Armour Group plc Annual Report 2010
Armour Group plc  
Annual Report 2010 Who we are Armour Group 
is the UK’s leading consumer 
electronics group within  
the home and in-car  
communications and  
entertainment markets,  
committed to designing,  
manufacturing and  
distributing leading-edge  
audio and visual products  
and solutions.
Our business model
The Group’s business model is based on  
five elements.
To maintain and develop:
p	 Brands that are award-winning and have 
 market presence
p	 A quality product portfolio
p	 Product innovation and proprietary technology
p	 An unrivalled UK customer base and 
 distribution platform
p	 A first class customer service
For more information please visit our website: armourgroup.uk.com Business Review Governance Financial Statements Annual General Meeting
1 Armour Group plc Annual Report 2010
Contents
Business Review
 1 Over the last 12 months
 2  Armour Group at a glance
 4  Chairman’s Statement
 6  Chief Executive’s Review 
 14 Finance Director’s Report
Governance
18  Directors and Advisers
19  Directors’ Report
22  Corporate Governance Statement
25  Remuneration Report
28  Independent Auditors’ Report
Financial Statements
29   Consolidated Statement 
of Comprehensive Income
30   Consolidated Statement 
of Financial Position
31  Consolidated Statement of  
 Changes  in Shareholders’ Equity
32  Consolidated Statement 
of Cash Flows
33 Notes to the Consolidated 
 Financial Statements
55  Company Balance Sheet
56 Notes to the Company Financial  
 Statements
Annual General Meeting
59 Notice of Annual General Meeting
Business Highlights
Sales growth of 10%.
16 Awards won.
New products launched including QTV2, Q2000, QED 
Profile and the Alphason Office Furniture range.
November 2010 Q2 Internet Radio launched.  
(www.q2radio.co.uk)
Continued growth in our Nordic and Asian operations.
 
Headline Figures
Sales £56.6 million (2009: £51.6 million).
EBITDA
*
 of £2.8 million (2009: £3.0 million).
Profit after taxation £0.9 million (2009: £0.9 million).
Basic earnings per ordinary share 1.4p (2009: 1.4p).
Cash generated from operations of £1.8 million  
(2009: £7.2 million).
Net Debt £5.7 million (2009: £4.9 million).
*  EBITDA is defined as profit before interest, taxation, depreciation, amortisation 
and share-based payments.
Over the last 12 months 
 
Market conditions have been volatile with the poor  
weather in January, a disappointing World Cup and 
weak consumer confidence all impacting the trading 
performance. Despite these factors the Group grew  
sales by 10% to £56.6 million, although profit margins  
were lower due to an unfavourable sales mix and  
strong price competition.
The Group has responded to the changing market 
conditions by lowering its cost base and sizing our 
operations to meet a more uncertain outlook.  
This programme will continue into 2011 with the 
reorganisation of Armour Home which will deliver  
further cost savings and efficiencies.
Driving sales growth in 2010 was the new product 
programme and the expansion of our operations in 
Scandinavia and Asia. Whilst we expect the market 
conditions to remain challenging in our core markets,  
we believe that new products and further growth in  
Asia and Scandinavia will provide some balance to  
the overall cautious trading outlook. 2 Armour Group plc Annual Report 2010
Armour Group at a glance
Our global marketplace
The Group possesses a strong brand portfolio of more than 6,000 
products and accessories. This is underpinned by strong product 
development and investment in proprietary technology.
An unrivalled distribution capability ensures that products are  
supplied direct to more than 6,000 retail outlets within the UK  
and to customers in 68 countries worldwide.
The Group is also a leading supplier of audio and visual technology 
to many non-retail customers including vehicle manufacturers, 
hotel chains, house builders and custom installers.
Australia 
Austria 
Bahrain 
Barbados 
Belarus 
Belgium 
Brazil 
Bulgaria 
Canada 
China 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Dubai 
Ecuador 
Egypt 
Eire 
Estonia 
Finland 
France 
Germany 
Greece 
Hong Kong 
Hungary 
India 
Indonesia 
Iran 
Israel 
Italy 
Japan 
Jordan 
Kazakhstan 
Kenya 
Korea 
Kuwait 
Latvia 
Lebanon 
Malaysia 
Malta 
Morocco 
Netherlands 
New Zealand 
Nigeria 
Norway 
Pakistan 
Philippines 
Poland 
Portugal 
Romania 
Russia 
Saudi Arabia 
Serbia 
Singapore 
Slovakia 
Slovenia 
South Africa 
Spain 
Sweden 
Switzerland 
Syria 
Taiwan 
Thailand 
Turkey 
UAE 
Ukraine 
United Kingdom 
USA 
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3 Armour Group plc Annual Report 2010
Armour Home is the leading provider of  
high-end products, solutions and services to 
the Hi-Fi, home theatre, entertainment and 
furniture markets in the UK. Its portfolio spans 
all aspects of sound, vision and the associated 
entertainment experience within the home.
Armour Auto is the UK market leader in the 
supply of audio and video solutions for the in-car 
entertainment and communications market, 
working with industry partners to research,  
develop and distribute cutting-edge products 
and accessories.
 
Revenue* £43.3m 
Percentage of Group revenue 77%
Number of staff 183
Number of locations  3
Facilities (sq ft) 136,500 
Number of customers 3,400+
Percentage revenue from owned brands 69%
* Revenue includes £0.5 million which from the 1 March 2010 was made 
direct by Armour Hong Kong
 
Revenue  £13.3m 
Percentage of Group revenue 23%
Number of staff  114
Number of locations 2
Facilities (sq ft) 51,600
Number of customers 1,900+
Percentage revenue from owned brands 85%
Key owned brands Key owned brands
Key customers
Comet  Sevenoaks Sound & Vision 
HMV  Argos 
Currys/PC World  John Lewis Partnership 
Tesco Marks & Spencer 
Euronics Richer Sounds 
Staples Superfi
Key customers
Halfords Same Deutz-Fahr 
Lunar Caravans Dennis Eagle 
Bailey Caravans New Holland Agriculture 
Sony France Scania (Great Britain) 
The Carphone Warehouse Kenwood Electronics Europe 4 Armour Group plc Annual Report 2010
The turbulence emanating from the uncertain 
economic environment has again had a major 
impact on the Group’s performance in the 
year 31 August 2010. Whilst it is pleasing to 
report that the Group sales increased to  
£56.6 million (2009: £51.6 million), it is 
disappointing to report that the profit  
from operations fell to £1.2 million (2009:  
£1.5 million). Basic earnings per ordinary 
share were 1.4p (2009: 1.4p). No dividend  
is proposed for the year (2009: 0.30p per 
ordinary share). The Group’s net debt  
at 31 August 2010 was £5.7 million 
(2009: £4.9 million).
Despite the UK moving out of recession in the  
latter part of 2009, the trading environment 
has remained volatile and the Group’s 
results reflect this uncertainty and the 
testing environment.
The Group enjoyed a period of strong sales in 
the run up to Christmas 2009, but experienced 
weak sales during the poor weather in 
January and immediately after the football 
World Cup in July. Managing our operations  
in such an uncertain climate is difficult, 
particularly where our customers themselves 
are struggling to predict buying patterns. 
Chairman’s Statement
Despite the UK moving out of 
recession in the latter part of 
2009, the trading environment 
has remained volatile and the 
Group’s results reflect this 
uncertainty and the testing 
environment.  Business Review Governance Financial Statements Annual General Meeting
5 Armour Group plc Annual Report 2010
The Board has confidence that this review,  
the sales effort in our core brands and the new 
manufacturing facility in China will put us in a 
good position for growth when markets recover .
The sales growth achieved by the Group 
in the year has been encouraging given 
the economic backdrop. This growth has 
come from across the Group and reflects 
investments made during 2009 in products, 
operations and new sales channels.  
In Asia and Scandinavia, our businesses  
grew significantly on the back of the expansion 
of their respective sales operations; our 
successful entry into the office furniture 
market in 2010 contributed over £2 million  
to sales; our automotive sales through the 
agricultural and commercial vehicle channel 
also benefited from an improvement in 
market conditions and reported a year-on-
year sales increase of 17%; and new products 
such as Q-TV2 and our new cable range  
QED Profile helped grow sales in the home 
retail channel.
Despite the sales growth, our profit margins 
have come under pressure from a weaker 
sales mix, additional promotional activity and 
continuing competitive price pressure. We 
have responded to these pressures through 
taking responsible and appropriate action to 
control our cost base and target lowering the 
purchase cost of products from our suppliers. 
The core fundamentals of strong brands, 
quality products, unrivalled distribution and 
excellent customer service all remain true, 
with our key proprietary brands continuing to 
dominate their respective niches in the UK.  
 
 
 
 
 
The Group employs over 300 people in the  
UK, Ireland, Sweden and Hong Kong. It is 
thanks to their hard work, dedication and 
professionalism that the Group continues  
to be successful in these challenging times.  
I would like to acknowledge the Board’s 
appreciation of their commitment and 
effort over the course of the year .
The Group has recently set up a 
manufacturing facility in northern China  
in response to a number of opportunities 
initiated by key customers. Whilst this initiative 
is in its early stages, the response from our 
customers has been encouraging.
The economic outlook remains uncertain and 
challenging in the near term in our core UK 
markets. Whilst there are opportunities for 
the Group to grow over the coming year , the 
Board remains cautious with regard to the 
short-term prospects, with the indications 
being that the first half of the new financial 
year will be below the prior year . The Group 
management have an ongoing operational 
review looking at all aspects of our business 
and how it can be streamlined with regard  
to reducing cost and improving efficiency.  
The Board has confidence that this review,  
the sales effort in our core brands and the 
new manufacturing facility in China will  
put us in a good position for growth when 
markets recover . 
Bob Morton
Chairman 
23 November 2010 6 Armour Group plc Annual Report 2010
Chief Executive’s Review
In the year to 31 August 2010 Armour has 
delivered profitable results in one of the most 
difficult trading environments in recent memory. 
The year to 31 August 2010 has been a  
volatile one for the Group, influenced by the 
poor weather in January , a disappointing 
World Cup and a general fall in consumer 
confidence following the Election and the 
subsequent Budget. Despite these issues,  
the Group has remained profitable and  
has successfully grown sales. 
The fluctuating demand from our customers, 
particularly in the latter part of the financial 
year , proved challenging in correctly sizing  
our business operations to ensure that we 
maintain our levels of service and support  
to our customers, whilst operating from an 
affordable cost base. Throughout the year we 
have looked to reduce our operating costs and 
as part of this review, we have now initiated a 
reorganisation of our home division which will 
deliver further cost savings and efficiencies 
going forward into 2011.
Whilst the economic environment has been 
uncertain, we have seen encouraging signs  
of steady improvement in Armour Auto and 
our operations in Asia have again grown sales 
significantly , albeit from a fairly small base. 
Our new product programme has also 
delivered further successes through products 
such as Q-TV2, our discreet flat screen 
speaker system, and remains a core part  
of the Group’s strategy to deliver future 
profitable growth.
Armour Home designs, develops and 
distributes a range of consumer products and 
accessories for the home, supplying the retail 
and house building markets primarily in the 
UK. In the year to 31 August 2010 the sales for 
the Armour Home division were £42.8 million 
which generated a profit of £1.9 million. 
 
2010 has been a year of contrast for the 
Home division, experiencing both ends of the 
trading spectrum over the course of the year .  
A strong first four months in the run into 
Christmas 2009 was impaired by a poor 
January , due to the serious winter weather , 
and a very quiet July following the end of  
the football World Cup.
Our key UK markets of retail and house 
building have continued to feel the effects of 
economic downturn during 2010. Once again 
profit margins have been under pressure from 
aggressive price competition, fluctuating 
exchange rates and a changing sales mix 
caused by slower sales into the high margin 
home automation market relative to an 
increase in sales in the lower margin  
retail market.
Sales of our home automation systems and 
associated products declined during the year 
by 5% with demand remaining subdued due 
to the low level of new house builds and a 
sluggish home renovation market. There 
were signs, in the first quarter of 2010, that 
the market was improving with a significant 
number of new project specifications for our 
core Systemline distributed home audio and 
video systems. However , following the Election 
and the emergency Budget, the market 
slowed with many projects being delayed.  
As with last year , demand has been better 
at the higher end of the market with smaller 
developers who are typically building less 
than 20 homes per year . We believe that this 
demand at the higher end of the market will 
continue and our launch of a new 16 room 
Systemline system, due at the beginning of 
2011, will help to protect and grow our 
revenues in this important sales channel.  
The home automation market remains a  
key part of the home division, accounting 
for 18% of divisional sales.
6
Armour Group plc Annual Report 2010 7 Armour Group plc Annual Report 2010 7
Conran Audio  
Speaker Dock. 
Designer ‘streaming’  
speaker dock for  
iPhones and iP ods 
Developing 
award- 
winning 
products
Armour Home’s designers 
constantly strive to develop 
products that lead the field 
through design and innovation, 
with impressive results. Our 
Q Acoustics and QED brands 
consistently win prestigious 
awards at home and abroad.
Alphason ‘Hunter’ Desk. 
Home office desk with 
keyboard shelf
Alphason  
‘Houston’.
Leather  
executive  
office chair
Grado RS1i 
headphones.
Premium 
headphones 
for hi-fi 
enthusiasts
Q Acoustics Q-TV .
Ultra discreet television 
sound enhancement 
system 
Q Acoustics 
2010 Speaker. 
Award-winning home 
cinema loudspeakers
Q2 Internet Radio.
The world’s easiest to 
use internet radio
Alphason 
‘Ancora’ TV 
Furniture.
Styled corner 
TV stand with 
safety glass 
Myryad ‘mi’
‘All-in-one’ 
compact  
CD/DAB 
hi-fi system
Nevo S70  
Remote Control.
Complete control  
of multi-room home 
entertainment 
systems
Business Review Governance Financial Statements Annual General Meeting
Armour Group plc Annual Report 2010 8 Armour Group plc Annual Report 2010
Aquavision  
AVF17W-4A LCD.
17" Widescreen 
waterproof kitchen/
bathroom television
iP ort IW 21.
Remote 
controlled 
In-wall iP od/
iPhone dock
Systemline  
TSK35C.
In-wall touch 
screen system 
control panel
Systemline Wireless 
Commander.
Hand held, touch 
screen multi-room 
system controller
Systemline ALM3. 
Amplified in-ceiling 
loudspeakers
Epson EH-TW5500. 
Full HD 1080P home 
cinema projector
Custom 
Installation
The way we live our lives has 
changed. The rise of iPods and 
smartphones means people now 
expect instant entertainment 
wherever they are. Systemline  
and the other multi-room products 
we supply, enable consumers 
to enjoy hi-fi quality music and 
high definition TV and movies 
throughout their homes, all at  
the touch of a button.
Systemline HomeNet. 
Enclosure to 
accommodate 
TV , telephone, data, 
and audio/video 
connections
Sonance ThinLine 
TL623R.
High power handling 
in-ceiling speakers 9 Armour Group plc Annual Report 2010
Business Review Governance Financial Statements Annual General Meeting
We believe that this demand at the higher end of 
the market will continue and our launch of a new 
16 room Systemline system, due at the beginning 
of 2011, will help to protect and grow our revenues 
in this important sales channel.
Sales into the UK retail channel performed 
satisfactorily given the market conditions, 
ending the year 13% up on 2009, although 
gross margins were down due to an 
unfavourable sales mix and price competition. 
Sales growth was driven by new products 
under our Q Acoustics, Alphason and QED 
brands. Q Acoustics, the award-winning hi-fi 
speaker brand, had a good year with both 
the Q2000 hi-fi speaker range and Q-TV2 
exceeding our sales expectations. Alphason’s 
new office furniture range also made an 
important impact generating sales of  
£2.2 million with the new range being listed  
at retailers including John Lewis, Staples,  
Next and Office Depot.
The division’s export sales had a reasonable 
year driven on by Q Acoustics Q2000 range  
of hi-fi speakers and Q-TV2, both of which 
delivered sales above our expectations.  
The trading environment in most of our 
target markets has remained difficult, 
although we have seen strong growth in 
Asia and Scandinavia, where our continued 
investment in expanding our subsidiary 
operations has delivered encouraging results. 
Armour Home has continued to bring to 
market award-winning products that are well 
reviewed in both the consumer and trade 
press. In 2010, the home division won more 
than 10 industry awards. These include the 
ERT Training Award for Alphason; Q Acoustics 
again winning the What Hi-Fi? Sound and 
Vision award for its Q2000 5.1 speaker 
package; and the new QED Profile HDMI  
cable winning What Hi-Fi? Sound and Vision 
“Product of the Year” award in the cable 
category. 
Our customer base in the home division has 
grown in 2010, particularly in the large retailer 
sector in the UK and Europe where new 
customers include Next, Debenhams, Shop 
Direct, Sainsbury , Kesa, Boulanger and FNAC. 
This underlines the quality of the brands, 
products and service that we continue to 
deliver into the retail market.
 
