api group plc
annual report 
and accounts 2008
foils
holographics
laminates  api group plc  
annual report  accounts 2008
1
highlights
contents
business review
01 highlights
02 chairman’s statement
04 group overview
05 chief executive’s review
06 financial review
governance
12 directors and advisers
13 directors’ report
16 corporate governance
● 18 month reporting period reflecting change in year end to 31 march
● group sales of £1438m and operating profit before goodwill and
exceptional items of £04m for the 18 months to 31 march 2008  
sales for 12 months to 31 march 2008 declined 78 to £934m 
and operating profit before exceptional items fell £06m to £04m
● operating profit before exceptionals for the last 6 months of £06m
compared to loss of £02m in the previous half year
● £24m of annualised savings achieved from overhead cost reduction
programme well ahead of original target of £10m 
● good progress in europe as a result of lower costs and growth in foils
and holographics  lower demand experienced in the us
● relocation of chinese manufacturing to new purposebuilt facility
substantially complete although results hit by costs and disruption 
to supplies
● pretax loss on continuing operations for the 18 month period of 
£71m £18m loss for 12 months to 30 september 2006 after charging
exceptional costs of £34m for restructuring and asset impairments  basic
loss per share from continuing operations of 167p 89p loss
● net debt reduced by £59m from september 2007 peak of £230m
primarily as a result of £72m net proceeds raised in january’s 
successful open offer to shareholders  f urther debt reduction 
anticipated in 200809 following provisional agreement for disposal 
of surplus property in china
● continued focus on costs and debt reduction in the year ahead 
as well as product and sales development
group financial statements
19 auditor’s report
20 group income statement
21 group statement of recognised
income and expense
22 group balance sheet
23 group cash flow statement
24 notes to the consolidated
financial statements
company financial statements
52 statement of directors’ 
responsibilities
53 auditor’s report
54 company balance sheet
55 notes to the company 
financial statements
59 five year record
60 financial calendar chairman’s statement
the significant changes at api over the last 18 months
have led to a much leaner and more competitive business
api group plc  
annual report  accounts 2008
2
this annual report covers the 18 months to 31 march 2008 reflecting
the change in the year end from the previous date of 30 september  the
period under review was a difficult and challenging one for api although
the board is pleased with the progress that the group has made since the
interim results at the end of september 2007  specifically during the
last six months we have strengthened the management team improved
our financial position and reduced the cost base which the group is
carrying into the new financial year 
as previously announced our shareholders overwhelmingly supported
the open offer which raised net proceeds of £72m in january 2008 in
order to strengthen the company’s balance sheet  the raising of new
equity occurred simultaneously with the renegotiation of the group’s
main lending facility and the combined refinancing package provides
adequate working capital for the group’s foreseeable requirements and
sufficient flexibility to support a turnaround in financial performance
also in january 2008 the admission of the company’s shares to aim will
enable the group to maintain a cost of compliance which is more
appropriate to its current size and resources  
results summary
sales from continuing operations for the 18 months ended 31 march 2008
were £1438m  sales for the 12 months to 31 march 2008 were £934m
down 78 on the prior year reflecting contract losses in laminates weak
demand in the us and operational difficulties in china partially offset by
steady growth in our european foils and holographics businesses    
operating profit before exceptional items was £04m for both the 18
months and 12 months ended 31 march 2008 compared with £10m for
the 12 months to 31 march 2007  on yeartoyear comparatives the
improvement in trading in europe and reduced central costs were offset by
declines in the us and asia pacific and especially disruption in china
associated with the relocation to the new factory 
after two lossmaking six month periods at the operating level the last
half year has seen a return to overall profitability due to a much improved
financial performance in europe reduced overhead costs and improved
productivity partly countered by lower sales in the us and stock write
downs costs and disruption caused by the factory relocation in china    
after charging exceptional items of £34m and net finance costs of £41m
the loss before tax for continuing operations for the 18 months to 31
march 2008 was £71m loss of £18m in year to 30 september 2006
exceptional items for the period included restructuring expenses of £20m
and a noncash asset impairment charge of £19m relating to a suspended
it project  the basic loss per share from continuing operations for the 18
month period was 167p per share
net borrowings at 31 march 2008 were £171m representing gearing of
62  compared to the position at the last interim results in september
2007 net borrowings were down £59m from a peak of £230m and
gearing of 116  the improvement in net borrowings primarily reflects
the net receipt of £72m from the open offer 
following the relocation of the group’ s operations in shanghai to their new
site on the outskirts of the city provisional agreement has been reached
with a branch of the local government to sell the vacated property  net
proceeds will initially be used to repay loans raised to finance the new factory
investment project and return the chinese business to a debtfree position
dividend
in view of the continuing need to reduce debt and reinvest in the
business the board is not recommending the payment of a dividend   
board
the board was strengthened by the appointment of andrew t urner as group
chief executive with effect from 15 october 2007  after leading the group’ s api group plc  
annual report  accounts 2008
3
refinancing andrew has already made significant progress in reducing
corporate and operating costs and driving performance improvement  
andrew robertson resigned as group finance director on 20 march 2008
and recruitment of a replacement is underway  in the interim period the
group is benefitting from the services of a wellqualified acting chief
financial officer richard scully  
on 30 april 2008 brian birkenhead and martin o’connell stepped down
as nonexecutive directors in line with a decision to reduce the size of the
board  brian and martin have served the board with distinction since
their appointments and the board would like to express its thanks for the
significant contributions which they have made and to wish them well for
the future
going forward the composition of the board will be more appropriate
for a company of api’s size and resources whilst allowing us to maintain
our commitment to high standards of corporate governance
employees customers and suppliers
after the challenges of the past 18 months api’s employees have
renewed their focus on performance and results  their hard work and
commitment is evident in the recent progress we have made in our
businesses  on behalf of the board and shareholders i would like to
thank them for their continuing contribution  
the board would also like to convey its appreciation to api’s customers
and suppliers who have remained loyal trading partners through recent
difficult times 
outlook
the successful open offer and renegotiated banking facilities have restored
the group’ s liquidity and strengthened the balance sheet  we expect to make
further progress in improving gearing in the coming 12 months through
strong cash generation from the businesses and disposal of surplus assets  
general demand for the group’ s products remains good and outside of the
us there are no signs yet of an adverse impact from macro economic factors
whilst there is much work to be done in restabilising our operation in china
after the relocation to its new facility the majority of our businesses are
carrying positive momentum into the new financial year   the recent overhead
reduction programme has lowered the cost base by £24m on an annualised
basis and ongoing performance improvement initiatives are expected to
deliver further benefits 
overall the significant changes to the group over the last 18 months and
especially in the last half year have led to a much leaner and more
competitive business  the board believes the group will continue to make
progress and is well placed to deliver improved returns to shareholders 
richard wright
nonexecutive chairman group overview
api is a producer and distributor of speciality foils and laminated materials used
primarily in the graphics and packaging industries the main end use markets
are in premium fast moving consumer goods such as alcoholic drinks
perfumery cosmetics healthcare speciality food and tobacco these sectors use
high impact graphics and finishes on labelling and packaging to reinforce 
and authenticate brand identity 
api group plc  
annual report  accounts 2008
4
the group is also a major supplier to the greeting card sector and also
produces a range of holographic anticounterfeit solutions for vouchers
tickets official documents and currency
foils is the group’s main business area where api has a global network
of manufacturing and distribution operations serving customers
worldwide
success factors include selection of api metallic holographic and
pigmented foil finishes by brand owners stock availability and service
for packaging and graphics material manufacturers and performance
reliability on a range of manufacturing machinery used for foil
application
competitiveness in the bespoke security holograms sector depends on
technical innovation manufacturing to the highest tolerances and quality
levels complete integrity and effective partnership with a range of security
solutions providers 
as the european market leader in filmtoboard lamination api has the
reputation and scale to handle packaging requirements for some of the
world’s leading brands
key success factors in this market are technical knowhow low conversion
costs and effective supply chain solutions for large volumes of materials
in response to increasing concern about the environmental impact of
packaging api has acquired the worldwide licence for a fully bio
degradable and compostable laminate called portabio 
poynton
laminates
● european scale
● lamination of foil 
metalised film to board
● 35 of group sales
● global scale ●  metallic holographic  pigmented foils
● bespoke holograms  security devices ●  65 of group sales
foils
california
kansas
new jersey
livingston 
salford
france
germany
italy
hong kong
shanghai
new
zealand
australia
manufacturing and distribution
distribution
plus agents and 3rd party
distributors serving more
than 60 countries chief executive’s review
api group plc  
annual report  accounts 2008
5
financing 
the refinancing which was completed in january 2008 has re
established the cash and covenant headroom which management
needs to operate the business as well as significantly reducing the
overall level of group debt   debt will reduce further in 200809 when
consideration is received from the sale of the group’s surplus land asset
in shanghai china 
cost reduction
in november 2007 the management team launched an overhead cost
reduction programme with an initial savings target of £1m per annum
the programme has now been concluded with the achievement of
annualised savings of approximately £24m
a review of centrallycontrolled costs including group functions shared
service costs and central initiatives billed to operating units yielded savings
of approximately £15m per annum the majority effective from january
2008 with the balance completing progressively during the remainder of
the first quarter of 2008  in addition streamlining of our uk operations
has yielded a reduction of 24 people from our indirect labour headcount and
a further 9 staff have been transferred from indirect to direct labour to
provide additional production capacity  the saving in overhead costs
associated with these changes is approximately £09m per annum effective
april 2008  total restructuring costs in relation to the november 2007
programme amounted to £12m out of total restructuring costs of £20m
for the 18 month period 
group results
group sales for the 18 months to 31 march 2008 were £1438m and
operating profit before exceptional items was £04m  on a 12 month
comparative basis to 31 march group sales reduced by 78 to £934m
68 reduction at constant exchange rates this decline was due
primarily to contract losses in the european laminates business at the
end of the prior year and lower sales from operations in the us and
china  operating profit for the 12 months was down £06m to £04m
after a doubling of profits in europe to £20m and a £06m reduction in
central costs were offset by declines in asia pacific and the us  the last
six months were particularly strong in europe although the gains were
partly offset by lower profitability in china and a particularly weak period
of trading in the us  the last six month’s operating profit before
exceptionals was £06m compared to a loss of £02m in the previous
half year
good progress has been made in the last six months in
addressing the group’s financial problems streamlining the
business and starting to turn around the performance of our
operations in europe  
europe
external sales from our european operations were £958m for the 18
month period with an operating profit before exceptional items of
£25m  in the year to 31 march 2008 european operating profits
increased by £10m compared to the prior year to £20m on sales down
43 to £626m  on 12 month comparatives foils and holographics
grew by a combined 11 and operating profit advanced 13 despite
significant operational problems in holographics in the first half of the
year  volume growth was driven by advances in security holographics
and by sales from our continental distribution units including the
newlyestablished operation in italy  laminates returned to profit
despite a 15 fall in sales responding to contract losses at the
beginning of 2007 with a deep restructuring programme and
significant cost and efficiency gains  the major part of the
improvement in performance in europe occurred in the last three
months aided by a strong recovery in holographics a significant new
product line developed between our laminates and holographics
businesses and tighter control of costs  
north america
us sales for the 18 months were £333m with operating profit before
exceptional items of £16m  on a 12 month basis us sales declined by 14
and operating profit declined by 44 against strong prior year
comparatives  the impact of exchange rates was more pronounced in the
us than other regions and on a constant currency basis sales and operating
profit declined by 9 and 40 respectively year on year  the last six
months were particularly difficult as the businesses suffered the effects of
certain customers in the greeting card sector moving manufacturing to the
far east and a general slow down in market activity  
asia pacific
18 months sales in asia pacific were £147m with an operating loss
before exceptional items of £03m  results in asia pacific suffered from
general disruption to trading associated with the relocation project in
china  by the end of april 2008 relocation of the china foils business
to its new 300000 square foot facility in the jiading industrial zone of
shanghai was substantially complete and management was focusing on
restabilising production and restoring normal service levels to customers
results in the last 6 months in china were disproportionally impacted by
adjustments arising from a thorough balance sheet review underlying
profitability also declined due to the impact on export margins of
exchange rates and the new vat regime general cost inflation and
competitive conditions in the home market financial review
api group plc  
annual report  accounts 2008
6
revenue
revenue from continuing operations for the 18 months to 31 march 2008
was £1438m  for the 12 months to 31 march 2008 revenue from
continuing operations was down 78 to £934m including 10 due to
the effect of exchange rate movements  revenue in europe fell by 43
on a local currency basis sales in the us and china reduced by 9 and
14 respectively 
operating profit 
operating profit before exceptional items for the 18 months to 31 march
2008 was £04m  for the 12 months to 31 march 2008 operating profit
before exceptional items was down £06m to £04m  gross profit reduced
by £14m though gross margins were maintained at 204 of sales as
the volume reduction was offset by improved sales mix of work and a
proportionate reduction in direct labour costs  the loss of gross profit was
partly offset by a reduction in other operating costs of £08m
exceptional items for the 18 months to 31 march 2008 were £34m with
a net cash impact in the period of £15m  redundancy and restructuring
costs included £08m relating to the retrenchment of the laminates
business implemented during the 6 months to 31 march 2007 and £12m
relating to the group cost reduction programme initiated in the last
calendar quarter of 2007  
exceptional items also include an impairment of £19m against a previous
investment in a groupwide it project  the system has so far been
implemented in two european locations but the project has been suspended
the board has taken the view that there will be no further implementation
in the foreseeable future requiring a full provision against the value of
‘construction in progress’ relating to business units where implementation
chief executive’s review continued
18 months to
31 march 2008
£’000
12 months to
30 september 2006
£’000
12 months to 
31 march 2008
unaudited
£’000
12 months to 
31 march 2007
unaudited
£’0000
revenue 143783 101979 93391 101253
operating profit before exceptional items 408 994 437 988
exceptional items 3417 863 2616 1221
operating profit  loss from continuing
operations
3009 131 2179 233
prospects
looking forward we are encouraged by demand for the group’ s products
the skills commitment and teamwork of our global workforce and the
loyalty of our customer base  
faced with strong inflationary pressure on raw material and utility prices
we will continue to bear down on costs through improved utilisation of key
manufacturing assets across the group efficiency improvement
programmes focused especially on waste an energetic purchasing function
and an ongoing review of headcount and overhead expenses  in addition
further steps are likely to be required to raise selling prices if the current rate
of increase in input costs persists 
the group continues to invest in research and development to enhance
the performance of its products and to bring new finishes and effects as
well as environmentallyfriendly packaging options to brand owners  a
number of exciting and profitenhancing innovations are in the pipeline
some of which leverage technical synergies between the group’s
businesses in standard foils holographic foils and laminates 
directionally we remain committed to the strategy of building on api’s
global position in the foils market whilst concentrating for the
foreseeable future on efficient execution profit growth and improvement
in the group’s overall financial condition 
andrew turner
group chief executive
the financial results are presented for the 18 months to 31 march 2008 the
comparatives are for the year ended 30 september 2006  in order to make a
more meaningful comparison the financial review also includes certain
unaudited pro forma financial information for the 12 months to 31 march 2008
for comparison with the 12 months to 31 march 2007  api group plc  
annual report  accounts 2008
7
18 months to 
31 march 2008 
£’000
12 months to 
30 september 2006 
£’000
12 months to
31 march 2008
unaudited 
£’000
12 months to
31 march 2007
unaudited 
£’000
net finance costs 4126 1924 2873 2468
