were appointed by the Board since the
last Annual General Meeting, (ii) held office at
the time of the two preceding Annual General
Meetings and who did not retire at either of them,
or (iii) have held office (other than employment or
executive office) for a continuous period of nine
years or more, shall automatically retire.

At the meeting at which the Director retires,
the members may pass an ordinary resolution
to fill the office being vacated by electing the
retiring Director or some other person eligible for
appointment to that office. In default, the retiring
Director shall be deemed to have been elected
or re-elected (as the case may be) unless (i) it is
expressly resolved at the meeting not to fill the
vacated office or the resolution of such election
or re-election is put to the meeting and lost, or
(ii) such Director has given notice that he or she
is unwilling to be elected or re-elected, or (iii) the
procedural requirements set out in the Company’s
Articles of Association are contravened.

The Company may, by ordinary resolution, remove
any Director before the expiration of his or her
term of office.

As set out in the Company’s Articles of Association,
there are also circumstances where a Director
will immediately cease to hold office. These
circumstances include where he or she is
prohibited by law from being or acting as a
Director or where he or she has been made
bankrupt.

Directors’ indemnities and insurance
In accordance with the Companies Act 2006
and the Company’s Articles of Association,
the Company has purchased Directors’ and
Officers’ Liability Insurance. This qualifying third
party indemnity, in line with section 234 of the
Companies Act, was in force throughout the last
financial year and is currently in force at the date
of this report. The Company reviews its insurance
policies on an annual basis in order to satisfy itself
that its level of cover remains adequate.

Directors’ share interests
The number of ordinary shares of the Company
in which the Directors are beneficially interested
at 2 April 2023 is set out in the Remuneration
Committee Report on page 112.

Articles of Association

Any amendments to the Articles of Association of
the Company may be made by special resolution
of the shareholders.

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Share capital
Details of the Company’s share capital are set
out in note 23 to the financial statements. The
Company’s share capital consists of one class of
ordinary shares which do not carry rights to fixed
income. As at 2 April 2023, there were 159,107,085
ordinary shares of 25p each in issue.

A new authority to allot shares will be sought at
the forthcoming Annual General Meeting.

Voting rights
Ordinary shareholders are entitled to receive
notice of, and in normal circumstances to
attend and speak at, general meetings. Each
shareholder present in person or by proxy (or by
duly authorised corporate representative) shall,
on a show of hands, have one vote. On a poll, each
shareholder present in person or by proxy shall
have one vote for each share held.

Shareholder

NR Holdings Limited1

Hargreaves Lansdown Asset Management

Ruffer

Investec Wealth & Investment

Interactive Investor

Herald Investment Management

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Restrictions on transfer of shares
Other than the general provisions of the Articles of
Association (and prevailing legislation) there are no
specific restrictions on the size of a holding or on
the transfer of the ordinary shares.

The Directors are not aware of any agreements
between the Company’s shareholders that may
result in the restriction of the transfer of securities
or on voting rights. No shareholder holds securities
carrying any special rights or control over the
Company’s share capital.

Significant shareholders
The Company had been advised of the following
notifiable direct and indirect interests in 3% or
more of its issued share capital as at 1 June 2023.

Number of ordinary shares
of 25p each

Percentage of total
voting rights

39,321,176

9,700,223

9,670,625

8,903,965

6,451,522

5,089,020

24.72

6.10

6.08

5.60

4.05

3.20

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1 The Executive Chairman, Nathaniel Rothschild, is a beneficiary of NR Holdings Limited. The number of shares noted here also includes

those he holds directly.

Authority to purchase own shares
The Company was authorised by shareholder
resolution at the 2022 Annual General Meeting
to purchase up to 10% of its issued share capital.
No shares were purchased pursuant to this
authority during the year. A resolution to renew
this authority will be proposed at the forthcoming
Annual General Meeting. Under this authority, any
shares purchased will either be cancelled, resulting
in a reduction of the Company’s issued share
capital, or held in treasury.

Employee share schemes
The Company does not have any employee share
schemes with shares which have rights with
regard to the control of the Company that are not
exercisable directly by the employees.

Significant agreements/change of control
The Company is a party to a revolving credit
facility in which the counterparties can determine
whether or not to cancel the agreement where
there has been a change of control of the
Company.

Details of the Directors’ service contracts can be
found in the Remuneration Committee Report on
pages 104 and 105.

Future developments
The development of the business is detailed in the
Strategic Report on pages 16 to 76.

Research and development
The Company’s research and development
activities are focused on driving innovation
throughout the product portfolio, to enable it
to deliver new or enhanced customer-specific
connection solutions. We have continued to recruit
design and development expertise and pursue the
development of patents where relevant.

Employees
The Company’s disclosures on employee policies
and involvement can be found in the Sustainability
Report on pages 68 to 70.

Relationships with suppliers, customers
and other business partners
Information on the Company’s management of
its business relationships can be found in the
Strategic Report on pages 74 and 75.

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Directors’ Report
(continued)

Corporate governance
The Company follows and complies with, subject
to some exceptions, the provisions of the Quoted
Companies Alliance’s Corporate Governance Code.
The Company’s corporate governance practice is
outlined in the Corporate Governance Report on
pages 84 to 89.

Political and charitable donations
The Group regularly contributes to local
communities through fundraising and charity
events. The Company did not make any political
donations during the year.

Energy use and emissions
The disclosures on energy use and greenhouse
gas emissions are made within the Sustainability
Report on page 66.

Financial risk management
The Company’s objectives and policies on financial
risk management, including information on the
exposure of the Company to strategic, operational,
financial and compliance risks and in relation to
the use of financial instruments, are set out in note
31 to the financial statements and in the Group
Risk Management section on pages 44 to 49.

Overseas branches
During the year, no new or additional overseas
branches were established.

Going concern statement
The Group’s financial statements have been
prepared on the going concern basis, which
contemplates the continuity of normal business
activity with the realisation of assets and the
settlement of liabilities in the normal course of
business. When assessing the going concern
status of the Group, the Directors have considered
in particular its financial position, including its
significant balance of cash and cash equivalents
and the borrowing facility in place, including its
terms, remaining duration and covenants.

Having taken these into account, the Directors
have, at the time of approving the financial
statements, a reasonable expectation that the
Company and the Group have adequate resources
to continue in operational existence for at least
12 months from the date of these financial
statements. Accordingly, they continue to adopt
the going concern basis in preparing the financial
statements.

Auditors and disclosure of information
to auditors
Each of the persons who is a Director at the date of
approval of this Annual Report confirms that:

f So far as the Director is aware, there is no
relevant audit information of which the
Company’s auditors are unaware; and

f The Director has taken all the steps that he
or she ought to have taken as a Director in
order to make himself or herself aware of any
relevant audit information and to establish
that the Company’s auditors are aware of that
information.

The above confirmation is given and should be
interpreted in accordance with the provisions of
Section 418 of the Companies Act 2006.

PricewaterhouseCoopers LLP have expressed
their willingness to continue in office as auditors
and a resolution seeking to reappoint them will
be proposed at the forthcoming Annual General
Meeting.

Annual General Meeting
The Company’s Annual General Meeting will be
held on 27 July 2023. Details of the arrangements
and the resolutions to be proposed are set out in a
separate Notice of Annual General Meeting.

This report was approved by the Board of Directors
of Volex plc and signed on its behalf by:

Jon Boaden
Chief Financial Officer

21 June 2023

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Statement of Directors’ Responsibilities
in respect of the financial statements

The Directors are also responsible for safeguarding
the assets of the Group and Company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s and Company’s transactions
and disclose with reasonable accuracy at any time
the financial position of the group and company
and enable them to ensure that the financial
statements comply with the Companies Act 2006.

The Directors are responsible for the maintenance
and integrity of the Company’s website. Legislation
in the United Kingdom governing the preparation
and dissemination of financial statements may
differ from legislation in other jurisdictions.

On behalf of the Board

Nathaniel Rothschild
Executive Chairman

Jon Boaden
Chief Financial
Officer

21 June 2023

The directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulation.

Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors have prepared the Group
financial statements in accordance with UK-
adopted international accounting standards and
the company financial statements in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 101 “Reduced
Disclosure Framework”, and applicable law).

Under company law, Directors must not approve
the financial statements unless they are satisfied
that they give a true and fair view of the state of
affairs of the Group and Company and of the profit
or loss of the Group for that period. In preparing
the financial statements, the Directors are
required to:

f select suitable accounting policies and then

apply them consistently;

f state whether applicable UK-adopted

international accounting standards have been
followed for the Group financial statements
and United Kingdom Accounting Standards,
comprising FRS 101 have been followed for the
company financial statements, subject to any
material departures disclosed and explained in
the financial statements;

f make judgements and accounting estimates

that are reasonable and prudent; and

f prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and Company will
continue in business.

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Independent Auditors’ Report
to the Members of Volex plc

Report on the audit of
the financial statements
Opinion
In our opinion:
f Volex plc’s Group financial statements and Company

financial statements (the “financial statements”) give a
true and fair view of the state of the Group’s and of the
Company’s affairs as at 2 April 2023 and of the Group’s
profit and the Group’s cash flows for the 52 week period
then ended;

f the Group financial statements have been properly

prepared in accordance with UK-adopted international
accounting standards as applied in accordance with the
provisions of the Companies Act 2006;

f the Company financial statements have been properly

prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards, including FRS 101 “Reduced
Disclosure Framework”, and applicable law); and
f the financial statements have been prepared in

accordance with the requirements of the Companies
Act 2006.

We have audited the financial statements, included
within the Annual Report and Accounts (the “Annual
Report”), which comprise: the Consolidated and Company
Statements of Financial Position as at 2 April 2023; the
Consolidated Income Statement and Consolidated
Statement of Comprehensive Income, the Consolidated
and Company Statements of Changes in Equity, and the
Consolidated Statement of Cash Flows for the period then
ended; and the notes to the financial statements, which
include a description of the significant accounting policies.

Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Independence
We remained independent of the Group in accordance
with the ethical requirements that are relevant to our audit
of the financial statements in the UK, which includes the
FRC’s Ethical Standard, as applicable to other listed entities
of public interest, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.

We have provided no non-audit services to the Company or
its controlled undertakings in the period under audit.

Our audit approach
Overview

Audit scope
f We conducted a full scope audit of 8 components which
were selected due to their size and risk characteristics.

f Specified audit procedures were performed on

certain financial statement line items at a further 4
components.

f This enabled us to obtain 77% coverage of revenue, 67%
of profit before tax, adjusting items and share-based
payments and 74% of net assets of the Group. Desktop
review procedures were performed on the remaining
components.

f To ensure sufficient oversight of our component

audit teams, the Group team performed a number of
procedures throughout the audit which included directing
the audit approach and procedures, site visits, conducting
file reviews and meetings with local management and the
component teams both remotely and in-person.

Key audit matters
f Accounting for business combinations (Group)
f Accounting for uncertain tax positions (Group)

f Carrying value of investments in subsidiaries (Company)

Materiality
f Overall Group materiality: $2,900,000 (2022: $2,570,000)
based on 5% of of profit before tax, adjusting items and
share-based payments.

f Overall Company materiality: £2,339,000 (2022:

£2,302,000) based on 1% of total assets capped at
allocated component materiality.

f Performance materiality: $2,175,000 (2022: $1,927,000)
(Group) and £1,754,000 (2022: £1,726,000) (Company).

The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.

Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period
and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by
the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the
context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Accounting for uncertain tax positions (Group) and carrying
value of investments in subsidiaries (Company) are new
key audit matters this year. Classification of adjusting items
(Group), which was a key audit matter last year, is no longer
included because the adjusting items that are processed
through the financial statements have not changed year-on-
year. We have not identified any material misstatements from
our audit work in prior years. As such, we have concluded that
there is no heightened risk in this area. Otherwise, the key
audit matters below are consistent with last year.

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Key audit matter

How our audit addressed the key audit matter

Accounting for business combinations (Group)
As disclosed in note 2 and note 35 to the consolidated
financial statements, during the year the Group acquired
100% of the issued share capital of GSRG Holdings Limited
(‘GSRG’), the holding Company for Review Display Systems
Limited (‘RDS’) for $5.5m. The transaction is considered to
be a business combination under IFRS 3. Accounting for
business combinations is complex and involves judgement
around identification and determination of the fair value of
consideration paid and payable, and assessment of the fair
value of assets and liabilities acquired.

The acquisition resulted in a $1.5m increase in goodwill and
a $1.8m increase in intangible assets. Management utilised
their in-house specialism to determine the fair value of the
assets and liabilities acquired.

The acquisition agreement included earn-out clauses for
the post acquisition period. The assessment for whether
this was post acquisition remuneration or contingent
consideration required management judgement.

Given the complexity around the judgements and
estimates associated with business combinations
as disclosed in note 2 to the consolidated financial
statements, there is a risk that the accounting treatment
may be incorrect and as such this is a key audit matter.

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We obtained management’s fair value calculations and
evaluated the key judgements and estimates made by
management in determining the fair value of net assets
acquired; this included the identification of intangible
assets related to customer relationships, order books and
the associated useful life. We focused on this area due to
the complexity around judgements and estimates made in
accounting for the acquisitions. We undertook the following
procedures:

f We have reviewed management’s fair value assessment.

f We used our valuation experts to evaluate the key

assumptions, including customer values, and discount
rates used by management. We benchmarked these to
external data and challenged the assumptions based on
our knowledge of the Group and the industries within
which the businesses operate.

f We obtained and reviewed the sale and purchase

agreements.

f We obtained management’s fair value calculations of the
consideration, including consideration for any contingent
consideration and deferred consideration elements, and
assessed the appropriateness of the calculations.

f For the assets and liabilities acquired, we tested
a selection to supporting documentation and
recalculated estimates to gain comfort over the fair
value at acquisition. There were no material differences.

119

f In respect of the fair value of the intangibles, we obtained
management’s discounted cash flow calculations and
assessed the reasonableness of the assumptions. Key
assumptions made by management included discount
rate, forecast sales, customer attrition rate and the
estimated economic life of the acquired intangibles.

Based on our procedures, we found no material exceptions
and overall considered management’s key assumptions to
be within an acceptable range.

We also reviewed the related disclosures in the notes to
the financial statements for compliance with accounting
standards and consistency with the results of our work, with
no matters arising.

We obtained management’s uncertain tax positions
calculations and evaluated the key judgements and
estimates made by management.

f We used our tax specialists to evaluate the key

assumptions made by management.

f We challenged management’s future cash flow

forecasts used to support the recognition of any tax
benefits.

f We received reporting from our overseas component
teams in assessing the completeness of uncertain tax
positions.

f We also reviewed the related disclosures in the notes
to the financial statements for compliance with
accounting standards and consistency with the results
of our work, with no matters arising.

Based on our procedures, we found no material exceptions
and overall considered management’s key assumptions
supporting the uncertain tax position to be reasonable.

Accounting for uncertain tax positions (Group)
As disclosed in note 2, note 10 and note 21 to the
consolidated financial statements, the Group operates in
a number of jurisdictions and has recognised provisions
for potential tax exposures, such as transfer pricing
arrangements and changing tax legislation in various
individual jurisdictions.

As at 2 April 2023, the Group had $10.4m (2022: $7.2m)
included in current tax liabilities and $2.6m (2022: ($1.5m))
included in deferred tax assets in respect of the estimated
impact on tax liabilities and recognised tax losses, giving
a total net liability of $7.8m (2022: $8.7m) recognised for
uncertain tax positions.

The valuation and completeness of tax provisions in the
financial statements requires management judgement.

Given the complexity over the judgement and estimates
made in arriving at the provision, there is a risk that the
provision recognised may be incorrect and as such this is a
key audit matter.

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Independent Auditors’ Report
to the Members of Volex plc
(continued)

Key audit matter

How our audit addressed the key audit matter

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Carrying value of investments in subsidiaries (Company)
Refer to note 2 and note 5 of the Company financial
statements. The Company holds investments amounting
to £191.8m (2022:£191.3m) at 2 April 2023. The investments
consist of £140.3m (2022: £129.8m) of investments in shares
and £51.5m (2022: £61.5m) of loans.

Investments in subsidiaries are all stated at cost less
provision for impairment while loans are carried at
amortised cost.

As required by IAS 36, management has assessed if there
is any indication that the investments balance may be
impaired at the reporting date. If any such indication exists,
the entity shall estimate the recoverable amount of the asset.
The assessment of potential impairment indicators involves
management judgement. No impairment indicators were
identified by management at the reporting date and no
impairment charge on investments has been recorded in the
period ended 2 April 2023.

120

How we tailored the audit scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion on
the financial statements as a whole, taking into account the
structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate.

In establishing the overall approach to the Group audit, we
determined the type of work that needed to be performed
by us, as the Group audit team, or through involvement
of our component auditors. The Group operates across
multiple countries in Asia, Europe and North America. Our
approach gives us sufficient coverage on all segments.

Where work was performed by component auditors, we
determined the level of involvement we needed to have
in the audit work for each reporting unit to be able to
conclude whether sufficient appropriate audit evidence
had been obtained as a basis for our opinion on the Group
financial statements as a whole. We were able to perform
site visits to Volex Inc, DE-KA, Volex (Asia) Pte, and PT Volex
Indonesia. For all the other components, we conducted
our oversight of the component teams through video
conferencing and remote working paper reviews and other
forms of communication as considered necessary to satisfy
ourselves as to the appropriateness of audit work performed
by our component teams.

The Group audit team performed the work over Servatron,
inYantra and the head office branch of the Company, with
our component auditors in Poland performing the work
in respect of the significant branches of the Company for
which the books and records are located in that territory. The
Group audit team performed the audit of the consolidation.

We identified 8 components which, in our view, required an
audit of their complete financial information, either due to
their size or risk characteristics. This included the operating
subsidiaries and branches in Turkey, China, Republic of Ireland,
Indonesia, Mexico, and Poland. Specified audit procedures on
certain financial statement line items were also performed on
a further 4 components. The above gave us coverage of 77% of

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We obtained management’s impairment assessment of the
investment at the period end.

We challenged management on the completeness of their
assessment by comparing the items assessed with those
required to be considered per the requirements of IAS 36
and our knowledge of the business.

Management’s assessment included comparing the
Group’s market capitalisation at 2 April 2023, which we
verified to an external source, to the Company’s net assets.

We compared the carrying value of the investments to the
net assets of the underlying subsidiaries.

We corroborated management’s assessment to the results
of the goodwill impairment review at a Group level. No
inconsistencies were noted.

We assessed the model used by management to calculate
the impairment risk of intercompany receivables in line
with IFRS 9 Financial Instruments principles.

Based on the procedures performed, we noted no material
issues arising from our work.

revenue, 67% of profit before tax, adjusting items and share-
based payments, and 74% of net assets of the Group. Desktop
review procedures were performed on all other components.
As a whole, these procedures gave us the evidence we needed
for our opinion on the Group financial statements.

The impact of climate risk on our audit
In planning our audit, we considered the potential impacts
of climate change on the Group’s business and financial
statements. We:

f made enquiries of management to understand the
extent of the potential impact of climate risk on the
Group’s and Company’s financial statements;

f reviewed management’s risk assessment and governance

processes in place to address climate risk impacts;

f evaluated management’s assessment of the impact of
climate risk on the financial statements, including the
potential impact on the underlying assumptions and
estimates;

f obtained an understanding of the carbon reduction
commitments made by the Group and the potential
implications of these for the financial statements; and

f remained alert when performing our audit procedures
for any indicators of the impact of climate risk. Our
procedures did not identify any material impact as a
result of climate risk on the Group’s and Company’s
financial statements.

Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually
and in aggregate, on the financial statements as a whole.

Based on our professional judgement, we determined
materiality for the financial statements as a whole as follows:

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Financial statements - Group

Financial statements - Company

Overall
materiality

$2,900,000 (2022: $2,570,000).

£2,339,000 (2022: £2,302,000).

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How we
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5% of profit before tax, adjusting items and
share-based payments.

1% of total assets capped at allocated component
materiality.

Rationale for
benchmark
applied

We consider profit before tax, interest, adjusting
items and share-based payments a key measure
of the underlying profitability of the business
and to be the primary measure used by
shareholders in assessing the performance of
the Group.

Total assets was considered an appropriate
benchmark to use due to the Company’s status
primarily as an investment holding Company.
However, this would have given a materiality level in
excess of the materiality allocated to the component
determined through our Group scoping exercise.
Accordingly, Company materiality was capped at the
Group component materiality allocation.

For each component in the scope of our Group audit, we
allocated a materiality that is less than our overall Group
materiality. The range of materiality allocated across
components was between $400,000 and $1,500,000. Certain
components were audited to a local statutory audit materiality
that was also less than our overall Group materiality.

f Reviewing the Group and Company cash flow forecasts

for both the base case and a severe but plausible
downside scenario, evaluating the assumptions used,
and verifying the Group’s and Company’s ability to
maintain liquidity within the going concern period
under these scenarios;

We use performance materiality to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall
materiality. Specifically, we use performance materiality
in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 75% (2022:
75%) of overall materiality, amounting to $2,175,000 (2022:
$1,927,000) for the Group financial statements and £1,754,000
(2022: £1,726,000) for the Company financial statements.

In determining the performance materiality, we considered
a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end
of our normal range was appropriate.

We agreed with those charged with governance that we
would report to them misstatements identified during
our audit above $145,000 (Group audit) (2022: 128,500)
and £110,000 (Company audit) (2022: £96,000) as well as
misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.

Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s
and the Company’s ability to continue to adopt the going
concern basis of accounting included:

f Obtaining and reviewing the Group and Company cash
flow forecasts for the going concern period, challenging
the Directors’ assumptions used and verifying that
these were consistent with our existing knowledge
and understanding of the business, as well as with the
Board-approved budget;

f Testing the model for mathematical accuracy and

assessing the reasonableness of sensitivities performed
by management;

121

f We read and understood the key terms of its committed

debt facilities to understand any terms and tested
compliance with the loan covenants;

f Assessing the adequacy of the disclosure provided
in note 2 ‘Basis of Accounting’ of the financial
statements; and

f We performed sensitivity testing of management model
and considered the results of reverse stress testing. These
sensitivities included the impact of potential acquisitions
on the Group’s liquidity and covenant headroom.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on
the Group’s and the Company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.

In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the Group’s
and the Company’s ability to continue as a going concern.

Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.