 
 
 
 
Chief Executive’s Review
continued
Cinemax HD200T.
Electrically operated, 
tensioned cinema 
screen screen screen screen screen 10 Armour Group plc Annual Report 2010
Armour Auto is the leading company in the 
UK and Sweden supplying the automotive 
aftermarket with connectivity solutions 
and audio-video equipment for in-vehicle 
applications. The division delivered sales 
of £13.3 million and a profit of £0.1 million 
in the year to 31 August 2010.
The automotive division has shown some 
encouraging signs of improvement during 
2010 that we believe will become increasingly 
evident in 2011. There have been positive signs 
of recovery in our OEM business and a good 
performance in the Nordic operations. 
However , weak consumer demand, logistical 
problems within a major customer’s 
operations and the delay in launching a key 
new product has combined to hold back sales 
in the year . Gross profit margins within the 
automotive division have performed well, 
increasing marginally on the prior year  
due to lower fixed production costs in  
the UK operations.
In our core UK retail sales channel, market 
conditions have been testing with sales 
declining by 12%. For much of the year , sales 
into the specialist independent retail channel 
showed modest improvement over 2009, but 
in the last quarter sales into this channel 
slowed and ended marginally down.  
In the national accounts, sales were also 
down, but this was distorted by operational 
issues experienced by our largest customer 
following the relocation of their warehousing 
and logistical operations in July. Whilst these 
issues are now resolved, they did have a 
material impact on sales and profits in  
July and August. 
 
 
 
 
In our OEM business, which accounts for 28% 
of the division’s sales, we experienced positive 
signs of recovery in 2010 with sales growing 
by 17%. Demand from all our key customers 
grew, particularly in the agricultural vehicle 
market, as their production schedules 
increased during the year . The new contracts 
won in 2009 all came on stream in 2010 and 
contributed to sales. Armour Auto has 
continued to win new contracts in 2010 in 
niche areas of the automotive OEM market 
and on the back of these contract wins and 
increasing demand from the existing 
customer base, sales are expected to continue 
to grow throughout 2011 in this sales channel.
The focus in 2010 for our iO range of in-vehicle 
Bluetooth music streaming and handsfree 
solutions has been to build the distribution 
channel in preparation of the launch of the 
new technology platform. Considerable 
progress has been made in developing the 
reseller network throughout the UK and in 
selected international markets. However , 
the delay in launching the second generation 
product range has undoubtedly held back our 
sales in this category. The launch of the new 
product range is scheduled for early 2011 and 
our expectation is that sales will accelerate 
following its launch.
Armour Nordic, our business in Scandinavia 
that forms part of Armour Auto, has had 
another good year with a strong increase in 
sales. This growth came principally from the 
expansion of the distribution in Sweden and 
Norway of Armour Home’s brands, which 
were taken on in March 2009. Sales of the 
automotive product portfolio, which remains 
the largest element of sales in Nordic, were 
flat in the year . The prospects for the Nordic 
region remain good driven by further growth 
in the home products and increased 
penetration in the Norwegian market,  
which we entered in 2009.
Chief Executive’s Review
continued
Armour Auto is the leading company in the UK 
and Sweden supplying the automotive aftermarket 
with connectivity solutions and audio-video 
equipment for in-vehicle applications. 11 Armour Group plc Annual Report 2010
Business Review Governance Financial Statements Annual General Meeting
Veba AVRS1. 
Reversing Sensor Kit  
with LED Visual Display 
Driving 
progress 
Armour Auto supplies a range of 
in-vehicle audio solutions for the 
retail and specialist commercial 
vehicle markets. The products 
supplied include head units, 
speakers, amplifiers, antennae 
and cable interfaces.
iO-Play2 G2
Music Streaming  
and Handsfree kit
MT6201 Mutant  
3" TouchScreen  
CD/DVD Head unit. 
Clifford Concept 
650 MkII.
High-level 
security and  
remote start  
system 12 Armour Group plc Annual Report 2010
Mutant 
MTHA6C 
‘Harmony’.
Separate 
crossover, mid-
range speaker 
and tweeter
Standard 12V
Automotive 
Battery
Mutant 
MTEN12 
‘Engage’.
250 Watt 
12" subwoofer
Mutant MT6201.
3" Touch Screen 
CD/DVD/Radio 
Head unit
Autoleads.
In-car connectivity 
cables
Leading  
solutions
Armour Auto supplies a range of 
car audio enhancement products 
including “Mutant” head units, 
speakers and amplifiers all 
connected using the market 
leading “Autoleads” audio leads, 
adaptors and interfaces.
Mutant 
MTOR1 ‘Origin’.
250 Watt 
MonoBlock 
Amplifier
Mutant 
MTHA6C 
‘Harmony’.
Separate 
crossover, mid-
range speaker 
and tweeter 13 Armour Group plc Annual Report 2010
Business Review Governance Financial Statements Annual General Meeting
New Product Development A significant 
proportion of the Group’s sales growth in 2010 
has come from new products launched in 
2010. The key new products have been Q-TV2, 
Q2000, QED Profile and the Alphason office 
furniture range. The continued investment  
in new product development is vital to the 
long-term growth of the Group and forms 
a fundamental part of the Group’s strategy.  
The economic environment has meant that 
some development programmes have been 
put on hold, but the core programmes have 
continued and will deliver a range of new 
products in 2011, with a focus firmly on the 
wireless delivery of content. One such product 
is the Q2 Internet Radio (www.Q2radio.co.uk), 
which was launched in November 2010 and 
provides access to over 10,000 radio stations 
as well as podcasts. This radio is truly unique 
with no buttons, dials or screens and is 
controlled by rolling it over to change  
stations and tilting forward or backwards  
to adjust volume.  
Outlook The forthcoming year is likely to 
continue to be challenging with considerable 
uncertainty lingering in our core consumer 
markets. Consequently , we are engaged in a 
review of our operations with a view to sizing 
the Group to meet a more difficult outlook. 
There will undoubtedly be areas of the Group 
that will make progress in the coming year 
and the prospects for new products such as 
the second generation of the iO Bluetooth 
music streaming and handsfree solutions  
are promising. However , the overall outlook  
is one of caution.
Chief Executive’s Review
continued
The continued investment in new product 
development is vital to the long-term growth  
of the Group and forms a fundamental part  
of the Group’s strategy. 14 Armour Group plc Annual Report 2010
Financial results
Reviews of the trading results for the year are set out in the Chairman’s Statement and Chief Executive’s Review, which form part 
of this Annual Report.
Group sales for the year were £56.6 million (31 August 2009: £51.6 million), representing a 10% increase on the comparative 
period last year .
Group profit before taxation was £0.9 million (31 August 2009: £1.1 million), representing a 15% decrease on the comparative 
period last year . Both operating divisions remained profitable despite the challenging economic climate and the Central Operations 
net costs of £1.1 million (31 August 2009: £2.3 million) were reduced by £1.2 million, a reduction of 51% (Note 4).
Net interest expense of £0.2 million (31 August 2009: £0.4 million) was covered five times (31 August 2009: four times) by profit from 
operations of £1.2 million (31 August 2009: £1.5 million).
The taxation charge on profit for the year was £0.07 million (31 August 2009: £0.2 million), resulting in an effective taxation rate 
of 8% (31 August 2009: 21%). The reduction in the effective rate from the expected rate of 28% is due to enhanced research 
and development relief and adjustments to charges made in previous periods.
Profit after taxation was £0.9 million (31 August 2009: £0.9 million).
Earnings and dividends
Basic earnings per ordinary share were 1.4p (31 August 2009: 1.4p). Basic underlying earnings per ordinary share, which adjusts 
for share-based payments, were 1.4p (31 August 2009: 1.5p). The Board has not recommended a final dividend for the year ended 
31 August 2010 (31 August 2009: 0.30p per ordinary share).
Equity
The Group’s equity was £30.1 million (31 August 2009: £29.3 million) and the Total Comprehensive Income for the year , taken into 
Shareholder’s Equity was £0.9 million (31 August 2009: £0.9 million).
Cash flow and net debt
The Group’s cash flow from operations was £1.8 million (31 August 2009: £7.2 million). Taxation payments amounted to £0.2 million 
(31 August 2009: £0.2 million inflow).
Expenditure on investing activities totalled £2.0 million (31 August 2009: £2.4 million). £0.4 million (31 August 2009: £0.6 million) was 
spent on property , plant and equipment and £1.7 million (31 August 2009: £1.9 million) on intangible assets.
Expenditure on financing activities totalled £1.4 million (31 August 2009: £1.6 million). Dividends paid were £0.2 million (31 August 
2009: £0.4 million), £1.0 million (31 August 2009: £0.7 million) relates to bank loan repayments and interest payments were 
£0.2 million (31 August 2009: £0.5 million).
Net debt is defined in Note 29 of the Consolidated Financial Statements and at 31 August 2010 was £5.7 million (31 August 2009: 
£4.9 million). The Group’s facilities at the year end are shown in Note 20 of the Consolidated Financial Statements and, at 31 August 
2010, the Group had undrawn facilities of £3.3 million (31 August 2009: £5.4 million). 
Principal risks and uncertainties
Risk is an inherent part of doing business. The Board’s approach to risk management is balanced with encouragement of 
entrepreneurial flair and recognition that some necessary activities carry an inherent risk over which the Group may at best have 
only limited control. The Corporate Governance Statement on pages 22 to 24 describes the systems and processes through 
which the Directors manage, and aim to mitigate, risk. The Board considers that the principal commercial and financial risks 
are identified below. However , the Board also recognises that the nature and scope of risks can change particularly in a period 
of economic uncertainty.
Finance Director’s Report Business Review Governance Financial Statements Annual General Meeting
15 Armour Group plc Annual Report 2010
Business model
Our business model is based on five elements: Ownership and development of strong brands highly regarded in their markets, 
to offer a quality product portfolio to our customers, to continually improve our products through a structured programme 
of product innovation, to maintain and grow our distribution platform and to offer our customers a first class service.
Pursuit of this business model introduces new risks to the Group through, for example, the adoption of new technologies and 
interaction with new customers and territories. Conversely , the strategy allows the Group to diversify its interests and areas of 
expertise. At a strategic level, this is considered to increase resilience and reduce overall risk by avoiding reliance on a single brand, 
restricted product portfolios or confined business areas. This is particularly pertinent in periods of sharp economic downturn and 
depressed market conditions.
Economic and market conditions
In 2008/09 many regions, including the United Kingdom, entered a period of sharp economic downturn or recession and, since then 
various consequential strategies have been developed and deployed. This has understandably caused a high degree of debate, 
speculation, uncertainty as to their effectiveness, the speed of economic recovery and market stability which may also vary from 
market to market. 
Many factors contribute to the overall economic climate and influence the markets in which the Group operates. These include 
inflation, interest rates, direct and indirect taxation, foreign exchange rates, levels of employment and job security , consumer debt, 
availability of credit and consumer confidence. At times of economic uncertainty future predictions of market conditions, trends and 
performance are difficult. As best as practicably possible, the Group takes into account external opinions in regard to the economic 
outlook and the potential effects on the Group’s markets.
Competition
Armour Home and Armour Auto operate in highly competitive markets and have to respond to market behaviour such as price 
deflation caused by advances in technology or aggressive pricing by competitors, possibly itself prompted by an unfavourable 
economic environment.
Both divisions have established strong market positions by building recognised brands, adopting new technologies and having 
the necessary infrastructure to meet customer needs. These positions are maintained through measures that include continued 
expenditure on research and development and facilities.
Changing consumer demands
The Group’s products are targeted at the consumer either through our retail customers or by being part of a larger product 
offering such as homes or vehicles. Consequently , the Group must respond to changing consumer demands that may be a 
response to aesthetic appeal, functionality or technological advancement.
The Group addresses this risk by reviewing its product lines and regularly introducing enhanced and refreshed generations. 
In addition, the Group’s Concept Design Centre focuses on emerging technologies and future product development strategies 
for the Group’s core product categories.
Foreign manufacturers
A significant proportion of the Group’s products are sourced from outside the United Kingdom. Consequently , the Group is subject 
to associated risks, which include foreign exchange rate fluctuations, inflation in foreign countries and duties imposed on foreign 
goods. In addition, legal standards, which are a requirement of the designated market of sale, but not the country of manufacture, 
must be complied with.
The Group addresses this risk through its operation based in Hong Kong, which is able to liaise directly with the Group’s Far 
Eastern suppliers. This operation contains management with significant experience of the Group’s activities and requirements 
and also local nationals with an understanding of local culture and practices.
In addition, both Armour Home and Armour Auto retain United Kingdom based assembly capability. This enables rapid response 
to customer demands, adaptability to short production runs and initial production of new products to identify errors and difficulties 
that may be encountered prior to offshore manufacture. 16 Armour Group plc Annual Report 2010
Finance Director’s Report
continued
Raw material prices
Many of the Group’s products contain copper (or other metals) and plastics whose prices can fluctuate significantly either directly 
or by virtue of being a derivative product. The Group manages this risk by seeking long-term relationships with its development 
partners and suppliers, assessing lower cost design and, subject to other factors including market conditions, reflecting underlying 
cost increases in sales pricing.
Senior management
The Group’s success to date has been due to the unified strategy executed by all staff throughout the Group. The Board and senior 
management supervise and monitor all aspects of the Group’s operations in the context of the business strategy. Retention of senior 
management is important to avoid the loss of experienced managers and to see the continuation of the Group’s objectives.
The Remuneration Report on pages 25 to 27 details the procedures in place to attract and retain high calibre senior management 
personnel.
Internal controls
The Group has a system of internal controls, which are given in the Corporate Governance Statement on pages 22 to 24. The Group 
continues to review this system of internal controls but recognises that any such system can provide only reasonable, not absolute, 
assurance.
Treasury management and banking arrangements
The Group’s treasury function is controlled centrally to ensure the availability and flexibility of funding in order to meet the Group’s 
ongoing requirements. Foreign exchange exposures are generally managed directly by the operating subsidiary undertakings within 
the guidelines and controls established by the Directors.
At the year end National Westminster Bank plc was the Group’s principal banker . The Group regularly reviews its banking 
arrangements and the facilities available to the Group.
Other financial risks
Details of credit risk, interest rate risk, currency risk, liquidity risk and capital management are given in Note 3 of the Consolidated 
Financial Statements on pages 38 to 41.
Performance indicators
The Group measures its performance through a number of performance indicators, the most prominent of which are shown on 
page 1. The Group sales, EBITDA and basic underlying earnings per ordinary share performance indicators used by the Group are 
shown below:
Group sales
Group sales were £56.6 million (31 August 2009: £51.6 million), representing a 10% increase.
2006 
£000
2007 
£000
2008 
£000
2009 
£000
2010 
£000
Group sales 40,004 55,171 54,008 51,614 56,591
Where applicable, prior years have been adjusted to show Group sales of continuing operations only. Business Review Governance Financial Statements Annual General Meeting
17 Armour Group plc Annual Report 2010
EBITDA
EBITDA is defined as profit before interest, taxation, depreciation, amortisation (of both goodwill and other intangible assets) 
and share-based payments. It provides a useful indicator of both profitability and cash generation. The Group’s EBITDA for the last 
five years (prior years being adjusted to show continuing operations only) is shown in the table below:
2006
£000*
2007 
£000
2008 
£000
2009 
£000
2010 
£000
Profit from operations 2,826 5,243 4,029 1,528 1,172
Depreciation 716 638 619 631 596
Amortisation of goodwill 1,012 – – – –
Amortisation of other intangibles – 540 456 782 977
Share-based payments 98 115 100 65 32
EBITDA 4,652 6,536 5,204 3,006 2,777
*The year ended 31 August 2006 has been extracted from the Consolidated Financial Statements prepared under UK GAAP and is included as an illustrative comparative.
The years ended 2009 and 2010 reflect the period of severe economic downturn and subsequent resulting period of economic 
uncertainty.
Basic underlying earnings per ordinary share
The calculation of basic underlying earnings per ordinary share for the current year , and the 2009 comparative, is shown in Note 9 
of the Consolidated Financial Statements on page 46. The measure adjusts for share-based payments.
In addition to the current and prior year comparative figures, the table below shows the basic underlying earnings per ordinary 
share from continuing operations for the years 2006 to 2008 inclusive. The figures for 2006 were based on financial statements 
prepared under UK GAAP and, consequently , have not only been adjusted to remove the effect on profit after taxation of discontinued 
operations, but also for the amortisation of goodwill. Although the basic underlying earnings per ordinary share for 2006 are based 
on UK GAAP financial statements, the Directors consider them to be a useful indicator .
2006 
£000
2007 
£000
2008 
£000
2009 
£000
2010 
£000
Profit after taxation 1,486 3,241 2,494 886 879
Discontinued operations loss 98 – – – –
Amortisation of goodwill 1,012 – – – –
Share-based payments 68 115 100 65 32
Underlying profit after taxation 2,664 3,356 2,594 951 911
Weighted shares (000s) 61,664 67,494 67,192 65,056 65,056
Basic underlying earnings per ordinary share (p) 4.3 4.9 3.9 1.5 1.4
The years ended 2009 and 2010 reflect the period of severe economic downturn and subsequent resulting period of economic 
uncertainty.
John Harris
Finance Director 
23 November 2010 18 Armour Group plc Annual Report 2010
Directors
Bob Morton (68) FCA*
Chairman
Appointed as a non-executive Director and Chairman in 
January 2002. He is also Chairman of Tenon Group Plc, 
Servoca Plc, WFCA plc and St. Peter Port Capital Ltd and 
holds directorships in a wide range of private companies. 
He is a member of the Audit, Remuneration and 
Nominations Committees.
George Dexter (48) BSc, ACA
Chief Executive 
Appointed in April 1998. He was previously a Director of 
Brink’s (UK) Limited and held various positions at Transport 
Development Group plc and ML Holdings plc after qualifying 
as a Chartered Accountant. He is a member of the 
Nominations Committee.
John Harris (49) BSc, ACA
Finance Director and Company Secretary
Appointed Finance Director in February 1999 and Company 
Secretary in April 2004. He was Finance Director of Howden 
Asia Pacific, part of Charter plc, where he held a number 
of positions including that of Group Financial Controller. 
He is a member of the Nominations Committee.
Steve Bodger (61) MA, FCA*
Senior Independent Director
Appointed in January 2002. He is Chairman of Jaques Vert PLC, 
a Director of Work Group PLC and is Chairman of a number of 
private companies. He is Chairman of the Audit, Remuneration 
and Nominations Committees.
*Non-executive Directors.
Advisers
Auditors
BDO LLP
2 City Place 
Beehive Ring Road 
Gatwick 
West Sussex RH6 0PA
Bankers
National Westminster Bank Plc
2nd Floor, Turnpike House 
123 High Street 
Crawley 
West Sussex RH10 1DQ
Nominated Adviser and Stockbrokers
FinnCap
60 New Broad Street 
London EC2M 1JJ
Registrars
Capita Registrars
Northern House 
Fenay Bridge 
Woodsome Park 
Huddersfield 
West Yorkshire HD8 OLA
Telephone: 0871 664 0300 
Facsimile: 020 8639 2342
Solicitors
Arnold & Porter (UK) LLP
Tower 42 
25 Old Broad Street 
London EC2N 1HQ
Registered Office
Lonsdale House 
7–9 Lonsdale Gardens 
Tunbridge Wells 
Kent TN1 1NU 
Telephone: 01892 502700 
Facsimile: 01892 502707
Registered Number: 803572
www.armourgroup.uk.com
Directors and Advisers Business Review Governance Annual General Meeting
Armour Group plc Annual Report 2010
Financial Statements
Directors’ Report 
19
The Directors present their report and the audited financial statements for the year ended 31 August 2010. 
Principal activities  
Armour Group plc is a public limited company incorporated in Great Britain, registered number 803572, which is listed on the 
Alternative Investment Market (“AIM”) of the London Stock Exchange. Its principal activity is that of a holding company providing 
corporate and technical guidance and services to its subsidiary undertakings.  
Armour Group plc is the ultimate parent company of a group, the principal activity of which is the design, manufacture, distribution 
and sale of consumer electronics, entertainment and furniture products focused on the home entertainment and in-car 
communications and entertainment markets.  
Review of business  
The Chairman’s Statement on page 4, Chief Executive’s Review on pages 6 to 13 and Finance Director’s Report on pages 14 to 17 
provide a review of the business, the Group’s trading for the year ended 31 August 2010, key performance indicators and an indication 
of future developments and risks. These form part of the Directors’ Report.  
Profit and dividend  
The Group has reported its Consolidated Financial Statements in accordance with International Financial Reporting Standards as 
adopted by the European Union. The Group’s results for the year are set out in the Consolidated Statement of Comprehensive 
Income on page 29. The Company Financial Statements continue to be reported under UK GAAP.  
The Group’s profit before taxation amounted to £0.9 million (31 August 2009: £1.1 million) and profit after taxation was £0.9 million 
(31 August 2009: £0.9 million).  
The Directors have not recommended a dividend for the year ended 31 August 2010 (31 August 2009: 0.30p per ordinary share).  
Directors  
The following persons were Directors during the year ended 31 August 2010 and up to the date of this report: 
Bob Morton 
George Dexter 
John Harris 
Steve Bodger 
The names of the Directors and Company Secretary, along with their brief biographical details, are given on page 18.  
Directors’ interests  
The Directors’ interests in ordinary shares and options over ordinary shares in the Company are shown in the Remuneration Report 
on pages 25 to 27.  
The Company has taken out insurance to indemnify Directors and Officers of the Group against third party claims.  
No Director has any beneficial interest in the share capital of any subsidiary undertaking.  
No Director had any material interest at any time during the year in any contract with the Company or any of its subsidiary 
undertakings, other than his service contract and indemnity agreements.  
Corporate governance  
A review of the Company’s application of the principles and provisions of the Combined Code is given in the Corporate Governance 
Statement on pages 22 to 24. This also includes the Statement of Directors’ Responsibilities in preparing the Annual Report and 
financial statements on page 24. The Corporate Governance Statement forms part of this Directors’ Report.  
Disclosure of information to auditors 
As far as the Directors are aware, there is no relevant audit information (that is, information needed by the Group’s Auditors in 
connection with preparing their Report) of which the Group’s Auditors are unaware, and each Director has taken all reasonable steps 
that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the 
Group’s Auditors are aware of that information.   Armour Group plc Annual Report 2010
Directors’ Report  
continued 
20 
Donations  
During the year, the Group made charitable donations of £932 (31 August 2009: £700). No political donations were made in either 
the current or preceding year.  
Financial instruments  
The financial risk management objectives of the Group including credit risk, interest rate risk and currency risk are provided 
in Note 3 of the Consolidated Financial Statements on pages 38 to 41. 
Creditor payment policy  
The Group does not follow any formal code or standard on payment practice. However, its policy is for subsidiary undertakings 
to agree terms and conditions for their business transactions with suppliers. Payment is normally made on these terms, subject 
to the terms and conditions being met by the suppliers. The Company had no trade creditors at the year end. The number of trade 
creditor days of the Group outstanding at the year end was 61 (31 August 2009: 74) days.  
Research and development  
The Company and its subsidiary undertakings are committed to ongoing research and development to meet the changing needs 
of the markets that they serve. Research and development expenditure totalled £2.3 million for the year of which £0.7 million was 
expensed to the Consolidated Statement of Comprehensive Income and £1.6 million was capitalised as intangible assets.  
Employees  
The Group’s policy is to encourage effective communication and consultation between employees and management. Subsidiary 
undertakings develop their own consultative and communication procedures as part of their operating practices.  
The Company and its subsidiary undertakings give full consideration to applications for employment made by disabled people, 
having regard to their aptitudes and abilities. Should employees become disabled during their employment, they are considered 
for any necessary retraining and available work within their capabilities. For the purposes of training, career development and 
promotion, disabled employees are treated in the same way as other employees.  
Environmental policy  
The Group consults professional experts on environmental matters as part of pre-acquisition enquiries for new businesses and 
takes appropriate action on the advice received. The Group is committed to maintaining a responsible attitude to environmental 
management in all areas of its business.  
Share capital structure  
At 31 August 2010, the Company’s authorised share capital was £15 million divided into 150 million ordinary shares at 10p each 
nominal value (“ordinary shares”). On 31 August 2010, there were 68,480,067 ordinary shares in issue. These ordinary shares are 
listed on AIM.  
Save for shares held by the Armour Employees’ Share Trust, holders of ordinary shares are entitled to one vote per ordinary share 
at the meetings of the Company. No shares have been issued that carry any special rights with regard to the control of the Company.  
Armour Employees’ Share Trust  
The Armour Employees’ Share Trust is a discretionary settlement, controlled and managed by an independent trustee company. 
It is empowered to purchase the Company’s ordinary shares (up to a maximum of 5% of the issued ordinary share capital) and 
subsequently make them available to employees, principally through the grant and exercise of rights under certain share option 
schemes operated by the Company. At 31 August 2010, the Armour Employees’ Share Trust held 3,424,000 ordinary shares but 
these have not been allocated to any specific beneficiaries under any scheme. The trustee is required to waive both voting rights 
and dividends payable on any ordinary share in the Company in excess of 0.001p, unless otherwise directed by the Company.   Business Review Governance Annual General Meeting
Armour Group plc Annual Report 2010
Financial Statements
 