loss on continuing activities before taxation 7135 1793 5052 2701
tax credit  expense 407 735 783 670
loss from continuing operations 6728 2528 4269 3371
loss from discontinued operations 1130 230 1130 127
loss for the period 7858 2758 5399 3498
basic loss per share continuing operations 167p 89p 97p 116p
has been shelved  these exceptional costs are partly offset by a gain on the
sale of a surplus property asset in charlotte us of £03m and a net credit of
£02m in relation to the relocation of the shanghai factory
finance costs
net finance costs in the 18 months ended 31 march 2008 were £41m
including £01m relating to the pension fund £03m for 12 months to 30
september 2006  for the 12 months to 31 march 2008 finance costs
increased by £04m to £29m including £03m amortisation of costs
associated with bank refinancing  in addition finance costs included realised
and unrealised net exchange losses of £04m 2006 nil arising on forward
foreign currency contracts and an unrealised loss on an interest rate swap of
£03m 2006 nil  these exchange and interest rate losses have been
reported within interest costs since they do not meet the requirements for
hedge accounting under ifrs  api group plc  
annual report  accounts 2008
8
financial review continued
18 months to 
31 march 2008 
£’000
12 months to
30 september 2006
£’000
12 months to
31 march 2008
unaudited 
£’000
12 months to
31 march 2007
unaudited 
£’000
ebitda after exceptional items 4370 3358 3497 3020
working capital movements 1528 2806 362 1451
pension contributions above the amounts
recognised in the income statement
1489 835 981 911
income taxes paid 359 656 93 628
other movements 37 109 49 132
net cash flow from operating activities 1031 830 2736 162
other selected cash flow information
purchase of property plant and equipment 8180 6140 4533 7106
interest paid 3280 2047 2319 2186
proceeds from share issues 7278 53 7278 –
net debt 17149 15523 17149 20824
taxation
for the 18 months to 31 march 2008 the group reported a loss before
discontinued operations and taxation of £71m and an after tax loss from
continuing operations of £67m  the tax credit £04m comprised a tax
charge attributable to overseas operations of £05m year to september
2006 £06m and a deferred tax gain of £09m £01m loss  deferred tax
in the period includes recognition of a deferred tax asset of £09m relating
to carried forward tax losses in the us  in addition further us federal tax
losses carried forward at 31 march 2008 amount to 122m 118m
which are available for offset against future taxable profits in the us 
at 31 march 2008 the group had uk capital allowances of £273m
£269m available to offset against future taxable profits at the rate of
250 per annum on a reducing balance basis and tax losses arising in
the uk of £57m £20m available for offset against future taxable
profits  deferred tax assets in respect of uk tax losses and deferred
capital allowances have not been recognised  
discontinued operations
the group made a loss from discontinued operations of £11m in the
18 months ended 31 march 2008 comprising a £075m writeoff of
deferred consideration relating to the disposal of the converted products
division in january 2005 and £035m in legal and settlement costs
connected with disputes arising from various business disposals 
earnings per share 
basic earnings per share from continuing operations were a loss per share
of 167p for the 18 months to 31 march 2008 and a loss per share of
97p for the 12 months ended 31 march 2008 116p 12 months ended
31 march 2007
cash flow and borrowings
net cash inflow from operating activities was £10m for the 18 month
period  ebitda after exceptional items was £44m offset by an increase
in working capital of £15m and additional pension contributions of £15m
for the 12 month period to 31 march 2008 net cash inflow from operating
activities increased by £25m to £27m  ebitda after the cash impact of
exceptional items increased from £30m to £35m  working capital
reduced by £04m largely due to lower inventory levels 
capital expenditure was £82m in the 18 months to 31 march 2008
compared to depreciation of £55m and included £53m expenditure
on the new facility in china  at the year end outstanding spend on the
china project scheduled for completion in 200809 amounted to
£35m  elsewhere in the group capital expenditure in the coming year
is expected to be well below depreciation as management focuses on
efficiency improvements and better utilisation of existing assets
cash interest expense was £33m for the 18 months and on an annual
basis increased from £22m to £23m for the 12 months ending 31
march 2008  net receipts from the share issue completed in january
2008 amounted to £72m  
net debt financial liabilities excluding the fair value of derivatives less
cash increased by £16m to £171m at 31 march 2008  however good
progress has been made in reducing debt by £59m from a peak of
£230m at 30 september 2007  api group plc  
annual report  accounts 2008
9
capital management
the primary objective of the group’s capital management is to ensure that
it maintains healthy capital ratios in order to support its business to achieve 
its strategic objectives the group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions and the
financial position of the group no changes have been made to the group’ s
objectives policies or processes during the periods ending 31 march 2008
and 30 september 2006 the group monitors capital using normal financial
ratios primarily gearing debt to ebitda and cash cover 
in january 2008 the company made an open offer of ordinary shares
raising £72m net of costs from equity shareholders  these proceeds were
used to reduce borrowings and resulted in a reduction in the gearing ratio
from 116 at 30 september 2007 to 62 at 31 march 2008 
the ratio of net debt to earnings before interest tax depreciation and
amortisation was 49 times at 31 march 2008 substantially reduced from
100 times based on 12 month trailing ebitda after exceptional items at
the last interim accounts on 30 september 2007  the group was within
banking covenants and the directors have agreed a plan for improving
debt cover in the next 12 months based on improved operational
performance and disposal of surplus assets
financial risk management
the group continually reviews its approach to the management of financial
risk  control over treasury and risk management is exercised by the board
through the setting of policy and the regular review of forecasts and financial
exposures  financial instruments in particular forward contracts and currency
swaps are used to manage the financial risks associated with the group’s
underlying business activities and the financing of those activities  the group
does not undertake any trading activity in financial instruments 
liquidity
the group’s policy is to ensure that bank and other funding facilities are
sufficient to meet foreseeable peak borrowing requirements  facilities are
in place to finance independently the main geographic regions within the
group – usa china and europe  in the us the group’s banking facilities
comprise a term loan of 11m repayable over a 5 year period from april
2006 and a working capital facility up to 70m capped in accordance with
the level of working capital at any one time  at 31 march 2008 the amount
available was 34m  lending is secured over us assets  in china the
group has bank loans of rmb35m repayable in 2008  it is anticipated that
repayment will be financed from the sale of land on the old manufacturing
site and the loans are secured against that property  in the uk the group
renegotiated its bank facilities in january 2008 to enable it to continue to
finance its operations  the group’ s uk facilities at 31 march 2008 totalled
£210m comprising a term loan of £45m repayable in quarterly instalments
to 1 october 2009 a term loan of £40m repayable on 31 january 2010
a revolving credit facility of £75m to 30 november 2009 and a multioption
facility up to £50m repayable on 18 january 2009  uk borrowings are
secured against the group’s uk assets 
interest rates
at 31 march 2008 the group had gross borrowings of £198m which
were funded on a floating rate basis  the group uses interest rate swaps
to fix a proportion of its interest costs and hedge against future changes
in floating rates  taking account of applicable floatingtofixed interest
rate swaps a one percentage point change in market rates would have
an impact of approximately £01m on the group’s annual interest bill   
foreign currency exchange rates
the group’s activities are global in nature with a significant proportion
of the group’s revenues and purchases arising in countries other than
the uk or denominated in currencies other than sterling  whenever
possible receipts and payments in foreign currencies are matched to
create natural hedges  forward contracts are used to hedge foreign
exchange exposures arising on the differences between forecast receipts
and payments in foreign currencies 
the balance sheets of foreign subsidiaries are translated into sterling at
closing exchange rates  any gains and losses on translation are recorded
in reserves  in order to limit translation exposure and the resulting impact
on shareholders’ funds the group aims to use available currency facilities
to borrow in those currencies in which the group has significant net
assets  whilst borrowings in the period were predominantly held in
sterling the group expects to increase the amount of foreign currency
borrowings in the next financial year  the group does not hedge the
translation effect of exchange rate movements on the income statement 
the exchange rates used for the translation of the results and assets of
the us chinese and euro based operations are shown below  the impact
on shareholders’ equity during the 18 months to 31 march 2008 of
changes to rates used for the translation was a gain of £02m compared
to a loss of £08m for the year to 30 september 2006 principal exchange
rates used in the financial statements were
average closing
rate to
£1
18 months
to 31 march
2008
12 months    
to 30 september
2006
as at 31
march
2008
as at 30
september
2006
us  198 180 199 187
euro 144 146 125 147
rmb 1502 1446 1394 1476
pensions
the group operates a number of pension schemes for its employees  at 31
march 2008 the group’s ias19 gross pension liability was £35m 2006
£109m with a net liability of £25m 2006 £76m after accounting for a
deferred tax asset of £10m 2006 £33m  the main uk defined benefit
scheme is the api group plc pension and life assurance fund  the ias19
liability has been calculated using a discount rate of 65 2006 51 
no new members have been admitted to the fund since october 2006 and
the trustees are currently reviewing the triennial valuation at 30 september
2007 the results of which are expected later this year  the previous
valuation at 30 september 2004 calculated a funding deficit of £60m on
a continuing basis  in order to reduce the deficit the group makes annual
contributions into the scheme of 4 per cent of pensionable earnings along
with additional contributions of £03m per year  the group also makes
regular contributions of 8 per cent of pensionable earnings in respect of
the accrual of future service benefits and also pays all pension related
administration fees on behalf of the fund api group plc  
annual report  accounts 2008
10
financial review continued 
sales revenue
sales revenue has declined over the last two years due to contract losses
in laminates weakening demand in the us and recent operational
problems in china connected with the business relocation  these adverse
trends have been partly offset by growth in european foils and
holographics  future sales growth depends on restoring output in china
especially increasing shipments to the group’s european distribution
units continued advances in security holographics and new product
developments in laminates 
key performance indicators
operating cash inflow
net cash flow from operating activities improved in the last 6 months to
£21m as a result of advances in profitability and lower inventory levels
future cash flows depend on improving trading results especially in
europe and china and continued progress in reducing working capital
net debt
debt levels have been building over the last two years as a consequence of
the group’ s £11m investment programme in its new manufacturing facility
in china and disappointing trading performance in europe  the reduction
in the last 6 months reflects primarily the receipt of £72m net proceeds
from the open offer which completed in january 2008  debt is expected
to reduce further in the next 6 months as a result of the sale of surplus
property assets in china  
operating profit 
operating profit improvement in the last 6 months is due to reduced costs
and improved productivity in the european businesses combined with lower
central costs offset by lower profitability in the us and a recent sharp fall in
the contribution from china  the full benefit of the recent cost reduction
programme is expected to show in the new financial year along with the 
reestablishment of profitable trading in china  
60000
50000
40000
30000
20000
10000
0
£000
300906 310307 300907 310308
6 months to
1500
1000
500
0
500
£000
300906 310307 300907 310308
6 months to
25000
20000
15000
10000
5000
0
£000
300906     310307    300907   310308
as at
3000
2000
1000
0
1000
2000
£000
300906     310307     300907     310308
6 months to
0
20
40
60
80
pence per share
300906 310307 300907 310308
6 months to
earnings per share continuing operations
the negative earnings per share over the last two years is due to interest
and exceptional costs in excess of operating income  the loss per share
in the latest 6 month period is diluted by an increase in the number of
shares in issue from the effective date of the open offer  future
prospects for earnings per share depend on a combination of improved
trading performance debt reduction reduced exceptional costs and
utilisation of unrecognised tax losses    principal risks and uncertainties 
this section describes the key risks which could affect the business
operations and the financial results of the group  
a significant proportion of the group’s raw material and conversion costs
are affected by the price of oil and gas  an increase or volatility in the price
of these commodities could adversely affect the group’s results  whilst
purchasing policies seek to reduce exposure to commodity prices
significant input cost increases could prove irresistible as well as difficult to
pass through to customers due to competitive pressures in most end
markets
for a large proportion of group activity manufacturing costs are incurred
in a different currency to the currency of sale  cost competitiveness is
therefore sensitive to certain exchange rate movements especially the
strength of sterling relative to the euro and the chinese remnimbi
relative to the euro and us dollar  
a significant proportion of the group’s sales are in developed western
economies including the uk  in line with the general move of manufacturing
to lower cost countries certain of the group’s immediate and enduse
customers routinely consider relocating facilities to regions where the group’ s
infrastructure is less well developed such as eastern europe and asia  in
addition the business relies for a proportion of its turnover on a small number
of key customers and supply contracts  any accelerated reduction in the
accessible customer base downturn in the fortunes of major customers or
lack of success in maintaining or replacing existing major contracts could
have a material adverse effect upon the group’ s operating results
api group plc  
annual report  accounts 2008
11
whilst there is no direct link between group sales prospects and the
general economic climate levels of customer activity may be impacted by
changes in consumer confidence and spending patterns  it is therefore
unlikely that financial results could be insulated from any prolonged
downturn or recession in the group’s main markets
the group operates in an international market and as such is exposed to
risks that are both external and internal to the group  these risks include
but are not limited to failure to comply with legislative and regulatory
requirements fire or equipment failure and the actions of customers and
competitors  the group is also exposed to political and economic risks
in the regions it operates where changes to government policy can affect
the group’s business and results  the board has adopted a standard
process for identification assessment and management of business risks
and this is described in the directors’ report  however there can be no
absolute assurance that such procedures will be effective in identifying or
controlling each of the operational risks faced by the business 
whilst the directors believe that the terms of the group’s banking
facilities provide adequate headroom and opportunity for compliance
failure to meet covenant and other conditions could result in the
company being forced to accept materially less attractive lending terms
and to implement measures designed to accelerate the repayment of
debt to the detriment of shareholder value   api group plc  
annual report  accounts 2008
12
directors and advisers
directors
rc wright chairman
a turner group chief executive
aj walker
la wiseman
m batzer
nonexecutive
secretary
r hart
registered office
second avenue poynton industrial estate
poynton stockport cheshire sk12 1nd
telephone 44 0 1625 858700
registered number 169249
bankers
barclays bank plc city office business centre
p o box 228 51 mosley street manchester m60 3dq
nominated adviser and broker
numis securities limited
the london stock exchange building
10 paternoster square london ec4m 7lt
auditors
ernst  young llp 
100 barbirolli square manchester m2 3ey
solicitors
addleshaw goddard llp 
100 barbirolli square manchester m2 3ab
registrars and transfer agents
capita irg plc bourne house
34 beckenham road beckenham kent br3 4tu api group plc  
annual report  accounts 2008
13
the directors present their annual directors’ report and the financial
statements for the eighteen months ended 31 march 2008  this follows
a change in the company’s accounting reference date from 30
september to 31 march
results and dividends
the group’ s results for the eighteen month period are set out in the group
income statement on page 20  the group incurred a pretax loss on
continuing operations of £71m 12 months to 30 september 2006
£18m after charging net exceptional costs of £34m 2006 £09m  the
loss after tax and minority interest attributable to equity shareholders
amounted to £80m 2006 £35m  the total loss per ordinary share was
195p 2006 95p in the light of the group’ s results the directors do not
recommend the payment of a dividend  it is proposed that the loss for the
period be set against reserves
principal activities business review 
and future developments
api group plc is the holding company of a group of companies which
manufacture and distribute speciality foils and laminated materials used
primarily in the graphics and packaging industries  the directors’ report
should be read in conjunction with the chief executive’ s review on pages
5 to 6 and the financial review on pages 6 to 11 which set out an
appraisal of the group’s activities performance and development
including key performance indicators  the principal operating companies
of the group during the period are listed on page 56
principal risks and uncertainties
the group’s principal risks and uncertainties are set out in the financial
review on page 11 and the board’s approach to risk management is set
out in the discussion on corporate governance on pages 16 to 18 
directors
the directors of the company as at the date of this report are
richard wright 62 nonexecutive chairman joined the board on 3
september 2001 and was appointed chairman on 1 february 2006  he has
previously held senior executive roles with the ford motor company
including director european operations at jaguar cars limited director of
sales ford motor company limited and presidentmanaging director of ford
belgium nv  he is the former chair of the board of national savings and
