helping  
the world  
connect
spirent communications plc
annual report 2013
spirent communications plc annual report 2013 spirent communications plc 
annual report 2013
2
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previous page spirent is a global leader in communications test and 
measurement listed on the london stock exchange
at spirent we develop innovative hardware and software 
solutions and test methodologies for the communications 
industry our solutions shorten our customers’ product 
development lifecycle improve the quality and reliability 
of their new and existing services whilst reducing their 
associated cost and risk
spirent employs 1500 talented people working in 
15 countries who serve our 1200 customers worldwide
cautionary statement regarding forwardlooking statements
this annual report may contain forwardlooking statements which are made in good faith and are based on 
current expectations or beliefs as well as assumptions about future events you can sometimes but not 
always identify these statements by the use of a date in the future or such words as “will” “anticipate” 
“estimate” “expect” “project” “intend” “plan” “should” “may” “assume” and other similar words by their 
nature forwardlooking statements are inherently predictive and speculative and involve risk and uncertainty 
because they relate to events and depend on circumstances that will occur in the future you should not place 
undue reliance on these forwardlooking statements which are not a guarantee of future performance and are 
subject to factors that could cause our actual results to differ materially from those expressed or implied by 
these statements the company undertakes no obligation to update any forwardlooking statements 
contained in this annual report whether as a result of new information future events or otherwise spirent communications plc 
annual report 2013
1
spirent vr5 quality assurance
chief executive’s review 8
our ceo discusses the market trends in 2013 
and explains the organisational changes made 
following his appointment in september 2013
our strategy 16
in this section we discuss the key components 
of our strategy what we have achieved in  
2013 and what we plan to achieve in 2014 in 
order to ultimately realise our vision
financial statements
consolidated financial statements
independent auditor’s report to the  
members of spirent communications plc 80
consolidated income statement 82
consolidated statement of  
comprehensive income 83
consolidated balance sheet 84
consolidated cash flow statement 85
consolidated statement of changes in equity 86
notes to the consolidated financial statements 87
parent company financial statements
independent auditor’s report to the  
members of spirent communications plc 121
parent company balance sheet 122
notes to the parent company financial 
 statements 123
principal divisions and subsidiaries 135
other information
financial history 136
shareholder information 138
glossary 140
contact details ibc
1 2 3
strategic report
chairman’s statement 2
results and highlights 4
spirent at a glance 6
chief executive’s review 8
market trends 10
what we test 12
our business model 14
our strategy 16
key performance indicators 18
our principal risks and uncertainties 20
financial review 26
operational review 30
our employees 36
corporate social responsibility statement 38
governance
chairman’s introduction 44
board of directors 46
directors’ statement on corporate governance  48
nomination committee  53
audit committee 54
report on directors’ remuneration 58
report of the directors 77
directors’ responsibilities statement 79 spirent communications plc 
annual report 2013
2
chairman’s statement
the changes made in 2013 will take 
time to be fully reflected in the 
financial performance of the company 
but it is planned to restore revenue to 
growth in 2014 which will fund the 
necessary investment in product 
development and in the expansion of 
the sales and marketing activities for 
the long term growth of the business
total dividend
354¢
10
alex walker
chairman 3
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
2013 is a year that marks a turning point for the company the impact 
on the business due to the significant changes in our markets and 
accelerating shifts in the structure of the industry we serve has 
been marked these trends manifested themselves through intense 
competition in the data center market wireless device vendors 
seeing lower profitability combined with a lull in new technology and 
service launches in addition under investment in development of 
new test systems in some parts of the business in previous years 
and the lack of expansion of our products into new markets has 
had a negative impact in response we have undertaken a radical 
reorganisation of the activities within spirent with the key strategic 
objective to create long term value by harnessing spirent’s leading 
capabilities and talent it will take time to be fully reflected in the 
financial performance of the company but it is planned to restore 
revenue to growth in 2014 which will fund the necessary investment 
in product development and in the expansion of the sales and 
marketing activities for the long term growth of the business
group revenue reduced to 4135 million 2012 4724 million this 
resulted in a considerable fall in reported profit before tax to 391 
million 2012 1084 million the first halfyear saw revenue fall by 
19 per cent but the rate of decline slowed in the second halfyear with 
revenues down by 6 per cent and underlying stability in order intake the 
order book increased by 214 million in 2013 2012 a reduction of 145 
million operational highlights included the release of nextgeneration 
products for ethernet test the launch of our advanced applications and 
security test system avalanche next and the delivery of test solutions 
for china’s regional satellite navigation system beidou
return on sales based on adjusted operating profit was 12 per cent for 
the group down from 25 per cent last year reflecting the impact of the 
fall in revenues and the investment in the business to drive recovery 
and long term growth this investment was in the expansion of our 
operating capabilities product development expenditure has been 
increased by 144 million and sales and marketing by 49 million 
basic earnings per share for the continuing group decreased in 2013 
to 510 cents per share 2012 1211 cents adjusted basic earnings 
per share was 571 cents 2012 1302 cents this is before charging 
exceptional items acquisition related costs acquired intangible 
asset amortisation and sharebased payment 
the group’s free cash flow generation was 439 million in 2013 
2012 840 million this is a cash conversion ratio of 13 times 
reported earnings 2012 11 times continuing operations the 
company has no debt and cash balances were 2162 million at 
31 december 2013
the board aims to achieve a high return on capital employed in the 
business the operating return on capital employed in the continuing 
group in 2013 was 16 per cent excluding cash balances the target 
set for return on investment in acquired businesses is 16 per cent 
returns are low to negligible on cash balances which are retained to 
allow surety of completion for acquisition negotiations whilst the 
company continues to expect to invest in acquisitions which are in line 
with the strategy it is also committed to returning surplus capital as 
appropriate to that end during 2013 the balance of the proceeds of 
the divestment of the systems business approximately 33 million 
was applied to the repurchase of spirent shares in the market for 
cancellation and the programme extended beyond this in total 
292 million shares were repurchased for 555 million in 2013 
no further buybacks are currently planned
i am delighted to report the completion of the acquisition of the 
business of dax technologies corp “dax” for a cash consideration 
of 370 million 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 
customers deploy and manage complex new networks and services 
faster and more effectively 
in addition today we are announcing the completion of the acquisition 
of a majority stake of 58 per cent of testing technologies ist gmbh 
“testing tech” for a cash consideration of euro 20 million this 
acquisition although small in size is an important step in the 
progression of spirent’s strategy to enter the automotive market
we very much welcome the employees of both these companies into 
the spirent group
the final dividend recommended is 201 cents per share compared with 
183 cents per share in 2012 this brings the total dividend for 2013 to 
354 cents per share compared with 322 cents for 2012 the increase in 
total dividend per share is 10 per cent in sterling terms this represents 
an increase in the distribution to our shareholders of 5 per cent
board changes
september 2013 saw a change in senior management with bill burns 
stepping down as chief executive officer and replaced in the role by 
eric hutchinson rachel whiting who has extensive financial 
experience and long service with spirent was welcomed to the 
board in february 2014 as chief financial officer
outlook
the disruption and structural changes experienced in our markets 
in the first half of 2013 stabilised during the second halfyear 
the reorganisation of the group in the fourth quarter of 2013 has 
released creativity and energy which is driving a dynamic change 
in the responsiveness and agility of our businesses we continue to 
see opportunities arising through infrastructure investment in the 
wireless networks worldwide and in the development and rollout 
of virtual and cloud based services 
in 2014 we anticipate that spirent’s revenue will be linked to recovery in 
china growth in the americas and expected stability in the european 
market and we look to achieve high single digit organic growth
this year the group intends to make an additional investment of 
around 330 million in future growth in particular through a 15 per 
cent increase in product development extending the sales channel 
to break into new areas expanding spirent’s capabilities in the 
core markets that it serves and by entering new markets including 
automotive and enterprise whilst there continue to be near term 
uncertainties activity levels at the beginning of 2014 are in line with 
our expectations the board remain confident that progress will be 
achieved and that the group will benefit from the investment to 
create long term strategic value spirent communications plc 
annual report 2013
4
basic earnings per share
4
 cents
09
10
11
12
13
1080
1307
1211
510
1292
adjusted basic earnings per share
124
 cents
09
10
11
12
13
1092
1281
1302
571
1039
dividend per share cents
09
10
11
12
13
250
293
322
354
193
revenue
4
  million
09
10
11
12
13
4228
4705
4724
4135
3694
adjusted operating profit
14
  million
09
10
11
12
13
1044
1161
1183
501
798
free cash flow
34
  million
09
10
11
12
13
755
693
840
439
764
results and highlights
the disruption and structural changes experienced in our markets in the first 
half of 2013 stabilised during the second halfyear the reorganisation of the 
group in the fourth quarter of 2013 has released creativity and energy which is 
driving a dynamic change in the responsiveness and agility of our businesses 
notes
1 before exceptional items acquisition related costs acquired intangible asset 
amortisation 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
4 continuing operations 5
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
• group revenue of 4135 million 2012 4724 million with a sequential 
improvement of 17 in the second halfyear compared with the first half 
of 2013
• book to bill ratio was 105 2012 97 reflecting the improving market dynamics 
in the second half of 2013 and spirent’s key product launches
• group adjusted operating profit of 501 million 2012 1183 million  
on lower revenue and after increased investment in product development 
