API Group plc
Annual Report 
and Accounts 2008
Foils
Holographics
Laminates  API Group plc  
Annual Report & Accounts 2008
1
Highlights
Contents
Business Review
01 Highlights
02 Chairman’s Statement
04 Group Overview
05 Chief Executive’s Review
06 Financial Review
Governance
12 Directors and Advisers
13 Directors’ Report
16 Corporate Governance
● 18 month reporting period reflecting change in year end to 31 March.
● Group sales of £143.8m and operating profit before goodwill and
exceptional items of £0.4m for the 18 months to 31 March 2008.  
Sales for 12 months to 31 March 2008 declined 7.8% to £93.4m 
and operating profit before exceptional items fell £0.6m to £0.4m.
● Operating profit before exceptionals for the last 6 months of £0.6m
compared to loss of £0.2m in the previous half year.
● £2.4m of annualised savings achieved from overhead cost reduction
programme, well ahead of original target of £1.0m. 
● Good progress in Europe as a result of lower costs and growth in foils
and holographics.  Lower demand experienced in the US.
● Relocation of Chinese manufacturing to new, purpose-built facility
substantially complete although results hit by costs and disruption 
to supplies.
● Pre-tax loss on continuing operations for the 18 month period of 
£7.1m (£1.8m loss for 12 months to 30 September 2006) after charging
exceptional costs of £3.4m for restructuring and asset impairments.  Basic
loss per share from continuing operations of 16.7p (8.9p loss).
● Net debt reduced by £5.9m from September 2007 peak of £23.0m,
primarily as a result of £7.2m net proceeds raised in January’s 
successful Open Offer to shareholders.  F urther debt reduction 
anticipated in 2008/09 following provisional agreement for disposal 
of surplus property in China.
● Continued focus on costs and debt reduction in the year ahead, 
as well as product and sales development.
Group Financial Statements
19 Auditor’s Report
20 Group Income Statement
21 Group Statement of Recognised
Income and Expense
22 Group Balance Sheet
23 Group Cash Flow Statement
24 Notes to the Consolidated
Financial Statements
Company Financial Statements
52 Statement of Directors’ 
Responsibilities
53 Auditor’s Report
54 Company Balance Sheet
55 Notes to the Company 
Financial Statements
59 Five Year Record
60 Financial Calendar Chairman’s Statement
The significant changes at API over the last 18 months
have led to a much leaner and more competitive business.
API Group plc  
Annual Report & Accounts 2008
2
This Annual Report covers the 18 months to 31 March 2008, reflecting
the change in the year end from the previous date of 30 September.  The
period under review was a difficult and challenging one for API although
the Board is pleased with the progress that the Group has made since the
interim results at the end of September 2007.  Specifically, during the
last six months we have strengthened the management team, improved
our financial position and reduced the cost base which the Group is
carrying into the new financial year. 
As previously announced, our shareholders overwhelmingly supported
the Open Offer which raised net proceeds of £7.2m in January 2008 in
order to strengthen the Company’s balance sheet.  The raising of new
equity occurred simultaneously with the renegotiation of the Group’s
main lending facility and the combined re-financing package provides
adequate working capital for the Group’s foreseeable requirements and
sufficient flexibility to support a turnaround in financial performance.
Also in January 2008, the admission of the Company’s shares to AIM will
enable the Group to maintain a cost of compliance which is more
appropriate to its current size and resources.  
Results summary
Sales from continuing operations for the 18 months ended 31 March 2008
were £143.8m.  Sales for the 12 months to 31 March 2008 were £93.4m,
down 7.8% on the prior year, reflecting contract losses in Laminates, weak
demand in the US and operational difficulties in China, partially offset by
steady growth in our European Foils and Holographics businesses.    
Operating profit before exceptional items was £0.4m for both the 18
months and 12 months ended 31 March 2008 compared with £1.0m for
the 12 months to 31 March 2007.  On year-to-year comparatives, the
improvement in trading in Europe and reduced central costs were offset by
declines in the US and Asia Pacific and especially disruption in China
associated with the relocation to the new factory. 
After two loss-making six month periods at the operating level, the last
half year has seen a return to overall profitability due to a much improved
financial performance in Europe, reduced overhead costs and improved
productivity partly countered by lower sales in the US and stock write-
downs, costs and disruption caused by the factory relocation in China.    
After charging exceptional items of £3.4m and net finance costs of £4.1m,
the loss before tax for continuing operations for the 18 months to 31
March 2008 was £7.1m (loss of £1.8m in year to 30 September 2006).
Exceptional items for the period included restructuring expenses of £2.0m
and a non-cash asset impairment charge of £1.9m relating to a suspended
IT project.  The basic loss per share from continuing operations for the 18
month period was 16.7p per share.
Net borrowings at 31 March 2008 were £17.1m representing gearing of
62%.  Compared to the position at the last interim results in September
2007, net borrowings were down £5.9m from a peak of £23.0m and
gearing of 116%.  The improvement in net borrowings primarily reflects
the net receipt of £7.2m from the Open Offer. 
Following the relocation of the Group’ s operations in Shanghai to their new
site on the outskirts of the city, provisional agreement has been reached
with a branch of the local government to sell the vacated property.  Net
proceeds will initially be used to repay loans raised to finance the new factory
investment project and return the Chinese business to a debt-free position.
Dividend
In view of the continuing need to reduce debt and reinvest in the
business, the Board is not recommending the payment of a dividend.   
Board
The Board was strengthened by the appointment of Andrew T urner as Group
Chief Executive with effect from 15 October 2007.  After leading the Group’ s API Group plc  
Annual Report & Accounts 2008
3
re-financing, Andrew has already made significant progress in reducing
corporate and operating costs and driving performance improvement.  
Andrew Robertson resigned as Group Finance Director on 20 March 2008
and recruitment of a replacement is underway.  In the interim period, the
Group is benefitting from the services of a well-qualified acting Chief
Financial Officer, Richard Scully.  
On 30 April 2008, Brian Birkenhead and Martin O’Connell stepped down
as Non-Executive Directors in line with a decision to reduce the size of the
Board.  Brian and Martin have served the Board with distinction since
their appointments and the Board would like to express its thanks for the
significant contributions which they have made and to wish them well for
the future.
Going forward, the composition of the Board will be more appropriate
for a company of API’s size and resources, whilst allowing us to maintain
our commitment to high standards of corporate governance.
Employees, customers and suppliers
After the challenges of the past 18 months, API’s employees have
renewed their focus on performance and results.  Their hard work and
commitment is evident in the recent progress we have made in our
businesses.  On behalf of the Board and shareholders, I would like to
thank them for their continuing contribution.  
The Board would also like to convey its appreciation to API’s customers
and suppliers, who have remained loyal trading partners through recent
difficult times. 
Outlook
The successful Open Offer and renegotiated banking facilities have restored
the Group’ s liquidity and strengthened the balance sheet.  We expect to make
further progress in improving gearing in the coming 12 months through
strong cash generation from the businesses and disposal of surplus assets.  
General demand for the Group’ s products remains good and, outside of the
US, there are no signs yet of an adverse impact from macro economic factors.
Whilst there is much work to be done in re-stabilising our operation in China
after the relocation to its new facility, the majority of our businesses are
carrying positive momentum into the new financial year .  The recent overhead
reduction programme has lowered the cost base by £2.4m on an annualised
basis and ongoing performance improvement initiatives are expected to
deliver further benefits. 
Overall, the significant changes to the Group over the last 18 months, and
especially in the last half year, have led to a much leaner and more
competitive business.  The Board believes the Group will continue to make
progress and is well placed to deliver improved returns to shareholders. 
Richard Wright
Non-Executive Chairman Group Overview
API is a producer and distributor of speciality foils and laminated materials used
primarily in the graphics and packaging industries. The main end use markets
are in premium, fast moving consumer goods such as alcoholic drinks,
perfumery, cosmetics, healthcare, speciality food and tobacco. These sectors use
high impact graphics and finishes on labelling and packaging to reinforce 
and authenticate brand identity. 
API Group plc  
Annual Report & Accounts 2008
4
The Group is also a major supplier to the greeting card sector and also
produces a range of holographic anti-counterfeit solutions for vouchers,
tickets, official documents and currency.
Foils is the Group’s main business area, where API has a global network
of manufacturing and distribution operations serving customers
worldwide.
Success factors include selection of API metallic, holographic and
pigmented foil finishes by brand owners, stock availability and service
for packaging and graphics material manufacturers and performance
reliability on a range of manufacturing machinery used for foil
application.
Competitiveness in the bespoke security holograms sector depends on
technical innovation, manufacturing to the highest tolerances and quality
levels, complete integrity and effective partnership with a range of security
solutions providers. 
As the European market leader in film-to-board lamination, API has the
reputation and scale to handle packaging requirements for some of the
world’s leading brands.
Key success factors in this market are technical know-how, low conversion
costs and effective supply chain solutions for large volumes of materials.
In response to increasing concern about the environmental impact of
packaging, API has acquired the worldwide licence for a fully bio-
degradable and compostable laminate called Portabio. 
Poynton
LAMINATES
● European scale
● Lamination of foil/ 
metalised film to board
● 35% of Group sales
● Global scale ●  Metallic, holographic & pigmented foils
● Bespoke holograms & security devices ●  65% of Group sales
FOILS
California
Kansas
New Jersey
Livingston 
Salford
France
Germany
Italy
Hong Kong
Shanghai
New
Zealand
Australia
Manufacturing and distribution
Distribution
Plus agents and 3rd party
distributors serving more
than 60 countries Chief Executive’s Review
API Group plc  
Annual Report & Accounts 2008
5
Financing 
The re-financing which was completed in January 2008 has re-
established the cash and covenant headroom which management
needs to operate the business, as well as significantly reducing the
overall level of Group debt.   Debt will reduce further in 2008/09 when
consideration is received from the sale of the Group’s surplus land asset
in Shanghai, China. 
Cost reduction
In November 2007, the management team launched an overhead cost
reduction programme with an initial savings target of £1m per annum.
The programme has now been concluded with the achievement of
annualised savings of approximately £2.4m.
A review of centrally-controlled costs, including Group functions, shared
service costs and central initiatives billed to operating units, yielded savings
of approximately £1.5m per annum, the majority effective from January
2008 with the balance completing progressively during the remainder of
the first quarter of 2008.  In addition, streamlining of our UK operations
has yielded a reduction of 24 people from our indirect labour headcount and
a further 9 staff have been transferred from indirect to direct labour to
provide additional production capacity.  The saving in overhead costs
associated with these changes is approximately £0.9m per annum, effective
April 2008.  Total restructuring costs in relation to the November 2007
programme amounted to £1.2m out of total restructuring costs of £2.0m
for the 18 month period. 
Group results
Group sales for the 18 months to 31 March 2008 were £143.8m and
operating profit before exceptional items was £0.4m.  On a 12 month
comparative basis to 31 March, Group sales reduced by 7.8% to £93.4m
(6.8% reduction at constant exchange rates). This decline was due
primarily to contract losses in the European Laminates business at the
end of the prior year and lower sales from operations in the US and
China.  Operating profit for the 12 months was down £0.6m to £0.4m
after a doubling of profits in Europe to £2.0m and a £0.6m reduction in
central costs were offset by declines in Asia Pacific and the US.  The last
six months were particularly strong in Europe although the gains were
partly offset by lower profitability in China and a particularly weak period
of trading in the US.  The last six month’s operating profit before
exceptionals was £0.6m compared to a loss of £0.2m in the previous
half year.
Good progress has been made in the last six months in
addressing the Group’s financial problems, streamlining the
business and starting to turn around the performance of our
operations in Europe.  
Europe
External sales from our European operations were £95.8m for the 18
month period with an operating profit before exceptional items of
£2.5m.  In the year to 31 March 2008, European operating profits
increased by £1.0m compared to the prior year to £2.0m on sales down
4.3% to £62.6m.  On 12 month comparatives, Foils and Holographics
grew by a combined 11% and operating profit advanced 13% despite
significant operational problems in Holographics in the first half of the
year.  Volume growth was driven by advances in security holographics
and by sales from our Continental distribution units, including the
newly-established operation in Italy.  Laminates returned to profit
despite a 15% fall in sales, responding to contract losses at the
beginning of 2007 with a deep restructuring programme and
significant cost and efficiency gains.  The major part of the
improvement in performance in Europe occurred in the last three
months aided by a strong recovery in Holographics, a significant new
product line developed between our Laminates and Holographics
businesses and tighter control of costs.  
North America
US sales for the 18 months were £33.3m with operating profit before
exceptional items of £1.6m.  On a 12 month basis US sales declined by 14%
and operating profit declined by 44% against strong prior year
comparatives.  The impact of exchange rates was more pronounced in the
US than other regions and on a constant currency basis sales and operating
profit declined by 9% and 40% respectively year on year.  The last six
months were particularly difficult as the businesses suffered the effects of
certain customers in the greeting card sector moving manufacturing to the
Far East and a general slow down in market activity.  
Asia Pacific
18 months sales in Asia Pacific were £14.7m with an operating loss
before exceptional items of £0.3m.  Results in Asia Pacific suffered from
general disruption to trading associated with the relocation project in
China.  By the end of April 2008, relocation of the China foils business
to its new 300,000 square foot facility in the Jiading industrial zone of
Shanghai was substantially complete and management was focusing on
re-stabilising production and restoring normal service levels to customers.
Results in the last 6 months in China were disproportionally impacted by
adjustments arising from a thorough balance sheet review. Underlying
profitability also declined due to the impact on export margins of
exchange rates and the new VAT regime, general cost inflation and
competitive conditions in the home market. Financial Review
API Group plc  
Annual Report & Accounts 2008
6
Revenue
Revenue from continuing operations for the 18 months to 31 March 2008
was £143.8m.  For the 12 months to 31 March 2008, revenue from
continuing operations was down 7.8% to £93.4m including 1.0% due to
the effect of exchange rate movements.  Revenue in Europe fell by 4.3%.
On a local currency basis, sales in the US and China reduced by 9% and
14% respectively. 
Operating profit 
Operating profit before exceptional items for the 18 months to 31 March
2008 was £0.4m.  For the 12 months to 31 March 2008, operating profit
before exceptional items was down £0.6m to £0.4m.  Gross profit reduced
by £1.4m, though gross margins were maintained at 20.4% of sales as
the volume reduction was offset by improved sales mix of work and a
proportionate reduction in direct labour costs.  The loss of gross profit was
partly offset by a reduction in other operating costs of £0.8m.
Exceptional items for the 18 months to 31 March 2008 were £3.4m, with
a net cash impact in the period of £1.5m.  Redundancy and restructuring
costs included £0.8m relating to the retrenchment of the Laminates
business implemented during the 6 months to 31 March 2007 and £1.2m
relating to the Group cost reduction programme initiated in the last
calendar quarter of 2007.  
Exceptional items also include an impairment of £1.9m against a previous
investment in a Group-wide IT project.  The system has so far been
implemented in two European locations but the project has been suspended.
The Board has taken the view that there will be no further implementation
in the foreseeable future, requiring a full provision against the value of
‘construction in progress’ relating to business units where implementation
Chief Executive’s Review (continued)
18 months to
31 March 2008
£’000
12 months to
30 September 2006
£’000
12 months to 
31 March 2008
(unaudited)
£’000
12 months to 
31 March 2007
(unaudited)
£’0000
Revenue 143,783 101,979 93,391 101,253
Operating profit before exceptional items 408 994 437 988
Exceptional items (3,417) (863) (2,616) (1,221)
Operating profit / (loss) from continuing
operations
(3,009) 131 (2,179) (233)
Prospects
Looking forward, we are encouraged by demand for the Group’ s products,
the skills, commitment and teamwork of our global workforce and the
loyalty of our customer base.  
Faced with strong inflationary pressure on raw material and utility prices,
we will continue to bear down on costs through improved utilisation of key
manufacturing assets across the Group, efficiency improvement
programmes focused especially on waste, an energetic purchasing function
and an ongoing review of headcount and overhead expenses.  In addition,
further steps are likely to be required to raise selling prices if the current rate
of increase in input costs persists. 
The Group continues to invest in research and development to enhance
the performance of its products and to bring new finishes and effects, as
well as environmentally-friendly packaging options, to brand owners.  A
number of exciting and profit-enhancing innovations are in the pipeline,
some of which leverage technical synergies between the Group’s
businesses in standard foils, holographic foils and laminates. 
Directionally, we remain committed to the strategy of building on API’s
global position in the foils market, whilst concentrating for the
foreseeable future on efficient execution, profit growth and improvement
in the Group’s overall financial condition. 
Andrew Turner
Group Chief Executive
The financial results are presented for the 18 months to 31 March 2008. The
comparatives are for the year ended 30 September 2006.  In order to make a
more meaningful comparison, the Financial Review also includes certain
unaudited pro forma financial information for the 12 months to 31 March 2008
for comparison with the 12 months to 31 March 2007.  API Group plc  
Annual Report & Accounts 2008
7
18 months to 
31 March 2008 
£’000
12 months to 
30 September 2006 
£’000
12 months to
31 March 2008
(unaudited) 
£’000
12 months to
31 March 2007
(unaudited) 
£’000
Net finance costs (4,126) (1,924) (2,873) (2,468)
Loss on continuing activities before taxation (7,135) (1,793) (5,052) (2,701)
Tax credit / (expense) 407 (735) 783 (670)
Loss from continuing operations (6,728) (2,528) (4,269) (3,371)
Loss from discontinued operations (1,130) (230) (1,130) (127)
Loss for the period (7,858) (2,758) (5,399) (3,498)
Basic loss per share (continuing operations) (16.7p) (8.9p) (9.7p) (11.6p)
has been shelved.  These exceptional costs are partly offset by a gain on the
sale of a surplus property asset in Charlotte, US of £0.3m and a net credit of
£0.2m in relation to the relocation of the Shanghai factory.