investments and is currently chair corporate relations board and member
of the business school board at warwick business school university of
warwick  he is a nonexecutive director of sonas investments limited  mr
wright is a member of the companys nominations committee
andrew turner 45 group chief executive officer joined the board
on 15 october 2007  mr turner is a graduate mechanical engineer with
an mba and has over 14 years’ experience in the packaging sector
before joining api he was global vice president marketing  sales for
the tobacco packaging sector of alcan the international packaging
group prior to that he was divisional managing director with field
group plc the printed paperboard packaging company with
responsibility for operations in the uk germany and spain
andrew walker 56 senior independent director joined the board on 25
july 2003 he has wide public company experience both in manufacturing
and service companies he was previously group chief executive of
mckechnie plc  prior to joining mckechnie he was group chief executive
of south wales electricity joining them from ti group plc mr walker is
currently nonexecutive chairman of bioganix plc and a nonexecutive
director of ultra electronic holdings plc plastics capital plc manganese
bronze holdings plc delta plc fountains plc porvair plc and brintons limited
he is chairman of the companys remuneration and audit committees
luke wiseman 41 nonexecutive director joined the board on 1
september 2006  mr wiseman is responsible for european research at
steel partners uk limited  steel partners ii lp a private investment
partnership and its affiliates have a significant beneficial interest in the
shares in the company  he is a nonexecutive director of barbican group
holdings and certain of its affiliated companies  mr wiseman is a
member of the companys audit committee
max batzer 63 nonexecutive director joined the board on 10 october
2007  mr batzer is a portfolio manager at wynnefield capital inc which
has a significant beneficial interest in the company’s shares  he is also a
director of cornell companies inc a company listed on the new y ork stock
exchange and integral wealth management and has previously held
positions as chairman of the board and ceo of diagnostic health services
director and executive committee member of simmons airlines inc a
publicly traded regional airline and president of general hide and skin
corporation a worldwide commodity trading organization  mr batzer is
chairman of the companys nominations committee
the above persons were all directors of the company as at 31 march 2008
david walton was an executive director of the company until his resignation
on 17 august 2007  andrew robertson was an executive director of the
company from his appointment on 1 april 2007 until his resignation on 20
march 2008  brian birkenhead and martin o’connell were each non
executive directors of the company for the whole of the period and
resigned from the board on 30 april 2008
the board is also currently served by richard scully who whilst not a director
of the company is fulfilling the role of chief financial officer for the group
and attends board meetings at the invitation of the directors  the board has
instigated a process to appoint a permanent group finance director
under the company’ s articles of association all the directors are subject to
retirement by rotation and to reelection by shareholders at intervals of no
more than three years  any director appointed during the year is required
to retire and seek reelection at the next annual general meeting  richard
wright having been last reappointed to the board at the 2005 annual
general meeting is retiring at the 2008 annual general meeting and being
eligible has indicated that he will offer himself for reelection  in addition
andrew t urner and max batzer were each appointed to the board following
the annual general meeting held in 2007 and accordingly will retire at the
2008 annual general meeting and have also each indicated that they will
offer themselves for reelection at that meeting  no other person is required
by the companys articles of association to retire by rotation or otherwise at
the 2008 annual general meeting  as part of the annual evaluation of the
board as reported at page 16 the board concluded that each of the directors
offering themselves for reelection continue to demonstrate commitment to
their particular roles and perform effectively and their reelection is
accordingly recommended by the board
directors’ report directors’ interests
the interests of the existing directors and their immediate families in the
shares of the company including share options were as shown below
during the period andrew turner received an award of options over
800000 shares under the api group plc 2006 performance share plan
“the psp”  the award is in the form of “nil cost” options over shares
and no price is payable for the grant of the options  the right to exercise
options is subject to the achievement of certain targets for financial
performance over a three year period commencing 1 april 2008
from 1 april 2008 to 22 may 2008 there were no changes in the above
interests  all the above interests were beneficial at the above dates andrew
t urner was at 15 october 2007 31 march 2008 and 22 may 2008 deemed
to be interested as a discretionary beneficiary of the company’s no 2
employee benefit t rust in all the ordinary shares in the company held by that
trust on those dates  save as mentioned above no director had any interest
in any share capital of the company or of any subsidiary 
during the period no director had an interest in any significant contract
relating to the business of the company or its subsidiaries other than the
service contracts of certain directors and qualifying third party
indemnities granted by the company to each of the directors as
described in further detail on page 16
during the period the company maintained liability insurance for its
directors and officers and also maintained liability insurance for the
benefit of the trustees of the group pension scheme    
substantial interests in shares
the company has been notified of the following substantial interests in
the issued ordinary shares of the company as at the date of this report
api group plc  
annual report  accounts 2008
14
except as disclosed above as at the date of this report the directors were
not aware of any interests amounting to 3 or more of the issued share
capital of the company 
safety health and the environment “she”  
the group operates its businesses in a manner which aims to eliminate
the possibility of its activities causing harm to people and the
environment  the group has established management systems and is
advised by qualified personnel to ensure that each of its businesses meets
or exceeds all local legal and regulatory requirements in the country or
countries in which it operates  audits by external experts are undertaken
periodically to verify whether she compliance obligations are met and
to identify opportunities for continuous improvement  progress towards
completion of any recommendations arising from such audits is
monitored by the audit committee
the group chief executive is accountable to the board for the overall
supervision of the group’s she management programme
the environment
the preservation and protection of the environment is an issue of
fundamental importance for the company and each of the operating
businesses in the group  the group’s environmental responsibilities are
managed through detailed internal systems with a number of the
group’s operating units maintaining certification to the international
environmental management standard iso 14001  during 2007 the
laminates business achieved certification to the forestry stewardship
council ‘chain of custody’ standard
api group complies with all applicable environmental legislation and the
group continues to invest in systems and equipment to ensure that
environmental performance is measured and improved in the key areas
of eliminating solvent emissions energy efficiency noise waste and
packaging management and soilgroundwater protection  in excess of
50 of manufacturing waste is recycled  
health and safety
the board regards the provision by the group of safe workplaces as a
fundamental business responsibility and one which it takes very seriously
with the assistance of qualified personnel and input from safety
committees all employees of the group are involved in implementing
the company’s health and safety management system
skill development is a key element of the group’s approach and it
encourages this through the organisation and funding of both internal
and external health and safety training  during 2007 this included
nationally accredited health and safety training for managers and
employees as well as hazardspecific training for environmental
protection fire safety workplace transport control of hazardous
substances and personal protective equipment
a key performance indicator monitored by the board is the incidence of
accidents at work causing an employee to be absent for one day or more
lost time accidents  the number of lost time accidents recorded for the
12 months to 31 march 2008 was thirteen compared to nineteen for the
prior 12 month period
directors’ report continued
shares
310308  300906 
options over shares
310308  300906
a turner
appointed 15
october 2007
26741 na 800000
see below
na
rc wright
373591 60000 – –
a j walker
165986 41666 – –
l a wiseman
– – – –
m bazter
appointed 10
october 2007
– na – na
 of issued
share capital
steel partners ii lp 357
wynnefield capital inc 315
berggruen holdings limited 91
credit agricole cheuvreux international limited 45 api group plc  
annual report  accounts 2008
15
employees
the board is aware of the importance of good relationships and
communication with employees  the group continues to inform
employees of the progress of the businesses recognising the value
which can be created where there is a common awareness of the
financial and economic factors affecting performance  the company
encourages continuing consultation and communication at site level so
that it may take the views of its employees into account when making
decisions which are likely to affect their interests training and
development of employees remains a priority and the group also
operates a number of incentive schemes which encourage employees to
contribute directly to the achievement of the group’s goals and reward
individual and collective success 
both employment policy and practice in the group are based on non
discrimination and equal opportunity irrespective of age race religion
sex colour sexual orientation and marital status  the group endeavors
to employ and train disabled people and their aptitudes and abilities are
realistically assessed and taken fully into account when suitable vacancies
occur  disabled employees have the same opportunities as other
employees so far as training career development and promotion are
concerned 
the board has implemented a “disclosure policy” to ensure that staff of
the group may in confidence raise any allegations of harassment or
bullying or any other breach of the company’s policies or values
arrangements are in place for the proportionate and independent
investigation of any such allegations and for appropriate followup action
where required
the company’s pension arrangements for the ukbased employees of
the group are summarised in note 18 to the consolidated financial
statements
payments to suppliers
the group’s policy is normally to pay suppliers according to agreed terms
of business  t erms are agreed with suppliers upon entering into contracts
and the group’s policy is to adhere to the payment terms providing the
supplier meets its obligations  the company is a holding company and
had no trade creditors at the end of the financial period
charitable and political donations
charitable donations made by the group during the period amounted to
£1244 2006 £650   there were no political donations
going concern
the directors consider that after making appropriate enquiries and at
the time of approving the financial statements there is a reasonable
expectation that the group has adequate resources to continue in
operational existence for the foreseeable future  the directors therefore
continue to adopt the going concern basis in preparing the financial
statements
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements for
each financial period  the directors have elected to prepare the financial
statements for the group in accordance with international financial
reporting standards as adopted by the european union and
implemented in the uk  the financial statements are required by law to
give a true and fair view of the state of affairs of the company and of the
group as at the end of the financial period and of the profit or loss of the
group for that period  in preparing those financial statements the
directors are required to
● select suitable accounting policies and then apply them consistently
● make judgments and estimates which are reasonable and prudent
● state whether applicable international financial reporting standards
have been followed and
● prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the group will continue in
business
the directors confirm that the accompanying financial statements 
comply with the above requirements
the directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the group and to enable them to ensure that the financial
statements comply with the companies act 1985 and going forward
the companies act 2006  they are also responsible for safeguarding the
assets of the group and hence for taking reasonable steps to prevent
and detect fraud and other irregularities
directors’ statement as to disclosure of
information to the auditor
the directors who were members of the board at the time of approving
the directors’ report are listed on page 12 having made enquiries of
fellow directors and of the company’s auditor each of those directors
confirms that as at the date of this report and as far as each director is
aware there is no relevant audit information of which the company’s
auditor is unaware and each director has taken such steps as he might
reasonably be expected to take as a director in order to make himself
aware of any relevant audit information and to establish that the
company’s auditor is aware of such information 
auditor
ernst  young llp has expressed its willingness to continue in office as
auditor and in accordance with section 4891 of the companies act
2006 a resolution proposing its reappointment will be put to the
members at the 2008 annual general meeting
by order of the board
roger hart
secretary
poynton
cheshire
22 may 2008 api group plc  
annual report  accounts 2008
16
on 12 february 2008 the listing of the company’ s shares on the official list
of the london stock exchange was cancelled and they were simultaneously
listed on the alternative investment market aim  aim rules do not require
the company to comply with the corporate governance best practice
provisions set out within section 1 of the combined code on corporate
governance “the combined code”  nevertheless the directors believe
that good corporate governance remains essential for the company and
accordingly they have considered the provisions of the combined code in
the context of the company’s size and resources  set out below are the
principles of the combined code which the board has adopted for the future
and how the group has applied those principles 
the board
the board currently comprises a nonexecutive chairman one executive
director and three nonexecutive directors as reflected in the
biographical details of the directors given in the directors’ report on
page 13 the directors have a wide range of business financial general
and international experience which they can contribute to the group
richard wright and andrew walker are considered to be independent
of management and free from any business or other relationships which
could materially interfere with the exercise of their independent
judgment  luke wiseman and max batzer have each been designated
by the board as nonindependent by virtue of their associations with steel
partners ii lp and wynnefield capital inc respectively both major
shareholders
the board appoints one of the independent nonexecutive directors to
be the senior independent director  during the period andrew walker
fulfilled this role 
the chairman is primarily responsible for the workings of the board and
ensuring that its role is achieved and he is not involved in day to day
operational issues  the division of responsibility between the chairman
and the group chief executive has been set out in writing and agreed by
the board  save for matters reserved for decision by the board the group
chief executive with the support of the chief financial officer is
responsible for the running of the group’s business carrying out the
agreed strategy adopted by the board and implementing specific board
decisions relating to the operation of the group
the board meets on a regular basis and during the period ended 31
march 2008 and in addition to other ad hoc meetings as required met
formally 17 times  appropriate documentation and financial information
is provided on a monthly basis and also in advance of each board
meeting  this normally includes monthly management accounts reports
on current trading and papers on matters in respect of which the board
makes decisions or is invited to give its approval  regular reports are
given to the board on such matters as insurance and treasury issues legal
matters pensions and safety health and environmental issues  specific
presentations are also made on business or strategic issues when
appropriate regular presentations are received from the general
manager of each of the group’s principal operating businesses in respect
of its market position current trading and prospects and from other
senior managers responsible for key functions or projects
the board has a formal schedule of reserved powers which it retains for
board decisionmaking on a range of key issues including the
formulation of strategy financial reporting and controls corporate
governance matters treasury and risk management and the
remuneration policy for executive directors and other senior executives
of the group  a procedure has been adopted for directors to obtain
independent professional advice where appropriate at the cost of the
company and all directors have unrestricted access to the company
secretary  in relation to nonreserved matters the board is assisted by a
number of committees with delegated authority  further details in
respect of each of the audit committee and the remuneration
committee are set out on pages 17 and 18 respectively  the other
principal standing committee is the nominations committee which is
responsible for nominating candidates both executive and non
executive for the approval of the board to fill vacancies or appoint
additional persons to the board  it is also responsible for making
recommendations regarding the composition and balance of the board
and succession planning for other senior executives 
during the period the nominations committee comprised richard
wright andrew walker and brian birkenhead and the group chief
executive  previously david walton and since his appointment andrew
turner on 15 may 2008 the board reviewed the membership of the
committee in the light of the changes to the board and the committee
now comprises richard wright andrew turner and max batzer who now
chairs the committee
the board has formally adopted an induction programme for new
directors which is tailored to each new director who joins the board and
includes briefings regarding the activities of the group and visits to the
operating units  the board has also established a formal process led by
the chairman for the annual evaluation of the performance of the board
its principal committees and individual directors following which the
board takes any appropriate action to ensure that the performance of
the board as a whole of its principal committees and of each individual