 
21
Substantial interests  
The Company has been notified that, as at 22 November 2010, the following shareholders are interested in 3% or more of the 
ordinary shares in issue:  
 % Southwind Limited  19.2
Brewin Dolphin Securities Limited  10.0
Armour Employees’ Share Trust  5.0
Simon Harold John Arthur Knott 4.4
Bluehone AIM VCT2 3.7
New Pistoia Income Settlement 3.2
The Directors have not been advised of any other substantial interest in the share capital of the Company.  
Share option schemes  
Details of employee share schemes are set out in Note 25 of the Consolidated Financial Statements.  
No grant of options was made in either the current or prior year under any of the Company’s employee share schemes. 
No options were granted to the executive Directors.  
No options were exercised in either the current or prior year.  
Going concern  
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in 
operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing 
the financial statements. 
AGM  
The AGM will be held on 23 February 2011.  
The ordinary business comprises receipt of the Directors’ Report and audited financial statements for the year ended 
31 August 2010; the reappointment of BDO LLP as Auditors and authorisation of the Directors to determine the Auditors’ 
remuneration, the reappointment of George Dexter as a Director and authorisation of the Directors to allot shares. Resolutions 
1 to 4 deal with these matters.  
The special business comprises the disapplication of Section 561 of the Companies Act 2006 and the authority for the Company 
to purchase its own ordinary shares. Resolutions 5 and 6 deal with these matters.  
The Notice of AGM and the ordinary and special resolutions to be put to the meeting are included at the end of this Annual Report 
and financial statements.  
Auditors  
BDO LLP has expressed its willingness to continue in office as Auditors and a resolution to reappoint them will be proposed at the 
forthcoming AGM.  
 
 
 
John Harris  
Company Secretary  
23 November 2010 Armour Group plc Annual Report 2010
Corporate Governance Statement 
 
 
22 
The Company is committed to good standards of corporate governance. Although the Company is listed on the Alternative 
Investment Market, and therefore not required to comply with the Combined Code (“Code”) that was issued in 2008 by the Financial 
Reporting Council, it has, as far as is practical, voluntarily complied with the relevant guidelines that are applicable to fully listed 
companies. This statement outlines how the Company has applied the relevant provisions of the Code. 
The Board 
The Board comprises two non-executive Directors and two executive Directors. Bob Morton is the non-executive Chairman and 
Steve Bodger is the non-executive Senior Independent Director. The position of Chief Executive is separate from that of Chairman 
and is held by George Dexter. Biographical details of all Board members are shown on page 18. 
The Board is the link in the chain of authority between the shareholders and the executive management and, as such, plays a key 
role in the corporate governance process. It recognises the dual role played by the executive Directors as both members of the 
Board and leaders of the executive management team. This duality is addressed by the non-executive Directors through their 
positions of authority on the Board and through the Board committees that they manage. 
The Board believes that restricting its membership to four is appropriate, given the Group’s size, and enables collective decisions 
to be made without undue delay. However, the Board recognises that its capacity is limited and, consequently, reserves to itself the 
making of strategic (including budget approval) and broad policy decisions. Day-to-day decisions and policies are delegated to the 
executive Directors. The Board monitors progress on strategy and policy either through its committees or directly through the 
executive Directors. 
A formal schedule of matters is reserved for consideration at Board meetings, which is updated as and when new situations 
require. Key activities of the business are reviewed and the Board receives full supporting papers to enable it to do so effectively. 
The Company Secretary is responsible to the Board and is available to individual Directors in respect of Board procedures. 
Directors may take independent professional advice on any matter relating to the Company at the Company’s expense. 
The Board met 11 times during the year at which all members were present. 
Board independence 
In selecting Directors, the Company looks for individuals who provide business experience, strong personal skills and independence 
of thought and perspective. The non-executive Directors regularly visit the operations and have a sound understanding of the Group’s 
businesses and affairs, enabling them to properly evaluate information and responses provided by management. They provide an 
objective challenge to management by being prepared to question assumptions and air alternative views as necessary for the good 
of the businesses and Group as a whole. 
The Code sets out circumstances that may be relevant to the Board’s determination of whether a non-executive Director is 
independent. The Board has determined that both non-executive Directors satisfy these circumstances, and those additionally set 
out by the Board, to be considered independent. The Board believes that their experience and knowledge of the Group’s businesses, 
combined with their external business experience, enable them to provide both an effective challenge and a constructive contribution 
to the Board. 
Board committees 
The terms of reference for the Nominations, Remuneration and Audit Committees have been approved by the Board and are on the 
Group’s website www.armourgroup.uk.com. 
The Nominations Committee 
The Nominations Committee meets as and when required to consider candidates for appointment as Directors. All Directors are 
required to submit themselves for re-election on the third anniversary of their last appointment. All of the Directors are members 
of the Nominations Committee of which Steve Bodger is the Chairman. 
The Nominations Committee did not meet during the year as the membership of the Board was both functional and stable. 
The Remuneration Committee 
The Remuneration Committee is responsible for ensuring that the remuneration packages of the executive Directors are appropriate 
to attract, motivate and retain high calibre individuals. The Remuneration Report on pages 25 to 27 contains more detailed 
information on the Directors’ remuneration. The members of the Remuneration Committee are the two non-executive Directors, 
Steve Bodger, who is the Chairman, and Bob Morton. 
The Remuneration Committee met once during the year and both members were present.  Business Review Governance Annual General Meeting
Armour Group plc Annual Report 2010
Financial Statements
 
 
 