and sales and marketing of 193 million compared to the prior year
• dividend increased by 10 final dividend proposed of 201 cents per 
ordinary share giving a full year dividend of 354 cents per ordinary share 
• free cash flow of 439 million 2012 840 million cash closed at  
2162 million after share buybacks and dividends totalling 769 million
financial
operational and strategic
there were strong headwinds in certain market segments and geographies 
exacerbated by historical under investment in certain parts of the business 
given the significant changes in the industry
• intense competition in the data center market and spending shifting to virtual 
and cloud based services
• wireless device vendors experienced lower profitability and a lull in new 
technology and service launches
• adverse macroeconomic conditions in europe coupled with spending caution  
by chinese customers earlier in the year
in spite of these challenges there were areas of progress
• structural reorganisation of the group into business units to create maximum 
focus on meeting customers’ changing needs as reported in january 2014
• service providers increased infrastructure spending on high density core 
routers and 100g ethernet
• spirent introduced a family of nextgeneration high speed ethernet test 
solutions incorporating market leading realism and scale to address 
increasing complexity and the explosion of data traffic in service provider 
and data center networks
• launched avalanche next a powerful easytouse solution that tests the 
performance scalability and security of applicationaware network 
infrastructures with positive feedback from customers
• underscored our industry leadership in gnss testing with the first 
commercially available support for the chinese beidou satellite navigation 
system
• acquisition of the business of dax technologies corp “dax” for a cash 
consideration of 37 0 million announced on 18 february 2014 dax is a 
leading provider of customer experience management solutions and will 
be reported within our service assurance division
• completion of the acquisition of a majority stake of 58 in testing 
technologies ist gmbh for a cash consideration of euro 20 million on 
20 february 2014 the company based in berlin germany develops and 
markets standards based and customerspecific software testing tools which 
support the development of missioncritical products and workflow steps
post balance sheet events spirent communications plc 
annual report 2013
6
spirent at a glance
spirent has a broad portfolio of innovative 
products and services and is organised into 
three operating segments
networks  applications
spirent’s networks and applications solutions put 
innovation to the test within labs networks and 
it organisations 
we enable our customers’ success in development and deployment  
of communications networks services and applications our broad 
solutions portfolio addresses data centers cloud computing 
virtualized environments security high speed ethernet networks 
and services and infrastructure test optimization
wireless  service experience
spirent’s wireless and service experience solutions apply 
our innovation to functional and performance testing of 
4glte and 3g mobile devices services and infrastructure 
and satellite positioning devices under realworld 
conditions in the lab prior to commercial launch 
the portfolio also includes tools and services for endtoend 
measurement of the mobile experience on live networks on any  
device and on any operating system these solutions help our 
customers to minimise the risks associated with deployment  
of new technologies devices and services 
service assurance
spirent’s service assurance solutions allow service 
providers to diagnose troubleshoot and determine how 
to resolve issues with networks and systems within the 
live network 
building on the expertise gained through testing technologies and 
systems in the lab spirent enables service providers to deploy 
and maintain efficient cost effective and high performing networks 
helping to reduce subscriber churn by providing better quality 
of experience  strategic report
governance
financial statements
spirent communications plc 
annual report 2013
7
1
2
3
1 americas 55
2 asia pacific 32
3 europe middle 
 east and africa 13
we serve 1200 customers worldwide and have  
built a worldclass organisation that enables 
spirent to develop and maintain strong customer 
relationships around the globe
revenue 
4135m
2012 4724m
1
2
3
1 americas 63
2 asia pacific 25
3 europe middle 
 east and africa 12
employees by location
1525
2012 1486
page 30 for the full operational review for networks  applications
revenue
2134m
2012 2595m
divisional focus
 – ethernet
 – data centercloud computing
 – applications and security
 – test optimization
 – wireless infrastructure
page 34 for the full operational review for service assurance
divisional focus
 – ethernet business services
 – wireless backhaul
 – field test solutions
 – customer experience management
revenue
324m
2012 384m
page 32 for the full operational review for wireless  service experience
divisional focus
 – wireless devices
 – wireless channel emulation
 – satellite navigation and global positioning
 – wireless service experience
revenue
167 7 m
2012 1745m
note
1  before exceptional items acquisition related 
costs acquired intangible asset amortisation 
and sharebased payment
1
2
3
1 networks  applications 24
2 wireless  service experience 60
3 service assurance 16
operating profit by division
1
501m
2012 1183m spirent communications plc 
annual report 2013
8
chief executive’s review
the key objectives in reorganising 
the group are to enable agile decision 
making to unleash the creativity and 
innovation of spirent’s expert and 
talented people and to devolve 
responsibility and accountability to 
customer facing management teams 
the result will be an organisation that 
is more effective in delivering expert 
solutions that are easytouse by 
customers to manage and deploy 
their complex systems
product development
1005m
17 
eric hutchinson
chief executive officer 9
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
wireless  service experience and service assurance each segment 
is comprised of business units focused on delivery of particular 
technology solutions each of these business units are led by a 
management team under a general manager responsible for all the 
activities required to serve customers
networks  applications
the businesses in networks  applications specialise in ethernet 
test applications test and network performance cyber security 
wifi offload and mobile packet core the development of virtual 
test solutions to address the emerging needs of softwaredefined 
networks “sdn” and network functions virtualization “nfv” are 
a key part of the division’s product portfolio in addition a new 
infrastructure test optimization “ito”  solutions business unit 
has been created to deliver test automation and professional 
services this business unit will address the demands by customers 
for greater efficiency and effectiveness through providing lab 
management tools expert analysis of data from test and 
measurement systems and testing services another new business 
unit has been established to apply our test technology expertise 
including cloud based testingasaservice to enterprise customers
wireless  service experience
within this division the wireless business unit serves the test needs of 
the wireless device ecosystem this business unit is in transition as the 
key served market centred on carrier acceptance test for mobile 
devices 3g cdma and umts mobile test requirements has moved into 
long term decline being replaced by the development and deployment 
of 4glte technologies solutions now under development in the 
wireless business unit address the needs of those developing and 
deploying the nextgeneration of services enabled by 4glte 
technologies and which provide for the evaluation of the mobile user’s 
service level of experience the positioning test business unit designs 
the world’s leading satellite navigation simulation systems for use by 
equipment manufacturers and system developers that utilise the 
various different global and regional satellite navigation and 
positioning technologies the service experience business unit’s focus 
is on the performance of devices in the live carrier network providing 
detailed analysis of the subscriber experience that allows wireless 
service providers and their suppliers to successfully roll out new 
devices and services a new business unit has also been set up to 
develop solutions for emerging needs in the automotive technology 
market including related connectivity challenges
service assurance
for service assurance the primary business is the provision of live 
network monitoring systems for diagnostics and assurance of service 
levels for wireline wireless service providers and multiservice 
cable operators 
the key objectives in reorganising the group are to enable agile 
decision making to unleash the creativity and innovation of spirent’s 
expert and talented people and to devolve responsibility and 
accountability to customer facing management teams the result 
will be an organisation that is more effective in delivering expert 
solutions that are easytouse by customers to manage and deploy 
their complex systems this will enable the group to return to growth 
and to enhance the long term value of its business
market conditions
it has been a challenging year for spirent revenues have decreased 
and profit has been impacted significantly the company has lost 
some market share in its core markets technologies have been in a 
rapid transition and some customers have faced great difficulties 
with the business performance of a number of major customers 
declining markedly reducing demand for our test systems there has 
been a structural change in the shape of the wireless mobile device 
industry resulting in a market characterised by a very small number 
of profitable manufacturers the rapid shift to deployment of a single 
global standard for wireless technologies 4glte while continuing 
to represent an opportunity for spirent has also eroded the 3g 
technology niches where spirent had a high market share regionally 
demand has been weak in europe china and in some market 
segments in north america the impact of the market challenges 
described above was exacerbated by historical under investment 
by spirent in the development of core technologies in channels 
to market and in customer support 
strategy and organisational structure
the vision for spirent is to consolidate its position as the leading 
expert in test and measurement for information technology 
communications worldwide in order to achieve this aim a number 
of areas are an important focus of spirent’s future investment 
these include the development of new product solutions in its 
core businesses in networks  applications wireless  service 
experience and service assurance establishment of an enterprise 
sales channel enhancements to spirent’s cyber security test 
offering and new solutions directed towards automotive 
technologies and related connectivity testing
furthermore better alignment of the business internally will allow 
spirent to maximise the growth areas that offer the most significant 
future opportunities to this end a number of management changes 
have been completed to provide a streamlined decentralised and 
simplified organisational structure these internal changes have 
been made to create a more agile and responsive business that better 
serves customer needs as well as to sharpen the business’ focus 
on anticipating customers’ requirements for the future the group 
is managed as three operating segments networks  applications 
cloud data center traffic will grow at a faster rate 
than traditional data center traffic zettabytes per year
10
20
30
40
50
60
70
80
90
69
31
54
46
14 16 15 13 17 12
25
cagr 201217
 
