API Group plc
Annual Report 2014
API Group plc
Annual Report 2014
AUTHENTICATION SOLUTIONS
BRAND ENHANCEMENT AND
API Group plc Annual Report 2014 OVERVIEW
ABOUT API
The image overleaf is produced on a sheet-fed  
offset printing press using API TU cold foil
Cold foil technology
API pioneered the development of cold foil technology, 
an innovative alternative to hot stamping foil, in the 1990s. 
Cold foil technology has revolutionised the flexibility and 
cost‑effectiveness of foil stamping as the process does not 
require the foil to be applied using specialist hot stamping 
equipment but is incorporated in the printing press itself.
There are two forms of cold foiling; web‑fed and sheet‑fed. 
Both forms employ an adhesive printed in the design area 
requiring the metallic effect. The foil is then applied to 
the adhesive, which is dried, or cured by UV light, before 
the carrier film is stripped away. Ink can then be printed 
onto the surface of the transferred foil, creating unlimited 
combinations of metallic colour. 
Cold foiling allows faster processing times and saves on 
tooling costs. It also presents a wide range of creative 
opportunities in designs incorporating fine lines, large 
area coverage, and even half tones, whilst over‑printing 
can produce a spectrum of multicoloured effects. Cold 
foiling on rotary print machines is widely used to produce 
self‑adhesive labels for personal care, wines, spirits and 
food packaging, whilst the sheet‑fed version of the process 
is typically used for cartons, labels and commercial print.
As the opportunities and demands continue to grow for 
both cold foiling processes, API remains an industry leader 
in new product development.
Sheet-fed innovation
API has been at the forefront of industry developments to 
integrate the cold foil application process into sheet‑fed 
offset printing presses. The sheet‑fed cold foil transfer 
process typically uses the first two units of an offset press. 
In the first printing unit, an adhesive is printed in the design 
requiring the metallic effect using a conventional offset 
plate. In the second printing unit, the cold foil is pressed 
onto the adhesive by the blanket cylinder, so creating the 
metallic design, whilst the remaining unused foil is stripped 
away. Subsequent units can then be used to print inks onto 
the surface of the transferred foil. 
Research and development at API has focused on the key 
features required for a high performing sheet‑fed cold foil 
– a free release, good bond to the adhesive and excellent 
receptivity to ink. This is delivered with the TU grade. TU has 
outstanding adhesion of UV curing offset inks, whilst having 
the versatility to give exceptional performance on a wide 
range of applications ranging from premium packaging to 
high quality commercial print.
Applications include cartons and wet glue labels for wines, 
spirits and premium fast moving consumer products such 
as confectionary, as well as in commercial print for posters, 
calendars, magazines, greetings cards and promotional 
items. Large area coverage with cold foil also offers an 
alternative to laminated or metalised substrates for cartons 
and labels.
IN AN INCREASINGLY COMPETITIVE AND FAST 
MOVING RETAIL ENVIRONMENT, SHELF IMPACT 
IS EVERYTHING. WE ENHANCE THE VISUAL 
APPEAL OF PRODUCTS AND PACKAGING 
– HELPING TO COMMUNICATE BRAND VALUES 
AND AUTHENTICITY.
We are a leading manufacturer and distributor of foils, films and 
laminates, operating from a global network of manufacturing  
and distribution facilities. 
With our customer service ethos, technical expertise and 
collaborative approach, API is a trusted partner in the supply  
chain for many of the world’s leading brands. 01
API Group plc Annual Report 2014 > Overview
  Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
CONTENTS
Overview
01  Contents
02  Strategic Highlights
03  Business Progress in 2013/14
04  Where We Operate
06  Chairman’s Statement
Strategic Report
07  Business Model and Measuring Performance
08  Chief Executive’s Review
10 Divisional Review 
 10 Laminates
 14 Foils Europe
 18 Foils Americas
 22  Holographics
26 Financial Review
29 Corporate Social Responsibility
32 Principal Risks and Uncertainties
Governance and Remuneration
34 Board of Directors
35 Corporate Governance Statement
39 Directors’ Remuneration Report
41 Directors’ Report
44 Statement of Directors’ Responsibilities
Financial Statements 
45 Independent Auditor’s Report 
46  Group Income Statement
46  Group Statement of Comprehensive Income
47 Group Balance Sheet
48 Group Statement of Changes In Equity
49 Group Cash Flow Statement
50 Notes to the Consolidated  
Financial Statements
77  Independent Auditor’s Report 
78  Company Balance Sheet
79  Notes to the Company Financial Statements
Shareholder Information
87  Financial Record
88 Financial Calendar
88 Advisers
BUSINESS DIVISIONS
LAMINATES
% of Group revenue
52%
Read more on page 10
FOILS Europe
% of Group revenue
24%
Read more on page 14
FOILS Americas
% of Group revenue
18%
Read more on page 18
HOLOGRAPHICS
% of Group revenue
6%
Read more on page 22 02
API Group plc Annual Report 2014
OVERVIEW 
STRATEGIC hIGhlIGhTS
YEAR IN PICTURES
The Group completed a number of key business improvement 
initiatives during the twelve months ending 31 March 2014.
New Sheffield hub
In summer 2013, 
Foils Europe completed 
the establishment of a 
new sales and distribution 
hub in England, aimed 
at improving service 
levels to customers and 
increasing penetration 
of the home, UK market.
Czech JV
The Group completed 
its investment in 
the joint venture 
company, API Optix 
s.R.o. Equipment 
specification and 
sourcing was completed 
and the production 
of market-leading 
holographic masters 
brought on stream. 
New supply  
contract at Laminates
Full product qualification 
on this major new 
supply arrangement was 
achieved in the first six 
months and shipments 
off the new laminator 
reached target rates early 
in the second half.
Tropos in the US
The Group’s new ERP 
(Enterprise Resource 
Planning) IT solution 
was successfully 
implemented at all three 
US locations, starting 
1 April 2013. The solution 
will be rolled out in the 
European Foils business 
during 2014/15. 03
API Group plc Annual Report 2014 > Overview
  Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
OVERVIEW 
BUSINESS PROGRESS IN 2013/14
•	 Revenues ahead by £2.3m (2.0%) to £114.7m 
(2013: £112.4m).
•	 Profit before tax unchanged at £5.6m 
(2013: £5.6m). Profit before tax of £6.3m 
on a pre-exceptional basis (2013: £6.6m). 
•	 Stronger second half, with pre-exceptional 
profit before tax ahead by £0.5m (+15%). 
•	 Diluted earnings per share 7.1p (2013: 7.2p). 
Excluding exceptional items, diluted earnings 
per share 7.8p (2013: 8.4p).
•	 Proposed final dividend of 1.3p per share, 
making 2.0p for the full year (2013: 0.0p).
•	 Cash flow from operations of £9.0m 
(2013: £8.6m), converted at 91% of EBITDA 
(2013: 86%) and a net cash inflow of 
£2.8m (2013: £1.2m).
•	 £0.2m net cash at year end (2013: net debt 
of £2.6m), the first time for 15 years that the 
Group has reported a net cash position.
•	 Another good performance from Laminates 
and further progress at Foils Europe. 
Holographics back to breakeven in final 
quarter after cost reduction measures. 
Operating margin maintained at Foils Americas 
despite weaker sales in the second half. 
•	 Laminates major new supply contract 
fully on stream during second half.
* from continuing operations
FINANCIAL HIGHLIGHTS
•	 Restructuring of UK foils operations completed; 
new distribution facility established in Sheffield, 
leaving Livingston to concentrate on 
manufacturing.
•	 New ERP solution successfully implemented 
by Foils Americas; roll-out in Foils Europe 
scheduled for 2014.
•	 Capital additions and joint venture investment 
of £3.8m (2013: £5.5m), including down 
payments on new metallising equipment for 
UK and US foils plants.
OPERATIONAL HIGHLIGHTS
Total revenue* (£m)
£114.7m
2014 114.7
2013 112.4
2012 113.9
2011 100.0
Operating profit before exceptional items* (£m)
£7.4m
2014 7.4
2013 7.8
2012 6.4
2011 4.8
Profit before tax* (£m)
£5.6m
2014 5.6
2013 5.6
2012 4.8
2011 2.5
Net cash flow from operating activities* (£m)
£9.0m
2014 9.0
2013 8.6
2012 10.0
2011 9.2 04
API Group plc Annual Report 2014
OVERVIEW 
WhERE WE OPERATE
GLOBAL REACH
Creative solutions, outstanding technical support and flexible 
service are just a step away via our network of regional distribution 
centres and quality manufacturing sites in the UK and USA.
UNITEd KINGdOm
% of Group revenues sold to customers in UK
20%
•	 Manufacturing and 
supply for Laminates 
and Holographics from 
single sites in the north 
west of England. 
•	 Foils Europe 
manufacturing at 
Livingston, Scotland. 
Distribution to UK and 
selected export markets 
from both Livingston 
and Sheffield.
EUROPE
% of Group revenues sold to customers in Europe
58%
•	 Network of API  
owned regional  
finishing and distribution 
hubs, providing  
market-leading  
service levels 
to customers 
throughout Europe.
•	 Laminates sales 
representation in 
Europe via Foils 
distribution hubs.
Manufacturing and distribution
Distribution
Salford
Poynton
Livingston
Sheeld
Paris
Milan
Nuremburg
Warsaw 05
API Group plc Annual Report 2014 > Overview
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An International Business; serving customers in over 60 countries.  
Over 80% of API Group revenues are derived from sales outside the UK.
AmERICAS
% of Group revenues sold to customers in Americas
15%
•	 Two manufacturing 
locations, New Jersey 
and Kansas.
•	 Regional distribution 
from finishing 
teams in each 
manufacturing location 
and California.
Key statistics
Operating from 
16
locations
Serving more than
60
countries
Employing 
520
staff
Manufacturing at 
5
facilities
ASIA PACIFIC
% of Group revenues sold to customers in Asia Pacific 
7%
•	 Foils distribution and 
finishing facilities in 
Hong Kong, New 
Zealand and at three 
locations in Australia.
to contact any of our sites, 
go to apigroup.com
 
Rahway, NJ
Lawrence, KS 
Sante Fe Springs, CA
Hong Kong
Auckland
Sydney
Adelaide
Melbourne 06
API Group plc Annual Report 2014
OVERVIEW 
ChAIRmAN’S STATEmENT
•	 Further progress on the overall financial 
strength of the Group.
•	 Re-introduction of the dividend after 
a break of more than 10 years.
•	 Continued investment in operational 
capabilities and performance.
Introduction
I am pleased to report that the year to March 2014 was 
another solid year for the Group and whilst there was a 
modest fall in operating results, the overall financial strength 
of the Group improved further and our operations have 
benefitted from another year of strong capital investment. 
Shareholders’ funds increased by 15% and the year saw 
the achievement of two significant milestones; no net 
debt at the year-end for the first time in 15 years and the 
reintroduction of a dividend after a break of more than 
10 years.
Strategic Report
During this last financial year, new regulations were 
issued by the UK Government on the content and 
structure of the narrative to be included in annual reports. 
These requirements affect all companies, with additional 
requirements for those which are fully listed. As an AIM 
company, we have taken steps to reorganise and enhance 
our commentary in order to meet the objectives of the new 
regulations. The new Strategic Report includes what was 
previously covered under the Business Review in addition 
to a new section on Strategy, Objectives, KPIs and the 
Business Model.
Board and governance
The Board and the composition of its Committees 
have remained unchanged throughout the year. 
Since the end of the financial year, the Group’s largest 
shareholder, Steel Partners, have advised the Board that 
Luke Wiseman no longer acts as their nominee director. 
Steel Partners have not indicated that they intend to 
request a replacement nominee director and the Board 
has no reason to believe that they intend to do so. In the 
meantime, the Board continues to place a high value on 
Mr Wiseman’s contribution and he has agreed to continue as 
a non-executive director for the foreseeable future. Bearing 
in mind the long service of a number of Directors, it has 
been agreed that the Head of the Nominations Committee, 
Mr Batzer, will undertake a review of the Board’s 
composition by the end of this calendar year, with a view to 
formulating a long term plan for succession. Details of the 
Group’s governance and the roles and responsibilities of the 
Board and its committees are included in the Governance 
and Remuneration section on pages 34 to 44. 
dividend
Following payment of the interim dividend in January, the 
Board is pleased to propose a final dividend of 1.3p per 
share. The total, full-year dividend of 2.0p will be put to 
shareholders for approval at the Annual General Meeting 
on 15 July 2014 and subject to this approval, it is our 
intention that the final dividend will be paid on 1 August 
to shareholders on the register as at 11 July, with an 
ex-dividend date of Wednesday 9 July.
Our people
My thanks go to all five hundred and twenty API employees 
in the various business units and the central team for 
their contribution to another year of solid progress for 
the Group. 
Conclusion
Following the distraction and uncertainty of the 2013 sale 
process, this year has allowed the Group’s management to 
focus on a number of operational improvement and capital 
investment initiatives. As well as realising the benefits from 
those actions, additional projects are already underway 
aimed at further enhancing capabilities and performance. 
The Board therefore remains confident in the Group’s 
prospects and the opportunity to create further value 
for shareholders. 
Richard C Wright
Chairman
3 June 2014 07
API Group plc Annual Report 2014  Overview
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STRATEGIC REPORT
BUSINESS mODEl AND mEASURING PERfORmANCE
Business model
•	 The Group is organised into four profit centres, each with 
an independent management team supported by a small 
central staff;
•	 Each business unit specialises in a single product category 
within the overall Group portfolio. Common end-markets 
and similar manufacturing technologies provide an 
opportunity for cross-selling and best practice sharing;
•	 Our products are made to unique formulations owned 
by API. Manufacturing scale presents a barrier to new 
market entrants; 
•	 We offer a collaborative, service-led approach with 
customers and a comprehensive range of products within 
each category, complemented by technical expertise and 
a track record of innovation; 
•	 As an integrated producer and distributor, profitability 
depends on maximising the utilisation of our installed base 
of equipment and facilities;
•	 Inter-group trade provides an additional opportunity to 
maximise added value for the Group from sales generated 
with third parties; 
•	 Excellent cash conversion ensures we have funds available 
to invest in profit-enhancing opportunities, as well as 
providing income for shareholders.
Who we are
•	 API is a long-established manufacturer of speciality foils 
and packaging materials, serving industrial markets in 
Europe, North America and Australasia from production 
operations in the UK and US; 
•	 We are the European market leader in carton-board 
laminates and a top three world-wide foils producer.
What we do
•	 API produces and markets foils, films and laminates for use 
primarily in packaging of fast moving consumer goods and 
in printed media; 
•	 Our metallic, holographic and pigmented solutions 
provide added value options for specifiers and brand 
owners, which enhance the visual appeal of products 
and packaging and help to communicate brand values 
and authenticity.
Strategy and objectives
•	 Our overriding purpose is to create economic value for 
the benefit of our customers, shareholders, employees 
and the wider community in which we operate;
•	 Our key financial objective is to increase the absolute 
level of operating profit through margin improvement 
and growth in sales, with a prudent regard for 
capital employed;
•	 We aim for each of our businesses to be contributing a 
high single digit or low double digit operating margin, 
with a resilient financial performance founded on a 
competent, well trained workforce, great products and 
a strong and sustainable market position;
•	 Progress towards our objectives depends on optimising 
our cost base and operational efficiency, growing 
volumes through product development and innovation, 
superior service delivery and selective investment in 
extended capabilities and capacity.
Growth strategies by business unit
•	 laminates: Increase the adoption of laminate through 
packaging development activity, working closely with print 
partners and premium brand owners;
•	 foils Europe: Deliver market-leading service through the 
industry’s best-invested sales and distribution network; 
•	 foils Americas: Leverage special competence in 
the production of foils for the growing metallic 
pigments sector;
•	 holographics: Exploit the opportunities provided by 
the growing security and authentication market, taking 
advantage of recent investment in market-leading 
holographic origination and manufacturing capabilities.
2014 7.4
2013 7.8
2012 6.4
2011 4.8
Operating profit before exceptional items
2014 114.7
2013 112.4
2012 113.9
2011 100.0
Revenues
2014 6.5
2013 6.9
2012 5.6
2011 4.8
Operating margin %
2014 2.20
2013 3.03
2012 2.12
2011 2.26
Total incident frequency per 100,000 hours worked 08
API Group plc Annual Report 2014
STRATEGIC REPORT
ChIEf ExECUTIVE’S REVIEW
•	 Revenues ahead by £2.3m (2.0%) 
to £114.7m (2013: £112.4m).
•	 Another good performance from Laminates 
and further progress at Foils Europe.
•	 Holographics back to breakeven in final 
quarter, Foils Americas operating margin 
maintained, but lower revenues.
•	 Profit before tax unchanged at 
£5.6m (2013: £5.6m).
Overall financial results
Group revenues for the twelve months 
to March 2014 increased by 2.0%, at 
both actual and constant FX rates, 
to £114.7m (2013: £112.4m). Sales 
volumes were higher by 2.7%, with 
second half volumes up 7.1% on the 
prior year compensating for a small 
decline in the first six months. 
In spite of the higher sales levels, 
added value margin declined slightly 
due to sales mix between the business 
units, the impact of less favourable 
exchange rates and higher levels 
of production scrap at Laminates. 
This, together with slightly higher 
variable costs, more than offset the 
contribution from higher sales to 
leave pre-exceptional operating profits 
down by 4.8% at £7.4m (2013: £7.8m). 
Operating margin was also lower, by 
0.4%, at 6.5%.
At segment level, full year profits 
advanced at Laminates (£0.2m) and 
Foils Europe (£0.1m) on the back of 
stronger volumes. Holographics losses 
increased by £0.4m, due to lower 
external sales, and Foils Americas 
profits declined by £0.2m, due to 
lower activity in the last quarter. 
Further details are provided in the 
divisional review on pages 10 to 25.
INTRODUCTION
In spite of a slightly weaker profit 
performance, results for the year 
demonstrate further strengthening 
of the Group’s financial position 
combined with continued investment 
in the operating assets of the business.
A number of key operational 
improvement projects were completed 
and, as the next step in this process, 
the Board has approved significant 
capital investment in additional 
capacity for the foils businesses. 
Managing this programme, along with 
the continued roll-out of the Group’s 
new ERP solution and building on the 
improved profit performance achieved 
in the second half of the year just 
ended, comprise the key operational 
agenda items for the year ahead. 09
API Group plc Annual Report 2014  Overview
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In a reversal of the pattern experienced 
in the last two years and as anticipated 
in our interim results statement, 
profitability improved significantly 
in the second half; up £0.5m (+15%) 
on the first half. Progress at Foils 
Europe (+£0.3m) and reduced losses 
at Holographics (+£0.4m), as a result 
of cost reduction measures, more 
than compensated for the weaker 
second half at Foils Americas (-£0.4m). 
Operating margin for the second half 
improved to 6.9% compared to 6.1% 
in the first half. 
For the year as a whole, profit 
before tax was unchanged, at £5.6m; 
although a small tax charge led to 
a marginal fall in diluted earnings 
per share to 7.1p (2013:7.2p).
Exceptional costs of £0.7m 
(2013: £1.0m) have been separately 
disclosed and relate to one-off 
costs and expenses associated 
with organisational change in three 
business units. Interest costs, including 
the new IAS 19 pension interest 
charge, were £0.1m lower at £1.1m 
(2013: £1.2m). On a pre-exceptional 
basis, profit before tax was 4.5% 
lower at £6.3m (2013: 6.6m) and 
diluted earnings per share were 7.8p, 
compared to 8.4p for the prior year.
Cash from operations, post 
exceptional items, converted at 91% of 
EBITDA (2013: 86%), with a net cash 
inflow of £2.8m compared to £1.2m 
for the previous year. 
Whilst cash capital expenditure of 
£3.5m was lower than the previous 
year (2013: £5.3m) capital additions 
still represented 1.4 times depreciation 
and will remain above depreciation for 
at least another two years as additional 
capacity is introduced into the Foils 
businesses. The Group completed 
its investment in the Czech Joint 
Venture after a further £0.5m transfer 
of funds on top of the £0.4m paid 
last year. With working capital broadly 
unchanged, the Group reported a 
small net cash position at the financial 
year end of £0.2m (2013: £2.6m debt).
Outlook
The Board expects a continuation of 
the second half trading momentum, 
with progression in results for the 
first half and for the financial year as 
a whole. 
At this stage, it is unclear how long 
Foils Americas will be affected by 
the reduced demand from metallic 
pigment customers, but any impact 
on the Group’s results should be more 
than compensated by the elimination 
of trading losses at Holographics and 
the benefit of last year’s restructuring 
at Foils Europe.
In respect of general market 
conditions, Foils Europe continues 
to experience steady overall 
demand, whereas recent activity in 
the decorative foils market in North 
America appears somewhat slower 
than usual. At Laminates, the new 
financial year has started strongly 
and there is a good pipeline of new 
business development projects.
Management is pressing ahead with 
its operational improvement and 
growth agenda, including the roll-out 
of the Group’s new ERP platform and 
investments in additional capacity for 
the Foils businesses. These initiatives 
will strengthen API’s ability to service 
customers in key markets and 
enhance the Group’s prospects over 
the medium term.
The Strategic Report as set out on 
pages 7 to 33 has been reviewed and 
approved by the Board of directors.
Andrew Turner
Chief Executive
3 June 2014
6%
Holographics
52%
Laminates
18%
Foils Americas
24%
Foils Europe
Revenue by division (£m)
-7%
Holographics
68%
Laminates
17%
Foils Americas
22%
Foils Europe
Operating profit by division (£m) 10
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW
OUR STRATEGy IN ACTION
INVESTMENT
Efficiency, quality,  
productivity and  
sustainability.
