api group plc
annual report 2014
api group plc
annual report 2014
authentication solutions
brand enhancement and
api group plc annual report 2014 overview
about api
the image overleaf is produced on a sheetfed  
offset printing press using api tu cold foil
cold foil technology
api pioneered the development of cold foil technology 
an innovative alternative to hot stamping foil in the 1990s 
cold foil technology has revolutionised the flexibility and 
cost‑effectiveness of foil stamping as the process does not 
require the foil to be applied using specialist hot stamping 
equipment but is incorporated in the printing press itself
there are two forms of cold foiling web‑fed and sheet‑fed 
both forms employ an adhesive printed in the design area 
requiring the metallic effect the foil is then applied to 
the adhesive which is dried or cured by uv light before 
the carrier film is stripped away ink can then be printed 
onto the surface of the transferred foil creating unlimited 
combinations of metallic colour 
cold foiling allows faster processing times and saves on 
tooling costs it also presents a wide range of creative 
opportunities in designs incorporating fine lines large 
area coverage and even half tones whilst over‑printing 
can produce a spectrum of multicoloured effects cold 
foiling on rotary print machines is widely used to produce 
self‑adhesive labels for personal care wines spirits and 
food packaging whilst the sheet‑fed version of the process 
is typically used for cartons labels and commercial print
as the opportunities and demands continue to grow for 
both cold foiling processes api remains an industry leader 
in new product development
sheetfed innovation
api has been at the forefront of industry developments to 
integrate the cold foil application process into sheet‑fed 
offset printing presses the sheet‑fed cold foil transfer 
process typically uses the first two units of an offset press 
in the first printing unit an adhesive is printed in the design 
requiring the metallic effect using a conventional offset 
plate in the second printing unit the cold foil is pressed 
onto the adhesive by the blanket cylinder so creating the 
metallic design whilst the remaining unused foil is stripped 
away subsequent units can then be used to print inks onto 
the surface of the transferred foil 
research and development at api has focused on the key 
features required for a high performing sheet‑fed cold foil 
– a free release good bond to the adhesive and excellent 
receptivity to ink this is delivered with the tu grade tu has 
outstanding adhesion of uv curing offset inks whilst having 
the versatility to give exceptional performance on a wide 
range of applications ranging from premium packaging to 
high quality commercial print
applications include cartons and wet glue labels for wines 
spirits and premium fast moving consumer products such 
as confectionary as well as in commercial print for posters 
calendars magazines greetings cards and promotional 
items large area coverage with cold foil also offers an 
alternative to laminated or metalised substrates for cartons 
and labels
in an increasingly competitive and fast 
moving retail environment shelf impact 
is everything we enhance the visual 
appeal of products and packaging 
– helping to communicate brand values 
and authenticity
we are a leading manufacturer and distributor of foils films and 
laminates operating from a global network of manufacturing  
and distribution facilities 
with our customer service ethos technical expertise and 
collaborative approach api is a trusted partner in the supply  
chain for many of the world’s leading brands 01
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
contents
overview
01  contents
02  strategic highlights
03  business progress in 201314
04  where we operate
06  chairman’s statement
strategic report
07  business model and measuring performance
08  chief executive’s review
10 divisional review 
 10 laminates
 14 foils europe
 18 foils americas
 22  holographics
26 financial review
29 corporate social responsibility
32 principal risks and uncertainties
governance and remuneration
34 board of directors
35 corporate governance statement
39 directors’ remuneration report
41 directors’ report
44 statement of directors’ responsibilities
financial statements 
45 independent auditor’s report 
46  group income statement
46  group statement of comprehensive income
47 group balance sheet
48 group statement of changes in equity
49 group cash flow statement
50 notes to the consolidated  
financial statements
77  independent auditor’s report 
78  company balance sheet
79  notes to the company financial statements
shareholder information
87  financial record
88 financial calendar
88 advisers
business divisions
laminates
 of group revenue
52
read more on page 10
foils europe
 of group revenue
24
read more on page 14
foils americas
 of group revenue
18
read more on page 18
holographics
 of group revenue
6
read more on page 22 02
api group plc annual report 2014
overview 
strategic highlights
year in pictures
the group completed a number of key business improvement 
initiatives during the twelve months ending 31 march 2014
new sheffield hub
in summer 2013 
foils europe completed 
the establishment of a 
new sales and distribution 
hub in england aimed 
at improving service 
levels to customers and 
increasing penetration 
of the home uk market
czech jv
the group completed 
its investment in 
the joint venture 
company api optix 
sro equipment 
specification and 
sourcing was completed 
and the production 
of marketleading 
holographic masters 
brought on stream 
new supply  
contract at laminates
full product qualification 
on this major new 
supply arrangement was 
achieved in the first six 
months and shipments 
off the new laminator 
reached target rates early 
in the second half
tropos in the us
the group’s new erp 
enterprise resource 
planning it solution 
was successfully 
implemented at all three 
us locations starting 
1 april 2013 the solution 
will be rolled out in the 
european foils business 
during 201415 03
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
overview 
business progress in 201314
•	 revenues ahead by £23m 20 to £1147m 
2013 £1124m
•	 profit before tax unchanged at £56m 
2013 £56m profit before tax of £63m 
on a preexceptional basis 2013 £66m 
•	 stronger second half with preexceptional 
profit before tax ahead by £05m 15 
•	 diluted earnings per share 71p 2013 72p 
excluding exceptional items diluted earnings 
per share 78p 2013 84p
•	 proposed final dividend of 13p per share 
making 20p for the full year 2013 00p
•	 cash flow from operations of £90m 
2013 £86m converted at 91 of ebitda 
2013 86 and a net cash inflow of 
£28m 2013 £12m
•	 £02m net cash at year end 2013 net debt 
of £26m the first time for 15 years that the 
group has reported a net cash position
•	 another good performance from laminates 
and further progress at foils europe 
holographics back to breakeven in final 
quarter after cost reduction measures 
operating margin maintained at foils americas 
despite weaker sales in the second half 
•	 laminates major new supply contract 
fully on stream during second half
 from continuing operations
financial highlights
•	 restructuring of uk foils operations completed 
new distribution facility established in sheffield 
leaving livingston to concentrate on 
manufacturing
•	 new erp solution successfully implemented 
by foils americas rollout in foils europe 
scheduled for 2014
•	 capital additions and joint venture investment 
of £38m 2013 £55m including down 
payments on new metallising equipment for 
uk and us foils plants
operational highlights
total revenue £m
£1147m
2014 1147
2013 1124
2012 1139
2011 1000
operating profit before exceptional items £m
£74m
2014 74
2013 78
2012 64
2011 48
profit before tax £m
£56m
2014 56
2013 56
2012 48
2011 25
net cash flow from operating activities £m
£90m
2014 90
2013 86
2012 100
2011 92 04
api group plc annual report 2014
overview 
where we operate
global reach
creative solutions outstanding technical support and flexible 
service are just a step away via our network of regional distribution 
centres and quality manufacturing sites in the uk and usa
united kingdom
 of group revenues sold to customers in uk
20
•	 manufacturing and 
supply for laminates 
and holographics from 
single sites in the north 
west of england 
•	 foils europe 
manufacturing at 
livingston scotland 
distribution to uk and 
selected export markets 
from both livingston 
and sheffield
europe
 of group revenues sold to customers in europe
58
•	 network of api  
owned regional  
finishing and distribution 
hubs providing  
marketleading  
service levels 
to customers 
throughout europe
•	 laminates sales 
representation in 
europe via foils 
distribution hubs
manufacturing and distribution
distribution
salford
poynton
livingston
sheeld
paris
milan
nuremburg
warsaw 05
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
an international business serving customers in over 60 countries  
over 80 of api group revenues are derived from sales outside the uk
americas
 of group revenues sold to customers in americas
15
•	 two manufacturing 
locations new jersey 
and kansas
•	 regional distribution 
from finishing 
teams in each 
manufacturing location 
and california
key statistics
operating from 
16
locations
serving more than
60
countries
employing 
520
staff
manufacturing at 
5
facilities
asia pacific
 of group revenues sold to customers in asia pacific 
7
•	 foils distribution and 
finishing facilities in 
hong kong new 
zealand and at three 
locations in australia
to contact any of our sites 
go to apigroupcom
 