 
traditional data center  
12 cagr
cloud data center  
35 cagr
source cisco global cloud index 10
spirent communications plc 
annual report 2013
market trends
2013 was a turning point for our 
industry as the shift from network and 
transport to applications and services 
accelerated with a renewed focus on 
the user experience we moved 
beyond just getting connected towards 
the age of hyperconnectivity the 
internet of things and machineto 
machine “m2m” communications 
and global connectedness is just 
getting started
ethernet cemented its role as the common building block for service 
provider enterprise and critical infrastructure networks cloud 
moved from being a convenience to an essential part of many 
people’s lives as the disruptive business models of cloud service 
providers made a major impact the cloud and data center 
segments were also impacted by new technologies such as 
softwaredefined networking “sdn” 
the move to virtualization accelerated including strong service provider 
interest in the potential for network functions virtualization “nfv” to 
lower costs raise efficiency and increase agility the entire industry 
faced continuing escalation of cybersecurity threats with frequent 
reports of high profile attacks security was also an issue in the 
positioning technologies market as concern grew over the vulnerability 
of global navigation satellite system “gnss” applications
although smartphone growth continued its focus shifted to 
emerging markets which caused profitability challenges for all but a 
very few device vendors 4glte networks were deployed at a rapid 
pace around the world as the industry prepared for widespread roll 
outs of important new services such as voice over lte “volte” 
looking to ensure a positive experience for users 
as a result the testing needs of our customers have continued to 
increase in complexity with its broad portfolio of products and 
services in the lab and in live networks spirent is uniquely 
positioned to help address this complexity enabling the shift to 
application and user experience testing 
2000
1st 
smartphone
key 
bn billion
eb exabyte
gb gigabyte
m million
1bn 
people using the 
internet
04eb 
mobile data  
traffic
56bn 
mobile
subscribers
10m 
new connected 
vehicles
954m 
new 
smartphones
9bn 
connected 
devices
27bn 
people using the 
internet
2005 2008 2011 2012 2013  11
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
47 
entertainment 
info in the cloud
24bn 
connected 
devices
31
connected 
devices per person
2020
300m
smartmeters
16bn 
new 
smartphones
10bn 
mobile 
subscribers
67m 
new connected 
vehicles
52eb 
mobile data  
traffic
16gb 
monthly per  
smartphone user
14
mobile devices 
per person
2018 2015 2016 2017
nigel wright
vice president international  
sales and marketing
“ with our expertise 
solutions and 
global reach we’re a 
strong partner to our 
customers helping 
them to address the 
internet of things cloud 
and virtual roll outs”
source cisco vni itu gsma gartner us census bureau berg insight 
and others spirent communications plc 
annual report 2013
12
what we test
the boundaries of how fast far and 
accurately voice and data can be 
transmitted have yet to be reached  
or even defined – but spirent is  
leading the way
spirent communications is where the world’s leading communications 
companies come to test and evaluate their nextgeneration devices 
and applications in fact most of the industry’s significant advances 
have been made using our tests as the benchmark
in an environment where everything is connected spirent provides 
hardware and software solutions services and test methodologies 
that address customers’ testing needs – from network equipment 
in a cloud data center to mobile device performance and user 
experience in the lab and on live networks
spirent is a leader in testing network equipment which utilises ethernet 
at everincreasing scale including switches routers firewalls load 
balancers data center fabrics and intrusion detectionprevention
spirent addresses the demands of virtualized data centers by testing 
performance availability security and scalability emulating the 
actions of millions of realworld subscribers and services to help 
ensure the quality of experience is maintained
spirent is leading the validation of softwaredefined networking 
“sdn”network functions virtualization “nfv” technologies with 
unparalleled realism and scale and accelerating their adoption in 
service provider data center and enterprise environments we 
develop test methodologies to deliver business benefits without 
impacting the quality of service “qos” of the network or the 
user experience
we address the testing needs of all layers of service provider 
networks including access wifi offload mobility and performance 
of the mobile packet core cloud infrastructure and applications
spirent also provides live network monitoring systems for diagnostics 
and assurance of service levels for wireline wireless service 
providers and multiservice cable operators helping them to deploy 
and maintain efficient cost effective and high performing networks 
and to reduce subscriber churn
spirent’s services help customers around the world 
accelerate development and deployment by maximising 
their investment in spirent test solutions through 
support education and professional services 
spirent’s infrastructure test optimization solutions help 
address the challenges of bringing quality products  
to market faster in the face of rapid change and  
increasing complexity
with its broad portfolio of solutions and services 
spirent is uniquely positioned to address its customers’ 
complex testing needs in areas that include strategic report
governance
financial statements
spirent communications plc 
annual report 2013
13
networks  applications
wireless  service experience
service assurance
cloud computing
services moving to the cloud require 
end user experience to be validated as 
data centers are upgraded with high 
speed ethernet and technologies 
such as sdn are introduced
applications  security
addressing the proliferation of 
application and vulnerability concerns 
for enterprise government and service 
provider networks spirent’s security 
test solutions offer unprecedented 
realism and easeofuse
mobility
spirent’s unique mobility test 
solutions and methodologies 
address the mobile data explosion 
growth in applications and mobility 
across lte 2g3g and wifi with 
realism and scale
enterprise business
spirent’s solutions enable tuning of 
enterprise networks across multiple 
sites to maintain maximum 
performance reduce it spending 
enhance scalability and resolve 
issues faster
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 
like volte puts extraordinary 
demands on networks and devices 
spirent is a leader in ensuring the 
successful endtoend deployment of 
volte and other ims services 
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 end user quality of 
experience on any device any 
operating system and any network
network service assurance
spirent’s service assurance solutions 
allow service providers around the 
world to diagnose troubleshoot and 
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
customer experience 
management
spirent’s customer experience and 
service quality management solution 
for service providers aggregates and 
analyses data from sources including 
probes network equipment end user 
devices and business systems 
providing realtime insights into their 
customers’ experience spirent communications plc 
annual report 2013
14
intellectual property
valuecreating culture
customer relationships
innovation
spirent is an expert in communications 
test and measurement technology 
how spirent creates value 
spirent’s customers are the global network equipment 
manufacturers service providers mobile device manufacturers 
government and enterprises all of whom face numerous challenges 
to satisfy the everincreasing demand for data capacity reliability and 
security by all members of society
spirent’s solutions enable customers to increase their revenues by 
reducing their time to bring new products and services to market 
with higher quality and reliability while reducing associated cost and 
risk our test solutions which span the entire product lifecycle from 
concept to commercial availability deliver efficiency and 
effectiveness to development engineers to make better use of their 
scarce resources much of our revenue comes from follow on 
business with our 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 on our emphasis on providing first class 
professional services and support all of the above with the optimal 
utilisation of our own resources supports the sustainability of the 
margins spirent achieves annual support and maintenance fees are 
an important source 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 
high for the business
an industry expert
our highly skilled people are our major resource it is they who 
provide the expert knowledge needed to develop these complex 
solutions our valuecreating culture is critical in providing the right 
environment to foster their innovation
we maintain and build on our expertise 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 
shareholder returns 
our focus on valuecreation through investment in the business 
whether that be organically through product development by 
acquisition of technology or access to new served markets is 
aimed at delivering capital growth and cash generation to service 
distributions through dividends and share repurchase 
our business model
caroline lee
emea hr director strategic report
governance
financial statements
spirent communications plc 
annual report 2013
15
customer relationships innovation
valuecreating culture intellectual property
customer relationships are key 
spirent’s customers are the leading 
providers of new technologies for 
data communications in the world 
our strategy is focused on providing 
our customers with easytouse 
solutions for testing and measuring 
their complex systems we also 
strive to provide our customers with 
the highest quality of support and 
service possible
in october 2013 spirent joined 
network equipment vendor huawei 
and independent testing lab eantc 
to conduct a large scale high density 
64 terabitsecond core router test  
at huawei’s ip technology gala  
and the broadband world forum 
this test verified the performance 
scalability and resiliency of huawei’s 
netengine 5000e core router with  
a fully loaded 400g line card
we innovate through the endeavours 
of our highly skilled and creative 
people who build on decades of 
