spirent communications plc annual report 2014
helping a complex 
world connect
spirent communications plc 
annual report 2014 contents
strategic report
1  results and highlights 
3  key strengths 
4 what we do
6 chairman’s statement 
8  market trends 
10  chief executive officer’s 
strategic review
12 business model
14 performance against our strategy
16 our strategy in action
22 key performance indicators
24 principal risks and uncertainties
28 operational review
34 financial review
38 resources and relationships
governance
44  board of directors
46  chairman’s introduction  
to governance
47  directors’ statement on 
corporate governance
51 nomination committee
52 audit committee
55 report on directors’ remuneration
72 report of the directors
74 directors’ responsibilities statement
financial statements
75  independent auditor’s report
78  consolidated income statement
79  consolidated statement 
of comprehensive income
80  consolidated balance sheet
81  consolidated cash flow statement
82  consolidated statement 
of changes in equity
83  notes to the consolidated 
financial statements
116 parent company balance sheet
117 notes to the parent company 
financial statements
129 principal divisions and subsidiaries
other information
130 financial history
132 shareholder information
134 glossary
136 contact details
in a world that is increasingly 
reliant on new technologies the 
ability to think ahead and think 
differently is key
inspiring ideas sit at the heart of 
everything we do we are a global 
leader in communications test and 
measurement we develop hardware 
and software solutions that help our 
customers innovate their products 
systems and networks
cautionary statement regarding forwardlooking statements 
this annual report may contain forwardlooking statements which are made in good faith and are based on current expectations or beliefs as well as assumptions about 
future events y ou can sometimes but not always identify these statements by the use of a date in the future or such words as “will” “anticipate” “estimate” “expect” 
“project” “intend” “plan” “should” “may” “assume” and other similar words by their nature forwardlooking statements are inherently predictive and speculative and 
involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future y ou should not place undue reliance on these 
forwardlooking statements which are not a guarantee of future performance and are subject to factors that could cause our actual results to differ materially from those 
expressed or implied by these statements the company undertakes no obligation to update any forwardlooking statements contained in this annual report whether 
as a result of new information future events or otherwise 4228
4705
4724
4135
4572
2010 2011 2012 2013 2014
1080
1307
1211
510
335
2010 2011 2012 2013 2014
250
293
322
354
389
2010 2011 2012 2013 2014
1044
1161
1183
501
460
2010 2011 2012 2013 2014
1092
1281
1302
571
582
2010 2011 2012 2013 2014
755
2010
693
2011
840
2012
439
2013
107
2014
revenue
4
4572m
basic earnings per share
4
335c
dividend per share
389c
adjusted operating profit
14
460m
adjusted earnings per share
124
582c
free cash flow
34
107m
financial highlights
 –group revenue up 11 to 4572 million 2013 4135 million 
acquisitions contributed 186 million with growth in all 
operating divisions and in all geographic regions
 –book to bill ratio 103 2013 105
 –group adjusted operating profit 460 million 
2013 501 million after absorbing 244 million increased 
organic investment in product development sales and 
marketing and support services
 –dividend up 10 final dividend proposed of 221 cents  
per ordinary share giving full year dividend of 389 cents 
per ordinary share 
 –free cash flow 107 million 2013 439 million affected 
by high activity in december and investment in new 
improved leasehold facilities cash closed at 998 million 
after acquisition consideration of 859 million and share 
buyback and dividends totalling 386 million
notes
1 before charging exceptional items acquisition related costs acquired intangible 
asset amortisation and impairment and sharebased payment
2 before tax effect of items in 1 and prior year tax
3 operating cash flow after tax net interest and net capital expenditure
4 continuing operations
results and highlights
go online for more
httpcorporatespirentcom
spirent communications plc
annual report 2014
1
strategic report governance financial statements our solutions shorten our customers’ 
product development lifecycle 
improve the quality and reliability 
of their services and reduce cost 
and risk key strengths
1  spirent serves the needs of the rapidly 
expanding data technology markets 
providing the world with the ability to 
verify the networks that utilise more 
and more digital information
2 spirent has an unrivalled breadth 
of expertise in data communications 
test and assurance methodologies
3 spirent has a proven track record in 
adoption to change in technologies and 
their deployment as well as to structural 
change in the industry
4 spirent has consistently reported profit 
and generated positive cash flows
5 spirent is well placed to provide the 
nextgeneration solutions required 
to accelerate and optimise the 
virtualization of data networks new 
wireless technologies and the explosion 
in the number of connected devices
spirent communications plc
annual report 2014
3
strategic report governance financial statements networks  applications
networks  applications develops innovative solutions  
for functional performance and security testing of next
generation networks and applications that simulate 
realworld conditions in the lab before a commercial launch
our broad solutions portfolio addresses data centers cloud 
computing virtualized environments applications and security 
high speed ethernet networks and services and virtualphysical 
test automation and management
divisional focus
 –ethernet
 –data centercloudvirtualization
 –applications and security
 –test automation orchestration and management 
 –mobility and wireless infrastructure
revenue
2215m
addressable market
874m
spirent’s market share
25
annual market growth
8
what we test
 
cloud and virtualization
managing the complexity of the 
demands on shared infrastructure 
and validating the enduser 
experience of cloud services as 
data centers are upgraded with high 
speed ethernet and technologies 
such as sdn are introduced 
applications and security
addressing the proliferation of 
application and vulnerability  
concerns for enterprise government 
and service provider networks 
spirent’s application and security  
test solutions offer unprecedented 
realism and ease of use
 
mobility
spirent’s unique mobility test 
solutions and methodologies address 
the mobile data explosion growth in 
applications such as vol te and 
mobility across 4g3g2g and wifi 
with peerless realism and scale
test automation
spirent’s solutions and services 
enable orchestration and 
management to deliver an efficient 
scalable and costeffective physical 
and virtual build test and  
deployment environment
our broad portfolio of 
innovative products and 
services is organised into 
three operating segments 
that address a wide range 
of our customers’ needs
revenue
– 4572m
1 americas – 54
2 asia pacific – 31
3 europe middle east  africa – 15
operating profit by division
1 
– 460m
1 networks  applications – 15
2 wireless  service experience – 46
3 service assurance – 39
employees by region
– 1727
1 americas – 57
2 asia pacific – 24
3 europe middle east  africa – 19
employees by division
– 1727
1 networks  applications – 54
2 wireless  service experience – 36
3 service assurance – 10
note
1 before exceptional items acquisition related costs acquired intangible asset 
amortisation and impairment and sharebased payment
1
2
3
1
2
3
1
2
3
1
2
3
what we do
spirent communications plc
annual report 2014
4 service assurance
spirent’s service assurance solutions allow service providers 
to diagnose troubleshoot and determine how to resolve 
issues with networks and systems within the entire live 
network – whether virtualized or not
spirent is also a leading provider of mobile device management 
device analytics and intelligence solutions for mobile operators 
spirent’s customer experience management solutions software 
enables mobile and wireline service providers to understand 
and quickly resolve their customers user experience issues
divisional focus
 –ethernet business services
 –field test solutions
 –mobile device management and analytics
 –customer experience management
revenue
571m
addressable market
460m
spirent’s market share
12
annual market growth
15
what we test
network service assurance
spirent’s service assurance solutions 
allow service providers around the 
world to diagnose troubleshoot and 
rapidly determine resolution of issues 
within mobile backhaul business 
services and global ip networks to 
support ethernet service delivery
field testing
spirent’s field test product for service 
providers enables qualification of 
the service and troubleshooting of 
transport and service related issues 
within the consumer’s home and in 
the outside plant
mobile device management
spirent’s mobile device management 
solutions allow operators to correctly 
detect mobile devices configure 
them for data usage analyse device 
population trends and run marketing 
campaigns helping to increase 
average revenue per user
customer experience 
management
spirent’s customer experience and 
service quality management solution 
helps service providers to reduce 
churn by aggregating and analysing 
data from multiple sources to 
provide realtime insights into 
their customers’ experience
wireless  service 
experience
spirent’s wireless  service experience solutions apply our 
innovation to functional and performance testing of 4g lte 
and 3g mobile devices services and infrastructure and 
satellite positioning devices
our solutions carry out this testing under realworld conditions 
in the lab prior to commercial launch the portfolio also includes 
services and tools for endtoend measurement of the mobile 
experience on live networks on any device and on any operating 
system helping our customers to minimise the risks associated 
with deployment of new technologies devices and services
divisional focus
 –wireless devices
 –wireless services including volte
 –satellite navigation and global positioning
 –wireless service experience
revenue
1786m
addressable market
710m
spirent’s market share
25
annual market growth
7 
what we test
positioning technologies
spirent is the global leader in testing 
multiple positioning technologies 
such as gps in mobile devices 
and other receivers used in an 
everincreasing range of commercial 
and government applications
voice over lte “volte”
launching complex new 4g services 
such as vol te puts extraordinary 
demands on networks and devices 
spirent is a leader in ensuring the 
successful deployment of vol te and 
other ims services such as video
device performance
spirent works with the world’s leading 
carriers to develop methodologies 
automated solutions and services 
that ensure device performance 
meets strict acceptance criteria  
in the lab and on live networks
service experience
in an age of exploding complexity 
and growth in mobile services 
spirent’s solutions objectively predict 
enduser quality of experience on 
any device any operating system 
and any network
spirent communications plc
annual report 2014
5
strategic report governance financial statements positioning the group for growth
last year we set out our strategy to restore revenue to growth 
in 2014 which would fund the necessary investment in product 
development and expansion of sales and marketing activities 
for the long term growth of the business we highlighted that we 
had undertaken a radical reorganisation of the activities within 
spirent with the key strategic objective of creating long term 
value by harnessing spirent’s leading capabilities and talent 
and that this would take time to be fully reflected in the financial 
performance of the company 2014 was eric hutchinson’s first full 
year as chief executive he and his new team have reenergised 
the company and laid the foundations for future growth 
it is pleasing to report that group revenue increased by 11 per 
cent to 4572 million 2013 4135 million of which 186 million 
came from acquisitions made during the year revenue grew 
in all divisions and in all regions this achievement was against 
a backdrop of some strong headwinds and changes in the 
markets that we serve particularly in the third quarter after 
achieving 16 per cent growth in revenue in the first half of 2014 
we saw a significant slowdown in the second half in our service 
provider ecosystem in north america as a major customer 
reorganised and paused in its investment cycle 
chairman’s statement
alex walker
chairman
in 2014 we have laid  
the foundations for 
returning the group 
to growth
spirent communications plc
annual report 2014
6 employees
spirent is its employees we have highly skilled and creative 
employees and as a communications technology company 
our employees and their capabilities hold the key to the long 
term prosperity of the company i would like to thank all our 
employees for their hard work and commitment to the future 
success of the group
dividends
the final dividend recommended is 221 cents per share 
compared with 201 cents per share in 2013 this brings the 
total dividend for 2014 to 389 cents per share compared with 
354 cents for 2013 the increase in total dividend per share is 
10 per cent in sterling terms this also represents an increase 
in the distribution to our shareholders of 10 per cent
board changes
in february 2014 we welcomed rachel whiting to the board 
as chief financial officer ian brindle our senior independent 
director and chair of the audit committee was appointed to the 
board in december 2006 and has signalled his intention to step 
down from the board we are in the process of recruiting his 
replacement and we are delighted to report that sue swenson 
has agreed to succeed ian as senior independent director 
outlook
following the sharp slowdown in the united states at some of our 
customers in the third quarter of 2014 we saw a marked uplift in 
business at the end of the year 
whilst there continue to be near term uncertainties and volatility 
we expect to see an increased level of demand for our solutions 
and services as the year unfolds which will result in a greater than 
usual second half weighting this will be exacerbated by the later 
timing of the shipment of a major contract for handheld test tools 
of 16 million in the second half of 2015 compared with 12 million 
shipped in the first quarter of 2014 
the board remains confident that further progress will be achieved 
during 2015 and that the group will benefit from continued 
investment to create long term strategic value we have a number 
of major new solutions that will be delivered to the market in the 
second half of 2015 and we will continue to pursue areas of 
opportunity to expand the markets we serve
alex walker
chairman
we also saw structural changes in the smartphone market and 
intense competition over a lower level of demand whilst the 
yearonyear increase in the second half slowed to 6 per cent 
the fourth quarter saw strong demand with revenue up 9 per 
cent over the same period in 2013
the growth in revenue has enabled us to fund the planned 
additional investment in product development and in sales 
and marketing that we highlighted in last year’s annual report 
innovation is at the heart of any technology company and 
spirent invested 1154 million in product development in 2014 
an organic increase of 8 per cent over 2013 during the year as 
part of spirent’s continuing strategic investment programme we 
released 85 new solutions and functionality which enhance our 
competitive advantage and spearhead future sales growth
additional investment of 129 million in sales and marketing 
excluding the effect of acquisitions during the year has enabled 
us to build on our customer relationships drive development 
of and access to markets and to gain market share
return on sales based on adjusted operating profit was 10 per 
cent for the group down from 12 per cent last year reflecting the 
impact of the investment in the business to drive recovery and 
long term growth
basic earnings per share for the group decreased in 2014 to 
335 cents per share 2013 510 cents adjusted basic earnings 
per share was 582 cents 2013 571 cents this is before charging 
exceptional items acquisition related costs acquired intangible 
asset amortisation and impairment and sharebased payment
the group’s free cash flow generation was 107 million in 2014 
2013 439 million a cash conversion ratio of 05 times reported 
earnings 2013 13 times the company has no debt and cash 
balances were 998 million at 31 december 2014
acquisitions
spirent made good progress in its strategy of acquiring new 
capabilities and technologies completing a number of focused 
acquisitions during 2014 for a total consideration of 859 million 
funded out of spirent’s existing cash resources as a board we 
evaluate each acquisition opportunity to ensure that it meets 
our strategic objectives as well as the financial hurdles set for 
investment 
in february 2014 spirent acquired dax technologies corp and 
also a majority stake of 58 per cent of testing technologies ist 
gmbh in july we acquired the assets of the radvision technology 
business unit and then finally in september mobilethink as and 
its wholly owned subsidiary tweakker aps these acquisitions are 
discussed in the financial review all of our 2014 acquisitions are 
on track to deliver revenue and profit growth
we very much welcome the employees of all these companies 
into the spirent group
spirent communications plc
annual report 2014
7
strategic report governance financial statements how we will grow our market share
— pages 14 and 15
the changing requirements of mobile connectivity
mobile connectivity is served by spirent’s wireless  
service experience division and the mobility business 
within networks  applications
new trends in mobile voice video data and devices are 
coming at a time when consumers are using their mobile 
services in ways that previous generations did not by 
constantly tapping the mobile networks the industry is 
moving beyond debating the benefits of voice over lte 
“volte” to discuss strategies for deployment according 
to research worldwide volte services revenue is expected 
to reach 68 billion by 2018 with a significant proportion 
coming from asia pacific 
the opportunity for carrier wifi hotspots is heating up 
as mobile operators position wifi as equivalent to mobile 
broadband the overwhelming demand for mobile data services 
is making mobile operators seek ways to closely integrate 
wifi with the mobile network – either by offering carrier 
hotspots or by offloading some mobile data traffic to a wifi 
network in 2015 we expect to witness wifi supporting the 
same service priorities as mobile broadband services infonetics 
research predicts revenue to hit 30 billion by 2018 with a 
fiveyear compound annual growth rate ”cagr” of 42 per cent
market trends 
we are pursuing the many 
opportunities to grow that 
exist within our served 
and adjacent markets 
through a strategy of 
continued investment 
in product development 
partnerships and 
acquisitions
market potential
we continue to grow our share of addressable markets 
covering ethernet networks and services cloud and 
virtualization wireless and mobility security satellite 
navigation and positioning and customer experience 
management and in 2014 we had a combined market 
share of 22 per cent across our primary addressable 
markets totalling 2 billion
market size
2 billion
our  
market share
22
wireless  service 
experience
710m
1
7
2 service  
assurance
460m
1
15
2
network   
applications
874m
1
8
2
notes
1 sprent’s addressable market
2 annual market growth rate
carrier wifi equipment  
worldwide market revenue  
forecast m
3002 by 2018
527
737
2013
1641
2014
2229
2015
2735
2016 2017
3002
2018
source infonetics research
spirent communications plc
annual report 2014
8 35
40
10
05
0
30
25
20
15
customer experience enhancement operation eciency realtime analysis and decision making 
2014 2013 2015 2016 2017 2018 2019 2020
big data and analytics market in telecom 
worldwide revenue 
forecast  billion
source heavy reading
mobile m2m modules  
worldwide revenue  
forecast m
4528 by 2018
1381
1606
2042
2013 2014
2707
2015
3597
2016 2017
4528
2018
2014 was when the communications ecosystem surged ahead 
towards an age of hyperconnectivity with machinetomachine 
“m2m” and the internet of things “iot” leading the way starting 
with home security systems controlled via the smartphone to 
connected vehicles m2m and iot are transforming industries 
and creating tremendous opportunities according to infonetics 
research mobile m2m modulebased solutions are most 
successful for use in cases that require mobility rapid deployment 
and wide area coverage automotive transport and logistics has 
many use cases with these requirements infonetics predicts that 
the mobile m2m modules market will grow from 2 billion in 2015 
to 45 billion in 2018 
as service providers strive to do more than just offer larger 
pipes their ability to leverage customer data becomes a key 
competitive advantage spirent entered this market with the 
acquisition of dax technologies in 2014 according to heavy 
reading while service providers do not have a dearth of data 
they are nonetheless lacking actionable insight from that data 
using analytics service providers are able to pierce through the 
mountain of data to get actionable insight that will help them 
increase revenues reduce capex build customer loyalty and 
improve customer experience the heavy reading report states 
that of the three identified business application categories 
customer experience enhancement will grow the most – from 
546 million in 2013 to 36 billion in 2020 with a cagr of 
approximately 31 per cent
spirent’s portfolio of solutions gives us the unique ability  
to test validate and analyse communication networks 
connected devices and emerging services in a world of 
expanding interconnectivity and complexity our focus on 
testing emerging wireless technology automotive networking 
and m2m communications as well as delivering customer and 
network analytics allows us to meet the challenges of the 
changing communications ecosystem and the opportunities 
it presents
volte service 
worldwide revenue 
forecast m
6816 by 2018 
291
1173
2013
2535
2014
4068
2015
5489
2016 2017
6816 
2018
source infonetics research source infonetics research
spirent communications plc
annual report 2014
9
strategic report governance financial statements we saw many fundamental changes in the data communications 
industry in 2014 which in turn caused uncertainty and volatility in 
demand across all sectors customer types and regions changes 
in technologies and deployment of virtual networks challenge 
established products and business models but change also 
creates opportunity driving new business for spirent constantly 
evolving and developing data technologies demand new test 
methodologies and solutions the lifeblood of spirent’s business 
there are a number of major themes which are driving these 
changes and it is in these areas that we see significant 
opportunities for our business we have divided these 
opportunities into six specific growth categories as follows
high speed ethernet
one of the major themes for fundamental change in our industry 
is the continued exponential growth in network bandwidth 
in particular the transport of video across our networks has 
continued to create the need for faster networks in 2015 
we will see widespread deployment of 100g networks by 
the service providers and the trialling of 400g 
maintaining performance at these speeds requires precise 
equipment and sophisticated testing techniques spirent will 
continue to invest in its core products to help its customers 
meet these rapidly growing bandwidth demands 
chief executive officer’s strategic review
eric hutchinson
chief executive officer
our vision
to be recognised as the 
leading experts in test 
methodologies and 
solutions for data 
communications
how we will achieve our vision
— pages 14 and 15
spirent communications plc
annual report 2014
10 analytics
there is more data than ever being generated on the network 
at the cell site and on user equipment service providers are keen 
to analyse this data as it helps them improve customer retention 
increase revenue and strengthen market share data analytics also 
improve information accuracy and increases operational efficiency 
all of which leads to an enhanced experience for the service 
providers’ customers
for customers trying to analyse the experience across their 
network disparate data silos make it hard to get a complete view 
spirent’s customer experience management “cem” solutions 
bring together data from different silos helping our customers 
to pinpoint and resolve problems fast additionally our device 
analytics offerings improve decision making in all areas of the 
operator’s business including marketing sales customer care 
and network infrastructure and as input for targeted campaigns
adjacent markets
the acquisition of key protocols and test tools and solutions have 
reinforced our capabilities to assure the testing of the provision 
of connectivity for machinetomachine the internet of things 
indeed the internet of everything 
spirent has made inroads into providing new capabilities  
in automotive data and connected cars again acquiring 
technologies during the year these are laying the foundations 
for long term market expansion and diversification
our approach
the vision for spirent is to be recognised as the leading expert 
in test methodologies for data communications spirent has the 
technical capabilities to satisfy the needs created by all of the 
above opportunities and is differentiated compared with other 
test and measurement suppliers in having such a wide portfolio of 
capabilities spirent exists to create solutions to solve customers’ 
problems to reduce time to market to ensure quality of service 
and of experience to create value through more efficient and 
effective development engineering and operations and to optimise 
our customers’ capital expenditure and ensure their customers’ 
brand reputation is protected the implementation of agile 
software development continuous integrated test optimization 
and automation by our customers is transitioning spirent’s 
business to be consultative to focus on the business case for the 
customer and to create test solutions and methodologies utilising 
all the capabilities across the spirent portfolio and the integration 
of third party products and services nowhere is this more 
pertinent than in the move to nfv and sdn the implementation 
of these technologies enables far more rapid system provisioning 
to turn up new services more effective utilisation of resources and 
lower costs to operators spirent has leading capabilities in virtual 
test methodologies working closely with the innovators in this 
industry to develop test standards
the dynamic nature of the markets which spirent serves can be 
seen in this review we are making investment decisions to target 
those areas which offer the most value to our existing and future 
customers this in turn will deliver the best return on investment 
for the company uncertainty and volatility are expected to 
continue through the near term followed by a renewed level of 
demand for services and solutions as the industry invests in the 
next wave of deployment
eric hutchinson
chief executive officer
cloud and virtualization
many parts of the service providers’ networks are being virtualized 
this virtualization is causing the established ways of deployment 
of data technologies through everincreasing capital investment 
in complex hardware to become a commoditised market this 
in turn means that service providers multiple service operators 
and internet service suppliers are significantly reorganising their 
business processes and seeking new ways to provide content to 
subscribers beyond traditional data networks the virtualization of 
networks also referred to as softwaredefined networking “sdn” 
or network functions virtualization “nfv” is aimed at increasing 
the elasticity of network provisioning to provide ondemand 
service creation through a dynamic programmable network 
it is blurring the boundaries that exist in current legacy networks 
spirent’s test solutions ensure that the performance of the virtual 
network can be assessed the availability of the services can be 
ascertained that the provision is secure and scalability can be 
measured the emerging virtual network will need to coexist with the 
legacy network for an extended period of time here spirent enables 
the emulation in laboratory modelling to be taken into the live network 
to provide continuous assurance in the hybrid virtualphysical world 
security
the concern over cyber security is ever present and becoming 
more challenging the interconnection of devices systems and 
networks that were never originally intended to be connected 
is creating new vulnerabilities for enterprise government and in 
critical infrastructures the constant availability of network services 
is the overarching concern and cyber security threats intrusion 
and denial of service attacks all impact on network availability 
in this area spirent’s ability to provide realism in test traffic 
enables our customers to optimise the balance between defence 
and the continued service provision spirent has invested in the 
development of more realistic emulation of realworld traffic to 
test applications and security and will add more capabilities 
through 2015 
in addition spirent has the technology to test satellite navigation 
vulnerability not only to allow the strengthening of defences in 
navigation but also to test the resilience of systems that utilise 
satellite navigation time signals in critical systems security will 
be a major line of business for spirent in the near future
mobility
mobile communications continues to see rapid deployment of 
new high speed high density data communications existing 
revenue streams from telephony are altering with the deployment 
of digital technologies across all networks wireline or wireless 
the polarisation of the smartphone market is well documented 
as is the rise of new manufacturers challenging the position of 
newly dominant suppliers wireless carriers need to optimise their 
investment in the deployment of 4g lte wifi offload and small 
cell they are also deploying digital voice through volte which 
in turn enables the provision of rich communication services 
interoperability challenges are now the main theme in this industry 
and spirent has developed the world’s first test platform to enable 
interoperability test on devicetodevice systems and on emulated 
network domains our leading capabilities in mobile infrastructure 
test are facilitating the rapid deployment of 4g lte networks which 
allows wireless carriers to model traffic patterns in advance of 
significant capital expenditure meaning they optimise their 
investment and provide the best quality of service to subscribers 
spirent communications plc
annual report 2014
11
strategic report governance financial statements resources and  
relationships
our people
our highly skilled people are vital to our organisation they provide 
the expert knowledge needed to develop spirent’s marketleading 
solutions our valuecreating culture is critical in providing the right 
environment to foster this innovation
spirent attracts and retains talented people by offering career development 
a nondiscriminatory workplace and fair and competitive remuneration within 
a nonbureaucratic culture we recognise that our competitive advantage can 
only be maintained by both developing our own talent internally and recruiting 
the best skills from outside the organisation we offer internships and work
experience programmes that not only help students develop professional 
knowledge but also provide a pool of future talent for our entire organisation
innovation
in our business we must continuously innovate this is what protects our 
market position enhances our organic growth and drives our future 
revenues profits and cash generation consequently spirent invests a 
significant amount in product development engineering each year in the 
region of 25 per cent of revenue spirent also adds capability through the 
acquisition of businesses and intellectual property
we innovate through the endeavours of our highly skilled and creative people 
who build on decades of experience external inputs are also important both 
through our engagement with industry standards bodies and our close 
alignment with our customers who lead innovation in the industries we serve 
spirent has created a large body of intellectual property patented and 
proprietary so raising the barriers of entry to competition
customers 
the strong and lasting relationships we have with our customers are a 
fundamental element of spirent’s business model spirent’s customers 
are some of the largest global telecommunications corporations and 
maintaining and expanding these close relationships are vital to 
spirent’s reputation and success
we also strive to provide our customers with the highest possible quality of 
support and service we work very closely alongside our customers and this 
gives us a deep understanding of the challenges they face and means that we 
focus on bringing the right solutions to market at the time when our customers 
need them most
financial discipline
to underpin our strengths and ensure that spirent has the financial 
flexibility to be able to invest for the future both organically and through 
strategic acquisition we maintain strong internal controls and a robust 
balance sheet with a significant cash balance and no debt
spirent’s emphasis on strong cash generation enables us to reinvest 
in the business to drive future topline growth even when our markets show 
some weakness
spirent is a leading expert in test methodologies 
and solutions for data communications
in a fast moving environment where everyone 
and everything is connected spirent provides 
hardware and software solutions services and test 
methodologies that address customers’ complex 
testing needs – from network management in a 
cloud data center to mobile device performance 
and user experience in the lab or on live networks 
spirent’s customers worldwide are the network 
equipment manufacturers the service providers 
the mobile device manufacturers governments 
and enterprises all of which face numerous 
challenges in satisfying the everincreasing 
demand for data capacity reliability and security 
by all members of society
spirent’s strategy focuses on harnessing the best 
resources to generate solutions services and 
customer support through continuous innovation 
and to create easytouse solutions to complex 
problems delivering a high return on investment 
for our customers
our business model is built on our key strengths – 
the resources and relationships which are critical 
in enabling spirent to compete effectively in the 
markets we serve and ultimately create value for 
our shareholders and other stakeholders 
business model
spirent communications plc
annual report 2014
12 valuecreation
spirent’s value proposition is based on providing our 
customers with easytouse solutions for testing and 
measuring their complex systems we have a broad 
portfolio of test solutions which span the entire product 
lifecycle from concept to commercial availability 
delivering efficiency and that enable development 
engineers to make better use of their scarce resources 
our customers attain key valuecreation through using our 
solutions to 
 –reduce the time taken to get their products and systems 
to market
 –gain competitive advantage and maximise revenue
 –ensure the quality of their products systems and services
 –protect their brand reputation and
 –increase the efficiency of their operations through the 
automation and utilisation of data that optimises their 
activities and capital expenditure 
our solutions enable customers to test the security of their 
systems networks and processes in a world where cyber 
attacks denial of service and falsification of positioning data 
are increasing every day
much of spirent’s revenue comes from follow on business 
with customers who have worked with us for many years 
this is a result of a combination of our ability to innovate to 
meet their needs and our emphasis on providing first class 
professional service and support all of the above with 
the optimal utilisation of our own resources supports the 
sustainability of the high gross margins spirent achieves 
annual support and maintenance fees and royalty income are 
further important sources of continuing revenue for spirent 
most of our manufacturing is outsourced to subcontractors 
and our business is not capital intensive hence the conversion 
of earnings into cash is typically high for the business which 
gives spirent the capacity to reinvest organically through 
product development by the acquisition of technology or 
through access to new served markets
outputs
our people
more than 
200 
new employees
85 
internships
44 
voluntary employee turnover 
below industry average
innovation
product development
1154m
25 of revenue
85
new products launched
5
acquisitions completed 
total consideration 86m
customers
326
new customers 
added in 2014
3
increase in 
service revenues
financial discipline
998m
cash and no debt
417 m
net cash flow 
from operations
shareholder 
returns
in order to maintain a 
sustainable business 
spirent follows a course of 
continuous reinvestment 
to both evolve and 
reinvent its capabilities 
funded by the revenue 
stream that generates 
profit and cash we aim to 
balance this reinvestment 
and therefore the 
opportunities for future 
capital growth with 
returns to shareholders 
through dividends and 
share repurchase 
in investing in the 
business spirent targets 
those markets which it 
considers have the highest 
growth opportunities 
and the best returns 
commensurate with 
the board’s risk appetite 
and financial hurdles 
our dividend policy is to 
maintain a sustainable 
dividend to shareholders 
as we consider the 
dividend to be a core 
component of shareholder 
return and one on which 
they can depend
resources and  
relationships
our people
our highly skilled people are vital to our organisation they provide 
the expert knowledge needed to develop spirent’s marketleading 
solutions our valuecreating culture is critical in providing the right 
environment to foster this innovation
spirent attracts and retains talented people by offering career development 
a nondiscriminatory workplace and fair and competitive remuneration within 
a nonbureaucratic culture we recognise that our competitive advantage can 
only be maintained by both developing our own talent internally and recruiting 
the best skills from outside the organisation we offer internships and work
experience programmes that not only help students develop professional 
knowledge but also provide a pool of future talent for our entire organisation
innovation
in our business we must continuously innovate this is what protects our 
market position enhances our organic growth and drives our future 
revenues profits and cash generation consequently spirent invests a 
significant amount in product development engineering each year in the 
region of 25 per cent of revenue spirent also adds capability through the 
acquisition of businesses and intellectual property
we innovate through the endeavours of our highly skilled and creative people 
who build on decades of experience external inputs are also important both 
through our engagement with industry standards bodies and our close 
alignment with our customers who lead innovation in the industries we serve 
spirent has created a large body of intellectual property patented and 
proprietary so raising the barriers of entry to competition
customers 
the strong and lasting relationships we have with our customers are a 
fundamental element of spirent’s business model spirent’s customers 
are some of the largest global telecommunications corporations and 
maintaining and expanding these close relationships are vital to 
spirent’s reputation and success
we also strive to provide our customers with the highest possible quality of 
support and service we work very closely alongside our customers and this 
gives us a deep understanding of the challenges they face and means that we 
focus on bringing the right solutions to market at the time when our customers 
need them most
financial discipline
to underpin our strengths and ensure that spirent has the financial 
flexibility to be able to invest for the future both organically and through 
strategic acquisition we maintain strong internal controls and a robust 
balance sheet with a significant cash balance and no debt
spirent’s emphasis on strong cash generation enables us to reinvest 
in the business to drive future topline growth even when our markets show 
some weakness
spirent communications plc
annual report 2014
13
strategic report governance financial statements our vision and strategy strategic priorities key achievements in 2014 plan for 2015 risks
our vision provides a simple definition of spirent’s ultimate goal and  
our strategy describes how we will achieve this vision 
our vision
to be recognised as the leading experts 
in test methodologies and solutions for 
data communications
spirent operates in a rapidly changing business environment and therefore 
we regularly review our strategy to ensure that it has a clear focus and direction 
based on the expected future market trends opportunities and the challenges 
we face
our strategy
continuously innovate in test and 
measurement technologies to develop 
leading products and services for fixed 
and mobile voice data and video 
applications and networks
to be recognised by customers for the ease 
of use and simplicity of our solutions for 
testing and measuring complex systems
key actions
we have identified the key strategic priorities that we believe are critical in order 
to achieve our strategy and ultimately our vision progress made during 2014 and 
what we are aiming to achieve in 2015 are summarised in this section
expand the markets we serve
this will be achieved through the extension of our test product portfolio to serve 
network and applications security mobile communications quality of service in 
the live network development of microchip technologies for data 
communications and monitoring systems for live network deployments for 
service providers and enterprise
 – we expanded into new verticals including automotive through 
the acquisition of testing tech see case study 3
 – we have added value to our customers with our automation and 
infrastructure test optimization “ito” capability by applying 
demonstrable solutions to real business problems
 – through the acquisitions of dax and mobilethink we now 
offer more analytics that provide actionable answers from 
our customers’ “big data”
we plan to further extend our 
capabilities in the areas of 
virtualization data analytics cyber 
security mobile infrastructure 
and automotive
 – compatibility of nextgeneration systems with 
current and legacy solutions may extend 
development timescales and cost 
 – the scarcity of technically skilled engineers may 
constrain the pace of development
principal risks – technology change 
and our people see pages 25 and 27 
for mitigation actions
establish and maintain technology leadership
through investment in product development engineering the extension of 
our engagement with industry standards bodies and close alignment with our 
customers who lead innovation in the industries we serve we will maintain and 
enhance our expertise we aim to expand our competencies in test automation 
efficiency and methodology high performance test scalability and in 
the replication of and use of live realworld traffic and conditions
spirent invested 1154 million in product development 
engineering 85 new products and additions to functionality were 
released including
 – spirent elevate test framework a revolutionary advance in 
testing wireless and m2m devices and services which provides a 
unique open test architecture
 – the spirent gss9000 multifrequency multignss rf 
constellation simulator which offers a new benchmark in 
performance capability and flexibility see case study 6
 – spirent was the first vendor to show a working 400g ethernet 
test capability to meet early design needs see case study 1
we plan to maintain the underlying 
rate of investment in product 
development in 2015 which will 
be centred on the following
 – applications and cyber security
 – mobile infrastructure
 – cloud virtualization and ip
 – volte and rcs
 – enhanced wifi capabilities
 – data analytics
 – scarcity of resources and demands to enhance 
current solutions to serve customers’ needs for 
current technologies may extend 
development timescales
principal risks – technology change 
and our people see pages 25 and 27 
for mitigation actions
deepen our customer relationships
our partnership with our customers will be strengthened through new innovative 
solutions for their future needs and by extending the capabilities of our inhouse 
expertise with an emphasis on quality of service delivery and support 
new relationships will be established with the expansion of our sales and 
marketing reach into new vertical segments and geographic regions
 – we aligned our services teams more closely with critical 
technology developments by our customers
 – we expanded our resources to better respond to our customers’ 
growing challenges with the complexity of systems and networks 
through software automation and expert test methodologies
 – for mobility testing we continued to be the choice of industry 
leaders as china mobile research institute used our landslide 
solution see case study 2
 – implement a new customer 
relationship management software 
platform to enhance spirent’s focus 
and operational effectiveness 
providing bestinclass tools
 – continue to develop our global 
account management programme
 – execution risk around a major system 
implementation may delay the achievement of 
increased operational effectiveness
 – failure to deliver leading edge solutions in a timely 
fashion may undermine customer confidence 
 – reorganisation by customers combined with 
changes to their strategic direction may disrupt 
relationships
principal risks – customer dependence and 
business continuity see pages 26 and 27 for 
mitigation actions
acquire new capabilities and technologies
through expansion of our portfolio through partnerships licensing technologies 
andor the purchase of businesses
the acquisitions completed in 2014 all add new capability to 
the business
 – dax a provider of cem solution software enabling mobile and 
wireline service providers to understand and quantify services as 
experienced by their customers
 – testing tech which provides standardised and customerspecific 
softwarebased testing tools and also participates in the 
connected vehicle market
 – radvision tbu which offers a complete test suite for voice and 
video over ip communications
 – mobilethink and its subsidiary tweakker providers of mobile 
device management device analytics and intelligence solutions 
for mobile operators see case study 5
 – metrico wireless acquired in 2012 gave spirent marketleading 
expertise in volte see case study 4
 – continue to extend our capabilities 
through partnership licensing 
and acquisition of businesses 
 – extend our interoperability with 
open technologies 
 – outsource some development 
activities to give flexibility
 – our partners may be subject to change of control 
causing cessation of activity with us 
 – target businesses may be acquired by others
principal risk – acquisitions see page 27 for 
mitigation actions 
invest in our people
spirent is its employees finding keeping and engaging highly qualified and 
skilled employees are central to our ability to deliver on our strategy and to the 
success of our business
 – investments in training and developing our employees were 
expanded primarily in the areas of culture management 
evolving technologies such as lte and cloud and solution
centric selling focused on the customer 
 – enhancements to the spirent learning centre’s resources 
supported newly joined employees in their assimilation to our 
team and in their speedtoproductivity
 – hired new people in functions that are critical to achieving the 
strategy for example cyber security
focus our efforts on maintaining the 
forward momentum of our cultural 
transformation building our technical 
proficiency and reputation as leading 
experts and implementing 
improvements to our performance 
management and employee 
engagement metrics
 – employee voluntary turnover may be high 
due to the high demand for scarce skillsets in 
the industry 
 – there may be an adverse impact on employee 
morale if growth objectives are not met which 
adversely affect incentive payments
principal risk – our people see page 27 for 
mitigation actions
maintain financial strength and flexibility
having a robust balance sheet and strong cash generation gives spirent the 
ability to invest in organic growth pursue strategic acquisitions and pay 
sustainable dividends to shareholders we operate in markets that deliver 
high operating returns and operating performance and cash generation are 
closely aligned
we achieved a positive operating cash flow while supporting
 – increase in investment in product development sales and 
marketing and support services of 244 million
 – acquisition spend of 859 million
 – increase in full year dividend of 10 per cent
 – increase cash generation 
through growth which in turn will 
support additional investment in 
the business
 – demand for leasing of test equipment by startup 
businesses in new technology areas
 – transition of the business model to annual 
subscription licences may impact cash generation
 – extension of credit terms demanded by 
dominant customers
performance against our strategy
on pages 16 to 21 which follow a number of 
case studies have been provided demonstrating 
the progress we have achieved and how our 
solutions are addressing our customers’ needs
spirent communications plc
annual report 2014
14 our vision and strategy strategic priorities key achievements in 2014 plan for 2015 risks
our vision provides a simple definition of spirent’s ultimate goal and  
our strategy describes how we will achieve this vision 
our vision
to be recognised as the leading experts 
in test methodologies and solutions for 
data communications
spirent operates in a rapidly changing business environment and therefore 
we regularly review our strategy to ensure that it has a clear focus and direction 
based on the expected future market trends opportunities and the challenges 
we face
our strategy
continuously innovate in test and 
measurement technologies to develop 
leading products and services for fixed 
and mobile voice data and video 
applications and networks
to be recognised by customers for the ease 
of use and simplicity of our solutions for 
testing and measuring complex systems
key actions
we have identified the key strategic priorities that we believe are critical in order 
to achieve our strategy and ultimately our vision progress made during 2014 and 
what we are aiming to achieve in 2015 are summarised in this section
expand the markets we serve
this will be achieved through the extension of our test product portfolio to serve 
network and applications security mobile communications quality of service in 
the live network development of microchip technologies for data 
communications and monitoring systems for live network deployments for 
service providers and enterprise
 – we expanded into new verticals including automotive through 
the acquisition of testing tech see case study 3
 – we have added value to our customers with our automation and 
infrastructure test optimization “ito” capability by applying 
demonstrable solutions to real business problems
 – through the acquisitions of dax and mobilethink we now 
offer more analytics that provide actionable answers from 
our customers’ “big data”
we plan to further extend our 
capabilities in the areas of 
virtualization data analytics cyber 
security mobile infrastructure 
and automotive
 – compatibility of nextgeneration systems with 
current and legacy solutions may extend 
development timescales and cost 
 – the scarcity of technically skilled engineers may 
constrain the pace of development
principal risks – technology change 
and our people see pages 25 and 27 
for mitigation actions
establish and maintain technology leadership
through investment in product development engineering the extension of 
our engagement with industry standards bodies and close alignment with our 
customers who lead innovation in the industries we serve we will maintain and 
enhance our expertise we aim to expand our competencies in test automation 
efficiency and methodology high performance test scalability and in 
the replication of and use of live realworld traffic and conditions
spirent invested 1154 million in product development 
engineering 85 new products and additions to functionality were 
released including
 – spirent elevate test framework a revolutionary advance in 
testing wireless and m2m devices and services which provides a 
unique open test architecture
 – the spirent gss9000 multifrequency multignss rf 
constellation simulator which offers a new benchmark in 
performance capability and flexibility see case study 6
 – spirent was the first vendor to show a working 400g ethernet 
test capability to meet early design needs see case study 1
we plan to maintain the underlying 
rate of investment in product 
development in 2015 which will 
be centred on the following
 – applications and cyber security
 – mobile infrastructure
 – cloud virtualization and ip
 – volte and rcs
 – enhanced wifi capabilities
 – data analytics
 – scarcity of resources and demands to enhance 
current solutions to serve customers’ needs for 
current technologies may extend 
development timescales
principal risks – technology change 
and our people see pages 25 and 27 
for mitigation actions
deepen our customer relationships
our partnership with our customers will be strengthened through new innovative 
solutions for their future needs and by extending the capabilities of our inhouse 
expertise with an emphasis on quality of service delivery and support 
new relationships will be established with the expansion of our sales and 
marketing reach into new vertical segments and geographic regions
 – we aligned our services teams more closely with critical 
technology developments by our customers
 – we expanded our resources to better respond to our customers’ 
growing challenges with the complexity of systems and networks 
through software automation and expert test methodologies
 – for mobility testing we continued to be the choice of industry 
leaders as china mobile research institute used our landslide 
solution see case study 2
 – implement a new customer 
relationship management software 
platform to enhance spirent’s focus 
and operational effectiveness 
providing bestinclass tools
 – continue to develop our global 
account management programme
 – execution risk around a major system 
implementation may delay the achievement of 
increased operational effectiveness
 – failure to deliver leading edge solutions in a timely 
fashion may undermine customer confidence 
 – reorganisation by customers combined with 
changes to their strategic direction may disrupt 
relationships
principal risks – customer dependence and 
business continuity see pages 26 and 27 for 
mitigation actions
acquire new capabilities and technologies
through expansion of our portfolio through partnerships licensing technologies 
andor the purchase of businesses
the acquisitions completed in 2014 all add new capability to 
the business
 – dax a provider of cem solution software enabling mobile and 
wireline service providers to understand and quantify services as 
experienced by their customers
 – testing tech which provides standardised and customerspecific 
softwarebased testing tools and also participates in the 
connected vehicle market
 – radvision tbu which offers a complete test suite for voice and 
video over ip communications
 – mobilethink and its subsidiary tweakker providers of mobile 
device management device analytics and intelligence solutions 
for mobile operators see case study 5
 – metrico wireless acquired in 2012 gave spirent marketleading 
expertise in volte see case study 4
 – continue to extend our capabilities 
through partnership licensing 
and acquisition of businesses 
 – extend our interoperability with 
open technologies 
 – outsource some development 
activities to give flexibility
 – our partners may be subject to change of control 
causing cessation of activity with us 
 – target businesses may be acquired by others
principal risk – acquisitions see page 27 for 
mitigation actions 
invest in our people
spirent is its employees finding keeping and engaging highly qualified and 
skilled employees are central to our ability to deliver on our strategy and to the 
success of our business
 – investments in training and developing our employees were 
expanded primarily in the areas of culture management 
evolving technologies such as lte and cloud and solution
centric selling focused on the customer 
 – enhancements to the spirent learning centre’s resources 
supported newly joined employees in their assimilation to our 
team and in their speedtoproductivity
 – hired new people in functions that are critical to achieving the 
strategy for example cyber security
focus our efforts on maintaining the 
forward momentum of our cultural 
transformation building our technical 
proficiency and reputation as leading 
experts and implementing 
improvements to our performance 
management and employee 
engagement metrics
 – employee voluntary turnover may be high 
due to the high demand for scarce skillsets in 
the industry 
 – there may be an adverse impact on employee 
morale if growth objectives are not met which 
adversely affect incentive payments
principal risk – our people see page 27 for 
mitigation actions
maintain financial strength and flexibility
having a robust balance sheet and strong cash generation gives spirent the 
ability to invest in organic growth pursue strategic acquisitions and pay 
sustainable dividends to shareholders we operate in markets that deliver 
high operating returns and operating performance and cash generation are 
closely aligned
we achieved a positive operating cash flow while supporting
 – increase in investment in product development sales and 
marketing and support services of 244 million
 – acquisition spend of 859 million
 – increase in full year dividend of 10 per cent
 – increase cash generation 
through growth which in turn will 
support additional investment in 
the business
 – demand for leasing of test equipment by startup 
businesses in new technology areas
 – transition of the business model to annual 
subscription licences may impact cash generation
 – extension of credit terms demanded by 
dominant customers
spirent communications plc
annual report 2014
15
strategic report governance financial statements our strategy in action
case study
1 spirent first to show 400g ethernet 
test solution
the ieee predicts that mobile devices high speed data center 
servers internetenabled entertainment cloud computing and 
social media will push network link speeds to 1 tbs by 2015 
and 10 tbs by 2020 
while the development of high speed 400g network devices 
will help address the expanding demands for network capacity 
they present new testing challenges and push the limits of 
today’s technologies
“the success of this single port 400g ethernet testing will help 
with standardisation and commercialisation of 400g ethernet 
huawei will continue to work with partners – to keep 
innovating and advancing the industry to a new level” 
peter stassar technical director europe rd center huawei
spirent has developed a complete testing solution for early 
design and development of 400g ethernet systems compatible 
with spirent’s existing chassis and its other ethernet products
spirent communications plc
annual report 2014
16 2 china mobile research institute 
evolved packet core network testing
by emulation of realworld calls from millions of smartphones 
spirent enables china mobile to ensure that its mobile core 
network delivers a high quality of service and will accommodate 
growth in new subscribers and traffic as well as helping to 
resolve issues in their multivendor ecosystem
spirent landslide is the only solution in the industry which is 
able to emulate the complex behaviour of today’s smartphone 
subscribers the solution enables carriers to generate bhca 
busy hour call attempt models including volte mobility 
scenarios lte to 3g to wifi handovers and mobile application 
traffic helping them reduce the risk of network outages and 
offer a better user experience
spirent landslide is used by the top mobile network operators 
and equipment suppliers around the world and is widely 
recognised as the leader in the epcmobile packet core 
performance test market 
spirent communications plc
annual report 2014
17
strategic report governance financial statements our strategy in action
case study
continued
3 spirent helps ruetz offer extensive 
compliance performance and security 
testing of invehicle networking
the “connected car” has gained major importance in 
particular ethernet networking in automobiles opens up a 
realm of opportunities while placing new requirements on 
component conformance and cyber security
“cooperation with spirent allows us to combine our experience 
in automotive engineering with spirent’s expertise in ethernet 
testing and our clients in the automotive industry receive a 
service offering which accommodates the high quality and 
safety expectations of the sector” wolfgang malek founding 
member of ruetz system solutions
 
ruetz’s test lab includes spirent’s automotive test platform with 
support for broadrreach® the automotive ethernet physical 
layer interface standard the company will also leverage spirent 
for layer 23 conformance and performance testing
spirent communications plc
annual report 2014
18 4 benchmark study reveals vol te 
outperforms both 3g circuit switched 
voice and skype
with ott services such as skype being readily available to mobile 
users the driver behind volte deployment is the opportunity for 
wireless carriers to provide a guaranteed quality of service for voice 
services on their lte network a study validated that although both 
volte and skype support hd voice voltespecific features 
deliver a much higher quality service to the mobile user 
“although conceptually i understood the potential benefits of 
volte it wasn’t until we analysed the results that we collected 
with spirent that i truly appreciated the incremental benefits 
that volte offers” michael thelander president of signals 
research group 
in this study spirent nomad was used to measure call quality 
and to control and capture performance data spirent quantum 
was used to measure power consumption current drain and 
the implied battery life spirent datum was used to simulate 
realworld data usage 
spirent communications plc
annual report 2014
19
strategic report governance financial statements our strategy in action
case study
continued
5 cloudbased mobile device customer 
care connectivity solutions
teleena delivers innovative managed mobile solutions to its 
customer base of cable companies mobile network operators 
“mnos” mobile virtual network operators “mvnos” 
retailers and mobile devices manufacturers 
“teleena’s mantra is to provide worldclass costcutting mobile 
business solutions to its customer base by partnering with 
spirent tweakker our customers can vastly reduce mobile 
connectivity care costs and better manage and support the 
diverse portfolio of devices in their networks” camilo castano 
chief product officer leading product development at teleena
the spirent tweakker cloudbased platform contains one  
of the largest customer connectivity portfolios in the world  
this also includes mobile device analytics and plugandplay 
device platforms allowing customers to better understand and 
manage devices in their networks and to provide mobile users 
with anytimeanywhere online guides for selfservice care
spirent communications plc
annual report 2014
20 6 the path to full operational capacity 
testing esa’s galileo
when complete galileo europe’s global navigation satellite 
system “gnss” will join gps glonass and other systems in 
providing positioning services across the world
thales alenia space has been involved with the delivery of the 
european space agency’s “esa” galileo programme to assist 
with the development of the galileo receivers
“the spirent solution was selected because it met our very 
demanding quality and performance criteria and since taking 
delivery of the simulator in our labs it has met our expectations 
and worked very well” tiziano sassorossi program manager at 
thales alenia space
a spirent multiconstellation simulator was chosen to meet the 
company’s unique testing needs this solution provided accuracy 
flexibility and reliability allowing the ongoing development of 
europe’s gnss galileo is a joint initiative between the european 
space agency and the european commission
©esap carril 
spirent communications plc
annual report 2014
21
strategic report governance financial statements key performance indicators
 reason for 
measurement
performance relevance to strategy
book to bill ratio
    