Key statistics
Despatching 
1 truck every 2 hours
Tonnes of adhesive 
consumed per month = 
4
Finished jumbo rolls 
produced per hour = 
3
LAMINATES
Trusted, innovative,  
reliable partner
Our investment in new 
laminating technology  
has broadened our product 
range and enhanced the 
service levels we can offer 
customers, cementing API’s 
position as Europe’s leading 
carton-board laminator. 11
API Group plc Annual Report 2014  Overview
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OUR STRATEGy IN ACTION
INVESTMENT
Efficiency, quality,  
productivity and  
sustainability. 12
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
Percentage of Group revenue
52%
As reported at the interim stage, 
API Laminates experienced lower 
first half activity due to net adverse 
‘churn’ of customer packaging 
specifications moving between 
laminate and non-laminate 
constructions and a reduced volume 
allocation on one of its key supply 
positions. In the second half, this 
was more than compensated 
by the commencement of bulk 
shipments against the major new 
supply contract, produced on the 
newly-installed laminator. As a result, 
second half revenues were 11% 
ahead of the first six months and 
25% higher than the comparative 
6 month period last year and full 
year revenues ended 7.4% higher, 
at £59.2m (2013: £55.2m). 
At the added value level, the 
contribution from higher sales 
was partially offset by the impact of 
changes in currency exchange rates 
and lower raw material efficiencies 
during the start-up phase on the 
new laminator. Operating costs 
increased by 5% due primarily to 
higher spend on plant maintenance 
and sales and marketing, leaving 
operating profits £0.2m ahead of 
the prior year, at £6.7m. Return 
on sales was slightly down on the 
prior year, but still a very creditable 
11.3% (2013: 11.8%). 
Experience 
API is Europe’s longest 
established and largest producer 
of paper and carton-board 
laminates for the packaging of 
consumer goods.
With over 50 years’ experience 
supplying to premium sectors 
such as fine spirits, tobacco, 
confectionary and beauty, we 
are committed to the highest 
standards of quality and technical 
excellence, innovation and supply 
chain efficiency.
LAMINATES
continued
Total revenue (£m)
£59.2m
2014 59.2
2013 55.2
2012 54.8
Operating profit (£m)
£6.7m
2014 6.7
2013 6.5
2012 5.7 13
API Group plc Annual Report 2014  Overview
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  Shareholder Information
Our products 
•	 Metallised Film Laminates
•	 Holographic Laminates
•	 Aluminium Foil Laminates
•	 Portabio Film Laminates
•	 Fresnel Lens Laminates
•	 Bespoke/Print-registered 
Holographics and Lens
•	 Microwave Susceptor 
Our markets
•	 Tobacco
•	 Wines and spirits
•	 Food and 
Confectionery
•	 Health 
•	 Beauty 
•	 Personal care 14
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
OUR STRATEGy IN ACTION
cOMPLETE 
PRODUcT 
RANGE
Local customer  
service and  
distribution.
Key statistics
Producing enough foil  
per year to circle the earth 
2,500 times
Foil so thin, the depth of  
an iPhone is equivalent to
10,000 layers
Typical length of a 
production roll 
36km
FOILS Europe
API Foils Europe delivers 
market leading service from 
the industry’s best invested 
distribution network. 15
API Group plc Annual Report 2014  Overview
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OUR STRATEGy IN ACTION
cOMPLETE 
PRODUcT 
RANGE
Local customer  
service and  
distribution. 16
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
Percentage of Group revenue
24%
In spite of the disruption caused 
by the reorganisation of its UK 
operations in the first half, Foils 
Europe recorded a second 
successive year of profits growth. 
Revenues moved ahead 5.0% at 
constant FX rates to £28.6m, with 
the Polish distribution unit more 
than doubling sales in its second 
year, further progress in Italy and 
an increased contribution from 
Germany. Revenues were lower 
in the UK and Australia, the latter 
due to a factory closure at a key 
customer in the label sector. 
Full year volumes increased 9.1% 
and, whilst there was a fall in 
average selling price due to mix, 
added value margin was slightly 
ahead of prior year. Production 
costs were higher despite second 
half labour savings arising from the 
UK restructuring, as were outbound 
freight costs, general overheads and 
marketing expenses. It is estimated 
that £0.2m of non-repeatable 
costs were incurred in connection 
with the UK reorganisation in the 
first half year. Profits increased by 
£0.3m in the second half with full 
year operating profits advancing by 
7.4% to £2.1m (2013: £2.0m) and 
operating margin higher by 0.2%, 
at 7.5%.
Over the last three years, activity at 
Foils Europe’s manufacturing plant in 
Livingston has increased by 18% due 
to growth in sales and repatriation 
of volume from the Group’s 
discontinued joint venture in China. 
With the facility now fully loaded 
and good prospects for further 
growth, the Board has approved 
capital investment to increase 
capacity, including a new vacuum 
metalliser which came on stream in 
May 2014 and an additional coating 
line planned for installation in the 
first quarter of 2015. Foils Europe is 
also planning to roll out the Group’s 
new ERP business, following its 
successful implementation in Foils 
Americas during the first half of the 
financial year just ended.
Experience 
API is a leading manufacturer 
and worldwide supplier of 
stamping foils used throughout 
the consumer goods industry 
to enhance the appearance of 
products and packaging.
As a top three player globally, 
API Foils is a well known brand 
name in the market with a 
comprehensive product range, 
including a particularly strong 
portfolio of foils used for special 
applications, and industry-leading 
service offering.
FOILS Europe
continued
Total revenue (£m)
£28.6m
2014 28.6
2013 27.0
2012 29.2
Operating profit (£m)
£2.1m
2014 2.1
2013 2.0
2012 0.4 17
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
Our products 
•	 Metallic Hot Stamping Foils
•	 Pigment Foils
•	 Holographic Foils
•	 Cold Foils
•	 Coding Foils
•	 Holographic 
Lamination Film
•	 Foiling Make Ready 
Materials
Our markets
•	 Wines and spirits
•	 Confectionery
•	 Beauty and 
personal care
•	 Greetings cards, 
books and magazines
•	 Food
•	 Footwear and 
sports goods
•	 Office and 
promotional products 18
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
OUR STRATEGy IN ACTION
ScALE AND  
fLExIbILIT y 
Large-scale producer,  
serving customers  
of all sizes.
Key statistics
Customers supplied  
in excess of
2,200
Products variants 
manufactured 
more than
1,000
A customer order 
received every 
6 minutes
FOILS Americas
Established name in the 
Americas foil market
API Foils’ reputation with 
customers is built on service 
excellence, especially 
flexibility, ease of dealing and 
technical application support. 19
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
OUR STRATEGy IN ACTION
ScALE AND  
fLExIbILIT y 
Large-scale producer,  
serving customers  
of all sizes. 20
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
Percentage of Group revenue
18%
Revenues at Foils Americas were 
down 8.2% at constant FX rates 
to £21.8m (2013: £24.0m) and 
were 9.0% lower than the prior 
year at actual FX rates. Following 
several years of strong growth 
in sales to the metallic pigment 
sector, the business experienced 
a sharp decline in order levels in 
the last quarter, due primarily to 
reduced conversion activity at one 
key customer. Sales of decorative 
foils were also lower due in part 
to capacity allocation in favour 
of the metallic pigment business 
in the earlier part of the year and 
a slow-down in the US market 
during the harsh winter period. 
The impact on profits of the 
reduced sales contribution was 
mitigated by an improvement in 
added value margins due to a more 
favourable sales mix, lower average 
raw material costs and a partial 
reversal of the prior year’s reduction 
in inventory. With costs broadly 
flat, operating profits were down 
just £0.2m, to £1.7m (2013: £1.9m), 
with operating margins virtually 
unchanged at 7.8% (2013: 7.9%).
At the beginning of the financial 
year, the US-based foils business 
transitioned across to a new ERP 
platform. Whilst there was a degree 
of initial disruption, the solution 
has now been running smoothly 
for several months and providing 
the business with a significantly 
improved information and control 
environment.
Experience 
API is a leading manufacturer 
and worldwide supplier of 
stamping foils used throughout 
the consumer goods industry 
to enhance the appearance of 
products and packaging.
As a top three player globally, 
API Foils is a well known brand 
name in the market with a 
comprehensive product range, 
including a particularly strong 
portfolio of foils used for special 
applications, and industry-leading 
service offering.
FOILS Americas
continued
Total revenue (£m)
£21.8m
2014 21.8
2013 24.0
2012 23.4
Operating profit (£m)
£1.7m
2014 1.7
2013
1.9
2012 1.2 21
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
Our products 
•	 Metallic Hot Stamping Foils
•	 Pigment and Coding Foils
•	 Holographic Foils
•	 Cold Foils
•	 Holographic Lamination Film
•	 Foiling Make Ready Materials
•	 Multi layer foil for 
metallic pigments
Our markets
•	 Wines and spirits
•	 Confectionery
•	 Beauty and 
personal care
•	 Greetings cards, 
books and magazines
•	 Food
•	 Footwear and 
sports goods
•	 Office and 
promotional products 22
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
OUR STRATEGy IN ACTION
HIGH SEcURIT y Resisting the threat from 
counterfeiting and identity 
fraud requires constant 
innovation and the utmost 
supply chain integrity.
Key statistics
Typical number of processes to 
complete a finished hologram =
15
Dots Per Inch resolution of a high 
security hologram =
245,000
Thickness of a typical transfer 
hologram foil is 3 microns =
0.003mm
HOLOGRAPHICS
High quality, high security
We understand the security 
and authentication sector and 
the levels of product quality 
and innovation demanded.  
We offer a broad and secure 
capability to meet and exceed 
customer expectations.  23
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information 24
API Group plc Annual Report 2014
STRATEGIC REPORT
DIVISIONAl REVIEW CONTINUED
Percentage of Group revenue
6%
API Holographics’ revenues declined 
by 7.9% to £8.9m (2013: £9.6m) with 
a recovery in sales of decorative 
holographic products to sister API 
companies adding £0.5m (+23%), 
offset by a reduction in third party 
revenues of £1.2m (-16%). The 
primary cause of the decline in 
external sales was the ending of a 
long-standing supply arrangement 
after the customer took production 
in house. In addition, the timing 
of shipments on a second major 
contract adversely impacted  
year-on-year comparatives. 
The lower sales contribution 
resulted in losses widening to £0.7m 
(2013: £0.3m) as operating cost 
savings of £0.2m were offset by a 
partial reversal of a credit to profit 
for inventory build in the previous 
year. After losses of £0.5m in the 
first half, management successfully 
implemented a cost reduction 
programme aimed at bringing 
the business back to a break even 
position in the final quarter. 
For the longer term, the Board 
remains committed to the strategy 
approved in 2011, aimed at growing 
API’s presence in the security and 
authentication market. Whilst a 
number of new sales opportunities 
have been developed in pursuance 
of that objective, progress has so 
far been slower than expected 
and undermined by the loss of 
one particular supply position due 
to factors beyond management’s 
control. In the meantime, significant 
capital investments have been 
completed in enhanced security 
and extended product capabilities 
at the Salford manufacturing facility, 
and the new Joint Venture in the 
Czech Republic is supporting the 
business development effort with a 
significantly improved holographic 
origination service.
HOLOGRAPHICS
continued
Total revenue (£m)
£8.9m
2014 8.9
2013 9.6
2012 13.0
Operating profit (£m)
-£0.7m
2014 (0.7)
2013 (0.3)
2012 1.6
Experience 
With a heritage going back to the 
original development of industrial 
holograms in the mid 1970s, API is 
today one of the industry’s largest 
manufacturers of holographic 
products, combining design, 
origination and micro-embossing 
expertise with know-how in 
coatings and adhesive technology 
derived from our extensive foil 
making activities.
API Holographics sells its 
authentication products directly 
to security printers, specifiers 
and other industry partners 
whilst decorative foils and films 
are distributed through sister 
companies within the Group. 25
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
Our products 
•	 Custom Holograms
•	 Holographic Stripe, 
Thread and Labels
•	 Holographic Overlays 
•	 Tamper Evident Seals
•	 Scratch-off Foil
•	 Security embossing base
Our markets
•	 Premium branded goods
•	 Dutiable goods (wines, 
spirits and tobacco)
•	 Pharmaceuticals, 
licenced goods
•	 Event and 
transport tickets
•	 Vouchers  
and certificates
•	 Government and 
institutional documents 
and currency 26
API Group plc Annual Report 2014
STRATEGIC REPORT
fINANCIAl REVIEW
•	 Diluted earnings per share were 
7.1p compared to 7.2p for last year.
•	 Net cash of £0.2m compares to £2.6m net 
debt at 31 March 2013.
•	 Final dividend of 1.3p, making the full year 
dividend 2.0p.
divisional profits summary
For the twelve months ending 
31 March 2014, total operating profits 
from the business units before central 
costs were down 3.3% to £9.8m  
(2013: £10.1m), equating to an 
operating margin of 8.5% (2013: 9.0%). 
A stronger second half yielded an 
operating margin before central costs 
of 8.9%.
Central costs
Central costs were £0.1m higher 
than prior year, at £2.4m, primarily 
due to over-lapping expenses to 
run two concurrent IT platforms 
during the transition to the new ERP 
solution. As a result of the change 
to pensions accounting following 
the introduction of IAS 19R, central 
costs now include pension expenses 
previously charged to finance costs 
and “other comprehensive income” in 
the financial statements. For the year 
ended 31 March 2014, costs relating 
to the closed defined benefit pension 
schemes amounted to £0.7m, which 
is in line with prior year comparatives 
when restated on the same basis.
Impairment
The Board considers that no 
impairments to goodwill or asset 
carrying values are necessary.
OVERVIEW
Cash generated from operations 
of £9.0m (2013: £8.6m) supported 
further capital investments in the year 
of £3.8m (2013: £5.5m).
Underlying diluted EPS* (pence per share)
7.8p
2014 7.8
2013 8.4
2012 6.1
Net debt (£m)
-£0.2m
2014 (0.2)
2013 2.6
2012 3.6 27
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
Exceptional items
Exceptional charges totalling £0.7m 
(2013: £1.0m) were incurred during 
the year in relation to reorganisation 
costs in Foils Europe, Holographics 
and Laminates. 
Further details are provided in Note 5 
to the financial statements.
Finance costs
Net finance costs for the year reduced 
by £0.1m to £1.1m. The non-cash, 
pension-related finance charge, 
calculated in accordance with the new 
IAS 19 accounting standard, increased 
by £0.2m to £0.6m. This increase 
was offset by interest and other costs 
relating to bank borrowings which 
fell by £0.2m to £0.6m (2013: £0.8m) 
as a result of lower average net 
debt and lower interest margins on 
both UK and US facilities. Further 
details are provided in Note 6 to the 
financial statements. 
Taxation
The Group continues to benefit from 
historic tax losses and non-utilised 
capital allowances in the UK. As a 
result, the current tax charge of £0.4m 
(2013: £0.2m) was mostly offset 
by a deferred tax credit of £0.3m 
(2013: £0.2m). 
In the UK, the current tax of £0.2m 
(2013: £0.1m) related entirely to 
API Laminates, where tax losses are 
now fully utilised. Taxable profits 
were partially sheltered by UK group 
relief (losses in API Holographics 
and central companies) and capital 
allowances. Overseas tax of £0.2m 
(2013: £0.1m) related to taxable 
profits in Germany and Italy. Overall 
tax on profits in the UK and US Foils 
businesses continues to benefit from 
previously accumulated tax losses and 
non-utilised UK capital allowances. 
In the period, a deferred tax charge 
of £1.5m (2013: £1.5m) was balanced 
by a deferred tax credit of £1.7m 
(2013: £1.6m); mostly from further 
recognition of historic tax losses in the 
Foils businesses. 
A full reconciliation of the tax charge 
is shown in Note 7(d) to the financial 
statements.
The net deferred tax asset recognised 
in the Group’s balance sheet reduced 
in the year by £0.3m to £6.1m 
(2013: £6.4m) predominantly due 
to a reduced deferred tax asset of 
£2.8m relating to the pension deficit 
(2013: £3.1m) as a consequence of 
lower corporation tax rates in the UK.
Remaining unrecognised tax losses, as 
at 31 March 2014, amounted to £2.1m 
in the UK (2013: £2.8m) and $4.1m in 
the US (2013: $9.0m), in addition to 
unclaimed capital allowances in the 
UK of £2.1m (2013: £3.9m).
Earnings per share 
Diluted earnings per share were 
7.1p, compared to 7.2p for last 
year. Excluding exceptional items, 
diluted earnings per share were 7.8p 
(2013: 8.4p).
Shareholders’ funds
At 31 March 2014, the Group’s net 
assets were £26.4m, an increase over 
the year of £3.5m or 15.2%.
Cash flow and net debt
There was a net cash inflow from 
operating activities (after cash flows for 
pension and finance costs) of £7.4m; 
up from £7.0m in the previous year. 
Cash flows resulting from capital 
expenditure amounted to £3.5m 
(2013: £5.3m) of which £3.3m was 
capitalised (2013: £5.1m). Spend 
included payments of £1.9m for 
projects scheduled to complete in 
the new financial year. Two new foil 
metallisers, which are scheduled for 
installation in the first half of the new 
financial year, incurred project costs of 
£1.2m. A further £0.7m was incurred 
on the new business IT system which 
is now operational in the US, with 
Foils Europe expected to complete 
by March 2015. A further investment 
of £0.5m (2013: £0.4m) was made in 
the Czech joint venture origination 
company to complete the funding 
of its new equipment. For the third 
successive year, capital investment 
was significantly ahead of depreciation 
of £2.4m (2013: £2.2m). 
The impact on working capital of 
stronger sales activity in the final 
three months of the year compared 
to the equivalent period a year earlier 
was offset by improved working 
capital efficiency, with the result that 
working capital ended the year broadly 
unchanged. Year-end efficiency, which 
is measured internally by reference to 
trailing three month sales (annualised), 
improved by 0.9% to 7.3% as a result of 
reduced inventories. 
Consistent with the charge in the 
income statement, cash flow for 
interest expense reduced by £0.2m, 
to £0.4m. 
Net cash at 31 March 2014 amounted 
to £0.2m, compared to net debt of 
£2.6m a year earlier. The Group’s 
year-end debt cover ratio (net debt 
to trailing 12 month EBITDA) was 
therefore zero (2013: 0.3x), as was 
gearing (net debt to shareholders’ 
funds) (2013: 11%).
In light of the Group’s recent record 
of strong cash conversion and the 
reduced levels of bank debt, and 
following a review of medium term 
business plans, the Board announced 
in December 2013 its intention 
to re-introduce a meaningful and 
sustainable dividend that would 
be affordable out of future cash 
flows after providing for finance 
and pension costs and funding of 
capital investment requirements. 
An interim dividend of 0.7p was 
paid to shareholders in January at a 
cost of £0.5m and a final dividend 
of 1.3p is being recommended to 
shareholders for approval at the AGM 
on 15 July 2014.  28
API Group plc Annual Report 2014
STRATEGIC REPORT
fINANCIAl REVIEW CONTINUED
Borrowings and liquidity
The Group’s policy is to ensure that 
banking facilities are adequate to meet 
foreseeable peak requirements arising 
from variations in working capital 
and the timing of capital expenditure. 
Facilities are in place to independently 
finance the two main operations based 
in the UK and North America.
During the year, new UK facilities were 
agreed with HSBC plc. These include a 
revolving credit facility of £13.5m and 
ancillary facilities of £7.5m to cover FX 
contracts, letters of credit and sundry 
other items. The facilities extend to 
December 2017 and are subject to two 
quarterly financial covenant tests. 
Lending is secured via a floating 
charge over the Group’s UK assets. 
Total facilities under the previous 
funding arrangement with Barclays 
Bank plc, as at 31 March 2013 
amounted to £12.8m.
In North America, funding has been 
arranged with Wells Fargo Bank, until 
April 2015. Facilities comprise an 
amortising loan, amounting to $0.9m 
at 31 March 2014 (2013: $1.2m), and 
a $5.5m asset backed working capital 
facility. Borrowings are secured on 
working capital, plant and equipment 
and the Kansas property and are 
subject to quarterly covenant tests. 
The soon-to-be-installed new 
metalliser for the Kansas facility is 
being funded via a separate asset 
financing agreement with Wells Fargo. 
Foreign currency exchange rates
Exchange rates used for the translation 
of results and assets of US and 
Euro-zone based operations are 
shown below. 
Rate to £1  US $ Euro
31 march 2014
Average 1.59 1.19
Closing 1.67 1.21
31 March 2013
Average 1.58 1.23
Closing 1.52 1.18
Pensions
The UK and US businesses each 
operate defined benefit pension 
schemes for the benefit of past and 
current employees. Both schemes 
are closed to future accrual and are 
accounted for under IAS 19R.  
At 31 March 2014 the Group’s IAS 19R 
gross pension liability was assessed at 
£13.3m (2013: £13.3m). When adjusting 
for the recognised deferred tax asset 
of £2.8m (2013: £3.1m), the net liability 
equates to £10.5m (2013: £10.2m). 
A small increase in the gross UK deficit 
was matched by reduced net liabilities 
on the US plan. The deferred tax asset 
reduced by £0.3m as a result of lower 
UK tax rates.
In the UK, the API Group plc 
Pension and Life Assurance Fund has 
approximately 1,520 pensioners and 
deferred members. The fund was 
closed to future service accrual on 
31 December 2008 following on from 
a decision to admit no new members 
since October 2006. 
The UK scheme’s last triennial 
valuation date was 30 September 
2013. The valuation results and funding 
plan were approved by the Trustees 
and the Company in May 2014. 
The outcome was broadly in line 
with the funding plan from September 
2010 and, as a consequence, the 
Company will continue its annual 
deficit reduction payment of £0.7m 
per annum. The Company also pays 
all administration fees on behalf of 
the Fund and works collaboratively 
with the Trustees on many aspects of 
scheme management, in particular 
investment strategy.
As at 31 March 2014, the gross deficit 
of the UK fund has been calculated 
at £12.6m (2013: £12.3m) under 
the valuation principles of IAS 19R. 
