inspiring 
innovation
enriching 
life
spirent communications plc
annual report 2010 interactive pdf welcome to the spirent annual 
report 2010 
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key
overview
our results 2
spirent at a glance 4
chairman’s statement 6
business review
chief executive officer’s review 8
our key performance indicators 14
our principal risks and uncertainties 16
 business group development 
and performance 18
financial review 26
corporate social responsibility statement 30
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web url wwwspirentcom spirent plays a significant role in shaping the way the 
world communicates we inspire innovation across 
our customer base by testing tomorrow’s networks 
and technologies today including cloud computing 
global positioning and high speed wireless data 
such as lte we thereby enhance the products 
services and applications that drive the everevolving 
communications industry as a leader in test and 
measurement we truly enrich the lives of people 
around the world by enabling them to communicate 
faster and more effectively – anytime anywhere overview
our results 2
spirent at a glance 4
chairman’s statement 6
business review
chief executive officer’s review 8
our key performance indicators 14
our principal risks and uncertainties 16
 business group development 
and performance 18
financial review 26
corporate social responsibility statement 30
governance
board of directors 34 
report of the directors 36 
statement of directors’ responsibilities 40 
directors’ statement on 
corporate governance 41
report on directors’ remuneration 45
financial statements
consolidated financial statements 
 independent auditors’ report to the 
members of spirent communications plc 53
consolidated income statement 54
consolidated statement of 
comprehensive income 55
consolidated balance sheet 56
consolidated cash flow statement 57
consolidated statement of changes in equity 58
notes to the consolidated financial 
statements 59
parent company financial statements
 independent auditors’ report to the 
members of spirent communications plc 103
parent company balance sheet 104
 notes to the parent company 
financial statements 105
principal divisions and subsidiaries 121
other information
financial history 122
shareholder information 124
glossary 126
contact details ibc
1 spirent communications plc annual report 2010 2008 2009 2010
4771 4272 4822
2008 2009 2010
896 886 1162
2008 2009 2010
901 868 1127
2008 2009 2010
185 193 250
2 spirent communications plc annual report 2010
our results
“ this is an exciting time within the telecom and data 
communication industries with increasing investment in 
both proven and emerging technologies driving demand for 
our leading test solutions 2010 was an excellent year for 
spirent – one in which we delivered a strong performance 
through the execution of our strategy our broad test solution 
portfolio coupled with our global reach gives us the ability to 
pursue further profitable growth in 201 1 and beyond”
cautionary statement regarding forwardlooking statements
this annual report may contain forwardlooking statements which are made in good faith and are based on current expectations or beliefs as well as assumptions about future 
events you can sometimes but not always identify these statements by the use of a date in the future or such words as “will” “anticipate” “estimate” “expect” “project” “intend” 
“plan” “should” “may” “assume” and other similar words by their nature forwardlooking statements are inherently predictive and speculative and involve risk and uncertainty 
because they relate to events and depend on circumstances that will occur in the future you should not place undue reliance on these forwardlooking statements which are not a 
guarantee of future performance and are subject to factors that could cause our actual results to differ materially from those expressed or implied by these statements the company 
undertakes no obligation to update any forwardlooking statements contained in this annual report whether as a result of new information future events or otherwise
group revenue
adjusted basic earnings per share
3
group operating profit
dividend per share
1
 million
cents
 million
cents
13
31 
30
30 3 spirent communications plc annual report 2010
overview
business review
governance
financial statements
 million 2010
2009
restated
4
change 
reported
revenue 4822 4272 13
operating profit 1127 868 30
profit before tax 1122 849 32
basic earnings per share cents 1177 1367 14
total dividend per share
1
 cents 250 193 30
free cash flow
2
826 865 5
adjusted
adjusted basic earnings per share
3
 cents 1162 886 31
financial highlights
order intake growth of 17 resulting in a book to bill ratio of 105 –
operating profit up 30 to 1127 million on revenue up 13 to 4822 million –
return on sales increased to 23 from 20 –
adjusted basic earnings per share up 31 to 1162 cents after eliminating the impact of the  –
change in the effective tax rate basic earnings per share down 14 to 1177 cents
final dividend increased by 40 to 140 cents per share equivalent to 086 pence per share –
strong cash generation resulted in cash and cash equivalents of 2239 million compared to  –
1739 million in the previous year
acquisition of the fanfare group inc for 150 million completed on 16 february 2011 –
operational highlights
during 2010 demand for spirent’s solutions increased as our customers invested in –
data center technologies to enable cloud computing and virtualization –
growth of ethernet across telecom and datacom network infrastructures –
expansion in mobile internet driving exponential growth in data traffic –
new investment in global positioning technologies to modernise gps and to upgrade other  –
satellite navigation systems
spirent introduced new test solutions to address increasing customer demand –
higher speed ethernet data test solutions on spirent testcenter™  to validate network  –
performance availability security and scalability of cloud computing using spirent  
test methodology
wireless test solutions for the rollout of lte networks and for higher 3g wireless network speeds –
new positioning test capabilities to serve the rapid expansion of satellite navigation and  –
location based services
notes
1    dividends are determined in us dollars and paid in sterling at the exchange rate prevailing when the dividend is proposed the final dividend proposed for 2010 of 140 cents per 
ordinary share is equivalent to 086 pence per ordinary share
2  operating cash flow after tax net interest and net capital expenditure
3  adjusted basic earnings per share is based on an effective tax rate of 304 being the rate applicable for 2010 see note 11 of notes to the consolidated financial statements
4 restated due to the change in the group’s reporting currency 4 spirent communications plc annual report 2010
spirent at a glance
spirent is a global leader in 
communications test and 
measurement listed on the 
london stock exchange 
the group is organised into three business 
segments performance analysis service 
assurance and systems performance analysis 
provides solutions that test current and next
generation communications technologies in 
the lab service assurance provides network 
monitoring and field test solutions for live 
networks systems is a leading supplier of 
sophisticated electronic control systems for 
electrically powered vehicles in the medical 
mobility and industrial markets
performance analysis
spirent puts innovation to the test with a concentration on ethernet 
data center including cloud computing and virtualization mobility 
and satellite positioning as well as the applications that enrich these 
networks spirent’s performance analysis division facilitates device 
and network testing from the research and development stage to the 
launch of communications networks and services we push the limits 
of these networks their elements mobile and satellite positioning 
devices and applications by allowing equipment makers and service 
providers to subject their offerings to labbased functional 
conformance and performance testing that simulates realworld 
conditions before a commercial launch
divisional review
revenue
3658m 2009 3168m
divisional focus
ethernet data center cloud computing
virtualization and applications
wireless devices and network infrastructure
satellite navigation and positioning technologies
highlights 2010
financial
revenue up 15 driven by  –
expansion in worldwide data 
connectivity
profit up 25 due to high  –
operating leverage on 
revenue growth
customer wins
huawei for hspa –
nokia siemens networks for  –
evolved packet core
ntt communications for   –
100gb ethernet
verizon wireless for lte –
new product introductions
high performance 10g and  –
40100g hypermetrics 
modules
avalanche virtual “best of  –
interop” award
8100 lte device test  –
solutions
wifi positioning test   –
solution 5 spirent communications plc annual report 2010
overview
business review
governance
financial statements
service assurance
spirent’s service assurance solutions allow service providers to 
diagnose troubleshoot and determine how to resolve issues with 
networks and systems within the live network building on the 
expertise gained through testing technologies and systems in the 
lab spirent enables service providers to deploy and maintain 
efficient cost effective and high performing networks helping to 
reduce subscriber churn by providing better quality of experience 
spirent’s solutions also allow service providers to reduce operational 
costs through better identification of potential network problems 
from the core of the network to inside the subscriber’s home and use 
of the most appropriate resources to address those issues 
divisional review
revenue
570m 2009 526m
divisional focus
ethernet business services
wireless backhaul
triple play services
highlights 2010
systems
systems comprises pg drives technology a leading supplier of 
sophisticated electronic control systems for electrically powered 
vehicles in the medical mobility and industrial markets these include 
vehicles such as powered wheelchairs and mobility scooters as well 
as industrial vehicles such as floor cleaning vehicles forklift trucks 
aerial access platforms and golf carts
divisional review
revenue
594m 2009 5 78m
divisional focus
motorised wheelchair and mobility scooters
commercial and industrial electric vehicles
low speed electric vehicles
highlights 2010
financial
demand driven by need for  –
increased data capacity 
across the industry
profit up 73 reflects  –
revenue growth and 
beneficial product mix
customer wins
north american msos for  –
inhome field testing
north american wireless  –
providers for wireless 
backhaul
msos in europe for ip video  –
monitoring and triple play 
testing
ziggo europe for carrier  –
ethernet performance 
monitoring 
new product introductions
spirent testcenter live  –
enhancements business 
services wireless backhaul 
ip video
techx flex docsis 30 and  –
1ghz cable tv testing
financial
grew revenue in newly   –
served commercial and 
industrial markets
profit improvement of 11  –
due to exchange rate losses 
in 2009 not repeated net of a 
oneoff charge in 2010
customer wins
new commercial applications –
new product introductions
c3 ac pallet truck controller –
new vsi wheelchair controller – 6 spirent communications plc annual report 2010
chair man’s state ment
“ the financial performance of the group reflects 
the improvement in operations achieved through 
the pursuit of excellence in all aspects of the 
business coupled with growth in the markets for 
spirent’s leading test solutions”
alex walker
chairman 7 spirent communications plc annual report 2010
overview
business review
governance
financial statements
spirent delivered a strong performance in 2010 
reporting growth of 13 per cent in revenue to 
4822 million and growth of 30 per cent in 
operating profit to 1127 million 
the company is consistently achieving a return on sales of over 20 
per cent with the return in 2010 being 23 per cent the order book 
increased in the year with a book to bill ratio of 105 earnings per 
share was distorted compared to the prior year by the recognition  
of deferred tax assets in 2009 eliminating this effect by taking a 
constant tax rate for both years shows that adjusted basic earnings 
per share increased by 31 per cent in 2010 to 1162 cents after 
charging 027 cents in respect of sharebased payment and acquired 
intangible asset amortisation
the financial performance of the group reflects the improvement in 
operations achieved through the pursuit of excellence in all aspects 
of the business coupled with growth in the markets for spirent’s 
leading test solutions 
this trend of improvement seen in the past several years is now 
combined with revenue growth driven by the innovation of our 
employees in developing worldclass test solutions to serve the 
needs of a rapidly evolving communications industry we plan  
to expand the group’s capabilities through additional investment  
for organic growth by the expansion of product development 
engineering and extension to our sales activities in addition  
we are pursuing growth through acquisition when and where  
we can see that the return on investment is attractive as the first 
step in this process we completed the acquisition of the fanfare 
group inc in february 2011
the group’s free cash generation was 826 million in 2010 
representing a cash conversion to earnings ratio of 104 cash 
balances were 2239 million at 31 december 2010 given the strong 
overall performance of the group the board recommends a final 
dividend of 140 cents per share compared with 100 cents per share 
in 2009 the company intends to maintain its policy to repurchase 
shares in order to counteract any dilutive effect from the exercise of 
sharebased incentives
ed bramson stood down as chairman on 4 march 2010 and both  
he and gerard eastman retired as nonexecutive directors on 5 may 
2010 we thank them for their outstanding achievements during  
their tenure 
the strong performance in 2010 was achieved through the hard work 
and commitment of our employees and management teams 
throughout the world i wish to thank all of them for their contribution 
to making 2010 such a success for spirent 
we are mindful of global macroeconomic factors that are likely to 
create challenges in the coming year however spirent’s diversified 
customer base market leading product offerings and promising 
market opportunities mean that we are well placed to deliver further 
growth through 2011 8 spirent communications plc annual report 2010
c hief e xecutive officer’s revie w 
“ the fundamental drivers for growth in our 
industry are strong as consumers and 
businesses demand anytime anywhere 
alwayson access to data applications  
and services”
bill burns
chief executive officer 9 spirent communications plc annual report 2010
overview
business review
governance
financial statements
this is an exciting time within the telecom and 
data communication industries with increasing 
investment in both proven and emerging 
technologies driving demand for our leading 
test solutions 2010 was an excellent year for 
spirent – one in which we delivered a strong 
performance through the execution of our 
strategy our broad test solution portfolio 
coupled with our global reach gives us the 
ability to pursue further profitable growth in 
2011 and beyond
markets and strategy
the fundamental drivers for growth in our industry are strong as 
consumers and businesses demand anytime anywhere alwayson 
access to data applications and services as a result service 
provider and enterprise it spending has returned either to seek new 
revenue streams or to resolve challenges associated with network 
capacity and performance spirent’s expertise is in delivering test 
solutions that capitalise on data center transformation cloud 
computing the concept of ethernet everywhere the proliferation  
of new wireless devices and infrastructure and applications that 
enrich our lives 
executing on our strategy delivered profitable growth for spirent and 
a strong overall financial performance in 2010 which enabled us to 
increase sales by 13 per cent and adjusted basic earnings per share 
by 31 per cent yearonyear spirent delivers best in class financial 
performance compared to its peers our pace of innovation leads the 
test and measurement market the key elements of our strategy are 
to focus on growing and emerging technology markets to invest in 
our people and to utilise innovation to deliver the “right solutions”  
to the global market at the “right time” these strategic goals have 
been furthered through the hard work dedication and enthusiasm of 
our people it is key to spirent’s success and future that we continue 
to develop our employees reward them and recognise their  
critical contribution 
spirent’s solutions span all major technologies and serve all major 
customer segments across the telecommunication industry we have 
prioritised engineering development spending on areas that matter 
most to customers such as the evolution of wireless technologies to 
4glte high speed ethernet nextgeneration data centers wireless 
infrastructure and application performance our worldwide sales  
and service organisation has industry leading capability serving  
over 1300 customers globally across all segments including network 
equipment manufacturers mobile device manufacturers service 
providers enterprise and governments as we enable the 
development of technology from inception to deployment in  
live networks
outlook
the outlook is promising with our customers making new 
investments to bring nextgeneration technologies to market as a 
result we are confident that the market for test and measurement will 
show further growth in 2011 and future years ethernet wireless 
device and positioning test markets all show positive signs for growth 
in 2011 we continue to invest in new test solutions and in enhancing 
our current capabilities in the areas that matter most to our customers 
as they look to improve time to market of their industry leading 
products and services we enter the year with the industry’s broadest 
and we believe most innovative test solution portfolio additional 
investment in product development to drive innovation coupled with 
a relentless focus on executing our strategy will enable spirent to 
continue to prosper 10 spirent communications plc annual report 2010
chief e xecutive officer’s revie w continued
the growth of communications networks continues to be driven by 
the demand for anytime anywhere connectivity at spirent we make 
use of our deep understanding of communications trends and 
technologies together with our close customer relationships to 
identify growing and emerging market opportunities attracting and 
retaining the best and brightest people in the industry enables 
spirent to develop the most innovative and complete test and 
measurement solutions to address these opportunities 
we maintain a high rate of investment in our solutions portfolio  
enabling us to bring solutions to market at the point in technology 
and market cycles when our customers most need them our 
solutions are used to develop and deploy the best devices networks 
and applications helping enrich people’s lives whether they’re 
consumers employed by a business enterprise or work for a 
government entity as a trusted partner to over 1300 global 
customers spirent’s global reach allows us to assist these 
organisations wherever they are located to transition from legacy  
to emerging and nextgeneration technologies spirent remains 
dedicated to retaining its position at the forefront of the everevolving 
communications industry understanding that market leadership 
plays an important part in sustaining profitable growth
our strategy
our vision is to be the global 
leader in growing and emerging 
test and measurement markets
strategy description 2010 achievements
✓
focus on growing and 
emerging markets
spirent closely monitors the everchanging trends across the 
communications landscape strategically reallocating resources  
to address growing and emerging markets
we once again focused on telecommunications growth markets 
including lte networks and devices cloud computing global 
positioning and high speed ethernet
✓
invest in our people
spirent is its employees attracting and retaining highly qualified and 
skilled employees is central to enabling us to deliver on our strategy 
and to the success of our business appropriate career paths and 
internal recognition programmes are developed for both technical 
and nontechnical staff 
the profitable growth that we achieved in 2010 enabled us to find 
ways to recognise and reward our employees for their hard work and 
for the success of spirent we continued to work hard to nurture an 
environment in which the innovation and collaboration critical to 
spirent’s success can thrive
✓
innovation
remaining at the leading edge of technology is critical to our 
continued success we apply our creativity to the development of 
tools and methodologies to meet our customers’ complex needs for 
testing and assuring communications and it equipment networks 
and applications
building on our earlier spirent testcenter virtual innovation we 
released our avalanche virtual solution for testing the performance 
availability security and scalability of virtualized network appliances 
and cloud based applications we also introduced innovative 
solutions for testing lte mobile devices and wifi positioning
✓
 
evolve our  
solutions portfolio
we invest in development across our product and service portfolio  
at a level that enables us to bring the most advanced test solutions  
to market
during 2010 we released over 50 new products and additions of new 
functionality in key technology areas including cloud computing 
high speed ethernet and lte
✓
“right solution”
at the “right time”
we enable our customers to bring new products and technologies  
to market in the shortest amount of time by making available the 
solutions they need when they need them
staying close to our customers enabled us to bring to market high 
performance 40100g test modules at the appropriate time to meet 
the demands of the earliest 40g ethernet technology developers
✓
global reach
we have built worldclass sales and service organisations  
that enable spirent to develop and maintain strong customer 
relationships around the globe
we continued to expand our sales and service capabilities in  
growth markets especially in asia pacific we also grew our  
product development capacity in china 11 spirent communications plc annual report 2010
overview
business review
governance
financial statements
strategy description 2010 achievements
focus on growing and 
emerging markets
spirent closely monitors the everchanging trends across the 
communications landscape strategically reallocating resources  
to address growing and emerging markets
we once again focused on telecommunications growth markets 
including lte networks and devices cloud computing global 
positioning and high speed ethernet
invest in our people
spirent is its employees attracting and retaining highly qualified and 
skilled employees is central to enabling us to deliver on our strategy 
and to the success of our business appropriate career paths and 
internal recognition programmes are developed for both technical 
and nontechnical staff 
the profitable growth that we achieved in 2010 enabled us to find 
ways to recognise and reward our employees for their hard work and 
for the success of spirent we continued to work hard to nurture an 
environment in which the innovation and collaboration critical to 
spirent’s success can thrive
innovation
remaining at the leading edge of technology is critical to our 
continued success we apply our creativity to the development of 
tools and methodologies to meet our customers’ complex needs for 
testing and assuring communications and it equipment networks 
and applications
building on our earlier spirent testcenter virtual innovation we 
released our avalanche virtual solution for testing the performance 
availability security and scalability of virtualized network appliances 
and cloud based applications we also introduced innovative 
solutions for testing lte mobile devices and wifi positioning
 
evolve our  
solutions portfolio
we invest in development across our product and service portfolio  
at a level that enables us to bring the most advanced test solutions  
to market
during 2010 we released over 50 new products and additions of new 
functionality in key technology areas including cloud computing 
high speed ethernet and lte
“right solution”
at the “right time”
we enable our customers to bring new products and technologies  
to market in the shortest amount of time by making available the 
solutions they need when they need them
staying close to our customers enabled us to bring to market high 
performance 40100g test modules at the appropriate time to meet 
the demands of the earliest 40g ethernet technology developers
global reach
we have built worldclass sales and service organisations  
that enable spirent to develop and maintain strong customer 
relationships around the globe
we continued to expand our sales and service capabilities in  
growth markets especially in asia pacific we also grew our  
product development capacity in china wireless user emulation
residential
enterprise
mobile core
unified core
cloud applications
content delivery
internet
2g
3g
4g
copper 
fiber 
cable
copper 
fiber 
cable
ipmpls ethernet
www
12 spirent communications plc annual report 2010
chief e xecutive officer’s revie w continued
what we test
example
application experience
spirent provides hardware and software tools and test 
methodologies that enable testing of the performance of 
network equipment devices and applications during the 
development phase we apply the expertise gained through 
this testing to our service assurance solutions which allow 
service providers to diagnose troubleshoot and determine  
how to resolve issues within live networks 
ethernet has become the de facto standard for service providers as well as the enterprise 
across all aspects of the network from access to the edge to the core due to its cost 
effectiveness scale and ability to support a wide range of applications spirent’s leadership 
in ethernet testing allows us to benefit significantly from the sustained growth in ethernet 
use across all communication and it markets we test network equipment which utilises 
ethernet at everincreasing scale including switches routers evolved packet core network 
elements firewalls load balancers and intrusion detectionintrusion prevention
for service provider networks see diagram we test all service layers of the network 
including those that require high data capacity and those that deliver application scale or 
security spirent testcenter is a single converged performance test platform to test 
application experience and backhaul networks as well as mobility interoperability and 
40100g ethernet in core networks we also test the service quality security and 
application performance of content delivery networks cloud applications and the internet
for the enterprise spirent is well positioned to benefit from the move of applications  
into publicprivate clouds and from the growth from enterprise nems who are building 
nextgeneration cloud infrastructure and cloud service devices the rapid convergence of 
data center technologies such as storage over ethernet high speed ethernet and virtual 
servers running multiple applications in the cloud is pushing the boundaries of testing 
spirent has released virtualized variants of its solutions to provide unsurpassed visibility 
into the entire data center infrastructure these take advantage of spirent’s innovative  
pass methodology to test the performance availability security and scalability of cloud 
computing networks
new testing needs for wireless devices are driven by smartphone growth and the  
associated exponential growth in mobile data which leads service providers to look to  
new technologies such as lte and to the cost and efficiency advantages of allip networks 
spirent is a leader in functional conformance and performance testing of 3g and 4glte 
devices including smartphones and data cards spirent also has a long track record as the 
leader in testing the performance of location technology that supports location based 
services on smartphones including overtheair testing
spirent is the worldwide leader in testing gnss receiving devices while gps remains the 
most widely used system others such as glonass galileo and compass are gaining 
ground with other positioning techniques such as use of wifi access points also growing  
in popularity spirent is able to test the performance of all of these technologies as they 
become embedded in an everbroader range of applications from smartphones and 
vehicles to aerospace and government wireless user emulation
residential
enterprise
mobile core
unified core
cloud applications
content delivery
internet
2g
3g
4g
copper 
fiber 
cable
copper 
fiber 
cable
ipmpls ethernet
www
wireless user emulation
residential
enterprise
mobile core
unified core
cloud applications
content delivery
internet
2g
3g
4g
copper 
fiber 
cable
copper 
fiber 
cable
ipmpls ethernet
www
wireless user emulation
residential
enterprise
mobile core
unified core
cloud applications
content delivery
internet
2g
3g
4g
copper 
fiber 
cable
copper 
fiber 
cable
ipmpls ethernet
www
13 spirent communications plc annual report 2010
overview
business review
governance
financial statements
service provider networks 
mobility and interoperability
high speed ethernet
backhaul service quality security and 
application performance 98
105
2010
102
105
2008
97
2006 2007 2009 2010
4771 4740 4790 4272 4822
2008 2007 2006 2009 2010
646
624
606
2009
663 666
2008 2007 2006 2010
942 578 261 888 1145
2008 2007 2006 2009 2010
14 spirent communications plc annual report 2010
our key perf ormance indicat ors
spirent has identified the following key performance 
indicators “kpis” that it believes are useful in assessing 
how the group is performing against its strategic aims 
kpi description
ratio of orders booked to revenue billed 
which is a measure of the visibility of our 
future revenues at current levels of activity 
the group aims to maintain a book to bill 
ratio of 100 or higher
growth in revenue is a measure of how we 
are growing our business our goal is to 
achieve yearonyear growth in addition 
our focus has been on increasing our 
market share and growing our new product 
revenues which are some of the key 
components of our strategy
gross profit as a percentage of revenue is a 
measure of our profitability we seek to 
maximise our gross margin through 
operational excellence in all aspects of our 
business
operating profit before sharebased 
payment and acquired intangible asset 
amortisation is the measure used to 
evaluate the overall performance of the 
group as well as each of our operating 
segments our goal is to achieve yearon
year growth
commentary
the ratio is 105 for 2010 up from 102 for 
2009 and this reflects the improving 
demand levels experienced by the group
revenue for the group increased by 13 per 
cent in 2010 there has been recovery in the 
markets we serve together with increasing 
demand for our test solutions driven by the 
expansion in worldwide data connectivity and 
the shift within enterprises to virtualization 
and cloud computing our strategy of focusing 
on growing and emerging technology markets 
is delivering growth
gross profit margin was slightly higher at 
666 per cent up from 663 per cent in 2009 
there has been an improving trend over a 
number of years achieved through design for 
lower cost of manufacture and outsourcing 
activities however improvements were 
partially offset in 2010 by large contract 
discounting and product mix including an 
increased proportion of revenue from third 
party products which carry a lower margin
operating profit increased by 29 per cent 
largely as a result of higher sales we 
managed costs carefully throughout the 
year but we made further investment in 
product development in the fourth quarter 
in order to generate new solutions to meet 
future customer requirements
book to bill ratio
revenue
gross profit margin
operating profit before sharebased 
payment and acquired intangible asset 
amortisation
 million

 million 197
122
54
208
237
2008 2007 2006 2009 2010
896 521 200 886 1162
2008 2007 2006 2009 2010
781 999 120 865 826
2008 2007 2006
1
2009 2010
1 before onetime pension contribution
15 spirent communications plc annual report 2010
overview
business review
governance
financial statements
kpi description
operating profit before sharebased 
payment and acquired intangible asset 
amortisation as a percentage of revenue is 
a measure of our overall profitability we 
strive to achieve best in class operating 
returns for our industry
earnings per share “eps” is the amount of 
earnings attributable to each share in issue 
adjusted eps excludes exceptional items 
and prior year tax which enables periodon
period comparisons to be made of our 
performance we aim to achieve growth in 
adjusted eps yearonyear we are using a 
constant effective tax rate of 304 per cent 
being the rate applicable for 2010 to 
evaluate eps the effective tax rate in 2009 
was much lower at 148 per cent 
free cash flow is operating cash flow  
after tax net interest and net capital 
expenditure we focus on cash generation 
as a measure of the quality of our earnings 
and our aim is to achieve a high conversion 
of earnings into cash each year
commentary
return on sales has improved from  
208 per cent in 2009 to 237 per cent in 
2010 driven by the high operating leverage 
in our business spirent’s operating returns 
are among the best in our industry
adjusted eps at a constant effective tax rate 
was 1162 cents for 2010 an improvement of 
31 per cent on the prior year 
free cash flow was strong at 826 million 
for 2010 which represents 104 per cent of 
reported earnings in 2009 the conversion 
ratio was 124 per cent after adjusting for the 
noncash deferred tax credit the absolute 
reduction in free cash flow was due to a 
number of factors more normal levels of tax 
payment an increase in working capital due 
to higher trading activity and an increase in 
capital expenditure
return on sales before sharebased 
payment and acquired intangible asset 
amortisation 
adjusted basic earnings per share at a 
constant tax rate 
free cash flow 
cents
 million
our strategy focuses on medium to long term growth and 
therefore its achievement cannot just be measured by looking at 
our performance in 2010 compared to the prior year trends over 
a number of years must also be considered 
 16 spirent communications plc annual report 2010
our principal ris ks and uncertainties
we conduct regular risk reviews to identify the major 
risks in the business which may affect our operating and 
financial performance and where possible put in place 
mechanisms to mitigate them
the principal risks and uncertainties which the directors believe are currently faced by spirent communications plc are discussed below
risk and potential impact
macroeconomic and industry sector
in common with most businesses spirent is exposed to the current 
world economic conditions due to a number of factors largely outside 
of our control we are particularly exposed to conditions in the 
telecommunications sector into which we sell many of our products 
and services and which has experienced significant downturns in  
the past 
technological change 
spirent sells complex solutions in industries that are characterised 
by rapid technological changes and keeping at the forefront of these 
technologies is critical to our success and to ensure that we remain 
competitive in our markets 
we must therefore ensure that our rd is invested in the right areas 
enabling us to develop solutions that our customers need and that 
we do not fail to address opportunities in a timely manner bringing 
new solutions to market at the right time for our customers is also key 
to our success 
reliance on contract manufacturers
we use contract manufacturers for the manufacture of a substantial 
amount of our products disruption or financial problems of contract 
manufacturers or limitations in the manufacturing capacity at 
contract manufacturers could either limit supply or increase  
our costs
mitigation actions
having the ability to adapt to changing market dynamics is  
key in order to minimise the effects of adverse economic or  
sector conditions 
our businesses closely monitor both market and geographic  
trends so that we are in a position to take timely actions to  
protect profitability where possible
we continue to make significant investment in product development 
and in 2010 802 million representing 17 per cent of revenue was 
invested 
a portfolio planning team is in place responsible for reviewing and 
making investment decisions across spirent’s portfolio of investment 
opportunities we work closely with customers and remain focused 
on their requirements and believe we are investing in areas that 
represent their future 
we work closely with our contract manufacturers and maintain  
a regular onsite presence at our major contract manufacturer to 
minimise the effect on supply that could be caused by disruption at 
contract manufacturers there are contingency plans in place to 
transfer manufacturing to other locations 17 spirent communications plc annual report 2010
overview
business review
governance
financial statements
significant risks are reviewed by the board and the audit 
committee it is not possible to identify every risk that 
could affect the business and the actions described 
below to mitigate those risks cannot provide absolute 
assurance that the risk will not occur and or adversely 
affect the operating or financial performance of the group 
these processes are more fully described in the directors’ 
statement on corporate governance 
risk and potential impact
business continuity risks 
operational risks are present in the group’s businesses these  
risks include the risk of failed internal and external processes and 
systems human error and external events such as a natural disaster 
for example a significant portion of our communications operations 
are located in california which has in the past experienced natural 
disasters including earthquakes and wildfires
retention and recruitment of key staff 
spirent is its employees so attracting and retaining highly qualified 
and skilled employees is essential in enabling us to deliver on our 
strategy and to the success of our business 
intellectual property
spirent’s success is dependent in part on proprietary technology 
which may be infringed by others inadvertently or otherwise 
protecting our proprietary technology is important in enabling  
us to compete successfully in our industry
companies in the telecommunications industry often aggressively 
protect and pursue their intellectual property rights and may assert 
infringement claims against spirent such claims can result in 
significant defence costs and may affect spirent’s ability to market 
its products
mitigation actions
an important component of spirent’s corporate governance is its 
integrated risk management strategy and its regular selfassessment 
of risks encompassing all business units part of this process is to 
ensure that the risks of disruption to the business are identified 
monitored and controlled wherever possible as well as arranging 
appropriate insurance cover
we aim to find keep and engage the highest calibre of employees  
and encourage their contribution and development an environment 
that fosters innovation and collaboration is critical to spirent’s success 
appropriate career paths and internal recognition programmes are 
developed for both technical and nontechnical staff
we have active intellectual property protection programmes in place 
to obtain appropriate intellectual property protection in a cost 
effective manner 
there are procedures in the development of new products that 
include consideration of intellectual property rights of third parties 
we also consult internal and external legal counsel experienced in 
intellectual property matters 1
2
3
1
2
3
18 spirent communications plc annual report 2010
business gr oup devel opment and perf ormance
description of our business
the spirent group is organised into three business segments 
performance analysis service assurance and systems 
performance analysis provides solutions that test current and 
nextgeneration communications technologies in the lab service 
assurance provides network monitoring and field test solutions for live 
networks systems is a leading supplier of sophisticated electronic 
control systems for electrically powered vehicles
spirent communications provides solutions to enable the world to 
communicate faster better and more reliably we develop innovative 
test solutions for the engineers working within the communications 
industry that allow them to evaluate the performance of the latest 
technologies infrastructure and applications to be deployed worldwide 
we also provide tools for service technicians and field test engineers to 
improve network quality and make troubleshooting of live networks 
efficient and effective
network equipment manufacturers and service providers face 
numerous challenges associated with bringing products and services 
from the lab to the commercial marketplace spirent’s performance 
analysis division allows network equipment and mobile device 
manufacturers service providers enterprises and government entities 
to holistically test and benchmark the performance of their networks 
network elements mobile devices and services thereby accelerating 
time to revenue
spirent provides the ability to conduct functional conformance 
performance interoperability scalability and quality of experience 
testing under realworld conditions inside and outside the lab this 
capability across the entire product lifecycle from concept to 
commercial availability helps to shorten the product development 
cycle improve the quality of new services while reducing associated 
cost and risk
spirent delivers solutions which address high speed ethernet data 
center cloud computing virtualization ims iptv location based 
services multignss satellite technologies 3g and 4glte wireless  
and other emerging technologies
spirent’s service assurance solutions allow service providers to 
diagnose troubleshoot and determine how to resolve issues with 
networks and systems within the live network all the way to the home 
by leveraging the expertise gained by testing technologies and systems 
in the lab spirent enables service providers to deploy and maintain 
efficient cost effective and high performing networks as a result 
network operators enjoy reduced churn by providing a higher quality  
of experience which ultimately increases subscriber retention our 
solutions also allow service providers to reduce operational costs 
through better identification of potential network problems and the use 
of the appropriate resources to address and correct those challenges
systems is a leading supplier of sophisticated electronic control systems 
for electrically powered vehicles in the medical mobility and industrial 
markets these include vehicles such as powered wheelchairs and 
mobility scooters as well as industrial vehicles such as floor cleaning 
equipment forklift trucks aerial access platforms and golf carts
revenue by division
operating profit by division
group revenue
group operating profit
4822m
2009 4 2 72m
1145m
2009 888m
2010 2009
1 performance analysis 3658 3168
2 service assurance 570 526
3 systems 594 578
2010 2009
1 performance analysis 979 783
2 service assurance 130 75
3 systems 88 79
corporate costs 52 49
overview
before sharebased payment and 
acquired intangible asset 
amortisation    19 spirent communications plc annual report 2010
overview
business review
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financial statements
our global presence
we are a trusted test partner for more than 1300 
global customers 
americas
revenue
europe middle east and africa asia pacific
2009 2322m 2009 718m 2009 1232m
2652m 806m 1364m
spirent has global reach which results from  
its global sales and service organisations’ 
industry leading capabilities we serve over 
1300 customers globally across all segments 
including network equipment manufacturers 
mobile device manufacturers service providers 
enterprise and governments as we enable the 
development of communications and it 
technologies from their inception to their 
deployment in live networks 3537 3168 3658
2008 2009 2010
831 783 979
2008 2009 2010
235
247
268
2008 2009 2010
235
247
268
2008 2009 2010
20 spirent communications plc annual report 2010
business gr oup devel opment and perf ormance continued
performance analysis
market conditions
the performance analysis division experienced significant growth in 
2010 with revenue up 15 per cent over 2009 as customers increased 
their investment in nextgeneration data centers that make use of cloud 
computing and virtualization we also saw investment growth in 
current and nextgeneration wireline and wireless networks and mobile 
devices as well as in global navigation satellite systems “gnss”
for the networks  applications business previously referred to as 
broadband anytime anywhere any device connectivity is driving 
rapid changes in service provider and enterprise networks converged 
ipethernet solutions have become the default for service providers as 
well as the enterprise due to their cost effectiveness scale and ability 
to support a wide range of applications as a leader in ethernet testing 
spirent is benefiting significantly from this industry trend 
in service provider networks the explosion in data demand by mobile 
subscribers is driving higher speed interfaces from 1g to 10g all the 
way to 100g ethernet to provide support for bandwidthhungry 
applications such as video cost effectiveness is driving ipethernet 
across all aspects of the network from access to the edge to the core 
but with this comes the need to ensure the quality of user experience 
the growth of ethernet in wireless radio access networks also brings 
with it new testing needs while industry standards have evolved to 
enable the synchronisation required to backhaul wireless traffic over 
ethernet this has added a layer of complexity which requires 
additional testing 
enterprises are building nextgeneration data centers and moving 
more applications to the cloud to take advantage of reductions in cost 
complexity and management overhead this allows businesses to 
focus on their core competencies instead of building a large it 
organisation powerful new technologies such as virtualization and 
local area networkstorage area network integration are powering 
the new data center but they bring with them significant challenges 
including security performance and availability the speed of 
information requires data center infrastructure to be upgraded to 10g 
ethernet switches and 40g ethernet links in order to handle the 
increases in data traffic moving across the data center network 
equipment manufacturers are responding to these requirements by 
building a new generation of terabit switches and routers that can 
support these technologies at unprecedented scale and this is forcing 
a new wave of investment in test and measurement solutions 
 million
 million