experience external inputs are 
important through our technology 
partners as is being located in the 
world’s leading centres for 
technological development
in september 2013 spirent launched 
avalanche next a powerful easy 
touse solution that tests the 
performance scalability and  
security of today’s application 
aware network infrastructures by 
generating authentic traffic and 
attacks the new interface is simple 
and streamlined but leverages all 
the power of spirent’s avalanche 
and studio performance traffic 
generation engines
we have embedded a culture  
aimed at creating value for 
stakeholders and shareholders 
which encourages rational risk 
taking we attract and retain  
talented people offering career 
development a nondiscriminatory 
workplace and fair and competitive 
remuneration within a 
nonbureaucratic culture
in 2013 spirent’s positioning 
operation received the investors  
in people silver award this was 
achieved through good planning 
strong leadership and people 
management excellent learning and 
development support and good 
evaluation processes all of which 
ensure we get the very best from  
our employees
we have created a large body of 
intellectual property patented and 
proprietary raising the barriers of entry 
to competition our new developments 
are evolutionary in nature and build 
on our existing expertise as well as 
expanding our capabilities both 
organically and through acquisition 
successful deployment of volte 
requires voice quality and call 
performance to be as good as and 
preferably better than the services 
they are replacing in august 2013 we 
launched an integrated test solution 
capable of fully quantifying the end 
user quality of experience and testing 
with realistic scenarios prior to 
commercial deployment this solution 
is backed by years of voice quality 
measurement expertise in live networks 
from metrico a market leading company 
acquired by spirent in 2012
our key strengths
at the cornerstone of spirent’s business model are the key strengths which support the strategy and are the enablers for the creation of value 
for shareholders and other stakeholders
test in progress using avalanche next
spirent’s positioning team 
paignton devon
top techx flex inhome test solution 
from service assurance
bottom acoustic lab at service 
experience facility
gene zhang – vp and general 
manager apac spirent communications plc 
annual report 2013
16
embed a culture of responsible and 
sustainable business practices
expand the markets 
we serve
through 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
key achievements in 2013 
we expanded our solutions portfolio and served markets with an 
integrated applications and security test platform as well as innovative 
test solutions for softwaredefined networking “sdn”openflow wifi 
offload and mobile device rd we applied our expertise to the needs of 
the enterprise market with a new powerful easytouse network test 
platform we also integrated the measurement tools for live networks 
acquired with metrico with test solutions from our wireless business to 
address the labbased quality of experience testing requirements of our 
mobile device customers 
plan 2014 
we plan to further extend our cloud and data center capabilities in sdn and 
network functions virtualization “nfv” differentiate in endtoend testing 
expand into new verticals including machinetomachine “m2m” critical 
infrastructure enterprise and automotive add value to our customers with 
automation and infrastructure test optimization “ito” and offer more 
analytics that provide actionable answers from our customers’ “big data”
acquire new capabilities 
and technologies
through expansion of our portfolio through partnerships licensing 
technologies andor the purchase of businesses
key achievements in 2013 
although there were no acquisitions in 2013 good progress was made 
in the integration of technology and expertise acquired in 2012 with mu 
and metrico in september 2013 avalanche next was launched which 
combines the powerful performance testing of spirent avalanche with 
spirent studio’s threats and application emulation using capabilities 
acquired with mu in august an integrated test solution capable of 
quantifying the mobile end user quality of experience and testing with 
realistic scenarios prior to commercial deployment was released taking 
advantage of the expertise in user experience testing in live networks 
acquired with metrico 
plan 2014 
further expansion of our partnership programme will take place in 2014 
and targeted technology acquisitions are planned in areas of strategic 
importance in 2014 to date two acquisitions have been announced 
our vision provides a simple definition of spirent’s ultimate goal  
and our strategy describes how we will achieve this vision
vision
to be the leading experts in test and 
measurement technology in the data 
communication market worldwide
spirent operates in a rapidly changing business environment and 
therefore we regularly review our strategy to ensure it has a clear 
focus and direction based on the expected future market trends 
opportunities and the challenges we face in september 2013 eric 
hutchinson was appointed as ceo which led spirent to refresh the 
strategy and the key actions for its achievement
strategy 
to 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 easeofuse and simplicity of our 
solutions for testing and measuring 
their complex systems
key actions
we have identified a number of key actions that we believe are critical 
in order for spirent to achieve the strategy and ultimately the vision 
recognising at the same time that spirent must utilise its resources as 
efficiently as possible 
progress made during 2013 and what we are aiming to achieve in 
2014 are summarised in this section
our strategy
pages 26 to 29 for financial review for more details on these acquisitions strategic report
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spirent communications plc 
annual report 2013
17
it is important that in the execution of our strategy we act responsibly and consider our impact on all of our stakeholders 
in this way spirent will remain an efficient well managed and well respected organisation – a business that our employees 
customers and communities delight in engaging with
invest in our people
spirent is its employees finding keeping and engaging highly qualified 
and skilled employees is central to our ability to deliver on our strategy 
and to the success of our business
key achievements in 2013 
we established an employee value proposition in order to clearly 
communicate our brand to current and prospective employees and 
thereby retain and attract the best people leadership bench strength was 
developed through various programmes including 360 degree feedback 
succession management organisational and individual accountability 
and financial acumen training employees in all regions around the globe 
participated in courses designed to enhance our ability to service the 
customer and to create innovative leading products 
plan 2014 
expansion of our training and development programmes is included in our 
operating budget for 2014 in order to align all levels of the organisation 
with our vision and strategy as we respond to the rapidly changing 
business environment emphasis will be placed upon communicating the 
company’s key objectives to every individual and driving the culture and 
technical expertise needed to attain them
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 progressive dividends to shareholders we operate in 
markets that deliver high operating returns and operating performance 
and cash generation are closely aligned
key achievements in 2013 
free cash flow for 2013 was 439 million representing 13 times 
reported earnings and the closing cash balance was 2162 million 
and there was no debt share buybacks and dividends to shareholders 
amounted to 769 million the strong balance sheet ensured that 
spirent was still able to meet its product development investment 
plans despite the lower levels of trading in 2013
plan 2014 
in 2014 spirent plans to make an additional investment of around 
33 million to support the future organic growth of the business 
this additional expenditure will be funded from cash generated from 
operating activities
deepen our customer 
relationships
through emphasis on quality of service delivery and support 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 new relationships will be 
established with the expansion of our sales and marketing reach  
into new vertical segments and geographic regions
key achievements in 2013 
a customer engagement programme focused on customer satisfaction 
and improved alignment with our key service provider and equipment 
manufacturer customers and has resulted in market share gains in 
some of our most important accounts customer satisfaction was also 
enhanced through an integrated approach of onsite resources and 
collaborative testing that drove improved quality of our solutions 
plan 2014 
we will align our services teams more closely with the critical technology 
developments of our customers we will expand our resources to put 
our experts closer to our customers and enhance our response to their 
growing challenges with the complexity of systems and networks 
through software automation and expert test methodologies
employees pages 36 to 37 and csr pages 38 to 43 for further information
establish and maintain 
technology leadership
through investment in product development engineering expertise 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 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
key achievements in 2013 
in 2013 we increased our investment in product development engineering 
by 144 million over the prior year in 2013 spirent released multiple 
important new products and additions to functionality in key areas such 
as sdnnfv applications and security ethernet service assurance and 
satellite positioning
plan 2014 
we plan to expand our capabilities by increasing investment in product 
development by an additional 15 million by growing our recognition  
as experts in test and measurement though enhancing our global 
presence and driving more industry standards through the acquisition  
of intellectual property and by the acquisition of new software and 
solution capabilities 18
spirent communications plc 
annual report 2013
book to bill ratio
09
10
11
12
13
105
103
97
105
102
adjusted operating profit
1
  million
09
10
11
12
13
1044
1161
1183
501
798
revenue  million
09
10
11
12
13
4228
4705
4724
4135
3694
return on sales
1
 