A benefit from a small increase in the 
discount rate to 4.40% (2013: 4.30%) 
was offset by changes to assumptions 
used for mortality. The average life 
expectancy assumption has been 
increased by 0.65 years across the 
population as a result of a postcode 
review of the membership carried 
out for the 2013 funding valuation. 
Additionally, an experience loss of 
£1.2m has been recognised relating to 
the triennial revision of expected future 
cash benefits to be paid. Inflation 
assumptions remain unchanged. 
In the US, the API Foils North America 
Pension Plan was closed to new 
entrants and future accrual in 2004. 
Membership is approximately 160 
current and past employees. Details of 
the net deficit of £0.7m (2013: £1.0m) 
are included in Note 18 to the financial 
statements. 
Also in the US, current and past 
employees covered by union 
contracts at the Group’s New Jersey 
manufacturing facility are members 
of a union-managed, multi-employer 
defined benefit pension plan. The plan 
operates under the terms of the site’s 
collective bargaining agreement and 
remains fully open. In accordance with 
IAS 19R, this scheme is accounted for 
as a defined contribution plan.
Chris Smith 
Group Finance Director
3 June 2014 29
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
mAKING OUR OPERATIONS mORE SUSTAINABLE
The Group operates in a manner which aims to eliminate 
the possibility of its activities causing harm to people and 
the environment.
Safety, health and  
environment (“SHE”)
Policy and implementation
The Group’s first priority in the 
workplace is the health, safety and 
welfare of its employees and those 
affected by its operations. API has a 
good health and safety record and 
a culture of safety which aims for 
continuous improvement is deeply 
embedded within the Group. 
The Board considers that the 
management of safety, health and 
environment form a key element of 
the Group’s corporate governance 
activities and the Board therefore has 
ultimate responsibility for policy and 
performance in this area. The Chief 
Executive has primary responsibility for 
setting principal SHE objectives within 
which detailed policies operate, and 
for reviewing progress against those 
objectives. Progress and performance 
is reported on a monthly basis to the 
Board, supplemented by an annual 
analysis and appraisal.
The Group’s SHE Policy has been 
designed to provide a framework and 
guidelines for business units to ensure 
that they meet or exceed all applicable 
legal and regulatory requirements, 
to share best practice and to 
maintain suitably active and directed 
management programmes at site 
level. There is a clear emphasis on the 
responsibilities of local management 
teams, with oversight through line 
management and support from 
Group resources. 
SHE training
Skill development is a key element 
of the Group’s SHE Policy which is 
encouraged through the organisation 
and funding of both internal and 
external health and safety training. 
The Group SHE Policy defines 
minimum training standards for 
nominated safety officers on each 
site and all supervisors and managers 
with responsibility for production 
operations. With the assistance of 
specially trained personnel and 
input from Safety Committees, 
all employees are involved in 
implementing the Company’s Health 
and Safety Management system. 
Fire prevention
The risk of fire and explosion at any of 
the Group’s five manufacturing plants 
is mitigated by constant attention to 
best practice techniques, processes 
and controls. In 2011, the Group 
introduced its Fire and Explosion 
Prevention Standard and Rating 
System. This comprehensive guide for 
site management teams incorporates 
a scoring system designed to quantify 
risk management status. As part of 
the annual business planning process, 
each site identifies a programme of 
specific improvements to increase 
their risk rating in the year ahead and 
gain marks under the scheme on 
a monthly basis as those measures 
are implemented. During the latest 
twelve-month period, the average 
Fire and Explosion Prevention rating 
improved from 345 to 350 out of a 
maximum achievable score of 400. 
2014
2013
2012
2011
2010
2.20
3.03
2.12
2.26
3.19
Total incident frequency  
per 100,000 hours worked
2014
2013
2012
2011
2010
0.84
1.05
0.20
0.64
0.46
Lost time accident frequency  
per 100,000 hours worked
2014
2013
2012
2011
2010
191
555
281
110
201
Days absence due to lost  
time accidents
STRATEGIC REPORT
CORPORATE SOCIAl RESPONSIBIlIT y 30
API Group plc Annual Report 2014
STRATEGIC REPORT
CORPORATE SOCIAl RESPONSIBIlIT y CONTINUED
Environmental practice and systems
API is committed to ensuring good 
environmental practice relating to its 
operational processes and investment 
decisions. A number of API’s principal 
manufacturing sites are ISO 14001 
accredited and the Group’s operations 
comply with applicable waste 
management regulations. 
The Group continues to invest in 
systems and equipment to ensure 
that environmental performance 
is measured and improved in the 
key areas of solvent emissions, 
energy efficiency, noise, process 
and packaging waste and soil/ 
groundwater protection. 
SHE performance 
As an integral part of the reporting 
cycle, all sites report monthly on 
SHE performance. Routine reporting 
encompasses a comprehensive suite 
of safety and environmental statistics 
and written details of any significant 
events are provided to the Group 
Chief Executive on a timely basis. 
Each site completes an annual review 
of performance, including progress 
against annual objectives, and sets out 
a plan of improvements for the year 
ahead. As a matter of policy, SHE is 
placed first on the agenda of all regular 
business review meetings, including 
Board meetings. 
It is normal practice for at least one 
SHE item to be included on the list 
of personal objectives for all business 
unit general managers and operations 
managers, which are in turn linked to 
the annual bonus scheme. 
With respect to environmental matters, 
for the past two years, the Group has 
been compiling standardised data 
on total waste as a proportion of the 
weight of all materials consumed and 
energy consumption per unit of sale. 
For the year ended 31 March 2014, 
total environmental waste increased 
14.2% compared to 13.6% for the prior 
year. The increase was primarily due to 
higher production scrap levels at the 
Laminates operation in Poynton. Waste 
may go to either landfill, incineration 
or recycling and the business is taking 
steps to reduce the amount going to 
the most environmentally damaging 
destination: landfill. There was a 
second successive year of significant 
progress against this objective, with 
the amount of waste going to landfill 
reducing by 14% on top of the 45% 
reduction achieved last year. Progress 
is expected to continue with the 
investment in onsite processing of 
foil waste at the Holographics facility 
at Salford, enabling a switch to a 
heat-from-waste solution. Unit energy 
consumption for the year was down 
by 30.0% to 226 Whr per square metre. 
The improvement was due to a 
number of energy saving initiatives at 
API Holographics and the benefit of a 
mild winter on heating costs at most 
European facilities.
No environmental incidents were 
logged under the Group’s internal 
reporting during the past year 
compared to two incidents in the 
preceding year. 
API’s employees
API Group employs 520 employees 
in 16 locations worldwide. Each 
business division is led by a Managing 
Director, who reports to the Group 
Chief Executive and is supported by a 
local management team. The Board 
and the Group leadership team value 
the contribution which the whole 
workforce makes to the success of 
the Group.
Communication with employees
The Board promotes good relationships 
and communication with employees. 
Steps are taken to inform employees 
of the circumstances facing the 
businesses and its progress and plans, 
with the aim of promoting a sense of 
common endeavour towards local 
business objectives and the success 
of the Group as a whole. 
Granulator for Holographics 
Enables production waste  
to be granulated onsite and 
sent for incineration instead 
of chemical processing 
and landfill. 31
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
The Group encourages consultation 
and communication at site level and 
employees have access to senior 
management so that their views can 
be taken into account when making 
decisions which are likely to affect 
their interests. Communication 
with employees includes publishing 
announcements and updates on staff 
notice boards, communications by 
email and team meetings. Information, 
including the latest news relating to 
the Group’s businesses, is also made 
available on the Company’s intranet.
Each business division and the 
Group’s central services team has its 
own HR advisor who is available to 
address any concerns or questions 
an employee may have on a strictly 
confidential basis.
The Group has a Whistleblowing 
Policy in place to enable and 
encourage employees, regardless of 
seniority, to bring matters relating to 
suspected wrongdoing or dangers 
at work to the Board’s attention. 
The Whistleblowing Policy forms part 
of the Employee Handbook and is also 
available for employees to access on 
the Company’s intranet. Arrangements 
are in place for proportionate 
and independent investigation of 
any concerns or allegations and 
for appropriate follow-up action, 
when required. 
Equal opportunities
API is an equal opportunities 
employer. Both employment 
(including recruitment) policy and 
practice in the Group are based 
on non-discrimination and equal 
opportunity irrespective of age, 
disability, race, religion or belief, 
gender, sexual orientation, gender 
re-assignment, colour, nationality, 
ethnic or national origin and marital 
or civil partner status. The Company’s 
Equal Opportunities Policy forms part 
of the Group’s Employee Handbook 
and is also available for employees to 
access on the Company’s intranet.
The Group endeavours to give 
full and fair consideration to the 
possibility of employing disabled 
people wherever a vacancy arises and 
is committed to making reasonable 
adjustments whenever required. 
Disabled employees have the same 
opportunities as other employees 
in relation to training, career 
development and promotion. 
Training and development 
Training and development of all 
employees is given due priority. 
The assessment of training and 
development needs is led by the 
relevant human resources professional 
and programmes are coordinated 
primarily at a business unit level. Senior 
management and staff participate 
in a performance management 
programme involving annual 
objective-setting and appraisal. 
Reward and recognition
Linked to the performance 
management system, the Group 
operates a number of incentive 
schemes which encourage 
employees to contribute directly 
to the achievement of the Group’s 
goals and reward individual and 
collective success. 
Laminates landfill reduction
A second successive year of 
significant progress on landfill 
reduction, with the amount of 
waste going to landfill down 
by 14% on top of the 45% 
reduction achieved last year. 32
API Group plc Annual Report 2014
STRATEGIC REPORT
PRINCIPAl RISKS AND UNCERTAINTIES
Financial risks
Area of risk Description Potential impact Mitigation
Foreign 
currency
With operations in nine countries, the 
Group is exposed to foreign exchange 
translation risk when the net assets and 
income statements of overseas subsidiaries 
are consolidated into the Group financial 
statements. T ransactional foreign exchange 
exposures arise when an entity within the 
Group enters into a transaction to pay or 
receive funds in a currency other than its 
functional currency. 
Movements in exchange 
rates could have substantial 
favourable or adverse impacts 
on both the consolidated 
financial statements and those 
of individual entities. Sensitivity 
to movements in exchange rates 
is explained in Note 22 to the 
financial statements.
The Group’s debt is structured to 
ensure that, where possible, it is 
held in the same territory where 
the operations being financed 
are situated. For substantial 
transactional exposures, it is Group 
policy to hedge through the use 
of foreign exchange forward 
contracts. The Group does not 
undertake any trading activity in 
financial instruments.
Interest rates Interest rate risk arises from cash and 
borrowings which are subject to floating 
interest rates. 
Changes to interest rates 
could impact net results 
and cash flow. Sensitivity to 
movements in interest rates 
is explained in Note 22 to the 
financial statements.
If considered appropriate, 
the Group uses swap hedge 
instruments to convert a portion 
of its debt from floating to fixed 
interest rates. 
Credit Credit risk arises from the possibility that 
customers may not be able to settle their 
obligations as agreed. 
Non-payment by customers 
resulting in bad debts could 
have an adverse impact on the 
Group’s profitability.
Customers are assessed for 
financial reliability using external 
rating agencies. Secure payment 
terms are frequently used 
in riskier geographies or for 
riskier customers. The Group 
regularly assesses the cost and 
benefits of credit insurance and 
procures coverage as considered 
appropriate.
Liquidity Liquidity risk refers to the risk that the 
Group may not be able to settle or meet 
its financial obligations on time or at a 
reasonable price. This will arise from 
mismatches between cash inflows and 
outflows from the business. 
Failure to meet covenant and 
other conditions could result in 
the Group being forced to accept 
materially less attractive lending 
terms or to implement measures 
designed to accelerate the 
repayment of debt to the possible 
detriment of shareholder value.
This risk is monitored through 
regular short-term cash flow 
forecasting, rolling twelve-month 
trading forecasts from the 
businesses and annual budgets 
agreed by the Board before the 
start of each financial year. 
Defined benefit 
pension 
schemes
The Group provides final salary retirement 
benefits for a number of its former and 
current employees through pension 
schemes in the UK and US. Contribution 
requirements may vary depending on 
investment performance, mortality rates, 
inflation levels and changes in other 
actuarial assumptions.
While these schemes are 
closed to future service accrual, 
actuarial valuations and funding 
assessments may lead to demands 
for higher top-up contributions 
from the Group. 
The Group, in conjunction with the 
T rustees of the pension schemes, 
actively monitors the performance 
of the schemes’ assets and takes 
appropriate actions to ensure 
these are maximised and also that 
the obligations under the schemes 
are mitigated where possible. 
RISK mANAGEmENT
Our management structure, business reporting and risk management 
processes ensure we are both informed of and responsive to 
business and marketplace trends, promoting timely and informed 
strategic and tactical decisions. 33
API Group plc Annual Report 2014  Overview
 > Strategic Report
  Governance and Remuneration
  Financial Statements
  Shareholder Information
Operational risks
Area of risk Description Potential impact Mitigation
Markets A key risk faced by the business is a 
reduction in levels of demand by customers. 
In general, customers are unencumbered 
by formal contractual commitments and 
provide limited visibility of future volume 
requirements. Ultimately, order levels 
depend on rates of consumption several 
stages removed from the Group’s point of 
sale which, when combined with the effects 
of confidence and decision making by 
multiple parties within the supply chain, are 
difficult to predict. 
The Group’s cost base is 
inevitably somewhat inelastic 
and financial results are therefore 
difficult to insulate from any 
sharp or prolonged downturn 
in market activity.
The Group constantly strives to 
adapt its operations to prevailing 
demand. Management prepares 
monthly forecasts and carries 
out regular business reviews to 
enable it to react to movements in 
demand and take remedial action 
as quickly as possible.
Commercial 
relationships
The business relies on a small number of 
key customers and supply contracts for a 
significant proportion of its turnover.
Any slump in the fortunes of major 
customers or lack of success in 
maintaining or replacing existing 
major supply positions could have 
a materially adverse impact on the 
Group’s operating results.
The Group aims to build long-term 
relationships with major end-users 
of its products, as well as 
continuing to provide a high value 
of quality and service to its direct 
customers. There is continuing 
focus on diversifying the customer 
base to reduce reliance on a few 
major customers.
Geographic A significant proportion of the Group’s 
sales are in developed Western economies, 
including the UK. In line with the general 
move of manufacturing to lower cost 
countries, certain of the Group’s immediate 
and end-use customers routinely consider 
relocating facilities to regions where the 
Group’s infrastructure is less well developed 
such as Eastern Europe and Asia.
Any accelerated reduction in 
the accessible customer base 
could impact the Group’s 
sales opportunities.
The Group has strategies in 
place to expand its operations 
into less well developed regions 
both through the creation of 
directly owned distribution hubs 
or developing relationships with 
third-party distributors. 
Input costs A significant proportion of the Group’s raw 
material and conversion costs are affected 
by the price of oil and gas and the dynamics 
of particular commodity supply sectors. It is 
difficult to insulate input costs from volatility 
in the price of these commodities.
A significant increase in raw 
material input costs could reduce 
margins as the Group could also 
face challenges in passing higher 
costs through to customers 
due to competitive pressures in 
most markets.
The Group constantly monitors 
the prices of raw materials and 
utilities. When it is deemed to 
be advantageous, fixed price 
contracts are entered into in order 
to protect margins.
Health and 
safety
Due to the nature of its operations, the 
Group is exposed to a wide range of health 
and safety risks, including the potential for 
serious fires and explosions. 
As well as the risk of injury or 
loss of life, failure to properly 
manage and control these risks 
could lead to the suspension or 
withdrawal of operating consents 
by enforcement authorities, 
corporate prosecution or the 
loss of productive capacity 
through damage to equipment or 
facilities. There is the potential for 
significant adverse disruption to 
the Group’s activities and financial 
consequences which may not be 
wholly covered by insurance.
Health and safety is given 
high priority by the Group’s 
management and is monitored 
closely by the Board. An active 
programme is in place to control 
exposure and minimise the fire 
and explosion risk. In addition, 
management works closely 
with insurers on the prevention 
of property loss and business 
interruption.
Environment API is aware of the impact the Group’s 
operations can have on the environment. 
Some of the Group’s manufacturing 
processes involve solvents and other 
hazardous chemicals. Where these 
substances are used there is the potential 
for air and ground contamination. 
Failure to meet required standards 
could lead to the suspension 
or withdrawal of operating 
consents by enforcement 
authorities or financial and 
reputational loss arising from 
corporate prosecution.
API is aware of the impact the 
Group’s operations can have on 
the environment. The risk of new 
incidents is contained by means 
of strict operating procedures. 
Past exposures are remedied 
when required.  34
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION
BOARD OF DIRECTORS
Richard Wright
Chairman
Richard joined the Board on 3 September 2001 and was 
appointed Chairman on 1 February 2006. He is a member 
of the Nomination, Remuneration and Audit Committees. 
Richard previously held senior executive roles with the Ford 
Motor Company including Director, European operations 
at Jaguar Cars Limited, Director of Sales, Ford Motor 
Company Limited and President/Managing Director of Ford 
Belgium NV. He is currently Chairman of Caffyns plc and a 
member of the Board of WBS, Warwick University Business 
School. He is the former Chair of the Board of National 
Savings and Investments.  
Andrew Walker
Non-executive Director, Senior Independent Director
Andrew joined the Board in 2003 and is Chairman of 
the Remuneration and Audit Committees. He is also a 
member of the Nomination Committee. He has wide public 
company experience both in manufacturing and service 
companies. He was previously Group Chief Executive of 
McKechnie plc and, prior to joining McKechnie, he was 
Group Chief Executive of South Wales Electricity, joining 
them from TI Group plc. Andrew is currently a  
Non-executive Director of Plastics Capital plc,  
Stemcor Ltd and Chairman of Mainstay Ltd.
Max Batzer
Non-executive Director
Max joined the Board in October 2007 and is Chairman 
of the Nomination Committee and a member of the 
Remuneration Committee. Max is a Portfolio Manager at 
Wynnefield Capital, Inc. which has a significant beneficial 
interest in the Company’s shares. He is also a Director 
of Integral Wealth Management and Summer Infant, 
Inc., and has previously held positions as Chairman and 
CEO of Diagnostic Health Services, Director of Cornell 
Companies, Inc., Director and Executive Committee 
member of Simmons Airlines, Inc. and President of 
General Hide and Skin Corporation. 
Andrew Turner
Group Chief Executive
Andrew joined the Board in October 2007 as Group Chief 
Executive. He is a graduate mechanical engineer with an 
MBA and has over 20 years’ experience in the packaging 
sector. Prior to joining API, Andrew was Global Vice 
President, Marketing & Sales for the Tobacco Packaging 
division of Alcan, a worldwide aluminium producer; and 
prior to that, he was Divisional Managing Director with Field 
Group plc, a printed paperboard packaging company, with 
responsibility for operations in the UK, Germany and Spain. 
Chris Smith
Group Finance Director
Chris joined the Board in September 2008 as Group 
Finance Director. He is a qualified ACA and has in excess of 
20 years’ experience working in manufacturing businesses. 
Chris previously held a variety of roles at Courtaulds plc, 
manufacturer of films, chemicals and fibres, where he 
gained international experience, including positions in 
Germany and Hong Kong. Prior to joining API, Chris worked 
for Scapa plc, manufacturer of adhesive tapes, where he 
was Finance and IT Director for Europe and Asia. 
Luke Wiseman
Non-executive Director
Luke joined the Board in September 2006 and is a member 
of the Audit and Remuneration Committees. Luke is a 
Director of the Olivetree Financial Group, a London-based 
financial technology business. He was previously Chairman 
of Barbican Group Holdings Limited and a Director of Steel 
Partners (UK) Limited, whose affiliates, Steel Partners II, LP, 
have a significant beneficial interest in the shares in the 
Company (and for whom up until 2 May 2014 Luke was a 
nominee Non-executive Director of the Company).  35
API Group plc Annual Report 2014  Overview
  Strategic Report
 > Governance and Remuneration
  Financial Statements
  Shareholder Information
GOVERNANCE AND REMUNERATION
CORPORATE GOVERNANCE STATEMENT
Board and Board Committees
The Board has adopted the Quoted Companies Alliance Guidelines (the “Guidelines”) for AIM-listed companies, which has 
been applied to ensure good levels of governance are maintained. 
Board composition
The Board consists of a Non-executive Chairman, two Executive Directors and three Non-executive Directors. A short 
biography of each Director, which illustrates their wide range of experience, is set out on page 34.
There is a clear division of responsibility between the Chairman and the Group Chief Executive, and written Terms of 
Reference have been adopted by the Board defining these roles. As Chairman, Richard Wright is responsible for managing 
the Board, ensuring its effectiveness and setting its agenda. Andrew Turner, Group Chief Executive, is responsible for 
implementing strategy and is responsible to the Board for the operational and financial performance of the Group. 
Andrew Walker is the Senior Independent Director. Notwithstanding his length of service on the Board, Andrew Walker 
is considered by the Board to be independent of management and free from any business or other relationships which 
could materially interfere with the exercise of his judgement. Andrew Walker has held both executive and non-executive 
directorships in the manufacturing and service sectors and accordingly he brings a wealth of knowledge and experience 
to the Board. 
Max Batzer has been designated by the Board as non-independent by virtue of his association with major shareholder, 
Wynnefield Capital, Inc. Up until 2 May 2014, Luke Wiseman was designated as non-independent by virtue of his 
association with, Steel Partners II, LP. Luke Wiseman remains a Non-Executive Director and is now considered by the Board 
to be independent of any business or other relationship that would materially impede on how he exercises his judgement 
on the Board. Each Non-executive Director proactively participates in the Board’s deliberations, constructively challenges 
the Executive team and helps develop proposals on strategy for the Group.