divisional revenue
divisional operating profit
return on sales
divisional highlights
15
25
revenue up 15 driven by expansion in  –
worldwide data connectivity
in wireless 2010 was a year of exceptional  –
expansion in mobile internet
solid recovery in positioning test –
profit up 25 due to high operating  –
leverage on revenue growth 21 spirent communications plc annual report 2010
overview
business review
governance
financial statements
both service provider and enterprise networks share the common 
goal of minimising costs while providing the same or better quality of 
experience for the user achieving this requires fundamental changes 
in the way networks are built and services are delivered validation of 
network performance availability security and scalability “pass” 
is critical which has led spirent to develop its unique pass testing 
methodology this cloud computing test methodology provides the 
test framework and approach to ensure that new products or network 
upgrades deliver the intended benefits and behave as expected 
even under the most demanding scenarios 
spirent enables its customers to address the many challenges of 
testing both new products and services with spirent testcenter our 
best in class solution that is specifically designed to work through the 
various stages of conformance functional and performance testing 
spirent testcenter enables validation of applications through realistic 
emulation and has the ability to scale at industry leading levels 
when combined with spirent’s depth of expertise spirent testcenter 
enables our customers to accelerate time to market of converged 
network equipment and applications
for the wireless communication industry 2010 was a year of 
exceptional expansion in mobile internet resulting in exponential 
mobile data growth this is necessitating major network capacity 
upgrades globally and accelerating the trend towards allip networks 
smartphones continued to grow market share with their users 
downloading ever more applications accessing the internet and 
using location based services to meet this demand investments are 
being made to increase cdma and umts network speeds and the 
first lte networks are now being deployed 
as a result we continue to see strong demand for our umts and lte 
wireless communication test solutions as well as for our physical 
layer solutions which are used to test wireless receivers in 3g and  
lte base stations and devices although cdma wireless technology 
showed some expected decline as investment shifted to umts and 
lte this was somewhat offset by investments by new cdma device 
vendors who are entering into markets such as the us and china 
where major networks continue to use cdma technology as a  
leader in testing wireless devices and infrastructure spirent 
continues to apply its innovations to meet the everevolving needs  
of wireless customers 
the market for test equipment in the positioning sector experienced  
a solid recovery through 2010 investment in gps test returned to 
predownturn levels with growth also evident in glonass galileo 
and multignss test opportunities for 2011 include gps 
modernisation and upgrades to the russian glonass system the 
european galileo system is also gaining momentum and is expected 
to be fully operational in 2015 the use of “smart” technology in 
government applications continues to increase enabling position 
awareness everywhere all the time under all conditions in the 
commercial markets rapid growth continues demanding low cost 
high availability consumer based products and applications
revenue
revenue in the performance analysis division grew 15 per cent from 
3168 million to 3658 million much of this growth came from the 
networks  applications business and our spirent testcenter 
solution as well as our avalanche solution for testing application 
security and application performance throughout 2010 there were 
many key wins around data center virtualization and cloud 
computing and the new network elements that support them 
another important area of growth was in mobile backhaul and core 
network testing spirent’s landslide solution used for testing mobile 
packet core networks experienced another strong year 
our 3gumts test solutions saw solid growth during the year global 
positioning has become a “must have” capability in smartphones 
and spirent once again experienced strong growth in its market 
leading location based test solutions for umts and lte devices our 
physical layer solutions used to test wireless receivers had a record 
year driven by the need for realistic testing of the complex new 
multiantenna transmission schemes used in lte infrastructure and 
devices we experienced success for our lte solutions within the 
verizon wireless’ ecosystem of toptier device suppliers early in 
2010 verizon a major us carrier announced that it had selected 
spirent as a supplier for its mobile lte device testing we also saw  
lte sales success with other leading carriers planning lte network 
deployments as well as within rd groups of major device 
manufacturers and technology providers 
for the positioning business our high end multiconstellation 
satellite simulators experienced strong sales growth one particularly 
notable win into the second and final phase of the european space 
agency’s galileo programme ensures spirent’s recognition as the  22 spirent communications plc annual report 2010
business gr oup devel opment and perf ormance continued
reference supplier of gnss test equipment to that programme sales 
of midrange gnss simulators to the commercial market were also up 
compared to 2009 with demand primarily being driven by the need 
to test combined gps and glonass
during 2010 we also strengthened our services organisation 
through integration of our global team enhancing our capacity to 
deliver support and professional services for our solutions in all  
of our key markets
profitability
operating profit reported by performance analysis increased by  
25 per cent to 97 9 million this was due to a large extent to the 
growth in revenue gross profit margin reduced by one percentage 
point compared to full year 2009 as a result of large contract 
discounting and the product mix of sales including an increased 
proportion of revenue from third party products gross margins are 
well within the normal range for the business overheads increased 
at a much lower rate than revenue growth rising by 8 per cent over 
the prior year this operating leverage expanded return on sales to 
268 per cent for 2010 compared to 247 per cent for 2009 
product development
our networks  applications business released several innovative 
market leading solutions in 2010 for spirent testcenter new 
capabilities included a high density hypermetrics 40100g ethernet 
module combining 100g and two 40g ethernet test ports to enable 
the highest performance and scale for routing emulation and 
application traffic we also released the industry’s highest 
performing 10g ethernet module for service provider multiplay 
testing and a hypermetrics fibre channel module for endtoend 
converged data center testing 
for lte evolved packet core testing we introduced a new landslide 
appliance a high performance solution to ensure nextgeneration 
wireless mobility performance a new high performance version of 
the avalanche appliance was also released offering multi 10g 
ethernet capacity and focusing on high performance true endtoend 
applications and security testing another major spirent innovation 
released in 2010 was avalanche virtual the industry’s first  
“allinone” cloud testing solution designed to test and measure the 
pass of virtualised network infrastructures and of applications 
deployed in the cloud spirent won a prestigious “2010 best of 
interop” award for this innovative solution
wireless test solutions delivered in 2010 addressed our customers’  
3g and 4glte testing needs spirent brought to market a family of  
test solutions that validate the performance of lte devices and their 
ability to move between lte and legacy wireless networks we also 
introduced powerful flexible network emulation and radio frequency 
“rf” test solutions for lte device development we grew our umts 
business with the introduction of more development library test 
solutions which provide developers with a highly configurable bench 
top umts wireless network to test their devices and applications 
the release of additional capabilities to test the performance of 
smartphones when utilising location based services maintained 
spirent’s leadership in this rapidly expanding area commercial 
availability of a new spirent test solution to enable the capture of 
realworld wireless conditions in the field and to replay them in the  
lab made it possible for device and base station developers as well  
as carriers to reduce their need for costly and time consuming  
drive testing 
in the positioning business there was a focus on growing our tailored 
solutions which develop or customise high end systems for 
individual customer requirements during 2010 we also launched a 
new test solution that enables labbased testing of hybrid wifi and 
satellite positioning technologies for mobile devices  620 526 570
2008 2009 2010
89 75 130
2008 2009 2010
144 143
228
2008 2009 2010

return on sales
23 spirent communications plc annual report 2010
overview
business review
governance
financial statements
divisional revenue
divisional operating profit
divisional highlights
8
73
demand driven by need for increased data  –
capacity across the industry
key wins for our stc live ethernet solution –
increased activity around triple play and  –
inhome field testing
profit up 73 reflects revenue growth and  –
beneficial product mix
service assurance
market conditions
2010 saw market conditions begin to improve in both the service 
assurance and field test markets as the need grew for service 
providers to address increased bandwidth demands for business 
residential triple play and mobility services increased investment by 
service providers was driven by competition increased complexity in 
the access network ipethernet enablement and a focus on 
improving the efficiency of their field forces these factors helped 
drive additional wins for our spirent testcenter live “stc live” 
ethernet solution at major wireline and wireless service providers in 
north america as well as at a large european multiple system cable 
operator “mso” in addition we continue to see increased activity 
around triple play services and inhome field testing as evidenced by 
five of the top eight us cable msos ramping up their purchases for 
our techx flex handheld products
growth in capital spending from service providers worldwide is 
expected to continue as improving economic conditions drive further 
demand for ethernet services and higher bandwidth residential 
service offerings service provider investments are expected in 
business ethernet offerings ip video 3g and lte services this 
growth will in turn drive investment in ethernet service assurance 
solutions for wireless backhaul and triple play services by the 
operations administration and maintenance organisations within the 
service providers in the field test market the transition from adsl to 
vdsl2 based services and the growing sophistication of inhome ip 
networks over coax and wireless will drive new field test tool 
investment decisions by service providers
revenue
service assurance revenues increased by 8 per cent in 2010 to 
57 0 million compared to 526 million in 2009 as service providers 
began to increase their capital spend the year was highlighted by 
strong demand for test solutions for business services and to support 
the growing bandwidth needs in the wireless backhaul there were 
key wins for our stc live ethernet solution at major wireline and 
wireless service providers in north america as well as at a large 
european cable mso in addition we continue to see increased 
activity in field test for triple play services and inhome testing 
 million
 million 24 spirent communications plc annual report 2010
business gr oup devel opment and perf ormance continued
profitability
with the increase in revenue in 2010 and continued tight 
management control of expenses the service assurance business 
improved profitability by 73 per cent yearonyear to 130 million 
from 7 5 million in 2009 reflecting the benefit of product mix 
including a major software contract during this same period return 
on sales increased from 143 per cent in 2009 to 228 per cent in 2010 
product development
the focus remains on development of service assurance and field test 
solutions for nextgeneration networks in 2010 this included 
enhancing our stc live ethernet test and performance monitoring 
offerings for business services and wireless backhaul as well as 
adding iptv support to our line of 1g and 10g ethernet probes in 
field test we continued to add capabilities to our innovative techx 
flex platform including the release of an important new 1ghz rf and 
docsis 30 testing module for the cable mso market 614 578 594
2008 2009 2010
80 79 88
2008 2009 2010
130
137
148
2008 2009 2010
130
137
148
2008 2009 2010

return on sales
25 spirent communications plc annual report 2010
overview
business review
governance
financial statements
systems
divisional revenue
divisional operating profit
divisional highlights
3
11 
grew revenue in newly served commercial  –
and industrial markets
market recovery for industrial products –
 medical mobility market broadly flat –
 profit improvement of 11 due to exchange  –
rate losses in 2009 not repeated net of a 
oneoff charge in 2010
market conditions
during the year the market for our existing industrial products saw 
some recovery but more importantly we grew sales in newly served 
commercial and industrial markets 
sales within the medical mobility market were broadly flat and under 
price pressure from changes in us medicare funding the pressure on 
margins that these changes create is being countered by product cost 
reduction and improvements in supply chain management
revenue and profitability
revenue grew 3 per cent from 57 8 million to 594 million sales 
growth in 2010 has predominantly come from our industrial products 
which includes a mixture of improving commercial and industrial 
sales coupled with growth in new markets the profit improvement 
of 11 per cent over 2009 reflects the exchange rate hedging loss of 
23 million last year which did not repeat partially offset by a 
nonrecurring charge in 2010 of 11 million
product development
during the year we launched our new c3 ac pallet truck controller 
this addresses a new market area for us and provides an opportunity 
for future growth we also launched the new vsi wheelchair 
controller an innovative low cost controller designed to replace one 
of our older product lines
corporate costs
corporate costs are those expenses which cannot be attributed to the 
group’s operating segments and comprise the costs of the board and 
other corporate activities the costs were maintained at a similar level 
to 2009 at 52 million 2009 49 million 
 million
 million 26 spirent communications plc annual report 2010
financial revie w
“ in 2010 there has been recovery in the markets we 
serve together with increasing demand for our test 
solutions driven by the expansion in worldwide 
data connectivity and the shift within enterprises 
to virtualization and cloud computing our strategy 
of focusing on growing and emerging technology 
markets is delivering growth”
eric hutchinson
chief financial officer 27 spirent communications plc annual report 2010
overview
business review
governance
financial statements
the following table shows the key performance indicators monitored by the board to measure performance
first half 
2010
second half 
2010
full year 
2010 2009
change 