Finance costs
Net finance costs in the 18 months ended 31 March 2008 were £4.1m,
including £0.1m relating to the pension fund (£0.3m for 12 months to 30
September 2006).  For the 12 months to 31 March 2008, finance costs
increased by £0.4m to £2.9m including £0.3m amortisation of costs
associated with bank refinancing.  In addition, finance costs included realised
and unrealised net exchange losses of £0.4m (2006 nil) arising on forward
foreign currency contracts and an unrealised loss on an interest rate swap of
£0.3m (2006 nil).  These exchange and interest rate losses have been
reported within interest costs since they do not meet the requirements for
hedge accounting under IFRS.  API Group plc  
Annual Report & Accounts 2008
8
Financial Review (continued)
18 months to 
31 March 2008 
£’000
12 months to
30 September 2006
£’000
12 months to
31 March 2008
(unaudited) 
£’000
12 months to
31 March 2007
(unaudited) 
£’000
EBITDA after exceptional items 4,370 3,358 3,497 3,020
Working capital movements (1,528) (2,806) 362 (1,451)
Pension contributions above the amounts
recognised in the income statement
(1,489) (835) (981) (911)
Income taxes paid (359) (656) (93) (628)
Other movements 37 109 (49) 132
Net cash flow from operating activities 1,031 (830) 2,736 162
Other selected cash flow information:
Purchase of property, plant and equipment (8,180) (6,140) (4,533) (7,106)
Interest paid (3,280) (2,047) (2,319) (2,186)
Proceeds from share issues 7,278 53 7,278 –
Net debt 17,149 15,523 17,149 20,824
Taxation
For the 18 months to 31 March 2008, the Group reported a loss before
discontinued operations and taxation of £7.1m and an after tax loss from
continuing operations of £6.7m.  The tax credit £0.4m comprised a tax
charge attributable to overseas operations of £0.5m (year to September
2006 £0.6m) and a deferred tax gain of £0.9m (£0.1m loss).  Deferred tax
in the period includes recognition of a deferred tax asset of £0.9m relating
to carried forward tax losses in the US.  In addition, further US Federal tax
losses carried forward at 31 March 2008 amount to $12.2m ($11.8m)
which are available for offset against future taxable profits in the US. 
At 31 March 2008 the Group had UK capital allowances of £27.3m
(£26.9m) available to offset against future taxable profits at the rate of
25.0% per annum on a reducing balance basis and tax losses arising in
the UK of £5.7m (£2.0m) available for offset against future taxable
profits.  Deferred tax assets in respect of UK tax losses and deferred
capital allowances have not been recognised.  
Discontinued operations
The Group made a loss from discontinued operations of £1.1m in the
18 months ended 31 March 2008 comprising a £0.75m write-off of
deferred consideration relating to the disposal of the Converted Products
Division in January 2005 and £0.35m in legal and settlement costs
connected with disputes arising from various business disposals. 
Earnings per share 
Basic earnings per share from continuing operations were a loss per share
of 16.7p for the 18 months to 31 March 2008 and a loss per share of
9.7p for the 12 months ended 31 March 2008 (11.6p 12 months ended
31 March 2007).
Cash flow and borrowings
Net cash inflow from operating activities was £1.0m for the 18 month
period.  EBITDA after exceptional items was £4.4m, offset by an increase
in working capital of £1.5m and additional pension contributions of £1.5m.
For the 12 month period to 31 March 2008, net cash inflow from operating
activities increased by £2.5m to £2.7m.  EBITDA after the cash impact of
exceptional items increased from £3.0m to £3.5m.  Working capital
reduced by £0.4m largely due to lower inventory levels. 
Capital expenditure was £8.2m in the 18 months to 31 March 2008,
compared to depreciation of £5.5m, and included £5.3m expenditure
on the new facility in China.  At the year end, outstanding spend on the
China project scheduled for completion in 2008/09 amounted to
£3.5m.  Elsewhere in the Group, capital expenditure in the coming year
is expected to be well below depreciation as management focuses on
efficiency improvements and better utilisation of existing assets.
Cash interest expense was £3.3m for the 18 months and on an annual
basis increased from £2.2m to £2.3m for the 12 months ending 31
March 2008.  Net receipts from the share issue completed in January
2008 amounted to £7.2m.  
Net debt (financial liabilities excluding the fair value of derivatives less
cash) increased by £1.6m to £17.1m at 31 March 2008.  However, good
progress has been made in reducing debt by £5.9m from a peak of
£23.0m at 30 September 2007.  API Group plc  
Annual Report & Accounts 2008
9
Capital management
The primary objective of the Group’s capital management is to ensure that
it maintains healthy capital ratios in order to support its business to achieve 
its strategic objectives. The Group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions and the
financial position of the Group. No changes have been made to the Group’ s
objectives, policies or processes during the periods ending 31 March 2008
and 30 September 2006. The Group monitors capital using normal financial
ratios, primarily gearing, debt to EBITDA and cash cover. 
In January 2008, the Company made an Open Offer of ordinary shares,
raising £7.2m net of costs from equity shareholders.  These proceeds were
used to reduce borrowings and resulted in a reduction in the gearing ratio
from 116% at 30 September 2007 to 62% at 31 March 2008. 
The ratio of net debt to earnings before interest, tax, depreciation and
amortisation was 4.9 times at 31 March 2008, substantially reduced from
10.0 times (based on 12 month trailing EBITDA after exceptional items) at
the last interim accounts on 30 September 2007.  The Group was within
banking covenants and the Directors have agreed a plan for improving
debt cover in the next 12 months based on improved operational
performance and disposal of surplus assets.
Financial risk management
The Group continually reviews its approach to the management of financial
risk.  Control over treasury and risk management is exercised by the Board
through the setting of policy and the regular review of forecasts and financial
exposures.  Financial instruments, in particular forward contracts and currency
swaps, are used to manage the financial risks associated with the Group’s
underlying business activities and the financing of those activities.  The Group
does not undertake any trading activity in financial instruments. 
Liquidity
The Group’s policy is to ensure that bank and other funding facilities are
sufficient to meet foreseeable peak borrowing requirements.  Facilities are
in place to finance independently the main geographic regions within the
Group – USA, China and Europe.  In the US the Group’s banking facilities
comprise a term loan of $1.1m repayable over a 5 year period from April
2006 and a working capital facility up to $7.0m capped in accordance with
the level of working capital at any one time.  At 31 March 2008 the amount
available was $3.4m.  Lending is secured over US assets.  In China, the
Group has bank loans of Rmb35m repayable in 2008.  It is anticipated that
repayment will be financed from the sale of land on the old manufacturing
site and the loans are secured against that property.  In the UK, the Group
renegotiated its bank facilities in January 2008 to enable it to continue to
finance its operations.  The Group’ s UK facilities at 31 March 2008 totalled
£21.0m comprising a term loan of £4.5m repayable in quarterly instalments
to 1 October 2009, a term loan of £4.0m repayable on 31 January 2010,
a revolving credit facility of £7.5m to 30 November 2009 and a multi-option
facility up to £5.0m repayable on 18 January 2009.  UK borrowings are
secured against the Group’s UK assets. 
Interest rates
At 31 March 2008, the Group had gross borrowings of £19.8m which
were funded on a floating rate basis.  The Group uses interest rate swaps
to fix a proportion of its interest costs and hedge against future changes
in floating rates.  Taking account of applicable floating-to-fixed interest
rate swaps, a one percentage point change in market rates would have
an impact of approximately £0.1m on the Group’s annual interest bill.   
Foreign currency exchange rates
The Group’s activities are global in nature, with a significant proportion
of the Group’s revenues and purchases arising in countries other than
the UK or denominated in currencies other than Sterling.  Whenever
possible, receipts and payments in foreign currencies are matched to
create natural hedges.  Forward contracts are used to hedge foreign
exchange exposures arising on the differences between forecast receipts
and payments in foreign currencies. 
The balance sheets of foreign subsidiaries are translated into Sterling at
closing exchange rates.  Any gains and losses on translation are recorded
in reserves.  In order to limit translation exposure and the resulting impact
on shareholders’ funds, the Group aims to use available currency facilities
to borrow in those currencies in which the Group has significant net
assets.  Whilst borrowings in the period were predominantly held in
sterling, the Group expects to increase the amount of foreign currency
borrowings in the next financial year.  The Group does not hedge the
translation effect of exchange rate movements on the income statement. 
The exchange rates used for the translation of the results and assets of
the US, Chinese and Euro based operations are shown below.  The impact
on shareholders’ equity during the 18 months to 31 March 2008 of
changes to rates used for the translation was a gain of £0.2m compared
to a loss of £0.8m for the year to 30 September 2006. Principal exchange
rates used in the financial statements were:
Average Closing
Rate to
£1
18 months
to 31 March
2008
12 months    
to 30 September
2006
As at 31
March
2008
As at 30
September
2006
US $ 1.98 1.80 1.99 1.87
Euro 1.44 1.46 1.25 1.47
RMB 15.02 14.46 13.94 14.76
Pensions
The Group operates a number of pension schemes for its employees.  At 31
March 2008 the Group’s IAS19 gross pension liability was £3.5m (2006
£10.9m) with a net liability of £2.5m (2006 £7.6m) after accounting for a
deferred tax asset of £1.0m (2006 £3.3m).  The main UK defined benefit
scheme is the API Group plc Pension and Life Assurance Fund.  The IAS19
liability has been calculated using a discount rate of 6.5% (2006 5.1%). 
No new members have been admitted to the Fund since October 2006 and
the Trustees are currently reviewing the triennial valuation at 30 September
2007, the results of which are expected later this year.  The previous
valuation at 30 September 2004 calculated a funding deficit of £6.0m on
a continuing basis.  In order to reduce the deficit, the Group makes annual
contributions into the scheme of 4 per cent. of pensionable earnings along
with additional contributions of £0.3m per year.  The Group also makes
regular contributions of 8 per cent of pensionable earnings in respect of
the accrual of future service benefits and also pays all pension related
administration fees on behalf of the Fund. API Group plc  
Annual Report & Accounts 2008
10
Financial Review (continued) 
Sales revenue
Sales revenue has declined over the last two years due to contract losses
in Laminates, weakening demand in the US and recent operational
problems in China connected with the business relocation.  These adverse
trends have been partly offset by growth in European Foils and
Holographics.  Future sales growth depends on restoring output in China,
especially increasing shipments to the Group’s European distribution
units, continued advances in security holographics and new product
developments in Laminates. 
Key performance indicators
Operating cash inflow
Net cash flow from operating activities improved in the last 6 months to
£2.1m as a result of advances in profitability and lower inventory levels.
Future cash flows depend on improving trading results, especially in
Europe and China, and continued progress in reducing working capital.
Net debt
Debt levels have been building over the last two years as a consequence of
the Group’ s £11m investment programme in its new manufacturing facility
in China and disappointing trading performance in Europe.  The reduction
in the last 6 months reflects primarily the receipt of £7.2m net proceeds
from the Open Offer which completed in January 2008.  Debt is expected
to reduce further in the next 6 months as a result of the sale of surplus
property assets in China.  
Operating profit 
Operating profit improvement in the last 6 months is due to reduced costs
and improved productivity in the European businesses combined with lower
central costs offset by lower profitability in the US and a recent sharp fall in
the contribution from China.  The full benefit of the recent cost reduction
programme is expected to show in the new financial year along with the 
re-establishment of profitable trading in China.  
60,000
50,000
40,000
30,000
20,000
10,000
0
£000
30/09/06 31/03/07 30/09/07 31/03/08
6 months to
1,500
1,000
500
0
(500)
£000
30/09/06 31/03/07 30/09/07 31/03/08
6 months to
25,000
20,000
15,000
10,000
5,000
0
£000
30/09/06     31/03/07    30/09/07   31/03/08
As at
3,000
2,000
1,000
0
(1,000)
(2,000)
£000
30/09/06     31/03/07     30/09/07     31/03/08
6 months to
0
(2.0)
(4.0)
(6.0)
(8.0)
Pence per share
30/09/06 31/03/07 30/09/07 31/03/08
6 months to
Earnings per share (continuing operations)
The negative earnings per share over the last two years is due to interest
and exceptional costs in excess of operating income.  The loss per share
in the latest 6 month period is diluted by an increase in the number of
shares in issue from the effective date of the Open Offer.  Future
prospects for earnings per share depend on a combination of improved
trading performance, debt reduction, reduced exceptional costs and
utilisation of unrecognised tax losses.    Principal risks and uncertainties 
This section describes the key risks which could affect the business
operations and the financial results of the Group.  
A significant proportion of the Group’s raw material and conversion costs
are affected by the price of oil and gas.  An increase or volatility in the price
of these commodities could adversely affect the Group’s results.  Whilst
purchasing policies seek to reduce exposure to commodity prices,
significant input cost increases could prove irresistible as well as difficult to
pass through to customers due to competitive pressures in most end
markets.
For a large proportion of Group activity, manufacturing costs are incurred
in a different currency to the currency of sale.  Cost competitiveness is
therefore sensitive to certain exchange rate movements, especially the
strength of Sterling relative to the Euro and the Chinese Remnimbi
relative to the Euro and US Dollar.  
A significant proportion of the Group’s sales are in developed, western
economies, including the UK.  In line with the general move of manufacturing
to lower cost countries, certain of the Group’s immediate and end-use
customers routinely consider relocating facilities to regions where the Group’ s
infrastructure is less well developed, such as Eastern Europe and Asia.  In
addition, the business relies for a proportion of its turnover on a small number
of key customers and supply contracts.  Any accelerated reduction in the
accessible customer base, downturn in the fortunes of major customers or
lack of success in maintaining or replacing existing major contracts could
have a material adverse effect upon the Group’ s operating results.
API Group plc  
Annual Report & Accounts 2008
11
Whilst there is no direct link between Group sales prospects and the
general economic climate, levels of customer activity may be impacted by
changes in consumer confidence and spending patterns.  It is therefore
unlikely that financial results could be insulated from any prolonged
downturn or recession in the Group’s main markets.
The Group operates in an international market and as such is exposed to
risks that are both external and internal to the Group.  These risks include,
but are not limited to, failure to comply with legislative and regulatory
requirements, fire or equipment failure and the actions of customers and
competitors.  The Group is also exposed to political and economic risks
in the regions it operates where changes to Government policy can affect
the Group’s business and results.  The Board has adopted a standard
process for identification, assessment and management of business risks
and this is described in the Directors’ Report.  However, there can be no
absolute assurance that such procedures will be effective in identifying or
controlling each of the operational risks faced by the business. 
Whilst the Directors believe that the terms of the Group’s banking
facilities provide adequate headroom and opportunity for compliance,
failure to meet covenant and other conditions could result in the
Company being forced to accept materially less attractive lending terms
and to implement measures designed to accelerate the repayment of
debt to the detriment of shareholder value.   API Group plc  
Annual Report & Accounts 2008
12
Directors and Advisers
DIRECTORS
RC Wright, Chairman*
A Turner, Group Chief Executive
AJ Walker*
LA Wiseman*
M Batzer*
*Non-executive
SECRETARY
R Hart
REGISTERED OFFICE
Second Avenue, Poynton Industrial Estate,
Poynton, Stockport, Cheshire, SK12 1ND
Telephone: +44 (0) 1625 858700
Registered Number: 169249
BANKERS
Barclays Bank plc, City Office Business Centre,
P .O. Box 228, 51 Mosley Street, Manchester, M60 3DQ
NOMINATED ADVISER AND BROKER
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square, London, EC4M 7LT
AUDITORS
Ernst & Young LLP ,
100 Barbirolli Square, Manchester, M2 3EY
SOLICITORS
Addleshaw Goddard LLP ,
100 Barbirolli Square, Manchester, M2 3AB
REGISTRARS AND TRANSFER AGENTS
Capita IRG Plc, Bourne House,
34 Beckenham Road, Beckenham, Kent, BR3 4TU API Group plc  
Annual Report & Accounts 2008
13
The Directors present their Annual Directors’ Report and the Financial
Statements for the eighteen months ended 31 March 2008.  This follows
a change in the Company’s accounting reference date from 30
September to 31 March.
RESULTS AND DIVIDENDS
The Group’ s results for the eighteen month period are set out in the Group
Income Statement on page 20.  The Group incurred a pre-tax loss on
continuing operations of £7.1m (12 months to 30 September 2006:
£1.8m) after charging net exceptional costs of £3.4m (2006: £0.9m).  The
loss after tax and minority interest attributable to equity shareholders
amounted to £8.0m (2006: £3.5m).  The total loss per ordinary share was
19.5p (2006: 9.5p). In the light of the Group’ s results, the Directors do not
recommend the payment of a dividend.  It is proposed that the loss for the
period be set against reserves.
