sepura plc
annual report  accounts 2014 strategic report
highlights 01
chairman’s statement 02
chief executive’s statement 03
sepura at a glance 04
marketplace 06
creating value 08
key performance indicators 10
strategic objective
› expanding addressable markets 12
› developing marketleading solutions 14
› building long term customer relationships  16
risk management 18
our achievements during the year 20
operational review 22
financial review 26
corporate social responsibility  30
 
governance 
corporate governance report 34
 › our board and senior management 35
report of the audit committee 39
directors’ remuneration report 
 › annual statement 42
 › remuneration policy report 44
 › annual report on remuneration 50
directors’ report 56
 
group financial statements
 
independent auditors’ report to  
the members of sepura plc 61
consolidated income statement 65
consolidated statement  
of comprehensive income 66
consolidated statement  
of changes in equity 66
consolidated balance sheet 67
consolidated statement  
of cash flows 68
notes to the group  
financial statements 69 
 
company financial statements
independent auditors’ report to  
the members of sepura plc 99
company balance sheet 100
notes to the parent company 
financial statements 101
 
shareholder information 110
contact details and advisers  111
financial calendar 201415 112
contents
sepura plc annual report  accounts 2014
chairmans statement
» 02
strategic objective
» 12
operational review
» 22 highlights
sepura is a global leader in the design development and 
supply of digital radio solutions complementary accessories 
support tools and devices 
strategic report
 financial highlights
» revenues up 11 to €1166 million 2013 €1048 million
» adjusted operating profit
1
 up 19 to €125 million  
 2013 €105 million adjusted eps up 8 to 84¢ 2013 78¢
» operating cash conversion of 101 2013 119  
 and closing net cash of €53 million 2013 €66 million
» full year dividend increased from 168p to 200p
» ifrs operating profit up 77 to €144 million 2013 €82 million
 operational highlights
» strong demand across core markets 
 › 188000 radios delivered worldwide up from 154000 last year
 › record deliveries of 65000 2013 48000 in germany  
  as rollout accelerates with increased backlog  
  of approximately 72500 radios
» medium term growth drivers validated
 ›  sepura systems and portalify acquisitions fully integrated
 › customers in 22 countries invested €1 million 2013 14
 › installed base grown to 12 million radios providing a stable  
  stream of repeat business 
 improved outlook
» long term growth prospects enhanced as global migration  
 to digital continues
 ›  first infrastructure win in north america
 › dmr portfolio launched
 » improved outlook and guidance for fy15 and fy16
 ›  revenue growth of 10 per annum
 › adjusted eps growth of 15 and 25 respectively
revenue  11
€1166m
2013 €1048m
adjusted operating profit
1
€125m
2013 €105m
ifrs operating profit
77
2013 67
1 the calculation of adjusted operating profit  
 is set out in note 8 to the consolidated  
 financial statements
sepura plc annual report  accounts 2014 01
strategic report governance group financial statements company financial statements i am pleased to report on a strong performance across  
the group we have delivered record revenues and  
a near twenty per cent increase in adjusted operating  
profit at the same time we continued our investment  
in expanding our customer offering both organically  
and through acquisition 
chairman’s statement
over the last three years we have 
transformed sepura from being solely  
a tetra devices supplier to a geographically 
and technologically diverse critical 
communications solution supplier  
our ability to now offer a onestop  
solution combining devices networks  
and applications has proved compelling 
to customers increasing dramatically the 
size of our addressable market in the last 
year we have recorded significant solution 
sales across a range of new customers and 
countries including canada luxembourg 
greece and lebanon
we have continued to build our us and 
canadian sales organisation and added a 
number of new distributors north america 
is the world’s largest professional mobile 
radio “pmr” market and we are confident 
that we can build on our early successes 
here and make it a significant market  
for the group
we have launched to market our portfolio  
of dmr products dmr is a radio standard 
that is analogous and complementary 
to tetra mainly serving commercial 
customers and which is forecast to be  
the fastest growing segment within pmr 
over the coming years while we have 
modest expectations for dmr in its first 
year we believe it can have a significant 
incremental impact on our revenues and 
earnings in the medium term
the compelling solution we offer  
our customers has created a robust  
and diverse business that is set to increase 
earnings and cash generation over the 
coming years we closed the year with  
a strong balance sheet net cash and  
record order book we look to the future 
with growing confidence reflected in an  
increase in the dividend from 168p to 200p
i would like once again to thank all  
of our employees for their outstanding 
contribution and welcome new colleagues 
joining from portalify and fylde
john hughes cbe
chairman
9 june 2014
revenues
19
addressable market
25b
record revenues and 19 increase  
in adjusted operating profit despite  
fx headwinds
addressable market increased from  
05 billion to 25 billion
strategic report
02 sepura plc annual report  accounts 2014 chief executive’s statement
we have delivered doubledigit earnings growth for  
a third consecutive year increasing adjusted operating 
profits by 19 to €125 million we have achieved this 
through our ongoing focus on sales growth and strong 
operational performance in our core markets 
at the same time we are executing  
on our strategic goal of expanding  
the group’s offering through continued 
new product delivery and the addition 
of incremental business lines through 
acquisition such that we have expanded  
the size of our addressable market from  
05 billion to approximately 25 billion
i am pleased to report that we are seeing 
strong performance in our core tetra 
devices markets in total we shipped  
188000 tetra devices in fy14 compared  
to 154000 in fy13 this growth was driven 
by germany but double digit growth in the 
uk norway and australia also contributed
germany produced another record year  
with 65000 radios shipped whilst we  
grew the backlog of contracted radios  
to approximately 72500 up from 30000  
at the end of september key wins in greece 
luxembourg austria and canada ensured 
that the list of countries that delivered over 
€1m of revenues during the year grew to  
22 up from 14 last year our continued focus  
on product leadership and ensuring product 
innovation directly meets our customers’ 
demands has been a significant factor in  
this growth combined with our other  
tetra markets we now have an installed 
base of over 12 million radios which will 
yield a growing stream of repeat business 
via refresh and accessory sales over the next 
few years
 
our infrastructure business has made 
outstanding progress since its acquisition 
last year and won its first public safety 
contracts in new markets including  
greece and lebanon it also won its first 
contract in north america for the initial 
phase of toronto transit commission’s new 
network which is currently being deployed 
along with other significant commercial 
sector contracts in luxembourg germany 
and malaysia after the initial contract value 
systems contracts yield a base of recurring 
revenues throughout the 1015 year life 
of these networks portalify the software 
developer acquired in july also generates 
recurring annual revenues from its  
data applications which we are well 
advanced on integrating fully into our  
solutions offering
investment in our dmr portfolio  
continued during fy14 with the initial  
range of products launched towards  
the end of the year the product range 
will continue to be expanded this year 
and has been further augmented by the 
recent acquisition of fylde whose enabling 
technology provides customers with  
a simple lowrisk and costeffective 
migration from analogue to digital networks  
we anticipate an acceleration in the 
migration from analogue to digital  
by smaller commercial users and as  
a result we expect dmr to contribute 
materially to revenues in fy15 and both 
revenue and earnings in fy16
we have now established a local sales  
team in north america to promote tetra 
and dmr and we are confident that we  
can build on our early successes such as  
toronto transit commission and make north 
america a significant market for the group
when you combine these growth 
opportunities with the robustness  
of our more established markets this  
gives us confidence in our outlook for  
the two years ending march 2016  
we expect to deliver 10 revenue growth 
over the next two years with adjusted eps 
growth of 15 and 25 respectively
gordon watling
chief executive
9 june 2014
radios delivered 
188000
we shipped a total of over 188000 tetra 
devices in 2014 2013 154000
sepura plc annual report  accounts 2014 03
strategic report governance group financial statements company financial statements sepura at a glance
sepura is a global leader in the design development 
and supply of digital radio solutions complementary 
accessories support tools and devices our compelling 
solutions bring together radio infrastructure terminals 
and data applications to help our customers overcome 
the operational challenges they face every day
our applications capability offers 
enhanced productivity tools that drive 
improved performance across customers’ 
communications networks
our network infrastructure delivers scaleable 
and seamless communications covering  
a singlesite campus right through to 
national networks
strategic report
number of organisations using sepura solutions
1000
in over 100 countires
our deep expertise and experience enables us to combine terminals 
systems and applications into solutions that address the operational 
challenges facing our customers
systems applications
we provide a comprehensive portfolio of 
handheld and vehicle radios that address 
the operational requirements of the most 
demanding users and environments
terminals
terminals 
 
 
 
   systems  
 
       
 
 
 
 
 
 
 
 
 
 
 
    applications
04 sepura plc annual report  accounts 2014  
over 1 million users  
across the globe
1m
our 28 overseas sales staff  
are based in 17 countries
17
 €1m
 €1m
revenues in 
previous years
2014
22
61
2013
14
64
our global customer base
our customer base is truly global and 
continues to expand we operate at the 
frontline in some of the most demanding 
environments in the world both in terms 
of climate and circumstance
» further details on our kpis
 see pages 10 and 11
our international footprint 
means we have customers 
 in 114 countries 
114
number of countries investing  
over €1m in our solutions
sepura plc annual report  accounts 2014 05
strategic report governance group financial statements company financial statements marketplace
sepura has successfully expanded its total addressable market from 
500 million in 2012 to over 25 billion for 2015 by investing in new 
products and solutions and expanding our geographical reach
» 40m pa  › tetra atex terminals
» 300m pa  › tetra infrastructure
» 200m pa  › applications
» 800m pa  › dmr
» 800m pa  › north america
strategic report
tetra » 10 years of future growth
» the largest digital installed base
 › new networks are being deployed
 › new users are continuing to join networks
 › users will replace their radios multiple times  
  over the life of the infrastructure
» tetra is the public safety users’ preferred  
 voice solution outside north america
dmr » the commercial users solution
» a tdmabased etsi standard like tetra
» targets users who do not need all  
 of tetra’s public safety functionality 
» results in significantly lowercost  
 infrastructure
worldwide installed base 
of pmr radios m units
the professional mobile radio “pmr” market is undergoing an 
“analogue to digital” migration as governments and commercial 
organisations replace ageing and obsolete analogue products with 
digital solutions these enable the efficient use of radio spectrum 
interoperability between government agencies and enhanced security 
and functionality that drive operational efficiencies
2012 2013 2014
total addressable market m
expanding sepura’s total addressable market
2015
3000
2500
2000
1500
1000
500
0
source managementihs
tetra terminals 
excluding atex
tetra atex  
terminals
infrastructure
applications
dmr
north america
2009 2010 2011 2012 2013 2014 2015 2016 2017
40000
10000
0
20000
30000
50000
source ihs
tetra
dmr
other digital 
standards
analogue
06 sepura plc annual report  accounts 2014 major market leaders
sepura has a proud tradition of supplying radio equipment to public 
safety users that spans over 70 years we now provide cutting edge 
solutions that deliver increased productivity and enhanced safety 
maximising public safety organisations return on their substantial 
investment in communication networks
mission critical
uk
» most mature tetra market with c265000 users
» supply every police force in england wales  
 and scotland
» supply every ambulance and paramedic
» in 2014 the uk generated 17 of global   
 revenues at €19m
germany
» largest tetra market in shortmedium term  
 with c750000 forecast users
» deployment is still underway and over 200000   
 more radios will be needed in the next 23 years 
» germany generated €30m of revenue in 2014
global
» in 2014 international revenues went up  
 by 12 to €97 million
» 22 countries generated over €1 million  
 of revenue with major new markets being  
 canada luxembourg greece and lebanon
business critical
sepura now supplies users across a wide spectrum of sectors  
that need the functionality of our secure and featurerich product 
portfolio these include transport networks utilities and the 
extractive industries which all demand secure reliable and robust 
communications solutions
sepura plc annual report  accounts 2014 07
strategic report governance group financial statements company financial statements    
creating value
our vision is to establish sepura as a global leader in the 
supply of digital communication systems
strategic report
expanding our 
addressable market
we are continually expanding our 
addressable market by identifying 
complementary highgrowth opportunities 
within the pmr market which can be 
addressed by our core competencies by
» growing our geographical footprint
» broadening our product portfolio
» entering new market verticals
» offering a range of pmr standards
» case study north america transport 
 see page 12
developing a broad portfolio 
of marketleading solutions
we continuously enhance our product  
and service offering to ensure that we  
have a broad portfolio of marketleading 
solutions we have invested over  
€150m in research and development  
enabling us to secure a competitive 
advantage by being first supplier in our 
markets to offer gps and gateway and 
repeater functionality together with a wide 
range of other innovative product features 
and functions
» case study mining atex
 see page 14
building longterm  
customer relationships
a typical pmr network will be operational 
for at least 20 years in addition to the initial 
capital sale of infrastructure applications  
and radios customers require regular 
supplies of batteries and other ancillaries 
which generate strong recurring revenues 
over the lifetime of the network they also 
create new opportunities as the network 
expands new applications are identified 
new users join the network or existing 
users replace ageing radios with the latest 
technology we have a demonstrable track 
record of customer retention and the repeat 
business that flows from establishing sepura 
as our customers’ supplier of choice
» case study network evolution
 see page 16
our strategy
our strategy is designed to deliver sustainable growth reduced risk 
and long term financial performance
08 sepura plc annual report  accounts 2014 business model
our business model is to exploit the sepura brand and the core 
competencies it represents
our employees have a deep understanding  
of the pmr market gained through many  
years of servicing the most demanding  
vertical within it public safety our close 
relationship with our customers ensures  
that we understand their operational 
challenges and our technical knowhow 
enables us to develop a solution to address 
their specific needs
we have exclusive partnerships with  
a global network of dedicated pmr  
distributors each of which is a specialist  
in their particular geography or market  
vertical we work closely with them to target  
key opportunities combining their local 
knowledge and relationships with our  
product expertise to create a compelling  
and costeffective solution for endusers
we outsource the manufacture of our 
products to worldclass contract electronics 
manufacturers who offer a flexible and 
scaleable supply that meets our customers’ 
demand profile we work closely with our 
supply chain to improve the design of our 
products and to reduce costs and leadtimes
market expertise
routes to market
supply chain
sepura plc annual report  accounts 2014 09
strategic report governance group financial statements company financial statements key performance indicators
2012 2013 2014
annual shipments 000s of radios
2012 2013 2014
commercial vs public safety revenues
2012 2013 2014
closing order book €m
59 22 98 29 131 30
20
€m
120
100
80
60
40
2012 2013 2014
total addressable market m installed base 000s of radios
2012 2013 2014
449 544 677 800 930 1048 1186
2009 2010 2011 2008 2015
3000
2500
2000
1500
1000
500
0
tetra atex  
terminals
strategic 
operational
150 154 188
our strategic kpis are leading indicators of future potential 
our operational kpis are leading and lagging indicators demonstrating operational progress during the year
our growing installed base 
of radios in use will generate 
additional revenues 
from regular demand for 
replacement accessories 
and ultimately new radios 
together with opportunities 
to upsell new applications 
to existing customers
our closing order book 
for delivery in the next 
12 months increased 
by €33 million as we 
secured significant 
infrastructure contracts 
that will be delivered 
over several financial 
years giving improved 
visibility for future 
revenues
annual shipments 
increased by 22 
including record 
deliveries of 65000 
radios to germany 
for the ongoing 
deployment of the new 
german national public 
safety network
we have delivered 
growth in all of our 
key markets and 
verticals through 
both new commercial 
users for our terminals 
and significant 
infrastructure 
contracts for public 
safety users
strategic report
tetra terminals 
excluding atex
infrastructure
applications
dmr
north america
other commercial
uk
germany
public safety
10 sepura plc annual report  accounts 2014 revenue €m
830 1048
2012 2013 2014
1166
we delivered our second 
consecutive year of 
doubledigit revenue 
growth with growth  
in all of our key markets 
and verticals
adjusted operating margin
1
2012 2013 2014
95 100 107
we delivered our third 
consecutive year of 
doubledigit growth in 
adjusted operating profits 
driven by both increased 
revenues and improved 
operational leverage
adjusted diluted eps ¢
1
2012 2013 2014
60 78 84
although adjusted 
operating profits increased 
19 adjusted diluted  
eps increased by 8  
as the growth of the  
group means it receives 
less tax relief on its rd 
expenditures as it qualifies 
for 30 “large company” 
relief rather than the 125 
received by smes
dividends per share p
2012 2013 2014
146 168 200
the dividend declared by 
the board of 2p represents 
a 19 increase over last 
year and reflects the 
group’s strong balance 
sheet cash generation 
during the year and 
increasing confidence  
in the future
cash conversion
2
2012 2013 2014
82 119 101
the significant growth in 
revenues and successful 
integration of sepura 
systems and portalify  
has been achieved 
without the need to 
invest in working capital 
and we generated net 
cash from operations of  
€264 million representing 
cash conversion of 101
financial
our financial kpis are lagging indicators showing the financial result of our operational performance
1 the calculations of adjusted operating margin and adjusted diluted eps are set out in notes 8 and 15 to the  
 consolidated financial statements respectively
2 calculated as cash generated from operations divided by cash generated from operations before movements in  
 working capital
sepura plc annual report  accounts 2014 11
strategic report governance group financial statements company financial statements  
 
strategic objective
expanding addressable markets
sepura has successfully expanded its total addressable market  
from 500 million in 2012 to 25 million for 2015 
one of the largest contributors to this 
expansion has been the opening of the 
north american market which represents 
an 800 million opportunity for sepura 
primarily in commercial verticals one such 
target vertical is transportation where 
sepura has developed a range of solutions 
to enhance transportation efficiency and 
safety which have been deployed on train 
tram and bus networks and at airports 
across the globe 
transportation
train operators need to keep passengers 
luggage and trains moving to schedule 
while also ensuring safety and security across 
a large and complex facility running an 
integrated metropolitan transport network 
with trains trams and buses is even more 
challenging toronto transport commission 
manages the third largest public transit 
system in north america covering 622 km
2
 
and carrying over 460 million passengers 
each year on 1800 buses 700 subway 
cars and 237 trams and selected sepura 
to deliver the first tetra network for the 
transportation sector in north america
toronto transit corporation joins a growing 
list of transportation customers utilising 
sepura solutions to drive productivity 
and enhance security including london 
heathrow madrid barajas airport bangkok 
metro moscow metro mumbai monorail 
and the panama canal
strategic report
3
4
12 sepura plc annual report  accounts 2014  
 
 sepura systems base station 
the sepura systems base stations provides secure connectivity  
for multiple simultaneous users across the entire transport 
network including underground
 dispatch solution 
the control room uses a dispatch application to manage  
the complex tasks required to ensure the safe and prompt  
turnaround of all trains buses and trams and to respond to any 
incidents it coordinates all of the teams involved by assigning 
tasks and monitoring progress to ensure that they are completed 
promptly in the right order
 stp9200 handportable 
guards and ticketinspectors use the rugged stp9200  
handportable for clear voice communications to receive  
data and to update the status of their assigned tasks via  
a short data application
 srg3900 
telemetry data is provided via srg3900 vehicle radios keeping 
controllers informed of progress and performance so that any 
delays can be communicated to waiting passengers
1
2
3
4
1 2
4
sepura plc annual report  accounts 2014 13
strategic report governance group financial statements company financial statements  
 
in addition to penetrating new geographical markets sepura has 
a strong track record of generating demand through innovative 
solutions that address the operational challenges facing users  
every day
one of the harshest environments possible 
for radio communications is in and around 
mines with workers exposed to heat dust and 
potentially explosive gases health and safety 
is paramount while any lost production due 
to accidents carries a heavy financial penalty 
sepura’s solutions offer clear communication 
improved employee safety and help reduce 
the likelihood of accidents they are used by 
mining and other extractive industries around 
the world including ironore mines and lpg 
refineries in australia platinum mines in africa 
gold mines in canada and finland oil and 
gas rigs in the north sea and petrochemical 
refineries in latin america
mine
our stp8x family of atex radios are the most 
robust radios available for teams working in 
the harshest of environments in addition to 
clear voice communication they incorporate 
worker safety alarms and innovative job 
dispatch and allocation solutions we also 
offer a range of applications that utilise gps  
to track resources and ensure they are kept 
away from potential hazards
strategic objective
developing marketleading solutions
strategic report
5
3
4
14 sepura plc annual report  accounts 2014  
 
 sepura systems base station 
a sepura systems base station provides secure connectivity  
for multiple simultaneous users across the entire mine  
and a chain of base stations extends the network along  
the train line connecting the mine to deep water ports  
for exports keeping maintenance teams in touch with  
their control room wherever they are needed
 dispatch solution 
the control room uses a dispatch application to manage  
the complex tasks required to ensure the safe and efficient 
operation of the facility it coordinates all of the teams involved  
by assigning tasks and monitoring progress to ensure that they  
are completed promptly and efficiently thereby minimising 
disruption to operations it also uses gps to track the location  
of all operatives and ensure their safety at all times
 sepura stp8x000 handportable 
miners rely on the intrinsically safe stp8x000 reducing the  
risk of a spark while working in an atmosphere of potentially 
explosive dust and gas the stp8x000 is a fullyfeatured  
handportable offering loud clear audio direct dialling  
and a full suite of data applications
 geofencing application 
a data application identifies hazards around the mine such as  
new blasting zones and uses the gps in miners’ handheld radios  
to track their proximity and sound an alarm if anyone approaches 
the danger zone
 collision avoidance application 
a data application tracks the gps in the trucks used to transport 
the ore triggering a proximity alert if any of the trucks – each 
the size of a house – get too close to each other in addition to 
improving driver safety such applications avoid downtime and 
reduce insurance premiums
2
1
5
4
3
2
1
5
sepura plc annual report  accounts 2014 15
strategic report governance group financial statements company financial statements  
 
sepura has invested in developing products and functionality that  
will address customers’ emerging needs over the 15 – 20 year life  
cycle of a network 
this is part of our commitment to building 
long term relationships with our customers 
and becoming a single strategic supplier 
of their critical communications solution 
following the acquisitions of our infrastructure 
and applications offerings we have the 
capabilities to provide solutions which 
generate longterm commitments from 
customers every customer and network is 
unique and we support users as they build 
maintain and expand their network to ensure 
that it meets their specific operational needs
strategic objective
building long term customer relationships 
strategic report
1
4
3
2
16 sepura plc annual report  accounts 2014  
 