book to bill ratio
1
104 107 105 102
revenue  million 2272 2550 4822 4272 13
gross profit margin  655 676 666 663
operating profit
2
  million 499 646 1145 888 29
return on sales
2
  220 253 237 208
adjusted basic earnings per share
3
 cents 492 670 1162 886 31
free cash flow
4
  million 334 492 826 865 5
notes
1 ratio of orders booked to revenue billed
2 before sharebased payment and acquired intangible asset amortisation
3  adjusted basic earnings per share is based on adjusted earnings as set out in note 11 of notes to the consolidated financial statements and is at a constant tax rate of 304
4 operating cash flow after tax net interest and net capital expenditure
change to reporting currency
in may 2010 spirent announced a change to the group’s reporting 
currency during 2010 from sterling to us dollars the decision to 
change the group’s reporting currency was made in order to give a 
clearer understanding of spirent’s performance more closely 
reflecting the profile of the group’s revenue and operating profit 
which are primarily generated in us dollars or us dollarlinked 
currencies
since the change has been applied retrospectively all comparative 
numbers in the consolidated financial statements have been restated 
into us dollars
revenue
revenue was up 13 per cent compared with 2009 with all operating 
segments achieving revenue growth in 2010 there has been recovery 
in the markets we serve together with increasing demand for our test 
solutions driven by the expansion in worldwide data connectivity and 
the shift within enterprises to virtualization and cloud computing our 
strategy of focusing on growing and emerging technology markets is 
delivering growth
in 2010 the geographic profile of revenue did not change significantly 
the us which grew 17 per cent in 2010 over 2009 remained our 
major market and represented 52 per cent of revenue there was 
progress in asia and europe up 12 per cent and 15 per cent 
respectively compared with the prior year
 million 2010  2009 
europe 795 16 692 16
united states 2485 52 2124 50
asia pacific rest of americas africa 1542 32 1456 34
4822 100 4272 100
the book to bill ratio which is a measure of the visibility of our future 
revenues grew to 105 for the year compared with 102 for 2009 order 
intake for the group grew by 17 per cent over that for 2009 the rate of 
growth in order intake was lower in the second half of 2010 at 12 per 
cent as the group had seen recovery in the fourth quarter of 2009 
operating profit
operating profit was 1127 million compared with 868 million in 
2009  an increase of 30 per cent operating profit before sharebased 
payment and acquired intangible asset amortisation which is the 
measure of profit used by the group to evaluate performance increased 
by 29 per cent to 1145 million compared with 888 million in 2009 
return on sales increased to 237 per cent in 2010 from 208 per cent in 
2009 largely as a result of the benefit of operational gearing on higher 
sales costs were managed carefully throughout the year but further 
investment was made in product development in the fourth quarter in 
order to generate new solutions to meet future customer requirements 
spirent’s returns continue to be among the best in our industry 
currency impact
following the change to the group’s reporting currency to us dollars 
the effect of fluctuating exchange rates is minimal as the group’s 
revenue and profits are denominated predominantly in us dollars or 
us dollarlinked currencies
cost of sales and operating expenses
gross margin was slightly higher than the prior year at 666 per cent 
2009 663 per cent there has been an improving trend in gross 
margin over a number of years achieved through design for lower cost 
of manufacture and outsourcing activities however improvements 
were partially offset in 2010 by large contract discounting and 
product mix including an increased proportion of revenue from third 
party products which carry a lower margin 28 spirent communications plc annual report 2010
financial revie w
the development of new innovative test solutions is critical to the 
success of our business hence product development forms a substantial 
proportion of our overall operating expenses we work closely with our 
customers focusing on their requirements for test solutions and invest 
in key areas that represent their future success product development 
expense in 2010 increased from 7 46 million in 2009 to 802 million 
but was down as a percentage of sales to 166 per cent from 17 5 per 
cent in 2009 the majority of this spend 659 million 2009 607 
million was incurred in our performance analysis segment 
other operating expenses were higher at 1282 million in 2010 
compared with 1220 million in 2009 but as a percentage of sales 
this was also lower at 266 per cent compared with 286 per cent in 
2009 the absolute increase is principally a result of the increase in 
variable sales and marketing expense required to achieve higher 
revenue in addition an expense for foreign exchange hedging losses 
of 50 million in 2009 was not repeated 
sharebased payment of 04 million 2009 06 million 
and acquired intangible asset amortisation of 14 million  
2009 14 million are included in other operating expenses  
it is anticipated that the sharebased payment charge will rise  
to 12 million in 2011
finance income and costs
strong cash generation has increased funds available for investment 
funds are held in short term bank deposits in the uk and us and earn 
market rates of interest interest rates remained low and some of our cash 
deposits were switched from sterling to us dollars which attract a lower 
interest rate as a consequence of the change in reporting currency and a 
reassessment of business requirements overall finance income was up 
slightly at 08 million for 2010 compared with 06 million for 2009 
finance costs were 13 million 2009 25 million these included 
12 million in respect of the defined benefit pension plans 2009 17 
million being the expected return on pension plan assets less the 
interest charge on the unwinding of the liabilities over time it is 
expected that the charge for the pension plans will be approximately 
the same for 201 1 the remainder of the interest charge relates to the 
discounting of leasehold provisions of 01 million 2009 03 million 
in 2009 finance costs also included bank fees of 05 million
profit before tax 
profit before tax was 1122 million compared with 849 million for 
2009 an increase of 32 per cent 
tax
the group has in recent years reported a low effective tax rate due to the 
use of tax losses brought forward in 2009 the group recognised the 
benefit of these losses in accordance with accounting standards and 
having recognised these losses the future tax rate was expected to rise
for 2010 the tax charge for the group was 331 million representing 
a current year effective tax rate of 304 per cent an increase as 
expected from 148 per cent for 2009 the tax rate has not increased 
in 2010 as much as anticipated at the time of the halfyear 
announcement as we benefited in the second halfyear from the 
renewal of the research  experimental tax credits in the us  
the net tax credit of 63 million in 2009 includes the benefit of   
217 million for a change in estimate in respect of the recovery of 
deferred tax assets 
at 31 december 2010 deferred tax assets amounting to 313 million 
have been recognised on the balance sheet 31 december 2009 425 
million at 31 december 2010 there are deferred tax assets amounting 
to a tax value of 27 5 million which remain unrecognised in respect of 
unutilised nontrading loan relationship losses 256 million and 
temporary differences 19 million 31 december 2009 308 million 
for 201 1 it is expected that the effective tax rate will be in the region of 
315 per cent
earnings per share
basic earnings per share for the group was 1 177 cents for 2010 
compared with 1367 cents for 2009 with 2009 benefiting from the tax 
effects described above a low effective tax rate and a deferred tax 
credit of 217 million to recognise deferred tax assets 
in order to provide a measure to enable periodonperiod comparisons 
to be made of its performance and considering the large increase in 
the effective tax rate in 2010 the group is reporting adjusted basic 
earnings per share calculated at a constant tax rate of 304 per cent
adjusted basic earnings per share at a constant tax rate before prior 
year tax and also excluding the benefit of the deferred tax credit of 
217 million in 2009 referred to above was 1 162 cents compared with 
886 cents for 2009 this is an improvement of 31 per cent yearonyear 
weighted average ordinary share capital was 6722 million shares 
compared with 667 0 million for 2009 at the year end the shares in 
issue ranking for dividend were 6705 million
financial risk management
the key objective of the group’s treasury department is to manage 
the financial risks of the business and to ensure that sufficient 
liquidity is available to the group all treasury activity operates within 
a formal control framework the board has approved treasury 
policies and guidelines and periodically reviews treasury activities 
additionally it is the group’s policy that speculative treasury 
transactions are expressly forbidden
spirent’s financial risk management objectives and policies and its 
exposure to risks are discussed in note 25 of notes to the consolidated 
financial statements 29 spirent communications plc annual report 2010
overview
business review
governance
financial statements
financing and cash flow
cash and cash equivalents increased to 2239 million at 31 december 
2010 compared with 1739 million at 31 december 2009 the group 
continues to be debt free the majority of the cash is held in bank 
deposits in the uk and us and 37 per cent of the balance is 
denominated in sterling currency translation has decreased cash and 
cash equivalents by 45 million in 2010
operating activities generated 994 million of cash in the year 
compared with 961 million in 2009 free cash flow is set out below
 million 2010 2009
cash flow from operations 1169 1063
tax paid 175 102
cash inflow from operating activities 994 961
interest received 08 06
net capital expenditure 176 102
free cash flow 826 865
cash conversion continued to be strong with free cash flow of 826 million 
for 201 0 which represents 1 04 per cent of reported earnings for 2009  
after adjusting for the onetime deferred tax credit of 217 million which 
was a noncash item the conversion ratio was 124 per cent 
the reduction in free cash flow in 2010 despite an improvement in 
earnings is due to a number of factors more normal levels of tax 
payment 17 5 million in 2010 compared with 102 million in 2009 as 
brought forward tax losses in the us had been utilised in previous years 
an increase in working capital of 42 million due to higher trading 
activity in 2010 2009 reduction of 108 million and an increase in net 
capital expenditure to 17 6 million 2009 102 million
net interest received was slightly higher at 08 million compared with 
06 million in 2009 due to increased funds available for investment
cash outflow for on market share repurchases amounted to 
197 million in 2010 2009 11 million cash of 47 million 
was received from the exercise of employee share incentives  
2009 38 million
in 2010 the group settled the final dividend of 100 cents for the 
year ended 31 december 2009 and paid an interim dividend of 
110 cents per share in total a net cash outflow of 137 million 
2009 121 million for dividends to shareholders
a transfer of 06 million 2009 22 million was made from the long 
term cash deposit set up as a consequence of a capital reorganisation 
in 2004 as we settled lease obligations to allow release of funds
net increase in cash and cash equivalents for 2010 in total was 
545 million compared with 793 million for 2009
defined benefit pension plans
the group operates two funded defined benefit plans which are in the uk
the accounting valuation of these plans at the end of 2010 was a  
surplus of 7 7 million compared with a net surplus of 05 million at  
31 december 2009 this is comprised of a surplus of 7 1 million in the 
main plan 31 december 2009 deficit 05 million and a surplus of  
06 million in the other plan 31 december 2009 10 million the 
improvement in funding in the main plan is due to an increase in the 
value of assets as markets recovered net of a rise in the liabilities as a 
result of changes in the assumptions
the actuarial valuations at 1 april 2009 of the plans were completed 
during 2010 such a valuation involves a complete review of all the 
assumptions including longevity and funding there was a deficit on the 
main uk plan arising from the valuation the company has agreed with 
the trustees of this plan to pay additional contributions of £16 million 
24 million per annum to fund the deficit and these contributions are 
being paid in monthly instalments which commenced in june 2010  
the group has also reported a liability of 06 million 2009 06 million 
in respect of uk unfunded plan liabilities
capital structure 
the company repurchased 104 million shares in 2010 at a cost of  
197 million 2009 06 million at a cost of 09 million of the shares 
repurchased 98 million were cancelled and 06 million were placed in 
trust to deliver to employees in relation to certain share incentives
shares were repurchased as part of the company’s policy to manage 
dilution attributable to its share incentive schemes
dividend
following the change to the group’s reporting currency dividends are 
determined in us dollars and paid in sterling at the exchange rate 
prevailing when the dividend is proposed for prior years the dividend 
was determined in sterling
due to the strong performance in 2010 the board are recommending the 
payment of a final dividend for 2010 of 140 cents 086 pence per share 
which with the interim dividend of 110 cents 069 pence per share paid 
in september 2010 brings the full year dividend to 250 cents 155 pence 
per share and is covered 46 times by adjusted earnings this is an increase 
of 30 per cent over the full year dividend for 2009 of 193 cents 121 pence
subject to approval by the shareholders at the annual general meeting 
the final dividend will be paid on 5 may 201 1 to ordinary shareholders on 
the register at 1 1 march 201 1 payment to adr holders will be made on  
12 may 201 1
post balance sheet events
spirent announced on 15 february 2011 the acquisition of the 
fanfare group inc for a cash consideration of 150 million the 
transaction was completed on 16 february 2011 30 spirent communications plc annual report 2010
corporate so cial responsibility statement corporate responsibility is integral to the way spirent conducts 
its business and we are committed to advancing our policies  
and systems across the group to ensure that we address all 
aspects of corporate social responsibility “csr” these include 
in particular our corporate practices in terms of ethical behaviour 
how we motivate support and reward our employees how we 
care for the environment and our community involvement
the board takes ultimate responsibility for csr and is committed to 
developing and implementing appropriate policies while adhering to 
a fundamental commitment to create and sustain long term value for 
shareholders
ethics
spirent expects that all of its business is conducted in compliance 
with high ethical standards of business practice we apply these 
standards to all dealings with employees customers suppliers and 
other stakeholders during 2010 spirent’s employees were again 
clearly reminded of the standards expected of them by the regular 
communication and explanation of spirent’s vision mission and 
values statements
the group’s ethics policy which has been approved by the board is 
available on our website at wwwspirentcom our ethics policy has 
been developed to ensure that the group’s business is conducted in 
adherence with high ethical and legal principles and sets standards 
of professionalism and integrity for all employees and operations 
worldwide
the following is a summary of the ethics policy
all employees have the right and responsibility to ensure that  –
spirent’s business is conducted with high ethical and legal 
principles
our policy is to operate within applicable laws –
discrimination or harassment of any kind will not be tolerated –
as a matter of policy we do not make political donations –
no bribes shall be given or received –
conflicts of interest must be avoided –
we aim to be a responsible partner within our local   –
communities and
employees are encouraged and supported to report in  –
confidence any suspected wrongdoings “whistleblowing”
appropriate ethical behaviour is reviewed as part of the group’s 
internal control process
spirent participates in the second harvest food bank 31 spirent communications plc annual report 2010
overview
business review
governance
financial statements
employees
spirent is its employees to sustain our competitive advantage the 
group is committed to creating and maintaining an environment 
where all employees can develop to their fullest potential have the 
opportunity to give back to their communities and advance their 
careers spirent employees come from a variety of diverse 
backgrounds and bring with them a broad range of skills and 
experiences from engineering to sales to supply chain as well  
as business functions such as finance human resources and 
information technology by the end of 2010 we employed more  
than 1400 people in over 25 locations in 12 countries 
to sustain our competitive advantage and bring together this 
culturally diverse group of employees spirent has built a global 
culture based on four values – being creative competitive customer 
focused and collaborative these values form the foundation of 
spirent’s ability to inspire innovation and enrich the lives of millions 
of people around the world 
by encouraging and rewarding innovative thought and action by our 
employees across the globe we inspire innovation within spirent our 
industry and our customers to accomplish this spirent employees 
have a number of career paths and internal recognition programmes 
for both technical and nontechnical staff these development 
opportunities are structured to align with our organisational 
objectives and to help employees in furthering their career 
aspirations for example we recently implemented a technical career 
ladder across the global engineering organisation to build our 
technical expertise and provide future career opportunities internal 
transfers and job rotations for example greatly benefit the career 
development of our engineering team as a result of these activities 
and others more than 7 per cent of employees received a promotion 
in 2010 
employees are provided with numerous learning and development 
opportunities to fulfill their potential for example our us employees 
enjoy a tax free tuition reimbursement benefit for classes taken 
towards college level degrees such as a master of business 
administration or master of science in electrical engineering a wide 
variety of courses and training opportunities are also available to 
employees globally to enhance their skills we recently implemented 
an engineering managers training course to drive stronger leadership 
in areas such as project management performance management and 
employee development spirent receives training grants that allow 
employees to take onsite skill training or attend classes at a local 
community college in software and other applicable subjects in 
china we provided new manager training english education and 
communication skills workshops
leadership and management development programmes are regularly 
reviewed and updated as the competition for talent increases and the 
leadership needs of our business grow formal performance reviews 
are conducted annually and are linked to the goals of the 
organisation an online performance management tool was 
introduced to all employees in early 2010 to align individual goals 
with company strategies and objectives 
spirent demonstrates that it values its employees through several 
reward and recognition programmes one way we reward and 
recognise excellence is through our global recognition programme 
which provides spot awards and onetime cash incentives to 
recognise exemplary contributions that demonstrate one or more of 
our key values spirent provides project based incentives to recognise 
and reward employees for extraordinary work that results in 
significant overachievement of critical projects in 2010 spirent 
reinstituted its patent award programme which rewards employees 
for being innovative while protecting the company’s investment and 
intellectual rights and property because spirent believes in sharing 
its success with its employees all employees now participate in 
some form of variable compensation for example the growth 
sharing plan provides an annual incentive payment based on the 
achievement of corporate growth and profitability goals because our 
employees have regularly asked for the opportunity to participate in 
spirent’s growth as our investors do starting in january 2011 us and 
uk employees may purchase spirent’s shares via monthly payroll 
deductions we plan to expand this opportunity to other locations 
over time
along with career opportunities and competitive compensation the 
importance of twoway communication is recognised particularly as it 
relates to the business and its performance our employees’ opinions 
matter to us in march 2010 employees were asked for their views on 
a wide range of issues relating to compensation and benefits 
communication employee engagement and commitment 
innovation manager quality and work environment the survey 
invited employees to rate each area and provide written comments 
about improvements recommended in the organisation more than 
70 per cent of our employees globally responded and we developed 
specific action plans based on the employee feedback that will 
increase the engagement of our employees and foster a stronger 
organisational culture in addition informal meetings between many 
of spirent’s executives and small groups of employees were and 
continue to be held on a regular basis with the aim of sharing 
perspectives among a broad cross section of our team members 
other tools aimed at facilitating twoway communication include 
regular all employee meetings with our ceo and other executives  
at all locations employee focus group meetings and the continued 
expansion of our employee intranet 
the group is committed to providing equality of opportunity to all 
existing and prospective employees without unlawful discrimination 
on the basis of religion disability gender age marital status sexual 
orientation race ethnicity or any other protected status with regard 
to employees who become disabled the policy is to take all  32 spirent communications plc annual report 2010
corp orate s ocial resp onsibility state ment continued
reasonable steps including retraining to ensure that they can remain 
in employment wherever practicable we encourage diversity and 
opportunity which is reinforced through the group’s ethics policy
health and safety
the chief financial officer is the director appointed by the board to 
have responsibility for the health and safety performance of the 
group no major health and safety issues were reported by the chief 
financial officer to the audit committee and board during the year
the health and safety risk profile of the group improved slightly again 
in 2010 as further group manufacturing moved to an outsourcing 
model and this trend is expected to continue in 2011 the main risks 
of the group continue to be based around final test and assembly of 
products and working environment issues such as ergonomics and 
repetitive strain injury the group continued to have very low 
accident rates in 2010 and no incidents required any hospitalisation
the group health and safety policy places responsibility for the 
management of health and safety on local management who are 
supported by local external advisers where necessary it is the 
group’s intention that each business unit should have a senior 
individual designated as being responsible for ensuring the business 
unit conforms to local statutory health and safety regulations as well 
as the group policy an annual questionnaire on health and safety 
performance is completed by all our business units and any issues 
are addressed and resolved independent external reviews of the 
company’s health and safety performance are conducted annually  
at selected business units regular designated health and safety 
awareness training programmes are also carried out
spirent recognises the importance that health and safety as with 
other corporate responsibilities is managed successfully throughout 
all levels of the organisation successful health and safety 
management contributes to spirent’s overall success by preserving 
and developing staff and physical resources thereby reducing costs 
and liabilities and is an expression of its corporate responsibility
spirent is committed to continually improving its health and safety 
performance and is also committed to employee wellbeing by 
encouraging the adoption of healthier lifestyles by its staff members 
regulatory requirements and the outline of care form the basis upon 
which spirent’s commitment is achieved by realistic planning review 
and development spirent continues to achieve a successful health 
and safety management programme and appropriate resources are 
made available for this purpose
environmental
the group’s environmental policy applies to the company and all  
its subsidiaries worldwide the group is committed to the concepts  
of pollution prevention minimising environmental impacts and 
ecoefficiency the main aim of spirent’s environmental policy is  
to comply with all applicable environmental legislation in all 
jurisdictions in which we operate and to adopt responsible 
environmental practices to achieve these goals the group strives  
to integrate sound environmental management into its business 
strategies and continually improve environmental performance  
for the benefit of all its stakeholders
the full policy can be found at wwwspirentcom in the about us 
section under corporate governance 
the group’s main environmental impact is due predominantly to the 
effects produced by offices housing employees internal it systems 
and travel all business units continue to take positive steps to reduce 
energy consumption such as better space utilisation more efficient 
running of equipment and machinery and sensor controlled 
equipment during 2010 the group reduced the square feet used by 
94 per cent to 634000 square feet 2009 700000 square feet  
we have also reduced the number of servers in our it data centres  
by 20 per cent we have invested in and are actively using video 
conferencing to reduce travel across the group where possible 
business units monitor energy consumption water consumption and 
waste production environmental waste management in the group 
continues to improve with most business units operating waste 
minimisation schemes mainly focusing on increased recycling one  
of our uk businesses is iso14001 registered
the vast majority of our products continue to be manufactured by 
outside contract manufacturers and we check the environmental 
policies of these suppliers through audits and surveys spirent’s largest 
contract manufacturer responsible for 60 per cent of our contract 
manufacturing services is not only iso14001 certified but also has an 
extensive co
2
 reduction programme in 2009 the programme reduced 
the manufacturing site co
2
 output as measured by reduced base line 
electrical consumption by 10 per cent over 2008 this is a reduction in 
co
2
 emissions of approximately 21 million kilograms in 2009
improvements in spirent’s order fulfilment logistics have led to 
significant reductions in air freight and corresponding reductions in 
carbon emissions orders for customers in apac and emea regions 
are directly fulfilled from our key contract manufacturer in asia this 
eliminates air freight to the us and then back to apac and emea 
customers 28 per cent of performance analysis’ shipments 
representing approximately 51000 kilograms of freight now ship 
direct from spirent’s asia contract manufacturer
wherever possible our products are designed and manufactured to 
take account of the recycling and disposal of the product at the end  
of its lifecycle our products are also designed to reduce the amount 
of power consumed two examples of this are our 1gb and 10gb 
products where we have reduced the power consumption by port  
in 2010 by 42 per cent and 70 per cent respectively 33 spirent communications plc annual report 2010
overview
business review
governance
financial statements
our business units comply with both the waste electrical and  
electronic equipment regulations and the batteries directive  
new products are designed to meet the restriction of hazardous 
substances directive “rohs” also known as directive 200295ec 
even though spirent communications’ hardware products are classified 
as category nine monitor and control equipment and are therefore 
currently out of scope with the rohs directive all spirent 
communications’ hardware products will be in compliance with the 
rohs directive at such time they are brought in to scope under the uk’s 
new mandatory carbon emission trading scheme crc energy efficiency 
scheme spirent is only required to make an information disclosure
community
spirent aims to build stronger and healthier global communities 
through education charitable donations and support of nonprofit 
agencies in the communities in which we operate working with 
established nonprofit organisations maximises the impact of our 
community building initiatives
education
the group has established links with certain public and private 
nonprofit educational organisations to help students develop the 
skills needed to succeed in the global economy throughout 2010  
we continued to support education by offering internships and work 
experience programmes as part of junior achievement of the 
national capital area many of our maryland office employees are 
involved in local activities that enabled volunteers to teach students 
financial literacy work readiness and entrepreneurship volunteers 
served as role models providing both education and inspiration in 
our new jersey office we partnered with a local high school to 
provide job shadowing opportunities to students interested in 
pursuing a career in engineering 
in the us we hired 11 interns in multiple locations ultimately hiring 
more than half as regular spirent employees in addition 12 new 
engineering graduates were hired in our honolulu calabasas and 
sunnyvale offices during 2010 spirent plans to expand both the new 
graduate and intern programs during 2011 building our relationships 
with local universities and colleges
spirent also periodically provides work experience opportunities  
for local students in our beijing office we increased the number of 
onsite internship opportunities to more than 20 students from top 
universities in china including university of science and technology 
beijing the graduate school of beijing institute of technology and 
beihang university these internships help students develop 
professional knowledge as well as enhance their competitiveness in 
society our engineering managers are routinely invited to speak at 
these universities about spirent and career opportunities in the 
engineering field
local community support of nonprofit agencies
we recognise the significance of our communities through our 
relationship with local nonprofit agencies our employees help their 
communities by volunteering their time to various programmes and 
donating materials and equipment to local causes
the group has formed lasting partnerships with several local 
nonprofit organisations to provide essential resources and  
services to those in need during the winter holiday season in 2010 
our employees in the us participated in a food drive for the los 
angeles regional food bank and also for the santa clara county 
second harvest food bank 
charitable donation policy
our businesses are encouraged to support the particular needs 
of their local community by contributing to local charities and 
participating in community initiatives support takes the form of 
employee time and skills gifts in kind and cash donations spirent 
donated to the california highway patrol – chips for kids and 
employees participated in the angel tree programme by working with 
the salvation army to purchase christmas gifts for underprivileged 
children in ottawa and beijing employees provide school assistance 
to needy children following the earthquake in qinghai china our 
employees delivered donations to the stricken area in the uk spirent 
sponsored employees who participated in charity fund raising events 
such as the british heart foundation’s london to brighton bike ride 
and the brighton marathon
in addition to these employee activities spirent made charitable 
cash donations of 81000 in 2010 2009 143000
team spirent london to brighton bike ride 2010 34 spirent communications plc annual report 2010
board of direct ors
1
3
5
2
4
6 35 spirent communications plc annual report 2010
overview
business review
governance
financial statements
1 alex walker 64 
n
chairman
alex walker was appointed to the board on 22 december 2006 and 
was appointed chairman of the company on 4 march 2010 having 
previously served as senior independent nonexecutive director and 
chairman of the remuneration committee he was chief executive of 
yule catto  co plc until 17 august 2006 and until 23 april 2010 was 
a nonexecutive director chairman of the remuneration committee 
and member of the audit and nomination committees of rotork plc
2 bill burns 43
chief executive officer
bill burns was appointed chief executive officer on 6 november 
2008 having previously led the group’s communications division  
he is responsible for overall leadership strategy investments 
coordination of resources and leveraging spirent’s breadth and  
depth of technology across all of spirent’s business units
3 eric hutchinson 55
chief financial officer
eric hutchinson was appointed finance director on 1 january 2000 
having previously been responsible for all financial reporting and 
control within the group he is a fellow of the chartered association 
of certified accountants and a member of the financial reporting 
review panel
4 ian brindle 67 
anr
senior independent nonexecutive director
ian brindle was appointed to the board on 22 december 2006  
and is the senior independent nonexecutive director and chairman 
of the audit committee he was previously uk chairman of 
pricewaterhousecoopers and deputy chairman of the financial 
reporting review panel he serves as nonexecutive chairman of 
sherborne investors guernsey a limited and as a nonexecutive 
director on the boards of fc asset management plc 4imprint group 
plc and elementis plc
5 duncan lewis 59 
anr
independent nonexecutive director 
duncan lewis was appointed to the board on 1 july 2007  he was chief 
executive officer of vislink plc until 31 march 2011 when he stepped 
down after completing its restructuring until october 2008 he was 
senior adviser to the carlyle group assisting them in developing 
strategy and identifying investments in the telecommunications and 
media sectors worldwide
6 tom maxwell 63
 anr
independent nonexecutive director
tom maxwell was appointed to the board on 1 october 2007 and is 
chairman of the remuneration committee until september 2007  he 
was investment director and head of the uk growth  income product 
group at martin currie investment management in edinburgh he is a 
member of the chartered institute of bankers in scotland and a 
member of the society of investment professionals  cfa institute 
statements on the independence of board members are given in the 
directors’ statement on corporate governance on page 41
further biographical details of the directors can be found on the 
company’s website at wwwspirentcom
a
 member of audit committee
n
 member of nomination committee
r
 member of remuneration committee 36 spirent communications plc annual report 2010
rep ort of the direct ors
the directors present their annual report to the shareholders together 
with the audited consolidated financial statements of the group and the 
parent company financial statements for the year to 31 december 2010
business review
the purpose of the annual report is to provide information to the 
shareholders of the company 
reviews of the group’s activities during the year the position at the 
yearend and developments since that date are set out in the 
chairman’s statement chief executive officer’s review the directors’ 
statement on corporate governance and the business review
the business review explains financial performance key performance 
indicators the position at the year end any post balance sheet events 
any likely future developments and a description of the principal risks 
and uncertainties facing the group and how these are managed
the annual report contains certain forwardlooking statements with 
respect to the operations performance and financial condition of the 
group by their nature these statements involve uncertainty since 
future events and circumstances can cause results to differ from 
those anticipated the forwardlooking statements reflect knowledge 
and information available at the date of preparation of this annual 
report and the company undertakes no obligation to update those 
forwardlooking statements
principal activities
the principal activities of the group are set out on page 18 of this 
annual report
results and dividends
the consolidated income statement is on page 54 profit for the 
financial year attributable to equity shareholders amounted to  
791 million 2009 912 million
following the change in reporting currency dividends will be 
determined in us dollars and paid in sterling at the exchange rate 
prevailing when the dividend is proposed a final dividend of  
140 cents 086 pence per ordinary share is recommended by the 
board for the year to 31 december 2010 2009 100 cents 066 
pence for which approval will be sought from shareholders at the 
company’s 2011 annual general meeting “2011 agm” on 4 may 
2011 to be paid on 5 may 2011 adr holders on 12 may 2011 to 
those shareholders whose names are on the register of members on 
11 march 2011 
together with the interim dividend of 110 cents 069 pence per 
ordinary share 2009 093 cents 055 pence which was paid to 
shareholders on 16 september 2010 this amounts to a total dividend 
for 2010 of 250 cents 155 pence per ordinary share 2009 193 cents 
121 pence
share capital and control
the company has a single class of share which is divided into 
ordinary shares of 3
1
 3 pence each each ordinary share carries one 
vote and all of the ordinary shares rank pari passu there are no 
special control rights relating to the ordinary shares
at the date of this report 6753 million ordinary shares of 3
1
 3 pence 
each had been issued which are fully paid up and are listed on the 
london stock exchange the company also operates a level 1 
american depositary receipt “adr” programme with each adr 
representing four ordinary shares the adrs trade on the us 
overthecounter market and the bank of new york mellon is the 
authorised depositary bank for the programme further details on 
share capital are set out in note 27 to the consolidated financial 
statements and note 16 to the parent company financial statements
the rights including those relating to voting obligations and any 
restrictions on transfer relating to the company’s ordinary shares as 
well as the powers of the company’s directors are set out in the 
company’s articles of association a copy of which can be found on 
our website at wwwspirentcom or can be obtained from companies 
house or by writing to the company secretary the company’s 
articles of association may only be amended by a special resolution 
at a general meeting of shareholders changes to the articles of 
association were approved at the 2010 agm and became effective at 
the close of the meeting on 5 may 2010 
there are no restrictions on the transfer of ordinary shares in the 
capital of the company other than certain restrictions which may from 
time to time be imposed by law for example insider trading law in 
accordance with the listing rules of the financial services authority 
certain employees are required to seek the approval of the company 
to deal in its shares
the company is not aware of any agreements between shareholders 
that may result in restrictions on the transfer of securities or on  
voting rights
during the year to 31 december 2010 options and rights exercised 
pursuant to the company’s share incentive plans resulted in the 
allotment of 66 million new ordinary shares
a further 04 million new ordinary shares have been allotted under 
the share incentive plans between the end of the financial year and 
the date of this report
at each annual general meeting the directors seek authority to allot 
shares for cash and to disapply preemption rights within prescribed 
limits at the 2011 agm authority will be sought to allot new ordinary 
shares up to a nominal value of £7 505723 which is equal to 333 
per cent of the company’s issued share capital as at 10 march 2011 37 spirent communications plc annual report 2010
overview
business review
governance
financial statements
the company has established two employee benefit trusts in 
connection with the operation of the company’s share incentive plans 
the spirent employee share ownership trust “esot” and the spirent 
sharesave trust “sst” the trustees of both trusts have waived their 
right to receive dividends on any ordinary shares held by them except 
for a nominal amount of 001 pence other than for those ordinary shares 
held in the esot which are the beneficial property of an employee
shareholder for further details on the employee benefit trusts see 
“investment in own ordinary shares” in note 27 to the consolidated 
financial statements and note 16 to the parent company financial 
statements trustees of both trusts do not vote their ordinary shares 
except for those ordinary shares held in the esot which are the 
beneficial property of an employeeshareholder which the trustees will 
vote in accordance with the instructions received from the beneficial 
owner 
the company does not have agreements with any director or 
employee that would provide compensation for loss of office or 
employment resulting from a takeover except that provisions of the 
company’s share incentive plans may cause outstanding unvested 
options and awards granted to employees under such plans to vest 
on a takeover as follows
share incentive plan
change 
of control 
provisions in 
the rules
effect on 
vesting
performance 
condition
2005 employee incentive plan yes prorated still applies
spirent stock incentive plan no none na
significant agreements
a group company has a significant agreement with a contract 
manufacturer which the company considers is essential to its business 
and which it intends to keep in place until at least april 2013
the company is not aware of any significant agreements to which it is 
party that take effect alter or terminate upon a change of control of 
the company following a takeover
return of capital
the company was authorised at the 2006 agm to repurchase up to 
1499 per cent of its own issued ordinary shares within certain limits 
and as permitted by the company’s articles of association this 
authority has been renewed at each agm since 2006 reducing to 
999 per cent at the 2010 agm since the company began returning 
capital to shareholders in may 2006 a total of £1886 million has been 
returned through the repurchase of 3299 million ordinary shares
during 2010 a total of 98 million ordinary shares each with a  
nominal value of 3
1
 3 pence were repurchased for an aggregate 
consideration of £123 million and cancelled immediately following 
repurchase this represents 15 per cent of the company’s issued 
ordinary share capital at the beginning of 2010 the company has 
not repurchased any further ordinary shares between the end of the 
financial year and the date of this report
the company will seek authority to repurchase up to 999 per cent  
of its own ordinary shares at the 2011 agm to facilitate any further 
return of capital if the board concludes that it is in the best interests 
of shareholders
substantial shareholdings
at the date of this report the company had been notified of the 
following significant interests in its ordinary shares under the 
disclosure and transparency rules of the financial services 
authority
shareholding made up of
total 
holding
 of 
company’s 
total voting 
rights
ordinary 
shares
contracts for 
difference
blackrock inc 83096790 35705552 118802342 1759
prudential plc 67614431 – 67614431 1001
ameriprise financial inc 38520235 – 38520235 570
axa group of companies 37856516 – 37856516 561
artemis investment management limited 32940888 – 32940888 488
standard life investments ltd 32370026 – 32370026 479
aviva plc 30826697 – 30826697 457
legal  general group plc 26423720 – 26423720 391
sun life assurance company of canada uk ltd 23382347 – 23382347 346
hermes equity ownership services limited 22116033 – 22116033 328
deutsche bank ag 21740213 – 21740213 322
total of significant holdings 416887896 35705552 452593448 6702
others 222709205 3298
total number of ordinary shares in issue 675302653 10000 38 spirent communications plc annual report 2010
report of the directors continued
board of directors
the names and brief biographical details of the current directors are 
shown on page 35
election and reelection of directors
the company’s articles of association require that directors offer 
themselves for reelection every three years and that new directors 
appointed by the board offer themselves for election at the next 
annual general meeting following their appointment however in 
accordance with the new uk corporate governance code which 
replaces the existing combined code on corporate governance for 
accounting periods beginning on or after 29 june 2010 the board has 
agreed that all directors will stand for reelection at the 2011 agm  
the board recognises that some shareholders have expressed 
concern that annual reelection of directors could encourage them to 
take a short term view the board is confident however that as more 
fully explained in the report on directors’ remuneration on pages 45 
to 52 the company’s remuneration policies encourage a 
performance based culture which reinforces behaviour which will 
lead to the continued long term development of the business and 
align executive directors’ interests with those of shareholders
directors’ interests
the directors’ interests including any connected persons in the 
issued ordinary share capital of the company are set out in the 
report on directors’ remuneration on pages 45 to 52
directors’ indemnity arrangements
the company has purchased and maintained throughout the year 
directors’ and officers’ liability insurance in respect of itself and its 
directors
in addition to the indemnity provision contained in the company’s 
articles of association the company has provided a deed of 
indemnity for the benefit of each of the directors of the company in 
respect of the costs of defending claims against them and any third 
party liabilities
other than these arrangements at no time during the year did any 
director hold a material interest in any contract of significance with 
the company or any of its subsidiary undertakings except for the 
service contracts between executive directors and the company
corporate social responsibility
the group’s corporate social responsibility statement appears on 
pages 30 to 33 this statement gives details of the group’s policies 
on ethics the environment health and safety charitable donations 
and involvement in the community
charitable donations of 81000 were made in the year 2009 
143000 this amount excludes operating units’ support for and 
participation in local community activities in accordance with the 
group’s ethics policy no political donations were made in the year 
2009 nil the group employs approximately 1470 people 2009 
1450 around the world and is proud of its history of being regarded 
as a responsible and respected employer the corporate social 
responsibility statement provides details of the group’s policies on 
employment training and development
research and development
product development and innovation are considered key strategies to 
maintain and improve the group’s competitive position and therefore 
continue to receive high priority this commitment is highlighted by 
the 802 million research and development spend during the year 
equivalent to 166 per cent of revenue 2009 746 million and 17 5 
per cent the group will continue to commit resources as appropriate 
to research and development
policy on payment of suppliers
group operating companies are responsible for agreeing the terms 
and conditions under which business transactions with their 
suppliers are conducted and it is group policy to comply with those 
terms and to make suppliers aware of them
at 31 december 2010 the company had an average of 46 days 
purchases outstanding in trade creditors 2009 59 days
corporate governance
the directors’ statement on corporate governance is set out on pages 
41 to 44 the statement of directors’ responsibilities in respect of the 
financial statements appears on page 40
going concern
the group’s business activities together with the factors likely to 
affect its future development performance and position are set out in 
the business review on pages 8 to 33 the financial position of the 
group its cash flows liquidity position and borrowing facilities are 
described in the financial review on pages 26 to 29 in addition note 
25 to the consolidated financial statements includes the group’s 
objectives policies and processes for managing its capital its 
financial risk management objectives details of its financial 
instruments and hedging activities and its exposures to credit risk 
and liquidity risk the group has considerable financial resources 
together with long term contracts with a number of customers and 
suppliers across different geographic areas and industries as a 
consequence the directors believe that the group is well placed to 
manage its business risks successfully despite the current uncertain 
economic outlook
after making enquiries the directors have a reasonable expectation 
that the group and the company have adequate resources to 
continue in operational existence for the foreseeable future 
accordingly they continue to adopt the going concern basis in 
preparing the annual report 39 spirent communications plc annual report 2010
overview
business review
governance
financial statements
disclosure of information to auditors
each of the directors of the company at the date of this report 
confirms that
so far as the director is aware there is no information needed by  –
the company’s auditors in connection with preparing their report 
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 information needed by the 
company’s auditors in connection with preparing their report and 
to establish that the company’s auditors are aware of that 
information
auditors
resolutions to reappoint ernst  young llp as auditors and to 
authorise the directors to determine their remuneration will be 
proposed at the 2011 agm
annual general meeting
the 2011 agm will be held at 1030am on wednesday 4 may 2011 at 
ubs 1 finsbury avenue london ec2m 2pp  united kingdom
by order of the board
rachel whiting
company secretary
3 march 2011 40 spirent communications plc annual report 2010
s tatement of directors’ responsibilities in respect  
of the annual report and the financial statements the directors are responsible for preparing the annual report the 
consolidated financial statements of the group and financial 
statements of the parent company
company law requires the directors to prepare financial statements 
for each financial year under that law they are required to prepare the 
consolidated financial statements of the group in accordance with 
international financial reporting standards “ifrs” as adopted by 
the european union “eu” and have elected to prepare the parent 
company financial statements in accordance with uk generally 
accepted accounting principles and applicable law
the consolidated financial statements of the group are required by 
law and ifrs to present fairly for each financial period the financial 
position and performance of the group the companies act 2006 
provides in relation to such financial statements that references in 
the relevant part of that act to financial statements giving a true and 
fair view are references to their achieving a fair presentation
the parent company financial statements are required by law to give 
a true and fair view of the state of affairs of the parent company
in preparing each of the consolidated financial statements of the 
group and parent company financial statements the directors are 
required to
select suitable accounting policies and then apply them  –
consistently
make judgements and estimates that are reasonable and prudent –
state for the audited consolidated financial statements of the  –
group whether they have been prepared in accordance with ifrs 
as adopted by the eu
state for the parent company financial statements whether  –
applicable uk accounting standards have been followed subject 
to any material departures disclosed and explained in the parent 
company financial statements and
prepare the financial statements on a going concern basis unless  –
it is inappropriate to presume the group and the parent company 
will continue in operational business for the foreseeable future
the directors confirm that they have complied with the above 
requirements in preparing the financial statements
the directors are responsible for keeping proper accounting records 
that disclose with reasonable accuracy at any time the financial 
position of the group and the parent company and enable them to 
ensure that its financial statements comply with the companies act 
2006 and for the group article 4 of the international accounting 
standards regulation they have general responsibility for taking 
such steps as are reasonably open to them to safeguard the assets of 
the group and to prevent and detect fraud and other irregularities
under applicable law and regulations the directors are also 
responsible for preparing a directors’ report a directors’ 
remuneration report and a statement on corporate governance that 
comply with the law and those regulations they are also responsible 
for the maintenance and integrity of the corporate and financial 
information included on the company’s website
legislation in the uk governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions
this annual report complies with the disclosure and transparency 
rules “dtr” of the financial services authority in respect of the 
requirement to produce an annual financial report
the annual report and consolidated financial statements are the 
responsibility of and have been approved by the directors
each of the directors confirms that to the best of his knowledge 
the consolidated financial statements of the group and parent  –
company financial statements prepared in accordance with the 
applicable set of accounting standards give a true and fair view of 
the assets liabilities financial position and the profit or loss of 
the company and the undertakings included in the consolidation 
taken as a whole and
the annual report includes a fair review of the development and  –
performance of the business and the position of the company and 
the undertakings included in the consolidation taken as a whole 
together with a description of the principal risks and uncertainties 
that they face
by order of the board
eric hutchinson
chief financial officer
3 march 2011 41 spirent communications plc annual report 2010
overview
business review
governance
financial statements
d irectors’ statement on corporate governance compliance
the board is committed to the highest standards of corporate 
governance and fully supports the principles laid down in the 
combined code on corporate governance published by the financial 
reporting council in june 2008 the “code” and in the uk corporate 
governance code published by the financial reporting council in 
june 2010 the “new code” the board is accountable to the 
company’s shareholders for good governance and this statement 
together with the report on directors’ remuneration on pages 45 to 
52 describes how the principles of the code were applied during the 
year under review and reports on the company’s compliance with its 
provisions disclosures relating to significant shareholdings voting 
rights election and reelection of directors amendment of the 
company’s articles of association and the directors’ power to issue or 
buy back shares are included in the report of the directors on pages 
36 to 39 it is the board’s view that the company was fully compliant 
with the provisions of the code throughout the period under review 
and with certain aspects of the new code to the date of this report
the board
as at 31 december 2010 the board comprised a chairman three 
independent nonexecutive directors and two executive directors 
the board operates within a framework of controls including a formal 
schedule of matters specifically reserved for its decision there is a 
clear division of responsibility at the head of the company the 
chairman alex walker being responsible for running the board and 
the chief executive officer bill burns being responsible for 
implementing strategy
the chairman and the nonexecutive directors contribute external 
expertise and experience in areas of importance to the company 
such as strategic investments corporate finance general finance and 
corporate governance they also contribute independent challenge 
and rigour to the board’s deliberations and assist in the development 
of the company’s strategy scrutiny of the performance of 
management in meeting agreed goals and targets and satisfying 
themselves of the integrity of the company’s internal controls and 
risk management systems the board believes that all of the directors 
devote sufficient time and attention as is necessary in order to 
perform their duties
the independence of each director is reviewed on appointment and 
at least annually the board determined that the nonexecutive 
directors are each independent in character and judgement and 
within the definition of the code no individual or group of individuals 
dominates the board’s decision making and the requirement of the 
code that at least half of the board excluding the chairman should 
comprise independent nonexecutive directors is satisfied
in october 2008 the company adopted new articles of association 
permitting the board to consider and if it sees fit to authorise 
situations where a director has an interest that conflicts or may 
potentially conflict with the interests of the company “situational 
conflicts” the board has a formal system in place for directors to 
declare situational conflicts and for these to be considered for 
authorisation by those directors who have no connection with the 
matter being considered in deciding whether to authorise a 
situational conflict the nonconflicted directors are required to act in 
the way they consider most likely to promote the success of the 
company and they may impose limits or conditions when giving 
authorisation or subsequently if they think this is appropriate the 
board considers the procedure to have continued to operate 
effectively during the year
details of other professional commitments of the chairman and 
nonexecutive directors are provided in their biographies on page 35
ian brindle became senior independent nonexecutive director on  
4 march 2010 following alex walker’s appointment as chairman of 
the company the senior independent nonexecutive director acts as 
a sounding board for the chairman and an intermediary for the 
nonexecutive directors if needed mr brindle is available to meet 
shareholders upon request if they have concerns which contact 
through the normal channels of the chairman or an executive director 
has failed to resolve or for which such contact would be inappropriate 
it is company policy to hold at least four board meetings a year 
during 2010 there were six board meetings the agenda is settled by 
the chairman in advance of the meeting and papers are circulated to 
board members ahead of the meeting minutes of meetings are 
circulated to all board members and subject to their agreement 
approved at the following board meeting
the attendance of individual directors at board meetings was as 
follows
number of 
meetings 
held
number of 
meetings 
attended
alex walker chairman 6 6
edward bramson
1
 retired 5 may 2010 2 0
bill burns 6 6
eric hutchinson 6 6
ian brindle 6 6
gerard eastman
1
 retired 5 may 2010 2 0
duncan lewis 6 6
tom maxwell
2
6 5
1  both mr bramson and mr eastman were unable to attend the meetings held  
on 3 march 2010 and 5 may 2010 due to unavoidable diary conflicts
2   mr maxwell was unable to attend the meeting held on 3 march 2010 due to  
an unavoidable diary conflict
the chairman is responsible for ensuring that the directors receive 
accurate timely and clear information they receive regular updates 
on business performance and receive presentations from the 
executive directors and other senior managers at board meetings  
in addition regular site visits are arranged for nonexecutive directors  42 spirent communications plc annual report 2010
d irectors’ statement on corporate governance continued
during which briefings are arranged and the directors are free to 
discuss aspects of the business with employees at all levels under 
the direction of the chairman the company secretary ensures good 
and timely information flows between the board and its committees 
and makes sure that board procedures are complied with the 
company secretary also updates and advises the board on all 
regulatory and governance matters
there is a policy whereby the nonexecutive directors and the board 
committees may take independent professional advice at the 
company’s expense in order to fulfil their duties all directors also 
have access to the advice and services of the company secretary 
whose removal may only be effected with the approval of the board
board appointments and induction
the board has in place a procedure for the appointment of new 
directors to the board which complies with the code on appointment 
to the board and its committees all directors receive an induction 
tailored to their individual requirements new directors are briefed on 
their legal and other duties and obligations as directors of a uk listed 
company visits to different facilities and meetings with senior 
management are organised as appropriate to assist the new director 
in developing an understanding of how the group operates and the 
key issues that it faces
the company’s articles of association require all directors to seek 
election by shareholders at the first annual general meeting following 
their appointment and that all directors retire and seek reelection at 
least every three years however in accordance with the new code 
which replaces the existing code for accounting periods beginning on 
or after 29 june 2010 the board has agreed that all directors will 
stand for reelection at the 2011 agm
the board recognises that some shareholders have expressed 
concern that annual reelection of directors could encourage them to 
take a short term view the board is confident however that as more 
fully explained in the report on directors’ remuneration on pages 45 
to 52 the company’s remuneration policies encourage a 
performance based culture which reinforces behaviour that will lead 
to the continued long term development of the business and align 
executive directors’ interests with those of shareholders
performance evaluation
performance evaluation of the board and its committees was carried 
out during the year by each director completing questionnaires and 
the results being collated and analysed by the company secretary 
who prepared a report for board discussion the board discussion 
concluded that the board and its committees operated well and  
were effective
the chairman communicates regularly with the nonexecutive  
directors and this contact provides an ongoing opportunity to assess 
performance and to discuss the performance of the executive directors 
or any other matters the chairman has concluded that during the year 
under review the commitment and application of the continuing 
nonexecutive directors was of a high standard including each having 
sufficient time to attend all board and appropriate committee meetings 
and to discharge their responsibilities effectively
the senior independent nonexecutive director met with the 
independent nonexecutive directors on 3 november 2010 in the 
absence of the chairman to assess the chairman’s effectiveness 
the independent nonexecutive directors were of the opinion that  
mr walker gave sufficient time to his role as chairman of the company 
and was effective in that role during the year under review
the board is actively considering the provisions under the new code 
relating to the use of external facilitators in the performance 
evaluation process and how best to develop the review process
board committees
certain of the matters specifically reserved for the board’s decision 
have been delegated to three committees with clearly defined terms 
of reference which together with the composition of each committee 
are reviewed annually the terms of reference for the audit 
nomination and remuneration committees can be found on the 
company’s website at wwwspirentcom
audit committee
the audit committee comprises ian brindle chairman duncan 
lewis and tom maxwell mr lewis joined the committee on 4 march 
2010 following alex walker’s appointment as chairman of the 
company all of the committee members are independent non
executive directors making the composition of the committee 
compliant with the code the code also requires that the audit 
committee includes at least one member who has recent significant 
and relevant financial experience the board considers that both ian 
brindle and tom maxwell provide such experience
the attendance of individual directors at audit committee meetings 
was as follows
number of 
meetings 
held
number of 
meetings 
attended
ian brindle committee chairman 3 3
duncan lewis 2 2
tom maxwell
1
3 2
alex walker until appointment as chairman 1 1
 