PRINCIPAL ACTIVITIES, BUSINESS REVIEW 
AND FUTURE DEVELOPMENTS
API Group plc is the holding company of a group of companies which
manufacture and distribute speciality foils and laminated materials used
primarily in the graphics and packaging industries.  The Directors’ Report
should be read in conjunction with the Chief Executive’ s Review on pages
5 to 6 and the Financial Review on pages 6 to 11, which set out an
appraisal of the Group’s activities, performance and development,
including key performance indicators.  The principal operating companies
of the Group during the period are listed on page 56.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group’s principal risks and uncertainties are set out in the Financial
Review on page 11 and the Board’s approach to risk management is set
out in the discussion on Corporate Governance on pages 16 to 18. 
DIRECTORS
The Directors of the Company as at the date of this report are:
Richard Wright, 62, (Non-executive Chairman) joined the Board on 3
September 2001 and was appointed Chairman on 1 February 2006.  He has
previously held senior executive roles with the Ford Motor Company,
including Director, European Operations, at Jaguar Cars Limited, Director of
Sales, Ford Motor Company Limited and President/Managing Director of Ford
Belgium NV.  He is the former Chair of the Board of National Savings and
Investments and is currently Chair, Corporate Relations Board and member
of The Business School Board at Warwick Business School, University of
Warwick.  He is a Non-executive Director of Sonas Investments Limited.  Mr.
Wright is a member of the Company's Nominations Committee.
Andrew Turner, 45, (Group Chief Executive Officer) joined the Board
on 15 October 2007.  Mr. Turner is a graduate mechanical engineer with
an MBA and has over 14 years’ experience in the packaging sector.
Before joining API, he was Global Vice President, Marketing & Sales for
the Tobacco Packaging sector of Alcan, the international packaging
group. Prior to that, he was Divisional Managing Director with Field
Group plc, the printed paperboard packaging company, with
responsibility for operations in the UK, Germany and Spain.
Andrew Walker, 56, (Senior Independent Director) joined the Board on 25
July 2003. He has wide public company experience both in manufacturing
and service companies. He was previously Group Chief Executive of
McKechnie plc.  Prior to joining McKechnie, he was Group Chief Executive
of South Wales Electricity, joining them from TI Group plc. Mr. Walker is
currently non-executive Chairman of Bioganix plc and a non-executive
Director of Ultra Electronic Holdings plc, Plastics Capital plc, Manganese
Bronze Holdings plc, Delta plc, Fountains plc, Porvair plc and Brintons Limited.
He is Chairman of the Company's Remuneration and Audit Committees.
Luke Wiseman, 41, (Non-executive Director) joined the Board on 1
September 2006.  Mr. Wiseman is responsible for European research at
Steel Partners (UK) Limited.  Steel Partners II, LP, a private investment
partnership, and its affiliates have a significant beneficial interest in the
shares in the Company.  He is a non-executive Director of Barbican Group
Holdings and certain of its affiliated companies.  Mr Wiseman is a
member of the Company's Audit Committee.
Max Batzer, 63, (Non-executive Director) joined the Board on 10 October
2007.  Mr Batzer is a Portfolio Manager at Wynnefield Capital, Inc. which
has a significant beneficial interest in the Company’s shares.  He is also a
Director of Cornell Companies, Inc. (a company listed on the New Y ork Stock
Exchange) and Integral Wealth Management and has previously held
positions as Chairman of the Board and CEO of Diagnostic Health Services,
Director and Executive Committee member of Simmons Airlines Inc., a
publicly traded regional airline, and President of General Hide and Skin
Corporation, a worldwide commodity trading organization.  Mr Batzer is
Chairman of the Company's Nominations Committee.
The above persons were all Directors of the Company as at 31 March 2008.
David Walton was an Executive Director of the Company until his resignation
on 17 August 2007.  Andrew Robertson was an Executive Director of the
Company from his appointment on 1 April 2007 until his resignation on 20
March 2008.  Brian Birkenhead and Martin O’Connell were each Non-
executive Directors of the Company for the whole of the period and
resigned from the Board on 30 April 2008.
The Board is also currently served by Richard Scully who, whilst not a Director
of the Company, is fulfilling the role of Chief Financial Officer for the Group
and attends Board meetings at the invitation of the Directors.  The Board has
instigated a process to appoint a permanent Group Finance Director.
Under the Company’ s Articles of Association, all the Directors are subject to
retirement by rotation and to re-election by shareholders at intervals of no
more than three years.  Any Director appointed during the year is required
to retire and seek re-election at the next Annual General Meeting.  Richard
Wright, having been last re-appointed to the Board at the 2005 Annual
General Meeting, is retiring at the 2008 Annual General Meeting and, being
eligible, has indicated that he will offer himself for re-election.  In addition,
Andrew T urner and Max Batzer were each appointed to the Board following
the Annual General Meeting held in 2007 and, accordingly, will retire at the
2008 Annual General Meeting and have also each indicated that they will
offer themselves for re-election at that meeting.  No other person is required
by the Company's Articles of Association to retire by rotation or otherwise at
the 2008 Annual General Meeting.  As part of the annual evaluation of the
Board, as reported at page 16, the Board concluded that each of the Directors
offering themselves for re-election continue to demonstrate commitment to
their particular roles and perform effectively and their re-election is
accordingly recommended by the Board.
Directors’ Report DIRECTORS’ INTERESTS
The interests of the existing Directors and their immediate families in the
shares of the Company (including share options) were as shown below:
During the period, Andrew Turner received an award of options over
800,000 shares under the API Group plc 2006 Performance Share Plan
(“the PSP”).  The award is in the form of “nil cost” options over shares
and no price is payable for the grant of the options.  The right to exercise
options is subject to the achievement of certain targets for financial
performance over a three year period commencing 1 April 2008.
From 1 April 2008 to 22 May 2008 there were no changes in the above
interests.  All the above interests were beneficial at the above dates. Andrew
T urner was, at 15 October 2007, 31 March 2008 and 22 May 2008, deemed
to be interested as a discretionary beneficiary of the Company’s No. 2
Employee Benefit T rust in all the ordinary shares in the Company held by that
trust on those dates.  Save as mentioned above, no Director had any interest
in any share capital of the Company or of any subsidiary. 
During the period, no Director had an interest in any significant contract
relating to the business of the Company or its subsidiaries other than the
service contracts of certain Directors and qualifying third party
indemnities granted by the Company to each of the Directors, as
described in further detail on page 16.
During the period, the Company maintained liability insurance for its
Directors and Officers and also maintained liability insurance for the
benefit of the Trustees of the Group pension scheme.    
SUBSTANTIAL INTERESTS IN SHARES
The Company has been notified of the following substantial interests in
the issued ordinary shares of the Company as at the date of this report:
API Group plc  
Annual Report & Accounts 2008
14
Except as disclosed above, as at the date of this report, the Directors were
not aware of any interests amounting to 3% or more of the issued share
capital of the Company. 
SAFETY, HEALTH AND THE ENVIRONMENT (“SHE”)  
The Group operates its businesses in a manner which aims to eliminate
the possibility of its activities causing harm to people and the
environment.  The Group has established management systems and is
advised by qualified personnel to ensure that each of its businesses meets
or exceeds all local legal and regulatory requirements in the country or
countries in which it operates.  Audits by external experts are undertaken
periodically to verify whether SHE compliance obligations are met and
to identify opportunities for continuous improvement.  Progress towards
completion of any recommendations arising from such audits is
monitored by the Audit Committee.
The Group Chief Executive is accountable to the Board for the overall
supervision of the Group’s SHE management programme.
The environment
The preservation and protection of the environment is an issue of
fundamental importance for the Company and each of the operating
businesses in the Group.  The Group’s environmental responsibilities are
managed through detailed internal systems, with a number of the
Group’s operating units maintaining certification to the international
environmental management standard ISO 14001.  During 2007, the
Laminates business achieved certification to the Forestry Stewardship
Council ‘Chain of Custody’ standard.
API Group complies with all applicable environmental legislation and the
Group continues to invest in systems and equipment to ensure that
environmental performance is measured and improved in the key areas
of eliminating solvent emissions, energy efficiency, noise, waste and
packaging management and soil/groundwater protection.  In excess of
50% of manufacturing waste is recycled.  
Health and safety
The Board regards the provision by the Group of safe workplaces as a
fundamental business responsibility and one which it takes very seriously.
With the assistance of qualified personnel and input from Safety
Committees, all employees of the Group are involved in implementing
the Company’s Health and Safety Management system.
Skill development is a key element of the Group’s approach and it
encourages this through the organisation and funding of both internal
and external health and safety training.  During 2007, this included
nationally accredited health and safety training for managers and
employees, as well as hazard-specific training for environmental
protection, fire safety, workplace transport, control of hazardous
substances and personal protective equipment.
A key performance indicator monitored by the Board is the incidence of
accidents at work causing an employee to be absent for one day or more
(lost time accidents).  The number of lost time accidents recorded for the
12 months to 31 March 2008 was thirteen compared to nineteen for the
prior 12 month period.
Directors’ Report (continued)
Shares
31/03/08  30/09/06 
Options over shares
31/03/08  30/09/06
A Turner
(appointed 15
October 2007)
26,741 N/A 800,000
(see below)
N/A
RC Wright
373,591 60,000 – –
A J Walker
165,986 41,666 – –
L A Wiseman
– – – –
M Bazter
(appointed 10
October 2007)
– N/A – N/A
% of issued
share capital
Steel Partners II, LP 35.7
Wynnefield Capital, Inc. 31.5
Berggruen Holdings Limited 9.1
Credit Agricole Cheuvreux International Limited 4.5 API Group plc  
Annual Report & Accounts 2008
15
EMPLOYEES
The Board is aware of the importance of good relationships and
communication with employees.  The Group continues to inform
employees of the progress of the businesses, recognising the value
which can be created where there is a common awareness of the
financial and economic factors affecting performance.  The Company
encourages continuing consultation and communication at site level so
that it may take the views of its employees into account when making
decisions which are likely to affect their interests. Training and
development of employees remains a priority and the Group also
operates a number of incentive schemes which encourage employees to
contribute directly to the achievement of the Group’s goals and reward
individual and collective success. 
Both employment policy and practice in the Group are based on non-
discrimination and equal opportunity irrespective of age, race, religion,
sex, colour, sexual orientation and marital status.  The Group endeavors
to employ and train disabled people and their aptitudes and abilities are
realistically assessed and taken fully into account when suitable vacancies
occur.  Disabled employees have the same opportunities as other
employees so far as training, career development and promotion are
concerned. 
The Board has implemented a “Disclosure Policy” to ensure that staff of
the Group may, in confidence, raise any allegations of harassment or
bullying or any other breach of the Company’s policies or values.
Arrangements are in place for the proportionate and independent
investigation of any such allegations and for appropriate follow-up action
where required.
The Company’s pension arrangements for the UK-based employees of
the Group are summarised in note 18 to the Consolidated Financial
Statements.
PAYMENTS TO SUPPLIERS
The Group’s policy is normally to pay suppliers according to agreed terms
of business.  T erms are agreed with suppliers upon entering into contracts
and the Group’s policy is to adhere to the payment terms, providing the
supplier meets its obligations.  The Company is a holding company and
had no trade creditors at the end of the financial period.
CHARITABLE AND POLITICAL DONATIONS
Charitable donations made by the Group during the period amounted to
£1,244 (2006: £650).   There were no political donations.
GOING CONCERN
The Directors consider that, after making appropriate enquiries and at
the time of approving the financial statements, there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future.  The Directors therefore
continue to adopt the going concern basis in preparing the financial
statements.
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 period.  The Directors have elected to prepare the financial
statements for the Group in accordance with International Financial
Reporting Standards, as adopted by the European Union and
implemented in the UK.  The financial statements are required by law to
give a true and fair view of the state of affairs of the Company and of the
Group as at the end of the financial period and of the profit or loss of the
Group for that period.  In preparing those financial statements, the
Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgments and estimates which are reasonable and prudent;
● state whether applicable International Financial Reporting Standards
have been followed; and
● prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in
business.
The Directors confirm that the accompanying financial statements 
comply with the above requirements.
The Directors are responsible for keeping proper accounting records
which disclose, with reasonable accuracy at any time, the financial
position of the Group and to enable them to ensure that the financial
statements comply with the Companies Act 1985 and, going forward,
the Companies Act 2006.  They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps to prevent
and detect fraud and other irregularities.
DIRECTORS’ STATEMENT AS TO DISCLOSURE OF
INFORMATION TO THE AUDITOR
The Directors who were members of the Board at the time of approving
the Directors’ Report are listed on page 12. Having made enquiries of
fellow Directors and of the Company’s Auditor, each of those Directors
confirms that, as at the date of this report and as far as each Director is
aware, there is no relevant audit information of which the Company’s
Auditor is unaware and each Director has taken such steps as he might
reasonably be expected to take as a Director in order to make himself
aware of any relevant audit information and to establish that the
Company’s Auditor is aware of such information. 
AUDITOR
Ernst & Young LLP has expressed its willingness to continue in office as
Auditor and, in accordance with Section 489(1) of the Companies Act
2006, a resolution proposing its re-appointment will be put to the
members at the 2008 Annual General Meeting.
By order of the Board
Roger Hart
Secretary
Poynton
Cheshire
22 May 2008 API Group plc  
Annual Report & Accounts 2008
16
On 12 February 2008, the listing of the Company’ s shares on the Official List
of the London Stock Exchange was cancelled and they were simultaneously
listed on the Alternative Investment Market (AIM).  AIM rules do not require
the Company to comply with the corporate governance best practice
provisions set out within section 1 of the Combined Code on Corporate
Governance (“the Combined Code”).  Nevertheless, the Directors believe
that good corporate governance remains essential for the Company and
accordingly, they have considered the provisions of the Combined Code, in
the context of the Company’s size and resources.  Set out below are the
principles of the Combined Code which the Board has adopted for the future
and how the Group has applied those principles. 
THE BOARD
The Board currently comprises a Non-executive Chairman, one Executive
Director and three Non-executive Directors. As reflected in the
biographical details of the Directors given in the Directors’ Report on
page 13, the Directors have a wide range of business, financial, general
and international experience which they can contribute to the Group.
Richard Wright and Andrew Walker are considered to be independent
of management and free from any business or other relationships which
could materially interfere with the exercise of their independent
judgment.  Luke Wiseman and Max Batzer have each been designated
by the Board as non-independent by virtue of their associations with Steel
Partners, II L.P. and Wynnefield Capital, Inc. respectively, both major
shareholders.
The Board appoints one of the independent Non-executive Directors to
be the Senior Independent Director.  During the period, Andrew Walker
fulfilled this role. 
The Chairman is primarily responsible for the workings of the Board and
ensuring that its role is achieved and he is not involved in day to day
operational issues.  The division of responsibility between the Chairman
and the Group Chief Executive has been set out in writing and agreed by
the Board.  Save for matters reserved for decision by the Board, the Group
Chief Executive, with the support of the Chief Financial Officer, is
responsible for the running of the Group’s business, carrying out the
agreed strategy adopted by the Board and implementing specific Board
decisions relating to the operation of the Group.
The Board meets on a regular basis and, during the period ended 31
March 2008 and in addition to other ad hoc meetings as required, met
formally 17 times.  Appropriate documentation and financial information
is provided on a monthly basis and also in advance of each Board
meeting.  This normally includes monthly management accounts, reports
on current trading and papers on matters in respect of which the Board
makes decisions or is invited to give its approval.  Regular reports are
given to the Board on such matters as insurance and treasury issues, legal
matters, pensions and safety, health and environmental issues.  Specific
presentations are also made on business or strategic issues when
appropriate. Regular presentations are received from the General
Manager of each of the Group’s principal operating businesses in respect
of its market position, current trading and prospects and from other
senior managers responsible for key functions or projects.
The Board has a formal schedule of reserved powers, which it retains for
Board decision-making on a range of key issues, including the
formulation of strategy, financial reporting and controls, corporate
governance matters, treasury and risk management and the
remuneration policy for Executive Directors and other senior executives
of the Group.  A procedure has been adopted for Directors to obtain
independent professional advice, where appropriate, at the cost of the
Company and all Directors have unrestricted access to the Company
Secretary.  In relation to non-reserved matters, the Board is assisted by a
number of committees with delegated authority.  Further details in
respect of each of the Audit Committee and the Remuneration
Committee are set out on pages 17 and 18 respectively.  The other
principal standing committee is the Nominations Committee which is
responsible for nominating candidates (both Executive and Non-
executive) for the approval of the Board to fill vacancies or appoint
additional persons to the Board.  It is also responsible for making
recommendations regarding the composition and balance of the Board
and succession planning for other senior executives. 
During the period the Nominations Committee comprised Richard
Wright, Andrew Walker and Brian Birkenhead and the Group Chief
Executive - previously David Walton and since his appointment, Andrew
Turner. On 15 May 2008, the Board reviewed the membership of the
Committee in the light of the changes to the Board and the Committee
now comprises Richard Wright, Andrew Turner and Max Batzer who now
chairs the Committee.