 
23
The Audit Committee 
The Audit Committee monitors the effectiveness of the internal controls and reviews the interim and annual financial statements 
before submission to the Board. It also advises the Board on the appointment of Auditors, reviews their fees and discusses the 
nature, scope and results of the audit with the Auditors. 
The members of the Audit Committee are the two non-executive Directors, Steve Bodger, who is the Chairman, and Bob Morton. 
The Audit Committee met three times during the year and both members were present on each occasion. The executive Directors 
were invited to attend these meetings. The Company’s Auditors may also be invited to attend meetings, particularly to discuss the 
results of the annual audit, and are available to the Audit Committee throughout the year as and when required. 
The Audit Committee monitors the objectivity and independence of the Company’s Auditors. Generally, the Auditors’ non-audit 
services are restricted to taxation advice and compliance. Any proposed additional work is considered on an individual basis. 
Performance and evaluation 
The performance of the Board and its Committees has been evaluated during the year in light of the size of the Group and resources 
available. The conclusions of this review were that: 
• There was the potential to increase the number of non-executive Directors, but that this was not necessary given the size 
of the Group; 
• The number of Board meetings and information presented at those meetings allowed continual monitoring of progress and 
informed decision making throughout the year; and 
• The Committees operated satisfactorily throughout the year and were able to attend to Group issues in a timely manner. 
Relations with shareholders 
The Company maintains communication with institutional shareholders through individual meetings with senior management and 
through reports published by the Company’s stockbrokers. Private shareholders are encouraged to attend the Annual General 
Meeting at which the Company’s activities are considered and questions answered. General information about the Company and 
its businesses is also available on the Company’s website: www.armourgroup.uk.com. 
Compliance with the Code 
Throughout the year ended 31 August 2010, the Company has been in compliance with the provisions set out in Section 1 of the 
Code except for: 
• A.7.2 Non-executive appointments are not restricted to specified terms other than by the requirement for re-election every 
three years; and 
• C.3.1 The Code recommends that the Audit Committee comprises (excluding the Chairman) entirely independent non-executive 
Directors and that, given the Company’s size, there should be at least two. The Group’s Audit Committee comprises two 
non-executive Directors, one of whom is the Company’s Chairman. 
Internal controls 
The Board has overall responsibility for the Group’s system of internal control. It should be recognised that any such system 
of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board 
confirms that it has carried out a review of the effectiveness of the Group’s internal controls as operated during the year. 
The Board places reliance on the internal controls operated by associated undertakings and the obligations upon their boards 
relating to the effectiveness of their systems. 
Processes to assess and manage the risks to success faced by the businesses are reviewed and improved as necessary. 
The objective is to enable the businesses to achieve their objectives without being hindered by circumstances that could have 
been reasonably foreseen whilst, at the same time, not adversely constricting the businesses with unnecessary bureaucracy. 
The principal elements of the system, which are designed to recognise the specific requirements of the Group, include: 
• An organisational structure with defined levels of responsibility and delegation of authority, which is subject to the overall 
Group control procedures; 
• Review of the risks faced by the businesses; 
• Comprehensive budgeting system producing detailed profit and loss account, balance sheet and cash flows, which are approved 
by the Board; 
• Monthly reporting of results that are compared to budget and revised forecasts; 
• Regular meetings with the Managing Directors of the Group’s operating divisions to review the current and forecast performance 
of each business;  Armour Group plc Annual Report 2010
Corporate Governance Statement  
continued 
 
 
24 
• Central control over key areas such as capital expenditure authorisation, insurance and banking facilities; and 
• Annual completion by the operating divisions of a self-certification internal control questionnaire, which confirms that appropriate 
controls are in place. Where potential weaknesses are identified, appropriate action is taken. 
The Group continues to review its system of internal control to ensure compliance with best practice, whilst also having regard to 
its size and the resources available. In this context, the Board has concluded that the introduction of an internal audit function is not 
appropriate at this juncture. 
Statement of Directors’ responsibilities 
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law 
and regulations. 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
elected to prepare the Group’s Consolidated Financial Statements in accordance with International Financial Reporting Standards 
(“IFRS”) as adopted by the European Union, and the 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 financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group 
and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements 
in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market. 
In preparing these financial statements, the Directors are required to: 
• Select suitable accounting policies and then apply them consistently; 
• Make judgements and accounting estimates that are reasonable and prudent; 
• State whether they have been prepared in accordance with applicable accounting standards, subject to any material departures 
disclosed and explained in the financial statements; and 
• Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue 
in business. 
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure 
that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding 
the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 
Website publication 
The Directors are responsible for ensuring the Directors’ Report and financial statements are made available on a website. 
Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the 
preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and 
integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing 
integrity of the financial statements contained therein.  Business Review Governance Annual General Meeting
Armour Group plc Annual Report 2010
Financial Statements
Remuneration Report 
 
 
 
 
25
Scope of report 
The Remuneration Report sets out the Company’s remuneration policy and, particularly, its approach for Directors. It also explains 
how the Company applies the principles of good corporate governance in relation to remuneration. This Report has been prepared 
by the Remuneration Committee and has been approved by the Board. 
Composition and role 
The Remuneration Committee’s members are Steve Bodger, who is the Chairman, and Bob Morton. The Committee is responsible 
for reviewing all senior executive appointments and determining the Group’s policy in respect of the terms of employment, including 
remuneration packages of executive Directors and for monitoring senior management development programmes. The constitution 
and operation of the Committee are in compliance with the principles of the Combined Code (“Code”). The Committee has given full 
consideration to the best practice provisions set out in the Code in determining the remuneration packages for executive Directors. 
Remuneration policy 
The objective of the Group’s remuneration policy is to attract, motivate and retain high quality individuals who will contribute fully 
to the success of the Group. To achieve this objective, the Group provides competitive salaries and benefits to all employees. 
Packages are established having regard to current market practice. 
Executive Directors’ remuneration is set to create an appropriate balance between both fixed and performance-related elements. 
Performance-related elements are intended to comprise a significant part of potential remuneration. Remuneration is reviewed 
each year in light of the Group’s business objectives. It is the Remuneration Committee’s intention that remuneration should reward 
achievement of objectives and that these are aligned with shareholders’ interests over the medium term. 
Remuneration consists of the following elements: 
• Basic salary; 
• Performance-related annual bonus; 
• Benefits; 
• Defined contribution pension payments; and 
• Share options. 
Bonuses and benefits 
The executive Directors’ bonus scheme is linked to the Group’s year-on-year profit performance and working capital management. 
Divisional performance-related bonus schemes are in place so that bonuses may be payable to senior executives provided their 
divisional results reach pre-set profit and cash generation targets. 
Senior executives’ benefits typically, but not necessarily, include a car (or cash alternative) and insurance for life, disability 
and health care. 
Share options 
The Company has a number of share option schemes, details of which are in Note 25 of the Consolidated Financial Statements. 
Under these schemes, share options have been granted to the executive Directors and senior executives within the Group. 
The grant of share options is a recognised mechanism, practiced by the Company, to encourage continual improvement and align 
the interests and objectives of the senior management team with those of shareholders over the medium term. 
In its review of share options, the Remuneration Committee is mindful of recommended practice, which is taken into account with 
other factors that include: 
• The available headroom under the schemes for new grants; 
• The price of previously granted options and whether these continue to act as the intended incentive; and 
• Share price movements as compared to the Group’s performance. 
Pension arrangements 
The majority of senior executives are members of a defined contribution pension plan operated by the Group or, alternatively, 
have their own personal pension arrangements to which the Group contributes between 7% and 10% of pensionable salary.  Armour Group plc Annual Report 2010
Remuneration Report  
continued 
 
 
26 
Executive Directors’ service contracts 
The executive Directors have service contracts with the Company, which are not of fixed duration and are terminable by either party 
giving twelve months’ written notice. 
Non-executive Directors 
There are service contracts with the Company for the provision of non-executive Directors’ services, which may be terminated by 
either party giving three months’ written notice. The fees payable for the services of the non-executive Directors are set by the Board. 
Directors’ remuneration 
The following table summarises the total gross remuneration, excluding gains on the exercise of options, of the Directors who served 
during the year ended 31 August 2010: 
   
Total remuneration 
excluding pensions 
 
Pension contributions 
 
Fees  
£000  
Basic  
salary  
£000  
Bonus 
£000 
Benefits
£000 
31 August 
2010
£000 
31 August  
2009  
£000  
 31 August  
2010  
£000  
31 August 
2009
£000
Executive       
George Dexter  – 164 – 14 178 178  17 17
John Harris  – 120 – 14 134 134  13 13
Non-executive       
Bob Morton  51 – – – 51 51  – –
Steve Bodger  30 – – – 30 30  – –
Total 2010  81 284 – 28 393 –  30 –
Total 2009  81 284 – 28 – 393  – 30
Fees for Bob Morton’s services, inclusive of all expenses, are payable to Hawk Consulting Limited, a company in which he has 
an interest. 
Fees for Steve Bodger’s services are payable to Stratys Limited, a company in which he has an interest. 
Benefits include all assessable taxation benefits arising from employment by the Company, which relate principally to a company 
car allowance. 
The above figures represent remuneration earned as Directors during the relevant year. Such remuneration has been paid in the 
same period. No bonuses have been awarded for either the current or prior year. The figures for pensions shown above are the 
contributions paid by the Company. 
Neither George Dexter nor John Harris exercised any options during the current or prior year.  Business Review Governance Annual General Meeting
Armour Group plc Annual Report 2010
Financial Statements
 
 
 
 
27
Directors’ shareholdings 
The Directors, who served during the year ended 31 August 2010 and who held an interest in the ordinary shares of the Company, 
were as follows: 
 
At 31 August 2010 
Ordinary shares of 10p each 
 At 1 September 2009 
Ordinary shares of 10p each 
Shares Options   Shares Options
Bob Morton  1,110,000 –  1,110,000 –
George Dexter  1,354,736 625,000  1,354,736 625,000
John Harris  176,541 875,000  176,541 875,000
Steve Bodger  100,000 –  100,000 –
There have been no changes in the Directors’ share interests from 1 September 2010 to 23 November 2010. 
Share options 
The non-executive Directors are not entitled to participate in the Company’s share option schemes. 
The share options held by the executive Directors are as follows: 
1999 Unapproved Executive Share Option Scheme 
 
Options at  
31 August  
2010 
Movements 
during 
the year
Options at 
1 September 
2009
Exercise 
price 
p Exercise period
George Dexter  125,000 – 125,000 20.0 10 May 2002 – 9 May 2012
John Harris 175,000 – 175,000 20.0 10 May 2002 – 9 May 2012
 200,000 – 200,000 34.5 24 July 2004 – 23 July 2013
Enterprise Management Incentive Share Option Plan 
 
Options at  
31 August  
2010 
Movements 
during 
the year
Options at 
1 September 
2009
Exercise 
price 
p Exercise period
George Dexter  500,000 – 500,000 20.0 21 January 2004 – 20 January 2013
John Harris  500,000 – 500,000 20.0 21 January 2004 – 20 January 2013
The high-low market price of ordinary shares in the Company during the year was 16.75p – 9.25p and the market price of the ordinary 
shares at 31 August 2010 was 11.75p (31 August 2009: 13.50p). 
The details of these share option schemes are set out in Note 25 of the Consolidated Financial Statements. 
By order of the Board 
 
 
 
John Harris 
Company Secretary 
23 November 2010  Armour Group plc Annual Report 2010
Independent Auditors’ Report  
to the Shareholders of Armour Group plc  
 
28 
We have audited the financial statements of Armour Group plc for the year ended 31 August 2010 which comprise the Consolidated 
Statement of Comprehensive Income, Consolidated Statement of Financial Position and Company Balance Sheet, Consolidated 
Statement of Changes in Shareholders' Equity, Consolidated Statement of Cash Flows and the related notes. The financial reporting 
framework that has been applied in the preparation of the Group’s Consolidated Financial Statements is applicable law and 
International Financial Reporting Standards (“IFRS”) as adopted by the European Union. The financial reporting framework that 
has been applied in preparation of the Company Financial Statements 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 auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.  
Respective responsibilities of Directors and Auditors 
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the 
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the 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 (APB’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 and the 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.  
Opinion on financial statements 
In our opinion: 
• The financial statements give a true and fair view of the state of the Group’s and the Company’s affairs as at 31 August 2010 
and of the Group’s profit for the year then ended; 
• The Group’s Consolidated Financial Statements have been properly prepared in accordance with IFRS as adopted by the 
European Union; 
• The Company Financial Statements have been properly prepared in accordance with United Kingdom Generally Accepted 
Accounting Practice; and 
• The financial statements have been prepared in accordance with the requirements of the Companies Act 2006. 
Opinion on other matters prescribed by the Companies Act 2006 
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared 
is consistent with the 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 Company, or returns adequate for our audit have not been received 
from branches not visited by us; or 
• The Company Financial Statements 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. 
 
 
 
John Everingham  
Senior statutory auditor 
For and on behalf of BDO LLP, statutory auditor 
Gatwick, United Kingdom 
23 November 2010 
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
Consolidated Statement of Comprehensive Income 
For the year ended 31 August 2010 
 
 
29
 Note 
31 August 
2010 
£000
31 August 
2009
£000
Revenue  4  56,591 51,614
Changes in inventory of finished goods and work in progress   (1,057) (1,060)
Raw materials and consumables   (33,559) (29,095)
Employee benefits costs  6  (9,756) (9,487)
Depreciation and amortisation expense   (1,573) (1,413)
Other expenses   (9,474) (9,031)
Total expenses   (55,419) (50,086)
Profit from operations  5  1,172 1,528
Finance expense  7  (233) (409)
Finance income  7  8 17
Share of Ioss of associated undertakings   – (16)
Profit before taxation  4  947 1,120
Taxation expense  8  (68) (234)
Profit for the year   879 886
Other Comprehensive Income  
Exchange gains/(losses) on translation of foreign operations  19 (5)
Total Other Comprehensive Income  19 (5)
Total Comprehensive Income for the year  898 881
  
Earnings per ordinary share  9  
Basic   1.4p 1.4p
Diluted   1.4p 1.4p
The Notes on pages 33 to 54 form part of the Consolidated Financial Statements.  Armour Group plc Annual Report 2010
Consolidated Statement of Financial Position 
At 31 August 2010 
 
 
30 
Note  
31 August 
2010  
£000 
31 August 
2009
£000
Non-current assets    
Goodwill  11 21,084 21,084
Other intangible assets  12  4,319 3,112
Property, plant and equipment  13  1,829 2,044
Investment in associated undertakings  15  – 352
Total non-current assets   27,232 26,592
Current assets    
Inventories  16  10,653 11,681
Trade and other receivables  17  9,523 9,876
Cash and cash equivalents  18  397 72
Total current assets   20,573 21,629
Total assets   47,805 48,221
Current liabilities    
Bank overdrafts and borrowings  20  (5,613) (3,521)
Trade and other payables  19  (10,392) (12,465)
Corporation taxation liability   (182) (580)
Provisions  21  (132) (95)
Total current liabilities   (16,319) (16,661)
Non-current liabilities    
Borrowings  20  (480) (1,438)
Provisions  21  – (141)
Deferred taxation liability  22  (946) (656)
Total non-current liabilities   (1,426) (2,235)
Total liabilities   (17,745) (18,896)
Total net assets   30,060 29,325
Equity    
Share capital  23  6,848 6,848
Share premium  24  8,513 8,513
Other reserves  24  871 871
Retained earnings  24  14,318 13,602
Translation reserve  24  82 63
Share trust reserve  24  (572) (572)
Total equity   30,060 29,325
These financial statements were approved by the Board and authorised for issue on 23 November 2010. 
 