1  mr maxwell was unable to attend the meeting held on 3 march 2010 due to an 
unavoidable diary conflict 43 spirent communications plc annual report 2010
overview
business review
governance
financial statements
the board has overall responsibility for the system of internal 
controls including risk management and has delegated certain of 
these responsibilities to the audit committee
at each meeting the company’s external auditors the chief executive 
officer the chief financial officer the group vice president finance 
the head of financial reporting and the company secretary who is 
secretary to the committee were in attendance the chairman also 
attends by invitation from the committee chairman in addition the 
committee meets with the company’s external auditors without 
management being present the minutes of committee meetings are 
available to all directors
during the year the committee has monitored and reviewed risk 
management and internal control reviewed the interim and full year 
financial statements key accounting policies the auditors’ report on 
the interim review and year end audit and management’s responses 
to the issues raised the internal audit programme and the external 
audit strategy and scope for 2010 were also agreed and approved 
further details of internal control and process are set out on page 44 
regular reports on tax treasury and health and safety are presented 
further details of the group’s ethics policy and health and safety 
performance are contained in the corporate social responsibility 
statement on pages 30 to 33 the chairman of the committee reports 
any significant findings or identified weaknesses to the board
the audit committee has adopted a policy in relation to the provision 
of nonaudit services by the external auditor to ensure that the 
provision of such services does not impair the external auditors’ 
independence or objectivity under this policy certain nonaudit 
services are precluded the policy is reviewed and financial limits  
for nonaudit services are set on an annual basis the committee 
considers that notwithstanding the nonaudit services provided 
during the year ernst  young’s objectivity as external auditors was 
not impaired prior to recommending their reappointment as external 
auditors the committee considered ernst  young’s performance 
resource quality control procedures policy on rotating its audit 
partners audit partners rotate every five years independence and 
objectivity the committee also considered the risk of ernst  young 
withdrawing from the audit market there are no contractual 
obligations that restrict the company’s current choice of  
external auditor
remuneration committee
the remuneration committee comprises tom maxwell chairman 
ian brindle and duncan lewis mr maxwell joined the committee as 
chairman on 4 march 2010 following alex walker’s appointment as 
chairman of the company all members of the committee are 
independent nonexecutive directors making it compliant with the 
code in terms of independent nonexecutive directors
further details about the remuneration committee are included in 
the report on directors’ remuneration on pages 45 to 52
nomination committee
the nomination committee comprises alex walker chairman  
ian brindle duncan lewis and tom maxwell and meets at least  
once each year the company secretary is secretary to the 
committee
the attendance of individual directors at nomination committee 
meetings was as follows
number of 
meetings 
held
number of 
meetings 
attended
alex walker committee chairman 1 1
edward bramson
1
 retired 5 may 2010 1 0
ian brindle 1 1
gerard eastman
1
 retired 5 may 2010 1 0
duncan lewis 1 1
tom maxwell
1
1 0
1  mr bramson mr eastman and mr maxwell were unable to attend the meeting held on  
3 march 2010 due to unavoidable diary conflicts
the nomination committee is responsible for reviewing the 
composition and structure of the board and for identifying and 
recommending candidates for executive and nonexecutive positions 
based on the required role and capabilities which have been 
specified for the appointment executive search consultants are used 
by the nomination committee to assist this process as appropriate 
as all of the committee members are independent nonexecutive 
directors the composition of the committee is compliant with the 
terms of the code
relations with shareholders
the board supports the use of the annual general meeting as a 
means of communicating with both private and institutional investors 
and encourages their participation the company is ready where 
practicable to enter into a dialogue with shareholders through 
analyst briefings and investor presentations all of which are made 
available on the company’s website at wwwspirentcom senior 
executives meet regularly with institutional and major shareholders 
to facilitate stakeholders’ understanding of the company and  
its objectives and to receive feedback which is then reported  
to the board
in november 2010 the company held an investor day which was 
attended by institutional investors potential investors and analysts 
at which there was an opportunity to meet members of the board and 
senior management 44 spirent communications plc annual report 2010
d irectors’ statement on corporate governance continued
the chairman of the remuneration committee tom maxwell 
consulted with the 20 largest shareholders in december 2010 
concerning remuneration policy feedback from shareholders 
obtained during these meetings was then shared with the 
remuneration committee and given due consideration
all of the company’s communications with shareholders are 
conducted in line with our environmental approach we hold the 
majority of our events via webcast and conference calls and we 
encourage all of our investors to receive communications 
electronically where possible
pensions governance
the group’s principal pension and retirement schemes are in the uk 
and the us scheme funds are held separately from those of the 
group and are administered by trustees which include employees 
and independent bodies the schemes do not lend money or lease 
any assets to the group
internal control
the board has overall responsibility for the group’s system of internal 
control the board assisted by the audit committee has reviewed 
the effectiveness of this system and this review did not reveal any 
significant issues or weaknesses the board confirms that this 
process was in place throughout the year under review and up to the 
date of approval of these financial statements the primary aim is to 
operate a system which is appropriate to the business and which can 
over time increase shareholder value whilst safeguarding the group’s 
assets the system is designed to manage rather than eliminate the 
risk of failure to achieve business objectives and can only provide 
reasonable and not absolute assurance against material 
misstatement or loss
process
day to day responsibility for effective internal control and risk 
monitoring rests with senior management at business unit level the 
board and the audit committee continue to agree that currently there 
is no need for a dedicated internal control department responsibility 
for internal control rests with the group vice president finance and 
the north america vice president finance both of these senior 
finance managers are independent of any business unit and play  
a key role in providing an objective view and continuing assessment 
of the effectiveness of the internal control systems throughout the 
group the group consists of a limited number of entities which can 
comfortably be covered by the two senior finance managers as 
stated above the group vice president finance attends all audit 
committee meetings to give an update on any internal control issues 
arising and any outstanding remedial actions
the group’s system of risk management comprises an integrated risk 
management strategy of regular selfassessment of all business 
units significant risks are regularly reviewed by the audit committee 
and by the board
management and specialists within the finance department are 
responsible for ensuring the appropriate maintenance of financial 
records and processes that ensure all financial information is 
relevant reliable in accordance with the applicable laws and 
regulations and distributed both internally and externally in a timely 
manner a review of the consolidation and financial statements is 
completed by management to ensure that the financial position and 
results of the group are appropriately reflected all financial 
information published by the group is subject to the approval of the 
audit committee
in addition to this process the following key elements are critical to 
the overall internal control environment
an organisational structure with clear operating procedures  –
defined lines of responsibility and delegated levels of authority
an ethics policy which has been approved by the board which  –
sets standards of professionalism and integrity for all employees 
and operations the ethics policy also includes “whistleblowing” 
procedures whereby employees may report in confidence 
suspected wrongdoings
a comprehensive strategic planning financial control and  –
budgeting system which is properly documented and regularly 
reviewed and
a disciplined acquisitions and divestments due diligence process  –
and post acquisition integration programme 45 spirent communications plc annual report 2010
overview
business review
governance
financial statements
r eport on directors’ remuneration this report on directors’ remuneration has been prepared by the 
remuneration committee on behalf of the board for approval by 
shareholders at the annual general meeting to be held on 4 may 2011 
“201 1 agm” the report has been prepared in accordance with 
schedule 8 to the large and mediumsized companies and groups 
accounts and reports regulations 2008 the report also meets the 
relevant requirements of the listing rules of the financial services 
authority and describes how the board has applied the principles and 
complied with the provisions of the 2008 combined code on corporate 
governance relating to directors’ remuneration part a of the report 
which is not subject to audit sets out the company’s remuneration 
policy part b which has been audited provides details of the 
remuneration pensions and share incentives of the directors for the 
period under review
part a unaudited information
remuneration committee
the remuneration committee the “committee” comprises tom 
maxwell chairman ian brindle and duncan lewis mr maxwell 
joined the committee as chairman on 4 march 2010 following  
alex walker’s appointment as chairman of the company all 
members of the committee are independent nonexecutive directors 
the company secretary is secretary to the committee
the attendance of individual directors at remuneration committee 
meetings was as follows
number of 
meetings 
held
number of 
meetings 
attended
alex walker until appointment as chairman 1 1
tom maxwell committee chairman 3 3
ian brindle 4 4
duncan lewis 4 4
the committee is responsible for determining on behalf of the board 
all elements of the remuneration of the chairman executive directors 
and senior managers reviewing remuneration policy and overseeing 
the operation of the company’s share incentive plans the 
committee’s terms of reference can be found on the company’s 
website at wwwspirentcom
remuneration policy
the remuneration policy set by the committee aims to encourage a 
performance based culture which reinforces behaviour that will lead 
to the continued long term development of the business attract and 
retain high calibre executive directors and senior managers and align 
their interests with shareholders the aims of the policy are achieved 
by ensuring their remuneration is competitive when compared with 
companies of similar size type and complexity within the countries in 
which they are based it is structured so that a substantial element of 
their total remuneration package is weighted towards performance 
based pay
advisers to the committee
when the committee considers it appropriate it takes advice on 
remuneration matters from
aon hewitt consulting inc – radford executive remuneration data –
ernst  young llp – independent verification of earnings per  –
share “eps” to determine the vesting of share incentives they 
are also the company’s auditors
kepler associates limited – measurement of total shareholder  –
return “tsr” to determine the vesting of share incentives
linklaters llp – advice on share incentive plans they are also one  –
of the company’s general legal advisers and
pricewaterhousecoopers llp – advice on share incentive plans  –
executive remuneration data and policy review
during the year the committee also consulted with the company’s 
chairman chief executive officer chief financial officer vice 
president human resources and the company secretary but not on 
matters relating directly to their own remuneration
executive directors’ remuneration
the remuneration of executive directors comprises the following 
elements
base salary benefits and pension contributions or cash allowance  –
in lieu of pension
quarterly and annual performance cash incentive and –
long term share incentive awards –
base salary fees and benefits
base salaries and benefits of executive directors are determined by 
the committee and are normally reviewed annually bill burns’ base 
salary and benefits were set on his appointment on 6 november 
2008 and reviewed on 1 january 2011 when the committee 
determined that there should be no change eric hutchinson’s base 
salary and benefits were last reviewed on 1 january 2011 and the 
committee determined that there should be no change the base 
salary and benefits of the executive directors will next be reviewed on 
1 january 2012
when conducting such reviews the committee takes into account a 
range of factors including the company’s performance economic 
conditions the prevailing market rates for similar positions in a 
comparable group of companies the responsibilities individual 
performance and experience of each executive director 
consideration is also given to pay and employment conditions of 
employees within the group and the committee particularly takes 
into account pay increases throughout the group when determining 
salary increases for executive directors as noted above neither bill 
burns nor eric hutchinson received an increase in base salary in the 
period under review 46 spirent communications plc annual report 2010
repo rt on di recto rs’ r emune ration continued
bill burns has a service agreement with spirent communications inc 
“sci” and being a us resident receives a remuneration package 
which is in line with us employment practice in addition to his base 
salary he participates in sci’s medical dental and vision plans 
401k pension plan a nonqualified deferred compensation plan 
and receives disability coverage benefit life insurance cover of four 
times base salary and a car allowance
the sci 401k pension plan is a defined contribution plan approved 
under section 401k of the us internal revenue code “us ir code” 
sci make matching contributions of up to 4 per cent of the maximum 
compensation permitted for these purposes under the us ir code 
which for 2010 was 245000
the sci deferred compensation plan is a nonqualified plan offered 
as a benefit to senior management in the us this plan allows 
participants to defer up to 50 per cent of their base salary and up to 
100 per cent of any cash incentive until they reach retirement age or 
leave the group’s employment under this plan contributions are met 
solely by mr burns and sci makes no matching contributions
eric hutchinson has a service agreement with spirent communications 
plc and being a uk resident receives a remuneration package which 
is in line with uk employment practice in addition to base salary he 
receives private medical insurance life insurance cover of four times 
base salary and a car allowance during the year under review eric 
hutchinson received an annual cash allowance in lieu of pension of 
20 per cent of base salary totalling £58970
quarterly and annual performance cash incentives
the committee regularly reviews performance incentive targets and 
performance conditions to incentivise executive directors to meet the 
short term strategic objectives of the spirent group
during 2010 the executive directors participated in a performance 
cash incentive arrangement with two thirds of the incentive target 
being earned quarterly and one third annually this cash incentive 
arrangement was structured so that performance was measured 
against a combination of growth targets in the company’s eps other 
financial targets and personal objectives achievement against the 
eps growth target and other financial measures determined the 
maximum bonus which could be earned in a given performance 
period with performance against personal objectives determing the 
actual bonus earned for 2010 the maximum cash incentive 
available for bill burns was 150 per cent of base salary and for eric 
hutchinson was 60 per cent of base salary the committee reviewed 
mr burns’ and mr hutchinson’s performance against the targets set 
and having exceeded the eps and other financial targets and met all 
personal objectives the committee approved a total cash incentive 
payment for the year of 900000 for mr burns equivalent to 150 per 
cent of his base salary and £176900 for mr hutchinson 272400 at 
an average exchange rate of 154  £1 equivalent to 60 per cent of 
base salary for 2011 the maximum cash incentive available for bill 
burns will continue to be 150 per cent of base salary and for eric 
hutchinson will be 75 per cent of base salary
long term share incentive awards
the company operates a number of share incentive plans currently the 
principal share incentive plan utilised for executive directors is the 2005 
employee incentive plan “eip” which is a discretionary share plan 
executive directors are also able to participate in all employee share 
plans if offered in the country within which they are resident the 
applicable all employee plans in the uk are the 2005 sharesave 
scheme and the uk employee share purchase plan and in the us is 
the us employee stock purchase plan in november 2010 the board 
made an invitation to all uk employees to participate in the uk 
employee share purchase plan and to all us employees to participate 
in the us employee stock purchase plan
during 2010 historical awards of share incentives held by executive 
directors under the spirent stock incentive plan “ssip” 1995 
executive share option scheme “esos” and the uk savings 
related share option scheme “srsos” remained outstanding the 
ssip was the principal share incentive plan used to deliver awards to 
communications group employees and bill burns participated in this 
plan in his former positions within the communications group all the 
grants made to mr burns under the ssip had performance conditions 
attached and further details are given below the ssip  esos and 
srsos are all now closed
further details of the company’s all employee and discretionary 
share plans are provided in note 28 to the consolidated financial 
statements and note 16 to the parent company financial statements
2005 employee incentive plan
under the eip  the company is able to grant options and sharesettled 
stock appreciation rights “sars” the vesting of which is subject to 
meeting an eps growth target performance shares may also be 
granted with the vesting of historical awards being subject to meeting  47 spirent communications plc annual report 2010
overview
business review
governance
financial statements
a tsr performance target the vesting of future awards of 
performance shares will be subject to more than one performance 
condition with vesting for 50 per cent of the award being based on the 
company’s relative tsr rating against a comparator group of 
companies and vesting for the remaining 50 per cent of the award 
being based on the rate of growth in the company’s eps over the 
performance period
any awards made to executive directors are subject to prior 
satisfactory performance of the individual and award levels vary in 
accordance with the individual’s potential to add value to the 
business over the medium to long term
in normal circumstances the maximum value of an award of 
performance shares under the eip is limited to 125 per cent of  
base salary with awards of options or sars limited to a maximum 
value of 250 per cent of base salary for combined awards the 
maximum value is limited to 250 per cent of base salary with one 
performance share being equivalent to two optionssars awards  
are valued at the closing price for a spirent ordinary share on the 
business day immediately preceding the date of award
all awards are tested once on or shortly following the third 
anniversary of grant any part of an award which does not vest will 
lapse and there is no retesting
the committee historically considered that real eps growth was  
the most appropriate measure of the company’s performance in 
determining the vesting of sars and options granted under the eip  
the vesting of future awards of sars and options will be based on  
the rate of growth in the company’s eps over the performance  
period the performance condition for sars and options currently 
outstanding is based on the rate of growth in the company’s eps  
over a three year performance period excluding any increase in the 
retail prices index “rpi” details of vesting are set out in the 
following table
annual rate of growth  
in eps in excess  
of growth in rpi over the  
performance period  percentage of sarsoptions vesting 
below 6 0
6 25
above 6 and below 15 on a straight line basis  
between 25 and 100
15 or above 100
historically the committee considered that a relative tsr growth 
target was the most appropriate measure of the company’s 
performance in determining the vesting of performance shares 
granted under the eip and the performance condition for performance 
shares was therefore based on the company’s relative tsr rating 
against a comparator group of companies over a three year 
performance period as set out in the table below as noted above  
the vesting of future awards of performance shares will be subject  
to more than one performance condition
tsr ranking proportion of performance shares vesting 
below median 0
between median and upper 
quartile
on a straight line basis  
between 30 and 100
at or above upper quartile 100
for awards made prior to 2009 the comparator group consisted of 
the 30 largest companies by market capitalisation in the ftse 
techmark 100 index excluding those companies who were also 
constituents of the ftse 100 index at the commencement of the 
performance period for the award made on 30 november 2009 
three non uk listed direct competitors were added to the comparator 
group the committee considers the selected comparator group 
provides a suitable benchmark for the company’s tsr rating in 
determining the tsr for the company and its comparator group in 
respect of the award made on 30 november 2009 share prices are 
averaged over the 90 day period immediately prior to and at the end 
of the performance period for previous awards there was no 
averaging period
spirent stock incentive plan
grants made to bill burns in 2005 and 2006 under the ssip were 
subject to a performance condition as set out below which was 
approved by shareholders in 2004 a 25 per cent tranche of each 
grant of sars vested and became exercisable subject to the 
attainment of a performance condition on each of the first second 
third and fourth anniversaries of the date of grant the performance 
condition was measured against a fixed base year determined at the 
date of grant any tranche which did not meet the performance 
condition before the fourth anniversary of the date of grant was 
subject to a final testing on that fourth anniversary the performance 
condition for this final testing was measured from the base year and 
the performance condition was increased in proportion to the four 
year performance period any tranche which did not vest after the 
fourth anniversary of the date of grant lapsed the grants made to  
mr burns in 2005 and 2006 have now vested in full having attained 
the relevant performance conditions 48 spirent communications plc annual report 2010
r eport on directors’ remuneration continued
spirent stock incentive plan — performance condition schedule
percentage of total grant tested 
rate of growth in eps in excess of growth 
in rpi over the performance period  percentage of sars vesting  performance period
25 
1st sar tranche
below 6
6
between 6 and 15
15 or above
0
25
on a straight line basis between 25 and 100
100
year 1
25 
2nd sar tranche
below 12
12
between 12 and 30
30 or above
0
25
on a straight line basis between 25 and 100
100
years 1 and 2
25
3rd sar tranche
below 18
18
between 18 and 45
45 or above
0
25
on a straight line basis between 25 and 100
100
years 1 2 and 3
25 4th sar tranche plus any  
unvested tranches of 1st 2nd  
and 3rd sar tranches
below 24
24
between 24 and 60
60 or above
0
25
on a straight line basis between 25 and 100
100
years 1 2 3 and 4
shareholder dilution
the committee is mindful of the need to manage shareholder dilution 
in a responsible manner no share incentive awards have been made 
under the eip since november 2009
overall shareholder dilution resulting from the company’s share 
incentive plans on a rolling 10 year basis has fallen by 13 per cent 
when comparing the positions at 31 december 2010 101 per cent 
and 31 december 2009 114 per cent the overall number of share 
incentives outstanding has fallen by 128 million during the year to 
155 million at 31 december 2010 2009 283 million
shareholder approval was given in 2005 to operate the eip until 
2015 subject to further shareholder approval being required on the 
use of new issue shares and any material changes to the plan no 
material changes to the eip are proposed and therefore no specific 
shareholder approval is required at the 2011 agm to continue to 
operate this plan
service contracts
it is the company’s policy that service contracts for the executive 
directors have no fixed term and are capable of termination on no 
more than 12 months’ notice from either the company or the 
executive director
the contract dates and notice periods for each executive director are 
as follows
date of contract
notice period 
by company 
months
notice period 
by director 
months
bill burns 6 november 2008 1 1
eric hutchinson 13 december 1999 12 12
both contracts contain provisions for the employer to make payment 
in lieu of notice and for removal of the director for poor performance 
or material misconduct without compensation in the case of eric 
hutchinson the company will seek to apply practical mitigation 
measures to any payment of compensation on termination taking 
into account all relevant circumstances 49 spirent communications plc annual report 2010
overview
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financial statements
in the case of bill burns mitigation provisions are contained in his 
service contract as noted above mr burns’ service contract is with 
sci and governed by the laws of the state of california its termination 
provisions therefore reflect us practice either the employer or  
mr burns may terminate employment upon 30 days’ notice and in 
addition to one month’s base salary or payment in lieu he would be 
entitled to accrued base salary cash incentives and vacation pay  
mr burns would also be entitled to 11 months’ base salary subject to 
a setoff for any base salary earned from alternative employment 
during the 12 month period following termination “severance 
period” and monthly cobra premium payments for the duration of 
the severance period subject to a setoff for health insurance 
provided by an alternative employer during the severance period
both service contracts contain appropriate provisions to protect the 
legitimate interests of the company with respect to preventing any 
terminated director from working in a business which competes 
against the company service contracts do not contain any 
compensation rights which could be increased on a change of control 
in the company
external appointments
the company recognises that its executive directors may be invited to 
become nonexecutive directors of other companies and that such 
appointments can broaden their knowledge and experience to the 
benefit of the company the director would then retain any related 
fees at the date of this report neither bill burns nor eric hutchinson 
hold any such external positions
nonexecutive directors’ fees and letters of appointment
the company’s remuneration policy with regard to nonexecutive 
directors is to pay fees which are in line with market practice fees are 
normally reviewed once every three years and were last reviewed on 
1 january 2011 when it was determined that fees would not be 
increased fees will next be reviewed on 1 january 2012 it is 
considered that nonexecutive director fees are at the median level 
for comparable companies the basic annual fee for nonexecutive 
directors with effect from 1 january 2011 is £36000 the chairmen of 
the audit and remuneration committees each receive additional fees 
of £11000 and £9000 respectively
all nonexecutive directors have a letter of appointment with the 
company for a period of not more than three years subject to the 
company’s articles of association each letter provides for retirement 
every three years however in accordance with the new uk corporate 
governance code the “new code” which replaces the existing 
combined code on corporate governance for accounting periods 
beginning on or after 29 june 2010 the board has agreed that all 
directors will stand for reelection at the 2011 agm
details of individual appointments are as follows
director
first appointed
 a director
current appointment 
due to expire
ian brindle
1
22 december 2006 2012 agm
duncan lewis 1 july 2007 2011 agm
tom maxwell 1 october 2007 2011 agm
alex walker
1
22 december 2006 2012 agm
1  as explained above all directors will stand for reelection at the 2011 agm
the letters of appointment are available for inspection on request and 
will be available for inspection before and during the 2011 agm an 
example of a letter of appointment for a nonexecutive director is 
available on the company’s website at wwwspirentcom
nonexecutive directors are not eligible to participate in cash 
incentive or share incentive arrangements and their service does not 
qualify for a pension or other benefits no element of their fee is 
performance related
during 2010 messrs bramson and eastman who both retired from 
the board at the conclusion of the 2010 agm on 5 may 2010 elected 
to have their fees paid to sherborne investors 0
50
100
150
200
250
300
350
rebased index
financial year end
dec 05 dec 06 dec 07 dec 08 dec 09 dec 10
spirent ftse 250 ftse techmark 100
2 
1 tsr is the growth in the value of a share or index assuming dividends and other distributions are reinvested
2 excluding ftse100 companies
50 spirent communications plc annual report 2010
r eport on directors’ remuneration continued
total shareholder return performance
the graph below shows the tsr performance for the last five financial years of spirent communications plc against the ftse 250 index and the 
ftse techmark 100 index excluding those companies who were also constituents of the ftse 100 index at the commencement of the period 
the committee believes that these provide broad equity market indices against which the performance of the company can be fairly 
compared and that the ftse techmark 100 index provides a particularly representative collection of comparator companies
5year tsr
1
 performance – spirent vs ftse techmark 100
2
 and ftse 250
 
part b audited information
directors’ remuneration
individual and total remuneration for the year to 31 december 2010
base salary 
and fees 
000
taxable 
benefits 
000
performance 
related 
incentive 
paid in cash 
000
cash in lieu 
of pension 
000
 total 2010
2
000
total 2009
2
000
executive directors
bill burns 6000 264 9000 – 15264 14709
eric hutchinson
1
4549 253 2724 908 8434 8513
nonexecutive directors
edward bramson
2
630 – – – 630 2355
ian brindle 724 – – – 724 738
gerard eastman
2
191 – – – 191 565
duncan lewis 554 – – – 554 565
tom maxwell 658 – – – 658 565
alex walker 1906 – – – 1906 707
2010 15212 517 11724 908 28361
2009 16132 517 11142 926 28717
notes
1 eric hutchinson earned a fee of 800 in respect of his services to the board and its committees
2 these figures relate to the period of each director’s board membership 51 spirent communications plc annual report 2010
overview
business review
governance
financial statements
summary of directors’ remuneration
2010  
000
2009  
000
total emoluments for all directors 28361 28717
gains made on the exercise of share incentives
1
29363 2228
contributions to 401k pension plan
2
98 98
57822 31043
notes
1  2010 on 16 march eric hutchinson exercised 1128000 esos share options granted on 5 august 2004 at an exercise price of 555 pence selling the resulting shares at a fair 
market value of 1201268 pence per share equating to a total gain of £728990 1122645 on the same date mr hutchinson also exercised 638700 eip stock appreciation 
rights granted at a base price of 53 pence on 25 august 2005 and 544650 eip stock appreciation rights granted at a base price of 47 5 pence on 5 may 2006 the applicable fair 
market value was 12280 pence per ordinary share and the exercises resulted in a total gain of £855934 1318138 
on 9 september bill burns exercised 250000 ssip stock appreciation rights granted at a base price of 6975 pence on 10 march 2005 and 200000 ssip stock appreciation rights 
granted at a base price of 53 pence on 25 august 2005 the applicable fair market value was 13380 pence per ordinary share and the exercises resulted in a total gain of £321725 
495457
  2009 on 5 may 91875 performance shares vested and were allotted to bill burns mr burns sold 36922 ordinary shares to cover the tax liability arising on the deemed gain of 
£54666 85826 which was realised based on a market price of 595 pence per ordinary share and retained the remaining 54953 ordinary shares on 5 may 146650 
performance shares vested and were allotted to eric hutchinson the shares were retained by mr hutchinson and a deemed gain of £87 257 136993 was realised based on a 
market price of 595 pence per share
2  a contribution of 9800 was made to the 401k pension plan relating to bill burns 2009 9800
directors’ interests in shares
the beneficial interests of the directors and their connected persons in the shares of the company are set out below
at 31 december 2010
ordinary shares
1
at 31 december 2009
ordinary shares
1
executive directors
bill burns 54953 54953
eric hutchinson 1205581 1205581
nonexecutive directors
edward bramson
2
220000 220000
ian brindle 4525 4525
gerard eastman
2
40000 40000
duncan lewis – –
tom maxwell 26955 26955
alex walker 50000 30000
notes
1 directors’ beneficial holdings do not form part of the remuneration provided by the company
2   holdings shown were at date of retirement from the board 52 spirent communications plc annual report 2010
r eport on directors’ remuneration continued
plan type
1
at 
31 december 
2010
lapsed 
during 
the 
period
exercised 
during the 
period
granted 
during 
the 
period
at  
1 january 
2010
date of 
grant
exercise 
price per 
share 
pence
market 
price on 
date of 
grant 
pence
date first 
exercisable
expiry  
date
bill burns
ssip – – 250000 – 250000 10 mar 05 70 70 15 nov 05 10 mar 12
ssip 62500 – 200000 – 262500 25 aug 05 53 53 25 aug 08 25 aug 12
ssip 170625 – – – 170625 05 may 06 48 48 05 may 07 05 may 13
eip 374000 – – – 374000 07 nov 08 51 51 07 nov 11 07 nov 18
eip 374000 – – – 374000 07 nov 08 nil
2
51 07 nov 11 07 nov 11
eip 377953 – – – 377953 30 nov 09 nil
2
98 30 nov 12 30 nov 12
eric hutchinson
esos 234000 – – – 234000 02 apr 02 134 134 02 apr 06 02 apr 12
esos 387000 – – – 387000 02 may 02 113 113 02 may 06 02 may 12
srsos 24721 – – – 24721 26 sep 03 38 38 01 jan 11 01 jul 11
esos – – 1128000 – 1128000 05 aug 04 56 56 05 aug 08 05 aug 14
eip 56600 – 638700 – 695300 25 aug 05 53 53 25 aug 08 25 aug 15
eip – – 544650 – 544650 05 may 06 48 48 05 may 09 05 may 16
eip 151829 – – – 151829 30 nov 09 nil
2
98 30 nov 12 30 nov 12
notes
an explanation of each share plan and its operation is given in note 28 to the audited consolidated financial statements of the group and note 16 to the parent company financial statements
1 key to share plan
 eip – 2005 employee incentive plan
 esos – 1995 executive share option scheme
 srsos – uk savings related share option scheme
 ssip – spirent stock incentive plan
2   this relates to an award of performance shares under the eip there is no exercise price payable for a performance share upon vesting further details on performance shares are 
provided above
events since 31 december 2010
on 1 january 2011 eric hutchinson received 24721 spirent savings related share option scheme options at an exercise price of 38 pence per 
share having elected to do so on 21 october 2010
on 24 january 2011 bill burns acquired 96 ordinary shares under the us employee stock purchase plan and eric hutchinson acquired 
184 ordinary shares under the uk employee share purchase plan both at a price of 1346 pence per share
on 24 february 2011 bill burns acquired 248 ordinary shares under the us employee stock purchase plan and eric hutchinson acquired 
166 ordinary shares under the uk employee share purchase plan both at a price of 1503 pence per share
at the date of this report mr burns has a beneficial interest in the company of 55297 ordinary shares and holds 1359078 share incentive 
awards and mr hutchinson has a beneficial interest in the company of 1230652 ordinary shares and holds 829429 share incentive awards
the middle market price of an ordinary share at the close of business on 4 january 2010 being the first day the london stock exchange was 
open for trading in 2010 and 31 december 2010 was 1040 pence and 147 8 pence respectively and during that period ranged between a 
high of 1603 pence and a low of 1028 pence
signed on behalf of the board
tom maxwell
chairman of the remuneration committee
3 march 2011 53 spirent communications plc annual report 2010
overview
business review
governance
financial statements
independent aud itors’ report to the members  
of s p irent commun icat ions pl c
we have audited the group financial statements of spirent 
communications plc for the year ended 31 december 2010 which 
comprise the consolidated income statement the consolidated 
statement of comprehensive income the consolidated balance 
sheet the consolidated cash flow statement and the consolidated 
statement of changes in equity and the related notes 1 to 33 the 
financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting 
standards “ifrss” as adopted by the european union
this report is made solely to the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 2006 our 
audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we  
have formed
respective responsibilities of directors and auditors
as explained more fully in the statement of directors’ responsibilities 
set out on page 40 the directors are responsible for the preparation 
of the group financial statements and for being satisfied that they 
give a true and fair view our responsibility is to audit and express an 
opinion on the group financial statements in accordance with 
applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing 
practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the 
financial statements
opinion on financial statements
in our opinion the group financial statements
give a true and fair view of the state of the group’s affairs as at  –
31 december 2010 and of its profit for the year then ended
have been properly prepared in accordance with ifrss as adopted  –
by the european union and
have been prepared in accordance with the requirements of the  –
companies act 2006 and article 4 of the ias regulation
opinion on other matter prescribed by the companies act 2006
in our opinion
the information given in the report of the directors for the  –
financial year for which the group financial statements are 
prepared is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following
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 or
we have not received all the information and explanations we  –
require for our audit
under the listing rules we are required to review
the directors’ statement set out on  – page 38 in relation to going 
concern and
the part of the corporate governance statement relating to the  –
company’s compliance with the nine provisions of the june 2008 
combined code specified for our review and
certain elements of the report to shareholders by the board on  –
directors’ remuneration
other matter
we have reported separately on the parent company financial 
statements of spirent communications plc for the year ended  
31 december 2010 and on the information in the report on directors’ 
remuneration that is described as having been audited 
richard wilson senior statutory auditor
for and on behalf of ernst  young llp  statutory auditor
london
3 march 2011
the maintenance and integrity of the spirent communications plc website is the responsibility of the directors the work carried out by the auditors does not involve consideration of these 
matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website
legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions 54 spirent communications plc annual report 2010
consol idated in come statement year to 31 december notes
2010 
 million 
2009
restated
1
 
 million
revenue 3 4 4822 4272
cost of sales 1611 1438
gross profit 3211 2834
product development 4 802 746
selling and distribution 879 780
administration 403 440
operating profit 4 1127 868
finance income 6 08 06
finance costs 7 13 25
profit before tax 4 5 1122 849
tax 10 331 63
profit for the year attributable to equity shareholders of parent company 791 912
earnings per share cents 11
basic 1177 1367
diluted 1166 1360
1 restated due to the change in the group’s reporting currency as set out in note 2 refer to note 32 for details   
all activities relate to continuing operations   
the notes on pages 59 to 102 and page 121 form part of these financial statements     55 spirent communications plc annual report 2010
overview
business review
governance
financial statements
consol idated statement of comprehens ive in come year to 31 december notes
2010 
 million
2009
restated
1
 
 million
profit for the year attributable to equity shareholders of parent company 791 912
other comprehensive income
fair value movements on cash flow hedges 24 06 80
exchange differences on retranslation of foreign operations 33 141
actuarial gainslosses on defined benefit pension plans 9 86 22
irrecoverable element of defined benefit pension plan surplus 9 19 –
deferred tax chargecredit on defined benefit pension plans 10 09 09
other comprehensive income 19 208
total comprehensive income for the year attributable to equity shareholders of parent company 810 1120
   
1 restated due to the change in the group’s reporting currency as set out in note 2 refer to note 32 for details   
the notes on pages 59 to 102 and page 121 form part of these financial statements  56 spirent communications plc annual report 2010
consol idated balan ce sheet at 31 december notes
2010 
 million
2009
restated
1
 
 million
2008
restated
1
 
 million
assets
noncurrent assets
intangible assets 13 1120 1124 1117
property plant and equipment 14 291 236 268
trade and other receivables 18 36 37 36
cash on deposit 19 11 18 36
defined benefit pension plan surplus 9 77 10 37 
deferred tax 21 313 425 175
1848 1850 1669 
current assets
inventories 17 376 281 348
trade and other receivables 18 982 813 899
derivative financial instruments 24 – 10 –
cash and cash equivalents 19 2239 1739 860
3597 2843 2107 
total assets 5445 4693 3776 
liabilities
current liabilities
trade and other payables 20 1085 866 914
current tax 130 103 66
derivative financial instruments 24 02 02 81
provisions and other liabilities 23 51 61 53
1268 1032 1114
noncurrent liabilities
trade and other payables 22 75 79 73
defined benefit pension plan deficit 9 06 11 09
provisions and other liabilities 23 25 53 118
106 143 200
total liabilities 1374 1175 1314
net assets 4071 3518 2462 
capital and reserves 27
share capital 353 364 322 
share premium account 314 295 248 
capital redemption reserve 173 171 153 
capital reserve – 16 20 
other reserves 16 06 76 
translation reserve 193 226 85 
cash flow hedge reserve – 06 68
retained earnings 3022 2446 1626 
total equity attributable to equity shareholders of parent company 4071 3518 2462
 
1 restated due to the change in the group’s reporting currency as set out in note 2 refer to note 32 for details    
the notes on pages 59 to 102 and page 121 form part of these financial statements    
signed on behalf of the board   
eric hutchinson   
director   
3 march 2011    57 spirent communications plc annual report 2010
overview
business review
governance
financial statements
consol idated cash flo w statement year to 31 december notes
2010 
 million
2009
restated
1
 
 million
cash flows from operating activities
cash flow from operations 30 1169 1063
tax paid 175 102
net cash inflow from operating activities 994 961
cash flows from investing activities
interest received 08 06
transfer from long term deposit 06 22
purchase of intangible assets 01 03
purchase of property plant and equipment 181 101
proceeds from the sale of property plant and equipment 06 02
net cash used in investing activities 162 74
cash flows from financing activities
dividend paid 137 121
proceeds from the issue of share capital and employee share ownership trust 47 38
share repurchase 197 11
net cash used in financing activities 287 94
net increase in cash and cash equivalents 545 793
cash and cash equivalents at the beginning of the year 1739 860
effect of foreign exchange rate changes 45 86
cash and cash equivalents at the end of the year 19 2239 1739
   
1 restated due to the change in the group’s reporting currency as set out in note 2 refer to note 32 for details   
   
the notes on pages 59 to 102 and page 121 form part of these financial statements    58 spirent communications plc annual report 2010
consol idated statement of chan ges in e qu it y
 million
share 
capital
share 
premium 
account
capital 
redemption 
reserve
capital 
reserve
other 
reserves
translation 
reserve
cash flow 
hedge 
reserve
retained 
earnings
total 
equity
at 1 january 2009 restated
1
322 248 153 20 76 85 68 1626 2462
total comprehensive income a – – – – – 141 80 899 1120
sharebased payment note 29 – – – – – – – 06 06
deferred tax credit on share incentives note 10 – – – – – – – 17 17
current tax on share incentives note 10 – – – – – – – 05 05
new shares issued note 27 03 18 – – – – – – 21
employee share ownership trust note 27 – – – – – – – 17 17
share repurchase note 27 – – – – – – – 09 09
equity dividends note 12 – – – – – – – 121 121
other movements note 27 – – – 06 – – – 06 –
exchange adjustment 39 29 18 02 82 – 06 – –
at 1 january 2010 restated
1
364 295 171 16 06 226 06 2446 3518
total comprehensive income b – – – – – 33 06 849 810
sharebased payment note 29 – – – – – – – 04 04
deferred tax credit on share incentives note 10 – – – – – – – 26 26
new shares issued note 27 03 27 – 02 – – – – 28
share cancellation note 27 05 – 05 – – – – – –
employee share ownership trust note 27 – – – – – – – 19 19
share repurchase note 27 – – – – – – – 197 197
equity dividends note 12 – – – – – – – 137 137
other movements note 27 – – – 12 – – – 12 –
exchange adjustment 09 08 03 02 22 – – – –
at 31 december 2010 353 314 173 – 16 193 – 3022 4071
         