 initial infrastructure rollout 
sepura‘s base stations and infrastructure provide secure connectivity 
for multiple simultaneous users whether for a single site or a trunked 
network covering a town city or country
 initial deployment of radios 
sepura has a broad range of handheld and vehicle radios that 
address the specific requirements of different users
 specialist users join the network 
specialist users such as firefighters or paramedics have very specific 
requirements sepura has a broad product portfolio that includes 
cuttingedge solutions for niche user groups these include our 
range of intrinsically safe stp8x solutions that combine core radio 
equipment with a comprehensive suite of specialist accessories
 new applications and ancillaries 
users need to replace batteries and other ancillaries approximately 
every 18 months users’ operational demands also evolve driving 
demand for different accessories and applications to help them 
overcome these new challenges
 network expansion 
as new facilities are built or additional users join the network 
additional infrastructure is required to expand geographical  
coverage or add extra capacity sepura’s scaleable infrastructure 
solutions enable networks to grow simply and efficiently
 radio refresh
sepura’s marketleading radios have a reputation for ruggedness 
and reliability and have an operational life of 57 years after which 
customers typically refresh their entire fleet with the latest models 
incorporating further advances in functionality and features
1
5
5
6
2
3
4
6
sepura plc annual report  accounts 2014 17
strategic report governance group financial statements company financial statements risk management 
product innovation
while the existing 4g standard does not contain the protocols necessary 
for voice traffic or the call prioritisation and similar functions required  
by public safety agencies we are investing in new product development 
to position the group for the likely future deployment of lte this is part 
of our ongoing programme of identifying customer needs and potential 
competitor advances to ensure that we maintain a portfolio of market 
leading products we focus our development efforts on features which 
meet a market requirement and are likely to generate sufficient revenue  
to fund their development we have established internal processes  
for prioritising and reviewing our development projects
growing our addressable market
the group’s focus on diversification will result in a reducing significance  
of individual contracts or customers relative to the group’s total 
operations our addressable market is increasing as we launch new 
products and enter new markets furthermore the increasing role  
of regular addon and replacement business also helps to mitigate  
the impact of significant delays in securing new customers however  
the impact of significant contracts on half and fullyear reported revenue 
remains a risk for the group
investing in product leadership
the group’s ability to compete depends on its highquality product range 
and its reputation for customer service as well as the ongoing programme 
of work to reduce product costs the board regularly reviews the level 
of investment in these areas in the light of changes in the competitive 
landscape to ensure that the group can continue to compete effectively
investing in operational excellence
the board is continually reviewing and enhancing our internal controls 
and processes and hiring additional employees in critical areas of the 
business we have two primary subcontract manufacturers ensuring 
continuity of supply and providing flexibility in meeting additional 
demand for our products
technological change
our revenue and profitability are affected by the extent to which  
there is increasing demand for and development by our competitors  
of additional products and product features for example the adoption 
of 4g  “lte” for the delivery of broadband data services to consumers 
has led some public safety agencies to explore the possibility of creating 
equivalent data networks using either planned commercial networks 
or constructing their own 4g private networks we make significant 
investments in new product development and there can be no  
guarantee that we will be able to generate sufficient revenue to offset 
these development costs or to continue to make such investments  
there are also associated risks relating to difficulties and delays in the 
development process of new products and their acceptance by  
customers if our competitors successfully launch new products or features 
which we are unable to match then we could lose market share with a 
corresponding impact on our future profitability and financial position
reliance on key markets or customers
a significant percentage of our revenue in each financial year is currently 
derived from a small number of enduser organisations the majority  
of which are governmental organisations in several key geographies
the timing of orders from these customers is influenced by a number  
of factors including governmental investment decisions which may  
be affected by changes in political and economic conditions this makes 
accurate predictions of the timing of future revenues more difficult  
in the event that there is a delay to either the tendering process or the 
placing of orders following a successful bid then revenues may not be 
generated within the originally forecast timeframe with a consequential 
impact on the profitability of the group in any given period
competition
there is strong competition in the markets in which we operate particularly 
in relation to government procurement tendering processes which rely on 
a combination of technical performance and price a significant reduction 
in the prices we achieve for our products could have a material impact on 
the group’s margins and profitability
managing rapid growth
the rapid growth of our business may place a significant strain on our 
management operational and financial resources and those of our 
manufacturing and distribution partners if we are unable to grow  
our business profitably as a result of being unable to secure adequate 
resources or incurring excessive costs in doing so then this could  
have a material adverse effect on our financial position
strategic report
the material strategic and operational risks and uncertainties  
facing the group their potential impact on our future  
performance and how we manage them
risk and impact management strategy
18 sepura plc annual report  accounts 2014 foreign currency
the group has an international customer base and purchases products and 
services in a range of currencies the reported revenues costs assets and 
liabilities of the group are therefore affected by fluctuations in prevailing 
rates of exchange between these currencies this affects comparisons 
of current year results to previous periods where equivalent underlying 
transactions are reported at differing rates and may affect future results  
if assets and liabilities are subject to revaluation over time
information security
the group regards information within the business as a key asset and 
recognises the risk and impact on the business of breaches to the integrity 
of information relating to the business
supply chain risk and product recall
we are dependent on outsourced electronic manufacturing companies for 
the manufacture of substantially all of our current products and on a small 
number of suppliers for key components any failure or inability of these 
companies to supply us could adversely affect our business our supply 
chain is complex and the use of thirdparty suppliers and service providers 
could adversely affect our product quality delivery schedules or  
customer satisfaction any of these could have an adverse effect on  
our financial results
integration of acquired businesses
our future financial performance will reflect the results of acquired 
businesses which will in turn be impacted by our ability to integrate such 
businesses into our current operations if we are unable to retain key 
employees or exploit forecast synergies then we may be unable to deliver 
the forecast level of revenues profitability and cash flows which could have 
an adverse effect on the financial results and position of the group as  
a whole
effective hedging of exchange rate exposures
the company’s presentational and functional currency is the euro 
reflecting the relative contribution of eurodenominated revenues  
the board has implemented policies that require regular reviews of the 
group’s forecast currency requirements in conjunction with a rolling 
programme of monthly forward contracts to hedge forecast net cash 
flows in major currencies where these hedges are deemed to be effective 
any unrealised gains or losses on the hedges are recognised in equity 
rather than in the consolidated income statement again reducing possible 
volatility in reported earnings arising from changes in exchange rates
effective protection of information security and integrity
the group has in place systems and processes for the classification  
and control of access to information within a number of elements of the 
business the information security standard iso27000 is a reference frame 
for all information security management systems and is the framework 
against which the group manages information security
monitor manufacturing and component supply chain
the group mitigates supply chain risk by employing a number of supplier 
monitoring mechanisms and control measures which address business 
viability production quality and component obsolescence automated 
and manual product testing is an integral part of all projects and 
manufacturing in addition all third party products undergo conformance 
testing and compliance checks
protection from vendors combined with detailed planning  
and execution 
prior to any acquisition the group undertakes detailed investigation 
and due diligence in conjunction with external advisors appropriate 
warranties and indemnities are obtained from the vendors against specific 
financial risks identified where appropriate an element of consideration 
is deferred and will only be satisfied if the acquired business generates 
the forecast level of profitability on which the valuation of the business 
was based detailed integration plans are prepared with specific risks 
identified and mitigation plans prepared which set out detailed actions 
responsibilities and timetables we conduct regular reviews with the 
management of acquired entities to assess performance against these 
plans and take action accordingly
risk and impact management strategy
sepura plc annual report  accounts 2014 19
strategic report governance group financial statements company financial statements our achievements during the year
» june 2013
july 2013
sepura crowned employer 
of the year by cambridge 
regional college
sepura received the employer of the 
year award by cambridge regional 
college “crc” within their faculty  
of construction and engineering  
the official award ceremony took  
place at crc’s premises on 25th june
sepura to deliver first tetra 
public transport solution  
in canada
sepura was selected by toronto 
transit commission “ttc” to supply 
the infrastructure for a tetra digital 
communications system covering 
toronto’s subway lines
sepura announces the 
acquisition of portalify oy
portalify provides endtoend solutions 
for mobile working via a suite of 
software applications which increase 
the safety productivity and efficiency 
of professional mobile radio users 
regardless of the communications 
standard in use by the customer 
july 2013
sepura announced 
as national business  
awards finalist
it was announced that sepura had 
been shortlisted for the international 
growth business of the year award at 
this year’s national business awards
geographical footprint 
114
countries
may 2013
sepura appoints strategic 
partner in the us
safemobile llc was appointed not  
only sepuras newest channel partner 
in north america but also both  
a sepura applications programme 
partner and one of sepura’s centres  
of competence for support in the 
united states of america
international  
revenues up 12
€97m
we have grown our business
» revenues up 11 to €1166 million
» adjusted operating profit up 19  
 to €125 million
» portalify acquired in july 2013
we have transformed sepura from being solely  
a tetra devices supplier to a geographically and 
technologically diverse critical communications 
solution supplier
strategic report
20 sepura plc annual report  accounts 2014 » november 2013
december 2013
sepura enhances offering to 
the market with the launch 
of its dmr solution 
sepura launched its dmr solution at 
comms connect the first in a series  
of planned promotional activities 
taking place on the global 
communication market
sepura launches new tetra 
dispatcher and dtt desktop 
tetra terminal
sepura announced the launch of two 
new additions to its portfolio of tetra 
products at pmrexpo in germany the 
sics net tetra dispatcher and the sics 
dtt desktop tetra terminal
january 2013
major swedish transport 
operator chooses sepura 
tetra terminal
sepura and srs ab have been  
awarded the contract for the 
deployment of tetra radios to 
värmlandstrafik the main public 
transport organisation for the  
värmland region in western sweden
austrian motorway operator 
asfinag goes the extra mile 
with sepura
asfinag the austrian stateowned 
company which builds operates and 
maintains all motorways in austria 
has selected sepura to provide tetra 
communications across its nationwide 
motorway and expressway network
october 2013
sepura launches  
new noiseeliminating  
covert solution
at gpec asia the largest event in 
the asian region for suppliers to 
public safety organisations sepura 
announced the launch of its new 
groundbreaking noiseeliminating 
solution nn5
adjusted operating  
profit up 19
€125m
we have entered new markets
» we have won new solution contracts  
 in canada luxembourg lebanon  
 and greece
» we have increased our geographical   
 footprint to 114 countries
we have invested for further success
» we acquired portalify in july 2013 to  
 expand our portfolio and market reach
» we have expanded our marketleading  
 product range
sepura plc annual report  accounts 2014 21
strategic report governance group financial statements company financial statements operational review
over the last three years sepura has been transformed 
from a tetra terminals business into a geographically 
diverse critical communications solutions provider  
with an estimated addressable market of €25 billion
targeted investment in products and 
markets offering longterm potential 
has resulted in a third consecutive year 
of doubledigit growth in earnings and 
sepura is positioned to capitalise on the 
opportunities offered by the accelerating 
analogue to digital migration
building on the strength of our  
core tetra devices markets
the group delivered a record 188000 
devices last year up from 154000  
in the previous year this includes  
record shipments into germany where  
the number of registered users is now  
over 400000 making it the world’s largest 
tetra market following further wins in the 
year our share has grown to approximately 
60 and the current backlog of contracted 
orders for future delivery is approximately 
72500 up from 30000 in september  
we also experienced double digit growth  
in other key markets such as the 
uk norway and australia
our installed base is now c12 million  
radios across 114 countries this will provide 
a growing stream of recurring revenues over 
the medium term as users look to refresh 
existing fleets and acquire accessories and 
applications to maximise the return on their 
investments in our technology
pmr a market with longterm  
structural growth
the total pmr market is continuing  
to expand with an estimated value  
of 165 billion per annum in 2017 when  
45 million pmr radios are forecast to be 
in use globally according to independent 
research from ihs an increasing proportion  
of these will be digital radios as pmr users 
migrate from increasingly obsolete analogue 
networks these independent market 
forecasts show the installed base of digital 
radios growing by over 15 cagr from  
124 million in 2013 to 229 million in 2017
the majority of this growth is expected  
to come from smaller frequently single  
site digital networks primarily for use  
by individual commercial organisations 
these users prefer a single supplier  
that can offer a simple migration path  
to a solution that suits their operational 
needs the group has therefore invested 
in expanding its routes to market and 
developing a product portfolio that will 
enable it to capitalise on these opportunities
increasing our addressable market  
new geographies
the largest geographical opportunity  
for the group is north america which  
is the world’s largest pmr market and  
is forecast to generate 25 of the growth  
in digital pmr users the group has  
recruited a local sales team which is building 
a pipeline of opportunities for both tetra 
and dmr their focus is on the 7 million 
commercial pmr users especially in key 
verticals such as oil and gas transportation 
and industrials
the group has demonstrated its  
success in entering new geographies  
with 22 countries generating revenues  
of over €1 million during the year compared  
to 14 last year these revenues include 
significant infrastructure contracts wins 
in new markets for the group in canada 
greece lebanon and luxembourg  
which are expected to lead to tenders  
for terminals in the coming year as the 
networks become operational these 
results also show a recovery in southern 
europe with spain and portugal both back 
generating revenues of over €1 million
installed base
12m
our installed base is now c12 million  
radios across 114 countries
strategic report
22 sepura plc annual report  accounts 2014 north america 
25
north america is the world’s largest pmr 
market and is forecast to generate 25 of 
the growth in digital pmr users
sepura plc annual report  accounts 2014 23
strategic report governance group financial statements company financial statements operational review
continued
strategic report
revenues from commercial 
pmr users
13
revenues from commercial pmr users 
increased by 13 to €344 million 
representing 30 of total revenues
24 sepura plc annual report  accounts 2014 increasing our addressable market 
commercial users
in addition to entering new geographies  
the group has made further progress  
in growing revenues from key commercial 
markets revenues from commercial pmr 
users increased by 13 to €344 million 
representing 30 of total revenues  
the group has broadened its management 
team through the appointment of senior 
executives with responsibility for developing 
the group’s target verticals supported  
by dedicated sales resources with specific 
sector expertise such as oil  gas 
developing a broad portfolio of  
marketleading solutions
the group has continued to invest  
in broadening its product portfolio  
the acquisition of infrastructure supplier 
3t last year was the first step to delivering 
a complete solution for commercial users 
requiring a single supplier the acquisition 
of software developer portalify in july has 
significantly expanded the group’s range of 
software tools and applications that enable  
customers to deploy and manage  
resources more effectively
the group has recently launched  
a portfolio of products utilising dmr  
which is independently forecast to be  
the fastest growing segment within pmr 
over the next 4 years with the installed base 
of dmr radios forecast to grow by 42 million 
radios by 2017 the group’s dmr offering 
incorporates many of the features that have 
helped build its reputation in tetra for 
rugged and reliable products management 
believe the group will be able to establish  
a similar reputation in the dmr market 
which when combined with fylde and  
its enabling technology that were acquired 
after the end of the year will enable dmr  
to become a significant revenue stream  
for the group over the medium term
becoming a strategic partner for  
our customers
the group has invested in developing 
products and functionality that will  
address customers’ emerging needs over  
the 15 – 20 year life cycle of a network  
this is part of the group’s commitment  
to building long term relationships with  
its customers and becoming a single 
supplier of their critical communications 
solution following the acquisitions  
of our infrastructure and applications 
offerings we now when combined  
with our terminals portfolio have the 
capabilities to provide solutions which 
generate longterm commitments from 
customers with multiyear contracts that  
are subject to incremental change orders 
and longterm maintenance agreements 
these both contributed to a closing systems’ 
order book of €78 million for delivery in 
fy15 up from €33 million last year
preparing for accelerated growth
we have taken important steps in preparing 
the business for a period of accelerated 
growth the senior management team  
has been enhanced with the establishment 
of two new positions vp  government  
and public safety and vp  commercial  
these provide additional bandwidth  
to the management team and more 
importantly focus on key market segments 
for growth
in addition we have established  
a manufacturing capability in malaysia and 
are well advanced in the implementation  
of a new integrated business system 
building long term 
relationships
1520
the group has invested in developing 
products and functionality that will  
address customers’ emerging needs over  
the 15 – 20 year life cycle of a network
sepura plc annual report  accounts 2014 25
strategic report governance group financial statements company financial statements the group delivered record revenues of €1166 million 
up 11 from last year’s €1048 million
financial review
revenue
€1166m
record revenues of €1166 million  
2013 €1048 million
revenue
the group delivered record revenues  
of €1166 million up 11 from last year’s 
€1048 million €07 million of the increase 
related to portalify whose results have been 
consolidated for the first time following 
its acquisition on 25 july 2013 the total 
number of radios shipped increased by 
 22 from 154000 to 188000 while the 
group’s infrastructure offering acquired 
last year contributed to major wins in new 
markets including canada greece lebanon 
and luxembourg
gross margin
gross margin strengthened as forecast in the 
second half of the year with a gross margin 
for h2 of 491 compared to 449 in h1 
and 490 for the same period last year  
the gross margin for the full year of 474 
was adversely affected by the foreign 
exchange movements reported for the  
first half of the year on a constant currency 
basis the gross margin was 480 consistent 
with the 479 reported for the same period 
last year as previously reported the volatility 
of the us against the euro reported last 
year continued to impact pricing from sub
contract manufacturers during the first half 
of the current year while a weaker sterling 
had an adverse impact on reported euro 
revenues and margins from the group’s 
domestic market product cost reduction 
programmes and the introduction of higher 
margin products such as portalify’s software 
applications continue to mitigate any 
price competition changes in product and 
customer mix were neutral reflecting the 
group’s increasing diversity and resilience
research and development costs
gross expenditure on rd increased by  
6 to €167 million 2013 €158 million  
a significant proportion of these costs relate  
to the fixed sterling costs of the group’s  
ukbased development teams these are  
hedged 12 months in advance and so reflect  
last year’s gbpeuro rates and on a constant 
currency basis gross expenditure on rd 
increased by 1 to €160 million
sepura’s “one stop shop” solution requires  
a portfolio where each product has the same 
sepura look and feel whether through  
a common user interface or industrial 
design the integration of both sepura 
systems’ and portalify’s development teams 
into the group’s overall development 
structure sharing common tools and 
methodologies and working on a 
consolidated product roadmap has been  
an important step towards realising that 
vision it has also improved efficiency and 
reduced backoffice costs and thereby 
reduced rd expenditure to 143 of 
revenues from 151 last year development 
of sepura’s next generation of terminals  
is transitioning from platform development 
to productisation and the group remains  
on track to release its first products based  
on the new platform during 2015 the 
productisation will lead to a short term 
increase in rd expenditure in absolute 
terms but it will continue to fall as a 
percentage of revenues
capitalised development expenditure 
represented 75 2013 76 of  
related gross development spend  
the related amortisation charge for  
the period decreased to €81 million  
2013 €102 million as the development 
expenditure on several older products  
is now fully amortised while an increasing 
proportion of research and development 
expenditure is on longterm projects  
such as the group’s next generation 
platform on which amortisation has  
yet to commence
strategic report
26 sepura plc annual report  accounts 2014 research and  
development costs  
€167m
an increase of 6 to €167 million  
2013 €158 million
selling marketing distribution and 
administrative expenses
selling marketing and distribution  
costs increased by 7 to €166 million  
2013 €155 million reflecting the 
investments made to expand the group’s 
addressable market current year costs 
include a full year contribution from sepura 
systems together with the incremental  
costs associated with portalify and the 
launch of the group’s dmr portfolio  
a local sales team has been established  
in north america with seven fulltime sales 
employees recruited to address the growing 
pipeline of tetra and dmr opportunities  
in the world’s largest pmr market
administrative expenses excluding the  
ifrs 2 share option cost nonrecurring costs 
and the amortisation of acquired intangibles 
increased by 13 compared with the  
same period last year to €95 million from 
€84 million 7 of this increase related  
to foreign exchange and the remainder 
related to the incremental costs of sepura 
systems and portalify following acquisition
the total cash operating costs being  
the gross rd expenditure sales and 
marketing costs and administrative  
expenses excluding the ifrs 2 share  
option cost associated national insurance  
the amortisation of acquired intangibles  
and nonrecurring costs increased by 8  
to €428 million 2013 €397 million 
reflecting the investment in research 
and development and routes to market 
described above
operating profit
the group presents adjusted operating 
profit as a key performance measure in 
addition to the operating profit reported 
under ifrs as the exclusion of certain  
nonoperational or noncash items better 
reflects the underlying trading performance 
of the group adjusted operating profit  
for the period has increased by 19 to  
€125 million 2013 €105 million  
while on a constant currency basis  
adjusted operating profit would have  
been €150 million a 43 increase over  
last year the operating profit reported under 
ifrs was €144 million 2013 €82 million 
representing growth of 77
nonrecurring costs
the group incurred €329000 of costs 
primarily professional fees in connection 
with the acquisition of portalify together 
with €261000 of subsequent  
restructuring costs
taxation
the growth of the business means that 
sepura has ceased to qualify as an sme 
under the uk government’s rd credit 
scheme resulting in less tax relief on 
research and development expenditures 
as the group now qualifies under the large 
company rate of 30 rather than the sme 
rate of 125 applicable in the prior year 
while the impact has been partly mitigated 
by the introduction of the patent box regime 
the group incurred a net tax charge for 
the period of €11 million representing an 
effective tax rate of 7 compared to  
a €12 million tax credit in the prior year  
this effective rate is expected to increase  
as the group grows its revenues and profits 
in the medium term
however the group continues to benefit 
from brought forward taxable losses and 
had €99 million net of losses available for  
offset against future taxable profits  
2013 €99 million the group also has 
deferred tax liabilities of €68 million  
2013 €66 million in relation to the 
development costs capitalised under ifrs 
together with €08 million 2013 €08 million 
in relation to acquired intangibles which 
do not represent future tax cash payments 
and will be released to income as the related 
costs are amortised
sepura plc annual report  accounts 2014 27
strategic report governance group financial statements company financial statements financial review 
continued
eps
adjusted diluted earnings per share  
based on expensing development  
costs as they are incurred and excluding  
nonrecurring costs the ifrs 2 share option 
charge associated national insurance and 
the amortisation of acquired intangibles  
was 84 € cents 2013 78 € cents ifrs fully 
diluted earnings per share was 94 € cents 
2013 65 € cents
foreign exchange
the volatility of both euro  gbp and euro  
usd exchange rates over the last two years 
has had a €25 million adverse impact on the 
results for the period adjusted operating 
profit on a constant currency basis was  
€150 million after adjusting for the 
following items
»  €04 million reduction in the euro value  
 of the group’s sterling revenues as the  
 euro has strengthened relative to sterling  
 compared to the same period last year
»  €04 million increase in product costs due  
 to adverse movements in the euro  usd  
 rate compared to the same period last  
 year which impacts the cost of  
 components sourced by the group’s   
 manufacturing partners
»  €03 million of transactional net foreign  
 exchange losses compared to the prior  
 year and
»  €14 million increase in the reported euro  
 value of the group’s sterling operating  
 costs as explained below
the group has a policy of hedging  
the majority of its operating expenses  
which relate to ukbased development  
and operations and are incurred in sterling  
and has in place forward contracts  
to sell euros and buy sterling to meet  
these forecast sterling expenses for the 
next twelve months this provides certainty 
for the future reported eurodenominated 
value of these costs the average hedge 
rate for the period was €124  £1 based 
on prevailing rates during the prior year 
compared to €116  £1 for the same  
period last year which were in turn  
based on prevailing rates twelve  
months previously as a result the  
group’s hedged euro operating costs  
have increased by 6
the hedges outstanding at the end  
of the period covered £192 million  
2013 £194 million of forecast expenses 
at rates ranging from €1169 – €1219  £1 
2013 €1177 – €1274  £1 and with  
a weighted average rate of €1190  £1  
2013 €1239  £1 compared to the spot  
rate at the end of the period of €1205  
£1 2013 €1183  £1 the translation of 
the group’s hedged sterling cost base into 
euros in the coming year will result in lower 
reported euro costs than those reported for 
the current period however the weakening 
of the euro both during and since the end of 
the period together with the rates currently 
available for hedging future costs indicate 
that this position may reverse in fy16
cash flows and financing
the groups continued focus on working 
capital management delivered strong 
cash conversion despite the growth in 
the business cash conversion for the year 
was up 101 compared to 119 last year 
closing cash balances at 28 march 2014 
stood at €80 million 2013 €86 million 
and net cash after deducting outstanding 
borrowings acquired with sepura systems 
and portalify was €53 million  
2013 €66 million
significant nonoperating cash flows during 
the period related to
»  €50 million 2013 €66 million paid  
 for acquisitions
»  €125 million 2013 €120 million spent  
 on capitalised development costs
»  €46 million 2013 €15 million of other  
adjusted diluted earnings per share ¢
60 78
2012 2013 2014
84
84¢
strategic report
28 sepura plc annual report  accounts 2014 dividend 
200p
a total dividend of 200p per ordinary share  
2013 168p
 capital expenditure up from prior year  
 as a result of investment in dmr   
 establishment of a manufacturing  
 capability in malaysia and investment  
 in a new integrated business system
»  €30 million 2013 €24 million paid in  
 relation to last year’s final dividend and  
 this year’s interim dividend
»  €13 million 2013 €17 million purchasing  
 shares for treasury and
»  €02 million 2013 €07 million received  
 from employees exercising share options
the balance sheet
the cash generation delivered during the 
period reflects continued focus on working 
capital inventory levels have decreased  
by €13 million despite the broadening  
of the group’s product portfolio by applying 
sepura’s supply chain expertise to sepura 
system’s procurement processes  
trade receivables excluding the impact  
of the acquisition of portalify increased  
by 16 or €48 million compared to the  
prior period this was in line with the growth 
in second half revenues over the same 
period last year with days sales outstanding 
being consistent with prior year at 91 days  
2013 90 days trade payables increased  
by €39 million in line with increased levels 
of activity across the group
share capital
the company has continued to  
purchase shares for treasury in anticipation 
of future share option awards vesting  
with a further 09 million shares  
2013 18 million acquired during the  
period for total consideration of €13 million 
2013 €17 million some of these were 
utilised to settle options over 05 million 
2013 17 million shares that vested and 
were exercised during the period leaving  
05 million shares in treasury at the end  
of the period
a further invitation for eligible employees  
to participate in the company’s saye 
scheme was issued in july with options  
over 05 million shares subsequently granted 
at an exercise price of 96p options were 
also granted to senior executives under 
the company’s longterm incentive plan 
totalling 20 million shares 2013 31 million 
these will vest if targets relating to the 
period to 31 march 2016 are achieved
the company also issued 13 million  
shares to settle €1 million of the contingent 
consideration payable in respect of the 
acquisition of 3t communications ag  
now renamed sepura systems gmbh  
last year
dividends
the board has proposed a final dividend  
of 141p per ordinary share in respect  
of the year 2013 117p payable on  
8 august 2014 to shareholders on the 
register at the close of business on  
4 july 2014 giving a total dividend  
of 20p per ordinary share 2013 168p  
this represents a 19 increase on last  
year’s total dividend reflecting the group’s 
strong balance sheet cash generation 
during the year and increasing confidence 
in the future
steve chamberlain
chief financial officer
9 june 2014
sepura plc annual report  accounts 2014 29
strategic report governance group financial statements company financial statements corporate social responsibility
sepura recognises that a positive approach  
to corporate social responsibility “csr” can  
have a positive contribution to its reputation  
and the ability to create and maintain longterm  
value for shareholders
this is why the board led by the chief 
executive officer takes csr seriously  
and is committed to advancing our related 
policies systems and initiatives across  
all areas of the business as we continue  
to grow and mature these areas primarily 
include ethical behaviour concern for 
employee welfare health and safety  
care for the environment and  
community involvement
we make considerable efforts to 
communicate effectively with all 
stakeholders who may have an interest 
in our csr activities including our 
shareholders customers suppliers partners 
and employees the company’s website 
is one of the main routes for providing 
information to interested parties and 
providing us with constructive feedback
ethical behaviour
in support of our core values of 
integrity excellence care teamwork 
and commitment sepura expects that 
its business around the world is always 
conducted to high ethical standards of 
practice and legal principles to that end 
all our employees and business partners 
are also expected to demonstrate high 
standards of professionalism and integrity  
at all times when conducting business  
on the company’s behalf this is indeed  
how we behave in practice
a code of business conduct and ethics 
including a whistleblowing policy covering 
the whole of the business and our various 
stakeholder interests is in place and is 
regularly reviewed and reiterated to staff  
and business partners
human rights
the group respects all human rights and 
conducts its business in adherence to all 
relevant government guidelines and takes 
all practical steps to ensure that its products 
are not supplied to organisations that may 
use them to advance terrorism internal 
repression or otherwise abuse human rights
employees
as a business driven largely by technical 
development and innovation our main 
assets lie in the talents and skills of the 
people we employ consequently we aim 
to attract retain and motivate the highest 
calibre of employees both technical 
and nontechnical by encouraging and 
rewarding high performance through 
competitive remuneration and incentive 
arrangements sepura continues to be an 
“investor in people” accredited employer
acknowledging that an environment that 
fosters innovation and collaboration is 
critical to our success efforts are made 
to identify and provide further learning 
training and development opportunities 
for our employees these are structured 
so as to align our organisational objectives 
with personal career aspirations formal 
performance reviews including 360° 
appraisals are conducted annually
similarly the importance of twoway 
communication is recognised particularly 
as it relates to the business and its 
performance we actively encourage 
employee involvement through a staff 
council and keep employees regularly 
informed of the group’s activities and 
performance through team briefings direct 
access to managers and directors at all levels 
and by interim and yearend presentations 
to all staff
during the period and with a view  
to encouraging share ownership amongst  
its employees the company issued  
another invitation to employees to join  
an allemployee sharesave scheme in the  
uk this scheme which is hmrc approved 
enables employees to purchase shares in 
sepura through regular savings made over  
a three or five year period but at a discount 
of up to 20 on the share price as 
determined at the outset the company 
intends to make an annual invitation under 
this scheme and will from time to time 
consider its extension to other countries  
in which it has established a major  
operating presence
strategic report
30 sepura plc annual report  accounts 2014 health and safety
during the period there were no accidents 
reportable under the reportable injuries 
diseases and dangerous occurrences 
regulations 2013 there were 3 non
reportable accidents in the uk 2013 5 
the group operates a health  safety 
management system based on the 
iso18001 framework the health and 
safety committee meets regularly with 
responsibility for controlling directing 
and delegating responsibility to line 
management and functional heads for the 
practical daytoday compliance with the 
group’s health and safety policy statement 
other operating procedures and relevant 
legislation appropriate training is also 
coordinated by this committee together 
with an ongoing awareness programme  
for all employees to help create and 
maintain a safe and healthy working 
environment health  safety is included  
as part of the group’s internal audit cycle 
with periodic audits also undertaken  
by an external consultant
it continues to be the company’s policy 
to offer staff free influenza injections and 
additional policy and contingency plans 
are in place in the event of any pandemic 
virus impacting staff health and business 
continuity the main health and safety risks 
to the business continue to be fire electrical 
faults manual handling work station use 
driving and stress employee travel to high 
risk geographies due to the expanding 
diversity of the group’s customer base  
is also of particular concern the statutory 
testing of all equipment and appliances  
is up to date and the next fiveyear audit  
of our fixed wiring will be carried  
out during 2016 
equality and diversity
the split of staff by gender at the end of the 
period was as shown above
sepura is committed to providing equality  
of opportunity to all existing and prospective 
employees without unlawful or unfair 
discrimination in addition we are supportive 
of the employment and advancement  
of disabled persons the group gives full  
and fair consideration to the applications  
for employment from disabled persons 
having regard to their particular aptitudes 
and abilities appropriate arrangements are 
made for the continued employment and 
training career development and promotion 
of disabled persons employed by the group 
if members of staff become disabled the 
group aims to continue their employment 
either in the same or an alternative position  
with appropriate retraining being given  
if necessary
manual handling training is offered to all 
staff to reduce risk of injury when lifting 
heavy objects and regular work station  
risk assessments are carried out together 
with any remedial action necessary  
all staff have free access to a stress 
counselling service
several new initiatives have been launched 
as part of the group’s programme  
of continuous improvement additional 
training has been provided to all line 
managers to reinforce awareness of their 
responsibilities while tailored inductions 
are provided to all new employees a new 
system to assess and review risks associated 
with chemicals falling under the control  
of substances hazardous to health 
regulations 2002 has together with 
additional training empowered teams  
to take ownership of the endtoend process 
of specification procurement and disposal  
of such chemicals the group is also 
responding to new risks identified as 
the group’s activities become more 
geographically diverse a harmonised  
system is being rolledout to ensure 
best practice based on the current high 
standards demanded in the uk is in place 
across the group
directors
senior 
managers
1
other
employees
gender diversity
278
male
female
49
32
6
3
1 being participants in the senior management bonus scheme
sepura plc annual report  accounts 2014 31
strategic report governance group financial statements company financial statements corporate social responsibility
continued
environmental care
we are committed to minimising the 
environmental impact of our business 
operations and complying with all relevant 
legislation with proactive and effective 
environmental management throughout  
our business operations wherever 
practicable the company is iso 14001 
accredited and our business complies  
with relevant legislation and regulation
we set targets against which we measure 
and report driving forward continuous 
improvement in resource conservation  
and the prevention of pollution throughout 
the lifecycle of our products with  
a particular focus on
»  conserving resources through better   
 energy efficiency reduction of travel   
 emissions and recycling
» promoting sustainable design principles  
 in the development of new products  
 and packaging
» fostering a positive culture amongst our  
 employees customers and supply chain  
 by the development and communication  
 of clear policies and the promotion  
 of good practice 
» minimising our impact on the  
 communities in which we operate  
 through engagement with local   
 organisations and raising  
 employee awareness and
» using our environmental management  
 system to provide a framework for setting  
 evaluating and reporting environmental  
 performance
specific initiatives undertaken during  
the last year included
»  packaging
 we have applied ecodesign principles  
 to a review of all of the packaging  
 we use decreasing the size of packaging  
 and delivered a lower carbon footprint  
 for the  packaging itself and reduced   
 emissions from shipping
»  recycling
 we encourage recycling wherever
 possible and during the period achieved  
 an overall recovery rate of 47 on waste  
 at our cambridge headquarters
»  batteries and radios
 we record sales by weight and chemistry  
 to comply with the waste batteries  
 and accumulators regulations and offer  
 a “takeback” scheme for batteries and  
 radio units that have reached their  
 endoflife we employ a specialist   
 contractor to recycle returns and  
 currently achieve a recycle rate  
 of at least 96 per unit
»  transport
 we participate in the government’s  
 “bikes for work scheme” for employees  
 and offer staff the opportunity  
 to have their bikes serviced free  
 of charge the number of employees   
 based at our cambridge hq who regularly  
 cycle to work has risen from 13 in  
 october 2012 to 20 in october 2013
by way of supplement to our existing 
environmental management system  
a regular environmental newsletter  
is issued to help highlight and explain  
to staff and other interested stakeholders 
exactly what we are doing in this  
important area
recycle rate 
47
overall recovery rate of 47 on waste
cycle rate
20
employees who regularly cycle to work 
october 2012 13
strategic report
32 sepura plc annual report  accounts 2014 greenhouse gas emissions
sepura is committed to reporting its total 
carbon emissions based on the scope 1  
and 2 greenhouse gas emissions from across 
the group a “financial control” approach 
has been adopted in conjunction with the 
“ghg protocol corporate accounting and 
reporting standard revised edition” and 
emission factors from uk government’s 
“ghg conversion factors for company 
reporting 2014” to determine the group’s 
total greenhouse gas emissions based on 
detailed metrics from each of the group’s 
locations where they are available data from 
several smaller offices based in serviced 
premises has been excluded on the grounds 
of materiality as the data is not available  
and estimates have been used for the 
group’s offices in vienna as the landlords 
could not provide accurate data
scope 1 direct emissions 72 06 02
scope 2 indirect emissions 1045 90 30
total scope 1 and 
scope 2 emissions 1117 96 32
 tonnes of co
2
 