09
10
11
12
13
247
247
250
121
216
key performance indicators
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 2013 compared to the prior year trends over a 
number of years must also be considered kpis relate to continuing 
operations only
to read about the strategic 
points associated with 
these kpis go to pages 16 
and 17
description
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
commentary
the ratio was 105 for 2013 2012 97 
which reflects the improving levels 
of demand experienced by the group 
during the second half of 2013 as 
customers began to increase their 
investment in new technologies 
and spirent launched some key new 
products
description
adjusted operating profit is the 
measure used to evaluate the overall 
performance of the group as well as 
each of our operating segments
the goal is to achieve yearonyear 
growth
commentary
adjusted operating profit fell to 501 
million in 2013 due to the loss of high 
gross margin on reduced revenue 
and increased investment in product 
development and sales and marketing 
for future growth
description
this is a measure of our overall 
profitability spirent operates in 
markets which have high operating 
returns and we strive to achieve best
inclass operating returns compared 
with our peers the ability to sustain 
these returns is dependent on 
maintaining a strong market position 
and good cost management but to 
also be mindful of the need to invest for 
future growth
commentary
return on sales was lower at 121 
per cent as a result of the 12 per cent 
reduction in revenue in 2013 and the 
planned increase in investment in 
product development and sales and 
marketing of 193 million
description
growth in revenue measures spirent’s 
ability to expand its markets and 
grow its customer base the goal is 
to achieve yearonyear growth in 
revenue
commentary
revenue for the group reduced by 12 
per cent in 2013 trading was mixed 
due to changing market dynamics 
exacerbated by historical under 
investment in some parts of the 
business there was strategic progress 
and growth in certain market segments 
such as the mobility testing market  
and positioning
pages 30 to 35 for operational review 19
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
engineering and product milestones achieved 
10
11
12
13
100
94
94
87
adjusted basic earnings per share
12
 cents
09
10
11
12
13
1092
1281
1302
571
1039
free cash flow
3
  million
09
10
11
12
13
755
693
840
439
764
voluntary employee turnover 
10
11
12
13
59
68
77
83
product development as a percentage of revenue 
09
10
11
12
13
179
177
182
243
192
description
long term growth in eps is a 
fundamental driver to increasing 
shareholder value consequently 
spirent’s aim is to achieve growth in 
adjusted eps yearonyear 
a component of the executive directors’ 
incentives is dependent on achieving 
an eps target
commentary
adjusted basic eps was 571 cents 
down from 1302 cents for 2012 and 
reduced as a result of all the factors 
previously discussed 
description
to maintain its competitive position 
spirent must continue to invest in 
order to support future organic growth 
initiatives in line with the strategic 
objectives 
commentary
we grew our investment in product 
development in 2013 by 144 million 
to 1005 million however under 
investment in previous years has 
been noted as a contributing factor to 
the 2013 performance
description
the board sets quarterly engineering 
milestones and dates by which these 
should be achieved these are selected 
to represent the next critical stages in 
the achievement of spirent’s long term 
strategic objectives these milestones 
are included as targets in its executive 
directors’ incentive plans 
this measure has been tracked  
since 2010
commentary
of the 30 milestones set in 2013 26 
were achieved on time the remaining 
four were achieved but slightly later 
than planned mainly due to technical 
issues many of these engineering 
targets are linked to spirent’s 
formalised gate process whereby 
a development project is split into 
individual stages each of which  
must be passed before moving  
onto the next
description
cash generation is a measure of the 
quality of spirent’s earnings the aim 
is to achieve a high conversion of 
earnings into cash each year having 
strong cash generation allows spirent 
to maintain its financial strength and 
flexibility 
commentary
cash generation reflects the lower 
operating result but cash conversion 
was good with free cash flow of  
439 million for 2013 which represents 
13 times reported earnings at  
31 december 2013 cash balances  
were 2162 million 31 december 2012 
2486 million and there was no debt 
in 2013 spirent used 222 million of 
cash for dividends and 547 million  
for share buybacks 
description
spirent’s success is dependent on 
its people it is therefore important 
that we attract and retain talented 
employees by appropriately managing 
and rewarding them we monitor our 
success in terms of voluntary employee 
turnover which is a good indicator of 
staff retention this measure has been 
tracked since 2010
commentary
although up on the prior year staff 
turnover remained low at 83 per cent 
in 2013 succession planning and talent 
management processes were further 
enhanced to ensure that spirent has 
the right people in order to deliver 
on the strategy at 31 december 
2013 there were 1525 employees 
2012 1486
notes
1 before exceptional items acquisition 
related costs acquired intangible asset 
amortisation and sharebased 
payment
2 before tax effect of items in note 1 and 
prior year tax
3 operating cash flow after tax and net 
capital expenditure
pages 16 and 17 fo our strategy
pages 58 to 76 for report on directors’ remuneration
pages 30 to 35 for operational  
review for discussion on product 
launches and development in 2013
pages 58 to 76 for report on directors’ remuneration spirent communications plc 
annual report 2013
20
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 processes 
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 
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 the 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 financial kpis the board’s view of 
the change in likelihood of occurrence andor in the impact on the 
group combined of each risk compared to the prior year has also 
been provided
our principal risks and uncertainties
identifying evaluating and managing risk 
audit committee 
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 individual businesses 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
group risk review committee
the risk registers from the businesses are 
reviewed regularly by the group risk review 
committee the purpose of the committee 
is to identify which risks are critical to the 
spirent group and also to highlight corporate 
wide risks that may not have been otherwise 
considered the committee which comprises 
the chief executive officer the chief financial 
officer the executive vice president “evp” 
networks applications  infrastructure the 
evp wireless  service experience and the 
vice president group finance challenge and 
debate the individual business risks and meet 
with each business periodically to discuss the 
risk assessment process the committee will 
assess each risk and rank each according to the 
estimated impact on the group and the likelihood 
of occurrence they are also responsible for 
developing and ensuring that appropriate risk 
mitigation processes are in place for each risk 
this committee is responsible for preparing the 
corporate risk register to present to the audit 
committee and to the board
individual business risk committees
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 risk review 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
pages 54 to 57 for audit committee
the board
the board has overall responsibility for internal control and risk management and for reviewing its effectiveness
pages 54 to 57 for audit committee for further information on 
spirent’s internal control systems pages 48 to 52 for directors’ 
statement on corporate governance strategic report
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financial statements
spirent communications plc 
annual report 2013
21
operational
 