director is such that each can perform at the optimum level for the
benefit of the company  
throughout the period and as at the date of this report the articles of
association of the company contained provisions for the benefit of
directors officers and employees of the company and its subsidiary and
associated companies to indemnify them out of the assets of the
company to the full extent allowed by the law against liabilities incurred
by them in the course of carrying out their duties  in addition and in
accordance with the company’s memorandum and articles of
association the company has granted qualifying third party indemnities
to each of its current directors in respect of any liability which attaches
to them in defending proceedings brought against them to the extent
permitted by the companies acts copies of such indemnities are
available for inspection upon application to the company secretary
accountability and audit
all the directors are equally accountable under law for the proper
stewardship of the group’s affairs  the board acts in a way which allows
all directors to bring their independent judgment to bear on issues of
strategy performance and resources including key appointments and
standards of conduct
corporate governance api group plc  
annual report  accounts 2008
17
audit committee
during the period the audit committee comprised brian birkenhead
andrew walker and richard wright  it was chaired by mr birkenhead
until his resignation from the board with effect from 30 april 2008 and
with effect from 1 may 2008 andrew walker became its chairman on
and from 15 may 2008 luke wiseman replaced richard wright as a
member of the committee  the committee meets at least three times
per year and the company’s auditor is normally in attendance andrew
walker is experienced in chairing audit committees
the audit committee reviews a wide range of accounting and financial
reporting matters on behalf of the board  it reviews the internal and
external audit activities monitors compliance with statutory requirements
for financial reporting and reviews the half year and annual financial
statements before they are presented to the board for approval  the
terms of reference of the audit committee also include keeping under
review the scope and results of the audit and its cost effectiveness and
the independence and objectivity of the auditor  the committee is also
required to review the nature and extent of nonaudit services provided
by the auditor in order to seek to balance the maintenance of objectivity
and value for money the effectiveness of the group’s internal control
systems and the scope and remit of the company’s internal auditor  at
least once each year the audit committee meets with the auditor
without the executive directors present the audit committee also
monitors progress towards implementation of any recommendations
arising from audits by external experts of the groups compliance with its
she obligations
during the period the committee conducted a review of various matters
including the following
● the companys interim and annual financial statements and formal
announcements on financial performance before submission to the
board for approval
● the groups risk profile and the effectiveness of the groups
accounting systems and internal controls
● the groups internal audit process the effectiveness of the internal
auditor and the 200708 internal audit plan
● the provision of audit and nonaudit services provided by the external
auditor their audit fees and their independence and objectivity and
● the groups treasury operations including net debt levels facility
headroom compliance with banking covenants and level and
appropriateness of hedging arrangements
internal control and risk management 
the board has overall responsibility for ensuring that the group maintains
a system of internal controls and the audit committee on behalf of the
board has formally reviewed the effectiveness of the internal control
system of the group for the period ended 31 march 2008
the key processes used in doing so included the following
● review of group risk assessment reports
● production and regular updating of summaries of key controls
● review of reports prepared throughout the period by the internal
auditor
● biannual confirmations from local management that the procedures
set out in the group’s financial policy manual have been followed
● reporting of the outcome of the audit committee meetings by the
chairman of the audit committee to the board and the board
receiving minutes of those meetings and
● review of the role of insurance in transferring risk from the group
there is an ongoing process for identifying evaluating and managing
the business risks faced by the group and this process was in place for
the period under review and up to the date of this directors’ report
business risks are identified and evaluated through senior management’s
ongoing review of progress against strategic objectives agreed with the
management team of each business in the group and a system of formal
risk assessments within each part of the group 
the group has also established and operates a number of key internal
financial control procedures including the promulgation and policing of
a written framework of financial reporting and operating procedures in
accordance with generally accepted accounting practice appropriate
central review and approval procedures in respect of major areas of risk
such as acquisitions and disposals major contracts capital expenditure
litigation treasury management taxation and environmental issues
detailed budgeting procedures with an annual budget approval monthly
consideration of actual results compared with budgets and forecasts
regular reviews of rolling profit and cash flow forecasts regular reviews
of the group capital expenditure plan and reporting of legal and
accounting developments
the internal audit function is contracted out to an external supplier to
ensure a robust and effective service  the internal auditor is tasked to
focus on areas of greatest risk as identified and approved from time to
time by the audit committee
reviews of the control checklists and comprehensive management
information are performed on a timely basis  any significant weaknesses
are brought to the attention of the audit committee and the board and
corrective action agreed and implemented the control checklists are
reviewed and substantially verified by the internal auditor api group plc  
annual report  accounts 2008
18
remuneration committee 
during the period the committee comprised andrew walker and brian
birkenhead and was chaired by andrew walker  brian birkenhead
resigned from the board with effect from 30 april 2008 and richard
wright was appointed to the committee in his place  richard wright
was replaced by max batzer on 15 may 2008  the committee therefore
comprises with effect from 15 may 2008 andrew walker and max
batzer and is chaired by andrew walker  on occasions and for matters
not related to him the group chief executive is consulted on proposals
relating to the remuneration of members of the group’s senior
management team and he also attends meetings of the committee 
by invitation 
the committee on behalf of the board and with input from external
advisers as appropriate determines all elements of the remuneration
packages of the executive directors and the framework and broad policy
for the remuneration of other members of the senior executive
management of the group to ensure that they are fairly rewarded for
their individual contribution to the company’s overall performance
approves the terms of service contracts with executive directors approves
any compensation arrangements resulting from the termination by the
company of a director’s service contract and approves the grant of long
term incentives  
no director was involved in deciding the level and composition of his
own remuneration  the remuneration of nonexecutive directors other
than the chairman is reviewed and determined by the other members
of the board  the remuneration of the chairman is reviewed and
determined on behalf of the board by the committee with the chairman
playing no part in the related decisions
following the listing of the company’s shares on aim the board has
resolved that the annual fees payable to richard wright as nonexecutive
chairman should be reduced from £70000 to £50000 and that the
annual fees payable to andrew walker as senior independent director
should be reduced from £32500 to £30000 each change to take effect
from 1 may 2008
relations with shareholders
the company is committed to maintaining open effective and ongoing
communications with shareholders presentations are made to
institutional shareholders covering the interim and preliminary results
and the company seeks regular contact with its major shareholders
any significant events affecting the group and any appropriate updates
on current trading are published as appropriate  all shareholders have
the opportunity formally and informally to put questions at the
company’s annual general meeting and the chairman usually makes
a statement on current trading conditions at that meeting  it is the
company’s practice to propose separate resolutions on each
substantially separate issue at the annual general meeting the
chairmen of the remuneration nominations and audit committees
normally attend the annual general meeting to answer questions which
may be relevant to the work of those committees the chairman also
advises shareholders on the proxy voting details for each of the
resolutions after the resolution is put to the meeting 
the company’s financial calendar is set out on page 60  the
company’s website provides financial and other business information
about the group including an archive of past announcements and
annual reports and share price information
corporate governance continued api group plc  
annual report  accounts 2008
19
independent auditor’s report to the
members of api group plc
we have audited the group financial statements the“financial
statements” of api group plc for the period ended 31 march 2008
which comprise the group income statement the group balance sheet
the group cash flow statement the group statement of recognised
income and expense and the related notes 1 to 26  these financial
statements have been prepared under the accounting policies set out
therein   
we have reported separately on the parent company financial statements
of api group plc for the period ended 31 march 2008
this report is made solely to the companys members as a body in
accordance with section 235 of the companies act 1985  our audit
work has been undertaken so that we might state to the companys
members those matters we are required to state to them in an auditors
report and for no other purpose  to the fullest extent permitted by law
we do not accept or assume responsibility to anyone other than the
company and the companys members as a body for our audit work for
this report or for the opinions we have formed 
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the
group financial statements in accordance with applicable united
kingdom law and international financial reporting standards ifrss as
adopted by the european union are set out in the statement of directors’
responsibilities 
our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and international standards on
auditing uk and ireland 
we report to you our opinion as to whether the financial statements give
a true and fair view and whether the group financial statements have been
properly prepared in accordance with the companies act 1985 we also
report to you whether in our opinion the information given in the directors
report is consistent with the financial statements  the information given
in the directors’ report includes that specific information presented in the
chief executive’s and financial reviews that is cross referred from the
results and dividends section of the directors’ report
in addition we report to you if in our opinion we have not received all
the information and explanations we require for our audit or if
information specified by law regarding directors’ remuneration and other
transactions is not disclosed 
we read other information contained in the annual report and consider
whether it is consistent with the audited group financial statements  the
other information comprises only the chairman’s statement the chief
executive’s review the financial review and the directors’ report  we
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements  our responsibilities do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on
auditing uk and ireland issued by the auditing practices board  an
audit includes examination on a test basis of evidence relevant to the
amounts and disclosures in the financial statements  it also includes an
assessment of the significant estimates and judgments made by the
directors in the preparation of the group financial statements and of
whether the accounting policies are appropriate to the group’s and
company’s circumstances consistently applied and adequately disclosed 
we planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the group
financial statements are free from material misstatement whether caused
by fraud or other irregularity or error  in forming our opinion we also
evaluated the overall adequacy of the presentation of information in the
group financial statements
opinion
in our opinion 
● the group financial statements give a true and fair view in
accordance with ifrss as adopted by the european union of the
state of the group’s affairs as at 31 march 2008 and of its loss for the
period then ended  
● the group financial statements have been properly prepared in
accordance with the companies act 1985 and 
● the information given in the directors report is consistent with the
financial statements 
ernst  young llp
registered auditor
manchester
22 may 2008
auditor’s report api group plc  
annual report  accounts 2008
20
eighteen
months ended year ended
31 march 30 september
2008 2006
note £’000 £’000
continuing operations
revenue 2 143783 101979
cost of sales 115120 80656 
gross profit 28663 21323
other operating costs 28255 20329 
operating profit before exceptional items 2 408 994
exceptional items 5 3417 863
operating loss  profit from continuing operations 23 3009 131 
finance revenue 6 292 85
finance costs 6 4418 2009
4126 1924
loss on continuing activities before taxation 7135 1793 
tax credit  expense 7 407 735
loss from continuing operations 6728 2528
discontinued operations
loss from discontinued operations 8 1130 230
loss for the period 7858 2758
attributable to
profit attributable to minority equity interest 137 695 
loss attributable to equity holders of the parent 7995 3453
total loss for the period 7858 2758
earnings per ordinary share pence
basic loss per share from continuing operations 9 167 89
diluted loss per share from continuing operations 9 167 89
basic loss per share on loss for the period 9 195 95
diluted loss per share on loss for the period 9 195 95
group income statement
for the eighteen months ended 31 march 2008 api group plc  
annual report  accounts 2008
21
group statement of recognised income and expense
for the eighteen months ended 31 march 2008
eighteen
months ended year ended
31 march 30 september
2008 2006
note £’000 £’000
exchange differences on retranslation of foreign operations 489 972
actuarial gains  losses on defined benefit pension plans 18 5936 1311
tax on items taken directly to or transferred from equity 7 1852 393
net income  expense recognised directly in equity 4573 1890
loss for the period 7858 2758
total recognised income and expense for the year 3285 4648
attributable to
equity holders of the parent 3734 5176
minority equity interests 449 528
3285 4648 api group plc  
annual report  accounts 2008
22
31 march 30 september
2008 2006
note £’000 £’000
assets
noncurrent assets
property plant and equipment 10 30901 30500
intangible assets  goodwill 11 6480 6480
deferred tax assets 7 2062 3263
39443 40243
current assets
trade and other receivables 12 17440 20112
inventories 13 11760 13195
other financial assets  forward currency hedging contracts 108 –
cash and shortterm deposits 14 2131 4909
31439 38216
total assets 70882 78459
liabilities
current liabilities
trade and other payables 15 18762 22306
financial liabilities 16 6794 1758
income tax payable 588 379
provisions 17 83 306
26227 24749
noncurrent liabilities
financial liabilities 16 13041 18674
deferred tax liabilities 7 363 659
provisions 17 70 93
defined benefit pension plan deficit 18 3482 10879
16956 30305
total liabilities 43183 55054
net assets 27699 23405
equity
called up share capital 19 8998 8612 
share premium 20 7136 244 
other reserves 20 298 298
foreign exchange reserve 20 188 366
retained earnings 20 5568 9179
api group shareholders’ equity 21812 17967
minority interest 20 5887 5438
total equity 27699 23405
signed on behalf of the board
a turner
22 may 2008
group balance sheet
at 31 march 2008 api group plc  
annual report  accounts 2008
23
group cash flow statement
for the eighteen months ended 31 march 2008
eighteen
months ended year ended
31 march 30 september
2008 2006
note £’000 £’000
operating activities
group operating loss  profit 3009 131
adjustments to reconcile group operating profit to
net cash flows from operating activities
operating loss from discontinued operations – 230
depreciation of property plant and equipment 5498 3457
impairment of property plant and equipment 1881 –
profit on disposal of property plant and equipment 263 22
sharebased payments 300 131
difference between pension contributions paid and amounts 
recognised in the income statement 1489 835
decrease  increase in inventories 1611 870
decrease  increase in trade and other receivables 1211 523
decrease in trade and other payables 4118 1120
movement in provisions 232 293
cash generated from  used in operations 1390 174
income taxes paid 359 656
net cash flow from operating activities 1031 830
investing activities
interest received 184 85
purchase of property plant and equipment 8180 6140
sale of property plant and equipment 730 244
sale of subsidiary undertakings 984 –
net cash flow from investing activities 6282 5811
financing activities
interest paid 3280 2047
dividends paid to minority interests – 487
proceeds from share issues 7278 53
new borrowings 2330 1956
repayment of borrowings 3459 –
net cash flow from financing activities 2869 525
decrease in cash and cash equivalents 2382 7166
effect of exchange rates on cash and cash equivalents 51 116
cash and cash equivalents at the beginning of the period 14 3346 10396
cash and cash equivalents at the end of the period 14 1015 3346 api group plc  
annual report  accounts 2008
24
notes to the consolidated financial statements
1 group accounting policies
authorisation of financial statements and statement 
of compliance with ifrs
the group’s financial statements for the eighteen months ended 31
march 2008 were authorised for issue by the board of directors on 22
may 2008 and the balance sheet was signed on the board’s behalf 
by a turner  
api group plc is a public company incorporated and domiciled in england
 wales  the company’s ordinary shares are traded on the alternative
investment market of the london stock exchange  
basis of preparation
the group’s financial statements have been prepared in accordance 
with international financial reporting standards ifrs issued by the
international accounting standards board iasb  the group has applied
optional exemptions available to it under ifrs 1
the principal accounting policies which follow set out those policies
which apply in preparing the financial statements for the eighteen
months ended 31 march 2008  these policies have been consistently
applied to all periods presented unless otherwise stated   
four interpretations issued by the international financial reporting
interpretations committee ifric are effective for the current period  these
are ifric 7 “applying the restatement approach under ias 29 “financial
reporting in hyperinflationary economies” ifric 8 “scope of ifrs 2”
ifric 9 “reassessment of embedded derivatives” and ifric 10 “interim