rahway nj
lawrence ks 
sante fe springs ca
hong kong
auckland
sydney
adelaide
melbourne 06
api group plc annual report 2014
overview 
chairman’s statement
•	 further progress on the overall financial 
strength of the group
•	 reintroduction of the dividend after 
a break of more than 10 years
•	 continued investment in operational 
capabilities and performance
introduction
i am pleased to report that the year to march 2014 was 
another solid year for the group and whilst there was a 
modest fall in operating results the overall financial strength 
of the group improved further and our operations have 
benefitted from another year of strong capital investment 
shareholders’ funds increased by 15 and the year saw 
the achievement of two significant milestones no net 
debt at the yearend for the first time in 15 years and the 
reintroduction of a dividend after a break of more than 
10 years
strategic report
during this last financial year new regulations were 
issued by the uk government on the content and 
structure of the narrative to be included in annual reports 
these requirements affect all companies with additional 
requirements for those which are fully listed as an aim 
company we have taken steps to reorganise and enhance 
our commentary in order to meet the objectives of the new 
regulations the new strategic report includes what was 
previously covered under the business review in addition 
to a new section on strategy objectives kpis and the 
business model
board and governance
the board and the composition of its committees 
have remained unchanged throughout the year 
since the end of the financial year the group’s largest 
shareholder steel partners have advised the board that 
luke wiseman no longer acts as their nominee director 
steel partners have not indicated that they intend to 
request a replacement nominee director and the board 
has no reason to believe that they intend to do so in the 
meantime the board continues to place a high value on 
mr wiseman’s contribution and he has agreed to continue as 
a nonexecutive director for the foreseeable future bearing 
in mind the long service of a number of directors it has 
been agreed that the head of the nominations committee 
mr batzer will undertake a review of the board’s 
composition by the end of this calendar year with a view to 
formulating a long term plan for succession details of the 
group’s governance and the roles and responsibilities of the 
board and its committees are included in the governance 
and remuneration section on pages 34 to 44 
dividend
following payment of the interim dividend in january the 
board is pleased to propose a final dividend of 13p per 
share the total fullyear dividend of 20p will be put to 
shareholders for approval at the annual general meeting 
on 15 july 2014 and subject to this approval it is our 
intention that the final dividend will be paid on 1 august 
to shareholders on the register as at 11 july with an 
exdividend date of wednesday 9 july
our people
my thanks go to all five hundred and twenty api employees 
in the various business units and the central team for 
their contribution to another year of solid progress for 
the group 
conclusion
following the distraction and uncertainty of the 2013 sale 
process this year has allowed the group’s management to 
focus on a number of operational improvement and capital 
investment initiatives as well as realising the benefits from 
those actions additional projects are already underway 
aimed at further enhancing capabilities and performance 
the board therefore remains confident in the group’s 
prospects and the opportunity to create further value 
for shareholders 
richard c wright
chairman
3 june 2014 07
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
strategic report
business model and measuring performance
business model
•	 the group is organised into four profit centres each with 
an independent management team supported by a small 
central staff
•	 each business unit specialises in a single product category 
within the overall group portfolio common endmarkets 
and similar manufacturing technologies provide an 
opportunity for crossselling and best practice sharing
•	 our products are made to unique formulations owned 
by api manufacturing scale presents a barrier to new 
market entrants 
•	 we offer a collaborative serviceled approach with 
customers and a comprehensive range of products within 
each category complemented by technical expertise and 
a track record of innovation 
•	 as an integrated producer and distributor profitability 
depends on maximising the utilisation of our installed base 
of equipment and facilities
•	 intergroup trade provides an additional opportunity to 
maximise added value for the group from sales generated 
with third parties 
•	 excellent cash conversion ensures we have funds available 
to invest in profitenhancing opportunities as well as 
providing income for shareholders
who we are
•	 api is a longestablished manufacturer of speciality foils 
and packaging materials serving industrial markets in 
europe north america and australasia from production 
operations in the uk and us 
•	 we are the european market leader in cartonboard 
laminates and a top three worldwide foils producer
what we do
•	 api produces and markets foils films and laminates for use 
primarily in packaging of fast moving consumer goods and 
in printed media 
•	 our metallic holographic and pigmented solutions 
provide added value options for specifiers and brand 
owners which enhance the visual appeal of products 
and packaging and help to communicate brand values 
and authenticity
strategy and objectives
•	 our overriding purpose is to create economic value for 
the benefit of our customers shareholders employees 
and the wider community in which we operate
•	 our key financial objective is to increase the absolute 
level of operating profit through margin improvement 
and growth in sales with a prudent regard for 
capital employed
•	 we aim for each of our businesses to be contributing a 
high single digit or low double digit operating margin 
with a resilient financial performance founded on a 
competent well trained workforce great products and 
a strong and sustainable market position
•	 progress towards our objectives depends on optimising 
our cost base and operational efficiency growing 
volumes through product development and innovation 
superior service delivery and selective investment in 
extended capabilities and capacity
growth strategies by business unit
•	 laminates increase the adoption of laminate through 
packaging development activity working closely with print 
partners and premium brand owners
•	 foils europe deliver marketleading service through the 
industry’s bestinvested sales and distribution network 
•	 foils americas leverage special competence in 
the production of foils for the growing metallic 
pigments sector
•	 holographics exploit the opportunities provided by 
the growing security and authentication market taking 
advantage of recent investment in marketleading 
holographic origination and manufacturing capabilities
2014 74
2013 78
2012 64
2011 48
operating profit before exceptional items
2014 1147
2013 1124
2012 1139
2011 1000
revenues
2014 65
2013 69
2012 56
2011 48
operating margin 
2014 220
2013 303
2012 212
2011 226
total incident frequency per 100000 hours worked 08
api group plc annual report 2014
strategic report
chief executive’s review
•	 revenues ahead by £23m 20 
to £1147m 2013 £1124m
•	 another good performance from laminates 
and further progress at foils europe
•	 holographics back to breakeven in final 
quarter foils americas operating margin 
maintained but lower revenues
•	 profit before tax unchanged at 
£56m 2013 £56m
overall financial results
group revenues for the twelve months 
to march 2014 increased by 20 at 
both actual and constant fx rates 
to £1147m 2013 £1124m sales 
volumes were higher by 27 with 
second half volumes up 71 on the 
prior year compensating for a small 
decline in the first six months 
in spite of the higher sales levels 
added value margin declined slightly 
due to sales mix between the business 
units the impact of less favourable 
exchange rates and higher levels 
of production scrap at laminates 
this together with slightly higher 
variable costs more than offset the 
contribution from higher sales to 
leave preexceptional operating profits 
down by 48 at £74m 2013 £78m 
operating margin was also lower by 
04 at 65
at segment level full year profits 
advanced at laminates £02m and 
foils europe £01m on the back of 
stronger volumes holographics losses 
increased by £04m due to lower 
external sales and foils americas 
profits declined by £02m due to 
lower activity in the last quarter 
further details are provided in the 
divisional review on pages 10 to 25
introduction
in spite of a slightly weaker profit 
performance results for the year 
demonstrate further strengthening 
of the group’s financial position 
combined with continued investment 
in the operating assets of the business
a number of key operational 
improvement projects were completed 
and as the next step in this process 
the board has approved significant 
capital investment in additional 
capacity for the foils businesses 
managing this programme along with 
the continued rollout of the group’s 
new erp solution and building on the 
improved profit performance achieved 
in the second half of the year just 
ended comprise the key operational 
agenda items for the year ahead 09
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
in a reversal of the pattern experienced 
in the last two years and as anticipated 
in our interim results statement 
profitability improved significantly 
in the second half up £05m 15 
on the first half progress at foils 
europe £03m and reduced losses 
at holographics £04m as a result 
of cost reduction measures more 
than compensated for the weaker 
second half at foils americas £04m 
operating margin for the second half 
improved to 69 compared to 61 
in the first half 
for the year as a whole profit 
before tax was unchanged at £56m 
although a small tax charge led to 
a marginal fall in diluted earnings 
per share to 71p 201372p
exceptional costs of £07m 
2013 £10m have been separately 
disclosed and relate to oneoff 
costs and expenses associated 
with organisational change in three 
business units interest costs including 
the new ias 19 pension interest 
charge were £01m lower at £11m 
2013 £12m on a preexceptional 
basis profit before tax was 45 
lower at £63m 2013 66m and 
diluted earnings per share were 78p 
compared to 84p for the prior year
cash from operations post 
exceptional items converted at 91 of 
ebitda 2013 86 with a net cash 
inflow of £28m compared to £12m 
for the previous year 
whilst cash capital expenditure of 
£35m was lower than the previous 
year 2013 £53m capital additions 
still represented 14 times depreciation 
and will remain above depreciation for 
at least another two years as additional 
capacity is introduced into the foils 
businesses the group completed 
its investment in the czech joint 
venture after a further £05m transfer 
of funds on top of the £04m paid 
last year with working capital broadly 
unchanged the group reported a 
small net cash position at the financial 
year end of £02m 2013 £26m debt
outlook
the board expects a continuation of 
the second half trading momentum 
with progression in results for the 
first half and for the financial year as 
a whole 
at this stage it is unclear how long 
foils americas will be affected by 
the reduced demand from metallic 
pigment customers but any impact 
on the group’s results should be more 
than compensated by the elimination 
of trading losses at holographics and 
the benefit of last year’s restructuring 
at foils europe
in respect of general market 
conditions foils europe continues 
to experience steady overall 
demand whereas recent activity in 
the decorative foils market in north 
america appears somewhat slower 
than usual at laminates the new 
financial year has started strongly 
and there is a good pipeline of new 
business development projects
management is pressing ahead with 
its operational improvement and 
growth agenda including the rollout 
of the group’s new erp platform and 
investments in additional capacity for 
the foils businesses these initiatives 
will strengthen api’s ability to service 
customers in key markets and 
enhance the group’s prospects over 
the medium term
the strategic report as set out on 
pages 7 to 33 has been reviewed and 
approved by the board of directors
andrew turner
chief executive
3 june 2014
6
holographics
52
laminates
18
foils americas
24
foils europe
revenue by division £m
7
holographics
68
laminates
17
foils americas
22
foils europe
operating profit by division £m 10
api group plc annual report 2014
strategic report
divisional review
our strategy in action
investment
efficiency quality  
productivity and  
sustainability
key statistics
despatching 
1 truck every 2 hours
tonnes of adhesive 
consumed per month  
4
finished jumbo rolls 
produced per hour  
3
laminates
trusted innovative  
reliable partner
our investment in new 
laminating technology  
has broadened our product 
range and enhanced the 
service levels we can offer 
customers cementing api’s 
position as europe’s leading 
cartonboard laminator 11
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our strategy in action
investment
efficiency quality  
productivity and  
sustainability 12
api group plc annual report 2014
strategic report
divisional review continued
percentage of group revenue
52
as reported at the interim stage 
api laminates experienced lower 
first half activity due to net adverse 
‘churn’ of customer packaging 
specifications moving between 
laminate and nonlaminate 
constructions and a reduced volume 
allocation on one of its key supply 
positions in the second half this 
was more than compensated 
by the commencement of bulk 
shipments against the major new 
supply contract produced on the 
newlyinstalled laminator as a result 
second half revenues were 11 
ahead of the first six months and 
25 higher than the comparative 
6 month period last year and full 
year revenues ended 74 higher 
at £592m 2013 £552m 
at the added value level the 
contribution from higher sales 
was partially offset by the impact of 
changes in currency exchange rates 
and lower raw material efficiencies 
during the startup phase on the 
new laminator operating costs 
increased by 5 due primarily to 
higher spend on plant maintenance 
and sales and marketing leaving 
operating profits £02m ahead of 
the prior year at £67m return 
on sales was slightly down on the 
prior year but still a very creditable 
113 2013 118 
experience 
api is europe’s longest 
established and largest producer 
of paper and cartonboard 
laminates for the packaging of 
consumer goods
with over 50 years’ experience 
supplying to premium sectors 
such as fine spirits tobacco 
confectionary and beauty we 
are committed to the highest 
standards of quality and technical 
excellence innovation and supply 
chain efficiency
laminates
continued
total revenue £m
£592m
2014 592
2013 552
2012 548
operating profit £m
£67m
2014 67
2013 65
2012 57 13
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our products 
•	 metallised film laminates
•	 holographic laminates
•	 aluminium foil laminates
•	 portabio film laminates
•	 fresnel lens laminates
•	 bespokeprintregistered 
holographics and lens
•	 microwave susceptor 
our markets
•	 tobacco
•	 wines and spirits
•	 food and 
confectionery
•	 health 
•	 beauty 
•	 personal care 14
api group plc annual report 2014
strategic report
divisional review continued
our strategy in action
complete 
product 
range
local customer  
service and  
distribution
key statistics
producing enough foil  
per year to circle the earth 
2500 times
foil so thin the depth of  
an iphone is equivalent to
10000 layers
typical length of a 
production roll 
36km
foils europe
api foils europe delivers 
market leading service from 
the industry’s best invested 
distribution network 15
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our strategy in action
complete 
product 
range
local customer  
service and  
distribution 16
api group plc annual report 2014
strategic report
divisional review continued
percentage of group revenue
24
in spite of the disruption caused 
by the reorganisation of its uk 
operations in the first half foils 
europe recorded a second 
successive year of profits growth 
revenues moved ahead 50 at 
constant fx rates to £286m with 
the polish distribution unit more 
than doubling sales in its second 
year further progress in italy and 
an increased contribution from 
germany revenues were lower 
in the uk and australia the latter 
due to a factory closure at a key 
customer in the label sector 
full year volumes increased 91 
and whilst there was a fall in 
average selling price due to mix 
added value margin was slightly 
ahead of prior year production 
costs were higher despite second 
half labour savings arising from the 
uk restructuring as were outbound 
freight costs general overheads and 
marketing expenses it is estimated 
that £02m of nonrepeatable 
costs were incurred in connection 
with the uk reorganisation in the 
first half year profits increased by 
£03m in the second half with full 
year operating profits advancing by 
74 to £21m 2013 £20m and 
operating margin higher by 02 
at 75
over the last three years activity at 
foils europe’s manufacturing plant in 
livingston has increased by 18 due 
to growth in sales and repatriation 
of volume from the group’s 
discontinued joint venture in china 
with the facility now fully loaded 
and good prospects for further 
growth the board has approved 
capital investment to increase 
capacity including a new vacuum 
metalliser which came on stream in 
may 2014 and an additional coating 
line planned for installation in the 
first quarter of 2015 foils europe is 
also planning to roll out the group’s 
new erp business following its 
successful implementation in foils 
americas during the first half of the 
financial year just ended
experience 
api is a leading manufacturer 
and worldwide supplier of 
stamping foils used throughout 
the consumer goods industry 
to enhance the appearance of 
products and packaging
as a top three player globally 
api foils is a well known brand 
name in the market with a 
comprehensive product range 
including a particularly strong 
portfolio of foils used for special 
applications and industryleading 
service offering
foils europe
continued
total revenue £m
£286m
2014 286
2013 270
2012 292
operating profit £m
£21m
2014 21
2013 20
2012 04 17
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our products 
•	 metallic hot stamping foils
•	 pigment foils
•	 holographic foils
•	 cold foils
•	 coding foils
•	 holographic 
lamination film
•	 foiling make ready 
materials
our markets
•	 wines and spirits
•	 confectionery
•	 beauty and 
personal care
•	 greetings cards 
books and magazines
•	 food
•	 footwear and 
sports goods
•	 office and 
promotional products 18
api group plc annual report 2014
strategic report
divisional review continued
our strategy in action
scale and  
flexibilit y 
largescale producer  
serving customers  
of all sizes
key statistics
customers supplied  
in excess of
2200
products variants 
manufactured 
more than
1000
a customer order 
received every 
6 minutes
foils americas
established name in the 
americas foil market
api foils’ reputation with 
customers is built on service 
excellence especially 
flexibility ease of dealing and 
technical application support 19
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our strategy in action
scale and  
flexibilit y 
largescale producer  
serving customers  
of all sizes 20
api group plc annual report 2014
strategic report
divisional review continued
percentage of group revenue
18
revenues at foils americas were 
down 82 at constant fx rates 
to £218m 2013 £240m and 
were 90 lower than the prior 
year at actual fx rates following 
several years of strong growth 
in sales to the metallic pigment 
sector the business experienced 
a sharp decline in order levels in 
the last quarter due primarily to 
reduced conversion activity at one 
key customer sales of decorative 
foils were also lower due in part 
to capacity allocation in favour 
of the metallic pigment business 
in the earlier part of the year and 
a slowdown in the us market 
during the harsh winter period 
the impact on profits of the 
reduced sales contribution was 
mitigated by an improvement in 
added value margins due to a more 
favourable sales mix lower average 
raw material costs and a partial 
reversal of the prior year’s reduction 
in inventory with costs broadly 
flat operating profits were down 
just £02m to £17m 2013 £19m 
with operating margins virtually 
unchanged at 78 2013 79
at the beginning of the financial 
year the usbased foils business 
transitioned across to a new erp 
platform whilst there was a degree 
of initial disruption the solution 
has now been running smoothly 
for several months and providing 
the business with a significantly 
improved information and control 
environment
experience 
api is a leading manufacturer 
and worldwide supplier of 
stamping foils used throughout 
the consumer goods industry 
to enhance the appearance of 
products and packaging
as a top three player globally 
api foils is a well known brand 
name in the market with a 
comprehensive product range 
including a particularly strong 
portfolio of foils used for special 
applications and industryleading 
service offering
foils americas
continued
total revenue £m
£218m
2014 218
2013 240
2012 234
operating profit £m
£17m
2014 17
2013
19
2012 12 21
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our products 
•	 metallic hot stamping foils
•	 pigment and coding foils
•	 holographic foils
•	 cold foils
•	 holographic lamination film
•	 foiling make ready materials
•	 multi layer foil for 
metallic pigments
our markets
•	 wines and spirits
•	 confectionery
•	 beauty and 
personal care
•	 greetings cards 
books and magazines
•	 food
•	 footwear and 
sports goods
•	 office and 
promotional products 22
api group plc annual report 2014
strategic report
divisional review continued
our strategy in action
high securit y resisting the threat from 
counterfeiting and identity 
fraud requires constant 
innovation and the utmost 
supply chain integrity
key statistics
typical number of processes to 
complete a finished hologram 
15
dots per inch resolution of a high 
security hologram 
245000
thickness of a typical transfer 
hologram foil is 3 microns 
0003mm
holographics
high quality high security
we understand the security 
and authentication sector and 
the levels of product quality 
and innovation demanded  
we offer a broad and secure 
capability to meet and exceed 
customer expectations  23
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information 24
api group plc annual report 2014
strategic report
divisional review continued
percentage of group revenue
6
api holographics’ revenues declined 
by 79 to £89m 2013 £96m with 
a recovery in sales of decorative 
holographic products to sister api 
companies adding £05m 23 
offset by a reduction in third party 
revenues of £12m 16 the 
primary cause of the decline in 
external sales was the ending of a 
longstanding supply arrangement 
after the customer took production 
in house in addition the timing 
of shipments on a second major 
contract adversely impacted  
yearonyear comparatives 
the lower sales contribution 
resulted in losses widening to £07m 
2013 £03m as operating cost 
savings of £02m were offset by a 
partial reversal of a credit to profit 
for inventory build in the previous 
year after losses of £05m in the 
first half management successfully 
implemented a cost reduction 
programme aimed at bringing 
the business back to a break even 
position in the final quarter 
for the longer term the board 
remains committed to the strategy 
approved in 2011 aimed at growing 
api’s presence in the security and 
authentication market whilst a 
number of new sales opportunities 
have been developed in pursuance 
of that objective progress has so 
far been slower than expected 
and undermined by the loss of 
one particular supply position due 
to factors beyond management’s 
control in the meantime significant 
capital investments have been 
completed in enhanced security 
and extended product capabilities 
at the salford manufacturing facility 
and the new joint venture in the 
czech republic is supporting the 
business development effort with a 
significantly improved holographic 
origination service
holographics
continued
total revenue £m
£89m
2014 89
2013 96
2012 130
operating profit £m
£07m
2014 07
2013 03
2012 16
experience 
with a heritage going back to the 
original development of industrial 
holograms in the mid 1970s api is 
today one of the industry’s largest 
manufacturers of holographic 
products combining design 
origination and microembossing 
expertise with knowhow in 
coatings and adhesive technology 
derived from our extensive foil 
making activities
api holographics sells its 
authentication products directly 
to security printers specifiers 
and other industry partners 
whilst decorative foils and films 
are distributed through sister 
companies within the group 25
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
our products 
•	 custom holograms
•	 holographic stripe 
thread and labels
•	 holographic overlays 
•	 tamper evident seals
•	 scratchoff foil
•	 security embossing base
our markets
•	 premium branded goods
•	 dutiable goods wines 
spirits and tobacco
•	 pharmaceuticals 
licenced goods
•	 event and 
transport tickets
•	 vouchers  
and certificates
•	 government and 
institutional documents 
and currency 26
api group plc annual report 2014
strategic report
financial review
•	 diluted earnings per share were 
71p compared to 72p for last year
•	 net cash of £02m compares to £26m net 
debt at 31 march 2013
•	 final dividend of 13p making the full year 
dividend 20p
divisional profits summary
for the twelve months ending 
31 march 2014 total operating profits 
from the business units before central 
costs were down 33 to £98m  
2013 £101m equating to an 
operating margin of 85 2013 90 
a stronger second half yielded an 
operating margin before central costs 
of 89
central costs
central costs were £01m higher 
than prior year at £24m primarily 
due to overlapping expenses to 
run two concurrent it platforms 
during the transition to the new erp 
solution as a result of the change 
to pensions accounting following 
the introduction of ias 19r central 
costs now include pension expenses 
previously charged to finance costs 
and “other comprehensive income” in 
the financial statements for the year 
ended 31 march 2014 costs relating 
to the closed defined benefit pension 
schemes amounted to £07m which 
is in line with prior year comparatives 
when restated on the same basis