 
 
George Dexter  John Harris 
Director   Director 
The Notes on pages 33 to 54 form part of the Consolidated Financial Statements.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
Consolidated Statement of Changes in Shareholders’ Equity 
For the year ended 31 August 2010 
 
 
31
 
Share 
capital 
£000 
Share 
premium 
£000 
Other 
reserves 
£000 
Retained 
earnings 
£000 
Translation  
reserve  
£000  
Share trust 
reserve 
£000 
Total 
equity 
£000
At 1 September 2008 6,848 8,513 871 13,074 68  (572) 28,802
  
Total Comprehensive Income – – – 886 (5) – 881
  
Share-based payments  – – – 65 – – 65
Dividend paid  – – – (423) – – (423)
At 31 August 2009 6,848 8,513 871 13,602 63 (572) 29,325
  
Total Comprehensive Income – – – 879 19 – 898
  
Share-based payments  – – – 32 – – 32
Dividend paid  – – – (195) – – (195)
At 31 August 2010 6,848 8,513 871 14,318 82 (572) 30,060
The Notes on pages 33 to 54 form part of the Consolidated Financial Statements.   Armour Group plc Annual Report 2010
Consolidated Statement of Cash Flows 
For the year ended 31 August 2010 
 
 
32 
Note 
31 August  
2010  
£000 
31 August 
2009 
£000
Cash flow from operating activities    
Cash generated from operations  28  1,818 7,171
Income taxes (paid)/recovered  (178) 156
Net cash from operating activities   1,640 7,327
Investing activities    
Acquisition of subsidiary undertaking, net of cash acquired   – (2)
Purchase of property, plant and equipment   (401) (604)
Sale of property, plant and equipment   36 40
Expenditure on intangible assets   (1,684) (1,853)
Interest received   8 17
Net cash used in investing activities   (2,041) (2,402)
Financing activities    
Dividend paid   (195) (423)
Repayment of bank loans   (1,000) (720)
Interest paid   (196) (475)
Net cash used in financing activities   (1,391) (1,618)
Net (decrease)/increase in cash, cash equivalents and bank overdrafts  29  (1,792) 3,307
Currency variations on cash, cash equivalents and bank overdrafts   23 (6)
Cash, cash equivalents and bank overdrafts at the start of the year   (2,491) (5,792)
Cash, cash equivalents and bank overdrafts at the end of the year  18  (4,260) (2,491)
The Notes on pages 33 to 54 form part of the Consolidated Financial Statements.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
Notes to the Consolidated Financial Statements  
 
 
 
33
1 Accounting policies  
Basis of preparation 
The Group’s Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, 
International Accounting Standards and Interpretations (collectively “IFRS”) issued by the International Accounting Standards Board 
as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their financial 
statements under IFRS. 
The principal accounting policies adopted in the preparation of the Group’s Consolidated Financial Statements are set out below. 
The policies have been consistently applied to all of the years presented, unless otherwise stated. 
Changes in accounting policies 
 New standards, interpretations and amendments effective from 1 September 2009. 
The following new standards, interpretations and amendments, applied for the first time from 1 September 2009, have had an effect 
on the financial statements: 
• Improving Disclosures about Financial Instruments (Amendments to IFRS 7): The application of this Amendment has resulted in 
changes to the disclosures provided in respect of financial instruments, primarily in Note 3 to the financial statements including an 
analysis of financial asset and financial liability that is measured at fair value in the statement of financial position, into a three-
level fair value measurement hierarchy. The Amendment does not change the recognition or measurement of transactions and 
balances in the financial statements. 
• Amendments to IAS 1 Presentation of Financial Statements: A Revised Presentation: As a result of the application of this 
Amendment the Group has elected to present a single Consolidated Statement of Comprehensive Income; previously it presented 
an income statement only, with movements in other comprehensive income recognised as part of total recognised income and 
expense in the Consolidated Statement of Changes in Shareholders’ Equity. In addition, certain primary statement titles have 
changed in order to align with the terms used in IAS 1. The Amendment does not change the recognition or measurement of 
transactions and balances in the financial statements. 
• Operating Segments IFRS 8: The Group has changed its presentation of segment information in line with the new standard.  
The following new standards, interpretations and amendments, also effective for the first time from 1 September 2009, have not had 
a material effect on the financial statements: 
• Amendment to IAS 23 Borrowing Costs; 
• Amendment to IFRS 2 Share-based Payment: Vesting Conditions and Cancellations; 
• Amendments to IAS 32 and IAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation; 
• Improvements to IFRSs (2009); 
• IFRIC 15 Agreements for the Construction of Real Estate; 
• Embedded Derivatives (Amendments to IFRIC 9 and IAS 39); 
• IFRIC 17: Distributions of Non-cash Assets to Owners.  
Basis of consolidation 
These Consolidated Financial Statements present the results of the Company and its subsidiary undertakings (“Group”) as if they 
form a single entity. Subsidiary undertakings are entities over which the Company has control in terms of the power to govern the 
financial and operating policies of an acquired entity so as to obtain benefits from its activities. Intercompany transactions and 
balances between entities within the Group are therefore eliminated in full. 
Business combinations 
These Consolidated Financial Statements incorporate the results of business combinations using the purchase method. In the 
Consolidated Statement of Financial Position, the acquired identified assets, liabilities and contingent liabilities are initially 
recognised at their fair values at the date of acquisition. The results of acquired operations are included in the Consolidated 
Statement of Comprehensive Income from the date on which control is obtained. 
Goodwill 
Goodwill arising on the acquisition of a business represents any excess of the fair value of the consideration over the fair value of 
the identifiable assets and liabilities acquired. The identifiable assets and liabilities acquired are incorporated into the Consolidated 
Financial Statements at their fair value to the Group. 
Goodwill is not amortised but tested for impairment annually. Any impairment is recognised immediately in the Consolidated 
Statement of Comprehensive Income and is not subsequently reversed. On disposal of a business, the attributable amount of 
goodwill is included in the determination of the profit or loss on disposal.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
34 
1 Accounting policies continued 
Intangible assets (excluding goodwill) 
Intangible assets (excluding goodwill) include the following: 
(a) Development costs 
Both internal and external development costs, associated with the production of saleable products, are capitalised as an intangible 
asset in accordance with the criteria of IAS 38 which include that the asset created can be identified, the cost can be measured 
reliably and it is probable that the asset will generate future economic benefits. The asset is then amortised on a straight-line basis 
over the expected sales period for the product, on a product type by product type basis. This is normally between three and five years. 
Where no intangible asset can be identified, development costs are recognised as an expense in the financial period in which they 
are incurred. 
(b) Other intangible assets 
Other intangible assets include investments, recorded at cost, in software (which is separately identifiable from the hardware on 
which it runs) and acquired Brands. The assets so created are amortised on a straight-line basis over their expected useful lives 
as follows: Software between three and five years and Brands 20 years. 
Where the software is not separately identifiable from the hardware, it is included with the hardware in property, plant 
and equipment. 
Impairment of non-financial assets 
Impairment tests on goodwill and other intangible assets with indefinite useful lives are undertaken annually for the reporting 
year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that 
their carrying amount may not be recoverable. Where the carrying value of an asset is judged to exceed its recoverable amount 
(i.e. the higher of value in use or the fair value less costs to sell), the asset is written down accordingly. 
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s 
cash-generating unit (i.e. the lowest group of assets, in which the asset belongs, for which there are separately identifiable cash 
flows). Goodwill is allocated on initial recognition to each of the Group’s cash-generating units that are expected to benefit from 
the synergies of the combination giving rise to the goodwill. 
Impairment charges, and the reversal of previous impairment charges, are expensed/credited to the Consolidated 
Statement of Comprehensive Income. 
Property, plant and equipment 
Property, plant and equipment are stated at cost less the accumulated depreciation and, where appropriate, provision for 
impairment in value or estimated loss on disposal. Property, plant and equipment are depreciated over their estimated useful 
lives on a straight-line basis as follows: 
Leasehold improvements  over the term of the lease 
Plant and fixtures and fittings  10% – 33% 
Motor vehicles  20% – 25% 
Associated undertakings 
An entity is treated as an associated undertaking where the Group exercises significant influence (but not control) over its operating 
and financial policy decisions. 
Associated undertakings are initially recognised in the Consolidated Statement of Financial Position at cost. Subsequently, the 
investment in associated undertakings is shown as the Group’s share of the identifiable net assets and the premium paid on 
acquisition, to the extent that the latter has not been impaired. Any premium, being the excess of cost above the fair value of the 
Group’s share of the identifiable assets and liabilities acquired, is subject to impairment in the same way as goodwill arising on 
a business combination. 
The Group’s share of post-acquisition results after taxation is recognised in the Consolidated Statement of Comprehensive Income, 
except that losses in excess of the Group’s investment in the associated undertaking are not recognised unless there is an obligation 
to make good those losses. The most recently available management information is used where statutory financial statements are 
not available. 
Foreign currencies 
The results of overseas subsidiary undertakings are translated into sterling at the actual rates of exchange during the financial 
period and their balance sheets at the rates ruling at the financial period end. Gains or losses arising on the translation of the 
opening net assets and results of overseas subsidiary undertakings are recognised in Other Comprehensive Income and taken 
to the Group’s translation reserve. 
Transactions denominated in foreign currencies are translated into sterling at the exchange rate in operation on the date of the 
transaction. Monetary assets and liabilities originally denominated in foreign currencies are translated into sterling at the exchange 
rate in operation at the date of the financial period end. Exchange gains and losses are reported as part of the Consolidated 
Statement of Comprehensive Income.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
35
Financial instruments 
(a) Derivative financial instruments 
The Group uses foreign exchange forward contracts to hedge financial risks to changes in foreign currency exchange rates. 
These financial instruments are included in the Consolidated Statement of Financial Position as assets or liabilities at their fair 
values. The Group does not use derivative financial instruments for speculative purposes but its financial instruments do not qualify 
for hedge accounting under IFRS and consequently changes in their fair values are recognised in the Consolidated Statement of 
Comprehensive Income as they arise. 
(b) Bank borrowings 
Bank borrowings are initially recognised at fair value. Such interest bearing liabilities are subsequently measured at amortised 
cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant 
rate on the balance of the liability carried in the Consolidated Statement of Financial Position. The interest expense includes initial 
transaction costs and premiums payable on redemption, as well as any interest coupon payable while the liability is outstanding. 
(c) Trade receivables and trade payables 
Trade receivables and trade payables are non-derivative assets and liabilities of fixed or determinable amounts that are not quoted 
in an active market. They arise principally through the provision of goods and services to customers (trade debtors) or the purchase 
of goods and services (trade creditors and accruals). They are initially recognised at fair value and subsequently carried at amortised 
cost and in the case of trade receivables less any provision for impairment. 
Inventories 
Inventories have been valued at the lower of cost and net realisable value. Cost includes all direct expenditure to bring items to 
their condition and location at the accounting date, together with, in the case of goods manufactured by the Group, an appropriate 
proportion of production overhead expenditure attributable thereto. 
Cash and cash equivalents 
Cash and cash equivalents comprise cash in hand, at bank and deposits where the amounts are not part of the Group’s set-off 
arrangements and, in the case of deposits, where they are repayable within three months and are subject to an insignificant risk 
of a change in value. Bank overdrafts are shown within current liabilities in the Consolidated Statement of Financial Position but 
are included within cash and cash equivalents in respect of the Consolidated Statement of Cash Flows. 
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. The provision is recorded at the present value of the expenditures expected to be required 
to settle the obligation using a discount rate that reflects the current market assessment of the time value of money and the risks 
specific to the obligation. The increase in the provision due to the passage of time is recognised as a finance cost. 
Deferred taxation 
Deferred taxation is the taxation expected to be payable or recoverable on differences between the carrying amounts of assets 
and liabilities in the financial statements and the corresponding taxation bases used in the computation of taxable profit. It is 
accounted for using the balance sheet liability method. Deferred taxation liabilities are generally recognised for all taxable temporary 
differences except goodwill. Deferred taxation assets are recognised to the extent that it is probable that taxable profit will be 
available against which deductible temporary differences can be utilised. 
Deferred taxation is calculated at the taxation rate that is expected to apply in the financial period when the liability is settled 
or the asset is realised. 
Leases 
Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group 
(a “finance lease”), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the 
present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown 
as a liability. Lease payments are analysed between capital and interest. The interest element is charged to the Consolidated 
Statement of Comprehensive Income over the period of the lease and is calculated so that it represents a constant proportion 
of the lease liability. The capital element reduces the balance owed to the lessor. 
Where substantially all of the risks and rewards incidental to ownership are retained by the lessor (an “operating lease”), the total 
rental payable under the lease is charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over 
the lease term.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
36 
1 Accounting policies continued 
Revenue 
Revenue represents the invoiced value of goods sold and the value of services provided to third party customers, excluding value 
added tax. Revenue is recognised when the risks and rewards of owning the goods have passed to the customer, which is generally 
on delivery or when services have been provided. 
Share-based payments 
Where share options are awarded to employees, the fair value of the option at the date of grant is charged to the Consolidated 
Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the 
number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over 
the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of 
the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting 
conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition. 
Where share options are cancelled, their remaining unamortised fair value is fully written off through the Consolidated Statement 
of Comprehensive Income. 
Pension costs 
The Group operates defined contribution arrangements. The pension costs payable by the Group in the financial period are charged 
to the Consolidated Statement of Comprehensive Income. 
Dividends 
Equity dividends are recognised when they become legally payable, which is when they are approved by the shareholders at the 
Annual General Meeting. They are charged directly to equity. 
Armour Employees’ Share Trust 
As the Company is deemed to have control of the Armour Employees’ Share Trust, it is treated as a subsidiary undertaking. 
The assets (other than investments in the Company’s ordinary shares), liabilities, income and expenses are included on a line-by-line 
basis in the Consolidated Financial Statements. The investment in the Company’s ordinary shares is shown in the share trust reserve 
and is treated as a deduction from equity in the Consolidated Statement of Financial Position. 
Standards, amendments and interpretations to existing standards not yet effective 
The following standard has been published but is not effective for the periods presented, has not been endorsed by the European 
Union and the Group has chosen not to early adopt: 
IFRS 9: Financial Instruments (effective for accounting periods beginning on or after 1 January 2013). It is envisaged that this 
standard will replace IAS 39: Financial Instruments: Recognition and Measurement in its entirety. The Group is currently assessing 
the impact of the new standard on its Consolidated Financial Statements. 
At the date of authorisation of these financial statements, the following standards, amendments or revisions to standards and 
interpretations of existing standards were in issue, but were not yet effective and/or had not been endorsed by the European Union. 
They have not been applied to the Consolidated Financial Statements. 
Applicable to the Group from 1 September 2010: 
• IFRS 2 (Amendment): Group Cash-settled Share-based Payment Transactions (from 1 January 2010); 
• Improvements to IFRS (2010) (from 1 January 2010);  
• IAS 32 (Amendment): Classification of Rights Issues (from 1 February 2010); and 
• IFRIC 19: Extinguishing Financial Liabilities with Equity Instruments (from 1 July 2010).  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
37
Applicable to the Group subsequent to 31 August 2011: 
• IAS 24 (Revised): Related Party Disclosures (from 1 January 2011); 
• IFRS 7 (Amendment): Disclosures – Transfers of Financial Assets (from 1 July 2011); 
• IFRIC 14 (Amendment): Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (from 
1 January 2011); 
• Improvements to IFRS (2010) (from 1 January 2011). 
The Group is currently assessing the impact of these amendments, revisions and interpretations on its Consolidated Financial 
Statements but, at this stage, does not consider that they will have a significant material effect save for any additional disclosure 
requirements. 
2 Accounting estimates and judgements 
(a) Impairment of goodwill and other intangible assets 
The Group is required to test on an annual basis, whether goodwill has suffered any impairment. Other intangible assets are tested 
for impairment when indication of impairment exists. The recoverable amount is determined based on value in use calculations. 
The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present 
value of the cash flows. Actual outcomes may vary. More information on goodwill impairment testing including the carrying value is 
included in Note 11. 
(b) Useful lives of intangible assets and property, plant and equipment 
Intangible assets and property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based 
on the management’s estimates of the period that the assets will generate revenue, which are periodically reviewed for continued 
appropriateness. Changes to estimates can result in significant variations in the carrying value and amounts charged to the 
Consolidated Statement of Comprehensive Income in specific periods. More details including the carrying values are included 
in Notes 12 and 13. 
(c) Fair value of financial instruments 
The Group determines the fair value of financial instruments that are not quoted using valuation techniques. Those techniques 
are significantly affected by the assumptions used, including discount rates and estimates of future cash flows. In that regard, 
the derived fair value estimates cannot always be substituted by comparison with independent markets and, in many cases, 
may not be capable of being realised immediately. 
More details on financial instruments are given in Note 3. 
(d) Inventories 
The companies within the Group that carry inventory review the net realisable value of, and demand for, their inventory on a regular 
basis and particularly at the year end to provide assurance that it is stated at the lower of cost and net realisable value. Factors that 
could impact estimated demand and selling prices include the timing and success of future technological innovations, competitor 
activities, supplier prices and economic trends. 
(e) Share-based payments 
The fair value of share option share-based payments is estimated, using the Black-Scholes valuation model, as at the date of grant 
and using certain assumptions. 
(f) Provisions 
The Group recognises provisions in accordance with its accounting policy described on page 35. In arriving at estimates for 
provisions, estimates and judgements are made, in particular with regard to timing and amount. Calculations are based on 
anticipated future cash flows relating to the relevant event, which are estimated by management and where appropriate supported 
by the use of external advisers. 
(g) Taxation 
The Group is subject to taxation in several jurisdictions and judgement is required in determining the provision for income and 
deferred taxation. The Group recognises taxation assets and liabilities based upon estimates and assessments of many factors 
including past experience, advice received on the relevant taxation legislation and judgements about the outcome of future events. 
To the extent that the final outcome of these matters is different from the amounts recorded, such differences will impact on the 
taxation charge made in the Consolidated Statement of Comprehensive Income in the period in which such determination is made.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
38 
3 Financial instruments and risk management  
The principal financial instruments used by the Group from which financial instrument risk arises are as follows: 
• Trade receivables; 
• Cash at bank; 
• Bank overdrafts; 
• Trade and other payables; 
• Floating rate bank loans; and 
• Forward currency contracts. 
The following tables show financial instruments by category: 
 31 August 2010 31 August 2009 
 