financial reporting and impairment”  the adoption of these interpretations
has not led to any changes in the group’s accounting policies 
during the period the iasb and ifric have issued certain standards and
interpretations which have an effective date after the commencement of
the current financial period 1 october 2006  these are amendment to
ifrs 2 – vesting conditions and cancellations ifrs 3 business
combinations revised january 2008 ifrs 7 financial statements
disclosures and the consequential amendments to ias 1 presentation of
financial statements ifrs 8 operating segments ias 1 revised
presentation of financial statements ias 23 revised borrowing costs
ias 27 consolidated and separate financial statements revised january
2008 ifric 12 service concession arrangements ifric 13 customer
loyalty programmes ifric 14 ias 19 – the limit on a defined benefit
asset minimum funding requirements and their interaction 
these standards and interpretations have not been adopted in these
financial statements  the directors do not anticipate that the adoption
of these standards and interpretations will have a material impact on the
group’s financial statements on initial adoption the impact of ias1
revised will be disclosure only 
ifrs 7 will be adopted in the financial statements for the year ended 31
march 2009  all other standards and interpretations listed above will be
adopted in the financial statements for the year ended 31 march 2010
the consolidated financial statements are presented in sterling and all
values are rounded to the nearest thousand £’000 except when
otherwise indicated
significant judgements and estimates
the preparation of the financial statements requires management to
make judgements estimates and assumptions that effect the amounts
reported for assets and liabilities as at the balance sheet date and the
amounts reported for revenues and expenses during the period
however the nature of estimation means that actual outcomes could
differ from those estimates  details regarding judgements which have
the most significant effect on the amounts recognised in the financial
statements are covered in the notes to the accounts
basis of consolidation
the consolidated accounts comprise those of the parent company and
its subsidiary undertakings for the eighteen months ended 31 march
2008  the results for the subsidiary undertakings are included for the
full period except where control is acquired or sold during the period
when results are included from or to the date of acquisition or sale
all intercompany balances and transactions including unrealised profits
arising from intragroup transactions have been eliminated in full
minority interest represents the portion of profit or loss and net assets in
subsidiaries that is not held by the group and is presented separately
within equity in the consolidated balance sheet separate from parent
shareholders’ equity
business combinations and goodwill
on the acquisition of a business fair values are attributed to the net
assets acquired  goodwill arises where the fair value of the consideration
given for a business exceeds the fair value of such net assets 
goodwill arising on acquisitions is capitalised and subject to impairment
review both annually and when there are indications that the carrying
value may not be recoverable  between 5 october 1997 and 1 october
2004 goodwill was amortised over its estimated useful life  such
amortisation ceased on 30 september 2004  the group’s policy before
5 october 1997 was to eliminate goodwill arising upon acquisitions
against reserves  under ifrs 1 and ifrs 3 such goodwill will remain
eliminated against reserves
for the purposes of impairment testing goodwill is allocated to the
related cashgenerating units monitored by management  where the
recoverable amount of the cashgenerating unit is less than its carrying
amount including goodwill an impairment loss is recognised in the
income statement
revenue recognition
revenue represents the value of goods sold to third parties excluding
value added tax less estimated rebates returns and settlement discounts
it is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer and the amount of revenue can be
reliably measured  this is normally the date of despatch api group plc  
annual report  accounts 2008
25
1 group accounting policies continued
exceptional items
exceptional items are material items which derive from events or
transactions that fall within the ordinary activities of the group and which
need to be disclosed by virtue of their size or incidence
property plant and equipment
property plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses  the group’s policy is
to write off the difference between the cost of each item of property
plant and equipment and its residual value systematically over its
estimated useful life  annual reviews are made of the estimated
remaining lives and residual values of individual productive assets taking
account of commercial and technological obsolescence as well as normal
wear and tear  under this policy it is impractical to indicate average asset
lives exactly but the indicative ranges are as follows
● freehold buildings and long leasehold property – 14 to 50 years
● plant and machinery – 5 to 20 years
● office and it equipment – 3 to 10 years
freehold land is not depreciated  
the carrying values of property plant and equipment are reviewed for
impairment if events or changes in circumstances indicate the carrying
value may not be recoverable
an item of property plant and equipment is derecognised upon disposal
or when no future economic benefits are expected to arise from the
continued use of the asset  any gain or loss arising on derecognition of
the asset calculated as the difference between the net disposal proceeds
and the carrying amount of the item is included in the income statement
in the year the item is derecognised 
as permitted by ifrs 1 property previously revalued before the
transition date of 1 october 2004 has been treated as deemed cost at the
transition date 
borrowing costs are not capitalised
intangible assets
intangible assets acquired separately from a business are capitalised at
cost intangible assets acquired with a business acquisition are
capitalised at fair value at the date of acquisition if the asset is separable
or arises from contractual or other legal rights and its fair value can be
measured reliably  the useful lives of intangible assets are assessed as
finite or indefinite 
the carrying values of intangible assets are reviewed annually for
impairment or if events or changes in circumstances indicate the carrying
value may not be recoverable  intangible assets created within the
business are not capitalised and expenditure is charged against income
as it is incurred  
research costs
research costs are expensed as incurred  
leases
leases where the lessor retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases and rentals
payable are charged in the income statement on a straight line basis over
the lease term
inventories
inventories are stated at the lower of cost and estimated net realisable
value  cost is determined on a first in first out basis  cost of work in
progress and finished goods comprises the cost of raw materials direct
labour and overheads attributable to the production of stock  net
realisable value comprises the estimated selling value less selling costs
trade and other receivables
trade and other receivables are recognised and carried at original invoice
value less an allowance for any amounts which may not be collectible
should an amount become uncollectible it is written off to the income
statement in the period in which it is identified
cash and cash equivalents
cash and cash equivalents principally comprise funds held with banks
and other financial institutions with an original maturity of three months
or less  for the purpose of the consolidated cash flow statement cash
and cash equivalents consist of cash and cash equivalents as defined
above net of outstanding bank overdrafts
financial liabilities  interestbearing 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 pretax rate that reflects current market
assessments of the time value of money and where appropriate the risks
specific to the liability  where discounting is used the increase in the
provision due to the passage of time is recognised as a finance cost api group plc  
annual report  accounts 2008
26
notes to the consolidated financial statements continued
1 group accounting policies continued
taxation
current tax assets and liabilities are measured at the amount expected 
to be recovered from or paid to the taxation authorities based on tax rates
and laws that are enacted or substantively enacted by the balance sheet date
deferred income tax is recognised on all temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts
in the financial statements with the following exceptions
● where the temporary difference arises from the initial recognition of
goodwill or of an asset or liability in a transaction that is not a
business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss
● in respect of taxable temporary differences associated with
investments in subsidiaries where the timing of the reversal of the
temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future and
● deferred income tax assets are recognised only to the extent that it
is probable that taxable profit will be available against which the
deductible temporary differences carried forward tax credits or tax
losses can be utilised
deferred income tax assets and liabilities are measured on an
undiscounted basis at the tax rates that are expected to apply when the
related asset is realised or liability is settled based on tax rates and laws
enacted or substantively enacted at the balance sheet date
income tax is charged or credited directly to equity if it relates to items
that are credited or charged to equity  otherwise income tax is
recognised in the income statement
pensions and other postretirement benefits
the cost of providing benefits under the defined benefit pension plans is
determined separately for each plan using the projected unit credit
method which attributes entitlements to benefits to the current period
to determine current service cost and to the current and prior periods
to determine the present value of defined benefit obligation and is
based on actuarial advice  past service costs are recognised in profit or
loss on a straight line basis over the vesting period or immediately if the
benefits have vested  when a settlement eliminating all obligations for
benefits already accrued or a curtailment reducing future obligations as
a result of a material reduction in the scheme membership or a reduction
in the future entitlement occurs the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or
loss recognised in the income statement during the period in which the
settlement or curtailment occurs 
the interest element of the defined benefit pension cost represents the
change in present value of scheme obligations resulting from the passage of
time and is determined by applying the discount rate to the opening present
value of the benefit obligation taking into account material changes in the
obligation during the year  the expected return on plan assets is based on
an assessment made at the beginning of the year of long term market returns
on scheme assets adjusted for the effect on the fair value of plan assets of
contributions received and benefits paid during the year  the difference
between the expected return on plan assets and the interest cost is
recognised in the income statement as other finance income or expense
actuarial gains and losses are recognised in full in the statement of
recognised income and expense in the period in which they occur
the defined benefit pension liability in the balance sheet comprises the
total for each plan of the present value of the defined benefit obligation
using a discount rate based on high quality corporate bonds less any
past service cost not yet recognised and less fair value of plan assets out
of which the obligations are to be settled directly  fair value is based on
market price information and in the case of quoted securities is the
published bid price  
contributions to defined contribution schemes are recognised in the
income statement in the period in which they become payable 
share based payments
the cost of equitysettled transactions with employees is measured by
reference to the fair value at the date at which they are granted and is
recognised as an expense over the vesting period which ends on the
date on which the relevant employees become fully entitled to the award
fair value is determined by an external valuer using the montecarlo
pricing model  in valuing equitysettled transactions no account is taken
of any vesting conditions other than conditions linked to the price of
the shares of the company market conditions
an expense is recognised in the income statement for all awards
irrespective of whether or not the market condition is satisfied provided
that all other performance conditions are satisfied
at each balance sheet date before vesting the cumulative expense is
calculated representing the extent to which the vesting period has
expired  the movement in cumulative expense since the previous balance
sheet date is recognised in the income statement with a corresponding
entry in equity   api group plc  
annual report  accounts 2008
27
1 group accounting policies continued
employee share option trust “esop trust”
the company has a discretionary trust established to facilitate the
operation of the company’s executive share option schemes  shares in
api group plc held by the esop trust are classified in shareholders’ equity
and are recognised at cost  amounts received on exercise of these
options are also recognised in equity with any difference between
proceeds from the exercise of these options and the original cost being
taken to revenue reserves  no gain or loss is recognised in the financial
statements on the purchase sale issue or cancellation of equity shares
foreign currencies 
the assets and liabilities of overseas subsidiary undertakings are
translated into sterling at rates ruling at the balance sheet date  income
and expenses are translated at the average rates for the period  the
exchange differences arising on the translation of the financial statements
of foreign subsidiary undertakings are taken directly to a separate
component of equity  on disposal of a foreign entity the deferred
cumulative amount recognised in equity relating to that particular foreign
operation is recognised in the income statement  
transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction  monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance
sheet date  all translation differences are taken to the income statement
derivative financial instruments and hedging
the group uses derivative financial instruments such as forward currency
contracts and interest rate swaps to hedge its risks associated with foreign
currency and interest rate fluctuations  such derivative instruments are
measured at fair value on the date which the derivative contract is entered
into and are subsequently remeasured at fair value at the balance sheet
date  derivatives are carried as assets if the fair value is positive and liabilities
if the fair value is negative
the fair value of forward currency contracts is calculated by reference to
current forward exchange rates for contracts with similar maturity profiles
the fair value of interest rate swaps is determined by reference to market
values for similar instruments
hedge accounting is adopted when the hedging relationship is formally
designated and documented on inception  such hedges are expected to
be highly effective in offsetting changes in fair value or cash flows and are
assessed on an ongoing basis to determine whether they have been highly
effective during the reporting period for which they were designated
during the periods to 31 march 2008 hedge accounting has not been
applied gains and losses arising from the changes in the fair value of
derivatives that do not qualify for hedge accounting are taken to finance
revenue or finance costs in the income statement  api group plc  
annual report  accounts 2008
28
notes to the consolidated financial statements continued
2 segmental analysis
the primary segment reporting format is determined to be geographical  at 31 march 2008 the group is organised into three distinct
independently managed geographic segments in accordance with the location of assets europe north america and asia pacific  secondary segmental
information is reported by business segment 
transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties
primary reporting format
by geographic segment
eighteen months ended
31 march 2008 year ended 30 september 2006
continuing and total continuing discontinued total
£’000 £’000 £’000 £’000
total revenue by origin
europe 100113 68367 – 68367
north america 33796 25958 129 26087
asia pacific 15863 12775 – 12775
149772 107100 129 107229
intersegmental revenue
europe 4353 3115 – 3115
north america 513 494 – 494
asia pacific 1123 1512 – 1512
5989 5121 – 5121
external revenue by origin
europe 95760 65252 – 65252
north america 33283 25464 129 25593
asia pacific 14740 11263 – 11263
segment revenue 143783 101979 129 102108
external revenue by destination
uk 50528 34398 14 34412
continental europe 42350 25467 – 25467
americas 30953 25769 106 25875
asia pacific 17002 12681 9 12690
africa 2950 3664 – 3664
143783 101979 129 102108
no revenue arises from discontinued businesses in the eighteen months ended 31 march 2008 
all revenue is derived from the sale of goods api group plc  
annual report  accounts 2008
29
2 segmental analysis continued
eighteen months ended 31 march 2008 year ended 30 september 2006
continuing discontinued total continuing discontinued total
£’000 £’000 £’000 £’000 £’000 £’000
operating profit  loss 
europe
before exceptional items 2481 – 2481 205 – 205
exceptional items 790 – 790 597 – 597
1691 – 1691 392 – 392
north america
before exceptional items 1560 – 1560 1521 53 1468
exceptional items 297 – 297 242 177 419
1857 – 1857 1279 230 1049
asia pacific
before exceptional items 289 – 289 1276 – 1276
exceptional items 238 – 238 –––
51 – 51 1276 – 1276
central costs
before exceptional items 3344 – 3344 2008 – 2008
exceptional items 3162 – 3162 24 – 24
6506 – 6506 2032 – 2032
total operating profit  loss before 
exceptional items 408 – 408 994 53 941
exceptional items 3417 – 3417 863 177 1040
segment result
total operating profit  loss 3009 – 3009 131 230 99
loss on disposal of discontinued operations – 1130 1130 –––
profit  loss before finance costs 
and taxation 3009 1130 4139 131 230 99
net finance costs 4126 – 4126 1924 – 1924
loss before taxation 7135 1130 8265 1793 230 2023
tax credit  expense 407 – 407 735 – 735
loss for the period 6728 1130 7858 2528 230 2758 api group plc  
annual report  accounts 2008
30
notes to the consolidated financial statements continued
2 segmental analysis continued
eighteen months ended
31 march 2008 year ended 30 september 2006
continuing and total continuing discontinued total
£’000 £’000 £’000 £’000
assets and liabilities
assets
europe 36322 45887 – 45887
north america 13618 14726 – 14726
asia pacific 16641 9674 – 9674
segment assets 66581 70287 – 70287
unallocated 4301 8150 22 8172
70882 78437 22 78459
liabilities
europe 18781 29021 – 29021
north america 2128 2978 – 2978
asia pacific 1488 1585 – 1585
segment liabilities 22397 33584 – 33584
unallocated 20786 21470 – 21470
43183 55054 – 55054
other segment information
capital expenditure
europe 2219 2280 – 2280
north america 668 1468 – 1468
asia pacific 5293 2392 – 2392
8180 6140 – 6140
depreciation
europe 3676 2413 – 2413
north america 1022 617 41 658
asia pacific 800 386 – 386
5498 3416 41 3457 api group plc  
annual report  accounts 2008
31
2 segmental analysis continued
secondary reporting format
by business segment
eighteen months ended
31 march 2008 year ended 30 september 2006
continuing and total continuing discontinued total
£’000 £’000 £’000 £’000
total revenue
foils 94417 65075 – 65075
laminates 50891 37254 – 37254