The Board has formally adopted an induction programme for new
Directors which is tailored to each new Director who joins the Board and
includes briefings regarding the activities of the Group and visits to the
operating units.  The Board has also established a formal process, led by
the Chairman, for the annual evaluation of the performance of the Board,
its principal Committees and individual Directors, following which the
Board takes any appropriate action to ensure that the performance of
the Board as a whole, of its principal Committees and of each individual
Director is such that each can perform at the optimum level for the
benefit of the Company.  
Throughout the period and as at the date of this report, the Articles of
Association of the Company contained provisions for the benefit of
Directors, officers and employees of the Company and its subsidiary and
associated companies to indemnify them out of the assets of the
Company to the full extent allowed by the law against liabilities incurred
by them in the course of carrying out their duties.  In addition, and in
accordance with the Company’s Memorandum and Articles of
Association, the Company has granted qualifying third party indemnities
to each of its current Directors in respect of any liability which attaches
to them in defending proceedings brought against them, to the extent
permitted by the Companies Acts. Copies of such indemnities are
available for inspection upon application to the Company Secretary.
ACCOUNTABILITY AND AUDIT
All the Directors are equally accountable under law for the proper
stewardship of the Group’s affairs.  The Board acts in a way which allows
all Directors to bring their independent judgment to bear on issues of
strategy, performance and resources, including key appointments and
standards of conduct.
Corporate Governance API Group plc  
Annual Report & Accounts 2008
17
AUDIT COMMITTEE
During the period, the Audit Committee comprised Brian Birkenhead,
Andrew Walker and Richard Wright.  It was chaired by Mr. Birkenhead
until his resignation from the Board with effect from 30 April 2008 and,
with effect from 1 May 2008, Andrew Walker became its chairman on
and from 15 May 2008, Luke Wiseman replaced Richard Wright as a
member of the Committee.  The Committee meets at least three times
per year and the Company’s Auditor is normally in attendance. Andrew
Walker is experienced in chairing audit committees.
The Audit Committee reviews a wide range of accounting and financial
reporting matters on behalf of the Board.  It reviews the internal and
external audit activities, monitors compliance with statutory requirements
for financial reporting and reviews the half year and annual financial
statements before they are presented to the Board for approval.  The
terms of reference of the Audit Committee also include keeping under
review the scope and results of the audit and its cost effectiveness and
the independence and objectivity of the Auditor.  The Committee is also
required to review the nature and extent of non-audit services provided
by the Auditor (in order to seek to balance the maintenance of objectivity
and value for money), the effectiveness of the Group’s internal control
systems and the scope and remit of the Company’s Internal Auditor.  At
least once each year, the Audit Committee meets with the Auditor
without the Executive Directors present. The Audit Committee also
monitors progress towards implementation of any recommendations
arising from audits by external experts of the Group's compliance with its
SHE obligations.
During the period, the Committee conducted a review of various matters,
including the following:
● the Company's interim and annual financial statements and formal
announcements on financial performance before submission to the
Board for approval;
● the Group's risk profile and the effectiveness of the Group's
accounting systems and internal controls;
● the Group's internal audit process, the effectiveness of the Internal
Auditor and the 2007/08 internal audit plan;
● the provision of audit and non-audit services provided by the external
Auditor, their audit fees and their independence and objectivity; and
● the Group's treasury operations, including net debt levels, facility
headroom, compliance with banking covenants and level and
appropriateness of hedging arrangements.
INTERNAL CONTROL AND RISK MANAGEMENT 
The Board has overall responsibility for ensuring that the Group maintains
a system of internal controls and the Audit Committee, on behalf of the
Board, has formally reviewed the effectiveness of the internal control
system of the Group for the period ended 31 March 2008.
The key processes used in doing so included the following:
● review of Group risk assessment reports;
● production and regular updating of summaries of key controls;
● review of reports prepared throughout the period by the Internal
Auditor;
● biannual confirmations from local management that the procedures
set out in the Group’s financial policy manual have been followed;
● reporting of the outcome of the Audit Committee meetings by the
Chairman of the Audit Committee to the Board and the Board
receiving minutes of those meetings; and
● review of the role of insurance in transferring risk from the Group.
There is an ongoing process for identifying, evaluating and managing
the business risks faced by the Group and this process was in place for
the period under review and up to the date of this Directors’ Report.
Business risks are identified and evaluated through senior management’s
ongoing review of progress against strategic objectives agreed with the
management team of each business in the Group and a system of formal
risk assessments within each part of the Group. 
The Group has also established and operates a number of key internal
financial control procedures, including the promulgation and policing of
a written framework of financial reporting and operating procedures in
accordance with generally accepted accounting practice; appropriate
central review and approval procedures in respect of major areas of risk
(such as acquisitions and disposals, major contracts, capital expenditure,
litigation, treasury management, taxation and environmental issues);
detailed budgeting procedures with an annual budget approval; monthly
consideration of actual results compared with budgets and forecasts;
regular reviews of rolling profit and cash flow forecasts; regular reviews
of the Group capital expenditure plan; and reporting of legal and
accounting developments.
The internal audit function is contracted out to an external supplier to
ensure a robust and effective service.  The Internal Auditor is tasked to
focus on areas of greatest risk as identified and approved from time to
time by the Audit Committee.
Reviews of the control checklists and comprehensive management
information are performed on a timely basis.  Any significant weaknesses
are brought to the attention of the Audit Committee and the Board and
corrective action agreed and implemented. The control checklists are
reviewed and substantially verified by the Internal Auditor. API Group plc  
Annual Report & Accounts 2008
18
REMUNERATION COMMITTEE 
During the period, the Committee comprised Andrew Walker and Brian
Birkenhead and was chaired by Andrew Walker.  Brian Birkenhead
resigned from the Board with effect from 30 April 2008 and Richard
Wright was appointed to the Committee in his place.  Richard Wright
was replaced by Max Batzer on 15 May 2008.  The Committee therefore
comprises with effect from 15 May 2008, Andrew Walker and Max
Batzer and is chaired by Andrew Walker.  On occasions and for matters
not related to him, the Group Chief Executive is consulted on proposals
relating to the remuneration of members of the Group’s senior
management team and he also attends meetings of the Committee 
by invitation. 
The Committee, on behalf of the Board and with input from external
advisers as appropriate, determines all elements of the remuneration
packages of the Executive Directors and the framework and broad policy
for the remuneration of other members of the senior executive
management of the Group to ensure that they are fairly rewarded for
their individual contribution to the Company’s overall performance,
approves the terms of service contracts with Executive Directors, approves
any compensation arrangements resulting from the termination by the
Company of a Director’s service contract and approves the grant of long
term incentives.  
No Director was involved in deciding the level and composition of his
own remuneration.  The remuneration of Non-executive Directors, other
than the Chairman, is reviewed and determined by the other members
of the Board.  The remuneration of the Chairman is reviewed and
determined on behalf of the Board by the Committee (with the Chairman
playing no part in the related decisions).
Following the listing of the Company’s shares on AIM, the Board has
resolved that the annual fees payable to Richard Wright, as Non-executive
Chairman, should be reduced from £70,000 to £50,000 and that the
annual fees payable to Andrew Walker, as Senior Independent Director,
should be reduced from £32,500 to £30,000, each change to take effect
from 1 May 2008.
RELATIONS WITH SHAREHOLDERS
The Company is committed to maintaining open, effective and ongoing
communications with shareholders. Presentations are made to
institutional shareholders covering the interim and preliminary results
and the Company seeks regular contact with its major shareholders.
Any significant events affecting the Group and any appropriate updates
on current trading are published, as appropriate.  All shareholders have
the opportunity formally and informally to put questions at the
Company’s Annual General Meeting and the Chairman usually makes
a statement on current trading conditions at that meeting.  It is the
Company’s practice to propose separate resolutions on each
substantially separate issue at the Annual General Meeting. The
Chairmen of the Remuneration, Nominations and Audit Committees
normally attend the Annual General Meeting to answer questions which
may be relevant to the work of those Committees. The Chairman also
advises shareholders on the proxy voting details for each of the
resolutions after the resolution is put to the meeting. 
The Company’s Financial Calendar is set out on page 60.  The
Company’s website provides financial and other business information
about the Group, including an archive of past announcements and
annual reports and share price information.
Corporate Governance (continued) API Group plc  
Annual Report & Accounts 2008
19
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF API GROUP PLC
We have audited the group financial statements (the“financial
statements”) of API Group plc for the period ended 31 March 2008
which comprise the Group Income Statement, the Group Balance Sheet,
the Group Cash Flow Statement, the Group Statement of Recognised
Income and Expense and the related notes 1 to 26.  These financial
statements have been prepared under the accounting policies set out
therein.   
We have reported separately on the parent company financial statements
of API Group plc for the period ended 31 March 2008.
This report is made solely to the company's members, as a body, in
accordance with Section 235 of the Companies Act 1985.  Our audit
work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditors'
report and for no other purpose.  To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company's members as a body, for our audit work, for
this report, or for the opinions we have formed. 
Respective responsibilities of Directors and Auditors
The directors’ responsibilities for preparing the Annual Report and the
group financial statements in accordance with applicable United
Kingdom law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union are set out in the Statement of Directors’
Responsibilities. 
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland). 
We report to you our opinion as to whether the financial statements give
a true and fair view and whether the group financial statements have been
properly prepared in accordance with the Companies Act 1985. We also
report to you whether in our opinion the information given in the Directors'
Report is consistent with the financial statements.  The information given
in the Directors’ Report includes that specific information presented in the
Chief Executive’s and Financial Reviews that is cross referred from the
Results and Dividends section of the Directors’ Report.
In addition we report to you if, in our opinion, we have not received all
the information and explanations we require for our audit, or if
information specified by law regarding directors’ remuneration and other
transactions is not disclosed. 
We read other information contained in the Annual Report and consider
whether it is consistent with the audited group financial statements.  The
other information comprises only the Chairman’s Statement, the Chief
Executive’s Review, the Financial Review and the Directors’ Report.  We
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements.  Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland) issued by the Auditing Practices Board.  An
audit includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements.  It also includes an
assessment of the significant estimates and judgments made by the
directors in the preparation of the group financial statements, and of
whether the accounting policies are appropriate to the group’s and
company’s circumstances, consistently applied and adequately disclosed. 
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the group
financial statements are free from material misstatement, whether caused
by fraud or other irregularity or error.  In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the
group financial statements.
Opinion
In our opinion :
● the group financial statements give a true and fair view, in
accordance with IFRSs as adopted by the European Union, of the
state of the group’s affairs as at 31 March 2008 and of its loss for the
period then ended;  
● the group financial statements have been properly prepared in
accordance with the Companies Act 1985; and 
● the information given in the Directors' Report is consistent with the
financial statements. 
Ernst & Young LLP
Registered auditor
Manchester
22 May 2008
Auditor’s Report API Group plc  
Annual Report & Accounts 2008
20
Eighteen
months ended Year ended
31 March 30 September
2008 2006
Note £’000 £’000
Continuing operations
Revenue 2 143,783 101,979
Cost of sales (115,120) (80,656) 
Gross profit 28,663 21,323
Other operating costs (28,255) (20,329) 
Operating profit before exceptional items 2 408 994
Exceptional items 5 (3,417) (863)
Operating (loss) / profit from continuing operations 2,3 (3,009) 131 
Finance revenue 6 292 85
Finance costs 6 (4,418) (2,009)
(4,126) (1,924)
Loss on continuing activities before taxation (7,135) (1,793) 
Tax credit / (expense) 7 407 (735)
Loss from continuing operations (6,728) (2,528)
Discontinued operations
Loss from discontinued operations 8 (1,130) (230)
Loss for the period (7,858) (2,758)
Attributable to:
Profit attributable to minority equity interest 137 695 
Loss attributable to equity holders of the parent (7,995) (3,453)
Total loss for the period (7,858) (2,758)
Earnings per ordinary share (pence)
Basic loss per share from continuing operations 9 (16.7) (8.9)
Diluted loss per share from continuing operations 9 (16.7) (8.9)
Basic loss per share on loss for the period 9 (19.5) (9.5)
Diluted loss per share on loss for the period 9 (19.5) (9.5)
Group Income Statement
for the eighteen months ended 31 March 2008 API Group plc  
Annual Report & Accounts 2008
21
Group Statement of Recognised Income and Expense
for the eighteen months ended 31 March 2008
Eighteen
months ended Year ended
31 March 30 September
2008 2006
Note £’000 £’000
Exchange differences on retranslation of foreign operations 489 (972)
Actuarial gains / (losses) on defined benefit pension plans 18 5,936 (1,311)
Tax on items taken directly to or transferred from equity 7 (1,852) 393
Net income / (expense) recognised directly in equity 4,573 (1,890)
Loss for the period (7,858) (2,758)
Total recognised income and expense for the year (3,285) (4,648)
Attributable to:
Equity holders of the parent (3,734) (5,176)
Minority equity interests 449 528
(3,285) (4,648) API Group plc  
Annual Report & Accounts 2008
22
31 March 30 September
2008 2006
Note £’000 £’000
Assets
Non-current assets
Property, plant and equipment 10 30,901 30,500
Intangible assets - goodwill 11 6,480 6,480
Deferred tax assets 7 2,062 3,263
39,443 40,243
Current assets
Trade and other receivables 12 17,440 20,112
Inventories 13 11,760 13,195
Other financial assets - forward currency hedging contracts 108 –
Cash and short-term deposits 14 2,131 4,909
31,439 38,216
Total assets 70,882 78,459
Liabilities
Current liabilities
Trade and other payables 15 18,762 22,306
Financial liabilities 16 6,794 1,758
Income tax payable 588 379
Provisions 17 83 306
26,227 24,749
Non-current liabilities
Financial liabilities 16 13,041 18,674
Deferred tax liabilities 7 363 659
Provisions 17 70 93
Defined benefit pension plan deficit 18 3,482 10,879
16,956 30,305
Total liabilities 43,183 55,054
Net assets 27,699 23,405
Equity
Called up share capital 19 8,998 8,612 
Share premium 20 7,136 244 
Other reserves 20 298 298
Foreign exchange reserve 20 (188) (366)
Retained earnings 20 5,568 9,179
API Group shareholders’ equity 21,812 17,967
Minority interest 20 5,887 5,438
Total equity 27,699 23,405
Signed on behalf of the Board
A Turner
22 May 2008
Group Balance Sheet
at 31 March 2008 API Group plc  
Annual Report & Accounts 2008
23
Group Cash Flow Statement
for the eighteen months ended 31 March 2008
Eighteen
months ended Year ended
31 March 30 September
2008 2006
Note £’000 £’000
Operating activities
Group operating (loss) / profit (3,009) 131
Adjustments to reconcile group operating profit to
net cash flows from operating activities:
Operating loss from discontinued operations – (230)
Depreciation of property, plant and equipment 5,498 3,457
Impairment of property, plant and equipment 1,881 –
Profit on disposal of property, plant and equipment (263) (22)
Share-based payments 300 131
Difference between pension contributions paid and amounts 
recognised in the income statement (1,489) (835)
Decrease / (increase) in inventories 1,611 (870)
Decrease / (increase) in trade and other receivables 1,211 (523)
Decrease in trade and other payables (4,118) (1,120)
Movement in provisions (232) (293)
Cash generated from / (used in) operations 1,390 (174)
Income taxes paid (359) (656)
Net cash flow from operating activities 1,031 (830)
Investing activities
Interest received 184 85
Purchase of property, plant and equipment (8,180) (6,140)
Sale of property, plant and equipment 730 244
Sale of subsidiary undertakings 984 –
Net cash flow from investing activities (6,282) (5,811)
Financing activities
Interest paid (3,280) (2,047)
Dividends paid to minority interests – (487)
Proceeds from share issues 7,278 53
New borrowings 2,330 1,956
Repayment of borrowings (3,459) –
Net cash flow from financing activities 2,869 (525)
Decrease in cash and cash equivalents (2,382) (7,166)
Effect of exchange rates on cash and cash equivalents 51 116
Cash and cash equivalents at the beginning of the period 14 3,346 10,396
Cash and cash equivalents at the end of the period 14 1,015 3,346 API Group plc  
Annual Report & Accounts 2008
24
Notes to the Consolidated Financial Statements
1. GROUP ACCOUNTING POLICIES
Authorisation of financial statements and statement 
of compliance with IFRS
The Group’s financial statements for the eighteen months ended 31
March 2008 were authorised for issue by the Board of Directors on 22
May 2008 and the balance sheet was signed on the Board’s behalf 
by A Turner.  
API Group plc is a public company incorporated and domiciled in England
& Wales.  The company’s ordinary shares are traded on the Alternative
Investment Market of the London Stock Exchange.  
Basis of preparation
The Group’s financial statements have been prepared in accordance 
with International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB).  The Group has applied
optional exemptions available to it under IFRS 1.
The principal accounting policies which follow set out those policies
which apply in preparing the financial statements for the eighteen
months ended 31 March 2008.  These policies have been consistently
applied to all periods presented unless otherwise stated.   
Four interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) are effective for the current period.  These
are: IFRIC 7 “Applying the Restatement Approach under IAS 29 “Financial
Reporting in Hyperinflationary Economies”; IFRIC 8 “Scope of IFRS 2”;
IFRIC 9 “Reassessment of Embedded Derivatives” and IFRIC 10 “Interim
Financial Reporting and Impairment”.  The adoption of these Interpretations
has not led to any changes in the Group’s accounting policies. 