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Independent Auditors’ Report
to the Members of Volex plc
(continued)

Reporting on other information
The other information comprises all of the information in
the Annual Report other than the financial statements and
our Auditors’ Report thereon. The Directors are responsible
for the other information, which includes reporting based
on the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations. Our opinion on the financial
statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except
to the extent otherwise explicitly stated in this report, any
form of assurance thereon.

In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a
material misstatement of the financial statements or a
material misstatement of the other information. If, based
on the work we have performed, we conclude that there
is a material misstatement of this other information, we
are required to report that fact. We have nothing to report
based on these responsibilities.

With respect to the Strategic Report and Directors’ Report,
we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.

Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report
and Directors’ Report for the period ended 2 April 2023
is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the Group
and Company and their environment obtained in the course
of the audit, we did not identify any material misstatements
in the Strategic Report and Directors’ Report.

Responsibilities for the financial statements and
the audit
Responsibilities of the Directors for the financial
statements
As explained more fully in the Statement of Directors’
Responsibilities in respect of the financial statements, the
Directors are responsible for the preparation of the financial
statements in accordance with the applicable framework
and for being satisfied that they give a true and fair view.
The Directors are also responsible for such internal control
as they determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors
either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an Auditors’ Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.

Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.

Based on our understanding of the Group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to compliance with corporation
tax legislation in jurisdictions in which the Group operates,
and we considered the extent to which non-compliance
might have a material effect on the financial statements. We
also considered those laws and regulations that have a direct
impact on the financial statements such as the Companies
Act 2006. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls) and
determined that the principal risks were related to posting
inappropriate journal entries to manipulate financial
results, risk of fraud in revenue recognition and potential
management bias in accounting estimates. The Group
engagement team shared this risk assessment with the
component auditors so that they could include appropriate
audit procedures in response to such risks in their work.
Audit procedures performed by the Group engagement
team and/or component auditors included:

f Enquiry of Directors, management and the Company’s
in-house legal and compliance team around actual and
potential non-compliance with laws and regulations
and fraud;

f Inspection of supporting documentation where

appropriate;

f Reviewing minutes of meetings of the Board of

Directors;

f Identifying and testing journal entries, in particular
any journal entries posted with unusual account
combinations;

f Challenging assumptions and judgements made by

management in relation to their significant accounting
judgements and estimates; and

f Review of related work performed by the component
audit teams, including their responses to risks related
to management override of controls and to the risk of
fraud in revenue recognition.

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There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting
a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.

Our audit testing might include testing complete
populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically
involves selecting a limited number of items for testing,
rather than testing complete populations. We will often
seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the
population from which the sample is selected.

A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to
you if, in our opinion:

f we have not obtained all the information and

explanations we require for our audit; or

f adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not
been received from branches not visited by us; or

f certain disclosures of Directors’ remuneration specified

by law are not made; or

f the Company financial statements are not in agreement

with the accounting records and returns.

We have no exceptions to report arising from this
responsibility.

Richard Porter (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London

21 June 2023

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Financials

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Building a Branded
IMS House

Over the past year, we have worked
hard to figure out how to get more
value from our global brand. We
already have a reputation for quality,
reliability, and customer service – and
when we are marketing ourselves
to new customers, that’s important.
With 11 acquisitions over the last
five years (including five in North
America), brand integration is a key
consideration.

The companies we acquired have a
range of manufacturing capabilities
and each brought their own legacy
branding. Initially we incorporated
the co-branding ‘A Volex Company’
into the existing logos. This allowed
us to introduce the customers of our
newly acquired entities to the global
capabilities and resources of the
Group. Each site instantly became
much stronger as part of a larger and
aligned entity.

To enhance our reach in the important
North American market, we developed
a brand integration plan. This was
implemented in the second half
of FY2023 to unite our businesses
across the region under the Volex
IMS brand. Each site receives the full
support of our management, sales,
technical, engineering, HR, IT, and
marketing teams. It also allows greater

communication and resource sharing
between other IMS supporting Volex
sites including Tijuana, Batam, Suzhou,
Komarno, and Pune.

We retained elements of the old
names as secondary branding to help
existing customers understand the
transition. A new section has been
added to the volex.com website, with
a dedicated landing page and five
supporting sub-pages for each service
offered by our IMS operations.

In the spirit of the expression “the
whole is greater than the sum of its
parts”, this move will allow us to offer
customers in specialty markets a full
range of products and services that
encompass everything we can now
provide.

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126

127

128

125

Contents

Financials
Consolidated Income Statement

Consolidated Statement of
Comprehensive Income

Consolidated Statement of
Financial Position

Consolidated Statement of
Changes in Equity

129
Consolidated Statement of Cash Flows 130
Notes to the Consolidated Financial
Statements

131

Company Statement of
Financial Position

Company Statement of
Changes in Equity

Notes to the Company
Financial Statements

Alternative Performance Measures

Five Year Summary

Shareholder Information

174

175

176
188
190
191

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Consolidated Income Statement
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

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Revenue

Cost of sales

Gross profit

Operating expenses

Operating profit

Share of net profit from
associates

Finance income

Finance costs

Profit on ordinary activities
before taxation

Taxation

Profit for the period

Profit is attributable to:

Owners of the parent

Non-controlling interests

126

Earnings per share (cents)

Basic

Diluted

Notes

2023

Before
adjusting
items and
share-based
payments
$’m

Adjusting
items and
share-based
payments
(Note 4)
$’m

–

(13.5)

–

(13.5)

2.3

(11.2)

–

(11.2)

722.8

(565.8)

157.0

(89.7)

67.3

1.1

0.4

(9.5)

59.3

(10.7)

48.6

48.0

0.6

48.6

30.2

28.8

Before
adjusting
items and
share-based
payments
$’m

2022

Adjusting
items and
share-based
payments
(Note 4)
$’m

–

(15.2)

–

(15.2)

3.3

(11.9)

–

(11.9)

614.6

(488.8)

125.8

(69.6)

56.2

0.4

0.3

(5.5)

51.4

(9.1)

42.3

–

42.3

26.9

25.2

Total
$’m

722.8

(565.8)

157.0

(103.2)

53.8

1.1

0.4

(9.5)

45.8

(8.4)

37.4

36.8

0.6

37.4

23.2

22.1

Total
$’m

614.6

(488.8)

125.8

(84.8)

41.0

0.4

0.3

(5.5)

36.2

(5.8)

30.4

–

30.4

19.3

18.1

All activities were in respect of continuing operations.

The notes on pages 131 to 173 are an integral part of these financial statements.

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Consolidated Statement of Comprehensive Income
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Profit for the period

Items that will not be reclassified subsequently to profit or loss

Actuarial (loss)/gain on defined benefit pension schemes

Tax relating to items that will not be reclassified

Items that may be reclassified subsequently to profit or loss

Gain arising on cash flow hedges during the period

Exchange loss on translation of foreign operations

Tax relating to items that may be reclassified

Other comprehensive expense for the period

Total comprehensive income for the period attributable to:

Owners of the parent

Non-controlling interests

The notes on pages 131 to 173 are an integral part of these financial statements.

Notes

2023
$’m

37.4

(0.5)

0.1

(0.4)

1.4

(7.0)

0.2

(5.4)

(5.8)

31.6

–

31.6

2022
$’m

30.4

0.7

(0.1)

0.6

0.1

(5.9)

0.1

(5.7)

(5.1)

25.3

–

25.3

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Consolidated Statement of Financial Position
As at 2 April 2023 (3 April 2022)

Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use asset
Interests in associates
Other receivables
Derivative financial instruments
Deferred tax assets

Current assets
Inventories
Trade receivables
Other receivables
Current tax assets
Derivative financial instruments
Cash and bank balances

Total assets
Current liabilities
Borrowings
Lease liabilities
Trade payables
Other payables
Current tax liabilities
Retirement benefit obligations
Provisions
Derivative financial instruments

Net current assets
Non-current liabilities
Borrowings
Lease liabilities
Other payables
Deferred tax liabilities
Retirement benefit obligations
Provisions

Total liabilities
Net assets
Equity
Share capital
Share premium account
Non-distributable reserve
Hedging and translation reserve
Own shares
Retained earnings
Total attributable to owners of the parent
Non-controlling interests
Total equity

Notes

2023
$’m

2022
$’m

12
13
14
15
16
18
31
21

17
18
18

31
28

19
19
20
20

30
22
31

19
19
20
21
30
22

23
23
24

82.3
41.8
50.1
34.5
2.6
1.8
0.9
24.6
238.6

120.5
136.2
15.7
0.8
0.9
22.5
296.6
535.2

1.8
15.6
84.4
65.2
14.5
0.3
0.9
–
182.7
113.9

89.6
19.2
1.4
6.9
2.3
0.4
119.8
302.5
232.7

62.7
60.7
2.5
(14.6)
(1.0)
115.0
225.3
7.4
232.7

82.9
47.0
43.4
19.4
1.5
2.1
–
20.6
216.9

119.3
119.0
16.7
1.9
0.4
29.1
286.4
503.3

5.0
4.3
84.7
61.9
10.1
1.1
2.3
0.1
169.5
116.9

98.5
16.6
1.0
7.0
2.0
0.2
125.3
294.8
208.5

62.5
60.9
2.5
(9.8)
(0.2)
85.2
201.1
7.4
208.5

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The notes on pages 131 to 173 are an integral part of these financial statements. The consolidated financial statements on
pages 126 to 130 of Volex plc (company number: 158956) were approved by the Board of Directors and authorised for issue
on 21 June 2023 and signed on its behalf by:

Nathaniel Rothschild
Executive Chairman

Jon Boaden
Chief Financial Officer

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Consolidated Statement of Changes in Equity
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Share
capital
$’m

Share
premium
account
$’m

Non-
distributable
reserves
$’m

Notes

Hedging
and
translation
reserve
$’m

Own
shares
$’m

Retained
earnings
$’m

Equity
attributable
to owners
$’m

Non-
controlling
interests
$’m

Share issue

0.5

Balance at
4 April 2021

Profit for the period

Other comprehensive
(expense)/income for
the period

Total comprehensive
income for the period

Business combination

Own shares sold/
(utilised) in the period

Own shares
purchased in the
period

Dividend paid

Credit to equity
for equity-settled
share-based
payments

Tax effect of share
options

Balance at
3 April 2022

Profit for the period

Other comprehensive
expense for the period

Total comprehensive
income for the period

Own shares sold/
(utilised) in the period

Own shares
purchased in the
period

Dividend paid

Scrip dividend related
share issue

Credit to equity
for equity-settled
share-based
payments

Tax effect of share
options

Balance at
2 April 2023

62.0

60.9

2.5

(4.1)

(3.3)

–

(5.7)

–

66.0

30.4

184.0

30.4

0.6

(5.1)

31.0

(0.5)

–

25.3

–

7.5

(7.5)

(4.4)

–

(7.2)

(4.4)

(7.2)

4.2

(0.8)

62.5

60.9

2.5

(9.8)

(0.2)

–

0.2

(0.2)

–

(4.8)

–

36.4

31.6

–

4.2

(4.2)

–

(5.0)

–

(7.1)

1.4

(5.0)

(7.1)

1.4

3.7

(0.4)

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equity
$’m

184.0

30.4

(5.1)

25.3

–

7.4

–

(4.4)

(7.2)

4.2

(0.8)

–

7.4

–

31.6

–

(5.0)

(7.1)

1.4

3.7

(0.4)

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The notes on pages 131 to 173 are an integral part of these financial statements.

62.7

60.7

2.5

(14.6)

(1.0)

115.0

225.3

7.4

232.7

85.2

36.8

201.1

36.8

7.4

0.6

208.5

37. 4

129

(0.4)

(5.2)

(0.6)

(5.8)

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Consolidated Statement of Cash Flows
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Net cash generated from operating activities

Cash flow used in investing activities

Interest received

Acquisition of businesses, net of cash acquired

Deferred and contingent consideration for businesses acquired

Proceeds on disposal of intangible assets, property, plant and equipment

Purchases of property, plant and equipment

Purchases of intangible assets

Proceeds from the repayment of preference shares

Net cash used in investing activities

Cash flows before financing activities

Cash generated/(used) before adjusting items

Cash used in respect of adjusting items

Cash flow generated from financing activities

Dividend paid

Net purchase of shares for share schemes

Refinancing costs paid

New bank loans raised

Repayment of borrowings

Outflow from factoring

Interest element of lease payments

Receipt from lease debtor

Capital element of lease payments

Net cash (used in)/generated from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Effect of foreign exchange rate changes

Cash and cash equivalents at end of period

The notes on pages 131 to 173 are an integral part of these financial statements.

Notes

2023
$’m

55.7

0.3

(5.1)

(7.1)

0.1

(14.4)

(3.9)

0.3

(29.8)

25.9

28.1

(2.2)

(5.7)

(7.2)

(0.5)

25.0

(35.3)

(0.7)

(1.7)

0.5

(5.8)

(31.4)

(5.5)

25.9

0.3

20.7

2022
$’m

18.5

0.1

(35.7)

(19.2)

0.5

(10.8)

(4.2)

–

(69.3)

(50.8)

(48.8)

(2.0)

(7.2)

(5.1)

(2.5)

69.3

(3.4)

(6.0)

(1.0)

0.5

(4.2)

40.4

(10.4)

36.5

(0.2)

25.9

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

1. Presentation of financial statements

Volex plc (‘the Company’ and together with its subsidiaries ‘the Group’) is a public company limited by shares domiciled and
incorporated in the United Kingdom under the Companies Act 2006. Its shares are listed on AIM, a market on the London
Stock Exchange. The address of the registered office is given on page 191. The nature of the Group’s operations and its
principal activities are set out in the Strategic Report on pages 16 to 76.

Financial statements are prepared for the period ending on the Sunday following the Friday that falls closest to the
accounting reference date of 31 March each year.

These financial statements are presented in US dollars (‘$’). The individual financial results of each Group subsidiary are
maintained in its functional currency, which is determined by reference to the primary economic environment in which the
subsidiary operates.

2.a) Significant accounting policies

The significant accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of accounting
The financial statements have been prepared in accordance with UK-adopted International Accounting Standards and with
the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The financial statements have been prepared under the historical cost convention except for the revaluation of financial
instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies
below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Going concern
The Group’s financial statements have been prepared on the going concern basis, which contemplates the continuity of normal
business activity with the realisation of assets and the settlement of liabilities in the normal course of business. When assessing
the going concern status of the Group, the Directors have considered in particular its financial position, including its significant
balance of cash and cash equivalents and the borrowing facility in place, including its terms, remaining duration and covenants.

The Directors have prepared a cash flow forecast for the period to the end of September 2024, which is based on the FY2024
Board-approved budget. The Directors have performed sensitivity analysis on the cash flow forecast using a base case and
downside scenario, that take into account the principal risks and uncertainties set out on pages 44 to 49 of the Annual
Report. The Directors have considered the potential impact of climate change on the going concern assessment and do
not believe there to be a significant impact over the going concern period. The severe but plausible downside scenario
models a 15% reduction in year-on-year revenue, equivalent to the worst result in recent history, and still provides significant
covenant and liquidity headroom. The Directors have considered the impact of potential acquisitions in both the base case
and severe but plausible downside scenarios where appropriate.

Based on their assessment and these sensitivity scenarios, the Directors are satisfied that there are no material uncertainties
regarding the Group’s going concern status and that there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for at least twelve months from the date of approval of the financial statements. The Directors,
therefore, consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

Adoption of new and revised International Financial Reporting Standards (‘IFRSs’)
No new standards and interpretations issued by the IASB had a significant impact on the consolidated financial statements.

New standards, amendments and interpretations issued but not yet effective for the financial year
beginning 3 April 2023 and not early adopted
The Group does not consider that any standard, amendment or interpretation issued by the IASB, but not yet applicable,
will have a significant impact on the financial statements. Standards and interpretations issued by the IASB are only
applicable if endorsed by the UK Endorsement Board.

Basis of consolidation
The consolidated financial statements of Volex plc incorporate the financial statements of the Company and entities which
it controls (its subsidiaries) (together ‘the Group’), and are drawn up to the relevant period end date. Control is achieved
where the Company has the power to govern the financial and operating policies so as to be able to obtain benefits from
its activities. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between the members of the Group are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity
therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination
and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of acquisition-date fair values of assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree. All acquisition-related costs are recognised in profit or loss within adjusting items as incurred.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

2.a) Significant accounting policies continued

Goodwill is measured as the excess of the sum of the consideration transferred and the amount of any non-controlling
interests in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed. The interest of the non-controlling shareholders in the acquiree may initially be measured either at fair value
or at the non-controlling shareholders’ proportion of the net fair value of the identifiable assets acquired, liabilities and
contingent liabilities assumed. The choice of measurement basis is made on an acquisition-by-acquisition basis.

Where the consideration for the acquisition includes any asset or liability resulting from a contingent consideration
arrangement, it is measured at its acquisition date fair value and included as part of the consideration transferred.
Subsequent changes in the fair value of contingent consideration that qualify as measurement period adjustments
are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one
year from the acquisition date) about facts and circumstances that existed at the acquisition date. Any adjustments outside
of the measurement period are taken to the income statement.

Goodwill
Goodwill is initially recognised and measured as set out above.

Goodwill is not amortised but is tested annually for impairment. For the purpose of impairment testing, goodwill is
allocated to cash-generating units. The allocation is made to those cash-generating units or groups of cash-generating
units that are expected to benefit from the business combination in which the goodwill arose. If the recoverable amount
of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of
the carrying amount of each asset in the unit. The impairment loss is recognised immediately in profit and loss and is not
reversed in subsequent periods.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts.
Goodwill arising on acquisitions prior to 31 March 1998 has been written off to reserves and has not been reinstated in the
statement of financial position and will not be included in determining any subsequent profit or loss on disposal.

Interests in associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity
method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is
increased or decreased to recognise the investor’s share of the change in net assets of the investee after the date of acquisition.

The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition
movements in other comprehensive income is recognised in other comprehensive income, with a corresponding
adjustment to the carrying amount of the investment. Where the Group’s share of losses in an associate equals or exceeds
its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on behalf of the associate. Distributions received from an
associate reduce the carrying amount of the investment.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate
is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its carrying value, and it recognises the amount adjacent to ‘share of profit/(loss) of associates’
in the income statement.

Foreign currencies
The individual financial statements of each Group company are prepared in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the
results and financial position of each Group company are expressed in USD, which is the presentation currency for the
consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions.
At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the
period in which they arise except for:

f Exchange differences on transactions entered into to hedge certain foreign currency risks (see financial instruments/

hedge accounting); and

f Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is

neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign
operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on
disposal or partial disposal of the net investment.

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2.a) Significant accounting policies continued

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations
are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange
rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive
income and accumulated in equity.

Revenue recognition
Revenue is recognised in accordance with the satisfaction of performance obligations of contracts. The majority of the
Group’s contracts have just one performance obligation, which is the delivery of goods, which under IFRS 15 ‘Revenue
from contracts with customers’ is recognised as a single point, on delivery or pick-up depending on the agreed terms with
the customer. This is normally when control of the goods or services are transferred to the customer at an amount that
reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has
concluded that it is the principal in its revenue arrangements.

Revenue is measured at the fair value of the consideration received or receivable for goods and services provided in the normal
course of business, net of discounts, VAT and other sales-related taxes. For sales to customers where a right to return an item is
granted, revenue is recognised to the extent of the consideration to which the Group ultimately expects to be entitled.

The Group considers whether there are additional commitments in contracts that have separate performance obligations
to which a portion of the transaction price needs to be allocated. In addition, most customer contracts include a warranty
clause for general repairs of defects that existed at the time of sale. Warranties cannot be purchased separately. These
assurance-type warranties are accounted for under IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’.

In determining the transaction price for the sale of equipment, the Group also considers the effects of the following:

f The existence of significant financing components. There are contracts where the Group receives short-term advances

from its customers. Using the practical expedient in IFRS 15, the Group does not adjust the promised amount of
consideration for the effects of a significant financing component if it expects, at contract inception, that the period
between the transfer of the promised goods or services to the customer and when the customer pays for those goods or
services will be one year or less. The normal credit term is 60 to 90 days upon delivery;

f Consideration payable to the customer – in certain instances the Group purchases raw materials from the customer.

This consideration is not treated as a reduction to revenue since the payments made are in exchange for a distinct good
(the raw material) that the customer transfers to the Group; and

133

f Variable consideration and non-cash consideration – both of these are deemed to be immaterial for the Group.

The Group also generates incidental revenue from the provision of engineering services, which is recognised by reference
to the stage of completion of the contracted services. No separate disclosures have been provided for this given it is
immaterial to the financial statements.

Finance income
Interest income is accrued on a timely basis by reference to the principal outstanding and the effective interest rate applicable.

Dividend income from investments is recognised when the shareholder’s right to receive payment has been established.

Finance costs
Finance costs comprise lease interest payable, amortised debt issue costs, interest expense on borrowings which are not
capitalised and the interest expense on the defined benefit obligation. Interest on borrowings is shown within operating
activities in the statement of cash flows. The interest element of lease payments is presented shown within financial activities.

Taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to
the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is
recognised in other comprehensive income or directly in equity, respectively.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other periods and it
further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates
and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

2.a) Significant accounting policies continued

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised based on tax rates and laws that have been enacted or substantively enacted by the reporting date. Deferred tax
is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive
income, in which case the deferred tax is also dealt with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.

Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Cost includes the original purchase price of the asset and any further costs attributable to bringing the asset to its working
condition for its intended use.

Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land, which is not
depreciated) less their residual values over their useful lives, using the straight-line method, on the following basis:

Freehold buildings and leasehold improvements

Up to 50 years or period of lease, if shorter

Plant and machinery

Assets under construction

3 to 15 years

Depreciation commences once an asset is ready for its intended use

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An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. The gain or loss arising on the disposal of an asset is determined as
the difference between the sale proceeds and the carrying amount of the asset and is recognised in the income statement.

Intangible assets – computer software and licences
Computer software is stated at cost less accumulated depreciation and any recognised impairment loss. Acquired
computer software licences are capitalised on the basis of the costs incurred to acquire and use the specific software. These
costs are included in the statement of financial position within intangible assets and are amortised straight-line over their
estimated useful lives, not exceeding five years. Costs associated with maintaining computer software are recognised as an
expense as incurred.