tonnes of co
2
 
per €1m tonnes of co
2
  per €1m of revenue per employee
community involvement
sepura aims to be a responsible  
corporate citizen and active employer  
in the communities in which we operate 
particularly at our main operating site  
in cambridge in april this year sepura 
became the headline sponsor of the 
cambridge united community trust  
which was established in 2011 with the  
aim of positively influencing 10000 children 
per year through a series of programmes  
for young offenders children at risk  
of exclusion ethnic minority groups 
disability groups the homeless and people 
living in areas of deprivation
gordon watling
chief executive officer
9 june 2014
the total emissions and intensity ratios for fy14 which forms the baseline year from which 
progress will be tracked are as follows
sepura plc annual report  accounts 2014 33
strategic report governance group financial statements company financial statements introduction from the chairman
my board colleagues and i recognise that 
sepura’s participation in an established 
investment market carries significant 
responsibility to manage the company 
transparently and in a manner appropriate  
to a successful business we also believe  
that the creation of value for shareholders  
on a basis that is sustainable over the  
long term requires the group to be  
operated within good governance 
principles we are therefore committed  
to high standards of corporate governance 
and business integrity 
the board considers good corporate 
governance to be at the heart of the  
group’s operations and the determination 
and implementation of the group’s overall 
strategy in terms of both informing decisions 
and monitoring their implementation  
the board has established the structure  
and procedures described in this report  
for these purposes
the following pages set out
» biographical details of the members  
of our board
» a summary of the operation of our board 
» a report from our audit committee
» the directors’ remuneration report
these reflect the new reporting 
requirements that take effect in relation 
to the company this year and i hope that 
readers will find them informative
this corporate governance report also sets 
out how the company has applied the main 
principles of good governance contained 
in the uk corporate governance code the 
“code” for the period ended 28 march 2014 
the board considers that the company is 
fully compliant with the code with just  
two exceptions 
firstly the board does not currently  
have a nominated senior independent 
nonexecutive director although it 
intends to appoint one in the coming year 
secondly although both our independent 
nonexecutive directors were appointed 
to the nominations committee during 
the year that committee has a parity 
of independent and nonindependent 
directors when counting me as chairman 
in the latter category rather than a majority 
as recommended by the code we believe 
its current membership works well although 
we do intend to move to full compliance  
as the board continues to develop
we look forward to reporting to you on 
these and other developments in our annual 
report next year
john hughes cbe
chairman
9 june 2014 
corporate governance report
governance
34 sepura plc annual report  accounts 2014 sion kearsey 48 n
nonexecutive director
sion kearsey is a founding member  
of sepura and joined the group in 2002 
he was a cofounder and is now managing 
partner of kelso place asset management 
llp  a private equity firm specialising in 
acquiring controlling interests in uk based 
companies sion was previously a managing 
director of goldman sachs international 
in its fixed income currencies and 
commodities division
nigel smith 60 a n r i
nonexecutive director
chairman of the remuneration 
committee
nigel smith joined the group in july 2013 
he is a highly experienced executive  
with deep technology sector expertise 
he is currently chairman of spikes cavell 
a business focused on the public sector 
in the uk and usa prior to that he was in 
hm treasury as permanent secretary board 
member and chief executive of the office  
of government commerce and is still 
actively involved with government as an 
adviser his previous experience includes 
senior board roles at major industrial and 
engineering businesses including invensys 
plc charter group plc and ti group plc  
he is also a nonexecutive director of 
sellafield ltd
gordon stuart 50 a n r i
nonexecutive director 
chairman of the audit committee
gordon stuart joined the group in  
july 2013 bringing his detailed 
understanding of quoted technology 
businesses he is currently chief financial 
officer of tmf group a leading global 
provider of high value outsourced business 
services previously following six years at 
mckinsey  co he held senior positions 
with a number of highly successful uk 
listed businesses serving as group finance 
director of london bridge software plc  
and thereafter xansa plc he then became  
chief financial officer of recruitment process 
outsourcing firm alexander mann solutions 
he also served as a nonexecutive director  
of intec telecom systems plc
john hughes cbe 62 n r i
nonexecutive chairman 
chairman of the nominations committee
john hughes joined the group as  
nonexecutive chairman in july 2010  
john has more than 30 years experience in 
the management and strategic positioning 
of complex high technology businesses 
john has previously held senior positions 
with a number of leading technology 
companies including thales group  
lucent technologies and hewlettpackard 
he is currently nonexecutive chairman  
of just eat plc spectris plc telecity  
group plc and nonexecutive director  
of csg systems international inc a nasdaq
listed company john is also an alzheimers 
society ambassador
gordon watling 46 
chief executive officer
gordon watling was appointed to the board 
as chief executive officer on 1 october 
2008 having served as chief operating 
officer since joining the group in november 
2006 he was previously global engineering 
director of honeywells electronic sensing 
business from 2003 to 2006 and operations 
director of invensys energy systems from 
1998 to 2000 until he became development 
manager at hpagilent technologies in 
2000 prior to that gordon had operations 
development and manufacturing roles  
at schlumberger industries between  
1985 and 1997
steve chamberlain 41 
chief financial officer
steve chamberlain was appointed chief 
financial officer in march 2012 he joined 
the group from autonomy where he spent 
7 years as vp finance with worldwide 
responsibility for finance during that time 
steve played a pivotal role in the successful 
integration of key acquisitions with a 
combined value of 2 billion he has over  
15 years of experience in the technology 
sector which includes time in practice at 
arthur andersen and deloitte steve is a 
chartered accountant and has a masters 
degree in mechanical engineering 
manufacture and management from  
the university of birmingham
our board and  
senior management
the board is responsible 
for providing leadership 
for the group it ensures 
that the right strategy  
and controls together 
with appropriate financial 
and human resources  
are in place to deliver 
value to shareholders and 
other stakeholders
kasper barfoed
vice president sales
jonathan hamill
vice president government and public safety
chris d’aguiar
vice president commercial
michael slade
development director
james griffiths
group hr director
duncan crouch
operations director 
steve barber
head of product strategy
a audit committee
n nominations committee
r remuneration committee
i independent nonexecutive director
senior management team
sepura plc annual report  accounts 2014 35
strategic report governance group financial statements company financial statements corporate governance report continued
this schedule of matters reserved for the 
board’s decision is reviewed annually 
and updated as considered appropriate 
in addition certain matters have been 
delegated to three principal committees 
within clearly defined terms of reference 
their remits together with the composition 
of each committee are reviewed annually 
the current terms of reference for the audit 
remuneration and nominations committees 
are available on the company’s website at 
wwwsepuracom a brief resumé of the role 
of each of these committees appears later in 
this report
the directors have access to the advice  
and services of the company secretary 
whose appointment and removal may  
only be effected by the board the company 
secretary who also acts as secretary to each 
committee is responsible for information 
flow to the board and committees 
facilitating the induction and professional 
development of the directors and advising 
through the chairman on compliance with 
board procedures and applicable laws and 
regulations on governance matters
board decisions are taken through consensus 
following debate as appropriate though 
no director so requested during the period 
directors have the right to request that 
any concerns they may have are recorded 
in the appropriate board or committee 
minutes minutes are circulated for comment 
before being formally approved at the 
next relevant meeting there is also an 
agreed procedure by which directors may 
take independent professional advice 
relating to their duties at the company’s 
expense if required no such advice was 
taken by any director during the period
all directors are able to and do devote 
sufficient time and attention to their board 
duties and responsibilities
the board has adopted a formal schedule 
of matters specifically reserved for its or its 
committees’ decision which include
» the group’s strategy which is reviewed at 
an annual strategy meeting of the board 
and management team as well as when 
appropriate during the year 
» the business plan and annual operating 
budget which are prepared and 
considered in the context of the outcome 
of the strategy meeting 
» internal controls and risk management 
which are reviewed regularly by the  
audit committee
» major investments and capital projects 
and monitoring their subsequent 
performance
» accounting policies which are reviewed  
in detail by the audit committee
» dividend policy and payments 
commented on further in the directors’ 
report on page 56
» shareholder communications such as 
announcements of results and this annual 
report and accompanying notice of agm
» the board structure composition  
and succession planning which 
are handled in more detail by the 
nominations committee
» executive remuneration policy and  
the remuneration of the chairman 
which are handled by the remuneration 
committee and
» the remuneration of the nonexecutive 
directors in relation to which they  
do not participate in decisions
summary of the operation of our board
the company is directed by the board 
of directors which provides leadership 
support and challenge to the rest of 
the group the group operates within a 
framework of appropriate and effective 
controls that enables risks and uncertainties 
to be identified assessed and managed  
the board
» sets the group’s strategic aims
» ensures that the necessary financial and 
human resources are in place
» reviews management performance
» defines the group’s values and standards
» ensures that its obligations to 
shareholders are understood and met and
» works closely with the operating 
management to achieve the group’s 
objectives
all members of the board take collective 
responsibility for the group’s performance
throughout the financial period the board 
had six members comprising
» a nonexecutive chairman john hughes 
who was independent on appointment
» two executive directors gordon watling 
chief executive officer and steve 
chamberlain chief financial officer and 
» three other nonexecutive directors  
nigel smith and gordon stuart who 
were independent on appointment and 
replaced tony illsley and david tilston  
at the company’s agm in 2013 and  
sion kearsey
36 sepura plc annual report  accounts 2014 board balance and independence
the board believes that its current structure 
and membership of two executive directors 
and four nonexecutive directors including 
the chairman is appropriate and represents 
a good balance of skills and experience 
necessary to manage the business and  
the company in an effective and successful 
manner this composition ensures that  
a proper balance of influence is maintained 
without one person or separate group 
having undue powers of decision making 
all the nonexecutive directors bring  
strong independent judgement to bear 
on the board’s deliberations and decision 
making process
as recommended by the code the board 
has considered the independence of its 
nonexecutive directors and determined 
that two of its three nonexecutive  
directors are independent for this purpose 
in addition the chairman was independent 
at the time of his appointment to that 
position sion kearsey is not deemed to  
be independent under the code due to his 
shareholding in the company and his being 
a principal shareholder and participant in  
the relationship agreement details of 
which are given in the directors’ report 
mr kearsey is though considered fully 
independent of management and makes 
a valuable contribution to the board as a 
whole in his role as a nonexecutive director
the board meets regularly at scheduled 
meetings approximately eight times per 
year at these meetings it reviews the 
development trading performance and 
plans of the group if and when required 
additional meetings are held usually by 
telephone conference
a contract bid committee has also been 
established with a remit to help facilitate the 
review and determination of contractual bid 
proposals which exceed predetermined 
approval limits delegated to management
irrespective of their membership all  
nonexecutive directors may attend 
committee meetings and the executive 
directors and members of management 
may attend and present on relevant matters 
at the invitation of the committee chairman
directors absent from meetings were unavoidably prevented from being present where a director was absent from two meetings they  
were both on the same day
where a director is unable to attend a particular meeting full documentation for the meeting is issued to them their views sought  
in advance and briefings are provided subsequent to the meeting as appropriate
the attendance of current board and committee members at meetings and calls  
as compared with the number of meetings held during the period they were a member  
of the board or on the relevant committee is shown below
   audit remuneration nominations
  board committee committee committee
  8 meetings 3 meetings 4 meetings 1 meeting
john hughes 78
1
 – 34
3
 11
1
gordon watling 88 – 44 –
steve chamberlain 88 33 44 –
sion kearsey 88 – 44 11
nigel smith2 56 22 22
1
 –
gordon stuart
2
 66 22
1
 22 –
1 denotes chairman status
2 appointed to the board in july 2013
– and were both appointed to the audit and 
remuneration committees in july 2013
– and were both appointed to the nominations 
committee in february 2014
3 john hughes would not attend meetings of the 
remuneration committee whilst it is considering 
matters in relation to his own remuneration
all directors on the board at that time attended  
the agm
tony illsley and david tilston attended all board and 
committee meetings until they stepped down from the 
board in july 2013
the role of the chairman and  
chief executive
the roles of the chairman and chief 
executive are separated with a clear division 
of responsibility at the head of the company 
having been established agreed and set out 
in writing this division of responsibilities 
has recently been reviewed and no changes 
found necessary 
the chairman is primarily responsible for 
managing the board facilitating the effective 
contribution of all directors for ensuring 
effective communication with shareholders 
and that all board members are aware of the 
views of major investors
the chief executive together with the 
chief financial officer has been delegated 
appropriate responsibilities and authorities 
for the effective leadership of the senior 
management team in the daytoday 
running of the business for carrying out 
the agreed strategy and for implementing 
specific board decisions relating to the 
group’s operations
during the period the chairman held 
both formal and informal discussions with 
the nonexecutive directors without the 
executive directors being present
sepura plc annual report  accounts 2014 37
strategic report governance group financial statements company financial statements corporate governance report continued
reelection of directors
all directors are to be proposed for 
reappointment at the company’s 
forthcoming annual general meeting  
the board considers that each of the 
nonexecutive directors makes a valuable 
contribution to the group both at and 
outside board meetings following the 
results of the board evaluation the chairman 
confirms that each of the nonexecutive 
directors continues to be effective
takeover directive 
disclosures relating to the takeover directive 
are included on page 60
shareholder relations
the board is committed to maintaining 
good communications with existing 
and potential shareholders based on 
the mutual understanding of objectives 
a comprehensive investor relations 
programme underpins this commitment 
the chairman chief executive chief 
financial officer and chairman of the 
remuneration committee have regular 
dialogue with institutional shareholders  
in order to develop an understanding 
of their views which is fed back to and 
discussed with the board presentations  
are given to analysts and investors covering 
the annual and interim results
the results announcements and results 
presentations together with all information 
reported to the market via a regulatory 
information service press releases and other 
shareholder information are published on 
the company’s website at wwwsepuracom 
additional shareholder information is set out 
on page 110
all shareholders are encouraged to attend 
and have the opportunity to ask questions 
at the company’s annual general meetings 
and at any other times by contacting the 
company the chairmen of the audit 
nominations and remuneration committees 
will be available at the annual general 
meeting to answer questions relating to 
the responsibilities of those committees
the notice convening the 2014 agm will be 
issued at least 20 working days in advance 
of the meeting and separate resolutions will 
be proposed on each substantially separate 
matter the results of the proxy votes on 
each resolution will be published on the 
company’s website after the meeting
remuneration committee 
nigel smith chairman
the remuneration committee comprises 
three independent nonexecutive directors 
including the chairman of the board and 
meets at least three times per year and 
otherwise as necessary it met four times 
during the period it advises the board on 
the company’s remuneration strategy and 
determines on behalf of the board and 
within its agreed remuneration framework 
the individual remuneration package and 
conditions of employment of each of the 
executive directors and the chairman
no director is involved in deciding his  
own remuneration whether determined  
by the committee or in the case of other 
nonexecutive directors by the board
the directors’ remuneration report  
on pages 42 to 55 includes a more detailed 
description of the remuneration  
of the directors
performance reviews and  
directors’ development
an internally facilitated evaluation of the 
board’s performance individual directors 
and its committees and of the performance 
of the chairman was undertaken during 
the period the appraisal questionnaires 
used were wideranging covering the 
membership activities and performance  
of the board and its committees the 
appraisal outputs were used to highlight 
strengths and weaknesses and indicated 
that the overall performance was effective  
a number of areas for improved 
effectiveness and opportunities to develop 
processes were identified for further 
consideration the board plans to agree 
specific actions to address these
directors have free access to the  
company’s officers management and 
advisers and to visit the company’s 
operations every director has access  
to appropriate training as required 
subsequent to appointment and it is  
the responsibility of the chairman and 
the company secretary to ensure that the 
directors are able to update their skills and 
are provided with the necessary resources 
to do so
board committees
audit committee 
gordon stuart chairman
this committee is commented upon in its 
report which commences on page 39
nominations committee 
john hughes chairman
the nominations committee now  
comprises the chairman who was 
considered independent on appointment 
and three other nonexecutive directors 
two of whom are considered independent 
it is responsible for evaluating the balance 
of skills knowledge and experience of the 
directors it also reviews the composition 
and structure of the board and makes 
recommendations to the board on 
retirements and appointments of additional 
and replacement directors including 
succession planning before they joined  
the board it selected and recommended  
the appointment of nigel smith and  
gordon stuart at last year’s agm following 
the completion of two full threeyear terms 
by the then outgoing independent  
nonexecutive directors this followed  
a formal rigorous and transparent 
recruitment process with the assistance  
of a leading independent external 
recruitment firm after assessing the skills  
and character profile that would be required  
this included both candidates meeting 
all ongoing directors prior to their 
recommendation for appointment
the board recognises the benefits  
of diversity in its membership and the  
group more generally and has a policy  
that recruitments to the board should 
enhance such diversity the directors 
currently on the board are from a diverse 
range of backgrounds and provide a wide 
range of knowledge skills and experience 
enriching board discussions and informing 
its decision making 
gender diversity forms part of the groups 
overall approach to equal opportunities  
as commented upon under corporate  
social responsibility on page 31 and  
the board supports this approach as part  
of its own policy
38 sepura plc annual report  accounts 2014 report of the audit committee
audit committee 
gordon stuart chairman
the audit committee comprises two 
independent nonexecutive directors 
in accordance with the provisions of the 
code relating to companies which are not 
constituents of the ftse 350 the committee 
meets at least three times a year together 
with representatives of the executive and 
finance management teams and the external 
auditors as appropriate it also meets 
privately with the external auditors  
on a regular basis 
the committee
» is chaired by an individual with  
recent significant and relevant  
financial experience
» is responsible for recommending the 
appointment review and remuneration of 
the external auditors and has authority to 
approve their engagement for both audit 
and permitted nonaudit services within 
an agreed framework
topic what was considered
financial reporting   the annual report interim results and related announcements together with reports from 
the external auditor further details on specific financial reporting risks identified and their 
mitigation are given below 
internal controls   the effectiveness of the group’s internal control systems and risk management processes in 
place during the period as set out on page 41
risk register   the group’s risk register which forms an integral part of the group’s risk management 
process as set out on page 41
the external auditor   the proposed audit plan of the external auditor together with the results of their review of 
the interim results the audit of the annual report their proposed fees and the policies in 
place to ensure the external auditor’s independence as set out below
going concern   the basis of the statement on going concern on page 59
the committee met three times during the year and addressed the following
» assesses the independence objectivity 
and effectiveness of the external auditors 
against specific criteria
» reviews the external audit process and 
postaudit findings
» reviews the annual and halfyear financial 
statements the group’s accounting 
policies and procedures and its financial 
control environment 
» monitors the group’s system of internal 
controls including financial operational 
and compliance risk management
» reviews updates to the group’s key 
policies including during the period  
its antibribery and related policies  
and its whistleblowing arrangements  
which now include an externally managed 
hotline and
» considers whether in its view the annual 
report taken as a whole provides a fair 
balanced and understandable assessment 
of the group’s position and prospects the 
ultimate judgement on which is decided 
by the board
the committee met three times during the 
year and addressed the following
sepura plc annual report  accounts 2014 39
strategic report governance group financial statements company financial statements as part of its consideration of the annual report the committee identified the 
following significant financial reporting issues
significant financial reporting issues for 2014  how the committee addressed these issues
changes in relevant laws and regulations  the committee considered the impact of recent changes in relevant laws  
and regulations including those concerning narrative reporting remuneration  
reports greenhouse gas reporting and taxation and ensured that these were  
reflected in the annual report 
revenue recognition the committee assessed the group’s policy in relation to revenue recognition  
 together with associated risk management and approval processes
capitalisation of development costs  the committee reviewed the methodology used to determine whether specific 
projects qualified for capitalisation and when amortisation should commence 
together with the basis for subsequent reviews of capitalised development costs  
for potential impairment and useful economic lives
overdue accounts receivable  the committee reviewed the methodology used to assess overdue accounts  
for potential indicators of impairment together with management’s judgement  
as to the level of provision required against specific receivables
 
report of the audit committee continued
the audit committee has set a policy which 
is intended to maintain the independence 
and integrity of the company’s auditors 
when acting as auditor of the group’s 
accounts the policy governs the provision 
of audit and nonaudit services provided 
by the auditor and in summary requires 
significant nonaudit services other than 
routine tax compliance services to be subject 
to a competitive tendering process the fees 
paid to the auditor for audit services audit 
related services and other nonaudit services 
are set out in note 9 to the consolidated 
financial statements 
nonaudit services over £5000  
are subject to approval by the  
audit committee 
we are mindful of the possibility of placing 
the group audit out to tender and will 
keep this possibility under review in the 
coming years taking into account the 
outcome of the audit committee’s annual 
review of the effectiveness of the external 
audit process the group will be subject  
to the eu mandatory rotation regime  
when it applies in the uk and will review  
its policy for the rotation of audit firms 
when the uk requirements are finalised 
pricewaterhousecoopers llp has served  
as the company’s auditor for the last 
12 years during the last 7 of which the 
company’s ordinary shares have been 
traded on the official list of the london 
stock exchange there has not been  
an audit tender during that time
the audit committee is authorised to 
engage the services of external advisers  
as it deems necessary at the company’s 
expense in order to carry out its functions
40 sepura plc annual report  accounts 2014 » procedures by which sepura’s 
consolidated financial statements 
are prepared which are monitored 
and maintained through the use 
of internal control frameworks 
addressing key financial reporting 
risks arising from changes in the 
business or accounting standards
» an experienced and commercially focused 
legal function that supports the group’s 
bid and contracts’ management process
» established policies and procedures 
setting out expected standards of integrity 
and ethical standards which reinforce the 
need for all employees to adhere to all 
legal and regulatory requirements
» an experienced and qualified finance 
function which regularly assesses the 
possible financial impact of the risks facing 
the group and
» an ongoing risk management programme 
including a comprehensive disaster 
recovery and business interruption plan
the audit committee considers annually 
whether there is any need for a separate 
internal audit activity and has again 
concluded in the period that in its opinion 
given the scale and nature of the group’s 
operations this is not required
a risk committee comprising the senior 
management team meets on a regular basis 
the company has a robust risk management 
process that follows a sequence of risk 
identification assessment of probability and 
impact and assigns an owner to manage 
mitigation activities a register is kept of all 
corporate risks and is monitored by the risk 
committee the risk committee the audit 
committee and the board together ensure 
that the risk management process  
is operating effectively this approach  
to risk management helps to facilitate  
topdown and bottomup perspectives 
across key business risks within the 
organisation the corporate risk register is 
presented to and reviewed by the audit 
committee regularly
internal controls and risk  
management environment
the board is ultimately responsible for 
the operation of an effective system of 
internal control and risk management 
appropriate to the business of course 
any control system can provide only 
reasonable and not absolute assurance 
against material misstatement or loss 
the company has complied with the 
frc’s internal control guidance for 
directors on the code throughout the 
period and up to the date on which these 
financial statements were approved
daytoday operating and financial 
responsibility rests with senior management 
and performance is closely monitored 
through the operations management 
committee which meets on a weekly basis
the following key elements comprise the 
present internal control environment which 
has been designed to identify evaluate and 
manage rather than eliminate the risks 
faced by the group in seeking to achieve 
its business objectives and ensure accurate 
and timely reporting of financial data for the 
company and the group
the process is embedded in the group 
through various operational and financial 
control and procedure statements
» an appropriate organisational structure 
with clear lines of responsibility
» a comprehensive annual strategic and 
business planning process
» systems of control procedures and 
delegated authorities which operate 
within defined guidelines and approval 
limits for capital and operating 
expenditure and other key business 
transactions and decisions
» a robust financial control budgeting and 
rolling forecast system which includes 
regular monitoring variance analysis  
key performance indicator reviews and risk 
and opportunity assessments at  
board level
the internal control process described above 
has been in place throughout the period 
and up to the date of approval of this  
annual report
the company’s code of business conduct 
and ethics which was reviewed and 
refreshed during the year has been  
recommunicated across the company 
together with the whistleblowing policy 
which provides a mechanism through which 
employees can raise public interest issues 
on a confidential basis these policies form 
an integral part of the company’s internal 
control policy
review of effectiveness
the audit committee on behalf of the 
board has reviewed the effectiveness 
of the internal control systems and risk 
management processes in place during 
the period taking account of any material 
developments since the financial period end 
and can confirm that no significant failings 
or weaknesses were found
gordon stuart
chairman of the audit committee
9 june 2014
sepura plc annual report  accounts 2014 41
strategic report governance group financial statements company financial statements dear shareholder
this report which has been prepared 
by the remuneration committee  
the committee and approved by  
the board for the financial year 
ended 28 march 2014 sets out the 
remuneration policy for the directors 
of the company as a result of the new 
shareholder voting and disclosure 
requirements published by the 
department for business innovation 
and skills in june 2013 this report  
has been divided into three sections
» this annual statement which   
 demonstrates how performance  
 has linked to reward and summarises  
 the decisions made by the committee  
 in the year
» the remuneration policy report  
 which sets out the group’s policy  
 on the remuneration of executive  
 and nonexecutive directors which  
 will subject to shareholder approval   
 become effective from the 2014  
 agm and
» the annual report on remuneration   
 which discloses details of the   
 remuneration committee how the   
 remuneration policy will operate for  
 the period ending 27 march 2015 
 “fy15” and how the policy was   
 implemented in the period ended  
 28 march 2014 “fy14”
the remuneration policy report will  
be subject to a binding vote and the  
annual statement and annual report  
on remuneration will be subject to an 
advisory vote at the 2014 agm in future 
years the remuneration policy report will 
be subject to a binding vote every three 
years or sooner if changes are made  
and the annual statement and annual 
report on remuneration will be subject  
to an advisory vote annually
the committee is supportive of the spirit  
of the uk department for business 
innovation and skills’ drive to improve the 
transparency and clarity in the reporting 
of directors’ remuneration and we feel this 
report provides improvements in both the 
level and quality of disclosure compared  
to last year’s annual report
remuneration policy and reward  
for fy14
the company has maintained its strategy  
of paying around market rate for basic salary 
and providing executives the opportunity 
to earn an upper quartile remuneration 
through the achievement of challenging 
performance conditions both short term  
in the form of the stip and long term in the 
form of the ltip 
the performance of the company is set out 
in the strategic report which commences 
on page 01 the company performance 
during fy14 has been strong with revenues 
up 11 adjusted operating profit up 19 
and adjusted earnings per share up 8  
this resulted in a payout under the terms 
of the fy14 stip of 59 of the maximum 
allowed to achieve maximum payout the 
group needed to achieve an adjusted 
operating profit of €136 million up 30  
on the previous year
the fy14 results also formed the basis for 
one third of the fy12 ltip granted in august 
2011 the group did not meet the minimum 
adjusted ebitda target of £144 million and 
hence vesting for this component is nil 
the remaining components of the ltip are 
strongly linked to share price performance 
and during fy14 the share price moved 
from 101p to 13925p which represents 
growth of c 38 and an increase in market 
capitalisation of £50 million full vesting will 
be determined on 18 august 2014 when the 
scheme performance period ends
directors remuneration report
annual statement
adjusted operating profit
19
increase of 19 in the last year
market capitalisation
£50m
increase of £50 million in market 
capitalisation
our remuneration policy is appropriately aligned  
with the strategic goals of the group
42 sepura plc annual report  accounts 2014 remuneration policy for fy15
the remuneration policy for fy15 has been 
determined by the committee following a 
review of a comprehensive benchmarking 
exercise completed with the assistance of 
hewitt new bridge street the key points to 
note in relation to the remuneration policy 
for fy15 are as follows
»  the chief executive officer’s base  
 salary will be increased by 10   
 to £330000 with effect from  
 1 july 2014 reflecting the performance  
 of mr watling since his appointment 
 on 1 october 2008 and also the change 
 in the scale and size of the business   
 following the successful execution  
 of the company’s strategy to diversify  
 the business and increase the total 
 addressable market from below  
 €05 billion to over €25 billion 
 the company has also delivered a third  
 successive year of double digit growth  
 for both revenue and profits the chief  
 financial officer’s base salary will be 
 increased by 5 to £190000 from   
 the same date in line with the increases  
 received by higher performers within  
 the business 
»  benefit and pension provision will remain  
 unchanged with the company pension  
 contribution or salary supplement  
 in lieu limited to no more than 10  
 of base salary
»  the stip will remain capped at 120  
 of salary for the chief executive officer  
 and 100 of salary for the chief financial 
 officer targets will continue to be very  
 challenging and primarily based around  
 financial performance requiring growth in  
 adjusted operating profit of over 30  
 for the maximum payout to be achieved
 the level of bonus received to be awarded  
 in deferred shares will be increased from  
 25 to 40 with a normal deferral period  
 of two years the committee intends that  
 the proportion to be awarded in deferred  
 shares will be increased again in fy15  
 to 50
»  ltip awards will continue to be granted 
 at 150 of salary for executive directors 
 with performance targets again based on 
 very challenging total shareholder return 
 tsr adjusted ebitda and absolute 
 share price targets measured over a 
 three year period however in addition 
 to the normal award level and as 
 discussed with the company’s major 
 shareholders the chief executive officer 
 will receive an additional award of 150 
 of salary which will be granted under 
 the exceptional award limit set at 300  
 of salary for 201415 but reducing to   
 200 of salary thereafter this award   
 recognises the individual’s performance  
 in the role todate it is designed to  
 incentivise and secure future performance  
 and strategy delivery and medium term  
 retention reflecting the unusual nature  
 of the award this exceptional award   
 will have a four year vesting period  
 with the share price tsr and adjusted  
 ebitda performance targets used for the  
 standard awards extended on the same  
 very challenging trajectory for a further  
 fourth year
»  share ownership guidelines will continue  
 to operate at 100 of salary
»  consistent with best practice clawback  
 provisions will be introduced in respect  
 of both the stip and ltip  
shareholder engagement
the committee continues to take an 
active interest in shareholder views on 
our executive remuneration policy and 
is mindful of the views of shareholders 
and other stakeholders this is reflected in 
our voting result at the 2013 agm which 
was over 99 in favour of the directors’ 
remuneration report resolution similar 
to last year the committee consulted with 
institutional and other substantial investors 
in the company representing approximately 
75 of the company’s share capital on the 
proposals for the current year the plans 
presented in this report reflect the results  
of that consultation
in conclusion we firmly believe that our 
remuneration policy for fy15 onwards is 
appropriately aligned with the strategic 
goals of the group in delivering shareholder 
value and supporting the longterm success 
of the group
nigel smith
chairman of the remuneration committee
9 june 2014
sepura plc annual report  accounts 2014 43
strategic report governance group financial statements company financial statements remuneration scenarios for executive 
directors for fy15
the charts above show how the 
composition of the executive directors’ 
remuneration packages varies at three 
performance levels namely at minimum 
ie fixed pay target and maximum levels 
under the policy set out in the table 
overleaf
the charts above are based on
» salary levels effective 1 july 2014
» an approximated annual value of benefits  
 for fy15
» an annualised pension contribution  
 as a  of salary
» a 120 of salary maximum annual bonus  
 for the chief executive officer and 100  
 of salary maximum annual bonus for the  
 chief financial officer with target  
 assumed to be 50 of the maximum
» a 150 of salary award under the  
 long term incentive plan with target  
 assumed to be 50 of the maximum  
 the additional award proposed for the  
 chief executive officer for fy15 has been  
 excluded from the analysis given that it  
 is not part of the ongoing policy no share  
 price appreciation in respect of the face  
 value of the ltip awards has been  
 assumed in line with the legislation
 
consequently the committee structures 
executive remuneration in two distinct 
parts
i fixed remuneration comprising base 
salary benefits and pension to recognise 
day to day responsibilities and support 
the internal control and risk management 
elements of the group strategy and
ii variable performancerelated 
remuneration provided through 
participation in the annual bonus  
and longterm incentive plans based  
on challenging targets to provide 
motivation for achieving the group’s 
shorter and longerterm aims
the committee aims to ensure that the 
incentive structure for executive directors 
and senior management does not raise 
environmental social or governance risks 
by inadvertently motivating irresponsible 
behaviour more generally with regard 
to the overall remuneration structure 
the committee also ensures that the 
remuneration policy does not encourage 
inappropriate operational risktaking and 
is aligned with the company’s risk policies 
and systems the group’s remuneration 
policy is reviewed regularly to ensure that 
it remains appropriate and recognises 
any key developments in remuneration 
practice and corporate governance
this part of the directors’ remuneration 
report sets out the remuneration policy 
for the group which will operate from 
and become formally effective subject to 
shareholder approval from the 2014 agm 
policy overview
the committee’s policy for the 
remuneration of the executive directors 
and senior management team members 
is based on the following three key 
principles
1 to provide remuneration in a form  
 and amount that is sufficient to attract  
 retain and motivate a senior  
 management team of the calibre  
 and experience required to run the  
 company successfully
2 to ensure that there is a strong link  
 between reward and corporate and  
 individual performance to this end  
 it has been the committee’s policy  
 to set fixed pay levels broadly around  
 market levels but to provide the  
 opportunity to earn upper quartile  
 rewards for achieving and exceeding  
 the group’s business plan through  
 variable performancelinked  
 remuneration and
3 to provide alignment with shareholders’  
 interests by ensuring that a significant  
 proportion of the remuneration package  
 is delivered in the form of shares  
 via the compulsory deferral of a portion  
 of any bonus earned and participation  
 in the longterm incentive plan  
 and by encouraging the executive  
 directors to build up a meaningful  
 holding of the company’s shares over  
 time through the operation of a formal  
 shareholding guideline
value of remuneration packages at different levels of performance
1500
£000
1250
1000
750
500
250
0
ltip award
bonus
basic salary benefits 
and pensions
100
minimum
100
minimum
31
24
45
ontarget
47
21
32
ontarget
40
31
29
maximum
41
28
31
maximum
chief financial officer chief executive officer
directors remuneration report continued
remuneration policy report
44 sepura plc annual report  accounts 2014 summary director policy table
the table below summarises the remuneration policy for directors which will subject to shareholder approval become effective from the 
2014 agm
purpose and link  
to strategy
operation maximum performance targets
salary reflects the role responsibilities 
and experience of the individual
provides an appropriate level 
of basic fixed income avoiding 
excessive risk arising from over 
reliance on variable income
normally reviewed annually 
effective 1 july
normally paid in cash on  
a monthly basis
comparisons against companies 
with similar characteristics and 
in similar sectors are taken into 
account
there is no prescribed 
maximum or maximum annual 
base salary increase
the committee is guided by 
the general increase for the 
broader employee population 
but may decide to award a 
lower increase or a higher 
increase for executive directors 
to recognise for example an 
increase in the scale scope or 
responsibility of the role and
or to take account relevant 
market movements
na
benefits provides market consistent 
benefits
supports the individual and their 
family during periods of ill health 
or death 
benefits currently comprised 
of life assurance and private 
medical cover
other benefits may be provided 
where appropriate
na na
pension provides competitive retirement 
benefits
defined contribution andor 
cash supplement
up to 10 of basic  
salary pa
na
bonus incentivises delivery  
of group and personalstrategic 
annual goals
maximum bonus only  
payable for achieving 
demanding targets
nonpensionable
part of the bonus may be 
payable in deferred shares 
which normally vest after  
3 years subject to continued 
employment
dividend equivalents may be 
payable in cash or shares on 
any deferred bonus shares 
up to 120 of salary pa group profitrelated target  
will apply for the majority  
if not all
personal andor strategic 
targets may be applied for  
a minority
one year performance 
period
clawback provisions apply 
sepura plc annual report  accounts 2014 45
strategic report governance group financial statements company financial statements directors remuneration report continued
remuneration policy report continued
purpose and link  
to strategy
operation maximum performance targets
long term
incentive plan
aligned to main strategic 
objectives of delivering  
longterm value creation
encourages coinvestment
aligns executive directors’ 
interests with those  
of shareholders
retention
grant policy normally based 
on the annual grant of share 
awards which normally vest 
subject to continued service  
and performance targets 
the committee reviews the 
quantum of awards annually 
and monitors the continuing 
suitability of the performance 
measures
150 of salary pa maximum 
limit 
300 of salary exceptional 
limit for fy15 200 of salary 
exceptional limit thereafter 
participants may benefit from 
the value of dividends paid 
over the vesting period to the 
extent that awards vest this 
benefit is delivered in the form 
of cash or additional shares at 
the time that awards vest
performance normally 
measured over three 
years although longer 
performance periods  
may apply
financial measures eg 
ebidta and  or relative 
share price related targets 
eg tsr
no more than 25  
may vest at threshold 
performance increasing to 
100 vesting at maximum
clawback provisions apply
all employee 
share plans
encourages employee
shareholder alignment and 
longterm shareholdings in  
the company
invitations made by the 
committee under the sharesave 
or any other all employee share 
plan introduced in the future 
as per prevailing hmrc limits na
share ownership
guidelines
provides alignment of interests 
between executive directors 
and shareholders
executive directors are 
required to build over time 
and maintain a shareholding 
equivalent to at least one year’s 
base salary
at least 100 of salary na
46 sepura plc annual report  accounts 2014 purpose and link  
to strategy
operation maximum performance targets
nonexecutive
directors
provides fees reflecting 
time commitments and 
responsibilities in line with 
those provided by similarly sized 
companies
normally based on a cash fee
normally paid on a monthly 
basis
fees are reviewed periodically
there is no prescribed 
maximum fee increase 
the board excluding 
nonexecutive directors 
is guided by market rates 
time commitments and 
responsibility levels
na
notes
1 the choice of the performance metrics applicable to the annual bonus scheme reflect the committee’s belief that any incentive compensation should be 
appropriately challenging and tied to both the delivery of profit growth and personal andor strategic objectives the remuneration committee may in its sole 
discretion at any time make adjustments to the targets for factors not taken into account at the time they were set such as subsequent acquisitions or other 
exceptional items
2 the performance conditions applicable to the fy14 ltip were selected by the remuneration committee on the basis that they reward the delivery of longterm 
returns to shareholders and the group’s financial performance and are consistent with the company’s objective of delivering superior levels of longterm value to 
shareholders performance conditions in future years may differ from those in 2014 if considered appropriate by the committee
3 the committee operates the ltip and its all employee share plan in accordance with the plan rules the listing rules and hmrc legislation and the committee 
consistent with market practice retains discretion over a number of areas relating to the operation and administration of the plan
4 consistent with hmrc legislation the allemployee sharesave scheme does not have performance conditions 
5 for the avoidance of doubt in approving this directors’ remuneration policy authority is given to the company to honour any commitments entered into with 
current or former directors such as the payment of the prior year’s annual bonus or the vestingexercise of share awards granted in the past details of any 
payments to former directors will be set out in the annual report on remuneration as they arise
sepura plc annual report  accounts 2014 47
strategic report governance group financial statements company financial statements nonexecutive directors letters  
of appointment 
each of the chairman and nonexecutive 
directors has a letter of appointment from 
the company rather than a contract of 
service setting out the terms on which 
the appointment is made the letter of 
appointment of the chairman may be 
terminated on three months’ notice by 
the chairman or six months’ notice by the 
company the letters of appointment of 
the independent nonexecutive directors 
may be terminated by either party on one
months’ notice the letter of appointment 
of the nonindependent nonexecutive 
director terminates automatically in line 
with the company’s articles or on three 
months’ notice from the director the 
company may elect to make a payment 
in lieu of any unexpired portion of notice 
period for earlier termination the letters of 
appointment are available for inspection 
at the company’s registered office 
during normal business hours relevant 
appointment letter and term dates are set 
out in the table above
 