During the period, the IASB and IFRIC have issued certain standards and
interpretations which have an effective date after the commencement of
the current financial period (1 October 2006).  These are: Amendment to
IFRS 2 – Vesting Conditions and Cancellations; IFRS 3 Business
Combinations (revised January 2008); IFRS 7 Financial Statements:
Disclosures and the consequential amendments to IAS 1 Presentation of
Financial Statements; IFRS 8 Operating Segments; IAS 1 (Revised)
Presentation of Financial Statements; IAS 23 (Revised) Borrowing Costs;
IAS 27 Consolidated and Separate Financial Statements (revised January
2008); IFRIC 12 Service Concession Arrangements; IFRIC 13 Customer
Loyalty Programmes; IFRIC 14 IAS 19 – the Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their Interaction. 
These standards and interpretations have not been adopted in these
financial statements.  The Directors do not anticipate that the adoption
of these standards and interpretations will have a material impact on the
Group’s financial statements on initial adoption. The impact of IAS1
(revised) will be disclosure only. 
IFRS 7 will be adopted in the financial statements for the year ended 31
March 2009.  All other standards and interpretations listed above will be
adopted in the financial statements for the year ended 31 March 2010.
The consolidated financial statements are presented in sterling and all
values are rounded to the nearest thousand (£’000) except when
otherwise indicated.
Significant judgements and estimates
The preparation of the financial statements requires management to
make judgements, estimates and assumptions that effect the amounts
reported for assets and liabilities as at the balance sheet date and the
amounts reported for revenues and expenses during the period.
However, the nature of estimation means that actual outcomes could
differ from those estimates.  Details regarding judgements which have
the most significant effect on the amounts recognised in the financial
statements are covered in the notes to the accounts.
Basis of consolidation
The consolidated accounts comprise those of the parent company and
its subsidiary undertakings for the eighteen months ended 31 March
2008.  The results for the subsidiary undertakings are included for the
full period except where control is acquired or sold during the period,
when results are included from or to the date of acquisition or sale.
All intercompany balances and transactions, including unrealised profits
arising from intra-group transactions, have been eliminated in full.
Minority interest represents the portion of profit or loss and net assets in
subsidiaries that is not held by the group and is presented separately
within equity in the consolidated balance sheet, separate from parent
shareholders’ equity.
Business combinations and goodwill
On the acquisition of a business, fair values are attributed to the net
assets acquired.  Goodwill arises where the fair value of the consideration
given for a business exceeds the fair value of such net assets. 
Goodwill arising on acquisitions is capitalised and subject to impairment
review, both annually and when there are indications that the carrying
value may not be recoverable.  Between 5 October 1997 and 1 October
2004 goodwill was amortised over its estimated useful life.  Such
amortisation ceased on 30 September 2004.  The Group’s policy before
5 October 1997 was to eliminate goodwill arising upon acquisitions
against reserves.  Under IFRS 1 and IFRS 3, such goodwill will remain
eliminated against reserves.
For the purposes of impairment testing, goodwill is allocated to the
related cash-generating units monitored by management.  Where the
recoverable amount of the cash-generating unit is less than its carrying
amount, including goodwill, an impairment loss is recognised in the
income statement.
Revenue recognition
Revenue represents the value of goods sold to third parties excluding
value added tax, less estimated rebates, returns and settlement discounts.
It is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer and the amount of revenue can be
reliably measured.  This is normally the date of despatch. API Group plc  
Annual Report & Accounts 2008
25
1. GROUP ACCOUNTING POLICIES (CONTINUED)
Exceptional items
Exceptional items are material items which derive from events or
transactions that fall within the ordinary activities of the Group and which
need to be disclosed by virtue of their size or incidence.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses.  The Group’s policy is
to write off the difference between the cost of each item of property,
plant and equipment and its residual value systematically over its
estimated useful life.  Annual reviews are made of the estimated
remaining lives and residual values of individual productive assets, taking
account of commercial and technological obsolescence as well as normal
wear and tear.  Under this policy it is impractical to indicate average asset
lives exactly but the indicative ranges are as follows:
● Freehold buildings and long leasehold property – 14 to 50 years
● Plant and machinery – 5 to 20 years
● Office and IT equipment – 3 to 10 years
Freehold land is not depreciated.  
The carrying values of property, plant and equipment are reviewed for
impairment if events or changes in circumstances indicate the carrying
value may not be recoverable.
An item of property, plant and equipment is derecognised upon disposal
or when no future economic benefits are expected to arise from the
continued use of the asset.  Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the item) is included in the income statement
in the year the item is derecognised. 
As permitted by IFRS 1, property previously revalued before the
transition date of 1 October 2004 has been treated as deemed cost at the
transition date. 
Borrowing costs are not capitalised.
Intangible assets
Intangible assets acquired separately from a business are capitalised at
cost. Intangible assets acquired with a business acquisition are
capitalised at fair value at the date of acquisition if the asset is separable
or arises from contractual or other legal rights and its fair value can be
measured reliably.  The useful lives of intangible assets are assessed as
finite or indefinite. 
The carrying values of intangible assets are reviewed annually for
impairment or if events or changes in circumstances indicate the carrying
value may not be recoverable.  Intangible assets, created within the
business are not capitalised and expenditure is charged against income
as it is incurred.  
Research costs
Research costs are expensed as incurred.  
Leases
Leases where the lessor retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases and rentals
payable are charged in the income statement on a straight line basis over
the lease term.
Inventories
Inventories are stated at the lower of cost and estimated net realisable
value.  Cost is determined on a first in first out basis.  Cost of work in
progress and finished goods comprises the cost of raw materials, direct
labour and overheads attributable to the production of stock.  Net
realisable value comprises the estimated selling value less selling costs.
Trade and other receivables
Trade and other receivables are recognised and carried at original invoice
value less an allowance for any amounts which may not be collectible.
Should an amount become uncollectible, it is written off to the income
statement in the period in which it is identified.
Cash and cash equivalents
Cash and cash equivalents principally comprise funds held with banks
and other financial institutions with an original maturity of three months
or less.  For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Financial liabilities - interest-bearing loans 
and borrowings
All loans and borrowings are initially recognised at fair value of the
consideration received net of issue costs associated with the borrowing.
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost under the effective interest 
rate method.  
Provisions
Provisions are recognised when the Group has a present obligation (legal
or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.  Where the Group expects some or all of a provision to be
reimbursed, for example under an insurance contract, the reimbursement
is recognised as a separate asset but only when the reimbursement is
virtually certain.  The expense relating to any provision is presented in the
income statement net of any reimbursement.  If the effect of the time value
of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks
specific to the liability.  Where discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost. API Group plc  
Annual Report & Accounts 2008
26
Notes to the Consolidated Financial Statements (continued)
1. GROUP ACCOUNTING POLICIES (CONTINUED)
Taxation
Current tax assets and liabilities are measured at the amount expected 
to be recovered from or paid to the taxation authorities, based on tax rates
and laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised on all temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts
in the financial statements, with the following exceptions:
● where the temporary difference arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a
business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss;
● in respect of taxable temporary differences associated with
investments in subsidiaries, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future; and
● deferred income tax assets are recognised only to the extent that it
is probable that taxable profit will be available against which the
deductible temporary differences, carried forward tax credits or tax
losses can be utilised.
Deferred income tax assets and liabilities are measured on an
undiscounted basis at the tax rates that are expected to apply when the
related asset is realised or liability is settled, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.
Income tax is charged or credited directly to equity if it relates to items
that are credited or charged to equity.  Otherwise income tax is
recognised in the income statement.
Pensions and other post-retirement benefits
The cost of providing benefits under the defined benefit pension plans is
determined separately for each plan using the projected unit credit
method, which attributes entitlements to benefits to the current period
(to determine current service cost) and to the current and prior periods
(to determine the present value of defined benefit obligation) and is
based on actuarial advice.  Past service costs are recognised in profit or
loss on a straight line basis over the vesting period or immediately if the
benefits have vested.  When a settlement (eliminating all obligations for
benefits already accrued) or a curtailment (reducing future obligations as
a result of a material reduction in the scheme membership or a reduction
in the future entitlement) occurs the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or
loss recognised in the income statement during the period in which the
settlement or curtailment occurs. 
The interest element of the defined benefit pension cost represents the
change in present value of scheme obligations resulting from the passage of
time, and is determined by applying the discount rate to the opening present
value of the benefit obligation, taking into account material changes in the
obligation during the year.  The expected return on plan assets is based on
an assessment made at the beginning of the year of long term market returns
on scheme assets, adjusted for the effect on the fair value of plan assets of
contributions received and benefits paid during the year.  The difference
between the expected return on plan assets and the interest cost is
recognised in the income statement as other finance income or expense.
Actuarial gains and losses are recognised in full in the statement of
recognised income and expense in the period in which they occur.
The defined benefit pension liability in the balance sheet comprises the
total for each plan of the present value of the defined benefit obligation
(using a discount rate based on high quality corporate bonds), less any
past service cost not yet recognised and less fair value of plan assets out
of which the obligations are to be settled directly.  Fair value is based on
market price information and in the case of quoted securities is the
published bid price.  
Contributions to defined contribution schemes are recognised in the
income statement in the period in which they become payable. 
Share based payments
The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date at which they are granted and is
recognised as an expense over the vesting period, which ends on the
date on which the relevant employees become fully entitled to the award.
Fair value is determined by an external valuer using the Monte-Carlo
pricing model.  In valuing equity-settled transactions, no account is taken
of any vesting conditions, other than conditions linked to the price of
the shares of the company (market conditions).
An expense is recognised in the income statement for all awards
irrespective of whether or not the market condition is satisfied, provided
that all other performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired.  The movement in cumulative expense since the previous balance
sheet date is recognised in the income statement, with a corresponding
entry in equity.   API Group plc  
Annual Report & Accounts 2008
27
1. GROUP ACCOUNTING POLICIES (CONTINUED)
Employee Share Option Trust (“ESOP Trust”)
The Company has a discretionary trust established to facilitate the
operation of the Company’s executive share option schemes.  Shares in
API Group plc held by the ESOP Trust are classified in shareholders’ equity
and are recognised at cost.  Amounts received on exercise of these
options are also recognised in equity, with any difference between
proceeds from the exercise of these options and the original cost being
taken to revenue reserves.  No gain or loss is recognised in the financial
statements on the purchase, sale, issue or cancellation of equity shares.
Foreign currencies 
The assets and liabilities of overseas subsidiary undertakings are
translated into sterling at rates ruling at the balance sheet date.  Income
and expenses are translated at the average rates for the period.  The
exchange differences arising on the translation of the financial statements
of foreign subsidiary undertakings are taken directly to a separate
component of equity.  On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign
operation is recognised in the income statement.  
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction.  Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance
sheet date.  All translation differences are taken to the income statement.
Derivative financial instruments and hedging
The Group uses derivative financial instruments such as forward currency
contracts and interest rate swaps to hedge its risks associated with foreign
currency and interest rate fluctuations.  Such derivative instruments are
measured at fair value on the date which the derivative contract is entered
into and are subsequently remeasured at fair value at the balance sheet
date.  Derivatives are carried as assets if the fair value is positive and liabilities
if the fair value is negative.
The fair value of forward currency contracts is calculated by reference to
current forward exchange rates for contracts with similar maturity profiles.
The fair value of interest rate swaps is determined by reference to market
values for similar instruments.
Hedge accounting is adopted when the hedging relationship is formally
designated and documented on inception.  Such hedges are expected to
be highly effective in offsetting changes in fair value or cash flows and are
assessed on an ongoing basis to determine whether they have been highly
effective during the reporting period for which they were designated.
During the periods to 31 March 2008, hedge accounting has not been
applied. Gains and losses arising from the changes in the fair value of
derivatives that do not qualify for hedge accounting are taken to finance
revenue or finance costs in the income statement.  API Group plc  
Annual Report & Accounts 2008
28
Notes to the Consolidated Financial Statements (continued)
2. SEGMENTAL ANALYSIS
The primary segment reporting format is determined to be geographical.  At 31 March 2008, the Group is organised into three distinct
independently managed geographic segments in accordance with the location of assets, Europe, North America and Asia Pacific.  Secondary segmental
information is reported by business segment. 
Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties.
Primary reporting format
By geographic segment
Eighteen months ended
31 March 2008 Year ended 30 September 2006
Continuing and Total Continuing Discontinued Total
£’000 £’000 £’000 £’000
Total revenue by origin
Europe 100,113 68,367 – 68,367
North America 33,796 25,958 129 26,087
Asia Pacific 15,863 12,775 – 12,775
149,772 107,100 129 107,229
Inter-segmental revenue
Europe 4,353 3,115 – 3,115
North America 513 494 – 494
Asia Pacific 1,123 1,512 – 1,512
5,989 5,121 – 5,121
External revenue by origin
Europe 95,760 65,252 – 65,252
North America 33,283 25,464 129 25,593
Asia Pacific 14,740 11,263 – 11,263
Segment revenue 143,783 101,979 129 102,108
External revenue by destination
UK 50,528 34,398 14 34,412
Continental Europe 42,350 25,467 – 25,467
Americas 30,953 25,769 106 25,875
Asia Pacific 17,002 12,681 9 12,690
Africa 2,950 3,664 – 3,664
143,783 101,979 129 102,108
No revenue arises from discontinued businesses in the eighteen months ended 31 March 2008. 
All revenue is derived from the sale of goods. API Group plc  
Annual Report & Accounts 2008
29
2. SEGMENTAL ANALYSIS (CONTINUED)
Eighteen months ended 31 March 2008 Year ended 30 September 2006
Continuing Discontinued Total Continuing Discontinued Total
£’000 £’000 £’000 £’000 £’000 £’000
Operating profit / (loss) 
Europe
before exceptional items 2,481 – 2,481 205 – 205
exceptional items (790) – (790) (597) – (597)
1,691 – 1,691 (392) – (392)
North America
before exceptional items 1,560 – 1,560 1,521 (53) 1,468
exceptional items 297 – 297 (242) (177) (419)
1,857 – 1,857 1,279 (230) 1,049
Asia Pacific
before exceptional items (289) – (289) 1,276 – 1,276
exceptional items 238 – 238 –––
(51) – (51) 1,276 – 1,276
Central costs
before exceptional items (3,344) – (3,344) (2,008) – (2,008)
exceptional items (3,162) – (3,162) (24) – (24)
(6,506) – (6,506) (2,032) – (2,032)
Total operating profit / (loss) before 
exceptional items 408 – 408 994 (53) 941
Exceptional items (3,417) – (3,417) (863) (177) (1,040)
Segment result
Total operating profit / (loss) (3,009) – (3,009) 131 (230) (99)
Loss on disposal of discontinued operations – (1,130) (1,130) –––
Profit / (loss) before finance costs 
and taxation (3,009) (1,130) (4,139) 131 (230) (99)
Net finance costs (4,126) – (4,126) (1,924) – (1,924)
Loss before taxation (7,135) (1,130) (8,265) (1,793) (230) (2,023)
Tax credit / (expense) 407 – 407 (735) – (735)
Loss for the period (6,728) (1,130) (7,858) (2,528) (230) (2,758) API Group plc  
Annual Report & Accounts 2008
30
Notes to the Consolidated Financial Statements (continued)
2. SEGMENTAL ANALYSIS (CONTINUED)
Eighteen months ended
31 March 2008 Year ended 30 September 2006
Continuing and Total Continuing Discontinued Total
£’000 £’000 £’000 £’000
Assets and liabilities
Assets
Europe 36,322 45,887 – 45,887
North America 13,618 14,726 – 14,726
Asia Pacific 16,641 9,674 – 9,674
Segment assets 66,581 70,287 – 70,287
Unallocated 4,301 8,150 22 8,172
70,882 78,437 22 78,459
Liabilities
Europe 18,781 29,021 – 29,021
North America 2,128 2,978 – 2,978
Asia Pacific 1,488 1,585 – 1,585
Segment liabilities 22,397 33,584 – 33,584
Unallocated 20,786 21,470 – 21,470
43,183 55,054 – 55,054
Other segment information
Capital expenditure
Europe 2,219 2,280 – 2,280
North America 668 1,468 – 1,468
Asia Pacific 5,293 2,392 – 2,392
8,180 6,140 – 6,140
Depreciation
Europe 3,676 2,413 – 2,413
North America 1,022 617 41 658
Asia Pacific 800 386 – 386
5,498 3,416 41 3,457 API Group plc  
Annual Report & Accounts 2008
31
2. SEGMENTAL ANALYSIS (CONTINUED)
Secondary reporting format
By business segment
Eighteen months ended
31 March 2008 Year ended 30 September 2006
Continuing and Total Continuing Discontinued Total
£’000 £’000 £’000 £’000
Total revenue
Foils 94,417 65,075 – 65,075
Laminates 50,891 37,254 – 37,254
Chromagem – – 129 129
145,308 102,329 129 102,458
Inter-segmental revenue
Foils 1,525 350 – 350
Laminates – –––
Chromagem – –––
1,525 350 – 350
External revenue
Foils 92,892 64,725 – 64,725
Laminates 50,891 37,254 – 37,254
Chromagem – – 129 129
Segment revenue 143,783 101,979 129 102,108
Assets
Foils 54,650 54,042 – 54,042
Laminates 11,931 16,245 – 16,245
Chromagem – –––
Segment assets 66,581 70,287 – 70,287
Unallocated 4,301 8,150 22 8,172
70,882 78,437 22 78,459
Capital expenditure
Foils 7,848 4,039 – 4,039
Laminates 332 2,101 – 2,101
Chromagem – –––
Segment capital expenditure 8,180 6,140 – 6,140 API Group plc  
Annual Report & Accounts 2008
32
Notes to the Consolidated Financial Statements (continued)
3. OPERATING (LOSS) / PROFIT
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
This is stated after charging / (crediting):
Research and development expenditure expensed during the period 1,369 980
Depreciation of property, plant and equipment 5,498 3,457
Profit on disposal of property, plant and equipment (263) (22)
Cost of inventories recognised as an expense 78,431 52,316
Including write-down of inventories to net realisable value 2,917 1,613
Net foreign currency differences 162 73
Operating lease payments - minimum lease payments 1,330 548
Audit of the financial statements 128 123
Other fees payable to the Group’s auditors
-audit of the group pension scheme 8 8
-local statutory audits for subsidiaries 76 87
-services relating to corporate finance transactions 230 –
-other services 55 60
4. STAFF COSTS AND DIRECTORS’ EMOLUMENTS
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Wages and salaries 30,502 22,177
Social security costs 2,856 2,391
Pension costs
- defined benefit (note 18) 1,074 767
- defined contribution (note 18) 135 105
- non contributory pension schemes 136 110
34,703 25,550
Included in wages and salaries is a total expense for share-based payments of £301,000 (2006: £131,000).