impairment
the board considers that no 
impairments to goodwill or asset 
carrying values are necessary
overview
cash generated from operations 
of £90m 2013 £86m supported 
further capital investments in the year 
of £38m 2013 £55m
underlying diluted eps pence per share
78p
2014 78
2013 84
2012 61
net debt £m
£02m
2014 02
2013 26
2012 36 27
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
exceptional items
exceptional charges totalling £07m 
2013 £10m were incurred during 
the year in relation to reorganisation 
costs in foils europe holographics 
and laminates 
further details are provided in note 5 
to the financial statements
finance costs
net finance costs for the year reduced 
by £01m to £11m the noncash 
pensionrelated finance charge 
calculated in accordance with the new 
ias 19 accounting standard increased 
by £02m to £06m this increase 
was offset by interest and other costs 
relating to bank borrowings which 
fell by £02m to £06m 2013 £08m 
as a result of lower average net 
debt and lower interest margins on 
both uk and us facilities further 
details are provided in note 6 to the 
financial statements 
taxation
the group continues to benefit from 
historic tax losses and nonutilised 
capital allowances in the uk as a 
result the current tax charge of £04m 
2013 £02m was mostly offset 
by a deferred tax credit of £03m 
2013 £02m 
in the uk the current tax of £02m 
2013 £01m related entirely to 
api laminates where tax losses are 
now fully utilised taxable profits 
were partially sheltered by uk group 
relief losses in api holographics 
and central companies and capital 
allowances overseas tax of £02m 
2013 £01m related to taxable 
profits in germany and italy overall 
tax on profits in the uk and us foils 
businesses continues to benefit from 
previously accumulated tax losses and 
nonutilised uk capital allowances 
in the period a deferred tax charge 
of £15m 2013 £15m was balanced 
by a deferred tax credit of £17m 
2013 £16m mostly from further 
recognition of historic tax losses in the 
foils businesses 
a full reconciliation of the tax charge 
is shown in note 7d to the financial 
statements
the net deferred tax asset recognised 
in the group’s balance sheet reduced 
in the year by £03m to £61m 
2013 £64m predominantly due 
to a reduced deferred tax asset of 
£28m relating to the pension deficit 
2013 £31m as a consequence of 
lower corporation tax rates in the uk
remaining unrecognised tax losses as 
at 31 march 2014 amounted to £21m 
in the uk 2013 £28m and 41m in 
the us 2013 90m in addition to 
unclaimed capital allowances in the 
uk of £21m 2013 £39m
earnings per share 
diluted earnings per share were 
71p compared to 72p for last 
year excluding exceptional items 
diluted earnings per share were 78p 
2013 84p
shareholders’ funds
at 31 march 2014 the group’s net 
assets were £264m an increase over 
the year of £35m or 152
cash flow and net debt
there was a net cash inflow from 
operating activities after cash flows for 
pension and finance costs of £74m 
up from £70m in the previous year 
cash flows resulting from capital 
expenditure amounted to £35m 
2013 £53m of which £33m was 
capitalised 2013 £51m spend 
included payments of £19m for 
projects scheduled to complete in 
the new financial year two new foil 
metallisers which are scheduled for 
installation in the first half of the new 
financial year incurred project costs of 
£12m a further £07m was incurred 
on the new business it system which 
is now operational in the us with 
foils europe expected to complete 
by march 2015 a further investment 
of £05m 2013 £04m was made in 
the czech joint venture origination 
company to complete the funding 
of its new equipment for the third 
successive year capital investment 
was significantly ahead of depreciation 
of £24m 2013 £22m 
the impact on working capital of 
stronger sales activity in the final 
three months of the year compared 
to the equivalent period a year earlier 
was offset by improved working 
capital efficiency with the result that 
working capital ended the year broadly 
unchanged yearend efficiency which 
is measured internally by reference to 
trailing three month sales annualised 
improved by 09 to 73 as a result of 
reduced inventories 
consistent with the charge in the 
income statement cash flow for 
interest expense reduced by £02m 
to £04m 
net cash at 31 march 2014 amounted 
to £02m compared to net debt of 
£26m a year earlier the group’s 
yearend debt cover ratio net debt 
to trailing 12 month ebitda was 
therefore zero 2013 03x as was 
gearing net debt to shareholders’ 
funds 2013 11
in light of the group’s recent record 
of strong cash conversion and the 
reduced levels of bank debt and 
following a review of medium term 
business plans the board announced 
in december 2013 its intention 
to reintroduce a meaningful and 
sustainable dividend that would 
be affordable out of future cash 
flows after providing for finance 
and pension costs and funding of 
capital investment requirements 
an interim dividend of 07p was 
paid to shareholders in january at a 
cost of £05m and a final dividend 
of 13p is being recommended to 
shareholders for approval at the agm 
on 15 july 2014  28
api group plc annual report 2014
strategic report
financial review continued
borrowings and liquidity
the group’s policy is to ensure that 
banking facilities are adequate to meet 
foreseeable peak requirements arising 
from variations in working capital 
and the timing of capital expenditure 
facilities are in place to independently 
finance the two main operations based 
in the uk and north america
during the year new uk facilities were 
agreed with hsbc plc these include a 
revolving credit facility of £135m and 
ancillary facilities of £75m to cover fx 
contracts letters of credit and sundry 
other items the facilities extend to 
december 2017 and are subject to two 
quarterly financial covenant tests 
lending is secured via a floating 
charge over the group’s uk assets 
total facilities under the previous 
funding arrangement with barclays 
bank plc as at 31 march 2013 
amounted to £128m
in north america funding has been 
arranged with wells fargo bank until 
april 2015 facilities comprise an 
amortising loan amounting to 09m 
at 31 march 2014 2013 12m and 
a 55m asset backed working capital 
facility borrowings are secured on 
working capital plant and equipment 
and the kansas property and are 
subject to quarterly covenant tests 
the soontobeinstalled new 
metalliser for the kansas facility is 
being funded via a separate asset 
financing agreement with wells fargo 
foreign currency exchange rates
exchange rates used for the translation 
of results and assets of us and 
eurozone based operations are 
shown below 
rate to £1  us  euro
31 march 2014
average 159 119
closing 167 121
31 march 2013
average 158 123
closing 152 118
pensions
the uk and us businesses each 
operate defined benefit pension 
schemes for the benefit of past and 
current employees both schemes 
are closed to future accrual and are 
accounted for under ias 19r  
at 31 march 2014 the group’s ias 19r 
gross pension liability was assessed at 
£133m 2013 £133m when adjusting 
for the recognised deferred tax asset 
of £28m 2013 £31m the net liability 
equates to £105m 2013 £102m 
a small increase in the gross uk deficit 
was matched by reduced net liabilities 
on the us plan the deferred tax asset 
reduced by £03m as a result of lower 
uk tax rates
in the uk the api group plc 
pension and life assurance fund has 
approximately 1520 pensioners and 
deferred members the fund was 
closed to future service accrual on 
31 december 2008 following on from 
a decision to admit no new members 
since october 2006 
the uk scheme’s last triennial 
valuation date was 30 september 
2013 the valuation results and funding 
plan were approved by the trustees 
and the company in may 2014 
the outcome was broadly in line 
with the funding plan from september 
2010 and as a consequence the 
company will continue its annual 
deficit reduction payment of £07m 
per annum the company also pays 
all administration fees on behalf of 
the fund and works collaboratively 
with the trustees on many aspects of 
scheme management in particular 
investment strategy
as at 31 march 2014 the gross deficit 
of the uk fund has been calculated 
at £126m 2013 £123m under 
the valuation principles of ias 19r 
a benefit from a small increase in the 
discount rate to 440 2013 430 
was offset by changes to assumptions 
used for mortality the average life 
expectancy assumption has been 
increased by 065 years across the 
population as a result of a postcode 
review of the membership carried 
out for the 2013 funding valuation 
additionally an experience loss of 
£12m has been recognised relating to 
the triennial revision of expected future 
cash benefits to be paid inflation 
assumptions remain unchanged 
in the us the api foils north america 
pension plan was closed to new 
entrants and future accrual in 2004 
membership is approximately 160 
current and past employees details of 
the net deficit of £07m 2013 £10m 
are included in note 18 to the financial 
statements 
also in the us current and past 
employees covered by union 
contracts at the group’s new jersey 
manufacturing facility are members 
of a unionmanaged multiemployer 
defined benefit pension plan the plan 
operates under the terms of the site’s 
collective bargaining agreement and 
remains fully open in accordance with 
ias 19r this scheme is accounted for 
as a defined contribution plan
chris smith 
group finance director
3 june 2014 29
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
making our operations more sustainable
the group operates in a manner which aims to eliminate 
the possibility of its activities causing harm to people and 
the environment
safety health and  
environment “she”
policy and implementation
the group’s first priority in the 
workplace is the health safety and 
welfare of its employees and those 
affected by its operations api has a 
good health and safety record and 
a culture of safety which aims for 
continuous improvement is deeply 
embedded within the group 
the board considers that the 
management of safety health and 
environment form a key element of 
the group’s corporate governance 
activities and the board therefore has 
ultimate responsibility for policy and 
performance in this area the chief 
executive has primary responsibility for 
setting principal she objectives within 
which detailed policies operate and 
for reviewing progress against those 
objectives progress and performance 
is reported on a monthly basis to the 
board supplemented by an annual 
analysis and appraisal
the group’s she policy has been 
designed to provide a framework and 
guidelines for business units to ensure 
that they meet or exceed all applicable 
legal and regulatory requirements 
to share best practice and to 
maintain suitably active and directed 
management programmes at site 
level there is a clear emphasis on the 
responsibilities of local management 
teams with oversight through line 
management and support from 
group resources 
she training
skill development is a key element 
of the group’s she policy which is 
encouraged through the organisation 
and funding of both internal and 
external health and safety training 
the group she policy defines 
minimum training standards for 
nominated safety officers on each 
site and all supervisors and managers 
with responsibility for production 
operations with the assistance of 
specially trained personnel and 
input from safety committees 
all employees are involved in 
implementing the company’s health 
and safety management system 
fire prevention
the risk of fire and explosion at any of 
the group’s five manufacturing plants 
is mitigated by constant attention to 
best practice techniques processes 
and controls in 2011 the group 
introduced its fire and explosion 
prevention standard and rating 
system this comprehensive guide for 
site management teams incorporates 
a scoring system designed to quantify 
risk management status as part of 
the annual business planning process 
each site identifies a programme of 
specific improvements to increase 
their risk rating in the year ahead and 
gain marks under the scheme on 
a monthly basis as those measures 
are implemented during the latest 
twelvemonth period the average 
fire and explosion prevention rating 
improved from 345 to 350 out of a 
maximum achievable score of 400 
2014
2013
2012
2011
2010
220
303
212
226
319
total incident frequency  
per 100000 hours worked
2014
2013
2012
2011
2010
084
105
020
064
046
lost time accident frequency  
per 100000 hours worked
2014
2013
2012
2011
2010
191
555
281
110
201
days absence due to lost  
time accidents
strategic report
corporate social responsibilit y 30
api group plc annual report 2014
strategic report
corporate social responsibilit y continued
environmental practice and systems
api is committed to ensuring good 
environmental practice relating to its 
operational processes and investment 
decisions a number of api’s principal 
manufacturing sites are iso 14001 
accredited and the group’s operations 
comply with applicable waste 
management regulations 
the group continues to invest in 
systems and equipment to ensure 
that environmental performance 
is measured and improved in the 
key areas of solvent emissions 
energy efficiency noise process 
and packaging waste and soil 
groundwater protection 
she performance 
as an integral part of the reporting 
cycle all sites report monthly on 
she performance routine reporting 
encompasses a comprehensive suite 
of safety and environmental statistics 
and written details of any significant 
events are provided to the group 
chief executive on a timely basis 
each site completes an annual review 
of performance including progress 
against annual objectives and sets out 
a plan of improvements for the year 
ahead as a matter of policy she is 
placed first on the agenda of all regular 
business review meetings including 
board meetings 
it is normal practice for at least one 
she item to be included on the list 
of personal objectives for all business 
unit general managers and operations 
managers which are in turn linked to 
the annual bonus scheme 
with respect to environmental matters 
for the past two years the group has 
been compiling standardised data 
on total waste as a proportion of the 
weight of all materials consumed and 
energy consumption per unit of sale 
for the year ended 31 march 2014 
total environmental waste increased 
142 compared to 136 for the prior 
year the increase was primarily due to 
higher production scrap levels at the 
laminates operation in poynton waste 
may go to either landfill incineration 
or recycling and the business is taking 
steps to reduce the amount going to 
the most environmentally damaging 
destination landfill there was a 
second successive year of significant 
progress against this objective with 
the amount of waste going to landfill 
reducing by 14 on top of the 45 
reduction achieved last year progress 
is expected to continue with the 
investment in onsite processing of 
foil waste at the holographics facility 
at salford enabling a switch to a 
heatfromwaste solution unit energy 
consumption for the year was down 
by 300 to 226 whr per square metre 
the improvement was due to a 
number of energy saving initiatives at 
api holographics and the benefit of a 
mild winter on heating costs at most 
european facilities
no environmental incidents were 
logged under the group’s internal 
reporting during the past year 
compared to two incidents in the 
preceding year 
api’s employees
api group employs 520 employees 
in 16 locations worldwide each 
business division is led by a managing 
director who reports to the group 
chief executive and is supported by a 
local management team the board 
and the group leadership team value 
the contribution which the whole 
workforce makes to the success of 
the group
communication with employees
the board promotes good relationships 
and communication with employees 
steps are taken to inform employees 
of the circumstances facing the 
businesses and its progress and plans 
with the aim of promoting a sense of 
common endeavour towards local 
business objectives and the success 
of the group as a whole 
granulator for holographics 
enables production waste  
to be granulated onsite and 
sent for incineration instead 
of chemical processing 
and landfill 31
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
the group encourages consultation 
and communication at site level and 
employees have access to senior 
management so that their views can 
be taken into account when making 
decisions which are likely to affect 
their interests communication 
with employees includes publishing 
announcements and updates on staff 
notice boards communications by 
email and team meetings information 
including the latest news relating to 
the group’s businesses is also made 
available on the company’s intranet
each business division and the 
group’s central services team has its 
own hr advisor who is available to 
address any concerns or questions 
an employee may have on a strictly 
confidential basis
the group has a whistleblowing 
policy in place to enable and 
encourage employees regardless of 
seniority to bring matters relating to 
suspected wrongdoing or dangers 
at work to the board’s attention 
the whistleblowing policy forms part 
of the employee handbook and is also 
available for employees to access on 
the company’s intranet arrangements 
are in place for proportionate 
and independent investigation of 
any concerns or allegations and 
for appropriate followup action 
when required 
equal opportunities
api is an equal opportunities 
employer both employment 
including recruitment policy and 
practice in the group are based 
on nondiscrimination and equal 
opportunity irrespective of age 
disability race religion or belief 
gender sexual orientation gender 
reassignment colour nationality 
ethnic or national origin and marital 
or civil partner status the company’s 
equal opportunities policy forms part 
of the group’s employee handbook 
and is also available for employees to 
access on the company’s intranet
the group endeavours to give 
full and fair consideration to the 
possibility of employing disabled 
people wherever a vacancy arises and 
is committed to making reasonable 
adjustments whenever required 
disabled employees have the same 
opportunities as other employees 
in relation to training career 
development and promotion 
training and development 
training and development of all 
employees is given due priority 
the assessment of training and 
development needs is led by the 
relevant human resources professional 
and programmes are coordinated 
primarily at a business unit level senior 
management and staff participate 
in a performance management 
programme involving annual 
objectivesetting and appraisal 
reward and recognition
linked to the performance 
management system the group 
operates a number of incentive 
schemes which encourage 
employees to contribute directly 
to the achievement of the group’s 
goals and reward individual and 
collective success 
laminates landfill reduction
a second successive year of 
significant progress on landfill 
reduction with the amount of 
waste going to landfill down 
by 14 on top of the 45 
reduction achieved last year 32
api group plc annual report 2014
strategic report
principal risks and uncertainties
financial risks
area of risk description potential impact mitigation
foreign 
currency
with operations in nine countries the 
group is exposed to foreign exchange 
translation risk when the net assets and 
income statements of overseas subsidiaries 
are consolidated into the group financial 
statements t ransactional foreign exchange 
exposures arise when an entity within the 
group enters into a transaction to pay or 
receive funds in a currency other than its 
functional currency 
movements in exchange 
rates could have substantial 
favourable or adverse impacts 
on both the consolidated 
financial statements and those 
of individual entities sensitivity 
to movements in exchange rates 
is explained in note 22 to the 
financial statements
the group’s debt is structured to 
ensure that where possible it is 
held in the same territory where 
the operations being financed 
are situated for substantial 
transactional exposures it is group 
policy to hedge through the use 
of foreign exchange forward 
contracts the group does not 
undertake any trading activity in 
financial instruments
interest rates interest rate risk arises from cash and 
borrowings which are subject to floating 
interest rates 
changes to interest rates 
could impact net results 
and cash flow sensitivity to 
movements in interest rates 
is explained in note 22 to the 
financial statements
if considered appropriate 
the group uses swap hedge 
instruments to convert a portion 
of its debt from floating to fixed 
interest rates 
credit credit risk arises from the possibility that 
customers may not be able to settle their 
obligations as agreed 
nonpayment by customers 
resulting in bad debts could 
have an adverse impact on the 
group’s profitability
customers are assessed for 
financial reliability using external 
rating agencies secure payment 
terms are frequently used 
in riskier geographies or for 
riskier customers the group 
regularly assesses the cost and 
benefits of credit insurance and 
procures coverage as considered 
appropriate
liquidity liquidity risk refers to the risk that the 
group may not be able to settle or meet 
its financial obligations on time or at a 
reasonable price this will arise from 
mismatches between cash inflows and 
outflows from the business 
failure to meet covenant and 
other conditions could result in 
the group being forced to accept 
materially less attractive lending 
terms or to implement measures 
designed to accelerate the 
repayment of debt to the possible 
detriment of shareholder value
this risk is monitored through 
regular shortterm cash flow 
forecasting rolling twelvemonth 
trading forecasts from the 
businesses and annual budgets 
agreed by the board before the 
start of each financial year 
defined benefit 
pension 
schemes
the group provides final salary retirement 
benefits for a number of its former and 
current employees through pension 
schemes in the uk and us contribution 
requirements may vary depending on 
investment performance mortality rates 
inflation levels and changes in other 
actuarial assumptions
while these schemes are 
closed to future service accrual 
actuarial valuations and funding 
assessments may lead to demands 
for higher topup contributions 
from the group 
the group in conjunction with the 
t rustees of the pension schemes 
actively monitors the performance 
of the schemes’ assets and takes 
appropriate actions to ensure 
these are maximised and also that 
the obligations under the schemes 
are mitigated where possible 
risk management
our management structure business reporting and risk management 
processes ensure we are both informed of and responsive to 
business and marketplace trends promoting timely and informed 
strategic and tactical decisions 33
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
operational risks
area of risk description potential impact mitigation
markets a key risk faced by the business is a 
reduction in levels of demand by customers 
in general customers are unencumbered 
by formal contractual commitments and 
provide limited visibility of future volume 
requirements ultimately order levels 
depend on rates of consumption several 
stages removed from the group’s point of 
sale which when combined with the effects 
of confidence and decision making by 
multiple parties within the supply chain are 
difficult to predict 
the group’s cost base is 
inevitably somewhat inelastic 
and financial results are therefore 
difficult to insulate from any 
sharp or prolonged downturn 
in market activity
the group constantly strives to 
adapt its operations to prevailing 
demand management prepares 
monthly forecasts and carries 
out regular business reviews to 
enable it to react to movements in 
demand and take remedial action 
as quickly as possible
commercial 
relationships
the business relies on a small number of 
key customers and supply contracts for a 
significant proportion of its turnover
any slump in the fortunes of major 
customers or lack of success in 
maintaining or replacing existing 
major supply positions could have 
a materially adverse impact on the 
group’s operating results
the group aims to build longterm 
relationships with major endusers 
of its products as well as 
continuing to provide a high value 
of quality and service to its direct 
customers there is continuing 
focus on diversifying the customer 
base to reduce reliance on a few 
major customers
geographic a significant proportion of the group’s 
sales are in developed western economies 
including the uk in line with the general 
move of manufacturing to lower cost 
countries certain of the group’s immediate 
and enduse customers routinely consider 
relocating facilities to regions where the 
group’s infrastructure is less well developed 
such as eastern europe and asia
any accelerated reduction in 
the accessible customer base 
could impact the group’s 
sales opportunities
the group has strategies in 
place to expand its operations 
into less well developed regions 
both through the creation of 
directly owned distribution hubs 
or developing relationships with 
thirdparty distributors 
input costs a significant proportion of the group’s raw 
material and conversion costs are affected 
by the price of oil and gas and the dynamics 
of particular commodity supply sectors it is 
difficult to insulate input costs from volatility 
in the price of these commodities
a significant increase in raw 
material input costs could reduce 
margins as the group could also 
face challenges in passing higher 
costs through to customers 
due to competitive pressures in 
most markets
the group constantly monitors 
the prices of raw materials and 
utilities when it is deemed to 
be advantageous fixed price 
contracts are entered into in order 
to protect margins
health and 
safety
due to the nature of its operations the 
group is exposed to a wide range of health 
and safety risks including the potential for 
serious fires and explosions 
as well as the risk of injury or 
loss of life failure to properly 
manage and control these risks 
could lead to the suspension or 
withdrawal of operating consents 
by enforcement authorities 
corporate prosecution or the 
loss of productive capacity 
through damage to equipment or 
facilities there is the potential for 
significant adverse disruption to 
the group’s activities and financial 
consequences which may not be 
wholly covered by insurance
health and safety is given 
high priority by the group’s 
management and is monitored 