risk 
macroeconomic and industry sector
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 we 
are particularly exposed to conditions in the 
telecommunications sector into which we sell many of 
our products and services and which has experienced 
significant downturns in the past 
 
potential impact 
deterioration in economic or sector 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
during 2013 disruption and structural changes were 
experienced in our markets which have impacted  
spirent’s performance
mitigation actions 
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 broad product portfolio of 
innovative test solutions and a large number of 
geographically diverse customers which may mitigate 
the impact
impact
likelihood
highlikely
 
change
 
risk 
competition
all spirent’s businesses operate in highly competitive 
markets which experience rapid technological 
changes 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
 
potential impact 
actions by competitors and increased competition can 
bring about pressure on spirent’s gross margin these 
factors will also affect spirent’s competitive position 
thereby reducing revenue and consequently affecting 
the financial results
mitigation actions 
in 2013 we saw intense competition in some of our 
markets and lost some market share the group’s 
broad solution portfolio market leading capabilities 
and customer focus continue to address this risk
spirent aims to maintain market leading positions 
through significant investment in product development 
which is being stepped up in 2014
competitor activity is closely monitored with a view to 
maintaining clear differentiation based on spirent’s 
products services and global reach
impact
likelihood
medium
possible
 
change
       the board’s view of how the 
likelihood of occurrence and
or impact has changed 
compared to the prior year spirent communications plc 
annual report 2013
22
our principal risks and uncertainties continued
operational
 
risk 
customer dependence
the group sells its solutions and services to a wide 
range of companies and seeks to continually expand 
its customer base in 2013 no one customer accounted 
for 10 per cent or more of group revenue although the 
top ten customers represented 38 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 time 
scale are vital to spirent’s reputation and success
the industry continues to experience consolidation 
which can disrupt the spending patterns of those 
customers affected
 
potential impact 
loss of one or more of spirent’s major customers could 
have a substantial 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 
mitigation actions 
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 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
impact
likelihood
medium
possible
 
change
new  
risk strategic report
governance
financial statements
spirent communications plc 
annual report 2013
23
operational
 
risk 
business continuity risks 
operational risks are present in the group’s 
businesses these risks include the risk of failed 
internal and external processes and systems 
human error and external events such as a natural 
disaster for example a significant portion of our 
communications operations are located in california 
which has in the past experienced natural disasters 
including earthquakes and wildfires
contract manufacturers are used for the manufacture 
of a substantial amount of spirent’s products the 
major contract manufacturer is located in thailand
 
potential impact 
a significant natural disaster could disrupt the 
group’s ability to conduct business and impact 
adversely 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
mitigation actions 
an important component of spirent’s corporate 
governance is its integrated risk management strategy 
and its regular selfassessment of risks encompassing 
all business units
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 a regular 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
impact
likelihood
high
possible
 
change
 
risk 
intellectual property
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 in enabling spirent 
to compete successfully
companies in the telecommunications industry often 
aggressively protect and pursue their intellectual 
property rights and may assert infringement claims 
against spirent 
 
potential impact 
such claims can result in significant defence costs and 
may affect spirent’s ability to market its products
mitigation actions 
spirent has active intellectual property protection 
programmes in place to obtain appropriate intellectual 
property protection in a cost effective manner 
there are procedures in the development of new 
products that include consideration of intellectual 
property rights of third parties the group also 
consults internal and external legal counsel 
experienced in intellectual property matters
impact
likelihood
low
possible
 
change
  the board’s view of how the 
likelihood of occurrence andor 
impact has changed compared 
to the prior year spirent communications plc 
annual report 2013
24
our principal risks and uncertainties continued
strategic
 