The Board structure ensures that no individual or group dominates the decision making process. The composition of 
the Board is kept under review to ensure that it remains appropriate to the strategic and managerial requirements of the 
Company. A full review of the Board’s composition will be completed by the end of this calendar year. There is a formal, 
rigorous and transparent procedure for the appointment of new Directors to the Board. The Company’s Articles of 
Association require that one-third of the Directors offer themselves for re-election annually in rotation. This enables the 
shareholders to decide on the composition of their Board.
Board meeting attendance and Board operation
Details of the Directors’ attendance at regular scheduled Board and Board Committee meetings are set out below.
       Audit Remuneration Nomination 
      Board Committee Committee Committee 
Total number of meetings in financial year:    8 meetings 2 meetings 4 meetings 2 meetings
Number of meetings attended in financial year:
Executive Directors
Andrew Turner
 1
     8/8 — — —
Chris Smith
 2
     8/8 — — —
Non-executive Directors
Richard Wright     8/8 2/2 4/4 2/2
Andrew Walker
 3
     8/8 2/2 4/4 —
Max Batzer     8/8 — 4/4 2/2
Luke Wiseman     8/8 2/2 4/4 —
1  Andrew Turner attended by invitation the whole or part of some of the meetings of the Audit, Remuneration and Nomination Committees.
2  Chris Smith attended by invitation the whole or part of some of the meetings of the Audit, Remuneration and Nomination Committees.
3  Andrew Walker was appointed a member of the Nomination Committee on 26 November 2013. No meetings of the Committee have taken place  
since his appointment.
The Board is focused on commercial strategy with strategic plans for both short-term and long-term growth of each 
business unit being presented to the Board for review and approval. Long-term incentive plans for the Executive Directors 
and the General Manager of each of the Group’s principal operating businesses are linked to these plans and operating 
budgets, and capital expenditure plans are expected to be in line with the Company’s overall commercial strategy.  36
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION
CORPORATE GOVERNANCE STATEMENT CONTINUED
Board meeting attendance and Board operation continued
The Board manages the Company through a formal schedule of matters reserved for its decision. These include overall 
management of the Company, financial reporting and controls, material agreements, non-recurring projects, treasury, 
audit and risk management, remuneration, corporate governance and corporate responsibility. The Board has delegated 
specific responsibility to the Board Committees set out below. The roles and responsibilities of each Committee are set 
out in clearly defined Terms of Reference. From time to time, and, if required, the Board will establish ad hoc committees 
to deal with specific issues.
The Board receives appropriate documentation and financial information in advance of each Board meeting. This includes 
monthly management accounts, reports on current trading and papers on matters in respect of which the Board makes 
decisions or is invited to give its approval. The Board receives regular reports on health, safety and environmental matters, 
treasury issues, legal, insurance, pensions and risk matters. Specific presentations are also made on business or strategic 
issues as appropriate. Regular presentations are received from the General Manager of each of the Group’s principal 
operating businesses in respect of its market position, current trading and prospects. 
Internal control and risk management
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. In the context of the 
Group’s business, any such system can only reasonably be expected to manage rather than eliminate risks arising from its 
operations. It can therefore only provide reasonable and not absolute assurance against material loss or misstatement.
Key features of the internal control system are as follows:
•	 the Group has an organisational structure with clearly established responsibilities and lines of accountability;
•	 the Group promotes the values of integrity and professionalism. The members of the Board are available to hear, 
in confidence, any individual’s concerns about improprieties;
•	 the Audit Committee reports at least twice per year to the Board and provides details and results of the external audit reviews;
•	 each business unit is expected to operate in accordance with an adopted system of core financial controls. External advisers 
are engaged to test the application of such controls, rating and classifying performance, identifying strengths and weaknesses 
and recommending any improvements that need to be made. These findings are reported to the Audit Committee;
•	 the Board has a schedule of matters expressly reserved for its consideration. This schedule includes acquisitions, major 
capital projects, treasury and risk management policies, approval of budgets and health and safety;
•	 an ongoing risk management process has been implemented which identifies the key business risks facing the Group 
including both financial and operational risks. The key business risks are reviewed by the Board at least twice per year 
and changes in operational risks are reviewed at every Board meeting;
•	 the controls in place to minimise the occurrence of risk are documented and analysed for effectiveness. These include 
procedures for the approval of major expenditure or commitment of resources;
•	 the Board monitors the activities of the Group through the management accounts, monthly forecasts and other 
reports on current activities and plans. The executive management monitors financial and operational performance 
in detail and takes any necessary corrective action; and
•	 the Group operates a Whistleblowing Policy, enabling any individual with a concern to approach the Board Chairman 
or Audit Committee Chairman in confidence.
The Board continues to review the effectiveness of the Group’s procedures in managing risk and, therefore, believes it 
meets the requirements of the Guidelines. 37
API Group plc Annual Report 2014  Overview
  Strategic Report
 > Governance and Remuneration
  Financial Statements
  Shareholder Information
Board development and performance
All Directors are offered appropriate training to develop their knowledge and ensure they remain up to date in relevant 
matters for which they have responsibility as a member of the Board. A procedure has been adopted for Directors to 
obtain independent professional advice, where appropriate, and all Directors have unrestricted access to the Company 
Secretary. The Board has also established a formal process, led by the Chairman, for the annual evaluation of the 
performance of the Board and its principal Committees. The responses are collated and then discussed by the Board. 
The latest evaluation confirmed a high degree of satisfaction with how the Board and its Committees operate, and the 
Board seeks to continuously improve on this. 
The Non-executive Directors met during the financial year without the Executive Directors being present.
Director indemnification
The Articles of Association of the Company contain provisions for the benefit of Directors, officers and employees of 
the Company and its subsidiary and associated companies indemnifying them out of the assets of the Company to the 
full extent allowed by law against liabilities incurred by them in the course of carrying out their duties. In addition, and in 
accordance with the Company’s Articles of Association and to the extent permitted by the laws of England and Wales, the 
Company has granted qualifying third-party indemnities to each of its current Directors which remain in force. Copies of 
such indemnities are available for inspection upon application to the Company Secretary and at the forthcoming Annual 
General Meeting.
Board Committees
Audit Committee
The Audit Committee consists of Andrew Walker (Chair), Richard Wright and Luke Wiseman. Its primary role is to assist 
the Board with the discharge of its responsibilities in relation to financial reporting, the annual audit and for the policies, 
procedures and review of internal control systems.
Meetings of the Committee are planned around the financial calendar for the Company. Attendance at meetings held 
during the financial year is shown in the table on page 35. From time to time, the Group Chief Executive and the Group 
Finance Director and other members of senior management attend meetings by invitation and the Committee also meets 
with the Company’s external Auditor, without API Group management being present.
During the year the Audit Committee, under its Terms of Reference, reviewed and monitored:
•	 developments in accounting and reporting requirements;
•	 interim and annual reports, information (including consideration of the appropriateness of accounting policies and 
material assumptions and estimates adopted by management);
•	 external Auditor’s plan for the year-end audit of the Group;
•	 the systems of internal control and their effectiveness, including reviews of extended controls assessment reports 
compiled by the external Auditor;
•	 the Group’s Whistleblowing Policy;
•	 external Auditor’s performance and independence, concluding in a recommendation to the Board on the 
reappointment of the Auditor by shareholders at the Annual General Meeting; 
•	 the audit fees charged by and the formal engagement terms entered into with the external Auditor; and
•	 any non-audit work for which the external Auditor is engaged, prior to commitment by the Group. 38
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION 
CORPORATE GOVERNANCE STATEMENT CONTINUED
Board Committees continued
Remuneration Committee 
Andrew Walker chairs the Remuneration Committee and the other members are Richard Wright, Max Batzer and Luke Wiseman. 
The Committee meetings attendance record for the financial year is set out in the table on page 35. On occasion, and for 
matters not related to them, the Group Chief Executive and the Group Finance Director attend the Committee meetings 
and are consulted on proposals relating to the remuneration of members of the Group’s senior management team. 
The Committee, on behalf of the Board, and with input from external advisers as appropriate, determines all elements 
of the remuneration packages of the Executive Directors and the framework and broad policy for the remuneration of 
other members of the Group’s senior management team. The Committee therefore ensures remuneration is competitive 
and that individuals are fairly rewarded for their contribution to the Group’s performance. It approves the terms of service 
contracts for Executive Directors, approves any compensation arrangements resulting from the termination by the 
Company of a Director’s service contract and approves the grant of long-term incentives. 
No Director was involved in deciding the level and composition of his own remuneration. The remuneration of  
Non-executive Directors, including the Chairman, is reviewed and determined by the other members of the Board. 
Nomination Committee
The Committee comprises Max Batzer (Chair), Richard Wright and Andrew Walker. 
The Committee meetings attendance record for the financial year is set out in the table on page 35. When appropriate, 
non-committee members, including the Executive Directors, are invited to participate in discussions and matters being 
addressed by the Committee. Its principal responsibility is to ensure that appropriate procedures are in place for the 
nomination, selection and succession of Directors and senior executives.
Relations with shareholders
Maintaining good relationships with shareholders is of great importance to the Company. The Directors meet with major 
shareholders and discuss the performance of the Group primarily following the announcement of the final and interim 
results. Queries or issues raised by shareholders are promptly addressed by whoever on the Board is best placed to do so. 
Investors are encouraged to participate in the Annual General Meeting at which the Chairman presents a review of the 
Company’s results and provides comments on current business activity. The Chairmen of the Remuneration, Nomination 
and Audit Committees attend the Annual General Meeting to answer questions which may be relevant to the work of 
those Committees.
The Company’s Financial Calendar is set out on page 88. The Company’s website provides financial and other business 
information about the Group including an archive of past announcements, annual reports and share price information.
Richard Wright
Chairman 
3 June 2014 39
API Group plc Annual Report 2014  Overview
  Strategic Report
 > Governance and Remuneration
  Financial Statements
  Shareholder Information
DIRECTORS’ REMUNERATION REPORT
In the financial year and the previous financial year, the emoluments of the Directors were as follows: 
        Employer 
    Salary Additional   pension 
    and fees fees Bonus Benefits contribution Total 
Year ended 31 March 2014   £’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
Andrew Turner   219 — 10 52 22 303
Chris Smith   153 — 7 12 15 187
Non-executive Directors
Richard Wright   58 — — — — 58
Andrew Walker   33 — — — — 33
Luke Wiseman   28 — — — — 28
Max Batzer   27 3 — — — 30
Year ended 31 March 2013
Executive Directors
Andrew Turner   214 — 39 71 21 345
Chris Smith   142 — 26 14 14 196
Non-executive Directors
Richard Wright   57 20 — — — 77
Andrew Walker   32 5 — — — 37
Luke Wiseman   27 — — — — 27
Max Batzer   27 3 — — — 30
Salaries
The Executive Directors’ salaries are reviewed annually with any increase being subject to the prior approval of the 
Remuneration Committee and, if approved, effective from 1 January. Salaries are benchmarked against comparable AIM 
and other small cap companies.
Andrew Turner received an annual increase on his basic salary of 2% with effect from 1 January 2014 (2013: 2.5%) and 
Chris Smith also received an annual increase on his basic salary of 2% with effect from 1 January 2014 (2013: 9.1%).
Annual fees
The Non-executive Directors’ fees are reviewed annually with any increase effective from 1 June. The annual fees of each 
Non-executive Director were increased by 2.5% in June 2013.
During the year and in the previous year, additional fees received by the Non-executive Directors related to additional time 
spent during the prior year on the formal sale process, which concluded in February 2013.
Bonuses
Bonus awards are determined by the Remuneration Committee based on an annual bonus plan related to financial targets 
with no personal objectives. Under the bonus plan, the Executive Directors can earn up to a maximum of 100% of their 
base salary.
Benefits
The Executive Directors’ benefits include a car allowance, health insurance and National Insurance pass-back in respect of 
a salary exchange scheme related to pension contributions. Andrew Turner also receives a commuting allowance.
Expenses
All expense payments made to Directors were made on the basis of reimbursement of expenses incurred. 40
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION 
DIRECTORS’ REMUNERATION REPORT CONTINUED
Scheme interests
2006 Performance Share Plan
The Executive Directors hold “nil” cost options under the 2006 Performance Share Plan over the Company’s ordinary 
shares of 1p as follows: 
       Andrew Turner  Chris Smith Total 
       number number number
At 31 March 2012      403,200 163,800 567,000
Exercised during the year      — (163,800) (163,800)
At 31 March 2013      403,200 — 403,200
Exercised during the financial year     — — —
At 31 March 2014      403,200 — 403,200
These options were granted on 28 March 2008 to Andrew Turner and on 30 September 2008 to Chris Smith and they 
were subject to the achievement of profit-related targets. Following the determination of the Remuneration Committee, 
taking into account profit related targets, 50.4% of Andrew Turner’s options vested on 7 June 2011 and 50.4% of 
Chris Smith’s options vested on 30 September 2011 (“Vested Options”). The remainder of the options lapsed in accordance 
with the scheme rules. Chris Smith exercised his options on 1 March 2013 and the gain arising thereon was £91,523. 
Andrew Turner’s Vested Options are exercisable between 7 June 2011 and 8 June 2018. 
Long Term Incentive Plan (“LTIP”)
Under the terms of the LTIP, the Executive Directors hold contingent shares in the Company’s ordinary shares of 1p 
as follows:
       Andrew Turner Chris Smith Total 
       number number number
At 31 March 2011 and 31 March 2012      1,800,000 1,200,000 3,000,000
Contingent shares vested June 2012     (577,856) (385,237) (963,093)
At 31 March 2013      1,222,144 814,763 2,036,907
Contingent shares vested June 2013     (323,631) (215,754) (539,385)
At 31 March 2014      898,513 599,009 1,497,522
The remaining contingent shares held by the Executive Directors can be earned following the financial year ended 
31 March 2015 based on a set of performance criteria reflecting increases in shareholder value. 
Following the financial year ended 31 March 2014, the Remuneration Committee has determined, in accordance with the 
scheme rules and based on the performance criteria for the year just ended, that no contingent shares held by Andrew 
Turner or Chris Smith are due to vest in June 2014. 
Following the annual award, vested shares are held in the API Group plc No 2 Employee Benefit Trust (“Trust”) and, 
when the relevant steps are taken by the trustee of the Trust, vested shares are transferred to the participants at nil cost. 
Full details are given in Notes 20 and 21 to the consolidated financial statements. In September 2013, Chris Smith exercised 
his option in respect of 250,000 of his vested shares at a price of 67.5p per share. 
Vested shares not transferred to the Executive Directors
       Andrew Turner Chris Smith Total 
       number number number
Contingent shares vested June 2012     577,856 385,237 963,093
Vested shares transferred to Executive Directors in FY 13   — — —
Contingent shares vested June 2013     323,631 215,754 539,385
Vested shares transferred to Executive Directors in FY 14   — (250,000) (250,000)
Vested shares as at 31 March 2014 not yet transferred to Executive Directors  901,487 350,991 1,252,478
Andrew Walker
Remuneration Committee Chairman
3 June 2014 41
API Group plc Annual Report 2014  Overview
  Strategic Report
 > Governance and Remuneration
  Financial Statements
  Shareholder Information
DIRECTORS’ REPORT
The Directors present their Annual Report and the audited financial statements for the year ended 31 March 2014. 
The Chairman’s Statement on page 6, the Strategic Report on pages 7 to 33, the Remuneration Report on pages 39 to 40, 
the Corporate Governance Statement on pages 35 to 38 and the Financial Statements on pages 46 to 49 form part of this 
Directors’ Report.
Directors
The Directors who served on the Board of the Company during the year to 31 March 2014 were:
•	 Richard Wright
•	 Andrew Turner
•	 Andrew Walker
•	 Chris Smith
•	 Max Batzer
•	 Luke Wiseman 
The Company’s Articles of Association require that Directors are subject to retirement by rotation and re-election by 
shareholders at intervals of not more than three years. 
Andrew Turner and Max Batzer were last re-elected by shareholders at the 2011 Annual General Meeting and will therefore 
offer themselves for re-election at the 2014 Annual General Meeting. Their biographical details can be found on page 
34. The Board recognises and values the performance and contribution of both Andrew Turner and Max Batzer and 
recommends their re-election. 
Details of Directors’ emoluments and share options (required to be disclosed in accordance with the AIM Rules for 
Companies) are set out in the table of Directors’ emoluments on page 39 and in the Scheme Interests tables on page 40.
None of the Directors has a service agreement with the Company requiring more than twelve months’ notice of 
termination to be given.
Dividend
The Board has recommended a final dividend of 1.3p per share (2013: nil) bringing the total dividend in the year to 2.0p per 
share (2013: nil). If approved by shareholders at the 2014 Annual General Meeting, the final dividend of 1.3p per share will 
be paid on Friday, 1 August 2014 to all shareholders on the register at close of business on Friday, 11 July 2014. 
Share capital
As at 31 March 2014, the Company’s issued share capital comprised 76,749 ordinary shares of 1p each. Details of the 
Company’s share capital can be found in Note 19 to the Financial Statements.
Directors’ shareholdings
The Directors who held office at the end of the financial year reported having the following interests in the ordinary shares 
of the Company as at the end of 31 March 2014:
 Ordinary shares owned by Vested ordinary shares    
 Directors or in which they under the 2006 Performance Vested ordinary shares Total interest in owned 
 have a beneficial interest Share Plan but not exercised under LTIP but not exercised and vested ordinary shares
   
Directors  2014 2013 2014 2013 2014 2013 2014 2013
Executive Directors
Andrew Turner  351,231 351,231 403,200 403,200 901,487 577,856 1,655,918 1,332,287
Chris Smith  232,035 232,035 — — 350,991 385,237 583,026 617,272
Non-executive Directors
Richard Wright  1,060,000 1,060,000 — — — — 1,060,000 1,060,000
Andrew Walker  355,986 355,986 — — — — 355,986 355,986
Max Batzer  — — — — — — — —
Luke Wiseman  — — — — — — — —
Totals  1,999,252 1,999,252 403,200 403,200 1,252,478 963,093 3,654,930 3,365,545
As noted in the Directors’ Remuneration Report, under the LTIP participated in by the Executive Directors, up to 1,497,522 
contingent ordinary shares may vest (Andrew Turner: 898,513; Chris Smith: 599,009) following the financial year ended 
31 March 2015. 42
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION 
DIRECTORS’ REPORT CONTINUED
Substantial shareholders
As at the date of this report, the Company has been notified of the following substantial interests in the issued ordinary 
shares of the Company:
         % of issued 
          share capital
Steel Partners II, LP        32.32
Wynnefield Capital, Inc.        29.68
Crystal Amber Fund Limited       11.57
API Group plc No 2 Employee Benefit Trust      3.58
Hargreave Hale Nominees Limited       3.51
Hargreave Hale (Stockbrokers)       3.29
Principal risks and uncertainties
The Board meets regularly to review operations and to discuss risk areas. The Corporate Governance Statement contains 
details of the Group’s internal control system. Pages 32 and 33 of the Strategic Report contain information on the principal 
risks facing the Group and Note 1 to the Financial Statements contains details of sensitivity to financial risks.
Safety, health and the environment 
One of the Group’s primary objectives is to achieve high standards of safety for its employees. This is an early item on the 
Agenda at each of the Company’s Board meetings. The Corporate Social Responsibility section of the Strategic Report 
on pages 29 to 31 contains information on the Group’s objectives and performance with regard to safety, health and 
the environment. 
Employees
Details on the Company’s employees can be found in the Corporate Social Responsibility Statement on page 30.
Research and development
Each business unit has a technical team which focuses on innovating, customising and developing existing and new 
product lines and manufacturing processes to address customer and market requirements. Details of the Group’s 
expenditure on research and development are disclosed in Note 3 to the Financial Statements.
Charitable and political donations
Charitable donations made by the Group during the period amounted to £2,531 (2013: £1,514). No political donations 
were made.
Going concern
The trading and financial position of the Group, including its cash flow position, liquidity situation and borrowing 
facilities are set out in the Strategic Report on page 27. The Principal Risks and Uncertainties that could impact on 
the future development of the Group’s operating and financial performance are outlined on pages 32 and 33 of the 
Strategic Report. The Group’s main borrowing facilities in the UK and the US are committed until December 2017 and 
April 2015 respectively.
The Directors are satisfied, on the basis of the Group’s latest financial projections and facilities available, that the Group has 
adequate financial resources to continue to operate for the foreseeable future. The Directors therefore continue to adopt 
the going concern basis in preparing these financial statements.
Articles of Association
The Company’s Articles of Association may only be amended by special resolution approved at a general meeting of the 
shareholders. A copy of the Articles of Association is available on the Company’s website.
Directors’ statement as to disclosure of information to the Auditor
The Directors who were members of the Board at the time of approving the Directors’ Report are listed on page 41. 
Having made enquiries of fellow Directors and of the Company’s Auditor, each of those Directors confirms that as at the 
date of this report, as far as each Director is aware, there is no relevant information of which the Company’s Auditor is 
unaware. Each Director has taken such steps as he might reasonably be expected to take as a Director in order to make 
himself aware of information which might be relevant to the Company’s Auditor and whether the Auditor is in possession 
of such information.  43
API Group plc Annual Report 2014  Overview
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  Shareholder Information
Annual General Meeting
The Annual General Meeting of the Company will be held at 2.00 p.m. on Tuesday, 15 July 2014 at the offices of 
Eversheds LLP, One Wood Street, London EC2V 7WS.
The Notice of the Annual General Meeting and details of the business to be proposed at that meeting will be made 
available on the Company’s website.
Auditor
Ernst & Young LLP has expressed its willingness to continue in office as Auditor and a resolution proposing its  
reappointment will be put to the members at the Annual General Meeting.
By order of the Board
Wendy Baker   
Company Secretary   
3 June 2014 
Registered office 
Second Avenue 
Poynton Industrial Estate 
Poynton 
Cheshire SK12 1ND 44
API Group plc Annual Report 2014
GOVERNANCE AND REMUNERATION 
STATEMENT OF DIRECTORS’ RESPONSIBIlITIES 
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. 