closely by the board an active 
programme is in place to control 
exposure and minimise the fire 
and explosion risk in addition 
management works closely 
with insurers on the prevention 
of property loss and business 
interruption
environment api is aware of the impact the group’s 
operations can have on the environment 
some of the group’s manufacturing 
processes involve solvents and other 
hazardous chemicals where these 
substances are used there is the potential 
for air and ground contamination 
failure to meet required standards 
could lead to the suspension 
or withdrawal of operating 
consents by enforcement 
authorities or financial and 
reputational loss arising from 
corporate prosecution
api is aware of the impact the 
group’s operations can have on 
the environment the risk of new 
incidents is contained by means 
of strict operating procedures 
past exposures are remedied 
when required  34
api group plc annual report 2014
governance and remuneration
board of directors
richard wright
chairman
richard joined the board on 3 september 2001 and was 
appointed chairman on 1 february 2006 he is a member 
of the nomination remuneration and audit committees 
richard previously held senior executive roles with the ford 
motor company including director european operations 
at jaguar cars limited director of sales ford motor 
company limited and presidentmanaging director of ford 
belgium nv he is currently chairman of caffyns plc and a 
member of the board of wbs warwick university business 
school he is the former chair of the board of national 
savings and investments  
andrew walker
nonexecutive director senior independent director
andrew joined the board in 2003 and is chairman of 
the remuneration and audit committees he is also a 
member of the nomination committee he has wide public 
company experience both in manufacturing and service 
companies he was previously group chief executive of 
mckechnie plc and prior to joining mckechnie he was 
group chief executive of south wales electricity joining 
them from ti group plc andrew is currently a  
nonexecutive director of plastics capital plc  
stemcor ltd and chairman of mainstay ltd
max batzer
nonexecutive director
max joined the board in october 2007 and is chairman 
of the nomination committee and a member of the 
remuneration committee max is a portfolio manager at 
wynnefield capital inc which has a significant beneficial 
interest in the company’s shares he is also a director 
of integral wealth management and summer infant 
inc and has previously held positions as chairman and 
ceo of diagnostic health services director of cornell 
companies inc director and executive committee 
member of simmons airlines inc and president of 
general hide and skin corporation 
andrew turner
group chief executive
andrew joined the board in october 2007 as group chief 
executive he is a graduate mechanical engineer with an 
mba and has over 20 years’ experience in the packaging 
sector prior to joining api andrew was global vice 
president marketing  sales for the tobacco packaging 
division of alcan a worldwide aluminium producer and 
prior to that he was divisional managing director with field 
group plc a printed paperboard packaging company with 
responsibility for operations in the uk germany and spain 
chris smith
group finance director
chris joined the board in september 2008 as group 
finance director he is a qualified aca and has in excess of 
20 years’ experience working in manufacturing businesses 
chris previously held a variety of roles at courtaulds plc 
manufacturer of films chemicals and fibres where he 
gained international experience including positions in 
germany and hong kong prior to joining api chris worked 
for scapa plc manufacturer of adhesive tapes where he 
was finance and it director for europe and asia 
luke wiseman
nonexecutive director
luke joined the board in september 2006 and is a member 
of the audit and remuneration committees luke is a 
director of the olivetree financial group a londonbased 
financial technology business he was previously chairman 
of barbican group holdings limited and a director of steel 
partners uk limited whose affiliates steel partners ii lp 
have a significant beneficial interest in the shares in the 
company and for whom up until 2 may 2014 luke was a 
nominee nonexecutive director of the company  35
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
governance and remuneration
corporate governance statement
board and board committees
the board has adopted the quoted companies alliance guidelines the “guidelines” for aimlisted companies which has 
been applied to ensure good levels of governance are maintained 
board composition
the board consists of a nonexecutive chairman two executive directors and three nonexecutive directors a short 
biography of each director which illustrates their wide range of experience is set out on page 34
there is a clear division of responsibility between the chairman and the group chief executive and written terms of 
reference have been adopted by the board defining these roles as chairman richard wright is responsible for managing 
the board ensuring its effectiveness and setting its agenda andrew turner group chief executive is responsible for 
implementing strategy and is responsible to the board for the operational and financial performance of the group 
andrew walker is the senior independent director notwithstanding his length of service on the board andrew walker 
is considered by the board to be independent of management and free from any business or other relationships which 
could materially interfere with the exercise of his judgement andrew walker has held both executive and nonexecutive 
directorships in the manufacturing and service sectors and accordingly he brings a wealth of knowledge and experience 
to the board 
max batzer has been designated by the board as nonindependent by virtue of his association with major shareholder 
wynnefield capital inc up until 2 may 2014 luke wiseman was designated as nonindependent by virtue of his 
association with steel partners ii lp luke wiseman remains a nonexecutive director and is now considered by the board 
to be independent of any business or other relationship that would materially impede on how he exercises his judgement 
on the board each nonexecutive director proactively participates in the board’s deliberations constructively challenges 
the executive team and helps develop proposals on strategy for the group
the board structure ensures that no individual or group dominates the decision making process the composition of 
the board is kept under review to ensure that it remains appropriate to the strategic and managerial requirements of the 
company a full review of the board’s composition will be completed by the end of this calendar year there is a formal 
rigorous and transparent procedure for the appointment of new directors to the board the company’s articles of 
association require that onethird of the directors offer themselves for reelection annually in rotation this enables the 
shareholders to decide on the composition of their board
board meeting attendance and board operation
details of the directors’ attendance at regular scheduled board and board committee meetings are set out below
       audit remuneration nomination 
      board committee committee committee 
total number of meetings in financial year    8 meetings 2 meetings 4 meetings 2 meetings
number of meetings attended in financial year
executive directors
andrew turner
 1
     88 — — —
chris smith
 2
     88 — — —
nonexecutive directors
richard wright     88 22 44 22
andrew walker
 3
     88 22 44 —
max batzer     88 — 44 22
luke wiseman     88 22 44 —
1  andrew turner attended by invitation the whole or part of some of the meetings of the audit remuneration and nomination committees
2  chris smith attended by invitation the whole or part of some of the meetings of the audit remuneration and nomination committees
3  andrew walker was appointed a member of the nomination committee on 26 november 2013 no meetings of the committee have taken place  
since his appointment
the board is focused on commercial strategy with strategic plans for both shortterm and longterm growth of each 
business unit being presented to the board for review and approval longterm incentive plans for the executive directors 
and the general manager of each of the group’s principal operating businesses are linked to these plans and operating 
budgets and capital expenditure plans are expected to be in line with the company’s overall commercial strategy  36
api group plc annual report 2014
governance and remuneration
corporate governance statement continued
board meeting attendance and board operation continued
the board manages the company through a formal schedule of matters reserved for its decision these include overall 
management of the company financial reporting and controls material agreements nonrecurring projects treasury 
audit and risk management remuneration corporate governance and corporate responsibility the board has delegated 
specific responsibility to the board committees set out below the roles and responsibilities of each committee are set 
out in clearly defined terms of reference from time to time and if required the board will establish ad hoc committees 
to deal with specific issues
the board receives appropriate documentation and financial information in advance of each board meeting this includes 
monthly management accounts reports on current trading and papers on matters in respect of which the board makes 
decisions or is invited to give its approval the board receives regular reports on health safety and environmental matters 
treasury issues legal insurance pensions and risk matters specific presentations are also made on business or strategic 
issues as appropriate regular presentations are received from the general manager of each of the group’s principal 
operating businesses in respect of its market position current trading and prospects 
internal control and risk management
the board is responsible for the group’s system of internal control and for reviewing its effectiveness in the context of the 
group’s business any such system can only reasonably be expected to manage rather than eliminate risks arising from its 
operations it can therefore only provide reasonable and not absolute assurance against material loss or misstatement
key features of the internal control system are as follows
•	 the group has an organisational structure with clearly established responsibilities and lines of accountability
•	 the group promotes the values of integrity and professionalism the members of the board are available to hear 
in confidence any individual’s concerns about improprieties
•	 the audit committee reports at least twice per year to the board and provides details and results of the external audit reviews
•	 each business unit is expected to operate in accordance with an adopted system of core financial controls external advisers 
are engaged to test the application of such controls rating and classifying performance identifying strengths and weaknesses 
and recommending any improvements that need to be made these findings are reported to the audit committee
•	 the board has a schedule of matters expressly reserved for its consideration this schedule includes acquisitions major 
capital projects treasury and risk management policies approval of budgets and health and safety
•	 an ongoing risk management process has been implemented which identifies the key business risks facing the group 
including both financial and operational risks the key business risks are reviewed by the board at least twice per year 
and changes in operational risks are reviewed at every board meeting
•	 the controls in place to minimise the occurrence of risk are documented and analysed for effectiveness these include 
procedures for the approval of major expenditure or commitment of resources
•	 the board monitors the activities of the group through the management accounts monthly forecasts and other 
reports on current activities and plans the executive management monitors financial and operational performance 
in detail and takes any necessary corrective action and
•	 the group operates a whistleblowing policy enabling any individual with a concern to approach the board chairman 
or audit committee chairman in confidence
the board continues to review the effectiveness of the group’s procedures in managing risk and therefore believes it 
meets the requirements of the guidelines 37
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
board development and performance
all directors are offered appropriate training to develop their knowledge and ensure they remain up to date in relevant 
matters for which they have responsibility as a member of the board a procedure has been adopted for directors to 
obtain independent professional advice where appropriate and all directors have unrestricted access to the company 
secretary the board has also established a formal process led by the chairman for the annual evaluation of the 
performance of the board and its principal committees the responses are collated and then discussed by the board 
the latest evaluation confirmed a high degree of satisfaction with how the board and its committees operate and the 
board seeks to continuously improve on this 
the nonexecutive directors met during the financial year without the executive directors being present
director indemnification
the articles of association of the company contain provisions for the benefit of directors officers and employees of 
the company and its subsidiary and associated companies indemnifying them out of the assets of the company to the 
full extent allowed by law against liabilities incurred by them in the course of carrying out their duties in addition and in 
accordance with the company’s articles of association and to the extent permitted by the laws of england and wales the 
company has granted qualifying thirdparty indemnities to each of its current directors which remain in force copies of 
such indemnities are available for inspection upon application to the company secretary and at the forthcoming annual 
general meeting
board committees
audit committee
the audit committee consists of andrew walker chair richard wright and luke wiseman its primary role is to assist 
the board with the discharge of its responsibilities in relation to financial reporting the annual audit and for the policies 
procedures and review of internal control systems
meetings of the committee are planned around the financial calendar for the company attendance at meetings held 
during the financial year is shown in the table on page 35 from time to time the group chief executive and the group 
finance director and other members of senior management attend meetings by invitation and the committee also meets 
with the company’s external auditor without api group management being present
during the year the audit committee under its terms of reference reviewed and monitored
•	 developments in accounting and reporting requirements
•	 interim and annual reports information including consideration of the appropriateness of accounting policies and 
material assumptions and estimates adopted by management
•	 external auditor’s plan for the yearend audit of the group
•	 the systems of internal control and their effectiveness including reviews of extended controls assessment reports 
compiled by the external auditor
•	 the group’s whistleblowing policy
•	 external auditor’s performance and independence concluding in a recommendation to the board on the 
reappointment of the auditor by shareholders at the annual general meeting 
•	 the audit fees charged by and the formal engagement terms entered into with the external auditor and
•	 any nonaudit work for which the external auditor is engaged prior to commitment by the group 38
api group plc annual report 2014
governance and remuneration 
corporate governance statement continued
board committees continued
remuneration committee 
andrew walker chairs the remuneration committee and the other members are richard wright max batzer and luke wiseman 
the committee meetings attendance record for the financial year is set out in the table on page 35 on occasion and for 
matters not related to them the group chief executive and the group finance director attend the committee meetings 
and are consulted on proposals relating to the remuneration of members of the group’s senior management team 
the committee on behalf of the board and with input from external advisers as appropriate determines all elements 
of the remuneration packages of the executive directors and the framework and broad policy for the remuneration of 
other members of the group’s senior management team the committee therefore ensures remuneration is competitive 
and that individuals are fairly rewarded for their contribution to the group’s performance it approves the terms of service 
contracts for executive directors approves any compensation arrangements resulting from the termination by the 
company of a director’s service contract and approves the grant of longterm incentives 
no director was involved in deciding the level and composition of his own remuneration the remuneration of  
nonexecutive directors including the chairman is reviewed and determined by the other members of the board 
nomination committee
the committee comprises max batzer chair richard wright and andrew walker 
the committee meetings attendance record for the financial year is set out in the table on page 35 when appropriate 
noncommittee members including the executive directors are invited to participate in discussions and matters being 
addressed by the committee its principal responsibility is to ensure that appropriate procedures are in place for the 
nomination selection and succession of directors and senior executives
relations with shareholders
maintaining good relationships with shareholders is of great importance to the company the directors meet with major 
shareholders and discuss the performance of the group primarily following the announcement of the final and interim 
results queries or issues raised by shareholders are promptly addressed by whoever on the board is best placed to do so 
investors are encouraged to participate in the annual general meeting at which the chairman presents a review of the 
company’s results and provides comments on current business activity the chairmen of the remuneration nomination 
and audit committees attend the annual general meeting to answer questions which may be relevant to the work of 
those committees
the company’s financial calendar is set out on page 88 the company’s website provides financial and other business 
information about the group including an archive of past announcements annual reports and share price information
richard wright
chairman 
3 june 2014 39
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
directors’ remuneration report
in the financial year and the previous financial year the emoluments of the directors were as follows 
        employer 
    salary additional   pension 
    and fees fees bonus benefits contribution total 
year ended 31 march 2014   £’000 £’000 £’000 £’000 £’000 £’000
executive directors
andrew turner   219 — 10 52 22 303
chris smith   153 — 7 12 15 187
nonexecutive directors
richard wright   58 — — — — 58
andrew walker   33 — — — — 33
luke wiseman   28 — — — — 28
max batzer   27 3 — — — 30
year ended 31 march 2013
executive directors
andrew turner   214 — 39 71 21 345
chris smith   142 — 26 14 14 196
nonexecutive directors
richard wright   57 20 — — — 77
andrew walker   32 5 — — — 37
luke wiseman   27 — — — — 27
max batzer   27 3 — — — 30
salaries
the executive directors’ salaries are reviewed annually with any increase being subject to the prior approval of the 
remuneration committee and if approved effective from 1 january salaries are benchmarked against comparable aim 
and other small cap companies
andrew turner received an annual increase on his basic salary of 2 with effect from 1 january 2014 2013 25 and 
chris smith also received an annual increase on his basic salary of 2 with effect from 1 january 2014 2013 91
annual fees
the nonexecutive directors’ fees are reviewed annually with any increase effective from 1 june the annual fees of each 
nonexecutive director were increased by 25 in june 2013
during the year and in the previous year additional fees received by the nonexecutive directors related to additional time 
spent during the prior year on the formal sale process which concluded in february 2013
bonuses
bonus awards are determined by the remuneration committee based on an annual bonus plan related to financial targets 
with no personal objectives under the bonus plan the executive directors can earn up to a maximum of 100 of their 
base salary
benefits
the executive directors’ benefits include a car allowance health insurance and national insurance passback in respect of 
a salary exchange scheme related to pension contributions andrew turner also receives a commuting allowance
expenses
all expense payments made to directors were made on the basis of reimbursement of expenses incurred 40
api group plc annual report 2014
governance and remuneration 
directors’ remuneration report continued
scheme interests
2006 performance share plan
the executive directors hold “nil” cost options under the 2006 performance share plan over the company’s ordinary 
shares of 1p as follows 
       andrew turner  chris smith total 
       number number number
at 31 march 2012      403200 163800 567000
exercised during the year      — 163800 163800
at 31 march 2013      403200 — 403200
exercised during the financial year     — — —
at 31 march 2014      403200 — 403200
these options were granted on 28 march 2008 to andrew turner and on 30 september 2008 to chris smith and they 
were subject to the achievement of profitrelated targets following the determination of the remuneration committee 
taking into account profit related targets 504 of andrew turner’s options vested on 7 june 2011 and 504 of 
chris smith’s options vested on 30 september 2011 “vested options” the remainder of the options lapsed in accordance 
with the scheme rules chris smith exercised his options on 1 march 2013 and the gain arising thereon was £91523 
andrew turner’s vested options are exercisable between 7 june 2011 and 8 june 2018 
long term incentive plan “ltip”
under the terms of the ltip the executive directors hold contingent shares in the company’s ordinary shares of 1p 
as follows
       andrew turner chris smith total 
       number number number
at 31 march 2011 and 31 march 2012      1800000 1200000 3000000
contingent shares vested june 2012     577856 385237 963093
at 31 march 2013      1222144 814763 2036907
contingent shares vested june 2013     323631 215754 539385
at 31 march 2014      898513 599009 1497522
the remaining contingent shares held by the executive directors can be earned following the financial year ended 
31 march 2015 based on a set of performance criteria reflecting increases in shareholder value 
following the financial year ended 31 march 2014 the remuneration committee has determined in accordance with the 
scheme rules and based on the performance criteria for the year just ended that no contingent shares held by andrew 
turner or chris smith are due to vest in june 2014 
following the annual award vested shares are held in the api group plc no 2 employee benefit trust “trust” and 
when the relevant steps are taken by the trustee of the trust vested shares are transferred to the participants at nil cost 
full details are given in notes 20 and 21 to the consolidated financial statements in september 2013 chris smith exercised 
his option in respect of 250000 of his vested shares at a price of 675p per share 
vested shares not transferred to the executive directors
       andrew turner chris smith total 
       number number number
contingent shares vested june 2012     577856 385237 963093
vested shares transferred to executive directors in fy 13   — — —
contingent shares vested june 2013     323631 215754 539385
vested shares transferred to executive directors in fy 14   — 250000 250000
vested shares as at 31 march 2014 not yet transferred to executive directors  901487 350991 1252478
andrew walker
remuneration committee chairman
3 june 2014 41
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
directors’ report
the directors present their annual report and the audited financial statements for the year ended 31 march 2014 
the chairman’s statement on page 6 the strategic report on pages 7 to 33 the remuneration report on pages 39 to 40 
the corporate governance statement on pages 35 to 38 and the financial statements on pages 46 to 49 form part of this 
directors’ report
directors
the directors who served on the board of the company during the year to 31 march 2014 were
•	 richard wright
•	 andrew turner
•	 andrew walker
•	 chris smith
•	 max batzer
•	 luke wiseman 
the company’s articles of association require that directors are subject to retirement by rotation and reelection by 
shareholders at intervals of not more than three years 
andrew turner and max batzer were last reelected by shareholders at the 2011 annual general meeting and will therefore 
offer themselves for reelection at the 2014 annual general meeting their biographical details can be found on page 
34 the board recognises and values the performance and contribution of both andrew turner and max batzer and 
recommends their reelection 
details of directors’ emoluments and share options required to be disclosed in accordance with the aim rules for 
companies are set out in the table of directors’ emoluments on page 39 and in the scheme interests tables on page 40
none of the directors has a service agreement with the company requiring more than twelve months’ notice of 
termination to be given
dividend
the board has recommended a final dividend of 13p per share 2013 nil bringing the total dividend in the year to 20p per 
share 2013 nil if approved by shareholders at the 2014 annual general meeting the final dividend of 13p per share will 
be paid on friday 1 august 2014 to all shareholders on the register at close of business on friday 11 july 2014 
share capital
as at 31 march 2014 the company’s issued share capital comprised 76749 ordinary shares of 1p each details of the 
company’s share capital can be found in note 19 to the financial statements
directors’ shareholdings
the directors who held office at the end of the financial year reported having the following interests in the ordinary shares 
of the company as at the end of 31 march 2014
 ordinary shares owned by vested ordinary shares    
 directors or in which they under the 2006 performance vested ordinary shares total interest in owned 
 have a beneficial interest share plan but not exercised under ltip but not exercised and vested ordinary shares
   