Details of share-based payments are included in note 21.
The average monthly number of employees during the period was made up as follows:
Eighteen
months ended Year ended
31 March 30 September
2008 2006
No No
Foils 735 744
Laminates 125 155
Head office 39 35
899 934 API Group plc  
Annual Report & Accounts 2008
33
4. STAFF COSTS AND DIRECTORS’ EMOLUMENTS (CONTINUED)
Directors’ emoluments
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Total
Aggregate emoluments 1,074 624
Contributions to defined contribution schemes (2 directors) 22 –
Compensation for loss of office 276 33
1,372 657
Highest paid director
Aggregate emoluments 362 312
Contributions to defined contribution schemes – –
Compensation for loss of office 156 –
518 312
No current director is a member of the defined benefit pension scheme. 
5. EXCEPTIONAL ITEMS
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Exceptional items charged against operating profit comprise:
Restructuring of UK operating businesses (790) (597)
Charlotte facility closure 297 (242)
Rationalisation of Group costs (1,281) (24)
Impairment of fixed assets (1,881) –
Factory relocation - China 238 –
(3,417) (863)
Restructuring of UK operating businesses
These relate to employee redundancy, relocation and other one-off costs.  In the eighteen months to 31 March 2008, this related largely to
redundancy and other costs associated with business improvement measures within the UK businesses.
Charlotte factory closure
In the year ended 30 September 2006, provision was made in respect of the estimated closure costs of the Charlotte factory in the United States.
In the eighteen months to 31 March 2008, these costs were utilised and the factory site was sold, realising a gain on disposal.
Rationalisation of Group costs
These costs relate to the severance and other related costs in respect of a number of senior executives who were made redundant during the
period.  The costs include compensation for loss of office paid to the former Chief Executive and the former Group Finance Director.
Impairment of fixed assets
As part of the review of Group costs, the project to install Oracle IT systems throughout the Group was suspended.  As there will be no further
implementation of the system for the forseeable future, capitalised costs incurred to date relating to businesses where Oracle has not yet been installed
have been fully impaired.
Factory relocation - China 
During the period, the Group’s subsidiary in China, Shanghai Shen Yong received compensation for sale of a parcel of land acquired by the local
authorities as a first stage of a full relocation of the Shanghai factory. The compensation was £541,000, net of costs incurred as a direct result of the
compulsory acquisition.  Offset against this amount is £303,000 in relation to initial relocation costs, including dual running costs, of the new facility. API Group plc  
Annual Report & Accounts 2008
34
Notes to the Consolidated Financial Statements (continued)
6. FINANCE REVENUE AND FINANCE COSTS  
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Finance revenue
Interest receivable on bank and other short term deposits 33 85
Gains arising on forward foreign currency contracts 259 –
292 85
Finance costs
Interest payable on bank loans and overdrafts (3,556) (1,698)
Other interest payable (92) –
Losses arising on forward foreign currency contracts (433) –
Unrealised loss on interest rate swap (260) –
Finance cost in respect of defined benefit pension plans (77) (311)
(4,418) (2,009)
7. TAXATION
(a) Tax on loss on ordinary activities
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Tax credited / (charged) in the income statement
Current income tax
UK Corporation tax – –
Foreign tax (525) (613)
Total current income tax expense (525) (613)
Deferred tax
Origination and reversal of temporary differences
- defined benefit pension plan (407) (281)
- tax losses 915 –
- accelerated capital allowances (7) (121)
- other short term timing differences 437 –
- effect of change in deferred tax rate (6) –
932 (402)
Adjustment to previous year – 280
Total deferred tax credit / (expense) 932 (122)
Tax credit / (expense) in the income statement (continuing operations) 407 (735)
There was no income or deferred tax on discontinued operations.
Tax relating to items credited / (charged) to equity
Deferred tax
Actuarial gains and losses on pension schemes – in respect of the current period (1,662) 393
– effect of change in tax rate (190) –
(1,852) 393 API Group plc  
Annual Report & Accounts 2008
35
7. TAXATION (CONTINUED)
(b) Reconciliation of the total tax charge
The tax expense in the income statement for the period is higher than the standard rate of corporation tax in the UK of 30% (2006: 30%).  The
differences are reconciled below:
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Loss before taxation from continuing operations (7,135) (1,793)
Loss before taxation from discontinued operations (1,130) (230)
Accounting loss before income tax (8,265) (2,023)
Accounting loss multiplied by the UK standard rate of corporation tax of 30% (2006: 30%) (2,480) (607)
Adjustments to tax in respect of prior period - deferred tax – (280)
Adjustments in respect of foreign tax rates 10 (28)
Additional tax on overseas dividends – 18
Losses for which deferred tax is not recognised 1,308 676
Other temporary differences for which deferred tax is not recognised 1,045 869
Initial recognition of US tax losses (915) –
Change in deferred tax rate 129 –
Expenses not deductible for tax purposes 139 87
Disposal of discontinued operations 357 –
Total tax (credit) / expense reported in the income statement (407) 735
(c) Unrecognised tax losses
The Group has tax losses arising in the UK of £5,702,000 (2006: £2,013,000) that are available and may be offset against future taxable profits 
of those businesses in which the losses arose.  The UK tax group also has capital allowances of £27,261,000 (2006: £26,900,000) available to
offset against future taxable profits at the rate of 25% a year on a reducing balance basis.  As the Group continues to face challenging trading
conditions in the UK, deferred tax assets have not been recognised in respect of the UK tax losses and capital allowances on the basis that it is not
probable they will in the short term be used to offset taxable profits. 
The Group also has unrecognised US tax losses carried forward of $12,219,000 (2006: $11,839,000), which are available for offset against future
profits for a period of between 12 and 18 years.  A deferred tax asset of £915,000 has been recognised on the US losses as the US company has now
been trading profitably for a number of years and is expected to continue to do so. The asset represents 3 years’ projected profits before tax at a rate of
37%.  In addition, a deferred tax asset has been recognised in respect of the deficit on the UK and US defined benefit pension funds as the Directors
believe it is appropriate to consider a longer period (see note 18).
(d) Deferred tax
The deferred tax included in the balance sheet is as follows: Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Deferred tax liability
Revaluation of fixed assets (256) (275)
Accelerated capital allowances (107) (106)
Other short term temporary differences – (278)
(363) (659)
Deferred tax asset
Defined benefit pension plan 975 3,263
Tax losses 915 –
Other short term temporary differences 172 –
2,062 3,263 API Group plc  
Annual Report & Accounts 2008
36
Notes to the Consolidated Financial Statements (continued)
8. DISCONTINUED OPERATIONS
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Revenue – 129
Expenses – (359) 
Operating loss and loss after tax for the period for discontinued operations – (230)
Loss on disposal of discontinued operations (1,130) –
Loss for the period from discontinued operations (1,130) (230)
The net cash flows attributable to discontinued operations are as follows: Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Operating cash flows – (105)
Investing cash flow 984 111
Net cash inflow 984 6
Discontinued operations for the prior year represent the results of Chromagem, a subsidiary which ceased trading during March 2006. 
The loss on disposal of discontinued operations relates to the sale of the Converted Products Division in January 2005.  At 30 September 2006,
£2,000,000 was held in other debtors in respect of deferred consideration.  Only £1,250,000 of this deferred consideration was paid on the due
date.  Following settlement of a number of disputes with the purchaser, the remaining amount of £750,000 has been written off, together with
other settlement costs payable to the purchaser and related legal fees.  A claim in respect of alleged breach of warranties from the purchaser is
still outstanding.  Details of this are included in note 25.  API Group plc  
Annual Report & Accounts 2008
37
9. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the period plus the number of ordinary shares at the period end that would be issued on the
conversion of all dilutive potential ordinary shares into ordinary shares.  As any dilation would reduce the loss per share, the diluted weighted
average number of shares is equivalent to the basic weighted average number of shares.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Net loss attributable to equity holders of the parent - continuing operations (6,865) (3,223)
Loss attributable to equity holders of the parent - discontinued operations (1,130) (230)
Net loss attributable to equity holders of the parent (7,995) (3,453)
Eighteen
months ended Year ended
31 March 30 September
2008 2006
No No
Basic and diluted weighted average number of ordinary shares 41,018,077 36,198,528
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of these financial statements.  
The weighted average number of shares excludes the shares owned by the API Group plc No.2 Employee Benefit Trust. 
The weighted average number of shares reflects the bonus element of the shares issued under the open offer implied by the discount on the
market price immediately prior to admission of the new shares. The comparative figures have also been adjusted to reflect this bonus element. 
Earnings / (loss) per ordinary share
Eighteen
months ended Year ended
31 March 30 September
2008 2006
pence pence
Continuing operations
Basic loss per share (16.7) (8.9)
Diluted loss per share (16.7) (8.9)
Discontinued operations
Basic loss per share (2.8) (0.6)
Diluted loss per share (2.8) (0.6)
Total
Basic loss per share (19.5) (9.5)
Diluted loss per share (19.5) (9.5) API Group plc  
Annual Report & Accounts 2008
38
10. PROPERTY, PLANT AND EQUIPMENT
Leasehold
Freehold Freehold Land and Plant and Office and
Land Buildings Buildings machinery IT equipment Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 October 2005 2,316 7,920 2,682 49,503 6,668 69,089
Additions – – – 5,406 734 6,140
Disposals – – (73) (2,801) (93) (2,967)
Foreign currency adjustment (108) (375) (27) (905) (96) (1,511)
At 30 September 2006 2,208 7,545 2,582 51,203 7,213 70,751
Additions – – 2,795 4,354 1,031 8,180
Disposals (182) (403) – (1,478) (452) (2,515)
Foreign currency adjustment (116) (402) 269 (6) (126) (381)
At 31 March 2008 1,910 6,740 5,646 54,073 7,666 76,035
Depreciation
At 1 October 2005 – 2,015 956 34,487 2,939 40,397
Provided during the year – 286 152 2,508 511 3,457
Disposals – – (62) (2,593) (91) (2,746)
Foreign currency adjustment – (194) (14) (567) (82) (857)
At 30 September 2006 – 2,107 1,032 33,835 3,277 40,251
Provided during the period – 327 230 4,193 748 5,498
Impaired during the period –––– 1,881 1,881
Disposals – (157) – (1,444) (449) (2,050)
Foreign currency adjustment – (210) 37 (196) (77) (446)
At 31 March 2008 – 2,067 1,299 36,388 5,380 45,134
Net book value at 31 March 2008 1,910 4,673 4,347 17,685 2,286 30,901
Net book value at 30 September 2006 2,208 5,438 1,550 17,373 3,931 30,500
Net book value at 30 September 2005 2,316 5,905 1,726 15,016 3,729 28,692
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
39
11. INTANGIBLE ASSETS - GOODWILL
£’000
At 1 October 2005, 30 September 2006 and 31 March 2008 6,480
As from 1 October 2004, the date of transition to IFRS, goodwill was no longer amortised (previously amortised over a period up to 20 years) 
but is now subject to annual impairment testing.
Impairment of goodwill
Goodwill acquired through business combinations has been allocated for impairment testing purposes to the following cash-generating units, 
as follows:
● Foils - Europe;
● Foils - Holographics;
● Foils - China; and
● Foils - Germany (formerly MEPA).
These represent the lowest level within the group at which goodwill is monitored for internal management purposes.
Carrying amount of goodwill allocated to cash-generating units:
Foils Foils Foils Foils
Europe Holographics China Germany Total
£’000 £’00 £’000 £’000 £’000
Carrying amount of goodwill 2,538 1,686 1,292 964 6,480
The recoverable amount of each of the cash generating units has been determined on a value in use basis over a five year period.  Value in use 
is calculated as the net present value of post tax cash flows derived from detailed financial plans and is in excess of the book value of goodwill at
the period end.  The most significant assumptions relevant to determination of the recoverable amount are the growth rate and discount factor.  
The cash flows are extrapolated from the budget for the year ending 31 March 2009, which has been approved by the Board and unapproved
financial projections prepared for the following four years.  A discount rate of 11.0% has been used.
The directors believe that no reasonable possible change in any of the above key assumptions would cause the carrying value of the units to
exceed their recoverable amounts. API Group plc  
Annual Report & Accounts 2008
40
12. TRADE AND OTHER RECEIVABLES
31 March 30 September
2008 2006
£’000 £’000
Amounts falling due within one year
Trade receivables 15,610 17,477
Prepayments 1,083 295
Other debtors 747 2,340
17,440 20,112
13. INVENTORIES
31 March 30 September
2008 2006
£’000 £’000
Raw materials 3,239 3,610
Work in progress 2,486 2,273
Finished goods 6,035 7,312
11,760 13,195
14. CASH AND SHORT-TERM DEPOSITS
31 March 30 September
2008 2006
£’000 £’000
Cash at bank and in hand 1,270 4,909
Short term deposits 861 –
2,131 4,909
Short term deposits earn interest at the prevailing floating daily bank deposit rate.  
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following:
31 March 30 September
2008 2006
£’000 £’000
Cash at bank and in hand 1,270 4,909
Short term deposits 861 –
Bank overdrafts (note 16) (1,116) (1,563)
1,015 3,346
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
41
15. TRADE AND OTHER PAYABLES
31 March 30 September
2008 2006
£’000 £’000
Trade payables 11,886 15,425
Other payables 6,876 6,881
18,762 22,306
16. FINANCIAL LIABILITIES
31 March 30 September
2008 2006
£’000 £’000
Current
Bank overdrafts 1,116 1,563
Current instalments due on bank loans 5,267 195
Forward currency hedging contracts 295 –
Interest rate swap 116 –
6,794 1,758
Non-current
Non-current instalments due on bank loans 12,897 18,674
Interest rate swap 144 –
13,041 18,674
Bank loans
Bank loans comprise the following:
31 March 30 September
2008 2006
£’000 £’000
Term loans (£) 7,505 7,831
Revolving credit facility (£) 7,500 10,000
Term loan (US$) 528 936
Term loan (Chinese Remnimbi) 2,511 –
Term loan (Euro) 120 102
18,164 18,869
Less: current instalments due on bank loans (5,267) (195)
12,897 18,674
The Group’s UK facilities comprise term loans of £8.5m falling due for repayment between April 2008 and January 2010, a £7.5m revolving credit
facility due for renewal in January 2010 and a multi-option overdraft facility of £5m.  Unamortised financing costs of £995,000 (2006:£169,000)
are deducted from the term loans.  The average rate of interest payable on all UK borrowings during the period was 2.65% over LIBOR.  In the US
the Group has banking facilities comprising a term loan of $1.1m repayable in installments between April 2008 and May 2010 and a working
capital facility of up to $7.0m, depending on the level of working capital. At 31 March 2008, the amount available was $3.4m.  Interest is payable
on US borrowings at the rate of 1% over the US prime interest rate.  In China, working capital loans of RMB 35m are repayable within 12 months.
The average rate of interest is 6.5%. The facilities are secured by charges over the Group’s UK, Chinese and US assets, totalling £43.7m (2006:
£58.0m).
In the UK, the Group has taken out an interest rate swap contract on £10m of its borrowings.  This swaps floating rate borrowings at 3 month
LIBOR with a fixed rate of 6.165% until 30 June 2010. API Group plc  
Annual Report & Accounts 2008
42
17. PROVISIONS
Restructuring Other Total
£’000 £’000 £’000
At 1 October 2006
Current 306 – 306
Non-current –9393
306 93 399
Arising during the year 83 12 95
Utilised (306) (35) (341)
At 31 March 2008 83 70 153
Analysed as:
Current 83 – 83
Non-current –7070
83 70 153
Restructuring
At 30 September 2006, the financial statements included a provision of £73,000 relating to a vacant property and £233,000 in respect of the
estimated closure costs of its plant located in Charlotte, USA.  These provisions have been utilised during the period.  A provision of £83,000 has been
made in the current period, relating to rent payable on a vacant property as a result of the rationalisation of central costs.