approach to recruitment and promotions
the remuneration package for  
a new executive director would  
be set in accordance with the terms  
of the company’s prevailing approved 
remuneration policy at the time of 
appointment and take into account the 
skills and experience of the individual 
the market rate for a candidate of that 
experience and the importance of securing 
the relevant individual salary would be 
provided at such a level as required to 
attract the most appropriate candidate  
and may be set initially at a below  
midmarket level on the basis that it may 
progress towards the midmarket level 
once expertise and performance has been 
proven and sustained 
how employees’ pay is taken  
into account
pay and conditions elsewhere in the group 
were considered when finalising the 
current policy for executive directors and 
continue to be considered in relation to 
implementation of this policy in order to 
do so the committee regularly interacts 
with the ceo and other senior executives
how the executive directors 
remuneration policy relates to the  
wider group
the remuneration policy described above 
provides an overview of the structure that 
operates for the most senior executives 
in the group employees below executive 
level have a lower proportion of their total 
remuneration made up of incentivebased 
remuneration with remuneration driven  
by market comparators and the impact  
of the role of the employee in question 
longterm incentives are reserved for 
those judged as having the greatest 
potential to influence the group’s earnings 
growth and share price performance
how shareholders’ views are taken  
into account
the committee continues to take an  
active interest in shareholder views on  
our executive remuneration policy and  
is mindful of the concerns of shareholders 
and other stakeholders this is reflected  
in our voting result at the 2013 agm  
at which over 99 of the votes cast were 
in favour of the directors’ remuneration 
report resolution similar to last year  
the committee consulted with institutional 
and other substantial investors in the 
company representing approximately  
75 of the company’s share capital  
on the proposals for the current year  
the plans presented in this report reflect 
the results of that consultation
directors remuneration 
report resolution
99
over 99 of votes at the 2013 agm were in 
favour of the directors remuneration report 
resolution
 effective date  commencement unexpired term
 of letter of  of current months from
 appointment three year term 28 march 2014
john hughes 21 july 2010 21 july 2013 28
sion kearsey 01 july 2007 01 july 2013 27
nigel smith 22 july 2013  22 july 2013 28
gordon stuart 22 july 2013 22 july 2013 28
tony illsley and david tilston both with letters of appointment with effective dates of  
21 may 2010 stepped down from the board on 22 july 2013
directors remuneration report continued
remuneration policy report continued
48 sepura plc annual report  accounts 2014 service contracts
 effective date of   notice period from company 
executive director service agreement  from employee
gordon watling 1 october 2008  12 months 2013 12 months
steve chamberlain 26 march 2012  6 months 2013 6 months
the annual bonus potential would be 
limited to 120 of salary and grants  
under the ltip would be limited to  
150 of salary 300 of salary in 
exceptional circumstances in addition 
the committee may offer additional cash 
andor sharebased elements to replace 
deferred or incentive pay forfeited by an 
executive leaving a previous employer  
it would seek to ensure where possible  
that these awards would be consistent  
with awards forfeited in terms of vesting 
periods expected value and  
performance conditions
for an internal executive director 
appointment any variable pay element 
awarded in respect of the prior role may  
be allowed to pay out according to its 
original terms
for external and internal appointments  
the committee may agree that the 
company will meet certain relocation  
andor incidental expenses as appropriate
fee structure and quantum for  
nonexecutive director appointments will 
be based on the prevailing nonexecutive 
director fee policy
approach to leavers
no executive director has the benefit  
of provisions in his or her service contract 
for the payment of predetermined 
compensation in the event of termination 
of employment or a change of control  
it has been the committee’s general policy 
that the service contracts of executive 
directors none of which are for a fixed 
term should provide for termination of 
employment by giving notice or by making 
a payment of an amount in lieu  
of notice equal to base salary pension  
and bonus for any completed year in 
respect of gordon watling’s contract 
and base salary in respect of steve 
chamberlain’s contract  
outside interests 
executive directors may accept external 
nonexecutive director appointments with 
prior approval of the board and provided 
that such appointments do not prejudice 
their ability to fulfil their executive duties 
with the company whether an executive 
director is entitled to retain any fees 
relating to such an appointment will be 
considered on a casebycase basis  
no nonexecutive directorships were held 
by the executive directors during the year
in determining amounts payable on 
termination the committee will also 
consider the executive director’s duty to 
mitigate his loss and amounts may be 
payable in instalments
in respect of gordon watling if the 
company terminates without cause on 
or after the end of the third quarter of the 
financial year the executive is entitled to 
a prorata proportion of the bonus paid 
in cash at the normal payment date in 
respect of steve chamberlain an annual 
bonus may be payable with respect to the 
period of the financial year served although 
it will be prorated for time and normally 
paid in cash at the normal payment date
any sharebased entitlements granted to 
an executive director under the company’s 
share plans will be determined based on 
the relevant plan rules however in certain 
prescribed circumstances such as illhealth 
injury disability retirement redundancy 
sale of employing company or business or 
other circumstances at the discretion of 
the committee good leaver status may 
be applied for good leavers
» deferred share bonus awards will  
 normally vest at cessation and
» ltip awards will normally vest at the date  
 of cessation subject to the satisfaction  
 of the relevant performance conditions  
 at that time and reduced prorata to  
 reflect the proportion of the vesting  
 period actually served however other  
 than in the case of death where ltip  
 awards vest on the date of death subject  
 to performance and time prorating the  
 remuneration committee has discretion  
 to determine that awards vest at some  
 other date eg the normal vesting date  
 andor disapply time prorating
sepura plc annual report  accounts 2014 49
strategic report governance group financial statements company financial statements to ensure a further alignment of interest 
between executive directors and 
shareholders any bonus paid will at the 
discretion of the committee be settled by 
a combination of cash 60 and deferred 
sepura plc shares 40 this compares 
with a split of 75 cash and 25 deferred 
shares in respect of the bonus in the past 
year the committee intends to move 
to a split of 50 cash and 50 shares in 
future years the deferred shares together 
with any dividends received thereon will 
normally vest after two years subject to 
continued employment as compared 
to three years in respect of the deferred 
shares to be issued in respect of the bonus 
payable for the past year
benefits in kind and pension
nonpension benefits will continue 
to comprise life assurance and private 
medical insurance cover the current range 
of benefits and their value are considered 
to be broadly in line with those provided to 
executive directors in other similarly sized 
listed companies and they will continue to 
be reviewed and monitored annually
executive directors will continue to 
be eligible to participate in a defined 
contribution group personal pension 
plan into which the company contributes 
on behalf of participating individuals 
alternatively an equivalent salary 
supplement may be provided the pension 
contributions for gordon watling and 
steve chamberlain for the coming year  
will continue to be 10 of salary
performancerelated annual bonus 
the annual bonus plan is designed to 
drive and reward the shortterm operating 
performance of the company which 
should in turn lead to the generation 
of sustained longterm returns to 
shareholders bonuses are not pensionable
for fy15 the performance targets  
for the executive directors under  
the annual bonus will be linked to  
the groups financial performance 
financial performance will be measured 
by reference to demanding profit targets 
consistent with the companys practice 
in prior years the precise targets are not 
being published as they are considered to 
be commercially sensitive the maximum 
bonus potential for the executive directors 
for fy15 will continue to be 120 of base 
salary for the chief executive officer  
and 100 of base salary for the chief 
financial officer 
implementation of the remuneration 
policy for fy15
base salary
the base salary for each executive director 
is determined by the remuneration 
committee taking into account the 
role responsibilities performance and 
experience of the individual when setting 
base salary levels the remuneration 
committee takes into account the 
performance of the individual the 
company’s particular circumstances and 
market data on salary levels for similar 
positions in comparable companies 
although the latter is used with caution 
given the risk of creating an upwards 
ratchet in pay levels the current annual 
salaries for the chief executive officer and 
chief financial officer effective from 1 july 
of each year are shown in the table above
the increase of 10 awarded to  
mr watling reflects his performance since 
his appointment on 1 october 2008  
and also the change in the scale and  
size of the business following the 
successful execution of the group strategy 
to diversify the business and increase  
the total addressable market from below  
€05 billion to over €25 billion the group 
has also delivered a third successive year  
of double digit growth for earnings
the increase of 5 awarded to  
mr chamberlain is in line with the amount 
received by higher performers within the 
business his salary remains below market 
rates but we consider the ltip package of 
150 of basic salary to provide him with 
potential to earn upper quartile earnings 
through the achievement of challenging 
long term objectives
  20142015 20132014  increase
gordon watling chief executive officer £330000 £300000 10
steve chamberlain chief financial officer £190000 £181000 5
alignment of interests
50
the committee intends to move to  
a split of 50 cash and 50 shares  
in future years
directors remuneration report continued
annual report on remuneration
50 sepura plc annual report  accounts 2014 c one third adjusted ebitda growth 
as measured from fy14 to fy18 10  of 
this part of an award vests for an adjusted 
ebitda growth of 10 compound pa 
and 25 of this part of an award vests for 
adjusted ebitda growth of 15 compound 
pa increasing pro rata to full vesting 
for this part of an award for an adjusted 
ebitda growth of 20 compound pa no 
vesting will take place for this part of an 
award for an adjusted ebitda growth less 
than 10 compound pa 
nonexecutive directors
current fee levels are shown above
consideration by the directors of matters 
relating to directors’ remuneration
all decisions with regard to the 
remuneration of the executive directors 
are taken by the remuneration committee 
this committee comprises nigel smith 
chairman john hughes and gordon 
stuart the committee is advised by 
its own remuneration advisor hewitt 
new bridge street which has no other 
relationship with the company or its 
executive directors 
hewitt new bridge streets fees for the  
year totalled €24000 for services principally 
relating to advice on the companys share 
schemes executive remuneration and the 
directors remuneration report
 
will take place for this part of an award for 
an adjusted ebitda growth less than 10 
compound pa
in addition to the above and as discussed 
with the company’s major shareholders 
the chief executive officer will receive an 
additional award of 150 of salary which 
will be granted under the exceptional 
award criteria to recognise his performance 
in the role todate incentivise future 
performance and strategy delivery and 
ensure medium term retention reflecting 
the unusual nature of the award this 
exceptional award will have a four year 
vesting period with performance measured 
using the same measures for the standard 
awards extended on the same very 
challenging trajectory for a further fourth 
year the performance targets will be  
as follows
a one third absolute share price growth 
measured over the four years from grant 
with testing based on the 90 day average 
share price prior to grant and the 90 
day average ending prior to the fourth 
anniversary of grant 10 of this part  
of an award vests for an average share 
price growth of 5 compound pa 
increasing prorata to 55 of this part  
of an award vesting for a share price 
growth of 10 compound pa increasing 
prorata to 100 of this part of an award 
vesting for a share price of 15 compound 
pa or more no vesting will take place 
for this part of an award for a share price 
growth less than 5 compound pa
b one third relative tsr as measured 
over the four years from grant – 10 of 
this part of an award vests for median tsr 
increasing prorata to 100 of this part of 
an award vesting for upper quartile tsr of 
the ftse smallcap excluding investment 
trusts at grant no vesting will take place 
for this part of an award for a tsr below 
median and
longterm incentives 
the sepura longterm incentive plan is 
the group’s primary longterm incentive 
arrangement it is envisaged that the fy15 
awards granted to executive directors 
will be 150 of salary and will be subject 
to the following performance conditions 
measured over three years from grant or  
in the case of adjusted ebitda three 
financial years ending 31 march 2017
a one third absolute share price growth 
measured over the three years from 
grant with testing based on the 90 day 
average share price prior to grant and the 
90 day average ending prior to the third 
anniversary of grant 10 of this part of 
an award vests for an average share price 
growth of 5 compound pa increasing 
prorata to 55 of this part of an award 
vesting for a share price growth of 10 
compound pa increasing prorata to 100 
of this part of an award vesting for a share 
price of 15 compound pa or more no 
vesting will take place for this part of an 
award for a share price growth less than 5 
compound pa
b one third relative tsr as measured over 
the 3 years from grant – 10 of this part of 
an award vests for median tsr increasing 
prorata to 100 of this part of an award 
vesting for upper quartile tsr of the ftse 
smallcap excluding investment trusts at 
grant no vesting will take place for this 
part of an award for a tsr below median 
and
c one third adjusted ebitda growth as 
measured from fy14 to fy17 10 of this 
part of an award vests for an adjusted 
ebitda growth of 10 compound pa 25 
of this part of an award vests for adjusted 
ebitda growth of 15 compound pa 
increasing pro rata to full vesting for this 
part of an award for an adjusted ebitda 
growth of 20 compound pa no vesting 
 20142015 20132014
 £’000 £’000
chairman 145 145
nonexecutive director fee 40 40
committee chair fee 5 5
sepura plc annual report  accounts 2014 51
strategic report governance group financial statements company financial statements tables for annual report on remuneration
audited information
total remuneration received by directors 
the individual remuneration of the directors serving during the period ended 28 march 2014 together with equivalent sums received in the 
prior year are set out below
 salary taxable  annual longterm
£’000 and fees benefits pension bonus  incentives total
gordon watling  
2014 298 – 30 205 – 533
2013 290 6 29 234 – 559
steve chamberlain 
2014 179 – 18 101 – 298
2013 171 – 17 115 – 303
john hughes  
2014 145 7 – – – 152
2013 145 7 – – – 152
sion kearsey      
2014 45 – – – – 45
2013 55 – – – – 55
gordon stuart
1
      
2014 31 – – – – 31
2013 – – – – – –
nigel smith
1
      
2014 31 – – – – 31
2013 – – – – – –
david tilston
2
 
2014 18 – – – – 18
2013 60 – – – – 60
tony illsley
2
 
2014 18 – – – – 18
2013 60 – – – – 60
1 appointed on 22 july 2013
2 retired on 22 july 2013
directors remuneration report continued
annual report on remuneration continued
52 sepura plc annual report  accounts 2014 annual bonus for fy14
the annual bonuses awarded to executive directors in respect of fy14 are set out below
    total awarded  award payable
   maximum actual in cash in shares
    of salary  of salary
1
  of salary  of salary
gordon watling   120 71 53 18
steve chamberlain   100 59 44 15
1 the bonus is determined by reference to the salary at the start of the bonus period
ltip performance
the ltip value for mr watling in respect of fy15 is based on the ltip award granted in august 2011 with performance targets ending 
in the year under review or just after in respect of the share price and tsr conditions actual performance against the targets and the 
corresponding vesting percentages are as follows
     
actual or  vested or
    target 
expected  expected
year metric  threshold stretch outturn  vesting
fy11 eps for fy13  85p 93p 65c 
1
 nil
fy12 absolute share price growth  75p 100p  100p
1 
 100
fy12 tsr  median  upper quartile upper quartile  100
   performance performance performance
2
 
fy12 adjusted ebitda  £144 m £177 m €144m
1
  nil
1 the actual outturn has been established at the date of this report
2 the performance period had not expired at the date of this report but will expire shortly hereafter
share awards granted in the year
the following share awards were granted to directors during fy14
 type of award basis of share price number face value  of face value vesting
  award granted used to of shares  of award
1
 that would vest determined by
   determine  granted
1 
£’000 at threshold performance over
   awards
1
   performance 
gordon watling ltip 150 of salary £1135 383260 £435000 10 3 years 
 deferred  25 of the £1135 50583 £57411 na 3 years
 bonus shares annual bonus 
steve chamberlain ltip 150 of salary £1135 225991 £256500 10 3 years
 deferred  25 of the £1135 24855 £28211 na 3 years 
 bonus shares annual bonus
1 based on a grant date of 10 june 2013 albeit the awards were formally granted on 31 july 2013 due to the company being in a prohibited period on the intended 
grant date pending the completion of the acquisition of portalify oy on 25 july 2013
the performance targets attached to the fy14 awards were as follows 
a one third absolute share price based on the average share price over the final 90 day period during the three years from grant – 10 of this 
part of an award vests for an average share price of 123 pence increasing prorata to 55 of this part of an award vesting for an average share 
price of 141 pence increasing prorata to 100 vesting for an average share price of 161 pence or more no vesting will take place for this part 
of an award for an average share price less than 123 pence
b one third relative tsr as measured over the 3 years from grant – 10 of this part of an award vests for median tsr increasing prorata to 
100 of this part of an award vesting for upper quartile tsr of the ftse smallcap excluding investment trusts at grant no vesting will take 
place for this part of an award for a tsr below median and
c one third adjusted ebitda as measured for fy17 – 10 of this part of an award vests for an adjusted ebitda of €165 million 25 of this 
part of an award vests for an adjusted ebitda of €188 million increasing pro rata to full vesting for this part of an award for an adjusted ebitda 
of €214 million no vesting will take place for this part of an award for an adjusted ebitda less than €165 million
sepura plc annual report  accounts 2014 53
strategic report governance group financial statements company financial statements outstanding ltip awards
details of outstanding ltip awards granted to directors are set out below
director scheme grant date exercise no of shares at  granted  vested lapsed no of shares end of exercise 
   price 30 march 2013 during  during during shares at  performance period 
     the year the year the year 28 march 2014 period 
gordon fy12 19 august 2011 – 860364 – – – 860364 18 august 2014 –
watling fy13 24 july 2012 – 614103 – – – 614103 23 july 2015 –
 fy14 10 june 2013 – – 383260 – – 383260 9 june 2016 –
steve fy13 24 july 2012 – 362109 – – – 362109 23 july 2015 –
chamberlain fy14 10 june 2013 – – 225991 – – 225991 9 june 2016 –
performance targets are disclosed above or in respect of earlier awards in prior remuneration reports
directors’ interests
directors’ interests in the shares of the company at the beginning and end of the period were as follows
director beneficially beneficially outstanding outstanding  outstanding share shareholding 
 owned at owned at ltip awards deferred awards under all as a  of salary
 30 march 2013 28 march 2014  share awards employee share plans at year end
1
gordon watling 81774 135994 1857727 50583 27777 64
2
steve chamberlain 50000 68125 588100 24855 16666 53
2
john hughes 40000 40000 – – – na
sion kearsey 9000000 8000000 – – – na
gordon stuart – 15000 – – – na
nigel smith – – – – – na
1 based on the share price and base salary levels as at 28 march 2013
2 the executive directors are increasing their shareholdings in accordance with the company’s shareholding criteria
the following information has not been audited
performance graph and ceo remuneration
the following chart presents the company’s tsr over the past 5 years compared to the ftse smallcap index excluding investment trusts
4000
3500
2500
1000
500
00
1500
2000
3000
4500
5000
31032009 31032010 01042011 29032013 01042012 28032014
ftse small cap
sepura
directors remuneration report continued
annual report on remuneration continued
54 sepura plc annual report  accounts 2014 the ceo’s total remuneration over the same five year period has been as follows
 fy10 fy11 fy12 fy13 fy14
total remuneration £000s 257 245 320 559 1332
annual bonus  5 – – 67 71
ltip vesting  – – – – –
changes in ceo remuneration
the ceo received an increase in salary and benefits equivalent to the average pay rise awarded to all employees as shown below
   change
chief executive salary 3
 benefits 3
 bonus –12
all employees salary 3
 benefits 3
 bonus na
relative importance of spend on pay
overall staff costs increased by 11 during fy14 through a combination of pay reviews additional headcount through both recruitment 
and the acquisition of sepura systems in the prior year and portalify in the current year and the impacts of foreign exchange this increase in 
overall staff costs can be seen in the context of the change in other key metrics as shown below
 fy13 fy14  change
staff costs €’000s 27435 30381 11
revenue €000s 104772 116645 11
gross margin €’000s 50180 55319 10
gross research  development  15772 16684 6
expenditures €’000s 
adjusted operating profit €’000s 10483 12473 19
dividends and share repurchases €’000s 4122 4343 5
shareholder voting
shareholders voted overwhelmingly in favour of adopting the fy13 remuneration report at the 2013 agm
 votes percentage 
  of votes
votes cast in favour 86209030 9987
votes cast against 109722 013
total votes cast 86318752 100
abstentions – –
sepura plc annual report  accounts 2014 55
strategic report governance group financial statements company financial statements the directors have pleasure in presenting 
their report and the audited financial 
statements for the period ended 28 march 
2014 being the nearest friday to the end  
of the period
strategic report
a fair review of the group’s performance 
during the period and of its position at the 
period end including commentary on its 
likely future development and prospects  
is set out in the strategic report on pages  
1 to 33 while information on principal risks 
and uncertainties and key performance 
indicators is given on pages 10 to 11 all this 
information should be read in conjunction 
with this report the corporate governance 
report and directors’ remuneration report 
summarise the company’s governance and 
directors’ remuneration arrangements the 
corporate social responsibility statement 
on pages 30 and 33 summarises the group’s 
approach to business ethics employee 
welfare and practice health and safety 
environmental and community matters  
all these sections form part of this directors’ 
report into which they are incorporated  
by reference
results and dividends
the audited financial statements of the 
group and of the company for the period 
under review are set out on pages 65 to 98 
and pages 100 to 109 respectively
the board has adopted a dividend policy 
which takes account of the profitability and 
underlying growth of the group in addition 
to capital requirements cash flows and 
distributable reserves while also recognising 
that it is appropriate to maintain an 
appropriate level of dividend cover
pursuant to that policy the directors  
have recommended an increased final 
dividend for the period of 141 pence  
per ordinary share which subject to 
approval by shareholders at the annual 
general meeting to be held on wednesday 
30 july 2014 “2014 agm” will be paid on 
8 august 2014 to shareholders registered 
at the close of business on 4 july 2014 
together with the interim dividend paid of 
059 pence per ordinary share this makes 
a total dividend for the period of 20 pence 
per ordinary share a dividend reinvestment 
plan will be offered in conjunction with the 
final dividend
 