chromagem – – 129 129
145308 102329 129 102458
intersegmental revenue
foils 1525 350 – 350
laminates – –––
chromagem – –––
1525 350 – 350
external revenue
foils 92892 64725 – 64725
laminates 50891 37254 – 37254
chromagem – – 129 129
segment revenue 143783 101979 129 102108
assets
foils 54650 54042 – 54042
laminates 11931 16245 – 16245
chromagem – –––
segment assets 66581 70287 – 70287
unallocated 4301 8150 22 8172
70882 78437 22 78459
capital expenditure
foils 7848 4039 – 4039
laminates 332 2101 – 2101
chromagem – –––
segment capital expenditure 8180 6140 – 6140 api group plc  
annual report  accounts 2008
32
notes to the consolidated financial statements continued
3 operating loss  profit
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
this is stated after charging  crediting
research and development expenditure expensed during the period 1369 980
depreciation of property plant and equipment 5498 3457
profit on disposal of property plant and equipment 263 22
cost of inventories recognised as an expense 78431 52316
including writedown of inventories to net realisable value 2917 1613
net foreign currency differences 162 73
operating lease payments  minimum lease payments 1330 548
audit of the financial statements 128 123
other fees payable to the group’s auditors
audit of the group pension scheme 8 8
local statutory audits for subsidiaries 76 87
services relating to corporate finance transactions 230 –
other services 55 60
4 staff costs and directors’ emoluments
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
wages and salaries 30502 22177
social security costs 2856 2391
pension costs
 defined benefit note 18 1074 767
 defined contribution note 18 135 105
 non contributory pension schemes 136 110
34703 25550
included in wages and salaries is a total expense for sharebased payments of £301000 2006 £131000
details of sharebased payments are included in note 21
the average monthly number of employees during the period was made up as follows
eighteen
months ended year ended
31 march 30 september
2008 2006
no no
foils 735 744
laminates 125 155
head office 39 35
899 934 api group plc  
annual report  accounts 2008
33
4 staff costs and directors’ emoluments continued
directors’ emoluments
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
total
aggregate emoluments 1074 624
contributions to defined contribution schemes 2 directors 22 –
compensation for loss of office 276 33
1372 657
highest paid director
aggregate emoluments 362 312
contributions to defined contribution schemes – –
compensation for loss of office 156 –
518 312
no current director is a member of the defined benefit pension scheme 
5 exceptional items
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
exceptional items charged against operating profit comprise
restructuring of uk operating businesses 790 597
charlotte facility closure 297 242
rationalisation of group costs 1281 24
impairment of fixed assets 1881 –
factory relocation  china 238 –
3417 863
restructuring of uk operating businesses
these relate to employee redundancy relocation and other oneoff costs  in the eighteen months to 31 march 2008 this related largely to
redundancy and other costs associated with business improvement measures within the uk businesses
charlotte factory closure
in the year ended 30 september 2006 provision was made in respect of the estimated closure costs of the charlotte factory in the united states
in the eighteen months to 31 march 2008 these costs were utilised and the factory site was sold realising a gain on disposal
rationalisation of group costs
these costs relate to the severance and other related costs in respect of a number of senior executives who were made redundant during the
period  the costs include compensation for loss of office paid to the former chief executive and the former group finance director
impairment of fixed assets
as part of the review of group costs the project to install oracle it systems throughout the group was suspended  as there will be no further
implementation of the system for the forseeable future capitalised costs incurred to date relating to businesses where oracle has not yet been installed
have been fully impaired
factory relocation  china 
during the period the group’s subsidiary in china shanghai shen yong received compensation for sale of a parcel of land acquired by the local
authorities as a first stage of a full relocation of the shanghai factory the compensation was £541000 net of costs incurred as a direct result of the
compulsory acquisition  offset against this amount is £303000 in relation to initial relocation costs including dual running costs of the new facility api group plc  
annual report  accounts 2008
34
notes to the consolidated financial statements continued
6 finance revenue and finance costs  
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
finance revenue
interest receivable on bank and other short term deposits 33 85
gains arising on forward foreign currency contracts 259 –
292 85
finance costs
interest payable on bank loans and overdrafts 3556 1698
other interest payable 92 –
losses arising on forward foreign currency contracts 433 –
unrealised loss on interest rate swap 260 –
finance cost in respect of defined benefit pension plans 77 311
4418 2009
7 taxation
a tax on loss on ordinary activities
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
tax credited  charged in the income statement
current income tax
uk corporation tax – –
foreign tax 525 613
total current income tax expense 525 613
deferred tax
origination and reversal of temporary differences
 defined benefit pension plan 407 281
 tax losses 915 –
 accelerated capital allowances 7 121
 other short term timing differences 437 –
 effect of change in deferred tax rate 6 –
932 402
adjustment to previous year – 280
total deferred tax credit  expense 932 122
tax credit  expense in the income statement continuing operations 407 735
there was no income or deferred tax on discontinued operations
tax relating to items credited  charged to equity
deferred tax
actuarial gains and losses on pension schemes – in respect of the current period 1662 393
– effect of change in tax rate 190 –
1852 393 api group plc  
annual report  accounts 2008
35
7 taxation continued
b reconciliation of the total tax charge
the tax expense in the income statement for the period is higher than the standard rate of corporation tax in the uk of 30 2006 30  the
differences are reconciled below
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
loss before taxation from continuing operations 7135 1793
loss before taxation from discontinued operations 1130 230
accounting loss before income tax 8265 2023
accounting loss multiplied by the uk standard rate of corporation tax of 30 2006 30 2480 607
adjustments to tax in respect of prior period  deferred tax – 280
adjustments in respect of foreign tax rates 10 28
additional tax on overseas dividends – 18
losses for which deferred tax is not recognised 1308 676
other temporary differences for which deferred tax is not recognised 1045 869
initial recognition of us tax losses 915 –
change in deferred tax rate 129 –
expenses not deductible for tax purposes 139 87
disposal of discontinued operations 357 –
total tax credit  expense reported in the income statement 407 735
c unrecognised tax losses
the group has tax losses arising in the uk of £5702000 2006 £2013000 that are available and may be offset against future taxable profits 
of those businesses in which the losses arose  the uk tax group also has capital allowances of £27261000 2006 £26900000 available to
offset against future taxable profits at the rate of 25 a year on a reducing balance basis  as the group continues to face challenging trading
conditions in the uk deferred tax assets have not been recognised in respect of the uk tax losses and capital allowances on the basis that it is not
probable they will in the short term be used to offset taxable profits 
the group also has unrecognised us tax losses carried forward of 12219000 2006 11839000 which are available for offset against future
profits for a period of between 12 and 18 years  a deferred tax asset of £915000 has been recognised on the us losses as the us company has now
been trading profitably for a number of years and is expected to continue to do so the asset represents 3 years’ projected profits before tax at a rate of
37  in addition a deferred tax asset has been recognised in respect of the deficit on the uk and us defined benefit pension funds as the directors
believe it is appropriate to consider a longer period see note 18
d deferred tax
the deferred tax included in the balance sheet is as follows eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
deferred tax liability
revaluation of fixed assets 256 275
accelerated capital allowances 107 106
other short term temporary differences – 278
363 659
deferred tax asset
defined benefit pension plan 975 3263
tax losses 915 –
other short term temporary differences 172 –
2062 3263 api group plc  
annual report  accounts 2008
36
notes to the consolidated financial statements continued
8 discontinued operations
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
revenue – 129
expenses – 359 
operating loss and loss after tax for the period for discontinued operations – 230
loss on disposal of discontinued operations 1130 –
loss for the period from discontinued operations 1130 230
the net cash flows attributable to discontinued operations are as follows eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
operating cash flows – 105
investing cash flow 984 111
net cash inflow 984 6
discontinued operations for the prior year represent the results of chromagem a subsidiary which ceased trading during march 2006 
the loss on disposal of discontinued operations relates to the sale of the converted products division in january 2005  at 30 september 2006
£2000000 was held in other debtors in respect of deferred consideration  only £1250000 of this deferred consideration was paid on the due
date  following settlement of a number of disputes with the purchaser the remaining amount of £750000 has been written off together with
other settlement costs payable to the purchaser and related legal fees  a claim in respect of alleged breach of warranties from the purchaser is
still outstanding  details of this are included in note 25  api group plc  
annual report  accounts 2008
37
9 earnings per ordinary share
basic earnings per share is calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period
diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the period plus the number of ordinary shares at the period end that would be issued on the
conversion of all dilutive potential ordinary shares into ordinary shares  as any dilation would reduce the loss per share the diluted weighted
average number of shares is equivalent to the basic weighted average number of shares
the following reflects the income and share data used in the basic and diluted earnings per share computations
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
net loss attributable to equity holders of the parent  continuing operations 6865 3223
loss attributable to equity holders of the parent  discontinued operations 1130 230
net loss attributable to equity holders of the parent 7995 3453
eighteen
months ended year ended
31 march 30 september
2008 2006
no no
basic and diluted weighted average number of ordinary shares 41018077 36198528
there have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of
completion of these financial statements  
the weighted average number of shares excludes the shares owned by the api group plc no2 employee benefit trust 
the weighted average number of shares reflects the bonus element of the shares issued under the open offer implied by the discount on the
market price immediately prior to admission of the new shares the comparative figures have also been adjusted to reflect this bonus element 
earnings  loss per ordinary share
eighteen
months ended year ended
31 march 30 september
2008 2006
pence pence
continuing operations
basic loss per share 167 89
diluted loss per share 167 89
discontinued operations
basic loss per share 28 06
diluted loss per share 28 06
total
basic loss per share 195 95
diluted loss per share 195 95 api group plc  
annual report  accounts 2008
38
10 property plant and equipment
leasehold
freehold freehold land and plant and office and
land buildings buildings machinery it equipment total
£’000 £’000 £’000 £’000 £’000 £’000
cost
at 1 october 2005 2316 7920 2682 49503 6668 69089
additions – – – 5406 734 6140
disposals – – 73 2801 93 2967
foreign currency adjustment 108 375 27 905 96 1511
at 30 september 2006 2208 7545 2582 51203 7213 70751
additions – – 2795 4354 1031 8180
disposals 182 403 – 1478 452 2515
foreign currency adjustment 116 402 269 6 126 381
at 31 march 2008 1910 6740 5646 54073 7666 76035
depreciation
at 1 october 2005 – 2015 956 34487 2939 40397
provided during the year – 286 152 2508 511 3457
disposals – – 62 2593 91 2746
foreign currency adjustment – 194 14 567 82 857
at 30 september 2006 – 2107 1032 33835 3277 40251
provided during the period – 327 230 4193 748 5498
impaired during the period –––– 1881 1881
disposals – 157 – 1444 449 2050
foreign currency adjustment – 210 37 196 77 446
at 31 march 2008 – 2067 1299 36388 5380 45134
net book value at 31 march 2008 1910 4673 4347 17685 2286 30901
net book value at 30 september 2006 2208 5438 1550 17373 3931 30500
net book value at 30 september 2005 2316 5905 1726 15016 3729 28692
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
39
11 intangible assets  goodwill
£’000
at 1 october 2005 30 september 2006 and 31 march 2008 6480
as from 1 october 2004 the date of transition to ifrs goodwill was no longer amortised previously amortised over a period up to 20 years 
but is now subject to annual impairment testing
impairment of goodwill
goodwill acquired through business combinations has been allocated for impairment testing purposes to the following cashgenerating units 
as follows
● foils  europe
● foils  holographics
● foils  china and
● foils  germany formerly mepa
these represent the lowest level within the group at which goodwill is monitored for internal management purposes
carrying amount of goodwill allocated to cashgenerating units
foils foils foils foils
europe holographics china germany total
£’000 £’00 £’000 £’000 £’000
carrying amount of goodwill 2538 1686 1292 964 6480
the recoverable amount of each of the cash generating units has been determined on a value in use basis over a five year period  value in use 
is calculated as the net present value of post tax cash flows derived from detailed financial plans and is in excess of the book value of goodwill at
the period end  the most significant assumptions relevant to determination of the recoverable amount are the growth rate and discount factor  
the cash flows are extrapolated from the budget for the year ending 31 march 2009 which has been approved by the board and unapproved
financial projections prepared for the following four years  a discount rate of 110 has been used
the directors believe that no reasonable possible change in any of the above key assumptions would cause the carrying value of the units to
exceed their recoverable amounts api group plc  
annual report  accounts 2008
40
12 trade and other receivables
31 march 30 september
2008 2006
£’000 £’000
amounts falling due within one year
trade receivables 15610 17477
prepayments 1083 295
other debtors 747 2340
17440 20112
13 inventories
31 march 30 september
2008 2006
£’000 £’000
raw materials 3239 3610
work in progress 2486 2273
finished goods 6035 7312
11760 13195
14 cash and shortterm deposits
31 march 30 september
2008 2006
£’000 £’000
cash at bank and in hand 1270 4909
short term deposits 861 –
2131 4909
short term deposits earn interest at the prevailing floating daily bank deposit rate  
for the purpose of the consolidated cash flow statement cash and cash equivalents comprise the following
31 march 30 september
2008 2006
£’000 £’000
cash at bank and in hand 1270 4909
short term deposits 861 –
bank overdrafts note 16 1116 1563
1015 3346
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
41
15 trade and other payables
31 march 30 september
2008 2006
£’000 £’000
trade payables 11886 15425
other payables 6876 6881
18762 22306
16 financial liabilities
31 march 30 september
2008 2006
£’000 £’000
current
bank overdrafts 1116 1563
current instalments due on bank loans 5267 195
forward currency hedging contracts 295 –
interest rate swap 116 –
6794 1758
noncurrent
noncurrent instalments due on bank loans 12897 18674
interest rate swap 144 –
13041 18674
bank loans
bank loans comprise the following
31 march 30 september
2008 2006
£’000 £’000
term loans £ 7505 7831
revolving credit facility £ 7500 10000
term loan us 528 936
term loan chinese remnimbi 2511 –
term loan euro 120 102
18164 18869
less current instalments due on bank loans 5267 195
12897 18674
the group’s uk facilities comprise term loans of £85m falling due for repayment between april 2008 and january 2010 a £75m revolving credit
facility due for renewal in january 2010 and a multioption overdraft facility of £5m  unamortised financing costs of £995000 2006£169000
are deducted from the term loans  the average rate of interest payable on all uk borrowings during the period was 265 over libor  in the us
the group has banking facilities comprising a term loan of 11m repayable in installments between april 2008 and may 2010 and a working
capital facility of up to 70m depending on the level of working capital at 31 march 2008 the amount available was 34m  interest is payable
on us borrowings at the rate of 1 over the us prime interest rate  in china working capital loans of rmb 35m are repayable within 12 months
the average rate of interest is 65 the facilities are secured by charges over the group’s uk chinese and us assets totalling £437m 2006
£580m
in the uk the group has taken out an interest rate swap contract on £10m of its borrowings  this swaps floating rate borrowings at 3 month
libor with a fixed rate of 6165 until 30 june 2010 api group plc  
annual report  accounts 2008
42
17 provisions
restructuring other total
£’000 £’000 £’000
at 1 october 2006
current 306 – 306
noncurrent –9393
306 93 399
arising during the year 83 12 95
utilised 306 35 341
at 31 march 2008 83 70 153
analysed as
current 83 – 83
noncurrent –7070
83 70 153
restructuring
at 30 september 2006 the financial statements included a provision of £73000 relating to a vacant property and £233000 in respect of the
estimated closure costs of its plant located in charlotte usa  these provisions have been utilised during the period  a provision of £83000 has been
made in the current period relating to rent payable on a vacant property as a result of the rationalisation of central costs
other
the group pays discretionary payments to a number of former long serving employees  the estimated liability in respect of these former
employees is reflected above
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
43
18 pensions and other postretirement benefits
the group operates a number of pension schemes  in the uk the principal pension scheme is the api group pension and life assurance scheme
a funded pension scheme for the company and its uk subsidiaries providing benefits based on final pensionable earnings  the scheme is 
funded by the payment of contributions to a separately administered trust fund  this scheme has admitted no new members since october 2006  
a defined benefit scheme was operated in the us the api foils inc north american pension plan  this was closed during the year ended 
30 september 2005
a defined contribution scheme is also operated in the uk  overseas employees participate in a variety of different pension arrangements of the
defined contribution type and are funded in accordance with local practice  non contributory schemes are operated in the us and china  in the
us this is available to members of the north new jersey teamsters 11 union 
the assets and liabilities of the defined benefit schemes are
at 31 march 2008
united kingdom united states total
£’000 £’000 £’000
equities 33215 702 33917