directors  2014 2013 2014 2013 2014 2013 2014 2013
executive directors
andrew turner  351231 351231 403200 403200 901487 577856 1655918 1332287
chris smith  232035 232035 — — 350991 385237 583026 617272
nonexecutive directors
richard wright  1060000 1060000 — — — — 1060000 1060000
andrew walker  355986 355986 — — — — 355986 355986
max batzer  — — — — — — — —
luke wiseman  — — — — — — — —
totals  1999252 1999252 403200 403200 1252478 963093 3654930 3365545
as noted in the directors’ remuneration report under the ltip participated in by the executive directors up to 1497522 
contingent ordinary shares may vest andrew turner 898513 chris smith 599009 following the financial year ended 
31 march 2015 42
api group plc annual report 2014
governance and remuneration 
directors’ report continued
substantial shareholders
as at the date of this report the company has been notified of the following substantial interests in the issued ordinary 
shares of the company
          of issued 
          share capital
steel partners ii lp        3232
wynnefield capital inc        2968
crystal amber fund limited       1157
api group plc no 2 employee benefit trust      358
hargreave hale nominees limited       351
hargreave hale stockbrokers       329
principal risks and uncertainties
the board meets regularly to review operations and to discuss risk areas the corporate governance statement contains 
details of the group’s internal control system pages 32 and 33 of the strategic report contain information on the principal 
risks facing the group and note 1 to the financial statements contains details of sensitivity to financial risks
safety health and the environment 
one of the group’s primary objectives is to achieve high standards of safety for its employees this is an early item on the 
agenda at each of the company’s board meetings the corporate social responsibility section of the strategic report 
on pages 29 to 31 contains information on the group’s objectives and performance with regard to safety health and 
the environment 
employees
details on the company’s employees can be found in the corporate social responsibility statement on page 30
research and development
each business unit has a technical team which focuses on innovating customising and developing existing and new 
product lines and manufacturing processes to address customer and market requirements details of the group’s 
expenditure on research and development are disclosed in note 3 to the financial statements
charitable and political donations
charitable donations made by the group during the period amounted to £2531 2013 £1514 no political donations 
were made
going concern
the trading and financial position of the group including its cash flow position liquidity situation and borrowing 
facilities are set out in the strategic report on page 27 the principal risks and uncertainties that could impact on 
the future development of the group’s operating and financial performance are outlined on pages 32 and 33 of the 
strategic report the group’s main borrowing facilities in the uk and the us are committed until december 2017 and 
april 2015 respectively
the directors are satisfied on the basis of the group’s latest financial projections and facilities available that the group has 
adequate financial resources to continue to operate for the foreseeable future the directors therefore continue to adopt 
the going concern basis in preparing these financial statements
articles of association
the company’s articles of association may only be amended by special resolution approved at a general meeting of the 
shareholders a copy of the articles of association is available on the company’s website
directors’ statement as to disclosure of information to the auditor
the directors who were members of the board at the time of approving the directors’ report are listed on page 41 
having made enquiries of fellow directors and of the company’s auditor each of those directors confirms that as at the 
date of this report as far as each director is aware there is no relevant information of which the company’s auditor is 
unaware each director has taken such steps as he might reasonably be expected to take as a director in order to make 
himself aware of information which might be relevant to the company’s auditor and whether the auditor is in possession 
of such information  43
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
annual general meeting
the annual general meeting of the company will be held at 200 pm on tuesday 15 july 2014 at the offices of 
eversheds llp one wood street london ec2v 7ws
the notice of the annual general meeting and details of the business to be proposed at that meeting will be made 
available on the company’s website
auditor
ernst  young llp has expressed its willingness to continue in office as auditor and a resolution proposing its  
reappointment will be put to the members at the annual general meeting
by order of the board
wendy baker   
company secretary   
3 june 2014 
registered office 
second avenue 
poynton industrial estate 
poynton 
cheshire sk12 1nd 44
api group plc annual report 2014
governance and remuneration 
statement of directors’ responsibilities 
the directors are responsible for preparing the annual report and the group and parent company financial statements in 
accordance with applicable law and regulations
company law requires the directors to prepare group and parent company financial statements for each financial year 
under that law and as required by the aim rules for companies the directors have elected to prepare the group financial 
statements in accordance with international financial reporting standards “ifrs” as adopted by the european union 
“eu” under that law the directors have elected to prepare the parent company financial statements in accordance with 
united kingdom generally accepted accounting practice united kingdom accounting standards and applicable law 
under company law the directors must not approve the group and parent company financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the group and the company and of their profit or loss 
for that period in preparing these financial statements the directors are required to
•	 select suitable accounting policies and then apply them consistently
•	 make judgments and accounting estimates that are reasonable and prudent
•	 present information including accounting policies in a manner that provides relevant reliable comparable and 
understandable information
•	 present fairly the group financial position financial performance and cash flows 
•	 provide additional disclosures when compliance with the specific requirements in ifrs as adopted by the eu is 
insufficient to enable users to understand the impact of particular transactions other events and conditions on the 
group’s financial position and financial performance
•	 state whether the group financial statements have been prepared in accordance with ifrs as adopted by the eu
•	 state whether applicable uk accounting standards have been followed in preparing the parent company financial 
statements and
•	 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and 
the parent company will continue in business
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group 
and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group 
and parent company and enable them to ensure that the group and parent company financial statements comply with 
the companies act 2006 they are also responsible for safeguarding the assets of the group and parent company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities 45
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
financial statements
independent audit or’s report to the members of api group plc
we have audited the consolidated financial statements of api group plc for the year ended 31 march 2014 which comprise 
the group income statement the group statement of comprehensive income the group balance sheet the group 
statement of changes in equity the group cash flow statement and the related notes 1 to 25 the financial reporting 
framework that has been applied in their preparation is applicable law and international financial reporting standards 
“ifrs” as adopted by the european union
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so that we might state to the company’s members those 
matters we are required to state to them in an auditor’s report and for no other purpose to the fullest extent permitted 
by law we do not accept or assume responsibility to anyone other than the company and the company’s members as 
a body for our audit work for this report or for the opinions we have formed 
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement set out on page 44 the directors are responsible for the 
preparation of the group financial statements and for being satisfied that they give a true and fair view our responsibility is to 
audit and express an opinion on the group financial statements in accordance with applicable law and international standards 
on auditing uk and ireland those standards require us to comply with the auditing practices board’s ethical standards 
for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting policies are appropriate to the group’s circumstances and have 
been consistently applied and adequately disclosed the reasonableness of significant accounting estimates made by the 
directors and the overall presentation of the financial statements in addition we read all the financial and non‑financial 
information in the annual report to identify material inconsistencies with the audited financial statements and to identify 
any information that is apparently materially incorrect based on or materially inconsistent with the knowledge acquired by 
us in the course of performing the audit if we become aware of any apparent material misstatements or inconsistencies 
we consider the implications for our report
opinion on financial statements
in our opinion the group financial statements
•	 give a true and fair view of the state of the group’s affairs as at 31 march 2014 and of the group’s profit for the year 
then ended
•	 have been properly prepared in accordance with ifrss as adopted by the european union and
•	 have been prepared in accordance with the requirements of the companies act 2006
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the strategic report and directors’ report for the financial year for which the group 
financial statements are prepared is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you 
if in our opinion
•	 certain disclosures of directors’ remuneration specified by law are not made or
•	 we have not received all the information and explanations we require for our audit
other matter
we have reported separately on the parent company financial statements of api group plc for the year ended 31 march 2014
colin brown senior statutory auditor
for and on behalf of ernst  young llp statutory auditor 
manchester united kingdom
3 june 2014
the maintenance and integrity of the api group plc website is the responsibility of the directors the work carried out by 
the auditor does not involve consideration of these matters and accordingly the auditor accept no responsibility for any 
changes that may have occurred to the financial statements since they were initially presented on the website
legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions 46
api group plc annual report 2014
financial statements
group inc ome statement for the year ended 31 march 2014
        year ended  year ended  
         31 march  31 march  
        2014 2013 
       note £’000 £’000
revenue      2 114712 112426
cost of sales       86617 84179
gross profit       28095 28247
distribution costs       3952 4249
administrative expenses excluding exceptional items    16716 16196
operating profit before exceptional items    23 7427 7802
exceptional items      5 705 1029
operating profit        6722 6773
finance revenue      6 2 10
finance costs      6 1132 1217
        1130 1207
profit before taxation       5592 5566
tax expensecredit      7 150 19
profit for the year       5442 5585
earnings per share pence    
basic earnings per share on profit for the year    8 74 76
underlying basic earnings per share on profit for the year   8 81 88
diluted earnings per share on profit for the year    8 71 72
underlying diluted earnings per share on profit for the year   8 78 84
  restated for ias 19 – employee benefits revised
all profits are attributable to equity holders of the parent and relate to continuing operations
group statement of comprehensive inc ome
for the year ended 31 march 2014
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
profit for the year       5442 5585
items that may be reclassified to profit or loss in subsequent periods
exchange differences on retranslation of foreign operations    1390 703
change in fair value of effective cash flow hedges     863 639
items not reclassified to profit or loss in subsequent periods
re‑ measurement lossesgains on defined benefit pension schemes   513 5243
tax on items relating to components of other comprehensive income   350 1228
other comprehensive income for the year net of tax    1390 3951
total comprehensive income for the year attributable to equity holders of the parent  4052 1634
  restated for ias 19 – employee benefits revised 47
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
financial statements
group balance sheet at 31 march 2014
         31 march  31 march  
        2014 2013 
       note £’000 £’000
assets    
non‑current assets    
property plant and equipment     9 21490 21313
intangible assets – goodwill     10 5188 5188
investment in joint venture interest     12 880 378
financial assets      22 — 152
deferred tax assets      7 6412 6617
        33970 33648
current assets    
trade and other receivables     13 16593 15811
inventories      14 12126 12864
other financial assets      22 594 184
cash and short‑term deposits     15 8606 6189
        37919 35048
total assets      2 71889 68696
liabilities    
current liabilities    
trade and other payables      16 22632 22428
financial liabilities      17 432 3766
income tax payable       635 373
        23699 26567
non‑current liabilities    
financial liabilities      17 8033 5574
deferred tax liabilities      7 306 211
provisions       56 66
deficit on defined benefit pension schemes    18 13364 13349
        21759 19200
total liabilities       45458 45767
net assets       26431 22929
equity    
called up share capital      19 767 767
share premium       7136 7136
other reserves      21 8818 8816
foreign exchange reserve     21 432 958
retained profit       10142 5252
equity shareholders’ funds      26431 22929
signed on behalf of the board
andrew turner
director 3 june 2014
company number 169249  48
api group plc annual report 2014
financial statements
group statement of changes in equit y for the year ended 31 march 2014
    equity    foreign  total 
    share  share other exchange retained shareholders’ 
    capital premium reserves reserve earnings  equity 
    £’000 £’000 £’000 £’000 £’000 £’000
at 1 april 2012   767 7136 8816 255 4348 21322
profit for the year   — — — — 5585 5585
other comprehensive income
exchange differences on retranslation  
of foreign operations   — — — 703 — 703
change in fair value of effective cash flow hedges — — — — 639 639
re‑ measurement losses on defined benefit  
pension schemes   — — — — 5243 5243
tax on items relating to components  
of other comprehensive income  — — — — 1228 1228
total comprehensive income for the year — — — 703 931 1634
shares acquired by employee benefit trust — — 94 — — 94
transferred on exercise of share options — — 94 — 94 —
share‑based payments   — — — — 85 85
tax relating to items accounted for  
directly through equity   — — — — 18 18
at 31 march 2013   767 7136 8816 958 5252 22929
profit for the year   — — — — 5442 5442
other comprehensive income      
exchange differences on retranslation  
of foreign operations   — — — 1390 — 1390
change in fair value of effective cash flow hedges — — — — 863 863
re‑ measurement losses on defined benefit  
pension schemes   — — — — 513 513
tax on items relating to components  
of other comprehensive income  — — — — 350 350
total comprehensive income for the year — — — 1390 5442 4052
dividends   — — — — 518 518
shares acquired by employee benefit trust — — 32 — — 32
transferred on exercise of share optionsltip — — 34 — 34 —
at 31 march 2014   767 7136 8818 432 10142 26431
 restated for ias 19 – employee benefits revised
an interim dividend of 07 pence per share 2013 nil was approved by the board on 2 december 2013 and was paid on 
9 january 2014 to equity holders on the register at the close of business on 13 december 2013
a final dividend of 13 pence per share 2013 nil was approved by the board on 2 june 2014 bringing the total dividend in 
the year to 20 pence per share 2013 nil the final dividend is payable on 1 august 2014 to equity holders on the register 
at the close of business on 11 july 2014 this dividend has not been provided for in these financial statements 49
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
financial statements
group cash fl ow statement for the year ended 31 march 2014
        year ended  year ended  
         31 march  31 march  
        2014 2013 
       note £’000 £’000
operating activities    
group profit before tax       5592 5566
adjustments to reconcile group profit before tax to net cash flow from operating activities    
net finance costs       1130 1207
depreciation of property plant and equipment     2367 2173
profit on disposal of property plant and equipment     4 5
movement in fair value foreign exchange contracts     44 38
share‑based payments       — 85
decreaseincrease in inventories      221 361
increase in trade and other receivables      1216 101
increase in trade and other payables      832 68
decrease in provisions       10 10
cash generated from operations      8956 8584
interest paid       396 583
pension contributions and scheme expenses paid     973 960
income taxes paid       155 50
net cash flow from operating activities     7432 6991
investing activities    
interest received       2 10
purchase of property plant and equipment     3465 5296
investment in joint venture      502 378
sale of property plant and equipment      4 23
net cash flow used in investing activities     3961 5641
financing activities    
dividends paid       518 —
purchase of shares by employee benefit trust     32 94
new borrowings       12340 —
arrangement fees for new borrowings      183 —
repayment of borrowings      12567 4148
net cash flow used in financing activities     960 4242
increasedecrease in cash and cash equivalents     2511 2892
effect of exchange rates on cash and cash equivalents    92 25
cash and cash equivalents at the beginning of the year   15 5955 8822
cash and cash equivalents at the end of the year    15 8374 5955
  restated for ias 19 – employee benefits revised 50
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
1 group accounting policies
authorisation of financial statements 
the group’s financial statements for the year ended 31 march 2014 were authorised for issue by the board of directors 
on 3 june 2014 and the balance sheet was signed on the board’s behalf by andrew turner group chief executive
api group plc is a public limited company incorporated and domiciled in england and wales the company’s ordinary 
shares are traded on the alternative investment market of the london stock exchange
basis of preparation and statement of compliance with ifrs
the group’s financial statements have been prepared under the historical cost convention except as disclosed in the 
accounting policies below in accordance with international financial reporting standards ifrs as adopted by the european 
union as they apply to the financial statements of the group for the year ended 31 march 2014 and applied in accordance 
with the companies act 2006 the group has applied optional exemptions available to it under ifrs 1
the consolidated financial statements are presented in sterling and all values are rounded to the nearest thousand £’000 
except when otherwise indicated
going concern
the directors are satisfied on the basis of the group’s latest financial projections and facilities available that the group has 
adequate financial resources to continue to operate for the foreseeable future the directors therefore continue to adopt 
the going concern basis in preparing these financial statements
changes in accounting policies
in the preparation of these group financial statements the group followed the same accounting policies and methods 
of computation as compared with those applied in the previous year except for the adoption of new standards and 
interpretations and revisions of the existing standards as of 1 april 2013
accounting standards adopted in the year
the following new accounting standards amendments to existing standards and interpretations effective from 
1 april 2013 which have had an impact of the group’s financial statements are outlined below 
ias 19 employee benefits revised
this standard was amended in june 2011 the key impact of ias 19 revised is the removal of the separate assumptions 
for expected return on plan assets and discounting of scheme liabilities replacing them with one single discount rate for 
the net deficit in addition scheme administration expenses including the ppf levy can no longer be treated as part of the 
finance cost of the scheme liabilities and must now be included in operating costs
the group’s results have been restated as a result of the adoption of ias 19 revised the impact on the results for the year 
ended 31 march 2013 is an increase to administrative expenses of £665000 a reduction in finance costs of £415000 and 
a reduction in the income tax charge of £60000 resulting in a lower profit after tax of £190000 the impact on basic 
earnings per share is a decrease of 02p within the group statement of comprehensive income the impact is an increase 
of £190000 represented by a reduction of £250000 to the actuarial losses on defined benefit pension schemes and a 
reduction of £60000 on the tax items relating to components of other comprehensive income there is no impact on 
either the deficit on defined benefit pension schemes or related deferred tax balances within the balance sheet 
the impact of ias 19 revised on the results for the year ended 31 march 2014 has been a reduction in profit before 
tax of £355000 and a reduction in the income tax charge of £82000 resulting in a lower profit after tax of £273000 
the impact on basic earnings per share is a decrease of 03p within the group statement of comprehensive income the 
impact is an increase of £273000 represented by a decrease of £355000 in actuarial losses on defined benefit schemes 
and a reduction of £82000 on the tax items relating to components of other comprehensive income there is no impact 
on either the deficit on defined benefit pension schemes or related deferred tax balances within the balance sheet
ias 1 presentation of items of other comprehensive income – amendment to ias 1
the amendments to ias 1 introduce a grouping of items presented in other comprehensive income oci items that could 
be reclassified or recycled to profit or loss at a future point in time eg exchange differences on translation of foreign 
operations and net movement on cash flow hedges now have to be presented separately from items that will never be 
reclassified eg re‑measurement gains and losses on defined benefit schemes the amendments affect presentation only 
and have no impact on the group’s financial position or performance
ifrs 13 fair value measurement
ifrs 13 establishes a single source of guidance under ifrs for all fair value measurements ifrs 13 does not change when 
an entity is required to use fair value but rather provides guidance on how to measure fair value under ifrs when fair 
value is required or permitted ifrs 13 defines fair value as an exit price application of ifrs 13 has not materially impacted 
the fair value measurements of the group ifrs 13 also requires additional disclosures which have been provided where 
required in the individual notes relating to the assets and liabilities 51
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
new standards amendments and interpretations not applied
the following standards and interpretations in issue are not yet effective for the group and have not been adopted by 
the group
         effective date 
ifrs 10 – consolidated financial statements     1 january 2014
ifrs 11 – joint arrangements      1 january 2014
ifrs 12 – disclosure of interests in other entities     1 january 2014
ias 27 –  separate financial statements     1 january 2014
ias 28 – investments in associates and joint ventures    1 january 2014
ias 32 – financial instruments presentation – offsetting financial assets  liabilities amendments 1 january 2014 
ias 36 – impairment of assets – recoverable amount disclosures for non‑ financial assets amendments 1 january 2014 
ias 39 – financial instruments recognition and measurement –  
  novation of derivatives and continuation of hedge accounting amendments  1 january 2014
the directors do not expect the adoption of these standards and interpretations to have a material impact on the group 
financial statements in the period of initial application 
significant judgements and estimates
the preparation of the financial statements requires management to make judgements estimates and assumptions that 
affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues 
and expenses during the year however the nature of estimation means that actual outcomes could differ from those 
estimates details regarding judgements which have the most significant effect on the amounts recognised in the financial 
statements are as follows
impairment of non‑financial assets
the group assesses whether there are any indicators of impairment for all non‑financial assets goodwill is tested for 
impairment annually or at other times when relevant indicators exist other non‑financial assets are tested for impairment 
when there are indicators that the carrying values may not be recoverable when value‑in‑use calculations are undertaken 
management must estimate expected cash flows from the asset or cash generating unit and choose a suitable discount 
rate to calculate the net present value of those cash flows further details regarding impairment of property plant and 
equipment and goodwill are given in note 11
deferred tax assets
management judgement is required to determine the amount of deferred tax assets that can be recognised based on the 
likely timing and level of future taxable profits further details are given in note 7
pensions and other post‑retirement benefits
the cost and valuation of defined benefit pension plans is determined using actuarial valuations this involves making 
assumptions about discount rates future salary and pension increases and mortality rates due to the long‑term nature of 
these plans such estimates are subject to significant uncertainty further details are given in note 18 
basis of consolidation
the consolidated financial statements comprise those of the parent company and its subsidiary undertakings for the year 
ended 31 march 2014 the results for the subsidiary undertakings are included for the full year except where control is 
acquired or sold during the year when results are included from or to the date of acquisition or sale
all intercompany balances and transactions including unrealised profits arising from intra‑group transactions have been 
eliminated in full 
business combinations and goodwill
on the acquisition of a business fair values are attributed to the net assets acquired goodwill arises where the fair value of 
the consideration given for a business exceeds the fair value of such net assets
goodwill arising on acquisitions is capitalised and subject to impairment review between 5 october 1997 and 1 october 2004 
goodwill was amortised over its estimated useful life such amortisation ceased on 30 september 2004 the group’s 
policy before 5 october 1997 was to eliminate goodwill arising upon acquisitions against reserves under ifrs 1 and ifrs 3 
such goodwill will remain eliminated against reserves 52
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
1 group accounting policies continued
interest in joint venture
the group has an interest in a joint venture which is established through a 50 interest in a company the group 
recognises its interest in the entity’s assets and liabilities using the equity method of accounting under the equity method 
the interest in the joint venture is carried at cost plus post‑acquisition changes in the group’s share of net assets less 
distributions received and less any impairment in the value of the investment the income statement reflects the share 
of the jointly controlled entity’s results after tax for the full year except where control is acquired or sold during the year 
when results are included from or to the date of acquisition or sale
goodwill arising on acquisition of the jointly controlled entity is included in the carrying amount and is not amortised 
to the extent that the fair value of the entity’s net assets is greater than the cost of investment a gain is recognised and 
added to the group’s share of the entity’s profit or loss in the period in which the investment is acquired 
financial statements of the jointly controlled entity are prepared for the same reporting period as the group where 
necessary adjustments are made to bring the accounting policies in line with those of the group to take account of 
fair values assigned at the date of acquisition and to reflect impairment losses where appropriate adjustments are also 
made to eliminate the group’s share of unrealised gains and losses on transactions between the group and the jointly 
controlled entity
revenue recognition
revenue represents amounts invoiced to third parties excluding value added taxes and represents net invoice value less 
estimated rebates returns and settlement discounts it is recognised when the significant risks and rewards of ownership 
of the goods have passed to the buyer and the amount of revenue can be reliably measured this is normally the date of 
despatch rebates and discounts are recognised in accordance with contractual obligations held with customers they are 
recognised in the period to which they relate
exceptional items
exceptional items are material items which derive from events which fall within the ordinary activities of the group and 
which require separate disclosure by virtue of their size or incidence 
borrowing costs
borrowing costs that are directly attributable to the acquisition construction or production of a qualifying asset form part 
of the cost of that asset other borrowing costs are recognised as an expense 
property plant and equipment
property plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses 
the group’s policy is to write off the difference between the cost of each item of property plant and equipment and its 
residual value systematically over its estimated useful life annual reviews are made of the estimated remaining lives and 
residual values of individual productive assets taking account of commercial and technological obsolescence as well as 
normal wear and tear under this policy it becomes impractical to indicate average asset lives exactly but the indicative 
ranges are as follows
•	 freehold buildings and long leasehold property – 14 to 50 years
•	 plant and machinery – 5 to 20 years
•	 office and it equipment – 3 to 10 years and
•	 freehold land is not depreciated
an item of property plant and equipment is derecognised upon disposal or when no future economic benefits are 
expected to arise from the continued use of the asset any gain or loss arising on de‑recognition of the asset calculated 
as the difference between the net disposal proceeds and the carrying amount of the item is included in the income 
statement in the year the item is derecognised 
as permitted by ifrs 1 property previously revalued before the transition date of 1 october 2004 has been treated as 
deemed cost at the transition date
impairment of non‑financial assets
the carrying values of intangible assets are reviewed annually for impairment or if events or changes in circumstances 
indicate the carrying value may not be recoverable property plant and equipment are reviewed to ensure that assets 
are not carried at above their recoverable amounts once some indication of impairment exists calculations are made of 
the discounted cash flows resulting from continued use of the assets value in use or from their disposal fair value less 
costs to sell where these values are less than the carrying amount of the assets an impairment loss is charged to the 
income statement 53
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
intangible assets
intangible assets acquired separately from a business are capitalised at cost intangible assets acquired with a business 
acquisition are capitalised at fair value at the date of acquisition if the asset is separable or arises from contractual or 
other legal rights and its fair value can be measured reliably the useful lives of intangible assets are assessed as finite or 
indefinite except as set out in the policy for research and development costs intangible assets created within the business 
are not capitalised and expenditure is charged against income as it is incurred
research and development costs
research costs are expensed as incurred development expenditure on an individual project is recognised as an intangible 
asset when the group can demonstrate the technical feasibility of completing the intangible asset so that it will be 
available for use or sale its intention to complete and its ability to use or sell the asset how the asset will generate future 
economic benefits the availability of resources to complete the asset and the ability to measure reliably the expenditure 
during development 
leases
leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating 
leases and rentals payable are charged in the income statement on a straight‑line basis over the lease term
inventories
inventories are stated at the lower of cost and estimated net realisable value cost is determined on a first‑in first‑out basis 
cost of work in progress and finished goods comprises the cost of raw materials direct labour and overheads attributable 
to the production of inventory net realisable value comprises the estimated selling value less selling costs
trade and other receivables
trade and other receivables are recognised and carried at original invoice value less an allowance for any amounts which 
may not be collectible should an amount become uncollectible it is written off to the income statement in the period in 
which it is identified
cash and cash equivalents
cash and cash equivalents principally comprise funds held with banks and other financial institutions with an original 
maturity of three months or less for the purpose of the consolidated cash flow statement cash and cash equivalents 
are as defined above net of outstanding bank overdrafts
financial liabilities – interest‑bearing loans and borrowings
all loans and borrowings are initially recognised at fair value of the consideration received net of issue costs associated 