1 restated due to the change in the group’s reporting currency as set out in note 2 refer to note 32 for details
a the amount included in retained earnings for 2009 of 899 million represents profit attributable to the owners of the parent of  
912 million less actuarial losses of 22 million in respect of the defined benefit pension plans net of a tax credit of 09 million      
 the amount included in the translation reserve of 141 million represents other comprehensive income related to the translation of  
foreign operations           
 the amount included within cash flow hedges of 80 million is in relation to movements on cash flow hedges see note 24
b  the amount included in retained earnings for 2010 of 849 million represents profit attributable to the owners of the parent of  
791 million plus actuarial gains of 86 million in respect of the defined benefit pension plans less an amount for the movement on the 
irrecoverable element of the pension plan surplus of 19 million net of a tax charge of 09 million           
 the amount included in the translation reserve of 33 million represents other comprehensive income related to the translation of  
foreign operations
 the amount included within cash flow hedges of 06 million is in relation to movements on cash flow hedges see note 24
the notes on pages 59 to 102 and page 121 form part of these financial statements 59 spirent communications plc annual report 2010
overview
business review
governance
financial statements
notes to the consol idated f inan cial statements 1 corporate information 
the group’s consolidated financial statements for the year ended 31 december 2010 were authorised for issue by the board of directors on  
3 march 2011 spirent communications plc is a public limited company incorporated and domiciled in england and wales the company’s 
ordinary shares are traded on the london stock exchange 
as required by the european union’s “eu” ias regulation and the companies act 2006 the group has prepared its consolidated financial 
statements in accordance with international financial reporting standards “ifrs” as adopted by the eu and issued by the international 
accounting standards board 
the company has elected to prepare the company financial statements in accordance with uk accounting standards these are presented on 
pages 104 to 121 and the accounting policies in respect of the company are set out on pages 105 to 108
2 summary of significant accounting policies 
basis of preparation 
the consolidated financial statements have been prepared under the historical cost convention except unless otherwise indicated 
the group has prepared its financial statements under ifrs the significant accounting policies applied in the preparation of these 
consolidated financial statements are set out below and the accounting policies adopted are consistent with those applied in the consolidated 
financial statements for the year ended 31 december 2009 although the comparative financial information has been restated for the change in 
reporting currency referred to below
change in reporting currency
the consolidated financial statements are presented in us dollars following a decision to change the reporting currency from sterling during 
the year the change was made in order to give a clearer understanding of spirent’s performance more closely reflecting the profile of the 
group’s revenue and operating profit which are primarily generated in us dollars or us dollarlinked currencies 
the currency translation reserve was set to zero at 1 january 2003 on transition to ifrs and has been represented on the basis that the group 
has reported in us dollars since that date share capital share premium account capital redemption reserve capital reserve and cash flow 
hedge reserve are translated into us dollars at the rates of exchange at the balance sheet date and the resultant exchange differences are 
included in other reserves
the reporting currency of the parent company remains as sterling as it is located in the united kingdom and its functional currency is sterling 
it will retain its share capital denominated in sterling
since the change in reporting currency has been applied retrospectively all comparative numbers in these consolidated financial statements 
have been restated into us dollars note 32 sets out in detail how the financial statements have been converted
new accounting standards
the following new standards amendments to standards and interpretations are mandatory for the first time in the current period and have 
been adopted by the group with no significant impact on its consolidated results or financial position
international accounting standards “iasifrs”
ias 27 revised consolidated and separate financial statements
ias 39 amendment to ias 39 – eligible hedged items
ifrs 2 amendments to ifrs 2 – group cashsettled sharebased payment transactions
ifrs 3 revised business combinations
ifric 17 distributions of noncash assets to owners
improvements to ifrss april 2009
basis of consolidation 
the consolidated financial statements incorporate the financial statements of the company and its subsidiaries made up to 31 december each 
year the financial statements of subsidiaries are prepared for the same reporting year as the parent company using consistent accounting 
policies  60 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
results of subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date 
on which control is transferred out of the group all intra group transactions balances income and expenses are eliminated on consolidation
goodwill 
goodwill arising on the acquisition of subsidiaries representing the excess of cost over the net fair value of the identifiable assets liabilities 
and contingent liabilities acquired is capitalised as an intangible asset goodwill is carried at cost less any accumulated impairment losses 
goodwill is subject to an annual review for impairment for the purpose of impairment testing goodwill is allocated to the related cash
generating units monitored by management where the recoverable amount of the cashgenerating unit is less than its carrying amount 
including goodwill an impairment loss is recognised in the income statement 
the carrying amount of goodwill allocated to a cashgenerating unit an operation within a cashgenerating unit an associate or jointly 
controlled entity is included in the profit or loss on its disposal 
intangible assets 
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses separately identifiable intangible 
assets such as patent fees licence fees trademarks and customer lists and relationships are capitalised on the balance sheet only when the 
value can be measured reliably or the intangible asset is purchased as part of the acquisition of a business such intangible assets are 
amortised over their useful economic lives on a straight line basis the carrying value of intangible assets is reviewed for impairment if events 
or changes in circumstances indicate the carrying value may not be recoverable 
product development
research expenditure is recognised in the year in which it is incurred intangible assets arising on the group’s various product development 
projects are recognised only if the recognition criteria of ias 38 “intangible assets” are met 
product development costs are expensed as incurred until the technological feasibility of the product under development has been 
established technological feasibility in spirent’s circumstances occurs when a working model is completed for software development 
technological feasibility is not established until the process of developing the software is complete after technological feasibility is 
established additional costs are capitalised and amortised on a straight line basis over the estimated useful life
at 31 december 2010 and 31 december 2009 no amounts have met the recognition criteria
property plant and equipment 
property plant and equipment are stated at cost less accumulated depreciation and accumulated impairment depreciation is not provided on 
freehold land depreciation is provided to write off the cost less estimated residual value of all other assets over their estimated useful lives 
on a straight line basis at rates which take into account commercial conditions at their location usual asset lives are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
building installations 20 years or lease period if less
fittings and equipment 3 to 8 years
motor vehicles 3 to 5 years
business systems software 4 years
the carrying values of property plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying 
value may not be recoverable 
impairment of assets 
intangible assets with finite useful lives and property plant and equipment are tested for impairment at each reporting date where there is an 
indication that an asset may be impaired goodwill and intangible assets with an indefinite useful life are assessed at least annually when an 
impairment test is performed the recoverable amount is assessed by reference to the higher of the net present value of the expected cash 61 spirent communications plc annual report 2010
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2 summary of significant accounting policies continued 
flows value in use of the relevant cashgenerating unit or asset and the fair value less cost to sell in assessing value in use the estimated 
future cash flows 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 where the carrying amount of an asset exceeds its recoverable amount the asset is considered 
impaired and is written down to its recoverable amount impairment losses are recognised in the income statement in those expense 
categories consistent with the function of the impaired asset
where an impairment loss has been recognised against an asset it may be reversed in future periods where there has been a change in the 
estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised but only to the extent that the 
asset’s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation had no 
impairment loss been recognised in prior years this does not apply for goodwill for which an impairment loss must not be reversed in any 
circumstances such a reversal is recognised in the income statement 
leases 
operating leases are leases where the lessor retains substantially all the risks and rewards of ownership of the asset and are not finance 
leases operating lease rentals are charged to the income statement on a straight line basis over the period of the lease 
inventories 
inventories are stated at the lower of cost and estimated net realisable value after provisions for obsolescence cost includes all costs in 
bringing each product to its present location and condition being the full manufacturing cost on a firstinfirstout basis including all 
attributable overheads based on a normal level of activity 
provisions 
provisions are recorded when the group has a present legal or constructive obligation as a result of a past event for which it is probable that 
the group will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the obligation can be made 
provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate 
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures expected to 
be required to settle the obligation 
foreign currencies 
the consolidated financial statements are presented in us dollars which is the group’s presentation currency 
transactions in foreign currencies are initially recorded at the rates ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated at the rates ruling at the balance sheet date all exchange differences are taken to the 
consolidated income statement nonmonetary assets and liabilities denominated in foreign currencies are measured in terms of historical 
costs using the exchange rate at the date of the initial transaction
the functional currencies of the group’s operations are principally us dollar sterling or euro on consolidation the assets and liabilities of the 
group’s foreign operations are translated into the group’s presentation currency at exchange rates ruling at the balance sheet date the results 
of foreign operations are translated into us dollars using average rates the exchange differences arising on retranslation are classified as a 
separate component of equity the translation reserve such translation differences are recognised as part of the profit or loss on disposal 
should an operation be disposed of the group has elected to apply the exemption in ifrs 1 “first time adoption of international financial 
reporting standards” which allows the cumulative translation differences for all foreign operations to be deemed to be zero at the date of 
transition to ifrs being 1 january 2003 
financial instruments 
financial assets and liabilities are recognised on the group’s balance sheet when it becomes a party to the contractual provisions of the 
instrument
trade receivables 
trade receivables are noninterest bearing and are stated at original invoiced amount less an appropriate allowance for estimated 
irrecoverable amounts such allowances are based on an assessment of debtor ageing past experience or known customer exposures 62 spirent communications plc annual report 2010
2 summary of significant accounting policies continued
cash and cash equivalents 
cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three 
months or less for the purposes of the consolidated cash flow statement cash and cash equivalents consist of cash and cash equivalents as 
defined above there are no bank overdrafts
trade payables
trade payables are noninterest bearing and are stated at the original invoiced amount 
equity instruments 
equity instruments are recorded at the proceeds received net of direct issue costs spirent communications plc ordinary shares held by the 
group are classified in shareholders’ equity as treasury shares and are recognised at cost and included as a deduction from retained earnings 
consideration received for the sale of such treasury shares is also recognised in equity with any difference between the proceeds from sale 
and the original cost being taken to retained earnings 
derivative financial instruments and hedge accounting
the group uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign currencies 
relating to firm commitments previously the group also managed exposures arising on highly probable forecast transactions this change in 
treasury policy arose as a consequence of the change in the group’s reporting currency from sterling to us dollars 
as the number of transactions now being hedged is significantly reduced and restricted to items which affect profit or loss or are recognised 
on the balance sheet at the balance sheet date the group has ceased to adopt the hedge accounting rules for all transactions entered into 
since the decision was taken to change the reporting currency the group previously designated its forward foreign currency exchange 
contracts as cash flow hedges and such designation was maintained until maturity of those remaining contracts in 2010
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into and are 
subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency exchange contracts is 
calculated by reference to current forward exchange rates for contracts with similar maturity profiles
changes in the fair value of contracts which were designated as effective hedges were recognised directly in other comprehensive income and 
the gain or loss on the ineffective portion of the hedge recognised immediately in the income statement for derivatives that do not qualify for 
hedge accounting any gains or losses arising from changes in fair value are taken to the income statement for effective hedges that were in 
relation to a financial asset or liability amounts originally deferred were recognised in the income statement in the same period in which the 
hedged item affected profit or loss for example when a highly probable forecast sale occurred for nonfinancial assets or liabilities the gains 
or losses that were included in equity were included in the initial measurement of the nonfinancial asset or liability at the time the asset or 
liability was recognised on the balance sheet
the group discontinued hedge accounting if the hedging instrument expired or was sold terminated or exercised the hedge no longer met the 
criteria for hedge accounting or the group revoked the designation gains or losses arising on hedging instruments which were cancelled due 
to termination of the underlying exposure were taken to the income statement immediately 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts 
 
retirement benefits
the group operates two funded defined benefit pension plans which are in the united kingdom all other pension plans are defined 
contribution in nature for the defined contribution plans the amount charged to the income statement is the contributions paid or payable 
during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method and 
updates are performed at each balance sheet date the cost of providing benefits under these plans is determined separately for each plan 
and attributes entitlement to benefits to the current period to determine current service cost and to the current and prior periods to 
determine the present value of defined benefit obligations past service costs are recognised in the income statement on a straight line basis 
over the vesting period or immediately if the benefits have vested when a settlement eliminating all obligations for benefits already accrued 
notes to the consol idated f inan cial statements continued 63 spirent communications plc annual report 2010
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financial statements
2 summary of significant accounting policies continued
or a curtailment reducing future obligations as a result of a material reduction in the plan membership or a reduction in future entitlement 
occurs the obligation and related plan assets are remeasured using current actuarial assumptions and the resultant gain or loss recognised in 
the income statement during the period in which the settlement or curtailment occurs
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting from the 
passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking into account 
material changes in the obligation during the year the expected return on plan assets is based on an assessment made at the beginning of 
the year of long term market returns on plan assets adjusted for the effect on the fair value of plan assets of contributions received and 
benefits paid during the year the difference between the expected return on plan assets and the interest cost is recognised in the income 
statement as finance costs or finance income
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments on liabilities 
and changes in actuarial assumptions are recognised immediately in the statement of comprehensive income
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the defined 
benefit obligation using a discount rate based on high quality corporate bonds denominated in the same currency and whose term is 
consistent with the estimated term of the obligation less any past service cost not yet recognised and less the fair value of plan assets out of 
which the obligations are to be settled directly fair value is based on market price information and in the case of quoted securities is the 
published bid price the value of a net pension benefit asset is restricted to the sum of any unrecognised past service costs and the present 
value of any amount the group expects to recover by way of refunds from the plan or reductions in the future contributions 
revenue recognition 
revenue is recognised when it is probable that economic benefits will flow to the group the revenue can be reliably measured and when the 
group has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised when collectability  
is probable 
for the sale of services revenue is recognised in accounting periods in which the service is rendered revenue from maintenance contracts is 
recognised over the period of performance on a straight line basis
revenue from product sales of hardware and software is recognised at the time of delivery and acceptance and when there are no significant 
vendor obligations remaining it is not until acceptance has occurred that the risks and rewards of ownership are transferred to the buyer 
terms of acceptance are dependent upon the specific contractual arrangement agreed with the customer
contractual arrangements are accounted for as two or more separate transactions only where the commercial substance is that the individual 
components operate independently of each other because they are capable of being provided separately from one another and it is possible 
to attribute reliable fair values to every component to the extent that a separate component comprises a product sale of hardware or 
software revenue is recognised as described above revenue is recognised on other components as the group fulfils its contractual 
obligations and to the extent that it has earned the right to consideration 
employee benefits 
when an employee has rendered services to the group during an accounting period short term benefits expected to be paid in exchange for 
those services are recognised in the same accounting period 
sharebased payment
the group operates various equitysettled sharebased compensation plans and accounts for these awards in accordance with ifrs 2 
“sharebased payment” in accordance with the transitional provisions available on firsttime adoption of ifrs the standard has been applied 
to awards granted after 7 november 2002 which were unvested at 1 january 2005
the fair value of these awards is recognised in the income statement on a straight line basis over the vesting period together with a corresponding 
change in equity the fair value is measured using a binomial model by reference to the share price at the date the awards were granted and taking 
into account the best estimate of the number of awards expected to vest the charge is reassessed at each balance sheet date to reflect the 
expected and actual levels of vesting except where the failure to vest is a result of not meeting a market condition awards where vesting is  64 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
conditional upon satisfying a market condition are treated as vesting irrespective of whether the market condition has been satisfied
the group has an employee share trust for the granting of certain share incentives to employees shares in the group held by the employee 
share trust are treated as treasury shares and presented in the balance sheet as a deduction from equity
tax
income tax on the profit or loss for the year comprises current and deferred tax income tax is recognised in the income statement except to the 
extent that it relates to items in equity
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the balance 
sheet date and any adjustments to tax payable for previous years
deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in 
the financial statements with the following exceptions
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business  –
combination that at the time of the transaction affects neither accounting nor taxable profit or loss 
in respect of taxable temporary differences associated with investments in subsidiaries associates and joint ventures where the timing of  –
the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the 
foreseeable future
a deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible 
temporary differences carried forward tax credits or tax losses can be utilised 
deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is 
realised or the liability is settled based on tax rates and laws enacted or substantively enacted at the balance sheet date
dividends paid
the interim dividend is included in the financial statements in the period it is approved by the directors and the final dividend in the period it 
is approved by the shareholders at an annual general meeting
critical accounting assumptions and judgements
the preparation of financial statements requires the group to make estimates and assumptions that affect items reported such estimates and 
assumptions are based on management’s best knowledge of current facts circumstances and future events actual results may differ 
possibly significantly from those estimates the areas requiring a high degree of judgement or where assumptions and estimates are 
significant to the consolidated financial statements are discussed below
goodwill impairment
the group tests annually by cashgenerating unit whether goodwill has suffered impairment and more frequently when events or 
circumstances indicate that the current carrying value may not be recoverable the recoverable amounts of cashgenerating units have been 
determined based on value in use calculations which require the use of estimates and assumptions these are described in note 13
defined benefit pension plans
the pension cost and the defined benefit obligation of the group’s defined benefit pension plans are based on a number of selected 
assumptions these include the discount rate inflation rate salary growth longevity and expected return on the plans’ assets differences 
arising from actual experience or future changes in assumptions will be reflected in future periods the effect of changing these assumptions 
is described in note 9 65 spirent communications plc annual report 2010
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financial statements
2 summary of significant accounting policies continued
revenue recognition
for revenue recognition purposes contractual arrangements are accounted for as two or more separate transactions only where the 
commercial substance is that the individual components operate independently of each other because they are capable of being provided 
separately from one another and it is possible to attribute reliable fair values to every component to the extent that a separate component 
comprises a product sale of hardware or software revenue is recognised as described above revenue is recognised on other components as 
the group fulfils its contractual obligations and to the extent that it has earned the right to consideration management exercises a degree of 
judgement in setting the criteria used for determining when revenue which involves several elements should be recognised
income taxes
the group is subject to income taxes in a number of tax jurisdictions and judgement is applied in determining the worldwide provision for 
income taxes there are many transactions for which the final tax determinability is uncertain for example liabilities are recognised for 
anticipated tax audit issues based on whether additional taxes are likely to be due based on the facts and circumstances known at the time 
the financial statements are prepared where the final outcome differs from the amounts that were initially recorded the differences will be 
recorded in the future period in which the determination is made
deferred taxes
the extent to which deferred tax assets can be recognised is based on current forecasts and estimates prepared by management a change to 
these forecasts and estimates could result in a different recognition outcome
provisions
the group records a provision for vacant property based on future rentals and reduced by its expected ability to sublease the vacant space to 
a third party provisions are discounted where the effect is significant changes in the actual outcome compared with the expected outcome 
on subleasing or changes to other assumptions will be recorded in future periods
new standards and interpretations not applied
the iasb and ifric have issued the following standards and interpretations with an effective date for the group after the date of these financial 
statements
international accounting 
standards “iasifrs”
effective for annual 
periods beginning on or after
ias 12 amendments to ias 12 – deferred tax recovery of underlying assets 1 january 2012
ias 24 revised related party disclosures 1 january 2011
ias 32 amendment to ias 32 – classification of rights issues 1 february 2010
ifrs 1 amendments to ifrs 1 – severe hyperinflation and removal of fixed dates for  
firsttime adopters 1 july 2011
ifrs 7 amendments to ifrs 7 disclosures – transfers of financial assets 1 july 2011
ifrs 9 financial instruments 1 january 2013
ifric 14 amendment to ifric 14 – prepayments of a minimum funding requirement 1 january 2011
ifric 19 extinguishing financial liabilities with equity instruments 1 july 2010
improvements to ifrss may 2010 various
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the group’s financial 
statements in the period of initial application
3 revenue      
2010 
 million
2009 
restated 
 million
sale of goods 4026 3556
maintenance and support services 796 716
total revenue 4822 4272 66 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
4 operating segments
the group’s organisational structure is based on differences in the products and services offered by each segment and information regularly 
reviewed by the group’s chief executive officer its chief operating decision maker is presented on this basis the group’s operating segments 
follow this structure however where operating segments exhibit similar economic characteristics and are similar in nature they are aggregated 
into a single reportable segment 
the group’s reportable operating segments are performance analysis service assurance and systems the group evaluates segment 
operating profit before sharebased payment acquired intangible asset amortisation and exceptional items although there were no 
exceptional operating items in 2010 or 2009 finance income and finance costs are not allocated to the reportable segments corporate  
is not an operating segment and costs are separately reported and not allocated to the reportable segments 
corporate assets comprise cash and cash equivalents held for central treasury purposes and other corporate assets information on segment 
liabilities is not regularly provided to the group’s chief executive officer and is therefore not disclosed below
the principal activities of each reportable operating segment are as follows
performance analysis provides solutions that test a broad range of communications technologies critical to the development of   –
nextgeneration network equipment and devices
service assurance provides network monitoring and field test solutions to allow service providers to diagnose troubleshoot and determine  –
how to resolve issues with networks and systems within the live network
systems develops and supplies sophisticated electronic control systems for electrically powered vehicles in the medical mobility and  –
industrial markets
2010 
 million
performance 
analysis
service 
assurance systems corporate total
revenue
external revenue 3658 570 594 – 4822
there were no intersegment sales
profit before tax
total reportable segment profitloss 979 130 88 52 1145
unallocated amounts
acquired intangible asset amortisation 14
sharebased payment note 29 04
operating profit 1127
finance income 08
finance costs 13
profit before tax 1122
other information
product development 659 99 44 – 802
expenditure on property plant and equipment note 14 163 12 06 – 181
depreciation note 14 100 13 05 01 119
intangible asset amortisation – other 02 – – – 02
segment assets 2641 177 227 2400 5445
segment cash flows
operating activities 984 175 77 242 994
investing activities 158 12 06 14 162
financing activities – – – 287 287
826 163 71 515 545 67 spirent communications plc annual report 2010
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4 operating segments continued
2009 
restated 
 million
performance 
analysis
service 
assurance systems corporate total
revenue
external revenue 3168 526 578 – 4272
there were no intersegment sales
profit before tax
total reportable segment profitloss 783 75 79 49 888
unallocated amounts
acquired intangible asset amortisation 14
sharebased payment note 29 06
operating profit 868
finance income 06
finance costs 25
profit before tax 849
other information
product development 607 100 39 – 746
expenditure on property plant and equipment note 14 90 08 03 – 101
depreciation note 14 118 11 06 – 135
intangible asset amortisation – other 05 – – – 05
segment assets 2422 130 214 1927 4693
segment cash flows
operating activities 924 104 104 171 961
investing activities 91 08 03 28 74
financing activities – – – 94 94
833 96 101 237 793
geographical information      
2010 
 million
2009 
restated 
 million
revenue by market
europe 795 692
united states 2485 2124
asia pacific rest of americas africa 1542 1456
4822 4272
europe includes united kingdom revenue of 147 million 2009 140 million
revenues are attributed to countries based on customer location  
   68 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
4 operating segments continued
2010 
 million
2009 
restated 
 million
noncurrent assets
europe 41 55
united states 1335 1288
asia pacific rest of americas africa 35 17
1411 1360
europe includes united kingdom noncurrent assets of 32 million 2009 48 million  
no one customer accounted for 10 per cent or more of total group revenue in either 2010 or 2009 
5 profit before tax  
the following items have been charged or credited in arriving at profit before tax   
2010 
 million
2009 
restated 
 million
employee benefit costs note 8 1697 1601
costs of inventories recognised as an expense 1255 1038
writedown of inventories to net realisable value note 17 10 17
amortisation of intangible assets note 13 16 19
depreciation of property plant and equipment
owned assets note 14 119 135
loss on disposal of property plant and equipment – 01
operating leases
minimum lease payments 117 107
sublease income 10 08
product development costs note 4 802 746
net foreign exchange charge 04 55
  
services provided to all of the operations of the group by the auditor ernst  young llp  and its associates  
2010 
 million
2009 
restated 
 million
audit services
statutory audit 04 04
other fees to auditors
local statutory audits for subsidiaries 04 04
other audit related services – 01
other services relating to tax 01 01
05 06
09 10
a description of the work of the audit committee is set out in the directors’ statement on corporate governance and includes an explanation of 
how auditor objectivity and independence is safeguarded when nonaudit services are provided by the auditors 69 spirent communications plc annual report 2010
overview
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governance
financial statements
6 finance income 
2010 
 million
2009 
restated 
 million
interest receivable 08 06
7  finance costs  
2010 
 million
2009 
restated 
 million
bank fees – 05
leasehold provisions discount unwind note 23 01 03
defined benefit pension plans note 9 12 17
13 25
8 employees  
the average number of people employed by the group during the year was  
2010 
number
2009 
number
manufacturing 402 414
product development 503 500
selling and distribution 376 362
administration 179 173
1460 1449
 
employee benefit costs were  
2010 
 million
2009 
restated 
 million
remuneration 1516 1432
social security costs 125 113
pension and other related costs 52 50
expense of sharebased payment note 29 04 06
1697 1601
please refer to the report on directors’ remuneration on pages 45 to 52 for disclosures relating to the emoluments share incentives and 
pensions of the directors
9 pensions
defined benefit plans
the funded defined benefit pension plans are in the united kingdom and comprise the spirent communications plc staff pension  life 
assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” the staff plan is the 
group’s most significant plan there is in addition a united kingdom unfunded plan 70 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
9 pensions continued
the assets and liabilities on the balance sheet are as follows 
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
assets
uk defined benefit pension plan – staff plan 71 – 30
uk defined benefit pension plan – cash plan 06 10 07
77 10 37
liabilities
uk defined benefit pension plan – staff plan – 05 –
uk unfunded plan 06 06 09
06 11 09
the valuation used for these disclosures has been based on a full assessment of the liabilities of the plans as at 1 april 2009 the present 
values of the defined benefit obligation the related current service cost and any past service costs were measured using the projected unit 
credit method
   
i the key financial assumptions 
the assumptions used for both plans were as follows 
2010

2009

2008

inflation – rpi 34 34 30
inflation – cpi 25 na na
rate of increase in pensionable salaries 39 39 35
rate of increase for pensions in payment pre 2001 service 37 37 36
rate of increase for pensions in payment post 2001 pre april 2005 service 32 32 29
rate of increase for pensions post april 2005 service 22 22 21
rate of increase in deferred pensions 25 34 30
rate used to discount plan liabilities 55 57 60
expected rate of return on plan assets weighted for both plans 58 56 52
spirent communications plc employs a building block approach in determining the long term rate of return on plans’ assets historical markets 
are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles 
the assumed long term rate of return on each class of asset is set out within this note the overall expected rate of return on assets is then 
derived by aggregating the expected return of each asset class over the actual asset allocation for the plans 
following the uk government’s announcement in 2010 the inflation index to be used to derive statutory increases to pensions both before 
and after they come into payment has been changed from the retail prices index “rpi” to the consumer prices index “cpi” in the staff 
plan the increases provided to pensions before they come into payment are at the statutory level and hence are impacted by this change 
however the increases provided to pensions after they come into payment are prescribed by the plan rules and are not impacted due to a 
number of differences between the indices including both constituents and construction cpi is expected to be lower than rpi over the long 
term which means that the defined benefit obligation has reduced this reduction has been recognised as an assumption change at 31 
december 2010
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are such 
that a member currently aged 68 2009 aged 68 2008 aged 65 will live on average for a further 192 years 2009 191 years 2008 217 years 
if they are male and for a further 210 years 2009 209 years 2008 240 years if they are female for a member who retires in 2020 2009 in 
2019 2008 in 2028 at age 64 2009 age 64 2008 age 65 the assumptions are that they will live on average for a further 237 years 2009 
236 years 2008 229 years after retirement if they are male and for a further 256 years 2009 255 years 2008 250 years after retirement if 
they are female  71 spirent communications plc annual report 2010
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business review
governance
financial statements
9 pensions continued
the approximate impact to the past service liabilities of changing these main assumptions is as follows 
reducing the discount rate by 01 per cent per annum this would increase past service liabilities by 31 million  –
increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling factor  –
this would increase past service liabilities by 7 1 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to be insignificant
ii the assets and the liabilities in the plans       
long term 
rate of return 
expected 

2010 
 million
long term 
rate of return 
expected 

2009 
restated 
 million
long term 
rate of return 
expected 

2008 
restated 
 million
staff plan
equities 85 554 85 493 80 358
government bonds 40 617 43 518 40 868
corporate bonds 50 739 51 923 57 370
insured annuities 55 46 57 47 57 55
property 84 207 90 58 70 59
cash and other 10 35 10 72 27 52
fair value of plan assets 59 2198 57 2111 53 1762
present value of defined benefit pension plan obligations 2105 2116 1729
surplusdeficit in the plan 93 05 33
irrecoverable element of pension plan surplus 22 – 03
surplusdeficit in the plan on the balance sheet 71 05 30
cash plan
equities 85 38 85 29 80 23
government bonds 41 33 44 43 40 30
insured annuities 55 03 57 03 40 04
cash and other 10 34 10 34 27 42
fair value of plan assets 46 108 45 109 44 99
present value of defined benefit pension plan obligations 102 96 92
surplus in the plan 06 13 07
irrecoverable element of pension plan surplus – 03 –
surplus in the plan on the balance sheet 06 10 07
the plans are prohibited from investing in spirent’s own financial instruments      
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these financial statements 72 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
9 pensions continued
iii analysis of the amounts chargedcredited to the income statement       
2010 
 million
2009 
restated 
 million
analysis of amount charged to operating costs
current service cost 03 02
expected return on pension plans’ assets 105 101
interest on pension plans’ liabilities 117 118
finance costs note 7 12 17
net charge to the income statement 15 19
iv analysis of amount recognised directly in the statement of comprehensive income      
2010 
 million
2009 
restated 
 million
actual return on pension plans’ assets 214 218
less expected return on pension plans’ assets 105 101
experience gains on plans’ assets 109 117
experience losses arising on plans’ liabilities 06 39
changes in assumptions underlying the present value of plans’ liabilities 17 100
actuarial gainslosses recognised directly in equity 86 22
the cumulative amount of actuarial gains and losses recognised since 1 january 2003 in the statement of comprehensive income is 
125 million loss 2009 211 million loss the directors are unable to determine how much of the pension plan deficit recognised on 
1 january 2003 and taken directly to equity of 67 5 million in the group is attributable to actuarial gains and losses since inception of  
those pension plans consequently the directors are unable to determine the amount of actuarial gains and losses that would have been 
recognised in the statement of comprehensive income before 1 january 2003 
2010 
 million
2009 
restated 
 million
movement in the irrecoverable element of the pension plan surplus 19 –
v movements in the present value of funded defined benefit obligations       
2010 
 million
2009 
restated 
 million
at 1 january 2212 1821
current service cost 03 02
interest cost 117 118
employee contributions 02 02
benefit payments 96 89
actuarial loss 23 139
exchange adjustment 54 219
present value of funded defined benefit pension plans’ obligations 2207 2212 73 spirent communications plc annual report 2010
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financial statements
9 pensions continued
vi movements in the fair value of plans’ assets
2010 
 million
2009 
restated 
 million
at 1 january 2220 1861
expected return on plans’ assets 105 101
employer contributions 18 05
employee contributions 02 02
benefit payments 96 89
actuarial gain 109 117
exchange adjustment 52 223
fair value of plans’ assets 2306 2220
vii history of experience gains and losses            
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
2007 
restated 
 million
2006 
restated 
 million
present value of defined benefit pension plans’ obligations 2207 2212 1821 2688 3101
fair value of plans’ assets 2306 2220 1861 2841 3148
net surplus in plans 99 08 40 153 47
experience loss on plans’ liabilities
amount  million 06 39 07 16 185
percentage of plans’ liabilities  03 18 04 06 60
experience gainloss on plans’ assets
amount  million 109 117 285 52 09
percentage of plans’ assets  47 53 153 18 03
the above plans are funded and have full uk hm revenue  customs “hmrc” taxexempt approval certain members whose salaries were 
in excess of the hmrc statutory earnings cap had their benefits increased through unapproved unfunded arrangements to the level that 
would otherwise have applied in respect of basic salary only the group has contractually agreed to pay the additional retirement benefits 
itself and a provision is made in respect of this obligation in the balance sheet at 31 december 2010 of 06 million 2009 06 million this 
represents the actuarial value as confirmed by the group’s pension advisers of the unapproved benefit entitlements accrued at that date the 
value is assessed and reviewed on a market value basis in line with the main plan valuation and adjusted each year there were no experience 
gains or losses in the period from 2006 to 2010 on the unfunded plan 
expected contributions for these plans for 2011 are 28 million including 24 million of additional contributions to fund the deficit arising 
from the actuarial valuation completed in 2010
defined contribution plans 
united kingdom 
the group maintains defined contribution pension plans for employees in the united kingdom employer contributions into these plans for 
2010 were 11 million 2009 13 million 
           
united states 
the group maintains a defined contribution pension plan for employees of its united states subsidiaries this plan also known as a 401k 
plan allows employees to defer a percentage of their salary for retirement the investment choices offered by the plan are a selection of 
diversified mutual funds offering a broad mix of investment return potential with varying levels of risk in aggregate the group’s contributions 
to the us plan totalled 30 million for 2010 2009 31 million total assets in the defined contribution plan at the end of 2010 were  
1449 million 2009 1236 million there were no defined benefit plans in the united states in 2010 or 2009  74 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
9 pensions continued
other jurisdictions 
outside the united kingdom and the united states employees are provided with pension arrangements determined in accordance with 
approved local practice and regulations these arrangements are defined contribution plans total contributions for 2010 in respect of these 
plans amounted to 05 million 2009 05 million
 
total contributions to defined contribution plans were 46 million 2009 49 million
 