Intangible assets – patents and customer contracts and relationships
Patents are stated at cost less accumulated amortisation. Customer contracts and relationships acquired in a business
combination are recognised at fair value at the acquisition date. These intangible assets are amortised on a straight-line
basis over their estimated useful lives as follows:

Customer contracts

Customer relationships

Up to 3 years

5 to 15 years

Intangible assets – internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.

The Group is engaged in development activities, which include both general product development and specific customer
development projects. An internally generated intangible asset arising from these development activities is recognised only
if all of the following conditions are met:

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f An asset is created that can be identified;

f It is probable that the asset created will generate future economic benefits; and

f The development cost of the asset can be measured reliably.

Internally generated intangible assets are amortised on a straight-line basis over their useful lives. Where no internally
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which
it is incurred.

Impairment of property, plant and equipment and intangible assets excluding goodwill
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where the
asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of
the cash-generating unit (‘CGU’) to which the asset belongs.

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2.a) Significant accounting policies continued

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have
not been adjusted.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless
the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or CGU) in prior periods. A reversal of
an impairment loss is recognised as a credit to the income statement immediately, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Leases
The Group leases various offices, buildings, vehicles and other equipment. Rental contracts are typically made for a period
of up to five years, but may have extension options.

Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to
the lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which
the Company is a lessee, and for which it has major leases, it has elected not to separate lease and non-lease components
and instead accounts for these as a single lease component.

Assets and liabilities arising from a lease are initially measured on a present-value basis. Lease liabilities include the net
present value of the following lease payments:

f Fixed payments less any lease incentive receivable;

f Variable lease payments that are based on an index or a rate;

f Amounts expected to be payable by the Group under residual value guarantees;

f The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

f Payments of penalties for termination of the lease, if the lease term reflects the Group exercising that option.

135

The Company is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take
effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets

Right-of-use assets are measured at cost comprising the following:

f The amount of the initial measurement of the lease liability or a revaluation of the liability;

f Any lease payments made at or before the commencement date less any lease incentives received;

f Any initial direct costs; and

f Restoration costs.

Each right-of-use asset is depreciated over the shorter of its useful economic life and the lease term on a straight-line basis
unless the lease is expected to transfer ownership of the underlying asset to the Group, in which case the asset is depreciated
to the end of the useful life of the asset. Payments associated with the short-term leases are recognised on a straight-line
basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less.

Where a vacant office is sub-leased for the remainder of the lease, the head lease and sublease are recorded as two
separate contracts, applying both the lessee and lessor accounting requirements.

Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a standard cost methodology
and adjusted for material variances such that the adjusted figure represents direct materials, direct labour and an
attributable proportion of manufacturing overheads based on normal levels of activity. Net realisable value is based on
estimated selling price, less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
A provision is made for obsolete, slow-moving or defective items where appropriate. Supplier inventory held under
consignment arrangements at manufacturing locations is recognised as inventory once the risks and rewards are transferred.

Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value less bank
overdrafts. Where a cashpool facility is operated, the right-of-offset is considered.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

2.a) Significant accounting policies continued

Borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges,
including premiums on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the
consolidated income statement using the effective interest rate method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise.

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its carrying value is the present value of those
cash flows (when the effect of the time value of money is material).

A restructuring provision is recognised when the Group has developed a detailed formal plan for restructuring and has
raised a valid expectation to those affected that it will carry out the restructuring by starting to implement the plan or
announcing its main features to those affected by it. The measurement of a restructuring provision includes only the
direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the
restructuring and not associated with ongoing activities of the entity.

Provisions for the expected cost of warranty obligations under local sales of goods legislation are recognised at the date of
sale of the relevant products, at the Directors’ best estimate of the expenditure required to settle the Group’s obligation.

Retirement benefits
The Group has both defined benefit and defined contribution retirement benefit schemes, including a defined benefit
scheme in the UK, which is now closed to new entrants, and an unfunded defined benefit scheme in Indonesia, which
provides a lump sum payment to individuals on retirement. The retirement benefit obligations recognised in the
consolidated statement of financial position represents the deficit or surplus in the Group’s defined benefit scheme.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with
actuarial valuations carried out at the end of each reporting period.

Defined benefit costs are split into three categories: Remeasurement; Net interest expense or income; and Past service cost
and gains and losses on curtailments and settlements.

Remeasurement comprises actuarial gains and losses, the effect of the asset ceiling (where applicable) and the return on
scheme assets (excluding interest). These costs are recognised immediately in the statement of financial position with a
charge or credit to the statement of comprehensive income in the period in which they occur. Remeasurement recorded
in the statement of comprehensive income is not recycled. Net interest is calculated by applying a discount rate to the net
defined benefit liability or asset and is recognised within finance costs (see note 6). As the defined benefit scheme is now
closed, no service cost is incurred.

Payments to defined contribution retirement benefit schemes are recognised as an expense when employees have
rendered service entitling them to the contributions. Payments to state-managed schemes are treated as payments
to defined contribution schemes where the Group’s obligations under the schemes are equivalent to those arising in a
defined contribution scheme.

Share-based payments
Certain senior employees (including executives) receive remuneration in the form of share-based payment transactions
where the individuals are compensated for services they provide with consideration in the form of equity instruments.

The cost of equity-settled transactions with employees is measured with reference to the fair value of the equity instrument
at the date they are granted and is recognised as an expense over the period in which the performance and/or service
conditions are fulfilled, ending on the date on which the employee becomes fully entitled to the award.

No expense is recognised for awards that do not ultimately vest as a result of not meeting performance or service
conditions. Where all service and performance vesting conditions have been met, the awards are treated as vesting,
irrespective of whether or not the market condition is satisfied, as market conditions have been reflected in the fair value of
the equity instruments.

The fair value determined at the date of grant of the equity-settled share-based payments is expensed to the income
statement on a straight-line basis over the vesting period, based on the estimate of the number of options that will eventually
vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result
of the effect of non-market-based vesting conditions. The movement in cumulative expense since the previous balance sheet
date is recognised in the income statement with a corresponding entry in equity. Within the income statement the share-
based payment charge is presented separately to assist in understanding the underlying performance of the Group.

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2.a) Significant accounting policies continued

Adjusting items
Adjusting items include costs and income that are one-off in nature and significant (such as restructuring costs,
impairment charges or acquisition-related costs) but also include the non-cash amortisation charge of intangible assets,
which have arisen under IFRS 3 ‘Business Combinations’. Only those restructuring costs that result in a permanent
reduction in capabilities, either to a particular geography or line of business, are treated as adjusting items.

Adjusting items are included under the statutory classification appropriate to their nature but are separately disclosed on the
face of the income statement within adjusting items to assist in understanding the underlying performance of the Group.

Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction from the proceeds, net of tax.

Investments and other financial assets – classification
Financial assets within the scope of IFRS 9 ‘Financial Instruments’ are classified as financial assets at fair value through
profit or loss (‘FVTPL’), financial assets at fair value through other comprehensive income (‘FVOCI’) and financial assets at
amortised cost.

The classification of financial assets is determined on initial recognition. This takes account of the nature of the financial
asset and the purpose for which it was acquired. Where an asset is classified as fair value through profit or loss (‘FVTPL’) it is
measured at fair value. Any net gains and losses, including dividend income or interest, are recognised in finance income or
finance cost in the income statement.

Financial assets classified as at fair value through other comprehensive income (‘FVOCI’) are measured at fair value. For
investments in equity instruments, dividends are recognised when the entity’s right to receive payment is established,
the amount can be measured reliably and it is probable that the economic benefits will flow to the entity. Dividends are
recognised in the income statement unless they represent the recovery of part of the cost of the investment, in which case
they are included in other comprehensive income.

Changes in the fair value of the financial asset are recognised in other comprehensive income and are not recycled to the
income statement.

137

Financial assets that are held with the objective of collecting contractual cash flows and where the contractual terms of
the financial asset give rise to cash flows on specified dates that represent the repayment of principal and interest are
measured subsequently at amortised cost.

Investments and other financial assets – recognition and measurement
Where an entity holds an investment in an equity instrument that is actively traded in an organised financial market, the
fair value is determined with reference to quoted closing market bid prices at the balance sheet date. Where there is no
such active market, fair value is determined using valuation techniques and models appropriate to the instrument.

Loans and receivables are measured at amortised cost using the effective interest method and taking into consideration
any allowance for impairment. The calculation includes any premium or discount on acquisition and includes transaction
costs and fees that are an integral part of the effective interest rate.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method less any provision for impairment.

At each balance sheet date the Group undertakes an assessment as to whether a financial asset or group of financial assets
is impaired.

Trade and other receivables
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, resulting in trade receivables recognised
and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit losses. The
Group assesses on a forward-looking basis the expected credit losses associated with its receivables carried at amortised cost.
The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement. Under
this arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash and is prevented
from selling or pledging the receivables. However, the Group has retained late payment and credit risk. The Group,
therefore, continues to recognise the transferred assets in their entirety in its balance sheet. The amount repayable under
the factoring agreement is presented as secured borrowing.

Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangement.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

2.a) Significant accounting policies continued

Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.

Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as
deferred income and they are credited to profit or loss on a straight-line basis over the expected lives of the related assets.

Derivative financial instruments
The Group’s activities expose it to the financial risks of changes in foreign exchange rates, interest rates and commodity
prices. The Group enters into a variety of derivative financial instruments to manage its exposure to these risks. The use of
financial derivatives is governed by a Group policy approved by the Board of Directors, which provides written principles on
the use of financial derivatives to hedge certain risk exposures. The Group does not use derivative financial instruments for
speculative purposes. Further details of derivative financial instruments are disclosed in note 31 to the financial statements.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately
unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in
profit or loss depends on the nature of the hedge relationship. The Group designates certain derivatives as either fair value
hedges, cash flow hedges or hedges of net investments in foreign operations.

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A derivative is classified as a non-current asset or a non-current liability if the remaining maturity of the instrument is more
than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current
assets or current liabilities.

Hedge accounting
The Group designates certain hedging instruments, which include derivatives and non-derivatives in respect of foreign
currency, interest rate and commodity risk, as either cash flow hedges or hedges of net investments in foreign operations.

At the inception of the hedge relationship the entity documents the relationship between the hedging instrument and
hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging
instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of
hedged items.

Cash flow hedge
Hedges of foreign exchange or interest rate risks on firm commitments are accounted for as cash flow hedges. Similarly,
commodity derivative contracts, which are entered into to mitigate commodity price fluctuations on firm purchasing
commitments, are accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in
profit or loss.

Hedges of net investments in foreign operations
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other
comprehensive income and accumulated in the hedging and translation reserve. The gain or loss relating to the ineffective
portion is recognised immediately in profit or loss.

Gains and losses deferred in the hedging and translation reserve are recognised immediately in profit or loss when the
foreign operation is disposed of.

2.b) Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with UK-adopted international accounting standards requires the use
of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying
the Group’s accounting policies. The Directors consider the following to be the key judgements and estimates that have the
most significant effect on the amounts recognised in the financial statements.

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2.b.i) Critical judgements in applying the Group’s accounting policies

In applying the Group’s accounting policies, management has made the following judgements, which have the most
significant effect on the consolidated financial statements.

Business combinations
Acquisitions are accounted for using the acquisition method as described in the business combinations accounting policy.
Management exercises judgement in the determination of fair values for assets and liabilities acquired, including the separate
identification of intangible assets, which use assumptions and estimates. The Group has developed a process to meet the
requirements of IFRS 3, including the separate identification of customer relationship intangible assets based on estimated
future performance, discount rates and customer attrition rates. External valuation specialists are used where appropriate.

Adjusting items
The Directors believe that presenting adjusting items separately provides a clearer understanding of the business
performance and facilitates comparison of trading performance year-on-year. In determining the classification of items,
management exercises significant judgement. During the period, the adjusting items identified total $9.8m (2022: $10.8m).
These primarily comprise acquisition-related costs and amortisation of intangibles arising from business combinations.
See note 4 for further details. Management sees this as a key judgement as a decision has to be made as to which income
statement items fall within the criteria and, therefore, should be shown separately.

Uncertain tax provisions
The Group operates in a large number of different tax jurisdictions and is subject to periodic tax audits by local authorities
on a range of tax matters in relation to corporate tax and transfer pricing. The Directors are, therefore, required to exercise
significant judgement in determining the Group’s provision for income taxes. There are many transactions for which the
ultimate tax treatment is uncertain during the ordinary course of business. Amounts provided are based on management’s
interpretation of country-specific tax law, guided by external experts where appropriate. The final agreed liabilities may
vary from the amounts provided as these are dependent upon the outcomes of the domestic and international dispute
resolution processes in the relevant jurisdictions. The Group typically has limited control over the timing of resolution of
uncertain tax positions with tax authorities.

Recognition of deferred tax assets
The Group has significant amounts of unused tax losses as set out in note 21, as well as various deductible temporary
differences across several major jurisdictions, giving rise to recognised deferred tax assets (after jurisdictional offsetting)
of $24.6m (2022: $20.6m). Significant judgement is used when assessing the extent to which deferred tax assets should
be recognised in respect of these tax losses and temporary differences. The Directors consider sources of taxable profits
against which these deferred assets may be utilised, including the reversal of deferred tax liabilities and forecast future
profits. In assessing the probability of recovery, the five-year cash flow forecast that has been used for goodwill impairment
testing was used as a basis for determining the probable taxable profits arising in each relevant jurisdiction.

139

Inventory provisions
In determining the inventory provision, on at least a quarterly basis and at the financial year end, management applies their
judgement to review provisions held against damaged, obsolete and slow-moving inventory.

Lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive
to exercise an extension option, or not utilise a break clause. Extension options (or periods after break clauses) are only
included in the lease term if the lease is reasonably certain to be extended (or break clause not utilised).

2.b.ii) Key sources of estimation uncertainty

The key areas where estimates and assumptions are significant to the financial statements are described below.

Inventory provisions
Inventories are carried at the lower of cost and net realisable value, which is calculated as the estimated sales proceeds
less costs of sale. Factors considered in the determination of net realisable value are the ageing, category and condition of
inventories, recent inventory utilisation and forecasts of projected inventory utilisation. Changes to these estimates could
result in changes to the net valuation of inventory. At 2 April 2023, the Group had net inventories of $120.5m (2022: $119.3m).

Goodwill
The carrying amount of goodwill has been tested for impairment by estimating the value in use of the cash-generating
units to which it has been allocated. Note 12 outlines the significant assumptions made in performing the impairment tests.

Uncertain tax provisions
In measuring provisions for uncertain tax positions, the Directors are required to make assumptions in order to estimate the
effect of the uncertainty in determining the related taxable profit or loss and unused tax losses in each affected jurisdiction.
Where there are a range of potential outcomes in settling the tax position, the expected value method is used to calculate
the estimated tax liability or asset arising to each jurisdiction. This requires assumptions to be made around both the range
of potential outcomes and the probability of each potential outcome arising. At 2 April 2023, the Group has $10.4m (2022:
$7.2m) included in current tax liabilities and $2.6m (2022: ($1.5m)) included in deferred tax assets in respect of the estimated
impact on tax liabilities and recognised tax losses, giving a total net liability of $7.8m (2022: $8.7m) recognised for uncertain
tax positions. To the extent that the ultimate outcome of a tax uncertainty differs from the tax that has been provided, a
material adjustment could arise in a future period.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

3. Segment information

Segment information is based on the information provided to the chief operating decision makers, being the Executive
members of the Company’s Board and the Chief Operating Officer. This is the basis on which the Group reports its primary
segmental information for the period ended 2 April 2023. These segments are discussed in the Performance Review on
page 34.

The accounting policies of the operating segments are the same as those described in the summary of significant
accounting policies on pages 131 to 138 of the Group accounts. The Group evaluates segmental information on the basis
of profit or loss from operations before adjusting items, share-based payments, interest and income tax expense. The
segmental results that are reported to the Executive members of the Company’s Board and Chief Operating Officer include
items directly attributable to a segment, as well as those that can be allocated on a reasonable basis.

The internal reporting provided to the Executive members of the Company’s Board and the Chief Operating Officer for the
purpose of resource allocation and assessment of Group performance is based upon the regional performance of where the
customer is based and where the products are delivered. In addition to the operating divisions, a Central division exists to
capture all of the corporate costs incurred in supporting the operations.

Unallocated central costs represent corporate costs that are not directly attributable to the manufacture and sale of the
Group’s products but which support the Group in its operations. Included within this division are the costs incurred by the
Executive management team and the corporate head office.

The following is an analysis of the Group’s revenues and results by reportable segment.

52 weeks to 2 April 2023

52 weeks to 3 April 2022

Revenue
$’m

Profit/(loss)
$’m

Revenue
$’m

Profit/(loss)
$’m

North America

Asia

Europe

Unallocated Central costs

Divisional results before share-based payments and adjusting items

Adjusting items

Share-based payment charge (see note 29)

Operating profit

Share of net profit from associates

339.8

171.4

211.6

–

722.8

Finance income

Finance costs

Profit before taxation

Taxation

Profit after taxation

272.1

142.7

199.8

–

614.6

30.9

12.5

31.5

(7.6)

67.3

(9.8)

(3.7)

53.8

1.1

0.4

(9.5)

45.8

(8.4)

37.4

21.4

11.6

32.1

(8.9)

56.2

(10.8)

(4.4)

41.0

0.4

0.3

(5.5)

36.2

(5.8)

30.4

The adjusting items charge of $9.8m (2022: $10.8m) was split $4.8m (2022: $2.0m) to North America, $3.7m (2022: $7.2m) to
Europe, a $0.3m in Asia (2022: $1.1m) and $1.0m (2022: $0.5m) to Central.

The segmental profit represents the profit earned from customers based in each region before the allocation of central
operating expenses, adjusting items, share-based payments, finance income, finance costs and income tax expense. This is
the measure reported to the Executive members of the Company’s Board and the Chief Operating Officer for the purpose
of resource allocation and assessment of performance. The divisional profits above are shown after the following charges for
depreciation and amortisation of non-acquired intangibles:

Depreciation and amortisation

North America

Asia

Europe

Central

2023
$’m

6.7

3.4

4.2

–

14.3

2022
$’m

4.3

2.3

3.2

0.1

9.9

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3. Segment information continued

Information about major customers
One (2022: two) of the Group’s customers individually accounts for more than 10% of total Group revenue. Revenue from this
customer is reported in North America, is within the Electric Vehicle sector, and accounts for 15.8% (2022: 14.7%).

Geographical information
The Group’s revenue from external customers and information about its non-current assets (excluding deferred tax assets)
by geographical location are provided below:

North America

Asia

Europe

Revenue

Non-current assets

2023
$’m

339.8

171.4

211.6

722.8

2022
$’m

272.1

142.7

199.8

614.6

2023
$’m

51.4

59.0

103.6

214.0

2022
$’m

49.3

47.2

99.8

196.3

Revenue is attributed to countries on the basis of the geographical location of the customer and delivery of the product.
Revenue and non-current assets attributable to the United Kingdom was $133.0m (2022: $105.5m) and $18.8m (2022: $14.6m)
respectively.

4. Adjusting items and share-based payments

Acquisition-related costs

Acquisition-related remuneration (see note 35)

Adjustment to fair value of contingent consideration

Restructuring costs

Amortisation of acquired intangibles

Paycheck Protection Program (‘PPP’) loan forgiveness

Total adjusting items

Share-based payments (see note 29)

Total adjusting items and share-based payments before tax

Tax effect of adjusting items and share-based payments (see note 10)

Total adjusting items and share-based payments after tax

2023
$’m

1.3

0.9

(1.3)

–

8.9

–

9.8

3.7

13.5

(2.3)

11.2

2022
$’m

2.5

–

(0.2)

0.8

10.3

(2.6)

10.8

4.4

15.2

(3.3)

11.9

Adjusting items include costs that are one-off in nature and significant as well as the non-cash amortisation of acquired
intangible assets. The adjusting items and share-based payments are included under the statutory classification
appropriate to their nature but are separately disclosed on the face of the income statement to assist in understanding the
underlying financial performance of the Group.

Acquisition-related costs of $1.3m (2022: $2.5m) consist of legal and professional fees relating to potential and completed
acquisitions. The acquisition-related costs associated with acquisitions completed during the year relate to the acquisition
of Review Display Systems (‘RDS’) ($0.2m). The remaining acquisition costs relate to other potential acquisitions that have
been or are being pursued. During the prior year, the $2.5m of acquisition-related costs consisted of legal and professional
fees associated primarily with the acquisitions of Irvine Electronics LLC (‘Irvine’) ($0.7m), Terminal & Cable TC Inc (‘TC’)
($0.4m), Prodamex SA de CV (‘Prodamex’) ($0.4m) and inYantra Technologies Pvt Ltd (‘inYantra’) ($0.6m).

The adjustment to the fair value of contingent consideration relates to a remeasurement of contingent consideration on the
acquisition of De-Ka Elektroteknik Sanayi ve Ticaret Anonim Şirketi (‘DE-KA’).

Associated with the acquisitions, the Group has recognised certain intangible assets, including customer relationships and
customer order backlogs. The amortisation of these intangibles is non-cash and totals $8.9m (2022: $10.3m) for the period.
The reduction from the prior year primarily reflects the completion of acquired order books being fully amortised during
the period. This was partially offset due to the annualised impact of acquisitions from the prior year, being Irvine, Prodamex,
TC and inYantra, and the new acquisition, RDS, in the current year.

During the prior period, the Group’s North American operations received notification that $2.6m of Payroll Protection
Program loans provided during the pandemic were forgiven.

F
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s

141

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

5. Finance income

Lease interest income

Interest on bank deposits

Interest on preference shares

2023
$’m

0.1

0.2

0.4

2022
$’m

0.1

–

0.2

0.3

Finance income earned on financial assets was derived from preference shares, bank deposits and the sublease of a
property. No other gains or losses have been recognised in respect of receivables held at amortised cost other than those
disclosed above and impairment losses recognised in respect of trade receivables (see note 18).

6. Finance costs

Interest on bank overdrafts and loans

Lease interest payable

Net interest expense on defined benefit obligations

Unwinding of deferred consideration

Total interest costs

Amortisation of debt issue costs

Total finance costs

Notes

2023
$’m

2022
$’m

6.4

1.7

0.3

0.4

8.8

0.7

9.5

1.7

1.0

0.2

1.3

4.2

1.3

5.5

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A
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a

R
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t
a
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d
A
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o
u
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t
s

f
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t
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e
a
r
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n
d
e
d
2
0
2
3

No gains or losses have been recognised on financial liabilities measured at amortised cost (including bank overdrafts and
loans) other than those disclosed above.