with the borrowing after initial recognition interest bearing loans and borrowings are subsequently measured at amortised 
cost under the effective interest rate method
provisions
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event 
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a 
reliable estimate can be made of the amount of the obligation where the group expects some or all of a provision to 
be reimbursed for example under an insurance contract the reimbursement is recognised as a separate asset but only 
when the reimbursement is virtually certain the expense relating to any provision is presented in the income statement 
net of any reimbursement if the effect of the time value of money is material provisions are determined by discounting 
the expected future cash flows at a pre‑tax rate that reflects current market assessments of the time value of money and 
where appropriate the risks specific to the liability where discounting is used the increase in the provision due to the 
passage of time is recognised as a finance cost 54
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
1 group accounting policies continued
taxation
current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation 
authorities based on tax rates and laws that are enacted or substantively enacted by the balance sheet date
deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and 
their carrying amounts in the financial statements with the following exceptions
•	 where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction 
that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit 
or loss
•	 in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal 
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the 
foreseeable future and
•	 deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available 
against which the deductible temporary differences carried forward tax credits or tax losses can be utilised
deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to 
apply when the related asset is realised or liability is settled based on tax rates and laws enacted or substantively enacted 
at the balance sheet date the carrying value of deferred tax assets is reviewed at each balance sheet date
income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity otherwise 
income tax is recognised in the income statement or other comprehensive income
pensions and other post‑retirement benefits
the cost of providing benefits under the defined benefit pension plans is determined separately for each plan using the 
projected unit credit method 
re‑measurements are recognised immediately in the statement of financial position with a corresponding debit or credit 
to retained earnings through other comprehensive income in the period in which they occur re‑measurements are not 
reclassified to profit or loss in subsequent periods
past service costs are recognised in profit or loss account on the earlier of
•	 the date of the plan amendment or curtailment and
•	 the date that the group recognises restructuring related costs
net interest is calculated by applying the discount rate to the net defined benefit liability or asset the difference between 
the return on plan assets and the interest income on plan assets recognised in the income statement as other finance 
revenue or cost is recognised in other comprehensive income
contributions to defined contribution schemes are recognised in the income statement in the period in which they 
become payable
the us business contributes to a multi‑employer defined benefit pension scheme this scheme is accounted for as 
a defined contribution scheme as the information available from the scheme administrators is insufficient for it to be 
accounted for as a defined benefit scheme  
share‑based payments
the cost of equity‑settled transactions with employees is measured by reference to the fair value at the date at which 
they are granted and is recognised as an expense over the vesting period which ends on the date on which the relevant 
employees become fully entitled to the award fair value is determined by using an appropriate pricing model in valuing 
equity‑settled transactions no account is taken of any vesting conditions other than conditions linked to the price of the 
shares of the company market conditions
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon 
market conditions which are treated as vesting irrespective of whether or not the market condition is satisfied provided 
that all other performance conditions are satisfied
at each balance sheet date before vesting the cumulative expense is calculated representing the extent to which the 
vesting period has expired and management’s best estimate of the achievement or otherwise of non‑market conditions 
and of the number of equity instruments that will ultimately vest or in the case of an instrument subject to market 
conditions be treated as vesting as described above the movement in cumulative expense since the previous balance 
sheet date is recognised in the income statement with a corresponding entry in equity  55
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
employee benefit trust the “trust”
the company has a discretionary trust established to facilitate the operation of the company executive share option 
schemes and long‑term incentive plans shares in api group plc held by the trust are deducted from equity as treasury 
shares and are recognised at cost amounts received on exercise of these options are also recognised in equity with any 
difference between proceeds from the exercise of these options and the original cost being taken to revenue reserves 
no gain or loss is recognised in the performance statements on the purchase sale issue or cancellation of equity shares
foreign currencies 
the assets and liabilities of overseas subsidiary undertakings are translated into sterling at rates ruling at the balance 
sheet date and trading items at the average rate for the period the exchange differences arising on the translation of the 
financial statements of foreign subsidiary undertakings are taken directly to a separate component of equity on disposal 
of a foreign entity the deferred cumulative amount recognised in equity relating to that particular foreign operation is 
recognised in the income statement 
transactions in foreign currencies are recorded at the rate ruling at the date of the transaction monetary assets and 
liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date 
all translation differences are taken to the income statement
derivative financial instruments and hedging
the group uses derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its 
risks associated with foreign currency and interest rate fluctuations such derivative instruments are measured at fair value 
on the date which the derivative contract is entered into and are subsequently re‑measured at fair value at the balance 
sheet date derivatives are carried as assets if the fair value is positive and liabilities if the fair value is negative the fair 
value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar 
maturity profiles the fair value of interest rate swaps is determined by reference to market values for similar instruments
hedge accounting is adopted when the hedging relationship is formally designated and documented on inception such 
hedges are expected to be highly effective in offsetting changes in fair value or cash flows and are assessed on an ongoing 
basis to determine whether they have been highly effective during the reporting period for which they were designated 
gains and losses arising from the changes in the fair value of derivatives that do not qualify for hedge accounting are taken 
to finance revenue or finance costs in the income statement
hedges of a net investment in a foreign operation are accounted for in a similar way gains or losses relating to the 
effective portion are recognised directly in equity while any gains or losses relating to the ineffective portion are 
recognised in the income statement on the disposal of the foreign operation the cumulative value of any gains or losses 
recognised directly in equity is transferred to the income statement  56
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
2 segmental analysis
the group produces monthly management information to enable the board including the group chief executive 
to monitor the financial performance of its constituent parts this information is analysed by business unit
revenue
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
total revenue by origin 
laminates       59237 55163
foils europe       28580 27021
foils americas       21819 23972
holographics       8888 9646
        118524 115802
inter‑segmental revenue    
laminates       13 2
foils europe       707 757
foils americas       567 556
holographics       2525 2061
        3812 3376
external revenue by origin    
laminates       59224 55161
foils europe       27873 26264
foils americas       21252 23416
holographics       6363 7585
segment revenue       114712 112426
external revenue by destination    
uk        23355 28655
rest of europe       66621 55606
americas       17638 21318
asia pacific       6877 6553
africa       221 294
segment revenue       114712 112426
all revenue is derived from the sale of goods
trading between operating segments is on an arm’s length basis and accounted for in a similar manner to transactions 
with third parties 57
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
segment result
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
operating profit before exceptional items   
laminates       6680 6515
foils europe       2130 1984
foils americas       1699 1893
holographics       724 275
segment result       9785 10117
central costs       2358 2315
total operating profit before exceptional items     7427 7802
central costs comprise primarily salaries defined benefit pension costs other employment costs and corporate advisory 
fees relating to the central management of the group
  restated for ias 19 – employee benefits revised 
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
assets   
laminates       15182 13550
foils europe       18586 17889
foils americas       13163 14544
holographics       8295 8719
segment assets       55226 54702
unallocated   
deferred tax assets       6412 6617
cash and short‑term deposits      8606 6189
other       1645 1188
total assets       71889 68696 58
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
3 operating profit   
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
this is stated after chargingcrediting   
research and development expenditure expensed during the period   696 596
depreciation of property plant and equipment     2367 2173
profit on disposal of property plant and equipment     4 5
cost of inventories recognised as an expense     64058 60841
 including write‑down of inventories to net realisable value    264 207
net foreign currency differences      216 54
operating lease payments – minimum lease payments    927 946
fees payable to the company’s auditor for the audit of the company’s accounts   74 69
fees payable to the company’s auditor and its associates for other services   
 – audit of the uk defined benefit pension scheme    5 5
 – audit of the accounts of subsidiaries     69 65
 – other assurance services      — 25
4 staff costs and directors’ emoluments   
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
wages and salaries       20127 20344
social security costs       2142 2159
defined contribution pension costs      730 745
        22999 23248
included in wages and salaries is a charge relating to share‑based payments of £nil 2013 £85000 details of share‑based 
payments are included in note 20
the average monthly number of employees excluding non‑executive directors during the period was made up as follows
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        number number
laminates       110 111
foils europe       183 189
foils americas       136 137
holographics        92 99
central       7 7
        528 543 59
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
directors’ emoluments
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
total   
aggregate emoluments       602 677
contributions to defined contribution schemes two directors    37 35
        639 712
highest paid director   
aggregate emoluments       281 324
contributions to defined contribution schemes      22 21
        303 345
none of the current directors are members of the defined benefit pension scheme
further details relating to directors’ emoluments are shown on pages 39 and 40
5 exceptional items
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
restructuring of operating businesses      705 488
fees associated with the formal sale process     — 541
        705 1029
restructuring of operating businesses relates primarily to redundancy severance settlements and other costs associated 
with business restructuring in the foils europe laminates and holographics businesses
6 finance revenue and finance costs
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
finance revenue   
interest receivable on bank and other short‑term deposits    1 2
other interest receivable       1 8
        2 10
finance costs   
interest payable on bank loans and overdrafts     533 804
other interest payable        41 17
finance cost in respect of defined benefit pension plans    558 396
        1132 1217
included within interest payable on bank overdrafts and loans is £178000 2013 £235000 relating to the amortisation of 
fees and expenses incurred in obtaining bank facilities
 restated for ias 19 – employee benefits revised  60
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
7 taxation
a tax expensecredit in the income statement   
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
current income tax   
uk corporation tax       330 75
uk corporation tax – adjustment to prior years     75 —
overseas tax        164 80
total current income tax expense      419 155
deferred tax   
origination and reversal of temporary differences   
 – defined benefit pension plan      35 135
 – tax losses and other short‑term differences     501 588
 – capital allowances       118 275
 – effect of change in tax rate      149 4
total deferred tax credit       269 174
total tax expensecredit in the income statement     150 19
b tax creditexpense on items accounted for through other comprehensive income   
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
deferred tax   
re‑ measurement gains and losses on defined benefit  
pension schemes       94 1258
change in fair value of effective cash flow hedges     198 151
effect of change in tax rate      246 181
        350 1228
c tax expensecredit on items accounted for directly through equity   
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
deferred tax
share‑based payments       — 18 61
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
d reconciliation of the total tax charge
the tax rate in the income statement for the year is lower than the standard rate of corporation tax in the uk of 23 
2013 24 the differences are reconciled below
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
accounting profit before tax      5592 5566
accounting profit multiplied by the uk standard rate of corporation tax of 23 2013 24  1286 1336
adjustments to tax charge in respect of prior periods     75 81
adjustments in respect of foreign tax rates     95 55
increase in deferred tax asset recognised on losses and capital allowances   1454 1595
losses for which deferred tax is not recognised     63 94
other temporary differences for which deferred tax is not recognised   6 33
effect of change in tax rate      152 4
expenses not deductible for tax purposes      77 201
total tax expensecredit reported in the income statement    150 19
e unrecognised tax losses
the group has unrecognised tax losses arising in the uk of £2068000 2013 £2819000 that are available and may be 
offset against future taxable profits of those businesses in which the losses arose the uk tax group also has unrecognised 
capital allowances of £2078000 2013 £3857000 available to offset against future taxable profits at the rate of 18 
2013 18 a year on a reducing balance basis the group has unrecognised us federal tax losses carried forward of 
4097000 2013 8963000 which are available for offset against future profits for a period of between 9 and 17 years 
f deferred tax
the deferred tax included in the balance sheet is analysed as follows
         31 march  31 march  
        2014 2013 
        £’000 £’000
deferred tax liability   
revaluation of fixed assets      183 211
fair value of cash flow hedges      123 —
        306 211
deferred tax asset   
defined benefit pension plans       2806 3070
tax losses       2724 2376
capital allowances       737 941
fair value of cash flow hedges      — 64
share‑based payments       145 166
        6412 6617
reductions in the uk corporation tax rate from 26 to 24 effective from 1 april 2012 and to 23 effective from 
1 april 2013 were substantially enacted on 26 march 2012 and 3 july 2012 respectively further reductions to 21 
effective from 1 april 2014 and 20 effective from 1 april 2015 were substantively enacted on 2 july 2013 this will 
impact the group’s future current tax charge accordingly the deferred tax assets and liabilities at 31 march 2014 have 
been calculated based on the rates of 20 and 21 substantively enacted at the balance sheet date  62
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
8 earnings per ordinary share
basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the 
parent by the weighted average number of ordinary shares outstanding during the year
diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the 
parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number 
of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares
earnings used to calculate underlying basic and diluted earnings per share exclude exceptional items net of tax 
the following reflects the income and share data used in the basic and diluted earnings per share computations
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        £’000 £’000
net profit attributable to equity holders of the parent     5442 5585
adjustments to arrive at underlying earnings   
exceptional items       705 1029
tax credit on exceptional items       162 103
underlying earnings       5985 6511
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        number number
basic weighted average number of ordinary shares     73892566 73748730
dilutive effect of employee share options and contingent shares    3265060 3600787
diluted weighted average number of ordinary shares     77157626 77349517
the basic weighted average number of shares excludes the 2750000 shares owned by the api group plc no2 employee 
benefit trust 2013 3000000 these contingent shares are included in the diluted weighted average number of shares 
on 2 september 2013 250000 shares which had vested under the ltip were exercised
there have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and 
the date of completion of these financial statements 
earnings per ordinary share
        year ended  year ended  
         31 march  31 march  
        2014 2013 
        pence pence
basic earnings per share       74 76
underlying basic earnings per share      81 88
diluted earnings per share      71 72
underlying diluted earnings per share      78 84
 restated for ias 19 – employee benefits revised 63
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
9 property plant and equipment
      long 
      leasehold  office 
    freehold  freehold land and plant and and it 
    land buildings buildings machinery equipment total 
    £’000 £’000 £’000 £’000 £’000 £’000
cost      
at 1 april 2012   2164 7700 1693 49499 6665 67721
additions   — 1419 283 1661 1780 5143
disposals   — — — 974 371 1345
foreign currency adjustment  99 364 — 720 151 1334
at 31 march 2013   2263 9483 1976 50906 8225 72853
additions   — 162 3 2442 729 3336
disposals   — 44 — 267 — 311
foreign currency adjustment  178 656 — 1355 270 2459
at 31 march 2014   2085 8945 1979 51726 8684 73419
depreciation      
at 1 april 2012   — 3206 923 40460 5196 49785
provided during the year   — 206 61 1387 519 2173
disposals    — — — 966 361 1327
foreign currency adjustment  — 223 — 577 109 909
at 31 march 2013   — 3635 984 41458 5463 51540
provided during the year   — 336 70 1408 553 2367
disposals    — 44 — 267 — 311
foreign currency adjustment  — 410 — 1104 153 1667
at 31 march 2014   — 3517 1054 41495 5863 51929
net book value at 31 march 2014  2085 5428 925 10231 2821 21490
net book value at 31 march 2013  2263 5848 992 9448 2762 21313
net book value at 31 march 2012  2164 4494 770 9039 1469 17936
construction work‑in‑progress
included in the cost of property plant and equipment is £2909000 2013 £1751000 2012 £2878000 relating to 
construction work‑in‑progress
commitments
amounts contracted in respect of property plant and equipment including construction work‑in‑progress amounted to 
£644000 2013 £404000 see note 23
security
the group’s uk borrowings of £7329000 2013 £7754000 are secured by floating charges on the uk assets of the 
group including fixed assets to the value of £13348000 2013 £12668000 the us loans of £891000 2013 £777000 
are pledged certain against property plant and equipment to the value of £5094000 2013 £5400000
10 intangible assets – goodwill
         £’000
cost and carrying value     
at 31 march 2012 31 march 2013 and 31 march 2014     5188
as from 1 october 2004 the date of transition to ifrs goodwill was no longer amortised previously amortised over a 
period up to 20 years but is now subject to annual impairment testing 64
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
10 intangible assets – goodwill continued
carrying amount of goodwill allocated to cash‑generating units
         £’000
foils europe – uk        2538
foils europe – germany        964
holographics        1686
at 31 march 2012 31 march 2013 and 31 march 2014     5188
11 impairment of non‑financial assets
the directors have reviewed impairment tests at 31 march 2014 for cash generating units that have a goodwill allocation 
and for any of these units or other units in the group that have indicators of impairment of property plant and equipment
goodwill acquired through business combinations has been allocated for impairment testing purposes to the following 
cash‑generating units
•	 foils europe – uk
•	 foils europe – germany and
•	 holographics
these represent the lowest level within the group at which goodwill is monitored for internal management purposes 
the value of goodwill allocated to these units is listed in note 10
the recoverable amount of each of the cash generating units has been determined on a value in use basis value in use is 
calculated as the net present value of pre‑tax cash flows based on budgets for the year ended 31 march 2015 and forecasts 
for the following three years which have been approved by the board the cash flows were derived from business plans 
including detailed sales forecasts by product type and geography prepared by individual businesses within each division 
these include an allowance for detailed capital and maintenance programmes the cash flows have been extrapolated 
for a period of 15 years using the key assumptions of estimated long‑term growth rates of 3 2013 3 to 35 and cost 
inflation of 2 to 3 2013 2 to 3 applicable to the location of each cash generating unit the growth rates do not 
exceed the long‑term average growth rate for the relevant cash generating unit a pre‑tax discount rate of 72 2013 70 
has been used which was considered a best estimate for the current risk‑adjusted cost of capital for the group 
the directors believe that no reasonable possible change in any of the key assumptions would cause the carrying value of 
the units to exceed their recoverable amounts
12 investment in joint venture
the group has a 50 interest in a company api optix sro “apio” during the year loans advanced to the company in 
the year ended 31 march 2013 have been converted into equity the total investment is as follows
         31 march  31 march  
        2014 2013 
        £’000 £’000
investment in equity capital      880 3
loan receivable       — 375
        880 378
the group’s interests in the assets and liabilities of the joint venture are as follows
         31 march  31 march  
        2014 2013 
        £’000 £’000
non‑current assets       287 24
current assets       145 168
current liabilities       52 189
        380 3
the aggregate amount of the capital and reserves of the joint venture is £760000 the net income for the year ended 
31 march 2014 is £nil 2013 £nil accordingly there is no separate disclosure of the group’s share of results in the 
income statement
the share capital of apio is 200000 czech crowns and the group holds 50 of that share capital 65
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
13 trade and other receivables
         31 march  31 march  
        2014 2013 
        £’000 £’000
amounts falling due within one year   
trade receivables       14163 13556
prepayments       1642 1644
other debtors       788 611
        16593 15811
trade receivables are non‑interest bearing and are generally on between 30 and 90 days’ terms they are shown net of 
any provisions for impairment at 31 march 2014 trade receivables at a nominal value of £95000 2013 £101000 were 
impaired and fully provided for movements in the provision for impairment of receivables were as follows 
         31 march  31 march  
        2014 2013 
        £’000 £’000
opening provision       101 161
creditcharge for the year      8 1
amounts written off       10 57
unused amounts reversed      1 4
foreign currency adjustment      3 2
closing provision       95 101
of the total trade receivables shown above £830000 2013 £998000 are past due but not impaired an analysis of 
these trade receivables is as follows
         31 march  31 march  
        2014 2013 
        £’000 £’000
0‑30 days overdue       621 936
31‑60 days overdue       100 19
61‑90 days overdue       61 35
91 days overdue       48 8
        830 998
due to the nature and number of the group’s customers it is not practical to analyse the credit quality of trade receivables 
that are neither past due nor impaired credit risk arises from the possibility that customers may not be able to settle their 
obligations as agreed customers are assessed for financial reliability using external rating agencies secure payment 
terms are frequently used in riskier geographical areas or for riskier customers in determining the level of credit insurance 
placed the group continually monitors the market to assess the cost of premiums compared to the credit risks associated 
with different market and product sectors at 31 march 2014 the maximum exposure to credit risk in respect of trade 
receivables after taking account of credit insurance was £3907000 2013 £4431000
during the year ended 31 march 2014 there were two major customers reported within the laminates segment which 
comprised 10 or more of the total external revenue amounting to £22779000 2013 £18685000 and £12094000 
2013 £18149000 respectively these customers are multi‑location groups and are supplied by api for a wide variety of 
end‑user designs and specifications  66
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
14 inventories
         31 march  31 march  
        2014 2013 
        £’000 £’000
raw materials       4043 4583
work in progress       1004 1675
finished goods       7079 6606
        12126 12864
15 cash and cash equivalents
for the purpose of the consolidated cash flow statement cash and cash equivalents comprise the following
         31 march  31 march  
        2014 2013 
        £’000 £’000
short‑term deposits       — 4500
cash at bank and in hand       8606 1689
cash and short‑term deposits      8606 6189
bank overdrafts note 17       232 234
        8374 5955
cash at bank and on deposit are held at major banks with high quality credit ratings the maximum exposure to credit risk 
is represented by their respective carrying values
16 trade and other payables
         31 march  31 march  
        2014 2013 
        £’000 £’000
trade payables       17150 16348
other payables       5482 6080
        22632 22428
17 financial liabilities
         31 march  31 march  
        2014 2013 
        £’000 £’000
current   
bank overdrafts       232 234
current instalments due on bank loans      187 2957
interest rate swaps       — 16
forward foreign exchange contracts      13 559
        432 3766
non‑current   
non‑current instalments due on bank loans     8033 5574
        8033 5574
details of interest rate swaps and forward foreign exchange contracts are given in note 22 67
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
bank loans
bank loans comprise the following   
         31 march  31 march  
        2014 2013 
        £’000 £’000
revolving loans uk       7329 7754
term loans us       891 777
        8220 8531
less current instalments due on bank loans     187 2957
        8033 5574
the group’s banking facilities comprise
uk facilities
the group’s lending arrangements in the uk were moved from barclays bank plc to hsbc bank plc in november 2013 
the facilities with hsbc are for a period to 31 december 2017 and comprise a £135m multicurrency revolving facility 
agreement and ancilliary facilities of £75m to cover fx contracts letters of credit and sundry other items total facilities 
under the previous funding agreement with barclays bank plc amounted to £128m as at 31 march 2013 at 31 march 
2014 uk facilities drawn down comprised revolving loans of £75m with interest rates of 20 the facilities are subject 
to two quarterly financial covenant targets reflecting the financial performance of the group excluding the impact of the 
foils americas business unit covenants relate to interest cover and leverage at 31 march 2014 the covenant ratios were 
comfortably within targets
us facilities
the us facilities are with wells fargo bank these facilities are scheduled for renewal in april 2015 at 31 march 2014 they 
comprised amortising loans of 09m 2013 12m a revolving credit facility of up to 55m 2013 55m depending on 
the level of working capital and a new 5 year loan of 05m relating to the metalliser at 31 march 2014 interest rates were 
35 the total debt outstanding is subject to a quarterly covenant obligation relating to fixed costs cover during the 
year to 31 march 2014 the us business met all its covenant obligations the revolving credit facility is secured on working 
capital to the value of £5189000 2013 £5861000 and the loans over certain property plant and equipment
18 pensions and other post‑retirement benefits 
the group operates a number of pension schemes current uk employees participate in a defined contribution scheme 
overseas employees participate in a variety of different pension arrangements of the defined contribution type and are 
funded in accordance with local practice a non‑contributory scheme is operated for members of the north new jersey 
teamsters 11 union employed at the company’s site in rahway new jersey this scheme is a multi‑employer defined 
benefit scheme which is accounted for as a defined contribution scheme as the information available from the scheme 
administrators is insufficient for it to be accounted for as a defined benefit scheme under the rules of the scheme the 
employer is not liable for any deficit of the scheme unless it withdraws from the scheme
in the uk a defined benefit pension scheme the api group pension and life assurance scheme was closed to future 
accrual in december 2008 this was a funded pension scheme for the company and its uk subsidiaries providing benefits 
based on final pensionable earnings funded by the payment of contributions to a separately administered trust fund 
a second defined benefit scheme operated in the us the api foils inc north american pension plan is also closed 
to future accrual due to the nature of the liabilities the pension schemes are exposed to inflation interest rate risk and 
changes in life expectancy of members as the plan assets include significant investments in equities the pension schemes 
are also exposed to equity market risk
ias 19 employee benefits was amended in june 2011 details of the restatement are included in note 1  68
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
18 pensions and other post‑retirement benefits continued
the assets and liabilities of the defined benefit schemes are
at 31 march 2014
       united  united 
       kingdom states total 
       £’000 £’000 £’000
equities      40485 918 41403
bonds      20981 1106 22087
hedge funds      11105 — 11105
property      7384 63 7447
cash      56 — 56
fair value of scheme assets     80011 2087 82098
present value of scheme liabilities     92631 2831 95462
net pension liability before deferred tax    12620 744 13364
at 31 march 2013
       united  united 
       kingdom states total 
       £’000 £’000 £’000
equities      39200 987 40187
bonds      22075 986 23061
hedge funds      10605 — 10605
property      6677 82 6759
cash      — — —
fair value of scheme assets     78557 2055 80612
present value of scheme liabilities     90880 3081 93961
net pension liability before deferred tax    12323 1026 13349
the major categories of plan assets have a quoted price in an active market the funds have not invested in any of the 
group’s own financial instruments nor in properties or other assets used by the group 69
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
the amounts recognised in the group income statement and group statement of comprehensive income for the year 
are as follows
year ended 31 march 2014
       united  united 
       kingdom states total 
       £’000 £’000 £’000
recognised in the income statement     
recognised in arriving at operating profit     
scheme expenses borne by employers     662 13 675
interest income on scheme assets     3322 78 3400
interest cost on scheme liabilities     3837 121 3958
other finance cost      515 43 558
taken to the statement of comprehensive income     
actual return on scheme assets     4067 196 4263
less interest income on scheme assets    3322 78 3400
less investment management fees     203 — 203
       542 118 660
other re‑ measurement gains and losses    1227 54 1173
re‑ measurement gains and losses recognised in the  
statement of comprehensive income     685 172 513
year ended 31 march 2013
       united  united 
       kingdom states total 
       £’000 £’000 £’000
recognised in the income statement     
recognised in arriving at operating profit     
scheme expenses borne by employers     665 — 665
interest income on scheme assets     3494 78 3572
interest cost on scheme liabilities     3842 126 3968
other finance cost      348 48 396
taken to the statement of comprehensive income     
actual return on scheme assets     7792 172 7964
less interest income on scheme assets    3494 78 3572
less investment management fees     160 — 160
       4138 94 4232
other re‑ measurement gains and losses    9418 57 9475
re‑ measurement gains and losses recognised in the  
statement of comprehensive income     5280 37 5243 70
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
18 pensions and other post‑retirement benefits continued
the major assumptions used in determining the value of the defined benefit schemes are disclosed below 
 united kingdom united states
       