bonds 31585 650 32235
property – 107 107
cash 51 – 51
fair value of scheme assets 64851 1459 66310
present value of scheme liabilities 68178 1614 69792
net pension liability 3327 155 3482

at 30 september 2006
united kingdom united states total
£’000 £’000 £’000
equities 33309 731 34040
bonds 29746   686 30432
property – 109 109
cash 90 – 90
fair value of scheme assets 63145 1526 64671
present value of scheme liabilities 73589 1961 75550
net pension liability 10444 435 10879 api group plc  
annual report  accounts 2008
44
18 pensions and other postretirement benefits continued
the amounts recognised in the group income statement and group statement of recognised income and expense for the period are as follows
eighteen months ended 31 march 2008
united kingdom united states total
£’000 £’000 £’000
recognised in the income statement
current service cost 1064 – 1064
past service cost 10 – 10
recognised in arriving at operating loss 1074 – 1074
expected return on scheme assets 5522 160 5682
interest cost on scheme liabilities 5626 133 5759
other finance cost  revenue 104 27 77
taken to the statement of recognised income and expense
actual return on scheme assets 2331 80 2411
less expected return on scheme assets 5522 160 5682
3191 80 3271
other actuarial gains and losses 8946 261 9207
actuarial gains and losses recognised in the statement of 
recognised income and expense 5755 181 5936
year ended 30 september 2006
united kingdom united states total
£’000 £’000 £’000
recognised in the income statement
current service cost 817 – 817
past service cost 50 – 50
gain from curtailment of scheme 100 – 100
recognised in arriving at operating profit 767 – 767
expected return on scheme assets 3142 120 3262
interest cost on scheme liabilities 3474 99 3573
other finance cost  revenue 332 21 311
taken to the statement of recognised income and expense
actual return on scheme assets 4582 120 4702
less expected return on scheme assets 3142 120 3262
1440 – 1440
other actuarial gains and losses 2601 150 2751
actuarial gains and losses recognised in the statement of 
recognised income and expense 1161 150 1311
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
45
18 pensions and other postretirement benefits continued
pension contributions are determined with the advice of an independent qualified actuary on the basis of triennial valuations using the projected
unit method  scheme assets are stated at their market values at the respective balance sheet dates and overall expected rates of return are
established by applying published brokers’ forecasts to each category of scheme assets
united kingdom united states
31 march 30 september 31 march 30 september
2008 2006 2008 2006
   
main assumptions
rate of salary increases 350 325 na na
rate of increase in pensions in payment 310 260 na na
rate of increase to deferred pensions 310 260 na na
discount rate 650 510 600 550
expected rates of return on scheme assets
equities 740 730 775 800
bonds 470 460 – –
inflation 330 275 300 300
in the uk it is assumed that mortality will be in line with nationally published pa00 yob tables incorporating the medium cohort and adjusted 
to take account of the demographic profile of the members plus 3 years
these major assumptions have been selected after consultation with the group’s uk pension advisors pricewaterhousecoopers and the group’s
us actuaries principal financial services
in order to eliminate the deficit on the uk scheme in addition to the employers regular contribution of 8 the group also makes contributions
of 4 of pensionable earnings pays all pension fund related administration fees and makes additional contributions of £300000 per annum
changes in present value of the defined benefit obligations are analysed as follows
united kingdom united states total
£’000 £’000 £’000
at 1 october 2005 69080 1867 70947
current service cost 742 – 742
contributions by employees 542 – 542
past service cost 25 – 25
interest cost 3474 99 3573
benefits paid 2875 71 2946
actuarial gains and losses 2601 150 2751
foreign currency differences – 84 84
at 30 september 2006 73589 1961 75550
current service cost 1064 – 1064
contributions by employees 712 – 712
past service cost 10 – 10
interest cost 5626 133 5759
benefits paid 3877 103 3980
actuarial gains and losses 8946 261 9207
foreign currency differences – 116 116
at 31 march 2008 68178 1614 69792 api group plc  
annual report  accounts 2008
46
18 pensions and other postretirement benefits continued
changes in present value of the defined benefit assets are analysed as follows
united kingdom united states total
£’000 £’000 £’000
at 1 october 2005 58882 1562 60444
expected return on plan assets 3142 120 3262
employer contributions 2014 – 2014
contributions by employees 542 – 542
benefits paid 2875 71 2946
actuarial gains and losses 1440 – 1440
foreign currency differences – 85 85
at 30 september 2006 63145 1526 64671
expected return on plan assets 5522 160 5682
employer contributions 2540 45 2585
contributions by employees 712 – 712
benefits paid 3877 103 3980
actuarial gains and losses 3191 80 3271
foreign currency differences – 89 89
at 31 march 2008 64851 1459 66310
employer contributions are expected to continue at similar levels to those made over the last eighteen months £17m over a 12 month period
history of experience gains and losses
eighteen
months ended year ended year ended year ended year ended
31 march 30 september 30 september 30 september 30 september
2008 2006 2005 2004 2003
£’000 £’000 £’000 £’000 £’000
united kingdom
fair value of scheme assets 64851 63145 58882 50900 47000
present value of defined benefit obligation 68178 73589 69080 63800 61200
deficit in the scheme 3327 10444 10198 12900 14200
experience adjustments arising on plan liabilities 8946 2601 2656 1020 900
experience adjustments arising on plan assets 3191 1440 4685 620 2900
united states
fair value of scheme assets 1459 1526 1562 1482 1352
present value of defined benefit obligation 1614 1961 1867 1681 1990
deficit in the scheme 155 435 305 199 638
experience adjustments arising on plan liabilities 261 150 173 103 364
experience adjustments arising on plan assets 80 –612333
the cumulative amount of actuarial gains recognised since 1 october 2004 in the group statement of recognised income and expense is
£6545000 2006 £609000  the directors are unable to determine how much of the pension scheme deficit recognised on transition to ifrs
and taken directly to equity of £13099000 is attributable to actuarial gains and losses since inception of those schemes  consequently the
directors are unable to determine the amount of actuarial gains and losses that would have been recognised in the group statement of
recognised income and expense before 1 october 2004
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
47
19 authorised and issued share capital
31 march 30 september 31 march 30 september
2008 2006 2008 2006
thousands thousands £’000 £’000
authorised
ordinary shares of 25p – 46541 – 11635
ordinary shares of 1p 333869 – 3338 –
deferred shares of 24p 34570 – 8297 –
11635 11635
allotted called up and fully paid
ordinary shares of 25p – 34450 – 8612
ordinary shares of 1p 70127 – 701 –
deferred shares of 24p 34570 – 8297 –
8998 8612
on 29 august 2007 options over 120000 ordinary shares of 25p were exercised under the employee share option scheme for consideration 
of £80000  following a general meeting on 9 january 2008 each authorised and issued ordinary share of 25p was split into one ordinary share
of 1p and one deferred share of 24p and each authorised and unissued share of 25p was subdivided into 25 ordinary shares of 1p  on 18 january
2008 following an open offer 35557213 ordinary shares of 1p were issued for consideration of £8000000 before costs of £802000  this
share issue was made as part of a financial restructuring of the group
during the period options were granted over 1243025 ordinary shares  full exercise of the options granted under the company’s share option
schemes would result in the issue not later than march 2018 of a further 1591812 ordinary shares made up of 10000 shares at 6425p 4279
shares at 310p 2500 shares at 336p 265000 shares at 655p 45000 shares at 64p 120148 shares at 795p and 1144885 shares at nil api group plc  
annual report  accounts 2008
48
20 reconciliation of movements in equity
foreign total
equity share share other exchange retained shareholders’
capital premium reserves reserve earnings equity
£’000 £’000 £’000 £’000 £’000 £’000
at 1 october 2005 8592 211 298 439 13419 22959
total recognised income and expense for the year – – – 805 4371 5176
exercise of employee share options 20 33 – – – 53
share based payment –––– 131 131
at 30 september 2006 8612 244 298 366 9179 17967
total recognised income and expense for the period – – – 178 3912 3734
issue of shares under open offer 356 7644 – – – 8000
costs relating to shares issued under open offer – 802 – – – 802
exercise of employee share options 30 50 – – – 80
share based payment –––– 301 301
at 31 march 2008 8998 7136 298 188 5568 21812
shareholders’
equity minority total
as above interest equity
£’000 £’000 £’000
at 1 october 2005 22959 5460 28419
total recognised income and expense for the year 5176 528 4648
exercise of employee share options 53 – 53
share based payment 131 – 131
dividends – 550 550
at 30 september 2006 17967 5438 23405
total recognised income and expense for the period 3734 449 3285
issue of shares under open offer 8000 – 8000
costs relating to shares issued under open offer 802 – 802
exercise of employee share options 80 – 80
share based payment 301 – 301
at 31 march 2008 21812 5887 27699
other reserves
other reserves comprise the capital redemption reserves £549000 and the esop reserve deficit £251000
the capital redemption reserve arose as a result of the cancellation of £549000 preference shares of £1 each in march 1999
the esop reserve relates to shares held by a discretionary trust established in 1997 to facilitate the operation of the company executive share
option schemes which are described in the directors’ report  at 31 march 2008 and 30 september 2006 the trust held 58221 ordinary shares 
at an average cost of £427 per share and a total cost of £251000 
foreign exchange reserve
the foreign exchange reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
49
21 share based payments
share options are granted to employees of api group companies through a number of share option schemes  prior to 2006 the exercise price of
the options is equal to the market price of the shares on the date of grant  the share options that have been granted since 2005 are nil cost
options  the ability to exercise options over shares is conditional on the attainment of specified performance targets over a three year
performance period  to the extent that options vest they lapse if they are not exercised within ten years of the date of grant  
the expense recognised for share based payments in respect of employee services received during the period is £301000 2006 £131000
the following table illustrates the number and weighted average exercise price waep of and movements in share options during the year
31 march 31 march 30 september 30 september
2008 2008 2006 2006
no waep p no waep p
outstanding at beginning of period 2201030 856 2170862 1142
granted during the period 1234025 – 348750 –
exercised during the period 120000 655 80000 658
expired during the period 1723243 773 238582 2269
outstanding at end of period 1591812 241 2201030 856
exercisable at end of period 446927 859 661364 962
the weighted average fair value of options granted during the period was 358p 2006 480p  the range of exercise prices for options
outstanding at the end of the period was nil  6425p 2006 nil  694p
the fair value of equitysettled share options granted is estimated as at the date of grant using a montecarlo model taking into account the
terms and conditions upon which the options were granted  the following table lists the inputs to the model used
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
dividend yield 0 0
expected share price volatility 26 30
historical volatility 26 30
riskfree interest rate 58 43
expected life of option 5 years 5 years
weighted average share price 92p 119p
the expected life of the options is usually based on historical data  limited data exists for api group therefore expected life has been based on
experience at other companies  the expected volatility reflects the assumption that the historical volatility is indicative of future trends which may
not necessarily be the actual outcome api group plc  
annual report  accounts 2008
50
22 financial instruments
details of the treasury operations and funding of the group are described in the financial review on pages 6 to 11
interest rate risk profile of financial assets and liabilities
the interest rate profile of the financial assets and liabilities of the group is as follows
at 31 march 2008
more 
within 12 23 34 45 than 5
1 year years years years years years total
floating rate £’000 £’000 £’000 £’000 £’000 £’000 £’000
cash 1270 ––––– 1270
short term deposits 861 ––––– 861
forward currency hedging contracts
 assets 108 ––––– 108
 liabilities 295 ––––– 295
interest rate swap 116 116 28 – – – 260
bank overdrafts 1116 ––––– 1116
revolving credit facility – 7500 –––– 7500
term loans 5267 5221 176 – – – 10664
4555 12837 204 – – – 17596
in the uk the group has taken out an interest rate swap contract on £10m of its borrowings this swaps floating rate borrowings at 3 month
libor with a fixed rate of 6165 until 30 june 2010
at 30 september 2006
more 
within 12 23 34 45 than 5
1 year years years years years years total
floating rate £’000 £’000 £’000 £’000 £’000 £’000 £’000
cash 4909 ––––– 4909
bank overdrafts 1563 ––––– 1563
revolving credit facility – – 10000 – – – 10000
term loans 195 843 7831 – – – 8869
3151 843 17831 – – – 15523
fair values of financial assets and liabilities
the fair values of the financial assets and liabilities is equivalent to their book values
credit risk
the group’s credit risks relates to trade receivables  there are no significant concentrations of credit risk within the group which are not covered
by third party credit insurance
price risk
price risks are not significant to the group as the group does not currently have any tradeable investments 
notes to the consolidated financial statements continued api group plc  
annual report  accounts 2008
51
23 capital commitments
31 march 30 september
2008 2006
£’000 £’000
contracted amounts not provided for in these accounts 191 259
24 obligations under leases and hire purchase contracts
future minimum rentals payable under noncancellable operating leases are as follows
31 march 30 september
2008 2006
£’000 £’000
not later than one year 285 203
after one year but not more than five years 511 420
after five years 38 33
834 656
25 contingent liabilities
during the period the group received a claim in respect of alleged breach of warranties in connection with the sale of the converted products
division in january 2005  the purchaser has acknowledged that the maximum amount which it may recover in connection with the material
element of the claim is capped at £31 million plus interest and costs  the directors believe that the group has a strong basis upon which the
claim can be defended  accordingly no provision has been made in the accounts in respect of this claim
26 related party transactions
entities with significant influence over the group
during the period steel partners ii lp  and wynnefield capital inc holders of 357 and 315 of the ordinary share capital of the company
respectively advanced bridging loans to the company amounting in total to £2500000  these loans were advanced on 17 december 2007 and
were repaid on 15 january 2008 following receipt of the proceeds of the open offer  these loans were advanced at commercial rates of interest
interest of £27000 and fees of £40000 were paid to the shareholders  
compensation of key management personnel including executive directors
eighteen
months ended year ended
31 march 30 september
2008 2006
£’000 £’000
short term employee benefits 1338 778
post employment benefits 95 71
termination benefits 346 33
share based payment 197 90
1976 972 api group plc  
annual report  accounts 2008
52
the directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements for
each financial period  under that law the directors have elected to
prepare the financial statements in accordance with united kingdom
generally accepted accounting practice united kingdom accounting
standards and applicable law  the financial statements are required by
law to give a true and fair view of the state of affairs of the company and
of the profit or loss of the company for that period  
in preparing those financial statements the directors are required to 
● select suitable accounting policies and then apply them consistently
● make judgments and estimates that are reasonable and prudent and 
● state whether applicable uk accounting standards have been
followed subject to any material departures disclosed and explained
in the financial statements
the directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of
the company and to enable them to ensure that the financial
statements comply with the companies act 1985  they are also
responsible for safeguarding the assets of the company and hence for
taking reasonable steps for the prevention and detection of fraud and
other irregularities 
statement of directors’ responsibilities in relation to the company 
financial statements api group plc  
annual report  accounts 2008
53
independent auditors report to the
members of api group plc
we have audited the parent company financial statements of api group
plc for the period ended 31 march 2008 which comprise the balance
sheet and the related notes 1 to 9  these parent company financial
statements have been prepared under the accounting policies set out
therein  
we have reported separately on the group financial statements of api
group plc for the period ended 31 march 2008
this report is made solely to the companys members as a body in
accordance with section 235 of the companies act 1985  our audit
work has been undertaken so that we might state to the companys
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 companys members as a body for our audit work for
this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the
parent company financial statements in accordance with applicable
united kingdom law and accounting standards united kingdom
generally accepted accounting practice are set out in the statement of
directors’ responsibilities
our responsibility is to audit the parent company financial statements in
accordance with relevant legal and regulatory requirements and
international standards on auditing uk and ireland
we report to you our opinion as to whether the parent company financial
statements give a true and fair view and whether the parent company
financial statements have been properly prepared in accordance with the
companies act 1985  we also report to you whether in our opinion the
information given in the company directors report is consistent with the
financial statements  the information given in the directors report
includes that specific information presented in the chief executive’s and
financial reviews that is cross referred from the results and dividends
section of the directors report  
in addition we report to you if in our opinion the company has not kept
proper accounting records if we have not received all the information
and explanations we require for our audit or if information specified by
law regarding directors’ remuneration and other transactions is not
disclosed
we read other information contained in the annual report and consider
whether it is consistent with the audited parent company financial
statements  the other information comprises only the chairman’s
statement the chief executive’s review  and the financial review  we
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the parent
company financial statements  our responsibilities do not extend to any
other information
basis of audit opinion
we conducted our audit in accordance with international standards on