Under that law, and as required by the AIM Rules for Companies, the Directors have elected to prepare the Group financial 
statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union 
(“EU”). Under that law, the Directors have elected to prepare the Parent Company financial statements in accordance with 
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 
Under company law the Directors must not approve the Group and Parent Company financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of their profit or loss 
for that period. In preparing these financial statements, the Directors are required to:
•	 select suitable accounting policies and then apply them consistently;
•	 make judgments and accounting estimates that are reasonable and prudent;
•	 present information, including accounting policies, in a manner that provides relevant, reliable, comparable, and 
understandable information;
•	 present fairly the Group financial position, financial performance and cash flows; 
•	 provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the EU is 
insufficient to enable users to understand the impact of particular transactions, other events and conditions on the 
Group’s financial position and financial performance;
•	 state whether the Group financial statements have been prepared in accordance with IFRS as adopted by the EU;
•	 state whether applicable UK Accounting Standards have been followed in preparing the Parent Company financial 
statements; and
•	 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and 
the Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group 
and Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group 
and Parent Company and enable them to ensure that the Group and Parent Company financial statements comply with 
the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Parent Company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 45
API Group plc Annual Report 2014  Overview
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FINANCIAL STATEMENTS
INdEPENdENT AudIT or’S rEPorT to the members of API Group plc
We have audited the consolidated financial statements of API Group plc for the year ended 31 March 2014 which comprise 
the Group Income Statement, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Group 
Statement of Changes in Equity, the Group Cash Flow Statement, and the related Notes 1 to 25. The financial reporting 
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards 
(“IFRS”) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those 
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted 
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as 
a body, for our audit work, for this report, or for the opinions we have formed. 
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 44, the Directors are responsible for the 
preparation of the group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to 
audit and express an opinion on the group financial statements in accordance with applicable law and International Standards 
on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards 
for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. 
This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have 
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the 
Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non‑financial 
information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify 
any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by 
us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies 
we consider the implications for our report.
Opinion on financial statements
In our opinion the group financial statements:
•	 give a true and fair view of the state of the Group’s affairs as at 31 March 2014 and of the Group’s profit for the year 
then ended;
•	 have been properly prepared in accordance with IFRSs as adopted by the European Union; and
•	 have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the group 
financial statements are prepared is consistent with the group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you 
if, in our opinion:
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Parent Company financial statements of API Group plc for the year ended 31 March 2014.
Colin Brown (Senior Statutory Auditor)
for and on behalf of Ernst & Young, LLP, Statutory Auditor 
Manchester, United Kingdom
3 June 2014
The maintenance and integrity of the API Group plc website is the responsibility of the Directors; the work carried out by 
the auditor does not involve consideration of these matters and, accordingly, the auditor accept no responsibility for any 
changes that may have occurred to the financial statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions. 46
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
GrouP INC oME STATEMENT for the year ended 31 March 2014
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
       Note £’000 £’000
Revenue      2 114,712 112,426
Cost of sales       (86,617) (84,179)
Gross profit       28,095 28,247
Distribution costs       (3,952) (4,249)
Administrative expenses (excluding exceptional items)    (16,716) (16,196)
Operating profit before exceptional items    2,3 7,427 7,802
Exceptional items      5 (705) (1,029)
Operating profit        6,722 6,773
Finance revenue      6 2 10
Finance costs      6 (1,132) (1,217)
        (1,130) (1,207)
Profit before taxation       5,592 5,566
Tax (expense)/credit      7 (150) 19
Profit for the year       5,442 5,585
Earnings per share (pence)    
Basic earnings per share on profit for the year    8 7.4 7.6
Underlying basic earnings per share on profit for the year   8 8.1 8.8
Diluted earnings per share on profit for the year    8 7.1 7.2
Underlying diluted earnings per share on profit for the year   8 7.8 8.4
*  restated for IAS 19 – Employee Benefits (revised)
All profits are attributable to equity holders of the Parent and relate to continuing operations.
GrouP STATEMENT oF CoMPrEhENSIvE INC oME
for the year ended 31 March 2014
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
        £’000 £’000
Profit for the year       5,442 5,585
Items that may be reclassified to profit or loss in subsequent periods:
Exchange differences on retranslation of foreign operations    (1,390) 703
Change in fair value of effective cash flow hedges     863 (639)
Items not reclassified to profit or loss in subsequent periods:
Re‑ measurement (losses)/gains on defined benefit pension schemes   (513) (5,243)
Tax on items relating to components of other comprehensive income   (350) 1,228
Other comprehensive income for the year, net of tax    (1,390) (3,951)
Total comprehensive income for the year attributable to equity holders of the Parent  4,052 1,634
*  restated for IAS 19 – Employee Benefits (revised) 47
API Group plc Annual Report 2014  Overview
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FINANCIAL STATEMENTS
GrouP BALANCE ShEET at 31 March 2014
         31 March  31 March  
        2014 2013 
       Note £’000 £’000
Assets    
Non‑current assets    
Property, plant and equipment     9 21,490 21,313
Intangible assets – goodwill     10 5,188 5,188
Investment in joint venture interest     12 880 378
Financial assets      22 — 152
Deferred tax assets      7 6,412 6,617
        33,970 33,648
Current assets    
Trade and other receivables     13 16,593 15,811
Inventories      14 12,126 12,864
Other financial assets      22 594 184
Cash and short‑term deposits     15 8,606 6,189
        37,919 35,048
Total assets      2 71,889 68,696
Liabilities    
Current liabilities    
Trade and other payables      16 22,632 22,428
Financial liabilities      17 432 3,766
Income tax payable       635 373
        23,699 26,567
Non‑current liabilities    
Financial liabilities      17 8,033 5,574
Deferred tax liabilities      7 306 211
Provisions       56 66
Deficit on defined benefit pension schemes    18 13,364 13,349
        21,759 19,200
Total liabilities       45,458 45,767
Net assets       26,431 22,929
Equity    
Called up share capital      19 767 767
Share premium       7,136 7,136
Other reserves      21 8,818 8,816
Foreign exchange reserve     21 (432) 958
Retained profit       10,142 5,252
Equity shareholders’ funds      26,431 22,929
Signed on behalf of the Board
Andrew Turner
Director 3 June 2014
Company number: 169249  48
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
GrouP STATEMENT oF ChANGES IN EquIT y for the year ended 31 March 2014
    Equity    Foreign  Total 
    share  Share Other exchange Retained shareholders’ 
    capital premium reserves reserve earnings  equity 
    £’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2012   767 7,136 8,816 255 4,348 21,322
Profit for the year*   — — — — 5,585 5,585
Other comprehensive income:
Exchange differences on retranslation  
of foreign operations   — — — 703 — 703
Change in fair value of effective cash flow hedges — — — — (639) (639)
Re‑ measurement losses on defined benefit  
pension schemes*   — — — — (5,243) (5,243)
Tax on items relating to components  
of other comprehensive income*  — — — — 1,228 1,228
Total comprehensive income for the year — — — 703 931 1,634
Shares acquired by Employee Benefit Trust — — (94) — — (94)
Transferred on exercise of share options — — 94 — (94) —
Share‑based payments   — — — — 85 85
Tax relating to items accounted for  
directly through equity   — — — — (18) (18)
At 31 March 2013   767 7,136 8,816 958 5,252 22,929
Profit for the year   — — — — 5,442 5,442
Other comprehensive income:      
Exchange differences on retranslation  
of foreign operations   — — — (1,390) — (1,390)
Change in fair value of effective cash flow hedges — — — — 863 863
Re‑ measurement losses on defined benefit  
pension schemes   — — — — (513) (513)
Tax on items relating to components  
of other comprehensive income  — — — — (350) (350)
Total comprehensive income for the year — — — (1,390) 5,442 4,052
Dividends   — — — — (518) (518)
Shares acquired by Employee Benefit Trust — — (32) — — (32)
Transferred on exercise of share options/LTIP — — 34 — (34) —
At 31 March 2014   767 7,136 8,818 (432) 10,142 26,431
* restated for IAS 19 – Employee Benefits (revised)
An interim dividend of 0.7 pence per share (2013: nil) was approved by the Board on 2 December 2013 and was paid on 
9 January 2014 to equity holders on the register at the close of business on 13 December 2013.
A final dividend of 1.3 pence per share (2013: nil) was approved by the Board on 2 June 2014 bringing the total dividend in 
the year to 2.0 pence per share (2013: nil). The final dividend is payable on 1 August 2014 to equity holders on the register 
at the close of business on 11 July 2014. This dividend has not been provided for in these financial statements. 49
API Group plc Annual Report 2014  Overview
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FINANCIAL STATEMENTS
GrouP CASh FL ow STATEMENT for the year ended 31 March 2014
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
       Note £’000 £’000
Operating activities    
Group profit before tax       5,592 5,566
Adjustments to reconcile Group profit before tax to net cash flow from operating activities    
Net finance costs       1,130 1,207
Depreciation of property, plant and equipment     2,367 2,173
Profit on disposal of property, plant and equipment     (4) (5)
Movement in fair value foreign exchange contracts     44 (38)
Share‑based payments       — 85
Decrease/(increase) in inventories      221 (361)
Increase in trade and other receivables      (1,216) (101)
Increase in trade and other payables      832 68
Decrease in provisions       (10) (10)
Cash generated from operations      8,956 8,584
Interest paid       (396) (583)
Pension contributions and scheme expenses paid     (973) (960)
Income taxes paid       (155) (50)
Net cash flow from operating activities     7,432 6,991
Investing activities    
Interest received       2 10
Purchase of property, plant and equipment     (3,465) (5,296)
Investment in joint venture      (502) (378)
Sale of property, plant and equipment      4 23
Net cash flow used in investing activities     (3,961) (5,641)
Financing activities    
Dividends paid       (518) —
Purchase of shares by Employee Benefit Trust     (32) (94)
New borrowings       12,340 —
Arrangement fees for new borrowings      (183) —
Repayment of borrowings      (12,567) (4,148)
Net cash flow used in financing activities     (960) (4,242)
Increase/(decrease) in cash and cash equivalents     2,511 (2,892)
Effect of exchange rates on cash and cash equivalents    (92) 25
Cash and cash equivalents at the beginning of the year   15 5,955 8,822
Cash and cash equivalents at the end of the year    15 8,374 5,955
*  restated for IAS 19 – Employee Benefits (revised) 50
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
1. Group accounting policies
Authorisation of financial statements 
The Group’s financial statements for the year ended 31 March 2014 were authorised for issue by the Board of Directors 
on 3 June 2014 and the balance sheet was signed on the Board’s behalf by Andrew Turner, Group Chief Executive.
API Group plc is a public limited company incorporated and domiciled in England and Wales. The Company’s ordinary 
shares are traded on the Alternative Investment Market of the London Stock Exchange.
Basis of preparation and statement of compliance with IFRS
The Group’s financial statements have been prepared under the historical cost convention, except as disclosed in the 
accounting policies below, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European 
Union as they apply to the financial statements of the Group for the year ended 31 March 2014 and applied in accordance 
with the Companies Act 2006. The Group has applied optional exemptions available to it under IFRS 1.
The consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand (£’000) 
except when otherwise indicated.
Going concern
The Directors are satisfied, on the basis of the Group’s latest financial projections and facilities available, that the Group has 
adequate financial resources to continue to operate for the foreseeable future. The Directors therefore continue to adopt 
the going concern basis in preparing these financial statements.
Changes in accounting policies
In the preparation of these group financial statements, the Group followed the same accounting policies and methods 
of computation as compared with those applied in the previous year, except for the adoption of new standards and 
interpretations and revisions of the existing standards as of 1 April 2013.
Accounting standards adopted in the year
The following new accounting standards, amendments to existing standards and interpretations, effective from 
1 April 2013, which have had an impact of the Group’s financial statements, are outlined below. 
IAS 19 Employee Benefits (revised)
This standard was amended in June 2011. The key impact of IAS 19 (revised) is the removal of the separate assumptions 
for expected return on plan assets and discounting of scheme liabilities, replacing them with one single discount rate for 
the net deficit. In addition, scheme administration expenses (including the PPF levy) can no longer be treated as part of the 
finance cost of the scheme liabilities and must now be included in operating costs.
The Group’s results have been restated as a result of the adoption of IAS 19 (revised). The impact on the results for the year 
ended 31 March 2013 is an increase to administrative expenses of £665,000, a reduction in finance costs of £415,000 and 
a reduction in the income tax charge of £60,000, resulting in a lower profit after tax of £190,000. The impact on basic 
earnings per share is a decrease of 0.2p. Within the Group Statement of Comprehensive Income, the impact is an increase 
of £190,000 represented by a reduction of £250,000 to the actuarial losses on defined benefit pension schemes and a 
reduction of £60,000 on the tax items relating to components of other comprehensive income. There is no impact on 
either the deficit on defined benefit pension schemes or related deferred tax balances within the balance sheet. 
The impact of IAS 19 (revised) on the results for the year ended 31 March 2014 has been a reduction in profit before 
tax of £355,000 and a reduction in the income tax charge of £82,000, resulting in a lower profit after tax of £273,000. 
The impact on basic earnings per share is a decrease of 0.3p. Within the Group Statement of Comprehensive Income, the 
impact is an increase of £273,000 represented by a decrease of £355,000 in actuarial losses on defined benefit schemes 
and a reduction of £82,000 on the tax items relating to components of other comprehensive income. There is no impact 
on either the deficit on defined benefit pension schemes or related deferred tax balances within the balance sheet.
IAS 1 Presentation of Items of Other Comprehensive Income – Amendment to IAS 1
The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could 
be reclassified (or recycled) to profit or loss at a future point in time (e.g. exchange differences on translation of foreign 
operations and net movement on cash flow hedges) now have to be presented separately from items that will never be 
reclassified (e.g. re‑measurement gains and losses on defined benefit schemes). The amendments affect presentation only 
and have no impact on the Group’s financial position or performance.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when 
an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair 
value is required or permitted. IFRS 13 defines fair value as an exit price. Application of IFRS 13 has not materially impacted 
the fair value measurements of the Group. IFRS 13 also requires additional disclosures which have been provided where 
required in the individual notes relating to the assets and liabilities. 51
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New standards, amendments and interpretations not applied
The following standards and interpretations in issue are not yet effective for the Group and have not been adopted by 
the Group:
         Effective date 
IFRS 10 – Consolidated Financial Statements     1 January 2014
IFRS 11 – Joint Arrangements      1 January 2014
IFRS 12 – Disclosure of Interests in Other Entities     1 January 2014
IAS 27 –  Separate Financial Statements     1 January 2014
IAS 28 – Investments in Associates and Joint Ventures    1 January 2014
IAS 32 – Financial Instruments: Presentation – Offsetting Financial Assets & Liabilities (Amendments) 1 January 2014 
IAS 36 – Impairment of Assets – Recoverable Amount Disclosures for Non‑ Financial Assets (Amendments) 1 January 2014 
IAS 39 – Financial Instruments: Recognition and Measurement –  
  Novation of Derivatives and Continuation of Hedge Accounting (Amendments)  1 January 2014
The Directors do not expect the adoption of these standards and interpretations to have a material impact on the group 
financial statements in the period of initial application. 
Significant judgements and estimates
The preparation of the financial statements requires management to make judgements, estimates and assumptions that 
affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues 
and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those 
estimates. Details regarding judgements which have the most significant effect on the amounts recognised in the financial 
statements are as follows:
Impairment of non‑financial assets
The Group assesses whether there are any indicators of impairment for all non‑financial assets. Goodwill is tested for 
impairment annually or at other times when relevant indicators exist. Other non‑financial assets are tested for impairment 
when there are indicators that the carrying values may not be recoverable. When value‑in‑use calculations are undertaken, 
management must estimate expected cash flows from the asset or cash generating unit and choose a suitable discount 
rate to calculate the net present value of those cash flows. Further details regarding impairment of property, plant and 
equipment and goodwill are given in Note 11.
Deferred tax assets
Management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the 
likely timing and level of future taxable profits. Further details are given in Note 7.
Pensions and other post‑retirement benefits
The cost and valuation of defined benefit pension plans is determined using actuarial valuations. This involves making 
assumptions about discount rates, future salary and pension increases and mortality rates. Due to the long‑term nature of 
these plans, such estimates are subject to significant uncertainty. Further details are given in Note 18. 
Basis of consolidation
The consolidated financial statements comprise those of the Parent Company and its subsidiary undertakings for the year 
ended 31 March 2014. The results for the subsidiary undertakings are included for the full year except where control is 
acquired or sold during the year, when results are included from or to the date of acquisition or sale.
All intercompany balances and transactions, including unrealised profits arising from intra‑group transactions, have been 
eliminated in full. 
Business combinations and goodwill
On the acquisition of a business, fair values are attributed to the net assets acquired. Goodwill arises where the fair value of 
the consideration given for a business exceeds the fair value of such net assets.
Goodwill arising on acquisitions is capitalised and subject to impairment review. Between 5 October 1997 and 1 October 2004 
goodwill was amortised over its estimated useful life. Such amortisation ceased on 30 September 2004. The Group’s 
policy before 5 October 1997 was to eliminate goodwill arising upon acquisitions against reserves. Under IFRS 1 and IFRS 3, 
such goodwill will remain eliminated against reserves. 52
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
1. Group accounting policies continued
Interest in joint venture
The Group has an interest in a joint venture which is established through a 50% interest in a company. The Group 
recognises its interest in the entity’s assets and liabilities using the equity method of accounting. Under the equity method, 
the interest in the joint venture is carried at cost plus post‑acquisition changes in the Group’s share of net assets, less 
distributions received and less any impairment in the value of the investment. The income statement reflects the share 
of the jointly controlled entity’s results after tax for the full year except where control is acquired or sold during the year, 
when results are included from or to the date of acquisition or sale.
Goodwill arising on acquisition of the jointly controlled entity is included in the carrying amount and is not amortised. 
To the extent that the fair value of the entity’s net assets is greater than the cost of investment, a gain is recognised and 
added to the Group’s share of the entity’s profit or loss in the period in which the investment is acquired. 
Financial statements of the jointly controlled entity are prepared for the same reporting period as the Group. Where 
necessary, adjustments are made to bring the accounting policies in line with those of the Group, to take account of 
fair values assigned at the date of acquisition and to reflect impairment losses where appropriate. Adjustments are also 
made to eliminate the Group’s share of unrealised gains and losses on transactions between the Group and the jointly 
controlled entity.
Revenue recognition
Revenue represents amounts invoiced to third parties excluding value added taxes and represents net invoice value less 
estimated rebates, returns and settlement discounts. It is recognised when the significant risks and rewards of ownership 
of the goods have passed to the buyer and the amount of revenue can be reliably measured. This is normally the date of 
despatch. Rebates and discounts are recognised in accordance with contractual obligations held with customers. They are 
recognised in the period to which they relate.
Exceptional items
Exceptional items are material items which derive from events which fall within the ordinary activities of the Group and 
which require separate disclosure by virtue of their size or incidence. 
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset form part 
of the cost of that asset. Other borrowing costs are recognised as an expense. 
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. 
The Group’s policy is to write off the difference between the cost of each item of property, plant and equipment and its 
residual value systematically over its estimated useful life. Annual reviews are made of the estimated remaining lives and 
residual values of individual productive assets, taking account of commercial and technological obsolescence as well as 
normal wear and tear. Under this policy it becomes impractical to indicate average asset lives exactly but the indicative 
ranges are as follows:
•	 freehold buildings and long leasehold property – 14 to 50 years;
•	 plant and machinery – 5 to 20 years;
•	 office and IT equipment – 3 to 10 years; and
•	 freehold land is not depreciated.
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. Any gain or loss arising on de‑recognition of the asset (calculated 
as the difference between the net disposal proceeds and the carrying amount of the item) is included in the income 
statement in the year the item is derecognised. 
As permitted by IFRS 1, property previously revalued before the transition date of 1 October 2004 has been treated as 
deemed cost at the transition date.
Impairment of non‑financial assets
The carrying values of intangible assets are reviewed annually for impairment or if events or changes in circumstances 
indicate the carrying value may not be recoverable. Property, plant and equipment are reviewed to ensure that assets 
are not carried at above their recoverable amounts once some indication of impairment exists. Calculations are made of 
the discounted cash flows resulting from continued use of the assets (value in use) or from their disposal (fair value less 
costs to sell). Where these values are less than the carrying amount of the assets, an impairment loss is charged to the 
income statement. 53
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Intangible assets
Intangible assets acquired separately from a business are capitalised at cost. Intangible assets acquired with a business 
acquisition are capitalised at fair value at the date of acquisition if the asset is separable or arises from contractual or 
other legal rights and its fair value can be measured reliably. The useful lives of intangible assets are assessed as finite or 
indefinite. Except as set out in the policy for research and development costs, intangible assets created within the business 
are not capitalised and expenditure is charged against income as it is incurred.
Research and development costs
Research costs are expensed as incurred. Development expenditure on an individual project is recognised as an intangible 
asset when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be 
available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future 
economic benefits, the availability of resources to complete the asset and the ability to measure reliably the expenditure 
during development. 
Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating 
leases and rentals payable are charged in the income statement on a straight‑line basis over the lease term.
Inventories
Inventories are stated at the lower of cost and estimated net realisable value. Cost is determined on a first‑in first‑out basis. 
Cost of work in progress and finished goods comprises the cost of raw materials, direct labour and overheads attributable 
to the production of inventory. Net realisable value comprises the estimated selling value less selling costs.
Trade and other receivables
Trade and other receivables are recognised and carried at original invoice value less an allowance for any amounts which 
may not be collectible. Should an amount become uncollectible, it is written off to the income statement in the period in 
which it is identified.
Cash and cash equivalents
Cash and cash equivalents principally comprise funds held with banks and other financial institutions with an original 
maturity of three months or less. For the purpose of the consolidated cash flow statement, cash and cash equivalents 
are as defined above, net of outstanding bank overdrafts.