142

In February 2022 the Group entered into a new enlarged debt facility. Included within the prior period amortisation of debt
issue costs is a $0.8m write-off of capitalised costs related to the previous facility. In February 2023 the Group exercised the
first of two one-year extension options. The debt issue costs being amortised in the year relate to the facility agreed in 2022.

7. Profit for the period

Profit for the period has been arrived at after (crediting)/charging:

Net foreign exchange (gain)/loss

Research and development costs

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Amortisation of intangible assets

Cost of inventories recognised as an expense

Write-down of inventories recognised as an expense

Reversal of write-downs of inventories recognised in the period

Staff costs

Impairment loss recognised on trade receivables

Reversal of impairment losses recognised on trade receivables

Loss/(profit) on disposal of property, plant and equipment

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Notes

2023
$’m

(0.6)

5.2

8.2

4.8

10.2

436.3

2.9

–

140.9

0.6

(0.1)

0.1

2022
$’m

0.6

3.8

6.4

3.4

10.4

382.2

2.1

(0.1)

114.0

–

(0.1)

(0.2)

31371 Volex AR2023 Financials.indd 142

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7. Profit for the period continued

Research and development costs disclosed above comprise the following:

Employment costs

Raw materials and consultancy

Other

2023
$’m

2.4

2.7

0.1

5.2

In addition to the above, during the current period, $3.7m development costs were capitalised (2022: $2.8m).

Reconciliation of operating profit to underlying EBITDA (earnings before interest, tax, depreciation and amortisation,
adjusting items and share-based payment charge):

Operating profit

Add back:

Adjusting operating items

Share-based payment charge

Underlying operating profit

Depreciation of property, plant and equipment (note 14)

Depreciation of right-of-use assets (note 15)

Amortisation of intangible assets not acquired in a business combination (note 13)

Underlying EBITDA

8. Auditors’ remuneration

The analysis of auditors’ remuneration is as follows:

Fees payable to the Company’s auditors for the audit of the Company’s annual financial statements

Fees payable to the Company’s auditors and their associates for other audit services to the Group

– the audit of the Company’s subsidiaries pursuant to legislation

Total audit fees

Other services

Total non-audit fees

2023
$’m

53.8

9.8

3.7

67.3

8.2

4.8

1.3

81.6

2023
$’m

0.6

0.5

1.1

–

F
n
a
n
c
i
a
l
s

143

2022
$’m

2.1

1.6

0.1

3.8

2022
$’m

41.0

10.8

4.4

56.2

6.4

3.4

0.1

66.1

2022
$’m

0.5

0.6

1.1

–

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

9. Staff costs

The average monthly number of employees (including Executive Directors) was:

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p
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Production

Sales and distribution

Administration

Their aggregate remuneration comprised:

Wages and salaries

Social security costs

Share-based payment charge (note 29)

Other pension costs (note 30)

A
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u
a

R
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o
r
t
a
n
d
A
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o
u
n
t
s

f
o
r

t
h
e
y
e
a
r
e
n
d
e
d
2
0
2
3

Remuneration of key management – Directors of the parent Company

144

Short-term employee benefits

Social security costs

Post-employment benefits

Share-based payment charge

10. Taxation

2023
No.

6,271

626

536

7,433

2023
$’m

119.8

16.9

3.7

0.5

140.9

2023
$’m

1.9

0.2

0.1

2.6

4.8

2023

Adjusting
items and
share-based
payments
$’m

Before
adjusting
items
$’m

Current tax – expense for the period

Current tax – adjustment in respect of
previous periods

Total current tax expense

Deferred tax – credit for the period

Deferred tax – adjustment in respect
of previous periods

Total deferred tax credit (note 21)

Income tax expense

(14.7)

0.1

(14.6)

4.5

(0.6)

3.9

(10.7)

0.2

–

0.2

2.1

–

2.1

2.3

2022

Adjusting
items and
share-based
payments
$’m

Before
adjusting
items
$’m

(10.1)

(0.1)

(10.2)

0.8

0.3

1.1

(9.1)

0.2

–

0.2

3.1

–

3.1

3.3

Total
$’m

(14.5)

0.1

(14.4)

6.6

(0.6)

6.0

(8.4)

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2022
No.

6,009

541

575

7,125

2022
$’m

96.7

12.5

4.4

0.4

114.0

2022
$’m

1.8

0.1

2.1

4.1

Total
$’m

(9.9)

(0.1)

(10.0)

3.9

0.3

4.2

(5.8)

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10. Taxation continued

UK corporation tax is calculated at the standard rate of 19% (2022: 19%) of the estimated assessable profit for the period.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The tax expense for the period is lower (2022: lower) than the standard rate of corporation tax in the UK and can be
reconciled to the profit before tax per the income statement as follows:

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a
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i
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s

2023

Adjusting
items and
share-based
payments
$’m

(13.5)

2.6

(0.8)

–

0.1

0.2

–

0.2

–

2.3

Before
adjusting
items
$’m

59.3

(11.3)

(0.1)

(1.9)

(0.5)

(0.4)

(0.7)

(1.5)

5.8

(0.1)

(10.7)

Before
adjusting
items
$’m

51.4

(9.8)

0.1

(2.4)

0.2

1.7

(1.1)

(0.1)

2.9

(0.6)

(9.1)

Total
$’m

45.8

(8.7)

(0.9)

(1.9)

(0.5)

(0.3)

(0.5)

(1.5)

6.0

(0.1)

(8.4)

2022

Adjusting
items and
share-based
payments
$’m

(15.2)

2.9

0.4

–

0.1

0.3

(0.1)

–

(0.3)

3.3

Total
$’m

36.2

(6.9)

0.5

(2.4)

0.2

1.8

(0.8)

(0.2)

145

2.9

(0.9)

(5.8)

Profit before tax

Tax at the UK corporation tax rate

Tax effect of:

Expenses that are not deductible
and income that is not taxable in
determining taxable profit

Foreign exchange on entities with
different tax and functional currencies

Adjustment in respect of previous
periods

Changes to tax rates

Overseas tax rate differences

Current year tax losses and other items
not recognised

Recognition of previously
unrecognised deferred tax assets

Derecognition of previously
recognised deferred tax assets

Income tax expense

Included in the non-deductible tax items is a net decrease to the Group’s estimated exposure arising from uncertain tax
positions of $0.6m (2022: increase of $0.4m).

A deferred tax credit of $6.0m (2022: $2.9m) arose due to the recognition of additional deferred tax assets, primarily relating
to historical tax losses, following management’s updated assessment of the probability of future taxable profits arising in
certain jurisdictions (see note 21).

The main rate of corporation tax in the UK increased from 19% to 25% on 1 April 2023 and will, therefore, be applicable to the
Group’s UK profits from the next financial year. This is expected to increase the Group’s effective tax rate going forwards as
it will increase the weighted average statutory tax rate applicable to the Group’s pre-tax profits.

The income tax expense reported directly in equity of $0.4m (2022: $0.8m) relates to share-based payments and consists of
a current tax credit of $0.7m (2022: $1.6m) and a deferred tax expense of $1.1m (2022: $2.4m).

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

11. Earnings per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

Profit for the purpose of basic and diluted earnings per share being net profit
attributable to owners of the parent

Adjustments for:

Adjusting items

Share-based payment charge

Tax effect of adjusting items and share-based payments

Underlying earnings

Notes

2023
$’m

2022
$’m

36.8

30.4

9.8

3.7

(2.3)

48.0

10.8

4.4

(3.3)

42.3

2023
No. shares

2022
No. shares

Weighted average number of ordinary shares for the purpose of basic earnings per share

158,681,078

157,245,284

Effect of dilutive potential ordinary shares/share options

7,896,423

10,309,105

Weighted average number of ordinary shares for the purpose of diluted earnings per share

166,577,501

167,554,389

V
o
e
x
p
c

A
n
n
u
a

R
e
p
o
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t
a
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d
A
c
c
o
u
n
t
s

f
o
r

t
h
e
y
e
a
r
e
n
d
e
d
2
0
2
3

Basic earnings per share

146

Adjustments for:

Adjusting items

Share-based payment charge

Tax effect of adjusting items and share-based payments

Underlying basic earnings per share

Diluted earnings per share

Adjustments for:

Adjusting items

Share-based payment charge

Tax effect of adjusting items and share-based payments

Underlying diluted earnings per share

2023
cents

23.2

6.1

2.3

(1.4)

30.2

2023
cents

22.1

5.9

2.2

(1.4)

28.8

2022
cents

19.3

6.9

2.8

(2.1)

26.9

2022
cents

18.1

6.5

2.6

(2.0)

25.2

The underlying earnings per share has been calculated on the basis of profit before adjusting items and share-based
payments, net of tax. The Directors consider that this calculation gives a better understanding of the Group’s earnings per
share in the current and prior period.

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12. Goodwill

Cost

At the beginning of the period

Business combinations (note 35)

Exchange differences

At the end of the period

Accumulated impairment losses

At the beginning of the period

Exchange differences

At the end of the period

Carrying amount at the end of the period

Carrying amount at the beginning of the period

2023
$’m

85.4

1.5

(2.3)

84.6

2.5

(0.2)

2.3

82.3

82.9

2022
$’m

70.7

18.3

(3.6)

85.4

2.7

(0.2)

2.5

82.9

68.0

Goodwill acquired in a business combination is allocated, at acquisition, to the business units that are expected to benefit
from that business combination. After recognition of impairment losses and exchange differences, the carrying amount of
goodwill has been allocated to the following CGUs:

DE-KA

GTK

Irvine

inYantra

Prodamex

Servatron

Silcotec

MC Electronics

Volex Asia

Volex North America

Volex Europe

RDS

2023
$’m

37.2

9.5

3.8

9.1

2.9

1.5

7.6

4.0

1.0

1.6

1.9

0.5

1.7

2022
$’m

37.8

10.0

3.8

9.9

2.9

1.7

7.6

4.1

1.0

1.6

1.9

0.6

–

82.3

82.9

Goodwill is not amortised and is retranslated each year at the prevailing rate. The Group annually tests goodwill for
impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of
goodwill is determined from value in use calculations. The key assumptions used in the value in use calculations are those
regarding the discount rates, forecast revenue, costs growth and climate change. Management estimates discount rates
using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the business
unit. The growth rates are based upon industry growth forecasts. Management has considered the impact of climate
change on goodwill impairment and, based on the information currently available, do not believe it to have a material
impact.

The Group prepared a cash flow forecast derived from the most recently approved annual budget, which has been
extrapolated over a five-year period. This assumes levels of revenue and profits based on both past performance and
expectations for future market development and takes into account the cyclicality of the business in which the CGU
operates. Cash flows beyond the five-year period are extrapolated in perpetuity using a growth rate of 3% (2022: 2%) in line
with long-term market expectations.

The rates used to discount the forecast cash flows for the CGUs were within a range of a pre-tax discount rate of
10.9–13.6%.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

V
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p
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A
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a

R
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a
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d
A
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c
o
u
n
t
s

f
o
r

t
h
e
y
e
a
r
e
n
d
e
d
2
0
2
3

13. Other intangible assets

Group

Cost

At 4 April 2021

Business combinations

Additions

Disposals

Exchange differences

At 3 April 2022

Business combinations

Additions

Disposals

Exchange differences

At 2 April 2023

Accumulated amortisation and impairment

At 4 April 2021

Amortisation charge for the period

Disposals

Exchange differences

148

At 3 April 2022

Amortisation charge for the period

Disposals

Exchange differences

At 2 April 2023

Carrying amount

At 2 April 2023

At 3 April 2022

At 4 April 2021

Capitalised
development
costs
$’m

Software and
licences
$’m

Patents
$’m

Customer
contracts
and
relationships
$’m

1.3

–

(0.1)

1.2

–

(0.1)

1.1

1.3

–

(0.1)

1.2

–

(0.1)

1.1

–

3.3

–

2.8

–

(0.2)

5.9

–

3.7

–

(0.1)

9.5

3.3

–

(0.1)

3.2

0.9

–

(0.1)

4.0

5.5

2.7

–

4.5

–

1.4

(0.9)

(0.1)

4.9

–

0.2

(0.2)

(0.1)

4.8

4.2

0.1

(0.9)

(0.1)

3.3

0.4

(0.2)

(0.1)

3.4

1.4

1.6

0.3

52.5

15.3

–

(2.5)

65.3

1.8

–

(1.1)

66.0

13.2

10.3

–

(0.9)

22.6

8.9

–

(0.4)

31.1

34.9

42.7

39.3

Total
$’m

61.6

15.3

4.2

(0.9)

(2.9)

77.3

1.8

3.9

(0.2)

(1.4)

81.4

22.0

10.4

(0.9)

(1.2)

30.3

10.2

(0.2)

(0.7)

39.6

41.8

47.0

39.6

Computer software is amortised over the estimated useful life, not exceeding five years. The amortisation charge for the
period is fully expensed within operating expenses.

Customer contracts and relationships relate to customer-related intangible assets acquired as part of a business combination.
They are recognised at their fair value at the date of acquisition and are subsequently amortised on a straight-line basis on
the timing of projected cash flows of the contracts and relationships over their estimated useful lives. More details on business
combinations are included in note 35.

Customer contracts and relationships include individually significant customer-related assets. The carrying value of these as
at 2 April 2023 are:

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Acquisition

DE-KA

Irvine

Region

Europe

North America

Customer
Relationship
($’m)

Remaining
Useful
life (years)

19.5

4.8

12.9

8.0

At the prior period end the significant customer-related assets related to DE-KA ($21.4m) with a remaining useful economic
life of 13.9 years. The net book value of customer relationships in Irvine was $5.4m with a remaining useful economic life of
9.0 years.

31371 Volex AR2023 Financials.indd 148

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14. Property, plant and equipment

Group

Cost

At 4 April 2021

Additions

Business combination

Disposals

Transferred to completed assets

Exchange differences

At 3 April 2022

Additions

Business combination (note 35)

Disposals

Transferred to completed assets

Exchange differences

At 2 April 2023

Accumulated depreciation and impairment

At 4 April 2021

Depreciation charge for the period

Disposals

Exchange differences

At 3 April 2022

Depreciation charge for the period

Disposals

Exchange differences

At 2 April 2023

Carrying amount

At 2 April 2023

At 3 April 2022

At 4 April 2021

Freehold land
and buildings
$’m

Leasehold
improvements
$’m

Plant and
machinery
$’m

Assets under
construction
$’m

3.4

–

5.0

–

(0.2)

8.2

0.4

–

(0.3)

8.3

0.7

0.3

–

(0.1)

0.9

0.3

–

1.2

7.1

7.3

2.7

10.0

0.2

–

5.2

–

15.6

1.6

–

(0.1)

17.1

5.2

0.7

–

5.9

1.1

–

7.0

10.1

9.7

4.8

57.3

5.9

1.9

(3.8)

1.0

(1.8)

60.5

7.4

0.1

(2.5)

4.8

(0.7)

69.6

37.6

5.4

(3.5)

(1.4)

38.1

6.8

(2.4)

(0.4)

42.1

27.5

22.4

19.7

5.2

5.0

–

(6.2)

–

4.0

6.2

–

(4.8)

–

5.4

–

5.4

4.0

5.2

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a
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s

149

Total
$’m

75.9

11.1

7.1

(3.8)

–

(2.0)

88.3

15.6

0.1

(2.5)

–

(1.1)

100.4

43.5

6.4

(3.5)

(1.5)

44.9

8.2

(2.4)

(0.4)

50.3

50.1

43.4

32.4

At 2 April 2023, the Group had $3.7m (2022: $5.2m) contractual commitments for the acquisition of property, plant and
equipment.

Of the $8.2m (2022: $6.4m) depreciation charge for the period, $7.3m (2022: $5.7m) was expensed through cost of sales and
$0.9m (2022: $0.7m) was expensed through operating expenses. Depreciation of property, plant and equipment that is used
in production activities is expensed through cost of sales.

The Group recognised a fair value adjustment of $nil (2022: decrease of $0.1m) in relation to the acquisition of plant and
machinery acquired as part of business combinations.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Buildings
$’m

Equipment
$’m

Vehicles
$’m

Total
$’m

21.2

0.1

5.1

(0.5)

(0.6)

25.3

8.9

2.0

(0.6)

0.1

35.7

4.2

3.0

(0.2)

(0.1)

6.9

4.1

(0.6)

0.2

10.6

25.1

18.4
17.0

1.3

–

1.3

8.7

–

0.1

10.1

0.6

0.2

–

0.8

0.5

–

1.3

8.8

0.5
0.7

0.6

0.4

–

(0.1)

–

0.9

0.2

0.1

–

1.2

0.3

0.2

(0.1)

–

0.4

0.2

–

0.6

0.5
0.3

23.1

0.5

5.1

(0.6)

27.5

17.8

2.1

(0.6)

0.2

47.0

5.1

3.4

(0.3)

(0.1)

8.1

4.8

(0.6)

0.2

12.5

34.5

19.4
18.0

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2
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15. Right-of-use assets

Cost

At 4 April 2021

Additions

Business combination

Disposals

Exchange differences

At 3 April 2022

Additions

Business combination (note 35)

Disposals

Exchange differences

At 2 April 2023

Accumulated depreciation and impairment

At 4 April 2021

Depreciation charge for the period

Disposals

Exchange differences

At 3 April 2022

150

Depreciation charge for the period

Disposals

Exchange differences

At 2 April 2023

Carrying amount

At 2 April 2023

At 3 April 2022
At 4 April 2021

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16. Interests in associates

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another
entity, it is classified as an associate. The Group uses the equity method, where the Group’s share of post-acquisition profits
and losses are recognised in the consolidated statement of comprehensive income (except for losses in excess of the
Group’s investment in the associate unless there is an obligation to make good those losses).

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Investment in associates:

Kepler SignalTek Ltd

2023
$’m

2.6

2022
$’m

1.5

Kepler SignalTek Ltd
On 12 April 2017, the Group acquired 26.09% of the voting shares in Kepler SignalTek Ltd (a company incorporated in Hong
Kong) for consideration of $0.3m. Subsequently, the Group increased its shareholding to 27.4%. The company is focused on
developing interconnect and finished device solutions for medical OEM customers and also provides high performance
data transmission and industrial cable assemblies from their facility in China. As part of the shareholder agreement, Volex is
entitled to appoint one of the three directors to the company.

Summarised financial information in respect of Kepler SignalTek Ltd is set out below. The summarised information below
represents amounts before intra-group eliminations.

Summarised statement of financial position

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

2023
$’m

12.9

2.3

(6.0)

–

9.2

2022
$’m

10.1

0.9

(6.0)

–

5.0

151

A reconciliation of the above summarised financial information to the carrying amount of the interests in the consolidated
financial statements is set out below:

Reconciliation to the carrying amounts

Net assets of the associate

Proportion of the Group

Carrying amount of the Group’s interest in Kepler SignalTek Ltd

Goodwill

Carrying amount

2023
$’m

9.2

27%

2.5

0.1

2.6

2022
$’m

5.0

27%

1.4

0.1

1.5

During the period, Kepler SignalTek Ltd redeemed $0.35m (2022: $0.03m) of the preference shares owned by Volex (see
note 18).

Summarised statement of comprehensive income

Revenue

Profit for the period

Other comprehensive income for the period

Total comprehensive income for the period

2023
$’m

20.7

4.1

0.1

4.2

2022
$’m

13.1

1.4

–

1.4

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0
2
3

152

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

17. Inventories

Raw materials

Work in progress

Finished goods

18. Trade and other receivables

Trade receivables

Amounts receivable for the sale of goods

Loss allowance

Other receivables

Net investment in sublease

Preference shares due from related parties

Prepayments

Due for settlement within 12 months

Due for settlement after 12 months

2023
$’m

71.1

7.7

41.7

120.5

2023
$’m

139.2

(3.0)

136.2

11.8

0.5

1.7

3.5

17.5

15.7

1.8

17.5

2022
$’m

64.6

5.1

49.6

119.3

2022
$’m

121.4

(2.4)

119.0

13.1

1.0

2.0

2.7

18.8

16.7

2.1

18.8

The carrying amounts of the trade receivables include certain receivables which are subject to a factoring arrangement.
Under this arrangement, Volex has transferred the relevant receivables to the factor in exchange for cash and is prevented
from selling or pledging the receivables. However, Volex has retained late payment and credit risk. Where there is recourse
the Group continues to recognise the transferred assets in their entirety in its balance sheet. The amount repayable under the
factoring agreement is presented as secured borrowing. The Group considers that the held to collect business model remains
appropriate for these receivables and hence continues measuring them at amortised cost. Where there is non-recourse, the
receivable is de-recognised upon receipt of the cash.

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

Other receivables comprises recoverable sales taxes, supplier deposits and other operating debtors. The Group has a
sublease on a property in North America. A corresponding lease liability was recognised in relation to the payments due
under the head lease.

One (2022: two) of the Group’s customers individually accounts for more than 10% of total Group revenue. The largest
customer operates in the Electric Vehicles sector and accounts for 15.8% (2022: two largest customers 27.6%) of total Group
revenue. Other than this customer, the Group has no significant concentration of credit risk, with exposure spread over
a large number of counterparties and customers. At 2 April 2023, the largest customer represented 17% of the net trade
receivables (2022: largest two customers 27%).

The average credit period taken on sales of goods is 73 days (2022: 74 days). An allowance has been made for estimated
irrecoverable amounts from the sale of goods. This allowance has been determined by reference to the expected credit loss,
which includes consideration of past default experience, an analysis of the counterparty’s current financial position, the
current economic environment and potential losses.

Included in trade receivables are receivables with a carrying value of $16.5m (2022: $9.4m) for the Group which are past due
at the reporting date for which no provision has been made as there has not been a significant change in credit quality and
the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

Ageing of past due but not impaired receivables

0–60 days

60–90 days

90–120 days

120+ days

2023
$’m

14.4

1.1

0.7

0.3

16.5

2022
$’m

8.9

0.4

0.1

–

9.4

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18. Trade and other receivables continued

Movement in the allowance for doubtful debts

Balance at the beginning of the period

Amounts acquired on business combination

Amounts written off during the period

Amounts recovered during the period

Increase/(decrease) in allowance recognised in profit or loss

Balance at the end of the period

F
n
a
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i
a
l
s

2022
$’m

1.9

0.6

–

(0.1)

2.4

2023
$’m

2.4

0.1

(0.6)

(0.1)

1.2

3.0

Exchange differences were $nil in both periods. In determining the recoverability of trade receivables, the Group considers
any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.
With the exception of the one customer noted above (2022: two customers), the concentration of credit risk is limited due to
the customer base being large and unrelated.