   
103
105
97
2014
2013
2012
103
105
2011
2010
the ratio of orders booked to revenue 
billed is a measure of the visibility of 
future revenues at current levels of 
activity and provides an indication 
of the underlying trend in spirent’s 
future revenue stream 
the group aims to maintain a book to bill ratio of 
100 or higher the ratio was 103 reflecting the higher 
level of demand experienced by the group during the 
fourth quarter of 2014
the book to bill ratio is an indicator of whether 
future activity levels are rising or slowing and 
therefore how effective we have been in the 
execution of our strategy
revenue  million 4572
4135
4724
2014
2013
2012
4705
4228
2011
2010
spirent monitors growth in revenue  
as this shows how successful spirent 
has been in expanding its markets  
and growing its customer base 
the goal is to achieve yearonyear topline growth and 
revenue for the group increased in total by 11 per cent 
in 2014 excluding acquisitions growth was 6 per cent 
all of our divisions grew revenue in 2014 despite a 
background of much change in our industry
our revenue growth demonstrates all the aspects of 
our strategy our success in expanding our markets 
both organically and through acquisition maintaining 
technology leadership and our strong relationships 
with our customers all of which ensure that we 
continue to win and maintain business
adjusted operating profit
1
  
 million
460
501
1183
2014
2013
2012
1161
1044
2011
2010
adjusted operating profit is the 
measure used to evaluate the overall 
performance of the group as well as 
each of the operating segments
the goal is to achieve yearonyear growth and 
despite revenue growth adjusted operating profit fell 
to 460 million gross margin was maintained at 
69 per cent of revenue however as announced in 
2013 spirent stepped up its investment in product 
development sales and marketing and support 
services which grew organically by 244 million 
adjusted operating profit is a direct consequence 
of our success in growing revenue but it also 
impacts our financial strength and therefore our 
ability to invest in the business for future growth
return on sales
1
  101
121
250
2014
2013
2012
247
247
2011
2010
this is a measure of the group’s 
overall profitability spirent operates  
in markets which have high operating 
returns and strives to achieve 
bestinclass operating returns 
compared with its peers 
return on sales was lower at 10 per cent as a result 
of the planned increase in investment and the effect 
of the overheads in the acquired businesses of 
129 million for 2015 the aim is to improve the return 
through good cost management however spirent 
must also remain mindful of the need to invest for 
future growth
this is a measure of how successful we are in 
our overall strategy and demonstrates our ability 
to grow revenue and sustain or improve margin 
through efficient operations whilst being mindful 
of the need to invest for the future
adjusted basic earnings per 
share “eps”
12 
cents 
582
571
1302
2014
2013
2012
1281
1092
2011
2010
long term growth in adjusted eps is 
a fundamental driver to increasing 
shareholder value 
spirent’s aim is to achieve growth in adjusted eps 
yearonyear adjusted basic eps for 2014 was 582 cents 
up from 571 cents in the prior year 
a component of the executive directors’ incentives 
is dependent on achieving an eps target 
see page 55 to 71 for report on directors’ 
remuneration
this is a measure of how successful we are overall 
in our strategy and ultimately how spirent increases 
value for its shareholders
product development as a 
percentage of revenue 
252
243
182
2014
2013
2012
177
179
2011
2010
to maintain its competitive position 
spirent must continue to invest in 
order to support future organic 
growth initiatives in line with the 
strategic objectives 
investment in product development grew organically 
by 83 million to 1154 million
see pages 28 to 33 for the operational review which 
includes a discussion of the product launches and 
development in 2014
it is critical that spirent’s product development 
investment keeps pace with the speed of change in 
technology and of course that it is directed at the right 
key technology areas it enables us to expand our 
markets and to maintain our technology leadership
number of engineering 
and product milestones 
achieved 
34
26
30
2014
2013
2012
31
31
2011
2010
the board sets quarterly engineering 
milestones which are selected to 
represent the next critical stages in  
the achievement of spirent’s long  
term strategic objectives
in 2014 34 milestones were achieved it was a year 
of intense activity and increased investment with 
85 releases of new solutions and functionality added 
these milestones are included as targets in the senior 
executives’ incentive plans 
to expand our markets and maintain technology 
leadership it is vital that spirent’s solutions must be 
first to market to ensure a competitive advantage 
and this of course is dependent on the achievement 
of its product milestones
voluntary employee 
turnover below industry 
average 
44
33
37
2014
2013
2012
32
28
2011
2010
spirent’s success is dependent on its 
talented employees and therefore 
retaining them is extremely important 
voluntary employee turnover 
compared to industry average is the 
measure used to assess how well the 
group has performed
staff turnover remained below the industry average of 
124 per cent and the measure improved compared to 
the prior year 
see pages 41 to 43 for how we develop and reward 
our employees
we cannot avoid the fact that some of our 
employees will move on but we can avoid a skills 
shortage by appropriately managing recognising 
and rewarding our people this kpi is a measure of 
how successful spirent is in its strategy of investing 
in its people
free cash flow
3
  million 107
439
840
2014
2013
2012
693
755
2011
2010
cash generation is a measure of the 
quality of spirent’s earnings the aim 
is to achieve a high conversion of 
earnings into cash 
cash conversion was lower in 2014 at 05 times 2013 
13 times reported earnings this was a consequence 
of a number of factors including
 – large increase in working capital with higher activity 
skewed towards the end of 2014 and
 – high capital investment which includes cost of new 
improved leasehold facilities of 95 million on the 
expiry of the previous leases
having strong free cash generation reflects 
spirent’s ability to generate funds for future 
investment it allows us to maintain financial 
strength and flexibility
the board has identified the following 
key performance indicators “kpis” to 
measure the group’s strategic progress 
spirent’s strategy focuses on medium to long term growth and 
therefore its achievement cannot just be measured by looking 
at performance in 2014 compared to the prior year trends over 
a number of years must also be considered kpis relate to 
continuing operations only
notes
1 before exceptional items acquisition related costs acquired intangible 
asset amortisation and impairment and sharebased payment
2 before tax effect of items in note 1 and prior year tax
3 operating cash flow after tax net interest and net capital expenditure
spirent communications plc
annual report 2014
22  
 reason for 
measurement
performance relevance to strategy
book to bill ratio
    
   
103
105
97
2014
2013
2012
103
105
2011
2010
the ratio of orders booked to revenue 
billed is a measure of the visibility of 
future revenues at current levels of 
activity and provides an indication 
of the underlying trend in spirent’s 
future revenue stream 
the group aims to maintain a book to bill ratio of 
100 or higher the ratio was 103 reflecting the higher 
level of demand experienced by the group during the 
fourth quarter of 2014
the book to bill ratio is an indicator of whether 
future activity levels are rising or slowing and 
therefore how effective we have been in the 
execution of our strategy
revenue  million 4572
4135
4724
2014
2013
2012
4705
4228
2011
2010
spirent monitors growth in revenue  
as this shows how successful spirent 
has been in expanding its markets  
and growing its customer base 
the goal is to achieve yearonyear topline growth and 
revenue for the group increased in total by 11 per cent 
in 2014 excluding acquisitions growth was 6 per cent 
all of our divisions grew revenue in 2014 despite a 
background of much change in our industry
our revenue growth demonstrates all the aspects of 
our strategy our success in expanding our markets 
both organically and through acquisition maintaining 
technology leadership and our strong relationships 
with our customers all of which ensure that we 
continue to win and maintain business
adjusted operating profit
1
  