Financial liabilities – interest‑bearing loans and borrowings
All loans and borrowings are initially recognised at fair value of the consideration received net of issue costs associated 
with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised 
cost under the effective interest rate method.
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 an outflow of resources embodying economic benefits will be required to settle the obligation and a 
reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to 
be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only 
when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement 
net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting 
the expected future cash flows at a pre‑tax rate that reflects current market assessments of the time value of money and, 
where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the 
passage of time is recognised as a finance cost. 54
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
1. Group accounting policies continued
Taxation
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation 
authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and 
their carrying amounts in the financial statements, with the following exceptions:
•	 where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction 
that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit 
or loss;
•	 in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal 
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the 
foreseeable future; and
•	 deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available 
against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to 
apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted 
at the balance sheet date. The carrying value of deferred tax assets is reviewed at each balance sheet date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise 
income tax is recognised in the income statement or other comprehensive income.
Pensions and other post‑retirement benefits
The cost of providing benefits under the defined benefit pension plans is determined separately for each plan using the 
projected unit credit method. 
Re‑measurements are recognised immediately in the statement of financial position with a corresponding debit or credit 
to retained earnings through Other Comprehensive Income in the period in which they occur. Re‑measurements are not 
reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss account on the earlier of:
•	 the date of the plan amendment or curtailment; and
•	 the date that the Group recognises restructuring related costs.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The difference between 
the return on plan assets and the interest income on plan assets recognised in the income statement as other finance 
revenue or cost is recognised in Other Comprehensive Income.
Contributions to defined contribution schemes are recognised in the income statement in the period in which they 
become payable.
The US business contributes to a multi‑employer defined benefit pension scheme. This scheme is accounted for as 
a defined contribution scheme, as the information available from the scheme administrators is insufficient for it to be 
accounted for as a defined benefit scheme.  
Share‑based payments
The cost of equity‑settled transactions with employees is measured by reference to the fair value at the date at which 
they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant 
employees become fully entitled to the award. Fair value is determined by using an appropriate pricing model. In valuing 
equity‑settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the 
shares of the Company (market conditions).
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon 
market conditions which are treated as vesting irrespective of whether or not the market condition is satisfied, provided 
that all other performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the 
vesting period has expired and management’s best estimate of the achievement or otherwise of non‑market conditions 
and of the number of equity instruments that will ultimately vest or, in the case of an instrument subject to market 
conditions, be treated as vesting as described above. The movement in cumulative expense since the previous balance 
sheet date is recognised in the income statement, with a corresponding entry in equity.  55
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Employee Benefit Trust (the “Trust”)
The Company has a discretionary trust established to facilitate the operation of the Company executive share option 
schemes and long‑term incentive plans. Shares in API Group plc held by the Trust are deducted from equity as treasury 
shares and are recognised at cost. Amounts received on exercise of these options are also recognised in equity, with any 
difference between proceeds from the exercise of these options and the original cost being taken to revenue reserves. 
No gain or loss is recognised in the performance statements on the purchase, sale, issue or cancellation of equity shares.
Foreign currencies 
The assets and liabilities of overseas subsidiary undertakings are translated into sterling at rates ruling at the balance 
sheet date and trading items at the average rate for the period. The exchange differences arising on the translation of the 
financial statements of foreign subsidiary undertakings are taken directly to a separate component of equity. On disposal 
of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is 
recognised in the income statement. 
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and 
liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. 
All translation differences are taken to the income statement.
Derivative financial instruments and hedging
The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its 
risks associated with foreign currency and interest rate fluctuations. Such derivative instruments are measured at fair value 
on the date which the derivative contract is entered into and are subsequently re‑measured at fair value at the balance 
sheet date. Derivatives are carried as assets if the fair value is positive and liabilities if the fair value is negative. The fair 
value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar 
maturity profiles. The fair value of interest rate swaps is determined by reference to market values for similar instruments.
Hedge accounting is adopted when the hedging relationship is formally designated and documented on inception. Such 
hedges are expected to be highly effective in offsetting changes in fair value or cash flows and are assessed on an ongoing 
basis to determine whether they have been highly effective during the reporting period for which they were designated. 
Gains and losses arising from the changes in the fair value of derivatives that do not qualify for hedge accounting are taken 
to finance revenue or finance costs in the income statement.
Hedges of a net investment in a foreign operation are accounted for in a similar way. Gains or losses relating to the 
effective portion are recognised directly in equity while any gains or losses relating to the ineffective portion are 
recognised in the income statement. On the disposal of the foreign operation, the cumulative value of any gains or losses 
recognised directly in equity is transferred to the income statement.  56
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
2. Segmental analysis
The Group produces monthly management information to enable the Board, including the Group Chief Executive, 
to monitor the financial performance of its constituent parts. This information is analysed by business unit.
Revenue
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Total revenue by origin 
Laminates       59,237 55,163
Foils Europe       28,580 27,021
Foils Americas       21,819 23,972
Holographics       8,888 9,646
        118,524 115,802
Inter‑segmental revenue    
Laminates       13 2
Foils Europe       707 757
Foils Americas       567 556
Holographics       2,525 2,061
        3,812 3,376
External revenue by origin    
Laminates       59,224 55,161
Foils Europe       27,873 26,264
Foils Americas       21,252 23,416
Holographics       6,363 7,585
Segment revenue       114,712 112,426
External revenue by destination    
UK        23,355 28,655
Rest of Europe       66,621 55,606
Americas       17,638 21,318
Asia Pacific       6,877 6,553
Africa       221 294
Segment revenue       114,712 112,426
All revenue is derived from the sale of goods.
Trading between operating segments is on an arm’s length basis and accounted for in a similar manner to transactions 
with third parties. 57
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Segment result
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
        £’000 £’000
Operating profit before exceptional items   
Laminates       6,680 6,515
Foils Europe       2,130 1,984
Foils Americas       1,699 1,893
Holographics       (724) (275)
Segment result       9,785 10,117
Central costs       (2,358) (2,315)
Total operating profit before exceptional items     7,427 7,802
Central costs comprise primarily salaries, defined benefit pension costs, other employment costs and corporate advisory 
fees relating to the central management of the Group.
*  restated for IAS 19 – Employee Benefits (revised) 
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Assets   
Laminates       15,182 13,550
Foils Europe       18,586 17,889
Foils Americas       13,163 14,544
Holographics       8,295 8,719
Segment assets       55,226 54,702
Unallocated:   
Deferred tax assets       6,412 6,617
Cash and short‑term deposits      8,606 6,189
Other       1,645 1,188
Total assets       71,889 68,696 58
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
3. Operating profit   
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
This is stated after charging/(crediting):   
Research and development expenditure expensed during the period   696 596
Depreciation of property, plant and equipment     2,367 2,173
Profit on disposal of property, plant and equipment     (4) (5)
Cost of inventories recognised as an expense     64,058 60,841
 Including write‑down of inventories to net realisable value    (264) 207
Net foreign currency differences      216 (54)
Operating lease payments – minimum lease payments    927 946
Fees payable to the company’s auditor for the audit of the company’s accounts   74 69
Fees payable to the company’s auditor and its associates for other services   
 – audit of the UK defined benefit pension scheme    5 5
 – audit of the accounts of subsidiaries     69 65
 – other assurance services      — 25
4. Staff costs and Directors’ emoluments   
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Wages and salaries       20,127 20,344
Social security costs       2,142 2,159
Defined contribution pension costs      730 745
        22,999 23,248
Included in wages and salaries is a charge relating to share‑based payments of £nil (2013: £85,000). Details of share‑based 
payments are included in Note 20.
The average monthly number of employees (excluding Non‑executive Directors) during the period was made up as follows:
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        Number Number
Laminates       110 111
Foils Europe       183 189
Foils Americas       136 137
Holographics        92 99
Central       7 7
        528 543 59
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Directors’ emoluments
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Total   
Aggregate emoluments       602 677
Contributions to defined contribution schemes (two Directors)    37 35
        639 712
Highest paid Director   
Aggregate emoluments       281 324
Contributions to defined contribution schemes      22 21
        303 345
None of the current Directors are members of the defined benefit pension scheme.
Further details relating to Directors’ emoluments are shown on pages 39 and 40.
5. Exceptional items
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Restructuring of operating businesses      (705) (488)
Fees associated with the formal sale process     — (541)
        (705) (1,029)
Restructuring of operating businesses relates primarily to redundancy, severance settlements and other costs associated 
with business restructuring in the Foils Europe, Laminates and Holographics businesses.
6. Finance revenue and finance costs
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
        £’000 £’000
Finance revenue   
Interest receivable on bank and other short‑term deposits    1 2
Other interest receivable       1 8
        2 10
Finance costs   
Interest payable on bank loans and overdrafts     (533) (804)
Other interest payable        (41) (17)
Finance cost in respect of defined benefit pension plans    (558) (396)
        (1,132) (1,217)
Included within interest payable on bank overdrafts and loans is £178,000 (2013: £235,000) relating to the amortisation of 
fees and expenses incurred in obtaining bank facilities.
* restated for IAS 19 – Employee Benefits (revised)  60
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
7. Taxation
a) Tax (expense)/credit in the income statement   
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Current income tax   
UK corporation tax       (330) (75)
UK corporation tax – adjustment to prior years     75 —
Overseas tax        (164) (80)
Total current income tax expense      (419) (155)
Deferred tax   
Origination and reversal of temporary differences   
 – defined benefit pension plan      35 (135)
 – tax losses and other short‑term differences     501 588
 – capital allowances       (118) (275)
 – effect of change in tax rate      (149) (4)
Total deferred tax credit       269 174
Total tax (expense)/credit in the income statement     (150) 19
(b) Tax credit/(expense) on items accounted for through other comprehensive income   
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Deferred tax   
Re‑ measurement gains and losses on defined benefit  
pension schemes       94 1,258
Change in fair value of effective cash flow hedges     (198) 151
Effect of change in tax rate      (246) (181)
        (350) 1,228
(c) Tax (expense)/credit on items accounted for directly through equity   
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Deferred tax
Share‑based payments       — (18) 61
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(d) Reconciliation of the total tax charge
The tax rate in the income statement for the year is lower than the standard rate of corporation tax in the UK of 23% 
(2013: 24%). The differences are reconciled below:
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        £’000 £’000
Accounting profit before tax      5,592 5,566
Accounting profit multiplied by the UK standard rate of corporation tax of 23% (2013: 24%)  1,286 1,336
Adjustments to tax charge in respect of prior periods     (75) (81)
Adjustments in respect of foreign tax rates     95 55
Increase in deferred tax asset recognised on losses and capital allowances   (1,454) (1,595)
Losses for which deferred tax is not recognised     63 94
Other temporary differences for which deferred tax is not recognised   6 (33)
Effect of change in tax rate      152 4
Expenses not deductible for tax purposes      77 201
Total tax expense/(credit) reported in the income statement    150 (19)
(e) Unrecognised tax losses
The Group has unrecognised tax losses arising in the UK of £2,068,000 (2013: £2,819,000) that are available and may be 
offset against future taxable profits of those businesses in which the losses arose. The UK tax group also has unrecognised 
capital allowances of £2,078,000 (2013: £3,857,000) available to offset against future taxable profits at the rate of 18% 
(2013: 18%) a year on a reducing balance basis. The Group has unrecognised US federal tax losses carried forward of 
$4,097,000 (2013: $8,963,000), which are available for offset against future profits for a period of between 9 and 17 years. 
(f) Deferred tax
The deferred tax included in the balance sheet is analysed as follows:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Deferred tax liability   
Revaluation of fixed assets      (183) (211)
Fair value of cash flow hedges      (123) —
        (306) (211)
Deferred tax asset   
Defined benefit pension plans       2,806 3,070
Tax losses       2,724 2,376
Capital allowances       737 941
Fair value of cash flow hedges      — 64
Share‑based payments       145 166
        6,412 6,617
Reductions in the UK corporation tax rate from 26% to 24% (effective from 1 April 2012) and to 23% (effective from 
1 April 2013) were substantially enacted on 26 March 2012 and 3 July 2012 respectively. Further reductions to 21% 
(effective from 1 April 2014) and 20% (effective from 1 April 2015) were substantively enacted on 2 July 2013. This will 
impact the Group’s future current tax charge accordingly. The deferred tax assets and liabilities at 31 March 2014 have 
been calculated based on the rates of 20% and 21% substantively enacted at the balance sheet date.  62
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
8. Earnings per ordinary share
Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the 
Parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the 
Parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number 
of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.
Earnings used to calculate underlying basic and diluted earnings per share exclude exceptional items, net of tax. 
The following reflects the income and share data used in the basic and diluted earnings per share computations:
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
        £’000 £’000
Net profit attributable to equity holders of the Parent     5,442 5,585
Adjustments to arrive at underlying earnings:   
Exceptional items       705 1,029
Tax credit on exceptional items       (162) (103)
Underlying earnings       5,985 6,511
        Year ended  Year ended  
         31 March  31 March  
        2014 2013 
        Number Number
Basic weighted average number of ordinary shares     73,892,566 73,748,730
Dilutive effect of employee share options and contingent shares    3,265,060 3,600,787
Diluted weighted average number of ordinary shares     77,157,626 77,349,517
The basic weighted average number of shares excludes the 2,750,000 shares owned by the API Group plc No.2 Employee 
Benefit Trust (2013: 3,000,000). These contingent shares are included in the diluted weighted average number of shares. 
On 2 September 2013, 250,000 shares which had vested under the LTIP were exercised.
There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and 
the date of completion of these financial statements. 
Earnings per ordinary share
        Year ended  Year ended  
         31 March  31 March  
        2014 2013* 
        pence pence
Basic earnings per share       7.4 7.6
Underlying basic earnings per share      8.1 8.8
Diluted earnings per share      7.1 7.2
Underlying diluted earnings per share      7.8 8.4
* restated for IAS 19 – Employee Benefits (revised) 63
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9. Property, plant and equipment
      Long 
      leasehold  Office 
    Freehold  Freehold land and Plant and and IT 
    land buildings buildings machinery equipment Total 
    £’000 £’000 £’000 £’000 £’000 £’000
Cost      
At 1 April 2012   2,164 7,700 1,693 49,499 6,665 67,721
Additions   — 1,419 283 1,661 1,780 5,143
Disposals   — — — (974) (371) (1,345)
Foreign currency adjustment  99 364 — 720 151 1,334
At 31 March 2013   2,263 9,483 1,976 50,906 8,225 72,853
Additions   — 162 3 2,442 729 3,336
Disposals   — (44) — (267) — (311)
Foreign currency adjustment  (178) (656) — (1,355) (270) (2,459)
At 31 March 2014   2,085 8,945 1,979 51,726 8,684 73,419
Depreciation      
At 1 April 2012   — 3,206 923 40,460 5,196 49,785
Provided during the year   — 206 61 1,387 519 2,173
Disposals    — — — (966) (361) (1,327)
Foreign currency adjustment  — 223 — 577 109 909
At 31 March 2013   — 3,635 984 41,458 5,463 51,540
Provided during the year   — 336 70 1,408 553 2,367
Disposals    — (44) — (267) — (311)
Foreign currency adjustment  — (410) — (1,104) (153) (1,667)
At 31 March 2014   — 3,517 1,054 41,495 5,863 51,929
Net book value at 31 March 2014  2,085 5,428 925 10,231 2,821 21,490
Net book value at 31 March 2013  2,263 5,848 992 9,448 2,762 21,313
Net book value at 31 March 2012  2,164 4,494 770 9,039 1,469 17,936
Construction work‑in‑progress
Included in the cost of property, plant and equipment is £2,909,000 (2013: £1,751,000; 2012: £2,878,000) relating to 
construction work‑in‑progress.
Commitments
Amounts contracted in respect of property, plant and equipment (including construction work‑in‑progress) amounted to 
£644,000 (2013: £404,000). See Note 23.
Security
The Group’s UK borrowings of £7,329,000 (2013: £7,754,000) are secured by floating charges on the UK assets of the 
Group including fixed assets to the value of £13,348,000 (2013: £12,668,000). The US loans of £891,000 (2013: £777,000) 
are pledged certain against property, plant and equipment to the value of £5,094,000 (2013: £5,400,000).
10. Intangible assets – goodwill
         £’000
Cost and carrying value     
At 31 March 2012, 31 March 2013 and 31 March 2014     5,188
As from 1 October 2004, the date of transition to IFRS, goodwill was no longer amortised (previously amortised over a 
period up to 20 years) but is now subject to annual impairment testing. 64
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
10. Intangible assets – goodwill continued
Carrying amount of goodwill allocated to cash‑generating units:
         £’000
Foils Europe – UK        2,538
Foils Europe – Germany        964
Holographics        1,686
At 31 March 2012, 31 March 2013 and 31 March 2014     5,188
11. Impairment of non‑financial assets
The Directors have reviewed impairment tests at 31 March 2014 for cash generating units that have a goodwill allocation 
and for any of these units or other units in the Group that have indicators of impairment of property, plant and equipment.
Goodwill acquired through business combinations has been allocated for impairment testing purposes to the following 
cash‑generating units:
•	 Foils Europe – UK
•	 Foils Europe – Germany; and
•	 Holographics.
These represent the lowest level within the Group at which goodwill is monitored for internal management purposes. 
The value of goodwill allocated to these units is listed in Note 10.
The recoverable amount of each of the cash generating units has been determined on a value in use basis. Value in use is 
calculated as the net present value of pre‑tax cash flows based on budgets for the year ended 31 March 2015 and forecasts 
for the following three years which have been approved by the Board. The cash flows were derived from business plans, 
including detailed sales forecasts by product type and geography, prepared by individual businesses within each division. 
These include an allowance for detailed capital and maintenance programmes. The cash flows have been extrapolated 
for a period of 15 years using the key assumptions of estimated long‑term growth rates of 3% (2013: 3% to 3.5%) and cost 
inflation of 2% to 3% (2013: 2% to 3%) applicable to the location of each cash generating unit. The growth rates do not 
exceed the long‑term average growth rate for the relevant cash generating unit. A pre‑tax discount rate of 7.2% (2013: 7.0%) 
has been used, which was considered a best estimate for the current risk‑adjusted cost of capital for the Group. 
The Directors believe that no reasonable possible change in any of the key assumptions would cause the carrying value of 
the units to exceed their recoverable amounts.
12. Investment in joint venture
The Group has a 50% interest in a company, API Optix s.r.o. (“APIO”). During the year, loans advanced to the company in 
the year ended 31 March 2013 have been converted into equity. The total investment is as follows:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Investment in equity capital      880 3
Loan receivable       — 375
        880 378
The Group’s interests in the assets and liabilities of the joint venture are as follows:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Non‑current assets       287 24
Current assets       145 168
Current liabilities       (52) (189)
        380 3
The aggregate amount of the capital and reserves of the joint venture is £760,000. The net income for the year ended 
31 March 2014 is £nil (2013: £nil). Accordingly there is no separate disclosure of the Group’s share of results in the 
income statement.
The share capital of APIO is 200,000 Czech crowns and the Group holds 50% of that share capital. 65
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13. Trade and other receivables
         31 March  31 March  
        2014 2013 
        £’000 £’000
Amounts falling due within one year   
Trade receivables       14,163 13,556
Prepayments       1,642 1,644
Other debtors       788 611
        16,593 15,811
Trade receivables are non‑interest bearing and are generally on between 30 and 90 days’ terms. They are shown net of 
any provisions for impairment. At 31 March 2014, trade receivables at a nominal value of £95,000 (2013: £101,000) were 
impaired and fully provided for. Movements in the provision for impairment of receivables were as follows: 
         31 March  31 March  
        2014 2013 
        £’000 £’000
Opening provision       101 161
(Credit)/charge for the year      8 (1)
Amounts written off       (10) (57)
Unused amounts reversed      (1) (4)
Foreign currency adjustment      (3) 2
Closing provision       95 101
Of the total trade receivables shown above, £830,000 (2013: £998,000) are past due, but not impaired. An analysis of 
these trade receivables is as follows:
         31 March  31 March  
        2014 2013 
        £’000 £’000
0‑30 days overdue       621 936
31‑60 days overdue       100 19
61‑90 days overdue       61 35
91+ days overdue       48 8
        830 998
Due to the nature and number of the Group’s customers, it is not practical to analyse the credit quality of trade receivables 
that are neither past due nor impaired. Credit risk arises from the possibility that customers may not be able to settle their 
obligations as agreed. Customers are assessed for financial reliability using external rating agencies. Secure payment 
terms are frequently used in riskier geographical areas or for riskier customers. In determining the level of credit insurance 
placed, the Group continually monitors the market to assess the cost of premiums compared to the credit risks associated 
with different market and product sectors. At 31 March 2014, the maximum exposure to credit risk in respect of trade 
receivables, after taking account of credit insurance, was £3,907,000 (2013: £4,431,000).
During the year ended 31 March 2014 there were two major customers, reported within the Laminates segment, which 
comprised 10% or more of the total external revenue, amounting to £22,779,000 (2013: £18,685,000) and £12,094,000 
(2013: £18,149,000) respectively. These customers are multi‑location Groups and are supplied by API for a wide variety of 
end‑user designs and specifications.  66
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
14. Inventories
         31 March  31 March  
        2014 2013 
        £’000 £’000
Raw materials       4,043 4,583
Work in progress       1,004 1,675
Finished goods       7,079 6,606
        12,126 12,864
15. Cash and cash equivalents
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Short‑term deposits       — 4,500
Cash at bank and in hand       8,606 1,689
Cash and short‑term deposits      8,606 6,189
Bank overdrafts (Note 17)       (232) (234)
        8,374 5,955
Cash at bank and on deposit are held at major banks with high quality credit ratings. The maximum exposure to credit risk 
is represented by their respective carrying values.