      31 march 31 march 31 march 31 march  
      2014 2013 2014 2013 
          
rate of increase in pensions in payment   235 235   
rate of increase to deferred pensions    235 235   
inflation – cpi     235 235  
discount rate     440 430 450 425
post‑retirement mortality in years       
member age 65 current life expectancy – male   209 203   
member age 65 current life expectancy – female   231 223   
member age 45 life expectancy at 65 – male   227 220   
member age 45 life expectancy at 65 – female   250 243   
these assumptions have been selected after consultation with the group’s uk pension advisors kpmg llp and the 
group’s us actuaries prudential retirement
the rate of increase in pensions and the inflation rate assumptions in the uk are based on statistics published by the bank 
of england for long‑term estimates of the retail price index “rpi” at 31 march 2014 the relevant inflation rate based on 
the rpi for the duration of the uk scheme was 335 2013 335 the statutory basis of indexation used by the scheme 
is based on the consumer price index “cpi” it is estimated that long‑term cpi is approximately 10 2013 10 lower 
than the rpi a 01 variation in the inflation rate would result in a change in the present value of the scheme liabilities of 
approximately £10m 2013 £10m 
the discount rate for the uk scheme has been set by reference to the iboxx aa corporate bond 15‑year index the rate has 
been modified to take account of the duration of the scheme which is approximately 18 years 2013 18 years a 01 variation 
in the discount rate would result in a change in the present value of the scheme liabilities of approximately £15m 2013 £16m
in the uk the mortality assumptions for the current year are based on nationally published tables using 120 of the 
s1pa yob cmi 2013 model with 125 long‑term rate of improvement 2013 130 of the s1pa yob cmi 2009 model 
with 125 long‑term rate of improvement a 1 year variation in life expectancy at age 65 would result in a change in 
the present value of the scheme liabilities of approximately £20m 2013 £23m in the us mortality assumptions are in 
accordance with the irs static mortality tables for the relevant year
scheme assets are stated at their market values at the respective balance sheet dates
following closure of the uk scheme to future accrual the group has agreed to make contributions up to 2021 in order to 
make up the funding shortfall the agreed contributions for the year ended 31 march 2015 are £700000 71
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
changes in the present value of the defined benefit obligations are as follows
       united  united 
       kingdom states total 
       £’000 £’000 £’000
at 1 april 2012      80821 2832 83653
interest cost      3842 126 3968
benefits paid      3201 86 3287
re‑ measurement gains and losses     9418 57 9475
foreign currency differences     — 152 152
at 31 march 2013      90880 3081 93961
service cost      — 13 13
interest cost      3837 121 3958
benefits paid      3313 54 3367
re‑ measurement losses from changes in demographic assumptions  1294 — 1294
re‑ measurement gains from changes in financial assumptions   1268 54 1322
experience losses on liabilities     1201 — 1201
foreign currency differences     — 276 276
at 31 march 2014      92631 2831 95462
changes in the fair value of the scheme assets are analysed as follows
       united  united 
       kingdom states total 
       £’000 £’000 £’000
at 1 april 2012      73266 1769 75035
interest income      3494 78 3572
return on scheme assets excluding interest income    4298 94 4392
employer contributions      700 100 800
benefits paid      3201 86 3287
foreign currency differences     — 100 100
at 31 march 2013      78557 2055 80612
interest income      3322 78 3400
return on scheme assets excluding interest income    745 118 863
employer contributions      700 83 783
benefits paid      3313 54 3367
foreign currency differences     — 193 193
at 31 march 2014      80011 2087 82098 72
api group plc annual report 2014
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014
19 share capital 
allotted called up and fully paid
      31 march 31 march 31 march 31 march  
      2014  2013 2014 2013 
      thousands thousands £’000 £’000
ordinary shares of 1p      76749 76749 767 767
during the current and previous years no further shares were issued 
during the current and previous years no options were granted over the ordinary shares full exercise of the options 
granted under the company’s share option schemes would result in the issue not later than march 2018 of 403200 
shares 2013 450450 shares at nil cost 
capital management
the primary purpose of the group’s capital management is to ensure the maintenance of healthy capital ratios in order 
to support day‑to‑day business operations and the achievement of strategic objectives the group manages its capital 
structure and makes adjustments to it in the light of changes in economic conditions and the financial position of the 
group capital which comprises total equity is monitored using normal financial ratios primarily gearing for the group 
overall and a leverage ratio associated with the main bank facilities in the uk ratios at 31 march 2014 are disclosed in the 
financial review on pages 26 to 28 
20 share‑based payments
during the year an amount of £nil was charged to the income statement 2013 £85000 in respect of share‑based 
payments this comprises £nil 2013 £4000 in respect of share options and £nil 2013 £81000 in respect of contingent 
shares under the long term incentive plan all share‑based payment plans are equity settled
share options
share options remaining in place at 31 march 2014 are nil cost options which are all exercisable the ability to exercise 
these options was conditional on the attainment of specified performance targets based on profits before tax over a 
three‑year performance period the options lapse if they are not exercised within ten years of the date of grant
the following table details the number and weighted average exercise price waep of and movements in share options 
during the year
 31 march 2014 31 march 2013
       
      number waep p number waep p
outstanding at beginning of year    450450 — 614250 —
granted during the year     — — — —
exercised during the year     47250 — 163800 —
surrendered during the year    — — — —
forfeited during the year     — — — —
expired during the year     — — — —
outstanding at end of year    403200 — 450450 —
exercisable at end of year    403200 — 450450 —
the weighted average share price of shares exercised at the date of exercise was 67p 2013 57p
for share options outstanding at the end of the year the weighted average remaining contractual life is 40 years 
2013 50 years 73
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
long term incentive plan
in september 2010 the two executive directors andrew turner and chris smith entered into a long‑term incentive plan 
“ltip” covering the period 1 april 2011 to 31 march 2015 under which they were each granted a single award which when 
combined totalled up to 3000000 contingent shares for a five year term under the terms of the ltip 3000000 ordinary 
shares of 1p “shares” were issued to the api group plc no 2 employee benefit trust the “trust” the fair value of these 
awards is 160p 
the executive directors are entitled to earn shares following the financial years ending 31 march 2012 2013 2014 and 
2015 based on a set of performance criteria reflecting increases in shareholder value the maximum number of shares 
available on each occasion will be unrestricted subject to the overall limit of the size of the award for the five year period 
any earned entitlement will be satisfied by transferring shares at nil cost from the trust to the directors at the end of the 
performance period residual unearned shares will remain in the trust and will be available for use under a successor ltip 
or any other employee benefit scheme 
the number of shares held by the trust in respect of the ltip reduced by 250000 during the year ended 31 march 2014 
there are 2750000 2013 3000000 shares held in the trust which can potentially be transferred to the directors under 
the ltip 
in may 2013 the remuneration committee determined in accordance with the scheme rules and based on the 
performance criteria reflecting increases in shareholder value in the year that a further 539385 of the contingent shares 
held by the executive directors in the company’s ordinary shares of 1p had vested following the year ended 31 march 2014 
the remuneration committee has determined that no further contingent shares held by the executive directors in the 
company’s ordinary shares of 1p had vested cumulatively 1502478 of the contingent shares held by the executive 
directors in the company’s ordinary shares of 1p have vested
21 reserves
other reserves
other reserves of £8818000 2013 £8816000 comprise the capital redemption reserve £8846000 and a deficit of 
£28000 in the esop reserve
the capital redemption reserve arose from the cancellation of 549000 preference shares of £1 each £549000 in 
march 1999 and the cancellation of 34570000 deferred shares of 24p £8297000 in the year ended 31 march 2009
the esop reserve relates to shares held by the api group plc no 2 employee benefit trust the “trust” established in 1997 
to facilitate the operation of the company’s executive share schemes during the year the trust acquired 47250 shares for 
a consideration of £32000 these shares were subsequently transferred to an employee in respect of the exercise of nil 
cost options at 31 march 2014 the trust held 2750000 2013 3000000 shares at an average cost of £001 per share and 
a total cost of £28000 2013 £30000
foreign exchange reserve
the foreign exchange reserve of £432000 deficit 2013 £958000 surplus is used to record exchange differences arising 
from the translation of the financial statements of foreign subsidiaries 74
api group plc annual report 2014
22 financial instruments
details of the treasury operations and funding of the group are described in the financial review on pages 26 to 28
liquidity profile
the table below summarises the maturity profile of the group’s financial liabilities based on contractual 
undiscounted payments
at 31 march 2014
      within one to two two to five 
      one year years years total 
      £’000 £’000 £’000 £’000
non‑ derivative financial liabilities    419 704 7500 8623
interest on financial liabilities    181 152 263 596
trade and other payables     21862 — — 21862
forward foreign exchange contracts    
payable      21725 2117 — 23842
receivable     22306 2117 — 24423
at 31 march 2013
      within one to two two to five 
      one year years years total 
      £’000 £’000 £’000 £’000
non‑derivative financial liabilities    3336 5202 395 8933
interest on financial liabilities    192 51 1 244
trade and other payables     21589 — — 21589
interest rate swaps     16 — — 16
forward foreign exchange contracts    
payable      24873 6374 — 31247
receivable     24488 6535 — 31023
fair values of financial assets and liabilities
the fair values of financial assets and liabilities are determined to be equivalent to their book values the group uses 
a fair value hierarchy for determining and disclosing the fair values of financial instruments by valuation technique in 
accordance with ifrs 13 all of the financial instruments held by the group are included in the level 2 hierarchy fair values 
are determined using observable market prices level 2 as defined by ifrs 13 fair value measurement with the fair value of 
forward exchange contracts being estimated by discounting the difference between the contractual forward price and the 
current forward price for the residual maturity of the contract using a risk‑free interest rate 
credit risk
the group’s credit risk relates to cash at bank and on deposit and trade receivables details are disclosed in notes 13 and 15
equity price risk
equity price risks are not applicable to the group as it does not currently have any tradable investments
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014 75
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
interest rate risk 
the following table demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables 
held constant of the group’s profit before tax the impact on the group’s equity is not significant 
         effect on profit 
        increase in  before tax 
        interest rate £’000
2014       1 86
2013       1 69
foreign currency risk 
the following table demonstrates the sensitivity to a reasonably possible change in the sterling against the us dollar and 
euro exchange rates with all other variables held constant of the group’s profit before tax and equity due to foreign 
exchange conversion of monetary assets and liabilities 
       increase  effect   
       decrease  on profit effect on 
       in sterling vs  before tax equity 
       us dollareuro  £’000  £’000 
2014      
us dollarsterling      10 80 245
       ‑10 88 270
eurosterling      10 147 1678
       ‑10 162 1845
2013      
us dollarsterling      10 62 62 
       ‑10 68 68 
eurosterling      10 382 2999 
       ‑10 420 3299 
the impact of translating the net assets of foreign operations into sterling is excluded from the above sensitivity analysis 
hedges
cash flow hedges
forward foreign exchange contracts 
the group has taken out foreign currency forward contracts in order to hedge the value of future sales denominated in 
euros to the value of €229m 2013 €341m future purchases denominated in us dollars to the value of 45m 2013 nil 
and future capital expenditure commitments denominated in euros to the value of €13m 2013 €nil these contracts 
have maturity dates extending to june 2015 2013 august 2014 at 31 march 2014 contracts with a positive value 
amounted to £594000 2013 £141000 maturing within one year and £nil 2013 £152000 maturing in greater than one 
year contracts with a negative value amounted to £12000 2013 £559000 maturing within one year these hedges 
are fully effective and consequently the full amounts of the changes in fair value have been shown in the statement 
of comprehensive income the total gain recognised in other comprehensive income in respect of foreign exchange 
contracts is £595000 2013 gain of £186000 a charge of £252000 2013 credit of £921000 was recycled from other 
comprehensive income to revenue in the income statement 
interest rate
in the us amortising interest rate swaps were taken out for the period 1 july 2011 to 30 october 2013 in respect of 100 
of the us term loans amortising at the same rate as the loans at 31 march 2013 the notional amount of these swaps 
was 12m a fixed value swap of 15m was also taken out for the same period as a hedge against the revolving credit 
facility the group received a variable rate based on 1 month libor on the us swaps and paid a fixed rate of 173 
at 31 march 2013 these swaps had a negative value of £16000 the interest rate swaps matured during the year ended 
31 march 2014 and there are no interest rate swaps at 31 march 2014
these hedges are fully effective and consequently the full amounts of the changes in fair value have been shown in the 
statement of comprehensive income the total loss recognised in other comprehensive income in respect of interest 
rate swaps was £nil 2013 gain of £2000 a charge of £16000 2013 £94000 was recycled from other comprehensive 
income to finance costs in the income statement  76
api group plc annual report 2014
22 financial instruments continued
hedges continued
fair value hedges
the group has also taken out foreign currency forward contracts in order to hedge the value of trade debtors net of trade 
creditors denominated in euros any profit or loss arising on these contracts is posted directly to the income statement 
at 31 march 2014 there were forward contracts in place in respect of fair value hedges to buy sterling and sell euros 
to the value of €13m 2013 €28m these contracts had a negative fair value of £1000 at 31 march 2014 2013 gain 
of £43000 losses on fair value hedges amounting to £14000 2013 gain of £69000 are included in the amounts 
disclosed for net foreign currency differences in note 3 
23 capital commitments
amounts contracted but not provided in these financial statements are as follow
         31 march  31 march  
        2014 2013 
        £’000 £’000
property plant and equipment      644 404
investment in joint venture      — 500
        644 904
24 obligations under leases and hire purchase contracts
future minimum rentals payable under non‑cancellable operating leases are as follows
         31 march  31 march  
        2014 2013 
        £’000 £’000
not later than one year        820 913
after one year but not more than five years     1527 1456
after five years       1402 1476
        3749 3845
these commitments include £1559000 2013 £1597000 in respect of annual payments of £38000 relating to a long 
lease which expires in 2055 the remaining commitments relate to short‑term leases of no more than six years mostly in 
respect of land and buildings
25 related party transactions
compensation of key management personnel
the key management personnel comprise the six directors 2013 six and the managing directors of the four business 
units 2013 four
        year ended  year ended 
         31 march  31 march  
        2014 2013 
        £’000 £’000
short‑term employee benefits      1350 1682
post employment benefits      68 57
share‑based payments       — 85
        1418 1824
transactions with joint venture
the movement in the investment during the year with the joint venture api optix sro is set out in note 12 
other transactions during the year with the joint venture api optix sro are purchases of £51000 and research 
and development charges of £150k
relationships between the parent and its subsidiaries
the relationships between the parent and its subsidiaries are disclosed in note 2 to the parent company 
financial statements
financial statements
no tes to the c onsolid ated financial statements for the year ended 31 march 2014 77
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
we have audited the parent company financial statements of api group plc for the year ended 31 march 2014 which 
comprise the company balance sheet and the related notes 1 to 11 the financial reporting framework that has been 
applied in their preparation is applicable law and united kingdom accounting standards united kingdom generally 
accepted accounting practice
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so that we might state to the company’s members those 
matters we are required to state to them in an auditor’s report and for no other purpose to the fullest extent permitted 
by law we do not accept or assume responsibility to anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we have formed 
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement set out on page 44 the directors are responsible for 
the preparation of the parent company financial statements and for being satisfied that they give a true and fair view 
our responsibility is to audit and express an opinion on the parent company financial statements in accordance with 
applicable law and international standards on auditing uk and ireland those standards require us to comply with the 
auditing practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement whether caused by fraud 
or error this includes an assessment of whether the accounting policies are appropriate to the parent company’s 
circumstances and have been consistently applied and adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the financial statements in addition we read all the 
financial and non‑financial information in the annual report to identify material inconsistencies with the audited financial 
statements and to identify any information that is apparently materially incorrect based on or materially inconsistent 
with the knowledge acquired by us in the course of performing the audit if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report
opinion on financial statements
in our opinion the parent company financial statements
•	 give a true and fair view of the state of the company’s affairs as at 31 march 2014
•	 have been properly prepared in accordance with united kingdom generally accepted accounting practice and
•	 have been prepared in accordance with the requirements of the companies act 2006
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the strategic report and directors’ report for the financial year for which the 
financial statements are prepared is consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you 
if in our opinion
•	 adequate accounting records have not been kept by the parent company or returns adequate for our audit have not 
been received from branches not visited by us or
•	 the parent company financial statements and the part of the directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by law are not made or
•	 we have not received all the information and explanations we require for our audit
other matter
we have reported separately on the group financial statements of api group plc for the year ended 31 march 2014
colin brown senior statutory auditor
for and on behalf of ernst  young llp statutory auditor 
manchester united kingdom
3 june 2014
financial statements
independent audit or’s report to the members of api group plc 78
api group plc annual report 2014
         31 march  31 march  
        2014 2013 
       note £’000 £’000
fixed assets    
investments      2 29114 29114
current assets    
debtors greater than one year     3 18106 30178
debtors less than one year     3 9767 —
cash at bank and in hand       2512 1338
        30385 31516
creditors – amounts falling due within one year    4 23202 26205
net current assets       7183 5311
total assets less current liabilities      36297 34425
creditors – amounts falling due after more than one year   5 — 4978
net assets before defined benefit pension deficit     36297 29447
defined benefit pension deficit     6 10089 —
net assets       26208 29447
share capital and reserves    
called up share capital       7 767 767
share premium account      8 7136 7136
other reserves      8 8818 8816
profit and loss account      8 9487 12728
equity shareholders’ funds      26208 29447
signed on behalf of the board
andrew turner
director
3 june 2014
company number 169249
financial statements
company balance sheet at 31 march 2014 79
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
1 accounting policies
accounting convention
the company’s financial statements have been prepared under the historical cost convention in accordance with uk 
gaap and with the companies act 2006 
the company has taken advantage of the exemption provided under section 408 of the companies act 2006 not to 
publish its individual profit and loss account and related notes 
the principal accounting policies which follow set out those policies which apply in preparing the financial statements for the 
year ended 31 march 2014 these policies have been consistently applied to all periods presented unless otherwise stated
as set out in the directors’ report the financial statements have been prepared on the going concern basis
investments in and loans due from subsidiaries
investments in and loans due from subsidiaries are stated at cost less any impairment which is charged to the profit and 
loss account
deferred tax
deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 
date where transactions or events have occurred at that date that will result in an obligation to pay more or a right to pay 
less or to receive more tax with the following exceptions
•	 provision is made for tax on gains arising from the revaluation and similar fair value adjustments of fixed assets and 
gains on disposal of fixed assets that have been rolled over into replacement assets only to the extent that at the 
balance sheet date there is a binding agreement to dispose of the assets concerned however no provision is made 
where on the basis of all available evidence at the balance sheet date it is more likely than not that the taxable gain will 
be rolled over into replacement assets and charged to tax only where the replacement assets are sold and
•	 deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there 
will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted
deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which 
timing differences reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date
pensions
in the uk a defined benefit pension scheme the api group pension and life assurance fund the “fund” was closed to 
future accrual in december 2008 this was a funded pension scheme for the company and its uk subsidiaries providing 
benefits based on final pensionable earnings funded by the payment of contributions to a separately administered 
trust fund 
historically the api group pension and life assurance fund has been operated as a multi‑employer scheme with api 
group plc as the principal employer figures have not been available to accurately determine each employer’s share of the 
liabilities so under frs 1712 each entity has reported their share under a defined contribution basis in their own accounts 
the consolidation accounts for api group plc have shown the full defined benefit balance sheet and associated entries
on 28 march 2014 the other participating employers api laminates limited api holographics limited api foils limited and 
api group services limited de‑participated from the fund liabilities for these entities were apportioned to api group plc by 
means of a flexible apportionment arrangement as allowed using the pension regulator’s framework as api group plc is 
now from 28 march 2014 the sole participating employer the provisions of frs 1712 no longer apply
at 31 march 2014 the defined benefit pension liability in the balance sheet comprises the total of the present value of 
the defined benefit obligation using a discount rate based on high quality corporate bonds that have been rated at aa or 
equivalent status less any past service cost not recognised and less the fair value of plan assets out of which the obligations 
are to be settled directly fair value is based on market price information and in the case of quoted securities is the published 
bid price
financial statements
no tes to the c ompany financial statements for the year ended 31 march 2014 80
api group plc annual report 2014
financial statements
no tes to the c ompany financial statements for the year ended 31 march 2014
1 accounting policies continued
foreign currencies
foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the 
transaction foreign exchange gains and losses resulting from the settlement of such transactions and from the translation 
at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit 
and loss account
share‑based payments
the cost of equity‑settled transactions with employees is measured by reference to the fair value at the date at which 
they are granted and is recognised as an expense over the vesting period which ends on the date on which the relevant 
employees become fully entitled to the award fair value is determined by using an appropriate pricing model in valuing 
equity‑settled transactions no account is taken of any vesting conditions other than conditions linked to the price of the 
shares of the company market conditions
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon 
market conditions which are treated as vesting irrespective of whether or not the market condition is satisfied provided 
that all other performance conditions are satisfied
at each balance sheet date before vesting the cumulative expense is calculated representing the extent to which the 
vesting period has expired and management’s best estimate of the achievement or otherwise of non‑market conditions 
and of the number of equity instruments that will ultimately vest or in the case of an instrument subject to market 
conditions be treated as vesting as described above the movement in cumulative expense since the previous balance 
sheet date is recognised in the income statement with a corresponding entry in equity
the financial effect of awards by the company of options over its equity shares to employees of subsidiary undertakings 
are recorded as an increase in its investment in subsidiaries with a credit to equity equivalent to the cost in the subsidiary 
undertakings 
employee benefit trust the “trust”
the company has a discretionary trust established to facilitate the operation of the company executive share option 
schemes and long‑term incentive plans shares in api group plc held by the trust are deducted from equity as treasury 
shares and are recognised at cost amounts received on exercise of these options are also recognised in equity with any 
difference between proceeds from the exercise of these options and the original cost being taken to revenue reserves 
no gain or loss is recognised in the performance statements on the purchase sale issue or cancellation of equity shares
financial instruments
all loans and borrowings are initially recognised at fair value of the consideration received net of issue costs associated 
with the borrowing after initial recognition interest bearing loans and borrowings are subsequently measured at amortised 
cost under the effective interest rate method
the company’s financial instruments are consolidated with those of the group and are incorporated into the disclosures 
in note 22 of the group’s financial statements accordingly the exemption under paragraph 2db of frs 29 from 
disclosing the details in the company financial statements has been applied  81
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
2 investments
subsidiary undertakings
         £’000
cost and carrying value  
at 31 march 2013 and 31 march 2014       29114
details of the principal investments of the company are as follows
name of company    country of incorporation holding 
api laminates limited
 