risk 
expand the markets we serve
an important component of the group’s strategy is 
to leverage spirent’s competencies and capabilities 
into new and expanding markets and new vertical 
market segments
 
potential impact 
failure to identify and execute on these new market 
opportunities will limit spirent’s capability to achieve 
its strategy grow its revenue and maintain its 
market share 
mitigation actions 
organisational changes have been made in 2013 to 
better align the businesses internally so that spirent can 
more effectively identify those areas which offer the 
most significant growth opportunities in addition in 
order to further facilitate knowledge of new market 
areas outside our served market individual managers 
are designated responsibility for investigation review 
and to develop action plans arising from such initiatives
impact
likelihood
medium
possible
 
change
new  
risk
 
risk 
establish and maintain technology leadership 
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
 
potential impact 
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 
mitigation actions 
under investment in previous years is one of the 
factors that caused revenue to fall in 2013 this is 
being addressed by increasing our investment in 
product development in order to underpin our organic 
growth initiates and by reorganising the structure of 
the business to sharpen our focus on anticipating 
our customers’ requirements for the future
we also intend to grow our recognition as experts 
in test and measurement through our increased 
engagement with industry standards bodies and 
our close alignment with our customers
impact
likelihood
highlikely
 
change strategic report
governance
financial statements
spirent communications plc 
annual report 2013
25
strategic
 
risk 
invest in 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 
 
potential impact 
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
mitigation actions 
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 
pages 36 to 37 for further information on our employees
impact
likelihood
medium
possible
  
change
 
risk 
acquire new capabilities and technologies 
a key element of spirent’s strategy is to acquire 
new capabilities and technologies and this may be 
through acquisition
 
potential impact 
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
mitigation actions 
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 regularly reviews postacquisition 
performance
impact
likelihood
medium
possible
 
change
  the board’s view of how the 
likelihood of occurrence andor 
impact has changed compared 
to the prior year
  the board’s view of how the 
likelihood of occurrence andor 
impact has changed compared 
to the prior year spirent communications plc 
annual report 2013
26
financial review
the following table shows the key financial performance indicators monitored by the board in order to measure the performance of the group
2013 2012
1
change 
continuing operations
book to bill ratio
2
105 97
revenue  million 4135 4724 12
gross profit margin  694 713
operating profit
3
  million 501 1183 58
return on sales
3
  121 250
adjusted basic earnings per share
4
 cents 571 1302 56
free cash flow
5
  million 439 840 48
notes
1 restated for the implementation of ias 19 “employee benefits”
2 ratio of orders booked to revenue billed
3 before exceptional items acquisition related costs acquired intangible asset amortisation and sharebased payment
4 adjusted basic earnings per share is based on adjusted earnings as set out in note 13 of notes to the consolidated financial statements
5 operating cash flow after tax net interest and net capital expenditure
spirent’s policy on capital structure is 
to maintain a strong balance sheet to 
support operational flexibility and fund 
investment for long term growth
rachel whiting
chief financial officer 27
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
a review of the group’s organisational structure has resulted in a 
change to the segmental reporting in 2013 as explained in note 2 
of notes to the consolidated financial statements spirent is now 
reporting three operating segments networks  applications 
wireless  service experience previously referred to as wireless 
 positioning in our 2013 halfyear report and service assurance 
comparatives have been restated accordingly
revenue
group revenue was down 12 per cent compared to the prior year at 
4135 million 2012 4724 million although trading was mixed as 
a consequence of structural changes in spirent’s markets there were 
some bright spots namely an improvement in the mobility testing 
market and also for our gnss products driven by a recovery in 
government spending new high end testing needs and the beidou 
chinese satellite system spirent’s professional services and support 
revenues also grew yearonyear by 15 per cent and now represents 
31 per cent of group revenue market conditions are described in the 
operational review which follows after a poor first half of 2013 in 
which revenue was down 19 per cent trading improved in the second 
halfyear as customers began to increase their investment in new 
technologies and spirent launched some key new products 
geographically the united states is our largest market and accounts 
for 52 per cent of group revenue revenue decreased 10 per cent 
periodonperiod in this region asia pacific is a major market for 
spirent and one in which we have seen significant growth in previous 
years revenue in this region declined 12 per cent being particularly 
weak in both china and india asia pacific represents 32 per cent 
of group revenue europe represents 12 per cent of group revenue 
and was 24 per cent lower compared with 2012 as difficult macro
economic conditions persisted in this region although there was 
some improvement towards the end of the year the rest of the 
world represents the remaining 4 per cent 
 million 2013  2012 
united states 2158 52 2392 51
asia pacific rest of 
world 1469 36 1660 35
europe 508 12 672 14
4135 100 4724 100
order intake was 5 per cent lower overall for the continuing 
group compared with 2012 order intake from several of our major 
customers increased whilst others did not repeat the high levels 
of spend seen in 2012 or deferred projects until 2014 the resulting 
book to bill ratio was 105 compared with 97 for 2012 with order book 
growing by 214 million over the position at 31 december 2012 
operating profit
reported operating profit for continuing operations was 391 million 
compared with 1081 million in 2012 operating profit before 
exceptional items acquisition related costs acquired intangible 
asset amortisation and sharebased payment “adjusted operating 
profit” which is the measure of profit used by the group to evaluate 
performance decreased by 58 per cent to 501 million compared 
with 1183 million in 2012 as a result of the loss of high gross 
margin on lower turnover as well as a significant increase in product 
development investment of 144 million to drive future growth 
a reconciliation is set out below
 million 2013 2012
adjusted operating profit 501 1183
exceptional items
 inventory provision – service assurance – 14
 reorganisation costs – service assurance – 15
 review of group’s organisational structure 34 –
 abortive acquisition costs 04 –
acquisition related costs – 12
acquired intangible asset amortisation 84 45
sharebased payment 12 16
reported operating profit 391 1081
return on sales based on adjusted operating profit was 121 per cent 
2012 250 per cent 
cost of sales and operating expenses
gross margin reduced to 694 per cent 2012 713 per cent due to 
lower volumes product mix and also the effect of a full year’s sales 
contributed by the former metrico wireless business which attract 
slightly lower margins 
spirent’s strategic priority is to generate growth both organically 
as well as through acquisitions additional investment is critical for 
spirent to accelerate the development of its existing capabilities as 
well as to expand the markets we serve and to ensure that spirent 
brings products to market in a timely manner in order to meet the 
needs of its customers investment in product development was 
increased in 2013 by 17 per cent to 1005 million representing 
24 per cent of revenue from 861 million and 18 per cent of 
revenue in 2012 
other operating expenses were higher at 1472 million in 2013 
compared with 1425 million in 2012 36 per cent of sales 2012 
30 per cent these costs include exceptional items of 38 million in 
2013 of which 34 million relates to a number of management and 
structural changes which were made in the period the balance of 
04 million is in respect of abortive acquisition costs in 2012 
exceptional reorganisation expenses of 15 million were charged 
within service assurance
other operating expenses also include acquired intangible asset 
amortisation of 84 million 2012 45 million which reflects a full 
year charge for the 2012 acquisitions of mu dynamics and metrico 
wireless and in 2012 a charge of 12 million for the expenses for 
these acquisitions sharebased payment is a credit of 12 million 
2012 charge 16 million as the expense has been reversed for 
certain awards which are now not expected to vest  28
spirent communications plc 
annual report 2013
excluding exceptional items acquisition related costs acquired 
intangible asset amortisation and sharebased payment other 
operating costs were 1362 million compared with 1337 million 
in 2012 an increase of 2 per cent
in 2014 spirent plans to make an additional investment of around 
330 million in future growth this increase comprises of
• product development – up 15 million
• sales and marketing – up 12 million
• support services – up 6 million
of the total increase 16 million will support our core business and 
17 million is to fund new initiatives
the areas where this additional spend will be focused include virtual 
test systems softwaredefined networking solutions expansion of 
the enterprise channel enhancements to spirent’s cyber security test 
offering as well as advancements in automotive software and related 
connectivity testing
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 59 million 2012 65 
million before exceptional items for the year corporate costs for 
2012 have been restated for the effect of the revised accounting 
standard ias 19 “employee benefits” which was implemented in 
2013 the effect of this standard for spirent for 2013 has been an 
increase in corporate costs of 07 million and an increase in net 
interest expense of 12 million 
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 2013 was 09 million compared with 08 million 
in 2012 surplus funds are held principally in the united kingdom 
and united states and earn market rates of interest which 
remain negligible 
finance costs comprise 09 million 2012 05 million of net 
defined benefit pension plan interest cost 
it is estimated that there will be no net interest expense for the 
pension plans for 2014
tax
for the group taxable profits principally arise in the united states the 
tax charge for the continuing group in 2013 was 64 million 2012 
290 million representing a current year effective tax rate of 258 per 
cent 2012 284 per cent of pretax profit excluding a prior year 
tax credit of 37 million 2012 18 million this rate is lower than 
the prior year principally due to the benefit of 2012 research and 
experimental tax credits in the united states which fall into 2013 and 
the spread across different territories at 31 december 2013 deferred 
tax assets amounting to 183 million 31 december 2012 284 
million have been recognised on the balance sheet at 31 december 
2013 there are deferred tax assets amounting to a tax value of 17 7 
million 31 december 2012 163 million which remain unrecognised
for 2014 it is expected that the effective tax rate will be in the region 
of 28 per cent
earnings per share
adjusted basic earnings per share was 571 cents compared with 
1302 cents for 2012 there were 6406 million 2012 6557 million 
weighted average ordinary shares in issue basic earnings per share 
was 510 cents for 2013 compared with 1211 cents for 2012 
a reconciliation of adjusted profit is provided below for continuing 
operations
 million 2013 2012
profit for the period attributable to owners of 
the parent company 327 794
exceptional items 38 29
acquisition related costs – 12
acquired intangible asset amortisation 84 45
sharebased payment 12 16
tax effect on the above items 34 24
prior year tax credit 37 18
adjusted profit for the period attributable to 
owners of the parent company 366 854
adjusted basic earnings per share 571 1302
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
financing and cash flow
cash and cash equivalents were 2162 million at 31 december 2013 
compared with 2486 million at 31 december 2012 spirent 
continues to be debt free cash and cash equivalents are held as 
cash on demand or in short term bank deposits and 84 per cent of 
the balance was denominated in us dollars
spirent remains cash generative despite the lower revenue in 2013 
and this gives spirent the financial flexibility to invest in organic 
growth pursue strategic acquisitions and pay sustainable 
progressive dividends to shareholders 
in 2013 operating activities generated 735 million 2012 1203 
million continuing operating activities of cash during the year free 
financial review continued 29
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
cash flow conversion represents 13 times 2012 11 times reported 
earnings working capital reduced by 121 million 2012 increased 
by 62 million during the year
free cash flow for continuing operations is set out below
 million 2013 2012
cash flow from operations 735 1203
tax paid 61 231
cash inflow from operating activities 674 972
net interest received 08 06
net capital expenditure 243 138
free cash flow 439 840
net capital expenditure has increased in 2013 to 243 million from 
138 million in 2012 in line with investment plans in 2012 the net 
cash outflow from acquisitions and disposal of businesses was 321 
million in 2013 there were no acquisitions or disposals
the cash generated has been utilised to pay dividends to shareholders 
and for the return of capital through the share buyback programme 
in 2013 a final dividend for 2012 and an interim dividend for 2013 
totalling 222 million 2012 203 million were paid share 
repurchases during the year have resulted in a cash outflow of 
547 million 2012 316 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 less than ten 
active members 
the accounting valuation of these plans at the end of 2013 was a net 
deficit of 25 million compared with a net deficit of 248 million at 
31 december 2012 and was based on the latest triennial actuarial 
valuation at 1 april 2012 the improvement in the deficit is a result 
of changes in the underlying assumptions and a rise in the value of 
the assets
the triennial actuarial valuation of the plans at 1 april 2012 was 
completed in the period to fund the deficit the company has agreed 
to pay additional contributions of £28 million 46 million per 
annum which will be paid on a monthly basis together with a oneoff 
contribution of £10 million 16 million which was paid in july 2013 
a further onetime contribution of £25 million 42 million is also 
payable no later than 1 july 2016 depending on the funding of the 
plan at that time
the group has also reported a liability of 08 million 31 december 
2012 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
during 2013 the balance of the proceeds from the divestment of the 
systems business approximately 33 million were applied to the 
repurchase of spirent shares in the market for cancellation and the 
programme extended beyond this in total during 2013 the company 
repurchased 292 million shares at a cost of 555 million 2012 134 
million at a cost of 308 million of which 08 million was settled in 
2014 shares were repurchased at an average share price of 119 
pence per share all shares repurchased were cancelled since the 
period end a further 97 million shares have been repurchased at a 
cost of 156 million no further buybacks are currently planned
dividend
the board are recommending the payment of a final dividend for 2013 
of 201 cents 120 pence per ordinary share which with the interim 
dividend of 153 cents 101 pence per ordinary share paid in 
september 2013 brings the full year dividend to 354 cents 221 
pence per ordinary share the dividend is covered 16 times by 
adjusted earnings this is an increase of 10 per cent over the full year 
dividend for 2012 of 322 cents per ordinary share
subject to approval by the shareholders at the annual general 
meeting the final dividend will be paid on 25 april 2014 to ordinary 
shareholders on the register at 7 march 2014 payment to adr 
holders will be made on 2 may 2014
events after the balance sheet date
on 19 february 2014 spirent completed the acquisition of the 
business of dax technologies corp “dax” privately held by 
dragos alexe and others for a cash consideration of 370 million 
based in matawan new jersey 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
the addition of dax positions spirent well to help service providers 
with the unprecedented challenges they face when developing and 
managing new services in mobile and wireline network environments 
of rapidly increasing complexity this acquisition will enable us to 
strengthen our service assurance portfolio expanding spirent’s 
addressable market in the live network 
on 20 february 2014 spirent completed the acquisition of 58 per cent 
of the share capital of testing technologies ist gmbh “testing 
tech” which was in private ownership for a cash consideration of 
euro 20 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 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 performance of testing tech and set at a minimum amount of 
euro 14 million testing tech will be reported within our wireless  
service experience division
as both acquisitions have only very recently completed neither the 
fair values of the assets and liabilities acquired nor the 
consideration have yet been determined 30
spirent communications plc 
annual report 2013
operational review
networks  applications
networks  applications develops innovative 
solutions for functional and performance testing of 
nextgeneration networks and applications that 
simulate realworld conditions in the lab before a 
commercial launch
market conditions
– intense competition in data center
– 4glte driving mobile data and signalling growth
– virtualization on the rise everywhere
– intense interest in cyber security sdn and nfv
 