16. Trade and other payables
         31 March  31 March  
        2014 2013 
        £’000 £’000
Trade payables       17,150 16,348
Other payables       5,482 6,080
        22,632 22,428
17. Financial liabilities
         31 March  31 March  
        2014 2013 
        £’000 £’000
Current   
Bank overdrafts       232 234
Current instalments due on bank loans      187 2,957
Interest rate swaps       — 16
Forward foreign exchange contracts      13 559
        432 3,766
Non‑current   
Non‑current instalments due on bank loans     8,033 5,574
        8,033 5,574
Details of interest rate swaps and forward foreign exchange contracts are given in Note 22. 67
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Bank loans
Bank loans comprise the following:   
         31 March  31 March  
        2014 2013 
        £’000 £’000
Revolving loans (UK)       7,329 7,754
Term loans (US)       891 777
        8,220 8,531
Less: current instalments due on bank loans     (187) (2,957)
        8,033 5,574
The Group’s banking facilities comprise:
UK facilities
The Group’s lending arrangements in the UK were moved from Barclays Bank plc to HSBC Bank plc in November 2013. 
The facilities with HSBC are for a period to 31 December 2017 and comprise a £13.5m multicurrency revolving facility 
agreement and ancilliary facilities of £7.5m to cover FX contracts, letters of credit and sundry other items. Total facilities 
under the previous funding agreement with Barclays Bank plc amounted to £12.8m as at 31 March 2013. At 31 March 
2014, UK facilities drawn down comprised revolving loans of £7.5m with interest rates of 2.0%. The facilities are subject 
to two quarterly financial covenant targets reflecting the financial performance of the Group excluding the impact of the 
Foils Americas business unit. Covenants relate to Interest Cover and Leverage. At 31 March 2014, the covenant ratios were 
comfortably within targets.
US facilities
The US facilities are with Wells Fargo Bank; these facilities are scheduled for renewal in April 2015. At 31 March 2014 they 
comprised amortising loans of $0.9m (2013: $1.2m), a revolving credit facility of up to $5.5m (2013: $5.5m), depending on 
the level of working capital and a new 5 year loan of $0.5m relating to the metalliser. At 31 March 2014, interest rates were 
3.5%. The total debt outstanding is subject to a quarterly covenant obligation relating to Fixed Costs Cover. During the 
year to 31 March 2014 the US business met all its covenant obligations. The revolving credit facility is secured on working 
capital to the value of £5,189,000 (2013: £5,861,000) and the loans over certain property, plant and equipment.
18. Pensions and other post‑retirement benefits 
The Group operates a number of pension schemes. Current UK employees participate in a defined contribution scheme. 
Overseas employees participate in a variety of different pension arrangements of the defined contribution type and are 
funded in accordance with local practice. A non‑contributory scheme is operated for members of the North New Jersey 
Teamsters 11 Union employed at the Company’s site in Rahway, New Jersey. This scheme is a multi‑employer defined 
benefit scheme which is accounted for as a defined contribution scheme, as the information available from the scheme 
administrators is insufficient for it to be accounted for as a defined benefit scheme. Under the rules of the scheme the 
employer is not liable for any deficit of the scheme unless it withdraws from the scheme.
In the UK, a defined benefit pension scheme, the API Group Pension and Life Assurance Scheme, was closed to future 
accrual in December 2008. This was a funded pension scheme for the Company and its UK subsidiaries providing benefits 
based on final pensionable earnings, funded by the payment of contributions to a separately administered trust fund. 
A second defined benefit scheme, operated in the US, the API Foils, Inc. North American Pension Plan, is also closed 
to future accrual. Due to the nature of the liabilities, the pension schemes are exposed to inflation, interest rate risk and 
changes in life expectancy of members. As the plan assets include significant investments in equities, the pension schemes 
are also exposed to equity market risk.
IAS 19 Employee Benefits was amended in June 2011. Details of the restatement are included in Note 1.  68
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
18. Pensions and other post‑retirement benefits continued
The assets and liabilities of the defined benefit schemes are:
At 31 March 2014
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
Equities      40,485 918 41,403
Bonds      20,981 1,106 22,087
Hedge funds      11,105 — 11,105
Property      7,384 63 7,447
Cash      56 — 56
Fair value of scheme assets     80,011 2,087 82,098
Present value of scheme liabilities     (92,631) (2,831) (95,462)
Net pension liability before deferred tax    (12,620) (744) (13,364)
At 31 March 2013
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
Equities      39,200 987 40,187
Bonds      22,075 986 23,061
Hedge funds      10,605 — 10,605
Property      6,677 82 6,759
Cash      — — —
Fair value of scheme assets     78,557 2,055 80,612
Present value of scheme liabilities     (90,880) (3,081) (93,961)
Net pension liability before deferred tax    (12,323) (1,026) (13,349)
The major categories of plan assets have a quoted price in an active market. The Funds have not invested in any of the 
Group’s own financial instruments nor in properties or other assets used by the Group. 69
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The amounts recognised in the Group Income Statement and Group Statement of Comprehensive Income for the year 
are as follows:
Year ended 31 March 2014
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
Recognised in the Income Statement     
Recognised in arriving at operating profit     
Scheme expenses borne by employers     662 13 675
Interest income on scheme assets     3,322 78 3,400
Interest cost on scheme liabilities     (3,837) (121) (3,958)
Other finance cost      (515) (43) (558)
Taken to the Statement of Comprehensive Income     
Actual return on scheme assets     4,067 196 4,263
Less: interest income on scheme assets    (3,322) (78) (3,400)
Less: investment management fees     (203) — (203)
       542 118 660
Other re‑ measurement gains and losses    (1,227) 54 (1,173)
Re‑ measurement gains and losses recognised in the  
Statement of Comprehensive Income     (685) 172 (513)
Year ended 31 March 2013
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
Recognised in the Income Statement     
Recognised in arriving at operating profit     
Scheme expenses borne by employers     665 — 665
Interest income on scheme assets     3,494 78 3,572
Interest cost on scheme liabilities     (3,842) (126) (3,968)
Other finance cost      (348) (48) (396)
Taken to the Statement of Comprehensive Income     
Actual return on scheme assets     7,792 172 7,964
Less: interest income on scheme assets    (3,494) (78) (3,572)
Less: investment management fees     (160) — (160)
       4,138 94 4,232
Other re‑ measurement gains and losses    (9,418) (57) (9,475)
Re‑ measurement gains and losses recognised in the  
Statement of Comprehensive Income     (5,280) 37 (5,243) 70
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
18. Pensions and other post‑retirement benefits continued
The major assumptions used in determining the value of the defined benefit schemes are disclosed below. 
 United Kingdom United States
       
      31 March 31 March 31 March 31 March  
      2014 2013 2014 2013 
      % % %  %
Rate of increase in pensions in payment   2.35 2.35   
Rate of increase to deferred pensions    2.35 2.35   
Inflation – CPI     2.35 2.35  
Discount rate     4.40 4.30 4.50 4.25
Post‑retirement mortality (in years):       
Member age 65 (current life expectancy) – male   20.9 20.3   
Member age 65 (current life expectancy) – female   23.1 22.3   
Member age 45 (life expectancy at 65) – male   22.7 22.0   
Member age 45 (life expectancy at 65) – female   25.0 24.3   
These assumptions have been selected after consultation with the Group’s UK pension advisors, KPMG LLP and the 
Group’s US actuaries, Prudential Retirement.
The rate of increase in pensions and the inflation rate assumptions in the UK are based on statistics published by the Bank 
of England for long‑term estimates of the Retail Price Index (“RPI”). At 31 March 2014, the relevant inflation rate based on 
the RPI for the duration of the UK Scheme was 3.35% (2013: 3.35%). The statutory basis of indexation used by the Scheme 
is based on the Consumer Price Index (“CPI”). It is estimated that long‑term CPI is approximately 1.0% (2013: 1.0%) lower 
than the RPI. A 0.1% variation in the inflation rate would result in a change in the present value of the scheme liabilities of 
approximately £1.0m (2013: £1.0m). 
The discount rate for the UK scheme has been set by reference to the iBoxx AA corporate bond 15‑year index. The rate has 
been modified to take account of the duration of the scheme, which is approximately 18 years (2013: 18 years). A 0.1% variation 
in the discount rate would result in a change in the present value of the scheme liabilities of approximately £1.5m (2013: £1.6m).
In the UK, the mortality assumptions for the current year are based on nationally published tables using 120% of the 
S1P*A YOB CMI 2013 model with 1.25% long‑term rate of improvement (2013: 130% of the S1P*A YOB CMI 2009 model 
with 1.25% long‑term rate of improvement). A 1 year variation in life expectancy at age 65 would result in a change in 
the present value of the scheme liabilities of approximately £2.0m (2013: £2.3m). In the US, mortality assumptions are in 
accordance with the IRS Static Mortality tables for the relevant year.
Scheme assets are stated at their market values at the respective balance sheet dates.
Following closure of the UK Scheme to future accrual, the Group has agreed to make contributions up to 2021 in order to 
make up the funding shortfall. The agreed contributions for the year ended 31 March 2015 are £700,000. 71
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Changes in the present value of the defined benefit obligations are as follows:
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
At 1 April 2012      80,821 2,832 83,653
Interest cost      3,842 126 3,968
Benefits paid      (3,201) (86) (3,287)
Re‑ measurement gains and losses     9,418 57 9,475
Foreign currency differences     — 152 152
At 31 March 2013      90,880 3,081 93,961
Service cost      — 13 13
Interest cost      3,837 121 3,958
Benefits paid      (3,313) (54) (3,367)
Re‑ measurement losses from changes in demographic assumptions  1,294 — 1,294
Re‑ measurement gains from changes in financial assumptions   (1,268) (54) (1,322)
Experience losses on liabilities     1,201 — 1,201
Foreign currency differences     — (276) (276)
At 31 March 2014      92,631 2,831 95,462
Changes in the fair value of the scheme assets are analysed as follows:
       United  United 
       Kingdom States Total 
       £’000 £’000 £’000
At 1 April 2012      73,266 1,769 75,035
Interest income      3,494 78 3,572
Return on scheme assets excluding interest income    4,298 94 4,392
Employer contributions      700 100 800
Benefits paid      (3,201) (86) (3,287)
Foreign currency differences     — 100 100
At 31 March 2013      78,557 2,055 80,612
Interest income      3,322 78 3,400
Return on scheme assets excluding interest income    745 118 863
Employer contributions      700 83 783
Benefits paid      (3,313) (54) (3,367)
Foreign currency differences     — (193) (193)
At 31 March 2014      80,011 2,087 82,098 72
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014
19. Share capital 
Allotted, called up and fully paid
      31 March 31 March 31 March 31 March  
      2014  2013 2014 2013 
      thousands thousands £’000 £’000
Ordinary shares of 1p      76,749 76,749 767 767
During the current and previous years, no further shares were issued. 
During the current and previous years, no options were granted over the ordinary shares. Full exercise of the options 
granted under the Company’s share option schemes would result in the issue, not later than March 2018, of 403,200 
shares (2013: 450,450 shares) at nil cost. 
Capital management
The primary purpose of the Group’s capital management is to ensure the maintenance of healthy capital ratios in order 
to support day‑to‑day business operations and the achievement of strategic objectives. The Group manages its capital 
structure and makes adjustments to it in the light of changes in economic conditions and the financial position of the 
Group. Capital, which comprises total equity, is monitored using normal financial ratios, primarily gearing for the Group 
overall and a leverage ratio associated with the main bank facilities in the UK. Ratios at 31 March 2014 are disclosed in the 
Financial Review on pages 26 to 28. 
20. Share‑based payments
During the year, an amount of £nil was charged to the income statement (2013: £85,000) in respect of share‑based 
payments. This comprises £nil (2013: £4,000) in respect of share options and £nil (2013: £81,000) in respect of contingent 
shares under the Long Term Incentive Plan. All share‑based payment plans are equity settled.
Share options
Share options remaining in place at 31 March 2014 are nil cost options which are all exercisable. The ability to exercise 
these options was conditional on the attainment of specified performance targets based on profits before tax over a 
three‑year performance period. The options lapse if they are not exercised within ten years of the date of grant.
The following table details the number and weighted average exercise price (WAEP) of, and movements in, share options 
during the year.
 31 March 2014 31 March 2013
       
      Number WAEP (p) Number WAEP (p)
Outstanding at beginning of year    450,450 — 614,250 —
Granted during the year     — — — —
Exercised during the year     (47,250) — (163,800) —
Surrendered during the year    — — — —
Forfeited during the year     — — — —
Expired during the year     — — — —
Outstanding at end of year    403,200 — 450,450 —
Exercisable at end of year    403,200 — 450,450 —
The weighted average share price of shares exercised at the date of exercise was 67p (2013: 57p).
For share options outstanding at the end of the year, the weighted average remaining contractual life is 4.0 years 
(2013: 5.0 years). 73
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Long Term Incentive Plan
In September 2010, the two Executive Directors (Andrew Turner and Chris Smith) entered into a long‑term incentive plan 
(“LTIP”) covering the period 1 April 2011 to 31 March 2015, under which they were each granted a single award which when 
combined totalled up to 3,000,000 contingent shares for a five year term. Under the terms of the LTIP, 3,000,000 ordinary 
shares of 1p (“shares”) were issued to the API Group plc No 2 Employee Benefit Trust (the “Trust”). The fair value of these 
awards is 16.0p. 
The Executive Directors are entitled to earn shares following the financial years ending 31 March 2012, 2013, 2014 and 
2015 based on a set of performance criteria reflecting increases in shareholder value. The maximum number of shares 
available on each occasion will be unrestricted, subject to the overall limit of the size of the award for the five year period. 
Any earned entitlement will be satisfied by transferring shares, at nil cost, from the Trust to the Directors. At the end of the 
performance period, residual, unearned shares will remain in the Trust and will be available for use under a successor LTIP 
or any other employee benefit scheme. 
The number of shares held by the Trust in respect of the LTIP reduced by 250,000 during the year ended 31 March 2014. 
There are 2,750,000 (2013: 3,000,000) Shares held in the Trust which can potentially be transferred to the Directors under 
the LTIP. 
In May 2013, the Remuneration Committee determined, in accordance with the scheme rules, and based on the 
performance criteria reflecting increases in shareholder value in the year, that a further 539,385 of the contingent shares 
held by the Executive Directors in the Company’s ordinary shares of 1p had vested. Following the year ended 31 March 2014, 
the Remuneration Committee has determined that no further contingent shares held by the Executive Directors in the 
Company’s ordinary shares of 1p had vested. Cumulatively, 1,502,478 of the contingent shares held by the Executive 
Directors in the Company’s ordinary shares of 1p have vested.
21. Reserves
Other reserves
Other reserves of £8,818,000 (2013: £8,816,000) comprise the capital redemption reserve £8,846,000 and a deficit of 
£28,000 in the ESOP reserve.
The capital redemption reserve arose from the cancellation of 549,000 preference shares of £1 each (£549,000) in 
March 1999 and the cancellation of 34,570,000 deferred shares of 24p (£8,297,000) in the year ended 31 March 2009.
The ESOP reserve relates to shares held by the API Group plc No 2 Employee Benefit Trust (the “Trust”), established in 1997 
to facilitate the operation of the Company’s executive share schemes. During the year, the Trust acquired 47,250 shares for 
a consideration of £32,000. These shares were subsequently transferred to an employee in respect of the exercise of nil 
cost options. At 31 March 2014 the trust held 2,750,000 (2013: 3,000,000) shares at an average cost of £0.01 per share and 
a total cost of £28,000 (2013: £30,000).
Foreign exchange reserve
The foreign exchange reserve of £432,000 deficit (2013: £958,000 surplus) is used to record exchange differences arising 
from the translation of the financial statements of foreign subsidiaries. 74
API Group plc Annual Report 2014
22. Financial instruments
Details of the treasury operations and funding of the Group are described in the Financial Review on pages 26 to 28.
Liquidity profile
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual 
undiscounted payments:
At 31 March 2014
      Within One to two Two to five 
      one year years years Total 
      £’000 £’000 £’000 £’000
Non‑ derivative financial liabilities    419 704 7,500 8,623
Interest on financial liabilities    181 152 263 596
Trade and other payables     21,862 — — 21,862
Forward foreign exchange contracts:    
Payable      21,725 2,117 — 23,842
Receivable     (22,306) (2,117) — (24,423)
At 31 March 2013
      Within One to two Two to five 
      one year years years Total 
      £’000 £’000 £’000 £’000
Non‑derivative financial liabilities    3,336 5,202 395 8,933
Interest on financial liabilities    192 51 1 244
Trade and other payables     21,589 — — 21,589
Interest rate swaps     16 — — 16
Forward foreign exchange contracts:    
Payable      24,873 6,374 — 31,247
Receivable     (24,488) (6,535) — (31,023)
Fair values of financial assets and liabilities
The fair values of financial assets and liabilities are determined to be equivalent to their book values. The Group uses 
a fair value hierarchy for determining and disclosing the fair values of financial instruments by valuation technique, in 
accordance with IFRS 13. All of the financial instruments held by the Group are included in the Level 2 hierarchy. Fair values 
are determined using observable market prices (level 2 as defined by IFRS 13 Fair Value Measurement) with the fair value of 
forward exchange contracts being estimated by discounting the difference between the contractual forward price and the 
current forward price for the residual maturity of the contract using a risk‑free interest rate. 
Credit risk
The Group’s credit risk relates to cash at bank and on deposit and trade receivables. Details are disclosed in Notes 13 and 15.
Equity price risk
Equity price risks are not applicable to the Group as it does not currently have any tradable investments.
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014 75
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Interest rate risk 
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables 
held constant, of the Group’s profit before tax. The impact on the Group’s equity is not significant. 
         Effect on profit 
        Increase in  before tax 
        interest rate £’000
2014       +1% (86)
2013       +1% (69)
Foreign currency risk 
The following table demonstrates the sensitivity to a reasonably possible change in the sterling against the US dollar and 
euro exchange rates, with all other variables held constant, of the Group’s profit before tax and equity due to foreign 
exchange conversion of monetary assets and liabilities. 
       Increase/  Effect   
       decrease  on profit Effect on 
       in sterling vs  before tax equity 
       US dollar/euro  £’000  £’000 
2014      
US dollar/sterling      +10% (80) (245)
       ‑10% 88 270
Euro/sterling      +10% 147 1,678
       ‑10% (162) (1,845)
2013      
US dollar/sterling      +10% 62 62 
       ‑10% (68) (68) 
Euro/sterling      +10% 382 2,999 
       ‑10% (420) (3,299) 
The impact of translating the net assets of foreign operations into sterling is excluded from the above sensitivity analysis. 
Hedges
Cash flow hedges
Forward foreign exchange contracts 
The Group has taken out foreign currency forward contracts in order to hedge the value of future sales denominated in 
euros to the value of €22.9m (2013: €34.1m), future purchases denominated in US dollars to the value of $4.5m (2013: $nil) 
and future capital expenditure commitments denominated in euros to the value of €1.3m (2013: €nil). These contracts 
have maturity dates extending to June 2015 (2013: August 2014). At 31 March 2014, contracts with a positive value 
amounted to £594,000 (2013: £141,000) maturing within one year and £nil (2013: £152,000) maturing in greater than one 
year. Contracts with a negative value amounted to £12,000 (2013: £559,000) maturing within one year. These hedges 
are fully effective and, consequently, the full amounts of the changes in fair value have been shown in the Statement 
of Comprehensive Income. The total gain recognised in other comprehensive income in respect of foreign exchange 
contracts is £595,000 (2013: gain of £186,000). A charge of £252,000 (2013: credit of £921,000) was recycled from other 
comprehensive income to revenue in the income statement. 
Interest rate
In the US, amortising interest rate swaps were taken out for the period 1 July 2011 to 30 October 2013 in respect of 100% 
of the US term loans, amortising at the same rate as the loans. At 31 March 2013, the notional amount of these swaps 
was $1.2m. A fixed value swap of $1.5m was also taken out for the same period as a hedge against the revolving credit 
facility. The Group received a variable rate based on 1 month LIBOR on the US swaps and paid a fixed rate of 1.73%. 
At 31 March 2013, these swaps had a negative value of £16,000. The interest rate swaps matured during the year ended 
31 March 2014 and there are no interest rate swaps at 31 March 2014.
These hedges are fully effective and, consequently, the full amounts of the changes in fair value have been shown in the 
Statement of Comprehensive Income. The total loss recognised in other comprehensive income in respect of interest 
rate swaps was £nil (2013: gain of £2,000). A charge of £16,000 (2013: £94,000) was recycled from other comprehensive 
income to finance costs in the income statement.  76
API Group plc Annual Report 2014
22. Financial instruments continued
Hedges continued
Fair value hedges
The Group has also taken out foreign currency forward contracts in order to hedge the value of trade debtors, net of trade 
creditors, denominated in euros. Any profit or loss arising on these contracts is posted directly to the income statement. 
At 31 March 2014, there were forward contracts in place in respect of fair value hedges to buy sterling and sell euros 
to the value of €1.3m (2013: €2.8m). These contracts had a negative fair value of £1,000 at 31 March 2014 (2013: gain 
of £43,000). Losses on fair value hedges amounting to £14,000 (2013: gain of £69,000) are included in the amounts 
disclosed for net foreign currency differences in Note 3. 
23. Capital commitments
Amounts contracted but not provided in these financial statements are as follow:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Property, plant and equipment      644 404
Investment in joint venture      — 500
        644 904
24. Obligations under leases and hire purchase contracts
Future minimum rentals payable under non‑cancellable operating leases are as follows:
         31 March  31 March  
        2014 2013 
        £’000 £’000
Not later than one year        820 913
After one year but not more than five years     1,527 1,456
After five years       1,402 1,476
        3,749 3,845
These commitments include £1,559,000 (2013: £1,597,000) in respect of annual payments of £38,000 relating to a long 
lease which expires in 2055. The remaining commitments relate to short‑term leases of no more than six years, mostly in 
respect of land and buildings.