Given the current economic uncertainty associated with various global events, the Directors have considered the impact
upon IFRS 9 and the Group’s provision matrix. After consideration of historical loss rates, the growth in the business, the
movement in credit scores observed for a range of customers the expected credit loss provision has been adjusted to $3.0m
(2022: $2.4m).

Ageing of impaired trade receivables

Current

0–60 days

60–90 days

90–120 days

120+ days

19. Borrowings and lease liabilities

Secured borrowings at amortised cost

Bank overdrafts

Bank loans

Lease liabilities

Total borrowings at amortised cost

Amount due for settlement within 12 months

Amount due for settlement after 12 months

2023
$’m

2022
$’m

1.1

0.6

–

0.2

1.1

3.0

1.1

0.3

–

0.6

0.4

2.4

153

2023
$’m

2022
$’m

1.8

89.6

34.8

126.2

17.4

108.8

126.2

3.2

100.3

20.9

124.4

9.3

115.1

124.4

The bank loans are secured by a floating charge over the assets of key subsidiaries of Volex plc. During the prior period bank
loans included $0.7m related to factored receivables (see note 18) and loans acquired as part of the acquisition of DE-KA. The
overdraft is secured by a floating charge over the assets of the relevant business unit. During the Covid-19 pandemic, the
Group’s North American operations applied for PPP (‘Paycheck Protection Program’) support loans in North America which
totalled $2.6m. During the prior period the PPP loans were forgiven.

At 2 April 2023 unamortised debt issue costs of $1.9m (2022: $2.2m) are included within bank loans.

Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements (see note 15)
revert to the lessor in the event of default.

The total cash outflow for leases is $7.5m (2022: $5.2m) comprising lease repayments of $5.8m (2022: $4.2m) and $1.7m
(2022: $1.0m) of interest on leases. Interest on lease liabilities is shown in note 6 and the maturity of lease liabilities is shown
in note 31.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

19. Borrowings and lease liabilities continued

The Group has outstanding commitments under short-term and low-value leases which fall due as follows:

In less than one year

The weighted average interest rates paid on the Group’s borrowings during the period were as follows:

Bank loans and overdrafts

2023
$’m

0.5

2023
%

5.2

2022
$’m

0.6

2022
%

2.2

The Group has a $200m committed facility (the ‘facility’) together with an additional $100m uncommitted accordion (the
‘accordion’). The syndicate comprises of HSBC UK Bank plc, Citibank, N.A. London branch, Barclays Bank PLC, Fifth Third
Bank, National Association and UniCredit Bank AG, London branch. As part of the Group’s banking facility there are floating
charges over certain subsidiaries and their assets. The accordion feature provides further capacity for potential future
acquisitions. This facility comprises a $125m revolving credit facility and a $75m term loan. The facility is secured by fixed and
floating charges over the assets of certain Group companies. As at the year end these totalled $226.5m (2022: $217.8m).

The terms of the facility require the Group to perform quarterly financial covenant calculations with respect to leverage
(adjusted total debt to adjusted rolling 12-month EBITDA) and interest cover (adjusted rolling 12-month EBITDA to adjusted
rolling 12-month interest). A breach of these covenants could result in cancellation of the facility. The Group was compliant
with these covenants during the period and remains compliant in the period subsequent to the period end.

During the period, professional fees of $0.5m were incurred in relation to the exercising the first of two one-year options.
Of this, $0.4m was paid to the syndicate. During the prior period $2.4m was capitalised in relation to the current banking
facility which was entered into in February 2022. These professional fees are being charged to the income statement on a
straight-line basis over the facility term.

During the prior period $0.8m debt issue costs associated with the previous facility were written off (see note 6).

At 2 April 2023, the facility incurred interest at a margin of 2.1% (2022: 2.1%) above the applicable rate, typically SOFR.

Also, drawn under the facilities, and not included above, are guarantees and letters of credit amounts to $0.7m (2022:
$0.3m).

Drawings under the facilities were made in various currencies. Total borrowings for the Group at 2 April 2023 can be
analysed by currency as follows:

USD

EUR

INR

Less: debt issue costs (note 27)

2023
$’m

91.5

–

91.5

(1.9)

89.6

2022
$’m

89.6

11.8

1.1

102.5

(2.2)

100.3

Undrawn borrowing facilities
At 2 April 2023, the Group had undrawn committed borrowing facilities available of $107.8m (2022: $96.0m).

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2
0
2
3

154

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20. Trade and other payables

Trade payables

Other payables

Other taxes and social security

Accruals and deferred income

Due for settlement within 12 months

Due for settlement after 12 months

2023
$’m

84.4

5.4

61.2

66.6

65.2

1.4

66.6

2022
$’m

84.7

4.6

58.3

62.9

61.9

1.0

62.9

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The
Directors consider that the carrying amount of trade and other payables approximates to their fair value.

Included in accruals and deferred income is $3.5m (2022: $11.2m) relating to deferred and contingent consideration for
acquisitions.

21. Deferred tax

The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the
current and prior reporting periods.

Unremitted
earnings
$’m

Intangible
assets
$’m

Trading
losses
$’m

Accelerated
tax
depreciation
$’m

Other
temporary
differences1
$’m

Share-based
payments
$’m

At 4 April 2021

Acquisitions

Credit/(expense) to
income statement

Expense to other
comprehensive income

Expense directly to
equity

Exchange differences

At 3 April 2022

Acquisitions

(Expense)/credit to
income statement

Expense to other
comprehensive income

Expense directly to
equity

Exchange differences

(1.1)

–

0.2

–

(0.9)

–

(0.7)

–

At 2 April 2023

(1.6)

(7.3)

(2.3)

2.2

–

0.3

(7.1)

(0.4)

1.5

–

0.2

(5.8)

8.6

–

2.0

–

(0.4)

10.2

–

5.1

–

(0.4)

14.9

0.6

(0.2)

0.4

–

0.1

0.9

–

(1.0)

–

(0.1)

7.8

0.4

5.6

–

(0.4)

(0.2)

(0.1)

–

(0.1)

7.6

–

1.2

(0.1)

–

8.7

–

(2.4)

(0.1)

2.9

–

(0.1)

–

(1.1)

(0.1)

1.6

Total
$’m

14.2

(2.1)

4.2

(0.1)

(2.4)

(0.2)

13.6

(0.4)

6.0

(0.1)

(1.1)

(0.3)

17.7

1 Other temporary differences primarily relate to financial instruments, pensions, leases and short-term timing differences on accruals,

provisions and finance costs.

Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:

Deferred tax assets

Deferred tax liabilities

2023
$’m

24.6

(6.9)

17.7

2022
$’m

20.6

(7.0)

13.6

F
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a
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c
i
a
l
s

155

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

21. Deferred tax continued

At the balance sheet date, the Group had unused tax losses of $89.2m (2022: $107.0m) available for offset against future
profits. No deferred tax asset has been recognised in respect of $28.8m (2022: $64.1m) of these losses.

Included in the unrecognised tax losses are losses of $17.3m (2022: $12.1m) that cannot be carried forward indefinitely. Of this
amount, $7.5m (2022: $3.2m) expires during the next five accounting periods. Other losses may be carried forward to future
periods.

The carrying amount of deferred tax assets is reviewed at each reporting date and recognised to the extent that it is
probable that there are sufficient taxable profits to allow all or part to be recovered. In assessing the probability of recovery,
the five-year cash flow forecast that has been used for goodwill impairment testing was used as a basis for determining the
probable taxable profits arising in each relevant jurisdiction. Of the $14.9m (2022: $10.2m) recognised in respect of tax losses,
$13.6m (2022: $7.3m) relates to a key jurisdiction. This includes amounts recognised arising from the Group’s uncertain tax
positions, where the Group typically has limited control over the timing of resolution.

At the reporting date, a deferred tax liability of $1.6m (2022: $0.9m) has been recognised relating to the unremitted earnings of
overseas subsidiaries. No deferred tax liability is recognised on temporary differences of $64.2m (2022: $60.6m) on unremitted
earnings of subsidiaries as the Group is able to control the reversal of these temporary differences and it is probable that they
will not reverse in the foreseeable future. The temporary differences represent only the unremitted earnings of those overseas
subsidiaries where remittance to the UK of those earnings may still result in a tax liability, principally as a result of dividend
withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate.

On 3 March 2021 the UK Government announced changes to the UK corporate tax system and an increase in tax rate
from the fiscal year 2023 to 25% from the currently enacted rate of 19%. This tax rate change was substantively enacted on
24 May 2021 and was, therefore, reflected in the closing UK deferred tax balances of the previous period, which resulted in
an increase to the value of the net UK deferred tax asset recorded in 2022. Deferred tax assets and liabilities are measured
at the tax rate expected to apply in the period in which the asset is realised or the liability is settled.

22. Provisions

At 4 April 2021

Charge/(credit) in the period

Utilisation of provision

Amounts acquired on business combination

Exchange differences

At 3 April 2022

Credit in the period

Utilisation of provision

Amounts acquired on business combination

Exchange differences

At 2 April 2023

Current liabilities

Non-current liabilities

Property
$’m

Restructuring
$’m

Other
$’m

Total
$’m

0.2

–

0.1

–

0.3

–

0.1

–

0.4

–

0.4

0.1

0.5

–

0.6

–

(0.6)

–

1.8

(0.1)

–

1.6

(0.6)

(0.1)

–

0.9

–

2.1

0.4

(0.1)

0.1

–

2.5

(0.6)

(0.7)

0.1

–

1.3

0.9

0.4

Restructuring
During March 2022 the Group commenced the closure of its Ta Hsing factory in China with production being transferred
to other sites within the Group. Following the communication to all those involved, a restructuring provision of $0.5m was
made to cover the redundancy and other associated exit costs. The closure was completed in the year and the provision was
fully utilised.

Other
Other provisions include the Directors’ best estimate, based upon past experience, of the Group’s liability under specific
product warranties and legal claims. The timing of the cash outflows with respect to these claims is uncertain. The Group
has a provision of $0.9m (2022: $0.9m) to cover potential costs of recall or warranty claims for products which are in the field
but where a specific issue has not been reported.

During the year the Group made additional office dilapidation provisions. These provisions relate to the RDS offices
acquired during the year and a new office being utilised by the Group located in Japan.

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s

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o
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a
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d
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d
2
0
2
3

156

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23. Share capital and share premium account

Allotted, called up and fully paid:

At 4 April 2021

Issue of new shares

At 3 April 2022

Issue of new shares (i)

At 2 April 2023

Ordinary
shares of
£0.25 each
Number

157,052,041

1,666,668

158,718,709

388,376

159,107,085

Par
value
$’m

Share
premium
$’m

62.0

0.5

62.5

0.2

62.7

60.9

–

60.9

(0.2)

60.7

Total
$’m

122.9

0.5

123.4

–

123.4

(i)

Shareholders were able to elect to receive ordinary shares in place of the final dividend of 2.4p per ordinary share (in relation to year
ended 3 April 2022) and the interim dividend of 1.3p (in relation to the current year) under the terms of the Company’s scrip dividend
scheme. This resulted in the issue of 377,615 and 10,761 new fully paid ordinary shares respectively (2022: nil).

The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at
meetings of the Company. The Company does not have an authorised share capital.

During the prior period the Company issued 1,666,668 ordinary shares to satisfy the vesting of the share awards granted
to the senior employees and/or former owners of Servatron and GTK as the businesses met the required operating profit
targets set out in the acquisition agreements.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

23. Share capital and share premium account continued

Under the terms of the Group’s various share schemes, the following rights to subscribe for ordinary shares are outstanding:

Date of grant

Option price (p) Exercise period

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0
2
3

Performance Share Plan

31 March 2016

1 December 2016

1 December 2017

11 December 2018

24 March 2019

Long Term Incentive Plan

10 September 2019

1 December 2019

11 December 2020

7 December 2021

21 December 2022

2 January 2023

Acquisition Retention Awards

31 July 2019

Deferred Bonus Plan

158

16 June 2021

26 August 2022

–

March 2019 – March 2026

December 2019 – December 2026

December 2020 – December 2027

December 2021 – December 2028

March 2022 – March 2029

Number of shares

2023

2022

140,737

223,505

200,000

545,000

150,000

227,461

407,642

530,000

600,000

300,000

September 2022 – September 2029

1,920,000

2,370,000

December 2022 – December 2029

December 2023 – December 2030

December 2024 – December 2031

December 2027 – December 2032

December 2028 – December 2032

December 2025 – December 2032

March 2020 – March 2027

June 2022

August 2023

305,000

941,000

941,925

1,852,500

424,500

–

68,678

437,500

961,000

944,425

–

966,666

97,011

–

9,565,345

7,841,705

For further details of the Group’s share option schemes, see note 29.

Under the FY2023 deferred share bonus plan, shares will be awarded to the executive management team in lieu of a cash
bonus. These will be issued in accordance with the terms of the deferred share bonus plan.

24. Own shares and non-distributable reserves

Own shares

At the beginning of the period

Sale of shares

Purchase of shares

At end of the period

2023
$’m

0.2

(4.2)

5.0

1.0

2022
$’m

3.3

(7.5)

4.4

0.2

The own shares reserve represents both the cost of shares in the Company purchased in the market and the nominal
share capital of shares in the Company issued to The Volex Group PLC Employees’ Share Trust to satisfy future share option
exercises under the Group’s share option schemes (see note 29).

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The number of ordinary shares held by The Volex Group PLC Employees’ Share Trust at 2 April 2023 was 233,978 (2022:
53,205). The market value of the shares as at 2 April 2023 was $0.6m (2022: $0.2m).

Unless and until the Company notifies a trustee of The Volex Group PLC Employees’ Share Trust, in respect to shares held
in the Trust in which a beneficial interest has not vested, rights to dividends in respect to the shares held in the Trust are
waived.

During the year 1,242,155 (2022: 3,645,040) shares were utilised on the exercise of share awards. During the year, the
Company purchased 1,422,928 shares (2022: 1,100,000) at a cost of $5.0m (2022: $4.4m) and issued zero new shares to the
Trust (2022: 1,666,668).

In December 2013, The Volex Group PLC Employees’ Share Trust sold 3,378,582 shares at £1.16 per share to the open market.
The average price of shares held by the Trust at the time was £0.70 with a number of the shares having been issued by Volex
plc to the Trust at nominal value. In accordance with the Accounting Standards, the difference between the sales price of £1.16
and the average share price of £0.70 was recorded as a non-distributable reserve, giving rise to the $2.5m non-distributable
reserve balance.

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25. Non-controlling interest

InYantra is a company incorporated in India. A 51% equity stake was acquired on 30 March 2022. Non-controlling interests
hold a 49% interest. Due to the timing of the acquisition no contribution to the Group income statement was recorded in
the prior period. Summarised financial information in respect of inYantra is set out below. The summarised information
below represents amounts before intra-group eliminations.

Summarised statement of financial position

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

Equity attributable to non-controlling interests

Summarised statement of comprehensive income

Revenue

Profit for the period

Other comprehensive expense for the period

Total comprehensive expense for the period

Summarised cash flow

Net cash used in operating activities

Net cash used in investing activities

Net cash generated from financing activities

Net decrease in cash and cash equivalents

26. Dividends

Dividends

Declared during the financial period:

Final – period ended 3 April 2022

Interim – period ended 2 April 2023

Final – period ended 4 April 2021

Interim – period ended 3 April 2022

2023
Total
$’m

Settled via
scrip
$’m

Dividend
per ordinary
share
(p)

2022
Total
$’m

Settled via
scrip
$’m

Dividend

per ordinary
share
(p)

4.6

2.5

–

7.1

1.4

–

1.4

2.4p

1.3p

–

4.7

2.5

7.2

–

2.2p

1.2p

The proposed final dividend of 2.6p per ordinary share based on the number of issued ordinary shares at 2 April 2023 is
subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial
statements. Based on shares in issue at 2 April 2023, this would equate to a final dividend of $5.1m.

2023
$’m

7.6

13.4

(4.6)

(0.7)

15.7

7.4

2022
$’m

10.3

13.5

(6.2)

(1.8)

15.8

7.4

2023
$’m

28.2

1.1

(1.2)

(0.1)

2023
$’m

(1.7)

(1.3)

–

(3.0)

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

27. Analysis of net debt

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2
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At 4 April 2021

Business combination

Cash flow

New leases entered into during the
year

Lease interest

PPP loan forgiveness

Exchange differences

Amortisation of debt issue costs

At 3 April 2022

Business combination

Cash flow

New leases entered into during the
year

Lease interest

Exchange differences

Amortisation of debt issue costs

At 2 April 2023

160

Cash
and cash
equivalents
$’m

36.5

5.3

(15.7)

–

(0.2)

–

25.9

0.4

(5.9)

–

0.3

–

20.7

Bank
loans
$’m

(38.1)

(1.1)

(65.9)

–

2.6

0.7

–

(101.8)

(0.7)

10.3

–

0.7

–

(91.5)

Factoring
$’m

Lease
liability
$’m

Debt issue
costs
$’m

(6.8)

–

6.0

–

0.1

–

(0.7)

–

0.7

–

(20.0)

(5.2)

5.2

(0.5)

(1.0)

–

0.6

–

(20.9)

(2.1)

7.5

(17.8)

(1.7)

0.2

–

(34.8)

1.1

–

2.5

–

(0.1)

(1.3)

2.2

–

0.5

–

(0.1)

(0.7)

1.9

Total
$’m

(27.3)

(1.0)

(67.9)

(0.5)

(1.0)

2.6

1.1

(1.3)

(95.3)

(2.4)

13.1

(17.8)

(1.7)

1.1

(0.7)

(103.7)

Debt issue costs relate to bank facility arrangement fees. In February 2023 the Group extended the facility by exercising the
first of its two one-year extension options, thereby extending the termination date to 10 February 2026. The $0.5m of costs
associated with the extension request were capitalised.

New leases entered into during the year primarily relate to expansions and renewals of factory leases across multiple sites
($8.8m), and investment in surface mount technology in North America ($8.7m).

During the prior year, $2.5m of professional fees were capitalised, $2.3m related to a new banking facility entered into during
February 2022 and $0.2m associated with executing the accordion on the previous facility. The refinancing resulted in a
write-off of $0.8m (see note 6).

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28. Notes to the statement of cash flows

Profit for the period

Adjustments for:

Finance income (note 5)

Finance costs (note 6)

Income tax expense (note 10)

Share of net profit from associates

Depreciation of property, plant and equipment (note 14)

Depreciation of right-of-use assets (note 15)

Amortisation of intangible assets (note 13)

Loss/(profit) on disposal of property, plant and equipment

Share-based payment charge (note 29)

PPP loan forgiveness (note 4)

Contingent consideration adjustments (note 4)

Decrease in provisions

Operating cash flow before movement in working capital

Increase in inventories

Increase in receivables

Increase in payables

Movement in working capital

Cash generated from operations

Cash generated from operations before adjusting operating items

Cash used by adjusting operating items

Taxation paid

Interest paid

Net cash generated from operating activities

Cash and cash equivalents

Cash and bank balances

Bank overdrafts

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2022
$’m

30.4

(0.3)

5.5

5.8

(0.4)

6.4

3.4

10.4

(0.2)

4.4

(2.6)

(0.2)

(1.7)

60.9

(28.1)

(14.2)

7.9

(34.4)

26.5

28.5

(2.0)

(6.5)

(1.5)

18.5

2022
$’m

29.1

(3.2)

25.9

2023
$’m

37.4

(0.4)

9.5

8.4

(1.1)

8.2

4.8

10.2

0.1

3.7

–

(1.3)

(1.1)

78.4

(0.2)

(15.4)

7.0

(8.6)

69.8

72.0

(2.2)

(7.9)

(6.2)

55.7

2023
$’m

22.5

(1.8)

20.7

Cash and cash equivalents comprise cash held by the Group, short-term bank deposits with an original maturity of three
months or less from inception and bank overdrafts. The carrying amount of these assets approximates their fair value.
Included within cash and cash equivalents is $0.1m (2022: $0.3m) held in trust, which can only be used for Volex employees.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

29. Share-based payments

The Group has four equity-settled share-based payment arrangements in operation.

Long Term Incentive Plan (‘LTIP’)
The LTIP is a discretionary long-term incentive scheme for Executive Directors and senior managers. It provides for the
award of nominal value options, which vest after at least three years, subject to performance conditions. Options issued
under the LTIP are exercisable between three and ten years from the date of grant, subject to the continued employment
of the participant and achievement of performance targets. All awards under the LTIP are nil cost. Full details of how the
scheme operates are explained on page 109 of the Remuneration Committee Report.

Performance Share Plan (‘PSP’)
The PSP scheme was replaced by the Long Term Incentive Plan (‘LTIP’) during 2020. The PSP is a discretionary long-term
incentive scheme for Executive Directors and senior managers. It provides for the award of nominal value options which
vest after at least three years, subject to performance conditions. Options issued under the PSP are exercisable between
three and ten years from the date of grant, subject to the continued employment of the participant and achievement of
performance targets. All awards under the PSP have an exercise price of 25p, which is equivalent to the nominal value of the
underlying ordinary shares.

Deferred Bonus Plan (‘DBP’)
The DBP is for the executive management team. A percentage of any cash bonus is deferred to shares and held in trust for
a period, which is determined by the Remuneration Committee. The percentage of any cash bonus to be deferred is at the
discretion of the Remuneration Committee. The only vesting condition is continuing employment.

Acquisition Retention Awards (‘ARA’)
The ARA were used to incentivise and retain key employees in acquired businesses who are deemed to deliver a significant
contribution to the integration of the acquired business into the Group and have an important role in the continuing
success of the acquired business. These awards have vesting periods that are determined by the specific circumstances of
the acquisition and vest based on continued employment as well as performance measures that relate to the performance
of the Group or the acquired business. Awards consist of shares or the right to acquire shares for a nominal value.