going forward and subject to any 
unforeseen circumstances the directors 
intend to continue their recommendation of 
both an interim and final dividend in respect 
of each financial period in the approximate 
proportions of onethird and twothirds 
respectively of the total annual dividend
research and development
product development and innovation 
principally but not solely related to tetra 
technology and products are considered key 
strategies in maintaining and improving the 
group’s competitive position and therefore 
they continue to receive high priority 
the primary objective is new product 
development improved functionality 
and extended application all focused on 
enhanced benefits for the enduser
our commitment to this important  
area is highlighted by the €167 million  
of development spend during the period 
equivalent to 143 of sales 2013 €158 
million and 15 of sales under ias 38 
“intangible assets” €125 million of this 
period’s spend was capitalised 2013  
€120 million the group will continue  
to commit a significant level of resource  
and expenditure as appropriate to research 
and development
financial instruments
details of the group’s objectives and policies 
on financial risk management and of the 
financial instruments currently in use can 
be found in note 31 to the consolidated 
financial statements 
employment
the group’s policy regarding the hiring 
continuing employment and training career 
development and promotion of disabled 
persons is set out on page 31
share capital
the company has a single class of share 
which is divided into ordinary shares of 
£00005 each with all of the ordinary shares 
ranking pari passu on a show of hands at a 
general meeting every holder of ordinary 
shares present in person or by proxy and 
entitled to vote has one vote and on a poll 
every holder of ordinary shares present in 
person or by proxy and entitled to vote has 
one vote for every ordinary share held
the rights including full details relating  
to voting obligations and any restrictions 
on transfer relating to the company’s 
ordinary shares as well as the powers of 
the directors are set out in the company’s 
articles of association these can only be 
amended by special resolution at a general 
meeting of shareholders
directors’ report
56 sepura plc annual report  accounts 2014 at the annual general meeting held on 
22 july 2013 “2013 agm” shareholders 
granted the company limited authority to 
purchase its own shares subject to certain 
specified conditions
share buy back
during the year the company purchased 
850000 shares into treasury and issued 
478551 shares from treasury in satisfaction 
of the company sharesave schemes
pursuant to resolutions passed at the 
2013 agm the company had authority 
exercisable by the directors 
a to allot shares in the company and to 
grant rights to subscribe for or to convert 
any security into shares in the company up 
to a maximum of £22864
b to make market purchases as defined 
in section 693 4 of that act of ordinary 
shares of £00005 each in the capital of the 
company
the company will seek to renew these 
authorities at the 2014 agm
save as described under the relationship 
agreement described below the company 
is not aware of any agreements or control 
rights between shareholders that may result 
in restrictions on the transfer of securities 
or on voting rights further information 
regarding the company’s share capital 
are set out in note 26 to the financial 
statements
board of directors
the directors of the company who served 
throughout the period and up to the date of 
signing of this annual report except where 
noted were
john hughes  chairman
gordon watling chief executive officer
steve chamberlain chief financial officer
sion kearsey
nigel smith appointed on 22 july 2013
gordon stuart appointed on 22 july 2013
tony illsley retired on 22 july 2013
david tilston retired on 22 july 2013
the names and brief biographical details 
of the current directors and identification 
of the board committees on which they 
sit are shown on page 35 and details of 
their beneficial holdings in the shares of the 
company are shown on page 54
election and reelection of directors
the company’s articles of association 
contain provisions relating to the 
appointment and replacement of directors 
they require that all directors stand for  
reelection at intervals of not more than 
three years the uk corporate governance 
code recommends that all directors are put 
up for election every year and in accordance 
with best practice the company is following 
this guideline
the service agreements of the executive 
directors and the letters of appointment of 
the nonexecutive directors are available for 
inspection by shareholders at the company’s 
registered office during normal business 
hours and at the company’s agm from 15 
minutes before the meeting
there have been no changes in the 
directors’ beneficial or nonbeneficial 
interests between the periodend and  
9 june 2014 the date on which this report 
has been signed save as disclosed none 
of the directors nor any person connected 
with a director has any interest in the shares 
or loan capital of the company or any 
subsidiary undertakings
details of the directors’ employment 
agreements and appointment letters and 
emoluments and interests in the ordinary 
share capital of the company which derive 
from their employment are set out in the 
directors’ remuneration report which 
commences on page 42
save as disclosed in this annual report at 
no time during the period did any director 
hold a material interest directly or indirectly 
in any contract of significance with the 
company or any undertaking other than 
service agreements between executive 
directors and the company
directors’ indemnity arrangements
the company has purchased and 
maintained throughout the period to  
the date of this report and intends to  
do so going forward directors’ and  
officers’ liability insurance in respect  
of itself and its directors
major shareholders
at 28 march 2014 the company had been notified or was aware of the following material 
interests of 3 or more in the ordinary share capital of the company
 number of  of
 ordinary shares voting rights
1
schroders plc 23851450 173
henderson global investors
2
 23483551 170
jonathan green 19095064 138
michael sherwood 17011836 123
john drinkwater 9600000 69
sion kearsey director 8000000 58
1 total voting rights attaching to the issued share 
capital of the company comprising 138141999 
ordinary shares each of £00005 nominal value 
being the 138645431 ordinary shares in issue 
less 503432 ordinary shares currently held  
in treasury
2 on 15 april 2014 the group was notified that 
henderson global investors held 21975279 
ordinary shares representing 159 of the 
companys total voting rights
sepura plc annual report  accounts 2014 57
strategic report governance group financial statements company financial statements directors’ report continued
greenhouse gas emissions
disclosures is respect of greenhouse gas 
emissions are given on page 33
employee share incentive plans
the company has in place for its executive 
directors and employees the sepura 2008 
longterm incentive plan “ltip” under 
which awards were granted during the 
period details of this share plan and 
the old share option plan an enterprise 
management incentive “emi” qualifying 
share option scheme which is closed to 
new entrants can be found in the directors’ 
remuneration report commencing on page 
42 and note 27 to the financial statements
the company also has in place a savings
related share option scheme based on 
hmrc guidelines “sharesave scheme” 
this incentive plan which encourages share 
ownership amongst sepura employees was 
successfully launched in september 2008 
and experienced a high level of takeup and 
has subsequently been refreshed annually 
the board expects this to continue for the 
foreseeable future
the table opposite outlines any impact  
of a change of control prescribed in the  
rules of each of the company’s share 
incentive plans
related party transactions
there were no related party transactions 
with directors other than their 
remuneration during either the current or 
previous period
» a protocol is to be observed in relation to 
any nonexecutive director appointed by 
the principal shareholders to deal with 
the introduction of new business and 
opportunities and any potential conflicts 
of interest and
» the principal shareholders have the right 
to be provided with certain confidential 
information while their interest in the 
company remains at or greater than 15
in addition the principal shareholders have 
entered into an orderly market agreement 
which limits the number of ordinary shares 
in the company which each of them may 
sell within specified periods of time
corporate governance
the company is committed to high 
standards of corporate governance  
its application of the principles of good 
governance in respect of the uk corporate 
governance code for the period under 
review is described in the corporate 
governance report which forms part  
of this directors’ report on pages 34 to 38
the statement of directors’ responsibilities 
in respect of this annual report and  
the financial statements appears on  
pages 59 and 60
political donations
at the 2013 agm shareholders gave 
authority covering the period up  
to the conclusion of the 2014 agm or  
29 september 2014 whichever is earlier for 
the company to make political donations 
and incur political expenditure up to a 
maximum aggregate sum of £100000  
as a precautionary measure in light of the 
wide definitions contained in the political 
parties elections and referendums act 2000 
no payments were made during the period 
2013 less than £2000 and it is proposed  
to maintain the group’s policy in this  
area and renew this authority at the 
forthcoming agm
relationship agreement
effective from listing in august 2007 john 
drinkwater jonathan green sion kearsey 
michael sherwood and kelso place asset 
management llp “principal shareholders” 
entered into an agreement to regulate the 
ongoing relationship between the company 
and the principal shareholders the primary 
purpose of the relationship agreement is to 
ensure that the company and its subsidiaries 
are capable of carrying out their business 
independently of the principal shareholders 
and that transactions and relationships 
with the principal shareholders are at arm’s 
length and on normal commercial terms 
provisions of the relationship agreement 
include the following
» the principal shareholders have the  
right to appoint remove and reappoint 
one nonexecutive director to the  
board and its nominations committee 
while they together hold an interest of 
15 or more in the company  
the principal shareholders’ current 
nominee in this regard is sion kearsey 
who has considerable knowledge and 
experience of the company’s business 
and market place
» the principal shareholders are obliged 
while they hold the right to appoint a 
nonexecutive director to comply with 
the financial conduct authority’s model 
code and the company’s own share 
dealing code of conduct in relation to any 
dealings in the company’s securities
» subject to certain exceptions each of the 
principal shareholders have agreed not 
to have any direct or indirect interest in 
any business similar to that carried out by 
the company without first seeking prior 
approval from the company
58 sepura plc annual report  accounts 2014 in preparing these financial statements  
the directors are required to
» select suitable accounting policies and 
then apply them consistently
» make judgements and accounting 
estimates that are reasonable  
and prudent
» state whether ifrss as adopted by 
the european union and applicable 
uk accounting standards have been 
followed subject to any material 
departures disclosed and explained in 
the group and parent company financial 
statements respectively and
» prepare the financial statements on 
the going concern basis unless it is 
inappropriate to presume that the 
company will continue in business
the directors are responsible for keeping 
adequate accounting records that 
are sufficient to show and explain the 
company’s transactions and disclose with 
reasonable accuracy at any time the financial 
position of the company and the group 
and enable them to ensure that the financial 
statements and the directors’ remuneration 
report comply with the companies act 
2006 and as regards the group financial 
statements article 4 of the ias regulation 
they are also responsible for safeguarding 
the assets of the company and the group 
and hence for taking reasonable steps for 
the prevention and detection of fraud and 
other irregularities
disclosure of information to auditors
each of the directors of the company at 
the time when this report was approved 
confirmed that
» so far as the director is aware there is no 
relevant audit information of which the 
company’s auditors are unaware and
» he has taken all the steps that he ought  
to have taken as a director in order to 
make himself aware of any relevant  
audit information and to establish that  
the company’s auditors are aware of  
that information
this confirmation is given in accordance 
with section 4182 of the act
statement of directors’ responsibilities
the directors are responsible for  
preparing the annual report the directors’ 
remuneration report and the financial 
statements in accordance with applicable 
law and regulations
company law requires the directors to 
prepare financial statements for each 
financial year under that law the directors 
have prepared the group financial 
statements in accordance with international 
financial reporting standards “ifrss” as 
adopted by the european union and the 
parent company financial statements in 
accordance with united kingdom generally 
accepted accounting practice united 
kingdom accounting standards and 
applicable law under company law the 
directors must not approve the financial 
statements unless they are satisfied that they 
give a true and fair view of the state of affairs 
of the group and the company and of the 
profit or loss of the group for that period
going concern
after making due enquiry and having 
considered the group’s budget for 
the coming year together with outline 
projections through to 2017 the directors 
confirm they have a reasonable expectation 
that the group and the company have 
adequate resources to continue in 
operational existence for the foreseeable 
future consequently the going concern 
basis has been applied in preparing the 
financial statements for the period ended  
28 march 2014
2014 agm
the annual general meeting of the 
company will be held at 900am on 
wednesday 30 july 2014 at the offices  
of eversheds llp one wood street  
london ec2v 7ws a separate circular 
comprising a letter from the chairman 
notice of meeting explanatory notes  
and a form of proxy accompanies this 
annual report
the notice of the 2014 agm specifies 
deadlines for the exercise of voting rights 
and the appointment of a proxy or proxies 
to vote in relation to the resolutions to be 
proposed at the meeting all proxy votes will 
be counted and the numbers for against 
or withheld the latter of which is not a 
vote in law in relation to each resolution 
will be announced at the meeting and 
via a regulatory information service and 
published on the company’s website at 
wwwsepuracom
independent auditors
separate resolutions to reappoint 
pricewaterhousecoopers llp as auditors 
of the company and to authorise the 
directors to determine their remuneration 
will be proposed at the 2014 agm the 
reappointment of pricewaterhousecoopers 
llp has been recommended to the 
board by its audit committee and 
pricewaterhousecoopers llp have indicated 
their willingness to remain in office
  change of control
  provisions contained
  within the share  performance
share incentive plan incentive plan rules effect on vesting condition
old share option plan no none not applicable
ltip yes acceleration pro rata to time
1
 pro rata testing
1
sharesave scheme yes acceleration pro rata to  
   accumulated savings
1
 not applicable
1 at the discretion of the remuneration committee
sepura plc annual report  accounts 2014 59
strategic report governance group financial statements company financial statements 60 sepura plc annual report  accounts 2014
directors’ report continued
post balance sheet event
on 20 may 2014 the company announced 
the acquisition of fylde micro limited 
further details are given in note 34 to 
the company’s consolidated financial 
statements
on behalf of the board
tony hunter
company secretary
radio house
st andrew’s road
cambridge cb4 1gr
registered in england no 04353801
9 june 2014
overseas branches
the company conducts some of its overseas 
operations through branches in malaysia 
and argentina
takeover directive disclosures
where not provided previously in this 
report the following provides the additional 
information required for shareholders as a 
result of the implementation of the takeover 
directive into english law and section 922 of 
the companies act 2006
» the company has not entered into any 
contractual commitments to its directors 
or employees providing for compensation 
on loss of office or employment 
whether through resignation purported 
redundancy or otherwise that would 
occur because of a takeover bid
» the company has entered into various 
agreements in the ordinary course of 
business many with local governments 
and government organisations around 
the world some of these either by 
their nature or value may represent 
significant agreements and generally as 
with the company’s standard terms and 
conditions of business do provide for 
a right of termination upon a change in 
control of the company national security 
and commercial sensitivity prevent 
disclosure of the details of any individual 
agreements and
» save as otherwise disclosed above there 
are no other significant agreements to 
which the company is a party that take 
effect alter or terminate upon a change  
of control following a takeover bid
the directors are responsible for the 
maintenance and integrity of the company’s 
website legislation in the united 
kingdom governing the preparation and 
dissemination of financial statements may 
differ from legislation in other jurisdictions
the directors consider that this annual 
report and accounts taken as a whole is fair 
balanced and understandable and provides 
the information necessary for shareholders 
to assess the company’s performance 
business model and strategy 
each of the directors whose names and 
functions are listed on page 35 confirms 
that to the best of their knowledge
» the group financial statements which 
have been prepared in accordance with 
ifrss as adopted by the european union 
give a true and fair view of the assets 
liabilities financial position and profit of 
the group and
» the strategic report and governance 
review along with the directors’ report 
together include a fair review of the 
development and performance of the 
business and the position of the group 
together with a description of the 
principal risks and uncertainties that it 
faces on pages 18 to 19  sepura plc annual report  accounts 2014 61
strategic report governance group financial statements company financial statements
report on the group  
financial statements 
our opinion
in our opinion the group financial 
statements
» give a true and fair view of the state  
of the group’s affairs as at 28 march 2014 
and of the group’s profit and cash flows 
for the year then ended
» have been properly prepared in 
accordance with international financial 
reporting standards “ifrss“ as adopted  
by the european union and
» have been prepared in accordance with 
the requirements of the companies act 
2006 and article 4 of the ias regulation
this opinion is to be read in the context of 
what we say in the remainder of this report
what we have audited
the group financial statements which are 
prepared by sepura plc comprise
» the consolidated balance sheet as at  
28 march 2014
» the consolidated income statement 
and consolidated statement of 
comprehensive income for the year  
then ended
» the consolidated statement of changes 
in equity and consolidated statement of 
cash flows for the year then ended and
» the notes to the group financial 
statements which include a summary  
of significant accounting policies and 
other explanatory information
the financial reporting framework that 
has been applied in their preparation 
comprises applicable law and ifrss as 
adopted by the european union
certain disclosures required by the  
financial reporting framework have  
been presented elsewhere in the annual 
report and accounts the “annual report” 
rather than in the notes to the financial 
statements these are crossreferenced 
from the financial statements and are 
identified as audited
 
what an audit of financial  
statements involves 
we conducted our audit in accordance 
with international standards on auditing 
uk and ireland “isas uk and ireland“ 
an audit involves obtaining evidence 
about the amounts and disclosures 
in the financial statements sufficient 
to give reasonable assurance that the 
financial statements are free from material 
misstatement whether caused by fraud  
or error this includes an assessment of
» whether the accounting policies are 
appropriate to the group’s circumstances 
and have been consistently applied and 
adequately disclosed
» the reasonableness of significant 
accounting estimates made by the 
directors and 
» the overall presentation of the financial 
statements 
in addition we read all the financial and 
nonfinancial information in the annual 
report to identify material inconsistencies 
with the audited group financial 
statements and to identify any information 
that is apparently materially incorrect 
based on or materially inconsistent with 
the knowledge acquired by us in the 
course of performing the audit if we 
become aware of any apparent material 
misstatements or inconsistencies we 
consider the implications for our report
overview of our audit approach
materiality
we set certain thresholds for materiality 
these helped us to determine the  
nature timing and extent of our audit 
procedures and to evaluate the effect  
of misstatements both individually and  
on the financial statements as a whole
based on our professional judgement 
we determined materiality for the group 
financial statements as a whole to be 
€685000 which represents approximately 
5 of profit before tax
we agreed with the audit committee  
that we would report to them 
misstatements identified during our audit 
above €30000 as well as misstatements 
below that amount that in our view 
warranted reporting for qualitative reasons
overview of the scope of our audit
the group is structured as one core 
operating business focused on the  
design development and supply  
of secure digital radio products and 
systems the core operating business 
consists of three reporting units and  
the group financial statements are  
a consolidation of those three reporting 
units and centralised functions
in establishing the overall approach  
to the group audit we determined the 
type of work that needed to be performed 
at the reporting units by us as the group 
engagement team or component auditors 
from other pwc network firms operating 
under our instruction where the work  
was performed by component auditors  
we determined the level of involvement 
we needed to have in the audit work  
at those reporting units to be able  
to conclude whether sufficient appropriate 
audit evidence had been obtained  
as a basis for our opinion on the group 
financial statements as a whole
 
independent auditors’ report  
to the members of sepura plc 62 sepura plc annual report  accounts 2014
independent auditors’ report  
to the members of sepura plc continued
accordingly of the group’s three reporting 
units we identified sepura plc based  
in the united kingdom and sepura 
systems gmbh based in austria which 
in our view required an audit of their 
complete financial information due to their 
size specific procedures were performed 
on certain balances of portalify oy based 
in finland this together with additional 
procedures at group level gave us the 
evidence we needed for our opinion on 
the group financial statements as a whole
areas of particular audit focus
in preparing the financial statements  
the directors made a number of subjective 
judgements for example in respect 
of significant accounting estimates 
that involved making assumptions 
and considering future events that are 
inherently uncertain we primarily focused 
our work in these areas by assessing the 
directors’ judgements against available 
evidence forming our own judgements 
and evaluating the disclosures in the 
financial statements
in our audit we tested and examined 
information using sampling and other 
auditing techniques to the extent 
we considered necessary to provide 
a reasonable basis for us to draw 
conclusions we obtained audit evidence 
through testing the effectiveness  
of controls substantive procedures  
or a combination of both
 
we considered the areas detailed on 
the following page to be those that 
required particular focus in the current 
year this is not a complete list of all risks 
or areas of focus identified by our audit 
we discussed these areas of focus with 
the audit committee their report on 
those matters that they considered to be 
significant issues in relation to the financial 
statements is set out on page 40 all of the 
risks arose in the parent company
going concern 
under the listing rules we are required  
to review the directors’ statement set 
out on page 59 in relation to going 
concern we have nothing to report having 
performed our review
 
as noted in the directors’ statement 
the directors have concluded that it 
is appropriate to prepare the group’s 
financial statements using the going 
concern basis of accounting the going 
concern basis presumes that the group  
has adequate resources to remain in 
operation and that the directors intend  
it to do so for at least one year from the 
date the financial statements were signed 
as part of our audit we have concluded 
that the directors’ use of the going 
concern basis is appropriate
however because not all future events 
or conditions can be predicted these 
statements are not a guarantee as to  
the group’s ability to continue as a  
going concern
opinion on other matter 
prescribed by the  
companies act 2006
in our opinion the information given  
in the strategic report and the directors’ 
report for the financial year for which  
the group financial statements are 
prepared is consistent with the  
group financial statements
other matters on which we are 
required to report by exception
adequacy of information and  
explanations received
under the companies act 2006 we are 
required to report to you if in our opinion 
we have not received all the information 
and explanations we require for our audit 
we have no exceptions to report arising 
from this responsibility
directors’ remuneration
under the companies act 2006 we 
are required to report to you if in our 
opinion certain disclosures of directors’ 
remuneration specified by law have not 
been made we have no exceptions to 
report arising from these responsibilities 
corporate governance statement
under the listing rules we are required 
to review the part of the corporate 
governance statement relating  
to the company’s compliance with nine 
provisions of the uk corporate governance 
code ’the code’ we have nothing  
to report having performed our review sepura plc annual report  accounts 2014 63
strategic report governance group financial statements company financial statements
area of focus how the scope of our audit addressed the area of focus
risk of fraud in revenue recognition
auditing standards require that we consider this 
we focused on this area because of the potential 
misstatement of revenue on complex contracts 
and bill and hold arrangements
recoverability of accounts receivable
the group has overseas customers that operate 
in territories where it can be difficult to obtain 
payment of accounts receivable on a timely basis
as a result there is a risk that the provision  
for accounts receivable is not sufficient
capitalisation of product  
development costs
we focused on this area because there is 
judgement involved in determining what product 
development costs should be capitalised and  
from what point such costs should be amortised 
the judgements relate to the likelihood that  
a development project will result in saleable 
product and its overall profitability
capitalised costs continue to be reviewed for 
impairment over the life of the related product
risk of management override  
of internal controls
auditing standards require that we consider this
» we performed year end sales cutoff testing including the review of credit notes raised during  
the year and after the yearend to check that they were treated appropriately
» we tested sales made on bill and hold terms obtaining customer confirmations where appropriate
» for contract revenue we tested the calculations of revenue recognised based on the work 
performed which we agreed to supporting documentation and the forecast costs to complete  
we agreed the forecast costs to complete to project plans and challenged management  
on the preparation of these plans
» we also tested manual journal entries posted to revenue accounts to identify unusual  
or irregular items
» where there was no provision for overdue amounts or where the provision was for less than 
the full amount of the balance we discussed with senior management and reviewed available 
correspondence with the customer 
» we tested the ageing of accounts receivable to ensure that invoices were correctly classified 
» we either obtained direct confirmation from the customer of the amount owed or tested payments 
received subsequent to the year end
» we assessed managements’ judgements associated with determining when projects should  
be capitalised and at what point amortisation should commence
» we traced a sample of capitalised costs back to the project ledger and general ledger and  
source documentation including invoices and other records of expenditure
» we reviewed managements’ impairment review and the associated assumptions
» we tested manual journal entries we considered whether there was evidence of bias  
by the directors in the significant accounting estimates and judgements relevant to the  
financial statements we also assessed the overall control environment of the group  
including the arrangements for staff to “whistleblow” inappropriate actions and discussed  
with senior management the possibilities for management override of controls 64 sepura plc annual report  accounts 2014
independent auditors’ report  
to the members of sepura plc continued
responsibilities for the financial 
statements and the audit
our responsibilities and those  
of the directors
as explained more fully in the directors’ 
responsibilities statement on pages 59 
and 60 the directors are responsible for 
the preparation of the group financial 
statements and for being satisfied that they 
give a true and fair view 
our responsibility is to audit and express an 
opinion on the group financial statements 
in accordance with applicable law and isas 
uk and ireland those standards require 
us to comply with the auditing practices 
board’s ethical standards for auditors 
this report including the opinions 
has been prepared for and only for 
the company’s members as a body in 
accordance with chapter 3 of part 16 
of the companies act 2006 and for no 
other purpose we do not in giving 
these opinions accept or assume 
responsibility for any other purpose 
or to any other person to whom this 
report is shown or into whose hands it 
may come save where expressly agreed 
by our prior consent in writing
on page 60 of the annual report  
as required by the code provision c11  
the directors state that they consider  
the annual report taken as a whole  
to be fair balanced and understandable 
and provides the information necessary 
for members to assess the group’s 
performance business model and strategy 
on page 40 as required by c38 of the 
code the audit committee has set out  
the significant issues that it considered  
in relation to the financial statements  
and how they were addressed under isas  
uk and ireland we are required to report 
to you if in our opinion
» the statement given by the directors 
is materially inconsistent with our 
knowledge of the group acquired  
in the course of performing our audit or
» the section of the annual report 
describing the work of the audit 
committee does not appropriately 
address matters communicated by  
us to the audit committee
we have no exceptions to report arising 
from this responsibility
other information in the annual report
under isas uk and ireland we are 
required to report to you if in our opinion 
information in the annual report is
» materially inconsistent with the 
information in the audited group financial 
statements or
» apparently materially incorrect based  
on or materially inconsistent with  
our knowledge of the group acquired  
in the course of performing our audit or
» is otherwise misleading
we have no exceptions to report arising 
from this responsibility
other matter
we have reported separately on the parent 
company financial statements of sepura 
plc for the year ended 28 march 2014 
and on the information in the directors’ 
remuneration report that is described  
as having been audited
stuart newman senior statutory auditor
for and on behalf of 
pricewaterhousecoopers llp
chartered accountants and statutory 
auditors
cambridge
9 june 2014 sepura plc annual report  accounts 2014 65
strategic report governance group financial statements company financial statements
consolidated income statement
   2014   2013
  before non non after non before non non after non
  recurring recurring recurring recurring recurring recurring
  costs  costs
1
 costs costs  costs
1
 costs
 note €’000 €’000 €’000 €’000 €’000 €’000
revenue 7 116645 – 116645 104772 – 104772
cost of sales  61326 – 61326 54592 – 54592
gross profit  55319 – 55319 50180 – 50180
selling marketing and distribution costs  16625 – 16625 15518 – 15518
research and development costs  12228 – 12228 14027 – 14027
administrative expenses  11449 590 12039 10437 2046 12483
operating profit 9 15017 590 14427 10198 2046 8152
financial income 12 6 – 6 11 – 11
financial expense 13 250 – 250 282 – 282
net financial expense  244 – 244 271 – 271
profit before income tax  14773 590 14183 9927 2046 7881
income tax expense credit 14 1189 136 1053 681 491 1172
profit for the period attributable 
to owners of the parent  13584 454 13130 10608 1555 9053
earnings per share ¢   
basic 15 98 03 95 77 11 66
diluted 15 98 04 94 76 11 65
1 nonrecurring costs relate to the acquisition of portalify oy in the current period as described in note 6 and subsequent restructuring costs nonrecurring costs in the 
prior period related to the acquisition of 3t communications ag now renamed sepura systems gmbh and subsequent restructuring costs
the accompanying notes are an integral part of these consolidated financial statements 66 sepura plc annual report  accounts 2014
consolidated statement of comprehensive income
consolidated statement of changes in equity
     2014 2013
     €’000 €’000
profit for the period     13130 9053
other comprehensive income expense
exchange translation     42 –
cash flow hedges net of taxation     1125 1469
other comprehensive income expense that may be reclassified into income    1083 1469
total comprehensive income for the period attributable to owners of the parent   14213 7584
  share share other retained total
  capital premium reserves earnings equity
 note  €’000 €’000 €’000 €’000 €’000
at 31 march 2012  78 – – 58296 58374
profit for the period  – – – 9053 9053
other comprehensive expense for the period  – – – 1469 1469
total comprehensive income  – – – 7584 7584
transactions with owners  
tax on share option schemes 19 – – – 98 98
employee share option schemes 
value of employee services 27 – – – 772 772
equity dividends paid 16 – – – 2420 2420
treasury shares  – purchase of own shares 26 – – – 1702 1702 
–  issue of shares to settle  
employee share options 26 – – – 671 671
total transactions with owners  – – – 2777 2777
at 30 march 2013  78 – – 63103 63181
profit for the period  – – – 13130 13130
other comprehensive expense income for the period  – – 42 1125 1083
total comprehensive expense income  – – 42 14255 14213
transactions with owners  
tax on share option schemes 19 – – – 517 517
employee share option schemes  
value of employee services 27 – – – 664 664
equity dividends paid 16 – – – 3020 3020
issue of shares 26 1 999 – – 1000
treasury shares  – purchase of own shares 26 – – – 1323 1323 
–  issue of shares to settle 
employee share options 26 – – – 163 163
total transactions with owners  1 999 – 2999 1999
at 28 march 2014  79 999 42 74359 75395
the accompanying notes are an integral part of these consolidated financial statements sepura plc annual report  accounts 2014 67
strategic report governance group financial statements company financial statements
consolidated balance sheet
of sepura plc company number 04353801 as at 28 march 2014
     2014 2013
    note €’000 €’000
assets
noncurrent assets
intangible assets    17 52864 41315
property plant and equipment    18 7706 5452
deferred tax asset    19 6069 6686
total noncurrent assets     66639 53453
current assets  
inventories    20 11983 13313
trade and other receivables    21 37407 32357
derivative financial instruments    31 403 –
cash and cash equivalents    22 8017 8634
total current assets     57810 54304
total assets     124449 107757
liabilities  
current liabilities  
borrowings    23 2182 1761
derivative financial instruments    31 – 1077
trade and other payables    24 34039 27368
income tax payable     1225 528
provisions    25 1316 5434
total current liabilities     38762 36168
noncurrent liabilities  
borrowings    23 650 436
trade and other payables    24 4826 7018
provisions    25 4816 954
total noncurrent liabilities     10292 8408
total liabilities     49054 44576
net assets      75395 63181
shareholders’ equity  
ordinary share capital    26 79 78
share premium    26 999 –
other reserves     42 –
retained earnings     74359 63103
total equity     75395 63181
the financial statements on pages 65 to 98 were approved by the board and authorised for issue on 9 june 2014 and are signed on  
its behalf by
gordon watling steve chamberlain 
chief executive officer chief financial officer
the accompanying notes are an integral part of these consolidated financial statements
  68 sepura plc annual report  accounts 2014
consolidated statement of cash flows
     2014 2013
    note  €’000 €’000
cash generated from operations    28 26446 26352
income taxes paid     60 44
net cash generated from operating activities     26386 26308
cash flow from investing activities
interest received     6 11
purchase of property plant and equipment     3711 1469
capitalised development costs     12536 11959
purchase of subsidiary undertakings net of cash acquired     4997 6552
purchase of other intangible assets     896 37
proceeds on disposal of property plant and equipment     18 –
net cash used in investing activities     22116 20006
cash flow from financing activities
new borrowings     – 8500
repayment of borrowings     463 8839
interest paid     202 234
dividends paid to shareholders     3020 2420
purchase of own shares for treasury     1323 1702
issue of share capital from treasury     163 671
net cash used in financing activities     4845 4024
net decrease increase in cash and cash equivalents    29 575 2278
cash and cash equivalents at the beginning of the period     8634 6356
foreign exchange     42 –
cash and cash equivalents at the end of the period    22 8017 8634
the accompanying notes are an integral part of these consolidated financial statements sepura plc annual report  accounts 2014 69
strategic report governance group financial statements company financial statements
notes to the group financial statements
for the period ended 28 march 2014
1 incorporation
sepura plc “the company” is a public limited company incorporated and domiciled in england and wales with registered number 
04353801 whose ordinary shares of £00005 each are traded on the official list of the london stock exchange the company’s registered 
office is radio house st andrew’s road cambridge cb4 1gr england
details of the company’s subsidiary undertakings are set out in note 6 to the company’s financial statements the company and its 
subsidiary undertakings are collectively referred to below as “the group”
2 the business of the group
the principal activity of the group is the design development and distribution of secure digital radio products and systems
3 basis of preparation
these consolidated financial statements have been prepared in accordance with international financial reporting standards “ifrss” 
as adopted by the european union the ifrs interpretations committee formerly the international financial reporting interpretations 
committee “ifric” interpretations and with those parts of the companies act 2006 applicable to companies reporting under ifrs  
the financial statements of the parent company which have been prepared in accordance with uk gaap are presented separately  
following these consolidated financial statements
the consolidated financial statements have been prepared on a going concern basis and under the historical cost basis except for certain 
financial instruments that have been measured at fair value
the company has prepared these consolidated financial statements for the period to 28 march 2014 being the nearest friday to the end  
of the period
4 summary of significant accounting policies
the principal accounting policies adopted in the preparation of these financial statements are set out below these policies have been 
consistently applied to all the years presented unless otherwise stated
new standards interpretations and amendments to published standards effective in the financial statements
for the purposes of the preparation of these consolidated financial statements the group has applied all standards and interpretations  
that are effective for accounting periods beginning on or after 30 march 2013
the following new standards and amendments to published standards have been adopted during the current period
» ifrs 13 “fair value measurement”
» ias 1 amended “financial statement presentation of other comprehensive income oci”
» ias 12 amended “income taxes”
» ias 19 revised “employee benefits”
» amendments to ifrs 7 “financial instruments on asset and liability offsetting”
» ifric 20 “stripping costs in the production phase of a surface mine”
» annual improvements 2011
none of these have had an impact on the reported results of the group
standards interpretations and amendments to published standards that are not yet effective
certain new standards amendments and interpretations to existing standards have been published that are mandatory for the group’s 
accounting periods beginning on or after 29 march 2014 or later periods and which the group has not adopted early
» ifrs 9 “financial instruments”
» ifrs 10 “consolidated financial statements”
» ifrs 11 “joint arrangements”
» ifrs 12 “disclosure of interests in other entities”
» amendments to ifrs 10 ifrs 11 and ifrs 12 on transition guidance
» amendments to ifrs 10 “consolidated financial statements” ifrs 12 “disclosure of interests in other entities” and ias 27 amended 
“separate financial statements” in relation to “investment entities”
» amendments to ias 32 “financial instruments on asset and liability offsetting”
» ias 27 revised “separate financial statements”
» ias 28 revised “investments in associates and joint ventures”
» ias 36 amended “recoverable amount disclosures for nonfinancial assets”
» ias 39 amended “novation of derivatives and continuation of hedge accounting”
the directors do not anticipate that the adoption of these standards amendments and interpretations where relevant in future periods  
will have a material impact on the group’s financial statements 70 sepura plc annual report  accounts 2014
4 summary of significant accounting policies continued
basis of consolidation
the group financial statements incorporate the financial statements of the company and its subsidiary undertakings subsidiary 
undertakings are all entities over which the group has the power to govern the financial and operating policies generally accompanying a 
shareholding of more than one half of the voting rights the existence and effect of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the group controls another entity subsidiary undertakings are fully consolidated from 
the date on which control is transferred to the group they are deconsolidated from the date that control ceases the acquisition method of 
accounting is used to account for the acquisition of subsidiaries by the group
intercompany transactions balances and unrealised gains on transactions between group companies are eliminated unrealised losses are 
also eliminated but are considered an impairment indicator of the asset transferred accounting policies of subsidiary undertakings have 
been changed where necessary to ensure consistency with the policies adopted by the group
segment reporting
an operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses 
including revenues and expenses relating to transactions with other components of the same entity whose operating results are regularly 
reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its 
performance and for which discrete financial information is available operating segments are aggregated into reporting segments where 
they share similar economic characteristics as a result of the nature of the products sold or the services provided the production processes 
used to manufacture the products the type of customer for the products and services and the methods used to distribute the products or 
provide the services
revenue
revenue which relates to both the shipment of products and supplying solutions as part of longterm contacts is recognised to the 
extent that it is probable that economic benefits will flow to the group and the revenue can be reliably measured the following specific 
recognition criteria must also be met before revenue is recognised
i sale of goods
revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and revenue can be 
reliably measured depending on the incoterms applicable the group typically recognises goods revenue from the sale of goods on 
despatch on receipt of goods by the customer or upon formal acknowledgement from the customer that title has passed but they wish the 
goods to be stored at the group’s premises in which case revenue is only recognised when the goods are on hand separately identified and 
available for collection usual payment terms apply and it is probable that delivery will take place
in a multiple element arrangement some of the elements either hardware or software may remain undelivered or incomplete revenue may 
be recognised on the fair value of the elements delivered providing the following conditions are fulfilled
» the element of the product delivered has value to the customer on a stand alone basis and is thus a separately identifiable component  
within the arrangement
» the fair value can be reliably attributed to the undelivered element in the event of bundling where undelivered components may not have 
a separate invoiced sales price the fair value of the revenue deferred is calculated by comparing the underlying product list price of each 
element of the bundle compared to the overall bundle price and
» delivery of the undelivered element is probable and under the control of the group ie the technical risk attached to the delivery of the 
component is acceptable
if any of these conditions are not met then all revenue under the arrangement is deferred until either the contract is complete or uncertainty 
over any of these conditions is removed
ii warranties
as noted above the group assesses whether any of its contracts contain elements which operate independently of other contractual 
elements and which should therefore be ’unbundled’ and accounted for separately the group offers as standard to all customers a 
product warranty package which is typically for a period of three to five years depending on the product and territory concerned generally 
product warranty packages which are offered as standard with all products are not separately priced are offered for periods in line with 
the group’s standard terms of supply at the time of sale and are not considered to be an element capable of ’unbundling’ in such cases 
provision is made at the time of sale for the estimated cost of providing the warranty cover based on historical information on the cost and 
frequency of repairs required to the group’s products the group also has backtoback warranties of between twelve and fifteen months 
with the majority of its subcontract manufacturers to limit risk on product warranties amounts due from manufacturers under backtoback 
warranties are not recognised until the manufacturer has confirmed a reimbursement will be made
in certain cases “enhanced” warranty packages of a longer than standard period are sold to customers as separate products in such cases  
the fair value of the revenue associated with the warranty cover is amortised over the underlying period of the warranty cover the fair value  
of the revenue is determined by the directors based on market information including the sales price when enhanced warranties are sold on  
a standalone basis
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 71
strategic report governance group financial statements company financial statements
4 summary of significant accounting policies continued
iii longterm contracts
revenue and cost of sales from longterm contracts are recognised on the percentage of completion basis based on costs incurred to date 
when the outcome of the contract can be estimated reliably the criteria for this are that total contract revenue and the costs to complete 
the contract can be estimated reliably it is probable that the economic benefits associated with the contract will flow to the group and that 
the stage of contract completion can be measured when the group is not able to meet those conditions the policy is to recognise revenue 
equal to costs incurred to date to the extent that such costs are expected to be recovered expected losses are recognised in full at the point 
at which they are anticipated if the amount of the revenue recognised exceeds the amounts invoiced to customers the excess amount is 
recorded in amounts recoverable on contracts within trade and other receivables if the amounts invoiced exceed the revenue recognised  
the excess amount is recorded as deferred revenue or payments in advance
pensions
the group provides access to a stakeholder pension scheme a defined contribution plan into which employees may elect to contribute 
via salary deduction the group makes contributions to the scheme in proportion to the amount contributed by the employees costs are 
recognised in the consolidated income statement in the period to which they relate
employee share schemes
the group issues equitysettled sharebased payments to its eligible employees equitysettled sharebased payments are measured at 
fair value at the date of grant the fair value determined at the grant date of the equitysettled sharebased payments is expensed in the 
consolidated income statement on a straightline basis over the vesting period based on the group’s estimate of the number of shares 
that will eventually vest the corresponding entry is recorded in retained earnings fair value is measured using the trinomial model the 
expected life used in the model has been adjusted based on management’s best estimate for the effects of nontransferability exercise 
restrictions and behavioural considerations
financial income
financial income comprises interest receivable on cash balances and deposits and is recognised using the effective interest rate method
financial expense
financial expense comprises interest payable on credit facilities and is calculated using the effective interest rate method in accordance with 
ias 39 “financial instruments recognition and measurement”
income tax
income tax on the result for the period comprises current and deferred tax income tax is recognised in the consolidated income statement 
except to the extent that it relates to items recognised directly in equity in which case it is recognised in equity
current tax is the expected tax payable on the taxable income for the period using tax rates enacted or substantively enacted at the balance 
sheet date in the countries in which the group operates and any adjustment to tax payable in respect of previous periods
deferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes the amount of deferred tax provided 
is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or 
substantively enacted at the balance sheet date
the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable 
that sufficient taxable profits will be available to allow all or part of the asset to be recovered deferred tax assets and liabilities are offset 
when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied 
by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis
 