 million
460
501
1183
2014
2013
2012
1161
1044
2011
2010
adjusted operating profit is the 
measure used to evaluate the overall 
performance of the group as well as 
each of the operating segments
the goal is to achieve yearonyear growth and 
despite revenue growth adjusted operating profit fell 
to 460 million gross margin was maintained at 
69 per cent of revenue however as announced in 
2013 spirent stepped up its investment in product 
development sales and marketing and support 
services which grew organically by 244 million 
adjusted operating profit is a direct consequence 
of our success in growing revenue but it also 
impacts our financial strength and therefore our 
ability to invest in the business for future growth
return on sales
1
  101
121
250
2014
2013
2012
247
247
2011
2010
this is a measure of the group’s 
overall profitability spirent operates  
in markets which have high operating 
returns and strives to achieve 
bestinclass operating returns 
compared with its peers 
return on sales was lower at 10 per cent as a result 
of the planned increase in investment and the effect 
of the overheads in the acquired businesses of 
129 million for 2015 the aim is to improve the return 
through good cost management however spirent 
must also remain mindful of the need to invest for 
future growth
this is a measure of how successful we are in 
our overall strategy and demonstrates our ability 
to grow revenue and sustain or improve margin 
through efficient operations whilst being mindful 
of the need to invest for the future
adjusted basic earnings per 
share “eps”
12 
cents 
582
571
1302
2014
2013
2012
1281
1092
2011
2010
long term growth in adjusted eps is 
a fundamental driver to increasing 
shareholder value 
spirent’s aim is to achieve growth in adjusted eps 
yearonyear adjusted basic eps for 2014 was 582 cents 
up from 571 cents in the prior year 
a component of the executive directors’ incentives 
is dependent on achieving an eps target 
see page 55 to 71 for report on directors’ 
remuneration
this is a measure of how successful we are overall 
in our strategy and ultimately how spirent increases 
value for its shareholders
product development as a 
percentage of revenue 
252
243
182
2014
2013
2012
177
179
2011
2010
to maintain its competitive position 
spirent must continue to invest in 
order to support future organic 
growth initiatives in line with the 
strategic objectives 
investment in product development grew organically 
by 83 million to 1154 million
see pages 28 to 33 for the operational review which 
includes a discussion of the product launches and 
development in 2014
it is critical that spirent’s product development 
investment keeps pace with the speed of change in 
technology and of course that it is directed at the right 
key technology areas it enables us to expand our 
markets and to maintain our technology leadership
number of engineering 
and product milestones 
achieved 
34
26
30
2014
2013
2012
31
31
2011
2010
the board sets quarterly engineering 
milestones which are selected to 
represent the next critical stages in  
the achievement of spirent’s long  
term strategic objectives
in 2014 34 milestones were achieved it was a year 
of intense activity and increased investment with 
85 releases of new solutions and functionality added 
these milestones are included as targets in the senior 
executives’ incentive plans 
to expand our markets and maintain technology 
leadership it is vital that spirent’s solutions must be 
first to market to ensure a competitive advantage 
and this of course is dependent on the achievement 
of its product milestones
voluntary employee 
turnover below industry 
average 
44
33
37
2014
2013
2012
32
28
2011
2010
spirent’s success is dependent on its 
talented employees and therefore 
retaining them is extremely important 
voluntary employee turnover 
compared to industry average is the 
measure used to assess how well the 
group has performed
staff turnover remained below the industry average of 
124 per cent and the measure improved compared to 
the prior year 
see pages 41 to 43 for how we develop and reward 
our employees
we cannot avoid the fact that some of our 
employees will move on but we can avoid a skills 
shortage by appropriately managing recognising 
and rewarding our people this kpi is a measure of 
how successful spirent is in its strategy of investing 
in its people
free cash flow
3
  million 107
439
840
2014
2013
2012
693
755
2011
2010
cash generation is a measure of the 
quality of spirent’s earnings the aim 
is to achieve a high conversion of 
earnings into cash 
cash conversion was lower in 2014 at 05 times 2013 
13 times reported earnings this was a consequence 
of a number of factors including
 – large increase in working capital with higher activity 
skewed towards the end of 2014 and
 – high capital investment which includes cost of new 
improved leasehold facilities of 95 million on the 
expiry of the previous leases
having strong free cash generation reflects 
spirent’s ability to generate funds for future 
investment it allows us to maintain financial 
strength and flexibility
spirent communications plc
annual report 2014
23
strategic report governance financial statements the principal risks and uncertainties which the directors believe 
are currently faced by the spirent group are discussed below 
together with the actions which have been developed to mitigate 
the effects
it is not possible to identify every risk that could affect the 
business and the actions described below to mitigate those risks 
cannot provide absolute assurance that the risk will not occur 
or adversely affect the operating or financial performance of 
the group 
the board has classified the principal risks by the impact the risk 
would be expected to have on the group should it occur and the 
anticipated likelihood that that risk may occur using the following 
classifications
impact highmediumlow
likelihood of occurrence likelypossibleunlikely
likelihood of occurrence is based on qualitative factors such as 
past experience and current market conditions impact is based 
on the estimated degree of change in kpis the board’s view of 
the change in likelihood of occurrence andor in the impact on 
the group combined of each risk compared with the prior year 
has also been provided
strong risk management underpins  
everything we do
like all businesses spirent is exposed to a number of risks and 
uncertainties these risks may arise from internal factors but 
some will be a result of external factors over which the group 
has little or no direct control it is the effective management of 
these risks that supports spirent in delivering on its strategic 
objectives safeguards the group’s assets and over time will also 
enhance shareholder value the process to identify and manage 
the principal risks and uncertainties of the spirent group are an 
integral component of the internal control system and are 
described below 
further information on spirent’s internal control systems can be 
found in the directors’ statement on corporate governance 
risk management structure
the risk assessment process starts in the businesses where 
uptodate risk registers are maintained as an integral part of 
the normal operating and control procedures each business 
identifies its key risks and nominates a risk owner the impact 
and the likelihood of occurrence of each risk is ranked which 
assists the group executive committee in assessing the 
importance of each risk to the spirent group as a whole 
once risks have been assessed an appropriate risk mitigation 
response is determined for each risk identified the individual 
businesses are required to update their risk registers as new 
or emerging risks are identified
the audit committee reviews and monitors the group’s risk 
process and reports to the board on its effectiveness risk is 
considered by the audit committee at least three times per 
year at which time risk registers for both the group and the 
material business units within the group are reviewed by the 
committee the audit committee challenge and debate the 
risks with reference to risk tolerance and appetite as set by the 
board progress made and any further actions to be taken 
regarding mitigation plans as well as any changes to the risk 
profile are discussed in detail
risk assessment review
identify group executive committee
assess audit committee
mitigation actions board
principal risks and uncertainties
directors’ statement on corporate governance
– page 47 to 50
spirent communications plc
annual report 2014
24 the board has identified the following principal risks each of which is discussed below
risk potential impact mitigation actions
macroeconomic 
spirent is a global business exposed to the 
current world economic conditions over which it 
has no control the business is also exposed to 
government spending priorities principally in the 
united states 
deterioration in economic conditions may lead to 
a reduction in the level of demand for spirent’s 
products and services and cause customers to 
delay their purchasing decisions
the group closely monitors both market and 
geographic trends in order to respond to changes in 
demand and be in a position to take timely 
actions to protect profitability where possible
in addition spirent has a large number of 
geographically diverse customers which mitigates 
the impact
technology change
spirent sells complex solutions in industries that 
are characterised by rapid technological changes 
keeping at the forefront of these key future 
technologies is critical to our success and to ensure 
that we remain competitive in our markets
it is critical that our product development 
investment is directed at the right areas to 
enable spirent to develop those solutions that our 
customers need in a timely manner
spirent’s success is dependent in part on 
proprietary technology which may be infringed 
by others inadvertently or otherwise protecting 
the group’s proprietary technology is important 
to enabling spirent to compete successfully
if product development investment does 
not keep pace with the speed of change in 
technology or if it is not directed at the right key 
areas our competitive position and financial 
performance will suffer 
if spirent’s solutions take longer to develop than 
anticipated or longer to develop than our 
competitors then our competitive position and 
financial performance will also suffer 
intellectual property claims can result in significant 
defence costs and may affect spirent’s ability to 
market its products
all spirent’s businesses work very closely 
with customers and remain focused on 
their requirements 
each business makes investment decisions 
specifically related to their solutions portfolio 
based on market needs this happens through our 
formalised gate process that has been in place for 
many years 
spirent continues to make a significant investment 
in product development in 2014 the investment was 
increased to 1154 million in order to underpin 
organic growth initiatives 
spirent has active intellectual property protection 
programmes in place to obtain appropriate 
intellectual property protection in a cost
effective manner 
risk impact likelihood change
macroeconomic high likely
t echnology change high likely
customer dependence medium likely 
competition medium possible
acquisitions medium possible
business continuity high possible
our people medium possible
the board’s view of how the likelihood of occurrence andor impact has changed combined compared with the prior year
spirent communications plc
annual report 2014
25
strategic report governance financial statements principal risks and uncertainties
continued
risk potential impact mitigation actions
customer dependence
the group sells its solutions and services to a 
wide range of companies and seeks to continually 
expand its customer base in 2014 no one customer 
accounted for 10 per cent or more of group 
revenue although the top 10 customers 
represented 35 per cent of group revenue in some 
of our markets certain customers have a dominant 
market share which makes doing business with 
these customers critical to the success of our 
business
in addition many of the companies with which 
we do business are some of the largest global 
telecommunications corporations and therefore 
meeting our development obligations producing 
high quality products and in an appropriate 
timescale are vital to spirent’s reputation 
and success
changes in our major customers’ priorities in 
technology investments can also have a significant 
impact on their spending on spirent products by 
those in the customers’ supply chain
the industry continues to experience consolidation 
which can disrupt the spending patterns of those 
customers affected
loss of one or more of spirent’s major customers 
could have a significant impact on spirent’s 
financial results
significant failings in either quality or being able to 
deliver in the appropriate timescale could cause 
long lasting damage to spirent’s reputation and 
relationships
customer consolidation could result in delays in 
spending thereby reducing demand for spirent’s 
solutions and services and also reduce the 
potential number of customers to whom those 
solutions and services could be sold
changes in our customers’ technology investments 
can result in reduced spending on our existing 
solutions before customers and those in the 
supply chain ramp up spending on new 
technologies
spirent’s strong customer relationships are critical 
as is providing innovative solutions which meet 
customers’ needs and spirent’s emphasis on 
providing professional service and support 
many customers have worked with the group 
for a number of years
one of the group’s strategic objectives is to 
deepen our customer relationships we place 
engineers onsite with our customers and 
undertake site surveys of the use and intended 
plans for the use of test solutions in their business 
we seek to establish thought leadership in our 
industry through participation in standards 
bodies and industry forums which in turn creates 
additional links with customers our strategy is to 
play a key part in the ecosystem of supply in our 
served markets by aligning with early adopters 
of technology and with chip developers
competition
all spirent’s businesses operate in highly 
competitive markets which experience rapid 
technological changes establishing and 
maintaining technological differentiation in 
our solutions is key to our success
the group faces competition from new market 
startups as well as the more established and 
wellresourced companies
industry consolidation amongst our direct 
competitors may bring about a shift in 
competitive advantages
actions by competitors and increased competition 
can bring about pressure on spirent’s gross 
margin these factors could also affect spirent’s 
competitive position thereby reducing revenue 
and consequently affecting financial results
the group’s broad solution portfolio market
leading capabilities and customer focus continue 
to address this risk
spirent aims to maintain marketleading positions 
through significant investment in the development 
of differentiated products
competitor activity is closely monitored with a view 
to maintaining clear differentiation based on 
spirent’s products services and global reach
spirent communications plc
annual report 2014
26 risk potential impact mitigation actions
acquisitions
a key element of spirent’s strategy is to acquire 
new capabilities and technologies and this may be 
through acquisition
integration of acquisitions can be a complex 
process and the results expected from acquisitions 
may not be achieved due to problems encountered 
in integration changes in market conditions or 
sometimes deficiencies arising in the due 
diligence processes
underperformance by acquisitions will impact 
the group’s results and may lead to impairment 
of goodwill andor intangible assets
during 2014 spirent has completed five 
acquisitions details of which are provided 
in note 32 of notes to the consolidated 
financial statements
rigorous strategic and financial evaluations of all 
acquisition opportunities are carried out detailed 
financial and commercial due diligence are 
performed the board will only authorise 
transactions after all due diligence has been 
successfully completed and where the financial 
hurdles are within the agreed guidelines
integration plans and processes are carefully 
considered prior to acquisition
the board reviews postacquisition performance
business continuity
operational risks are present in the group’s 
businesses these risks include the risk of failed 
internal and external processes and systems 
human error and external events such as a 
natural disaster for example a significant 
portion of our communications operations 
are located in california which has in the past 
experienced natural disasters including 
earthquakes and wildfires
contract manufacturers are used for the 
manufacture of a substantial amount of spirent’s 
products the major contract manufacturer is 
located in thailand
the incidence of cyber security crime is on the 
rise spirent is dependent on its information 
technology systems for both internal and 
external communications as well as for its 
daytoday operations
a significant natural disaster could disrupt the 
group’s ability to conduct business and adversely 
impact revenue and operating results
disruption or financial problems of contract 
manufacturers or limitations in the manufacturing 
capacity at contract manufacturers could either  
limit supply or increase cost
if a cyber attack were to be successful it could 
result in loss of data confidential information and 
damage to spirent’s intellectual property causing 
major disruption to the business
an important component of spirent’s corporate 
governance is its integrated risk management 
strategy and its regular selfassessment of 
risks encompassing all business units
it disaster recovery plans are in place for all 
core business systems and ensure that the wider 
operations are all fully covered in addition the 
group’s largest manufacturing subcontractor has 
worldwide multiple sites and comprehensive 
business continuity plans 
regular meetings are held with contract 
manufacturers and an onsite presence 
is maintained to minimise the effect on supply 
that could be caused by disruption at contract 
manufacturers there are contingency plans in 
place to transfer manufacturing to other locations
a cyber security and cybercrime diagnostics 
review has been performed during 2014 a new 
nextgeneration firewall has been installed 
which provides a high level of protection to 
the network
our people
spirent is its employees so attracting and retaining 
highly qualified and skilled employees is essential 
in enabling the group to deliver on its strategy and 
to the success of the business
intense competition is faced for personnel from 
other companies and organisations and the loss of 
key employees the failure to attract and retain 
other highly skilled employees or the failure to 
adequately plan for succession may impair 
spirent’s ability to run and expand the business 
effectively
investing in people is at the core of the group’s 
strategy the aim is to find keep and engage the 
highest calibre of employees and encourage their 
contribution and development an environment 
that fosters innovation and collaboration is critical 
to spirent’s success as is ensuring incentive plans  
are competitive 
succession planning for senior posts in the 
company is regularly reviewed by the board
appropriate career paths and internal recognition 
programmes are developed for both technical and 
nontechnical staff further information on our 
employees is provided in resources and 
relationships on pages 41 to 43
the risks associated with achieving spirent’s strategy are also considered in “our strategy” on pages 14 and 15
spirent communications plc
annual report 2014
27
strategic report governance financial statements networks  applications
develops innovative solutions 
for functional performance  
and security testing of next
generation networks and 
applications that simulate 
realworld conditions in the lab 
before a commercial launch
networks  applications snapshot
strategy
 –leadership in virtual sdnnfv and high speed ethernet 
 –invest in mobility especially volte wifi and signalling
 –increase investment in application and cyber security testing
 –simplify lab testing through automation and test  
orchestration tools
key market drivers
 –growth in mobile data and high speed ethernet
 –virtualization sdnnfv on the rise everywhere
 –cyber security more critical than ever
performance highlights
 –major customer reorganised slowing revenue in third quarter
 –growth in mobility revenue
 –built leadership in sdn and nfv
 –success with virtual solutions
revenue
2215m
4 2013 2134m
operating profit
53m
–54 2013 116m
operating profit before 
exceptional items
76m
–42 2013 132m
return on sales before 
exceptional items
34
2013 62
operational review
market conditions
the growth of video and other bandwidthintensive services 
once again drove the requirement for faster networks with 100g 
ethernet deployments under way and many more expected in 
2015 along with an increase in trials of 400g ethernet we also 
saw 100g ethernet push into data centers expanding beyond its 
presence in core routers 4g lte network roll outs and the 
proliferation of applications and services continued to contribute 
to the rapid growth in mobile data as well as in signalling traffic 
as 4g lte coverage increased deployment of volte and other 
imsenabled services began in earnest in north america and are 
expected to continue globally into 2015 and beyond access 
networks evolved with wifi offload solutions and deployment of 
the latest wifi technologies virtualization remained a major 
trend across all our markets service providers and their vendors 
continued to intensively explore how sdn and nfv can best be 
utilised to accelerate delivery of products and services as a 
result at least one toptier service provider reorganised and 
paused its capital spending with the associated impact on its 
vendors while it undertook an organisationwide investigation 
into a softwaredriven network based on sdn and nfv in the 
applications and security space 2014 saw numerous high profile 
attacks and breaches from large retailers to media companies 
and financial institutions these showcased the intense need to 
prevent cyber intrusions and led to a sharp rise in spending on 
cyber security by enterprise government and large service 
providers along with the widespread adoption of agile 
development processes has come the growth in “devops” 
in which development engineers and operations participate 
together from design to product test and support spirent’s ito 
solutions are playing a key role in helping to automate these 
increasingly complex environments reducing costs and 
accelerating time to market
revenue
revenue in networks  applications grew by 4 per cent to 
2215 million from 2134 million in 2013 with a book to bill 
ratio of 103 2013 105
on the back of the 4g lte and volte development trends 
identified above we saw an increase in revenue for our mobility 
solutions in 2014 there was also growth in our high speed 
ethernet solutions for service providers and data centers 
revenue in our application and security market was flat while 
our virtual solutions grew at triple digit rates support services 
revenue was 9 per cent up compared with 2013 our ito  
solutions business saw strong growth from professional services 
and from innovative continuous integration solutions for 
agile development environments from a regional perspective 
revenue was down slightly in north america and apac and up 
strongly in emea 
profitability
operating profit before exceptional items was down to 
76 million from 132 million in 2013 increased investment of 
136 million in product development sales and marketing and 
support services offset gross margin from revenue growth 
gross margin increased to 683 per cent 2013 680 per cent of 
revenue exceptional items of 23 million were charged for 
reorganisation expenses
spirent communications plc
annual report 2014
28 we think about the 
next big thing after 
the next big thing
as bandwidth demand continues to grow ethernet speeds 
increase and the migration to virtual environments forges 
ahead the need remains to deliver optimal performance 
scalability and security
spirent is at the forefront of delivering innovative test 
solutions for the development of technologies such as 
400g ethernet long before they are implemented in a live 
environment we are committed to delivering a flexible 
scalable test architecture and efficient lab management to 
an emerging generation of cloud service providers and 
their vendors
product development
spirent continued to expand its leadership in virtual sdn and 
nfv launching first to market sdn capabilities for service 
providers on spirent testcenter helping to ensure a smooth 
migration to sdn while achieving optimal performance in the 
mobility space we announced expanded volte and ims test 
capabilities and new wifi test capabilities for our landslide 
solution together with a landslide virtual solution spirent 
made further contributions to advancing ultrahigh bandwidth 
networking with release of a new high density 100g test solution 
supporting the latestgeneration cfp4 optical transceiver 
interface we also announced new mx2 modules for 1040g 
ethernet testing with bestinclass performance and realism 
enabling enhanced reliability and security testing in applications 
and security we launched multiple enhancements to the 
avalanche solution including fuzzing and the avalanche next 
solution won a 2014 best of interop award spirent announced 
the first fully integrated test solution to support the emerging 
industry standard for automotive ethernet reflecting the 
evolution of invehicle networks to support increasingly 
sophisticated electronics including driver assistance 
technologies infotainment systems and connected cars  
our ito  solutions business announced velocity a 2014 best  
of interop award finalist a virtual lab environment that helps 
validate sdnnfv technologies and deployments helping 
customers accelerate time to market and reduce the costs 
associated with traditional virtual and physical test beds
strategy
for 2015 we will focus our investments to align with the 
continued rapid growth in network bandwidth requirements in 
the virtualization of networks and in mobile access we will grow 
our leadership in virtual sdn and nfv addressing not only our 
core network equipment manufacturer and service provider 
customer base but also the new opportunities presented by 
“white box” vendors cloud and virtualization specialists and 
software vendors and a new generation of cloud service 
provider for mobility we will invest to address the development 
of softwarecentric evolved packet core networks and leverage 
our investment in volte and wifi as these services roll out 
globally our applications and security test focus is on cyber 
security and the challenges of migrating to the cloud for 
enterprise government and solution vendors applying spirent’s 
key strengths of realism and performance at scale as the drivers 
for faster networks continue to intensify spirent will build its 
leadership in 100g ethernet networking spirent was the first test 
and measurement vendor to show a working test solution for 
400g ethernet and we plan to continue our key role in enabling 
high speed ethernet technologies and the associated industry 
standards we will expand our ito  solutions business to 
address the opportunities presented by automation devops 
virtualization test and lab management positioning spirent as a 
trusted partner throughout our customers’ project lifecycle
spirent communications plc
annual report 2014
29
strategic report governance financial statements wireless  service experience
applying our innovation to 
functional and performance 
testing of 4g l te mobile 
devices services satellite 
positioning devices and 
wireless infrastructure 
as well as to endtoend 
measurement of the mobile 
experience on live networks
wireless  service experience snapshot
strategy
 –reduce time to market for new devices and services
 –build leadership in user experience testing  
of converged services
 –expand test capabilities across the entire lifecycle
key market drivers
 –economic pressure on toptier smartphone vendors
 –4g lte services growth with volte and rcs
 –increased gnss interference vulnerability awareness
performance highlights
 –government spending restrictions limit positioning growth
 –china 4g lte ecosystem drives wireless business
 –volte and rcs test leadership for wireless  
service experience 
revenue
1786m
6 2013 1677m
operating profit
231m
–32 2013 338m
operating profit before 
exceptional items
240m
–29 2013 338m
return on sales before 
exceptional items
134
2013 202
operational review
continued
market conditions 
in our wireless  service experience markets the economic 
pressure on toptier global smartphone vendors continued into 
2014 a year characterised by local smartphone vendors’ market 
share gains in key growth markets such as china and india 
however spirent benefitted from the development phase of 
important 4g lte services and the focus on user experience of 
those services especially volte and other imsenabled services 
such as rich communication suite “rcs” 2014 saw the first 
large scale volte and rcs roll outs in north america with global 
deployments following in 2015 and beyond as lte coverage 
becomes ubiquitous enhancements to 4g technology “lte
advanced” such as carrier aggregation were also widely 
deployed to improve performance spectrum utilisation and 
coverage 4g network buildouts continued apace in china and 
impressive subscriber growth followed with china mobile 
claiming more than 90 million 4g subscribers by the end of the 
year the importance of wireless m2m connectivity continued to 
rise as the internet of things became a reality and began to 
change the way in which people live from smart homes to 
connected vehicles in our positioning markets applications 
grew for multignss technologies such as beidou with gps 
and glonass and were a significant driver for both government 
and commercial customers including the emerging “wearable” 
technology sector the growing concern over the vulnerability 
of gnss receivers to interference including jamming and 
spoofing attempting to deceive a gnss receiver by 
broadcasting counterfeit gnss signals is becoming an 
important market driver
revenue
wireless experienced modest growth in its mobile device test 
markets as a result of strength in 4g carrier ecosystems in china 
and continued worldwide investment in 4g lte technologies and 
services especially in volte service experience also grew 
primarily in north america as a result of expanding its portfolio  
to include more services for device vendors positioning also 
saw modest growth yearonyear with a strong performance 
in commercial markets due to the launch of innovative new 
solutions that took market share being offset by government 
spending restrictions in some regions the former radvision 
tbu acquired by spirent in july contributed 42 million in 
revenue and testing technologies ist gmbh 23 million 
overall revenue was up by 109 million to 1786 million from 
1677 million in 2013 giving an organic revenue growth rate of 
3 per cent for this division book to bill ratio grew to 102 from 
101 at the end of 2013 
profitability 
operating profit before exceptional items was 240 million 
compared with 338 million in 2013 as high gross margin on 
the increased revenue was more than offset by the increase 
in investment in product development sales and marketing and 
support services of 94 million gross margin was 680 per cent 
compared with 694 per cent in 2013 due to product mix 
the resulting return on sales reduced to 134 per cent compared 
with 202 per cent in 2013 exceptional reorganisation costs of 
09 million were charged in 2014
product development
our wireless  service experience business invested to address 
the industry’s needs against a background of large scale 
deployment of 4g lteenabled services and the continued surge 
spirent communications plc
annual report 2014
30 we think about the 
internet of everything
smartphones have become ubiquitous and spirent plays 
a major role in ensuring the performance of these devices 
and the services they enable yet to date only a tiny 
fraction of all the “things” in the world that could be 
connected to the internet have been
with a broad and deep expertise in wireless connectivity 
and services spirent is well positioned to advance 
the development of wireless machinetomachine 
communications that underpins the “internet of things” 
accelerating its deployment in everything from smart 
homes to connected vehicles 
in smartphones and m2m devices with the deployment of 
services such as volte and rcs legacy test solutions are no 
longer able to support the associated increases in complexity 
interoperability challenges and time to market requirements to 
address this evolving need in september spirent announced its 
elevate test framework a powerful network of resources 
designed to address the wireless industry’s increasingly complex 
testing challenges and scale demands elevate’s unique open 
test architecture disrupts the status quo in test and measurement 
with its ability to evaluate device service and user experience 
performance in the lab earlier in the development lifecycle and 
generate meaningful analytics that can be shared across global 
development teams elevate also incorporates the prolab test 
suite an asset acquired with radvision’s tbu prolab is a widely 
accepted solution in the industry which leverages the radvision 
tbu team’s expertise in voice and video over ip including volte 
we launched an acoustic verification system the industry’s first 
benchtop system that enables operators to incorporate 
sophisticated acoustic speech analysis into their forward and 
reverse device logistics processes driving substantial cost 
savings and an improved user experience the business also 
launched quantum an automated system for measuring and 
driving improvements in the battery life of mobile devices under 
typical consumer use cases as well as a new ip analytics 
capability for improving the user experience of volte and other 
ipbased services our positioning business significantly 
extended its industry leadership with the launch of the gss9000 
a highend multignss solution which offers unrivalled 
performance flexibility and costeffectiveness
strategy
the strategy for wireless  service experience centres around 
radically reducing time to market for new devices and services for 
its global customers and ecosystems while helping to ensure the 
highest quality and user experience spirent elevate the unique 
toolsets from spirent’s developer tools formerly radvision tbu 
business and recent additions to its powerful portfolio of gnss 
platforms are all examples of spirent’s capability to help its 
customers reduce time to market for their products and services 
spirent is building leadership in testing the user experience of 
converged services and the devices that support them including 
video data and voice such as volte and voice over wifi across 
the entire lifecycle from development to initial deployment to 
issues that arise over the lifetime including device returns the 
addition of powerful analytic capabilities enabling customers to 
gain new insights into test data and correlate user experience 
metrics with iplayer performance metrics accelerates the 
resolution of issues and improves the user experience
spirent communications plc
annual report 2014
31
strategic report governance financial statements service assurance
enabling service providers to 
diagnose troubleshoot and 
reduce time to resolve issues 
with production networks and 
services and continuously 
monitor production network 
performance and enduser 
experience through endto
end visibility and realtime 
automation
service assurance snapshot
strategy
 –reduce time to solve user experience degradation
 –combine service assurance cem and device intelligence assets
 –leverage cem analytics capabilities across the portfolio
key market drivers
 –growing complexity and customer churn fears
 –caution around virtualization 
 –increased carrier competition drives customer  
experience focus
performance highlights
 –revenue up significantly on field test strength
 –ethernet sales maintained but virtualization causes  
spending caution
 –second phase of large field test project received for delivery 
in the second half of 2015
revenue
571m
76 2013 324m
operating profit
205m
128 2013 90m
operating profit before 
exceptional items
207 m
130 2013 90m
return on sales before 
exceptional items
363
2013 278
operational review
continued
market conditions 
overall service provider spend remained cautious with 
investment in legacy now almost at a standstill major carriers 
shifted their focus to research and evaluation of virtualization  
and how best to evolve their networks to incorporate its benefits 
these trends resulted in a pause in investment in traditional 
probes by some key customers and early stage growth in 
demand for virtualized solutions the rapid growth of video 
services and mobile subscriber data led to the need for more 
ethernet “pipes” in backbone networks increasing pressure to 
move to higher ethernet speeds and better data analytics 
continued growth in the complexity of networks and services 
coupled with intense competition between service providers  
and the fear of customer churn has led to greater emphasis on 
customer experience management and on the value of big 
data analytics it has also driven demand for powerful yet 
easytouse tools that technicians can employ to help manage 
the increasingly complex end point of the network the 
customer’s home mobile operators struggle to keep abreast of 
the capabilities and technical requirements of the everexpanding 
pool of new devices and os versions coming onto their networks 
to maintain a consistent costefficient service and maximise 
their topline they are moving beyond device management to 
obtain intelligence on the limitations and potential of every 
device on their network spirent acquired mobilethink in 
september 2014 to enable it to address this trend 
revenue
overall revenue was up strongly by 247 million to 571 million 
in 2014 compared with 324 million in 2013 126 million of 
this growth was organic while the cem business acquired 
from dax technologies in february contributed 101 million 
growing its business at a major us service provider the device 
intelligence business acquired as mobilethink in september 
contributed 20 million in revenue in 2014 for our core service 
assurance business field test revenue was particularly strong 
as we delivered a large 2013 order to a major north american 
service provider for a new version of our techx flex product 
a second larger order was placed in december by the same 
customer for delivery in the second half of 2015 the book to 
bill was 104 due to the large field test order and cem projects 
awaiting completion
profitability
adjusted operating profit was 207 million compared with 
90 million in 2013 as a result of the significantly increased 
revenue gross margin was 762 per cent compared with 
778 per cent in 2013 the resulting return of sales increased 
to 363 per cent compared with 278 per cent in 2013
product development
we shipped a new version of our techx flex field test product 
that supports the latest generation of wifi technology 80211ac 
and inhome networking standard moca 20 and incorporates 
new network data performance test methodologies current 
development work on field test solutions is focused on 
incorporating additional test methodologies and further 
improving ease of use enabling use by technicians of all skill 
levels in response to the increasingly important role played by 
sdn and nfv in cable and telecom operator networks spirent 
also announced spirent testcenter live virtual probe which is  
as the name suggests a virtualized distributed ethernet probe  
spirent communications plc
annual report 2014
32 we think about finding 
things that others don’t
today’s greater emphasis on customer experience 
management means finding and resolving issues more 
quickly preferably before your customers are even aware 
of them
spirent is developing powerful yet easytouse tools 
to help manage the increasingly complex networking 
environment in the customer’s home our customer 
experience management software helps operators 
find network issues before their subscribers do while 
our device intelligence tools help them seamlessly 
manage the exploding number of devices coming 
onto their networks
in conjunction with the spirent testcenter live ethernet services 
platform it allows operators to extend performance management 
to all points of their network as well as to respond to the rapidly 
changing demands of new virtual environments and today’s 
fast paced network operations conditions our cem business 
released new capability for lte
strategy
the complexity of today’s networks and services and fierce 
competitive environment result in the need for service providers 
to assure the user experience of services endtoend spirent 
aims to enable its customers to radically reduce time to resolve 
user experience degradation through endtoend visibility and 
realtime automation and response it will accomplish this by 
combining the ethernet and inhome service assurance assets 
from spirent’s core service assurance business with the analytics 
and cem systems from the dax technologies acquisition and the 
device intelligence capabilities from the mobilethink acquisition 
as a result spirent will be able to assure networks and services 
at all layers of the protocol stack and to employ its analytics and 
cem expertise to find and resolve user experience issues more 
quickly and efficiently spirent’s device intelligence and new 
predictive capabilities within its cem systems will enable service 
providers to identify issues before subscribers are even aware of 
them helping to maximise service revenues and minimise 
subscriber churn spirent enables its customers to get the turnup 
of new services right first time ensuring that they work at the 
bearer and transport layers and also at the increasingly complex 
end point of the network the subscriber’s home through 
spirent’s unique field test offerings we will also expand the 
scalability and costeffectiveness of the solutions offered by our 
cem business expanding its analytics capabilities to applications 
across the spirent portfolio this will enable customers to 
correlate user experience metrics with iplayer performance 
metrics to accelerate the resolution of issues and improve the 
user experience
spirent communications plc
annual report 2014
33
strategic report governance financial statements financial review
rachel whiting
chief financial officer
our strong balance 
sheet has enabled us 
to invest for the future 
both organically and 
through acquisition
revenue 
group revenue increased by 11 per cent compared with the prior 
year to 4572 million 2013 4135 million the group’s 2014 
acquisitions contributed revenue of 186 million during the year 
and excluding this effect the organic increase in revenue was 
6 per cent trading improved towards the end of the year in all 
divisions after a slow third quarter as our customers released 
capital budgets and some of the new product launches gained 
traction the structural changes in spirent’s markets and the 
consequential caution some of our customers are understandably 
exhibiting in their investment plans have delayed revenue growth 
in 2014 however spirent’s 2014 investments were focused on 
building on the many opportunities that exist in our markets 
spirent had some major successes in 2014 and market conditions 
and performance in each of spirent’s divisions are discussed in 
the operational review
excluding the effect of acquisitions order intake grew by 3 per 
cent compared with 2013 and the book to bill ratio was above 
100 at 103 2013 105 both orders and revenue grew organically 
in all divisions in service assurance revenue of 120 million was 
recognised in the first half from a large field test order received 
in 2013 and a follow on order of 162 million was booked in the 
fourth quarter of 2014 for delivery in the second half of 2015
spirent communications plc
annual report 2014
34 cost of sales and operating expenses
gross margin reduced slightly to 692 per cent 2013 
694 per cent due to product mix and the increased investment 
in support services 
in the 2013 annual report spirent announced that it would 
make an additional investment of around 33 million in product 
development sales and marketing and support services for 
future growth the actual amount invested was an additional 
244 million excluding acquisitions or 5 per cent of revenue 
32 million for support services included in cost of sales 
83 million for product development and 129 million for sales 
and marketing our investment was mainly in our core markets 
focusing on virtual test solutions and cyber security and to also 
to fund new initiatives such as automotive 
administration expenses were 414 million in 2014 compared 
with 396 million in 2013 before charging the following items 
which are added back for the purposes of the calculation of 
adjusted operating profit
 –exceptional items of 41 million 2013 38 million
 –acquired intangible asset amortisation and impairment of 
137 million 2013 84 million which reflects a prorata 
amortisation charge for the 2014 acquisitions 
 –acquisition related costs of 38 million 2013 nil and
 –a sharebased payment charge of 07 million 2013 credit 
of 12 million 
total reported administration expenses were 637 million 
compared with 506 million after charging the items above
the 2014 acquisitions have added a total of 129 million to 
reported operating expenses in the year
it is planned to maintain the underlying rate of investment in 
product development in 2015 and to increase the investment 
in sales and marketing by approximately 7 million this will 
support new product releases build on the global opportunities 
provided by the 2014 acquisitions and enable us to implement 
a new customer relationship management software platform 
to enhance operational effectiveness
geographically the united states is our largest market 
accounting for 51 per cent of group revenue revenue increased 
by 8 per cent periodonperiod in this region asia pacific 
amounts to 31 per cent of group revenue and increased by 8 per 
cent over 2013 primarily due to strong activity in china driven by 
the china carrier ecosystem europe represents 14 per cent of 
group revenue and was 29 per cent up as we saw recovery after 
a difficult 2013 the rest of the world represents the remaining 
4 per cent 
 million 2014  2013 
united states 2332 51 2158 52
asia pacific  
 rest of world 1587 35 1469 36
europe 653 14 508 12
4572 100 4135 100
operating profit
reported operating profit was 237 million compared with 
391 million in 2013 operating profit before exceptional items 
acquisition related costs acquired intangible asset amortisation 
and impairment and sharebased payment “adjusted operating 
profit” which is the measure of profit the group uses to evaluate 
performance decreased by 8 per cent to 460 million compared 
with 501 million in 2013 primarily as a result of the planned 
increase in product development sales and marketing and 
support services of 244 million to drive future growth 
a reconciliation is set out below
 million 2014 2013
adjusted operating profit 460 501
exceptional items
reorganisation expenses in response
 to market changes 4 1 –
review of group’s organisational structure – 34
abortive acquisition costs – 04
acquisition related costs 38 –
acquired intangible asset amortisation
 and impairment 137 84
sharebased payment 07 12
reported operating profit 237 391
return on sales based on adjusted operating profit was 
101 per cent 2013 121 per cent 
the following table shows the key financial performance indicators monitored by the board in order to measure the performance  
of the group
2014 2013 change 
book to bill ratio
1
103 105
revenue  million 4572 4135 11
gross profit margin  692 694
adjusted operating profit
2
  million 460 501 8
return on sales
2
  101 121
adjusted basic earnings per share
3
 cents 582 571 2
free cash flow
4
  million 107 439 76
notes
1 ratio of orders booked to revenue billed
2 before exceptional items acquisition related costs acquired intangible asset amortisation and impairment and sharebased payment
3 adjusted basic earnings per share is based on adjusted earnings as set out in note 12 of notes to the consolidated financial statements
4 operating cash flow after tax net interest and net capital expenditure
spirent communications plc
annual report 2014
35
strategic report governance financial statements exceptional items and intangible asset impairment
in 2014 following dynamic changes in spirent’s markets and 
the need to ensure that the group is investing in the right areas 
to maximise its potential spirent undertook a series of steps 
to reallocate resources in its worldwide operations at a cost 
of 41 million the annualised cost savings from these actions 
is 12 million of which we have reinvested 5 million giving 
a net saving of 7 million
in 2013 the group undertook a review of its organisational 
structure on the appointment of a new chief executive officer 
at an exceptional cost of 34 million and also incurred abortive 
acquisition costs of 04 million
in 2014 an intangible asset impairment charge of 10 million has 
been incurred in respect of the development asset arising on 
the acquisition of netgend the asset had been acquired at a 
preproduction stage and although the intention is to use this 
technology to enhance spirent’s solutions the extent and the 
means by which this will be achieved had not been determined 
at 31 december 2014 resulting in an impairment charge
corporate costs
corporate costs are those expenses which cannot be attributed 
to the group’s operating segments and comprise the costs of 
the board and other corporate activities these costs were 
63 million 2013 59 million before exceptional items of 
07 million 2013 22 million for the year 
currency impact
the effect of fluctuating exchange rates is relatively minimal as 
the group’s revenue and profits are primarily denominated in 
us dollars or us dollarlinked currencies
finance income and costs
finance income for 2014 was 04 million compared with 
09 million in 2013 surplus funds are held principally in the 
united kingdom and in the united states and earn market rates 
of interest which remain negligible 
finance costs were nil in 2014 they were 09 million in 2013 
which was the defined benefit pension plan interest cost
tax
for the group taxable profits principally arise in the united states 
the tax charge for the group in 2014 was 35 million 2013 
64 million representing a current year effective tax rate of 
220 per cent 2013 258 per cent of pretax profit excluding a prior 
year tax credit of 18 million 2013 37 million the effective tax 
rate is lower in 2014 as a result of the geographic mix of taxable 
profit as well as the effect of research and experimental tax credits 
in the united states at 31 december 2014 deferred tax assets 
amounting to 205 million 31 december 2013 183 million have 
been recognised on the balance sheet at 31 december 2014 there 
are deferred tax assets amounting to a tax value of 171 million 
31 december 2013 177 million which remain unrecognised
for 2015 it is expected that the effective tax rate will be in the 
region of 25 per cent
earnings per share
adjusted basic earnings per share was 582 cents compared with 
571 cents for 2013 there were 6112 million 2013 6406 million 
weighted average ordinary shares in issue basic earnings per 
share was 335 cents for 2014 compared with 510 cents for 2013 
a reconciliation is provided below
 million 2014 2013
profit for the year attributable to 
  owners of the parent company 205 327
exceptional items 41 38
acquisition related costs 38 –
acquired intangible asset amortisation
 and impairment 137 84
sharebased payment 07 12
tax effect on the above items 54 34
prior year tax credit 18 37
adjusted profit for the year attributable 
  to owners of the parent company 356 366
adjusted basic earnings share cents 582 571
financial risk management
the key objective of the group’s treasury department is to 
manage the financial risks of the business and to ensure that 
sufficient liquidity is available to the group all treasury activity 
operates within a formal control framework the board has 
approved treasury policies and guidelines and periodically 
reviews treasury activities additionally it is the group’s policy 
that speculative treasury transactions are expressly forbidden
spirent’s financial risk management objectives and policies and 
its exposure to risks are discussed in note 26 of notes to the 
consolidated financial statements
acquisitions
the following acquisitions were completed in 2014
 –the business of dax technologies corp “dax” for a cash 
consideration of 369 million which completed on 19 february 
2014 dax is a leading provider of customer experience 
management solutions and is reported within the service 
assurance division
 –a majority stake of 58 per cent in testing technologies ist 
gmbh “testing tech” for a cash consideration of euro 
18 million 24 million on 20 february 2014 the company 
develops and markets standardised and customerspecific 
softwarebased testing tools which support the development of 
missioncritical products and workflow steps testing tech also 
participates in the connected vehicle market which will facilitate 
spirent’s progress in this market the minority stake of 42 per 
cent of the share capital is the subject of a put and call option 
which is exercisable between 1 january and 31 march 2016 
the consideration is based on the 2015 performance of testing 
tech and set at a minimum amount of euro 14 million the option 
has been assigned a fair value of euro 22 million 27 million 
this acquisition is reported within the wireless  service 
experience division
financial review
continued
spirent communications plc
annual report 2014
36 the cash generated has been utilised to pay dividends to 
shareholders and for the return of capital through the share 
buyback programme in 2014 a final dividend for 2013 and 
an interim dividend for 2014 totalling 222 million 2013 
222 million were paid share repurchases during the early part 
of 2014 have resulted in a cash outflow of 164 million 2013 
547 million cash consideration for acquisitions amounted to 
859 million
defined benefit pension plans
the group operates two funded defined benefit pension plans 
which are in the united kingdom both of these schemes were 
closed some time ago to new entrants and the main plan now has 
fewer than ten active members 
the accounting valuation of these plans at the end of 2014 
was a net deficit of 137 million compared with a net deficit of 
25 million at 31 december 2013 and was based on the latest 
triennial actuarial valuation at 1 april 2012 the increase in the 
deficit is mainly a result of changes in the underlying assumptions 
principally the discount rate net of a rise in the value of the assets
the group has also reported a liability of 08 million 
31 december 2013 08 million in respect of united kingdom 
unfunded plan liabilities
capital structure 
spirent’s policy on capital structure is to maintain a strong 
balance sheet to support operational flexibility and fund 
investment for long term growth 
in 2014 the company repurchased 97 million ordinary shares 
at a cost of 156 million 2013 292 million at a cost of 
555 million all shares repurchased were cancelled no further 
buybacks are currently planned
dividend
the board is recommending the payment of a final dividend 
for 2014 of 221 cents 143 pence per ordinary share which 
with the interim dividend of 168 cents 099 pence per ordinary 
share paid in september 2014 brings the full year dividend to 
389 cents 242 pence per ordinary share the dividend is  
covered 15 times by adjusted earnings this is an increase of 
10 per cent over the full year dividend for 2013 of 354 cents per 
ordinary share
subject to approval by the shareholders at the annual general 
meeting the final dividend will be paid on 8 may 2015 to ordinary 
shareholders on the register at 6 march 2015 payment to adr 
holders will be made on 18 may 2015
 –on 31 july 2014 spirent completed the acquisition of the assets 
of radvision’s technology business unit “tbu” the part of the 
radvision business responsible for delivering industryleading 
developer solutions for a cash consideration of 259 million 
the business unit is based in tel aviv israel and offers a 
complete development and test suite for voice and video 
over ip communications including volte this acquisition is 
reported within the wireless  service experience division
 –on 12 september 2014 spirent acquired mobilethink as 
“mobilethink” and its wholly owned subsidiary tweakker aps 
“tweakker” for a cash consideration of 201 million 
headquartered in aarhus denmark mobilethink is a provider 
of mobile device management device analytics and intelligence 
solutions for mobile operators this acquisition is reported 
within the service assurance division
in addition spirent acquired the net assets of netgend llc 
in september a texas based entity for a cost of 10 million 
acquisition expenses of 38 million which have been expensed 
were incurred in relation to these transactions 
financing and cash flow
the group remains cash generative and this gives spirent the 
financial flexibility to invest in organic growth pursue strategic 
acquisitions and pay sustainable dividends to shareholders 
cash and cash equivalents were 998 million at 31 december 
2014 compared with 2162 million at 31 december 2013 with no 
debt cash and cash equivalents are held as cash on demand or 
in short term bank deposits and 57 per cent of the balance was 
denominated in us dollars 
cash generated from operating activities was lower in 2014 at 
489 million 2013 735 million as the activity was skewed 
to the end of the fourth quarter resulting in an increase in working 
capital of 67 million for the year 2013 reduction of 121 million 
this working capital increase is expected to unwind during the 
first quarter of 2015 free cash flow conversion represents 
05 times 2013 13 times reported earnings 
free cash flow is set out below
 million 2014 2013
cash flow from operations 489 735
tax paid 72 61
cash inflow from operating activities 417 674
interest received 06 08
net capital expenditure 316 243
free cash flow 107 439
net capital expenditure was higher by 73 million than in 2013 
this increase was due to the move to new improved leasehold 
facilities in the united states on the expiry of the previous lease 
terms at a cost of 95 million for 2015 capital expenditure is 
expected to be in the region of 20 million
spirent communications plc
annual report 2014
37
strategic report governance financial statements resources and relationships
ethics
spirent expects that all of its 
business is conducted in 
compliance with high ethical 
standards of business practice 
we apply these standards to 
all dealings with employees 
customers suppliers and 
other stakeholders
health and safety
spirent is committed to 
continually improving its health 
and safety performance and is 
also committed to employee 
wellbeing by encouraging the 
adoption of healthier lifestyles 
by its staff members
sustainability  
and environmental
the group is committed 
to the concepts of pollution 
prevention minimising 
environmental impacts 
and ecoefficiency
community
spirent aims to build 
stronger and healthier 
global communities through 
education charitable donations 
and support of nonprofit 
agencies in the communities 
in which we operate
our responsibility 
framework
it is our highly skilled 
motivated and empowered
employees that drive the 
success of the business
spirent communications plc
annual report 2014
38 planning review and development spirent maintains a 
successful health and safety management programme and 
appropriate resources are made available for this purpose
the chief financial officer is the director nominated by the board 
to have responsibility for the health and safety performance of the 
group no major health and safety issues were reported by the chief 
financial officer to the audit committee and board during the year
the health and safety risk profile of the group remained low during 
2014 the main risks of the group continue to be based around final 
test and assembly of products and working environment issues such 
as ergonomics and repetitive strain injury the acquisitions made 
during 2014 had a similar risk profile to the existing group
the group continued to have very low accident rates in 2014 and 
no incidents required any hospitalisation
the group health and safety policy places responsibility for the 
management of health and safety on local management who are 
supported by local external advisers where necessary it is the 
group’s policy that each business unit should have a senior 
individual designated as being responsible for ensuring the business 
unit conforms to local statutory health and safety regulations as well 
as the group policy an annual questionnaire on health and safety 
performance is completed by our business units and any issues 
are addressed and resolved independent external reviews of the 
company’s health and safety performance are conducted 
periodically at selected business units regular designated health 
and safety awareness training programmes are also carried out
environmental
sustainability remains an important issue for the group the 
strategy was reviewed and updated in 2014 to ensure spirent 
continues to manage all material sustainability issues and to 
direct the programme of action for the coming years whilst 
compliance with environmental legislation and our sustainability 
policy remain a key priority our focus on opportunities and 
innovation has yielded good results particularly at the low 
carbon centre of excellence at paignton and in innovation in 
product design and functionality in the elevate test framework
growth in revenue and property estate in 2014 has seen a 5 per 
cent increase in our absolute carbon emissions from 2013 to 
6831 tonnes co
2
e however the carbon intensity of our 
operations has continued to fall per m
2
 and m revenue basis 
down 9 per cent and 21 per cent respectively
environmental policy and compliance
the group environmental policy applies to the company and to 
all subsidiaries worldwide it commits the group to prevention 
and control of pollution minimising environmental impacts to 
ecoefficiency and to adopt responsible environmental practices
the group is also committed to compliance with all applicable 
environmental regulation in each of the jurisdictions in which  
it operates
to meet these objectives the group endeavours to continuously 
improve environmental performance and to make robust 
environmental management integral to its overall strategy 
external consultants are periodically used to assist in this area
the full policy can be found at httpcorporatespirentcom
corporateresponsibilityourpolicies
corporate responsibility is integral to the way spirent 
conducts its business and we are committed to advancing  
our policies and systems across the group to ensure that we 
address all aspects of corporate social responsibility “csr”
the board takes ultimate responsibility for csr with a 
fundamental commitment to create and sustain long term 
value for shareholders recognising that acting responsibly 
and sustainably creates value spirent’s csr strategy covers 
our accountability to all of our stakeholders this includes 
striving for the highest ethical standards of business practice 
embedding a culture of health and safety minimising our 
impact on the environment supporting developing and 
rewarding our employees and supporting and engaging 
with the communities in which we operate
ethics and human rights
spirent expects that all of its business is conducted in compliance 
with high ethical standards of business practice we apply these 
standards to all dealings with employees customers suppliers 
and other stakeholders and expect high standards of respect 
and integrity in all our business dealings
spirent has continued to ensure that all its systems controls and 
training comply with the antibribery and corruption legislation 
in all the countries where we operate and that a culture of 
prevention and detection of corruption is in place this policy 
applies to spirent’s subsidiaries and business partners
the group’s ethics policy which has been approved by the 
board is available on our website at httpcorporatespirentcom 
our ethics policy has been developed to ensure that the group’s 
business is conducted in adherence with high ethical and legal 
principles and sets standards of professionalism and integrity 
for all employees and operations worldwide
the following is a summary of the ethics policy
 –all employees have the right and responsibility to ensure that spirent’s 
business is conducted with high ethical and legal principles
 –our policy is to operate within applicable laws
 –discrimination or harassment of any kind will not be tolerated
 –as a matter of policy we do not make political donations
 –no bribes shall be given or received
 –conflicts of interest must be avoided
 –we aim to be a responsible partner within our local communities and
 –employees are encouraged and supported to report in 
confidence any suspected wrongdoings “whistleblowing”
appropriate ethical behaviour is monitored as part of the group’s 
internal control process
health and safety
spirent recognises that it is important that health and safety is 
managed to high standards successfully throughout all levels of the 
organisation successful health and safety management contributes 
to spirent’s overall success by preserving and developing staff and 
physical resources thereby reducing costs and liabilities it is an 
essential element of our corporate responsibility
spirent is committed to continually improving its health and 
safety performance and to employee wellbeing by encouraging 
the adoption of healthier lifestyles by its staff members 
regulatory requirements and the outline of care form the basis 
upon which spirent’s commitment is achieved by realistic 
spirent communications plc
annual report 2014
39
strategic report governance financial statements work to incorporate sustainability thinking into our products 
has led to a revolutionised design for our new elevate product 
designed to help our customers measure and minimise energy 
use in mobile devices
products
elevate test framework – sustainability improvements through 
innovative product design
the elevate test framework represents a radical innovation in 
how spirent products are designed elevate breaks the “box” 
model by separating hardware from software organising 
elements into a network of test resources that not only delivers 
faster and more efficient testing but also significantly reduces 
energy use heat noise and product footprint
unit b200 q100
 reduction 
from b200
noise dba 60 40 33
power watts 650 200 69
heat watts 650 200 69
weight kgs 142 14 90
size – volume cm
3
 1077736 20353 98
through network functions virtualization it has been possible 
to develop a small lightweight device with a marketleading 
footprint the new spirent wts122 network emulator operates 
in standalone mode for rd testing and is used as the main 
component of the new spirent 8100 q100 system for carrier 
acceptance testing the q100 has reduced energy use and heat 
output by 69 per cent compared with the previous b200 model 
at 10 per cent of the weight and 2 per cent of the total size 
further environmental performance improvements have been 
achieved in the elevate solution for imsrcsvolte as hardware can 
be scaled independently from software allowing the q100 series 
to support multiple handsets requiring fewer smaller test devices 
the 200w q100 system reduces the power per handset tested by 13 
times compared with the four b200 units required to test 4 handsets
q100 69 reduction in power from b200
q100 90 reduction in weight from b200
q100 only 2 of the size volume of the b200
compliance statements
the group’s business units comply with the waste electrical and 
electronic equipment regulations 2013 the batteries directive 
and the california electronic waste recycling programme new 
products are designed to meet the restriction of hazardous 
substances directive “rohs” also known as directive 201165
eu even though spirent communications’ hardware products are 
classified as category nine monitor and control equipment 
and are therefore currently out of scope with the rohs directive 
measures are in place to ensure spirent communications’ 
hardware products will be in compliance with the rohs directive 
at such time as they are brought in to scope 
the group is not directly required to comply with or report under 
section 1502 of the doddfrank act the us conflict minerals 
law however it has robust procedures to ensure that it would 
be in compliance if it were brought in within the scope of 
this legislation
sustainability strategy 
in 2014 the key update to the group’s sustainability strategy 
is to expand from a programme of ecoefficiency and legal 
compliance and to also understand and help address customers’ 
sustainability challenges
our work with external consultants led us to revise our 
sustainability strategy which now has four key strands
 –minimise our environmental impacts from our properties
 –provide our people with the skills and resources to address 
sustainability issues effectively
 –incorporate sustainability thinking into products through
 –innovation in product design and manufacture and
 –new products and services to address customers’ 
sustainability challenges and
 –minimise sustainability impacts from the supply chain
2014 performance and trends
during 2014 we have made progress across all areas of 
our sustainability strategy in particular in the property and 
product design areas
we have continued to drive sustainability into our property estate 
installing further retrofit technologies at the low carbon centre 
of excellence in paignton and incorporating best practice in the 
design and fitout of our new site in liberty canyon california 
we have also undertaken site energy audits at our beijing sites
property
paignton – low carbon centre of excellence
since designating our paignton site as the group’s low carbon 
centre of excellence in 2012 we have made significant 
reductions in the site’s energy and carbon footprint through 
technology and behavioural change 
the majority of the site’s energy needs are met from grid 
electricity and as such the focus has been on energy reduction 
programmes from the 2011 baseline purchased electricity has 
reduced by 27 per cent at paignton this has been achieved 
through a programme of staff awareness and technology 
investment 
in may 2014 voltage optimisation equipment was installed and 
ceiling insulation laid in the office areas although the labs the 
key energyusing areas at paignton have been extended there 
was an 11 per cent yearonyear reduction in total energy use 
including a 44 per cent reduction in gas use from 2013
the site green team has continued to run energy reduction and 
environmental awareness programmes as an integral part of the 
sites iso 140012004 certified management system
although energy usage onsite decreased between 2013 and 
2014 the site’s associated carbon emissions increased by around 
8 per cent from 171 tonnes co
2
e to 184 tonnes co
2
e this was 
due to an increase in the carbon intensity of the uk national grid 
and a small increase in purchased electricity use this year the 
long term trend remains downward with total co
2
e emissions 
down 18 per cent from the 2011 baseline
27 reduction in purchased electricity 2011 – 2014
13 of paignton’s electricity generated from onsite solar pv in 2014
resources and relationships
continued
spirent communications plc
annual report 2014
40 the group will be required to comply with the energy savings 
opportunity scheme “esos” regulations 2014 and has put 
measures in place to meet its obligations in 2015
procurement 
almost all products continue to be produced by external contract 
manufacturers and the environmental performance of suppliers 
is monitored through audits and surveys our largest contract 
manufacturer was responsible for 664 per cent of our production 
in 2014 and they have an iso 14001 certified environmental 
management system alongside an extensive carbon reduction 
programme the table below shows their emissions performance 
for the last two years for which data is available
2013 2012
change in greenhouse gas emissions in 
co
2
e  43 11
greenhouse gas emissions
carbon emissions are a material sustainability issue for the 
group and we remain committed to reporting emissions and 
taking action to combat climate change the group once again 
responded to the carbon disclosure project in 2014 completing 
both the climate change and supply chain questionnaires for 
the calendar year 2013
the greenhouse gas “ghg” emissions for 2013 and 2014 are set 
out in the table below
global ghg emissions data for the year ended 31 december 2014
2014
tonnes 
of co
2
e
2013 
tonnes  
of co
2
e
emissions from
combustion of fuel and operation of facilities 228 238
electricity heat steam and cooling
 purchased for own use 6603 6127
total emissions 6831 6365
company’s chosen intensity measurement
emissions reported above normalised 
 to per m
2
 of gross internal 
 area of our facilities 014 015
emissions reported above normalised 
 to per £ million of revenues 1248 1576
methodology
we have reported on all of the emission sources required 
under the companies act 2006 strategic report and directors’ 
report regulations 2013 these sources fall within our 
consolidated financial statements we do not have responsibility 
for any emission sources that are not included in our consolidated 
financial statements 
we have used the ghg protocol corporate accounting and 
reporting standard revised edition data gathered to fulfil our 
requirements under these regulations and emission factors 
from the uk government’s ghg conversion factors for company 
reporting 2015
2015 programme
the work programme for 2015 will focus on the four strands of 
the group’s sustainability strategy
property
a pilot programme to test automatic energy metering technology 
will be undertaken at paignton in early 2015 which will be rolled 
out across major sites during the year continued efforts to 
incorporate energy efficiency technology and practices will be 
made across the group’s estate with particular consideration to 
new sites
products
analysis of product sustainability will be undertaken and a 
programme to assess and improve performance will be 
examined opportunities to make sustainability improvements 
to existing and future products will also be explored
procurement
a programme to determine the key impact areas in the group’s 
supply chain will be undertaken and initiatives to reduce 
pollution energy and material use will be introduced
people
a programme to further engage staff across the group on 
sustainability issues will be undertaken and opportunities 
to expand the participation in sustainability initiatives will 
be reviewed
targets and objectives
a target reduction of 5 per cent has been set for group energy 
use carbon emissions and an intensity metric of carbon emitted 
per million dollar of revenue all three will be assessed against 
the baseline year of 2014 
our employees
as a business which relies on our employees to drive the 
understanding development and sales of complex technologies 
spirent understands that its future growth is directly tied to the 
motivation and drive of our people accordingly we strive to 
recruit train develop and retain the best talent in our industry 
it is imperative to our future success that spirent is a company 
that people want to work for as well as do business with and 
our employees lie at the heart of making that happen
our 1700 talented employees working in 33 locations in 
17 countries provide a matchless competitive advantage for us 
creating innovative products for our customers to sustain our 
competitive advantage and bring together this culturally diverse 
group of employees spirent has built a global culture based on 
four values being creative competitive customer focused and 
collaborative these values form the foundation of spirent’s 
ability to inspire innovation and drive a competitive spirit in 
our business
to attract keep and grow our people we regularly review our 
benefits retention development programmes and career growth 
opportunities our efforts continue to bear positive fruit with 
global voluntary turnover at 8 per cent compared to an industry 
average of 124 per cent radford trends report – technology 
edition q4 2014
spirent communications plc
annual report 2014
41
strategic report governance financial statements resources and relationships
continued
rewarding our people
our compensation and benefit schemes are aligned with performance 
and are regularly benchmarked to ensure that spirent rewards 
employees competitively in each country in which we operate
spirent believes in sharing its success with its employees with all 
employees participating in some form of variable compensation 
tied to the achievement of key goals such as revenue growth 
and profitability growth sharing plan for individual contributors 
through managers sales commission plan for sales employees 
and management incentive plan for senior managers and above
another way in which we reward and recognise excellence is 
through our global recognition programme which provides 
spot excellence and executive awards these awards are 
onetime cash incentives as recognition for exemplary 
contributions that demonstrate one or more of our key values
in addition we provide projectbased incentives to recognise 
and reward employees for extraordinary work on critical projects 
growing our talent
we recognise that our competitive advantage can only be 
maintained by developing our own talent internally as well as 
recruiting the best skills from outside of our organisation
in 2014 we continued to develop our employee value proposition in 
order to clearly communicate our brand to current and prospective 
employees and thereby retain and attract the best people spirent 
is large enough to provide a wide range of career possibilities but 
small enough for individuals to be noticed and recognised we offer 
an ideal environment for people to unleash their innovative spirits 
and collaborate to discover the future together
throughout 2014 we continued to support education by offering 
internships and work experience programmes that not only help 
students develop professional knowledge but also to provide 
future talent for our entire organisation in 2014 spirent offered 
36 internships in the united states seven in europe and 42 
in asia
our challenging work environment inspires innovation 
with continuous learning as an essential part of our human 
resources philosophy
in 2014 employees in all regions participated in courses designed 
to enhance our ability to service the customer and to create 
innovative leading products leadership bench strength was 
developed through various programmes including 360 degree 
feedback succession management organisational and individual 
accountability and financial acumen our career development 
emphasises tailored flexible pathways that give employees the 
opportunity to explore their potential in the right direction and at 
the right speed
employee engagement
spirent regularly canvasses its employees’ views on a range of 
matters related to their employment in both formal and informal 
ways in 2014 spirent conducted one of its regular allemployee 
surveys to gauge the level of employee satisfaction in the 
business the participation rate was good at 77 per cent we aim 
to identify the key drivers of increased employee engagement 
and based on the survey results drivers of employment 
engagement continued to be learning and development 
leadership and direction culture and collaboration the feedback 
from the survey is distilled to actionable tasks which we expect 
will enhance our employees’ experience in addition to the more 
formal survey informal meetings are regularly held between 
many of spirent’s senior management team and small groups of 
employees with the aim of sharing perspectives among a broad 
crosssection of our team members
diversity
diversity means understanding and reflecting the community 
in which we operate building loyalty with our colleagues and 
customers age gender ethnicity physical appearance religion 
education and beliefs are all valued and everyone has the 
opportunity to contribute to our success as a business and fulfil 
their potential our aim is to ensure that all our employees are 
respected as individuals we have a diverse employee population 
and believe that this variety of backgrounds experience beliefs 
personalities knowledge skills and ideas helps to deliver the 
innovation and creativity necessary for us to succeed
the group is committed to providing equality of opportunity 
to all existing and prospective employees without unlawful 
discrimination on the basis of religion disability gender age 
marital status sexual orientation race ethnicity or any other 
protected status
board diversity
 male 5 71
 female 2 29
employee diversity
 male 1301 78
 female 370  22
senior manager diversity
 male 157 75
 female 51 25
spirent communications plc
annual report 2014
42 our commitment to being good stewards of our environment 
also extends to our community support networks employees 
at our calabasas california site and their families participated 
in the international coastal cleanup again in september 2014 
forming part of a global effort which collected a total of 
5647 tonnes of waste from coastlines and inland waterways 
in california alone
in total spirent made charitable cash donations of 84333 
during 2014
pages 1 to 43 form part of the strategic report
by order of the board
angus iveson
company secretary  general counsel
26 february 2015
disabled persons
disabled persons whether registered or not are accorded 
equal opportunities when applying for vacancies with due regard 
to their aptitudes and abilities in addition to complying with 
legislative requirements we are committed to ensuring that 
disabled employees are fairly treated in respect of training and 
career development and promotion with regard to employees 
who become disabled during the course of their employment the 
group is supportive and will take all reasonable steps to ensure 
that they can remain in employment wherever practicable
community
spirent encourages employees to participate in charitable 
programmes within their communities supporting their efforts 
financially in some cases but also in north america and europe 
through a voluntary time off policy which allows employees 
to donate up to two working days each year to a charitable 
organisation close to their hearts
making a commitment to our local communities takes many forms 
at spirent from donating books to the johns hopkins children’s 
center to joining with the united way of monmouth county in 
their continuing work to help rebuild families’ homes around 
new jersey in the wake of superstorm sandy
competitive
engage and develop our 
employees to relentlessly 
outexecute the competition 
every time whilst maintaining 
the highest ethical standards
creative
innovation that inspires our 
customers our customers’ 
customers our employees 
and shareholders
customer focused
dedicated to every customer’s 
every employee’s and every 
shareholder’s success  
 