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Details of the share awards outstanding and the weighted average exercise price of those awards are as follows:

PSP
Number

LTIP
Number

DBP
Number

ARA
Number

Total
Number

Outstanding at 4 April 2021

3,866,382

3,788,500

202,097

4,666,667

12,523,646

Exercisable at the 4 April 2021

1,726,382

–

1,726,382

Outstanding at 5 April 2021

3,866,382

3,788,500

202,097

4,666,667

12,523,646

Granted during the period

–

950,725

97,011

–

1,047,736

Exercised during the period

(1,801,279)

–

(202,097)

(1,666,668)

(3,670,044)

Lapsed during the period

–

(26,300)

–

(2,033,333)

(2,059,633)

Outstanding at 3 April 2022

2,065,103

4,712,925

97,011

966,666

7,841,705

Exercisable at the 3 April 2022

2,065,103

–

Outstanding at 4 April 2022

2,065,103

4,712,925

Granted during the period

–

4,395,361

Exercised during the period

(555,000)

(833,361)

–

97,011

68,678

(97,011)

–

2,065,103

966,666

7,841,705

–

4,464,039

(1,485,372)

Lapsed during the period

(250,861)

(37,500)

–

(966,666)

(1,255,027)

Outstanding at 2 April 2023

1,259,242

8,237,425

68,678

Exercisable at the 2 April 2023

1,259,242

2,225,000

–

9,565,345

3,484,242

Weighted
average
exercise
price (p)

–

(10)

–

(9)

–

Included within the LTIP awards are 3,097,500 (2022: 3,547,500) options awarded to Directors and senior leadership, which
are subject to an additional multiplier effect whereby the awards can double depending upon the performance of the
Volex share price relative to peers. Full details of how the scheme operates are explained on page 109 of the Remuneration
Committee Report. Of the share awards that lapsed during the period, 288,361 (2022: 1,059,633) lapsed in respect of leavers
and 966,666 (2022: 1,000,000) lapsed due to failure to meet performance conditions.

The awards outstanding at 2 April 2023 had a weighted average remaining contractual life of seven years (2022: eight years).

Of the 9,565,345 awards outstanding at 2 April 2023, 1,259,242 had an exercise price of £0.25 and 8,306,103 had an exercise
price of £nil.

Of the 7,841,705 awards outstanding at 3 April 2022, 2,065,103 had an exercise price of £0.25 and 5,776,602 had an exercise
price of £nil.

The aggregate of the estimated fair values of the options granted during the period was $11.5m (2022: $4.6m).

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29. Share-based payments continued

Of the awards granted during the period, 68,678 were deferred bonus plan awards with an exercise price of £nil, a service
period of one year and no performance conditions. The remaining 4,395,361 awards were long term incentive plan awards
with a nil exercise price. Of these awards, Executive Directors and key senior managers were awarded 3,705,000 options
with service period of five and six years with performance conditions based on the business performance linked to the
Group’s five-year plan. The remaining options were awarded to individuals which require a service period of three years with
performance conditions based on the business performance and total shareholder return.

The fair value of awards granted in the period was calculated at the date of grant using a Monte Carlo binomial model or a
Black–Scholes model, depending on the vesting criteria of each award. Market-based performance conditions are taken into
account in the calculation of the fair values. Valuation model inputs were as follows:

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Weighted average share price

Weighted average exercise price

Expected volatility

Expected life (years)

Risk-free rate

Expected dividends

2023
LTIP

£2.60

£nil

49%

3.2%

1.4%

2022
LTIP

£3.56

£nil

52%

0.4%

1.0%

Expected volatility was determined with reference to historical volatility of the Group’s share price over the previous three
years. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.

During the period, the total expense recognised for share-based payment arrangements was as follows:

PSP

LTIP

DBP

ARA

Share-based payment charge

Employers’ tax charge in relation to share awards

30. Retirement benefit obligations

2023
$’m

–

4.2

0.4

(0.9)

3.7

–

3.7

2022
$’m

163

0.4

3.3

0.1

0.6

4.4

–

4.4

Defined contribution schemes
The Group operates a number of defined contribution pension schemes. Contributions to the defined contribution
schemes are charged to the income statement as they fall due. The Group has no further obligations once the contributions
have been made.

The total cost charged to the Group’s income statement in the period was $0.5m (2022: $0.4m).

Defined benefit schemes
The Group operates five defined benefit plans.

Volex Executive Pension Scheme
Volex plc (the ‘Company’) operates a defined benefit pension arrangement called the Volex Executive Pension Scheme (the
‘Scheme’). The Scheme provides benefits based on final salary and length of service on retirement, leaving service or death.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is
carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the
process, the Company must agree with the Trustees of the Scheme the contributions to be paid to meet the Statutory
Funding Objective. The future contributions required to meet the Statutory Funding Objective do not currently affect the
balance sheet of the Scheme in these financial statements.

The most recent comprehensive actuarial valuation of the Scheme was carried out as at 31 July 2019. An actuarial valuation
as at 31 July 2022 is currently in progress. In the event that the valuation reveals a larger deficit than expected, the Company
may be required to increase contributions above those set out in the existing Schedule of Contributions. Conversely, if the
position is better than expected, it is possible that contributions may be reduced.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

30. Retirement benefit obligations continued

In accordance with the Schedule of Contributions dated September 2020 the Company has agreed to pay contributions of
£0.8m p.a. (payable in quarterly instalments) over the period to 30 September 2025.

The Scheme is managed by a Trustee Company, the board of which is appointed in part by the Company and in part from
elections by members of the Scheme. The Trustees have responsibility for obtaining valuations of the fund, administering
benefit payments and investing the Scheme’s assets. The Trustee delegates some of these functions to their professional
advisers where appropriate.

The Scheme exposes the Company to a number of risks:

f Investment risk. The Scheme holds investments in asset classes, such as equities, which have volatile market values

and while these assets are expected to provide the real returns over the long-term, the short-term volatility can cause
additional funding to be required if the deficit increases.

f Interest rate risk. The Scheme’s liabilities are assessed using market yields on high quality corporate bonds to discount
the liabilities. As the Scheme holds assets such as equities, the value of the assets and liabilities may not move in the
same way.

f Inflation risk. A significant proportion of the benefits under the Scheme are linked to inflation. Although the Scheme’s

assets are expected to provide a good hedge against inflation over the long term, movements over the short term could
lead to deficits emerging.

f Mortality risk. In the event that members live longer than assumed deficits may emerge in the Scheme.

There were no plan amendments, curtailments or settlements during the period.

The key assumptions utilised are:

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Discount rate

Future pension increases

Inflation assumption (RPI)

Inflation assumption (CPI)

The following mortality assumptions have been made:

Future life expectancy for a pensioner currently aged 65

– Male

– Female

Future life expectancy at age 65 for a non-pensioner currently aged 55

– Male

– Female

Valuation at

2023

4.7%

3.0%

3.6%

3.1%

2023
Years

22.6

24.2

23.1

24.9

2022

2.7%

3.4%

4.0%

3.6%

2022
Years

22.6

24.2

23.2

24.9

Significant actuarial assumptions for the determination of the defined benefit obligations are the discount rate, inflation
and life expectancy. The sensitivity analysis below has been determined based on reasonably possible changes of the
assumptions occurring at the end of the reporting period, assuming that all other assumptions are held constant:

Assumption

Discount rate

Inflation

Life expectancy

Change in assumption

Impact on scheme liabilities

Increase/decrease by 0.5%

Increase/decrease by 1 year

($0.6m)/$0.7m

$0.3m/($0.3m)

$0.6m/($0.6m)

In reality, one might expect interrelationships between the assumptions, especially between discount rate and inflation. The
above analysis does not take the effect of these interrelationships into account.

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30. Retirement benefit obligations continued

Amounts recognised in income statement

Interest cost

Expected return on scheme assets

Finance costs

2023
$’m

(0.5)

0.5

(0.0)

No other amounts have been recognised in the income statement in the current or prior year.

An actuarial movement of $nil (2022: gain of $0.6m) has been reported in the statement of comprehensive income.

Cumulative actuarial losses recognised in equity

At the beginning of the period

Net actuarial gains recognised in the period

At the end of the period

Amounts recognised in the statement of financial position

Fair value of scheme assets

Present value of defined benefit obligations

Deficit in scheme recognised in the statement of financial position

Current liabilities

Non-current liabilities

2023
$’m

(4.3)

–

(4.3)

2023
$’m

12.8

(13.1)

(0.3)

–

(0.3)

The Group has contributed $1.0m to the defined benefit pension plan in the period ended 2 April 2023 (2022: $1.1m).

Movements in the present value of defined benefit obligations

At the beginning of the period

Interest cost

Experience loss on liabilities

Remeasurement gain

Benefits paid

Foreign exchange

At the end of the period

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2022
$’m

(0.4)

0.3

(0.1)

2022
$’m

(4.9)

0.6

(4.3)

2022
$’m

17.5

(18.9)

(1.4)

(1.1)

(0.3)

(1.4)

2022
$’m

(22.0)

(0.4)

–

1.2

1.1

2023
$’m

(18.9)

(0.5)

0.3

3.7

1.1

1.2

(13.1)

(18.9)

The average duration of the Scheme’s defined benefit obligation is approximately 10 years (2022: 15 years).

Movements in the fair value of scheme assets

At the beginning of the period

Interest on assets

Actuarial losses

Contributions from the sponsoring company

Benefits paid

Foreign exchange

At the end of the period

2023
$’m

17.5

0.5

(4.0)

1.0

(1.1)

12.8

2022
$’m

18.8

0.3

(0.6)

1.1

(1.2)

(0.9)

17.5

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

30. Retirement benefit obligations continued

Assets

Asset category

Target return assets1

Corporate Bonds2

Liability Driven Investments1

Cash

Total

2023
$’m

7.5

0.7

3.9

0.7

12.8

2022
$’m

8.7

3.7

4.5

0.6

17.5

1 Targeted return and LDI – Dynamic Diversified Growth Fund and the Liability Driven Investment fund are pooled investment vehicles
whereby the Scheme purchases units in that fund which are not quoted. The funds invest in a variety of assets including quoted/listed
stocks and shares and bonds, which are valued by the investment manager using the latest available prices. The Scheme itself is not
directly the owner of these underlying assets.

2 Corporate bonds – This is also a pooled investment vehicle whereby the Scheme purchases units of the fund. The fund invests in UK

investment grade corporate bonds with maturities in excess of 10 years. The fund is valued by the investment manager using the latest
available prices and is benchmarked against the iBoxx Sterling Non-Gilts Over 10 Year Index. The Scheme itself is not directly the owner of
these underlying assets.

None of the fair values of the assets shown above include any of the Company’s own financial instruments or any property
occupied or other assets used by the Company (2022: nil).

The actual return on scheme assets for the period was a loss of $3.5m (2022: loss of $0.3m).

The estimated amount of contributions expected to be paid to the Scheme during the 52 weeks to 31 March 2024 is $1.1m
(2022: $1.1m).

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0
2
3

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Overseas schemes
In Indonesia, the Group operates an unfunded defined benefit scheme. The scheme requires continuous employment with
a lump sum payable upon retirement. The actuarial liability as at 2 April 2023 has been calculated as $0.8m (2022: $0.9m) by
an external actuary.

DE-KA also operates an unfunded defined benefit scheme. The scheme requires continuous employment with a lump sum
payable upon retirement. The actuarial liability as at 2 April 2023 has been calculated as $1.3m (2022: $0.5m) by an external
actuary. The Group also operates unfunded schemes in Mexico and India.

31. Financial instruments

Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximising the return to shareholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 19, cash and cash
equivalents and equity attributable to the owners of the parent, comprising issued capital, reserves and retained earnings
as contained in the statement of changes in equity.

The Board reviews the capital structure on a regular basis, including facility headroom, forecast working capital and capital
expenditure requirements.

The Group has a $200 million committed facility, together with an additional $100 million uncommitted accordion. The
facility comprises a $125 million revolving credit facility (‘RCF’) and a $75 million term loan. As at the 2 April 2023 the term
loans of $75m were fully drawn and $16.5m (2022: $25.6m) was also utilised under the revolving credit facility. The Group also
operates a cashpool facility, which is denominated in a variety of currencies. As at 2 April 2023, there was a $1.7m overdraft
(2022: $3.2m). The average combined utilisation of the cashpool during the period was $2.5m (2022: $1.5m). The three-year
facility includes two one-year extensions and in February 2023 the Group utilised the first of these extensions, leading to a
new termination date of 10 February 2026.

Included in note 19 is a description of undrawn facilities as at the reporting date.

The terms of the RCF require the Group to perform quarterly financial covenant calculations with respect to leverage
(adjusted total debt to adjusted rolling 12-month EBITDA) and interest cover (adjusted rolling 12-month EBITDA to adjusted
rolling 12-month interest). Breach of these covenants could result in cancellation of the facility. The Group was compliant
with these covenants during the year and has continued to operate within these covenants in the period from 2 April 2023
to the date of issue of these financial statements.

The Board is, therefore, confident that the combination of the above facility and the cash on hand at the end of the year
provides adequate liquidity headroom for the successful execution of the Group’s operations.

The Group is not subject to externally imposed capital requirements.

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31. Financial instruments continued

Financial instruments
The Group’s principal financial instruments comprise bank borrowings and overdrafts, cash and short-term deposits, trade
and other receivables and trade and other payables. The Group also enters into derivative transactions, principally forward
copper contracts to manage the commodity price risk arising from its operations and forward currency contracts to
manage the currency risks. Set out below is a comparison by category of carrying amounts and fair values of all the Group’s
financial instruments that are carried in the financial statements. Except as detailed below, the Directors consider that the
carrying amounts of the financial assets and financial liabilities recorded at amortised cost approximate their fair values.

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Financial assets – loans and receivables

Cash

Trade and other receivables

Financial liabilities – amortised cost

Interest-bearing loans and borrowings

Lease liabilities

Trade and other payables

Financial derivatives for which hedge accounting has been
applied

Derivative financial instruments

Financial derivatives for which hedge accounting has not been
applied

Derivative financial instruments

Book value
2023
$’m

Book value
2022
$’m

Fair value
2023
$’m

Fair value
2022
$’m

22.5

136.2

(91.4)

(34.8)

(107.6)

1.8

–

29.1

123.8

(103.5)

(20.9)

(115.5)

0.3

–

22.5

136.2

(93.3)

(34.8)

(107.6)

1.8

–

29.1

123.8

(105.7)

(20.9)

(115.5)

0.3

–

167

The fair values of the financial derivatives above are categorised within Level 2 of the fair value hierarchy on the basis that
their fair value has been calculated by management using inputs that are observable in active markets that are related to
the individual asset or liability. Included within trade and other payables is contingent consideration, which is categorised as
Level 3 using inputs that are not based on observable market data.

Financial risk management
Activities related to financing, monitoring and managing the financial risks relating to the operations of the Group are
co-ordinated centrally. These risks include market risk (interest rate risk, currency risk and commodity price risk), credit risk
and liquidity risk.

The Group seeks to minimise these risks by using derivative financial instruments to hedge these risk exposures and
external borrowings denominated in currencies that match the net asset currency profile of the Group. The Board reviews
and agrees policies for managing these risks and they are summarised below. The Group also monitors the market price risk
arising from all financial instruments. It is, and has been throughout the periods under review, the Group’s policy that no
trading in financial instruments shall be undertaken.

Market risk
The Group’s activities expose it primarily to the financial risks of changes in interest rates, foreign currency exchange rates
and copper commodity prices.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

31. Financial instruments continued

Interest rate risk
The Group’s interest rate risk arises principally from borrowings issued at variable rates which expose the Group to cash flow
interest rate risk. The Group holds 10% cumulative preference shares with its associate, Kepler SignalTek Ltd. The following
table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest rate risk:

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0
2
3

2023

Fixed rate

Trade and other receivables

Bank loans and borrowings

Floating rate

Cash assets

Bank loans and borrowings

2022

Fixed rate

Trade and other receivables

Bank loans and borrowings

Floating rate

Cash assets

168

Bank loans and borrowings

Within
1 year
$’m

1–2
years
$’m

1.7

–

22.5

(1.8)

–

Within
1 year
$’m

1–2
years
$’m

2.0

(1.1)

29.1

(3.9)

–

2–3
years
$’m

–

(50.0)

–

(41.5)

2–3
years
$’m

–

(100.7)

3–4
years
$’m

4–5
years
$’m

More than
5 years
$’m

–

3–4
years
$’m

4–5
years
$’m

More than
5 years
$’m

–

Total
$’m

1.7

(50.0)

22.5

(43.3)

Total
$’m

2.0

(1.1)

29.1

(104.6)

Interest rate and sensitivity
The Group manages its exposure to interest rate risk by maintaining an appropriate mix between fixed and floating rate
borrowings. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring
the most cost-effective hedging strategies are applied.

Management regularly reviews the interest rate risk exposure. The Group is exposed to floating rate interest on its RCF
borrowings at a margin of 2.1% (2022: 2.1%) above SOFR (2022: SOFR). In September 2022 an interest rate swap was entered
into following market evaluation, which has enabled the Group to fix the interest rate paid on a notional value of $50m.

Had interest rates moved 1% in the period, and all other variables were held constant, including the impact of the interest
rate swap, Group profit before tax would have moved by $0.8m (2022: $0.6m). A 1% interest rate sensitivity test has been
performed since this represents the Directors’ assessment of a reasonably possible change in interest rates.

Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the euro, Chinese renminbi and pound sterling. Foreign exchange risk arises from future
commercial transactions, recognised assets and liabilities and net investments in foreign operations.

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.
The Group’s policy is to hedge its related translation exposures through the designation of certain amounts of its foreign
currency denominated debt as a hedging instrument.

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31. Financial instruments continued

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
reporting date are as follows:

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USD

Euro

Chinese renminbi

Pound sterling

Indian rupee

Other

Foreign currency sensitivity

Liabilities

Assets

2023
$’m

136.3

25.5

19.7

4.5

5.1

9.8

2022
$’m

127.8

36.8

24.6

15.1

6.4

19.9

2023
$’m

93.0

35.6

19.9

6.3

3.2

11.5

2022
$’m

92.8

32.7

15.9

1.1

6.9

4.0

The following table details the Group’s sensitivity to a 10% increase and decrease in US dollar against the relevant foreign
currencies. The 10% rate used represents management’s assessment of the reasonably possible change in foreign exchange
rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes both external
loans and loans to foreign operations within the Group where the denomination of the loan is in a currency other than the
currency of the lender or the borrower. A 10% change in foreign exchange rate sensitivity test has been performed since this
represents the Directors’ assessment of a reasonably possible change in foreign exchange rates.

Pound sterling impact

Euro impact

Chinese renminbi impact

2023
$’m

2022
$’m

2023
$’m

2022
$’m

2023
$’m

2022
$’m

169

10% depreciation of US dollar against
foreign currency

(i) Profit before tax

(ii) Equity*

10% appreciation of US dollar against
foreign currency

(i) Profit before tax

(ii) Equity*

(2.0)

2.8

1.6

(2.3)

(0.1)

(4.3)

0.1

3.5

(0.3)

1.0

0.2

(0.8)

0.1

(0.6)

(0.1)

0.5

(1.1)

–

1.0

–

(1.2)

–

1.0

–

i. The main exposure impacting profit before tax is on Pound sterling monetary liabilities in the Group at the reporting date.

ii.

This is mainly attributable to changes in the carrying value of intercompany loans for which settlement is not planned and external
borrowing designated as a hedging instrument.

* Excludes any deferred tax impact.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

31. Financial instruments continued

Copper commodity price risk
Copper price volatility is the single largest commodity price exposure facing the Group. Many of the Group’s products, in
particular power cords used to manufacture the Group’s power products, are manufactured from components that contain
significant amounts of copper. Where possible, the Group will pass on copper price movements to its customers. In order
to mitigate the remaining volatility associated with copper, the Group has entered into arrangements with its key suppliers
to purchase copper. Coupled with these purchases, the Group has entered into a number of contracts with financial
institutions, which are linked to the average copper price as published by the London Metal Exchange (‘LME’). These
contracts have been deemed cash flow hedges of forecast future copper purchases. At the reporting date, the open copper
contracts are as follows:

Copper cash flow hedges
Contracted copper price

$7,000–$7,500

$7,500–$8,000

$8,000–$8,500

$8,500–$9,000

$9,000–$9,500

$9,500–$10,000

2023

2022

Contracted
volume
(MT)

Fair value
$’m

Contracted
volume
(MT)

Fair value
$’m

125

392

–

100

–

657

0.1

–

0.1

–

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2
3

All contracts expire within 12 months of 2 April 2023.

170

Liquidity risk
The Group manages liquidity risk by maintaining adequate banking facilities, regular monitoring of forecast and actual cash
flows and matching the maturity profiles of financial assets and liabilities. Included in note 19 is a description of undrawn
facilities as at the reporting date.

The following table analyses the Group’s financial liabilities into relevant maturity groupings to show the timing of cash
flows associated with the financial liabilities from the reporting date to the contracted maturity date. The amounts
disclosed represent the contracted undiscounted cash flows (based on the earliest date on which the Group may be
required to pay).

2023

Non-derivative financial liabilities

Trade and other payables

Bank overdrafts and loans

Lease liabilities

Derivative financial liabilities

Carrying
amount
$’m

Contractual
cash flows
$’m

Within
1 year
$’m

(107.6)

(91.4)

(34.8)

(107.6)

(93.3)

(37.6)

(107.1)

(1.8)

(16.7)

1–2
years
$’m

(0.3)

–

(6.6)

2–5
years
$’m

More than
5 years
$’m

(0.1)

(91.5)

(10.8)

(0.1)

–

(3.5)

Derivative financial instruments

–

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Non-derivative financial liabilities

Trade and other payables

Bank overdrafts and loans

Lease liabilities

Derivative financial liabilities

Carrying
amount
$’m

Contractual
cash flows
$’m

(115.5)

(103.5)

(20.9)

(115.5)

(105.7)

(24.2)

Within
1 year
$’m

(115.3)

(5.0)

(4.7)

1–2
years
$’m

(0.2)

–

(11.9)

Derivative financial instruments

(0.1)

–

2–5
years
$’m

More than
5 years
$’m

–

(100.7)

(3.5)

–

(4.1)

–

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31. Financial instruments continued

Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables. Credit risk refers to the risk
that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

Bank and cash balances comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less. The carrying amount of these assets approximates to their fair value. The credit risk on these assets is
limited because the counterparties are predominantly financial institutions with investment-grade credit ratings assigned
by international credit rating agencies.