Loans and 
receivables 
£000 
Derivative 
financial 
instruments 
£000 
Total 
£000 
Loans and 
receivables  
£000  
Derivative 
financial 
instruments 
£000  
Total 
£000
Assets   
Trade and other receivables  8,129 1 8,130 8,619 – 8,619
Cash and cash equivalents  397 – 397 72 – 72
 8,526 1 8,527 8,691 – 8,691
 
 31 August 2010 31 August 2009 
 
Derivative 
financial 
instruments 
£000
Other
 financial 
liabilities 
£000 
Total 
£000 
Derivative 
financial 
instruments 
£000 
Other 
 financial 
liabilities  
£000  
Total 
£000
Liabilities   
Borrowings  – 6,093 6,093 – 4,959 4,959
Trade and other payables  23 10,369 10,392 162 10,706 10,868
 23 16,462 16,485 162 15,665 15,827
Valuation hierarchy 
The adoption of the amendment to IFRS 7 requires enhanced disclosures about fair value measurements of financial instruments 
through the use of a three-level fair value hierarchy that prioritises the valuation techniques used in fair value calculations. 
The levels can be broadly described as follows: 
• Level 1 – use of unadjusted quoted prices in active markets for identical assets or liabilities;  
• Level 2 – use of observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets 
or liabilities in active markets; and  
• Level 3 – use of inputs not based on observable market data but reflecting management’s own assumptions about pricing 
the asset or liability.   Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
39
The Group’s financial instruments measured at fair value are categorised as follows: 
 
Level 1
£000 
Level 2 
£000 
Level 3
£000
Total
£000
At 31 August 2010  
Assets  
Derivative assets – 1 – 1
Total assets – 1 – 1
Liabilities  
Derivative liabilities – (23) – (23)
Total liabilities – (23) – (23)
 
 
Level 1
£000 
Level 2 
£000 
Level 3
£000
Total
£000
At 31 August 2009  
Liabilities  
Derivative liabilities – (162) – (162)
Total liabilities – (162) – (162)
The Group encounters, through its operations, the following financial risks: 
• Credit risk; 
• Market risk, being; 
 (a) Interest rate risk; 
 (b) Currency risk; 
• Liquidity risk; 
• Capital management. 
In common with all other businesses, the Group encounters risks that arise from its use of financial instruments. This note 
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. 
Additional information in respect of these risks is included throughout the Consolidated Financial Statements. 
Credit risk 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations. The Group is mainly exposed to credit risk from credit sales. It is the Group’s policy, implemented in the operating 
subsidiary undertakings, to assess the credit worthiness of customers prior to opening new accounts. This assessment includes 
an internal assessment of the acceptable risk corroborated where available with an external rating from an acceptable credit rating 
agency. Purchase limits are established for customers, which represent the maximum open amount. Authorisation to allow sales 
that would cause this limit to be exceeded is required from the operating subsidiary undertaking senior management team. If this 
authorisation is not given, no further sales are made to that customer until payment has been received. 
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. The Group’s main 
banking arrangements are with National Westminster Bank Plc. Amounts held by overseas operations with foreign banks are 
kept to a minimum. 
The Group does not enter into derivatives to manage credit risk, although, in certain cases, may take steps to mitigate such risks 
if it is sufficiently concentrated. 
Quantitative disclosure of the credit risk exposure in relation to trade and other receivables is given in Note 17.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
40 
3 Financial instruments and risk management continued 
Market risk 
Market risk arises from the Group’s interest bearing, tradable and foreign currency financial instruments. It is the risk that the 
fair value, or future cash flows, of a financial instrument will fluctuate because of changes in the interest rates (interest rate risk) 
or foreign exchange rates (currency risk). 
(a) Interest rate risk 
The Group is exposed to cash flow interest rate risk from its overdraft and loan facilities, which are denominated in sterling and 
carry interest at variable rates. The Group’s policy is to balance exposure to interest rate risk with the cost and flexibility of funding. 
This policy is managed centrally and subsidiary undertakings are generally not permitted to borrow from external sources and not 
without central approval. 
The requirement for interest rate hedging is reviewed periodically being a mechanism available to manage interest rate risk. 
These reviews acknowledge that interest rate hedges will not necessarily protect the Group from the risk of paying rates in 
excess of current market rates nor eliminate cash flow risk associated with the variability in interest payments. Judgements are 
therefore exercised in the context of the market and the materiality of the potential risk compared to the cost. At 31 August 2010: 
None (31 August 2009: None) of the Group’s borrowings were hedged against interest rate movements. 
Based upon the average of the Group’s net debt during the year, it is estimated that a rise/fall of one percentage point in the 
principal interest rates to which the Group is exposed would decrease/increase profit before taxation by approximately £73,000 
(31 August 2009: £92,000). 
(b) Currency risk 
Currency risk arises because the Group has operations located in various parts of the world whose functional currencies are 
different from that of the Group. However, these are not currently considered to be of a size that would warrant use of a hedge 
against the net investments in these overseas operations. 
Currency risk also arises when operating subsidiary undertakings enter into transactions denominated in a currency that is different 
from their functional currency. The principal exposure is through purchases made from suppliers in North America and the Far East 
which are denominated in US dollars. 
The Group’s policy is, where possible, to allow operating subsidiary undertakings to settle foreign currency transactions with cash 
generated in the same functional currency from their normal operations. If this is not possible, but cash in the required functional 
currency exists elsewhere in the Group, it will be transferred. Generally, however, purchases in foreign currency exceed receipts. 
Consequently, the Group will enter into forward currency contracts to protect against currency risk. Forward currency contracts 
typically crystallise on a monthly basis, account for up to half the projected forward monthly exposure and may be taken out up to 
twelve months forward. Judgement is exercised with respect to the appropriate time to enter into forward currency contracts and 
in the context of the overall banking facilities available to the Group. 
Although the Board accepts that this policy does not protect the Group entirely from currency risk or from incurring an exchange rate 
in the future that is adverse to the then spot rate in operation, it considers that it achieves an appropriate balance against exposure 
to the risk. 
Financial instruments within individual Group companies that are not denominated in the functional currency of the company 
concerned at 31 August 2010 were as follows: 
Net foreign currency monetary assets/(Iiabilities) 
Functional currency of Group operation  
Euro
£000 
US dollar 
£000  
Other 
£000  
Total
£000
At 31 August 2010   
Sterling (288) (1,151) (37) (1,476)
At 31 August 2009   
Sterling  (1,129) (947) (84) (2,160)
The Group’s major non-functional currency exposure is to the US dollar and Euro. It is estimated that the impact of a 10% 
strengthening of the US dollar and Euro would decrease profit before taxation by approximately £160,000 (31 August 2009: £231,000). 
A 10% weakening of the US dollar and Euro would increase profit before taxation by approximately £131,000 (31 August 2009: 
£189,000). 
It should be noted that the sensitivity indication given above reflects the impact on financial instruments held at the financial 
reporting date. It does not reflect changes in revenue or costs that may result from changing exchange rates.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
41
Liquidity risk 
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt 
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. 
The Group finances its operations through a mix of equity and borrowings. The Group’s objective is to provide funding for future 
growth and achieve a balance between continuity and flexibility through loan and overdraft facilities. At the year end, in addition 
to a committed term loan, the Group was able to draw on up to £8.0 million on a committed overdraft facility. At 31 August 2010, 
the Group had undrawn bank overdraft facilities of £3.3 million (31 August 2009: £5.4 million). Further details of the Group’s bank 
facilities are given in Note 20. 
If from time to time, the Group has surplus funds, interest income is earned on a daily basis. 
Capital management 
The Group manages its capital structure in order to safeguard the going concern of the Group and provide returns for shareholders 
and benefits for other stakeholders. The capital structure of the Group consists of debt, which includes borrowings disclosed in 
Note 20, cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves 
and retained earnings. 
The Group may maintain or adjust its capital structure by adjusting the amount of dividend paid to shareholders, returning capital 
to shareholders, issuing new shares or selling assets to reduce debt. 
4 Segment information 
The Group operates in the following main business segments: 
Armour Auto    The design, manufacture and supply of products for the in-car communications and entertainment market; 
Armour Home    The design, manufacture and supply of products into the Hi-Fi, home theatre, home entertainment and office 
furniture markets; and 
Central operations   The provision of finance and support services, including future product concepts and Hong Kong based 
quality control, to the other business segments within the Group and the sale of Armour Auto and Armour 
Home products to the Asian markets. 
These segments are considered on the basis of different products and services. The accounting policies of the operating segments 
are the same as those described in the accounting policies in Note 1. 
Year ended 31 August 2010 
Armour 
Auto 
£000 
Armour 
Home  
£000  
Central 
operations 
£000 
Total 
£000
Revenue 13,252 42,794 545 56,591
Profit/(Ioss) before taxation 122 1,942 (1,117) 947
Balance sheet  
Assets 11,235 21,696 14,874 47,805
Liabilities (3,680) (9,274) (4,791) (17,745)
Net assets 7,555 12,422 10,083 30,060
Other  
Additions to non-current assets 350 1,724 11 2,085
Finance expense (19) (11) (203) (233)
Finance income 5 3 – 8
Taxation (expense)/income (16) (252) 200 (68)
Depreciation 178 403 15 596
Amortisation of intangible assets 213 762 2 977
Share-based payments 4 25 3 32
  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
42 
4 Segment information continued 
Year ended 31 August 2009 
Armour 
Auto 
£000 
Armour  
Home  
£000  
Central  
operations  
£000  
Total 
£000
Revenue  13,092 38,522 – 51,614
Profit/(Ioss) before taxation  71 3,327 (2,278) 1,120
Balance sheet   
Assets  7,891 18,691 21,639 48,221
Liabilities  (2,166) (5,756) (10,974) (18,896)
Net assets  5,725 12,935 10,665 29,325
Other   
Additions to non-current assets  699 1,756 2 2,457
Investment in associates – – 352 352
Share of loss in associate – – (16) (16)
Finance expense – (20) (389) (409)
Finance income 5 12 – 17
Taxation income/(expense) 37 (295) 24 (234)
Depreciation  213 404 14 631
Amortisation of intangible assets  224 557 1 782
Share-based payments 7 52 6 65
Geographical information 
Revenue by 
location of customers  
Total non-current assets  
by location 
2010
£000
2009 
£000  
2010 
£000 
2009
£000
United Kingdom 45,077 41,851  27,214 26,576
Sweden 1,927 1,603  10 10
Hong Kong 1,785 2,074  8 6
France 1,461 1,025  – –
Other Countries 6,341 5,061  – –
 56,591 51,614  27,232 26,592
  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
43
5 Profit from operations 
 
31 August 
2010 
£000 
31 August 
2009
£000
Profit from operations is stated after charging/(crediting): 
Depreciation of property, plant and equipment (Note 13) 596 631
Amortisation and impairment of intangible fixed assets (Note 12)  977 782
Profit on disposal of property, plant and equipment  (17) (9)
Research and development expenditure  716 614
Operating lease rentals: 
 Hire of plant and machinery  212 206
 Other  1,413 1,354
Gain on financial instruments  (424) (1,530)
Foreign exchange loss 289 1,894
 
 
31 August 
2010 
£000 
31 August 
2009
£000
Services provided by the Company’s Auditors and its associates: 
Audit services: 
Fees payable to the Company’s Auditors for the audit of the Company 
and Consolidated Financial Statements  16 18
Fees payable to the Company’s Auditors and its associates for other services: 
Audit of the Company’s subsidiary undertakings pursuant to legislation  69 68
Taxation services  14 27
 99 113 Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
44 
6 Staff and key management 
The aggregate amounts payable to people employed by the Group (including Directors) during the year was as follows: 
 
31 August  
2010  
£000  
31 August 
2009
£000
Wages and salaries  9,178 8,765
Social security costs  995 928
Pension costs  292 265
Share-based payments  32 65
Total employment costs  10,497 10,023
Amount capitalised as development  (741) (536)
 9,756 9,487
The average number of people employed by the Group was: 
 
31 August  
2010  
31 August 
2009
Armour Auto  114 118
Armour Home  183 173
Central operations  17 14
 314 305
Directors’ remuneration was: 
 
31 August  
2010  
£000  
31 August 
2009
£000
Emoluments 312 312
Amounts paid to third parties for Directors’ services  81 81
Company contributions to money purchase pension schemes  30 30
 423 423
No options were exercised by the Directors and no gains were made in either the current or prior year. Two Directors accrued 
pension benefits. 
The remuneration of the highest paid director amounted to £178,000 (31 August 2009: £178,000) and Company contributions to the 
defined contribution pension scheme amounted to £17,000 (31 August 2009: £17,000).  
Further information in regard to the Directors’ remuneration, interests in ordinary shares and interests in share options is included 
in the Remuneration Report on pages 25 to 27. 
Key management remuneration was: 
 
31 August  
2010  
£000 
31 August 
2009
£000
Emoluments 703 691
Amounts paid to third parties for Directors’ services  81 81
Contributions to money purchase pension schemes  67 53
Share-based payments  10 20
 861 845
The amounts shown above for key management comprise amounts in respect of the Directors of Armour Group plc (as shown 
in the Remuneration Report on page 26), Managing Director of Armour Auto and Managing Director and Chief Operating Officer 
of Armour Home.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
45
7 Finance income and expense 
 
31 August 
2010 
£000
31 August 
2009
£000
Finance income 
Interest received on bank deposits  8 17
Finance expense 
Unwinding of discounts  (10) (19)
Bank loans and overdrafts  (185) (356)
Bank loan arrangement costs expensed  (38) (34)
 (233) (409)
8 Taxation expense 
 
31 August 
2010 
£000
31 August 
2009
£000
Current taxation expense 
UK Corporation Tax on profit for the year  – (119)
Adjustment in respect of prior years  261 61
Income taxation of overseas operations  (42) (40)
Total current taxation expense  219 (98)
Deferred taxation expense 
UK operations  (70) (104)
Adjustment in respect of prior years  (228) (36)
Overseas operations  11 4
Total deferred taxation expense (Note 22)  (287) (136)
Total taxation expense  (68) (234)
The taxation assessed for the year is lower (31 August 2009: lower) than the standard rate of UK Corporation Tax. The differences are 
explained below: 
 
31 August 
2010 
£000
31 August 
2009
£000
Profit on ordinary activities before taxation  947 1,120
Profit multiplied by the rate of UK Corporation Tax of 28% (2009: 28%)  (265) (314)
Effects of: 
Expenses not deductible for taxation purposes  (31) (51)
Taxation credits  189 105
Lower taxation rates on overseas profit and marginal relief  6 1
Adjustments in respect of prior years  33 25
Total taxation expense  (68) (234) Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
46 
9 Earnings per ordinary share 
Basic earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the financial 
year of 65,056,067 (31 August 2009: 65,056,067). Diluted earnings per ordinary share are calculated with reference to 65,056,067 
(31 August 2009: 65,056,067) ordinary shares. The effect of the exercise of options on the weighted average number of ordinary 
shares in issue is nil (31 August 2009: nil). 
At 31 August 2010, the Armour Employees’ Share Trust held 3,424,000 (31 August 2009: 3,424,000) ordinary shares. The weighted 
average number of ordinary shares held by the Armour Employees’ Share Trust during the year of 3,424,000 (31 August 2009: 
3,424,000) are not included in either the weighted average, or diluted weighted average, ordinary shares in issue during the 
financial year. 
Underlying earnings per ordinary share are also shown calculated by reference to earnings before share-based payments. 
The Directors consider that this gives a useful additional indication of underlying performance. It should be noted that the term 
“underlying” is not defined under IFRS and may not therefore be comparable with similarly titled profit measures reported by 
other entities. 
 31 August 2010 31 August 2009 
 £000 
Basic 
p 
Diluted 
p £000 
Basic  
p  
Diluted 
p
   