    uk ordinary shares 
api foils holdings limited
 
   uk ordinary shares 
api foils limited
 
    uk ordinary shares 
api holographics limited
 
   uk ordinary shares 
api overseas holdings limited
 
   uk ordinary shares 
api group services limited
 1
   uk ordinary shares 
api‑stace limited
 2
    uk ordinary shares 
api usa holdings limited
 
   usa common and preferred stocks 
api foils inc
 
    usa common and preferred stocks 
api foils sas
 
    france ordinary shares 
api foils pty limited
 
    australia ordinary shares 
api foils new zealand limited
 
   new zealand ordinary shares 
api foils deutschland gmbh
 
   germany ordinary shares 
api foils italia srl
 
    italy ordinary shares 
api foils asia limited
 
    hong kong ordinary shares 
api folie polska sp z oo
 
   poland ordinary shares 
api optix sro
 3
    czech republic ordinary shares 
  held by subsidiary undertaking 
  operating company  
  intermediate holding company   
1  group management company 
2  property holding company    
3  company controls 50 of the voting rights and share capital   
with the exception of api optix sro the company controls 100 of the voting rights and shares capital of all the 
above companies
all the operating subsidiary undertakings are involved in the principal activities of the group 82
api group plc annual report 2014
3 debtors
         31 march  31 march  
        2014 2013 
        £’000 £’000
amounts falling due after more than one year   
amounts due from subsidiary undertakings     18106 30178
amounts falling due within less than one year   
amounts due from subsidiary undertakings     9596 —
other debtors       171 —
        9767 —
amounts due from subsidiary undertakings after more than one year are stated after an impairment provision of 
£45000000 2013 £34000000
4 creditors – amounts falling due within one year
         31 march  31 march  
        2014 2013 
        £’000 £’000
current instalments on bank loans      — 2776
corporation tax       572 578
amounts due to subsidiary undertakings     22600 22600
accruals       30 251
        23202 26205
corporation tax represents group relief payable
5 creditors – amounts falling due after more than one year
         31 march  31 march  
        2014 2013 
        £’000 £’000
bank loans       — 4978
financial statements
no tes to the c ompany financial statements for the year ended 31 march 2014 83
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
6 pensions and other post‑retirement benefits
historically the api group pension and life assurance fund has been operated as a multi‑employer scheme with 
api group plc as the principal employer figures have not been available to accurately determine each employer’s 
share of the liabilities so under frs 1712 each entity has reported their share under a defined contribution basis in their 
own accounts the consolidation accounts for api group plc have shown the full defined benefit balance sheet and 
associated entries
on 28 march 2014 the other participating employers api laminates limited api holographics limited api foils limited and 
api group services limited de‑participated from the fund liabilities for these entities were apportioned to api group plc 
by means of a flexible apportionment arrangement as allowed using the pension regulator’s framework as api group plc 
is now from 28 march 2014 the sole participating employer the provisions of frs 1712 no longer apply the disclosures 
below have been prepared on the basis that the liabilities were brought on to the balance sheet via the statement of total 
recognised gains and losses at the year end accounting date
          31 march  
         2014  
         £’000
present value of funded obligations       92631 
fair value of scheme assets       80011 
net defined benefit liability before deferred tax      12620 
related deferred tax asset       2531 
net liability in the balance sheet       10089
the fund has not invested in any of the group’s own financial instruments nor in properties or other assets used by the group
there are no amounts recognised in the profit and loss account for the year ended 31 march 2014 as the flexible 
apportionment arrangement was completed on 28 march 2014 2013 £nil 
changes in the present value of the defined benefit obligations are as follows
          31 march  
         2014 
         £’000
opening defined benefit obligation       —
actuarial losses recognising liabilities       92631
closing defined benefit obligation       92631
changes in the fair value of the scheme assets are as follows
          31 march  
         2014  
         £’000 
opening fair value of scheme assets       — 
actuarial gains recognising assets       80011 
closing fair value of scheme assets       80011 
the major categories of scheme assets as a percentage of total scheme assets are as follows
          31 march  
         2014 
          
equities        506 
bonds        262 
hedge funds        139 
property        92 
cash        01  84
api group plc annual report 2014
6 pensions and other post‑retirement benefits continued
the major assumptions used in determining the value of the defined benefit schemes are as follows 
          31 march  
         2014  
          
rate of increase in pensions in payment      235 
rate of increase to deferred pensions       235 
inflation – cpi        235 
discount rate        440 
post‑retirement mortality in years   
member age 65 current life expectancy – male      209 
member age 65 current life expectancy – female      231 
member age 45 life expectancy at 65 – male      227 
member age 45 life expectancy at 65 – female      250 
the mortality assumptions are based on nationally published tables using 120 of the s1pa yob cmi 2013 model with 
125 long‑term rate of improvement 
the expected rates of return for each asset class net of scheme expenses are as follows
          31 march  
         2014 
          
equities        635 
bonds        370 
hedge funds        635 
property        635 
cash        050 
where investments are held in bonds and cash the expected long term rate of return is taken to be the yields generally 
prevailing on such assets at the balance sheet date a higher rate of return is expected on equity investments which is based 
on realistic future expectations rather than on the returns that have been available historically the overall expected long term 
rate of return on assets is then the average of these rates taking into account the underlying asset portfolio of the fund
the agreed contributions for the year ended 31 march 2015 are £700000
an actuarial loss of £12620000 was recognised in the statement of total recognised gains and losses for the year ended 
31 march 2014 the cumulative amount of actual gains and losses in the statement of total recognised gains and losses 
is £12620000
financial statements
no tes to the c ompany financial statements for the year ended 31 march 2014 85
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
7 share capital
allotted called up and fully paid
      31 march 31 march 31 march 31 march  
      2014 2013 2014 2013 
      thousands thousands £’000 £’000
ordinary shares of 1p      76749 76749 767 767
during the current and previous years no further shares were issued
during the current and previous years no options were granted over the ordinary shares full exercise of the options 
granted under the company’s share option schemes would result in the issue not later than september 2018 of 403200 
shares 2013 450450 shares at nil cost 
details relating to share based‑payments are summarised in note 20 of the consolidated financial statements
8 reconciliation of movements on equity
     equity share  share other profit and shareholders’ 
     capital premium reserves loss account  equity 
     £’000 £’000 £’000 £’000 £’000
balance at 1 april 2012    767 7136 8816 11450 28169
shares acquired by employee benefit trust  — — 94 — 94
transferred on exercise of share options  — — 94 94 —
share‑based payments    — — — 85 85
balance from profit and loss account   — — — 1287 1287
balance at 31 march 2013    767 7136 8816 12728 29447
shares acquired by employee benefit trust  — — 32 — 32
transferred on exercise of share optionsltip   — — 34 34 —
share‑based payments    — — — — —
dividends    — — — 518 518
deficit on defined benefit pension scheme  — — — 10089 10089
balance from profit and loss account   — — — 7400 7400
balance at 31 march 2014   767 7136 8818 9487 26208
other reserves
other reserves of £8818000 2013 £8816000 comprise the capital redemption reserve £8846000 and a deficit of 
£28000 in the esop reserve
the capital redemption reserve arose from the cancellation of 549000 preference shares of £1 each £549000 in 
march 1999 and the cancellation of 34570000 deferred shares of 24p £8297000 in the year ended 31 march 2009
the esop reserve relates to shares held by the api group plc no 2 employee benefit trust the “trust” established in 1997 
to facilitate the operation of the company’s executive share schemes during the year the trust acquired 47250 shares for 
a consideration of £32000 these shares were subsequently transferred to an employee in respect of the exercise of nil 
cost options at 31 march 2014 the trust held 2750000 2013 3000000 shares at an average cost of £001 per share and 
a total cost of £28000 2013 £30000 86
api group plc annual report 2014
9 profit attributable to members of the parent company
a profit of £7400000 for the year ended 31 march 2014 2013 £1287000 has been dealt with in the financial statements 
of the parent company as permitted by section 408 of the companies act 2006 the company has not presented its own 
profit and loss account 
fees paid to the auditor in respect of audit services provided to the company for the period amounted to £5000 
2013 £5000
10 dividends
an interim dividend of 07 pence per share 2013 nil was approved by the board on 2 december 2013 and was paid on 
9 january 2014 to equity holders on the register at the close of business on 13 december 2013
a final dividend of 13 pence per share 2013 nil was approved by the board on 2 june 2014 bringing the total dividend in 
the year to 20 pence per share 2013 nil the final dividend is payable on 1 august 2014 to equity holders on the register 
at the close of business on 11 july 2014 this dividend has not been provided for in these financial statements
11 related party transactions
in accordance with paragraph 3c of frs 8 the company has taken advantage of the exemption not to disclose related 
party transactions with wholly‑owned subsidiaries there are no other related party transactions which require disclosure
financial statements
no tes to the c ompany financial statements for the year ended 31 march 2014 87
api group plc annual report 2014  overview
  strategic report
  governance and remuneration
  financial statements
  shareholder information
shareholder information
financial rec ord
     year ended year ended year ended year ended year ended 
     31 march 31 march 31 march 31 march 31 march 
     2014 2013 2012 2011 2010 
     £’000 £’000 £’000 £’000 £’000
continuing operations      
revenue    114712 112426 113935 99963 79192
operating profit before exceptional items   7427 7802 6400 4768 3266
exceptional items    705 1029 — — 626
operating profit    6722 6773 6400 4768 2640
net finance costs    1130 1207 1606 2289 2978
profitloss before taxation   5592 5566 4794 2479 338
tax expensecredit    150 19 36 159 2804
profitloss from continuing operations  5442 5585 4758 2320 2466
discontinued operations      
loss from discontinued operations   — — — 4124 4358
profitloss for the year    5442 5585 4758 1804 1892
attributable to      
profitloss attributable to equity holders of the parent 5442 5585 4758 1708 124
lossprofit attributable to non‑controlling equity interest — — — 3512 2016
total profitloss for the year   5442 5585 4758 1804 1892
the comparative figures above have been restated to reflect the presentation of the results of the china business which 
was sold in the year ended 31 march 2011 as a discontinued operation 
  restated for ias 19 – employee benefits revised 
basic earningsloss per ordinary share pence      
from continuing operations   74 76 64 32 34
from total operations    74 76 64 23 02
the weighted average number of shares in the previous periods has been adjusted to reflect the exercise of warrants at 
below market price
net funds debt £’000    154 2576 3587 8511 18527
gearing     0 11 17 56 107
average number of employees – all businesses  528 543  540 671 691 88
api group plc annual report 2014
registrars and transfer agents
capita irg plc
bourne house 
34 beckenham road 
beckenham  
kent br3 4tu
broker
numis securities limited
the london stock exchange building 
10 paternoster square  
london ec4m 7lt
financial pr
abchurch communications limited
125 old broad street 
london ec2n 1ar
nominated adviser
cairn financial advisers llp
61 cheapside  
london ec2v 6ax
bankers
hsbc bank plc
2nd floor 
4 hardman square 
spinningfields 
manchester m3 3eb 
wells fargo  company
420 montgomery street 
san francisco 
usa 
ca 94104
auditor
ernst  young llp
100 barbirolli square  
manchester m2 3ey
solicitors
eversheds llp
eversheds house 
70‑76 great bridgewater street  
manchester m1 5es
shareholder information
financial calend ar
annual general meeting
to be held at 200 pm on tuesday 15 july 2014 at the offices of eversheds llp at 1 wood street london ec2b 7ws
reports
interim results announcement for six months to 30 september 2014 issued december 2014
interim report for six months to 30 september 2014 circulated december 2014
final results announcement for the year ended 31 march 2015 issued june 2015
annual report for the year ended 31 march 2015 circulated june 2015
capital gains tax
the market value of an ordinary share on 31 march 1982 was 605p
advisers designed and produced by  
wwwlyonsbennettcom 
 
 
 
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cool blue 350gsm supplied by gf smith text pages 
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bleached using a totally chlorine free process tcf or 
elemental chlorine free process ecf and is produced 
in a mill that is certified to iso 14001 environmental 
management standards  
this paper is from responsible sources api group plc
second avenue  
poynton industrial estate  
poynton 
stockport 
cheshire sk12 1nd
tel 44 01625 858 700 
fax 44 01625 858 701
apigroupcom


Summary:
 06
api group plc annual report 2014
overview 
chairman’s statement
•	 further progress on the overall financial 
strength of the group
•	 reintroduction of the dividend after 
a break of more than 10 years
•	 continued investment in operational 
capabilities and performance
introduction
i am pleased to report that the year to march 2014 was 
another solid year for the group and whilst there was a 
modest fall in operating results the overall financial strength 
of the group improved further and our operations have 
benefitted from another year of strong capital investment 
shareholders’ funds increased by 15 and the year saw 
the achievement of two significant milestones no net 
debt at the yearend for the first time in 15 years and the 
reintroduction of a dividend after a break of more than 
10 years
strategic report
during this last financial year new regulations were 
issued by the uk government on the content and 
structure of the narrative to be included in annual reports 
these requirements affect all companies with additional 
requirements for those which are fully listed as an aim 
company we have taken steps to reorganise and enhance 
our commentary in order to meet the objectives of the new 
regulations the new strategic report includes what was 
previously covered under the business review in addition 
to a new section on strategy objectives kpis and the 
business model
board and governance
the board and the composition of its committees 
have remained unchanged throughout the year 
since the end of the financial year the group’s largest 
shareholder steel partners have advised the board that 
luke wiseman no longer acts as their nominee director 
steel partners have not indicated that they intend to 
request a replacement nominee director and the board 
has no reason to believe that they intend to do so in the 
meantime the board continues to place a high value on 
mr wiseman’s contribution and he has agreed to continue as 
a nonexecutive director for the foreseeable future bearing 
in mind the long service of a number of directors it has 
been agreed that the head of the nominations committee 
mr batzer will undertake a review of the board’s 
composition by the end of this calendar year with a view to 
formulating a long term plan for succession details of the 
group’s governance and the roles and responsibilities of the 
board and its committees are included in the governance 
and remuneration section on pages 34 to 44 
dividend
following payment of the interim dividend in january the 
board is pleased to propose a final dividend of 13p per 
share the total fullyear dividend of 20p will be put to 
shareholders for approval at the annual general meeting 
on 15 july 2014 and subject to this approval it is our 
intention that the final dividend will be paid on 1 august 
to shareholders on the register as at 11 july with an 
exdividend date of wednesday 9 july
our people
my thanks go to all five hundred and twenty api employees 
in the various business units and the central team for 
their contribution to another year of solid progress for 
the group 
conclusion
following the distraction and uncertainty of the 2013 sale 
process this year has allowed the group’s management to 
focus on a number of operational improvement and capital 
investment initiatives as well as realising the benefits from 
those actions additional projects are already underway 
aimed at further enhancing capabilities and performance 
the board therefore remains confident in the group’s 
prospects and the opportunity to create further value 
for shareholders 
richard c wright
chairman
3 june 2014