The Group’s credit risk is, therefore, primarily attributable to its trade receivables. The Group’s customers are predominantly large
blue chip OEMs, contract equipment manufacturers and distributors. The Group regularly reviews the creditworthiness of
significant customers and credit references are sought for major new customers where relevant. The Board recognises that credit
risk is a feature of all businesses, especially international businesses. However, it believes that all reasonable steps to mitigate
any loss are taken.

The net amount of trade receivables reflects the maximum credit exposure to the Group. No other guarantees or security
have been given. For further information on the credit risk associated with trade and other receivables, see note 18.

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32. Contingent liabilities

As a global Group, subsidiary companies, in the normal course of business, engage in significant levels of cross-border
trading. The customs, duties and sales tax regulations associated with these transactions are complex and often subject to
interpretation. While the Group places considerable emphasis on compliance with such regulations, including appropriate
use of external legal advisers, full compliance with all customs, duty and sales tax regulations cannot be guaranteed.

Through the normal course of business, the Group provides manufacturing warranties to its customers and assurances
that its products meet the required safety and testing standards. When the Group is notified that there is a fault with one
of its products, the Group will provide a rigorous review of the defective product and its associated manufacturing process
and, if found at fault and contractually liable, will provide for costs associated with recall and repair as well as rectify the
manufacturing process or seek recompense from its supplier. The Group holds a provision to cover potential costs of recall
or warranty claims for products which are in the field but where a specific issue has not been reported.

171

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other Group companies,
the Company considers these to be insurance arrangements and treats the guarantee contract as a contingent liability
until such time as it becomes probable that the Company will be required to make a payment under the guarantee. At the
period end there were no outstanding guarantees (2022: none).

33. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this section of the note.

The Group’s other related party transactions were the remuneration of key management personnel (refer to note 9). Details
of Directors’ remuneration for the period are provided in the Remuneration Committee Report on page 108. As explained
in note 16, the Group has a 27.4% interest in Kepler SignalTek Ltd, which is accounted for as an associate. The Group initially
invested $2.0m ($1.7m preference shares and $0.3m equity investment). During the period, $0.35m of preference shares
were repaid (2022: $0.03m). The Group accrued financial income of $0.2m on the preference shares (2022: $0.2m). In the
prior period $0.25m of preference shares were converted into shares. The balance due from the associate as at the period
end date was $1.7m (2022: $2.0m).

The Group also has a 43% interest in Volex-Jem Co. Ltd. The Group did not transact with the entity during the current or
prior periods. The balance due to the associate as at the period end date was $0.1m (2022: $0.1m).

34. Events after the balance sheet date

There are no disclosable events after the balance sheet date.

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Notes to the Consolidated Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

35. Business combinations

Review Display Systems
On 28 October 2022 the Group completed the acquisition of 100% of the shareholding of GSRG Holdings Limited (‘GSRG’),
the holding company for Review Display Systems Limited (‘RDS’) and two other subsidiaries. RDS is a UK-based specialist
distribution company focused on the design and manufacture of electronic touchscreen displays, embedded solutions and
IoT solutions.

RDS and the other entities in the group were acquired for initial cash consideration of $5.5m funded from the Group’s
existing debt facilities. As part of the acquisition additional payments of up to $3.4m are payable depending upon the
EBITDA performance of the business over the two years post-acquisition. In accordance with IFRS 3, this is accounted for as
remuneration rather than deferred or contingent consideration due to the ongoing service conditions. An expense of $0.9m
has been recorded in adjusting items related to this post-acquisition performance.

The provisional fair value amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set
out in the table below:

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2
0
2
3

Identifiable intangible assets

Property, plant and equipment

Right-of-use asset

Inventories

Trade receivables

Trade payables

Other debtors and creditors

172

Loans

Provisions

Cash

Deferred taxes

Lease liabilities

Total identifiable assets

Goodwill

Consideration

Provisional
Fair Value
$’m

1.8

0.1

2.1

2.0

2.4

(0.5)

(1.0)

(0.7)

(0.1)

0.4

(0.4)

(2.1)

4.0

1.5

5.5

An exercise has been conducted to assess the provisional fair value of assets and liabilities assumed. This exercise identified
customer relationships and order backlog intangible assets.

The fair value adjustments are provisional and will be finalised within 12 months of the acquisition date. Any resulting
changes in the fair values will have an impact on the acquisition accounting and will result in a reallocation between the
assets and goodwill and a possible adjustment to the amortisation charge shown in the income statement.

The provisional goodwill balance recognised above includes certain intangible assets that cannot be separately identified
and measured due to their nature. This includes control over the acquired business, the skills and experience of the
assembled workforce and the anticipated synergies arising on integration. None of the goodwill recognised is expected to
be deductible for income tax purposes.

In FY2023, the entities acquired contributed $5.7m to Group revenue and $0.6m to adjusted operating profit. Associated
acquisition costs of $0.2m and intangible asset amortisation of $0.4m have both been expensed as adjusting items in the
period.

If these entities had been acquired at the beginning of the year, they would have contributed revenues of $14.5m and
operating profit of $1.9m to the results of the Group.

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35. Business combinations continued

Net cash outflows in respect of acquisitions comprises:

Net cash outflow on acquisitions

Cash consideration
– RDS

Total cash consideration
Less: cash and cash equivalents acquired

– RDS

Net cash outflow

Payment of deferred and contingent consideration
– DE-KA
– TC
– inYantra

Net cash outflow

$’m

5.5

0.4

5.1

1.0
1.1
5.0

7.1

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2
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Company Statement of Financial Position
As at 2 April 2023 (3 April 2022)

Non-current assets

Other intangible assets

Right-of-use assets

Investments

Derivative financial instruments

Deferred tax asset

Current assets

Inventories

Trade receivables

Other receivables

Derivative financial instruments

Cash and bank balances

Total assets

Current liabilities

Borrowings

Trade payables

Other payables

Lease liability

Provisions

Derivative financial instruments

Retirement benefit obligation

Net current assets

Non-current liabilities

Borrowings

Other payables

Retirement benefit obligation

Total liabilities

Net assets

Equity attributable to owners of the parent

Share capital

Share premium account

Hedging and translation reserve

Merger reserve

Retained earnings

Total equity

Company

2023
£’m

2022
£’m

Notes

0.1

191.8

0.7

10.2

202.9

4.5

14.8

11.0

0.7

0.1

31.1

234.0

1.7

0.3

24.0

0.1

–

0.3

26.4

4.7

72.5

2.8

–

75.3

101.7

132.3

39.8

44.2

(2.7)

8.2

42.8

132.3

–

0.1

191.3

–

8.0

199.4

4.6

9.6

16.2

0.3

0.1

30.8

230.2

2.3

0.7

23.0

0.1

0.4

0.1

0.8

27.4

3.4

75.1

2.8

0.2

78.1

105.5

124.7

39.7

44.3

(3.4)

8.2

35.9

124.7

The notes on pages 176 to 187 are an integral part of these financial statements. The profit after tax for the period of the
Company amounted to £9.8m (2022: loss of £0.1m). The financial statements on pages 174 to 175 of Volex plc (company
number: 158956) were approved by the Board of Directors and authorised for issue on 21 June 2023. They were signed on its
behalf by:

Nathaniel Rothschild
Executive Chairman

Jon Boaden
Chief Financial Officer

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Company Statement of Changes in Equity
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Share
premium
account
£’m

Hedging and
translation
reserve
£’m

Notes

Balance at 5 April 2021

Loss for the period

Other comprehensive
(expense)/income for the period

Total comprehensive
(expense)/income for the period

Shares issued

Dividend paid

Credit to equity for equity-settled
share-based payments

Tax effect of share options

Balance at 3 April 2022

Profit for the period

Other comprehensive income
for the period

Total comprehensive income for
the period

Dividend paid

Scrip dividend related share
issue

Credit to equity for equity-settled
share-based payments

Tax effect of share options

Balance at 2 April 2023

Share
capital
£’m

39.3

–

0.4

–

44.3

–

39.7

44.3

–

0.1

–

(0.1)

–

Merger
reserve
£’m

8.2

–

8.2

–

(3.3)

–

(0.1)

–

(3.4)

–

0.7

–

39.8

44.2

(2.7)

8.2

Retained
earnings
£’m

37.8

(0.1)

0.4

0.3

(0.4)

(5.3)

3.2

0.3

35.9

9.8

–

9.8

(5.9)

1.2

1.9

(0.1)

42.8

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Total
equity
£’m

126.3

(0.1)

0.3

0.2

–

(5.3)

3.2

0.3

124.7

9.8

0.7

10.5

(5.9)

1.2

1.9

(0.1)

132.3

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

1. General Information

Volex plc (‘the Company’) is a public company limited by shares domiciled and incorporated in the United Kingdom
under the Companies Act 2006. Its shares are listed on AIM, a market on the London Stock Exchange. The address of the
registered office is given on page 191.

The principal activities of the Company are the manufacture and sale of power and data cables, and to act as the ultimate
holding company of the Volex Group.

2. Significant accounting policies

2.1 Basis of preparation
The significant accounting policies applied in the presentation of these individual financial statements are set out below.
These policies have been applied consistently to all the periods presented, unless otherwise stated.

The parent company financial statements are presented in pound sterling, which is also the functional currency of the
Company.

The separate financial statements of the Company are drawn up in accordance with the Companies Act 2006 and Financial
Reporting Standard 101 ‘Reduced Disclosure Framework’, (‘FRS 101’). The Company will continue to prepare its financial
statements in accordance with FRS 101 on an ongoing basis until such time as it notifies shareholders of any change to its
chosen accounting framework.

The Company financial statements have been prepared using the historical cost convention, as modified by the revaluation
of certain financial assets and financial liabilities and in accordance with the UK Companies Act 2006.

The following exemptions available under FRS 101 have been applied:

f Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based Payment’ (details of the number and weighted-average exercise

prices of share options, and how the fair value of goods or services received was determined);

f IFRS 7 ‘Financial Instruments: Disclosures’;

f Paragraph 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used for fair value

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176

measurement of assets and liabilities);

f Paragraph 38 of IAS 1 ‘Presentation of financial statements’ comparative information requirements in respect of

paragraph 79(a)(iv) of IAS 1;

f Paragraph 118(e) of IAS 38, ‘Intangible assets’ (reconciliations between the carrying amount at the beginning and end of

the period).

The following paragraphs of IAS 1 ‘Presentation of financial statements’:

− 10(d) (statement of cash flows);

− 16 (statement of compliance with all IFRS);

− 38A (requirement for minimum of two primary statements, including cash flow statements);

− 38B–D (additional comparative information);

− 111 (cash flow statement information); and

− 134–136 (capital management disclosures).

f IAS 7 ‘Statement of cash flows’;

f Paragraph 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the
disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective);

f The requirements in IAS 24 ‘Related party disclosures’ to disclose related party transactions entered into between two or

more members of a group; and

f Paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases.

The Company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the parent
Company statement of comprehensive income (and separate income statement). The profit for the parent Company for the
period was £9.8m (2022: loss of £0.1m).

There have been no new or amended accounting standards or interpretations adopted during the year that have a
significant impact on the financial statements.

2.2 Going concern
The Company’s financial statements have been prepared on the going concern basis, which contemplates the continuity of
normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. Refer
to note 2 of the Group financial statements on page 131 for further information on the going concern assessment.

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2. Significant accounting policies continued

2.3 Revenue recognition
Revenue is recognised in accordance with the satisfaction of performance obligations of contracts. The majority of the
Company’s contracts have just one performance obligation, which is the delivery of goods, which under IFRS 15 ‘Revenue
from contracts with customers’ is recognised at a single point, on delivery or pick-up depending on the agreed terms with
the customer.

This is normally when control of the goods or services are transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled in exchange for those goods or services.

The Company has concluded that it is the principal in its revenue arrangements. Revenue is measured at the fair value of
the consideration received or receivable for goods and services provided in the normal course of business, net of discounts,
VAT and other sales-related taxes. The Company’s revenues are derived from Europe.

2.4 Business combinations
Acquisitions are accounted for using the acquisition method as described in the Group’s business combinations accounting
policy. This includes the determination of fair values for assets and liabilities acquired, including the separate identification
of intangible assets, which use assumptions and estimates and are, therefore, subjective. The Group has developed a process
to meet the requirements of IFRS 3, including the separate identification of customer relationship intangible assets based
on estimated future performance and customer attrition rates. External valuation specialists are used where appropriate.

2.5 Investments
Investments are stated at cost and reviewed for impairment if there are indicators that the carrying value may not be
recoverable. An impairment loss is recognised to the extent that the carrying amount cannot be recovered, either by
selling the asset or by continuing to hold the asset and benefiting from the net present value of the future cash flows of
the investment. Where subsidiary undertakings incur charges for share-based payments in respect of share options and
awards granted by the Company, a capital contribution in the same amount is recognised as an investment in subsidiary
undertakings with a corresponding credit to shareholders’ equity.

2.6 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Cost includes the original purchase price of the asset and any further costs attributable to bringing the asset to its working
condition for its intended use.

177

Freehold and long leasehold buildings

Up to 50 years or period of lease, if shorter

Plant and machinery

3 to 15 years

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. The gain or loss arising on the disposal of an asset is determined as
the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

2.7 Intangible assets – computer software and licences
Computer software is stated at cost less accumulated depreciation and any recognised impairment loss. Acquired
computer software licences are capitalised on the basis of the costs incurred to acquire and use the specific software. These
costs are included in the statement of financial position within intangible assets and are amortised straight-line over their
estimated useful lives of between three and five years. Costs associated with maintaining computer software are recognised
as an expense as incurred.

2.8 Leases
Upon commencement of a lease, a right-of-use asset and corresponding liability are recognised. The liability is initially
measured at the present value of the future lease payments for the lease term. The depreciation of the right-of-use asset
and interest on the lease liability will be recognised in the income statement over the lease term. Leases with terms less
than 12 months or deemed low value are not capitalised.

2.9 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a standard cost methodology
and adjusted for material variances such that the adjusted figure represents direct materials, direct labour and an
attributable proportion of manufacturing overheads based on normal levels of activity. Net realisable value is based on
estimated selling price, less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
A provision is made for obsolete, slow moving or defective items where appropriate.

2.10 Trade and other receivables
For trade receivables, the Company applies the simplified approach permitted by IFRS 9, resulting in trade receivables
recognised and carried at original invoice amount less an allowance for any uncollectible amounts based on expected credit
losses. The Company assesses on a forward-looking basis the expected credit losses associated with its receivables carried at
amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

2. Significant accounting policies continued

2.11 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks with original maturities of three months or
less, and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities. Where a
cashpool facility is operated, the right-of-offset is considered.

2.12 Borrowings
Interest-bearing loans and overdrafts are recognised initially at fair value, net of transaction costs incurred. Subsequent to
initial recognition, borrowings are measured at amortised cost, using the effective interest rate method.

2.13 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.

2.14 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately.

Further details of derivative financial instruments are disclosed in note 31 to the consolidated financial statements.

2.15 Taxation
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to
the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is
recognised in other comprehensive income or directly in equity, respectively.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other periods and it
further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax
rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible temporary differences can
be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates
and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets
is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised based on tax rates and laws that have been enacted or substantively enacted by the reporting date. Deferred tax is
charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive
income, in which case the deferred tax is also dealt with in other comprehensive income.

2.16 Share-based payment transactions
Certain senior employees within the Group (including Executives) receive remuneration in the form of share-based payment
transactions where the individuals are compensated for services they provide with consideration in the form of equity
instruments. The parent Company settles the award by delivering its own equity instruments to the employees of the subsidiary.

The cost of equity-settled transactions with employees is measured with reference to the fair value of the equity instrument at the
date they are granted and for employees of the Company is recognised as an expense over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the employee becomes fully entitled to the award.

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2. Significant accounting policies continued

The fair value determined at the date of grant of the equity-settled share-based payments is expensed to the income
statement on a straight-line basis over the vesting period, based on the estimate of the number of options that will
eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest
as a result of the effect of non-market-based vesting conditions. The movement in cumulative expense since the previous
balance sheet date is recognised in the income statement, with a corresponding entry in equity.

The fair value of the Company’s employee services received in exchange for the grant of the options is recognised as an
expense. The fair value of share-based payments in respect of employees of Group subsidiaries is recharged to those
subsidiary undertakings on exercise of the awards. In the Company financial statements the amount recoverable from
subsidiaries is reported as a capital contribution increasing the Company’s investment in the employing subsidiary. A credit
is recognised directly in shareholders’ funds for both Company and subsidiary employees.

2.17 Retirement benefits
The Company has both defined benefit and defined contribution retirement benefit schemes, the former of which is
now closed to new entrants. The retirement benefit obligation recognised in the Company statement of financial position
represents the deficit or surplus in the Company’s defined benefit scheme. For defined benefit schemes, the cost of
providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations carried out at the end of
each reporting period.

Defined benefit costs are split into three categories:

f Remeasurement;

f Net interest expense or income; and

f Past service cost and gains and losses on curtailments and settlements.

Remeasurement comprises actuarial gains and losses, the effect of the asset ceiling (where applicable) and the return on
scheme assets (excluding interest). These costs are recognised immediately in the statement of financial position with a
charge or credit to the statement of comprehensive income in the period in which they occur. Remeasurement recorded
in the statement of comprehensive income is not recycled. Net interest is calculated by applying a discount rate to the net
defined benefit liability or asset and is recognised within finance costs. As the defined benefit scheme is now closed, no
service cost is incurred.

Payments to defined contribution retirement benefit schemes are recognised as an expense when employees have
rendered service entitling them to the contributions.

2.18 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction from the proceeds, net of tax.

2.19 Merger reserve
The merger reserve was derived from acquisitions made under old UK GAAP prior to the transition to IFRS.

2.20 Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as a liability in the Company’s financial statements in
the period in which the dividends are approved by the Company’s shareholders.

2.21 Critical accounting judgements and key sources of estimation uncertainty
The preparation of Company financial statements in conformity with FRS 101 requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the Company financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the revision affects both current and
future periods. The key area of judgement that has the most significant effect on the amounts recognised in the financial
statements is the review for impairment of the carrying amount of investments in the Company’s subsidiaries.

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

3. Staff costs

The average monthly number of employees (including Executive Directors) was:

Sales and distribution

Administration

Their aggregate remuneration comprised:

Wages and salaries

Social security costs

Other pension costs (note 11)

2023
Number

2022
Number

2023
£’m

4.1

0.4

0.1

4.6

2022
£’m

3.0

0.3

0.1

3.4

Directors’ remuneration for the year totalled £1.5m (2022: £2.3m). The remuneration of the highest paid Director is £0.7m
(2022: £1.3m). Employer contributions of £0.1m (2022: £0.1m) were made to defined contribution personal pension schemes
in respect of the Directors. Further details of Directors’ remuneration, share options, pension contributions, pension
entitlements, fees for consulting services and interests for the period are provided in the Remuneration Committee Report
on pages 98 to 113 and form part of the financial statements.

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4. Right-of-use assets

This note provides information for leases where the Company is a lessee.

180

Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:

Right-of-use assets

Vehicles

Lease liability

Current

Non-current

Additions during the period to the right-of-use assets were £0.03m (2022: £0.08m).

2 April
2023
£’m

3 April
2022
£’m

0.1

–

0.1

–

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5. Investments

The Company’s fixed asset investments comprise investments in wholly-owned subsidiary undertakings and long-term
loans as follows:

Cost

At 4 April 2021

Additions

Capital contribution

Repayment

Exchange differences

At 3 April 2022

Additions

Capital contribution

Repayment

Exchange differences

At 2 April 2023

Accumulated depreciation and impairment

At 4 April 2021

Impairment

Exchange differences

At 3 April 2022

Exchange differences

At 2 April 2023

Carrying amount

At 2 April 2023

At 3 April 2022

At 4 April 2021

Shares
£’m

Loans
£’m

Total
£’m

136.8

7.8

1.5

–

146.1

10.0

0.9

(0.4)

–

156.6

12.5

3.8

–

16.3

–

16.3

140.3

129.8

124.3

28.2

39.3

–

(6.5)

2.6

63.6

17.0

–

(30.0)

2.9

53.5

4.8

(3.8)

1.1

2.1

(0.1)

2.0

51.5

61.5

23.4

165.0

47.1

1.5

(6.5)

2.6

209.7

27.0

0.9

(30.4)

2.9

210.1

17.3

–

1.1

18.4

(0.1)

18.3

191.8

191.3

147.7

In the United Kingdom, the Company includes two operational branches, Volex Powercords Europe and Volex Europe Cable
Assemblies. Details of the Company’s subsidiary undertakings are set out in note 17 ‘Related undertakings’. Investments in
subsidiaries are all stated at cost less provision for impairment.

During the period, the Group subscribed to share capital in Volex Group Holdings Ltd (£10.0m) to support the subsidiary’s
acquisition of inYantra, which completed in March 2022.

During the prior period, the Group subscribed to share capital in Volex Group Holdings Ltd (£4.0m) and Volex Canada Inc
(‘Volex Canada’) (£3.8m) to support the subsidiaries acquisitions of Prodamex and TC. The Company’s previous investment
and loans in Volex Canada were previously impaired. As such, upon subscription of the new shares the investment was
immediately impaired with a corresponding reversal of the previously impaired loan balance.

The capital contribution of £0.9m (2022: £1.5m) is in respect of the fair value of equity-settled share-based payment
transactions during the period with employees of Group subsidiary companies which will be recharged to the employing
subsidiaries when the awards are exercised. A corresponding increase to shareholders’ funds was recognised.

All loans are carried at amortised cost. Interest is charged at either a fixed rate or linked to a public indices. In the 52 weeks
to 2 April 2023, the Company’s loans receivable accrued interest. Repayments were received from Volex (Asia) Pte Ltd,
Silcotec Europe Ltd, Volex Holdings Inc and Volex Inc during the period.

During the period, the Company received dividends totalling £2.3m (2022: £2.8m) from GTK (Holdco) Ltd.

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22 June 2023 6:26 pm

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

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d
2
0
2
3

6. Inventories

Finished goods

7. Trade and other receivables

Trade receivables

Amounts receivable for the sale of goods

Loss allowance

Other receivables

Amounts due from Group undertakings

Other debtors

Prepayments

Due for settlement within 12 months

Due for settlement after 12 months

Amounts due from Group undertakings are unsecured, non-interest bearing and repayable on demand.