dividends
dividends declared on the company’s equity share capital are recognised as a liability when an irrevocable obligation to pay the dividends 
is established in the case of interim dividends this arises when the dividend is paid while for final dividends this is the date at which the 
dividends are approved at a shareholders’ general meeting 72 sepura plc annual report  accounts 2014
4 summary of significant accounting policies continued
property plant and equipment
property plant and equipment are stated at historical cost less accumulated depreciation and impairment losses historical cost includes 
expenditure that is directly attributable to the acquisition of the items including where relevant the cost of subcontractors direct labour  
and a proportion of attributable overheads subsequent costs are included in the asset’s carrying amount or recognised as a separate asset  
as appropriate only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the 
item can be measured reliably all other repairs and maintenance are charged to the consolidated income statement during the financial 
period in which they are incurred
depreciation is provided to write off the cost less the estimated residual value of property plant and equipment depreciation for certain 
manufacturing plant and machinery is calculated by reference to the number of units produced and for all other assets by equal annual 
instalments over their estimated useful economic lives as follows
» plant and machinery 3 – 7 years
» it equipment 3 – 5 years
no depreciation is charged on assets in the course of construction as their useful economic life has yet to commence on completion the 
assets are transferred to the appropriate class of property plant and equipment and depreciation is charged at the above rates
intangible assets
the group undertakes research and development activities with a view to developing new products and product functionality expenditure 
on research activities undertaken with the prospect of gaining new technical knowledge and understanding is recognised in the 
consolidated income statement when incurred
costs incurred on development projects relating to the design and testing of new or improved products are recognised as intangible assets 
when it is demonstrable that
» it is technically feasible that the project can be completed and will result in a product that is available for use or sale
» it is intended that the project will be completed and the asset will be used or sold
» the resultant asset can be used or sold
» the resultant asset will generate future economic benefits
» there are sufficient resources to complete the development and use or sell the asset and
» the expenditure attributable to the project can be measured reliably
development expenditures that do not meet these criteria are recognised as an expense in the consolidated income statement as they are 
incurred development costs previously recognised as an expense are not recognised as an asset in a subsequent period the expenditure 
capitalised includes cost of materials subcontractors direct labour and a proportion of attributable overheads capitalised development 
expenditure is stated at cost less accumulated amortisation and impairment losses amortisation is provided to write off the cost of the 
development expenditure by equal annual instalments over the products’ estimated useful life which is usually three years commencing 
from the time the asset is available for use the amortisation of capitalised development expenditure is included in research and 
development costs in the consolidated income statement
software and similar licences
externally purchased software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software  
the group also purchases licences to exploit thirdparty intellectual property rights licences are recorded at the historical cost to acquire the 
licence less accumulated amortisation and impairment losses and are amortised on a straightline basis over the life of the licence or where 
the licence is indefinite their estimated useful life which is generally three years the amortisation of software and similar licences is included 
in the consolidated income statement within cost of sales or research and development costs as appropriate
acquired intangible assets
at the date of acquisition of a subsidiary intangible assets that are deemed separable and that arise from contractual or other legal rights are 
capitalised and included within the net identifiable assets acquired these intangible assets are initially measured at fair value which reflects 
market expectations of the probability that the future economic benefits embodied in the asset will flow to the entity and are amortised on 
a straightline basis over their expected useful lives they are subsequently measured at cost less accumulated amortisation and impairment  
at each balance sheet date these assets are assessed for indicators of impairment and in the event that an asset’s carrying amount is 
determined to be greater than its recoverable amount the asset is written down immediately through the consolidated income statement
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 73
strategic report governance group financial statements company financial statements
4 summary of significant accounting policies continued
goodwill
goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in the fair value of the 
identifiable assets and liabilities of a subsidiary goodwill is initially recognised as an asset at cost and is subsequently measured at cost less 
any accumulated impairment losses goodwill impairment reviews are undertaken annually or more frequently if events or changes in 
circumstances indicate potential impairment the carrying value of goodwill is compared to the recoverable amount which is the higher of 
the value in use and the fair value less costs to sell any impairment is recognised immediately as an expense and is not subsequently reversed
acquisition costs
costs relating to an acquisition other than those associated with the issue of debt or equity securities are expensed to the consolidated 
income statement as incurred
impairment
the carrying value of noncurrent assets is reviewed whenever events or changes in circumstances indicate that the carrying value may not 
be recoverable to determine whether there is any indication of impairment if any such indication exists the asset’s recoverable amount 
is estimated intangible assets initially recognised during the current annual period which are not yet available for use are also tested for 
impairment by reference to the asset’s recoverable amount at the balance sheet date
an impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount the recoverable 
amount of property plant and equipment and capitalised software and other licences is the greater of their fair value less costs to sell and 
value in use the recoverable amount of capitalised development costs is its value in use in assessing value in use the estimated future cash 
flows over the remaining useful economic life of the asset in question are discounted to their present value using a pretax discount rate that 
reflects current market assessments of the time value of money and the risks specific to the asset
 
inventories
inventories including work in progress are stated at the lower of cost and net realisable value being estimated selling price in the ordinary 
course of business less applicable variable selling costs cost is determined on a first in first out basis and includes transport and handling 
costs where necessary provision is made for obsolete slow moving and defective inventories
cash and cash equivalents
cash and cash equivalents comprise cash in hand and call deposits with maturity of less than three months
leases
finance leases which transfer to the group substantially all the risks and benefits incidental to ownership of the leased item are capitalised  
at the inception of the lease at the fair value of the leased property or if lower at the present value of the minimum lease payments  
lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest 
on the remaining balance of the liability finance charges are charged directly against income
capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term unless there is reasonable 
certainty that ownership will be retained at the end of the lease term in which case they are depreciated over their useful economic life
leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases operating 
lease payments are recognised as an expense in the consolidated income statement on a straightline basis over the lease term
where the group enters into a finance sale and leaseback the transaction is essentially a financing operation and therefore no profit or loss is 
recognised on the sale instead any gain or loss arising on the sale reflecting the difference between the sale price and the previous carrying 
value is deferred and amortised over the lease term
restructuring provisions
provisions are recognised when the group has a present legal or constructive obligation as a result of a past event it is probable that the 
group will be required to settle that obligation and the amount can be estimated reliably provisions are measured at the best estimate of  
the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material
warranty provisions
provision is made at the time of sale for the estimated cost of providing warranty cover which cannot be separated from the sale of 
the underlying goods the provision is calculated based on historical information on the cost and frequency of repairs required to the 
group’s products the group also has backtoback warranties of between twelve and fifteen months with the majority of its subcontract 
manufacturers to limit risk on liabilities arising from manufacturing defects this backtoback warranty has not been netted from the 
provision the warranty provision has not been discounted 74 sepura plc annual report  accounts 2014
4 summary of significant accounting policies continued
contingent consideration
any contingent consideration payable is recognised at fair value at the acquisition date if the contingent consideration is classified as equity 
it is not remeasured and settlement is accounted for within equity otherwise subsequent changes to the fair value of the contingent 
consideration are recognised in the consolidated income statement
share capital
ordinary shares are classified as equity incremental costs directly attributable to the issue of new shares or options are shown in equity as a 
deduction net of tax from the proceeds
nonrecurring items
items of income and expense that are considered material either by their size andor nature are classified as exceptionalnonrecurring  
such items are shown separately on the face of the consolidated income statement the categorisation of exceptional items depends on the 
nature of the items arising
 
financial instruments
i treasury policies and management
the group’s treasury policies are designed to ensure that adequate financial resources are available for the development of the group’s 
businesses
ii trade receivables
trade receivables are recognised initially at fair value and subsequently held at amortised cost using the effective interest rate method 
less provision for impairment trade receivables are first assessed individually for impairment or collectively where the receivables are 
not individually significant where there is no objective evidence of impairment for an individual receivable it is included in a group of 
receivables with similar credit risk characteristics and these are collectively assessed for impairment movements in the provision for doubtful 
debts are recorded in the consolidated income statement
iii trade payables
trade payables are recognised initially at fair value and subsequently held at amortised cost using the effective interest rate method  
trade payables are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 
twelve months after the balance sheet date
iv borrowings
borrowings are recognised initially at fair value net of transaction costs incurred borrowings are subsequently stated at amortised cost  
any difference between the proceeds net of transaction costs and the redemption value is recognised in the consolidated income 
statement over the period of the borrowings using the effective interest rate method borrowings are classified as current liabilities unless 
the group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date
v derivative financial instruments
derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured at their 
fair value at each reporting date the method of recognising the resulting gain or loss depends on whether the derivative is designated as a 
hedging instrument and if so the nature of the item being hedged the group designates certain derivatives as either
a hedges of the fair value of recognised assets or liabilities or a firm commitment “fair value hedges”
b hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction “cash flow hedge” or
c hedges of a net investment in a foreign operation “net investment hedge”
the group documents at the inception of the transaction the relationship between hedging instruments and hedged items as well as its 
risk management objectives and strategy for undertaking various hedging transactions the group also documents its assessment both at 
hedge inception and on an ongoing basis of whether the derivatives that are used in hedging transactions are highly effective in offsetting 
changes in fair values or cash flows of hedged items
the fair values of various derivative instruments used for hedging purposes are disclosed in note 31
the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other 
comprehensive income the gain or loss relating to the ineffective portion is recognised immediately in the income statement within “losses 
on forward currency contracts” amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects 
profit or loss for example when the forecast sale that is hedged takes place when a hedging instrument expires or is sold or when a 
hedge no longer meets the criteria for hedge accounting any cumulative gain or loss existing in equity at that time remains in equity and 
is recognised when the forecast transaction is ultimately recognised in the income statement when a forecast transaction is no longer 
expected to occur the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within “losses 
on forward currency contracts” changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are 
recognised in the consolidated income statement as they arise
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 75
strategic report governance group financial statements company financial statements
4 summary of significant accounting policies continued
foreign currencies
i functional and presentational currency
the presentational currency of the group is the euro € the functional currency of each group entity is that of the primary economic 
environment in which it operates
ii transactions and balances
transactions denominated in foreign currencies have been translated into euros at the actual rates of exchange ruling at the date of the 
transaction monetary assets and liabilities denominated in foreign currencies have been retranslated at rates ruling at the balance sheet date 
all exchange gains and losses are taken to the consolidated income statement in the period in which they arise
iii group companies
the results and financial position of the group’s overseas subsidiary undertakings are translated where appropriate into euros as follows
» assets and liabilities at each balance sheet date presented are translated at the closing rate at the date of that balance sheet
» income and expenses are translated at average exchange rates and
» all resulting exchange differences are recognised as a separate component of equity
5 critical accounting estimates and assumptions
judgements and estimates
the preparation of financial information in conformity with ifrs requires the directors to make critical accounting estimates and judgements 
that affect the application of policies and reported amounts of assets and liabilities income and expenses an assessment of the impact of 
these estimates and judgements on the financial statements is set out below
the estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable 
under the circumstances the results of which form the basis of making the judgements about carrying values of assets and liabilities that are 
not readily apparent from other sources actual results may differ from these estimates
the estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised in the period 
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects 
both current and future periods
the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets or liabilities 
within the next financial period are discussed below
assessment of fair value of undelivered elements in multiple element arrangements
revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and revenue can be  
reliably measured depending on the incoterms applicable there can be judgement regarding the point at which these risks and rewards 
have been transferred the group enters into a number of multiple element arrangements where typically an element of software which  
is not fundamental to the effective operation of the product is delivered after the date of delivery of the initial hardware and software  
in such circumstances where the fair value of the undelivered elements can be estimated by management revenue equal to this fair  
value is separately carved out and deferred until such items have been delivered the remainder of the revenue is recognised on initial 
delivery if management’s estimation of the fair value of deferred income were increased by 10 then profit for the period ended 28 march 
2014 would be reduced by €21000 and profit for the period ended 29 march 2013 would be increased by €54000 while net assets would  
be reduced by €553000 and €571000 respectively
estimating the costs required to complete longterm contracts
revenue recognised under longterm contracts is determined by reference to the stage of completion of the relevant contract assessing  
the stage of completion requires an estimation of the future costs that will be incurred to complete the contract if management’s assessment  
of these future costs were amended by 10 then the impact on revenue and gross margin would be €250000
assessing whether development costs meet the criteria for capitalisation
the point at which development costs meet the criteria for capitalisation is critically dependent on management’s judgement of the point at 
which technical feasibility is demonstrable
the carrying amount of development costs on projects which are not yet available for sale or use was
     2014 2013
     €’000 €’000
development costs not available for sale or use     25600 16909 76 sepura plc annual report  accounts 2014
5 critical accounting estimates and assumptions continued
assessing the useful economic lives of capitalised development costs
management have estimated the useful economic lives of capitalised development costs as three years based on historical knowledge of the 
life cycle of the group’s products and technology
if this estimate was reduced from three to two years net assets would be reduced by €2650000 at 28 march 2014 and €2265000 at  
29 march 2013 with a corresponding increase in the group’s reported profit of €385000 and €1057000 respectively
bad debt provision
the group has some concentration of credit risk due to the influence of large contracts on its business albeit these contracts are directly or 
indirectly via the group’s distribution partners predominantly with government agencies both in the uk and internationally to offset this risk 
the group has implemented policies that require appropriate credit checks on potential customers before sales are made the group does not 
hold any security or other collateral in respect of its trade receivables and so was exposed to credit risk in respect of the net trade receivables 
balance of €34840000 2013 €30370000 an impairment provision is maintained in respect of amounts owed by specific customers which 
were more than 120 days overdue and where recoverability of the debt was considered uncertain but if in the event other customers are 
unable to settle their accounts additional provisions would be required
tax estimates
the calculation of the group’s total tax charge for the period necessarily involves a degree of estimation and judgement in respect of certain 
items whose tax treatment cannot be finally determined at the reporting date to the extent that the final outcome differs from the tax that 
has been provided adjustments will be made to income tax and deferred tax provisions furthermore the recognition of deferred tax assets 
is based upon whether it is more likely than not that sufficient and suitable taxable profits based on the latest available profit forecasts will be 
available in the future against which the reversal of temporary differences can be deducted
acquired intangibles
ifrs 3 revised “business combinations” requires that goodwill arising on the acquisition of subsidiaries is capitalised and included in 
intangible assets ifrs 3 revised also requires the identification of other intangible assets at acquisition the assumptions involved in 
valuing these intangible assets requires the use of estimates and judgements that may differ from the actual outcome these estimates 
and judgements cover future growth rates expected inflation rates and the discount rate used changing the assumptions selected by 
management could significantly affect the allocation of the purchase price paid between goodwill and other acquired intangibles
impairment of goodwill capitalised development costs and acquired intangibles
determining whether goodwill is impaired requires an estimation of the value in use of the cash generating unit “cgu” to which goodwill 
has been allocated the value in use calculation requires the entity to estimate the future cash flows of the cgu and a suitable discount 
rate in order to calculate the present value similar calculations are required in respect of capitalised development costs and other acquired 
intangibles changing the assumptions selected by management in particular the discount rate and growth rate assumptions used in the 
cash flow projections could significantly affect the group’s impairment evaluation
contingent consideration
contingent consideration of up to €49 million is payable to the previous owners of portalify oy in the event that portalify oy achieves revenue 
and operating profit targets over a certain period management have considered that based on current projections all of this consideration 
will be payable and accordingly a provision for €49 million is recorded in the consolidated financial statements in the event that portalify 
oy fails to meet these targets then the amount of consideration payable will be reduced accordingly with a corresponding impact on the 
carrying value of goodwill attributed to portalify
 
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 77
strategic report governance group financial statements company financial statements
6 acquisition of portalify oy
on 25 july 2013 the group announced the acquisition of the entire share capital of portalify oy “portalify” which designs and implements 
software applications the acquisition of portalify expands the group’s addressable market by broadening the group’s product portfolio 
the initial cash consideration was €1 million with further contingent consideration of up to €49 million payable in cash if portalify achieves 
revenue and operating profit targets over an earnout period
the book and fair values of the assets and liabilities acquired are as follows
     fair value provisional
    book value adjustments fair value
    €’000 €’000 €’000
intangible assets    730 1535 2265
property plant and equipment    6 – 6
deferred tax    – 517 517
trade and other receivables    479 125 354
cash at bank and in hand    3 – 3
borrowings    1098 – 1098
income tax payable    – 12 12
trade and other payables    525 35 560
net liabilities assets acquired    405 870 465
goodwill      5440
purchase consideration including maximum contingent consideration     5905
 
the maximum purchase consideration comprises 
cash consideration paid on completion      1000
deferred consideration payable in cash      4905
purchase consideration including maximum contingent consideration     5905
 
intangible assets acquired relate to existing customer contracts and relationships together with software assets developed by portalify  
these are being amortised over the expected useful economic lives which have been assessed as five years the goodwill arising on the 
acquisition is attributable to the value of synergies arising from the acquisition and future profits arising from access to new markets  
none of the goodwill on this acquisition is expected to be deductible for tax
acquisition costs of €329000 have been charged to the consolidated income statement during the period together with €261000 of 
subsequent restructuring costs as portalify is integrated with the group’s existing operations
portalify reported a loss after tax for the year ended 31 december 2012 of €04 million portalify contributed €07 million of revenue and  
€01 million of losses to the group’s results for the period since acquisition while the group’s revenue and earnings would have been  
€1169 million and €127 million respectively if portalify had been a member of the group for the whole period 78 sepura plc annual report  accounts 2014
7 segment reporting
the board has concluded that the group has a single reportable segment being the design development and supply of secure digital radio 
products and systems as
» the chief operating decision maker is the board which reviews regular financial information on the performance of the group assesses the 
performance of the group’s executives and is responsible for resource allocation
» since acquiring portalify oy on 25 july 2013 its operations have been integrated into sepura’s core business and a combined sales team 
now go to market selling portalify’s products as part of sepura’s total product portfolio and
» responsibility for worldwide sales falls under a single individual reflecting the shared economic characteristics of the group’s geographical 
markets and customers in terms of the products sold into these markets the sourcing of those products from the group’s subcontract 
manufacturers and the distribution channels used by endcustomers
revenues attributable to customers based in the company’s country of domicile the united kingdom were €19346000 2013 €16929000 
revenues from all other countries totalled €97299000 2013 €87843000 of which €32309000 2013 €29601000 related to customers 
in germany which in aggregate represented more than 10 of the group’s revenues for the period a significant percentage of the group’s 
revenue in each financial period is derived from orders from a small number of enduser organisations the group is not reliant on any 
individual enduser organisations
the group’s intangible assets and property plant and equipment are located as follows
     2014 2013
     €’000 €’000
united kingdom     39520 32990
rest of world     21050 13777
     60570 46767
8 adjusted performance measures
the group presents adjusted figures as key performance measures in addition to those reported under ifrs these adjusted figures 
comprising ebitda adjusted ebitda adjusted operating profit and adjusted operating margin exclude certain nonoperational or noncash 
items and reflect the underlying trading performance of the group
earnings before interest tax depreciation and amortisation has been calculated as follows
    2014 2013
    €’000 €’000 increase
operating profit    14427 8152 77
depreciation see note 18    1445 1392
amortisation see note 17    9588 11871
ebitda    25460 21415 19
nonrecurring costs see note 9    590 2046
reversal of capitalised development costs see note 17    12536 11959
reversal of the ifrs 2 shareoption charge see note 10    664 772
reversal of the ni payable on the shares subject to the ifrs 2 shareoption charge  238 203
adjusted ebitda    14416 12477 16
adjusted operating profit has been calculated as follows
    2014 2013
    €’000 €’000 increase
operating profit    14427 8152 77
adjustments 
nonrecurring costs see note 9    590 2046
reversal of capitalised development costs see note 17    12536 11959
reversal of associated amortisation see note 17    8080 10214
reversal of amortisation of acquired intangibles see note 17    1010 1055
reversal of the ifrs 2 shareoption charge see note 10    664 772
reversal of the ni payable on the shares subject to the ifrs 2 shareoption charge  238 203
adjusted operating profit    12473 10483 19
adjusted operating margin being adjusted operating profit divided by revenue  107 100 
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 79
strategic report governance group financial statements company financial statements
8 adjusted performance measures continued
adjusted operating costs have been calculated as follows
for the period ended 28 march 2014  selling marketing research and administrative total
  and distribution costs development costs expenses
  €’000 €’000 €’000 €’000
per consolidated income statement   16625 12228 12039 40892
adjustments       
nonrecurring costs see note 9   – – 590 590
reversal of capitalised development costs see note 17   – 12536 – 12536 
reversal of associated amortisation see note 17   – 8080 – 8080 
reversal of amortisation of acquired intangibles see note 17   – – 1010 1010 
reversal of the ifrs 2 shareoption charge see note 10   – – 664 664 
reversal of the ni payable on the shares    
subject to the ifrs 2 shareoption charge   – – 238 238
adjusted operating costs   16625 16684 9537 42846
for the period ended 29 march 2013  selling marketing research and administrative total
  and distribution costs development costs expenses
  €’000 €’000 €’000 €’000
per consolidated income statement   15518 14027 12483 42028
adjustments       
nonrecurring costs see note 9   – – 2046 2046
reversal of capitalised development costs see note 17   – 11959 – 11959 
reversal of associated amortisation see note 17   – 10214 – 10214 
reversal of amortisation of acquired intangibles see note 17   – – 1055 1055 
reversal of the ifrs 2 shareoption charge see note 10   – – 772 772 
reversal of the ni payable on the shares    
subject to the ifrs 2 shareoption charge   – – 203 203
adjusted operating costs   15518 15772 8407 39697
9 operating profit
     2014 2013
     €’000 €’000
operating profit is stated after charging crediting 
cost of inventories recognised as an expense included in cost of sales    53530 48380
depreciation on property plant and equipment 
– owned assets     1445 1392
– amounts included in capitalised development costs     183 159
amortisation of intangible assets 
– development costs     8080 10214
– software and similar licences     498 602
– acquired intangibles     1010 1055
research and noncapitalised development costs excluding amortisation    4148 3813
operating lease rentals 
– land and buildings     1451 1244
– plant and machinery     19 46
trade receivables impairment included in sales marketing and distribution costs   346 569
foreign exchange losses     144 155
nonrecurring costs 
– acquisition costs     329 625 
– restructuring costs     261 1421
nonrecurring costs in the current period relate to the acquisition of portalify oy and subsequent restructuring nonrecurring costs in the 
prior period related to the acquisition of 3t communications ag and subsequent restructuring 80 sepura plc annual report  accounts 2014
9 operating profit continued
     2014 2013
     €’000 €’000
auditors’ remuneration 
– fees payable to the company’s auditors for the audit of the company and consolidated financial statements  99 114
– fees payable to the company’s auditors for other services 
– audit related assurance services interim review     25 31
– tax compliance services     12 15
– tax advisory services     11 4
– corporate finance services     16 71
– all other nonaudit services     3 14
     166 249
 10 employee numbers and costs
the average monthly number of persons employed by the group including executive directors during the period analysed by category  
was as follows
     2014 2013
     number number
research and development     200 180
sales marketing and distribution     78 71
general and administration     17 17
production support     50 43
     345 311
the aggregate costs of these employees were as follows
     2014 2013
     €’000 €’000
wages and salaries     25303 22626
social security costs     3238 3056
other pension costs     1176 981
expense relating to share based payments     664 772
     30381 27435
11 key management compensation and remuneration of directors
information on the remuneration of directors is given in those sections of the directors’ remuneration report described as having been 
audited and those elements required by the companies act 2006 and the financial conduct authority form part of these financial statements 
one of the directors exercised share options during the period giving rise to a taxable gain of £211000 2013 £nil the total expense in the 
income statement relating to directors’ share based payments was €190000 2013 €246000
the compensation of the directors and the seven 2013 six other key management personnel as defined within ias 24 was as follows
     2014 2013
     €’000 €’000
salaries and other shortterm employee benefits     2687 2344
expense relating to share based payments     300 354
     2987 2698
12 financial income
     2014 2013
     €’000 €’000
interest receivable and similar income on shortterm bank deposits    6 11
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 81
strategic report governance group financial statements company financial statements
13 financial expense
     2014 2013
     €’000 €’000
interest payable on borrowings and credit facilities     202 234
amortisation of loan arrangement fees     48 48
     250 282
14 income tax expense credit
     2014 2013
     €’000 €’000
current tax 
income tax for the period     769 411
deferred tax 
origination and reversal of temporary differences     1200 1817
adjustment in respect of prior periods     1428 –
impact of change in uk tax rate     512 234
total tax in consolidated income statement     1053 1172
 
factors affecting the tax expense credit for the period
the tax expense credit for the period is different from the standard rate of corporation tax in the uk which was 23 2013 24  
the differences are explained below
     2014 2013
     €’000 €’000
tax reconciliation 
profit before income tax     14183 7881
at standard rate of corporation tax in the uk     3262 1891
effects of 
research and development enhanced expenditure     735 3304
patent box     498 –
expenses not deductible for tax purposes     65 16
accelerated capital allowances     23 4
effect of overseas tax rates     – 13
employee share options     148 –
impact of change in uk tax rate     512 234
adjustment in respect of prior periods     1428 –
total tax expense credit see above     1053 1172
effective tax rate     7 15
 
the finance act 2013 which provides for reductions in the main rate of corporation tax from 23 to 21 effective from 1 april 2014 and to 
20 effective from 1 april 2015 was substantively enacted on 2 july 2013 these rate reductions have been reflected in the calculation of 
deferred tax at the balance sheet date
  82 sepura plc annual report  accounts 2014
15 earnings per share
basic earnings per share has been calculated by dividing earnings attributable to owners of the parent by the weighted average number of 
shares of the company for each period for diluted earnings per share the weighted average number of shares is adjusted to allow for the 
conversion of all dilutive equity instruments
   2014   2013
 before non non after non before non non after non
 recurring recurring recurring recurring recurring recurring
 costs costs costs costs costs costs
earnings attributable to owners of the parent €’000 13584 454 13130 10608 1555 9053
number of shares  
basic weighted average number of shares ’000 138057 138057 138057 137319 137319 137319
effect of dilutive securities  
employee incentive plans ’000 1160 1160 1160 1314 1314 1314
diluted weighted average number of shares ’000 139217 139217 139217 138633 138633 138633
basic eps ¢ 98 03 95 77 11 66
diluted eps ¢ 98 04 94 76 11 65
  
the group presents an adjusted earnings per share figure which excludes nonrecurring costs the capitalisation of development costs 
together with associated amortisation the amortisation of acquired intangibles and the ifrs 2 shareoption charge all net of uk corporation 
tax at the standard rate this adjusted earnings per share figure has been based on adjusted basic earnings for each financial period and on 
the same number of diluted weighted average shares in issue as the gaap earnings per share calculation above
     2014 2013
     €’000 €’000
earnings attributable to owners of the parent     13130 9053
adjustments
nonrecurring costs     590 2046
reversal of capitalised development costs     12536 11959
reversal of associated amortisation     8080 10214
reversal of amortisation of acquired intangibles     1010 1055
reversal of the ifrs 2 shareoption charge     664 772
reversal of the ni payable on the shares subject to the ifrs 2 shareoption charge   238 203
     1954 2331
effect of uk corporation tax at 23 2013 24     449 559
net of uk corporation tax at 23 2013 24     1505 1772
adjusted earnings attributable to owners of the parent     11625 10825
adjusted diluted eps ¢     84 78
 
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 83
strategic report governance group financial statements company financial statements
16 dividends
the directors have proposed a final dividend in respect of the financial period ended 28 march 2014 of 141p per ordinary share totalling 
approximately €24m based on the ordinary shares in issue at 28 march 2014 the proposed dividend is subject to approval by shareholders 
and has not been included as a liability in these financial statements
during the current and prior periods the company paid the following dividends
     2014 2013
     €’000 €’000
fy14 interim dividend of 059p per ordinary share     966 –
fy13 final dividend of 117p per ordinary share     2054 –
fy13 interim dividend of 051p per ordinary share     – 864
fy12 final dividend of 098p per ordinary share     – 1556
     3020 2420
17 intangible assets
    acquired
  capitalisation of software customer
  development and similar relationships
  costs licences and brand goodwill total
  €’000 €’000 €’000 €’000 €’000
cost
at 30 march 2012  81387 3937 – – 85324
additions  11959 37 – – 11996
acquisitions  – – 4468 8513 12981
disposals  – 269 – – 269
at 29 march 2013  93346 3705 4468 8513 110032
additions  12536 896 – – 13432
acquisitions  730 504 1031 5440 7705
at 28 march 2014  106612 5105 5499 13953 131169
amortisation and impairment
at 30 march 2012  54534 2581 – – 57115
charge for the period  10214 602 1055 – 11871
disposals  – 269 – – 269
at 29 march 2013  64748 2914 1055 – 68717
charge for the period  8080 498 1010 – 9588
at 28 march 2014  72828 3412 2065 – 78305
net book value
at 28 march 2014  33784 1693 3434 13953 52864
at 29 march 2013  28598 791 3413 8513 41315
at 30 march 2012  26853 1356 – – 28209
  
the amortisation charge for each period has been included within the following captions of the consolidated income statement
     2014 2013
     €’000 €’000
cost of sales     315 278
research and development costs     8175 10519
administrative expenses     1098 1074
     9588 11871
 