Profit for the year  879 1.4 1.4 886 1.4 1.4
Share-based payments  32 – – 65 0.1 0.1
Underlying earnings  911 1.4 1.4 951 1.5 1.5
10 Dividend 
 
31 August  
2010  
£000  
31 August 
2009
£000
Proposed dividend for the year of Nil (31 August 2009: 0.30p) per ordinary share  – (195)
The Armour Employees’ Share Trust has waived its right to a dividend in excess of 0.001p per ordinary share for 3,424,000 
(31 August 2009: 3,424,000) ordinary shares that it holds. 
The Board has not recommended a final dividend for the year ended 31 August 2010. The dividend proposed in the financial 
statements as at 31 August 2009, and approved by shareholders at the Annual General Meeting held on 28 January 2010, 
was charged to reserves and paid during the year. 
11 Goodwill and impairment 
 
31 August  
2010  
£000  
31 August 
2009
£000
At the start of the year  21,084 21,082
Additions  – 2
At the end of the year  21,084 21,084
The addition during the prior year relates to the acquisition of Armour Nordic AS.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
47
Goodwill acquired in business combinations and carried in the Consolidated Statement of Financial Position is allocated to the 
cash-generating units (“CGUs”) that are expected to benefit from that business combination. The carrying amount of goodwill has 
been allocated as follows: 
 
31 August 
2010 
£000 
31 August 
2009
£000
Armour Auto  2,088 2,088
Armour Home  18,996 18,996
At the end of the year  21,084 21,084
The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use 
calculations are those regarding discount rates, growth rates, expected sales prices and costs during the period. Management 
estimates discount rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. 
The growth rates, selling prices and direct costs are based on past experience and expectations of future changes in the market. 
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management and extrapolates 
cash flows for the following years based upon estimated growth rates. 
The extrapolated cash flows have been prepared for 10 years with an average growth rate of 3% (31 August 2009: 3%). The rate used 
to discount the cash flows was 15% (31 August 2009: 15%). 
12 Other intangible assets 
31 August 2010 31 August 2009 
Computer 
software  
£000  
Brands
£’000
Development 
costs 
£000 
Total 
£000 
Computer 
software  
£000  
Development 
costs 
£000 
Total 
£000
Cost   
At the start of the year  543 – 4,747 5,290 529 2,942 3,471
Additions  67 500 1,617 2,184 14 1,839 1,853
Disposals  – – – – – (34) (34)
At the end of the year  610 500 6,364 7,474 543 4,747 5,290
Amortisation   
At the start of the year  457 – 1,721 2,178 389 1,041 1,430
Charge for the year  61 24 892 977 68 641 709
Impairment charge  – – – – – 73 73
Disposals  – – – – – (34) (34)
At the end of the year  518 24 2,613 3,155 457 1,721 2,178
Net book value   
At the end of the year  92 476 3,751 4,319 86 3,026 3,112
Of the additions in the year the £500,000 of brands acquired was for a non-cash consideration in the acquisition of the Audica 
business. IFRS 3 disclosures have not been made as this is not considered a material transaction during the year.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
48 
13 Property, plant and equipment 
Leasehold 
improvements 
£000 
Motor 
vehicles 
£000 
Plant and 
equipment  
£000  
Fixtures and 
fittings  
£000  
Total 
£000
Cost   
At 1 September 2009 635 508 3,176 1,056 5,375
Additions  53 7 204 137 401
Disposals  – (166) (6) (1) (173)
Foreign exchange movement – – – 1 1
At 31 August 2010 688 349 3,374 1,193 5,604
Depreciation   
At 1 September 2009 161 385 2,138 647 3,331
Charge for the year  94 69 231 202 596
Disposals  – (150) (4) – (154)
Foreign exchange movement – – 1 1 2
At 31 August 2010 255 304 2,366 850 3,775
Net book value   
At 1 September 2009 474 123 1,038 409 2,044
At 31 August 2010 433 45 1,008 343 1,829
 
Leasehold 
improvements 
£000 
Motor 
vehicles 
£000 
Plant and 
equipment  
£000  
Fixtures and 
fittings  
£000  
Total 
£000
Cost   
At 1 September 2008  558 639 2,845  947  4,989
Additions  77 13 388 126 604
Disposals  – (144) (57) (17) (218)
At 31 August 2009 635 508 3,176 1,056 5,375
Depreciation   
At 1 September 2008 99 411 1,835  542  2,887
Charge for the year  62 101 347 121 631
Disposals  – (127) (44) (16) (187)
At 31 August 2009 161 385 2,138 647 3,331
Net book value   
At 1 September 2008 459 228 1,010  405  2,102
At 31 August 2009  474 123 1,038 409 2,044
At 31 August 2010 and 31 August 2009, there were no assets held under finance leases.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
49
14 Subsidiary undertakings 
The principal subsidiary undertakings of Armour Group plc, all of which have been included in these Consolidated Financial 
Statements, are as follows: 
 
 
Proportion of ownership  
at 31 August 
 
Country of incorporation  
2010
%
2009
%
Armour Automotive Group Limited  Great Britain  100 100
Armour Hong Kong Limited  Hong Kong   100 100
Armour Auto   
Armour Automotive Limited  Great Britain  100 100
Armour Nordic AB  Sweden   100 100
Armour Nordic AS Norway  100 100
Armour Home   
Armour Home Electronics Limited  Great Britain   100 100
Alphason Designs Limited  Great Britain   100 100
Note 4 on pages 41 and 42, describes the nature of the businesses contained within each business segment. 
15 Investment in associated undertakings 
The following entity met the definition of an associated undertaking and was equity accounted in the Consolidated 
Financial Statements. 
 
 
Proportion of ownership  
at 31 August 
Country of incorporation  
2010 
%
2009
%
Audica Limited  Great Britain   – 25
The aggregated amounts relating to the associated undertaking are as follows: 
 
31 August 
2010 
£000 
31 August 
2009
£000
Total assets  – 210
Total liabilities  – (485)
Revenues  – 347
Loss – (64)
16 Inventories 
 
31 August 
2010
£000 
31 August 
2009
£000
Raw materials and consumables  1,167 1,138
Finished goods and goods for resale  9,486 10,543
Total inventories  10,653 11,681
  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
50 
17 Trade and other receivables 
 
31 August  
2010  
£000 
31 August
2009
£000
Trade receivables  8,280 8,947
Less: Provision for impairment of trade receivables  (292) (416)
Net trade receivables  7,988 8,531
Other receivables  141 44
Prepayments  1,393 1,301
Derivative financial instruments  1 –
Total trade and other receivables  9,523 9,876
There is no material difference between the net book amount and the fair value of current trade and other receivables due to their 
short-term nature. 
There is no particular concentration of credit risk to the Group’s trade receivables as the Group has a large number of customers. 
The provision for impairment is analysed as follows: 
 
31 August  
2010  
£000 
31 August
2009
£000
At 1 September  (416) (478)
Consolidated Statement of Comprehensive Income charge  (125) (158)
Written off as uncollectable  249 220
At 31 August  (292) (416)
The creation and release of provision for impaired receivables has been included in the Consolidated Statement of Comprehensive 
Income under other expenses. 
Trade and other receivables that have not been received within the payment terms agreed are classified as overdue. The ageing 
of overdue amounts at 31 August is as follows: 
31 August 2010  31 August 2009 
Impaired 
£000
Not impaired  
£000  
Impaired  
£000 
Not impaired
£000
Past due 0 – 3 months  25 596  27 739
Past due 4 – 6 months  60 80  73 120
Past due 7 – 12 months  19 22  55 88
Past due over 12 months  188 32  261 13
 292 730  416 960
18 Cash and cash equivalents 
 
31 August  
2010  
£000 
31 August
2009
£000
Cash at bank and in hand, being cash and cash equivalents in the Consolidated Statement 
of Financial Position  397 72
Less: Overdrafts (Note 20) (4,657) (2,563)
Cash, cash equivalents and bank overdrafts in the Consolidated Statement of Cash Flows  (4,260) (2,491)
19 Trade and other payables – current 
 
31 August  
2010  
£000 
31 August
2009
£000
Trade payables  6,838 7,914
Other taxation and social security  964 1,469
Other payables  925 985
Accruals  1,642 1,935
Derivative financial instruments  23 162
Total trade and other payables  10,392 12,465
There is no material difference between the net book amount and fair value of trade and other payables due to their 
short-term nature.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
51
20 Borrowings 
31 August 2010  31 August 2009 
Fair value 
£000
Carrying 
amount  
£000  
Fair value 
£000
Carrying 
amount
£000
Non-current:   
Secured bank term loan  480 480  1,438 1,438
Current:   
Secured bank term loan  956 956  958 958
Secured overdraft (Note 18) 4,657 4,657  2,563 2,563
 5,613 5,613  3,521 3,521
Total borrowings  6,093 6,093  4,959 4,959
The bank term loan and overdraft are secured by a fixed and floating charge over the Group’s assets. Both the bank term loan and 
overdraft are subject to a floating rate of interest being the base rate plus the bank’s margin. At 31 August 2010, the interest rate 
was 1.75% (31 August 2009: 1.75%). Both the bank term loan and overdraft are committed facilities. The bank term loan is repayable 
in instalments made in February and August each year, with the final payment due on 31 August 2012. The overdraft facility is for up 
to a maximum of £8 million and matures in February 2011. The maturity of non-current borrowing is as follows: 
 
31 August 
2010
£000
31 August
2009
£000
Between one and two years  516 1,031
Between two and five years  – 524
 516 1,555
The figures above show the contractual undiscounted cash flows and therefore include an estimate of the future interest payable 
on each element of borrowings up to its repayment date. Interest has been estimated at the rate ruling at the year end, being 1.75% 
(31 August 2009: 1.75%). 
21 Provisions 
Restructuring  
£000 
Dilapidations
£000
Total
£000
At 1 September 2008 192 170 362
Amounts utilised (103) (2) (105)
Unused amounts reversed – (40) (40)
Unwinding of discount 9 10 19
At 1 September 2009 98 138 236
Amounts utilised (69) (45) (114)
Unwinding of discount – 10 10
At 31 August 2010 29 103 132
The provisions have been analysed between current and non-current as follows: 
 
31 August 
2010 
£000
31 August
2009
£000
Current  132 95
Non-current  – 141
 132 236
The restructuring provision relates to the termination of satellite leased premises arising from business disposals, and the 
reorganisation of operations within Armour Home, performed in prior years. 
The dilapidations provision relates to the probable exposure arising from returning leasehold property to its original state at the end 
of the lease in accordance with the lease terms.  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
52 
22 Deferred taxation 
Deferred taxation is calculated in full on temporary differences under the liability method using the taxation rate of 28% (2009: 28%). 
The movement on the deferred taxation account is shown below: 
 
31 August  
2010 
£000 
31 August
2009
£000
At 1 September  (656) (520)
Exchange (3) –
Consolidated Statement of Comprehensive Income charge (Note 8) (287) (136)
At 31 August  (946) (656)
Deferred taxation assets have been recognised in respect of taxation losses and other temporary differences giving rise to deferred 
taxation assets where the Directors believe that it is probable that these assets will be recovered. 
 31 August 2010  31 August 2009 
 
Asset/(liability) 
£000
Exchange
£000
(Charge)/credit 
to income  
£000  
Asset/(liability)  
£000 
(Charge)/credit 
to income
£000
Accelerated capital allowances  (792) – (76)  (716) (299)
Short-term temporary differences  (201) (3) (238)  40 154
Taxation losses  47 – 27  20 9
 (946) (3) (287)  (656) (136)
23 Share capital 
Ordinary shares of 10p each 
Authorised   Allotted, called up and fully paid 
Number £000   Number  £000
At 1 September 2009 and 31 August 2010 150,000,000 15,000  68,480,067 6,848
Share capital represents the amount subscribed for share capital at nominal value. 
24 Reserves 
The nature of the reserves shown in the Consolidated Statement of Financial Position and Consolidated Statement of Changes in 
Shareholders’ Equity is as follows: 
Share premium  Amount subscribed for share capital in excess of nominal value. 
Other reserves  The premium on shares issued as consideration shares for acquisitions, being the difference between the 
nominal value and fair value of these shares. In accordance with Sections 612 and 615 of the Companies 
Act 2006, the acquiring company has taken no account of this premium and the cost of investment includes 
only the nominal value of the consideration shares. On consolidation, the premium has been credited to 
this reserve. 
Retained earnings  Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income. 
Translation reserve  Gains and losses arising on retranslating the net assets of overseas operations into sterling. 
Share trust reserve  Cost of Company’s shares held by the Armour Employees’ Share Trust. 
25 Share-based payments 
During the year, the Company and Group operated three equity-settled share-based schemes being the: 
• 1999 Unapproved Executive Share Option Scheme; 
• 1999 Approved Executive Share Option Scheme; and 
• Enterprise Management Incentive Share Option Plan. 
Options granted under the 1999 Unapproved Executive Share Option Scheme, 1999 Approved Executive Share Option Scheme and 
Enterprise Management Incentive Share Option Plan are subject to performance criteria relating to the growth in earnings per 
ordinary share or growth in the average ordinary share price. These criteria were approved by the shareholders at the Annual 
General Meeting held on 3 December 2002. In addition, the options lapse if the employee leaves within the service period required 
following the date of grant.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
 
53
25 Share-based payments continued 
No options were granted or exercised during either the current or prior year. 
Weighted 
average 
exercise price 
p 
2010
Number  
2010 
Weighted 
average 
exercise price
p 
2009
Number
2009
Outstanding at the start of the year  28.2 5,905,000 28.2 5,905,000
Lapsed during the year  17.5 60,000 ––
Outstanding at the year end  28.3 5,845,000 28.2 5,905,000
The exercise price of options outstanding at the end of the year ranged between 17.5p and 56.5p (31 August 2009: 17.5p – 56.5p) 
and the weighted average contractual life was 4.8 years (31 August 2009: restated to 5.9 years). 
Of the total number of options outstanding at the end of the year, 4,050,000 (31 August 2009: 3,500,000) had vested and 
were exercisable. 
The Group recognised a total expense of £32,000 (31 August 2009: £65,000) in respect of equity-settled share-based payments 
in the year. 
At 31 August 2010, the following options were outstanding in respect of the ordinary shares: 
1999 Unapproved Executive Share Option Scheme 
Date of grant Number
Exercise 
price (p) Exercise period
10 May 2000  300,000 20.0 10 May 2002 – 9 May 2012
24 July 2003  550,000 34.5 24 July 2004 – 23 July 2013
14 November 2005  725,000 56.5 14 November 2008 – 13 November 2015
12 December 2006  250,000 45.5 12 December 2009 – 11 December 2016
4 July 2008  20,000 21.0 4 July 2011 – 3 July 2018
 1,845,000
1999 Approved Executive Share Option Scheme 
Date of grant Number 
Exercise 
price (p) Exercise period
12 December 2006  300,000 45.5 12 December 2009 – 11 December 2016
 300,000
Enterprise Management Incentive Share Option Plan 
Date of grant Number 
Exercise 
price (p) Exercise period
5 December 2002  100,000 20.0 5 December 2003 – 4 December 2012
21 January 2003  1,500,000 20.0 21 January 2004 – 20 January 2013
24 July 2003  325,000 34.5 24 July 2004 – 23 July 2013
4 July 2008  1,775,000 17.5 4 July 2011 – 3 July 2018
 3,700,000
26 Related party transactions 
Transactions between the Company and its subsidiary undertakings, which are related parties of the Company, have been eliminated 
on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed 
below. Amounts owed by and to related parties are included in trade receivables and trade payables respectively: 
 Purchase of goods 
Amounts owed by  
related parties 
 Amounts owed to  
related parties 
 
2010
£000
2009
£000
2010
£000
2009 
£000 
 2010
£000
2009
£000
Associated undertaking  – 119 – 39  – –
  Armour Group plc Annual Report 2010
Notes to the Consolidated Financial Statements  
continued  
 