Other
The Group pays discretionary payments to a number of former long serving employees.  The estimated liability in respect of these former
employees is reflected above.
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
43
18. PENSIONS AND OTHER POST-RETIREMENT BENEFITS
The Group operates a number of pension schemes.  In the UK, the principal pension scheme is the API Group Pension and Life Assurance Scheme,
a funded pension scheme for the Company and its UK subsidiaries providing benefits based on final pensionable earnings.  The scheme is 
funded by the payment of contributions to a separately administered trust fund.  This scheme has admitted no new members since October 2006.  
A defined benefit scheme was operated in the US, the API Foils, Inc. North American Pension Plan.  This was closed during the year ended 
30 September 2005.
A defined contribution scheme is also operated in the UK.  Overseas employees participate in a variety of different pension arrangements of the
defined contribution type and are funded in accordance with local practice.  Non contributory schemes are operated in the US and China.  In the
US, this is available to members of the North New Jersey Teamsters 11 Union. 
The assets and liabilities of the defined benefit schemes are:
At 31 March 2008
United Kingdom United States Total
£’000 £’000 £’000
Equities 33,215 702 33,917
Bonds 31,585 650 32,235
Property – 107 107
Cash 51 – 51
Fair value of scheme assets 64,851 1,459 66,310
Present value of scheme liabilities (68,178) (1,614) (69,792)
Net pension liability (3,327) (155) (3,482)
.
At 30 September 2006
United Kingdom United States Total
£’000 £’000 £’000
Equities 33,309 731 34,040
Bonds 29,746   686 30,432
Property – 109 109
Cash 90 – 90
Fair value of scheme assets 63,145 1,526 64,671
Present value of scheme liabilities (73,589) (1,961) (75,550)
Net pension liability (10,444) (435) (10,879) API Group plc  
Annual Report & Accounts 2008
44
18. PENSIONS AND OTHER POST-RETIREMENT BENEFITS (CONTINUED)
The amounts recognised in the Group Income Statement and Group Statement of Recognised Income and Expense for the period are as follows:
Eighteen months ended 31 March 2008
United Kingdom United States Total
£’000 £’000 £’000
Recognised in the Income Statement
Current service cost 1,064 – 1,064
Past service cost 10 – 10
Recognised in arriving at operating loss 1,074 – 1,074
Expected return on scheme assets (5,522) (160) (5,682)
Interest cost on scheme liabilities 5,626 133 5,759
Other finance cost / (revenue) 104 (27) 77
Taken to the Statement of Recognised Income and Expense
Actual return on scheme assets 2,331 80 2,411
Less: expected return on scheme assets (5,522) (160) (5,682)
(3,191) (80) (3,271)
Other actuarial gains and losses 8,946 261 9,207
Actuarial gains and losses recognised in the Statement of 
Recognised Income and Expense 5,755 181 5,936
Year ended 30 September 2006
United Kingdom United States Total
£’000 £’000 £’000
Recognised in the Income Statement
Current service cost 817 – 817
Past service cost 50 – 50
Gain from curtailment of scheme (100) – (100)
Recognised in arriving at operating profit 767 – 767
Expected return on scheme assets (3,142) (120) (3,262)
Interest cost on scheme liabilities 3,474 99 3,573
Other finance cost / (revenue) 332 (21) 311
Taken to the Statement of Recognised Income and Expense
Actual return on scheme assets 4,582 120 4,702
Less: expected return on scheme assets (3,142) (120) (3,262)
1,440 – 1,440
Other actuarial gains and losses (2,601) (150) (2,751)
Actuarial gains and losses recognised in the Statement of 
Recognised Income and Expense (1,161) (150) (1,311)
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
45
18. PENSIONS AND OTHER POST-RETIREMENT BENEFITS (CONTINUED)
Pension contributions are determined with the advice of an independent qualified actuary on the basis of triennial valuations using the projected
unit method.  Scheme assets are stated at their market values at the respective balance sheet dates and overall expected rates of return are
established by applying published brokers’ forecasts to each category of scheme assets.
United Kingdom United States
31 March 30 September 31 March 30 September
2008 2006 2008 2006
% % % %
Main assumptions
Rate of salary increases 3.50 3.25 N/A N/A
Rate of increase in pensions in payment 3.10 2.60 N/A N/A
Rate of increase to deferred pensions 3.10 2.60 N/A N/A
Discount rate 6.50 5.10 6.00 5.50
Expected rates of return on scheme assets
Equities 7.40 7.30 7.75 8.00
Bonds 4.70 4.60 – –
Inflation 3.30 2.75 3.00 3.00
In the UK, it is assumed that mortality will be in line with nationally published PA00 yob tables incorporating the medium cohort and adjusted 
to take account of the demographic profile of the members (plus 3 years).
These major assumptions have been selected after consultation with the Group’s UK pension advisors, PricewaterhouseCoopers and the Group’s
US actuaries, Principal Financial Services.
In order to eliminate the deficit on the UK scheme, in addition to the employers regular contribution of 8%, the Group also makes contributions
of 4% of pensionable earnings, pays all pension fund related administration fees and makes additional contributions of £300,000 per annum.
Changes in present value of the defined benefit obligations are analysed as follows:
United Kingdom United States Total
£’000 £’000 £’000
At 1 October 2005 69,080 1,867 70,947
Current service cost 742 – 742
Contributions by employees 542 – 542
Past service cost 25 – 25
Interest cost 3,474 99 3,573
Benefits paid (2,875) (71) (2,946)
Actuarial gains and losses 2,601 150 2,751
Foreign currency differences – (84) (84)
At 30 September 2006 73,589 1,961 75,550
Current service cost 1,064 – 1,064
Contributions by employees 712 – 712
Past service cost 10 – 10
Interest cost 5,626 133 5,759
Benefits paid (3,877) (103) (3,980)
Actuarial gains and losses (8,946) (261) (9,207)
Foreign currency differences – (116) (116)
At 31 March 2008 68,178 1,614 69,792 API Group plc  
Annual Report & Accounts 2008
46
18. PENSIONS AND OTHER POST-RETIREMENT BENEFITS (CONTINUED)
Changes in present value of the defined benefit assets are analysed as follows:
United Kingdom United States Total
£’000 £’000 £’000
At 1 October 2005 58,882 1,562 60,444
Expected return on plan assets 3,142 120 3,262
Employer contributions 2,014 – 2,014
Contributions by employees 542 – 542
Benefits paid (2,875) (71) (2,946)
Actuarial gains and losses 1,440 – 1,440
Foreign currency differences – (85) (85)
At 30 September 2006 63,145 1,526 64,671
Expected return on plan assets 5,522 160 5,682
Employer contributions 2,540 45 2,585
Contributions by employees 712 – 712
Benefits paid (3,877) (103) (3,980)
Actuarial gains and losses (3,191) (80) (3,271)
Foreign currency differences – (89) (89)
At 31 March 2008 64,851 1,459 66,310
Employer contributions are expected to continue at similar levels to those made over the last eighteen months (£1.7m over a 12 month period).
History of experience gains and losses
Eighteen
months ended Year ended Year ended Year ended Year ended
31 March 30 September 30 September 30 September 30 September
2008 2006 2005 2004 2003
£’000 £’000 £’000 £’000 £’000
United Kingdom
Fair value of scheme assets 64,851 63,145 58,882 50,900 47,000
Present value of defined benefit obligation (68,178) (73,589) (69,080) (63,800) (61,200)
Deficit in the scheme (3,327) (10,444) (10,198) (12,900) (14,200)
Experience adjustments arising on plan liabilities 8,946 (2,601) (2,656) (1,020) 900
Experience adjustments arising on plan assets (3,191) 1,440 4,685 620 2,900
United States
Fair value of scheme assets 1,459 1,526 1,562 1,482 1,352
Present value of defined benefit obligation (1,614) (1,961) (1,867) (1,681) (1,990)
Deficit in the scheme (155) (435) (305) (199) (638)
Experience adjustments arising on plan liabilities 261 (150) (173) (103) (364)
Experience adjustments arising on plan assets (80) –612333
The cumulative amount of actuarial gains recognised since 1 October 2004 in the Group Statement of Recognised Income and Expense is
£6,545,000 (2006: £609,000).  The directors are unable to determine how much of the pension scheme deficit recognised on transition to IFRS
and taken directly to equity of £13,099,000 is attributable to actuarial gains and losses since inception of those schemes.  Consequently, the
directors are unable to determine the amount of actuarial gains and losses that would have been recognised in the Group Statement of
Recognised Income and Expense before 1 October 2004.
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
47
19. AUTHORISED AND ISSUED SHARE CAPITAL
31 March 30 September 31 March 30 September
2008 2006 2008 2006
thousands thousands £’000 £’000
Authorised
Ordinary shares of 25p – 46,541 – 11,635
Ordinary shares of 1p 333,869 – 3,338 –
Deferred shares of 24p 34,570 – 8,297 –
11,635 11,635
Allotted, called up and fully paid
Ordinary shares of 25p – 34,450 – 8,612
Ordinary shares of 1p 70,127 – 701 –
Deferred shares of 24p 34,570 – 8,297 –
8,998 8,612
On 29 August 2007, options over 120,000 ordinary shares of 25p were exercised under the employee share option scheme for consideration 
of £80,000.  Following a General Meeting on 9 January 2008, each authorised and issued ordinary share of 25p was split into one ordinary share
of 1p and one deferred share of 24p and each authorised and unissued share of 25p was subdivided into 25 ordinary shares of 1p.  On 18 January
2008, following an open offer, 35,557,213 ordinary shares of 1p were issued for consideration of £8,000,000 (before costs of £802,000).  This
share issue was made as part of a financial restructuring of the Group.
During the period options were granted over 1,243,025 ordinary shares.  Full exercise of the options granted under the Company’s share option
schemes would result in the issue, not later than March 2018, of a further 1,591,812 ordinary shares made up of 10,000 shares at 642.5p, 4,279
shares at 310p, 2,500 shares at 336p, 265,000 shares at 65.5p, 45,000 shares at 64p, 120,148 shares at 79.5p and 1,144,885 shares at nil. API Group plc  
Annual Report & Accounts 2008
48
20. RECONCILIATION OF MOVEMENTS IN EQUITY
Foreign Total
Equity share Share Other exchange Retained Shareholders’
capital premium reserves reserve earnings equity
£’000 £’000 £’000 £’000 £’000 £’000
At 1 October 2005 8,592 211 298 439 13,419 22,959
Total recognised income and expense for the year – – – (805) (4,371) (5,176)
Exercise of employee share options 20 33 – – – 53
Share based payment –––– 131 131
At 30 September 2006 8,612 244 298 (366) 9,179 17,967
Total recognised income and expense for the period – – – 178 (3,912) (3,734)
Issue of shares under open offer 356 7,644 – – – 8,000
Costs relating to shares issued under open offer – (802) – – – (802)
Exercise of employee share options 30 50 – – – 80
Share based payment –––– 301 301
At 31 March 2008 8,998 7,136 298 (188) 5,568 21,812
Shareholders’
equity Minority Total
(as above) interest equity
£’000 £’000 £’000
At 1 October 2005 22,959 5,460 28,419
Total recognised income and expense for the year (5,176) 528 (4,648)
Exercise of employee share options 53 – 53
Share based payment 131 – 131
Dividends – (550) (550)
At 30 September 2006 17,967 5,438 23,405
Total recognised income and expense for the period (3,734) 449 (3,285)
Issue of shares under open offer 8,000 – 8,000
Costs relating to shares issued under open offer (802) – (802)
Exercise of employee share options 80 – 80
Share based payment 301 – 301
At 31 March 2008 21,812 5,887 27,699
Other reserves
Other reserves comprise the capital redemption reserves (£549,000) and the ESOP reserve (deficit £251,000).
The capital redemption reserve arose as a result of the cancellation of £549,000 preference shares of £1 each in March 1999.
The ESOP reserve relates to shares held by a discretionary trust established in 1997 to facilitate the operation of the Company executive share
option schemes which are described in the Directors’ Report.  At 31 March 2008 and 30 September 2006 the trust held 58,221 ordinary shares 
at an average cost of £4.27 per share and a total cost of £251,000. 
Foreign exchange reserve
The foreign exchange reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
49
21. SHARE BASED PAYMENTS
Share options are granted to employees of API Group companies through a number of share option schemes.  Prior to 2006, the exercise price of
the options is equal to the market price of the shares on the date of grant.  The share options that have been granted since 2005 are nil cost
options.  The ability to exercise options over shares is conditional on the attainment of specified performance targets over a three year
performance period.  To the extent that options vest, they lapse if they are not exercised within ten years of the date of grant.  
The expense recognised for share based payments in respect of employee services received during the period is £301,000 (2006: £131,000).
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the year.
31 March 31 March 30 September 30 September
2008 2008 2006 2006
No. WAEP (p) No. WAEP (p)
Outstanding at beginning of period 2,201,030 85.6 2,170,862 114.2
Granted during the period 1,234,025 – 348,750 –
Exercised during the period (120,000) (65.5) (80,000) (65.8)
Expired during the period (1,723,243) (77.3) (238,582) (226.9)
Outstanding at end of period 1,591,812 24.1 2,201,030 85.6
Exercisable at end of period 446,927 85.9 661,364 96.2
The weighted average fair value of options granted during the period was 35.8p (2006: 48.0p).  The range of exercise prices for options
outstanding at the end of the period was nil - 642.5p (2006: nil - 694p).
The fair value of equity-settled share options granted is estimated as at the date of grant using a Monte-Carlo model, taking into account the
terms and conditions upon which the options were granted.  The following table lists the inputs to the model used.
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Dividend yield 0% 0%
Expected share price volatility 26% 30%
Historical volatility 26% 30%
Risk-free interest rate 5.8% 4.3%
Expected life of option 5 years 5 years
Weighted average share price 92p 119p
The expected life of the options is usually based on historical data.  Limited data exists for API Group, therefore expected life has been based on
experience at other companies.  The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
not necessarily be the actual outcome. API Group plc  
Annual Report & Accounts 2008
50
22. FINANCIAL INSTRUMENTS
Details of the treasury operations and funding of the Group are described in the Financial Review on pages 6 to 11.
Interest rate risk profile of financial assets and liabilities
The interest rate profile of the financial assets and liabilities of the group is as follows:
At 31 March 2008
More 
Within 1-2 2-3 3-4 4-5 than 5
1 Year Years Years Years Years Years Total
Floating rate £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cash 1,270 ––––– 1,270
Short term deposits 861 ––––– 861
Forward currency hedging contracts
- assets 108 ––––– 108
- liabilities (295) ––––– (295)
Interest rate swap (116) (116) (28) – – – (260)
Bank overdrafts (1,116) ––––– (1,116)
Revolving credit facility – (7,500) –––– (7,500)
Term loans (5,267) (5,221) (176) – – – (10,664)
(4,555) (12,837) (204) – – – (17,596)
In the UK, the Group has taken out an interest rate swap contract on £10m of its borrowings. This swaps floating rate borrowings at 3 month
LIBOR with a fixed rate of 6.165% until 30 June 2010.
At 30 September 2006
More 
Within 1-2 2-3 3-4 4-5 than 5
1 Year Years Years Years Years Years Total
Floating rate £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cash 4,909 ––––– 4,909
Bank overdrafts (1,563) ––––– (1,563)
Revolving credit facility – – (10,000) – – – (10,000)
Term loans (195) (843) (7,831) – – – (8,869)
3,151 (843) (17,831) – – – (15,523)
Fair values of financial assets and liabilities
The fair values of the financial assets and liabilities is equivalent to their book values.
Credit risk
The Group’s credit risks relates to trade receivables.  There are no significant concentrations of credit risk within the Group which are not covered
by third party credit insurance.
Price risk
Price risks are not significant to the Group as the Group does not currently have any tradeable investments. 
Notes to the Consolidated Financial Statements (continued) API Group plc  
Annual Report & Accounts 2008
51
23. CAPITAL COMMITMENTS
31 March 30 September
2008 2006
£’000 £’000
Contracted amounts not provided for in these accounts 191 259
24. OBLIGATIONS UNDER LEASES AND HIRE PURCHASE CONTRACTS
Future minimum rentals payable under non-cancellable operating leases are as follows:
31 March 30 September
2008 2006
£’000 £’000
Not later than one year 285 203
After one year but not more than five years 511 420
After five years 38 33
834 656
25. CONTINGENT LIABILITIES
During the period, the Group received a claim in respect of alleged breach of warranties in connection with the sale of the Converted Products
Division in January 2005.  The purchaser has acknowledged that the maximum amount which it may recover in connection with the material
element of the claim is capped at £3.1 million plus interest and costs.  The Directors believe that the Group has a strong basis upon which the
claim can be defended.  Accordingly, no provision has been made in the accounts in respect of this claim.