25. Related party transactions
Compensation of key management personnel
The key management personnel comprise the six Directors (2013: six) and the Managing Directors of the four business 
units (2013: four).
        Year ended  Year ended 
         31 March  31 March  
        2014 2013 
        £’000 £’000
Short‑term employee benefits      1,350 1,682
Post employment benefits      68 57
Share‑based payments       — 85
        1,418 1,824
Transactions with joint venture
The movement in the investment during the year with the joint venture, API Optix s.r.o. is set out in Note 12. 
Other transactions during the year with the joint venture, API Optix s.r.o, are purchases of £51,000 and research 
and development charges of £150k.
Relationships between the parent and its subsidiaries
The relationships between the Parent and its subsidiaries are disclosed in Note 2 to the Parent Company 
financial statements.
FINANCIAL STATEMENTS
No TES To ThE C oNSoLId ATEd FINANCIAL STATEMENTS for the year ended 31 March 2014 77
API Group plc Annual Report 2014  Overview
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We have audited the parent company financial statements of API Group plc for the year ended 31 March 2014 which 
comprise the Company Balance Sheet and the related notes 1 to 11. The financial reporting framework that has been 
applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally 
Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those 
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted 
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a 
body, for our audit work, for this report, or for the opinions we have formed. 
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 44, the Directors are responsible for 
the preparation of the parent company financial statements and for being satisfied that they give a true and fair view. 
Our responsibility is to audit and express an opinion on the parent company financial statements in accordance with 
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the 
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud 
or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company’s 
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting 
estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the 
financial and non‑financial information in the Annual Report to identify material inconsistencies with the audited financial 
statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent 
with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion the parent company financial statements:
•	 give a true and fair view of the state of the Company’s affairs as at 31 March 2014;
•	 have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•	 have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you 
if, in our opinion:
•	 adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or
•	 the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in 
agreement with the accounting records and returns; or
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the group financial statements of API Group plc for the year ended 31 March 2014.
Colin Brown (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor 
Manchester, United Kingdom
3 June 2014
FINANCIAL STATEMENTS
INdEPENdENT AudIT or’S rEPorT to the members of API Group plc 78
API Group plc Annual Report 2014
         31 March  31 March  
        2014 2013 
       Note £’000 £’000
Fixed assets    
Investments      2 29,114 29,114
Current assets    
Debtors (greater than one year)     3 18,106 30,178
Debtors (less than one year)     3 9,767 —
Cash at bank and in hand       2,512 1,338
        30,385 31,516
Creditors – amounts falling due within one year    4 (23,202) (26,205)
Net current assets       7,183 5,311
Total assets less current liabilities      36,297 34,425
Creditors – amounts falling due after more than one year   5 — (4,978)
Net assets before defined benefit pension deficit     36,297 29,447
Defined benefit pension deficit     6 (10,089) —
Net assets       26,208 29,447
Share capital and reserves    
Called up share capital       7 767 767
Share premium account      8 7,136 7,136
Other reserves      8 8,818 8,816
Profit and loss account      8 9,487 12,728
Equity shareholders’ funds      26,208 29,447
Signed on behalf of the Board
Andrew Turner
Director
3 June 2014
Company number: 169249
FINANCIAL STATEMENTS
CoMPANy BALANCE ShEET at 31 March 2014 79
API Group plc Annual Report 2014  Overview
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1. Accounting policies
Accounting convention
The Company’s financial statements have been prepared under the historical cost convention in accordance with UK 
GAAP and with the Companies Act 2006. 
The Company has taken advantage of the exemption provided under Section 408 of the Companies Act 2006 not to 
publish its individual profit and loss account and related notes. 
The principal accounting policies which follow set out those policies which apply in preparing the financial statements for the 
year ended 31 March 2014. These policies have been consistently applied to all periods presented unless otherwise stated.
As set out in the Directors’ Report, the financial statements have been prepared on the going concern basis.
Investments in and loans due from subsidiaries
Investments in and loans due from subsidiaries are stated at cost less any impairment which is charged to the profit and 
loss account.
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 
date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay 
less or to receive more, tax, with the following exceptions:
•	 provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and 
gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the 
balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made 
where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will 
be rolled over into replacement assets and charged to tax only where the replacement assets are sold; and
•	 deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there 
will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which 
timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Pensions
In the UK, a defined benefit pension scheme, the API Group Pension and Life Assurance Fund (the “Fund”) was closed to 
future accrual in December 2008. This was a funded pension scheme for the Company and its UK subsidiaries providing 
benefits based on final pensionable earnings, funded by the payment of contributions to a separately administered 
trust fund. 
Historically the API Group Pension and Life Assurance Fund has been operated as a multi‑employer scheme, with API 
Group plc as the principal employer. Figures have not been available to accurately determine each employer’s share of the 
liabilities so under FRS 17.12 each entity has reported their share under a defined contribution basis in their own accounts. 
The consolidation accounts for API Group plc have shown the full defined benefit balance sheet and associated entries.
On 28 March 2014 the other participating employers (API Laminates Limited, API Holographics Limited, API Foils Limited and 
API Group Services Limited) de‑participated from the Fund. Liabilities for these entities were apportioned to API Group plc by 
means of a Flexible Apportionment Arrangement as allowed using the Pension Regulator’s framework. As API Group plc is 
now (from 28 March 2014) the sole participating employer, the provisions of FRS 17.12 no longer apply.
At 31 March 2014, the defined benefit pension liability in the balance sheet comprises the total of the present value of 
the defined benefit obligation (using a discount rate based on high quality corporate bonds that have been rated at AA or 
equivalent status), less any past service cost not recognised and less the fair value of plan assets out of which the obligations 
are to be settled directly. Fair value is based on market price information and in the case of quoted securities is the published 
bid price.
FINANCIAL STATEMENTS
No TES To ThE C oMPANy FINANCIAL STATEMENTS for the year ended 31 March 2014 80
API Group plc Annual Report 2014
FINANCIAL STATEMENTS
No TES To ThE C oMPANy FINANCIAL STATEMENTS for the year ended 31 March 2014
1. Accounting policies continued
Foreign currencies
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the 
transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation 
at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit 
and loss account.
Share‑based payments
The cost of equity‑settled transactions with employees is measured by reference to the fair value at the date at which 
they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant 
employees become fully entitled to the award. Fair value is determined by using an appropriate pricing model. In valuing 
equity‑settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the 
shares of the Company (market conditions).
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon 
market conditions which are treated as vesting irrespective of whether or not the market condition is satisfied, provided 
that all other performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the 
vesting period has expired and management’s best estimate of the achievement or otherwise of non‑market conditions 
and of the number of equity instruments that will ultimately vest or, in the case of an instrument subject to market 
conditions, be treated as vesting as described above. The movement in cumulative expense since the previous balance 
sheet date is recognised in the income statement, with a corresponding entry in equity.
The financial effect of awards by the Company of options over its equity shares to employees of subsidiary undertakings 
are recorded as an increase in its investment in subsidiaries with a credit to equity equivalent to the cost in the subsidiary 
undertakings. 
Employee Benefit Trust (the “Trust”)
The Company has a discretionary trust established to facilitate the operation of the Company executive share option 
schemes and long‑term incentive plans. Shares in API Group plc held by the Trust are deducted from equity as treasury 
shares and are recognised at cost. Amounts received on exercise of these options are also recognised in equity, with any 
difference between proceeds from the exercise of these options and the original cost being taken to revenue reserves. 
No gain or loss is recognised in the performance statements on the purchase, sale, issue or cancellation of equity shares.
Financial instruments
All loans and borrowings are initially recognised at fair value of the consideration received net of issue costs associated 
with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised 
cost under the effective interest rate method.
The Company’s financial instruments are consolidated with those of the Group and are incorporated into the disclosures 
in Note 22 of the Group’s financial statements. Accordingly, the exemption under paragraph 2D(b) of FRS 29 from 
disclosing the details in the Company financial statements has been applied.  81
API Group plc Annual Report 2014  Overview
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2. Investments
Subsidiary undertakings
         £’000
Cost and carrying value  
At 31 March 2013 and 31 March 2014       29,114
Details of the principal investments of the Company are as follows:
Name of company    Country of incorporation Holding 
API Laminates Limited
 +
    UK Ordinary shares 
API Foils Holdings Limited
 #
   UK Ordinary shares 
API Foils Limited
 *+
    UK Ordinary shares 
API Holographics Limited
 *+
   UK Ordinary shares 
API Overseas Holdings Limited
 *#
   UK Ordinary shares 
API Group Services Limited
 1
   UK Ordinary shares 
API‑Stace Limited
 2
    UK Ordinary shares 
API (USA) Holdings Limited
 *#
   USA Common and preferred stocks 
API Foils, Inc.
 *+
    USA Common and preferred stocks 
API Foils SAS
 *+
    France Ordinary shares 
API Foils Pty Limited
 *+
    Australia Ordinary shares 
API Foils New Zealand Limited
 *+
   New Zealand Ordinary shares 
API Foils Deutschland GmbH
 *+
   Germany Ordinary shares 
API Foils Italia srl
 *+
    Italy Ordinary shares 
API Foils (Asia) Limited
 +
    Hong Kong Ordinary shares 
API Folie Polska Sp. z o.o.
 +
   Poland Ordinary shares 
API Optix s.r.o.
 *+3
    Czech Republic Ordinary shares 
*  Held by subsidiary undertaking 
+  Operating company  
#  Intermediate holding company   
1  Group management company 
2  Property holding company    
3  Company controls 50% of the voting rights and share capital   
With the exception of API Optix s.r.o., the Company controls 100% of the voting rights and shares capital of all the 
above companies.
All the operating subsidiary undertakings are involved in the principal activities of the Group. 82
API Group plc Annual Report 2014
3. Debtors
         31 March  31 March  
        2014 2013 
        £’000 £’000
Amounts falling due after more than one year   
Amounts due from subsidiary undertakings     18,106 30,178
Amounts falling due within less than one year   
Amounts due from subsidiary undertakings     9,596 —
Other debtors       171 —
        9,767 —
Amounts due from subsidiary undertakings after more than one year are stated after an impairment provision of 
£45,000,000 (2013: £34,000,000).
4. Creditors – amounts falling due within one year
         31 March  31 March  
        2014 2013 
        £’000 £’000
Current instalments on bank loans      — 2,776
Corporation tax       572 578
Amounts due to subsidiary undertakings     22,600 22,600
Accruals       30 251
        23,202 26,205
Corporation tax represents group relief payable.
5. Creditors – amounts falling due after more than one year
         31 March  31 March  
        2014 2013 
        £’000 £’000
Bank loans       — 4,978
FINANCIAL STATEMENTS
No TES To ThE C oMPANy FINANCIAL STATEMENTS for the year ended 31 March 2014 83
API Group plc Annual Report 2014  Overview
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6. Pensions and other post‑retirement benefits
Historically the API Group Pension and Life Assurance Fund has been operated as a multi‑employer scheme, with 
API Group plc as the principal employer. Figures have not been available to accurately determine each employer’s 
share of the liabilities so under FRS 17.12 each entity has reported their share under a defined contribution basis in their 
own accounts. The consolidation accounts for API Group plc have shown the full defined benefit balance sheet and 
associated entries.
On 28 March 2014 the other participating employers (API Laminates Limited, API Holographics Limited, API Foils Limited and 
API Group Services Limited) de‑participated from the Fund. Liabilities for these entities were apportioned to API Group plc 
by means of a Flexible Apportionment Arrangement as allowed using the Pension Regulator’s framework. As API Group plc 
is now (from 28 March 2014) the sole participating employer, the provisions of FRS 17.12 no longer apply. The disclosures 
below have been prepared on the basis that the liabilities were brought on to the balance sheet via the Statement of Total 
Recognised Gains and Losses at the year end accounting date.
          31 March  
         2014  
         £’000
Present value of funded obligations       (92,631) 
Fair value of scheme assets       80,011 
Net defined benefit liability before deferred tax      (12,620) 
Related deferred tax asset       2,531 
Net liability in the balance sheet       (10,089)
The Fund has not invested in any of the Group’s own financial instruments nor in properties or other assets used by the Group.
There are no amounts recognised in the profit and loss account for the year ended 31 March 2014 as the Flexible 
Apportionment Arrangement was completed on 28 March 2014 (2013: £nil). 
Changes in the present value of the defined benefit obligations are as follows:
          31 March  
         2014 
         £’000
Opening defined benefit obligation       —
Actuarial losses (recognising liabilities)       (92,631)
Closing defined benefit obligation       (92,631)
Changes in the fair value of the scheme assets are as follows:
          31 March  
         2014  
         £’000 
Opening fair value of scheme assets       — 
Actuarial gains (recognising assets)       80,011 
Closing fair value of scheme assets       80,011 
The major categories of scheme assets as a percentage of total scheme assets are as follows:
          31 March  
         2014 
         % 
Equities        50.6 
Bonds        26.2 
Hedge funds        13.9 
Property        9.2 
Cash        0.1  84
API Group plc Annual Report 2014
6. Pensions and other post‑retirement benefits continued
The major assumptions used in determining the value of the defined benefit schemes are as follows: 
          31 March  
         2014  
         % 
Rate of increase in pensions in payment      2.35 
Rate of increase to deferred pensions       2.35 
Inflation – CPI        2.35 
Discount rate        4.40 
Post‑retirement mortality (in years):   
Member age 65 (current life expectancy) – male      20.9 
Member age 65 (current life expectancy) – female      23.1 
Member age 45 (life expectancy at 65) – male      22.7 
Member age 45 (life expectancy at 65) – female      25.0 
The mortality assumptions are based on nationally published tables using 120% of the S1P*A YOB CMI 2013 model with 
1.25% long‑term rate of improvement. 
The expected rates of return for each asset class, net of scheme expenses, are as follows:
          31 March  
         2014 
         % 
Equities        6.35 
Bonds        3.70 
Hedge funds        6.35 
Property        6.35 
Cash        0.50 
Where investments are held in bonds and cash, the expected long term rate of return is taken to be the yields generally 
prevailing on such assets at the balance sheet date. A higher rate of return is expected on equity investments, which is based 
on realistic future expectations rather than on the returns that have been available historically. The overall expected long term 
rate of return on assets is then the average of these rates taking into account the underlying asset portfolio of the Fund.
The agreed contributions for the year ended 31 March 2015 are £700,000.
An actuarial loss of £12,620,000 was recognised in the Statement of Total Recognised Gains and Losses for the year ended 
31 March 2014. The cumulative amount of actual gains and losses in the Statement of Total Recognised Gains and Losses 
is £12,620,000.
FINANCIAL STATEMENTS
No TES To ThE C oMPANy FINANCIAL STATEMENTS for the year ended 31 March 2014 85
API Group plc Annual Report 2014  Overview
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7. Share capital
Allotted, called up and fully paid
      31 March 31 March 31 March 31 March  
      2014 2013 2014 2013 
      thousands thousands £’000 £’000
Ordinary shares of 1p      76,749 76,749 767 767
During the current and previous years, no further shares were issued.
During the current and previous years, no options were granted over the ordinary shares. Full exercise of the options 
granted under the Company’s share option schemes would result in the issue, not later than September 2018, of 403,200 
shares (2013: 450,450 shares) at nil cost. 
Details relating to share based‑payments are summarised in Note 20 of the consolidated financial statements.
8. Reconciliation of movements on equity
     Equity share  Share Other Profit and Shareholders’ 
     capital premium reserves loss account  equity 
     £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2012    767 7,136 8,816 11,450 28,169
Shares acquired by Employee Benefit Trust  — — (94) — (94)
Transferred on exercise of share options  — — 94 (94) —
Share‑based payments    — — — 85 85
Balance from profit and loss account   — — — 1,287 1,287
Balance at 31 March 2013    767 7,136 8,816 12,728 29,447
Shares acquired by Employee Benefit Trust  — — (32) — (32)
Transferred on exercise of share options/LTIP   — — 34 (34) —
Share‑based payments    — — — — —
Dividends    — — — (518) (518)
Deficit on defined benefit pension scheme  — — — (10,089) (10,089)
Balance from profit and loss account   — — — 7,400 7,400
Balance at 31 March 2014   767 7,136 8,818 9,487 26,208
Other reserves
Other reserves of £8,818,000 (2013: £8,816,000) comprise the capital redemption reserve £8,846,000 and a deficit of 
£28,000 in the ESOP reserve.
The capital redemption reserve arose from the cancellation of 549,000 preference shares of £1 each (£549,000) in 
March 1999 and the cancellation of 34,570,000 deferred shares of 24p (£8,297,000) in the year ended 31 March 2009.
The ESOP reserve relates to shares held by the API Group plc No 2 Employee Benefit Trust (the “Trust”), established in 1997 
to facilitate the operation of the Company’s executive share schemes. During the year, the Trust acquired 47,250 shares for 
a consideration of £32,000. These shares were subsequently transferred to an employee in respect of the exercise of nil 
cost options. At 31 March 2014 the trust held 2,750,000 (2013: 3,000,000) shares at an average cost of £0.01 per share and 
a total cost of £28,000 (2013: £30,000). 86
API Group plc Annual Report 2014
9. Profit attributable to members of the Parent Company
A profit of £7,400,000 for the year ended 31 March 2014 (2013: £1,287,000) has been dealt with in the financial statements 
of the Parent Company. As permitted by Section 408 of the Companies Act 2006 the Company has not presented its own 
profit and loss account. 
Fees paid to the Auditor in respect of audit services provided to the Company for the period amounted to £5,000 
(2013: £5,000).
10. Dividends
An interim dividend of 0.7 pence per share (2013: nil) was approved by the Board on 2 December 2013 and was paid on 
9 January 2014 to equity holders on the register at the close of business on 13 December 2013.
A final dividend of 1.3 pence per share (2013: nil) was approved by the Board on 2 June 2014 bringing the total dividend in 
the year to 2.0 pence per share (2013: nil). The final dividend is payable on 1 August 2014 to equity holders on the register 
at the close of business on 11 July 2014. This dividend has not been provided for in these financial statements.
11. Related party transactions
In accordance with paragraph 3(c) of FRS 8, the Company has taken advantage of the exemption not to disclose related 
party transactions with wholly‑owned subsidiaries. There are no other related party transactions which require disclosure.
FINANCIAL STATEMENTS
No TES To ThE C oMPANy FINANCIAL STATEMENTS for the year ended 31 March 2014 87
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ShArEhoLdEr INForMATIoN
FINANCIAL rEC ord
     Year ended Year ended Year ended Year ended Year ended 
     31 March 31 March 31 March 31 March 31 March 
     2014 2013* 2012* 2011* 2010 
     £’000 £’000 £’000 £’000 £’000
Continuing operations      
Revenue    114,712 112,426 113,935 99,963 79,192
Operating profit before exceptional items   7,427 7,802 6,400 4,768 3,266
Exceptional items    (705) (1,029) — — (626)
Operating profit    6,722 6,773 6,400 4,768 2,640
Net finance costs    (1,130) (1,207) (1,606) (2,289) (2,978)
Profit/(loss) before taxation   5,592 5,566 4,794 2,479 (338)
Tax (expense)/credit    (150) 19 (36) (159) 2,804
Profit/(loss) from continuing operations  5,442 5,585 4,758 2,320 2,466
Discontinued operations      
Loss from discontinued operations   — — — (4,124) (4,358)
Profit/(loss) for the year    5,442 5,585 4,758 (1,804) (1,892)
Attributable to:      
Profit/(loss) attributable to equity holders of the Parent 5,442 5,585 4,758 1,708 124
(Loss)/profit attributable to non‑controlling equity interest — — — (3,512) (2,016)
Total profit/(loss) for the year   5,442 5,585 4,758 (1,804) (1,892)
The comparative figures above have been restated to reflect the presentation of the results of the China business, which 
was sold in the year ended 31 March 2011, as a discontinued operation. 
*  restated for IAS 19 – Employee Benefits (revised) 
Basic earnings/(loss) per ordinary share (pence)      
From continuing operations   7.4 7.6 6.4 3.2 3.4
From total operations    7.4 7.6 6.4 2.3 0.2
The weighted average number of shares in the previous periods has been adjusted to reflect the exercise of warrants at 
below market price.
Net funds (debt) (£’000)    154 (2,576) (3,587) (8,511) (18,527)
Gearing (%)    0% 11% 17% 56% 107%
Average number of employees – all businesses  528 543  540 671 691 88
API Group plc Annual Report 2014
Registrars and transfer agents
Capita IRG Plc
Bourne House 
34 Beckenham Road 
Beckenham  
Kent BR3 4TU
Broker
Numis Securities Limited
The London Stock Exchange Building 
10 Paternoster Square  
London EC4M 7LT
Financial PR
Abchurch Communications Limited
125 Old Broad Street 
London EC2N 1AR
Nominated adviser
Cairn Financial Advisers LLP
61 Cheapside  
London EC2V 6AX
Bankers
HSBC Bank plc
2nd Floor 
4 Hardman Square 
Spinningfields 
Manchester M3 3EB 
Wells Fargo & Company
420 Montgomery Street 
San Francisco 
USA 
CA 94104
Auditor
Ernst & Young LLP
100 Barbirolli Square  
Manchester M2 3EY
Solicitors
Eversheds LLP
Eversheds House 
70‑76 Great Bridgewater Street  
Manchester M1 5ES
ShArEhoLdEr INForMATIoN
FINANCIAL CALENd Ar
Annual General Meeting
To be held at 2.00 p.m. on Tuesday, 15 July 2014 at the offices of Eversheds LLP at 1 Wood Street, London EC2B 7WS.
Reports
Interim results announcement for six months to 30 September 2014 issued December 2014.
Interim Report for six months to 30 September 2014 circulated December 2014.
Final results announcement for the year ended 31 March 2015 issued June 2015.
Annual Report for the year ended 31 March 2015 circulated June 2015.
Capital gains tax
The market value of an ordinary share on 31 March 1982 was 60.5p.
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