collaborative
one global team sharing 
knowledge ideas technology 
resources and talents to 
achieve and sustain  
profitable growth
our key values
spirent communications plc
annual report 2014
43
strategic report governance financial statements alex walker 
chairman
alex joined the board in 
december 2006 and was 
appointed chairman of the 
company in march 2010 
he chairs the nomination 
committee and attends other 
committee meetings 
by invitation
until august 2006 alex was 
chief executive of yule catto 
 co plc until april 2010 he 
was a nonexecutive director 
chairman of the remuneration 
committee and member of 
the audit and nomination 
committees of rotork plc 
and until may 2014 he was 
a nonexecutive director 
of zotefoams plc
board of directors
rachel whiting
chief financial officer
rachel was appointed to the 
board in february 2014 as 
chief financial officer
rachel joined the company in 
1986 working in various roles 
within finance before being 
appointed head of group tax 
in 2003 and adding the role of 
company secretary in 2009
she is a fellow of the institute 
of chartered accountants 
in england  wales and an 
associate of the chartered 
institute of taxation and of 
the institute of chartered 
secretaries and administrators
eric hutchinson 
chief executive officer
eric was appointed to the 
board in january 2000 as 
chief financial officer and 
appointed chief executive 
officer in september 2013
before this appointment eric 
joined the company in 1983 
and worked in various roles 
in the finance function prior 
to his appointment as 
chief financial officer
he is a fellow of the 
association of chartered 
certified accountants and 
a member of the financial 
reporting review panel
a strong 
leadership 
team
spirent communications plc
annual report 2014
44 ian brindle
senior independent  
nonexecutive director
ian was appointed to the 
board in december 2006 
he is chairman of the audit 
committee and serves on the 
nomination and remuneration 
committees and has acted as 
senior independent director 
since 2006
he was senior partner of 
price waterhouse from 1991 
to 1998 and chairman of 
pricewaterhousecoopers until 
2001 ian was also a member 
of the accounting standards 
board between 1992 and 2001 
and of the financial reporting 
review panel between 2001 
and 2008
duncan lewis
independent nonexecutive 
director
duncan was appointed to 
the board in july 2007 
he is a member of the audit 
nomination and remuneration 
committees
until march 2011 duncan was 
chief executive officer of 
vislink plc and until october 
2008 was senior adviser to 
the carlyle group assisting 
them in developing strategy 
and identifying investments in 
the telecommunications and 
media sectors worldwide
duncan is chairman of 
nextiraone eu and workshare 
limited nonexecutive 
director of eunetworks group 
limited and director of several 
other companies
tom maxwell
independent nonexecutive 
director
tom was appointed to the 
board in october 2007 he is 
chairman of the remuneration 
committee and a member 
of the audit and nomination 
committees
until september 2007 tom 
was investment director and 
head of the uk growth  
income product group at 
martin currie investment 
management in edinburgh 
he is a member of the 
chartered institute of bankers 
in scotland and a member 
of the society of investment 
professionals and the 
cfa institute
tom is a nonexecutive 
director of foresight 3 vct plc 
and is chairman of their 
audit committee
sue swenson
independent nonexecutive 
director
sue was appointed to the 
board in february 2012 
she is a member of the audit 
nomination and remuneration 
committees
sue is a nonexecutive 
director of wells fargo and 
sits on their audit  
examination committee and 
governance  nominating 
committee she also serves 
as nonexecutive director on 
the boards of harmonic inc 
serving as chair of the 
nominating  governance 
committee and sitting on 
their audit  examination 
committee and novatel 
wireless inc sitting on their 
compensation committee 
in august 2012 sue was 
appointed by the us national 
telecommunications and 
information administration as 
a founding board member of 
the first responder 
network authority
spirent communications plc
annual report 2014
45
strategic report governance financial statements dear shareholder 
as i mentioned in my chairman’s introduction this has been a year 
of significant activity under the leadership of eric hutchinson our 
chief executive officer the board has been working to support the 
business by ensuring that the appropriate investment and structures 
are in place to position the business to achieve its strategic plan
the board seeks to build and maintain good governance 
structures and thereby appropriately manage risk in the business 
our goal is to achieve the returns our shareholders expect 
as such the board continues to be committed to high standards 
of corporate governance and fully supports the principles laid 
down in the uk corporate governance code the corporate 
governance reports which follow set out the activities of the 
board and its committees and explain how we operate
i look forward to meeting any shareholders who can join us at our 
annual general meeting “agm” in may and extend my thanks 
to you all for your continued support as we look forward to the 
year ahead
alex walker
chairman
26 february 2015
chairman’s introduction to governance
alex walker
chairman
spirent communications plc
annual report 2014
46 compliance statement
the board fully supports the principles laid down in the uk 
corporate governance code as issued by the financial 
reporting council in september 2012 which applies to financial 
years beginning on or after 1 october 2012 the “code” and 
the updated uk corporate governance code issued in 
september 2014 the “new code” which applies to financial 
periods beginning on or after 1 october 2014 both of which are 
available at wwwfrcorguk
this report describes how the principles of the code are applied and 
reports on the company’s compliance with the code’s provisions
governance framework
board
nonexecutive chairman
two executive directors
four independent nonexecutive directors
nomination committee
nonexecutive chairman
four independent  
nonexecutive directors
primary responsibility for succession 
planning boarddirector selection 
and board composition
committee report 
 – page 51
audit committee
four independent  
nonexecutive directors
provides oversight and governance 
over the group’s annual reporting 
internal controls risk management 
and relationship with external auditor
committee report  
 – pages 52 to 54
remuneration committee
four independent  
nonexecutive directors
agrees remuneration policy and sets 
individual compensation levels for 
executive directors and senior 
management
committee report  
 – pages 55 to 71
the board considers that it has been in compliance with the 
provisions of the code throughout the period under review 
except for code provision d15 in relation to eric hutchinson’s 
fixed term contract as reported in last year’s annual report this 
has now been replaced with a standard 12 month rolling contract 
as described more fully in the report on directors’ remuneration 
on page 68 the board also considers that it complies with 
certain aspects of the new code to the date of this report and 
is working towards full compliance by the next reporting cycle
directors’ statement on 
corporate governance
board activities during 2014
at each board meeting the chief executive officer presents an 
update on the performance strategy and business issues 
across the group and the chief financial officer presents a 
detailed analysis of the financial performance of the business 
units senior executives below board level attend relevant parts 
of board meetings in order to make presentations on their areas 
of responsibility this gives the board access to a broader group 
of executives and helps the directors make assessments of the 
group’s succession plans the board has a rolling programme of 
visits to business unit locations to deepen its appreciation of the 
different opportunities and challenges that each unit faces
leadership
the board has a formal schedule of matters reserved for its 
decision which was reviewed and updated during the course of the 
year the board’s primary responsibility is to promote the long term 
success of the company by creating and delivering sustainable 
shareholder value the board seeks to achieve this through setting 
out its strategy monitoring its strategic objectives and providing 
oversight and direction to the management team the board 
considers the impact of its decisions on wider stakeholders 
including employees suppliers and the environment
spirent communications plc
annual report 2014
47
strategic report governance financial statements page 42 the board has not set any specific aspirations or quotas 
in respect of gender diversity however the board recognises 
the benefits of diversity of which gender is one aspect and 
it will continue to ensure that this is taken into account when 
considering any particular appointment whilst ensuring 
appointments are made on merit and ability to enhance 
the performance of the business
independence
the independence of each director is reviewed on appointment 
and at least annually the board determined that the 
nonexecutive directors are each independent in character and 
judgement save for the chairman who was deemed independent 
by the board at the date of his appointment none have been 
employed by the company previously in any capacity or have 
any material business relationship with any group company 
nonexecutive directors at spirent receive no remuneration 
from the company other than their fees detailed in the report 
on directors’ remuneration on page 68 and each nonexecutive 
director has confirmed that they do not represent any significant 
shareholder in the company no individual or group of individuals 
dominates the board’s decision making and the code requirement 
stating that at least half of the board excluding the chairman 
should comprise independent nonexecutive directors is satisfied
senior independent director
the role of senior independent nonexecutive director “sid” 
provides a sounding board for the chairman and an intermediary 
for the other nonexecutive directors if needed the sid is also 
available to meet with shareholders upon request if they feel that 
they have concerns which contact through the normal channels 
of the chairman or an executive director has failed to resolve or 
for which such contact would be inappropriate
our current sid ian brindle will reach the nineyear anniversary 
of his appointment to the board in december 2015 which will in 
terms of the uk corporate governance code mean that he will 
cease to be considered independent as explained on page 51 
the nomination committee is in the process of recruiting a new 
nonexecutive director and mr brindle has agreed to continue in 
role until that process is completed as such he will seek 
reelection at the 2015 agm
when mr brindle steps down from the board sue swenson has 
been asked by the board to become the sid subject to her 
reelection at the 2015 agm
biographical details for each of the directors are set out on pages 
44 and 45 and can also be found on the company’s website at 
httpcorporatespirentcomaboutusourboardofdirectors 
division of responsibilities
there is a clear division of responsibilities at the company 
between the running of the board undertaken by the non
executive chairman and the executive responsibility for the 
running of the company’s business which is in the hands of the 
chief executive officer this division of roles is reviewed and 
approved by the board annually
as chairman alex walker presides over the board and is 
responsible for its leadership and overall effectiveness in doing 
so he encourages and helps to maintain an effective working 
relationship between the executive and nonexecutive directors
as chief executive officer eric hutchinson has responsibility for 
the daytoday management of the company’s business and the 
implementation and delivery of the board strategy 
this separation of roles enhances the independent oversight of 
executive management by the board and more closely aligns the 
board with shareholders it also means that no one individual 
within the company has unfettered powers of decision
composition of the board
at the date of this report the board comprises a nonexecutive 
chairman four independent nonexecutive directors and two 
executive directors
the chairman and the nonexecutive directors contribute 
entrepreneurial leadership and external expertise and 
experience in areas of importance to the company such as 
strategic investments corporate finance general finance and 
corporate governance they also contribute independent 
challenge and rigour to the board’s deliberations and assist in 
the development of the company’s strategy scrutiny of the 
performance of management in meeting agreed goals and 
targets and satisfying themselves of the integrity of the 
company’s internal controls and risk management systems 
the board believes that all of the directors devote sufficient time 
and attention as is necessary in order to perform their duties
the chairman holds regular discussions with the nonexecutive 
directors without the executive directors present to ensure a free 
and frank exchange of views on the effectiveness of the 
executive directors and senior management
spirent’s group policy is to hire the best candidates for all 
positions at all levels throughout the business irrespective of 
gender including candidates at board level with two female 
directors namely rachel whiting and sue swenson 29 per cent 
of the current board is female further information and statistics 
on gender diversity can be found within our csr statement on 
during the period under review the board focussed on the following matters
strategy financial management governance
 – reviewed analysis of test  measurement market
 – received and discussed updates on corporate 
strategy and acqusiitions
 – reviewed proposed acquisitions and monitored 
integration programmes
 – reviewed business unit reorganisations
 – discussed capital policy in particular the 
company’s share buyback programme
 – discussed a proposal for business process  
and systems upgrade
 – reviewed and approved full year and halfyear 
results announcements and presentations and 
interim management statements
 – reviewed and approved annual report 2013
 – reviewed and approved budget for 2015
 – reviewed and approved continuing 
dividend policy
 – reviewed policy on management of 
company investments
 – reviewed intragroup pricing policy
 – reviewed the schedule of matters reserved  
to the board and committee terms of reference
 – reviewed independent status of neds
 – considered audit committee review of internal 
controls and risk management
 – reviewed policy for identification of pdmrs
 – reviewed external governance reports on annual 
report 2013 in preparation for the 2014 agm
 – reviewed and discussed results of the 
board evaluation
 – reviewed group insurance coverage
directors’ statement on 
corporate governance
continued
spirent communications plc
annual report 2014
48 attendance
the attendance of individual directors at board and committee meetings held during 2014 was as follows
board audit committee remuneration committee nomination committee
alex walker 88 – – 33
eric hutchinson 88 – – –
rachel whiting
1
77 – – –
ian brindle 88 33 99 33
duncan lewis
2
78 33 99 33
tom maxwell
2
78 33 99 33
sue swenson
3
88 33 99 22
notes
1 rachel whiting was appointed to the board on 1 february 2014
2 duncan lewis and tom maxwell were unable to attend an ad hoc meeting of the board as they conflicted with meetings already in their diary for other 
listed companies both directors received all papers relating to the meeting and had the opportunity to discuss issues arising directly with the chairman 
both directors appointed alex walker as their proxy for the duration of the meeting
3 sue swenson did not attend that part of the nomination committee meeting which considered her election by the other nonexecutive directors to the role 
of sid
board procedures
during 2014 eight board meetings were held the agenda is set 
by the chairman together with the chief executive officer and all 
members of the board are supplied in advance with appropriate 
clear and accurate information in a timely manner covering matters 
which are to be considered all of the directors are free to seek 
clarification or elaboration of the information provided from 
the management team if they feel it to be necessary minutes 
of meetings are circulated to all board members and subject 
to their agreement approved at the following board meeting
board performance evaluation
every year the board and its committees audit nomination and 
remuneration evaluate their performance in accordance with 
code provision b61 in 2012 the evaluation was conducted by 
useful thinking ltd useful thinking ltd has no other connection 
with the company following the internal review undertaken in 
2013 the board focused on the following during 2014
 –continuing to review and advance strategic planning
 –providing more opportunities for nonexecutive directors to 
meet with executives and senior managers below board 
level to assist in the identification of internal talent for 
succession planning
 –building greater visibility and connection with the business units 
to develop a mutual understanding of roles and challenges and
 –strengthening the board with the appointment of additional 
nonexecutive directors in order to ensure orderly succession 
for appointments and to ensure progressive refreshing of 
the board
during 2014 the board assessed its own effectiveness through an 
internal board evaluation the 2014 evaluation was facilitated by 
the chairman assisted by the company secretary all directors 
completed a questionnaire followed by meetings with the 
chairman to discuss views in more detail and consider training and 
development needs committee effectiveness was also assessed 
separately results were presented to the board and the following 
areas for improved effectiveness were identified
 –further develop understanding of strategic positioning and 
competitive issues facing the group in view of ongoing changes 
in our industry
 –obtain further insight into performance metrics on acquisitions 
and organic investments
 –continue to focus on strengthening the board with non
executive directors with specific industry sector and relevant 
geographic business knowledge and
 –gain greater visibility on depth of management bench strength 
below board level given changes to the management team 
in 2014
the sid met with the other independent nonexecutive directors 
on 11 november 2014 in the absence of the chairman to assess 
the chairman’s effectiveness after considering and discussing the 
tasks undertaken by the chairman during the period under review 
the independent nonexecutive directors agreed that mr walker 
gave appropriate time and commitment to his role as chairman 
of the company and was effective in that role throughout 2014 
in line with code provision b62 it is anticipated that the 2015 
review will be conducted by an external provider
directors’ conflicts
procedures are in place for the disclosure by directors of 
any interest that conflicts or may possibly conflict with the 
company’s interests and for the appropriate authorisation to be 
sought if a conflict arises in accordance with the company’s 
articles of association in deciding whether to authorise a conflict 
or potential conflict of interest only noninterested directors ie 
those that have no interest in the matter under consideration will 
be able to take the relevant decisions in taking such a decision 
the directors must act in a way they consider most likely to 
promote the success of the company and may impose such limits 
or conditions as they see fit the board has reviewed the 
procedures in place and considers that they continue to operate 
effectively there were no actual or potential conflicts of interest 
which were required to be authorised by the board during 2014 
or to the date of this report
service contracts and letters of appointment
the terms of executive directors’ service contracts are disclosed 
in the report on directors’ remuneration on pages 55 to 71 
directors’ interests in the shares of the company are disclosed 
on page 59
executive directors’ service contracts and nonexecutive 
directors’ letters of appointment are available for inspection 
at the company’s registered office and will be available at the 
2015 agm
spirent communications plc
annual report 2014
49
strategic report governance financial statements directors’ statement on 
corporate governance
continued
shareholder engagement
the board is committed to maintaining good communications 
with shareholders the chairman chief executive officer and 
chief financial officer have regular dialogue with individual 
institutional shareholders in order to develop an understanding of 
their views which is then discussed with the board all directors 
are offered the opportunity to meet with major shareholders to 
listen to their views and executive directors receive regular 
reports prepared by an independent capital markets advisory 
firm which provides comprehensive information relating to the 
company’s major shareholders
presentations are made to analysts investors and prospective 
investors covering the full year and halfyear results and the 
company seeks to maintain a dialogue with the various 
bodies which monitor the company’s governance policies and 
procedures also in october 2014 the company held an investor 
and analyst day at which senior executives presented updates 
on the markets in which spirent operates
the strategic report on pages 1 to 43 details the financial 
performance of the company as well as setting out the risks 
it faces
the company is always keen to hear the views of its private 
shareholders and we encourage them to use our shareholder 
mailbox at investorrelationsspirentcom for detailed enquiries 
and to access our website at httpcorporatespirentcom for our 
company reports and business information
any concerns raised by shareholders or their representatives 
whether expressed directly or through voting patterns at the 
company’s agm are discussed by the directors and an 
appropriate response given either specifically to the concerned 
party or if it is felt to be of wider benefit made available to all 
shareholders via the company’s website
annual general meeting
the company’s agm will be held at 1pm on tuesday 5 may 2015 
at the offices of ubs at 100 liverpool street london ec2m 2rh
at the agm the chief executive officer gives an update on the 
positioning and outlook for the company shareholders are 
invited to ask questions formally during the meeting and to follow 
up these discussions with directors on a onetoone basis 
afterwards the chairmen of each of the committees of the board 
will be in attendance and all directors will be available to respond 
to questions at the agm
the board looks forward to welcoming all our shareholders to our 
2015 agm and to updating them on our business developments
reelection of directors
nonexecutive directors are appointed on threeyear terms in 
accordance with the company’s articles of association
in accordance with code provision b71 all directors are also 
subject to election or annual reelection by shareholders at 
the 2015 agm the board recommends to shareholders the 
reappointment of all directors who are retiring at the 2015 
agm and who are offering themselves for reelection the 
board believes that they are all effective directors of the 
company and demonstrate the appropriate level of 
commitment in their respective roles
company secretary
in october 2014 angus iveson joined spirent as company 
secretary  general counsel releasing rachel whiting to focus 
entirely on her role as chief financial officer the company 
secretary is responsible for advising and supporting the 
chairman and the board on corporate governance matters as 
well as ensuring that there is a smooth flow of information to 
enable effective decision making all directors have access to 
the advice and services of the company secretary and can take 
independent professional advice in respect of their duties at the 
company’s expense
induction and development
on appointment directors undertake a structured induction 
programme in the course of which they receive information 
about the operations and activities of the group the role of the 
board and the matters reserved to its decision the group’s 
corporate governance practices and procedures and their duties 
responsibilities and obligations as directors of a listed public 
limited company this is supplemented by visits to key locations 
and meetings with and presentations by senior executives 
training for directors is available as required and is provided 
mainly by means of external courses internal computerbased 
training briefings from specific consultants or inhouse 
presentations in addition directors’ knowledge of the legal and 
regulatory environment is updated through the provision of 
information by the group’s advisers and by means of regular 
updates from the company secretary  general counsel
new directors are encouraged to take advantage of opportunities 
to meet with major shareholders and attend presentations to 
analysts where possible
directors’ indemnification
in accordance with its articles of association the company has 
granted a qualifying third party indemnity to the extent permitted 
by law to each director the company also maintains directors’ 
and officers’ liability insurance
these provisions are qualifying third party indemnity provisions 
as defined in section 234 of the companies act 2006 neither 
the company’s indemnity nor the insurance provides cover in 
the event that a director is proven to have acted dishonestly 
or fraudulently
spirent communications plc
annual report 2014
50 the current board composition in relation to nonexecutive 
directors at 31 december 2014 in terms of length of service 
and current term is set out below
there is a formal rigorous and transparent procedure for the 
appointment of new directors to the board under which the 
committee interviews suitable candidates who are proposed 
either by existing board members or by an executive search firm 
the search for candidates is conducted and appointments made 
on merit against objective criteria and with due regard for the 
benefits of diversity when the committee has found a suitable 
candidate the committee proposes the appointment to the whole 
board which retains responsibility for all such appointments
careful consideration is given to ensure that proposed 
appointees for nonexecutive roles have enough time available 
to devote to the role and that an appropriate balance of skills 
knowledge and experience on the board is maintained when 
discussions relate to the appointment of the company chairman 
the sid chairs the committee
during 2014 the committee appointed jca group to begin 
a search process for new nonexecutive directors in order 
that there be an orderly succession in place to both refresh 
the balance of the board’s skills experience independence and 
knowledge and to find suitable candidates to step into specific 
roles such as the chairing of the audit committee jca group 
has no other connection with the company
diversity
the board is committed to the merits of diversity in all its forms 
at board level and throughout the group although neither the 
nomination committee nor the board has set specific targets 
or objectives for diversity the benefits of a diverse board are 
reviewed prior to the commencement of recruitment processes 
at all levels currently women represent 29 per cent of the board 
and the nomination committee continues to focus on encouraging 
diverse skill sets capabilities and experience recognising that 
directors from different geographical and cultural backgrounds 
may enhance the performance of the board
directors’ tenure at 31 december 2014
15 years 0 months
alex walker
eric hutchinson
0 years 11 months rachel whiting
8 years 0 months
duncan lewis
ian brindle
tom maxwell
sue swenson
8 years 0 months
7 years 3 months
1 years 11 months
7 years 6 months
responsibilities
the nomination committee’s main focus is on supporting the 
board and its committees and ensuring that they have the 
necessary skills knowledge experience and diversity the 
nomination committee aims to hire the best available 
candidates irrespective of age gender ethnicity physical 
appearance religion education or beliefs
the full terms of reference of the committee are available at 
httpcorporatespirentcomgovernanceboardcommittees or 
from the company secretary at the registered office
composition of the committee
at the date of this report the nomination committee comprises 
the company chairman who also acts as committee chairman 
and four independent nonexecutive directors
committee activity in 2014
 –the appointment of rachel whiting as chief financial officer 
and to the board and
 –planning for board succession with particular attention to 
a replacement of the chair of the audit committee
priorities for 2015
 –concluding the search process for new nonexecutive directors 
and
 –continuing the management of succession planning of  
nonexecutive directors and senior management
succession planning and appointment of directors
succession planning takes place at board and senior 
management level to ensure that the group is managed by 
executives with the necessary skills experience and knowledge 
the board has a role to play in overseeing the development of 
management resources in the group specifically the board 
wants to see depth and quality in management and robust 
processes are in place to help the board in this task
after a period of adjustment and internal reorganisation following 
the promotion of eric hutchinson from the role of chief financial 
officer to chief executive officer the committee reviewed the role 
of chief financial officer and generated a set of criteria upon 
which to base recruitment as an internal candidate rachel 
whiting was already well known to the board and committee 
however in order to validate her skills and experience against the 
criteria the committee appointed spencer stuart to carry out a 
benchmarking process on her suitability for the role on receiving 
a formal report substantiating her suitability for the role of chief 
financial officer the committee was pleased to unanimously 
recommend her appointment as chief financial officer and to the 
board spencer stuart has no other connection with the company
nomination committee
spirent communications plc
annual report 2014
51
strategic report governance financial statements dear shareholder
on the following pages we set out the audit committee’s report 
for 2014
the principal aims of the committee are to support with diligent 
oversight the maintenance and development of a strong control 
environment across the group and to ensure the integrity of the financial 
information provided to our shareholders in the context of a business with 
ambitious plans and a growing global footprint we believe that strong 
and effective risk management and control procedures underpin 
spirent’s ability to execute and implement its strategy 
our aspiration is not just to respond to changes but to support 
and challenge management to develop controls as they 
anticipate future opportunities and risks 
whilst the board is responsible for the preparation of an annual 
report that is fair balanced and understandable the committee 
supports the board in meeting that responsibility and ensuring 
the integrity of the group’s financial statements as a result of 
the committee’s work during the year it has concluded that the 
processes and controls in place are appropriate and provide 
positive assurance to the board
ian brindle
chairman of the audit committee
26 february 2015
fair balanced understandable
in making its recommendation to the board that the annual report taken as a 
whole is fair balanced and understandable the committee applied its robust 
governance arrangements which include
 – comprehensive group and subsidiary accounts processes with written 
confirmations provided by business unit management teams on the 
health of the financial control environment
 – reviews of the annual report undertaken at different levels of the group 
and by the senior management team that aim to ensure consistency and 
overall balance
 – external audit review
 – clear guidance and instruction of the disclosure requirement provided 
to contributors
 – inclusion of a new additional written confirmation that information 
provided has been done so on a fair and balanced basis and provides 
the information necessary to assess the company’s performance 
business model and strategy
 – additional scrutiny by senior management including focused review 
of risk registers and
 – additional committee reviews of the draft annual report in advance 
of final signoff in the context of the revised code provision
final signoff of the annual report is provided by the board on the 
recommendation of the committee
audit committee
responsibilities
the board has delegated to the audit committee responsibility 
for overseeing the financial reporting internal risk management 
and control functions and for making recommendations to 
the board in relation to the appointment of the company’s 
external auditor
the full terms of reference of the audit committee are available 
at httpcorporatespirentcomgovernanceboardcommittees 
or from the company secretary at the registered office
composition of the audit committee
at the date of this report the audit committee comprises four 
independent nonexecutive directors one of whom acts as 
committee chairman
the board considers that two members of the audit committee 
ian brindle who acts as committee chairman and tom maxwell 
provide recent significant and relevant financial experience
the company’s external auditor the chairman chief executive 
officer chief financial officer group vice president finance 
head of financial reporting and company secretary who is 
secretary to the committee were in attendance at each meeting 
of the audit committee
in addition the audit committee gives each of the company’s 
external auditor and the group vice president finance the 
opportunity to meet without management present
committee activity in 2014
the audit committee’s activities principally related to financial 
reporting internal control and risk management and the 
external audit in addition the audit committee considered 
other specific matters such as the group’s approach to it controls 
and cyber security
financial reporting and significant issues
during the year the audit committee
 –reviewed the full year and halfyear financial statements 
interim management statements key accounting policies and 
significant financial reporting judgements contained therein 
with particular reference to the critical accounting assumptions 
and judgements as set out in note 2 of the consolidated 
financial statements on pages 83 to 88 and recommended the 
financial statements to the board for approval
 –reviewed whether the annual report taken as a whole is fair 
balanced and understandable and formed an opinion thereon 
prior to recommending it to the board
 –reviewed and considered assumptions in relation to the going 
concern basis for preparation of financial statements
 –reviewed the external auditor’s report on the interim review 
and year end audit and management’s responses to the issues 
raised and
 –reviewed the treatment of purchase price allocation for 
acquisitions during the period
the committee chairman reports any significant findings or 
identified weaknesses to the board
significant financial issues considered
the audit committee has reviewed each of the following key 
significant financial risks by
ian brindle
chairman of the audit committee
spirent communications plc
annual report 2014
52 internal control
during the year the audit committee
 –monitored and reviewed internal control and risk management 
systems
 –reviewed and approved the internal audit programme for 2014
 –reviewed the company’s whistleblowing policy and antibribery 
and corruption procedures and
 –reviewed regular reports on taxation treasury operations 
health and safety and cyber security
the board has overall responsibility for the group’s system 
of internal control and risk management and for reviewing its 
effectiveness the board assisted by the audit committee has 
reviewed the effectiveness of this system and this review did not 
reveal any significant issues or weaknesses the board confirms 
that this system of financial operational and compliance controls 
and risk management was in place throughout the year under 
review and up to the date of approval of this report
the primary aim of the group’s internal controls is to operate 
a system which is appropriate to the business and which can 
support the group in delivering its strategic objectives safeguard 
the group’s assets and over time enhance shareholder value 
the system is designed to identify evaluate and manage the 
significant risks faced by the group rather than to eliminate the 
risk of failure to achieve business objectives and can only provide 
reasonable and not absolute assurance against material 
misstatement or loss this is in accordance with the guidance 
on risk management internal control and related financial and 
business reporting issued by the financial reporting council 
in september 2014 the group consists of a limited number of 
entities and the board and audit committee continue to consider 
that currently there is no need for a dedicated internal control 
and risk management department
as disclosed in the “principal risks and uncertainties” section 
on pages 24 to 27 the group risk owners and their executive 
management review the key risks facing the business the group 
risk owners which include representation from each of the key 
business areas are currently
 –chief executive officer
 –chief financial officer
 –executive vice president networks  applications
 –executive vice president wireless  service experience
 –group vice president finance and
 –company secretary  general counsel
the group risk owners meet with each business unit periodically to 
challenge and debate the assessment of risk within each business 
unit who then submit local risk registers for analysis and ranking 
together with companywide risks to form a robust corporate risk 
register this corporate risk register is then presented to the audit 
committee three times each year actions arising from the audit 
committee’s review of the corporate risk register can then be fed 
back to the business units for their management
daytoday responsibility for effective internal control and risk 
management and monitoring rests with senior management at 
business unit level the group vice president finance attends 
all audit committee meetings to report on internal control and 
risk management and to apprise the committee of any control 
weaknesses control failings and risks their impact and the 
actions taken to deal with the issues the group vice president 
 –reviewing papers and management updates
 –holding discussions with management and key finance 
staff to challenge assumptions made
 –debating alternative treatments
 –receiving periodic reports on key areas of judgement
 –discussing with external auditor and
 –considering analysts’ presentations to assess for 
inconsistencies or areas of bias
revenue recognition
the committee is aware that the potential complexity of 
accounting as well as the pressure on management to meet 
certain targets may result in inappropriate recognition of revenue 
and associated balances additional training and a programme of 
awarenessraising has been rolled out across the business units 
as part of their audit procedures agreed with the committee 
ernst  young llp “ey” would examine the allocation of 
revenue and review specific large and complex transactions 
to ensure that revenue has been recognised appropriately
tax accounting
the committee recognises that by operating in a number of 
jurisdictions with differing tax regulations there is a risk that the 
group may incorrectly recognise tax charges in the income 
statement for the period and in deferred tax assets the committee 
noted that ey would be performing a detailed review of the deferred 
tax recognised and tax provisions to ensure the appropriateness of 
tax disclosures in the group accounts as part of their audit review
acquisition accounting – ppa and opening balance sheets
the committee acknowledges that the five acquisitions 
completed during 2014 were of varying complexity with the 
acquisition of testing tech in particular requiring estimates to 
be made as regards the put and call options over the non
controlling interest the committee noted that for all acquisitions 
management performs a purchase price allocation exercise and 
assesses the intangible assets to be recognised in the acquisition 
accounting based on judgements around future revenue and 
profit generated by the entity and identification of the potential 
intangible assets management also sought advice from external 
experts when dealing with complex judgements
acquisition accounting – goodwill
the committee considers that management’s assessment of 
goodwill in the acquired business units is not overstated but in 
the light of the limited headroom in particular in the device 
intelligence and service experience units has asked management 
to monitor the situation closely and report to them regularly
the committee noted that ey had included these areas of 
significant risk in the auditor’s report on pages 75 to 77 of 
this annual report and was satisfied with the results of the 
procedures followed
the group vice president finance is responsible for ensuring 
that the finance department employs a level of management 
and specialists appropriate for maintaining financial records and 
processes that provide financial information that is relevant reliable 
complies with the applicable laws and regulations and is distributed 
both internally and externally in a timely manner a review of the 
consolidation and financial statements is undertaken by senior 
management to ensure that the financial position and results of the 
group are appropriately reflected all financial information published 
by the group is subject to the approval of the audit committee prior 
to it being approved by the board
spirent communications plc
annual report 2014
53
strategic report governance financial statements audit committee
continued
statement risk including the audit approach for these areas 
in some detail the areas of significant risk are identified on 
pages 52 and 53 the committee reviewed and appropriately 
challenged the basis for these before agreeing the proposed 
approach and scope of the external audit identified
ey prepared a detailed report of their audit findings which was 
presented to the committee at its meeting in february 2015 
the findings were reviewed and discussed in detail by the 
committee in particular in relation to the areas that had been 
highlighted at the planning stage as part of the review the 
external auditor was questioned and challenged by the 
committee about the work undertaken its findings and what 
key assumptions had been made during the audit especially 
with regard to the key areas of audit risk identified
prior to recommending their reappointment as external auditor the 
committee considers ey’s independence and objectivity in the light 
of relevant uk professional and regulatory requirements specifically 
in the light of the competition commission’s investigation into the 
market for statutory audit services for large companies and also 
the eu’s review of the audit services market although ey or its 
predecessor firms have been the company’s auditor for more than 
25 years the firm periodically changes its audit partners at group 
divisional and country level in accordance with professional and 
regulatory standards in order to protect independence and 
objectivity and provide fresh challenges to the business such 
changes are carefully planned to ensure that the company 
benefits from continuity of staffing without incurring undue risk 
or inefficiency karl havers was appointed as ey lead audit partner 
in 2011 and a new divisional partner has been attached to the 
networks  applications business for the 2014 audit
the committee noted the introduction of audit tendering 
provisions in the september 2014 uk corporate governance 
code and the applicable date by which the external audit should 
be put out to tender the committee continues to consider on an 
annual basis if the audit should be put out to tender ahead of the 
date when this becomes compulsory but confirms that there are 
no contractual obligations that restrict the company’s current 
choice of external auditor
policy on nonaudit services
the committee’s responsibility to monitor and review the 
objectivity and independence of the external auditor is supported 
by a policy relating to the provision of nonaudit services by the 
external auditor taking into account relevant ethical guidance 
this policy precludes a number of nonaudit services including 
services relating to the accounting records and financial 
statements internal audit it consulting legal and investment 
services and other services deemed by regulators to be 
precluded the committee believes the issue of nonaudit 
services is linked to external auditor independence and 
objectivity that said the committee accepts that certain work 
of a nonaudit nature may be best undertaken by the external 
auditor the policy is reviewed and financial limits for the 
provision of nonaudit services including auditrelated fees 
taxrelated fees and other fees are set on an annual basis 2014 
06 million 2013 06 million any amounts in excess of this 
limit must be approved in advance by the audit committee
the committee considers that notwithstanding the nonaudit 
services provided during the year totalling 02 million 
2013 02 million ey’s objectivity and independence 
as external auditor was not impaired
finance is independent of any business unit and is therefore able 
to provide an objective view and continual assessment of the 
effectiveness of internal control and risk management throughout 
the group detailed updates on specific areas such as cyber 
security or business continuity are provided by the group vice 
president finance at the committee’s request
risk management
the board and audit committee consider that having the 
following key elements in place are critical to underpinning the 
overall internal control environment
operating structure and controls
an organisational structure with clear operating procedures 
defined lines of responsibility and delegated levels of authority
financial control structure 
a comprehensive strategic planning financial control and 
budgeting system which is properly documented and 
regularly reviewed
ethics policy 
a policy that sets standards of professionalism and integrity for 
all employees and operations the ethics policy includes sections 
relating to bribery and corruption to ensure that all of spirent’s 
systems controls and training comply with the antibribery and 
corruption legislation in the countries where we operate and that 
a culture of prevention and detection of all forms of bribery and 
corruption is in place
whistleblowing policy 
a whistleblowing procedure whereby employees may report in 
confidence suspected wrongdoings 
acquisitions and divestments 
a disciplined due diligence process and postacquisition 
integration programme
external audit
during the year the audit committee
 –reviewed the policy on the engagement of ey to supply 
nonaudit services and
 –reviewed and recommended to the board the reappointment of 
ey as external auditor and approval of their fees in particular in 
light of the uk corporate governance code’s recommendations 
regarding the tender of the external audit contract
the committee places great importance on ensuring that high 
standards of quality and effectiveness are maintained within the 
external audit process it considers a number of areas in relation to 
the external auditor their performance in discharging the audit and 
interim review of financial statements their independence and 
objectivity and their reappointment and remuneration
consideration of the effectiveness of the external auditor also 
forms part of the audit committee’s performance evaluation 
questionnaire and is discussed regularly with management to 
enable prompt feedback to be given
the company’s external auditor ey provided the committee 
with their plan for undertaking the year end audit at the 
committee meeting in november 2014 this highlighted the 
proposed approach and scope of the audit for the year and 
identified the areas of significant risk and other financial 
spirent communications plc
annual report 2014
54 report on directors’ remuneration
or misleading reporting in order to ensure that the company’s 
executive directors are subject to these provisions as required 
by the uk corporate governance code applicable to the 2015 
period the committee will not make any awards to either eric 
hutchinson or rachel whiting until after shareholders have 
been given the opportunity to approve the extended eip similar 
malus and clawback provisions will also be applied to the 
executive directors’ annual cash incentive for 2015 and beyond
the committee is aware of a developing view among investors 
that would see a holding period of two years following the 
vesting of awards under long term incentive plans and will 
engage with key shareholders towards the end of 2015 to 
gather their input prior to seeking shareholder approval of a 
new long term incentive plan at the 2016 agm
 –we have approved stretching annual cash incentive targets for 
the executive directors and quarterly cash incentive targets for 
senior management then monitored and reviewed performance 
against those targets 
 –we have reviewed the committee’s terms of reference in the 
light of the updated uk corporate governance code issued 
in 2014
 –the uk employee share purchase plan “uk espp” which is 
an hmrcapproved share incentive plan available to all uk 
employees including executive directors was approved by 
shareholders in 2005 for a period of ten years the uk espp 
has being operating successfully since november 2010 
alongside similar allemployee share purchase plans around 
the world and provides an opportunity for employees to 
become shareholders which the committee wishes to 
encourage the committee therefore seeks shareholder 
approval to continue to operate the uk espp
on behalf of the committee i hope that you find this report 
comprehensive clear and informative
tom maxwell
chairman of the remuneration committee
26 february 2015
dear shareholder
as chairman of the remuneration committee i am pleased 
to present our remuneration report for the year ended 
31 december 2014
this report has been prepared on behalf of the board by the 
remuneration committee and has been approved by the board
last year we introduced a number of changes to our directors’ 
report on remuneration and we were pleased with the levels of 
shareholder support shown for our remuneration policy and 
report at the 2014 agm see page 62 we do not propose any 
changes to our shareholderapproved remuneration policy this 
year but we have made some refinements to our practices in 
line with the move towards compliance with the uk corporate 
governance code published in 2014 and developing 
best practice
as a committee we continue to believe it is essential that 
directors’ remuneration is aligned with the company’s strategic 
framework the interests of shareholders and the external 
competitive market
committee activities in 2014
 –in order to retain his services beyond may 2015 eric 
hutchinson’s fixed term contract has been replaced with a 
12 month rolling contract in compliance with the company’s 
remuneration policy by removing the fixed term nature of his 
appointment the company returns to full compliance with the 
uk corporate governance code 2012
 –the employee incentive plan “eip” the share incentive plan 
used to make awards to selected employees including 
executive directors on a discretionary basis was approved by 
shareholders and introduced in 2005 for a period of ten years 
the committee has reviewed best practice both in our industry 
and marketwide in this area and in the light of the continuing 
developments arising from the 2014 uk corporate governance 
code and guidance published by institutional investors has 
decided that the interests of shareholders would be best served 
by seeking an extension to the operating period of the eip for 
one additional year
while seeking this extension on broadly the same terms as the 
existing plan the committee has however introduced malus 
and clawback provisions this will enable unvested or vested 
eip awards to be withheld in certain circumstances where there 
has been found to be misconduct by an individual or there has 
been a requirement to restate financial results due to inaccurate 
tom maxwell
chairman of the remuneration committee
spirent communications plc
annual report 2014
55
strategic report governance financial statements report on directors’ remuneration
continued
compliance statement
this report on directors’ remuneration for the year ended 31 december 2014 has been prepared on behalf of the board by the 
remuneration committee in accordance with schedule 8 to the large and mediumsized companies and groups accounts and 
reports amendment regulations 2013 and the relevant sections of the companies act 2006 and meets the requirements of the 
listing rules of the financial conduct authority the report also describes how except with regard to eric hutchinson’s service 
contract as more fully described on page 68 the board has complied with the provisions of the uk corporate governance code 
issued in september 2012 during the period under review
the report is presented in two parts the directors’ annual remuneration report and the directors’ remuneration policy
the directors’ annual remuneration report sets out details of how our remuneration policy was implemented for the year ended 
31 december 2014 and how it will be applied for the year ended 31 december 2015 at the 2015 agm to be held on 5 may 2015 the 
directors’ annual remuneration report on pages 56 to 63 will be put to an advisory shareholder vote
the directors’ remuneration policy was approved by a binding vote at the 2014 agm and became effective on 24 april 2014 
for ease of reference we are including the policy in this year’s report on directors’ remuneration crossreferences to page numbers 
have been updated but other than that the policy is the same as stated in the 2013 report on directors’ remuneration in accordance 
with the reporting regulations the illustrations of the application of the remuneration policy on page 70 are the same as included in 
that 2013 report
directors’ annual remuneration report 2014
statement of implementation of remuneration policy in 2015 unaudited
information on how the company intends to implement the directors’ remuneration policy in 2015 is set out below
the committee has continued to monitor the executive remuneration policy having regard to evolving market practice whilst also 
seeking to ensure that there is continuity to the structure of executive pay accordingly the existing remuneration policy and 
fundamental structure of the executive remuneration package remains largely unchanged and the overall quantum of the annual 
and long term incentive opportunity has not increased
salary
2015 2014
eric hutchinson £400000 £400000
rachel whiting £250000 £250000
benefits
 –private healthcare cover for executive and family
 –permanent health insurance
 –life insurance cover of four times annual base salary
 –car allowance ceo only
retirement benefits
eric hutchinson will receive a taxable cash sum in lieu of pension at a rate of 20 per cent of base salary
rachel whiting will receive a contribution to a defined contribution arrangement of her choice or a taxable cash sum in lieu of pension 
at a rate of 14 per cent of base salary
annual cash incentive
the committee has set stretching targets for the year focused on order intake and trading profit growth although the target detail 
is considered commercially sensitive the weightings for the year ended 31 december 2015 are as follows
trading profit 20
order intake 80
on target and maximum annual cash incentive payments are as follows
on target performance  of base salary maximum  of base salary
eric hutchinson 100 150
rachel whiting 50 75
spirent communications plc
annual report 2014
56 award under employee incentive plan
it is anticipated that awards will be made under the eip in 2015 subject to the extension of the eip’s operation by shareholders at the 
2015 agm as follows
anticipated value of award £000
eric hutchinson 500
rachel whiting 150
the awards are made in the form of performance shares which are valued at the share price on the date of grant
the performance measures and targets are set out on page 67 of this report
audited information
single figure of total remuneration for 2014
the table below provides a single figure of total remuneration for 2014 and 2013 for the executive directors
salary
1
000
benefits
2
000
performance 
related
incentive
3
000
long term
incentive
4
000
pension
5
000
total  
2014
000
eric hutchinson 6600 283 – – 1320 8203
rachel whiting
6
378 1 16 – – 530 4327
salary
1
000
benefits
2
000
performance 
related
incentive
3
000
long term
incentive
4
000
pension
5
000
total  
2013
000
bill burns
7
5862 296 – – 102 6260
eric hutchinson
8
5408 270 381 – 1080 7139
notes
1 salary and fees cash paid in respect of the year
2 benefits taxable value of all benefits in respect of the year which comprise private healthcare permanent health insurance life insurance and car allowance
3 performance related incentive cash incentive payable in respect of the year
4 long term incentive value of performance shares vesting in the year based on the performance condition that ends in the year
5 pension cash value in lieu of pension or us 401k plan contribution
6 rachel whiting was appointed to the board as cfo on 1 february 2014
7 bill burns stepped down as ceo on 3 september 2013
8 eric hutchinson became ceo on 3 september 2013
annual performance incentives
during 2014 cash incentives were only available to executive directors on an annual basis with a maximum total cash incentive 
available for eric hutchinson and rachel whiting of 150 per cent and 75 per cent of base salary respectively
growth targets in the company’s order intake and eps representing 80 per cent and 20 per cent of the incentive respectively 
determined the maximum incentive which could be earned in respect of the annual incentive element the targets with minimum 
performance thresholds of 771 cents eps growth and order intake of 4762 million were not achieved and therefore no cash 
incentive awards were earned by the executive directors in the prior year targets were also not achieved with no awards earned
total pension entitlements
eric hutchinson receives a taxable cash allowance in lieu of pension of 20 per cent of base salary for 2014 the allowance paid 
was £80000 132000 at an average exchange rate of 165£1 2013 £69233 108000 at an average exchange rate of 156£1 
rachel whiting receives a taxable cash allowance in lieu of pension of 14 per cent of base salary for 2014 the allowance paid was 
£32083 52938 at an average exchange rate of 165£1
spirent communications plc
annual report 2014
57
strategic report governance financial statements report on directors’ remuneration
continued
payments to past directors
bill burns stepped down as chief executive officer on 3 september 2013 his termination payments were as set out in his service 
agreement and as disclosed in previous reports on director’s remuneration he received one month’s base salary 60000 as pay 
in lieu of notice and received 11 months’ base salary 660000 in ten equal monthly instalments of 66000 each commencing in 
december 2013 however this was subject to setoff for any base salary earned from alternative employment during the 12 month 
period following termination on 3 september 2013 the “severance period” leading to a reduction in the monthly payment from 
66000 to 51416 for the months after april 2014 monthly cobra premium payments of 1840 were also payable for the duration 
of the severance period but were also subject to a setoff for health insurance provided by an alternative employer during the 
severance period and therefore these payments ceased after april 2014 during 2013 the company paid 8000 in respect of 
mr burns’ legal fees all outstanding unvested share awards granted to mr burns’ lapsed on termination however the committee 
exercised its discretion under the plan rules of the eip to allow mr burns vested and unfettered share awards to continue to be 
exercisable during the 12 month period following termination as these awards had been retained by mr burns as part of his 
shareholding to meet the committee’s shareholding guideline for executive directors on 19 february 2014 mr burns exercised 
this remaining award of 374000 eip stock appreciation rights granted at a base price of 505 pence on 7 november 2008 
the applicable fair market value of 1046 pence resulted in a gain of £20233400 33592307
payments for loss of office
there were no payments for loss of office during the year under review other than those payments to bill burns set out above
nonexecutive director fees
details of fees paid to nonexecutive directors in 2014 and 2013 are as follows
2014 2013
£000 £000
alex walker chairman 1600 1600
ian brindle 510 510
duncan lewis 400 400
tom maxwell 490 490
sue swenson 400 400
total 3400 3400
shareholding guidelines for executive directors
the committee believes that to further align their interests with those of shareholders executive directors should have a significant 
shareholding in the company equivalent to at least 100 per cent of their base salary in the form of shares and unfettered share 
incentive awards which may be built up over time following appointment as an executive director the table below sets out the 
holdings of the executive directors who served during the year at 31 december 2014
guideline holding beneficially owned shares unfettered share incentives guideline met
eric hutchinson 1306209 56600 yes
100 of base salary
rachel whiting 84937 60348 no
spirent communications plc
annual report 2014
58 statement of directors’ share holdings and share interests
the beneficial interests of the directors and their connected persons in the shares of the company are set out below
at 31 december 2013
ordinary shares
1
at 31 december 2014
ordinary shares
at 26 february 2015
ordinary shares
2
executive directors
eric hutchinson 1302775 1306209 1306797
rachel whiting
3
na 84937 85231
nonexecutive directors
ian brindle 4525 38396 38396
duncan lewis – – –
tom maxwell 50000 50000 50000
sue swenson – – –
alex walker 180481 214530 214530
notes
1 directors’ beneficial interests do not form part of the remuneration provided by the company
2 events since 31 december 2014
 on 26 january 2015 eric hutchinson and rachel whiting acquired 294 and 147 ordinary shares respectively under the uk employee share purchase plan 
at a price of 8500 pence per share
 on 24 february 2015 eric hutchinson and rachel whiting acquired 294 and 147 ordinary shares respectively under the uk employee share purchase plan 
at a price of 8508 pence per share
3 rachel whiting joined the board on 1 february 2014
outstanding share incentive awards
1
the share incentive interests of executive directors who served during the period 1 january 2014 to the date of this report are set out below
eric hutchinson
plan type eip eip eip eip eip eip
award type sar ps ps ps sar ps
award date 25 aug 2005 23 mar 2011 21 mar 2012 8 may 2013 8 may 2013 28 apr 2014
at 1 january 2014  
 or at date of appointment 56600 109366 142235 172531 86266
granted during the period – – – – – 493583
vested during the period – – – – – –
exercised during the period – – – – – –
lapsed during the period – 109366
2
– – – –
any other adjustments during period – – – – – –
at 31 december 2014  
or at date of cessation 56600 – 142235 172531 86266 493583
market price at date of award £ 053 1432 1531 1291 1291 1013
face value of award granted in period £ – – – 222737 111369 500000
exercise price £ 053 nil
3
nil
3
nil
3
1291 nil
3
subject to performance conditions yes yes yes yes yes yes
performance condition eps 50 eps 
50 tsr
50 eps 
50 tsr
50 eps 
50 tsr
eps 50 eps 
50 tsr
performance condition testing date
4
25 aug 2008 23 mar 2014 21 mar 2015 8 may 2016 8 may 2016 28 apr 2017
result of performance condition testing 100 vest 0 vesting
2
– – – –
market price at vesting date £
5
080 102 – – – –
exercise date – – – – – –
market price at exercise date £ – – – – – –
gain on exercise £ – – – – – –
expiry date 24 aug 2015 23 mar 2014 21 mar 2015 8 may 2016 8 may 2023 28 apr 2017
spirent communications plc
annual report 2014
59
strategic report governance financial statements report on directors’ remuneration
continued
rachel whiting
plan type eip eip eip eip eip
award type sar ps ps ps ps
award date 5 may 2006 23 mar 2011 21 mar 2012 8 may 2013 28 apr 2014
at 1 january 2014  
 or at date of appointment
6
60348 21873 19928 24262 –
granted during the period – – – – 148075
vested during the period – – – – –
exercised during the period – – – – –
lapsed during the period – 21873
2
– – –
any other adjustments during period – – – – –
at 31 december 2014  
or at date of cessation 60348 – 19928 24262 148075
market price at date of award £ 0475 1432 1531 1291 1013
face value of award granted in period £ – – – 31322 150000
exercise price £ 0475 nil
3
nil
3
nil
3
nil
3
subject to performance conditions yes yes yes yes yes
performance condition eps 50 eps 
50 tsr
50 eps 
50 tsr
50 eps 
50 tsr
50 eps 
50 tsr
performance condition testing date
4
5 may 2009 23 mar 2014 21 mar 2015 8 may 2016 28 apr 2017
result of performance condition testing 100 vest 0 vesting
2
– – –
market price at vesting date £
5
0595 102 – – –
exercise date – – – – –
market price at exercise date £ – – – – –
gain on exercise £ – – – – –
expiry date 5 may 2016 23 mar 2014 21 mar 2015 8 may 2016 28 apr 2017
notes
an explanation of each share plan and its operation is given in note 29 to the audited consolidated financial statements of the group and note 14 to the parent 
company financial statements
1 key to share plan and type of award 
eip sar – 2005 employee incentive plan stock appreciation rights 
eip ps – 2005 employee incentive plan performance shares awarded as conditional share awards
2 the awards of eip performance shares granted on 23 march 2011 were due to vest on 23 march 2014 however after the testing of performance conditions 
attached to these awards the remuneration committee confirmed that the performance condition thresholds had not been met resulting in the lapsing of 
the awards in full
3 there is no exercise price payable for a performance share upon vesting further details on performance shares are provided above
4 awards which have passed the date first exercisable have vested and are unfettered having passed the relevant performance conditions
5 the market price on date of grant is the price of an ordinary share at the close of business on the day before the date of grant
6 rachel whiting was appointed to the board on 1 february 2014 some of the awards shown were awarded prior to her appointment as chief financial officer
scheme interests awarded during the year
in 2014 the committee approved an award of performance shares to mr hutchinson and mrs whiting equivalent to 125 per cent and 
60 per cent of base salary respectively
policy for performance shares granted in 2014
the performance conditions for performance shares awarded in 2014 under the eip are calculated over a threeyear performance 
period as set out in the following table
50 per cent of award
growth in eps
1
 over the performance period  proportion of performance shares vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis between 30 and 100
30 or above 100
note
1 eps means adjusted basic earnings per share after expensing of sharebased payments
spirent communications plc
annual report 2014
60 50 per cent of award
absolute tsr proportion of performance shares vesting 
up to 25 growth 0
at 25 growth but below 65 growth on a straight line basis between 30 and 100
at or above 65 growth 100
in determining tsr for the company share prices will be averaged over the 90 day period immediately prior to and at the end of the 
performance period
sars and share options
the performance condition for sars and share options where awarded would continue to be based on the rate of growth in the 
company’s eps over the threeyear performance period
growth in eps
1
 over the performance period  proportion of sarsshare options vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis between 30 and 100
30 or above 100
note
1 eps means adjusted basic earnings per share after expensing of sharebased payments
share interests vesting during 2015
awards which are due to vest on 21 march 2015 and are subject to an eps performance condition have not passed that condition and 
will lapse on that date
awards which are due to vest on 21 march 2015 and are subject to a tsr performance condition will have that performance condition 
tested on 21 march 2015
unaudited information
total shareholder return performance
the graph below shows the tsr performance for the last six financial years of spirent communications plc against the ftse 250 
index and the ftse techmark 100 index excluding those companies who were also constituents of the ftse 100 index at the 
commencement of the period the committee believes that these provide broad equity market indices against which the 
performance of the company can be fairly compared and that the ftse techmark 100 index provides a particularly representative 
collection of comparator companies
sixyear tsr performance – spirent vs ftse techmark 100
1
 and ftse 250
500
200
100
400
300
ftse techmark 100
1
ftse 250 spirent
dec 08 dec 09 dec 10 dec 11 dec 12 dec 13 dec 14
note
1 as of 1 january 2009 excluding ftse100 companies
the middle market price of an ordinary share at the close of business on 2 january 2014 and 31 december 2014 being the first and 
last days the london stock exchange was open for trading in 2014 was 9965 pence and 7575 pence respectively and during that 
period ranged between a high of 11080 pence and a low of 6615 pence
spirent communications plc
annual report 2014
61
strategic report governance financial statements report on directors’ remuneration
continued
percentage change in the remuneration 
of the director undertaking the role 
of ceo compared to the percentage 
change in remuneration of all 
group employees
1
remuneration paid to all employees 
m during 2014
2
returns to shareholders m 
during 2014
25
163
2013
2014
20
05
1636
1858
2013 2014
102
120
555
99
123
156
2013 2014
378   
777  
 