  84 sepura plc annual report  accounts 2014
17 intangible assets continued
the group tests annually for impairment or more frequently if there are indications that goodwill may have been impaired goodwill relates 
to the acquisition during the period of portalify oy and the acquisition of 3t communications ag in the prior period the directors have 
prepared “value in use” calculations in accordance with ias 36 “impairment of assets” using the following key assumptions
assumption how determined
revenues management have used detailed forecasts and 10 per annum for years 4 to ten 
gross margin management have assumed an improvement in gross margin for the first three years based on 
detailed forecasts with gross margin assumed to be flat thereafter
operating costs operating costs have been assumed to remain a constant percentage of sales throughout the forecast 
period with minor reductions in percentages as revenues grow given the primarily fixed cost nature of 
the business
discount rate the pretax discount rate of 12 applied to the cash flows reflects the weighted average cost  
of capital of the group using the industry standard formula
sensitivity management have prepared sensitivity analysis that eliminates any revenue growth and increases  
the discount rate to 20 at these levels no impairment would be required
forecast period the group’s impairment model covers a forecast 10 year period which does not include a terminal 
value and the directors consider to be an appropriate period to consider
based on the above the directors have concluded that no impairment is required to be recorded
18 property plant and equipment
   assets under plant and
   construction machinery it equipment total
   €’000 €’000 €’000 €’000
cost
at 30 march 2012   724 9744 1932 12400
transfers   516 466 50 –
additions   260 992 217 1469
acquisitions   – 1234 119 1353
disposals   – 4 – 4
at 29 march 2013   468 12432 2318 15218
transfers   247 229 18 –
additions   1746 1655 310 3711
acquisitions   – – 6 6
disposals   – 13 5 18
at 28 march 2014   1967 14303 2647 18917
accumulated depreciation
at 30 march 2012   – 6781 1597 8378
charge for the period   – 1156 236 1392
disposals   – 4 – 4
at 29 march 2013   – 7933 1833 9766
charge for the period   – 1228 217 1445
at 28 march 2014   – 9161 2050 11211
net book value
at 28 march 2014   1967 5142 597 7706
at 29 march 2013   468 4499 485 5452
at 30 march 2012   724 2963 335 4022
  
there was no capital expenditure at the end of either period which had been contracted for prior to the end of the period but not provided 
for in the financial statements
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 85
strategic report governance group financial statements company financial statements
19 deferred tax
the group’s deferred tax assets and liabilities totalled €13681000 2013 €14049000 and €7612000 2013 €7363000 respectively and 
relate to temporary differences in respect of
     equity
 capitalised cash acquired  settled other property
 development flow intangible  share temporary plant and
 costs hedges assets losses options differences equipment net
 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000
at 30 march 2012 6435 202 – 9955 1528 61 801 5708
foreign exchange – – 1072 – – 115 – 957
recognised in income 143 – 287 69 177 12 1319 1583
recognised in equity   
– arising on cash flow hedges – 450 – – – – – 450
– arising on equity settled share options – – – – 94 – – 94
– effect of change in tax rate – – – – 4 – – 4
at 29 march 2013 6578 248 785 9886 1607 188 2120 6686
acquired 179 – 338 – – – – 517
recognised in income – – 353 41 153 11 820 284
recognised in equity   
– arising on cash flow hedges – 333 – – – – – 333
– arising on equity settled share options – – – – 289 – – 289
– effect of change in tax rate – – – – 228 – – 228
at 28 march 2014 6757 85 770 9927 2277 177 1300 6069
   
deferred tax liabilities have been offset against deferred tax assets at 28 march 2014 as there is a legally enforceable right to offset current tax 
assets and current tax liabilities within the same fiscal jurisdiction
the group’s deferred tax assets have been recognised in accordance with ias 12 as based on historical performance and future budgets the 
directors believe that it is probable that there will be sufficient taxable profits against which the assets will reverse
deferred tax assets and liabilities may be classified as longterm or current as follows
     2014 2013
     €’000 €’000
noncurrent assets     12421 14049 
noncurrent liabilities     7378 7363
     5043 6686
current assets     1260 – 
current liabilities     234 –
     1026 – 86 sepura plc annual report  accounts 2014
20 inventories
     2014 2013
     €’000 €’000
raw materials     1800 2953
work in progress     1526 3339
finished goods and goods for resale     8657 7021
     11983 13313
 
an obsolescence provision is maintained in respect of inventories the movements on which are set out below
     2014 2013
     €’000 €’000
at the beginning of the period     907 542
charged to cost of sales in the consolidated income statement     11 197
acquired     – 200
utilised in period     12 32
at the end of the period     906 907
21 trade and other receivables
     2014 2013
     €’000 €’000
trade receivables     35844 31150
less provision for impairment of receivables     1004 780
trade receivables net     34840 30370
other receivables     416 419
prepayments and accrued income     2151 1568
     37407 32357
 
other receivables at 28 march 2014 included €120000 2013 €168000 of unamortised fees incurred in connection with the £18 million 
revolving credit facility described in note 23
credit risk in relation to trade receivables
the group has some concentration of credit risk due to the influence of large contracts on its business albeit these contracts are directly or 
indirectly via the group’s distribution partners predominantly with government agencies both in the uk and internationally to offset this risk 
the group has implemented policies that require appropriate credit checks on potential customers before sales are made customer orders 
are checked against preset requirements before acceptance and formal credit control procedures are applied subsequent to invoicing the 
customer letters of credit and payments in advance are also obtained from customers as appropriate
the group does not hold any security or other collateral in respect of its trade receivables and so was exposed to credit risk in respect of 
the net trade receivables balance of €34840000 2013 €30370000 management believe that the credit quality of trade receivables which 
are within the group’s typical payment terms of between 30 and 90 days is good with €5126000 2013 €6413000 being overdue but not 
impaired at period end of which €2059000 was less than 30 days overdue 2013 €1736000 and €3128000 2013 €2872000 was more 
than 120 days overdue no amounts outstanding at the end of the period had had terms renegotiated prior to the end of the period
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 87
strategic report governance group financial statements company financial statements
21 trade and other receivables continued
an impairment provision is maintained in respect of amounts owed by specific customers which were more than 120 days overdue and 
where recoverability of the debt was considered uncertain
     2014 2013
     €’000 €’000
at the beginning of the period     780 225
charged to the consolidated income statement     346 569
acquired     – 280
utilised in period     122 294
at the end of the period     1004 780
 
foreign exchange risk in relation to trade receivables
the carrying amounts of the group’s trade receivables are denominated in the following currencies
     2014 2013
     €’000 €’000
euro     32392 22928
sterling     2125 7436
us dollar     134 6
other      189 –
total     34840 30370
 
the group’s overall foreign exchange risk is explained in note 31 “financial instruments”
22 cash and cash equivalents
the denomination and interest rate risk profile of the group’s cash and cash equivalents is as follows
   2014   2013
 cash at    cash at
 bank and shortterm  bank and shortterm
 in hand deposits total in hand deposits total
 €’000 €’000 €’000 €’000 €’000 €’000
sterling 728 121 849 1 2041 2042
us dollar 2219 168 2387 8 523 531
euro 2625 2018 4643 2898 3163 6061
other currencies 138 – 138 – – –
total 5710 2307 8017 2907 5727 8634
variable rate  04 013  04 025
   
the credit risk associated with cash and cash equivalents is mitigated by holding funds with counterparties with high credit ratings assigned 
by international credit rating agencies deposit accounts represent amounts placed on shortterm deposit on the money markets through 
accounts held at aa2 to aa3rated banks 2013 aa2 to aa3rated the effective interest rate on deposit accounts was 01 2013 02  
the group’s overall interest rate risk is explained in note 31 “financial instruments” 88 sepura plc annual report  accounts 2014
23 borrowings and facilities
borrowings outstanding at the end of the period
     2014 2013
     €’000 €’000
bank borrowings all of which are denominated in euros are repayable as follows 
within one year     2182 1761
in the second year     311 165
in the third to fifth year inclusive     339 271
     2832 2197
less amounts due for settlement within 12 months shown under current liabilities   2182 1761
amount due for settlement after 12 months     650 436
 
bank borrowings at sepura systems gmbh comprise an export loan of €1500000 which bears interest at 185 a term loan of which 
€433000 is outstanding is repayable in monthly instalments of €11000 and bears interest at 456 and a second term loan of which  
€33000 is outstanding and is repayable in quarterly instalments of €27000
bank borrowings at portalify oy comprise development funding loans of €539000 which are repayable in annual instalments through  
to 2017 and bear interest at the bank of finland base rate less 3 subject to a minimum of 1 and €327000 of other loans repayable 
monthly or quarterly that bear interest at rates ranging from 1 to 6
facilities
in addition to the above the group has a five year £18 million revolving credit facility none of which was drawn down at the end of the 
period the total costs associated with taking out the new facility were €244000 which are being amortised over the life of the facility 
agreement the facility is secured by a fixed and floating charge over the group’s assets and includes covenants which are tested quarterly
24 trade and other payables
     2014 2013
     €’000 €’000
trade payables     21039 14286
other taxation and social security     896 1540
accruals and deferred income     11650 11408
payments in advance     454 134
     34039 27368
noncurrent 
deferred income     4826 7018
 
noncurrent deferred income relates to nonstandard warranty package revenues which are amortised over the underlying period of the 
warranty cover
at the end of the period the group had entered into supply agreements under which the group has minimum contractual purchase 
commitments of €9899000 2013 €3330000 during the three month period subsequent to the period end no loss is expected to be 
incurred in respect of these contracts
foreign exchange risk in relation to trade payables
the carrying amounts of the group’s trade payables are denominated in the following currencies
     2014 2013
     €’000 €’000
euro     14894 11162
sterling     4220 2069
us dollar     1872 1049
other currencies     53 6
total     21039 14286
 
the group’s overall foreign exchange risk is explained in note 31 “financial instruments”
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 89
strategic report governance group financial statements company financial statements
25 provisions
   2014   2013
 warranty contingent  warranty contingent
 provision consideration total provision consideration total
 €’000 €’000 €’000 €’000 €’000 €’000
at the beginning of the period 1388 5000 6388 1617 – 1617
settled during the period – 5000 5000 – – –
arising on acquisition of portalify oy
as described in note 6 – 4905 4905 – – –
arising on acquisition of 3t communications – – – – 5000 5000
charged to the consolidated income statement 441 – 441 613 – 613
utilised in period 602 – 602 842 – 842
at the end of the period 1227 4905 6132 1388 5000 6388
less amounts due for settlement within 12 months
shown under current liabilities 411 905 1316 434 5000 5434
amount due for settlement after 12 months 816 4000 4816 954 – 954
  
warranty provision
a warranty provision is made at the time of sale for the estimated cost of providing standard warranty cover which cannot be separated 
from the sale of the underlying goods the provision is calculated based on historical information regarding the cost and frequency of repairs 
required to the group’s products warranty cover is typically provided over a period of three to five years depending on the product and 
territory concerned the group also has backtoback warranties of between twelve and fifteen months with the majority of its subcontract 
manufacturers to limit risk on liabilities arising on manufacturing defects
 
26 share capital
authorised share capital
   2014   2013
 number £ €’000 number £ €’000
authorised   
ordinary shares of £00005 each 400000000 200000 227 400000000 200000 227
   
issued share capital
during the period the following changes occurred in the company’s issued allotted and fully paid share capital of ordinary shares  
of £00005 each
     share share
     capital premium
   number £ €’000 €’000
at 30 march 2012 and 29 march 2013   137318580 68659 78 –
exercise of options under employee share option schemes   25517 13 – –
issue of shares to settle contingent consideration relating  
to the acquisition of 3t communications ag   1301334 651 1 999
at 28 march 2014   138645431 69323 79 999 90 sepura plc annual report  accounts 2014
26 share capital continued
treasury shares
during the period the following changes occurred in the number of ordinary shares held in treasury
      aggregate employee
     consideration consideration
    number €’000 €’000
at 30 march 2012     – 
purchase of ordinary shares for treasury    1844712 1702 –
exercise of options under employee share option schemes    1712729 – 671
at 29 march 2013    131983 
purchase of ordinary shares for treasury    850000 1323 –
exercise of options under employee share option schemes    478551 – 163
at 28 march 2014    503432
27 share based payments
share options have been granted to directors and employees under the following equitysettled schemes
i sepura limited 2002 employees’ share option plan
in july 2002 the company established the sepura limited emi share option plan that entitled employees to purchase shares in the entity 
under the government’s enterprise management initiative “emi” scheme the scheme was closed to new employees joining the group after 
1 october 2005 save for one individual award made in july 2007
ii long term incentive plan
the group launched its long term incentive plan for senior executives and management in july 2008 annual awards have been made under 
the long term incentive plan which will vest in the event that certain performance targets are met further details are set out in the directors’ 
remuneration report on pages 42 to 55
iii employee saye schemes
following shareholder approval at the 2008 agm the company launched an allemployee saye scheme in september 2008 the third scheme 
matured during the period and a further invitation to employees to join the scheme was issued in august 2013
vi deferred bonus shares
deferred shares are issued as part of the bonus arrangements for senior management further details are set out in the directors’ 
remuneration report on pages 42 to 55
the group recognised an expense of €664000 2013 €772000 in relation to equitysettled share based payments during the period
movements in the total number of share options outstanding and their relative weighted average exercise prices are as follows
    2014  2013
   weighted  weighted
   average  average
   exercise  exercise
   price in £  number price in £ number
   per share of options per share of options
at the beginning of the period   011 7797623 010 12114493
granted   019 2700029 010 4071497
forfeited   012 584802 013 6675638
exercised   027 504068 031 1712729
at the end of the period   013 9408782 011 7797623
  
the weighted average share price at the date of exercise of the options exercised during the period was £143 2013 £076
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 91
strategic report governance group financial statements company financial statements
27 share based payments continued
the outstanding options may be analysed as follows
    2014  2013
   weighted  weighted
   average  average
   exercise  exercise
   price in £  number price in £ number
   per share of options per share of options
vested and exercisable   00000007 9940 00000007 167440
unvested   013 9398842 012 7630183
    9408782  7797623
 
share options outstanding at each reporting date have the following expiry date and exercise prices
     exercise price 2014 2013
expiry date  scheme    in £ per share number number
1 march 2014 2011 saye 3 year scheme    034 – 283225
30 april 2014 2009 saye 5 year scheme    060 – 80173
31 may 2014 2012 ltip    –
1
  2537132 2576780
1 october 2014 2002 employees’ share option plan    00000007 9240 9240
1 march 2015 2010 saye 5 year scheme    031 328250 348314
30 april 2015 2012 saye 3 year scheme    043 135156 140193
31 may 2015 2013 ltip    –
1
 2782775 3104566
1 october 2015 2002 employees’ share option plan    00000007 700 700
1 march 2016 2011 saye 5 year scheme    034 56345 65433
1 march 2016 2013 saye 3 year scheme    054 811159 839158
31 july 2016 2013 deferred shares    –
1
 118779 –
31 july 2016 2014 ltip    –
1
 1957755 –
1 march 2017 2014 saye 3 year scheme    096 387822 –
30 april 2017 2012 saye 5 year scheme    043 21522 64568
1 october 2017 2002 employees’ share option plan    00000007 – 157500
1 march 2018 2013 saye 5 year scheme    054 127773 127773
1 march 2019 2014 saye 3 year scheme    096 134374 –
      9408782 7797623
1 not applicable for awards under the ltip scheme or deferred shares forming part of the shortterm bonus arrangements for senior management
the weighted average remaining contractual life of the outstanding options was 1 year and 4 months 2013 1 year and 10 months 92 sepura plc annual report  accounts 2014
27 share based payments continued
the fair value of services received in return for share options granted are measured by reference to the fair value of share options granted  
the estimate of the fair value of the services received is measured based on the trinomial model the significant inputs into the model for each 
grant during the period and the prior period were
   2013 deferred bonus 2014 ltip 2014 saye 2014 saye
   10 june 24 july 29 july 29 july
date of grant   2013 2013 2013 2013
share price at grant date   £114 £135 £142 £142
exercise price   – – £096 £096
number of employees   6 46 21 95
shares under option   118779 2040304 134374 406572
vesting period   36 months 36 months 60 months 36 months
expected volatility expressed as standard deviation   21 21 21 21
of expected share price returns
expected option life   39 months 39 months 63 months 39 months
risk free interest rate
based on national government bonds   30 30 30 30
dividend yield   12 12 12 12
fair value per option   £114 £134 £055 £052
    2013 ltip 2013 saye 2013 saye
    24 july 30 july 30 july
date of grant    2012 2012 2012
share price at grant date    £076 £076 £076
exercise price    – £054 £054
number of employees    40 9 95
shares under option    3104566 127773 839158
vesting period    36 months 60 months 36 months
expected volatility expressed as standard deviation of expected share price returns  21 21 21
expected option life    39 months 63 months 39 months
risk free interest rate
based on national government bonds    30 30 30
dividend yield    31 31 31
fair value per option    £069 £022 £022
 
the expected volatility for those options granted during the period was determined by reference to the company’s share price since listing 
in august 2007 for those options granted in prior periods volatility was estimated based on the historical volatility of comparable listed 
companies share options are granted under a service condition such conditions are not taken into account in the fair value measurement  
of the services received
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 93
strategic report governance group financial statements company financial statements
28 cash generated from operations
     2014 2013
     €’000 €’000
profit before income tax     14183 7881
adjustments for
depreciation charges     1445 1392
amortisation charges     9588 11871
equity settled share based payment charge     664 772
financial income     6 11
financial expense     250 282
cash generated from operations before movements in working capital    26124 22187
decrease increase in inventories     1330 302
increase decrease in trade and other receivables     4766 4436
increase in trade and other payables     3919 260
decrease in provisions     161 229
movements in working capital     322 4165
cash generated from operations     26446 26352
 
29 reconciliation of cash flows to movements in net funds
     2014 2013
     €’000 €’000
net decrease increase in cash and cash equivalents     575 2278
net repayment of borrowings     463 339
changes in net funds resulting from cash flows     112 2617
amortisation of debt issue costs     48 48
borrowings acquired with subsidiary undertaking     1098 2536
net movements in net funds     1258 33
net funds at the beginning of the period     6605 6572
foreign exchange     42 –
net funds at the end of the period     5305 6605
net funds comprises 
cash and cash equivalents     8017 8634
gross borrowings  – amounts due within one year     2182 1761 
– amounts due after one year     650 436
unamortised loan arrangement fees     120 168
     5305 6605
  94 sepura plc annual report  accounts 2014
30 operating lease commitments
the future aggregate minimum lease payments under noncancellable operating leases are as follows
   2014   2013
 plant and   plant and
 machinery property total machinery property total
 €’000 €’000 €’000 €’000 €’000 €’000
no later than one year 6 970 976 6 946 952
later than one year and no later than five years – 1546 1546 – 2400 2400
 6 2516 2522 6 3346 3352
  
the group rents its principal location at radio house st andrew’s road cambridge under a lease which expires during the year ending  
31 march 2017
 
31 financial instruments
derivative financial instruments
    current assets liabilities
     2014 2013
     €’000 €’000
derivatives that are designated and effective as hedging instruments carried at fair value – cash flow hedges 
foreign exchange derivative financial instruments through equity    403 1077
financial assets and liabilities
the group’s accounting policies for financial instruments have been applied to the items below
    2014  2013
    derivatives  derivatives
   loans and used for loans and used for
   receivables hedging receivables hedging
assets as per balance sheet   €’000 €’000 €’000 €’000
trade and other receivables excluding prepayments   35256 – 30789 –
derivative financial instruments   – 403 – –
cash and cash equivalents   8017 – 8634 –
   43273 403 39423 –
    2014  2013
   liabilities   liabilities
   at fair value  other at fair value other
   through profit  financial through profit financial
   and loss liabilities and loss liabilities 
liabilities as per balance sheet   €’000 €’000 €’000 €’000
borrowings   – 2832 – 2197
derivative financial instruments   – – 1077  –
trade and other payables excluding nonfinancial instruments   – 33143 – 25828
   – 35975 1077 28025
 
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 95
strategic report governance group financial statements company financial statements
31 financial instruments continued
trade receivables
trade receivables are recognised initially at fair value and subsequently remeasured at amortised cost using the effective interest rate 
method less provision for impairment a provision for impairment of trade receivables is established where there is objective evidence that 
the group will not be able to collect all amounts due according to the original terms of receivables significant financial difficulties of the 
debtor probability that the debtor will enter bankruptcy or financial reorganisation or default or delinquency in payments are considered 
to be indicators that the trade receivable is impaired the amount of the provision is the difference between the asset’s carrying amount 
and the present value of estimated future cash flows discounted at the effective interest rate the carrying amount of the asset is reduced 
through the use of an allowance account and the amount of loss is recognised in the consolidated income statement within administrative 
expenses when a trade receivable is irrecoverable it is written off against the allowance account for trade receivables subsequent recoveries 
of amounts previously written off are credited against the trade receivable impairment provision in the consolidated income statement  
details concerning the credit risk associated with trade receivables are set out in note 21 above
derivative financial instruments and hedging activities
derivatives are initially recognised at fair value on the date that a derivative contract is entered into and are subsequently remeasured at their 
fair value details concerning derivative financial instruments are set out above
cash and cash equivalents
cash and cash equivalents include cash in hand deposits held at call with banks and other shortterm highly liquid investments with original 
maturities of three months or less further details are set out in note 22 above
fair value estimation
the fair value of foreign exchange contracts is determined by comparing contracted forward exchange rates with the prevailing exchange 
rates at the balance sheet date as a result they fall into “level 2” of the fair value hierarchy as defined in paragraph 27a of ifrs 7 “financial 
instruments disclosures” the nominal value less impairment provision of trade receivables and payables approximates to their fair value  
the book value of all other financial assets and liabilities approximate to fair value
financial risk management
the group’s operations expose it to financial risks that include the effects of changes in certain currency rates credit risk and interest rate cash 
flow and fair value risk the group has in place risk management procedures that seek to limit the adverse effects on the financial performance 
of the group by monitoring the movements in relevant currency and interest rates and a credit control procedure to minimise the risk of 
customer debt default
the board of directors sets the policies for liquidity credit and interest rate cash flow and fair value risk and these are implemented by the 
group’s finance department which has a procedures manual that sets out specific guidelines for managing currency interest and credit risk  
in circumstances where it is appropriate financial instruments are used to manage those risks 
market risk management
the group is not exposed to market risks other than currency and interest rate risks
  96 sepura plc annual report  accounts 2014
31 financial instruments continued
foreign exchange risk
currency denominated bank accounts are maintained to provide some cover for timing differences and a currency exchange hedging policy 
has been agreed by the board of directors the group invoices its customers in sterling pounds gbp us dollars us or euros € and the 
majority of the group’s suppliers also trade in these currencies the exposure to other currencies is not material to the group’s operations
i sterling
the group has a partial natural hedge as operating expenses are primarily denominated in sterling and this exposure is partly offset by sterling 
receivables from the group’s uk business however there remains a net exposure and the board has agreed a policy of taking out forward 
contracts on a rolling twelve month basis to hedge the forecast monthly sterling operating costs
the group had the following current assets and liabilities denominated in sterling
     2014 2013
     £’000 £’000
outstanding forward contracts     19228 19350
trade receivables denominated in gbp     1756 6197
sundry receivables denominated in gbp     64 1187
cash balances denominated in gbp     702 2042
trade payables denominated in gbp     3488 2069
other payables denominated in gbp     6950 4606
percentage of net current assets not matched by forward contracts    nil nil
the periodend rate and the average rate for the period were as follows
     2014 2013
periodend rate     €121£1 €118£1
average rate for the period     €118£1 €123£1
if sterling had weakened or strengthened by 10 against the euro then the following additional foreign exchange gains losses would have 
been reported in the consolidated income statement or consolidated statement of comprehensive income
     2014 2013
     €’000 €’000
gbp weakens     850 803
gbp strengthens     935 981
 
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 97
strategic report governance group financial statements company financial statements
31 financial instruments continued
ii us dollar
purchases and receipts in us dollars are dealt with through the group’s us dollar current account with further purchases of currency to meet 
us dollar denominated liabilities being made as necessary on a spot basis any significant us dollar revenues or purchases are hedged on 
order confirmation
the group had the following current assets and liabilities denominated in us dollars
     2014 2013
     ’000 ’000
outstanding forward contracts     – –
trade receivables denominated in us dollars      184 8
cash balances denominated in us dollars     4434 682
trade payables denominated in us dollars     2740 1347
percentage of net current assets not matched by forward contracts    100 100
the periodend rate and the average rate for the period were as follows
     2014 2013
periodend rate     138€1 128€1
average rate for the period     134€1 129€1
if the us dollar had weakened or strengthened by 10 against the euro then the following additional foreign exchange gains losses would 
have been reported in the consolidated income statement or consolidated statement of comprehensive income
     2014 2013
     €’000 €’000
us dollar weakens     235 47
us dollar strengthens     259 57
liquidity risk
prudent liquidity risk management implies maintaining sufficient cash and shortterm deposits and the availability of funding through an 
adequate amount of committed credit facilities accordingly on 14 october 2011 the group entered into a five year £18 million revolving 
credit facility as described in note 23 above none of this facility was drawn down at the end of the period €85 million was drawn down 
under this facility in may 2012 to finance the acquisition of 3t communications ag and was repaid during the period
 
the table below analyses the group’s financial liabilities which will be settled on a net basis into relevant maturity groupings based on 
the remaining period at the balance sheet date to the contractual maturity date the amounts disclosed in the table are the contractual 
undiscounted cash flows
    less than between between
    one year 1  2 years 2  5 years
    €’000 €’000 €’000
at 28 march 2014 
borrowings    2241 332 337
trade and other payables    34039 – –
at 30 march 2013 
borrowings    1821 185 296
derivative financial instruments    1077 – –
trade and other payables    27368 – –
 
borrowings are eurodenominated 98 sepura plc annual report  accounts 2014
31 financial instruments continued
cash flow and fair value interest rate risk
the group had interest bearing cash deposits of €2307000 2013 €5727000 the group had no outstanding amounts due under  
its revolving credit facility at the end of the period interest on any amounts drawn down under the facility would be at floating rates  
exposing the group to cash flow interest rate risk
the group’s outstanding borrowings comprise €1966000 which bears interest at fixed rates and €866000 which was acquired with portalify 
oy and bears interest at floating rates as set out in note 23 above
capital risk management
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide  
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital  
the capital structure of the group comprises borrowings as disclosed in note 23 cash and cash equivalents as disclosed in note 22 and  
the equity attributable to equity holders in the parent company comprising the issued share capital share premium other reserves and 
retained earnings disclosed in the consolidated statement of changes in equity at 28 march 2014 the group had net assets of €75395000 
2013 €63181000 which included net funds of €5305000 2013 €6605000 in order to maintain or adjust the capital structure the group 
may adjust the amount of dividends paid to shareholders return capital to shareholders issue new shares borrow additional funds or sell 
assets to reduce debt
the group is not subject to externally imposed capital requirements the group is subject to certain covenant restrictions under its revolving 
credit facility the group complied with all of these covenants during the period
 
32 contingent liabilities
the group has entered into guarantee and performance bond arrangements with its customers totalling approximately €21 million  
2013 €175 million the group is also subject to disputes with suppliers during the ordinary course of business provision is made for any 
amounts that the directors consider will probably become payable under such arrangements
33 ultimate controlling party
the directors do not consider that sepura plc has an ultimate controlling party as no individual shareholder is able to exercise control over  
the company
34 post balance sheet event
on 20 may 2014 the group announced the acquisition of the entire share capital of fylde micro limited “fylde” which designs and 
manufactures trunking controllers that enable a simple lowrisk and costeffective migration from analogue to digital networks the initial 
cash consideration was £275 million with contingent consideration of up to £35 million payable in cash if fylde achieves ebit targets over an 
earnout period
the preliminary provisional book and fair values of the assets and liabilities acquired are as follows
      €’000
property plant and equipment      39 
inventory      85 
trade and other receivables      209 
trade and other payables      172
net assets acquired      161 
goodwill and purchased intangibles arising on acquisition      7464
purchase consideration including maximum contingent consideration     7625
the purchase price allocation has not yet been finalised given that the acquisition was completed on 20 may 2014 this exercise is expected  
to be completed during the first half of the current financial year and the appropriate amount will be recorded as purchased intangibles  
with the balance being attributable to goodwill
the goodwill arising on the acquisition is attributable to the value of synergies arising from the acquisition fylde’s assembled workforce  
and future profits arising from access to new markets acquisition costs are expected to be approximately €400000 which will be charged  
to administrative expenses in the consolidated income statement for the year ending 27 march 2015 none of the goodwill on this acquisition is 
expected to be deductible for tax
notes to the group financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 99
strategic report governance group financial statements company financial statements
report on the parent company 
financial statements 
our opinion 
in our opinion the financial statements 
defined below
» give a true and fair view of the state  
of the parent company’s affairs  
as at 28 march 2014
» have been properly prepared in 
accordance with united kingdom 
generally accepted accounting  
practice and
» have been prepared in accordance  
with the requirements of the  
companies act 2006
this opinion is to be read in the context  
of what we say in the remainder  
of this report
what we have audited
the parent company financial statements 
the “financial statements” which  
are prepared by sepura plc comprise
» the company balance sheet as at  
28 march 2014 and
» the notes to the parent company financial 
statements which include a summary  
of significant accounting policies and 
other explanatory information
the financial reporting framework that 
has been applied in their preparation 
is applicable law and united kingdom 
accounting standards united kingdom 
generally accepted accounting practice
certain disclosures required by the  
financial reporting framework have  
been presented elsewhere in the annual 
report the “annual report” rather than  
in the notes to the financial statements  
these are crossreferenced from the financial 
statements and are identified as audited
what an audit of financial  
statements involves
we conducted our audit in accordance  
with international standards on auditing  
uk and ireland “isas uk  ireland”  
an audit involves obtaining evidence about 
the amounts and disclosures in the financial 
statements sufficient to give reasonable 
assurance that the financial statements are 
free from material misstatement whether 
caused by fraud or error this includes  
an assessment of 
» whether the accounting policies are 
appropriate to the parent company’s 
circumstances and have been consistently 
applied and adequately disclosed 
» the reasonableness of significant 
accounting estimates made by the 
directors and 
» the overall presentation of the financial 
statements 
in addition we read all the financial and  
nonfinancial information in the annual 
report to identify material inconsistencies 
with the audited financial statements and  
to identify any information that is apparently 
materially incorrect based on or materially 
inconsistent with the knowledge acquired 
by us in the course of performing the audit  
if we become aware of any apparent 
material misstatements or inconsistencies 
we consider the implications for our report
opinions on other matters 
prescribed by the companies 
act 2006
in our opinion
» the information given in the strategic 
report and the directors’ report for the 
financial year for which the financial 
statements are prepared is consistent  
with the financial statements and
» the part of the directors’ remuneration 
report to be audited has been properly 
prepared in accordance with the 
companies act 2006
other matters on which we are required  
to report by exception
adequacy of accounting records and 
information and explanations received 
under the companies act 2006 we are 
required to report to you if in our opinion
» we have not received all the information 
and explanations we require for our  
audit or
» adequate accounting records have  
not been kept by the parent company  
or returns adequate for our audit have  
not been received from branches not 
visited by us or
» the financial statements and the part  
of the directors’ remuneration report  
to be audited are not in agreement  
with the accounting records and returns
we have no exceptions to report arising 
from this responsibility
directors’ remuneration
under the companies act 2006 we  
are required to report to you if in our 
opinion certain disclosures of directors’ 
remuneration specified by law are not  
made we have no exceptions to report 
arising from this responsibility
other information in the annual report
under isas uk  ireland we are required  
to report to you if in our opinion 
information in the annual report is
» materially inconsistent with the 
information in the audited financial 
statements or
» apparently materially incorrect based  
on or materially inconsistent with  
our knowledge of the company acquired 
in the course of performing our  
audit or
» is otherwise misleading
we have no exceptions to report arising
from this responsibility
responsibilities for the financial 
statements and the audit
our responsibilities and those  
of the directors
as explained more fully in the statement  
of directors responsibilities set out  
on pages 59 and 60 the directors are 
responsible for the preparation of the 
financial statements and for being satisfied 
that they give a true and fair view
our responsibility is to audit and express  
an opinion on the financial statements  
in accordance with applicable law and  
isas uk  ireland those standards require  
us to comply with the auditing practices 
board’s ethical standards for auditors
this report including the opinions has been 
prepared for and only for the company’s 
members as a body in accordance with 
chapter 3 of part 16 of the companies act 
2006 and for no other purpose we do not 
in giving these opinions accept or assume 
responsibility for any other purpose or to  
any other person to whom this report is 
shown or into whose hands it may come 
save where expressly agreed by our prior 
consent in writing
other matter
we have reported separately on the group 
financial statements of sepura plc for the 
year ended 28 march 2014
stuart newman senior statutory auditor
for and on behalf of 
pricewaterhousecoopers llp
chartered accountants and statutory 
auditors
cambridge
9 june 2014
independent auditors’ report to the members of sepura plc  100 sepura plc annual report  accounts 2014
     2014 2013
    note  €’000 €’000
fixed assets    
tangible assets    4 7761 4765
intangible assets    5 – 315
investments    6 18967 13052
     26728 18132
current assets    
stock    7 8337 11950
current asset investments    8 2306 5319
debtors including £10361000 due after more than one year    9 46329 42910
derivative financial instruments    11 403 –
cash at bank and in hand     1801 997
     59176 61176
creditors amounts falling due within one year    12 30019 26639
net current assets      29157 34537
total assets less current liabilities     55885 52669
creditors amounts falling due after more than one year    13 4826 7018
provision for liabilities    14 6132 6388
net assets      44927 39263
    