26. RELATED PARTY TRANSACTIONS
Entities with significant influence over the group
During the period, Steel Partners II, L.P . and Wynnefield Capital Inc., holders of 35.7% and 31.5% of the ordinary share capital of the company
respectively, advanced bridging loans to the Company amounting in total to £2,500,000.  These loans were advanced on 17 December 2007 and
were repaid on 15 January 2008, following receipt of the proceeds of the open offer.  These loans were advanced at commercial rates of interest.
Interest of £27,000 and fees of £40,000 were paid to the shareholders.  
Compensation of key management personnel (including executive directors)
Eighteen
months ended Year ended
31 March 30 September
2008 2006
£’000 £’000
Short term employee benefits 1,338 778
Post employment benefits 95 71
Termination benefits 346 33
Share based payment 197 90
1,976 972 API Group plc  
Annual Report & Accounts 2008
52
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 period.  Under that law the Directors have elected to
prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law).  The financial statements are required by
law to give a true and fair view of the state of affairs of the Company and
of the profit or loss of the Company for that period.  
In preparing those financial statements, the Directors are required to: 
● select suitable accounting policies and then apply them consistently;
● make judgments and estimates that are reasonable and prudent; and 
● state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained
in the financial statements;
The Directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial
statements comply with the Companies Act 1985.  They are also
responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and
other irregularities. 
Statement of Directors’ Responsibilities in relation to the Company 
Financial Statements API Group plc  
Annual Report & Accounts 2008
53
INDEPENDENT AUDITOR'S REPORT TO THE
MEMBERS OF API GROUP PLC
We have audited the parent company financial statements of API Group
plc for the period ended 31 March 2008 which comprise the Balance
Sheet and the related notes 1 to 9.  These parent company financial
statements have been prepared under the accounting policies set out
therein.  
We have reported separately on the group financial statements of API
Group plc for the period ended 31 March 2008.
This report is made solely to the company's members, as a body, in
accordance with Section 235 of the Companies Act 1985.  Our audit
work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an auditor’s
report and for no other purpose.  To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the
parent company financial statements in accordance with applicable
United Kingdom law and Accounting Standards (United Kingdom
Generally Accepted Accounting Practice) are set out in the Statement of
Directors’ Responsibilities.
Our responsibility is to audit the parent company financial statements in
accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the parent company financial
statements give a true and fair view and whether the parent company
financial statements have been properly prepared in accordance with the
Companies Act 1985.  We also report to you whether in our opinion the
information given in the company directors' report is consistent with the
financial statements.  The information given in the Directors' Report
includes that specific information presented in the Chief Executive’s and
Financial Reviews that is cross referred from the Results and Dividends
section of the Directors' Report.  
In addition we report to you if, in our opinion, the company has not kept
proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information specified by
law regarding directors’ remuneration and other transactions is not
disclosed.
We read other information contained in the Annual Report and consider
whether it is consistent with the audited parent company financial
statements.  The other information comprises only the Chairman’s
Statement, the Chief Executive’s Review  and the Financial Review.  We
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the parent
company financial statements.  Our responsibilities do not extend to any
other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland) issued by the Auditing Practices Board.  An
audit includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the parent company financial statements.  It
also includes an assessment of the significant estimates and judgments
made by the directors in the preparation of the parent company financial
statements, and of whether the accounting policies are appropriate to the
company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the parent
company financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error.  In forming our
opinion we also evaluated the overall adequacy of the presentation of
information in the parent company financial statements.
Opinion
In our opinion:
● the parent company financial statements give a true and fair view, in
accordance with United Kingdom Generally Accepted Accounting
Practice, of the state of the company's affairs as at 31 March 2008; 
● the parent company financial statements have been properly
prepared in accordance with the Companies Act 1985; and
● the information given in the Directors' Report is consistent with the
parent company financial statements.
Ernst & Young LLP
Registered auditor
Manchester
22 May 2008
Auditor’s Report API Group plc  
Annual Report & Accounts 2008
54
Company Balance Sheet
at 31 March 2008
31 March 30 September
2008 2006
Note £’000 £’000
Fixed Assets
Investments 2 6,218 6,218
6,218 6,218
Current assets
Debtors (£36,515,000> 1 year – 2006: £60,524,000> 1 year) 3 36,515 62,693
Cash at bank and in hand and short term deposits 861 1,235
37,376 63,928
Creditors - amounts falling due within one year 4 (5,628) –
Net current assets 31,748 63,928
Total assets less current liabilities 37,966 70,146
Creditors - amounts falling due after more than one year 5 (12,545) (18,000)
25,421 52,146
Share capital and reserves
Called up share capital 6 8,998 8,612
Share premium account 7 7,136 244 
Other reserves 7 298 298
Profit and loss account 7 8,989 42,992
Equity shareholders’ funds 25,421 52,146
Signed on behalf of the Board
A Turner
22 May 2008 API Group plc  
Annual Report & Accounts 2008
55
1. ACCOUNTING POLICIES
Accounting convention
The Company’s financial statements have been prepared under the
historical cost convention except for the inclusion of certain assets which
are at valuation and have been prepared in accordance with UK GAAP
and with the Companies Act 1985.   
The Company has taken advantage of the exemption provided under
section 230 of the Companies Act 1985 not to publish its individual
income statement and related notes.  
The principal accounting policies adopted by the Company are set out
below.
Investments in and loans due from subsidiaries
Investments in and loans due from subsidiaries are stated at cost less any
impairment which is charged to the profit and loss account.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions
or events have occurred at that date that will result in an obligation to pay
more, or a right to pay less or to receive more, tax, with the following
exceptions:
● provision is made for tax on gains arising from the revaluation (and
similar fair value adjustments) of fixed assets, and gains on disposal
of fixed assets that have been rolled over into replacement assets,
only to the extent that, at the balance sheet date, there is a binding
agreement to dispose of the assets concerned.  However, no
provision is made where, on the basis of all available evidence at the
balance sheet date, it is more likely than not that the taxable gain will
be rolled over into replacement assets and charged to tax only where
the replacement assets are sold; and
● deferred tax assets are recognised only to the extent that the
Directors consider that it is more likely than not that there will be
suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that
are expected to apply in the periods in which timing differences reverse,
based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
Pensions
In the UK, the majority of employees are members of either a defined
benefit or a defined contribution pension scheme.  The defined benefit
scheme is run on a basis that does not enable individual companies within
the Group to identify their share of the underlying assets and liabilities.
In accordance with FRS 17, the Company has accounted for the scheme
as a defined contribution scheme and has given additional disclosures in
the consolidated financial statements.  This additional information is
provided in accordance with International Accounting Standard 19,
‘Employee benefits’.  The Directors believe that information disclosed in
accordance with that standard is not materially different to that which
would be disclosed in accordance with FRS 17.
All defined contribution scheme costs are charged directly to the profit
and loss account as incurred.
Foreign currencies
Foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the date of the transaction.  Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are
recognised in the profit and loss account.
Financial instruments
All loans and borrowings are initially recognised at fair value of the
consideration received net of issue costs associated with the borrowing.
After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost under the effective interest rate
method.
In accordance with paragraph 3(c) of FRS 25, the Company is exempt
from the disclosure requirements of paragraphs 51 to 95 of FRS 25.  The
Company’ s financial instruments are consolidated with those of the group
and are incorporated into the disclosures in note 22 of the Group’s
financial statements.
Leases
The costs of operating leases are charged to the profit and loss account
in equal instalments over the periods of the leases.
Notes to the Company Financial Statements API Group plc  
Annual Report & Accounts 2008
56
Notes to the Company Financial Statements (continued)
2. INVESTMENTS
Subsidiary undertakings
£’000
Cost
At 1 October 2006 and 31 March 2008 6,218
Details of the principal investments in which the Company (unless otherwise indicated) holds 20% or more of the nominal value of any class of
share capital are as follows:
Proportion of 
Country of voting rights
Name of company incorporation Holding and shares held
API Laminates Limited + UK Ordinary shares 100%
API Foils Holdings Limited # UK Ordinary shares 100%
API Foils Limited *+ UK Ordinary shares 100%
API Holographics Limited *+ UK Ordinary shares 100%
API Overseas Holdings Limited *# UK Ordinary shares 100%
API (USA) Holdings Limited *# USA Common and 100%
preferred stocks
API Foils, Inc. *+ USA Common and 100%
preferred stocks
API Foils SAS *+ France Ordinary shares 100%
API Asia Limited *# UK Ordinary shares 100%
API Wing Fat Limited *# ∆ Hong Kong Ordinary shares 63.75%
Shanghai Shen Yong Stamping Foil Company Limited *+ ∆ China Ordinary shares 51%
API Foils Pty Limited *+ Australia Ordinary shares 100%
API Foils New Zealand Limited *+ New Zealand Ordinary shares 100%
API Foils Deutschland GmbH
(formerly MEPA-S Blattmetalle und Prägefolien GmbH) *+ ∆ Germany Ordinary shares 100%
API Italia srl  *+ ∆ Italy Ordinary shares 100%
* Held by subsidiary undertaking
+ Operating company
# Intermediate holding company
∆ 31 December year end
All the operating subsidiary undertakings are involved in the principal activities of the Group.
3. DEBTORS
31 March 30 September
2008 2006
£’000 £’000
Amounts falling due within one year
Other debtors – 2,169
Amounts falling due after more than one year
Amounts due from subsidiary undertakings 36,515 60,524
36,515 62,693
Amounts due from subsidiary undertakings are stated after an impairment provision of £34,000,000 (2006: nil). API Group plc  
Annual Report & Accounts 2008
57
4. CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR
31 March 30 September
2008 2006
£’000 £’000
Bank overdraft 1,001 –
Current instalments on bank loans 2,460 –
Corporation tax 1,366 –
Accruals 801 –
5,628 –
Corporate tax represents group relief payable.
5. CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
31 March 30 September
2008 2006
£’000 £’000
Bank loans 12,545 18,000
6. SHARE CAPITAL
31 March 30 September 31 March 30 September
2008 2006 2008 2006
thousands thousands £’000 £’000
Authorised
Ordinary shares of 25p – 46,541 – 11,635
Ordinary shares of 1p 333,869 – 3,338 –
Deferred shares of 24p 34,570 – 8,297 –
11,635 11,635
Allotted, called up and fully paid
Ordinary shares of 25p – 34,450 – 8,612
Ordinary shares of 1p 70,127 – 701 –
Deferred shares of 24p 34,570 – 8,297 –
8,998 8,612
On 29 August 2007, options over 120,000 ordinary shares of 25p were exercised under the employee share option scheme for consideration of
£80,000.  Following a General Meeting on 9 January 2008, each authorised and issued ordinary share of 25p was split into one ordinary share of
1p and one deferred share of 24p and each authorised and unissued share of 25p was subdivided into 25 ordinary shares of 1p.  On 18 January
2008, following an open offer, 35,557,213 ordinary shares of 1p were issued for consideration of £8,000,000 (before costs of £802,000).  This
share issue was made as part of a financial restructuring of the Group.
During the period options were granted over 1,243,025 ordinary shares.  Full exercise of the options granted under the Company’s share option
schemes would result in the issue, not later than March 2018, of a further 1,591,812 ordinary shares made up of 10,000 shares at 642.5p, 4,279
shares at 310p, 2,500 shares at 336p, 265,000 shares at 65.5p, 45,000 shares at 64p, 120,148 shares at 79.5p and 1,144,885 shares at nil. API Group plc  
Annual Report & Accounts 2008
58
Notes to the Company Financial Statements (continued)
7. RECONCILIATION OF MOVEMENTS IN EQUITY
Profit and
Equity share Share Other loss Shareholders’
capital premium reserves account equity
£’000 £’000 £’000 £’000 £’000
Balance at 1 October 2005 8,592 211 298 41,225 50,326
Balance from profit and loss account – – – 1,767 1,767
Exercise of employee share options 20 33 – – 53
Balance at 30 September 2006 8,612 244 298 42,992 52,146
Balance from profit and loss account – – – (34,003) (34,003)
Issue of shares under open offer 356 7,644 – – 8,000
Costs relating to shares issued under open offer – (802) – – (802)
Exercise of employee share options 30 50 – – 80
Balance at 31 March 2008 8,998 7,136 298 8,989 25,421
Other reserves
Other reserves comprise the capital redemption reserves (£549,000) and the ESOP reserve (deficit £251,000).
The capital redemption reserve arose as a result of the cancellation of £549,000 preference shares of £1 each in March 1999.
The ESOP reserve relates to shares held by a discretionary trust established in 1997 to facilitate the operation of the Company executive share
option schemes which are described in the Directors’ Report.  At 31 March 2008 and 30 September 2006 the trust held 58,221 ordinary shares at
an average cost of £4.27 per share and a total cost of £251,000.  
8. PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY
A loss of £34,003,000 for the eighteen months ended 31 March 2008 (year ended 30 September 2006: profit of £1,767,000) has been dealt with
in the accounts of the parent company.  The loss is stated after an impairment provision of £34,000,000 (2006: nil) relating to amounts due from
subsidiary undertakings.  As permitted by section 230 of the Companies Act 1985 the Company has not presented its own profit and loss account. 
Fees paid to the Auditor in respect of audit services provided to the Company for the period amounted to £5,000 (2006: £5,000).
9. CONTINGENT LIABILITIES
The Company is party to a composite banking agreement providing unlimited guarantees between the company and its UK subsidiaries.  A $2,000,000
guarantee has been provided by the Company to the bank providing facilities to a wholly owned US subsidiary.
During the period, the Group received a claim in respect of alleged breach of warranties in connection with the sale of the Converted Products
Division in January 2005.  The purchaser has acknowledged that the maximum amount which it may recover in connection with the material
element of the claim is capped at £3.1 million plus interest and costs.  The Directors believe that the Group has a strong basis upon which the
claim can be defended.  Accordingly, no provision has been made in the accounts in respect of this claim. API Group plc  
Annual Report & Accounts 2008
59
Prepared under IFRS Eighteen
months ended Year ended Year ended
31 March 30 September 30 September
2008 2006 2005
£’000 £’000 £’000
Continuing operations
Revenue 143,783 101,979 105,570
Operating profit before exceptional items 408 994 3,562
Exceptional items (3,417) (863) (430)
Operating (loss) / profit (3,009) 131 3,132
Net finance costs (4,126) (1,924) (1,549)
(Loss) / profit before taxation (7,135) (1,793) 1,583
Tax credit / (expense) 407 (735) (504)
(Loss) / profit (6,728) (2,528) 1,079
Discontinued operations
Loss from discontinued operations (1,130) (230) (10,149)
Loss for the year (7,858) (2,758) (9,070)
Attributable to:
Profit attributable to minority equity interest 137 695 574
Loss attributable to equity holders of the parent (7,995) (3,453) (9,644)
Total loss for the year (7,858) (2,758) (9,070)
Statistics relating to ordinary shareholders
Basic loss per ordinary share (pence) (adjusted  for the bonus element of Open Offer) (19.5) (9.5) (27.2)
Net debt (£’000) (17,149) (15,523) (6,686)
Gearing (%) 62% 66% 24%
Average number of employees 899 934 1,041
Prepared under UK GAAP Year ended Year ended Year ended
30 September 30 September 30 September
2005 2004 2003
£’000 £’000 £’000
Turnover 118,350 169,545 176,192
Operating profit before goodwill amortisation 
and exceptional items 1,751 1,418 600
Goodwill amortisation (407) (450) (447)
Exceptional items (16,921) (23,026) (5,593)
Joint venture (55) (91) –
Loss on ordinary activities before interest and taxation (15,632) (22,149) (5,440)
Interest expense (1,407) (1,696) (1,621)
Loss on ordinary activities before taxation (17,039) (23,845) (7,061)
Taxation (338) (559) 753
Loss on ordinary activities after taxation (17,377) (24,404) (6,308)
Profit attributable to minority equity interest (574) (982) (995)
Loss attributable to ordinary shareholders (17,951) (25,386) (7,303)
Statistics relating to ordinary shareholders
Basic loss per share (pence) (adjusted for the bonus element the Open Offer) (50.9) (72.4) (20.8)
Net debt (£’000) (6,686) (10,535) (9,821)
Gearing (%) 18% 23% 17%
Average number of employees 1,041 1,421 1,606
Five Year Record API Group plc  
Annual Report & Accounts 2008
60
ANNUAL GENERAL MEETING
To be held at 3pm, 30 June 2008 at the London offices of the Company’s Solicitors: 
Addleshaw Goddard, 150 Aldersgate Street, London EC1A 4EJ.
REPORTS
Interim Report for 6 months to 30 September 2008 circulated November 2008.
Preliminary Announcement for the year ended 31 March 2009 issued May 2009.
Report and Accounts for the year ended 31 March 2009 circulated June 2009.
CAPITAL GAINS TAX
The market value of an ordinary share on 31 March 1982 was 60.5p.
Financial Calendar API Group plc  
Annual Report & Accounts 2008
Produced by kwd:perceptions www.kwdperceptions.com AP
An
an
Foils
Holographics
Laminates
API Group plc
Second Avenue, Poynton Industrial Estate, Poynton,
Stockport, Cheshire SK12 1ND
Tel: +44 (0) 1625 858700  Fax: +44 (0) 1625 858701  www.apigroup.com
API GROUP PLC ANNUAL REPORT AND ACCOUNTS 2008