■ ceo
■ average group employee
■ onmarket share repurchase
3
■ final dividend
4
■ interim dividend
4
notes
1 the graph shows the change in ceo’s annual cash remuneration defined as base salary taxable benefits and cash incentive compared to that of the 
average group employee for 2013 and 2014
2 total as set out in note 9 to the consolidated financial statements note the increase in remuneration paid to all employees during the period reflects the 
additional employees that have joined the group as a result of acquired businesses
3 total as set out in note 28 to the consolidated financial statements
4 total as set out in note 13 to the consolidated financial statements
table of ceo remuneration
year ceo
ceo single figure of 
 total remuneration

annual bonus payout against 
maximum opportunity

long term incentive  
vesting rates against  
maximum opportunity

2014 eric hutchinson 8203 – –
2013 eric hutchinson 2915
1
120 –
2013 bill burns 6260
2
– –
2012 bill burns 14723 405 34
2011 bill burns 20954 933 84
2010 bill burns 19711 1000 100
2009 bill burns 15665 939 100
notes
1 eric hutchinson took up the position of chief executive officer on 3 september 2013
2 earnings disclosed are to 3 september 2013 when bill burns stepped down as chief executive officer
statement of shareholder voting
at the 2014 agm on 23 april 2014
the results of the binding vote regarding the remuneration policy for the year to 31 december 2014 as set out in the annual report 2013 were
votes for
1
votes against
number  number  votes cast votes witheld
2
466013882 9902 4633694 098 470647576 775063
notes
1 the “for” vote includes those giving the company chairman discretion
2 a vote withheld is not a vote in law and is not counted in the calculation of the votes “for” and “against” the resolution
the results of the advisory vote regarding the report on directors’ remuneration for the year to 31 december 2014 were
votes for
1
votes against
number  number  votes cast votes witheld
2
459488798 9930 3248537 070 462737335 8685304
notes
1 the “for” vote includes those giving the company chairman discretion
2 a vote withheld is not a vote in law and is not counted in the calculation of the votes “for” and “against” the resolution
votes “for” and “against” are expressed as a percentage of total votes cast
spirent communications plc
annual report 2014
62 remuneration committee
responsibilities
the committee is responsible for determining all elements of the 
remuneration of the chairman executive directors company 
secretary and senior executives of the group reviewing 
remuneration policy and overseeing the operation of the 
company’s share incentive plans
the full terms of reference of the committee are available at 
httpcorporatespirentcomgovernanceboardcommittees or 
from the company secretary at the registered office
composition of the committee
at the date of this report the remuneration committee 
comprises four independent nonexecutive directors one of 
whom acts as committee chairman the company secretary 
serves as secretary to the committee all members are 
considered independent within the meaning of the uk 
corporate governance code the “code”
advisers to the committee
during the year the committee also consulted with the 
company’s chairman chief executive officer chief financial 
officer and the company secretary  general counsel but not 
on matters relating to their own remuneration
kepler associates limited who were appointed by the 
committee some years ago provided the results of tsr testing 
to determine the vesting of share incentives
kepler associates limited is a member of the 
remuneration consultants group and complies with its 
voluntary code of conduct in respect of the provision of 
remuneration consulting services details of which can be found 
at wwwremunerationconsultantsgroupcom and has no other 
connection to the company the committee considers them to 
be independent in their approach
the fees paid to kepler associates limited to carry out work 
during 2014 for the remuneration committee totalled £2850 
2013 £17460 and were based on time and materials
directors’ remuneration policy unaudited
our remuneration policy was approved by shareholders at the 
company’s 2014 agm held on 23 april 2014 with 9902 per cent 
of all votes cast in favour accordingly it had a binding effect on 
the company from that date 
the committee is satisfied that the refinements do not provide 
for any additional payments above those permitted in the 
approved policy are in line with best practice and are in the 
interests of shareholders
components of executive director remuneration
the committee’s policy is to set remuneration levels which 
ensure that executive directors are fairly and responsibly 
rewarded in return for high levels of performance the 
remuneration policy set by the committee aims to encourage a 
performancebased culture which reinforces behaviour that will 
lead to the continued long term successful development of the 
business is sufficient to attract retain and motivate high calibre 
executive directors and senior managers and aligns their 
interests with those of shareholders the committee believes 
that the aims of the policy are achieved by ensuring that a 
significant proportion of total remuneration is linked to the 
achievement of stretching corporate and individual targets 
both in the short and long term
spirent communications plc
annual report 2014
63
strategic report governance financial statements purpose and link to strategy operation maximum potential value performance metrics
fixed pay
base salary
to provide fixed remuneration for 
each role which reflects the size and 
scope of the executive director’s 
responsibilities and their individual 
skills and experience
set at levels to attract and retain the 
high calibre talent necessary to 
deliver the group’s strategy
base salaries are normally reviewed 
annually with changes effective 
from 1 january
salaries are typically set after 
considering the salary levels in 
companies of a similar size and 
complexity the responsibilities of 
each individual role progression 
within the role individual 
performance and an individual’s 
experience and with regard to salary 
levels in the country in which the 
executive resides our overall policy 
having had due regard to the factors 
noted is normally to target salaries 
at the median market level
salary levels for current incumbents 
for the 2015 financial year are
chief executive officer 
£400000 per annum
chief financial officer  
£250000 per annum
salaries may be adjusted and any 
increase will ordinarily be in 
percentage of salary terms in line 
with those of the wider workforce 
having particular regard to the 
increases in the country in which the 
individual resides
increases beyond those granted to 
the wider workforce in percentage 
of salary terms may be awarded in 
certain circumstances for example 
where there is a change in 
responsibility progression in the 
role experience or a significant 
increase in the scale of the role and
or size value andor complexity of 
the group
individual and business 
performance are considered when 
determining salary levels together 
with experience scope of 
responsibility and salary increases 
of employees in the country of 
residence of the director
benefits
to provide market levels of benefits 
on a costeffective basis
to support personal health 
and wellbeing
may include private health cover 
for the executive and their family 
life insurance cover typically up 
to four times annual base salary 
permanent health insurance and 
a car allowance
other benefits may be offered from 
time to time broadly in line with local 
market practice in the country of 
residence of the executive director 
global relocation support and any 
associated costs or benefits may 
also be provided if considered by 
the committee to be appropriate 
and reasonable to meet the 
requirements of the business
private healthcare benefits are 
provided through third party 
providers and therefore the cost to 
the company and the value to the 
director may vary from year to year
it is intended that the maximum 
value of benefits offered will remain 
broadly in line with market practice
none
report on directors’ remuneration
continued
spirent communications plc
annual report 2014
64 purpose and link to strategy operation maximum potential value performance metrics
fixed pay
pension or cash allowance
to provide costeffective 
competitive postretirement benefits
defined contribution scheme or 
cash allowance in lieu of company 
pension contributions or a 
combination of both
other postretirement benefits may 
be offered from time to time broadly 
in line with local market practice in 
the country of residence of the 
executive director
an annual taxable cash allowance of 
20 per cent of base salary is 
provided to the chief executive 
officer and 14 per cent of base 
salary is provided to the chief 
financial officer either as a 
contribution to a defined 
contribution plan or as a taxable 
salary supplement in lieu of pension
base salary only is pensionable but 
the percentage allowance may 
increase in line with market practice
none
variable pay
annual incentive
to reward and incentivise the 
achievement of annual financial and 
strategic goals
the performance measures are 
selected to align the strategy of 
the business with shareholder 
valuecreation
measures and targets are set 
annually payments are determined 
by the remuneration committee 
after the year end based on 
performance against those targets
the annual incentive is payable 
in cash
on target opportunity of 100 per 
cent of base salary for chief 
executive officer subject to a cap 
of 150 per cent of base salary 
on target opportunity of 50 per cent 
of base salary for chief financial 
officer subject to a cap of 75 per 
cent of base salary
the remuneration committee may 
in exceptional circumstances 
amend the payments should this 
not in the view of the committee 
reflect overall business performance 
or individual contribution but they 
would not exceed the maximum 
opportunity set out above
for 2015 the annual incentive is 
based on financial targets only 
reflecting the focus for the group 
future annual incentives may be 
based on a mix of financial and 
individual business objectives with 
the majority of the weighting being 
given to financial metrics
a sliding scale between 0 per cent 
and 100 per cent of the maximum 
incentive applies for achievement 
between threshold and maximum 
performance under the 
annual incentive
the exact measures weightings 
and targets are determined by the 
remuneration committee each year 
taking into account the group’s key 
strategic priorities and the approved 
budget for the year
long term incentives
to incentivise executives to achieve 
enhanced returns for shareholders
to encourage long term retention of 
key executives
to align the interests of executives 
and shareholders
discretionary awards of conditional 
awards nil cost options or stock 
appreciation rights “sars” may be 
granted annually as a percentage of 
base salary vesting is based on 
performance measured over three 
years the performance period 
normally starts at the beginning of 
the financial year in which the grant 
is awarded in respect of eps 
conditions or shortly before the 
date of award in respect of 
tsr conditions
limits of 250 per cent and 125 per 
cent of base salary for awards of 
sars and performance shares 
respectively
limit of 250 per cent of base salary 
for combined awards where one 
performance share is equivalent to 
two sars or share options
award levels and performance 
conditions are reviewed before each 
award cycle to ensure they remain 
appropriate if employment ceases 
during a performance period 
awards may be tested on a pro rata 
basis under certain “good leaver” 
circumstances at the discretion of 
the remuneration committee
a full description of the performance 
conditions applicable to long term 
incentive awards under the 
employee incentive plan “eip” can 
be found below this table
spirent communications plc
annual report 2014
65
strategic report governance financial statements report on directors’ remuneration
continued
purpose and link to strategy operation maximum potential value performance metrics
variable pay
allemployee share plans
to provide all employees with the 
opportunity to become shareholders 
on similar terms
executive directors are eligible to 
participate on the same basis as 
other employees in the company’s 
hmrcapproved share incentive 
plan known as the employee share 
purchase plan or any other 
allemployee share plan operated in 
the future
employee share purchase plan all 
eligible employees in participating 
locations are invited to participate 
partnership shares are held in trust 
and can be released at any time 
subject to appropriate tax treatment 
of proceeds
participation by all employees in any 
allemployee share plan operated 
now or in the future is limited to the 
maximum award levels permitted by 
relevant legislation
none
relocation
to offer assistance to executive 
directors who are required to 
relocate by the company to enable 
the company to attract and 
retain talent
global relocation support and any 
associated costs or benefits may 
be provided
the company may also provide tax 
equalisation arrangements
there are a number of variables 
affecting the amount that may be 
payable but the committee would 
pay no more than it judged 
reasonably necessary in the light of 
all applicable circumstances
none
share ownership
to align the interests of executive 
directors with shareholders and 
promote a long term approach
executive directors are expected to 
hold shares in the company to the 
value of a minimum of 100 per cent 
of base salary over time these can 
include shares and unfettered share 
incentive awards
except for those sold to cover 
subscription costs income tax and 
national insurance contributions 
executive directors are encouraged 
to retain shares arising from share 
schemes until the minimum level of 
ownership has been achieved
none none
spirent communications plc
annual report 2014
66 notes to the policy table
performance conditions for awards under the employee 
incentive plan “eip”
the committee reviews the appropriateness of performance 
parameters for each award under the eip and sets stretching 
performance conditions in the light of the company’s current 
and expected performance over the vesting cycle
2015 policy on share incentive awards
the committee expects to approve an award of performance 
shares to eric hutchinson and rachel whiting equivalent to 
125 per cent and 60 per cent of annual base salary respectively
performance conditions for awards expected to be made in 2015
having reviewed the performance parameters for awards under 
the eip the committee has determined that for awards to be 
made in 2015 the following parameters are appropriate
performance shares
the performance conditions for performance shares will be 
calculated over a threeyear performance period as set out 
in the following table
50 per cent of award
growth in eps
1
 over the  
performance period 
proportion of performance  
shares vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis
between 30 and 100
30 or above 100
note
1 eps means adjusted basic earnings per share after expensing of 
sharebased payments
50 per cent of award
absolute tsr
proportion of performance  
shares vesting 
up to 25 growth 0
at 25 growth but  
below 65 growth
on a straight line basis 
between 30 and 100
at or above 65 growth 100
in determining tsr for the company share prices will be 
averaged over the 90 day period immediately prior to and at the 
end of the performance period
sars and share options
the performance condition for sars and share options where 
awarded would continue to be based on the rate of growth in the 
company’s eps over the threeyear performance period
growth in eps
1
 over the  
performance period 
proportion of sarsshare  
options vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis 
between 30 and 100
30 or above 100
note
1 eps means adjusted basic earnings per share after expensing of 
sharebased payments
shareholder approval for eip
at the 2005 agm shareholders approved the operation of the 
eip for a period of ten years subject to further approval being 
required on the use of new issue shares or any material changes 
to the plan in order to undertake a full review of incentive 
arrangements across the group during 2015 the board will be 
seeking shareholder approval at the 2015 agm to extend the 
operation of the eip for a period of one year this would be with a 
view to consulting with shareholders prior to seeking approval of 
a new long term incentive plan at the 2016 agm
in order to comply with the revised code published in september 
2014 and applicable to our 2015 reporting period the eip has 
been amended to include provisions which permit the committee 
to reduce unvested or in the case of options unexercised awards 
in the event of employee misconduct or where there has been 
a requirement to restate financial results due to inaccurate or 
misleading reporting where an award has vested the committee 
has discretion to require that the participant return any shares 
received or an equivalent cash amount any awards made in 
2015 to executive directors will be made after the 2015 agm 
thereby including these provisions
approach to recruitment remuneration
in the event that the company recruits a new executive 
director either from within the organisation or externally when 
determining the appropriate remuneration arrangements the 
committee will take into consideration all relevant factors 
including but not limited to quantum the type of remuneration 
being offered and the jurisdiction which the candidate was 
recruited from to ensure that arrangements are in the best 
interests of both the shareholders and the company without 
paying more than is necessary to recruit an executive of the 
required calibre
the committee would generally seek to align the remuneration 
package offered with our remuneration policy outlined in the 
table above however the committee retains discretion to 
make proposals on hiring a new executive director which are 
outside the standard policy in the first year of appointment the 
committee may offer additional remuneration arrangements that 
it considers appropriate and necessary to recruit and retain the 
individual such remuneration may be in the form of cash or 
sharebased awards which may vest immediately or at a future 
point in time vesting may be subject to performance conditions 
selected by the committee
the committee may make awards on appointing an executive 
director to “buyout” remuneration arrangements forfeited on 
leaving a previous employer in doing so the committee will take 
account of relevant factors including any performance conditions 
attached to those awards the form in which they were granted 
and the time over which they would have vested generally 
buyout awards would be made on a comparable basis to 
those forfeited
in the event of recruitment the committee may also grant an 
award to a new executive under listing rule 942 which allows 
for the granting of awards specifically to facilitate in unusual 
circumstances the recruitment or retention of an executive 
director without seeking prior shareholder approval
spirent communications plc
annual report 2014
67
strategic report governance financial statements the maximum level of variable pay which may be awarded to new 
executive directors would normally be in line with the maximum 
level of variable pay set out in the policy table on pages 64 to 66 
but in any event would be limited to 400 per cent of base salary 
excluding any buyout awards
for an internal appointment any variable pay element awarded 
in respect of the previous role may either continue on its original 
terms or be adjusted to reflect the new appointment
when recruiting nonexecutive directors the remuneration 
arrangements offered would normally be in line with those 
paid to existing nonexecutive directors details of which are 
set out below
service contracts
executive directors
in normal circumstances it is the company’s policy that service 
contracts for executive directors have no fixed term and are 
capable of termination on no more than 12 months’ notice from 
either the company or the executive director it is intended that 
this policy would also apply to new appointments of executive 
directors following the termination of bill burns’ service 
agreement on 3 september 2013 the board determined that in 
order to provide certainty and stability it was in the best interests 
of promoting the long term success of the company not to 
comply with provision d15 of the code with regard to the length 
of service agreements for executive directors the company 
therefore entered into a fixed term contract with eric hutchinson 
for two years which was due to expire on 31 may 2015 
in order to retain mr hutchinson’s services beyond the expiry 
date in december 2014 mr hutchinson entered into a new 
12 month rolling contract which is in compliance with the 
remuneration policy approved by shareholders at the 2014 
agm accordingly the company is now in full compliance with 
the code
both eric hutchinson and rachel whiting currently have a service 
agreement with spirent communications plc and being uk 
residents both their contracts are in line with uk employment 
practice and are governed by the laws of england rachel 
whiting’s service agreement dated 1 february 2014 may be 
terminated on 12 months’ notice from the company and six 
months’ notice from mrs whiting eric hutchinson’s service 
agreement dated 8 december 2014 may be terminated on 
12 months’ notice from the company and six months’ notice 
from mr hutchinson
the company recognises that its executive directors may from 
time to time be invited to become nonexecutive directors of 
other companies and that such appointments can broaden their 
knowledge and experience to the benefit of the company at the 
date of this report neither eric hutchinson nor rachel whiting 
holds any such external positions
the service agreements of the executive directors are available 
for inspection on request and will be available for inspection at 
the 2015 agm
report on directors’ remuneration
continued
nonexecutive directors
all nonexecutive directors have a letter of appointment with the 
company for a period of not more than three years subject to the 
company’s articles of association however since 2011 and in 
accordance with the code all directors stand for reelection at 
each agm
details of individual appointments are as follows
director
first appointed  
a director
current appointment  
due to expire
ian brindle 22 december 2006 2015 agm
duncan lewis 1 july 2007 2017 agm
tom maxwell 1 october 2007 2017 agm
sue swenson 1 february 2012 2015 agm
alex walker 22 december 2006 2015 agm
both mr brindle and mr walker were elected to the board 
on 22 december 2006 and so will be reaching their ninth 
anniversary of appointment before the 2016 agm mr brindle 
will be seeking reelection at the 2015 agm in order to assist with 
the handover to a new chair of the audit committee mr walker 
although not required by the code to meet the same level of 
independence as the chairman will be seeking reelection at 
the 2015 agm
the letters of appointment of nonexecutive directors are 
available for inspection on request and will be available for 
inspection at the 2015 agm an example of a letter of 
appointment for a nonexecutive director is available on the 
company’s website at httpcorporatespirentcomgovernance 
remuneration policy for nonexecutive directors
the board aims to recruit high calibre nonexecutive directors 
with broad commercial international or other relevant 
experience
the company’s remuneration policy with regard to fees for 
nonexecutive directors including the chairman is to pay fees which 
are in line with market practice for companies of a similar size and 
complexity fees for the nonexecutive directors are normally 
reviewed by the board once every three years and were last 
reviewed on 1 january 2015 having been frozen since 1 january 
2008 it was determined that the basic annual fee for nonexecutive 
directors would remain at £40000 per annum for 2015 fees for the 
chairman which are determined by the remuneration committee 
would remain at £160000 per annum for 2015 having been frozen 
since 1 january 2009 the chairmen of the audit and remuneration 
committees each receive additional fees of £11000 and £9000 per 
annum respectively as explained on page 48 the board has asked 
sue swenson to become the new senior independent non
executive director when ian brindle steps down from the board 
at such time as sue swenson becomes the senior independent 
nonexecutive director she will receive an additional fee of 
£7500 per annum in recognition of the increased time commitment 
of this role 
spirent communications plc
annual report 2014
68 fees for nonexecutive directors and the chairman will be 
reviewed again for the period effective 1 january 2016 onwards
nonexecutive directors are not eligible to participate in cash 
incentive or share incentive arrangements and their service does 
not qualify for pension or other benefits no element of their fee 
is performancerelated
when recruiting nonexecutive directors the remuneration 
arrangements offered will generally be in line with those set 
out above
exit payment policy
the committee is committed to ensuring that it does not pay 
more than is necessary when executives leave the group and 
its policy on exit payments is and will continue to be in line 
with market practice in the country in which the executive 
director resides
 –service contracts contain provisions for the removal of the director 
without compensation for not performing their duties to the 
standard required by the board or material misconduct
 –payment in lieu of notice may be paid under service contracts 
if the relevant notice period is not given to the director or if 
having received notice from the director the employer does 
not wish himher to serve it
 –unless provided for in the service contract the company would 
seek to apply practical mitigation measures to any payment 
of compensation on termination for example by reducing 
payments to reflect payments received in respect of alternative 
employment taking into account all relevant circumstances
 –service contracts do not contain provision for additional 
compensation on termination following a change of control 
as detailed in the change of control provisions set out on 
page 73
 –service contracts do not contain provision for liquidated 
damages of any kind
 –service contracts contain appropriate provisions to protect the 
legitimate interests of the company with respect to preventing 
any terminated director from working in a business which 
competes against the company and
 –incentives
 –cash incentives unless otherwise provided in the service 
contract to be consistent with market practice in the country 
in which the executive resides executives are not entitled to 
accrued cash incentives payable following termination
 –employee incentive plan eip leaver provisions were approved 
by shareholders when they approved the eip unvested awards 
will generally lapse at the point of exit participants who leave 
due to special circumstances including redundancy illhealth 
injury or disability retirement death the participant’s employing 
company ceasing to be under the control of the group a transfer 
of the undertaking in which the participant works and any other 
reason if the committee so decides in general or in any 
particular case may be considered ‘good leavers’ under the eip 
plan rules in such circumstances performance conditions are 
assessed by the committee at the point of exit by testing the 
performance conditions up to the date of exit for tsr 
performance and to the end of the most recent financial period 
for eps performance vesting is then prorated for time and 
vested awards may be exercised within 12 months following the 
date of termination of employment
spirent communications plc
annual report 2014
69
strategic report governance financial statements report on directors’ remuneration
continued
illustrations of the application of our remuneration policy in 2015
the charts below show an illustration of the proportion of total remuneration made up of each component of the remuneration policy 
and the value of each component
three scenarios have been illustrated for each executive director
minimum performance –fixed remuneration
1
 –no cash incentive
2
 – no vesting under the employee incentive plan
3
on target performance  –fixed remuneration
1
 – 100 per cent of target cash incentive paid
2
 – 65 per cent vesting under the employee incentive plan
3
maximum performance  –fixed remuneration
1
 – 150 per cent of target cash incentive paid
2
 – full vesting under the employee incentive plan
3
notes
1 fixed remuneration comprises salary and benefit provision as set out in the policy table
2 cash incentive is annual bonus for 2015 as set out in the policy table
3 vesting of awards under the employee incentive plan assumes full vesting for awards subject to eps performance conditions for on target and maximum 
performance the share price is assumed to increase in line with the implied price earnings ratio at 31 december 2014 for awards subject to absolute tsr 
performance conditions vesting is assumed to be 30 per cent for on target performance and 100 per cent for maximum performance the share price is 
assumed to increase in line with the performance condition required under each scenario depending on share price performance the actual outcome may 
be different
chief executive officer policy for 2015 
100
minimum performance
fixed
on target performance
maximum performance
497
1310
1816
38 30 32
27 33 40
cash incentive long term incentive £000
chief financial officer policy for 2015 
100
minimum performance
fixed
on target performance
maximum performance
286
535
689
54 23 23
42 31 27
cash incentive long term incentive £000
spirent communications plc
annual report 2014
70 consideration of employee remuneration arrangements 
elsewhere in the group 
when setting the policy for directors’ remuneration the 
committee has regard to the pay and employment conditions 
elsewhere within the group particularly in the jurisdictions in 
which the executive directors are based the committee is kept 
informed on a regular basis of salary increases for the general 
employee population and takes these into account when 
determining salary increases for executive directors no salary 
increase has been awarded for the role of either chief executive 
officer or chief financial officer for 2015
while the committee does not directly consult with employees as 
part of the process of reviewing executive pay the committee 
does receive updates and feedback on employee engagement 
surveys and allemployee pay increases and takes these into 
account when reviewing executive pay an employee 
engagement survey was undertaken in 2014 and the results 
reviewed by senior management
further details of employee remuneration arrangements can be 
found in the “our employees” section on pages 41 to 43 of this 
annual report
consideration of the views of shareholders in setting 
remuneration policy
the committee is mindful of the views of shareholders in 
determining appropriate levels of remuneration and in 
ensuring that shareholder and director interests are aligned 
the committee is committed to an ongoing dialogue with 
shareholders and seeks shareholder views when any significant 
changes are proposed to remuneration arrangements in 
particular the committee consulted with major shareholders 
regarding the appropriate performance measures for awards 
granted under the employee incentive plan in both 2010 and 
2013 and will continue to do so when changes are proposed to 
ensure both shareholder and director interests are aligned 
in particular the committee will be consulting key shareholders 
in relation to the development of a new long term incentive plan 
prior to seeking approval by shareholders at the 2016 agm
dilution
the committee is strongly committed to managing shareholder 
dilution in a responsible manner no new shares were issued 
during the year with all vesting and exercises of share incentives 
being satisfied by the transfer of shares held by the company’s 
employee share ownership trust “esot” at the date of this 
report the esot holds 07 million ordinary shares for the 
purpose of satisfying the exercises of current and future awards 
by employees and former employees of the group overall 
shareholder dilution resulting from the company’s share 
incentive plans on a rolling tenyear basis has fallen by 06 per 
cent when comparing the positions at 31 december 2014 83 per 
cent and 31 december 2013 89 per cent the overall number of 
share incentives outstanding has risen by 12 million during the 
year to 66 million at 31 december 2014 2013 54 million
legacy matters
for the avoidance of doubt in approving this remuneration 
policy authority is given to the company to honour any 
commitments entered into with current or former directors 
such as the payment of pension or the unwinding of legacy 
share schemes that have or will have been disclosed to 
shareholders in remuneration reports before this policy takes 
effect details of any payments will be set out in the annual 
report on remuneration as they arise
committee discretion
the committee has powers delegated by the board under which 
it operates in addition it complies with rules which have either 
been approved by shareholders the employee incentive plan or 
by the board annual cash incentives these rules provide the 
committee with certain discretions which serve to ensure that 
the implementation of the remuneration policy is fair both to the 
individual director and to shareholders taking overall performance 
and the position of the company into account the committee also 
has discretions to set components of remuneration within a range 
from time to time the extent of such discretions are set out in the 
relevant rules or in the maximum opportunity and performance 
metrics sections of the policy table
in addition the committee requires discretion to deal with 
genuinely exceptional or unforeseen circumstances this form 
of discretion will only be applied in the best interests of the 
company and when in the view of the committee it would be 
disproportionate to seek specific approval from shareholders in 
general meeting it is intended that this discretion be used only 
in the event of changed circumstances or strategy that has not 
been provided for in the remuneration policy
the remuneration committee will not exercise discretion to 
reward failure and will report on any exercise of discretion that 
changes the amount of remuneration paid in any year
on 3 april 2014 the remuneration committee announced that 
following discussions with shareholder representatives the 
committee wished to clarify that any additional cash or share
based awards offered on recruitment of an executive director 
which may fall outside the policy statement on pages 60 to 62 
of the annual report 2013 would be performancerelated and 
would therefore be regarded as variable remuneration and fall 
within the company’s standard 400 per cent cap
the remuneration committee can confirm that no discretion was 
used either during the period or to the date of this report and 
that it does not envisage any cash payment being offered which 
could be construed as a “golden hello”
signed on behalf of the board
tom maxwell
chairman of the remuneration committee
26 february 2015
spirent communications plc
annual report 2014
71
strategic report governance financial statements held in the esot which are the beneficial property of an 
employeeshareholder for further details on the employee 
benefit trusts see “investment in own ordinary shares” in note 
28 to the consolidated financial statements and note 14 to the 
parent company financial statements trustees of both trusts do 
not vote their ordinary shares except for those ordinary shares 
held in the esot that are the beneficial property of an employee
shareholder which the trustees will vote in accordance with the 
instructions received from the beneficial owner
restrictions on share transfers
there are no restrictions on the transfer of ordinary shares in the 
capital of the company other than certain restrictions which may 
from time to time be imposed by law for example insider trading 
law in accordance with the listing rules of the financial conduct 
authority certain employees are required to seek the approval of 
the company prior to dealing in its securities
the company is not aware of any agreements between 
shareholders that may result in restrictions on the transfer of 
securities or on voting rights the company is also not aware of 
any contract of significance between itself or any subsidiary 
undertaking and a controlling shareholder
powers for issue of new shares
during the year to 31 december 2014 and to the date of this 
report no new ordinary shares have been allotted as a result of 
the exercise of options and rights pursuant to the company’s 
share incentive plans
at each agm the directors seek authority to allot shares for cash 
and to disapply preemption rights within prescribed limits at the 
2015 agm authority will be sought to allot new ordinary shares 
up to a nominal value of £6797132 which is equal to 
approximately 333 per cent of the company’s issued share 
capital as at 6 march 2015
return of capital
the company was first authorised to repurchase up to 1499 per 
cent of its own issued ordinary shares within certain limits and 
as permitted by the company’s articles of association at the 
2006 agm this authority has been renewed at each subsequent 
agm reducing to 999 per cent at the 2010 agm and subsequent 
agms the authority from the 2014 agm remains valid until the 
earlier of the 2015 agm or 30 june 2015 since the company 
began returning capital to shareholders in may 2006 a total 
of £2702 million has been returned through the repurchase 
of 3976 million ordinary shares
during 2014 97 million ordinary shares each with a nominal value 
of 3⅓ pence were repurchased for an aggregate consideration of 
156 million and cancelled immediately following repurchase this 
represents 16 per cent of the company’s issued ordinary share 
capital at the beginning of 2014
the company will seek authority to repurchase up to 999 per 
cent of its own ordinary shares at the 2015 agm to facilitate any 
further return of capital if the board concludes that it is in the best 
interests of shareholders to do so
pages 44 to 74 inclusive together with the sections of the annual 
report incorporated by reference form part of the directors’ 
report which is presented in accordance with and with reliance 
upon applicable english company law the liabilities of the 
directors in connection with that report shall be subject to the 
limitations and restrictions provided by such law
as permitted by section 414c ii of the companies act 2006 the 
following information required in the directors’ report has been 
included in the strategic report as the directors consider the 
information to be of strategic importance
information location in annual report
development costs 90
directors’ indemnity arrangements 50
disability 43
employees 41
financial risk management 36
future developments 14
greenhouse gas emissions 41
treasury policy 36
political donations
in accordance with the group’s ethics policy no political 
donations were made during the year 2013 nil
share capital
the company has a single class of share which is divided into 
ordinary shares of 3⅓ pence each each ordinary share carries 
one vote and all of the ordinary shares rank pari passu there 
are no special control rights relating to any of the ordinary 
shares at the date of this report 6117 million ordinary shares 
of 3⅓ pence each had been issued which are fully paid up and 
are listed on the london stock exchange the company also 
operates a level 1 american depositary receipt “adr” 
programme with each adr representing four ordinary shares 
the adrs trade on the us overthecounter market and bny 
mellon is the authorised depositary bank for the programme 
further details on share capital are set out in note 28 to the 
consolidated financial statements and note 14 to the parent 
company financial statements
the rights including those relating to voting obligations and 
any restrictions on transfer relating to the company’s ordinary 
shares as well as the powers of the company’s directors are 
set out in the company’s articles of association a copy of which 
can be found on our website at httpcorporatespirentcom or 
can be obtained from companies house or by writing to the 
company secretary the company’s articles of association may 
only be amended by a special resolution at a general meeting 
of shareholders the most recent changes to the articles of 
association were approved at the 2010 agm and became 
effective at the close of that meeting on 5 may 2010
the company has established two employee benefit trusts in 
connection with the operation of the company’s share incentive 
plans the spirent esot and the spirent sharesave trust “sst” 
the trustees of both trusts have waived their right to receive 
dividends on any ordinary shares held by them except for a 
nominal amount of 1 pence other than for those ordinary shares 
report of the directors
spirent communications plc
annual report 2014
72 substantial shareholdings
in accordance with listing rule 9862 the company has been 
notified of the following significant interests in its ordinary 
shares pursuant to disclosure and transparency rule 5 
as at 31 december 2014
date of notification total holding
 of 
company’s 
total voting 
rights
ameriprise
 financial inc 21 october 2014 73957502 1209
prudential plc 29 january 2014 67877796 1110
axa investment
 managers sa 18 october 2011 47515946 777
aviva plc 22 january 2014 40597969 664
artemis
 investment
 management
 limited 17 september 2010 32940888 538
standard life
 investments
 limited 27 january 2011 32370026 529
fidelity
 international 11 july 2014 30998000 507
schroders plc 9 october 2014 26986598 441
sun life
 assurance
 company of
 canada uk
 limited 5 december 2008 23382347 382
norges bank 30 may 2013 19516804 319
the following notifications have been received during the period 
1 january 2015 to 26 february 2015
date of notification total holding
 of 
company’s 
total voting 
rights
fidelity 
 international 28 january 2015 29483020 481
change of control provisions
the company does not have agreements with any director or 
employee that would provide compensation for loss of office or 
employment resulting from a takeover except that provisions of 
the company’s share incentive plans may cause outstanding 
unvested options and awards granted to employees under such 
plans to vest on a takeover as follows
share incentive plan 
change of  
control  
provisions  
in the rules
effect on  
vesting
performance  
condition
2005 employee incentive plan yes prorated still applies
spirent stock incentive plan no none na
the company is not aware of any significant agreements to which 
it is party that take effect alter or terminate upon a change of 
control of the company following a takeover
post balance sheet events
no post balance sheet events are required to be disclosed in 
the consolidated financial statements 
going concern
after making appropriate enquiries and taking into account the 
matters set out in the principal risks and uncertainties section 
on pages 24 to 27 of this annual report the directors have a 
reasonable expectation that the group has adequate resources 
to continue in operational existence for the foreseeable future 
for this reason they continue to adopt the going concern basis 
on preparing the financial statements
disclosure of information to auditor
each of the directors of the company at the date of this report 
confirms that
 –so far as the director is aware there is no information needed 
by the company’s auditor in connection with preparing their 
report of which the company’s auditor is unaware and
 –he she has taken all the steps that he she ought to have taken 
as a director in order to make himself herself aware of any 
information needed by the company’s auditor in connection 
with preparing their report and to establish that the company’s 
auditor is aware of that information
independent auditors
as described in more detail on page 54 of the audit committee 
report the board will be proposing a resolution to reappoint 
ey as auditor at the 2015 agm
annual general meeting
the 2015 agm will be held at 1pm on tuesday 5 may 2015 at the 
offices of ubs at 100 liverpool street london ec2m 2rh
by order of the board
angus iveson
company secretary
26 february 2015
spirent communications plc
company number 470893
spirent communications plc
annual report 2014
73
strategic report governance financial statements under applicable law and regulations the directors are also 
responsible for preparing a strategic report a directors’ report 
a directors’ remuneration report and a statement on corporate 
governance that comply with the law and those regulations 
they are also responsible for the maintenance and integrity of 
the corporate and financial information included on the 
company’s website
legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions
the directors consider that the annual report taken as a whole 
is fair balanced and understandable and provides the information 
necessary to assess the company’s performance business 
model and strategy
this annual report complies with the disclosure and 
transparency rules “dtr” of the financial conduct authority in 
respect of the requirement to produce an annual financial report
the annual report and consolidated financial statements are the 
responsibility of and have been approved by the directors
each of the directors confirms that to the best of 
their knowledge
 –the consolidated financial statements of the group and parent 
company financial statements prepared in accordance with the 
applicable set of accounting standards give a true and fair view 
of the assets liabilities financial position and the profit or loss 
of the company and the undertakings included in the 
consolidation taken as a whole and
 –the annual report includes a fair review of the development 
and performance of the business and the position of the 
company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal 
risks and uncertainties that they face
by order of the board
rachel whiting
chief financial officer
26 february 2015
the directors are responsible for preparing the annual report 
the report on directors’ remuneration the consolidated financial 
statements of the group and the financial statements of the 
parent company
company law requires the directors to prepare financial 
statements for each financial year under that law they are 
required to prepare the consolidated financial statements of the 
group in accordance with international financial reporting 
standards “ifrss” as adopted by the european union “eu” 
and have elected to prepare the parent company financial 
statements in accordance with uk generally accepted 
accounting principles and applicable law
the consolidated financial statements of the group are required 
by law and ifrss to present fairly for each financial period the 
financial position and performance of the group the companies 
act 2006 provides in relation to such financial statements that 
references in the relevant part of that act to financial statements 
giving a true and fair view are references to their achieving a 
fair presentation
the parent company financial statements are required by 
law to give a true and fair view of the state of affairs of the 
parent company
in preparing each of the consolidated financial statements of the 
group and parent company financial statements the directors 
are required to
 –select suitable accounting policies and then apply 
them consistently
 –make judgements and estimates that are reasonable 
and prudent
 –state for the audited consolidated financial statements of the 
group whether they have been prepared in accordance with 
ifrss as adopted by the eu
 –state for the parent company financial statements whether 
applicable uk accounting standards have been followed 
subject to any material departures disclosed and explained in 
the parent company financial statements and
 –prepare the financial statements on a going concern basis 
unless it is inappropriate to presume the group and the parent 
company will continue in operational business for the 
foreseeable future
the directors confirm that they have complied with the above 
requirements in preparing the financial statements
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and that disclose with reasonable accuracy at any 
time the financial position of the group and the parent company 
and enable them to ensure that its financial statements comply 
with the companies act 2006 and for the group article 4 of the 
international accounting standards “ias” regulation they have 
general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the group and to prevent 
and detect fraud and other irregularities
directors’ responsibilities statement
spirent communications plc
annual report 2014
74 reasonableness of significant accounting estimates made by the 
directors and the overall presentation of the financial statements 
in addition we read all the financial and nonfinancial information 
in the annual report to identify material inconsistencies with the 
audited financial statements and to identify any information 
that is apparently materially incorrect based on or materially 
inconsistent with the knowledge acquired by us in the course 
of performing the audit if we become aware of any apparent 
material misstatements or inconsistencies we consider the 
implications for our report
our assessment of risks of material misstatement
we identified the following risks that have had the greatest effect 
on the overall audit strategy the allocation of resources in the 
audit and directing the efforts of the engagement team
 –revenue recognition in relation to correct allocation to 
components for multielement contracts and appropriate 
cut off 
 –tax accounting as the group operates in a number of 
jurisdictions with different tax regulations and available 
credits there is an increased risk of noncompliance with local 
tax regulations which may result in an understatement of tax 
provisions and liabilities including those arising from penalties 
and charges in addition there is a risk that inappropriate use 
of brought forward tax losses and volatility in forecast sales 
may result in incorrect recognition and risks around 
recoverability of deferred tax assets and
 –acquisition accounting as there have been a number of 
acquisitions in 2014 for which the value of consideration is 
significant this has been an area of audit focus in the current 
year the assessment around the purchase price allocation 
of goodwill and intangible assets involves judgment around 
future revenue and profit generated by the entity and the 
identification of the potential intangible assets the acquisitions 
are of varying complexity and there is a risk around the 
incorrect accounting of contract terms in addition there is an 
assessment to be made with regards to the opening balance 
sheets acquired and there is a risk that required adjustments 
are not made or that they are incorrect lastly there is 
judgement involved in forecasting future cash flows and 
underlying assumptions in relation to current and past 
acquisitions to support their carrying value and thus there 
is a risk that goodwill could become impaired
our application of materiality
we apply the concept of materiality both in planning and 
performing our audit and in evaluating the effect of 
misstatements on our audit and on the financial statements 
for the purposes of determining whether the financial statements 
are free from material misstatement we define materiality as the 
magnitude of misstatement that makes it probable that the 
economic decisions of a reasonably knowledgeable person 
relying on the financial statements would be changed or 
influenced we also determine a level of performance materiality 
which we use to determine the extent of testing needed to 
reduce to an appropriately low level the probability that the 
aggregate of uncorrected and undetected misstatements 
exceeds materiality for the financial statements as a whole
when establishing our overall audit strategy we determined 
a magnitude of uncorrected misstatements that we judged 
would be material for the financial statements as a whole we 
opinion on financial statements
in our opinion
 –the financial statements give a true and fair view of the state 
of the group’s and of the parent company’s affairs as at 
31 december 2014 and of the group’s profit for the year 
then ended
 –the group financial statements have been properly prepared 
in accordance with ifrss as adopted by the european union 
 –the parent company financial statements have been properly 
prepared in accordance with united kingdom generally 
accepted accounting practice and
 –the financial statements have been prepared in accordance 
with the requirements of the companies act 2006 and 
as regards the group financial statements article 4 of the 
ias regulation
what we have audited
we have audited the group financial statements of spirent 
communications plc for the year ended 31 december 2014 
which comprise the consolidated income statement the 
consolidated balance sheet the consolidated statement 
of comprehensive income the consolidated cash flow 
statement and the consolidated statement of changes in equity 
the related notes 1 to 33 and the parent company balance sheet 
and the related notes 1 to 18 the financial reporting framework 
that has been applied in their preparation is applicable law and 
international financial reporting standards ifrss as adopted 
by the european union the financial reporting framework that 
has been applied in the preparation of the parent company 
financial statements is applicable law and united kingdom 
accounting standards united kingdom generally accepted 
accounting practice
this report is made solely to the company’s members as a body 
in accordance with chapter 3 of part 16 of the companies act 
2006 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose 
to the fullest extent permitted by law we do not accept or 
assume responsibility to anyone other than the company and the 
company’s members as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement set out on page 74 the directors are responsible for 
the preparation of the group financial statements and for being 
satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the group financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require 
us to comply with the auditing practices board’s ethical 
standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and 
have been consistently applied and adequately disclosed the 
independent auditor’s report to the 
members of spirent communications plc
spirent communications plc
annual report 2014
75
strategic report governance financial statements the way in which we scoped our response to the risks identified 
above was as follows
revenue recognition
 –we have carried out audit procedures on revenue in relation 
to sales contracts specifically focusing on the service element 
of multiple element sales contracts as well as contracts with 
separate components consisting of hardware and subsequent 
software upgrades
 –we have carried out audit procedures on specific large and 
complex transactions together with a sample of regular 
transactions at each location
 –we have carried out audit procedures on deferred revenue and 
other revenue associated balances to ensure they have been 
recognised in accordance with group accounting policies and 
ifrs and
 –we have carried out audit procedures on cut off in relation to 
revenue recognised close to the year end and with particular 
focus in china and india which might be caused by import 
challenges including direct confirmations of customers where 
considered necessary
tax accounting
 –assessment of the consistency and robustness of tax 
provisions particularly in the light of any expected resolution of 
older issues and changes in local regulations and
 –we have challenged management’s assessment of future profit 
forecasts and the underlying assumptions and we have 
assessed the utilisation of unrecognised brought forward losses 
to calculate the recognition of deferred tax assets
acquisition accounting
 –we have challenged management’s assessment of control 
to ensure the decision to fully consolidate the acquiree 
is appropriate
 –we have reviewed management’s purchase price allocation and 
challenged the underlying assumptions this included a review 
of external valuation experts employed by management 
and meeting with management and these experts to discuss 
the results 
 –we have carried out audit procedures over the opening balance 
sheet as well challenging the adjustments made
 –we have reviewed the sale and purchase agreements to ensure 
the acquisitions have been accounted for in accordance with 
the contract terms and
 –we have reviewed management’s annual impairment review in 
relation to the acquisitions made for indicators of impairment 
challenging management’s underlying assumptions 
opinion on other matter prescribed by the companies 
act 2006
in our opinion
 –the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the companies 
act 2006 and
 –the information given in the strategic report and the directors’ 
report for the financial year for which the financial statements 
are prepared is consistent with the financial statements
determined planning materiality for the group to be 165 million 
2013 225m which is 5 of profit before tax adjusted for 
nonrecurring items for the year ending 31 december 2014 
nonrecurring items relate to exceptional items and acquisition 
related costs we note that planning materiality has decreased 
from the prior year due to a reduction in profit before tax on the 
basis of our risk assessments together with our assessment of 
the group’s overall control environment our judgement is that 
overall performance materiality for the group should be 75 
of planning materiality namely 12 million 2013 17m our 
objective in adopting this approach is to ensure that total 
detected and undetected audit differences do not exceed our 
planning materiality of 165 million for the financial statements 
as whole this provided a basis for determining the nature 
timing and extent of risk assessment procedures identifying 
and assessing the risk of material misstatement and determining 
the nature timing and extent of further audit procedures
we agreed with the audit committee that we would report to the 
committee all audit differences in excess of 009m 2013 01m 
and differences below that threshold which in our view 
warranted reporting on qualitative grounds
we evaluate any uncorrected misstatements against both the 
quantitative measures of materiality discussed above and in light 
of other relevant qualitative considerations
an overview of the scope of our audit
following our assessment of the risk of material misstatement to 
the group financial statements we have scoped in 12 locations 
which represent the principal business units within the group’s 
three reportable segments networks  applications wireless  
service experience and service assurance and account for 95 
of the group’s total net assets and 89 of the group’s profit 
before tax the number of locations has increased from 10 in 
the prior year due to the acquisitions made for the remaining 
locations we performed other procedures to confirm there 
were no significant risks of material misstatement in the 
group financial statements 
the audit work at the 12 locations was performed at a materiality 
level calculated by reference to a proportion of group materiality 
appropriate to the relative scale of the business concerned
detailed instructions were sent to all auditors in these locations 
these instructions covered the significant areas that should be 
addressed by the component team auditors which included the 
relative risks of material misstatement detailed above and set out 
the information to be reported back to the group audit team the 
group audit team continued to follow a programme of planned 
visits that has been designed to ensure that senior members of 
the audit team including the senior statutory auditor visit certain 
material or high risk locations on a rotational basis in addition for 
all inscope locations the component audit teams participated 
in the group team’s planning event including discussion of fraud 
and error telephone meetings were also held throughout the 
year with all inscope locations to monitor audit progress audit 
quality and to assess which items required direct involvement 
from the group team the group audit team attended all local 
close meetings we also required detailed reporting on audit 
results and audit procedures on higher risk areas and performed 
reviews of local audit work of high risk area working papers 
on revenue recognition whilst all work on tax and acquisition 
accounting was performed at group level
independent auditor’s report to the 
members of spirent communications plc
continued 
spirent communications plc
annual report 2014
76 matters on which we are required to report by exception
we have nothing to report in respect of the following
under the isas uk and ireland we are required to report 
to you if in our opinion information in the annual report is
 –materially inconsistent with the information in the audited 
financial statements or
 –apparently materially incorrect based on or materially 
inconsistent with our knowledge of the group acquired in the 
course of performing our audit or
 –is otherwise misleading
in particular we are required to consider whether we have 
identified any inconsistencies between our knowledge acquired 
during the audit and the directors’ statement that they consider 
the annual report is fair balanced and understandable and 
whether the annual report appropriately discloses those matters 
that we communicated to the audit committee which we 
consider should have been disclosed
under the companies act 2006 we are required to report to you 
if in our opinion
 –adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been 
received from branches not visited by us or
 –the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or 
 –certain disclosures of directors’ remuneration specified by law 
are not made or
 –we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review
 –the directors’ statement set out on page 73 in relation to going 
concern and
 –the part of the corporate governance statement relating to the 
company’s compliance with the nine provisions of the uk 
corporate governance code specified for our review
karl havers senior statutory auditor
for and on behalf of ernst  young llp
statutory auditor  
london 
26 february 2015
notes
1 the maintenance and integrity of the spirent communications plc website is 
the responsibility of the directors the work carried out by the auditor does 
not involve consideration of these matters and accordingly the auditor 
accepts no responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the website
2 legislation in the united kingdom governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions
spirent communications plc
annual report 2014
77
strategic report governance financial statements 2014 2013
notes  million  million
continuing operations
revenue 3 4 4572 4135
cost of sales 1409 1267
gross profit 3163 2868
product development 4 1154 1005
selling and distribution 1135 966
administration 637 506
operating profit 4 237 391
finance income 7 04 09
finance costs 8 – 09
profit before tax 4 5 24 1 391
tax 11 35 64
profit for the year 206 327
attributable to
 owners of the parent company 205 327
 noncontrolling interest 01 –
profit for the year 206 327
earnings per share
 basic 12 335 510
 diluted 335 509
the notes on pages 83 to 115 and page 129 form part of these financial statements
consolidated income statement
year to 31 december 2014
spirent communications plc
annual report 2014
78 2014 2013
notes  million  million
profit for the year 206 327
other comprehensive income
items that may subsequently be reclassified to profit or loss
 exchange differences on retranslation of foreign operations 42 07
items that will not subsequently be reclassified to profit or loss
 remeasurement of the net defined benefit pension liability 10 160 178
 income tax effect 11 33 42
127 136
other comprehensive income 169 129
total comprehensive income for the year 37 456
attributable to
 owners of the parent company 36 456
 noncontrolling interest 01 –
total comprehensive income for the year 37 456
the notes on pages 83 to 115 and page 129 form part of these financial statements
consolidated statement  
of comprehensive income
year to 31 december 2014 
spirent communications plc
annual report 2014
79
strategic report governance financial statements 2014 2013
notes  million  million
assets
non‑current assets
intangible assets 14 2733 1988
property plant and equipment 15 522 396
trade and other receivables 19 42 44
cash on deposit 20 – 01
defined benefit pension plan surplus 10 08 06
deferred tax asset 22 205 183
3510 2618
current assets
inventories 18 265 316
trade and other receivables 19 1229 1027
current tax asset 67 –
cash and cash equivalents 20 998 2162
2559 3505
total assets 6069 6123
liabilities
current liabilities
trade and other payables 21 1272 1307
current tax liability 39 36
provisions 25 67 60
1378 1403
non‑current liabilities
trade and other payables 23 126 152
other financial liabilities 24 27 –
deferred tax liability 22 25 –
defined benefit pension plan deficit 10 153 39
provisions 25 16 05
347 196
total liabilities 1725 1599
net assets 4344 4524
capital and reserves 28
share capital 318 344
share premium account 315 335
capital redemption reserve 206 213
other reserves 21 32
translation reserve 191 233
retained earnings 3292 3431
total equity attributable to owners of the parent company 4343 4524
noncontrolling interest 01 –
total equity 4344 4524
the notes on pages 83 to 115 and page 129 form part of these financial statements
signed on behalf of the board
rachel whiting
director 
26 february 2015
consolidated balance sheet
at 31 december 2014
spirent communications plc
annual report 2014
80 2014 2013
notes  million  million
cash flows from operating activities
cash flow from operations 31 489 735
tax paid 72 61
net cash inflow from operating activities 417 674
cash flows from investing activities
interest received 06 08
transfer from long term deposit 01 03
purchase of intangible assets 14 06 24
purchase of property plant and equipment 322 229
proceeds from the sale of property plant and equipment 12 10
acquisition of subsidiaries and businesses net of cash acquired 32 859 –
net cash used in investing activities 1168 232
cash flows from financing activities
dividend paid 13 222 222
proceeds from the issue of share capital and employee share ownership trust – 02
share repurchase 164 547
loan repayment 0 1 –
net cash used in financing activities 387 767
net decrease in cash and cash equivalents 1138 325
cash and cash equivalents at the beginning of the year 2162 2486
effect of foreign exchange rate changes 26 01
cash and cash equivalents at the end of the year 20 998 2162
the notes on pages 83 to 115 and page 129 form part of these financial statements
consolidated cash flow statement
year to 31 december 2014 
spirent communications plc
annual report 2014
81
strategic report governance financial statements attributable to owners of the parent company  million
notes
share 
capital
share 
premium 
account
capital 
redemption 
reserve
other 
reserves
translation 
reserve
retained 
earnings total
non
controlling 
interest
total  
equity
at 1 january 2013 353 329 194 16 240 3856 4956 – 4956
profit for the year – – – – – 327 327 – 327
other comprehensive income a – – – – 07 136 129 – 129
total comprehensive income – – – – 07 463 456 – 456
sharebased payment 30 – – – – – 12 12 – 12
employee share ownership trust 28 – – – – – 02 02 – 02
share cancellation 28 15 – 15 – – – – – –
share repurchase 28 – – – – – 555 555 – 555
share buyback obligation 28 – – – – – 101 101 – 101
equity dividends 13 – – – – – 222 222 – 222
exchange adjustment 06 06 04 16 – – – – –
at 1 january 2014 344 335 213 32 233 343 1 4524 – 4524
profit for the year – – – – – 205 205 01 206
other comprehensive income b – – – – 42 127 169 – 169
total comprehensive income – – – – 42 78 36 01 37
sharebased payment 30 – – – – – 07 07 – 07
tax charge on share incentives 11 – – – – – 0 1 0 1 – 0 1
share cancellation 28 05 – 05 – – – – – –
share repurchase 28 – – – – – 156 156 – 156
share buyback obligation 28 – – – – – 182 182 – 182
equity dividends 13 – – – – – 222 222 – 222
other movements 24 – – – – – 27 27 – 27
exchange adjustment 2 1 20 12 53 – – – – –
at 31 december 2014 318 315 206 21 191 3292 4343 01 4344
a the amount included in other comprehensive income for 2013 of 136 million represents remeasurement gains of the net defined benefit pension liability 
of 178 million net of a tax charge of 42 million
 the amount included in the translation reserve of 07 million represents other comprehensive income related to the translation of foreign operations
b the amount included in other comprehensive income for 2014 of 127 million represents remeasurement losses of the net defined benefit pension liability 
of 160 million net of a tax credit of 33 million
 the amount included in the translation reserve of 42 million represents other comprehensive income related to the translation of foreign operations
the notes on pages 83 to 115 and page 129 form part of these financial statements
consolidated statement  
of changes in equity
spirent communications plc
annual report 2014
82 notes to the consolidated  
financial statements
1 corporate information 
the group’s consolidated financial statements for the year ended 31 december 2014 were authorised for issue by the board of directors 
on 26 february 2015 spirent communications plc is a public limited company incorporated and domiciled in england and wales 
the company’s ordinary shares are traded on the london stock exchange
as required by the european union’s “eu” ias regulation and the companies act 2006 the group has prepared its consolidated 
financial statements in accordance with international financial reporting standards “ifrss” as adopted by the eu and issued by 
the international accounting standards board “iasb” 
the company has elected to prepare the company financial statements in accordance with uk accounting standards these are 
presented on pages 116 to 129 and the accounting policies in respect of the company are set out on pages 117 to 119
2 significant accounting policies 
accounting convention
the consolidated financial statements are prepared on a historical cost basis apart from certain financial instruments that have been 
measured at fair value
going concern
at 31 december 2014 the group had cash balances of 998 million and no debt
the directors have reviewed the detailed financial projections for a period of 12 months from the date of this report and the business 
plans for the 2016 and 2017 financial years they have also considered the principal risks and uncertainties that the group face and 
its current financial position and are satisfied that the group has adequate financial resources to continue in operational existence for 
the foreseeable future a period of not less than 12 months from the date of this report accordingly the going concern basis 
continues to be used in the preparation of the financial statements
new accounting standards
the following new standards amendments to standards and interpretations have been adopted by the group with no significant 
impact on its consolidated results or financial position
international accounting standards “iasifrs”
ifrs 10 consolidated financial statements
ifrs 11 joint arrangements
ifrs 12 disclosure of interests in other entities
ias 32 amendments to ias 32 – offsetting financial assets and financial liabilities
ias 39 and ifrs 9 amendments to ias 39 and ifrs 9 – novation of derivatives and continuation of hedge accounting
ifric 21 levies
basis of consolidation
the consolidated financial statements incorporate the financial statements of the company and its subsidiaries made up to 
31 december each year the financial statements of subsidiaries are prepared for the same reporting year as the parent company 
using consistent accounting policies principal subsidiaries and divisions are listed on page 129
subsidiary undertakings are entities that are directly or indirectly controlled by the group the group controls an entity when it is 
exposed or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its 
power over the entity
results of subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated 
from the date on which control is transferred out of the group 
the separable net assets including intangible assets of newly acquired subsidiaries are incorporated into the consolidated 
financial statements based on their fair values at the effective date of control
all intragroup transactions balances income and expenses are eliminated on consolidation
business combinations and goodwill
a business combination is a transaction or other event in which an acquirer obtains control of one or more businesses 
business combinations are accounted for using the acquisition method
at acquisition date the identifiable assets acquired and liabilities assumed including intangible assets are measured at their fair values 
the cost of an acquisition is measured as the aggregate of the consideration transferred and the amount of any noncontrolling interest 
in the acquiree noncontrolling interests are measured at the proportionate share of the acquiree’s identifiable net assets
spirent communications plc
annual report 2014
83
strategic report governance financial statements 2 significant accounting policies continued
acquisition costs are expensed and included in administration costs
goodwill arising on the acquisition of subsidiaries representing the excess of cost over the net fair value of the net assets acquired 
is capitalised as an intangible asset goodwill is carried at cost less any accumulated impairment losses 
goodwill is subject to an annual review for impairment for the purpose of impairment testing goodwill is allocated to the related 
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 
intangible assets 
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses separately identifiable 
intangible assets such as patent fees licence fees trademarks and customer lists and relationships are capitalised on the balance 
sheet only when the value can be measured reliably or the intangible asset is purchased as part of the acquisition of a business 
such intangible assets are amortised over their useful economic lives on a straight line basis the carrying value of intangible assets 
is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable 
product development
research expenditure is recognised in the year in which it is incurred intangible assets arising on the group’s various product 
development projects are recognised only if the recognition criteria of ias 38 “intangible assets” are met 
product development costs are expensed as incurred until the technological feasibility of the product under development has 
been established technological feasibility in spirent’s circumstances occurs when a working model is completed for software 
development technological feasibility is not established until the process of developing the software is complete after technological 
feasibility is established additional costs are capitalised and amortised on a straight line basis over the estimated useful life
at 31 december 2014 and 31 december 2013 no amounts have met the recognition criteria
property plant and equipment 
property plant and equipment are stated at cost less accumulated depreciation and accumulated impairment depreciation is not 
provided on freehold land depreciation is provided to write off the cost less estimated residual value of all other assets over their 
estimated useful lives on a straight line basis at rates which take into account commercial conditions at their location usual asset 
lives are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
 building installations 20 years or lease period if less
 fittings and equipment 3 to 8 years
 motor vehicles 3 to 5 years
 business systems software 4 years
the carrying values of property plant and equipment are reviewed for impairment if events or changes in circumstances indicate the 
carrying value may not be recoverable
impairment of assets 
intangible assets with finite useful lives and property plant and equipment are tested for impairment at each reporting date where 
there is an indication that an asset may be impaired goodwill and intangible assets with an indefinite useful life are assessed at least 
annually when an impairment test is performed the recoverable amount is assessed by reference to the higher of the net present 
value of the expected cash flows value in use of the relevant cashgenerating unit or asset and the fair value less cost to sell 
in assessing value in use the estimated future cash flows are discounted to their present value using a pretax discount rate that 
reflects current market assessments of the time value of money and the risks specific to the asset where the carrying amount of an 
asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount impairment 
losses are recognised in the income statement in those expense categories consistent with the function of the impaired asset
where an impairment loss has been recognised against an asset it may be reversed in future periods where there has been a change 
in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised but only to the 
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined net of depreciation 
or amortisation had no impairment loss been recognised in prior years such a reversal is recognised in the income statement 
this does not apply for goodwill for which an impairment loss must not be reversed in any circumstances 
leases 
operating leases are leases where the lessor retains substantially all the risks and rewards of ownership of the asset and are not 
finance leases operating lease rentals are charged to the income statement on a straight line basis over the period of the lease 
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
84 2 significant accounting policies continued
inventories 
inventories are stated at the lower of cost and estimated net realisable value after provisions for obsolescence cost includes all 
costs incurred in bringing each product to its present location and condition being the full manufacturing cost on a firstinfirstout 
basis including all attributable overheads based on a normal level of activity 
provisions 
provisions are recorded when the group has a present legal or constructive obligation as a result of a past event for which it is 
probable that the group will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the 
obligation can be made provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate 
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures 
expected to be required to settle the obligation 
foreign currencies 
the consolidated financial statements are presented in us dollars which is the group’s presentation currency 
transactions in foreign currencies are initially recorded at the rates ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated at the rates ruling at the balance sheet date all exchange differences are taken to 
the consolidated income statement nonmonetary assets and liabilities denominated in foreign currencies are measured in terms of 
historical costs using the exchange rate at the date of the initial transaction
the functional currencies of the group’s operations are principally us dollar sterling or euro on consolidation the assets and 
liabilities of the group’s foreign operations are translated into the group’s presentation currency at exchange rates ruling at the 
balance sheet date the results of foreign operations are translated into us dollars using average rates for the period the exchange 
differences arising on retranslation are classified as a separate component of equity the translation reserve such translation 
differences are recognised as part of the profit or loss on disposal should an operation be disposed of the group has elected to 
apply the exemption in ifrs 1 “first time adoption of international financial reporting standards” which allows the cumulative 
translation differences for all foreign operations to be deemed to be zero at the date of transition to ifrss being 1 january 2003 
financial instruments 
financial assets and liabilities are recognised on the group’s balance sheet when it becomes a party to the contractual provisions 
of the instrument
trade receivables 
trade receivables are noninterest bearing and are stated at original invoiced amount less an appropriate allowance for estimated 
irrecoverable amounts such allowances are based on an assessment of debtor ageing past experience or known 
customer exposures
cash and cash equivalents 
cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits which usually have 
an original maturity of three months or less for the purposes of the consolidated cash flow statement cash and cash equivalents 
consist of cash and cash equivalents as defined above there are no bank overdrafts
trade payables
trade payables are noninterest bearing and are stated at the original invoiced amount 
equity instruments 
equity instruments are recorded at the proceeds received net of direct issue costs spirent communications plc ordinary shares 
held by the group are classified in equity as treasury shares and are recognised at cost and included as a deduction from retained 
earnings consideration received for the sale of such treasury shares is also recognised in equity with any difference between the 
proceeds from sale and the original cost being taken to retained earnings 
derivative financial instruments and hedge accounting
the group uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign 
currencies relating to firm commitments 
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into 
and are subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency 
exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles the 
group has not adopted the hedge accounting rules consequently all gains and losses arising from changes in fair value are taken 
to the income statement
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts 
spirent communications plc
annual report 2014
85
strategic report governance financial statements 2 significant accounting policies continued
retirement benefits
the group operates two funded defined benefit pension plans which are in the united kingdom all other pension plans are defined 
contribution in nature for the defined contribution plans the amount charged to the income statement is the employers’ contributions 
paid or payable during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method 
and updates are performed at each balance sheet date remeasurement comprising actuarial gains and losses the effect of 
changes to the asset ceiling if relevant and the return on plan assets excluding interest is reflected immediately in the balance 
sheet liability or asset with a charge or credit recognised in other comprehensive income in the period in which they occur 
remeasurement recognised in other comprehensive income will not be reclassified to profit or loss past service cost is recognised 
in profit or loss in the period of plan amendment net interest is calculated by applying the discount rate at the beginning of the 
period to the net defined benefit pension liability or asset taking account of any changes in the net defined benefit pension liability 
during the period as a result of contribution and benefit payments defined benefit pension costs are categorised as
 –service cost including current service cost past service cost and gains and losses on curtailments or settlements
 –net interest expense or income and
 –remeasurement
the group presents the first two components of defined benefit pension costs in profit or loss 
revenue recognition 
revenue is recognised when it is probable that economic benefits will flow to the group the revenue can be reliably measured and 
when the group has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised 
when collectability is probable 
for the sale of services revenue is recognised in accounting periods in which the service is rendered revenue from maintenance 
contracts is recognised over the period of performance on a straight line basis
revenue from product sales of hardware and software is recognised at the time of delivery and acceptance and when there are 
no significant vendor obligations remaining it is not until acceptance has occurred that the risks and rewards of ownership are 
transferred to the buyer terms of acceptance are dependent upon the specific contractual arrangement agreed with the customer
revenue from sales or usagebased royalties is recognised as the subsequent sale or usage occurs
contractual arrangements are accounted for as two or more separate transactions only where the commercial substance is that 
the individual components operate independently of each other because they are capable of being provided separately from one 
another and it is possible to attribute reliable fair values to every component to the extent that a separate component comprises 
a product sale of hardware or software revenue is recognised as described above revenue is recognised on other components 
as the group fulfils its contractual obligations and to the extent that it has earned the right to consideration 
employee benefits 
when an employee has rendered services to the group during an accounting period short term benefits expected to be paid 
in exchange for those services are recognised in the same accounting period 
share‑ based payment
the group operates various equitysettled sharebased compensation plans and accounts for these awards in accordance with 
ifrs 2 “sharebased payment”
the fair value of these awards is recognised in the income statement on a straight line basis over the vesting period together with 
a corresponding change in equity the fair value is measured using the hullwhite trinomial model by reference to the share price 
and taking into account the terms and conditions of the award excluding nonmarket vesting conditions at the date the awards 
were granted the charge is reassessed at each balance sheet date to reflect the expected and actual levels of vesting due to 
achievement or otherwise of nonmarket conditions awards where vesting is conditional upon satisfying a market condition or 
nonvesting condition are treated as vesting irrespective of whether the market or nonvesting condition has been satisfied
the group has an employee share trust for the granting of certain share incentives to employees shares in the group held by the 
employee share trust are treated as treasury shares and presented in the balance sheet as a deduction from equity
tax
income tax on the profit or loss for the year comprises current and deferred tax income tax is recognised in the income statement 
except to the extent that it relates to items in other comprehensive income or equity
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the 
balance sheet date and any adjustments to tax payable for previous years
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
86 2 significant accounting policies continued
deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying 
amounts in the financial statements with the following exceptions
 –where the temporary difference arises from the initial recognition of goodwill taxable temporary differences only or of an asset or 
liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable 
profit or loss 
 –in respect of taxable temporary differences associated with investments in subsidiaries associates and joint ventures where the 
timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not 
reverse in the foreseeable future
a deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the 
deductible temporary differences carried forward tax credits or tax losses can be utilised 
deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related 
asset is realised or the liability is settled based on tax rates and laws enacted or substantively enacted at the balance sheet date
dividends paid
the interim dividend is included in the financial statements in the period in which it is paid and the final dividend in the period it is 
approved by the shareholders at an annual general meeting
critical accounting assumptions and judgements
the preparation of financial statements requires the group to make estimates and assumptions that affect items reported such 
estimates and assumptions are based on management’s best knowledge of current facts circumstances and future events actual 
results may differ possibly significantly from those estimates the areas requiring a high degree of judgement or where assumptions 
and estimates are significant to the consolidated financial statements are discussed below 
business combinations and goodwill
the fair values of the identifiable assets acquired and liabilities assumed is based on a number of assumptions and judgements by 
management in establishing the fair value of intangible assets recognised at acquisition and their estimated useful lives the group 
considers each entity acquired valuation estimates are used to determine the fair values of intangible assets and this includes 
estimation of future cash flows weighted average cost of capital external royalty rates and useful lives 
the group tests annually by cashgenerating unit whether goodwill has suffered impairment and more frequently when events or 
circumstances indicate that the current carrying value may not be recoverable the recoverable amounts of cashgenerating units 
have been determined based on value in use calculations which require the use of estimates and assumptions these are described 
in note 14
defined benefit pension plans
the pension cost and the defined benefit pension obligation of the group’s defined benefit pension plans are based on a number 
of selected assumptions these include the discount rate inflation rate salary growth and longevity differences arising from actual 
experience or future changes in assumptions will be reflected in future periods the effect of changing these assumptions 
is described in note 10
revenue recognition
for revenue recognition purposes contractual arrangements are accounted for as two or more separate transactions only where the 
commercial substance is that the individual components operate independently of each other because they are capable of being 
provided separately from one another and it is possible to attribute reliable fair values to every component management exercises 
a degree of judgement in setting the criteria used for determining when revenue which involves several elements should be 
recognised and the fair values allocated to each element
income taxes
the group is subject to income taxes in a number of tax jurisdictions and judgement is applied in determining the worldwide 
provision for income taxes there are many transactions for which the final tax determinability is uncertain for example liabilities 
are recognised for anticipated tax audit issues based on whether additional taxes are likely to be due based on the facts and 
circumstances known at the time the financial statements are prepared where the final outcome differs from the amounts that 
were initially recorded the differences will be recorded in the future period in which the determination is made
deferred taxes
the extent to which deferred tax assets can be recognised is based on current forecasts and estimates prepared by management 
a change to these forecasts and estimates could result in a different recognition outcome unrecognised deferred tax assets are 
disclosed in note 22
spirent communications plc
annual report 2014
87
strategic report governance financial statements 2 significant accounting policies continued
new standards and interpretations not applied
the iasb and ifric have issued the following standards and interpretations with an effective date for the group after the date of 
these financial statements
international accounting standards 
“iasifrs”
effective for annual periods  
beginning on or after
ifrs 9 financial instruments 1 january 2018
ifrs 10 and ias 28 amendments to ifrs 10 and ias 28 – sale or contribution of  
 assets between an investor and its associate or joint venture
1 january 2016
ifrs 10 and 12 and ias 28 investment entities applying the consolidated exception 1 january 2016
ifrs 11 amendments to ifrs 11 – accounting for acquisitions of  
 interests in joint operations
1 january 2016
ifrs 14 regulatory deferral accounts 1 january 2016
ifrs 15 revenue from contracts with customers 1 january 2017
ias 1 disclosure initiative 1 january 2016
ias 16 and 38 amendments to ias 16 and ias 38 – clarification of  
 acceptable methods of depreciation and amortisation
1 january 2016
ias 19 amendments to ias 19 – employee contributions 1 july 2014
ias 27 amendments to ias 27 – equity method in separate financial statements 1 january 2016
annual improvements
2010–2012 cycle 1 july 2014
2011–2013 cycle 1 july 2014
2012–2014 cycle 1 january 2016
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the group’s 
financial statements in the period of initial application other than in relation to ifrs 15 “revenue from contracts with customers” 
which is discussed below
the group is currently undertaking a project to determine the effect of implementation of ifrs 15 this project will be ongoing 
throughout 2015 and therefore the company has not yet determined the effect this standard will have on the results of the group
3 revenue 
2014 2013
 million  million
sale of goods 3257 2862
maintenance and support services 1306 1273
royalty income 09 –
total revenue 4572 4135
4 operating segments
the group’s organisational structure is based on differences in the products and services offered by each segment and information 
regularly reviewed by the group’s chief executive officer its chief operating decision maker is presented on this basis the group’s 
operating segments follow this structure
the group’s reportable operating segments are networks  applications wireless  service experience and service assurance 
the group evaluates segment operating profit before exceptional items acquisition related costs acquired intangible asset 
amortisation and impairment and sharebased payment finance income and finance costs are not allocated to the reportable 
segments corporate is not an operating segment and costs are separately reported and not allocated to the reportable segments 
information on segment assets and segment liabilities is not regularly provided to the group’s chief executive officer and is therefore 
not disclosed below
the principal activities of each of the reportable operating segments are as follows
 –networks  applications develops innovative solutions for functional performance and security testing of nextgeneration networks 
and applications that simulate realworld conditions in the lab before a commercial launch
 –wireless  service experience develops innovative solutions for functional and performance testing of 4g lte mobile devices 
services satellite positioning devices and wireless infrastructure as well as the endtoend measurement of the mobile experience 
on live networks
 –service assurance provides solutions to enable service providers to diagnose troubleshoot and reduce time to resolve issues with 
production networks and services and continuously monitor production network performance and enduser experience through 
endtoend visibility and realtime automation
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
88 4 operating segments continued
2014
 million
notes
networks  
applications
wireless  
service 
experience
service 
assurance corporate total
revenue
external revenue 2215 1786 571 – 4572
there were no intersegment sales
profit before tax
total reportable segment profitloss before exceptional items 76 240 207 63 460
exceptional items 6 23 09 02 07 4 1
total reportable segment profitloss 53 23 1 205 70 419
unallocated amounts
 acquisition related costs 38
 acquired intangible asset amortisation 127
 impairment of intangible rd asset 14 10
 sharebased payment 30 07
operating profit 237
finance income 04
profit before tax 24 1
other information
product development 597 432 125 – 1154
expenditure on intangibles 14 10 301 615 – 926
expenditure on property plant and equipment 15 169 126 42 01 338
intangible asset amortisation – other – 13 – – 13
depreciation 15 97 89 09 02 197
2013
 million
notes
networks  
applications
wireless  
service 
experience
service 
assurance corporate total
revenue
external revenue 2134 1677 324 – 4135
there were no intersegment sales
profit before tax
total reportable segment profitloss before exceptional items 132 338 90 59 501
exceptional items 6 16 – – 22 38
total reportable segment profitloss 116 338 90 81 463
unallocated amounts
 acquired intangible asset amortisation 84
 sharebased payment 30 12
operating profit 391
finance income 09
finance costs 09
profit before tax 391
other information
product development 551 376 78 – 1005
expenditure on intangibles 14 – 24 – – 24
expenditure on property plant and equipment 15 107 112 10 – 229
intangible asset amortisation – other – 15 – – 15
depreciation 15 87 66 10 02 165
spirent communications plc
annual report 2014
89
strategic report governance financial statements 4 operating segments continued
2014 2013
 million  million
revenue by market
united states 2332 2158
asia pacific rest of world 1587 1469
europe 653 508
4572 4135
europe includes united kingdom revenue of 116 million 2013 98 million
revenues are attributed to countries based on customer location 
2014 2013
 million  million
noncurrent assets
united states 2633 2280
asia pacific rest of world 344 71
europe 278 33
3255 2384
europe includes united kingdom noncurrent assets of 23 million 2013 21 million
no one customer accounted for 10 per cent or more of total group revenue in either 2014 or 2013 
5 profit before tax 
the following items have been charged or credited in arriving at profit before tax 
2014 2013
notes  million  million
employee benefit costs 9 211 1 1838
costs of inventories recognised as an expense 913 823
writedown of inventories to net realisable value 18 08 03
amortisation of intangible assets 14 140 99
depreciation of property plant and equipment
 owned assets 15 197 165
operating leases
 minimum lease payments 90 84
product development costs 1154 1005
net foreign exchange gaincharge 1 1 04
services provided to all of the operations of the group by the auditor ernst  young llp and its associates 
2014 2013
 million  million
audit services
group audit fee 09 08
audit of subsidiaries 01 –
total audit fee 10 08
other fees to auditors
other assurance services 01 –
taxation advisory services 01 02
02 02
12 10
a description of the work of the audit committee is set out in the audit committee report on pages 52 to 54 and includes an 
explanation of how auditor objectivity and independence is safeguarded when nonaudit services are provided by the auditor
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
90 6 exceptional items
2014 2013
 million  million
reorganisation in response to market changes 41 –
review of the group’s organisational structure – 34
abortive acquisition costs – 04
41 38
in 2014 following dynamic changes in spirent’s markets and the need to ensure the group was investing in the right areas 
to maximise its potential spirent undertook a series of steps to reallocate resources in its worldwide operations
in 2013 on the appointment of the new chief executive officer the group undertook a review of its operational structure in order 
to deliver a streamlined decentralised and more simplified business
the tax effect of exceptional items is a credit of 12 million 2013 08 million the cash outflow in respect of exceptional items 
was 33 million 2013 12 million
7 finance income
2014 2013
 million  million
bank interest receivable 04 09
8 finance costs
2014 2013
note  million  million
net defined benefit pension plan interest 10 – 09
9 employees 
the average number of people employed by the group during the year was
2014 2013
number number
manufacturing 356 339
product development 705 596
selling and distribution 461 394
administration 205 185
1727 1514
employee benefit costs were
2014 2013
note  million  million
remuneration 1858 1636
social security costs 170 149
pension and other related costs 76 65
expensecredit of sharebased payment 30 07 12
211 1 1838
please refer to the report on directors’ remuneration on pages 55 to 71 and note 33 for disclosures relating to the emoluments 
share incentives and pensions of the directors
spirent communications plc
annual report 2014
91
strategic report governance financial statements 10 pensions
defined benefit plans
i characteristics and risks associated with the plans
the group sponsors two funded defined benefit pension plans in the united kingdom the spirent communications plc staff pension 
 life assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” these 
plans are funded and have full uk hm revenue  customs “hmrc” taxexempt approval both schemes are administered by a 
trustee board which is comprised of representatives from the employer member nominated trustees and an independent trustee 
the trustee board operates in accordance with the trust deed and rules of each plan and acts in the interests of all of its members
 –the staff plan is the group’s most significant plan and it provides its members with retirement benefits based on their final salary 
and length of service the staff plan was closed to new entrants on 1 october 2002
 –the cash plan is primarily a defined contribution arrangement although there are some legacy defined benefits old section 
that have been valued for the purpose of these accounts in accordance with ias 19 “employee benefits” members who left service 
before 1992 are entitled to a cash lump sum on retirement that is based on their salary and length of service members of the 
old section are entitled to defined contribution benefits but with an underpin based on salary and length of service
there is also a united kingdom unfunded plan which consists of a contractual obligation for the group to top up certain former 
employees’ benefits whose salaries exceeded the statutory earnings cap
as with a vast majority of similar arrangements in the united kingdom the group ultimately underwrites the risks relating to the 
defined benefit plans these risks include investment risks and demographic risks such as the risks of members living longer 
than expected
the plans hold a large proportion of their assets in equity strong future equity returns would be expected to reduce the group’s 
future cash contributions and vice versa
expected contributions to the defined benefit plans in 2015 are 44 million this includes the contributions agreed with the funded 
plans’ trustees in accordance with uk legislation following the triennial valuations as at 1 april 2012 the group has agreed to pay 
the following contributions in order to clear the funding deficit as assessed by the trustees’ independent actuary
 –staff plan 41 million per annum from 1 july 2013 to 30 june 2019 plus a further contribution of up to 39 million by july 2016 if the 
plan remains in deficit
 –cash plan 03 million per annum from 1 july 2013 to 31 march 2015
if the contributions currently agreed are insufficient to pay the benefits due the group will need to make further contributions
ii amounts in the financial statements
the assets and liabilities on the balance sheet are as follows
2014 2013
 million  million
assets
uk defined benefit pension plan – cash plan 08 06
liabilities
uk defined benefit pension plan – staff plan 145 31
uk unfunded plan 08 08
153 39
for the purposes of the following disclosures the staff plan and cash plan have been combined as the cash plan is immaterial to 
these financial statements
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
92 10 pensions continued
a the assets and liabilities in each plan
2014 2013
 million  million
staff plan
quoted
 equities 760 894
unquoted
 ldi funds 393 239
 cash benchmarked bonds 1089 1204
 insured annuities 53 55
 property 150 254
 cash and other 227 08
fair value of plan assets 2672 2654
present value of defined benefit pension plan obligations 2817 2685
deficit in the plan on the balance sheet 145 31
cash plan
quoted
 equities 45 45
 government bonds 44 33
unquoted
 insured annuities 03 03
 cash and other 31 40
fair value of plan assets 123 121
present value of defined benefit pension plan obligations 115 115
surplus in the plan on the balance sheet 08 06
the plans are prohibited from investing in spirent’s own financial instruments 
the fair values of the quoted equity and debt instruments are determined based on quoted market prices in active markets whereas 
the fair values of the other assets are not
b analysis of the amounts charged to the income statement
2014 2013
 million  million
plan administration expenses 07 07
current service cost 02 02
amount charged to operating costs 09 09
net interest on the net defined benefit pension liability – 09
net charge to the income statement 09 18
c analysis of amount recognised directly in the statement of comprehensive income
2014 2013
 million  million
remeasurement gain on plans’ assets 163 112
actuarial gain arising from experience 08 –
actuarial lossgain arising from changes in financial assumptions 33 1 66
remeasurement of the net defined benefit pension liability 160 178
spirent communications plc
annual report 2014
93
strategic report governance financial statements 10 pensions continued
d movements in the present value of funded defined benefit obligations
2014 2013
 million  million
at 1 january 2800 2820
current service cost 02 02
interest cost 122 114
benefit payments 129 117
actuarial gain arising from experience 08 –
actuarial lossgain arising from changes in financial assumptions 33 1 66
exchange adjustment 186 47
present value of funded defined benefit pension plans’ obligations 2932 2800
e movements in the fair value of plans’ assets
2014 2013
 million  million
at 1 january 2775 2572
interest income on plans’ assets 122 105
employer contributions 48 53
benefit payments 129 117
plan administration expenses 07 07
remeasurement gain on plans’ assets 163 112
exchange adjustment 177 57
fair value of plans’ assets 2795 2775
f the key financial assumptions 
the assumptions used for both plans using a weighted average were as follows
2014 2013
 