directors’ pension arrangements 
the pension arrangements of the executive directors are described in detail in the report on directors’ remuneration on pages 45 to 52
10 tax
2010 
 million
2009 
restated 
 million
tax chargecredit in the income statement
current income tax
foreign tax 213 118
amounts overprovidedunderprovided in previous years
foreign tax creditcharge 10 28
total current income tax charge 203 146
deferred tax
recognition of deferred tax assets 03 311
reversal of temporary differences 131 102
total deferred tax chargecredit 128 209
tax chargecredit in the income statement 331 63
tax relating to items chargedcredited to other comprehensive income or equity 
2010 
 million
2009 
restated 
 million
current tax on share incentives – 05
deferred tax on share incentives 26 17
deferred tax on defined benefit pension plan 09 09
reconciliation of the total tax charge
the tax expense in the income statement for the year is higher than the standard rate of corporation tax in the uk of 280 per cent 2009 lower 
and 280 per cent 75 spirent communications plc annual report 2010
overview
business review
governance
financial statements
10 tax continued
the differences are reconciled below    
2010 
 million
2009 
restated 
 million
accounting profit before tax 1122 849
accounting profit multiplied by the uk standard rate of corporation tax of 280 per cent 2009 280 per cent 314 237
intangible assets 01 02
sharebased payment 21 14
differences in overseas rates and other adjustments 77 20
tax overprovidedunderprovided in prior years 10 28
recognition of uk deferred tax assets 03 143
recognition of us deferred tax assets – 168
use of overseas tax credits and unrecognised losses 25 25
total tax chargecredit reported in the income statement 331 63
recognition of deferred tax assets
during 2010 the group recognised deferred tax assets in the united kingdom of 03 million 2009 143 million and in the united states of 
nil 2009 168 million
of the deferred tax credit arising in 2009 217 million is as a result of a change in estimate in respect of the recovery of tax losses and  
timing differences
11 earnings per share 
earnings per share is calculated by dividing the profit for the year attributable to ordinary equity shareholders of the parent company by the 
weighted average number of ordinary shares outstanding during the year 
diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary equity shareholders of the parent company 
by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that 
would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares 
2010 
 million
2009 
restated 
 million
profit for the year attributable to equity shareholders of parent company 791 912
2010 
number 
million
2009 
number 
million
weighted average number of shares in issue – basic 6722 6670
dilutive potential of employee share incentives 62 34
weighted average number of shares in issue – diluted 6784 6704 76 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
11 earnings per share continued
2010 
cents
2009 
restated 
cents
earnings per share
basic earnings per share 1177 1367
diluted earnings per share 1166 1360
there were no ordinary share transactions that occurred after 31 december that would have significantly changed the number of ordinary 
shares or potential ordinary shares outstanding at the end of the period if those transactions had occurred before the end of the reporting 
period in either year 
the group is disclosing adjusted earnings per share attributable to equity shareholders at a constant effective tax rate of 304 per cent being 
the rate applicable for 2010 in order to provide a measure to enable periodonperiod comparisons to be made of its performance a 
reconciliation is provided below
 million
2010 
cents  million
2009 
restated 
cents
profit for the period attributable to equity shareholders of parent company 791 1177 912 1367
deferred tax assets – change in estimate note 10 – 217
restate tax to a constant effective tax rate of 304 – 132
prior year tax creditcharge note 10 10 28
adjusted basic at a constant tax rate 781 1162 591 886
adjusted diluted at a constant tax rate 1151 882
12 dividends paid and proposed    
2010 
 million
2009 
restated 
 million
declared and paid in the year
equity dividend on ordinary shares
final dividend paid for the year ended 31 december 2009 of 100 cents 066 pence per ordinary share  
31 december 2008 087 cents 060 pence 64 62
interim dividend 2010 110 cents 069 pence per ordinary share 2009 093 cents 055 pence 73 59
137 121
proposed for approval at agm not recognised as a liability at 31 december
equity dividend on ordinary shares
final dividend 2010 140 cents 086 pence per ordinary share 2009 100 cents 066 pence 94 64
the directors are proposing a final dividend in respect of the financial year ended 31 december 2010 of 140 cents per share 086 pence 
2009 100 cents 066 pence which will absorb an estimated 94 million of shareholders’ funds 2009 64 million it will be paid on 5 may 
2011 to shareholders who are on the register of members at close of business on 11 march 2011 payment will be made to adr holders on 
12 may 2011 no liability is recorded in the financial statements in respect of this final dividend
with effect from 2010 dividends are proposed in us dollars and paid in pounds sterling in previous years the dividend was proposed and paid 
in pounds sterling the exchange rate for determining the amount of the final dividend to be paid for 2010 was 163 £1 77 spirent communications plc annual report 2010
overview
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governance
financial statements
13 intangible assets    
 million
goodwill
intangible 
assets total
cost net of accumulated amortisation and impairment losses
at 1 january 2009 restated 1070 47 1117
amortisation for the year – 19 19
additions – 03 03
exchange adjustment 23 – 23
at 1 january 2010 restated 1093 31 1124
amortisation for the year – 16 16
additions – 01 01
exchange adjustment 11 – 11
at 31 december 2010 1104 16 1120
at 31 december 2009 restated
cost gross carrying amount 29224 122 29346
amortisation and accumulated impairment losses 28131 91 28222
net carrying amount 1093 31 1124
at 31 december 2010
cost gross carrying amount 28754 123 28877
amortisation and accumulated impairment losses 27650 107 27757
net carrying amount 1104 16 1120
the carrying amounts of intangible assets at 31 december by class are as follows    
 million
customer 
list
current 
technology other total
at 31 december 2010 01 04 11 16
at 31 december 2009 restated 02 16 13 31
amortisation and impairment charges 
goodwill at 31 december 2010 acquired through business combinations is all in the cashgenerating unit performance analysis which is a 
reportable segment there has been no goodwill impairment charged in 2010 or 2009
 
intangible assets are amortised on a straight line basis over their estimated useful lives which are on average five years and the charge is 
included within administration expenses in the income statement the remaining amortisation periods of the intangible asset balances arising 
in relation to customer list and current technology are less than one year
  78 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
13 intangible assets continued
annual impairment test 
the recoverable amount of the performance analysis cashgenerating unit at 30 november 2010 the annual impairment testing date has 
been determined based on a value in use calculation using management’s cash flow projections over a five year period cash flows in 
subsequent years have been extrapolated using a 275 per cent growth rate 2009 275 per cent which management estimates to be the 
approximate average long term growth rate for the industries in which this unit operates the cash flows have been discounted using a pretax 
discount rate of 146 per cent 2009 17 6 per cent the recoverable amount of this unit calculated on a value in use basis was in excess of its 
carrying value and consequently no impairment has been recognised 
key assumptions for the annual impairment test 
the key assumptions used in the value in use calculation were
 
revenue growth rates  –
gross margin  –
operating expenses  –
discount rate  –
growth rate used to extrapolate cash flows beyond the five year period covered by management’s projections –
 
projections are denominated in the same currency as the denomination of the goodwill balance to eliminate the effect of fluctuating  
exchange rates
 
revenue growth rates used in management’s projections are based on management’s estimate of growth in the markets served 
the cash flows used in the impairment review have been approved by the board
 
gross margins and operating expenses are based on historical values adjusted for the effect of revenue growth
 
the discount rate applied to the cash flows is based on the risk free rate for ten year government bonds adjusted for a risk premium to reflect 
both the increased risk associated with investing in equities and the systematic risk of the specific cashgenerating unit
 
long term growth rates are based upon management’s estimate
 
sensitivity to changes in key assumptions 
the directors believe that no reasonable possible change in any of the key assumptions used in isolation would cause the carrying value of 
performance analysis to exceed its recoverable amount 79 spirent communications plc annual report 2010
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governance
financial statements
14 property plant and equipment  
 million
land and 
buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost net of accumulated depreciation and accumulated impairment
at 1 january 2009 restated 68 131 69 268
additions
owned assets 02 70 29 101
disposals – 02 01 03
depreciation charge for the year 20 75 40 135
exchange adjustment 01 03 01 05
at 1 january 2010 restated 51 127 58 236
additions
owned assets 10 131 40 181
disposals – 06 – 06
interclass transfers – 10 10 –
depreciation charge for the year 15 74 30 119
exchange adjustment – 01 – 01
at 31 december 2010 46 167 78 291
at 31 december 2009 restated
cost 222 504 526 1252
accumulated depreciation and accumulated impairment 171 377 468 1016
net carrying amount 51 127 58 236
at 31 december 2010
cost 232 609 549 1390
accumulated depreciation and accumulated impairment 186 442 471 1099
net carrying amount 46 167 78 291
none of the property plant and equipment is held under finance lease arrangements
15 capital commitments and contingent liabilities 
the group had no capital commitments at 31 december 2010 31 december 2009 nil 
the group has provided indemnities of 06 million 2009 06 million for certain ongoing business obligations under letters of credit for 
subsidiary companies
16 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest is given 
on page 121 of these financial statements 80 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
17  inventories 
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
raw materials 131 132 168
work in progress 20 14 22
finished goods 225 135 158
376 281 348
an expense of 10 million 2009 17 million has been recognised in the period for inventory writedowns there were no reversals of prior 
period inventory writedowns 2009 nil 
no inventories are carried at fair value less costs to sell 2009 nil
18 trade and other receivables    
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
noncurrent assets
other receivables 34 29 32
prepayments accrued income and deferred costs 02 08 04
36 37 36
current assets
trade receivables 817 675 752
other receivables 35 32 35
prepayments accrued income and deferred costs 130 106 112
982 813 899
1018 850 935
the trade receivables are stated net of provisions for doubtful debts the movement in the provision was as follows    
2010 
 million
2009  
restated
 million
at 1 january 21 27
charge for the year 06 02
released in the year 18 02
amounts written off 03 08
exchange adjustment – 02
at 31 december 06 21
the directors consider that the carrying amount of trade and other receivables approximates to their fair value    
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a large number  
of customers  81 spirent communications plc annual report 2010
overview
business review
governance
financial statements
19 cash and cash equivalents    
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
cash at bank and in hand 1264 665 395
short term bank deposits 975 1074 465
2239 1739 860
cash at bank and in hand earns interest at floating interest rates of this balance 258 million 2009 267 million 2008 nil is callable at 
notice of between 7 and 35 days
 
short term bank deposits are made for varying periods of between one day and three months 2009 one day and three months 2008 one day 
and one week depending on the cash requirements of the group and earn interest at the short term deposit rates appropriate for the term of 
the deposit and currency
at the end of 2010 the currency split of cash and cash equivalents was us dollar 56 per cent 2009 13 per cent 2008 30 per cent sterling  
37 per cent 2009 77 per cent 2008 61 per cent and other currencies 7 per cent 2009 10 per cent 2008 9 per cent
for the purposes of the cash flow statement cash and cash equivalents comprise the above amounts  
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
noncurrent
cash on deposit 11 18 36
at 31 december 2010 11 million 2009 18 million 2008 36 million is held in a blocked trust account and is available for use by the 
company as creditors who were outstanding at the date of the cancellation of the share premium account and capital redemption reserve 
being 24 november 2004 are settled see note 27 
20 trade and other payables – current   
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
trade payables 270 188 197
payments received on account 27 13 33
other taxes and social security costs 32 29 24
accruals and deferred income 756 636 660
1085 866 914
trade payables are noninterest bearing and are normally settled on 60 day terms other payables are noninterest bearing   
the directors consider that the carrying amount of trade payables approximates to their fair value     82 spirent communications plc annual report 2010
notes to the consolidated financial statements continued
21 deferred tax     
t he movements in the deferred tax assetsliabilities are as follows     
 million
t emporary 
differences tax losses
uk pension 
plans t otal
at 1 january 2009 restated 128 54 07 175
recognised in the year note 10 173 138 – 311
charged in the year note 10 94 08 – 102
deferred tax on defined benefit pension plan note 10 – – 09 09
deferred tax on share incentives recognised in equity note 10 17 – – 17
exchange adjustment 04 11 – 15
at 1 january 2010 restated 228 195 02 425
recognised in the year note 10 – 03 – 03
charged in the year note 10 75 56 – 131
deferred tax on defined benefit pension plan note 10 – – 09 09
deferred tax on share incentives recognised in equity note 10 26 – – 26
exchange adjustment 03 03 01 01
at 31 december 2010 182 139 08 313
a deferred tax asset of 313 million has been recognised at 31 december 2010 2009 425 million 2008 17 5 million 137 million is in 
the united kingdom 2009 204 million 2008 88 million 17 5 million is in the united states 2009 221 million 2008 87 million and 
01 million is in the rest of the world 2009 nil 2008 nil
 
t he deferred tax asset includes 64 million in respect of the tax deduction which may be available on the future exercise of share incentives 
2009 53 million 2008 nil of which 26 million has been recognised in equity 2009 17 million
t he deferred tax liability arising on the united kingdom pension plan surplus in 2010 and 2008 has been offset as permitted by ias 12 “income 
taxes”  movements in deferred tax in relation to the pension plan have been charged or credited to the statement of comprehensive income in all 
years
all deferred tax assets on temporary differences arising principally in the united kingdom and united states have been recognised at  
31 december 2010 and 2009 apart from 19 million in c anada 2009 26 million in 2008 419 million of temporary differences were not 
recognised as there was insufficient evidence under ias 12 to recognise a deferred tax asset in respect of these temporary differences
t he group has tax losses arising in the united kingdom of 942 million 2009 1001 million 2008 1322 million that are available for 
offset against suitable future taxable profits a deferred tax asset has not been recognised in respect of these losses as their future recovery 
is uncertain united kingdom tax losses can be carried forward indefinitely in total deferred tax assets amounting to 27 5 million 
2009 308 million 2008 536 million have not been recognised
t he chancellor in the budget on 22 june 2010 announced reductions in the main rate of corporation tax and rates of capital allowances t he 
standard rate of uk corporation tax will be reduced from 28 per cent to 27 per cent from 1 april 2011 and there will be progressive annual 
reductions of a further 1 per cent until a rate of 24 per cent is reached with effect from 1 april 2014
t he finance act no 2 2010 received royal assent on 27 july 2010 with the first of the rate reductions being substantively enacted from 
21 july 2010
t he deferred tax assets and liabilities at the balance sheet date are calculated at the substantively enacted rate of 27 per cent whilst detailed 
calculations have not been prepared at this stage it is estimated that the impact of the remaining annual corporation tax rate reductions 
would not be material to the financial statements 83 spirent communications plc annual report 2010
overview
business review
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financial statements
22 trade and other payables – noncurrent      
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
other payables 14 16 18
accruals and deferred income 61 63 55
75 79 73
23 provisions and other liabilities    
 million
other 
provisions
lease 
provisions total
at 1 january 2009 restated 13 158 171
discount unwind note 7 – 03 03
utilised in the year – 68 68
exchange adjustment – 08 08
at 1 january 2010 restated 13 101 114
discount unwind note 7 – 01 01
charged in the year – 07 07
released in the year – 02 02
utilised in the year – 45 45
exchange adjustment – 01 01
at 31 december 2010 13 63 76
provisions have been analysed as follows    
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
current 51 61 53
noncurrent 25 53 118
76 114 171
the lease provisions are for the continuing obligations under leases in respect of properties which have been vacated by the group where 
material lease obligations are discounted the group expects these provisions to be utilised over the next five years
 
other provisions are mainly environmental provisions on property disposed of the group expects these provisions to be utilised in less than 
one year
24 derivative financial instruments
the derivative financial instruments are forward foreign currency exchange contracts
the group uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign currencies 
relating to firm commitments in 2009 the group also managed exposures arising on highly probable forecast transactions  84 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
24 derivative financial instruments continued
at 31 december 2010 and 2009 the group held various forward foreign currency exchange contracts in respect of the forward sale of us 
dollars against sterling and for the purchase of euro against sterling on trading transactions
2010 
 million
2009 
restated 
 million
sale of us dollars against sterling at an average rate of 157 2009 157 148 279
purchase of euro against sterling at an average rate of 118 2009 111 09 23
these contracts were designated as cash flow hedges at 31 december 2009 following the change in reporting currency to us dollars in 2010 
the group has chosen not to designate any new contracts as hedges      
the fair value of the derivative financial instruments at 31 december is as follows      
2010 
 million
2009 
restated 
 million
2008 
restated 
 million
assets liabilities assets liabilities assets liabilities
currency derivatives – expected to be realised in less than one year
not designated as hedges – 02 – – – –
designated as a cash flow hedge – – 10 02 – 81
– 02 10 02 – 81
the movements included within other comprehensive income in respect of cash flow hedges are as follows     
2010 
 million
2009 
restated 
 million
gains arising during the year – 08
less reclassification adjustments for gainslosses included in profit or loss 06 72
fair value movements on cash flow hedges 06 80
gains and losses on cash flow hedges recycled into the income statement from equity are charged or credited to administration costs  
  85 spirent communications plc annual report 2010
overview
business review
governance
financial statements
25 financial instruments and financial risk management     
the main purpose of the group’s financial instruments other than trade receivables trade payables and provisions is to fund the group’s 
liquidity requirements
all the group’s financial assets and liabilities are categorised as loans and receivables with the exception of the derivative financial 
instruments which are measured at fair value these are shown in the following table     
2010 
 million
2009 
restated 
 million
loans and 
receivables 
at amortised 
cost
derivative 
financial 
instruments 
at fair value
loans and 
receivables 
at amortised 
cost
derivative 
financial 
instruments 
at fair value
noncurrent cash on deposit note 19 11 – 18 –
noncurrent other receivables note 18 34 – 29 –
cash and cash equivalents note 19 2239 – 1739 –
current trade and other receivables note 18 852 – 707 –
currency derivatives that are designated hedges note 24 – – – 10
financial assets 3136 – 2493 10
noncurrent other payables note 22 14 – 16 –
current trade payables note 20 270 – 188 –
accruals 486 – 399 –
provisions note 23 76 – 114 –
currency derivatives that are not designated hedges note 24 – 02 – –
currency derivatives that are designated hedges note 24 – – – 02
financial liabilities 846 02 717 02
the group enters into derivative transactions forward foreign currency exchange contracts for the management of the group’s foreign 
currency exposures when deemed appropriate 
the key objective of the group’s treasury department is to manage the financial risks of the business and to ensure that sufficient liquidity is 
available to the group all treasury activity operates within a formal control framework the board has approved treasury policies and 
guidelines and periodically reviews treasury activities additionally it is the group’s policy that speculative treasury transactions are  
expressly forbidden 
a market risk 
the main types of market risk that affect the group are interest rate risk and exchange rate risk 
interest rate risk 
the group has no external debt and has limited exposure to interest rate risk
 
the group’s excess funds are principally held in the united kingdom and the united states and invested in short term bank deposits it 
therefore has some exposure to interest rate risk arising on changes in sterling and us dollar interest rates
cash and cash equivalents long term cash on deposit and forward foreign currency exchange contracts are the group’s financial instruments 
which are exposed to interest rate risk  86 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
25 financial instruments and financial risk management continued
short term bank deposits all mature within three months forward foreign currency exchange contracts all mature within three months 2009 
one year the financial instruments bear the following interest rates 
effective 
interest rate 

2010 
 million
effective 
interest rate 

2009 
restated 
 million
fixed rate
fixed deposits 040 975 042 1074
forward foreign currency exchange contracts net 02 08
973 1082
floating rate
cash at bank and in hand 1264 665
interest rates on financial instruments classified as fixed rate are fixed until the maturity of the instrument all fixed rate deposits mature 
within three months after which date they will be exposed to floating rates of interest 
in addition 11 million 2009 18 million was held in a blocked trust account and was earning interest of 071 per cent at 31 december 2010 
2009 061 per cent the maturity of the deposit is three months at maturity the interest rate will be reset this cash must be retained in the 
blocked trust account in accordance with the terms of the undertakings made at the time of the cancellation of the share premium account and 
capital redemption reserve the “cancellation” in 2004 the funds must remain in this account until creditors which existed at the date of the 
cancellation have been repaid and therefore the maturity of this account is uncertain 
interest receivable for the year was 08 million note 6 2009 06 million and is under the effective interest method 
the other financial instruments of the group that are not included in the above table are noninterest bearing and are therefore not subject to 
interest rate risk 
a movement of 25 basis points in interest rates based on levels of investment at 31 december 2010 would increase or reduce interest income 
and equity by 03 million 
exchange rate risk 
currency exposures arise from trading transactions undertaken by the group in foreign currencies and on the translation of the operating 
results and net assets of overseas subsidiaries 
the group has the majority of its operations in the united states and has chosen with effect from 1 january 2010 to present its consolidated 
financial statements in us dollars the company’s functional currency is sterling and its share capital is denominated in pounds sterling the 
group also has operations in europe and asia and therefore its results and assets and liabilities are affected on translation by movements in 
exchange rates in relation to the us dollar the group does not enter into instruments to hedge the translation exposure of the operating 
results or net assets of its overseas subsidiaries since these are considered accounting and not cash exposures
the group is not exposed to significant transactional foreign currency risk at 31 december 2010 nor at 31 december 2009 because the 
majority of its businesses do not enter into nonfunctional currency transactions where such transactions do occur the group enters into 
forward foreign currency exchange contracts as appropriate 
group treasury by means of forward foreign currency exchange contracts carries out the transaction hedging activity in relation to normal 
trading activity at 31 december 2010 the group has hedged its financial assets and liabilities denominated in nonfunctional currencies in 
2009 the group also hedged its forecast trading receipts and payments  87 spirent communications plc annual report 2010
overview
business review
governance
financial statements
25 financial instruments and financial risk management continued
b credit risk 
investment counterparties are subject to preapproval by the board and as such short term deposits are limited to banks with a rating of 
standard  poor’s a or moody’s a there are preapproved limits set for each bank to avoid any concentrations of credit risk 
the maximum credit exposure at the balance sheet date under financial instruments in relation to cash and bank deposits is equal to the 
carrying value of 2250 million 2009 1757 million 
trade receivables which generally have 30 to 90 day terms are carried at original invoice amount less an allowance for uncollectable amounts 
where appropriate trade receivable exposures are managed in the business units where they arise allowance is made for bad and doubtful 
debts based on management’s assessment of the risk taking into account ageing profile experience and circumstance 
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a large number of 
customers with no one customer accounting for more than 10 per cent of total group revenue the maximum credit exposure at the balance 
sheet date in relation to trade receivables is equal to the carrying value of 817 million 2009 67 5 million 
the composition of trade receivables at 31 december is as follows 
2010 
 million
2009 
restated 
 million
neither impaired nor past due 450 440
past due but not impaired
less than 30 days overdue 241 156
30 to 60 days 59 32
over 60 days 67 47
trade receivables 817 675
the group closely monitors amounts due from customers and performs activities such as credit checks and review of payment history and has 
put in place appropriate credit approval limits based on these procedures management assessed the quality of those receivables that are 
past due but not impaired as low risk 
the movement on the receivables provision during the year is given in note 18 the value of impaired trade receivables is 06 million  
2009 21 million for all other financial assets the maximum exposure to credit risk is represented by the carrying amount
c liquidity risk 
the group’s objective is to ensure that there are sufficient sources of funding to meet projected requirements its operations are financed 
through cash and cash equivalents held centrally and cash generated from operations 
at 31 december 2010 the group had cash and cash equivalents of 2239 million 2009 1739 million all of which matures within three months
during 2010 the group generated 994 million of cash from operating activities 2009 961 million and considers that with current cash 
resources no debt and positive cash flow from its operating activities it has adequate resources available to it to remain in operational 
existence for the forseeable future  88 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
25 financial instruments and financial risk management continued
the group has entered into forward foreign currency exchange contracts all of which mature within 3 months 2009 one year the gross 
settlement amounts of these contracts are as follows
2010 
 million
2009 
restated 
 million
sale of us dollars against sterling 148 279
purchase of euro against sterling 09 23
gross settlement amounts 157 302
the group is debt free and does not have loans payable financial liabilities other than derivative financial liabilities are trade and other 
payables the majority of which are all due to be settled within one year and provisions note 23 
the group does not have any other material financial contractual commitments 
d fair value of financial instruments 
the carrying value of all financial assets and liabilities is a reasonable approximation of fair value 
derivative financial instruments are stated at fair value 
the fair value of currency derivatives is determined by reference to current forward exchange rates for contracts with similar maturity profiles 
and is therefore determined to be a level 2 financial instrument as its value is based on observable market inputs 
e capital management 
the primary objective of the group’s capital management is to support its business and maximise shareholder value the group’s capital is its 
total shareholders’ funds 
the group manages its capital structure and makes adjustments to it in the light of changes in economic conditions during 2009 and 2010 
the company has been operating an on market share repurchase programme in 2010 the company repurchased 104 million of its ordinary 
shares at a cost of 197 million in 2009 the company repurchased 06 million of its ordinary shares at a cost of 09 million 
26 operating lease commitments  
at 31 december the group had outstanding commitments for future minimum lease payments under noncancellable operating leases which 
fall due as follows  
2010 
 million
2009 
restated 
 million
within one year 112 109
in the second to fifth years 163 216
over five years – 10
275 335
the group leases certain land and buildings under noncancellable operating lease agreements with a variety of terms the group also leases 
certain plant and equipment under noncancellable operating lease agreements total future sublease payments receivable relating to the 
above leases amount to 10 million 2009 21 million of which 09 million 2009 10 million will be recognised within one year and the 
balance in the second to fifth year 89 spirent communications plc annual report 2010
overview
business review
governance
financial statements
27  equity  
a issued share capital   
issued and fully paid  
number of  
ordinary shares 
million  million
at 1 january 2009 restated 6718 322
allotted pursuant to share incentives exercised 69 03
cancelled during the year
1
06 –
exchange adjustment – 39
at 1 january 2010 restated 6781 364
allotted pursuant to share incentives exercised 66 03
cancelled during the year
1
98 05
exchange adjustment – 09
at 31 december 2010 6749 353
note
1  during 2010 under the programme of returning capital to shareholders the company repurchased 98 million 2009 06 million ordinary shares on market which were 
subsequently cancelled  
in accordance with the rules of the following share plans share incentives were exercised during the year which resulted in new ordinary 
shares being allotted by the company or existing ordinary shares being transferred from either the spirent employee share ownership trust 
“esot” or spirent sharesave trust “sst” as follows
number of 
ordinary shares 
million
consideration 
received 
 million
2005 employee incentive plan 07 01
spirent stock incentive plan 66 34
1995 executive share option scheme 13 11
all employee share plans
1
 01 01
 87 47
  
note
1  the all employee share plans are the uk savings related share option scheme the 2005 sharesave scheme the us employee stock purchase plan the global all employee share 
purchase plan and the uk employee share purchase plan see note 28
during the year 01 million ordinary shares were transferred from the sst to satisfy options exercised under the uk all employee share 
schemes 2009 03 million and 20 million ordinary shares were transferred from the esot to satisfy options exercised under the spirent 
stock incentive plan 2009 17 million 06 million ordinary shares were purchased and placed into the esot during 2010 2009 nil
there has been no material increase in the issued ordinary share capital whether by exercise of share incentives or otherwise between  
31 december 2010 and 3 march 2011 the date on which these financial statements have been signed
b equity and reserves
the nature and purpose of each reserve within equity is as follows
i share premium account this reserve records the consideration premium for shares issued at a value that exceeds their nominal value
ii  capital redemption reserve this reserve arises in relation to share capital cancellation
iii  capital reserve this reserve arises in relation to share option plans in acquired companies
iv other reserves share capital share premium account capital redemption reserve capital reserve and cash flow hedge reserve are 
translated into us dollars at the rates of exchange at the balance sheet date and the resultant exchange differences are included in other 
reserves 90 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
27  equity continued
v  translation reserve this reserve is used to record exchange differences arising from the translation of the financial statements of foreign 
subsidiaries and
vi cash flow hedge reserve this reserve records movements in the fair value of effective forward foreign currency exchange contracts 
designated as hedging instruments
investment in own ordinary shares
at 31 december 2010 an amount of 3004 million 2009 2826 million has cumulatively been deducted from retained earnings in relation 
to the cost of investment in own ordinary shares
at 31 december 2010 the esot held 40 million ordinary shares 2009 54 million ordinary shares to satisfy awards under various share 
incentive plans of this number 01 million ordinary shares were unconditionally vested at 31 december 2010 2009 01 million ordinary 
shares at 31 december 2010 the sst held 05 million ordinary shares 2009 06 million ordinary shares to satisfy awards made to uk 
based employees under an all employee share scheme the market value of own ordinary shares held in trust being in total 45 million 
ordinary shares 2009 60 million ordinary shares at 31 december 2010 was 104 million 2009 98 million
cancellation of share premium account and capital redemption reserve
on 24 november 2004 spirent communications plc was granted an order of the high court for the approval of the cancellation of the share 
premium account and capital redemption reserve the “cancellation” which stood at that date at 13211 million £7027 million and  
13 million £07 million respectively
the cancellation created a reserve in the financial statements of the company which was applied to eliminate the deficit in distributable 
reserves the balance of this reserve created after the deficit in distributable reserves had been eliminated was transferred to a special 
nondistributable reserve during 2006 the company transferred funds equal to the aggregate amount due to any creditors of spirent 
communications plc who were creditors on 24 november 2004 and who still remained creditors to a blocked trust account placing these 
funds in a blocked trust account in accordance with the undertakings made at the time of the cancellation allowed the special reserve to be 
released to distributable reserves
capital redemption reserve
during 2010 the company cancelled 98 million ordinary shares 2009 06 million ordinary shares that had been the subject of the on market 
share repurchase programme and transferred 05 million 2009 32000 to the capital redemption reserve
capital reserve
in 2010 the reserve has been reduced by 12 million 2009 06 million in relation to share incentives which have been cancelled or  
have lapsed
share repurchase
during 2010 the company repurchased 104 million ordinary shares on market at a cost of 197 million 2009 06 million at a cost of  
09 million of the shares repurchased 98 million ordinary shares have been subsequently cancelled and 06 million have been placed into 
the esot in 2009 all shares repurchased were subsequently cancelled 91 spirent communications plc annual report 2010
overview
business review
governance
financial statements
28 employee share plans           
movements in share incentives over a two year period ending on 31 december 2010 are shown below      
2005 
employee 
incentive
plan
1
spirent 
stock 
incentive
plan
2
1995 
executive 
share 
option 
scheme
acquisition
plans
3
uk 
sharesave
schemes
4
number 
of share 
incentives 
million
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise 
price 
pence
incentives outstanding 
at 31 december 2008 30 37 417 66 36 119 14 122 04 39
granted 17 – 01 72 – – – – – –
exercised 07 19 139 52 03 49 – – 03 38
forfeited – – 03 50 – – – – – –
expired – – 66 123 03 425 12 116 – –
incentives outstanding 
at 31 december 2009 40 24 210 57 30 123 02 157 01 39
exercised 13 50 93 60 13 58 – – 01 39
forfeited – – 01 51 – – – – – –
expired – – 02 58 03 326 02 165 – –
incentives outstanding 
at 31 december 2010 27 11 114 55 14 140 – – – –
incentives exercisable 
at 31 december 2009 15 50 193 58 30 123 02 157 01 39
at 31 december 2010 02 50 112 55 14 140 – – – –
notes  
1    figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate as at 31 december 2010 13 million ordinary 
shares held in the esot had been allocated to hedge awards made under the 2005 employee incentive plan 2009 08 million
2   figures for the spirent stock incentive plan show both share options and stock appreciation rights in aggregate as at 31 december 2010 02 million ordinary shares held in the 
esot had been allocated to hedge awards made under the spirent stock incentive plan 2009 22 million
3   the acquisition plans are share plans which originally granted options over other companies’ equity which on acquisition by spirent communications plc have been rolled over 
into spirent ordinary shares further details of the acquisition plans can be found below
4  01 million ordinary shares were transferred from the sst to settle the exercise of uk sharesave options in 2010 2009 03 million as at 31 december 2010 05 million ordinary  
 shares remained in the sst hedging share option grants made under the uk sharesave schemes
  