54 
27 Leases 
Total commitments under operating leases with expiry dates are as follows: 
31 August 2010  31 August 2009 
Land and 
buildings 
£000
Other  
£000 
 Land and 
buildings  
£000 
Other
£000
Within one year  871 119  1,003 156
Two to five years inclusive  2,936 204  3,487 220
Over five years  2,763 –  2,215 –
 6,570 323  6,705 376
28 Net cash inflow from operations 
 
31 August  
2010  
£000 
31 August
2009
£000
Profit from operations  1,172 1,528
Depreciation of property, plant and equipment  596 631
Amortisation of intangible assets  977 782
Share-based payments  32 65
EBITDA* 2,777 3,006
Gain on sale of property, plant and equipment and fair value adjustments (165) (9)
Decrease in inventories  1,028 1,145
Decrease in trade and other receivables  353 344
(Decrease)/increase in trade, other payables and provisions  (2,175) 2,685
Net cash from operations  1,818 7,171
*EBITDA is defined as profit before interest, taxation, depreciation, amortisation and share-based payments. 
29 Reconciliation of net cash flow to movement in net debt 
Net debt incorporates the Group’s borrowings, bank overdrafts and obligations under finance leases, less cash and cash equivalents. 
A reconciliation of the movement in the net debt from the beginning to the end of the year is shown below: 
 
31 August  
2010  
£000 
31 August
2009
£000
Net (decrease)/increase in cash and cash equivalents  (1,792) 3,307
Net cash outflow from debt and lease financing  1,000 720
Other non-cash movements  (17) (40)
(Increase)/decrease in net debt  (809) 3,987
Opening net debt  (4,887) (8,874)
Closing net debt  (5,696) (4,887)
30 Guarantees, contingent liabilities and capital commitments 
The Company and its subsidiary undertakings have cross guarantees in regard to the amounts drawn under the Group’s banking 
facilities. At 31 August 2010, the Group’s subsidiary undertakings had contingent liabilities in respect of outstanding documentary 
credits amounting to £963,000 (31 August 2009: £860,000). 
At 31 August 2010, the Group had no capital commitments (31 August 2009: £nil). 
  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
Company Balance Sheet 
Registered Number: 803572 
At 31 August 2010 
55
Note 
31 August 
2010 
£000
31 August
2009
£000
Fixed assets  
Investment in subsidiary undertakings  4  – –
Tangible assets  5  15 22
Total fixed assets   15 22
Current assets  
Amounts owed by subsidiary undertakings   30,059 29,698
Prepayments   22 124
Corporation Tax  105 50
Deferred taxation  6  14 9
Cash and cash equivalents   8 7
  30,208 29,888
Creditors: Amounts falling due within one year  
Bank overdrafts and borrowings   (10,028) (8,385)
Amounts owed to subsidiary undertakings   (63) (63)
Other taxes and social security   (57) (116)
Other creditors and accruals   (427) (589)
Corporation taxation   – –
  (10,575) (9,153)
Net current assets   19,633 20,735
Total assets less current liabilities   19,648 20,757
Creditors: Amounts falling due after more than one year  
Borrowings   (480) (1,438)
  (480) (1,438)
Net assets   19,168 19,319
Capital and reserves  
Share capital  7  6,848 6,848
Share premium account  8  8,513 8,513
Profit and loss account  8  4,379 4,530
Share trust reserve  8  (572) (572)
Shareholders’ funds   19,168 19,319
These financial statements were approved by the Board and authorised for issue on 23 November 2010. 
 
 
George Dexter  John Harris 
Director  Director 
The Notes on pages 56 to 58 form part of these Company Financial Statements.  Armour Group plc Annual Report 2010
Notes to the Company Financial Statements  
 
 
56 
1 Basis of preparation 
The Company Financial Statements have been prepared on the basis of accounting policies set out in Note 2 below using applicable 
accounting standards generally accepted in the United Kingdom (UK GAAP). As permitted by Section 408 of the Companies Act 2006, 
the profit and loss account is not presented. The profit before dividend for the year amounted to £12,000 (31 August 2009: £9,000). 
Details of the Auditors’ remuneration payable by the Company are disclosed in Note 5 to the Consolidated Financial Statements 
on page 43. 
2 Principal accounting policies 
The principal accounting policies set out below have been consistently applied to all the periods presented. 
Foreign currencies 
Foreign currency transactions are translated using the exchange rate at the date of transaction. Foreign exchange gains and losses 
arising from the settlement of transactions and from the translation at the year end exchange rates of monetary assets and liabilities 
are recognised in the profit and loss account. 
Investments in subsidiary undertakings 
Investments in subsidiary undertakings are included at cost less provision for impairment in value. 
Deferred taxation 
Deferred taxation is provided on the incremental liability approach in respect of timing differences giving rise to an asset or liability. 
Deferred taxation assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. 
Deferred taxation assets and liabilities are not discounted. 
Share-based payments 
The Company operates equity-settled share-based option plans. The fair value of the employee services received in exchange for the 
participation in the plan is recognised as an expense in the profit and loss account. In accordance with UITF 44: Group and Treasury 
Transactions, the Company has accounted for options granted to the employees of subsidiary undertakings as capital contributions, 
which have been recharged to the intermediate company holding the investment. The corresponding credit has been recognised in 
the profit and loss account reserve. 
The fair value of the employee service is based on the fair value of the equity instrument granted. This expense is spread over the 
vesting period of the instrument. The corresponding entry is credited to equity. The liability for social security costs arising in relation 
to the awards is measured at each reporting date based upon the share price at the reporting date and the elapsed portion of the 
relevant vesting periods to the extent that it is considered that a liability will arise. 
Dividends 
Dividend distributions to the Company’s shareholders are recognised in the period when paid or, if earlier, in which the dividend is 
approved by the Company’s shareholders. 
3 Staff costs 
The aggregate payroll costs (including those of Directors) during the year was as follows: 
 
31 August  
2010 
£000 
31 August
2009
£000
Wages and salaries  610 621
Social security costs  73 74
Pension costs  43 43
Share-based payments  3 5
 729 743
  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
 
 
57
4 Investment in subsidiary undertakings 
 
31 August 
2010
£000
31 August
2009
£000
Cost 
At start and end of the year  1,743 1,743
Provisions 
At start and end of the year (1,743) (1,743)
Net book value 
At start and end of the year  – –
5 Fixed assets 
The Company’s tangible fixed assets comprise computer equipment, testing equipment and fixtures and fittings. 
Depreciation is charged over each asset’s expected useful life on a straight-line basis. The annual depreciation rates used are: 
• Computer equipment  20% – 33% 
• Plant and fixtures and fittings  10% – 20% 
£000
Cost 
At 1 September 2009 123
Additions 2
At 31 August 2010 125
Depreciation 
At 1 September 2009 101
Charge for the year 9
At 31 August 2010 110
Net book value 
At 1 September 2009 22
At 31 August 2010 15
6 Deferred taxation 
 
31 August 
2010 
£000
31 August
2009
£000
Accelerated capital allowances  4 1
Short-term timing differences  10 8
 14 9
At 1 September  9 16
Movement in the year  5 (7)
At 31 August  14 9
7 Share capital 
Ordinary shares of 10p each 
Authorised  Allotted, called up and fully paid 
Number £000   Number £000
At 1 September 2009 and 31 August 2010 150,000,000 15,000  68,480,067 6,848
Details of outstanding share options are given in Note 25 of the Consolidated Financial Statements on pages 52 and 53.  Armour Group plc Annual Report 2010
Notes to the Company Financial Statements 
Continued  
 
58 
8 Reserves 
Share 
premium 
£000
Profit and loss 
account  
£000 
Share trust 
reserve  
£000 
Total
£000
At 1 September 2008 8,513 4,879 (572) 12,820
Profit for the year – 9 – 9
Dividend paid – (423) – (423)
Share-based payments – 65 – 65
At 31 August 2009 8,513 4,530 (572) 12,471
Profit for the year – 12 – 12
Dividend paid (195) – (195)
Share-based payments – 32 – 32
At 31 August 2010 8,513 4,379 (572) 12,320
The Company’s reconciliation of movements in shareholders’ funds is shown below: 
 
31 August  
2010  
£000 
31 August
2009
£000
Opening shareholders’ funds  19,319 19,668
Profit for the year  12 9
Dividend paid  (195) (423)
Profit for the year retained  (183) (414)
Share-based payments  32 65
Net movement in shareholders’ funds  (151) (349)
Closing shareholders’ funds  19,168 19,319
9 Share-based payments 
Share-based payment arrangements for the executive Directors are set out in the Remuneration Report on pages 25 to 27. 
No new share-based payment arrangements were put in place for the Directors in either the current or prior year. 
Details of the share options in existence are shown in Note 25 of the Consolidated Financial Statements. 
10 Related party transactions 
Details of transactions between the Company and its subsidiary undertakings, which are related parties of the Company, 
are shown below: 
 Management fees 
Amounts owed by  
related parties 
 Amounts owed to  
related parties 
 
2010
£000
2009 
£000
2010
£000
2009 
£000 
 2010 
£000 
2009
£000
Subsidiary undertakings 617 893 30,059 29,698  63 63
11 Guarantees, contingent liabilities and capital commitments 
The Company has guaranteed certain overdrafts, loans and credit facilities of its subsidiary undertakings. At 31 August 2010, 
the Company had no contingent liabilities under these guarantees (31 August 2009: £nil). 
At 31 August 2010 and 31 August 2009, the Company had no capital commitments.  Armour Group plc Annual Report 2010
Financial Statements Business Review Annual General Meeting Governance
Notice of Annual General Meeting 
 
59
Notice is hereby given that the Annual General Meeting of Armour Group plc will be held at the offices of Arnold & Porter (UK) LLP, 
Tower 42, 25 Old Broad Street, London EC2N 1HQ on 23 February 2011 at 2.00 pm for the following purposes: 
Ordinary Business 
1.  To receive and consider the Annual Report and audited financial statements for the year ended 31 August 2010, the Directors’ 
Report and the Auditors’ Report on those financial statements. 
2.  To reappoint BDO LLP as Auditors to hold office from the conclusion of this Meeting until the conclusion of the next general 
meeting of the Company at which financial statements are laid and to authorise the Directors to determine their remuneration. 
3. To reappoint Mr GL Dexter as a Director. 
Special Business 
5. To consider the following resolution, which will be proposed as a Special Resolution: 
 
 That in substitution for all existing authorities, the Directors be and are hereby empowered pursuant to Section 570 of the Act 
to allot equity securities (within the meaning of Section 560 of the Act) wholly for cash pursuant to the authority conferred by 
Resolution 4 above, as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited 
to the allotment of equity securities: 
(a)  In connection with an offer of such securities by way of rights issue or other offering in favour of the holders of ordinary 
shares in proportion (as nearly as may be practicable) to their holdings of such shares, but subject to such exclusions or 
other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal 
or practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange; and 
(b)  Otherwise than pursuant to paragraph (a) above up to an aggregate nominal amount of £1,600,000 representing 23% of the 
issued share capital of the Company 
 and shall expire 15 months after the date of the passing of this Resolution or at the conclusion of the next Annual General 
Meeting of the Company following the passing of this Resolution, whichever first occurs, save that the Company may, before 
such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the 
Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred 
by this Resolution has expired. 
 
6. To consider the following resolution, which will be proposed as a Special Resolution: 
  
 That: 
(a)  In accordance with Article 52 of its Articles of Association and Chapter IV of the Act and subject to paragraph (b) of this 
Resolution, the Company be and hereby is granted general and unconditional authority (pursuant to Section 701 of the Act) 
to make market purchases (as defined in Section 693(4) of the Act) of its own ordinary shares on such terms and in such 
manner as the Directors may from time to time determine; and 
 
(b)  The authority conferred by paragraph (a) of this Resolution shall: 
(i)  Expire on the date of the next Annual General Meeting of the Company; 
(ii)  Be limited to the purchase of a maximum 10,272,010 ordinary shares representing 15% of the issued share capital 
of the Company; 
(iii) Not permit the payment per ordinary share of more than 5% above the average of the middle market quotations for 
an ordinary share derived from the London Stock Exchange Daily Official List for the five business days immediately 
preceding the day on which any purchase by the Company of ordinary shares is made or less than 10p exclusive of any 
applicable Corporation Tax payable by the Company; 
4.  That, in accordance with Section 551 of the Companies Act 2006 (“Act”)  and in substitution for all previous authorities conferred 
on the Directors, the Directors be generally and unconditionally authorised to allot shares in the Company up to an aggregate 
nominal amount of £4,000,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on  
22 February 2016 save that the Company may, before such expiry, make an offer or agreement which would or might require 
shares to be allotted and the Directors may allot shares in pursuance of such offer or agreement notwithstanding that the 
authority conferred by this resolution has expired.   Armour Group plc Annual Report 2010
Notice of Annual General Meeting 
Continued  
60 
(iv) Before expiry entitle the Company to enter into any contract for the purchase of ordinary shares which might be executed 
and completed wholly or partly after its expiry; and 
(v) Only be capable of variation, revocation or renewal by the Company in general meeting. 
 
By order of the Board 
John Harris  
Company Secretary  
23 November 2010 
 
Notes 
1. A shareholder entitled to attend and vote at the Meeting is also entitled to appoint one or more proxies to attend and, on a poll, 
vote instead of him/her. The proxy need not be a shareholder of the Company. 
2. To be effective, the instrument appointing a proxy and any authority under which it is executed (or a notarially certified copy 
of such authority) must be deposited at the offices of Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, 
Kent BR3 4TU, not less than two days before the time for holding the Meeting. Completion and return of the Form of Proxy 
will not preclude shareholders from attending and voting in person at the Meeting. 
3. A corporation’s Form of Proxy must be executed pursuant to the terms of Section 44 of the Companies Act 2006 or under the 
hand of a duly authorised officer or attorney. Any corporation which is a member of the Company may authorise a person (who 
need not be a member of the Company) to act as its representative to attend, speak and vote (on a show of hands or a poll) on its 
behalf. A corporate representative may exercise on behalf of a member corporation all of its powers as a member provided that 
they do not do so in relation to the same shares. 
4. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the time by which a person must be entered on the 
Register of Members in order to have the right to attend and vote at the Meeting is close of business on 21 February 2011 or, if 
the Meeting is adjourned, such time being not more than 48 hours prior to the time fixed for the adjourned meeting. Changes to 
entries on the Register of Members after that time will be disregarded in determining the right of any person to attend or vote at 
the Meeting. 
5. The register of interests of the Directors and their families in the issued share capital of the Company and copies of all 
Directors’ service contracts will be available for inspection at the registered office of the Company during usual business 
hours (Saturdays, Sundays and public holidays excepted) from the date of this Notice until the conclusion of the Meeting. 
6. As at 5.00 pm on the date immediately prior to the date of posting of this Notice, the Company’s issued share capital 
comprised of 68,480,067 ordinary shares of 10p each and each ordinary share carries the right to one vote at a general 
meeting of the Company.  Designed and produced by Radley Yeldar (www.ry.com) using the paperless proofing system 
Wizardry. 
Armour Group plc are committed to caring for the environment and looking for sustainable 
ways to minimise our impact on it.
We take care to minimise the impact on the environment in the paper we use. The paper we 
have chosen: 
• contains material sourced from responsibly managed forests, certified in accordance with  
 the FSC (Forest Stewardship Council)*
• is made from 10% recovered fibre, diverting waste from landfill
• is manufactured under strict environmental management systems, the international  
 ISO 14001 standard, EMAS (Eco-Management & Audit Scheme) and the IPPC (Integrated  
 Pollution Prevention and Control) regulation.
FSC – Forest Stewardship Council. This ensures there is an audited chain of custody from the tree in the 
well-managed forest through to the finished document in the printing factory.
 ISO 14001 – A pattern of control for an environmental management system against which an organisation 
can be credited by a third party. Armour Group plc Annual Report 2010
Armour Group plc
Lonsdale House 
7–9 Lonsdale Gardens 
Tunbridge Wells 
Kent TN1 1NU 
United Kingdom
t: +44 (0)1892 502700 
f: +44 (0)1892 502707
www.armourgroup.uk.com