inflation – rpi 29 33
inflation – cpi 18 22
rate of increase in pensionable salaries 30 31
rate of increase for pensions in payment pre 2001 service 36 36
rate of increase for pensions in payment 2001 to 5 april 2005 service 28 31
rate of increase for pensions post 5 april 2005 service 20 22
rate of increase in deferred pensions 18 22
rate used to discount plan liabilities 36 45
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions 
are such that a member currently aged 65 2013 aged 65 will live on average for a further 235 years 2013 235 years if they are 
male and for a further 257 years 2013 256 years if they are female for a member who retires in 2034 2013 in 2033 at age 65 
2013 age 65 the assumptions are that they will live on average for a further 244 years 2013 243 years after retirement if they 
are male and for a further 268 years 2013 267 years after retirement if they are female 
iii amount timing and uncertainty of future cash flows
the approximate impact to the past service liabilities of changing these main assumptions is as follows 
 –reducing the discount rate by 01 per cent per annum would increase past service liabilities by 41 million 
 –increasing rpi inflation by 01 per cent would increase the plans’ liabilities by 17 million
 –increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling 
factor would increase past service liabilities by 117 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to 
be insignificant
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
94 10 pensions continued
the sensitivity figures have been calculated to show the movement in the defined benefit obligation for each assumption change in 
isolation and assuming no other changes in market conditions at the accounting date and may not be representative of the actual 
change as the changes in assumptions may not occur in isolation
the weighted average duration of the defined benefit obligation is 15 years 2013 15 years
defined contribution plans 
united kingdom 
the group maintains defined contribution pension plans for employees in the united kingdom employer contributions into these 
plans for 2014 were 12 million 2013 14 million 
united states 
the group maintains a defined contribution pension plan for employees of its united states subsidiaries this plan also known as a 
401k plan allows employees to defer a percentage of their salary for retirement the investment choices offered by the plan are a 
selection of diversified mutual funds offering a broad mix of investment return potential with varying levels of risk in aggregate the 
group’s contributions to the us plan totalled 37 million for 2014 2013 33 million total assets in the defined contribution plan at 
the end of 2014 were 2225 million 2013 2046 million there were no defined benefit plans in the united states in 2014 or 2013
other jurisdictions 
outside the united kingdom and the united states employees are provided with pension arrangements determined in accordance 
with approved local practice and regulations these arrangements are defined contribution plans total employer contributions for 
2014 in respect of these plans amounted to 12 million 2013 09 million
total employer contributions to defined contribution plans were 61 million 2013 56 million
directors’ pension arrangements 
the pension arrangements of the executive directors are described in detail in the report on directors’ remuneration on pages 55 
to 71
11 tax
2014 2013
 million  million
tax charge in the income statement
current income tax
uk tax 01 –
foreign tax 38 51
amounts overprovided in previous years 14 37
total current income tax charge 25 14
deferred tax
recognition of deferred tax assets 06 –
reversal of temporary differences 20 50
adjustments in respect of prior years 04 –
total deferred tax charge 10 50
tax charge in the income statement 35 64
the tax charge for the year ended 31 december 2014 was 35 million 2013 charge 64 million this was after a prior year tax credit 
of 18 million 2013 credit 37 million resulting from the expiration and reassessment of open tax positions for previous years 
excluding the prior year tax credit the effective tax rate was 220 per cent 2013 258 per cent 
spirent communications plc
annual report 2014
95
strategic report governance financial statements 11 tax continued
tax relating to items chargedcredited to other comprehensive income or equity
2014 2013
 million  million
deferred tax on share incentives 02 06
current tax on share incentives 0 1 06
tax charge on share incentives 01 –
deferred tax on defined benefit pension plan 33 42
reconciliation of the total tax charge
the tax expense in the income statement for the year is lower than the standard rate of corporation tax in the uk of 215 per cent 
2013 lower and 2325 per cent the differences are reconciled below
2014 2013
 million  million
accounting profit before tax 24 1 391
accounting profit multiplied by the uk standard rate of corporation tax of 215 per cent 2013 2325 per cent 52 91
sharebased payment 01 –
differences in overseas rates and other adjustments 20 11
tax overprovided in prior years 18 37
recognition of deferred tax assets 06 –
us research and experimental tax credit 14 –
use of pension fund and other uk adjustments – 01
total tax charge reported in the income statement 35 64
12 earnings per share
basic
earnings per share is calculated by dividing the profit for the year attributable to owners of the parent company by the weighted 
average number of ordinary shares outstanding during the year
diluted
diluted earnings per share is calculated by dividing the profit for the year attributable to owners of the parent company by the 
weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares 
that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares
2014 2013
 million  million
profit for the year attributable to owners of the parent company 205 327
number number
million million
weighted average number of ordinary shares in issue – basic 6112 6406
dilutive potential of employee share incentives 15 14
weighted average number of ordinary shares in issue – diluted 6127 6420
cents cents
earnings per share
basic 335 510
diluted 335 509
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
96 12 earnings per share continued
adjusted
the group is disclosing adjusted earnings per share for continuing operations attributable to owners of the parent company in order 
to provide a measure to enable periodonperiod comparisons to be made of its performance the following items are excluded from 
adjusted earnings
 –exceptional items
 –acquisition related costs
 –acquired intangible asset amortisation and impairment
 –sharebased payment
 –tax effect on the above items
 –prior year tax
a reconciliation is provided below
2014 2013
eps eps
notes  million cents  million cents
profit for the year attributable to owners of the parent company 205 335 327 510
exceptional items 6 41 38
acquisition related costs 38 –
acquired intangible asset amortisation and impairment 137 84
sharebased payment 30 07 12
tax effect on the above items 54 34
prior year tax credit 11 18 37
adjusted basic 356 582 366 571
adjusted diluted 581 570
there were no ordinary share transactions that occurred after 31 december that would have significantly changed the number of 
ordinary shares or potential ordinary shares outstanding at the period end if those transactions had occurred before the end of the 
reporting period in either year
13 dividends paid and proposed
2014 2013
 million  million
declared and paid in the year
equity dividend on ordinary shares
final dividend paid for the year ended 31 december 2013 of 201 cents 120 pence per  
 ordinary share 31 december 2012 183 cents 121 pence 123 120
interim dividend 2014 168 cents 099 pence per ordinary share 2013 153 cents 101 pence 99 102
222 222
proposed for approval at agm not recognised as a liability at 31 december
equity dividend on ordinary shares
final dividend 2014 221 cents 143 pence per ordinary share 2013 201 cents 120 pence 135 123
the directors are proposing a final dividend in respect of the financial year ended 31 december 2014 of 221 cents per ordinary share 
143 pence 2013 201 cents 120 pence which will absorb an estimated 135 million of shareholders’ funds 2013 123 million 
it will be paid on 8 may 2015 to ordinary shareholders who are on the register of members at close of business on 6 march 2015 
payment will be made to adr holders on 18 may 2015 no liability is recorded in the financial statements in respect of this 
final dividend 
dividends are determined in us dollars and paid in pounds sterling the exchange rate for determining the amount of the final 
dividend to be paid for 2014 was 155 £1 2013 167£1
spirent communications plc
annual report 2014
97
strategic report governance financial statements 14 intangible assets
 million
note goodwill
customer 
list
current 
technology
rd 
asset database 
brand 
names
non
compete 
covenant licences total
cost net of accumulated
 amortisation and 
 impairment losses
at 1 january 2013 1701 97 218 – 23 15 – 20 2074
additions – – – – – – – 24 24
amortisation for the year – 20 51 – 10 03 – 15 99
exchange adjustment 11 – – – – – – – 11
at 1 january 2014 1690 77 167 – 13 12 – 29 1988
acquisitions 32 566 102 193 10 29 09 11 – 920
additions – – – – – – – 06 06
impairment – – – 10 – – – – 10
amortisation for the year – 38 72 – 1 1 05 0 1 13 140
exchange adjustment 24 0 1 04 – 02 – – – 3 1
at 31 december 2014 2232 140 284 – 29 16 10 22 2733
at 31 december 2013
cost gross  
 carrying amount 5740 114 254 – 26 16 – 113 6263
amortisation  
 and accumulated  
 impairment losses 4050 37 87 – 13 04 – 84 4275
net carrying amount 1690 77 167 – 13 12 – 29 1988
at 31 december 2014
cost gross  
 carrying amount 627 1 213 442 10 53 26 11 119 7145
amortisation 
 and accumulated 
 impairment losses 4039 73 158 10 24 10 0 1 97 4412
net carrying amount 2232 140 284 – 29 16 10 22 2733
amortisation and impairment charges 
goodwill is allocated at acquisition to the cash generating units “cgus” that are expected to benefit from that business combination
the group identifies cgus at the lowest level at which cash flows are largely independent of other cash flows
goodwill has been allocated to seven cgus as follows
2014 2013
 million  million
networks  applications an operating segment 850 860
wireless  positioning product lines within the wireless  service experience operating segment 515 521
service experience a product line within the wireless  service experience operating segment 309 309
testing technologies a product line within the wireless  service experience operating segment 21 –
developer tools a product line within the wireless  service experience operating segment 190 –
customer experience management a product line within the service assurance operating segment 238 –
device intelligence a product line within the service assurance operating segment 109 –
2232 1690
estimated useful lives 
acquired intangible assets being customer list current technology database brand names and noncompete covenant are 
amortised on a straight line basis over their estimated useful lives and the charge is included within administration expenses in 
the income statement licences are amortised over their useful lives or term and are expensed within cost of sales or selling costs 
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
98 14 intangible assets continued
the estimated useful lives of the intangible assets and the amortisation expiry dates are as follows
useful life expiry date
customer list 2–7 years 2019
current technology 5–7 years 2021
database 25–7 years 2021
brand names 5 years 2019
noncompete covenant 4 years 2018
licences 3–5 years 2017
annual impairment test
the key assumptions used in the value in use calculations were
 –revenue growth rates
 –gross margin
 –operating expenses
 –discount rate and
 –growth rate used to extrapolate cash flows beyond the fiveyear period covered by management’s projections
the cash flows are derived from the most recent financial budgets for the next financial year as approved by the board and the 
group’s three year strategic plan cash flows for years four and five are then extrapolated based on long range plans cash flows in 
subsequent years have been extrapolated using a steady 20 per cent growth rate for developer tools as this is considered to be a 
more mature business and 275 per cent for all other cgus 2013 275 per cent for all cgus which management estimates to be the 
approximate average long term growth rate for the industries in which these units operate 
the discount rate applied to the cash flows is based on spirent’s weighted average cost of capital by taking the risk free rate for 
tenyear government bonds and making an adjustment to reflect the increased risk of investing in equities in making this adjustment 
the inputs required are the equity market risk premium beta and the risk adjustment applied to reflect the risk of spirent relative to 
the market as a whole the discount rate is adjusted to reflect the systematic risk of the specific cgu taking into account the relative 
size of the cgu and the territories in which it operates
the cash flows have been discounted using the following pretax discount rates
2014 2013
 