the weighted average share price at exercise date was 127 6 pence 2009 824 pence 92 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
28 employee share plans continued
share plan
exercise period  
as at 31 december
range of 
exercise 
prices 
pence
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
outstanding 
million
2010 
weighted 
average 
remaining 
contractual 
life 
years
weighted 
average 
exercise 
price 
pence
number 
of share 
incentives 
outstanding 
million
2009 
weighted 
average 
remaining 
contractual 
life 
years
2005 employee  
incentive plan 250808 – 291119 0–53 11 27 83 24 40 82
spirent stock  
incentive plan 110304 – 070510 17–22 – – – 20 – 03
050805 – 131115 37–57 50 81 21 50 119 30
170904 – 120816 59–87 69 33 11 67 91 16
1995 executive share 031004 – 040814 56–72 69 02 32 59 15 44
option scheme 020405 – 010512 113–134 126 10 13 126 10 23
110503 – 080411 305 305 02 03 322 05 07
acquisition plans 150802 – 060811 10 – – – 10 – 16
141100 – 121010 127 – – – 127 02 05
141100 – 121010 350 – – – 350 – 08
uk sharesave schemes 011209 – 310511 38–41 – – – 39 01 11
total 155 283
description of employee share plans 
discretionary plans
2005 employee incentive plan “eip”
the eip  which was introduced in 2005 and replaced the now closed esos see below is currently available for selected employees including 
executive directors on a discretionary basis
under the eip  the company is able to grant share options including hmrc approved options sharesettled stock appreciation rights “sars” 
and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions have been met 
for share options and sars the performance conditions relate to the company’s earnings per share “eps” and for performance shares 
relate to total shareholder return “tsr”
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on pages 46  
and 47 
options and sars granted under the eip expire on the tenth anniversary of their grant unless they have previously lapsed or been exercised
spirent stock incentive plan “ssip”
the ssip is now closed for new grants and has been replaced by the eip referred to above
the ssip was introduced in 2000 this discretionary plan was primarily targeted at us employees with grants normally determined by 
reference to the seniority and contribution of the individual together with the performance of the relevant business and prevailing local market 
practice grants were also permitted to selected newly hired and promoted employees on a monthly basis under the ssip  the company was 
able to grant share options and sharesettled sars no price was payable on the grant of an award 93 spirent communications plc annual report 2010
overview
business review
governance
financial statements
28 employee share plans continued
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not normally subject 
to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant and thereafter in equal 
tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary of the date of grant will lapse
the vesting of ssip awards made to bill burns prior to his appointment as chief executive officer and to certain other key senior managers 
within the communications group were subject to the company meeting eps growth targets over the vesting periods further details of these 
performance conditions are set out in the report on directors’ remuneration on pages 47 and 48
sars granted under the eip and ssip will deliver the appreciation value ie the increase in market value of an ordinary share over the base 
price of the sar in the form of ordinary shares this “sars approach” helps the company manage its dilution headroom more efficiently as 
only the sar gain needs to be funded using a sars approach it is not possible to determine the precise level of dilution until the sars are 
exercised at 31 december 2010 05 million eip sars and 110 million ssip sars with an average base price of 50 pence and 55 pence 
respectively were outstanding 2009 19 million eip sars and 17 6 million ssip sars with an average base price of 50 pence and 56 pence 
respectively during 2010 7 3 million eip and ssip sars were exercised resulting in the issue of 40 million ordinary shares 2009 31 million 
ordinary shares were issued on the exercise of 94 million eip and ssip sars
1995 executive share option scheme “esos”
the esos is now closed for new grants and has been replaced by the eip referred to above
under the esos awards of share options including hmrc approved options were on a discretionary basis no price was payable on the grant 
of an option and no options were granted at a discount to the market price
the normal exercise period for options granted under the esos is between the third and tenth anniversary of the date of grant options 
awarded under the esos were subject to the achievement of an eps performance condition before they could be exercised all outstanding 
options have now passed their eps performance conditions and remain exercisable until they expire on the tenth anniversary of their 
respective grant dates
acquisition plans
netcom amended and restated stock option plan “narsop”
spirent completed the acquisition of netcom systems inc “netcom” in 1999 445 million of the total consideration was satisfied through 
the rollover of outstanding options over netcom shares into options over approximately 238 million ordinary shares as adjusted on 
substantially similar terms as previously existed at 31 december 2010 there are no remaining outstanding narsop options and the plan has 
therefore been closed
zarak amended and restated stock option plan “zarsop”
out of a total consideration of approximately 449 million ordinary shares issued for the acquisition of zarak systems corporation “zarak” in 
2000 approximately 38 million ordinary shares arose in connection with the rollover of outstanding options over zarak shares into options 
over spirent ordinary shares on substantially similar terms as previously existed at 31 december 2010 there are no remaining outstanding 
zarsop options and the plan has therefore been closed
caw amended and restated stock plan “carsp”
out of a total initial consideration for the acquisition of caw networks inc “caw” in 2002 of 49 million approximately 4 million was in 
respect of spirent ordinary shares and options which arose on the rollover of outstanding options and shares under the previous caw 
employee stock plan the options and shares vested over a period ending in 2006 on substantially similar terms as previously existed the 
options have a ten year life from the original date of grant pursuant to the terms of the merger agreement for caw an additional cash payment 
of 788 us cents was payable as each share vested or upon the exercise of a vested option no further awards can be made under this plan
the ordinary shares subject to rolledover options from the acquisition of netcom zarak and caw or granted under the ssip  do not count 
towards abi scheme limits  94 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
28 employee share plans continued
all employee plans
uk savings related share option scheme “srsos” and the 2005 sharesave scheme 
the srsos closed in 2005 and was replaced by the 2005 sharesave scheme srsos options which remain outstanding may still be exercised 
prior to expiry however no further grants can be made both schemes operate as hmrc approved saveasyouearn schemes and are open to 
all uk employees subject to a qualifying service period any future sharesave invitations will be made under the 2005 sharesave scheme 
which is broadly similar to the srsos
no price is payable on the grant of an option the option exercise price is calculated by reference to the middle market closing price of an 
ordinary share on the business day prior to the beginning of the invitation period discounted by up to 20 per cent at the board’s discretion 
options are normally exercisable within six months of the third fifth or seventh anniversary of the contract commencement date as elected by 
the option holder at the start of the contract
the company operates the sst to honour the commitment to deliver ordinary shares against the exercise of outstanding options under the 
srsos spirent sharesave trust limited a whollyowned subsidiary of spirent communications plc acts as sole trustee of the sst during the 
year 01 million ordinary shares were transferred to participants 2009 03 million ordinary shares
no invitations have been made under either of these schemes since 2003
us employee stock purchase plan “us espp”
the us espp enables the company to invite all us employees to acquire shares in the company on market using deductions from payroll in 
november 2010 such an invitation was made with deductions from payroll commencing in january 201 1 the us espp also enables the company 
to grant eligible us employees the right to acquire spirent ordinary shares using the proceeds of a savings contract if such a grant were made 
when joining the us espp  participants would enter into a 12 month contract to save up to 15 per cent of base salary subject to an individual limit 
of 1000 per month
prior to the invitation in november 2010 no offer had been made under this plan since 2003
global all employee share purchase plan “gaespp”
the gaespp offers employees in countries other than the uk or us an opportunity to share in the company’s performance through share 
ownership the gaespp was implemented in canada in january 2002 and operated on similar terms to the us espp above with participants 
entering into a 12 month contract to save up to 15 per cent of base salary subject to an individual maximum of cdn 1000 per month
no offer has been made under this plan since 2003
uk employee share purchase plan “uk espp”
the uk espp  which is an hmrc approved share incentive plan was approved by shareholders in 2005 and is available to all uk employees 
the uk espp offers three ways to provide ordinary shares to employees free shares partnership shares and matching shares the uk espp 
will operate in conjunction with a trust which holds the shares on behalf of participants
in november 2010 the company made an invitation to all uk employees to acquire partnership shares on market using deductions from 
payroll commencing in january 2011
stock appreciation rights plan “sarp”
the sarp was introduced in september 1999 as an interim incentive arrangement for the employees of netcom following the closure of the 
narsop described above and subsequently for certain other employees in the communications group rights under the sarp vested over 
four years 25 per cent vesting one year after the date of grant and the remainder vesting on a monthly basis over a further 36 months rights 
granted were not subject to the fulfilment of any performance conditions
the sarp will deliver the appreciation value ie the aggregated increase in the market value of an ordinary share over the rights price in the 
form of existing ordinary shares which have been purchased in the market by the company’s esot the sarp is closed and no further grants 
can be made under it
at 31 december 2010 there are no remaining outstanding sarp options and the plan has therefore been closed 95 spirent communications plc annual report 2010
overview
business review
governance
financial statements
29 sharebased payment   
the total charge for the year relating to employee sharebased payment plans is as follows   
2010 
 million
2009 
restated 
 million
2005 employee incentive plan 03 02
spirent stock incentive plan 01 04
04 06
all schemes are equitysettled
 
no share incentives were granted during 2010 for 2009 the fair value of share incentives has been estimated as at the date of grant using a 
binomial model the following table gives the assumptions made in arriving at the sharebased payment charge and the fair value 
2010 2009
weighted average share price pence – 963
weighted average exercise price pence – 39
weighted average fair value pence – 294
expected volatility  – 53–55
expected life years – 45
risk free rate  – 24–25
dividend yield  – 20
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two years which 
management considers to be the period which is likely to be most representative of future volatility 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 for performance shares granted under the 2005 employee incentive plan which have a market based performance condition 
it has been assumed that there will be 30 per cent vesting for valuation purposes
30 reconciliation of profit before tax to cash generated from operations   
2010 
 million
2009 
restated 
 million
profit before tax 1122 849
adjustments for
finance income 08 06
finance costs 13 25
intangible asset amortisation 16 19
depreciation of property plant and equipment 119 135
loss on the disposal of property plant and equipment – 01
sharebased payment 04 06
changes in working capital
deferred income received 102 64
increasedecrease in receivables 165 72
increasedecrease in inventories 96 80
increasedecrease in payables 117 108
decrease in provisions 40 68
defined benefit pension plan 15 06
cash flow from operations 1169 1063 96 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
31 related party transactions   
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are not 
disclosed in this note
 
remuneration of key management personnel 
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of the 
categories specified in ias 24 “related party disclosures” 
2010 
 000
2009 
restated 
 000
short term employee benefits 2836 2872
sharebased payment 90 104
post retirement benefits 10 10
2936 2986
in 2010 eric hutchinson made gains on the exercise of share incentives of 2441000 2009 137 000
in 2010 bill burns made gains on the exercise of share incentives of 495000 2009 86000
32 explanation of the effect of a change to the reporting currency on prior year financial statements
as referred to in note 2 during the period the spirent communications group changed its reporting currency from pounds sterling to us dollars 
as a result the group’s prior year consolidated income statement its prior year consolidated statement of comprehensive income its 
consolidated balance sheet at 31 december 2009 and 2008 its prior year consolidated cash flow statement and its consolidated statement 
of changes in equity for 2009 and 2008 that were presented in the 2009 annual report have been restated to show all amounts in us dollars 
this note explains the methodology used to translate amounts previously reported by the group
consolidated income statement for the year ended 31 december 2009
the group’s policy has been to translate transactions in foreign currencies at the average rate applicable during the financial year unless this 
would produce a material difference compared with using the spot rate of exchange the consolidated income statement has therefore been 
translated into us dollars using an average exchange rate for 2009 of 157 us dollars to 1 pound sterling or the spot us dollar to sterling rate 
ruling on the date of the specific transaction 97 spirent communications plc annual report 2010
overview
business review
governance
financial statements
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
the table below sets out the reported numbers in pounds sterling and the restatement into us dollars
amounts per 2009 
annual report 
presented in £ 
£ million
2009 comparative 
amounts as included in 
2010 annual report 
presented in us 
 million
revenue 2721 4272
cost of sales 916 1438
gross profit 1805 2834
product development 475 746
selling and distribution 497 780
administration 280 440
operating profit 553 868
finance income 04 06
finance costs 16 25
profit before tax 541 849
tax 40 63
profit for the year attributable to equity shareholders of parent company 581 912
earnings per share pencecents
basic 871 1367
diluted 867 1360
consolidated statement of comprehensive income for the year ended 31 december 2009
the consolidated statement of comprehensive income has been translated into us dollars using an average exchange rate for 2009 of 157 us 
dollars to 1 pound sterling or the spot us dollar to sterling rate ruling on the date of the specific transaction
the currency translation reserve was set to zero at 1 january 2003 on transition to ifrs and has been represented on the basis that the group 
has reported in us dollars since that date  
amounts per 2009 
annual report 
presented in £ 
£ million
2009 comparative 
amounts as included in 
2010 annual report 
presented in us
 million
profit for the year attributable to equity shareholders of parent company 581 912
other comprehensive income
fair value movements on cash flow hedges 51 80
exchange differences on retranslation of foreign operations 108 141
actuarial losses on defined benefit pension plans 14 22
deferred tax credit on defined benefit pension plans 06 09
other comprehensive income 65 208
total comprehensive income for the year attributable to equity shareholders of parent company 516 1120 98 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
consolidated balance sheets at 31 december 2009 and 2008
as required by ias 1 “presentation of financial statements revised” the change in reporting currency requires the group to include two 
comparative balance sheets in its 2010 consolidated financial statements the consolidated balance sheets have been translated into us 
dollars by multiplying all assets and liabilities by using the following closing exchange rates
us£1
year ended 31 december 2009 161
year ended 31 december 2008 144
share capital share premium account capital redemption reserve capital reserve and cash flow hedge reserve are translated into us dollars 
at the rates of exchange at the balance sheet date and the resultant exchange differences are included in other reserves
the currency translation reserve was set to zero at 1 january 2003 on transition to ifrs and has been represented on the basis that the group 
has reported in us dollars since that date   99 spirent communications plc annual report 2010
overview
business review
governance
financial statements
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
amount at 
31 december 2009 
per 2009 
annual report 
presented in £
£ million
2009 comparative 
amounts included in 
2010 annual report 
presented in us
 million
amount at 
31 december 2008 
per 2009 
annual report 
presented in £
£ million
2008 comparative 
amounts included in 
2010 annual report 
presented in us
 million
assets
noncurrent assets
intangible assets 698 1124 776 1117
property plant and equipment 147 236 186 268
trade and other receivables 23 37 25 36
cash on deposit 11 18 25 36
defined benefit pension plan surplus 06 10 26 37
deferred tax 264 425 122 175
1149 1850 1160 1669
current assets
inventories 175 281 242 348
trade and other receivables 505 813 624 899
derivative financial instruments 06 10 – –
cash and cash equivalents 1080 1739 597 860
1766 2843 1463 2107
total assets 2915 4693 2623 3776
liabilities
current liabilities
trade and other payables 538 866 635 914
current tax 64 103 46 66
derivative financial instruments 01 02 56 81
provisions and other liabilities 38 61 37 53
641 1032 774 1114
noncurrent liabilities
trade and other payables 49 79 51 73
defined benefit pension plan deficit 07 11 06 09
provisions and other liabilities 33 53 82 118
89 143 139 200
total liabilities 730 1175 913 1314
net assets 2185 3518 1710 2462
capital and reserves
share capital 226 364 224 322
share premium account 183 295 172 248
capital redemption reserve 106 171 106 153
capital reserve 10 16 14 20
other reserves – 06 – 76
translation reserve 118 226 226 85
cash flow hedge reserve 04 06 47 68
retained earnings 1538 2446 1015 1626
total equity attributable to equity shareholders of parent company 2185 3518 1710 2462 100 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
equity items at 31 december 2007
the group translates all transactions that affect share capital share premium account  capital redemption reserve capital reserve which all 
occur in the books of the parent company whose functional currency is pounds sterling retained earnings and cash flow hedge reserve at 
either the average rate for the year or the spot rate on the date of the specific transaction concerned as noted above the closing balances on 
share capital share premium account capital redemption reserve capital reserve and cash flow hedge reserve are then translated into us 
dollars at the rates of exchange at the balance sheet date and the resultant exchange differences are included in other reserves   
 
the currency translation reserve was set to zero at 1 january 2003 on transition to ifrs and has been represented on the basis that the   
group has reported in us dollars since that date
the table below shows all equity items in pounds sterling along with the equivalent us dollar amount at 31 december 2007   
amount at 31 december 
2007 per 2009 annual 
report presented in £
£ million
2007 comparative 
amounts included in 
2010 annual report 
presented in us
 million
share capital 280 557
share premium account 155 308
capital redemption reserve 48 96
capital reserve 36 72
other reserves – 187
translation reserve 67 519
cash flow hedge reserve 05 10
retained earnings 965 1455
total equity attributable to equity shareholders of parent company 1412 2810 101 spirent communications plc annual report 2010
overview
business review
governance
financial statements
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
equity items at 31 december 2008         
the table below reconciles the group’s equity from 31 december 2007 as per the table above to 31 december 2008 all balances shown form  
the opening balance of the group’s consolidated statement of changes in equity for 2009
 million
share 
capital 
share 
premium 
account 
capital 
redemption 
reserve
capital 
reserve
other 
reserves
translation 
reserve
cash flow 
hedge 
reserve
retained 
earnings
total
 equity
balance at 31 december 2007 557 308 96 72 187 519 10 1455 2810
profit for the period – – – – – – – 1384 1384
fair value movements on cash flow hedges – – – – – – 78 – 78
exchange differences on foreign operations – – – – – 434 – – 434
actuarial losses on defined benefit  
pension plans – – – – – – – 94 94
irrecoverable element of pension  
plan surplus – – – – – – – 26 26
deferred tax on defined benefit  
pension plans – – – – – – – 05 05
total comprehensive income for the year – – – – – 434 78 1321 809
new shares issued 03 31 – – – – – – 34
share cancellation 107 – 107 – – – – – –
employee share ownership trust – – – – – – – 11 11
share repurchase – – – – – – – 1166 1166
sharebased payment – – – – – – – 28 28
equity dividends – – – – – – – 64 64
other movements – – – 41 – – – 41 –
exchange adjustment 131 91 50 11 263 – 20 – –
balance at 31 december 2008 322 248 153 20 76 85 68 1626 2462
consolidated cash flow statement for the year ended 31 december 2009       
the group’s policy has been to translate transactions in foreign currencies at the average rate applicable during the financial year unless this 
would produce a material difference compared with using the spot rate of exchange the consolidated cash flow statement has therefore been 
translated into us dollars using an average exchange rate for 2009 of 157 us dollars to 1 pound sterling or the spot us dollar to sterling rate  
ruling on the date of the specific transaction 102 spirent communications plc annual report 2010
notes to the consol idated f inan cial statements continued
32 explanation of the effect of a change to the reporting currency on prior year financial statements continued
the table below sets out the reported numbers in pounds sterling and the restatement into us dollars
     
amounts per 2009 
annual report 
presented in £
£ million
2009 comparative 
amounts included in 
2010 annual report  
presented in us
 million
cash flows from operating activities
cash flow from operations 677 1063
tax paid 65 102
net cash inflow from operating activities 612 961
cash flows from investing activities
interest received 04 06
transfer from long term deposit 14 22
purchase of intangible assets 02 03
purchase of property plant and equipment 64 101
proceeds from the sale of property plant and equipment 01 02
net cash used in investing activities 47 74
cash flows from financing activities
dividend paid 77 121
proceeds from the issue of share capital and employee share ownership trust 24 38
share repurchase 07 11
net cash used in financing activities 60 94
net increase in cash and cash equivalents 505 793
cash and cash equivalents at the beginning of the year 597 860
effect of foreign exchange rate changes 22 86
cash and cash equivalents at the end of the year 1080 1739
33 post balance sheet events
on 15 february 2011 the group announced that it had entered into an agreement to acquire the fanfare group inc for a cash consideration of 
150 million the transaction was completed on 16 february 2011 103 spirent communications plc annual report 2010
overview
business review
governance
financial statements
independent auditors’ report to the 
members of spirent communications plc
we have audited the parent company financial statements of spirent 
communications plc for the year ended 31 december 2010 which 
comprise the parent company balance sheet and the related notes 1 
to 21 the financial reporting framework that has been applied in 
their preparation is applicable law and united kingdom accounting 
standards united kingdom generally accepted accounting practice
this report is made solely to the company’s members as a body  
in accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as  
a body for our audit work for this report or for the opinions we  
have formed
respective responsibilities of directors and auditors
as explained more fully in the statement of directors’ responsibilities 
set out on page 40 the directors are responsible for the preparation 
of the parent company financial statements and for being satisfied 
that they give a true and fair view our responsibility is to audit and 
express an opinion on the parent company financial statements in 
accordance with applicable law and international standards on 
auditing uk and ireland those standards require us to comply with 
the auditing practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements
opinion on financial statements
in our opinion the parent company financial statements
give a true and fair view of the state of the company’s affairs as at  –
31 december 2010
have been properly prepared in accordance with united kingdom  –
generally accepted accounting practice and
have been prepared in accordance with the requirements of the  –
companies act 2006
opinion on other matters prescribed by the companies act 2006
in our opinion
the part of the report on directors’ remuneration to be audited  –
has been properly prepared in accordance with the companies act 
2006 and
the information given in the report of the directors for the  –
financial year for which the financial statements are prepared is 
consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where 
the companies act 2006 requires us to report to you if in our opinion
 adequate accounting records have not been kept by the parent  –
company or returns adequate for our audit have not been 
received from branches not visited by us or
the parent company financial statements and the part of the  –
report on directors’ remuneration to be audited are not in 
agreement with the accounting records and returns or
certain disclosures of directors’ remuneration specified by law are  –
not made or
we have not received all the information and explanations we  –
require for our audit
other matter
we have reported separately on the group financial statements of 
spirent communications plc for the year ended 31 december 2010
richard wilson senior statutory auditor
for and on behalf of ernst  young llp  statutory auditor
london
3 march 2011
the maintenance and integrity of the spirent communications plc website is the responsibility of the directors the work carried out by the auditors does not involve consideration of these 
matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website
legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions 104 spirent communications plc annual report 2010
parent compan y balan ce sheet at 31 december notes
2010 
£ million
2009 
£ million
fixed assets
intangible assets 4 43 50
tangible assets 5 19 17
fixed asset investments
shares in subsidiaries 6 2094 1652
loans to subsidiaries 7 82 179
total fixed assets 2238 1898
current assets
inventories 8 59 59
trade and other debtors 9 209 229
derivative financial instruments 15 – 06
cash and bank deposits 540 844
808 1138
current liabilities
creditors due within one year 10 111 109
derivative financial instruments 15 01 01
112 110
net current assets 696 1028
assets less current liabilities 2934 2926
long term liabilities
creditors due after more than one year 11 608 612
provisions for liabilities and charges
provisions 13 – 02
assets less liabilities excluding pension plan 2326 2312
pension plan surplusdeficit 3 13 03
assets less liabilities including pension plan 2339 2309
capital and reserves 16
called up share capital 225 226
share premium account 200 183
capital redemption reserve 109 106
capital reserve – 10
cash flow hedge reserve – 04
profit and loss account 1805 1780
shareholders’ funds – equity 2339 2309
the notes on pages 105 to 121 form part of these financial statements
signed on behalf of the board
eric hutchinson
director
3 march 2011 105 spirent communications plc annual report 2010
overview
business review
governance
financial statements
notes to the parent compan y f inan cial statement s 1 significant accounting policies
basis of accounting
the financial statements have been prepared under the historical cost convention modified for measurement of derivative financial 
instruments at fair value and in accordance with applicable uk law and uk generally accepted accounting principles uk gaap
as the company is included in the consolidated financial statements made up to 31 december each year it is not required to present a 
separate profit and loss account as provided by section 408 of the companies act 2006
intangible assets
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses the carrying value of intangible 
assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable
purchased goodwill representing the excess of cost over the fair value of assets acquired is written off on a straight line basis from the date of 
acquisition over 20 years being its anticipated useful life
tangible assets
depreciation is not provided on freehold land depreciation is provided to write off the cost of all other assets less residual value on a  
straight line basis over their estimated useful lives at rates which take into account commercial conditions at their location usual asset lives 
are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
building installations 20 years or lease period if less
fittings and equipment 3 to 8 years
motor vehicles 3 to 5 years
business systems software 4 years
the carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying 
value may not be recoverable
investments
fixed asset investments including investment in subsidiaries are stated at cost and reviewed for impairment if there are indications that the 
carrying value may not be recoverable
leases
operating lease rentals are charged to the profit and loss account over the period of the lease on a straight line basis
inventories
inventories are valued at the lower of cost and estimated net realisable value cost includes all costs in bringing each product to its present 
location and condition being the full manufacturing cost on a firstinfirstout basis including all attributable overheads based on a normal 
level of activity net realisable value represents the selling price less further costs to be incurred to completion and on sale
trade and other debtors
trade debtors which generally have 30 to 90 day terms are recognised and carried at original invoice amount less an allowance for any 
uncollectable amounts an estimate for doubtful debts is made when collection of the full amount is no longer probable bad debts are written 
off when identified 106 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
1 significant accounting policies continued
provisions
provisions are recorded when the company has a present legal or constructive obligation as a result of a past event for which it is probable 
that it will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the obligation can be made 
provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures expected to 
be required to settle the obligation
revenue recognition
revenue is recognised when it is probable that economic benefits will flow to the company the revenue can be reliably measured and when 
the company has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised when 
collectability is probable
for the sale of services revenue is recognised in accounting periods in which the service is rendered
foreign currencies
transactions in foreign currencies are recorded at the rate ruling at the date of transaction
monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date all exchange 
gains and losses are taken to the profit and loss account
product development
expenditure is charged to the profit and loss account in the year in which it is incurred
financial instruments
financial assets and liabilities are recognised on the company’s balance sheet when it becomes a party to the contractual provisions of the 
instrument
equity instruments
equity instruments are recorded at the proceeds received net of direct issue costs
derivative financial instruments and hedge accounting
the company uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign currencies 
relating to firm commitments previously the company also managed exposures arising on highly probable forecast transactions this change 
in treasury policy arose as a consequence of the change in the group’s reporting currency from sterling to us dollars 
as the number of transactions now being hedged is significantly reduced and restricted to items which affect profit or loss or are recognised 
on the balance sheet at the balance sheet date the company has ceased to adopt the hedge accounting rules for all transactions entered into 
since the decision was taken to change the group’s reporting currency the company previously designated its forward foreign currency 
exchange contracts as cash flow hedges and such designation was maintained until maturity of those remaining contracts in 2010
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into and are 
subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency exchange contracts is 
calculated by reference to current forward exchange rates for contracts with similar maturity profiles
changes in the fair value of contracts which were designated as effective were recognised directly in equity and the gain or loss on the 
ineffective portion of the hedge recognised immediately in the profit and loss account for derivatives that do not qualify for hedge accounting 
any gains or losses arising from changes in fair value are taken to the profit and loss account for effective hedges that were in relation to a 
financial asset or liability amounts originally deferred were recognised in the profit and loss account in the same period in which the hedged 
item affected profit or loss for example when a highly probable forecast sale occurred for nonfinancial assets or liabilities the gains or 
losses that were included in equity were included in the initial measurement of the nonfinancial asset or liability at the time the asset or 
liability was recognised on the balance sheet 107 spirent communications plc annual report 2010
overview
business review
governance
financial statements
1 significant accounting policies continued
the company discontinued hedge accounting if the hedging instrument expired or was sold terminated or exercised the hedge no longer met 
the criteria for hedge accounting or the group revoked the designation gains or losses arising on hedging instruments which were cancelled 
due to termination of the underlying exposure were taken to the profit and loss account immediately 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts 
 
pensions
the company operates two funded defined benefit pension plans all other plans are defined contribution in nature where the amount 
charged to the profit and loss account is the contributions paid or payable during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method and 
updates are performed at each balance sheet date the cost of providing benefits under these plans is determined separately for each plan 
and attributes entitlement to benefits to the current period to determine current service cost and to the current and prior periods to 
determine the present value of defined benefit obligations
past services are recognised in the profit and loss account on a straight line basis or immediately if the benefits have vested when a 
settlement eliminating all obligations for benefits already accrued or a curtailment reducing future obligations as a result of a material 
reduction in the plan membership or a reduction in future entitlement occurs the obligation and related plan assets are remeasured using 
current actuarial assumptions and the resultant gain or loss recognised in the profit and loss account during the period in which the settlement 
or curtailment occurs
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting from the 
passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking into account 
material changes in the obligation during the year 
the expected return on plan assets is based on an assessment made at the beginning of the year of long term market returns on plan assets 
adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year the difference between the 
expected return on plan assets and the interest cost is recognised in the profit and loss account as finance costs or finance income
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments on liabilities 
and changes in actuarial assumptions are recognised immediately in the statement of total recognised gains and losses
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the defined 
benefit obligation using a discount rate based on high quality corporate bonds denominated in the same currency and whose term is 
consistent with the estimated term of the obligation fair value is based on market price information and in the case of quoted securities is 
the published bid price the value of a net pension benefit asset is restricted to the sum of any unrecognised past service costs and the 
present value of any amount the company expects to recover by way of reductions in the future contributions or refunds from the plan that 
have been agreed by the trustees 
treasury shares
spirent communications plc ordinary shares held by the company are classified in shareholders’ equity as treasury shares and are recognised 
at cost and shown as a deduction from retained earnings consideration received for the sale of such ordinary shares is also recognised in 
equity with any difference between the proceeds from sale and the original cost being taken to retained earnings
employee benefits
when an employee has rendered service to the company during an accounting period short term benefits expected to be paid in exchange for 
that service are recognised in the same accounting period
dividends paid
the interim dividend is included in the financial statements in the period it is approved by the directors and the final dividend in the period it 
is approved by the shareholders at an annual general meeting 108 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
1 significant accounting policies continued
sharebased payment
the cost of equitysettled transactions with employees is measured by reference to the fair value at the date at which they are granted  
the fair value is determined using a binomial model
the cost of equitysettled transactions is recognised as a cost to the company or as an addition to the cost of investment in the subsidiary  
in which the relevant employees work over the vesting period of the equitysettled transactions with a corresponding adjustment to  
reserves any payments received from the company’s subsidiaries in respect of these sharebased payments result in a reduction in  
the cost of investment
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon a market condition 
which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other vesting conditions  
are satisfied
where the terms of an equitysettled award are modified as a minimum an expense is recognised as if the terms had not been modified  
in addition an expense is recognised for any increase in the value of the transaction as a result of the modification as measured at the date  
of modification
where an equitysettled award is cancelled it is treated as if it had vested on the date of cancellation and any expense not yet recognised for 
the award is recognised immediately however if a new award is substituted for the cancelled award and designated as a replacement award 
on the date that it is granted the cancelled and new awards are treated as if they were a modification of the original award as described in the 
previous paragraph
the company has an employee share trust for the granting of certain share incentives to employees shares are held by the employee share 
trust treated as treasury shares and presented in the balance sheet as a deduction from equity 
tax
the tax expense represents the sum of the tax currently payable and deferred tax
the tax currently payable represents the amount expected to be paid or recovered in respect of taxable profit for the year and is calculated 
using tax rates that have been enacted or substantively enacted at the balance sheet date
deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed at the balance sheet date 
except as referred to below amounts provided are calculated with reference to tax rates that are expected to apply in the periods in which  
the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance 
sheet date
deferred tax assets are recognised only to the extent that it is considered more likely than not that there will be suitable taxable profits from 
which the future reversal of the underlying timing differences can be deducted
deferred tax is not provided on gains on the disposal of fixed assets that have been rolled over into replacement assets unless there is a 
binding agreement to dispose of the assets concerned provision will not be made where it is considered more likely than not that the taxable 
gain will be rolled over into replacement assets and charged to tax only when the replacement assets are sold
2 employees
please refer to the report on directors’ remuneration on pages 45 to 52 for disclosures relating to the emoluments share incentives and long 
term incentive interests and pensions of the directors 109 spirent communications plc annual report 2010
overview
business review
governance
financial statements
3 pensions
defined benefit plans 
the funded defined benefit pension plans are in the united kingdom and comprise the spirent communications plc staff pension  life 
assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” the staff plan is the 
company’s most significant plan there is in addition an unfunded plan 
the valuation used for these disclosures has been based on a full assessment of the liabilities of the plans as at 1 april 2009 the present 
values of the defined benefit obligation the related current service cost and any past service costs were measured using the projected unit 
credit method
i the key financial assumptions
the assumptions used for both plans were as follows
2010 

2009 

inflation rpi 34 34
inflation cpi 25 na
rate of increase in pensionable salaries 39 39
rate of increase for pensions in payment pre 2001 service 37 37
rate of increase for pensions in payment post 2001 pre april 2005 service 32 32
rate of increase for pensions post april 2005 service 22 22
rate of increase in deferred pensions 25 34
rate used to discount plan liabilities 55 57
expected rate of return on plan assets weighted for both plans 58 56
spirent communications plc employs a building block approach in determining the long term rate of return on the plans’ assets historical 
markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market 
principles the assumed long term rate of return on each class of asset is set out within this note the overall expected rate of return on assets 
is then derived by aggregating the expected return of each asset class over the actual asset allocation for the plans
following the uk government’s announcement in 2010 the inflation index to be used to derive statutory increases to pensions both before 
and after they come into payment has been changed from the retail prices index “rpi” to the consumer prices index “cpi” in the staff 
plan the increases provided to pensions before they come into payment are at the statutory level and hence are impacted by this change 
however the increases provided to pensions after they come into payment are prescribed by the plan rules and are not impacted due to  
a number of differences between the indices including both constituents and construction cpi is expected to be lower than rpi over the  
long term which means that the defined benefit obligation has reduced this reduction has been recognised as an assumption change at  
31 december 2010
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions are such 
that a member currently aged 68 2009 aged 68 will live on average for a further 192 years 2009 191 years if they are male and for a further 
210 years 2009 209 years if they are female for a member who retires in 2020 2009 in 2019 at age 64 2009 aged 64 the assumptions 
are that they will live on average for a further 237 years 2009 236 years after retirement if they are male and for a further 256 years 2009 
255 years after retirement if they are female
 
the approximate impact to the past service liabilities of changing these main assumptions is as follows
 
reducing the discount rate by 01 per cent per annum this would increase past service liabilities by £20 million  –
increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling factor  –
this would increase past service liabilities by £45 million
 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to be insignificant 110 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
3 pensions continued
ii the assets and the liabilities in the plans were as follows
long term 
rate of return 
expected 

2010 
£ million
long term 
rate of return 
expected
 
2009 
£ million
staff plan 
equities 85 353 85 306
government bonds 40 393 43 322
corporate bonds 50 471 51 573
insured annuities 55 29 57 29
property 84 132 90 36
cash and other 10 22 10 45
fair value of plan assets 59 1400 57 1311
present value of defined benefit pension plan obligations 1341 1314
surplusdeficit in the plan 59 03
surplus restriction 40 –
surplusdeficit recognised 19 03
cash plan
equities 85 24 85 18
government bonds 41 21 44 27
insured annuities 55 02 57 02
cash and other 10 22 10 21
fair value of plan assets 46 69 45 68
present value of defined benefit pension plan obligations 65 60
surplus in the plan 04 08
surplus restriction 01 05
surplus recognised 03 03
total net surplus recognised 22 –
unfunded plan
present value of unfunded obligations 04 04
net pension plan surplusdeficit on the balance sheet 18 04
deferred tax liabilityasset note 12 05 01
net pension plan surplusdeficit on the balance sheet 13 03
the recognition of the surplus in the staff plan and the cash plan is restricted in 2010 and 2009 to the present value of economic benefits 
available in the form of refunds from the plan or reductions in future contributions to the plan as a result only £22 million 2009 £03 million 
of the £63 million 2009 £08 million surplus has been recognised on the balance sheet at 31 december
the plans are prohibited from investing in spirent’s own financial instruments
 