auditing uk and ireland issued by the auditing practices board  an
audit includes examination on a test basis of evidence relevant to the
amounts and disclosures in the parent company financial statements  it
also includes an assessment of the significant estimates and judgments
made by the directors in the preparation of the parent company financial
statements and of whether the accounting policies are appropriate to the
company’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the parent
company financial statements are free from material misstatement
whether caused by fraud or other irregularity or error  in forming our
opinion we also evaluated the overall adequacy of the presentation of
information in the parent company financial statements
opinion
in our opinion
● the parent company financial statements give a true and fair view in
accordance with united kingdom generally accepted accounting
practice of the state of the companys affairs as at 31 march 2008 
● the parent company financial statements have been properly
prepared in accordance with the companies act 1985 and
● the information given in the directors report is consistent with the
parent company financial statements
ernst  young llp
registered auditor
manchester
22 may 2008
auditor’s report api group plc  
annual report  accounts 2008
54
company balance sheet
at 31 march 2008
31 march 30 september
2008 2006
note £’000 £’000
fixed assets
investments 2 6218 6218
6218 6218
current assets
debtors £36515000 1 year – 2006 £60524000 1 year 3 36515 62693
cash at bank and in hand and short term deposits 861 1235
37376 63928
creditors  amounts falling due within one year 4 5628 –
net current assets 31748 63928
total assets less current liabilities 37966 70146
creditors  amounts falling due after more than one year 5 12545 18000
25421 52146
share capital and reserves
called up share capital 6 8998 8612
share premium account 7 7136 244 
other reserves 7 298 298
profit and loss account 7 8989 42992
equity shareholders’ funds 25421 52146
signed on behalf of the board
a turner
22 may 2008 api group plc  
annual report  accounts 2008
55
1 accounting policies
accounting convention
the company’s financial statements have been prepared under the
historical cost convention except for the inclusion of certain assets which
are at valuation and have been prepared in accordance with uk gaap
and with the companies act 1985   
the company has taken advantage of the exemption provided under
section 230 of the companies act 1985 not to publish its individual
income statement and related notes  
the principal accounting policies adopted by the company are set out
below
investments in and loans due from subsidiaries
investments in and loans due from subsidiaries are stated at cost less any
impairment which is charged to the profit and loss account
deferred taxation
deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions
or events have occurred at that date that will result in an obligation to pay
more or a right to pay less or to receive more tax with the following
exceptions
● provision is made for tax on gains arising from the revaluation and
similar fair value adjustments of fixed assets and gains on disposal
of fixed assets that have been rolled over into replacement assets
only to the extent that at the balance sheet date there is a binding
agreement to dispose of the assets concerned  however no
provision is made where on the basis of all available evidence at the
balance sheet date it is more likely than not that the taxable gain will
be rolled over into replacement assets and charged to tax only where
the replacement assets are sold and
● deferred tax assets are recognised only to the extent that the
directors consider that it is more likely than not that there will be
suitable taxable profits from which the future reversal of the
underlying timing differences can be deducted
deferred tax is measured on an undiscounted basis at the tax rates that
are expected to apply in the periods in which timing differences reverse
based on tax rates and laws enacted or substantively enacted at the
balance sheet date
pensions
in the uk the majority of employees are members of either a defined
benefit or a defined contribution pension scheme  the defined benefit
scheme is run on a basis that does not enable individual companies within
the group to identify their share of the underlying assets and liabilities
in accordance with frs 17 the company has accounted for the scheme
as a defined contribution scheme and has given additional disclosures in
the consolidated financial statements  this additional information is
provided in accordance with international accounting standard 19
‘employee benefits’  the directors believe that information disclosed in
accordance with that standard is not materially different to that which
would be disclosed in accordance with frs 17
all defined contribution scheme costs are charged directly to the profit
and loss account as incurred
foreign currencies
foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the date of the transaction  foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are
recognised in the profit and loss account
financial instruments
all loans and borrowings are initially recognised at fair value of the
consideration received net of issue costs associated with the borrowing
after initial recognition interest bearing loans and borrowings are
subsequently measured at amortised cost under the effective interest rate
method
in accordance with paragraph 3c of frs 25 the company is exempt
from the disclosure requirements of paragraphs 51 to 95 of frs 25  the
company’ s financial instruments are consolidated with those of the group
and are incorporated into the disclosures in note 22 of the group’s
financial statements
leases
the costs of operating leases are charged to the profit and loss account
in equal instalments over the periods of the leases
notes to the company financial statements api group plc  
annual report  accounts 2008
56
notes to the company financial statements continued
2 investments
subsidiary undertakings
£’000
cost
at 1 october 2006 and 31 march 2008 6218
details of the principal investments in which the company unless otherwise indicated holds 20 or more of the nominal value of any class of
share capital are as follows
proportion of 
country of voting rights
name of company incorporation holding and shares held
api laminates limited  uk ordinary shares 100
api foils holdings limited  uk ordinary shares 100
api foils limited  uk ordinary shares 100
api holographics limited  uk ordinary shares 100
api overseas holdings limited  uk ordinary shares 100
api usa holdings limited  usa common and 100
preferred stocks
api foils inc  usa common and 100
preferred stocks
api foils sas  france ordinary shares 100
api asia limited  uk ordinary shares 100
api wing fat limited  ∆ hong kong ordinary shares 6375
shanghai shen yong stamping foil company limited  ∆ china ordinary shares 51
api foils pty limited  australia ordinary shares 100
api foils new zealand limited  new zealand ordinary shares 100
api foils deutschland gmbh
formerly mepas blattmetalle und prägefolien gmbh  ∆ germany ordinary shares 100
api italia srl   ∆ italy ordinary shares 100
 held by subsidiary undertaking
 operating company
 intermediate holding company
∆ 31 december year end
all the operating subsidiary undertakings are involved in the principal activities of the group
3 debtors
31 march 30 september
2008 2006
£’000 £’000
amounts falling due within one year
other debtors – 2169
amounts falling due after more than one year
amounts due from subsidiary undertakings 36515 60524
36515 62693
amounts due from subsidiary undertakings are stated after an impairment provision of £34000000 2006 nil api group plc  
annual report  accounts 2008
57
4 creditors  amounts falling due within one year
31 march 30 september
2008 2006
£’000 £’000
bank overdraft 1001 –
current instalments on bank loans 2460 –
corporation tax 1366 –
accruals 801 –
5628 –
corporate tax represents group relief payable
5 creditors  amounts falling due after more than one year
31 march 30 september
2008 2006
£’000 £’000
bank loans 12545 18000
6 share capital
31 march 30 september 31 march 30 september
2008 2006 2008 2006
thousands thousands £’000 £’000
authorised
ordinary shares of 25p – 46541 – 11635
ordinary shares of 1p 333869 – 3338 –
deferred shares of 24p 34570 – 8297 –
11635 11635
allotted called up and fully paid
ordinary shares of 25p – 34450 – 8612
ordinary shares of 1p 70127 – 701 –
deferred shares of 24p 34570 – 8297 –
8998 8612
on 29 august 2007 options over 120000 ordinary shares of 25p were exercised under the employee share option scheme for consideration of
£80000  following a general meeting on 9 january 2008 each authorised and issued ordinary share of 25p was split into one ordinary share of
1p and one deferred share of 24p and each authorised and unissued share of 25p was subdivided into 25 ordinary shares of 1p  on 18 january
2008 following an open offer 35557213 ordinary shares of 1p were issued for consideration of £8000000 before costs of £802000  this
share issue was made as part of a financial restructuring of the group
during the period options were granted over 1243025 ordinary shares  full exercise of the options granted under the company’s share option
schemes would result in the issue not later than march 2018 of a further 1591812 ordinary shares made up of 10000 shares at 6425p 4279
shares at 310p 2500 shares at 336p 265000 shares at 655p 45000 shares at 64p 120148 shares at 795p and 1144885 shares at nil api group plc  
annual report  accounts 2008
58
notes to the company financial statements continued
7 reconciliation of movements in equity
profit and
equity share share other loss shareholders’
capital premium reserves account equity
£’000 £’000 £’000 £’000 £’000
balance at 1 october 2005 8592 211 298 41225 50326
balance from profit and loss account – – – 1767 1767
exercise of employee share options 20 33 – – 53
balance at 30 september 2006 8612 244 298 42992 52146
balance from profit and loss account – – – 34003 34003
issue of shares under open offer 356 7644 – – 8000
costs relating to shares issued under open offer – 802 – – 802
exercise of employee share options 30 50 – – 80
balance at 31 march 2008 8998 7136 298 8989 25421
other reserves
other reserves comprise the capital redemption reserves £549000 and the esop reserve deficit £251000
the capital redemption reserve arose as a result of the cancellation of £549000 preference shares of £1 each in march 1999
the esop reserve relates to shares held by a discretionary trust established in 1997 to facilitate the operation of the company executive share
option schemes which are described in the directors’ report  at 31 march 2008 and 30 september 2006 the trust held 58221 ordinary shares at
an average cost of £427 per share and a total cost of £251000  
8 profit attributable to members of the parent company
a loss of £34003000 for the eighteen months ended 31 march 2008 year ended 30 september 2006 profit of £1767000 has been dealt with
in the accounts of the parent company  the loss is stated after an impairment provision of £34000000 2006 nil relating to amounts due from
subsidiary undertakings  as permitted by section 230 of the companies act 1985 the company has not presented its own profit and loss account 
fees paid to the auditor in respect of audit services provided to the company for the period amounted to £5000 2006 £5000
9 contingent liabilities
the company is party to a composite banking agreement providing unlimited guarantees between the company and its uk subsidiaries  a 2000000
guarantee has been provided by the company to the bank providing facilities to a wholly owned us subsidiary
during the period the group received a claim in respect of alleged breach of warranties in connection with the sale of the converted products
division in january 2005  the purchaser has acknowledged that the maximum amount which it may recover in connection with the material
element of the claim is capped at £31 million plus interest and costs  the directors believe that the group has a strong basis upon which the
claim can be defended  accordingly no provision has been made in the accounts in respect of this claim api group plc  
annual report  accounts 2008
59
prepared under ifrs eighteen
months ended year ended year ended
31 march 30 september 30 september
2008 2006 2005
£’000 £’000 £’000
continuing operations
revenue 143783 101979 105570
operating profit before exceptional items 408 994 3562
exceptional items 3417 863 430
operating loss  profit 3009 131 3132
net finance costs 4126 1924 1549
loss  profit before taxation 7135 1793 1583
tax credit  expense 407 735 504
loss  profit 6728 2528 1079
discontinued operations
loss from discontinued operations 1130 230 10149
loss for the year 7858 2758 9070
attributable to
profit attributable to minority equity interest 137 695 574
loss attributable to equity holders of the parent 7995 3453 9644
total loss for the year 7858 2758 9070
statistics relating to ordinary shareholders
basic loss per ordinary share pence adjusted  for the bonus element of open offer 195 95 272
net debt £’000 17149 15523 6686
gearing  62 66 24
average number of employees 899 934 1041
prepared under uk gaap year ended year ended year ended
30 september 30 september 30 september
2005 2004 2003
£’000 £’000 £’000
turnover 118350 169545 176192
operating profit before goodwill amortisation 
and exceptional items 1751 1418 600
goodwill amortisation 407 450 447
exceptional items 16921 23026 5593
joint venture 55 91 –
loss on ordinary activities before interest and taxation 15632 22149 5440
interest expense 1407 1696 1621
loss on ordinary activities before taxation 17039 23845 7061
taxation 338 559 753
loss on ordinary activities after taxation 17377 24404 6308
profit attributable to minority equity interest 574 982 995
loss attributable to ordinary shareholders 17951 25386 7303
statistics relating to ordinary shareholders
basic loss per share pence adjusted for the bonus element the open offer 509 724 208
net debt £’000 6686 10535 9821
gearing  18 23 17
average number of employees 1041 1421 1606
five year record api group plc  
annual report  accounts 2008
60
annual general meeting
to be held at 3pm 30 june 2008 at the london offices of the company’s solicitors 
addleshaw goddard 150 aldersgate street london ec1a 4ej
reports
interim report for 6 months to 30 september 2008 circulated november 2008
preliminary announcement for the year ended 31 march 2009 issued may 2009
report and accounts for the year ended 31 march 2009 circulated june 2009
capital gains tax
the market value of an ordinary share on 31 march 1982 was 605p
financial calendar api group plc  
annual report  accounts 2008
produced by kwdperceptions wwwkwdperceptionscom ap
an
an
foils
holographics
laminates
api group plc
second avenue poynton industrial estate poynton
stockport cheshire sk12 1nd
tel 44 0 1625 858700  fax 44 0 1625 858701  wwwapigroupcom
api group plc annual report and accounts 2008


Summary:
 chief executive’s review
api group plc  
annual report  accounts 2008
5
financing 
the refinancing which was completed in january 2008 has re
established the cash and covenant headroom which management
needs to operate the business as well as significantly reducing the
overall level of group debt   debt will reduce further in 200809 when
consideration is received from the sale of the group’s surplus land asset
in shanghai china 
cost reduction
in november 2007 the management team launched an overhead cost
reduction programme with an initial savings target of £1m per annum
the programme has now been concluded with the achievement of
annualised savings of approximately £24m
a review of centrallycontrolled costs including group functions shared
service costs and central initiatives billed to operating units yielded savings
of approximately £15m per annum the majority effective from january
2008 with the balance completing progressively during the remainder of
the first quarter of 2008  in addition streamlining of our uk operations
has yielded a reduction of 24 people from our indirect labour headcount and
a further 9 staff have been transferred from indirect to direct labour to
provide additional production capacity  the saving in overhead costs
associated with these changes is approximately £09m per annum effective
april 2008  total restructuring costs in relation to the november 2007
programme amounted to £12m out of total restructuring costs of £20m
for the 18 month period 
group results
group sales for the 18 months to 31 march 2008 were £1438m and
operating profit before exceptional items was £04m  on a 12 month
comparative basis to 31 march group sales reduced by 78 to £934m
68 reduction at constant exchange rates this decline was due
primarily to contract losses in the european laminates business at the
end of the prior year and lower sales from operations in the us and
china  operating profit for the 12 months was down £06m to £04m
after a doubling of profits in europe to £20m and a £06m reduction in
central costs were offset by declines in asia pacific and the us  the last
six months were particularly strong in europe although the gains were
partly offset by lower profitability in china and a particularly weak period
of trading in the us  the last six month’s operating profit before
exceptionals was £06m compared to a loss of £02m in the previous
half year
good progress has been made in the last six months in
addressing the group’s financial problems streamlining the
business and starting to turn around the performance of our
operations in europe  
europe
external sales from our european operations were £958m for the 18
month period with an operating profit before exceptional items of
£25m  in the year to 31 march 2008 european operating profits
increased by £10m compared to the prior year to £20m on sales down
43 to £626m  on 12 month comparatives foils and holographics
grew by a combined 11 and operating profit advanced 13 despite
significant operational problems in holographics in the first half of the
year  volume growth was driven by advances in security holographics
and by sales from our continental distribution units including the
newlyestablished operation in italy  laminates returned to profit
despite a 15 fall in sales responding to contract losses at the
beginning of 2007 with a deep restructuring programme and
significant cost and efficiency gains  the major part of the
improvement in performance in europe occurred in the last three
months aided by a strong recovery in holographics a significant new
product line developed between our laminates and holographics
businesses and tighter control of costs  
north america
us sales for the 18 months were £333m with operating profit before
exceptional items of £16m  on a 12 month basis us sales declined by 14
and operating profit declined by 44 against strong prior year
comparatives  the impact of exchange rates was more pronounced in the
us than other regions and on a constant currency basis sales and operating
profit declined by 9 and 40 respectively year on year  the last six
months were particularly difficult as the businesses suffered the effects of
certain customers in the greeting card sector moving manufacturing to the
far east and a general slow down in market activity  
asia pacific
18 months sales in asia pacific were £147m with an operating loss
before exceptional items of £03m  results in asia pacific suffered from
general disruption to trading associated with the relocation project in
china  by the end of april 2008 relocation of the china foils business
to its new 300000 square foot facility in the jiading industrial zone of
shanghai was substantially complete and management was focusing on
restabilising production and restoring normal service levels to customers
results in the last 6 months in china were disproportionally impacted by
adjustments arising from a thorough balance sheet review underlying
profitability also declined due to the impact on export margins of
exchange rates and the new vat regime general cost inflation and
competitive conditions in the home market