capital and reserves    
called up share capital    15 79 78
share premium    15 999 –
cumulative translation reserve     46 –
profit and loss account    17 43895 39185
total shareholders’ funds    18 44927 39263
the parent company financial statements on pages 100 to 109 were approved by the board and authorised for issue on 9 june 2014 and  
are signed on its behalf by
gordon watling steve chamberlain 
chief executive officer chief financial officer
the accompanying notes are an integral part of these financial statements
 
company balance sheet
of sepura plc company number 04353801 at 28 march 2014 sepura plc annual report  accounts 2014 101
strategic report governance group financial statements company financial statements
1 principal accounting policies
basis of accounting
the financial statements have been prepared on the going concern basis in accordance with the companies act 2006 and in accordance 
with applicable accounting standards in the united kingdom a summary of the more important accounting policies which have been 
reviewed by the board of directors in accordance with financial reporting standard “frs” 18 “accounting policies” and have been applied 
consistently is set out below
the company has prepared these financial statements for the period to 28 march 2014 being the nearest friday to the end of the period
the financial statements are prepared in accordance with the historical cost convention except for certain financial instruments that have 
been measured at fair value
turnover and warranty costs
turnover represents the invoiced amount of goods sold excluding value added tax for contracts which do not involve complex longterm 
software and hardware development revenue is recognised on despatch or upon formal acknowledgement from the customer that title has 
passed but they wish the goods to be stored at the group’s premises turnover also includes warranty income as appropriate
revenue and cost of sales from contracts which do involve complex longterm software and hardware development are recognised on the 
percentage of completion basis based on costs incurred to date when the outcome of the contract can be estimated reliably the criteria for 
this are that total contract revenue and the costs to complete the contract can be estimated reliably it is probable that the economic benefits 
associated with the contract will flow to the company and that the stage of contract completion can be measured when the company is not 
able to meet those conditions the policy is to recognise revenue equal to costs incurred to date to the extent that such costs are expected to 
be recovered expected losses are recognised in full at the point at which they are anticipated if the amount of revenue recognised exceeds 
the amounts invoiced to customers the excess amount is recorded in amounts recoverable on contracts within debtors if the amounts 
invoiced exceed the revenue recognised the excess amount is recorded as deferred revenue or payments in advance
in a multielement arrangement some of the elements either hardware or software may remain undelivered or incomplete revenue may be 
recognised on the fair value of the elements delivered providing the following conditions are fulfilled
» if the element of the product delivered has value to the customer on a standalone basis and is thus a separable element from the 
undelivered element
» if the fair value can be reliably attributed to the undelivered element in the event of bundling where undelivered components may not have 
a separate invoiced sales price then the fair value of the revenue deferred can be calculated by comparing the underlying product list price of 
each element of the bundle to the overall bundle price and
» if the delivery of the undelivered element is probable and under the control of the company ie the technical risk attached to the delivery of 
the component is acceptable
if any of these conditions are not met then all revenue under the arrangement is deferred until the contract is complete or uncertainty over 
any of these conditions is removed
in accordance with the requirements of frs 5 application note g “reporting the substance of transactions revenue recognition” the 
company assesses whether any of its contracts contain elements which operate independently of other contractual elements and which 
should therefore be ’unbundled’ and accounted for separately the company offers as standard to all customers a product warranty package 
which is typically for a period of three to five years depending on the product and territory concerned generally in the case of product 
warranty packages which are offered as standard with all products are not separately priced and are offered for periods in line with the 
company’s standard terms of supply at the time of sale such standard warranty packages are not considered to be an element capable of 
’unbundling’ in such cases provision is made at the time of sale for the estimated cost of providing the warranty cover based on historical 
information on the cost and frequency of repairs required to the company’s products the company also has backtoback warranties of 
between twelve and fifteen months with the majority of its subcontract manufacturers to limit risk on product warranties amounts due from 
manufacturers under backtoback warranties are not recognised until the manufacturer has confirmed a reimbursement will be made
in certain cases “enhanced” warranty packages of a longer than standard period are sold to customers as separate products in such cases  
the fair value of the revenue associated with the warranty cover is amortised over the underlying period of the warranty cover the fair value  
of the revenue is determined by the directors based on market information including the sales price when enhanced warranties are sold on  
a standalone basis
notes to the parent company financial statements
for the period ended 28 march 2014 102 sepura plc annual report  accounts 2014
1 principal accounting policies continued
research and development expenditure
all ongoing research and development expenditure is written off in the period in which it is incurred
investments in subsidiary undertakings
investments in subsidiary undertakings are stated at cost less provision for impairment if any
tangible fixed assets
the cost of tangible fixed assets is their purchase cost together with any incidental costs of acquisition including where relevant the 
cost of subcontractors direct labour and a proportion of attributable overheads tangible fixed assets are carried at cost less accumulated 
depreciation and are depreciated from the date they come into use depreciation is provided to write off the cost less the estimated residual 
value of tangible fixed assets depreciation for certain manufacturing plant and machinery is calculated by reference to the number of units 
produced and for all other assets by equal annual instalments over their estimated useful economic lives as follows
» plant and machinery 37 years
» it equipment 35 years
provision is made against the carrying value of tangible fixed assets where impairment is deemed to have occurred
no depreciation is charged on assets in the course of construction as their useful economic life has yet to commence on completion the 
assets are transferred to the appropriate class of tangible fixed assets and depreciation is charged at the above rates
intangible assets
the company purchases licences to exploit thirdparty intellectual property rights licences are recorded at the historical cost to acquire the 
licence less accumulated amortisation and impairment losses and are amortised on a straightline basis over the life of the licence
leases
finance leases which transfer to the company substantially all the risks and benefits incidental to ownership of the leased item are  
capitalised at the inception of the lease at the fair value of the leased property or if lower at the present value of the minimum lease 
payments lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant  
rate of interest on the remaining balance of the liability finance charges are charged directly against income
capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term
leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases  
operating lease payments are recognised as an expense in the profit and loss account on a straightline basis over the lease term
stocks and work in progress
stocks and work in progress are stated at the lower of cost and net realisable value cost is determined on a first in first out basis and includes 
transport and handling costs where necessary provision is made for obsolete slow moving and defective stocks
current asset investments
shortterm bank deposits are stated at cost less provision for impairment if any
cash flow
the company has taken advantage of the exemption in frs 1 revised 1996 “cash flow statements” which provides that where a company 
is a member of a group and a consolidated cash flow statement is published the company does not have to prepare a cash flow statement
deferred taxation
provision is made for deferred taxation using full provision accounting when an event has taken place by the balance sheet date which 
gives rise to an increased or reduced tax liability in the future in accordance with frs 19 “deferred taxation” deferred tax assets and liabilities 
are not discounted
pension scheme arrangements
the company contributes to defined contribution plans for employees the company contributes to these schemes based upon various 
fixed percentages of employee compensation and such contributions are expensed as incurred
the company provides no other postretirement benefits to its employees
notes to the parent company financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 103
strategic report governance group financial statements company financial statements
1 principal accounting policies continued
derivative financial instruments and hedging activities
the company has taken advantage of the exemption under frs 29 “financial instruments disclosures” for parent company financial 
statements as the disclosures in respect of the company are included in the consolidated financial statements
derivatives are initially accounted for at fair value on the date a derivative contract is entered into and are subsequently remeasured at their 
fair value at each reporting date the gain or loss on remeasurement is taken to the profit and loss account except where the derivative is a 
designated cash flow hedging instrument the accounting treatment of derivatives classified as hedges depends on their designation which 
occurs on the date that the derivate contract is committed to the company designates derivatives as either
a hedges of the fair value of an asset or liability “fair value hedges”
b hedges of the income or cost of a highly probable forecast transaction or commitment “cash flow hedges” or
c hedges of a net investment in a foreign operation “net investment hedges”
in order to qualify for hedge accounting the company is required to document in advance the relationship between the item being hedged 
and the hedging instrument the company is also required to document and demonstrate an assessment of the relationship between 
the hedged item and the hedging instrument which shows that the hedge will be highly effective on an ongoing basis this effectiveness 
testing is performed at each period end to ensure that the hedge remains highly effective
gains or losses on fair value hedges that are regarded as highly effective are recorded in the profit and loss account with the gain or loss on 
the hedged item attributable to the hedged risk
gains or losses on cash flow hedges that are regarded as highly effective are recognised in equity where the forecast transaction results in a 
financial asset or liability only gains or losses previously recognised in equity are reclassified to profit or loss in the same period as the asset 
or liability affects profit or loss where the forecasted transaction or commitment results in a nonfinancial asset or nonfinancial liability 
any gains or losses previously deferred in equity are included in the cost of the related asset or liability if the forecasted transaction or 
commitment results in future income or expenditure gains or losses deferred in equity are transferred to the profit and loss account in the 
same period as the underlying income or expenditure the ineffective portions of the gain or loss on the hedging instrument are recognised 
in the profit and loss account
for the portion of hedges deemed ineffective or transactions that do not qualify for hedge accounting under frs 26 any change in assets 
or liabilities is recognised immediately in the profit and loss account where a hedge no longer meets the effectiveness criteria any gains or 
losses deferred in equity are only transferred to the profit and loss account when the committed or forecasted transaction is recognised in 
the profit and loss account however where an entity applied cash flow hedge accounting for a forecasted or committed transaction that is 
no longer expected to occur the cumulative gain or loss that has been recorded in equity is transferred to the profit and loss account when 
a hedging instrument expires or is sold any cumulative gain or loss existing in equity at that time remains in equity and is recognised when 
the forecast transaction is ultimately recognised in the profit and loss account
foreign currencies
transactions denominated in foreign currencies have been translated into euros at actual rates of exchange ruling at the date of the 
transactions except to the extent that these transactions were covered by forward foreign exchange contracts monetary assets and 
liabilities denominated in foreign currencies have been translated at rates ruling at the balance sheet date except to the extent that the 
assets and liabilities are covered by forward foreign exchange contracts all exchange gains and losses are taken to the profit and loss 
account in the period in which they arise transactions assets and liabilities covered by forward foreign currency contracts are translated at 
the forward foreign currency contract rate 
share options
the company issues equitysettled sharebased payments to employees and directors of the company in accordance with frs 20  
“sharebased payment” equitysettled sharebased payments are measured at fair value at the date of grant fair value is measured by  
use of the trinomial pricing model the fair value determined at the grant date of the equitysettled sharebased payments is expensed  
on a straightline basis over the vesting period based on the company’s estimate of the number of shares that will eventually vest  
the corresponding credit is recognised in reserves 104 sepura plc annual report  accounts 2014
2 profit for the financial period
as permitted by section 408 of the companies act 2006 the parent company’s profit and loss account has not been included in these 
financial statements the parent company’s profit after taxation was €7101000 2013 €6614000
the average number of employees of the company during the period was 289 2013 267 and total staff costs excluding charges for share 
options were €23846000 2013 €22549000 information on the remuneration of directors is given in those sections of the directors’ 
remuneration report described as having been audited and those elements required by the companies act 2006 and the financial conduct 
authority form part of these financial statements the audit fee for the company was €72000 2013 €70000
3 dividends
the directors have proposed a final dividend in respect of the financial period ended 28 march 2014 of 141p per ordinary share totalling 
approximately €24 million based on the ordinary shares in issue at 28 march 2014 the proposed dividend is subject to approval by 
shareholders and has not been included as a liability in these financial statements
during the current and prior periods the company paid the following dividends
     2014 2013
     €’000 €’000
fy14 interim dividend of 059p per ordinary share     966 –
fy13 final dividend of 117p per ordinary share     2054 –
fy13 interim dividend of 051p per ordinary share     – 864
fy12 final dividend of 098p per ordinary share     – 1556
     3020 2420
   
4 tangible assets
   assets under plant and it
   construction machinery equipment total
   €’000 €’000 €’000 €’000
cost     
at 30 march 2013   468 11046 3890 15404
transfers   247 229 18 –
additions    1746 1371 1109 4226
disposals   – 13 5 18
at 28 march 2014   1967 12633 5012 19612
accumulated depreciation     
at 30 march 2013   – 7609 3030 10639
charge for the period   – 909 303 1212
disposals   – – – –
at 28 march 2014   – 8518 3333 11851
net book value at 28 march 2014   1967 4115 1679 7761
net book value at 29 march 2013   468 3437 860 4765
there was no capital expenditure at the end of either period which had been contracted for prior to the end of the period but not provided 
for in the financial statements
notes to the parent company financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 105
strategic report governance group financial statements company financial statements
5 intangible assets
      licences
      €’000
cost
at 30 march 2013      1985
additions      –
at 28 march 2014      1985
accumulated amortisation
at 30 march 2013      1670
charge for the period      315
at 28 march 2014      1985
net book value at 28 march 2014      –
net book value at 29 march 2013      315
     
6 fixed asset investments
     2014 2013
     €’000 €’000
shares in group undertakings   
at the beginning of the period     13052 20
acquisition of portalify oy
see note 6 to the company’s consolidated financial statements    5905 –
acquisition of 3t communications ag
see note 6 to the company’s consolidated financial statements    – 13000
investment in newlyincorporated subsidiaries     10 32
at the end of the period     18967 13052
   
the company owns the entire issued share capital of the following subsidiary undertakings whose results are included within the 
consolidated financial statements of sepura plc for the period ended 28 march 2014
   proportion of nominal
 country of  value of shares held principal
name of undertaking incorporation description of shares held by the group activity
sepura systems gmbh austria 8400 ordinary shares of €10 each 100 trading
portalify oy finland 17991795 ordinary shares 
  of €001 each 100 trading
smashlet oy finland 8000 ordinary shares of €1 each 100 dormant
sepura deutschland gmbh germany one ordinary share of €250 and
  one ordinary share of €24750 100 sales support
sepura seviços de brazil six thousand ordinary shares
intermediação e marketing em  of r1000 each 100 sales support
equipamentos de radio ltda
sepura llc the state of delaware 
 united states of america one ordinary share of 1 100 sales support
sepura overseas limited england  wales one hundred ordinary shares   holding 
  of £1 each 100 company
    
the directors believe that the carrying value of the investments is supported by their underlying net assets 106 sepura plc annual report  accounts 2014
7 stock
     2014 2013
     €’000 €’000
raw materials     1800 2953
work in progress     1526 3339
finished goods and goods for resale     5011 5658
     8337 11950
   
there is no material difference between the balance sheet value of stock and its replacement cost
8 current asset investments
current asset investments of €2306000 2013 €5319000 comprise shortterm bank deposits which are classified as cash in the group’s 
financial statements which are prepared under ifrs
9 debtors
     2014 2013
     €’000 €’000
amounts falling due within one year   
trade debtors     32574 28700
other debtors     259 165
deferred tax asset including €10361000 due after one year see note 10    11387 12501
prepayments and accrued income     1321 1372
amounts due from group undertakings     788 172
     46329 42910
   
10 deferred tax
the company’s deferred tax assets relate to timing differences in respect of
 
  cashflow tangible  equitysettled
  hedges fixed assets losses share options net
  €’000 €’000 €’000 €’000 €’000
at 30 march 2013  248 2120 9886 247 12501
charged credited to the profit and loss account  – 820 119 158 781
recognised in equity  333 – – – 333
at 28 march 2014  85 1300 9767 405 11387
     
deferred tax liabilities have been offset against deferred tax assets as there is a legally enforceable right to offset current tax assets and current 
tax liabilities within the same fiscal jurisdiction there was no unprovided deferred taxation at the end of either period
the company’s deferred tax asset has been recognised as based on historical performance and future budgets the directors believe that it is 
probable that there will be sufficient taxable profits against which the assets will reverse the net deferred tax asset has been classified within 
debtors in note 9 above
the finance act 2013 which provides for reductions in the main rate of corporation tax from 23 to 21 effective from 1 april 2014 and to 
20 effective from 1 april 2015 was substantively enacted on 2 july 2013 these rate reductions have been reflected in the calculation of 
deferred tax at the balance sheet date
notes to the parent company financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 107
strategic report governance group financial statements company financial statements
11 derivative financial instruments
derivative financial instruments comprise foreign exchange forward contracts further details are given in note 31 to the company’s 
consolidated financial statements
12 creditors amounts falling due within one year
     2014 2013
     €’000 €’000
trade creditors     18658 15031
corporation tax payable     181 –
other taxation and social security     1007 1664
accruals and deferred income     10173 9944
     30019 26639
   
13 creditors amounts falling due after more than one year
     2014 2013
     €’000 €’000
accruals and deferred income     4826 7018
   
14 provision for liabilities
   2014   2013
 warranty contingent  warranty contingent
 provision consideration total provision consideration total
 €’000 €’000 €’000 €’000 €’000 €’000
at the beginning of the period 1388 5000 6388 1617 – 1617
settled during the period – 5000 5000 – – –
arising on acquisition of portalify oy 
as described in note 6 to the company’s  
consolidated financial statements – 4905 4905 – – –
arising on acquisition of 3t communications – – – – 5000 5000
charged to the profit and loss account 441 – 441 613 – 613
utilised in period 602 – 602 842 – 842
at the end of the period 1227 4905 6132 1388 5000 6388
      
warranty provision
the warranty provision is an estimate of the future costs of rectifying potential defects in products shipped to customers whilst they are under 
warranty cover warranty cover is typically provided over a period of three to five years depending on the product and territory concerned 
the company also has backtoback warranties of between twelve and fifteen months with the majority of its subcontract manufacturers  
to limit risk on liabilities arising on manufacturing defects 108 sepura plc annual report  accounts 2014
15 called up share capital
authorised share capital
   2014   2013
 number £ €’000 number £ €’000
authorised
ordinary shares of £00005 each 400000000 200000 227 400000000 200000 227
     
issued share capital
during the period the following changes occurred in the company’s issued allotted and fully paid share capital of ordinary shares of  
£00005 each
     share share
     capital premium
   number £ €’000 €’000
at 30 march 2012 and 29 march 2013   137318580 68659 78 –
exercise of options under employee share option schemes   25517 13 – –
issue of shares to settle contingent consideration  
relating to the acquisition of 3t communications ag   1301334 651 1 999
at 28 march 2014   138645431 69323 79 999
    
treasury shares
during the period the following changes occurred in the number of ordinary shares held in treasury
     aggregate employee
     consideration consideration
    number €’000 €’000
at 30 march 2012       
purchase of ordinary shares for treasury    1844712 1702 –
exercise of options under employee share option schemes    1712729 – 671
at 29 march 2013    131983  
purchase of ordinary shares for treasury    850000 1323 –
exercise of options under employee share option schemes    478551 – 163
at 28 march 2014    503432  
16 share options
information on share options which have been granted to directors and employees is given in note 27 to the company’s consolidated 
financial statements
17 profit and loss account
     2014 2013
     €’000 €’000
at the beginning of the period     39185 36719
profit for the financial period     7101 6614
dividends paid     3020 2420
employee share option schemes value of employee services     664 772
cash flow hedges net of taxation     1125 1469
treasury shares  – purchase of own shares     1323 1702 
– issue of shares to settle  employee share options    163 671
at the end of the period     43895 39185
notes to the parent company financial statements continued
for the period ended 28 march 2014 sepura plc annual report  accounts 2014 109
strategic report governance group financial statements company financial statements
18 reconciliation of movements in shareholders’ funds
     2014 2013
     €’000 €’000
profit for the financial period     7101 6614
dividends paid     3020 2420
employee share option schemes value of employee services     664 772
cash flow hedges net of taxation     1125 1469
issue of shares     1000 –
treasury shares  – purchase of own shares     1323 1702 
– issue of shares to settle  employee share options    163 671
foreign exchange     46 –
net additions to shareholders’ funds     5664 2466
opening shareholders’ funds     39263 36797
closing shareholders’ funds     44927 39263
19 operating lease commitments
at 28 march 2014 the company had annual commitments under noncancellable operating leases as follows
   other  other
   operating land and operating land and
   leases buildings leases buildings
   2014 2014 2013 2013
   €’000 €’000 €’000 €’000
expiring within one year   6 20 6 20
expiring between two to five years inclusive   – 912 – 891
   6 932 6 911
20 bank facilities
on 14 october 2011 the company entered into a five year £18 million revolving credit facility none of which was drawn down at the end 
of the period the total costs associated with taking out the new facility were €244000 which are being amortised over the life of the facility 
agreement the facility is secured by a fixed and floating charge over the group’s assets
21 contingent liabilities
the company has entered into guarantee and performance bond arrangements with its customers totalling approximately €30 million 
2013 €175 million the company is also subject to disputes with suppliers during the ordinary course of business provision is made for any 
amounts that the directors consider will probably become payable under such arrangements
22 related party transactions
the company has taken advantage of the exemption available to parent companies under frs 8 “related party disclosures”
 not to disclose transactions and balances with wholly owned subsidiary undertakings
23 ultimate controlling party
the directors do not consider that sepura plc has an ultimate controlling party as no individual shareholder is able to exercise control over  
the company
24 post balance sheet event
on 20 may 2014 the company announced the acquisition of fylde micro limited details are provided in note 34 to the companys 
consolidated financial statements 110 sepura plc annual report  accounts 2014
shareholder information
share services and information
equiniti the company’s registrars provide a range of shareholder information online you can check your holding and find practical help on 
transferring shares and updating your personal details at wwwshareviewcouk equiniti may also be contacted on 0871 384 2030 calls to this 
number are charged at 8p per minute plus network extras or by writing to equiniti aspect house spencer road lancing west sussex  
bn99 6da lines are open 830am to 530pm monday to friday callers from outside the uk should dial 44 0 121 415 7047
share dealing service
an internet and telephone share dealing service is operated by equiniti enabling shareholders to buy and sell sepura plc ordinary shares  
on the london stock exchange shareholders who are interested in using these services should visit wwwshareviewcouk or telephone  
0845 603 7037
sharegift
shareholders who hold only a small number of shares where dealing costs make it uneconomic to sell them may wish to consider donating 
them to charity though sharegift a registered charity administered by the orr mackintosh foundation the relevant share transfer form  
can be obtained from their website wwwsharegiftorg or by writing to sharegift 5 lower grosvenor place london sw1w 0ej or by 
telephoning 44 0 20 7828 1151
dividendspayments to mandated accountsdividend reinvestment plan
we recommend to you that you have all your future dividends paid direct into your nominated bank or building society account via the 
bankers’ automated clearing system bacs this service provides you with cleared funds on the dividend payment date is more secure  
than sending a cheque by post and avoids the inconvenience of paying each dividend by cheque a tax voucher will still be sent to your 
registered address
you can take advantage of this convenient and popular method of payment by visiting wwwshareviewcouk or by completing the dividend 
mandate form that will be sent to you with your dividend cheque on 8 august 2014 alternatively you can contact the company’s registrar 
equiniti by telephone 0871 384 2030 or by writing to them at aspect house spencer road lancing west sussex bn99 6da lines are open 
830am to 530pm monday to friday callers from outside the uk should dial 44 0 121 415 7047 please quote your shareholder reference 
number as detailed on your dividend tax voucher or share certificate
shareholders have the opportunity of using their cash dividend payments to increase their shareholding in sepura plc through the dividend 
reinvestment plan “drip” participation in the drip will mean that in future all your dividends will be reinvested in sepura plc shares which 
will be purchased on your behalf in the market on or as soon as practicable after the relevant dividend payment an explanatory booklet 
which also contains the terms and conditions of the drip and an application form will be sent to you on request if you wish to join the drip 
please read the terms and conditions carefully and return the completed application form in the reply paid envelope provided alternatively 
you can access the details and download the application form from the investor section of the company’s website sepura plc annual report  accounts 2014 111
company secretary
tony hunter
registered office
radio house
st andrews road
cambridge
cb4 1gr
tel 44 0 1223 876000
fax 44 0 1223 879000
email infosepuracom
website
wwwsepuracom
registered number
4353801
registrars
equiniti
aspect house
spencer road
lancing
west sussex 
bn99 6da
service helpline
tel  0871 384 2030 uk
44 0 121 415 7047 overseas
wwwshareviewcouk
corporate brokers
investec bank uk limited 
2 gresham street
london 
ec2v 7qp
liberum capital
ropemaker place 
25 ropemaker street
london
ec2y 9ly
bankers
barclays bank plc
ashton house
497 silbury boulevard
milton keynes
mk9 2ld
independent auditors
pricewaterhousecoopers llp
chartered accountants and  
statutory auditors
abacus house
castle park
cambridge 
cb3 0an
tel 44 0 1223 460055
wwwpwccom
legal advisors
linklaters llp
one silk street
london
ec2y 8hq
eversheds llp
one wood street 
london 
ec2v 7ws
financial pr consultants
bell potinger
6th floor holborn gate
330 high holborn
london
wc1v 7qd
contact details and advisers financial calendar 201415
annual general meeting  30 july 2014
fy14 final dividend key dates
exdividend 2 july 2014
record 4 july 2014
payment 8 august 2014
fy15 interim results announcement
provisional november 2014
fy15 interim dividend key dates
exdividend 11 december 2014
record 13 december 2014
payment 7 january 2015
fy15 financial period end 27 march 2015
fy15 final results announcement
provisional june 2015
provisional and subject to directors’ decision to declare
sepura plc is a public limited company registered in england no 04353801 and its ordinary shares are traded 
on the official list of the london stock exchange ticker sepu
sepura plc is the parent company of the sepura group of companies unless otherwise stated the text in this 
annual report does not distinguish between the activities and operations of the parent company and those of 
its subsidiary undertakings
this is the annual report of sepura plc for the 12 month period ended 28 march 2014 and complies with uk 
legislation and regulations it is also available on the company’s website
© sepura 2014 the name ’sepura’ and its logo device and all other brand or product names referred to in this 
annual report are registered trademarks or trademarks pending registration in accordance with the relevant 
national laws worldwide of the sepura group of companies all rights reserved
cautionary statement
the purpose of this annual report is to provide information to the members of the company the annual 
report contains certain forwardlooking statements with respect to the operations performance and financial 
condition of the group by their nature future events and circumstances can cause results and developments 
to differ materially from those anticipated no undertaking is given to update the forwardlooking statements 
whether as a result of new information future events or otherwise nothing in this annual report should be 
construed as a profit forecast or an invitation to deal in the ordinary shares of sepura plc
directors’ liability and indemnity arrangements
under the companies act 2006 a new safe harbour limits the liability of directors in respect of certain 
statements in and omissions from this annual report under english law the directors would be liable to the 
company but not any third party if any errors were made as a result of reckless or knowing misstatement or 
dishonest concealment of a material fact but they would not otherwise be liable this annual report has been 
drawn up and presented in accordance with and in reliance upon english law and the liabilities of the directors 
shall be limited and restricted accordingly
112 sepura plc annual report  accounts 2014 design  production
wwwcarrkamasacouk sepura plc
radio house
st andrews road
cambridge
cb4 1gr
t 44 0 1223 876000
f 44 0 1223 879000


Summary:
 chief executive’s statement
we have delivered doubledigit earnings growth for  
a third consecutive year increasing adjusted operating 
profits by 19 to €125 million we have achieved this 
through our ongoing focus on sales growth and strong 
operational performance in our core markets 
at the same time we are executing  
on our strategic goal of expanding  
the group’s offering through continued 
new product delivery and the addition 
of incremental business lines through 
acquisition such that we have expanded  
the size of our addressable market from  
05 billion to approximately 25 billion
i am pleased to report that we are seeing 
strong performance in our core tetra 
devices markets in total we shipped  
188000 tetra devices in fy14 compared  
to 154000 in fy13 this growth was driven 
by germany but double digit growth in the 
uk norway and australia also contributed
germany produced another record year  
with 65000 radios shipped whilst we  
grew the backlog of contracted radios  
to approximately 72500 up from 30000  
at the end of september key wins in greece 
luxembourg austria and canada ensured 
that the list of countries that delivered over 
€1m of revenues during the year grew to  
22 up from 14 last year our continued focus  
on product leadership and ensuring product 
innovation directly meets our customers’ 
demands has been a significant factor in  
this growth combined with our other  
tetra markets we now have an installed 
base of over 12 million radios which will 
yield a growing stream of repeat business 
via refresh and accessory sales over the next 
few years
 
our infrastructure business has made 
outstanding progress since its acquisition 
last year and won its first public safety 
contracts in new markets including  
greece and lebanon it also won its first 
contract in north america for the initial 
phase of toronto transit commission’s new 
network which is currently being deployed 
along with other significant commercial 
sector contracts in luxembourg germany 
and malaysia after the initial contract value 
systems contracts yield a base of recurring 
revenues throughout the 1015 year life 
of these networks portalify the software 
developer acquired in july also generates 
recurring annual revenues from its  
data applications which we are well 
advanced on integrating fully into our  
solutions offering
investment in our dmr portfolio  
continued during fy14 with the initial  
range of products launched towards  
the end of the year the product range 
will continue to be expanded this year 
and has been further augmented by the 
recent acquisition of fylde whose enabling 
technology provides customers with  
a simple lowrisk and costeffective 
migration from analogue to digital networks  
we anticipate an acceleration in the 
migration from analogue to digital  
by smaller commercial users and as  
a result we expect dmr to contribute 
materially to revenues in fy15 and both 
revenue and earnings in fy16
we have now established a local sales  
team in north america to promote tetra 
and dmr and we are confident that we  
can build on our early successes such as  
toronto transit commission and make north 
america a significant market for the group
when you combine these growth 
opportunities with the robustness  
of our more established markets this  
gives us confidence in our outlook for  
the two years ending march 2016  
we expect to deliver 10 revenue growth 
over the next two years with adjusted eps 
growth of 15 and 25 respectively
gordon watling
chief executive
9 june 2014
radios delivered 
188000
we shipped a total of over 188000 tetra 
devices in 2014 2013 154000
sepura plc annual report  accounts 2014 03
strategic report governance group financial statements company financial statements