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these financial statements  111 spirent communications plc annual report 2010
overview
business review
governance
financial statements
3 pensions continued
iii analysis of the amounts chargedcredited to the profit and loss account   
2010 
£ million
2009 
£ million
analysis of amount charged to operating costs
current service cost 02 01
expected return on pension plans’ assets 68 64
interest on pension plans’ liabilities 76 75
finance costs 08 11
net profit and loss charge 10 12
iv analysis of amount recognised directly in equity   
2010 
£ million
2009 
£ million
actual return on pension plans’ assets 139 139
less expected return on pension plans’ assets 68 64
experience gains on plans’ assets 71 75
experience losses arising on plans’ liabilities 04 25
changes in assumptions underlying the present value of plans’ liabilities 11 64
movement in surplus restriction 36 02
actuarial gainslosses recognised directly in equity 20 12
the cumulative amount of actuarial gains and losses recognised since 1 january 2003 in the company’s statement of total recognised gains 
and losses is £116 million loss 2009 £136 million loss the directors are unable to determine how much of the pension plan deficit 
recognised on 1 january 2003 and taken directly to equity of £419 million in the company is attributable to actuarial gains and losses since 
inception of those pension plans consequently the directors are unable to determine the amount of actuarial gains and losses that would 
have been recognised in the company’s statement of recognised gains and losses before 1 january 2003
v movements in the present value of funded defined benefit obligations   
2010 
£ million
2009 
£ million
at 1 january 1374 1265
current service cost 02 01
interest cost 76 75
employee contributions 01 01
benefit payments 62 57
actuarial loss 15 89
present value of funded defined benefit pension plans’ obligations 1406 1374
vi movements in the fair value of plans’ assets      
2010 
£ million
2009 
£ million
at 1 january 1379 1293
expected return on plans’ assets 68 64
employer contributions 12 03
employee contributions 01 01
benefit payments 62 57
actuarial gain 71 75
fair value of plans’ assets 1469 1379 112 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
3 pensions continued   
vii history of experience gains and losses      
2010 
£ million
2009 
£ million
2008
 £ million 
2007 
£ million 
2006 
£ million
present value of defined benefit pension plans’ obligations 1406 1374 1265 1351 1582
fair value of plans’ assets 1469 1379 1293 1428 1606
net surplus in plans 63 05 28 77 24
experience losses on plans’ liabilities
amount £ million 04 25 04 08 100
percentage of plans’ liabilities  03 18 03 06 63
experience gains and losses on plans’ assets
amount £ million 71 75 154 26 05
percentage of plans’ assets  48 54 119 18 03
expected cash contributions for 2011 for these plans are £18 million
 
the above plans are funded and have full uk hm revenue  customs “hmrc” taxexempt approval certain members whose salaries were 
in excess of the hmrc statutory earnings cap had their benefits increased through unapproved unfunded arrangements to the level that 
would otherwise have applied in respect of basic salary only the company has contractually agreed to pay the additional retirement benefits 
itself and a provision is made in respect of this obligation in the balance sheet at 31 december 2010 of £04 million 2009 £04 million this 
represents the actuarial value as confirmed by the company’s pension advisers of the unapproved benefit entitlements accrued at that date 
the value is assessed and reviewed on a market value basis in line with the main plan valuation there are no experience gains or losses on 
the unfunded plan in the period from 2006 to 2010
defined contribution schemes
the company also maintains defined contribution pension plans for employees employer contributions into these plans for 2010 were  
£07 million 2009 £08 million
4 intangible assets  
£ million 
goodwill
cost
at 1 january 2010 and 31 december 2010 68
amortisation
at 1 january 2010 18
provided during the year 07
at 31 december 2010 25
net book value at 31 december 2009 50
net book value at 31 december 2010 43 113 spirent communications plc annual report 2010
overview
business review
governance
financial statements
5 tangible fixed assets    
£ million
freehold land 
and buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost
at 1 january 2010 06 39 36 81
interclass transfers – 05 05 –
additions – 06 02 08
disposals – 04 05 09
at 31 december 2010 06 46 28 80
depreciation and impairment
at 1 january 2010 – 33 31 64
inter class transfers – 05 05 –
provided during the year 01 03 02 06
disposals – 04 05 09
at 31 december 2010 01 37 23 61
net book value at 31 december 2009 06 06 05 17
net book value at 31 december 2010 05 09 05 19
6 shares in subsidiaries 
£ million
cost
at 1 january 2010 8857
additions 456
disposals 16
at 31 december 2010 9297
provisions
at 1 january 2010 7205
provided in the year 08
disposals 10
at 31 december 2010 7203
net book value at 31 december 2009 1652
net book value at 31 december 2010 2094
7  loans to subsidiaries 
£ million
at 1 january 2010 179
repayments 99
exchange 02
at 31 december 2010 82 114 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
8 inventories  
2010 
£ million
2009 
£ million
raw materials 30 31
work in progress 08 07
finished goods 21 21
59 59
9 trade and other debtors  
2010 
£ million
2009 
£ million
due within one year
trade debtors 63 61
owed by subsidiaries 47 31
other debtors 04 06
prepayments and accrued income 06 04
120 102
due after more than one year
deferred tax asset note 12 89 127
209 229
10 creditors due within one year  
2010 
£ million
2009 
£ million
trade creditors 46 54
owed to subsidiaries 03 02
accruals and deferred income 57 45
other taxes and social security costs 05 08
111 109
11 creditors due after more than one year  
2010 
£ million 
2009 
£ million
owed to subsidiaries 608 612
12 deferred tax  
£ million
at 1 january 2010 127
reversed in the year 38
at 31 december 2010 89
the deferred tax asset is in relation to short term timing differences and tax losses 
there is a deferred tax liability at 31 december 2010 of £06 million and a deferred tax asset of £01 million 2009 liability of £01 million and 
asset of £02 million in relation to the pension plans note 3 115 spirent communications plc annual report 2010
overview
business review
governance
financial statements
13 provisions   
£ million
lease provisions
at 1 january 2010 02
utilised in the year 02
at 31 december 2010 –
 
provisions are analysed as follows   
2010 
£ million
2009 
£ million
current – 02
these provisions were in respect of obligations for properties under operating leases which have been vacated
14 operating lease commitments   
at the balance sheet date the company had annual commitments which expire as follows     
2010 
£ million
2009 
£ million
in the second to fifth years 05 05
15 derivative financial instruments     
the company has taken advantage of the exemption under frs 29 “financial instruments disclosures” for parent company financial 
statements the disclosures in respect of the group are included in the consolidated financial statements
the fair value of derivative financial instruments is as follows       
2010 
£ million
2009 
£ million
assets liabilities assets liabilities
currency derivatives – 01 06 01
currency derivatives are expected to be realised within one year     
currency derivatives     
the company uses forward foreign currency exchange contracts in the management of transactional exchange rate exposures these 
contracts were designated in 2009 as hedging instruments in 2010 the company has chosen not to designate these contracts as hedges 116 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
16 capital and reserves        
£ million
called up 
share capital
share 
premium 
account
capital 
redemption 
reserve
capital 
reserve
cash flow 
hedge 
reserve
profit and
loss account
2
total
at 1 january 2010 226 183 106 10 04 1780 2309
new shares issued 02 17 – 01 – – 18
share cancellation 03 – 03 – – – –
profit for the year
3
– – – – – 208 208
sharebased payment
4
– – – – – 03 03
actuarial gain recognised on defined benefit  
pension plans – – – – – 20 20
deferred tax on defined benefit pension plans – – – – – 06 06
cash flow hedges – – – – 04 – 04
employee share ownership trust – – – – – 12 12
share repurchase – – – – – 130 130
equity dividends – – – – – 91 91
other movements – – – 09 – 09 –
at 31 december 2010 225 200 109 – – 1805 2339
notes        
1  the company has taken advantage of the exemption given in section 408 of the companies act 2006 not to publish its profit and loss account     
2  the company’s profit and loss account of £1805 million 2009 £1780 million includes nondistributable reserves of £69 million 2009 £69 million    
3   the profit for the year dealt with in the financial statements of the company was £208 million 2009 £530 million which after dividends of £91 million 2009 £7 7 million gave a 
retained profit of £117 million 2009 £453 million 
4  sharebased payment has been recorded for subsidiary companies whose incentives are satisfied by the company’s shares      
  
changes during the year in the issued ordinary share capital were as follows  
number of 
ordinary shares 
million
issued and fully paid at 1 january 2010 6781
allotted pursuant to share incentives exercised 66
cancelled during the year
1
98
issued and fully paid at 31 december 2010 6749
 
note   
1  during 2010 under the programme of returning capital to shareholders the company repurchased 98 million ordinary shares on market which were subsequently cancelled
  
in accordance with the rules of the following share plans share incentives were exercised during the year which resulted in new ordinary 
shares being allotted by the company or existing ordinary shares being transferred from either the spirent employee share ownership trust 
“esot” or from the spirent sharesave trust “sst” as follows   
number of 
ordinary shares 
million
consideration 
received 
£ million
2005 employee incentive plan 07 01
spirent stock incentive plan 66 22
1995 executive share option scheme 13 07
all employee share plans
1
01 –
87 30
note 
1  the all employee share plans are the uk savings related share option scheme the 2005 sharesave scheme the us employee stock purchase plan the global all employee share 
purchase plan and the uk employee share purchase plan  117 spirent communications plc annual report 2010
overview
business review
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financial statements
16 capital and reserves continued
during the year 01 million ordinary shares were transferred from the sst to satisfy options exercised under the uk all employee share 
schemes 2009 03 million and 20 million ordinary shares were transferred from the esot to satisfy options exercised under the spirent 
stock incentive plan 2009 17 million
there has been no material increase in the issued ordinary share capital whether by exercise of share incentives or otherwise between  
31 december 2010 and 3 march 2011 the date on which these financial statements have been signed
investment in own ordinary shares
at 31 december 2010 the esot held 40 million ordinary shares 2009 54 million ordinary shares to satisfy awards under various share 
incentive plans of this number 01 million ordinary shares were unconditionally vested at 31 december 2010 2009 01 million ordinary 
shares at 31 december 2010 the sst held 05 million ordinary shares 2009 06 million ordinary shares to satisfy awards made to uk 
based employees under an all employee share scheme the market value of own ordinary shares held in trust being in total 45 million 
ordinary shares 2009 60 million ordinary shares at 31 december 2010 was £67 million 2009 £61 million
capital redemption reserve
during 2010 the company cancelled 98 million ordinary shares that had been the subject of the on market share repurchase programme 
2009 06 million ordinary shares and transferred £03 million 2009 £20333 to the capital redemption reserve
capital reserve
in 2010 the reserve has been reduced by £09 million 2009 £04 million in relation to share incentives which have been cancelled or have lapsed
share repurchase
during 2010 the company repurchased 104 million ordinary shares on market at a cost of £130 million 2009 06 million ordinary shares  
at a cost of £06 million of the shares repurchased 98 million 2009 06 million ordinary shares were subsequently cancelled and 06 million 
were placed into the esot 
employee share plans 
the company operates a number of employee share incentive plans as described below the following share incentives over ordinary shares 
under these plans have been granted and remain outstanding held by employees of the parent company
movements in share incentives during the year to 31 december 2010 are shown below
2005 
employee 
incentive 
plan
spirent stock 
incentive 
plan
1995
executive 
share option 
scheme
uk 
sharesave 
schemes
number 
of share 
incentives 
million
weighted 
average 
exercise price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise price 
pence
number 
of share 
incentives 
million
weighted 
average 
exercise price 
pence
options outstanding at 31 december 2009 30 30 16 58 26 112 01 39
exercised 12 50 09 59 12 56 01 39
expired – – – – 02 323 – –
options outstanding at 31 december 2010 18 17 07 53 12 135 – –
options exercisable at 31 december 2010 02 50 07 53 12 135 – –
the weighted average share price at exercise date was 1235 pence 2009 77 6 pence      
  118 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
16 capital and reserves continued
the following information relates to outstanding share incentives at 31 december 2010
       2010    2009
share plan
exercise period  
as at 31 december
range of
exercise  
prices
pence
weighted
average
exercise  
price
pence
number
of share
incentives
outstanding
million
weighted 
average
remaining
contractual  
life
years
weighted
average
exercise  
price
pence
number
of share
incentives
outstanding
million
weighted 
average
remaining
contractual  
life
years
2005 employee incentive plan 250808 – 061118 053 17 18 33 30 30 50
spirent stock incentive plan 120903 – 121115 3753 49 06 21 50 09 30
170904 – 120816 5987 67 01 10 67 07 17
1995 executive share 031004 – 040814 5672 69 02 35 58 14 45
option scheme 020405 – 010512 113134 125 09 13 125 09 23
110503 – 080411 305334 305 01 03 322 03 07
uk sharesave schemes 011209 – 310511 3841 – – – 39 01 11
   37  73
note
1  figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate no exercise price is payable on the vesting of a 
performance share 
description of employee share plans 
discretionary plans
2005 employee incentive plan “eip” 
the eip  which was introduced in 2005 and replaced the now closed esos see below is currently available for selected employees including 
executive directors on a discretionary basis
under the eip  the company is able to grant share options including hmrc approved options sharesettled stock appreciation rights “sars” 
and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions have been met 
for share options and sars the performance conditions relate to the company’s earnings per share “eps” and for performance shares 
relate to total shareholder return “tsr”
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on pages 46  
and 47 
options and sars granted under the eip expire on the tenth anniversary of their grant unless they have previously lapsed or been exercised
spirent stock incentive plan “ssip”
the ssip is now closed for new grants and has been replaced by the eip referred to above
the ssip was introduced in 2000 this discretionary plan was primarily targeted at us employees with grants normally determined by 
reference to the seniority and contribution of the individual together with the performance of the relevant business and prevailing local market 
practice grants were also permitted to selected newly hired and promoted employees on a monthly basis under the ssip  the company was 
able to grant share options and sharesettled sars no price was payable on the grant of an award 
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not normally subject 
to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant and thereafter in equal 
tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary of the date of grant will lapse 119 spirent communications plc annual report 2010
overview
business review
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financial statements
16 capital and reserves continued
the vesting of ssip awards made to bill burns prior to his appointment as chief executive officer and to certain other key senior managers 
within the communications group were subject to the company meeting eps growth targets over the vesting periods further details of these 
performance conditions are set out in the report on directors’ remuneration on pages 47 and 48 
sars granted under the eip and ssip will deliver the appreciation value ie the increase in market value of an ordinary share over the base 
price of the sar in the form of ordinary shares this “sars approach” helps the company manage its dilution headroom more efficiently as 
only the sar gain needs to be funded using a sars approach it is not possible to determine the precise level of dilution until the sars are 
exercised 
1995 executive share option scheme “esos” 
the esos is now closed for new grants and has been replaced by the eip referred to above 
under the esos awards of share options including hmrc approved options were on a discretionary basis no price was payable on the grant 
of an option and no options were granted at a discount to the market price 
the normal exercise period for options granted under the esos is between the third and tenth anniversary of the date of grant options 
awarded under the esos were subject to the achievement of an eps performance condition before they could be exercised all outstanding 
options have now passed their eps performance conditions and remain exercisable until they expire on the tenth anniversary of their 
respective grant dates 
all employee plans
uk savings related share option scheme “srsos” and the 2005 sharesave scheme 
the srsos closed in 2005 and was replaced by the 2005 sharesave scheme srsos options which remain outstanding may still be exercised 
prior to expiry however no further grants can be made both schemes operate as hmrc approved saveasyouearn schemes and are open to 
all uk employees subject to a qualifying service period any future sharesave invitations will be made under the 2005 sharesave scheme 
which is broadly similar to the srsos 
no price is payable on the grant of an option the option exercise price is calculated by reference to the middle market closing price of an 
ordinary share on the business day prior to the beginning of the invitation period discounted by up to 20 per cent at the board’s discretion 
options are normally exercisable within six months of the third fifth or seventh anniversary of the contract commencement date as elected by 
the option holder at the start of the contract 
the company operates the sst to honour the commitment to deliver ordinary shares against the exercise of outstanding options under the 
srsos spirent sharesave trust limited a whollyowned subsidiary of spirent communications plc acts as sole trustee of the sst during the 
year 01 million ordinary shares were transferred to participants 2009 03 million ordinary shares 
no invitations have been made under either of these schemes since 2003 
uk employee share purchase plan “uk espp” 
the uk espp  which is an hmrc approved share incentive plan was approved by shareholders in 2005 and is available to all uk employees 
the uk espp offers three ways to provide ordinary shares to employees free shares partnership shares and matching shares the uk espp 
will operate in conjunction with a trust which holds the shares on behalf of participants
in november 2010 the company made an invitation to all uk employees to acquire partnership shares on market using deductions from 
payroll commencing in january 2011 120 spirent communications plc annual report 2010
notes to the parent compan y f inan cial statement s continued
17  sharebased payment  
the total charge for the year relating to employee sharebased payment plans is as follows    
2010 
£ million
2009 
£ million
2005 employee incentive plan 01 01
all schemes are equitysettled  
no share incentives were granted during 2010 for 2009 the fair value of share incentives has been estimated as at the date of grant using a 
binomial model   
the following table gives the assumptions made in arriving at the sharebased payment charge and the fair value  
2010 2009
weighted average share price pence – 978
weighted average exercise price pence – –
weighted average fair value pence – 293
expected volatility  – 530
expected life years – 45
risk free rate  – 24
dividend yield  – 20
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two years which 
management considers to be the period which is likely to be most representative of future volatility 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 for performance shares granted under the 2005 employee incentive plan which have a market based performance condition 
it has been assumed that there will be 30 per cent vesting for valuation purposes
18 related party transactions 
the company has taken advantage of the exemption under frs 8 “related party disclosures” in relation to disclosing transactions with its 
subsidiaries
19 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest is given 
on page 121 of this annual report 
20 capital commitments and contingent liabilities 
there were no capital commitments at 31 december 2010 or 31 december 2009 
spirent communications plc has provided indemnities of £04 million 2009 £04 million for certain ongoing business obligations under 
letters of credit for subsidiary companies
21 directors’ emoluments and transactions with directors 
please refer to the report on directors’ remuneration on pages 45 to 52 for disclosures relating to the remuneration share incentives and 
pensions of the directors 121 spirent communications plc annual report 2010
overview
business review
governance
financial statements
pr incipal d iv is ions and subs id iar ies  held at 31 december 2010
communications
performance analysis and service assurance solutions  
canada  
spirent communications of ottawa limited nepean ontario 100
france 
spirent communications sas paris 100
hong kong 
spirent communications asia limited 100
india 
spirent communications india pvt limited bangalore 100
people’s republic of china 
spirent communications technology beijing limited 100
united kingdom 
spirent communications international limited crawley west sussex 100
spirent communications positioning paignton devon
†
united states 
spirent communications hawaii llc honolulu hawaii 100
spirent communications inc 100
calabasas california   
sunnyvale california
eatontown new jersey
spirent communications of rockville inc germantown maryland 100
systems
control systems for the medical mobility and industrial markets 
united kingdom 
pg drives technology limited christchurch dorset 100
united states 
pg drives technology inc anaheim california 100
notes  
the above companies operate and are incorporated in the countries listed all shareholdings in the companies are held indirectly by spirent communications plc except where 
indicated by an asterisk  where the shareholding is held directly by spirent communications plc  
 
† spirent communications positioning operates as a division of spirent communications plc  
the activity mentioned is indicative and not comprehensive 
  122 spirent communications plc annual report 2010
f inan cial h istor y
 million
2010 2009 2008 2007 2006
summary income statement
continuing operations
revenue 4822 4272 4771 4740 4790
operating profit before exceptional items and goodwill impairment 1127 868 901 510 155
exceptional items – – – 288 163
goodwill impairment – – – – 353
operating profitloss 1127 868 901 222 361
net finance costsincome 05 19 50 134 111
exceptional net finance costs – – 33 – 156
profitloss before tax 1122 849 918 356 406
tax 331 63 07 76 07
exceptional tax – – 473 78 –
profitloss from continuing operations after tax 791 912 1384 510 413
discontinued operations – – – 151 2358
profit attributable to equity shareholders of parent company 791 912 1384 359 1945
summary balance sheet
intangible assets 1120 1124 1117 1166 1241
property plant and equipment 291 236 268 322 496
working capital excluding cash and deferred tax 104 83 230 378 44
operating assets 1515 1443 1615 1110 1693
derivative financial instruments net 02 08 81 10 02
net funds including long term cash 2250 1757 896 1646 2080
provisions and other liabilities 76 114 171 252 236
deferred tax 313 425 175 209 23
defined benefit pension plan surplusdeficit 71 01 28 107 20
net assets 4071 3518 2462 2810 3582
total equity 4071 3518 2462 2810 3582
summary cash flows
cash flow from operating activities 994 961 883 991 745
net interest received 08 06 26 112 76
net capital expenditure 176 102 128 104 269
free cash flow 826 865 781 999 938
acquisitions and disposals – – – 234 4042
share capital and share repurchase 150 27 1129 1264 743
dividends paid 137 121 64 – –
borrowings – – – – 1459
transfer from long term deposit 06 22 22 96 157
net increasedecrease in cash and cash equivalents 545 793 390 403 745 123 spirent communications plc annual report 2010
 million
2010 2009 2008 2007 2006
other information
expenditure on property plant and equipment 181 101 137 102 261
depreciation 119 135 163 190 248
product development 802 746 838 926 1073
share information
earningsloss per share from continuing operations cents
basic 1177 1367 1874 593 446
diluted 1166 1360 1861 587 446
adjusted basic 1162 1084 1154 714 274 
adjusted basic at a constant tax rate of 304 1162 886 896 521 200 
total dividend per ordinary share cents 250 193 185 – –
fully paid ordinary shares in issue at year end million 6749 6781 6718 8408 9759
segmental analysis
revenue from continuing operations
performance analysis 3658 3168 3537 3386 3321
service assurance 570 526 620 686 807
systems 594 578 614 668 662
4822 4272 4771 4740 4790
operating profit from continuing operations
1
performance analysis 979 783 831 498 272
service assurance 130 75 89 76 02
systems 88 79 80 78 89
segment operating profit 1197 937 1000 652 363
corporate — nonsegmental 52 49 58 74 102
acquired intangible asset amortisation 14 14 13 18 10
sharebased payment 04 06 28 50 96
1127 868 901 510 155
geographical information
revenue by market from continuing operations
europe 795 692 884 874 809
united states 2485 2124 2388 2464 2662
asia pacific rest of americas africa 1542 1456 1499 1402 1319
4822 4272 4771 4740 4790
     
notes     
1  before exceptional items and goodwill impairment      124 spirent communications plc annual report 2010
shareholder informat ion financial calendar 2011
3 march 2011 preliminary results and final dividend announcement
9 march final dividend – exdividend date
11 march final dividend – record date
4 may annual general meeting and interim management statement
5 may final dividend – payment date ordinary shareholders
12 may final dividend – payment date adr holders
3 july halfyear end
august halfyear results and interim dividend announcement
august interim dividend – exdividend date
august interim dividend – record date
september interim dividend – payment date ordinary shareholders
september interim dividend – payment date adr holders
november interim management statement
31 december financial year end
february 2012 2011 preliminary results and final dividend announcement
ordinary shares and american depositary receipts
the company’s ordinary shares are traded on the london stock exchange ticker spt the company operates a level 1 american depositary 
receipt “adr” programme with each adr representing four ordinary shares the adrs trade on the us overthecounter market symbol 
spmyy cusip 84856m209 the bank of new york mellon is the authorised depositary bank for the company’s adr programme the adrs 
are quoted on the pink sheets electronic quotation service which can be found at wwwpinksheetscom
annual general meeting
the company’s 2011 annual general meeting “2011 agm” will be held at 1030am on wednesday 4 may 2011 at ubs 1 finsbury avenue 
london ec2m 2pp  united kingdom
dividends
shareholders are able to choose how they receive their dividends
direct to their bank account –
reinvested in ordinary shares through the company’s dividend reinvestment plan see below –
paid by cheque or –
paid in foreign currencies –
the quickest and most efficient way to receive your dividends is to have them paid direct to your bank account it saves waiting for funds to 
clear and reduces the paper and postage we use to change how you receive your dividends please contact the company’s registrar equiniti 
on 0871 384 2268 or log on to wwwshareviewcouk
dividend reinvestment plan
the company has a dividend reinvestment plan “drip” delivered by equiniti financial services limited the drip allows eligible 
shareholders to use their cash dividend to buy additional shares in the company so increasing their shareholding if you would like additional 
information please contact the company’s registrar equiniti on 0871 384 2268 or log on to wwwshareviewcouk
electronic communications
all of the company’s communications with shareholders are conducted in line with our environmental approach we hold the majority of our 
events via webcast and conference calls and we encourage all of our investors to receive communications electronically shareholders who do 
not currently receive company mailings electronically but wish to do so should notify the company’s registrar equiniti on 0871 384 2126 or 
via wwwshareviewcouk 125 spirent communications plc annual report 2010
company’s registrar
enquiries concerning shareholdings change of address or other particulars should be directed in the first instance to the company’s registrar 
equiniti on 0871 384 2126 equiniti also provide a range of online shareholder information services at wwwshareviewcouk where 
shareholders can check their holdings and find practical help on transferring shares or updating their details
share dealing services
equiniti shareview dealing is a service that provides a simple and convenient way of buying and selling the company’s ordinary shares  
for telephone services call 08456 037 037 between 800am and 430pm monday to friday and for internet services visit  
wwwshareviewcoukdealing a postal share dealing service for buying and selling ordinary shares is also available and a dealing  
form can be obtained by calling 0871 384 2248 or at wwwshareviewcouk
individual savings accounts
information about investing in the company’s ordinary shares through an individual savings account “isa” may be obtained from equiniti 
on 0845 300 0430 or at wwwshareviewcouk isas are also offered by other organisations
shareholder security
shareholders are advised to be wary of any unsolicited advice offers to buy shares at a discount or offers of free reports about the company 
details of any share dealing facilities that the company endorses will be included in the company’s mailings or on our website more detailed 
information can be found at wwwmoneymadeclearfsagovuk
unsolicited mail
the company is obliged by law to make its share register publicly available subject to a “proper purpose” test should a request be received 
as a consequence some shareholders may receive unsolicited mail to limit the amount of unsolicited mail received please contact the 
mailing preference service mps dma house 70 margaret street london w1w 8ss register online at wwwmpsonlineorguk or call the mps 
registration line on 0845 703 4599 the mailing preference service is an independent organisation which offers a free service to the public 
within the uk registering with them will help stop most unsolicited consumer advertising material
company’s website
the directors are responsible for the maintenance and integrity of the company’s website financial information published on the website is 
based on legislation in the uk governing the preparation and dissemination of financial statements that may be different from comparable 
legislation in other jurisdictions
shareholder analysis
at 3 march 2011 the number of registered shareholders was 4039 and the number of ordinary shares in issue was 6753 million
number of ordinary shares held
number of 
shareholders
 of total 
shareholders
number of 
ordinary 
shares 
 of share 
capital
1 – 5000 2853 7064 4164922 062
5001 – 10000 410 1015 3064326 045
10001 – 50000 429 1062 9039762 134
50001 – 100000 72 178 5118538 076
100001 – 250000 64 159 10711015 159
250001 – 500000 47 116 17558248 260
500001 – 1000000 68 168 47225472 699
1000001 – highest 96 238 578420370 8565
total 4039 10000 675302653 10000
number of 
holders
 of total 
holders
number of 
shares 
 of total 
shares
individuals 3185 7886 15757094 233
institutions 854 2114 659545559 9767
total 4039 10000 675302653 10000 126 spirent communications plc annual report 2010
glossar y
3g third generation third generation of mobile communications following first generation analogue and 
second generation digital that promises megabits per second
4g fourth generation future generation of mobile communications following 3g that promises hundreds of 
megabits per second
adsl asymmetric digital subscriber line the most common of the dsl technologies adsl is designed to deliver more bandwidth 
downstream than upstream for example from a central office to a customer site
backhaul a communications channel is backhauling when it takes traffic beyond its destination and 
back there are many reasons it might do this for example it may be cheaper to go that route 
instead of going directly
broadband generic term for devices with a bandwidth greater than one megabit per second
cdma code division multiple access a digital cellular standard technology allowing communications circuits to carry multiple 
conversations simultaneously thus increasing capacity used in radio communications
cloud computing a way of computing via the internet that broadly shares computer resources instead of 
having local servers handle specific applications
compass a chinese project to develop and deploy an independent global navigation satellite system
content delivery on the internet content delivery is a service that entails copying pages from a website to 
geographically dispersed servers and when a page is requested dynamically identifying 
and serving the page from the closest server to the user enabling faster delivery
data center a centralised location where computing resources critical to an organisation are maintained 
in a highly controlled environment
docsis data over cable service interface 
specification
an international telecommunications standard that permits the addition of high speed data 
transfer to an existing cable tv system it is employed by many cable television operators to 
provide internet access over their existing hybrid fibre coaxial infrastructure
ethernet a family of networking technologies developed for local area networks migrating to metro 
area networks and becoming a dominant standard in wireline networks
galileo the informal name for the european global navigation satellite system a system that will 
offer users anywhere in the world “near pinpoint” geographic positioning when it becomes 
fully operational
gbe gigabit ethernet a term describing various technologies for transmitting ethernet frames at a rate of a gigabit 
per second gbe uses the same framing as ethernet and fast ethernet but has a much 
higher clock speed one billion bits per second
gnss global navigation satellite systems the standard generic term for satellite navigation systems “sat nav” that provide 
autonomous geospatial positioning with global coverage gnss allows small electronic 
receivers to determine their location to within a few metres using time signals transmitted 
along a lineofsight by radio from satellites receivers calculate the precise time as well  
as position
gps global positioning system a system for determining location and height at any point on the earth’s surface a receiver 
uses minute differences in measured time signals from clocks on satellites to calculate 
these positions and altitudes 127 spirent communications plc annual report 2010
glonass global navigation satellite system global navigation satellite system operated by the russian federation ministry of defence
hspa high speed packet access a collection of mobile telephone protocols that extend and improve the performance of 
existing umts protocols for high speed data transmission
ims internet protocol multimedia subsystem a standardised nextgeneration architecture for telecoms operators who want to provide 
mobile and fixed multimedia services
ip internet protocol data protocol used by many networking devices to facilitate and control the flow of data
iptv internet protocol television the delivery of programming by video stream encoded as a series of ip packets
lan local area network a short distance data communications network used to link computers and peripheral 
devices such as printers or modems under some form of standard control
location based services the delivery of information mapping and locally available business and public data over the 
wireless network dependent upon the ability to locate mobile devices by means of direct 
satellite or cellular assisted satellite signals
lte long term evolution a standard to enhance existing 3g wireless to add 4g mobile communications technology 
on an ip network air interface to create a wireless broadband internet system
mso multiple system operator a company that operates more than one cable tv system often in different places
overtheair mobile network radio cellular tower signal or satellite signal transmitted overtheair to a 
mobile device antenna and processed by the mobile device communicating with the mobile 
network
rf radio frequency a technology used for wireless broadcasting andor communications
san storage area network a special purpose high speed network designed to transport databaseintensive 
applications such as those used for inventory billing receivables customer relationship 
management and supply chain
triple play voice video and data transmitted over a single transport medium
umts universal mobile  
telecommunications system
one of the 3g wireless technologies the most common form of umts uses wcdma on its 
underlying air interface and offers support for high speed data transfer
vdsl2 second generation veryhighdatarate 
digital subscriber line
designed to support simultaneous bandwidthintensive and tenancysensitive voice video 
data tv over ip and interactive gaming
virtualization a term that refers to the abstraction of computer resources virtualization puts a number of 
computing and networking facilities together in such a way that it looks like a virtual 
computer to a user or a customer
wcdma wideband cdma a global standard for mobile 3g
wifi enables devices such as personal computers video game consoles smart phones or digital 
audio players to connect to the internet when within range of a wireless network connected 
to the internet the coverage of one or more access points generally comprises an area the 
size of a few rooms but may be expanded to cover many square miles depending on the 
number of access points with overlapping coverage 128 spirent communications plc annual report 2010
notes contac t deta ils registered office
spirent communications plc
northwood park
gatwick road
crawley
west sussex rh10 9xn
united kingdom
tel 44 01293 767676
fax 44 01293 767677
email investorrelationsspirentcom
website wwwspirentcom
registered in england no 470893
auditor
ernst  young llp
1 more london place
london se1 2af
united kingdom
tel 44 020 7951 2000
website wwweycom
registrar
equiniti limited
aspect house
spencer road
lancing
west sussex bn99 6da
united kingdom
tel 0871 384 2126 uk
tel 44 0121 415 7047 overseas
text phone for shareholders with hearing difficulties
0871 384 2255 uk
44 0121 415 7028 overseas
website wwwshareviewcouk
adr depositary
the bank of new york mellon corporation
adr depositary receipts
101 barclay street
22nd floor
new york
ny 10286
usa
tel 1 888 269 2377 toll free – us
tel 1 201 680 6825 outside us
email shrrelationsbnymelloncom
website wwwadrbnymelloncom
brokers joint
rbs hoare govett limited
250 bishopsgate
london ec2m 4aa
united kingdom
tel 44 020 7678 8000
website wwwrbscom
ubs limited
1 finsbury avenue
london ec2m 2pp
united kingdom
tel 44 020 7567 8000
website wwwubscom
financial pr advisers
financial dynamics limited
holborn gate
26 southampton buildings
london wc2a 1pb
united kingdom
tel 44 020 7831 3113
website wwwfdcom registered office
spirent communications plc
northwood park
gatwick road
crawley
west sussex rh10 9xn
united kingdom
tel 44 01293 767676
fax 44 01293 767677
email investorrelationsspirentcom
website wwwspirentcom
registered in england no 470893
spirent and the spirent logo are trademarks or registered 
trademarks of spirent communications plc all other 
trademarks or registered trademarks mentioned herein are 
held by their respective companies all rights reserved
wwwspirentcom


Summary:
 6 spirent communications plc annual report 2010
chair man’s state ment
“ the financial performance of the group reflects 
the improvement in operations achieved through 
the pursuit of excellence in all aspects of the 
business coupled with growth in the markets for 
spirent’s leading test solutions”
alex walker
chairman 7 spirent communications plc annual report 2010
overview
business review
governance
financial statements
spirent delivered a strong performance in 2010 
reporting growth of 13 per cent in revenue to 
4822 million and growth of 30 per cent in 
operating profit to 1127 million 
the company is consistently achieving a return on sales of over 20 
per cent with the return in 2010 being 23 per cent the order book 
increased in the year with a book to bill ratio of 105 earnings per 
share was distorted compared to the prior year by the recognition  
of deferred tax assets in 2009 eliminating this effect by taking a 
constant tax rate for both years shows that adjusted basic earnings 
per share increased by 31 per cent in 2010 to 1162 cents after 
charging 027 cents in respect of sharebased payment and acquired 
intangible asset amortisation
the financial performance of the group reflects the improvement in 
operations achieved through the pursuit of excellence in all aspects 
of the business coupled with growth in the markets for spirent’s 
leading test solutions 
this trend of improvement seen in the past several years is now 
combined with revenue growth driven by the innovation of our 
employees in developing worldclass test solutions to serve the 
needs of a rapidly evolving communications industry we plan  
to expand the group’s capabilities through additional investment  
for organic growth by the expansion of product development 
engineering and extension to our sales activities in addition  
we are pursuing growth through acquisition when and where  
we can see that the return on investment is attractive as the first 
step in this process we completed the acquisition of the fanfare 
group inc in february 2011
the group’s free cash generation was 826 million in 2010 
representing a cash conversion to earnings ratio of 104 cash 
balances were 2239 million at 31 december 2010 given the strong 
overall performance of the group the board recommends a final 
dividend of 140 cents per share compared with 100 cents per share 
in 2009 the company intends to maintain its policy to repurchase 
shares in order to counteract any dilutive effect from the exercise of 
sharebased incentives
ed bramson stood down as chairman on 4 march 2010 and both  
he and gerard eastman retired as nonexecutive directors on 5 may 
2010 we thank them for their outstanding achievements during  
their tenure 
the strong performance in 2010 was achieved through the hard work 
and commitment of our employees and management teams 
throughout the world i wish to thank all of them for their contribution 
to making 2010 such a success for spirent 
we are mindful of global macroeconomic factors that are likely to 
create challenges in the coming year however spirent’s diversified 
customer base market leading product offerings and promising 
market opportunities mean that we are well placed to deliver further 
growth through 2011