8. Borrowings and lease liability

182

Secured borrowings at amortised cost

Bank loans

Lease liability

Total borrowings at amortised cost

Amount due for settlement within 12 months

Amount due for settlement after 12 months

2023
£’m

4.5

2023
£’m

14.9

(0.1)

14.8

10.4

0.1

0.5

11.0

–

11.0

2023
£’m

72.5

0.1

72.6

0.1

72.5

72.6

2022
£’m

4.6

2022
£’m

9.6

–

9.6

15.4

0.4

16.2

–

16.2

2022
£’m

75.1

0.1

75.2

0.1

75.1

75.2

At 2 April 2023, debt issue costs of £1.5m were included within the total bank loan balance shown above (2022: £1.7m). Full
details of the bank loans are disclosed in note 19 ‘Borrowings and lease liabilities’ of the consolidated financial statements.

9. Trade and other payables

Trade payables

Other payables

Amounts owed to Group undertakings

Other taxes and social security

Accruals and deferred income

Due for settlement within 12 months

Due for settlement after 12 months

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2023
£’m

0.3

17.3

0.1

9.4

26.8

24.0

2.8

26.8

2022
£’m

0.7

17.5

0.3

8.0

25.8

23.0

2.8

25.8

Amounts owed to Group undertakings are unsecured, non-interest bearing and repayable on demand. The Directors
consider that the carrying amount of trade and other payables approximates to their fair value.

Included in accruals and deferred income is £2.8m relating to contingent consideration for acquisitions. Included in accruals
and deferred income in the prior period was £4.2m relating to deferred and contingent consideration for acquisitions.

31371 Volex AR2023 Financials.indd 182

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10. Deferred tax

The following are the major deferred tax assets recognised by the Company and movements thereon during the reporting
period.

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At 4 April 2021

Credit/(expense) to income statement

Expense directly to equity

At 3 April 2022

Credit/(expense) to income statement

Expense to other comprehensive income

Expense directly to equity

At 2 April 2023

Trading
losses
£’m

Accelerated
tax
depreciation
£’m

Other
temporary
differences1
£’m

Share-based
payments
£’m

3.9

1.7

–

5.6

2.4

–

8.0

0.6

0.4

–

1.0

0.3

–

1.3

0.5

(0.1)

–

0.4

(0.3)

(0.2)

–

(0.1)

1.0

0.2

(0.2)

1.0

0.2

–

(0.2)

1.0

Total
£’m

6.0

2.2

(0.2)

8.0

2.6

(0.2)

10.2

1 Other temporary differences include deferred tax on financial instruments, pensions and short-term timing differences on provisions.

At the reporting date, the Company had unused tax losses of £32.0m (2022: £41.0m) available for offset against future profits.
Of this amount, £10.1m (2022: £10.3m) are post-31 March 2017. The losses may be carried forward indefinitely.

On 3 March 2021 the UK Government announced changes to the UK corporate tax system and an increase in tax rate from
the fiscal year 2023 to 25% from the currently enacted rate of 19%. This tax rate change was substantively enacted on 24 May
2021 and was, therefore, reflected in the closing deferred tax balances of the previous period, which resulted in an increase
to the value of the deferred tax asset recorded in 2022. Deferred tax assets and liabilities are measured at the tax rate
expected to apply in the period in which the asset is realised or the liability is settled.

183

11. Retirement benefit obligation

Defined benefit scheme
The Company operates a defined benefit pension arrangement called the Volex Executive Pension Scheme (the ‘Scheme’).
The Scheme provides benefits based on final salary and length of service upon retirement, leaving service or death.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is
carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the
process the Company must agree with the Trustees of the Scheme the contributions to be paid to meet the Statutory
Funding Objective. The future contributions required to meet the Statutory Funding Objective do not currently affect the
balance sheet of the Scheme in these financial statements.

The most recent comprehensive actuarial valuation of the Scheme was carried out as at 31 July 2019. An actuarial valuation
of the Scheme as at 31 July 2022 is currently in progress. In the event that the valuation reveals a larger deficit than expected
the Company may be required to increase contributions above those set out in the existing Schedule of Contributions.
Conversely, if the position is better than expected, it is possible that contributions may be reduced.

In accordance with the Schedule of Contributions dated September 2020, the Company has agreed to pay contributions of
£0.8m p.a. (payable in quarterly instalments) until 30 September 2025.

Further details of the scheme and assumptions associated with the actuarial valuation are provided in note 30 to the Group
financial statements.

Defined contribution scheme
The Company operates a Group personal pension plan for employees and pays contributions to administered pension
insurance plans. Contributions to the defined contribution schemes are charged to the income statement as they fall due.
The Group has no further obligations once the contributions have been made. The total cost charged to the Company’s
income statement in the period was £0.1m (2022: £0.1m).

12. Share-based payments

The Company currently uses a number of equity-settled share plans to grant options and shares to the Directors and
employees of its subsidiaries. Full details of share-based payments, share option schemes and share plans are disclosed in
note 29 ‘Share-based payments’ to the consolidated financial statements.

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

13. Share capital

Allotted, called up and fully paid:

At 5 April 2021

Issue of new shares

At 3 April 2022

Issue of new shares (i)

At 2 April 2023

Ordinary
shares of
£0.25 each
Number

157,052,041

1,666,668

158,718,709

388,376

159,107,085

Par
value
£’m

Share
premium
£’m

39.3

0.4

39.7

0.1

39.8

44.3

–

44.3

(0.1)

44.2

Total
£’m

83.6

0.4

84.0

–

84.0

(i)

The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at
meetings of the Company.

The Company does not have any authorised share capital.

During the prior period, the Company issued 1,666,668 ordinary shares to satisfy the vesting of the share awards granted
to the senior employees and/or former owners of Servatron and GTK as the businesses met the required operating profit
targets set out in the acquisition agreements.

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2
0
2
3

14. Equity dividend

184

Dividends paid and received are included in the Company financial statements in the period in which the related dividends
are actually paid or received or, in respect of the Company’s final dividend for the period, approved by shareholders.

Dividends

Declared during the financial period:

Final – period ended 3 April 2022

Interim – period ended 2 April 2023

Final – period ended 4 April 2021

Interim – period ended 3 April 2022

2023
Total
£’m

3.8

2.1

–

5.9

Settled
via
scrip
£’m

Dividend
per ordinary
share
(p)

1.2

–

1.2

2.4p

1.3p

–

2022
Total
£’m

–

3.4

1.9

5.3

Settled
via
scrip
£’m

Dividend per
ordinary share
(p)

–

2.2p

1.2p

–

The Group’s consolidated reserves set out on page 129 do not reflect the profits available for distribution in the Group.

15. Other matters

The auditors’ remuneration for the current period in respect of audit services was £0.5m (2022: £0.3m) and £nil for non-audit
services performed (2022: £nil).

16. Related party transactions

For full details of transactions and arrangements with key management personnel (Directors of the Company), see note 9 of
the consolidated financial statements.

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Volex International Korea LLC 3

South Korea

17. Related undertakings

Volex Powercords Europe and Volex Europe Cable Assemblies are both trading divisions of Volex plc. In accordance with
Section 409 of the Companies Act 2006, the subsidiaries owned at 2 April 2023 are disclosed below. Unless otherwise
stated the following subsidiary entities are either wholly or partly owned directly by the plc and/or through other Group
companies. For the two associates, ownership is shared between a local Volex subsidiary and the relevant partner.

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Footnote

Country of
incorporation

Address

Percentage
owned by plc

Singapore

37A Tampines Street 92, #08–01, Singapore 528886

Name of entity

Directly held

Volex Pte Ltd

Volex Holdings Inc

Terminal & Cable TC Inc

Volex Group Holdings Ltd

GTK (Holdco) Ltd

Volex Poland Sp z.o.o.

Volex Germany GmbH

Volex Sweden AB

Volex do Brasil Ltda

Volex (No.4) Ltd

Volex (No.3) Ltd

Volex (No.2) Ltd

Volex (No.1) Ltd

Cable Products Ltd

Pencon Ltd

Volex Executive Pension
Scheme Trustee Ltd

Volex Electrical Products Ltd

Volex Group Pension Scheme
Trustee Ltd

Ward and Goldstone Ltd

Volex Interconnect Products
Ltd

Volex Electronics Ltd

Ionix Development Company
Ltd

Pendle Connectors Ltd

Mayor (UK) Ltd

Volex Interconnect Systems
Ltd

Volex Europe (No.1) Ltd

USA

Canada

Poland

Germany

Sweden

Brazil

511 E San Ysidro Blvd # 509, San Ysidro CA 92173

300 – 50 O’Connor Street, Ottawa ON K1P 6L2,
Canada

Unit C1 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

Unit C2 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

Podłuzna 11–13, 85–790, Bydgoszcz, Kuyavian–
Pomeranian Voivodeship, Poland

Zu den Mühlen 19, 35390 Gießen, Deutschland

C/O Servando Bolag AB, Johan Fredrik Stahl, Box
5814, 102 48 Stockholm

6th Floor, 100 Toegye-ro, Hoehyun-dong 2-ga,
State Tower Namsan, Jung-gu, Seoul

Rod. Geraldo Scavone 2.080, Unidade 13 A 16,
Jacarei, 12305–490, Brazil

Unit C1 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

100%

99%

100%

99%

50%

99%

50%

67%

90%

99%

185

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Ireland

Carraroe Industrial Estate, Carraroe, Co Galway,
H91WR82

100%

1 Manufacture and/or sale of power and data cables.
2 Holding company.
3 Dormant company.

31371 Volex AR2023 Financials.indd 185

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Notes to the Company Financial Statements
For the 52 weeks ended 2 April 2023 (52 weeks ended 3 April 2022)

Footnote

Country of
incorporation

Address

Percentage
owned
by Group
companies

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2
0
2
3

Name of entity

Indirectly held

G.T.K. (U.K.) Ltd

GTK Ltd

GSRG Holdings Limited

Review Display Systems
Limited

Review Display Systems Inc

IQRF UK Limited

De-Ka Elektroteknik Sanayi
ve Ticaret Anonim Şirketi

Volex (No.5) Ltd

GTK Electronics GmbH

GTK RO S.r.l

Silcotec Europe (SK) s.r.o

186

Silcotec Europe Ltd

Volex Inc

MC Electronics LLC

Servatron Inc.

Irvine Electronics LLC

Volex (Asia) Pte Ltd

PT Volex Indonesia

Turkey

Unit C2 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

Unit C1 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

790 N Milwaukee Street, Suite 321, Milwaukee
WI 53202

Unit C1 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

Akse Mah. Fevzi Çakmak Cad. No: 140 Çayırova,
Kocaeli

Unit C1 Antura, Bond Close, Basingstoke,
Hampshire, England, RG24 8PZ

Germany

Romberg 25b, 51381 Leverkusen

Romania

Slovakia

Ireland

USA

Str. Fantana Popova, Nr. 36, Et.1, Cod Postal, 200319,
Craiova, Dolj, Romania

Družstevná 14, Komárno, 945 05, Slovakia

Carraroe Industrial Estate, Carraroe, Co Galway,
H91WR82

511 E San Ysidro Blvd # 509, San Ysidro CA 92173

9571 Pan American Drive, El Paso, TX 79927

12825 Mirabeau Parkway, Suite 104, Spokane Valley,
WA 99216–1617

1601 Alton Parkway, Suite A, Irvine CA 92606

Singapore

37A Tampines Street 92, #08–01, Singapore 528886

Indonesia

Kawasan Industri Sekupang, Batam, Kepulauan
Riau, Indonesia 29428

PT Volex Cable Assembly

Indonesia

EJIP Industrial Park, Plot 8M-1, A-B Lemahabang,
Bekasi 17550, Jakarta

Philippines

Galaxy Building km 60.7 Maharlika Highway, Sto
Thomas Batangas

Volex Cable Assemblies
(Phils) Inc

Volex Japan KK

Volex (Taiwan) Co. Ltd

Volex (Thailand) Co. Ltd

Volex Cable Assembly
(Vietnam) Co Ltd

Volex Cable Assemblies Sdn
Bhd

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Japan

Taiwan

Thailand

Vietnam

Malaysia

inYantra Technologies Pvt Ltd 1

India

Volex Interconnect (India)
Pvt Ltd

India

9th floor Kannai Tosei Building II, Sumiyoshi–cho
4–45–1, Naka–Ku, Yokohama–shi, Kangawa

4F, No 1223, Zhongzheng Road, Taoyuan District,
Taoyuan City 330, Taiwan

No. 99/349, Chaengwattana Road,
Thungsong–Hong, Laksi, Bangkok 10210, Thailand

Plot D–5B, Thanglong Industrial Park, Vong La
Commune, Dong Anh District, Hanoi, Vietnam

B–03–13A, Empire Soho, Empire Subang, Jalan
SS16/1, SS16, 47500, Subang Jaya, Selangor,
Malaysia

GAT NO. 208-210, 221, 224 & Others, Shindewadi,
Shirval – 412801

Level 9, Olympia Teknos Park, No. 28 Sidco
Industrial Estate, Guindy, Chennai, Tamil Nadu, IN
600 032

100%

51%

100%

31371 Volex AR2023 Financials.indd 186

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Name of entity

Footnote

Country of
incorporation

Address

Hong Kong

Unit 5805, 58/F., Two International Finance Centre,
8 Finance Street, Central, Hong Kong

China

Mexico

Guernsey

5 Horizontal Lane, Yuan Hu Road, Zhang Bei
Community, Long Cheng Street, Long Gang
District, Shenzhen City, Guang Dong

Building 3, Fumin Phase 3, No.818 Wushong
Road, Guoxiang Street, Wuzhong Economic
Development Zone, Suzhou, Jiangsu Province
215124

No. 6279, Longgang Avenue, Longgang District,
Shenzhen City

2 Xingda Street, Torch High–tech Ind Dvpt Zone,
Zhongshan, 528437, China

Carretera a Zacatecas Km 12.5 Nave 5, Parque
Industrial Pueblo Viejo, Mexquitic de Carmona, SLP
CP 78480, Mexico

Av 32 Sur, No 8950 Interior G/1,D,E,F, Parque
Industrial La Mesa, Fraccionamiento Rubio,
Tijuana; Baja California Mexico, CP 22116

St. Peter’s House, Le Bordage, St. Peter Port,
Guernsey, GY1 1BR

Percentage
owned
by Group
companies

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s

100%

187

Volex Cables (HK) Ltd

Ta Hsing Industries Ltd

Shenzhen Ta Hsing Wire and
Cable Ltd

Volex Interconnect Systems
(Suzhou) Co. Ltd

Volex Cable Assembly
(Shenzhen) Co. Ltd

Volex Cable Assembly
(Zhongshan) Co. Ltd

Prodamex SA de CV

Volex de Mexico SA de CV

The Volex Group PLC
Employees’ Share Trust

Interests in associates

Kepler SignalTek Ltd

Volex-Jem Co Ltd

Hong Kong

Unit 912 9/F Two Harbourfront 22 Tak Fung Street
Hunghom KL, Hong Kong

Taiwan

19F.-13, No. 79, Sec. 1, Xintai 5th Rd., Xizhi Dist., New
Taipei City 22101, Taiwan (R.O.C.)

27%

43%

1 Manufacture and/or sale of power and data cables.

2 Holding company.

3 Dormant company.

4 Employees’ Share Trust

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Alternative Performance Measures

The Group makes use of underlying and other alternative performance measures in addition to the measures set out
in International Financial Reporting Standards, which provides investors with information consistent to that used by
management to evaluate performance of the Group.

Underlying operating profit and Underlying EBITDA

Underlying operating profit is defined as operating profit excluding adjusting items and share-based payments. Underlying
EBITDA is defined as underlying operating profit adjusted for depreciation and amortisation. The Group uses Underlying
operating profit and Underlying EBITDA to present meaningful year-on-year comparisons. The reconciliation between
Operating profit and Underlying operating profit and Underlying EBITDA is presented in note 7.

Underlying basic earnings per share and underlying diluted earnings per share

Underlying basic earnings per share is defined as the profit attributable to the owners of the parent company excluding
adjusting items divided by the weighted average number of share in issue during the year. Underlying diluted earnings per
share adjusts the basic earnings per share by the effect of dilutive potential share options as at the period end date. Both
metrics are reconciled to statutory measures in note 11.

Organic growth

Organic revenue growth is calculated using constant exchange rates by taking the total reported revenue (excluding the
impact of acquisitions and disposals) divided by the preceding financial year’s revenue at the current year’s exchange rates.

Where the Group has undertaken eleven acquisitions in the past five years, management use organic revenue growth so
that meaningful year-on-year comparisons can be made.

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s

f
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y
e
a
r
e
n
d
e
d
2
0
2
3

Electric
Vehicles
$’m

Consumer
Electricals
$’m

Medical
$’m

Complex
Industrial
Technology
$’m

104.2

(0.1)

104.1

34.2

32.9%

–

138.3

262.4

(10.8)

251.6

(8.1)

(3.2)%

18.3

261.8

128.3

(7.7)

120.6

19.4

16.1%

5.0

145.0

119.7

(2.1)

117.6

22.0

18.7%

38.1

177.7

Total
$’m

614.6

(20.7)

593.9

67.5

11.4%

61.4

722.8

2022 revenue

FX impact

188

2022 revenue at 2023 FX rates

Organic growth

Organic growth %

Acquisitions

2023 revenue

Covenant leverage

The Group has a $200m committed facility together with an additional $100m uncommitted accordion.

The terms of the RCF require the Group to perform quarterly financial covenant calculations with respect to leverage (net
debt (before operating lease liabilities) to covenant EBITDA) and interest cover (covenant EBITDA to covenant interest).
Breach of these covenants could result in cancellation of the facility. Net debt (before operating lease liabilities) in the
financial statements is defined as net debt excluding lease liabilities but including pre-IFRS 16 finance leases. Covenant
EBITDA is defined as underlying EBITDA adjusted for depreciation of right-of-use assets.

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Net debt

Lease liabilities

Finance leases

Net debt (before operating lease liabilities)

Underlying EBITDA

Depreciation of right-of-use assets

Covenant EBITDA

Interest on bank overdrafts and loans

Interest on finance leases

Covenant interest

Leverage

Interest cover

Note

2023
$’m

(103.7)

34.8

(7.5)

(76.4)

81.6

(4.8)

76.8

6.4

0.4

6.8

1.0x

11.0

2022
$’m

(95.3)

20.9

–

(74.4)

66.1

(3.4)

62.7

1.8

–

1.8

1.2x

34.8

31371 Volex AR2023 Financials.indd 188

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Free cash flow and underlying free cash flow

Free cash flow is defined as the net cash flow before financing activities excluding the net outflow from the acquisition of
subsidiaries.

Underlying free cash flow is defined as the free cash flow excluding non-recurring items.

Free cash flow and underlying free cash flow are used where they allow for comparative year-on-year comparisons to be
made by excluding cost of acquisitions and adjusting items that vary year-to-year.

Cash flow before financing activities

Add back: Acquisition of businesses, net of cash acquired

Add back: Contingent consideration for businesses acquired

Free cash flow

Add back: Cash utilised in respect of adjusting items

Underlying free cash flow

Note

2023
$’m

25.9

5.1

7.1

38.1

2.2

40.3

2022
$’m

(50.8)

35.7

19.2

4.1

2.0

6.1

F
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a
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c
i
a
l
s

189

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Five Year Summary

Results

Revenue – total Group

Gross profit – total Group

Operating expenses – total Group
Underlying operating profit(i) – total Group

Adjusting operating items

Share-based payment charge

Profit on ordinary activities before taxation

Depreciation and amortisation (excluding intangible
assets acquired in a business combination)

Basic underlying earnings per share – total Group(ii)

Basic earnings per share – total Group

Statement of financial position

Non-current assets
Net debt (before operating lease liabilities)(iii)

Other assets and liabilities

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s

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n
d
e
d
2
0
2
3

190

Net assets

Gearing

Unaudited
IFRS
2023
$’m

Unaudited
IFRS
2022
$’m

Unaudited
IFRS
20211
$’m

Unaudited
IFRS
2020
$’m

Unaudited
IFRS
2019
$’m

722.8

157.0

(103.2)

67.3

(9.8)

(3.7)

45.8

14.3

614.6

125.8

(84.8)

56.2

(10.8)

(4.4)

36.2

443.3

103.9

(73.2)

42.9

(5.6)

(6.6)

29.4

9.9

7.9

391.4

90.7

(73.6)

31.6

(5.8)

(8.7)

15.9

6.5

372.1

73.5

(60.5)

21.6

(6.2)

(2.4)

11.6

3.8

Cents

30.2

23.2

$’m

238.6

(76.4)

63.0

232.7

30%

26.9

19.3

$’m

216.9

(74.4)

66.0

208.5

36%

32.1

25.5

$’m

185.3

(7.3)

6.0

184.0

18.2

9.9

$’m

84.7

31.6

14.2

130.5

–

13.1

6.9

$’m

56.0

20.6

39.0

115.6

–

(i) Defined as operating profit before adjusting items and share-based payments.
(ii) Defined as earnings per share before share-based payments and adjusting items, net of tax.
(iii) Following the adoption of IFRS 16 on 1 April 2019 this calculation excludes the lease liability.

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Shareholder Information

Provisional Financial Calendar

FY2024
Interim Results announced w/c 13 November 2023
Period end 31 March 2024
Final Results announced w/c 17 June 2024

Registered Office and Advisers

Registered Office
Unit C1 Antura, Bond Close
Basingstoke, Hampshire
RG24 8PZ

www.volex.com

Registered number
158956 (Registered in England and Wales)

Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL

www.linkgroup.eu

Independent Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH

Bankers
HSBC Bank plc

Citibank, N.A. London branch

Barclays Bank plc

Fifth Third Bank, National Association

UniCredit Bank AG, London Branch

Nominated Adviser and Joint Broker
Peel Hunt LLP

Joint Broker
HSBC Bank plc

Solicitors
Travers Smith LLP

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191

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Shareholder Notes

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192

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31371 Volex AR2023 Financials.indd 192

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The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
charity. Each tree planted will grow into a vital carbon store,
helping to reduce environmental impact as well as creating
natural havens for wildlife and people.

31371 Volex AR2023 Financials.indd 3

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22 June 2023 6:26 pm

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Volex plc
Unit C1 Antura
Bond Close
Basingstoke
Hampshire
RG24 8PZ
United Kingdom

www.volex.com

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