networks  applications 143 138
wireless  positioning 145 138
service experience 171 138
testing technologies 147 –
developer tools 135 –
customer experience management 175 –
device intelligence 160 –
for spirent the key factor in the cash flow forecasts is the ability to forecast revenue all cgus operate in the data technology market 
and generate a high gross profit gross margin consequently changes in revenue can have a significant impact on the operating profit 
and cash flows revenue growth rates used in the projections are based on management’s estimate of growth in the markets served 
and take into account historic levels of growth expected future developments in products and technology industry forecasts and 
macroeconomic conditions in the territories in which the cgus operate as testing technologies developer tools customer 
experience management and device intelligence were all acquired in 2014 management has also considered the detailed projections 
and information that was prepared during the due diligence processes and the postacquisition performance to date gross margin 
and operating expenses are based on historical values adjusted for the effect of revenue growth and recent acquisitions 
the recoverable amount of each cgu was calculated on a value in use basis and was in excess of its carrying value and 
consequently no impairment has been recognised
spirent communications plc
annual report 2014
99
strategic report governance financial statements 14 intangible assets continued
sensitivity to changes in key assumptions 
the directors believe that no reasonable possible change in any of the key assumptions used in isolation would cause the value 
in use of the networks  applications wireless  positioning testing technologies developer tools and customer experience 
management cgus to fall below carrying value
the headroom on the service experience and device intelligence cgus was 63 million and 13 million respectively 
revenue growth is projected to be higher in year 1 than the growth experienced in 2014 for the service experience cgu as 
management has invested in infrastructure and undertaken new initiatives during 2014 to position this product line for growth 
in 2015 and beyond in addition new product launches are expected to benefit 2015
the device intelligence cgu is projecting significant revenue growth in year 1 in line with the acquisition plan the strategy behind 
this acquisition was to combine spirent’s multiple offerings in solutions to target a larger global customer base and the acquisition will 
also benefit from the sales channels available in the spirent group 
sensitivity analysis around the key assumptions has indicated that for these cgus the following changes in assumptions in isolation 
would cause the value in use to fall below the carrying values
year ended 31 december 2014
change required to trigger impairment
service experience
forecast revenue
1
105 decrease
long term growth rate 40 percentage point decrease to 13 
discount rate 18 percentage point increase to 189
device intelligence
forecast revenue
1
47 decrease
long term growth rate 12 percentage point decrease to 15
discount rate 07 percentage point increase to 167
note
1 cumulative effect of a decrease in revenue in year 1 and continuing to apply the forecast growth rates to subsequent years
in 2013 there were no reasonable possible changes that would have led to impairment
intangible asset impairment
an intangible asset impairment charge of 10 million has been incurred in respect of the rd asset arising on the acquisition of 
netgend the asset had been acquired at a preproduction stage and although the intention is to use this technology to enhance 
spirent’s solutions the extent and the means by which this will be achieved had not been determined at 31 december 2014 resulting 
in an impairment charge following this impairment the recoverable amount of netgend was nil
the impairment charge has been expensed to administrative expenses in the income statement
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
100 15 property plant and equipment
 million
note
land and 
buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost net of accumulated depreciation and accumulated impairment
at 1 january 2013 30 226 85 341
additions
 owned assets 05 188 36 229
disposals – 10 – 10
depreciation charge for the year 12 115 38 165
exchange adjustment – – 01 01
at 1 january 2014 23 289 84 396
additions
 owned assets 110 171 57 338
disposals – 12 – 12
acquisitions 32 – 01 01 02
depreciation charge for the year 13 14 1 43 197
exchange adjustment 0 1 04 – 05
at 31 december 2014 119 304 99 522
at 31 december 2013
cost 192 775 542 1509
accumulated depreciation and accumulated impairment 169 486 458 1113
net carrying amount 23 289 84 396
at 31 december 2014
cost 226 916 479 162 1
accumulated depreciation and accumulated impairment 107 612 380 1099
net carrying amount 119 304 99 522
none of the property plant and equipment is held under finance lease arrangements
16 capital commitments and contingent liabilities 
the group had capital commitments of 31 million at 31 december 2014 31 december 2013 13 million 
the group has provided indemnities of 01 million 2013 01 million for certain ongoing business obligations under letters of credit 
for subsidiary companies
the group has provided guarantees totalling 17 million euro 14 million 2013 nil in respect of the minimum consideration for the 
acquisition of minority shareholdings in testing technologies ist gmbh and which expire on 31 march 2016 see note 24
17 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest 
is given on page 129 of these financial statements
18 inventories
2014 2013
 million  million
raw materials 65 130
work in progress 09 10
finished goods 191 176
265 316
an expense of 08 million 2013 03 million has been recognised in the period for inventory writedowns there were no reversals 
of prior period inventory writedowns 2013 nil 
no inventories are carried at fair value less costs to sell 2013 nil
spirent communications plc
annual report 2014
101
strategic report governance financial statements 19 trade and other receivables
2014 2013
 million  million
non‑current assets
trade receivables – 04
other receivables 38 35
prepayments accrued income and deferred costs 04 05
42 44
current assets
trade receivables 1078 896
other receivables 49 42
prepayments accrued income and deferred costs 102 89
1229 1027
127 1 1071
the trade receivables are stated net of provisions for doubtful debts the movement in the provision was as follows
2014 2013
 million  million
at 1 january 10 08
charge for the year 03 04
released in the year 02 02
at 31 december 11 10
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a large 
number of customers 
20 cash and cash equivalents
2014 2013
 million  million
cash at bank and in hand 948 1721
short term bank deposits 50 441
998 2162
cash at bank and in hand earns interest at floating interest rates
short term bank deposits are made for varying periods of between one day and three months depending on the cash requirements 
of the group and earn interest at the short term deposit rates appropriate for the term of the deposit and currency
at the end of 2014 the currency split of cash and cash equivalents was us dollar 57 per cent 2013 84 per cent sterling 30 per cent 
2013 10 per cent and other currencies 13 per cent 2013 6 per cent
for the purposes of the cash flow statement cash and cash equivalents comprise the above amounts 
2014 2013
 million  million
noncurrent
cash on deposit – 01
at 31 december 2013 01 million was held in a blocked trust account available for use by the company as creditors who were 
outstanding at the date of the cancellation of the share premium account and capital redemption reserve being 24 november 2004 
were settled
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
102 21 trade and other payables – current
2014 2013
note  million  million
trade payables 178 183
payments received on account 12 02
other taxes and social security costs 39 45
share buyback obligation 28 – 182
accruals 402 382
deferred income 64 1 513
1272 1307
trade payables are noninterest bearing and are normally settled on 30 to 60 day terms other payables are noninterest bearing 
the directors consider that the carrying amount of trade payables approximates to their fair value
22 deferred tax 
the movements in the deferred tax assetsliabilities are as follows
 million
notes
temporary 
differences tax losses
uk pension 
plans total
at 1 january 2013 29 196 59 284
charged in the year 11 09 34 07 50
deferred tax on defined benefit pension plan 11 – – 42 42
deferred tax on share incentives recognised in equity 11 06 – – 06
exchange adjustment – – 03 03
at 1 january 2014 14 162 07 183
charged in the year 11 29 3 1 08 10
deferred tax on defined benefit pension plan 11 – – 33 33
deferred tax on share incentives recognised in equity 11 02 – – 02
acquisitions 32 23 – – 23
exchange adjustment 01 01 03 0 1
at 31 december 2014 19 132 29 180
amounts on the balance sheet
at 31 december 2013
deferred tax asset 14 162 07 183
at 31 december 2014
deferred tax asset 44 132 29 205
deferred tax liability 25 – – 25
19 132 29 180
a deferred tax asset of 205 million has been recognised at 31 december 2014 2013 183 million 64 million is in the united 
kingdom 2013 52 million 130 million is in the united states 2013 120 million and 11 million is in the rest of the world 
2013 11 million
the deferred tax asset includes 04 million 2013 07 million in respect of the tax deduction which may be available on the future 
exercise of share incentives
deferred tax assets on temporary differences of 58 million arising in the rest of the world 2013 47 million have not 
been recognised
the group has tax losses arising in the united kingdom of 564 million 2013 651 million that are available for offset against 
suitable future taxable profits a deferred tax asset has not been recognised in respect of these losses as their future recovery 
is uncertain united kingdom tax losses can be carried forward indefinitely in total deferred tax assets amounting to 171 million 
2013 177 million have not been recognised
the group also has capital losses carried forward of 12843 million 2013 13666 million for which no deferred tax asset is 
recognised on the balance sheet these capital losses have no expiry date
spirent communications plc
annual report 2014
103
strategic report governance financial statements 22 deferred tax continued 
future changes in tax rates
the uk current tax rate was reduced from 23 per cent to 21 per cent with effect from 1 april 2014 under the finance act 2013 the uk 
current tax rate will reduce to 20 per cent with effect from 1 april 2015 this will reduce future tax rates accordingly these reductions 
in the current tax rate were substantively enacted on 2 july 2013
in line with these rate changes deferred tax assets and liabilities being realised or settled before 1 april 2015 have been based on the 
existing 21 per cent rate those being realised or settled after 1 april 2015 have been based on a rate of 20 per cent
23 trade and other payables – noncurrent
2014 2013
 million  million
other payables 16 22
accruals 05 04
deferred income 105 126
126 152
24 other financial liabilities
2014 2013
 million  million
put option 27 –
in relation to the acquisition of testing technologies ist gmbh in 2014 the minority stake of 42 per cent of the share capital is the 
subject of a put and call option which expires on 31 march 2016 the consideration is based on the 2015 revenue performance of 
testing tech and set at a minimum amount of euro 14 million
a financial liability of euro 22 million 27 million has been recorded to reflect the fair value of the exercise price of the option 
measured at recurring fair value through profit and loss and considered to be categorised within level 3 as no observable market data 
is available 
the fair value of the put option over the noncontrolling interest has been measured using discounted cash flows with inputs derived 
from the projected financial performance in accordance with the agreement 
an increase or decrease in the projected financial performance used in the put option measurements by 10 per cent would increase 
or decrease the liability by 02 million
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
104 25 provisions
 million
lease 
provisions
restructuring 
provisions
other 
provisions total
at 1 january 2013 31 – 19 50
charged in the year 05 31 – 36
released in the year 02 – – 02
utilised in the year 07 12 – 19
at 1 january 2014 27 19 19 65
charged in the year – 41 03 44
asset retirement obligation 16 – – 16
released in the year 0 1 0 1 – 02
utilised in the year 05 33 – 38
exchange difference 0 1 – 0 1 02
at 31 december 2014 36 26 21 83
2014 2013
 million  million
current 67 60
noncurrent 16 05
83 65
the lease provisions are for the continuing obligations under leases in respect of properties which have been vacated by the group 
and property dilapidation and restoration provisions where material lease obligations are discounted the group expects these 
provisions to be utilised over one to nine years
restructuring provisions relate to severance costs which are expected to be utilised within one year
other provisions are mainly environmental provisions related to property disposed of the group expects these provisions to be 
utilised in less than one year
spirent communications plc
annual report 2014
105
strategic report governance financial statements 26 financial instruments and financial risk management 
the main purpose of the group’s financial instruments other than trade receivables trade payables and provisions is to fund the 
group’s liquidity requirements
all of the group’s financial assets and liabilities are categorised as loans and receivables and these are shown in the following table 
2014 2013
notes  million  million
loans and 
receivables 
at amortised 
cost
loans and 
receivables 
at amortised 
cost
noncurrent cash on deposit 20 – 01
noncurrent trade and other receivables 19 38 39
cash and cash equivalents 20 998 2162
current trade and other receivables 19 1127 938
financial assets 2163 3140
noncurrent other payables and accruals 23 21 26
current trade payables and accruals 21 580 565
share buyback obligation 21 – 182
other financial liabilities 24 27 –
provisions 25 83 65
financial liabilities 71 1 838
the group enters into derivative transactions forward foreign currency exchange contracts for the management of the group’s 
foreign currency exposures when deemed appropriate these derivative financial instruments are measured at fair value however 
the fair values at 31 december 2014 and 2013 were immaterial to these accounts
the key objective of the group’s treasury department is to manage the financial risks of the business and to ensure that sufficient 
liquidity is available to the group all treasury activity operates within a formal control framework the board has approved treasury 
policies and guidelines and periodically reviews treasury activities additionally it is the group’s policy that speculative treasury 
transactions are expressly forbidden
a market risk 
the main types of market risk that affect the group are interest rate risk and exchange rate risk
interest rate risk 
the group has no external debt and has limited exposure to interest rate risk
the group’s excess funds are principally held in the united kingdom and the united states and invested in ondemand or short term 
bank deposits it therefore has some exposure to interest rate risk arising on changes in sterling and us dollar interest rates
cash and cash equivalents long term cash on deposit and forward foreign currency exchange contracts are the group’s financial 
instruments which are exposed to interest rate risk
short term bank deposits and forward foreign currency exchange contracts mature within three months the financial instruments 
bear the following interest rates 
2014 2013
effective 
interest rate 
  million
effective 
interest rate 
  million
fixed rate
fixed deposits 024 50 027 441
floating rate
cash at bank and in hand 948 1721
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
106 26 financial instruments and financial risk management continued
interest rates on financial instruments classified as fixed rate are fixed until the maturity of the instrument all fixed rate deposits 
mature within three months after which date they will be exposed to floating rates of interest
at 31 december 2013 01 million was held in a blocked trust account and was earning interest of 044 per cent the maturity of the 
deposit was three months at maturity the interest rate was reset 
interest receivable for the year was 04 million note 7 2013 09 million and is under the effective interest method 
the other financial instruments of the group that are not included in the above table are noninterest bearing and are therefore not 
subject to interest rate risk
a movement of 25 basis points in interest rates based on levels of investment at 31 december 2014 would increase or reduce interest 
income and equity by 02 million 2013 05 million
exchange rate risk 
currency exposures arise from trading transactions undertaken by the group in foreign currencies and on the translation of the 
operating results and net assets of overseas subsidiaries
the group has the majority of its operations in the united states and presents its consolidated financial statements in us dollars 
the company’s functional currency is sterling and its share capital is denominated in pounds sterling the group also has operations 
in europe and asia and therefore its results and assets and liabilities are affected on translation by movements in exchange rates in 
relation to the us dollar the group does not enter into instruments to hedge the translation exposure of the operating results or net 
assets of its overseas subsidiaries since these are considered accounting and not cash exposures
the group undertakes transactions denominated in foreign currencies consequently exposures to exchange rate fluctuations arise 
exchange rate exposures are managed within approved policy parameters using forward foreign currency exchange contracts 
the main exposures arise in relation to us dollar receivables and cash balances held by nonus operations group treasury by 
means of forward foreign currency exchange contracts carries out transaction hedging a 10 per cent appreciation or depreciation 
of sterling and euro against the us dollar would increase or reduce profit before tax by 11 million 2013 08 million based on the 
balance at the reporting dates
b credit risk 
investment counterparties are subject to preapproval by the board with preapproved limits set for each bank to avoid any 
concentrations of credit risk
the maximum credit exposure at the balance sheet date under financial instruments in relation to cash and bank deposits is equal 
to the carrying value of 998 million 2013 2163 million
trade receivables which generally have 30 to 90 day terms are carried at original invoice amount less an allowance for 
uncollectable amounts where appropriate trade receivable exposures are managed in the business units where they arise 
allowance is made for bad and doubtful debts based on management’s assessment of the risk taking into account ageing profile 
experience and circumstance
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a large 
number of customers with no one customer accounting for more than 10 per cent of total group revenue the maximum credit 
exposure at the balance sheet date in relation to trade receivables is equal to the carrying value of 1078 million 2013 900 million
spirent communications plc
annual report 2014
107
strategic report governance financial statements 26 financial instruments and financial risk management continued
the composition of trade receivables at 31 december is as follows 
2014 2013
 million  million
neither impaired nor past due 682 599
past due but not impaired
 less than 30 days overdue 205 155
 30 to 60 days 79 51
 over 60 days 112 95
trade receivables 1078 900
the group closely monitors amounts due from customers and performs activities such as credit checks and review of payment 
history and has put in place appropriate credit approval limits based on these procedures management assessed the quality of those 
receivables that are past due but not impaired as low risk
the movement on the receivables provision during the year is given in note 19 the value of impaired trade receivables is 11 million 
2013 10 million for all other financial assets the maximum exposure to credit risk is represented by the carrying amount
c liquidity risk 
the group’s objective is to ensure that there are sufficient sources of funding to meet projected requirements its operations are 
financed through cash and cash equivalents held centrally and cash generated from operations
at 31 december 2014 the group had cash and cash equivalents of 998 million 2013 2162 million of which 948 million 
2013 1709 million is available on demand and 50 million matures within three months 2013 453 million on one months’ notice 
or matures within three months
during 2014 the group generated 417 million of cash from operating activities 2013 674 million and considers that with current 
cash resources no debt and positive cash flow from its operating activities it has adequate resources available to it to remain in 
operational existence for the foreseeable future
the group has entered into forward foreign currency exchange contracts all of which mature within three months the gross 
settlement amounts of these contracts are as follows
2014 2013
 million  million
sale of us dollars against sterling 63 35
the group is debt free and does not have loans payable financial liabilities are trade and other payables the majority of which are all 
due to be settled within one year and provisions note 25 in addition the group has a liability in respect of a put and call option with 
a fair value of 27 million which will be settled in 2016 see note 24
the group does not have any other material financial contractual commitments
d fair value of financial instruments 
the carrying value of all financial assets and liabilities is a reasonable approximation of fair value
derivative financial instruments are stated at fair value although the amounts at 31 december 2014 and 2013 were immaterial
the fair value of currency derivatives is determined by reference to forward foreign currency exchange rates for contracts with similar 
maturity profiles and is therefore determined to be a level 2 financial instrument as its value is based on observable market inputs
e capital management
the primary objective of the group’s capital management is to support its business and maximise shareholder value the group’s 
capital is its total shareholders’ funds
the group manages its capital structure and makes adjustments to it in the light of changes in economic conditions during 2014 and 
2013 the company has been operating an on market share repurchase programme in 2014 the company repurchased 97 million of its 
ordinary shares at a cost of 156 million 2013 292 million at a cost of 555 million no further share buybacks are currently planned
spirent’s policy on the payment of dividends to shareholders is to maintain a sustainable dividend
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
108 27 operating lease commitments
at 31 december the group had outstanding commitments for future minimum lease payments under noncancellable operating 
leases which fall due as follows
2014 2013
 million  million
within one year 91 82
in the second to fifth years 18 1 123
over five years 138 32
410 237
the group leases certain land and buildings under noncancellable operating lease agreements with a variety of terms the group 
also leases certain plant and equipment under noncancellable operating lease agreements 
28 equity
a issued share capital
issued and fully paid ordinary shares of 3⅓ pence each
number of 
ordinary 
shares
million  million
at 1 january 2013 6506 353
cancelled during the year 292 15
exchange adjustment 06
at 1 january 2014 6214 344
cancelled during the year 97 05
exchange adjustment 2 1
at 31 december 2014 6117 318
during 2014 and 2013 no ordinary shares were transferred from the spirent sharesave trust “sst” to satisfy options exercised 
under the uk all employee share schemes and in 2014 02 million ordinary shares were transferred from the spirent employee share 
ownership trust “esot” to satisfy options exercised under the spirent stock incentive plan and 2005 employee incentive plan 
2013 14 million ordinary shares 
b equity and reserves
the nature and purpose of each reserve within equity is as follows
i share premium account this reserve records the consideration premium for shares issued at a value that exceeds their nominal value
ii capital redemption reserve this reserve arises in relation to share capital cancellation
iii other reserves share capital share premium account and capital redemption reserve are translated into us dollars at the rates 
of exchange at the balance sheet date and the resultant exchange differences are included in other reserves and
iv translation reserve this reserve is used to record exchange differences arising from the translation of the financial statements 
of foreign subsidiaries
investment in own ordinary shares
at 31 december 2014 the esot held 07 million ordinary shares 2013 09 million ordinary shares to satisfy awards under various share 
incentive plans at 31 december 2014 the sst held 05 million ordinary shares 2013 05 million ordinary shares to satisfy awards 
made to united kingdom based employees under an all employee share scheme the market value of own ordinary shares held in trust 
being in total 12 million ordinary shares 2013 14 million ordinary shares at 31 december 2014 was 14 million 2013 25 million
capital redemption reserve
during 2014 the company cancelled 97 million ordinary shares 2013 292 million ordinary shares that had been the subject of 
the on market share repurchase programme and transferred 05 million 2013 15 million to the capital redemption reserve
share repurchase
during 2014 the company repurchased 97 million 2013 292 million ordinary shares on market at a cost of 156 million 
2013 555 million which were subsequently cancelled 
spirent communications plc
annual report 2014
109
strategic report governance financial statements 28 equity continued
share buyback obligation
on 23 december 2013 the company entered into an irrevocable agreement with ubs limited to purchase ordinary shares up to 
a maximum value of 182 million at no more than 105 per cent of the average market value of a share for the five business days 
immediately preceding the day on which the share is purchased with the maximum number of shares acquired on any dealing day 
not to exceed 250000 shares from 2 january 2014 to 26 february 2014 on their behalf this agreement entered into in respect of 
share buybacks during the close period has been recognised as a financial liability of 182 million at 31 december 2013
as at the close of business on 26 february 2014 97 million shares had been repurchased under this buyback programme at an 
average price of 97 pence per share for a total consideration of 156 million the remaining liability expired at close of business 
on 26 february 2014
29 employee share plans
movements in share incentives over a twoyear period ending on 31 december 2014 are shown below
2005 employee
 incentive plan
1
spirent stock
incentive plan
2
1995 executive share
option scheme
number of 
share 
incentives 
million
weighted 
average 
exercise 
price
pence
number of 
share 
incentives 
million
weighted
 average 
exercise 
price 
pence
number of 
share 
incentives 
million
weighted
 average 
exercise 
price 
pence
incentives outstanding at 31 december 2012 39 53 18 50 01 69
exercised – – 17 50 01 69
granted 33 73 – – – –
forfeited 18 7 – – – –
incentives outstanding at 31 december 2013 54 82 01 60 – –
exercised 04 51 0 1 60 – –
granted 40 47 – – – –
forfeited 24 81 – – – –
incentives outstanding at 31 december 2014 66 63 – – – –
incentives exercisable
at 31 december 2013 05 50 01 60 – –
at 31 december 2014 02 50 – – – –
notes
1 figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate 
2 figures for the spirent stock incentive plan show both share options and stock appreciation rights in aggregate
the weighted average share price at exercise date was 1043 pence 2013 1437 pence
the following information relates to outstanding share incentives at 31 december 2014
2014 2013
share plan
exercise period  
as at 31 december
range of 
exercise 
prices 
pence
weighted 
average 
exercise 
price  
pence
number of 
share 
incentives 
outstanding 
million
 weighted 
average
 remaining 
contractual 
life 
years
weighted
 average 
exercise 
price
pence
number of 
share 
incentives 
outstanding 
million
weighted 
average 
remaining 
contractual 
life 
years 
2005 employee 250808–161124 0–72 3 32 85 11 24 74
 incentive plan 230314–270424 101–169 120 34 86 137 30 88
spirent stock
 incentive plan 120107–131115 37–57 – – – 53 01 19
total 66 55
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
110 29 employee share plans continued
description of employee share plans
discretionary plans
2005 employee incentive plan “eip”
the eip which was approved by shareholders and introduced in 2005 is available for selected employees including executive 
directors on a discretionary basis
under the eip the company is able to grant share options including hmrcapproved options share settled stock appreciation rights 
“sars” and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions 
have been met for share options and sars the performance conditions relate to the company’s earnings per share “eps” 
for performance share awards made prior to 2011 performance conditions related to total shareholder return “tsr” for awards 
made since 2011 performance conditions relate to the company’s eps and tsr
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on 
pages 55 to 71
options and sars granted under the eip expire on the tenth anniversary of their grant unless they have previously lapsed or 
been exercised
spirent stock incentive plan “ssip”
the ssip is now closed for new awards and has been replaced by the eip referred to above
the ssip was introduced in 2000 this discretionary plan was primarily targeted at us employees with grants normally determined 
by reference to the seniority and contribution of the individual together with the performance of the relevant business and prevailing 
local market practice grants were also permitted to selected newly hired and promoted employees on a monthly basis under the 
ssip the company was able to grant share options and share settled sars no price was payable on the grant of an award
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not 
normally subject to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant 
and thereafter in equal tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary of 
the date of grant will lapse
the vesting of some ssip awards were subject to the company meeting eps growth targets over the vesting periods all outstanding 
awards have now passed their eps performance conditions and remain exercisable until they expire on the seventh anniversary of 
their respective grant dates
sars granted under the eip and ssip will deliver the appreciation value ie the increase in market value of an ordinary share over 
the base price of the sar in the form of ordinary shares this “sars approach” helps the company manage its dilution headroom 
more efficiently as only the sar gain needs to be funded using a sars approach it is not possible to determine the precise level 
of dilution until the sars are exercised at 31 december 2014 36 million eip sars with an average base price of 116 pence were 
outstanding and no ssip sars remained outstanding 2013 28 million eip sars and 01 million ssip sars with an average base price 
of 127 pence and 60 pence respectively during 2014 05 million eip and ssip sars were exercised resulting in the transfer from the 
esot of 02 million ordinary shares 2013 11 million ordinary shares were issued or transferred on the exercise of 16 million eip and 
ssip sars
1995 executive share option scheme “esos”
the esos is now closed for new grants and has been replaced by the eip referred to above
under the esos awards of share options including hmrcapproved options were on a discretionary basis no price was payable 
on the grant of an option and no options were granted at a discount to the market price
the normal exercise period for options granted under the esos is between the third and tenth anniversary of the date of grant 
options awarded under the esos were subject to the achievement of an eps performance condition before they could be exercised 
all outstanding options have now passed their eps performance conditions and remain exercisable until they expire on the tenth 
anniversary of their respective grant dates
all employee plans
uk employee share purchase plan “uk espp”
the uk espp which is an hmrcapproved share incentive plan was approved by shareholders in 2005 and is available to all uk 
employees the uk espp offers four ways to provide ordinary shares to employees free shares partnership shares matching shares 
and dividend shares the uk espp operates in conjunction with a trust which holds the shares on behalf of participants
spirent communications plc
annual report 2014
111
strategic report governance financial statements 29 employee share plans continued
in november 2010 the company commenced making invitations to all uk employees to acquire partnership shares on market using 
deductions from payroll
us employee stock purchase plan “us espp”
the us espp was initially approved by shareholders in 2000 with amendments being approved by shareholders in 2005 and 2011 
the us espp enables the company to invite all us employees to acquire ordinary shares in the company on market using 
deductions from payroll in november 2010 the company commenced making sixmonthly invitations to employees 
the us espp also enables the company to grant eligible us employees the right to acquire ordinary shares in the company using 
the proceeds of a savings contract if such a grant were made when joining the us espp participants would enter into a 12 month 
contract to save up to 15 per cent of base salary subject to an individual limit of 1000 per month no grants of this nature have been 
made since 2003
global all employee share purchase plan “gaespp”
the gaespp was initially approved by shareholders in 2001 with amendments being approved by shareholders in 2005 and 2011 
the gaespp enables the company to invite employees in countries other than the us or uk to acquire ordinary shares in the 
company on market using deductions from payroll in september 2011 the first such invitation was made to all employees in canada 
hong kong france and germany and subsequent invitations have been made on a sixmonthly basis since 2012
the gaespp can also be operated on similar terms to the us espp above with participants entering into a 12 month contract to save 
up to 15 per cent of base salary subject to an individual limit no grants of this nature have been made since 2003
2005 sharesave scheme 
the 2005 sharesave scheme was approved by shareholders in 2005 and was introduced following the expiry of the savings 
related share option scheme the scheme is an hmrcapproved saveasyouearn scheme open to all uk employees subject to 
a qualifying service period no price is payable on the grant of an option the option exercise price is calculated by reference to the 
middle market closing price of an ordinary share on the business day prior to the beginning of the invitation period discounted by up 
to 20 per cent at the board’s discretion options are normally exercisable within six months of the third fifth or seventh anniversary of 
the contract commencement date as elected by the option holder at the start of the contract no invitations have yet been made 
under this scheme
30 sharebased payment
2014 2013
 million  million
2005 employee incentive plan 07 12
all schemes are equitysettled
40 million share incentives were granted during 2014 2013 33 million the fair value of share incentives has been estimated as at 
the date of grant using the hullwhite trinomial model the following table gives the assumptions made in arriving at the sharebased 
payment charge and the fair value 
2014 2013
weighted average share price pence 971 1291
weighted average exercise price pence 466 733
weighted average fair value pence 478 590
expected volatility  34–38 330
option life years
 performance shares 3 3
 options and sars 10 10
suboptimal exercise factor 15 15
risk free rate  2 1–28 16
dividend yield  17 13
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two 
years which management considers to be the period which is likely to be most representative of future volatility the risk free rate 
is calculated by reference to uk government bonds 
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
112 31 reconciliation of profit to cash generated from operations
2014 2013
 million  million
profit before tax 24 1 391
adjustments for
 finance income 04 09
 finance costs – 09
 intangible asset amortisation and impairment 150 99
 depreciation of property plant and equipment 197 165
 sharebased payment 07 12
changes in working capital
 deferred income received 27 129
 increase in receivables 170 60
 decrease in inventories 47 24
 decrease in payables 29 28
increase in provisions 04 15
defined benefit pension plan 39 44
cash flow from operations 489 735
32 business combinations
the following acquisitions were completed in 2014 there were no acquisitions in 2013 
dax technologies corp “dax”
the assets of dax were acquired for a cash consideration of 369 million on 19 february 2014 dax is a leading provider of 
customer experience management solution software that enables mobile and wireline service providers to understand and quantify 
services as experienced by their customers dax is reported within the group’s service assurance division
converging multitechnology 3g and 4g lte networks and services such as volte require the use of big data analytics to fully 
understand the customer experience the acquisition of dax will enable spirent to combine measurements and data from its 
solutions in the lab and in live networks delivering high value solutions and expertise that help its customers deploy and manage 
complex new networks and services faster and more effectively
from the date of acquisition to 31 december 2014 dax contributed 101 million of revenue and 37 million of profit before tax 
to the results of the group before charging 07 million of acquisition related costs and 29 million of acquired intangible asset 
amortisation if the combination had occurred at the beginning of the financial year revenue of 105 million and profit before tax 
of 34 million would have been included in the group result before 07 million of acquisition related costs and 33 million of 
acquired intangible asset amortisation
the goodwill arising of 238 million consists largely of the synergies and economies of scale expected from the combination of the 
entities together with intangible assets not qualifying for separate recognition such as workforce in place the goodwill recognised 
is expected to be deductible for income tax purposes
radvision technology business unit “tbu”
on 31 july 2014 spirent completed the acquisition of the assets of radvision’s tbu for a cash consideration of 259 million 
the radvision tbu offers a complete test suite for voice and video over ip communications including volte expanding spirent’s 
leading portfolio of volte solutions to address needs from early development through to deployment the radvision tbu pioneered 
the introduction of voice and video over ip with a range of embedded technologies and test solutions combining unique expertise in 
signalling multimedia and ims used by developers of mobile chipsets mobile devices and communications infrastructure as well 
as service providers worldwide the radvision tbu’s solutions have helped enable the majority of today’s voice and video over 
ip deployments the radvision tbu is reported within the wireless  service experience division
volte testing is already a critical element in many of spirent’s test solutions spirent’s customers’ transition from circuitswitched 
voice networks to allip networks presents huge opportunities for volte and rcs services on mobile devices the addition of 
radvision’s tbu will expand spirent’s test solution portfolio to meet the needs of customers from early in the development 
cycle right through to deployment helping to save development time and cost
spirent communications plc
annual report 2014
113
strategic report governance financial statements 32 business combinations continued
from the date of acquisition to 31 december 2014 the radvision tbu contributed 42 million of revenue and 05 million of profit 
before tax to the results of the group before charging 19 million of acquisition related costs and 05 million of acquired intangible 
asset amortisation if the combination had occurred at the beginning of the financial year revenue of 117 million and profit before tax 
of 29 million would have been included in the group result before charging 19 million of acquisition related costs and 12 million 
of acquired intangible asset amortisation
the goodwill arising of 190 million consists largely of the synergies and economies of scale expected from the combination of the 
entities together with intangible assets not qualifying for separate recognition such as workforce in place the goodwill recognised 
is expected to be deductible for income tax purposes
mobilethink as “mobilethink”
on 12 september 2014 spirent completed the acquisition of 100 per cent of the share capital of mobilethink and its wholly owned 
subsidiary tweakker aps “tweakker” for a cash consideration of 201 million headquartered in aarhus denmark mobilethink is a 
provider of mobile device management device analytics and intelligence solutions for mobile operators tweakker is a cloudbased 
mobile device configuration solution specifically targeted at mobile virtual network operators “mvnos” mobilethink’s solutions 
allow operators to correctly detect mobile devices configure them for data usage analyse device population trends and run 
marketing campaigns with the goal of increasing average revenue per user this acquisition is reported within the service 
assurance division
hosted and cloudenabled device intelligence solutions give operators and mvnos the ability to significantly improve subscriber 
service experience the acquisition of mobilethink combined with spirent’s extensive portfolio of mobile device performance and 
cem solutions will help drive spirent’s overall growth with additional recurring revenue potential
from the date of acquisition to 31 december 2014 mobilethink and tweakker contributed 20 million of revenue and a 03 million 
loss before tax to the results of the group before charging 06 million of acquisition related costs and 07 million of acquired 
intangible asset amortisation if the combination had occurred at the beginning of the financial year revenue of 76 million and 
profit before tax of nil would have been included in the group result before charging 06 million of acquisition related costs and 
24 million of acquired intangible asset amortisation
the goodwill arising of 115 million consists largely of the synergies and economies of scale expected from the combination of the 
entities together with intangible assets not qualifying for separate recognition such as workforce in place the goodwill recognised 
is not expected to be deductible for income tax purposes
other acquisitions
from the date of acquisition to 31 december 2014 other acquisitions contributed 23 million of revenue and 05 million of profit 
before tax to the results of the group before charging 06 million of acquisition related costs 02 million of acquired intangible 
asset amortisation and 10 million of intangible asset impairment if the combination had occurred at the beginning of the financial 
year revenue of 26 million and a profit before tax of 06 million would have been included in the group result before charging 
06 million of acquisition related costs 02 million of acquired intangible asset amortisation and 10 million of intangible 
asset impairment
testing technologies ist gmbh “testing tech”
on 20 february 2014 spirent completed the acquisition of 58 per cent of the ordinary share capital of testing tech which was in 
private ownership for a cash consideration of euro 18 million 24 million the company develops and markets standardised and 
customerspecific softwarebased testing tools which support the development of missioncritical products and workflow steps 
testing tech also participates in the connected vehicle market which will facilitate spirent’s progress in this market this acquisition 
is reported within the wireless  service experience division
the minority stake of 42 per cent of the share capital is the subject of a put and call option which expires on 31 march 2016 note 24
notes to the consolidated  
financial statements
continued 
spirent communications plc
annual report 2014
114 32 business combinations continued
netgend llc “netgend”
on 15 september 2014 spirent completed the acquisition of the net assets of netgend a texas based entity for a cash consideration 
of 10 million deferred consideration is payable based on revenue generated during the fouryear period commencing in 2015 
the fair value of the deferred consideration has been estimated as immaterial netgend provides a scalable and flexible application 
performance testing platform that runs on both cloud infrastructure and hardware and its results are reported within the networks 
 applications division
the goodwill arising on these other acquisitions of 23 million consists largely of the synergies and economies of scale expected 
from the combination of the entities together with intangible assets not qualifying for separate recognition such as workforce in place 
the following table summarises the consideration paid and the assets and liabilities acquired at the acquisition date since the 
acquisitions of the radvision tbu and mobilethink have taken place fairly recently the net assets acquired and consideration given 
below are provisional
 million
dax
radvision  
tbu mobilethink other total
intangible assets 14 1 72 12 1 20 354
tangible fixed assets 01 01 – – 02
deferred tax asset 06 – – – 06
trade and other receivables – 18 41 01 60
cash and cash equivalents – – – 04 04
trade and other creditors 17 22 50 10 99
borrowings – – – 0 1 0 1
deferred tax liability – – 26 03 29
total identifiable net assets 13 1 69 86 11 297
goodwill 238 190 115 23 566
consideration 369 259 201 34 863
cash flows
consideration 369 259 201 34 863
cash acquired – – – 04 04
369 259 201 30 859
for trade and other receivables the gross contractual amounts are 76 million in total for all acquisitions
the intangible assets acquired represent software technology customer list data base noncompete covenant and brands and 
these have been assigned provisional lives of between two to seven years
the noncontrolling interest has been measured as the proportionate share of the acquirer’s identifiable net assets and was nil 
on acquisition
acquisition related costs were 38 million and these have been expensed to administration costs
33 related party transactions 
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are 
not disclosed in this note
remuneration of key management personnel 
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of the 
categories specified in ias 24 “related party disclosures”
2014 2013
 000  000
short term employee benefits 1814 1860
contribution to defined contribution scheme post employment benefits – 10
compensation for loss of office termination benefits 514 136
statutory disclosures 2328 2006
sharebased payment 198 350
2526 1656
spirent communications plc
annual report 2014
115
strategic report governance financial statements parent company balance sheet
at 31 december 2014
2014 2013
notes £ million £ million
fixed assets
intangible assets 4 18 24
tangible assets 5 10 11
investments 6 3462 3102
3490 3137
current assets
stocks 7 17 16
debtors 8 97 70
cash at bank and in hand 216 142
330 228
creditors amounts falling due within one year
trade and other creditors 9 109 184
net current assets 22 1 44
total assets less current liabilities 371 1 3181
creditors amounts falling due after more than one year
trade and other creditors 10 742 750
net assets excluding defined benefit pension plan deficit 2969 2431
defined benefit pension plan deficit 3 74 16
net assets 2895 2415
capital and reserves 14
called up share capital 204 207
share premium account 202 202
capital redemption reserve 13 1 128
profit and loss account 2358 1878
shareholders’ funds – equity 2895 2415
the notes on pages 117 to 129 form part of these financial statements
signed on behalf of the board
rachel whiting
director 
26 february 2015
spirent communications plc
annual report 2014
116 1 significant accounting policies
basis of accounting
the financial statements have been prepared under the historical cost convention modified for measurement of derivative financial 
instruments at fair value and in accordance with applicable uk law and uk generally accepted accounting principles “uk gaap”
the financial statements have been prepared on a going concern basis 
as the company is included in the consolidated financial statements made up to 31 december each year it is not required to present 
a separate profit and loss account as provided by section 408 of the companies act 2006 information on fees for nonaudit services 
in respect of the parent company accounts have not been disclosed as the company prepares group accounts which disclose 
information on fees for nonaudit services on a consolidated basis
cash flow statement
the company is exempt under the terms of frs 1 “cash flow statements” from the requirement to publish its own cash flow 
statement as its cash flows are included within the consolidated cash flow statement of the group
intangible assets
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses the carrying value 
of intangible assets is reviewed for impairment if events or changes in circumstances indicate that the carrying value may not 
be recoverable
purchased goodwill representing the excess of cost over the fair value of assets acquired is written off on a straight line basis 
from the date of acquisition over 20 years being its anticipated useful life
tangible assets
depreciation is not provided on freehold land depreciation is provided to write off the cost of all other assets less residual value 
on a straight line basis over their estimated useful lives at rates which take into account commercial conditions at their location 
usual asset lives are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
 building installations 20 years or lease period if less
 fittings and equipment 3 to 8 years
 motor vehicles 3 to 5 years
 business systems software 4 years
the carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the 
carrying value may not be recoverable
investments
fixed asset investments including investment in subsidiaries are stated at cost and reviewed for impairment if there are indications 
that the carrying value may not be recoverable
leases
operating lease rentals are charged to the profit and loss account over the period of the lease on a straight line basis
inventories
inventories are valued at the lower of cost and estimated net realisable value cost includes all costs in bringing each product to 
its present location and condition being the full manufacturing cost on a firstinfirstout basis including all attributable overheads 
based on a normal level of activity net realisable value represents the selling price less further costs to be incurred to completion 
and on sale
trade and other debtors
trade debtors which generally have 30 to 90 day terms are recognised and carried at original invoice amount less an allowance 
for any uncollectable amounts an estimate for doubtful debts is made when collection of the full amount is no longer probable 
bad debts are written off when identified
provisions
provisions are recorded when the company has a present legal or constructive obligation as a result of a past event for which it is 
probable that it will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the obligation 
can be made provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures 
expected to be required to settle the obligation
notes to the parent company 
financial statements
spirent communications plc
annual report 2014
117
strategic report governance financial statements notes to the parent company 
financial statements
continued 
1 significant accounting policies continued
revenue recognition
revenue is recognised when it is probable that economic benefits will flow to the company the revenue can be reliably measured 
and when the company has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only 
recognised when collectability is probable
for the sale of services revenue is recognised in accounting periods in which the service is rendered
foreign currencies
transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction
monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date 
all exchange gains and losses are taken to the profit and loss account
product development
expenditure is charged to the profit and loss account in the year in which it is incurred
financial instruments
financial assets and liabilities are recognised on the company’s balance sheet when it becomes a party to the contractual provisions 
of the instrument
equity instruments
equity instruments are recorded at the proceeds received net of direct issue costs
derivative financial instruments and hedge accounting
the company uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign 
currencies relating to firm commitments
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into 
and are subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency 
exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles the 
company has not adopted the hedge accounting rules consequently all gains and losses arising from changes in fair value are taken 
to the profit and loss account
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts
pensions
the company operates two funded defined benefit pension plans all other plans are defined contribution in nature where the 
amount charged to the profit and loss account is the contributions paid or payable during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method 
and updates are performed at each balance sheet date the cost of providing benefits under these plans is determined separately for 
each plan and attributes entitlement to benefits to the current period to determine current service cost and to the current and prior 
periods to determine the present value of defined benefit obligations
past services are recognised in the profit and loss account on a straight line basis or immediately if the benefits have vested when 
a settlement eliminating all obligations for benefits already accrued or a curtailment reducing future obligations as a result of a 
material reduction in the plan membership or a reduction in future entitlement occurs the obligation and related plan assets are 
remeasured using current actuarial assumptions and the resultant gain or loss is recognised in the profit and loss account during 
the period in which the settlement or curtailment occurs
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting 
from the passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation 
taking into account material changes in the obligation during the year
the expected return on plan assets is based on an assessment made at the beginning of the year of long term market returns on 
plan assets adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year 
the difference between the expected return on plan assets and the interest cost is recognised in the profit and loss account as 
finance costs or finance income
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments on 
liabilities and changes in actuarial assumptions are recognised immediately in the statement of total recognised gains and losses
spirent communications plc
annual report 2014
118 1 significant accounting policies continued
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the 
defined benefit obligation using a discount rate based on high quality corporate bonds denominated in the same currency and 
whose term is consistent with the estimated term of the obligation fair value is based on market price information and in the case 
of quoted securities is the published bid price the value of a net pension benefit asset is restricted to the sum of any unrecognised 
past service costs and the present value of any amount the company expects to recover by way of reductions in the future 
contributions or refunds from the plan that have been agreed by the trustees
treasury shares
spirent communications plc ordinary shares held by the company are classified in shareholders’ equity as treasury shares and are 
recognised at cost and shown as a deduction from retained earnings consideration received for the sale of such ordinary shares is 
also recognised in equity with any difference between the proceeds from sale and the original cost being taken to retained earnings
employee benefits
when an employee has rendered service to the company during an accounting period short term benefits expected to be paid in 
exchange for that service are recognised in the same accounting period
dividends paid
the interim dividend is included in the financial statements in the period in which it is paid and the final dividend in the period it is 
approved by the shareholders at an annual general meeting
share‑ based payment
the cost of equitysettled transactions with employees is measured by reference to the fair value at the date at which they are 
granted the fair value is determined using the hullwhite trinomial model
the cost of equitysettled transactions is recognised as a cost to the company or as an addition to the cost of investment in the 
subsidiary in which the relevant employees work over the vesting period of the equitysettled transactions with a corresponding 
adjustment to reserves any payments received from the company’s subsidiaries in respect of these sharebased payments result in 
a reduction in the cost of investment
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon a market 
condition which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other vesting 
conditions are satisfied
where the terms of an equitysettled award are modified as a minimum an expense is recognised as if the terms had not been 
modified in addition an expense is recognised for any increase in the value of the transaction as a result of the modification as 
measured at the date of modification
where an equitysettled award is cancelled it is treated as if it had vested on the date of cancellation and any expense not yet 
recognised for the award is recognised immediately however if a new award is substituted for the cancelled award and designated 
as a replacement award on the date that it is granted the cancelled and new awards are treated as if they were a modification of the 
original award as described in the previous paragraph
the company has an employee share trust for the granting of certain share incentives to employees shares are held by the 
employee share trust treated as treasury shares and presented in the balance sheet as a deduction from equity
tax
the tax expense represents the sum of the tax currently payable and deferred tax
the tax currently payable represents the amount expected to be paid or recovered in respect of taxable profit for the year and is 
calculated using tax rates that have been enacted or substantively enacted at the balance sheet date
deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed at the balance sheet 
date except as referred to below amounts provided are calculated with reference to tax rates that are expected to apply in the 
periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively 
enacted by the balance sheet date
deferred tax assets are recognised only to the extent that it is considered more likely than not that there will be suitable taxable 
profits from which the future reversal of the underlying timing differences can be deducted
deferred tax is not provided on gains on the disposal of fixed assets that have been rolled over into replacement assets unless there 
is a binding agreement to dispose of the assets concerned provision will not be made where it is considered more likely than not that 
the taxable gain will be rolled over into replacement assets and charged to tax only when the replacement assets are sold
spirent communications plc
annual report 2014
119
strategic report governance financial statements notes to the parent company 
financial statements
continued 
2 employees
please refer to the report on directors’ remuneration on pages 55 to 71 for disclosures relating to the emoluments share incentives 
and long term incentive interests and pensions of the directors
3 pensions
defined benefit plans 
the funded defined benefit pension plans are in the united kingdom and comprise the spirent communications plc staff pension  
life assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” the staff 
plan is the company’s most significant plan there is in addition an unfunded plan 
the valuation used for these disclosures has been based on a full assessment of the liabilities of the plans as at 1 april 2012 the 
present values of the defined benefit obligation the related current service cost and any past service costs were measured using 
the projected unit credit method
i the key financial assumptions
the assumptions used for both plans were as follows
2014 2013
 
inflation – rpi 29 33
inflation – cpi 18 22
rate of increase in pensionable salaries 30 31
rate of increase for pensions in payment pre 2001 service 36 36
rate of increase for pensions in payment 2001 to 5 april 2005 service 28 31
rate of increase for pensions post 5 april 2005 service 20 22
rate of increase in deferred pensions 18 22
rate used to discount plan liabilities 36 45
expected rate of return on plan assets weighted for both plans 34 46
spirent communications plc employs a building block approach in determining the long term rate of return on plans’ assets historical 
markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital 
market principles the assumed long term rate of return on each class of asset is set out within this note the overall expected rate of 
return on assets is then derived by aggregating the expected return of each asset class over the actual asset allocation for the plans 
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions 
are such that a member currently aged 65 2013 aged 65 will live on average for a further 235 years 2013 235 years if they are 
male and for a further 257 years 2013 256 years if they are female for a member who retires in 2034 2013 in 2033 at age 65 
2013 age 65 the assumptions are that they will live on average for a further 244 years 2013 243 years after retirement if they are 
male and for a further 268 years 2013 267 years after retirement if they are female 
the approximate impact to the past service liabilities of changing these main assumptions is as follows
 –reducing the discount rate by 01 per cent per annum would increase past service liabilities by £26 million
 –increasing the rpi inflation assumption by 01 per cent would increase the plans’ liabilities by £11 million 
 –increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling 
factor would increase past service liabilities by £75 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to 
be insignificant
spirent communications plc
annual report 2014
120 3 pensions continued
ii the assets and the liabilities in the plans were as follows
2014 2013
long term 
rate of 
return 
expected
long term 
rate of 
return 
expected
note  £ million  £ million
staff plan
equities 62 487 74 539
ldi funds 09 252 13 144
cash benchmarked bonds 11 698 30 725
insured annuities 36 34 45 33
property 43 96 55 153
cash and other 09 146 13 05
fair value of plan assets 34 1713 46 1599
present value of defined benefit pension plan obligations 1806 1618
deficit in the plan 93 19
cash plan
equities 62 29 74 27
government bonds 20 28 32 20
insured annuities 36 02 45 02
cash and other 09 20 13 24
fair value of plan assets 33 79 42 73
present value of defined benefit pension plan obligations 74 69
surplus in the plan 05 04
total net deficit recognised 88 15
unfunded plan
present value of unfunded obligations 05 05
net pension plan deficit 93 20
deferred tax asset 11 19 04
net pension plan deficit on the balance sheet 74 16
the plans are prohibited from investing in spirent’s own financial instruments
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these 
financial statements
iii analysis of the amounts creditedcharged to the profit and loss account 
2014 2013
£ million £ million
analysis of amount charged to operating costs
current service cost 01 01
expected return on pension plans’ assets 71 75
interest on pension plans’ liabilities 74 73
finance expenseincome 03 02
net profit and loss chargecredit 04 01
spirent communications plc
annual report 2014
121
strategic report governance financial statements 3 pensions continued
iv analysis of amount recognised directly in equity
2014 2013
£ million £ million
actual return on pension plans’ assets 169 135
less expected return on pension plans’ assets 71 75
experience gains on plans’ assets 98 60
experience gains arising on plans’ liabilities 05 –
changes in assumptions underlying the present value of plans’ liabilities 20 1 42
actuarial lossesgains recognised directly in equity 98 102
the cumulative amount of actuarial gains and losses recognised since 1 january 2003 in the company’s statement of total recognised 
gains and losses is £319 million loss 2013 £221 million loss the directors are unable to determine how much of the pension plan 
deficit recognised on 1 january 2003 and taken directly to equity of £419 million in the company is attributable to actuarial gains and 
losses since inception of those pension plans consequently the directors are unable to determine the amount of actuarial gains and 
losses that would have been recognised in the company’s statement of recognised gains and losses before 1 january 2003
v movements in the present value of funded defined benefit obligations
2014 2013
£ million £ million
at 1 january 1687 1730
current service cost 01 01
interest cost 74 73
benefit payments 78 75
actuarial lossgain 196 42
present value of funded defined benefit pension plans’ obligations 1880 1687
vi movements in the fair value of plans’ assets
2014 2013
£ million £ million
at 1 january 1672 1578
expected return on plans’ assets 71 75
employer contributions 29 34
benefit payments 78 75
actuarial gain 98 60
fair value of plans’ assets 1792 1672
vii history of experience gains and losses
2014 2013 2012 2011 2010
£ million £ million £ million £ million £ million
present value of defined benefit pension plans’ obligations 1880 1687 1730 1584 1406
fair value of plans’ assets 1792 1672 1578 1508 1469
net deficitsurplus in plans 88 15 152 76 63
experience gainloss on plans’ liabilities
amount £ million 05 – 07 17 04
percentage of plans’ liabilities  03 – 04 11 03
experience gain on plans’ assets
amount £ million 98 60 44 07 71
percentage of plans’ assets  55 36 28 05 48
notes to the parent company 
financial statements
continued 
spirent communications plc
annual report 2014
122 3 pensions continued
expected cash contributions for 2015 for these plans are £28 million
the above plans are funded and have full uk hm revenue  customs “hmrc” taxexempt approval certain members 
whose salaries were in excess of the hmrc statutory earnings cap had their benefits increased through unapproved unfunded 
arrangements to the level that would otherwise have applied in respect of basic salary only the company has contractually 
agreed to pay the additional retirement benefits itself and a provision is made in respect of this obligation in the balance sheet at 
31 december 2014 of £05 million 2013 £05 million this represents the actuarial value as confirmed by the company’s pension 
advisers of the unapproved benefit entitlements accrued at that date the value is assessed and reviewed on a market value basis 
in line with the main plan valuation and adjusted each year there were no experience gains or losses on the unfunded plan in the 
period from 2010 to 2014
defined contribution schemes
the company also maintains defined contribution pension plans for employees employer contributions into these plans for 2014 
were £07 million 2013 £09 million
4 intangible assets
£ million
goodwill
cost
at 1 january 2014 and 31 december 2014 68
amortisation
at 1 january 2014 44
provided during the year 06
at 31 december 2014 50
net book value at 31 december 2013 24
net book value at 31 december 2014 18
5 tangible fixed assets
£ million
freehold 
land and 
buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost
at 1 january 2014 07 26 11 44
additions – 02 – 02
disposals – 0 1 – 0 1
at 31 december 2014 07 27 11 45
depreciation and impairment
at 1 january 2014 02 22 09 33
provided during the year – 02 – 02
at 31 december 2014 02 24 09 35
net book value at 31 december 2013 05 04 02 11
net book value at 31 december 2014 05 03 02 10
spirent communications plc
annual report 2014
123
strategic report governance financial statements 6 investments
£ million
shares in 
subsidiaries
loans to 
subsidiaries total
cost
at 1 january 2014 10263 62 10325
additions 62 278 340
exchange adjustment – 19 19
sharebased payment 02 – 02
at 31 december 2014 10327 359 10686
provisions
at 1 january 2014 7209 14 7223
increase in provision 01 – 01
at 31 december 2014 7210 14 7224
net book value at 31 december 2013 3054 48 3102
net book value at 31 december 2014 3117 345 3462
7 stocks
2014 2013
£ million £ million
work in progress 02 03
finished goods 15 13
17 16
8 debtors
2014 2013
note £ million £ million
due within one year
trade debtors 21 17
owed by subsidiaries 58 27
other debtors 07 07
prepayments and accrued income 03 05
89 56
due after more than one year
deferred tax asset 11 08 14
97 70
9 trade and other creditors amounts falling due within one year
2014 2013
£ million £ million
trade creditors 07 10
owed to subsidiaries 26 10
accruals and deferred income 52 51
share buyback obligation – 109
other taxes and social security costs 24 04
109 184
notes to the parent company 
financial statements
continued 
spirent communications plc
annual report 2014
124 10 trade and other creditors amounts falling due after more than one year
2014 2013
£ million £ million
owed to subsidiaries 742 750
11 deferred tax
£ million
at 1 january 2014 14
reversed in the year 06
at 31 december 2014 08
the deferred tax asset is in relation to short term timing differences of £02 million 2013 £02 million and tax losses of £06 million 
2013 £12 million the company has tax losses of £251 million 2013 £288 million that are available for offset against suitable 
future taxable profits a deferred tax asset has not been recognised in respect of these losses as their future recovery is uncertain 
these losses can be carried forward indefinitely
there is a deferred tax asset at 31 december 2014 of £19 million 2013 asset of £04 million in relation to the pension plans note 3
the company also has capital losses carried forward of £8233 million 2013 £8233 million for which no deferred tax asset is 
recognised on the balance sheet these capital losses have no expiry date
12 operating lease commitments
at the balance sheet date the company had annual commitments which expire as follows
2014 2013
£ million £ million
in the second to fifth years 02 02
13 derivative financial instruments
the company has taken advantage of the exemption under frs 29 “financial instruments disclosures” for parent company financial 
statements the disclosures in respect of the group are included in the consolidated financial statements
14 capital and reserves
£ million
called up 
share 
capital
share 
premium 
account
capital 
redemption 
reserve
profit  
and loss 
account total
at 1 january 2014 207 202 128 1878 2415
share cancellation 03 – 03 – –
profit for the year
2
– – – 674 674
sharebased payment
3
– – – 04 04
tax on sharebased payment – – – 0 1 0 1
actuarial loss recognised on defined benefit pension plans – – – 98 98
deferred tax on defined benefit pension plans – – – 20 20
share repurchase – – – 94 94
share buyback obligation – – – 109 109
equity dividends – – – 134 134
at 31 december 2014 204 202 13 1 2358 2895
notes
1 the company has taken advantage of the exemption given in section 408 of the companies act 2006 not to publish its profit and loss account 
2 the profit for the year dealt with in the financial statements of the company was £674 million 2013 £474 million which after dividends of £134 million 
2013 £143 million gave a retained profit of £540 million 2013 £331 million 
3 sharebased payment has been recorded for subsidiary companies whose incentives are satisfied by the company’s shares
spirent communications plc
annual report 2014
125
strategic report governance financial statements 14 capital and reserves continued
changes during the year in the issued ordinary share capital were as follows 
number of  
ordinary shares
million
issued and fully paid ordinary shares of 3⅓ pence each at 1 january 2014 6214
cancelled during the year 97
issued and fully paid ordinary shares of 3⅓ pence each at 31 december 2014 6117
during 2014 and 2013 no ordinary shares were transferred from the spirent sharesave trust “sst” to satisfy options exercised 
under the uk all employee share schemes and in 2014 02 million ordinary shares were transferred from the spirent employee share 
ownership trust “esot” to satisfy options exercised under the spirent stock incentive plan and 2005 employee incentive plan 
2013 14 million ordinary shares 
there has been no material increase in the issued ordinary share capital whether by exercise of share incentives or otherwise 
between 31 december 2014 and 26 february 2015 the date on which these financial statements have been signed
investment in own ordinary shares
at 31 december 2014 the esot held 07 million ordinary shares 2013 09 million ordinary shares to satisfy awards under various 
share incentive plans at 31 december 2014 the sst held 05 million ordinary shares 2013 05 million ordinary shares to satisfy 
awards made to united kingdom based employees under an all employee share scheme the market value of own ordinary shares 
held in trust being in total 12 million ordinary shares 2013 14 million ordinary shares at 31 december 2014 was £09 million 
2013 £15 million
capital redemption reserve
during 2014 the company cancelled 97 million ordinary shares 2013 292 million ordinary shares that had been the subject of 
the on market share repurchase programme and transferred £03 million 2013 £10 million to the capital redemption reserve
share repurchase
during 2014 the company repurchased 97 million ordinary shares on market at a cost of £94 million 2013 292 million ordinary 
shares at a cost of £349 million all shares repurchased in 2014 and 2013 were subsequently cancelled 
share buyback obligation
on 23 december 2013 the company entered into an irrevocable agreement with ubs limited to purchase ordinary shares up to 
a maximum value of £109 million at no more than 105 per cent of the average market value of a share for the five business days 
immediately preceding the day on which the share is purchased with the maximum number of shares acquired on any dealing day 
not to exceed 250000 shares from 2 january 2014 to 26 february 2014 on their behalf this agreement entered into in respect of 
share buybacks during the close period was recognised as a financial liability of £109 million
as at the close of business on 26 february 2014 97 million shares had been repurchased under this buyback programme at an 
average price of 97 pence per share for a total consideration of £94 million the remaining liability expired at close of business on 
26 february 2014
employee share plans 
the company operates a number of employee share incentive plans which are described in note 29 of notes to the consolidated 
financial statements the following share incentives over ordinary shares under these plans have been granted and remain 
outstanding held by employees of the parent company
notes to the parent company 
financial statements
continued 
spirent communications plc
annual report 2014
126 14 capital and reserves continued
movements in share incentives during the year to 31 december 2014 are shown below
2005 
employee 
incentive 
plan
1995 
executive 
share 
option 
scheme
number of 
share 
incentives 
million
weighted 
average 
exercise 
price 
pence
number of 
share 
incentives 
million
weighted
 average 
exercise 
price 
pence
incentives outstanding at 31 december 2012 16 21 01 69
granted 11 55 – –
exercised – – 01 69
cancelled 09 – – –
incentives outstanding at 31 december 2013 18 53 – –
granted 08 12 – –
exercised 03 51 – –
cancelled 06 122 – –
incentives outstanding at 31 december 2014 17 23 – –
incentives exercisable at 31 december 2013 05 50 – –
incentives exercisable at 31 december 2014 02 50 – –
the weighted average share price at exercise date was 1046 pence 2013 1459 pence
the following information relates to outstanding share incentives at 31 december 2014
2014 2013
share plan
exercise period  
as at 31 december
range of 
exercise 
prices  
pence
weighted 
average 
exercise 
price  
pence
number of 
share 
incentives 
outstanding 
million
weighted 
average 
remaining 
contractual 
life  
years
weighted 
average 
exercise 
price  
pence
number of 
share 
incentives 
outstanding 
million
weighted 
average 
remaining 
contractual 
life  
years
2005 employee incentive plan
1
250808–260424 0–101 120 15 79 210 13 66
2303 14–080523 129–153 1340 02 81 1310 05 93
17 18
note
1 figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate no exercise price is 
payable on the vesting of a performance share
spirent communications plc
annual report 2014
127
strategic report governance financial statements notes to the parent company 
financial statements
continued 
15 sharebased payment
the total chargecredit for the year relating to employee sharebased payment plans is as follows
2014 2013
£ million £ million
2005 employee incentive plan 02 03
all schemes are equitysettled
the fair value of share incentives has been estimated as at the date of grant using the hullwhite trinomial model
the following table gives the assumptions made in arriving at the sharebased payment charge and the fair value
2014 2013
weighted average share price pence 1013 1291
weighted average exercise price pence 122 547
weighted average fair value pence 618 651
expected volatility  340 330
option life years
 performance shares 3 3
 options and sars 10 10
suboptimal exercise factor 15 15
risk free rate  28 16
dividend yield  17 13
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two 
years which management considers to be the period which is likely to be most representative of future volatility the risk free rate is 
calculated by reference to uk government bonds
16 related party transactions
the company has taken advantage of the exemption under frs 8 “related party disclosures” in relation to disclosing transactions 
with its subsidiaries
17 subsidiaries
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest 
is given on page 129 of this annual report
18 capital commitments and contingent liabilities
there were no capital commitments at 31 december 2014 or 31 december 2013
spirent communications plc has provided indemnities of £01 million 2013 £01 million for certain ongoing business obligations under 
letters of credit for subsidiary companies
spirent communications plc has provided guarantees totalling £11 million 2013 nil in respect of the minimum consideration for the 
acquisition of minority shareholdings in testing technologies ist gmbh and which expire on 31 march 2016
spirent communications plc
annual report 2014
128  held at
31 december
2014
canada
spirent communications of ottawa limited nepean ontario 100
denmark
spirent holdings denmark aps aarhus 100
france
spirent communications sas paris 100
germany
t esting t echnologies ist gmbh berlin 58
hong kong
spirent communications asia limited 100
india
spirent communications india pvt limited bangalore 100
israel
spirent communications israel limited t el aviv 100
japan
spirent communications japan kk t okyo 100
people’s republic of china
spirent communications t echnology beijing limited 100
singapore
spirent communications singapore pte limited 100
taiwan
spirent communications taiwan limited taipei 100
united kingdom
spirent communications international limited crawley west sussex 100
spirent communications positioning paignton devon†
united states
spirent communications hawaii llc honolulu hawaii 100
spirent communications inc 100
 calabasas california
 sunnyvale california
 eatontown new jersey
 frederick maryland
spirent federal systems inc 100
notes
the above companies operate and are incorporated in the countries listed all shareholdings in the companies are held indirectly by spirent communications 
plc except where indicated by an asterisk  where the shareholding is held directly by spirent communications plc
† spirent communications positioning operates as a division of spirent communications plc
the company has taken advantage of section 4102 of the companies act 2006 to list only its principal subsidiaries at 31 december 
2014 whose results or financial position in the opinion of the directors principally affected the financial statements all subsidiary 
companies are consolidated a full list of subsidiary and other associated undertakings as at 31 december 2014 will be annexed to the 
company’s next annual return filed with the registrar of companies
principal divisions and subsidiaries
spirent communications plc
annual report 2014
129
strategic report governance financial statements  million
2014 2013 2012 2011 2010
summary income statement
continuing operations
revenue 4572 4135 4724 4705 4228
operating profit 237 391 1081 1122 1026
net finance income 04 – 03 14 09
profit before tax 24 1 391 1084 1136 1035
tax 35 64 290 264 309
profit from continuing operations after tax 206 327 794 872 726
discontinued operations – – 471 67 66
profit for the year 206 327 1265 939 792
summary balance sheet
intangible assets 2733 1988 2074 1232 1120
property plant and equipment 522 396 341 355 291
working capital excluding cash and deferred tax 139 108 73 138 104
operating assets 3394 2276 2488 1725 1515
derivative financial instruments net – – – – 02
net funds including long term cash 998 2163 2490 2372 2250
provisions and other liabilities 83 65 50 45 76
deferred tax 180 183 284 294 313
defined benefit pension plan deficitsurplus 145 33 256 124 71
net assets 4344 4524 4956 4222 4071
total equity 4344 4524 4956 4222 4071
summary cash flows
cash flow from operating activities 417 674 1051 987 994
net interest received 06 08 06 09 08
net capital expenditure 316 243 143 235 176
free cash flow 107 439 914 761 826
acquisitions and disposals 859 – 321 145 –
share capital and share repurchase 164 545 294 330 150
dividends paid 222 222 203 175 137
transfer from long term deposit and loan repayment – 03 03 04 06
net decreaseincrease in cash and cash equivalents 1138 325 99 115 545
financial history
spirent communications plc
annual report 2014
130  million
2014 2013 2012 2011 2010
other information – continuing operations
expenditure on property plant and equipment 338 229 159 201 175
depreciation 197 165 146 127 114
product development 1154 1005 861 833 758
share information
earnings per share from continuing operations cents
basic 335 510 1211 1307 1080
diluted 335 509 1207 1296 1070
adjusted basic
12
582 571 1302 1281 1092
total dividend per ordinary share cents 389 354 322 293 250
fully paid ordinary shares in issue at year end number million 6117 6214 6506 6640 6749
segmental analysis – continuing operations
revenue
networks  applications 2215 2134 2595 2546 2420
wireless  service experience 1786 1677 1745 1618 1238
service assurance 571 324 384 541 570
4572 4135 4724 4705 4228
operating profit
networks  applications 76 132 597 566 582
wireless  service experience 240 338 567 585 397
service assurance 207 90 84 70 130
corporate – nonsegmental 63 59 65 60 65
operating profit
1
460 501 1183 1161 1044
exceptional items 4 1 38 29 – –
acquisition related costs 38 – 12 12 –
acquired intangible asset amortisation and impairment 137 84 45 16 14
sharebased payment 07 12 16 11 04
237 391 1081 1122 1026
geographical information – continuing operations
revenue by market
united states 2332 2158 2392 2388 2300
asia pacific rest of world 1587 1469 1660 1591 1263
europe 653 508 672 726 665
4572 4135 4724 4705 4228
notes 
1 before exceptional items acquisition related costs acquired intangible asset amortisation and impairment and share‑based payment
2 before tax effect of items in note 1 and prior year tax
spirent communications plc
annual report 2014
131 financial calendar 2015
26 february preliminary results and final dividend announcement
5 march final dividend – exdividend date
6 march final dividend – record date
5 may annual general meeting
8 may final dividend – payment date ordinary shareholders
18 may final dividend – payment date adr holders
30 june halfyear end
august  halfyear results and interim dividend announcement
august  interim dividend – exdividend date
august  interim dividend – record date
september  interim dividend – payment date ordinary shareholders
september  interim dividend – payment date adr holders
31 december 2015 financial year end
februarymarch 2016  2015 preliminary results and final dividend announcement
ordinary shares and american depositary receipts
the company’s ordinary shares are traded on the london stock exchange ticker spt the company operates a level 1  
american depositary receipt “adr” programme with each adr representing four ordinary shares the adrs trade on the 
us overthecounter market symbol spmyy cusip 84856m209 bny mellon is the authorised depositary bank for the 
company’s adr programme the adrs are quoted on the otc pink electronic quotation service which can be found at  
wwwotcmarketscomotcpinkhome
annual general meeting
the company’s 2015 annual general meeting “2015 agm” will be held at 1pm on 5 may 2015 at the offices of ubs at  
100 liverpool street london ec2m 2rh
dividends
shareholders are able to choose how they receive their dividends
 –direct to their bank account
 –reinvested in ordinary shares through the company’s dividend reinvestment plan see below
 –paid by cheque or
 –paid in foreign currencies
the quickest and most efficient way to receive your dividends is to have them paid direct to your bank account it saves waiting for 
funds to clear and reduces the paper and postage we use to change how you receive your dividends please contact the company’s 
registrar equiniti on 0871 384 2268 or log on to wwwshareviewcouk
dividend reinvestment plan
the company has a dividend reinvestment plan “drip” delivered by equiniti financial services limited the drip allows eligible 
shareholders to use their cash dividend to buy additional shares in the company so increasing their shareholding if you would like 
additional information please contact the company’s registrar equiniti on 0871 384 2268 or log on to wwwshareviewcouk
electronic communications
all of the company’s communications with shareholders are conducted in line with our environmental approach we hold the majority 
of our events via webcast and conference calls and we encourage all of our investors to receive communications electronically 
shareholders who do not currently receive company mailings electronically but wish to do so should notify the company’s registrar 
equiniti on 0871 384 2126 or via wwwshareviewcouk
company’s registrar
enquiries concerning shareholdings change of address or other particulars should be directed in the first instance to the company’s 
registrar equiniti on 0871 384 2126 equiniti also provide a range of online shareholder information services at wwwshareviewcouk 
where shareholders can check their holdings and find practical help on transferring shares or updating their details
share dealing services
equiniti shareview dealing is a service that provides a simple and convenient way of buying and selling the company’s ordinary 
shares for telephone services call 08456 037 037 between 800am and 430pm monday to friday and for internet services visit 
wwwshareviewcoukdealing
a postal share dealing service for buying and selling ordinary shares is also available and a dealing form can be obtained by calling 
0871 384 2248 or at wwwshareviewcouk
shareholder information
spirent communications plc
annual report 2014
132 individual savings accounts
information about investing in the company’s ordinary shares through an individual savings account “isa” may be obtained 
from equiniti on 0845 300 0430 or at wwwshareviewcouk isas are also offered by other organisations
shareholder security
shareholders are advised to be wary of any unsolicited advice offers to buy shares at a discount or offers of free reports 
about the company
details of any share dealing facilities that the company endorses will be included in the company’s mailings or on our website 
more detailed information can be found at wwwfsagovukconsumerinformation
unsolicited mail
the company is obliged by law to make its share register publicly available subject to a “proper purpose” test should a request 
be received as a consequence some shareholders may receive unsolicited mail to limit the amount of unsolicited mail received 
please contact the mailing preference service mps dma house 70 margaret street london w1w 8ss or register online at  
wwwmpsonlineorguk the mailing preference service is an independent organisation which offers a free service to the public 
within the uk registering with them will help stop most unsolicited consumer advertising material
company’s website
the directors are responsible for the maintenance and integrity of the company’s website financial information published on the 
website is based on legislation in the uk governing the preparation and dissemination of financial statements that may be different 
from comparable legislation in other jurisdictions
shareholder analysis
at 26 february 2015 the number of registered shareholders was 3349 and the number of ordinary shares in issue was 6117 million
number of ordinary shares held
number of 
shareholders
 of total 
shareholders
number of  
ordinary shares
 of  
share 
capital
1 – 5000 2405 7181 3276548 054
5001 – 10000 341 1018 2529628 041
10001 – 50000 364 1087 7848116 128
50001 – 100000 60 179 4328454 071
100001 – 250000 51 152 8282902 135
250001 – 500000 33 099 12537586 205
500001 – 1000000 30 090 21919556 358
1000001 – highest 65 194 551019098 9008
total 3349 10000 611741888 10000
number of 
shareholders
 of total 
shareholders
number of  
ordinary shares
 of  
share 
capital
individuals 2688 8026 13034230 213
institutions 661 1974 598707658 9787
total 3349 10000 611741888 10000
spirent communications plc
annual report 2014
133 3g third generation third generation of mobile communications that delivers data rates of hundreds of kilobits 
per second to tens of megabits per second
4g fourth generation fourth generation of mobile communications that delivers data rates of tens to hundreds of 
megabits per second future 4g technologies promise data rates in excess of one gigabit 
per second
agile software development a group of development methods in which requirements and solutions evolve through 
collaboration between selforganising crossfunctional teams it promotes adaptive 
planning evolutionary development early delivery continuous improvement and 
encourages rapid and flexible response to change
application a software programme designed to perform a specific function for the end user which uses 
the services of the computer’s operating system and other supporting programmes 
applications include database programmes spreadsheets web browsers graphics 
programmes and word processors
attacks attempts to damage disrupt or gain unauthorised access to a computer computer system 
or electronic communications network
beidou china’s second generation global satellite navigation system which is under construction 
but eventually planned to consist of 35 satellites service was launched in china during 
2011 with plans to provide service globally by 2020
carrier aggregation a technique used in 4g mobile communications that allows expansion of the effective 
bandwidth delivered to a mobile user terminal by concurrent utilisation of resources across 
multiple radio carriers
cloud a variety of computing concepts that involve a large number of computers connected 
through a realtime communication network such as the internet often used in reference to 
networkbased services served up by virtual hardware simulated by software running on 
one or more physical machines
continuous integrated test optimization a practice in software development environments that employ continuous integration in 
which code is built automatically and tests are run against a specific build providing 
feedback to developers in a shorter timeframe to allow coding issues to be fixed or code 
changes to be rolled back to ensure stable code 
data center a centralised location where computing resources critical to an organisation are maintained 
in a highly controlled environment
ethernet a family of networking technologies originally developed for local area networks which 
migrated to metro area networks and eventually became the dominant standard in wireline 
networks worldwide
evolved packet core an integrated ipbased mobile transport network with the ability to support 2g 3g and 
lte coexistence
fuzzing a software testing technique commonly used to uncover security vulnerabilities in software 
operating systems or networks by inputting large amounts of invalid unexpected or 
random data to the system in an attempt to make it crash
global navigation satellite systems “gnss” the standard generic term for satellite navigation systems that provide autonomous 
geospatial positioning with global coverage gnss allows users’ receivers to determine 
their location to within a few metres by employing a triangulation technique that uses 
information from multiple satellites
global positioning system “gps” a global navigation satellite system operated by the united states government for 
determining a user’s location and height at any point on the earth’s surface a receiver uses 
minute differences in measured time signals from clocks on satellites to calculate these 
positions and altitudes
glonass a global navigation satellite system operated by the russian federation deployment 
began in 1976 and although the system fell into disrepair in the 1990s full global service 
was restored in 2011
internet of everything “ioe” an extension to today’s internet that builds on the compound impact of connections among 
people processes data and things where each is intended to amplify the capabilities of 
the other three this global connectedness is expected to create additional value as 
“everything” comes online
glossary
spirent communications plc
annual report 2014
134 internet of things “iot” a network of physical objects or “things” embedded with electronics software sensors and 
connectivity to enable data exchange with the manufacturer operator andor other 
connected devices each thing is uniquely identifiable through its embedded computing 
system but is able to interoperate within existing internet infrastructure
internet protocol “ip” the primary network protocol used on the internet and on other network devices to 
facilitate and control the flow of data
internet protocol multimedia subsystem “ims” a standardised nextgeneration architecture for telecoms operators who want to provide 
mobile and fixed multimedia services
intrusion an incident of unauthorised access to data or an automated information system
jamming the intentional emission of radio frequency signals to interfere with the operation of gnss 
receiver by saturating it with noise or false information
long term evolution “lte” an advanced wireless data communications technology standard sometimes called “4g” 
which is an evolution of 3g umts standards in addition to a new wireless interface 
specification lte uses a simplified flat ipbased network architecture
lteadvanced an evolution of lte technology specified in 3gpp release 10 and later specifications 
regarded by some as the first true 4g technology
machinetomachine “m2m” a technology that enables automated wireless or wired communication between 
mechanical or electronic devices
network functions virtualization “nfv” an initiative to provide a new network production environment which lowers cost raises 
efficiency and increases agility by hosting network functions previously carried out by 
proprietary dedicated hardware on virtual machines running on industrystandard 
commodity hardware
rich communication suite “rcs” also known as rich communications services rcs is a platform intended to enable mobile 
network operators to deliver integrated communication services beyond voice and sms 
over allip networks including instant messaging or chat live video and file sharing across 
any device on any network
small cells a generic term for microcells picocells and femtocells small cells provide network 
coverage in dead zones within a macrocell the coverage area of a traditional cellular base 
station and extra network capacity by offloading mobile data traffic from macrocells
software defined network “sdn” an approach to networking in which control is decoupled from hardware and given to a 
software application called a controller
spoofing an attempt to deceive a gnss receiver’s estimate of its position or time by broadcasting 
counterfeit gnss signals structured to resemble a set of normal gnss signals or by 
rebroadcasting genuine signals captured elsewhere or at a different time
virtualization  technologies designed to provide a layer of abstraction from the physical characteristics of 
computing resources to simplify the way in which other systems applications or end users 
interact with those resources
voice over lte “volte” a standardsbased scheme adopted by the gsma the cellular industry’s association to 
provide voice service over dataonly lte networks volte’s use of an ip media subsystem 
enables voice to be offered as part of a rich communications solution integrated with 
services such as messaging live video sharing and file transfer
wifi  a mechanism that enables devices such as personal computers video game consoles 
smartphones or digital audio players to exchange data wirelessly over a computer network 
and connect to network resources such as the internet coverage ranges from a few rooms 
to several square miles depending on the number of access points used
wifi offload a technique that helps operators manage mobile data growth by seamlessly offloading 
subscriber traffic from their primary 3g and 4g networks to wifi networks
wireline communication services provided over a physical connection which may be copper 
or fibre
spirent communications plc
annual report 2014
135 adr depositary
bny mellon corporation
po box 30170
college station
tx 778423170
usa
tel 1 888 269 2377 toll free us
tel 1 201 680 6825 outside us
email shrrelationscpushareownerservicescom
website wwwmybnymdrcom
brokers joint
jefferies hoare govett
vintners place
68 upper thames street
london ec4v 3bj
united kingdom
tel 44 020 7029 8000
website wwwjefferiescom
ubs limited
1 finsbury avenue
london ec2m 2pp
united kingdom
tel 44 020 7567 8000
website wwwubscom
financial pr advisers
fti consulting limited
200 aldersgate
aldersgate street
london ec1a 4hd
united kingdom
tel 44 020 3727 1000
website wwwfticonsultingcom
registered office
spirent communications plc
northwood park
gatwick road
crawley
west sussex rh10 9xn
united kingdom
tel 44 01293 767676
fax 44 01293 767677
email investorrelationsspirentcom
website httpcorporatespirentcom
registered in england no 470893
auditor
ernst  young llp
1 more london place
london se1 2af
united kingdom
tel 44 020 7951 2000
website wwweycom
registrar
equiniti limited
aspect house
spencer road
lancing
west sussex bn99 6da
united kingdom
tel 0871 384 2126 uk
tel 44 0121 415 7047 overseas
text phone for shareholders with hearing difficulties
0871 384 2255 uk 44 0121 415 7028 overseas
website wwwshareviewcouk
contact details
spirent communications plc
annual report 2014
136 designed and produced by luminous
wwwluminouscouk spirent communications plc
northwood park
gatwick road
crawley
west sussex rh10 9xn
united kingdom
tel 44 01293 767676
fax 44 01293 767677
email investorrelationsspirentcom
website httpcorporatespirentcom
registered in england no 470893
spirent and the spirent logo are trademarks or registered 
trademarks of spirent communications plc all other 
trademarks or registered trademarks mentioned herein are 
held by their respective companies all rights reserved


Summary:
 positioning the group for growth
last year we set out our strategy to restore revenue to growth 
in 2014 which would fund the necessary investment in product 
development and expansion of sales and marketing activities 
for the long term growth of the business we highlighted that we 
had undertaken a radical reorganisation of the activities within 
spirent with the key strategic objective of creating long term 
value by harnessing spirent’s leading capabilities and talent 
and that this would take time to be fully reflected in the financial 
performance of the company 2014 was eric hutchinson’s first full 
year as chief executive he and his new team have reenergised 
the company and laid the foundations for future growth 
it is pleasing to report that group revenue increased by 11 per 
cent to 4572 million 2013 4135 million of which 186 million 
came from acquisitions made during the year revenue grew 
in all divisions and in all regions this achievement was against 
a backdrop of some strong headwinds and changes in the 
markets that we serve particularly in the third quarter after 
achieving 16 per cent growth in revenue in the first half of 2014 
we saw a significant slowdown in the second half in our service 
provider ecosystem in north america as a major customer 
reorganised and paused in its investment cycle 
chairman’s statement
alex walker
chairman
in 2014 we have laid  
the foundations for 
returning the group 
to growth
spirent communications plc
annual report 2014
6 employees
spirent is its employees we have highly skilled and creative 
employees and as a communications technology company 
our employees and their capabilities hold the key to the long 
term prosperity of the company i would like to thank all our 
employees for their hard work and commitment to the future 
success of the group
dividends
the final dividend recommended is 221 cents per share 
compared with 201 cents per share in 2013 this brings the 
total dividend for 2014 to 389 cents per share compared with 
354 cents for 2013 the increase in total dividend per share is 
10 per cent in sterling terms this also represents an increase 
in the distribution to our shareholders of 10 per cent
board changes
in february 2014 we welcomed rachel whiting to the board 
as chief financial officer ian brindle our senior independent 
director and chair of the audit committee was appointed to the 
board in december 2006 and has signalled his intention to step 
down from the board we are in the process of recruiting his 
replacement and we are delighted to report that sue swenson 
has agreed to succeed ian as senior independent director 
outlook
following the sharp slowdown in the united states at some of our 
customers in the third quarter of 2014 we saw a marked uplift in 
business at the end of the year 
whilst there continue to be near term uncertainties and volatility 
we expect to see an increased level of demand for our solutions 
and services as the year unfolds which will result in a greater than 
usual second half weighting this will be exacerbated by the later 
timing of the shipment of a major contract for handheld test tools 
of 16 million in the second half of 2015 compared with 12 million 
shipped in the first quarter of 2014 
the board remains confident that further progress will be achieved 
during 2015 and that the group will benefit from continued 
investment to create long term strategic value we have a number 
of major new solutions that will be delivered to the market in the 
second half of 2015 and we will continue to pursue areas of 
opportunity to expand the markets we serve
alex walker
chairman
we also saw structural changes in the smartphone market and 
intense competition over a lower level of demand whilst the 
yearonyear increase in the second half slowed to 6 per cent 
the fourth quarter saw strong demand with revenue up 9 per 
cent over the same period in 2013
the growth in revenue has enabled us to fund the planned 
additional investment in product development and in sales 
and marketing that we highlighted in last year’s annual report 
innovation is at the heart of any technology company and 
spirent invested 1154 million in product development in 2014 
an organic increase of 8 per cent over 2013 during the year as 
part of spirent’s continuing strategic investment programme we 
released 85 new solutions and functionality which enhance our 
competitive advantage and spearhead future sales growth
additional investment of 129 million in sales and marketing 
excluding the effect of acquisitions during the year has enabled 
us to build on our customer relationships drive development 
of and access to markets and to gain market share
return on sales based on adjusted operating profit was 10 per 
cent for the group down from 12 per cent last year reflecting the 
impact of the investment in the business to drive recovery and 
long term growth
basic earnings per share for the group decreased in 2014 to 
335 cents per share 2013 510 cents adjusted basic earnings 
per share was 582 cents 2013 571 cents this is before charging 
exceptional items acquisition related costs acquired intangible 
asset amortisation and impairment and sharebased payment
the group’s free cash flow generation was 107 million in 2014 
2013 439 million a cash conversion ratio of 05 times reported 
earnings 2013 13 times the company has no debt and cash 
balances were 998 million at 31 december 2014
acquisitions
spirent made good progress in its strategy of acquiring new 
capabilities and technologies completing a number of focused 
acquisitions during 2014 for a total consideration of 859 million 
funded out of spirent’s existing cash resources as a board we 
evaluate each acquisition opportunity to ensure that it meets 
our strategic objectives as well as the financial hurdles set for 
investment 
in february 2014 spirent acquired dax technologies corp and 
also a majority stake of 58 per cent of testing technologies ist 
gmbh in july we acquired the assets of the radvision technology 
business unit and then finally in september mobilethink as and 
its wholly owned subsidiary tweakker aps these acquisitions are 
discussed in the financial review all of our 2014 acquisitions are 
on track to deliver revenue and profit growth
we very much welcome the employees of all these companies 
into the spirent group
spirent communications plc
annual report 2014
7
strategic report governance financial statements