in 2013 4glte network rollouts drove continued rapid growth in 
mobile data as well as in signalling traffic due to the proliferation 
of “chatty” applications we saw access networks evolving to 
accommodate the growth employing small cells and wifi offload 
which led to new mobility testing needs mobile also played a role in 
driving service provider infrastructure spending growth with intense 
competition amongst multiple players for nextgeneration high 
density core router and 100g ethernet optical transport network 
“otn” business in the cloud and data center market we saw the 
rise of softwaredefined networking “sdn” and of cloud service 
providers with innovative business models while virtualization and 
intense competition led to price erosion in the traditional switch 
market in the applications and security space cyber security and 
bring your own device to work “byod” continued to grab headlines 
leading to intense interest in the enterprise government and large 
service provider space and to advances in nextgeneration firewalls 
virtualization continues to be a major trend across all our markets 
with the move to network virtualization and strong service provider 
interest in network functions virtualization “nfv”
performance
– growth in mobility revenue offset by decline in 
data center 
– built leadership in sdn and nfv
– regional challenges in apac and emea
– historical under investment in parts of the business
revenue
on the back of the mobile trends identified above we saw growth 
in our mobility solutions in 2013 service provider infrastructure 
business was also up modestly while revenue in our application and 
security market was flat however the growth was more than offset 
by a sharp fall in data center revenue with customer investments 
shifting to virtual and intense competition from a regional perspective 
revenue was flat in north america slightly down in apac and 
considerably down in emea although we saw a modest rebound in 
apac and emea during the fourth quarter under investment in 
new test systems and lack of expansion into new markets in prior 
years also had an effect on the results of this business in 2013 
our infrastructure test optimization “ito” business saw growth 
on the back of spirent professional services and large service 
providers standardising on our itest
®
 solution revenue was down  
at 2134 million from 2595 million in 2012 while we built the  
order book with a book to bill ratio of 105 2012 94
profitability
operating profit before exceptional items was down to 132 million 
from 597 million in 2012 on the reduced revenue and with an increased 
investment in product development of 53 million compared with the  31
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
results
from left to right  ahmed murad – general manager                                             
angus robertson – senior director of segment marketing
2134m
2012 2595m  
132m
2012 597m  
62 
2012 230
revenue
operating profit 
before exceptional 
items
return on sales 
before exceptional 
items
previous year exceptional items of 16 million were charged in 
relation to reorganisation expenses in the fourth quarter
product development
in january 2013 spirent launched axon a new solution for the enterprise 
market that enables new applications and services to be deployed more 
quickly and with greater confidence in may we launched a family of 
nextgeneration high speed ethernet test solutions with new high 
density 1040100g test modules to address increasing complexity and 
exploding data traffic in service provider and data center networks with 
market leading realism and scale in september we launched spirent 
avalanche next a powerful easytouse solution that tests the 
performance scalability and security of today’s applicationaware 
network infrastructures by generating realistic traffic and attacks we 
also built a leadership position in sdnopenflow which included 
hosting the open networking foundation plugfest at our sunnyvale 
california facility in november
strategy
– invest in mobility especially volte and wifi
– increase investment in application and cyber 
security testing
– gain leadership in virtual sdn and nfv
for 2014 we plan to shift our investment focus to better align with 
that of our customers for mobility we will address new opportunities 
presented by volte and wifi we also plan to increase our investment 
in applications and security building out our avalanche next solution 
focusing on cyber security and critical infrastructure developing the 
government market and growing cloud based testingasaservice 
offerings our service provider infrastructure focus will be on next
generation core routers and sdnnfv rollouts with leadership in 
coverage and scale we also plan to play a key role in technology and 
standards definition for 400g ethernet in cloud and data center we will 
target the fast growing cloud service provider space and gain 
leadership in virtual and sdn we have established a focused ito  
solutions business to address key service provider ecosystems and 
align with market trends including lab consolidation and agile 
development our enterprise business will build out its channels to 
market and develop customer demand
page 14 for our  
business model
strategy in action
innovation runs 
throughout our 
organisation spirent communications plc 
annual report 2013
32
wireless  service experience
wireless  service experience develops solutions 
for functional and performance testing of next
generation mobile wireless and satellite positioning 
devices in the lab before commercial launch and 
for measurement of the mobile experience on 
live networks
market conditions
– many smartphone vendors experiencing 
business challenges
– new 4g voice services poised for widespread 
deployment
– beidou and vulnerability concerns drive 
positioning markets 
in our wireless  service experience markets the focus of 
smartphone growth shifted to more price sensitive regions which 
coupled with the increasing dominance of a few manufacturers 
led to profitability challenges for many vendors 2013 saw initial 
deployments of important new 4g services and technologies 
including volte and lteadvanced with large scale rollouts expected 
in 2014 china awarded its 4g licences in december mandating the 
use of tdlte technology wireless machinetomachine “m2m” 
connectivity continued to expand into everything from domestic 
appliances to medical and vehicle applications in our positioning 
markets the application of multignss technologies grew with the 
chinese beidou system joining established gps and glonass 
another market driver was the growing concern over the vulnerability 
of gnss receivers to jamming and other attacks 
performance
– wireless revenue declines on weak carrier driven 
business
– service experience flat in an integration year
– positioning benefits from government spending 
revenue
wireless experienced a sharp decline in its mobile device test 
markets as a result of device vendors’ profitability challenges a lull 
in new technology and service launches fierce competition and 
continued investment shift from 3g to 4glte technologies service 
experience had a flat year as we focused on integrating the metrico 
business acquired in september 2012 positioning experienced 
growth in its markets as a result of us government business recovery 
new high end testing needs from applications and the beidou 
chinese satellite navigation system including a full year contribution 
from the metrico business of 258 million 2012 64 million 
overall revenue was down by 68 million to 1677 million from 
1745 million in 2012 book to bill ratio grew to 101 from 97 at the 
end of 2012
profitability
operating profit was 338 million compared with 567 million in 
2012 due to loss of high gross margin on the reduced revenue 
together with an increase in investment in product development of 
83 million the resulting operating margin reduced to 202 per cent 
compared with 325 per cent in 2012
product development
our wireless  service experience businesses invested to address 
the industry’s needs as it prepared for large scale deployment of  
4glteenabled services such as volte we released labbased test 
operational review continued 33
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
results
revenue
operating profit
return on sales
solutions for volte and other ims services as well as tools and 
services for both the lab and live networks that measure audio 
quality including hd voice and volte video performance and 
battery life as experienced by mobile subscribers other new 
solutions addressed e911 emergency requirements for volte in the 
us and the tdlte technology testing needs of markets such as 
china and india our positioning business underscored its industry 
leadership with the first commercial release of test solution support 
for the chinese beidou satellite navigation system
strategy
– invest in machinetomachine market opportunities
– expand our offerings that ensure performance of 
new devices and services
– focus on new positioning technologies and high 
end applications 
our wireless business will focus on enabling our customers to 
improve both the realisation and management of their mobility 
services through application of technology expertise and analytics 
we also will apply the wireless and application expertise gained in 
the smartphone cellular market to the m2m connectivity market 
our service experience business will add more analytics to its 
portfolio of services and solutions that help network operators ensure 
the performance of new devices and services as they come to market 
as well as focusing on business development in asia pacific and 
europe our positioning business will focus on the expanding high 
end leading edge technologies that lead to new applications as 
well as on the challenges surrounding the vulnerability of gnss in 
critical infrastructure
1677 m
2012 1745m  
338m
2012 567m  
202 
2012 325
strategy in action
innovation runs 
throughout our 
organisation
from left to right
pat petillo – vice president sales wireless
rob vanbrunt – general manager wireless
guy merritt – vice president of the wireless products group 
page 16 for our 
strategy 34
spirent communications plc 
annual report 2013
service assurance
service assurance provides solutions which allow 
service providers to diagnose troubleshoot and 
determine how to resolve issues with networks and 
systems within live networks and to monitor live 
network performance
market conditions
–  continued caution by service providers around 
legacy spending
–  inhome complexity drives more field testing needs 
–  downward pressure on support contract renewals
service providers remain cautious with their spending particularly 
around legacy technologies and are also applying greater pricing 
pressure on support contract renewals the growth in mobile data 
subscribers and 4glte technology is driving ethernet speeds ever 
higher and requiring better data analytics increasing inhome 
complexity for triple play services resulted in a need for better tools 
to manage this one of the most challenging parts of the distribution 
network the rapid evolution of cloud services data center 
virtualization sdn and nfv is greatly increasing the importance of 
innetwork testing
performance
–  revenue down due to legacy and service 
contract pressure
–  strong growth in ethernet space
–  new field test solution attracts large order 
120 million revenue delayed until 2014
revenue
overall revenue was down primarily due to continued carrier caution 
in their legacy tdm triple play innetwork probes and support 
contract spend ethernet was a strong growth area for service 
assurance in 2013 particularly in the intelligent software areas 
although field test revenue fell 2013 saw a large order from a major 
north american service provider for a new version of our techx flex 
product for which revenue will not be recognised until 2014 overall 
revenue fell 60 million to 324 million in 2013 compared with 
384 million in 2012 the book to bill was 127 due to large revenue 
deferrals around field test and ethernet solutions hence the outlook 
for service assurance revenue heading into 2014 is positive 
operational review continued
strategy in action
innovation runs 
throughout our 
organisation
page 12 for what 
we test 35
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
results
revenue
operating profit 
before exceptional 
items
return on sales 
before exceptional 
items
profitability
operating profit increased in service assurance to 90 million from 
84 million in the prior year despite the lower revenue in 2013 
the increase in profit is mainly due to abnormally high gross margin 
as a result of a higher proportion of service revenue as well as lower 
overhead costs gross margin for 2014 is likely to be in the region of 
75 per cent our investment in product development has increased in 
this division by 08 million compared to 2012
product development
development focus remained on ethernet service assurance as well 
as expansion of our field test solutions and an entry into the service 
provider data center market the capabilities of spirent testcenter 
live our ethernet service assurance solution are expanding to 
include performance monitoring for lte and volte as well as a 
new  100g ethernet probe and software to enable testing further 
up the protocol stack we developed a greatly enhanced version of 
our techx flex field test unit which will ship to customers early in 
2014 we also invested in development of data center live our 
comprehensive virtual network monitoring and troubleshooting 
solution aimed at the latest highly complex and versatile data center 
networks building on spirent’s wide ranging expertise to test every 
aspect of a data center cloud which we will also bring to market 
in 2014
strategy
–  invest in solutions for mobile and enterprise services
–  launch new field test tool to address inhome issues
–  enter the service provider data center market 
spirent will invest in our customers’ most pressing operational issues 
in the core of the ethernet network in the field and with emerging 
clouddata center networks spirent testcenter live will continue to 
benefit from service provider investments that remain focused on 
growth areas such as 4glte mobile and higher bandwidth enterprise 
business services we will go to market with our enhanced field test 
tool to greatly improve the efficiency and effectiveness of installation 
and maintenance teams when addressing inhome network issues 
lastly as service providers ramp up their investments in their cloud 
services and associated data centers we will introduce a solution 
that allows them to dissect problems inside and outside the data 
center simultaneously 
324m
2012 384m  
90m
2012 84m 
278
2012 219
from left to right 
jeff schmitz – executive vice president wireless  service experience
brian ketchum – vice president engineering and product development 
service assurance spirent communications plc 
annual report 2013
36
spirent is its employees – it is our highly 
skilled motivated and empowered 
employees that drive the success of 
the business for more than 75 years 
spirent has sustained a globally 
effective organisation and provided  
a great place to work through career 
advancement opportunities  
workforce diversity and transparent 
communication 
our employees
employees in our 
crawley west sussex 
corporate office
our 1500 talented employees working in 29 locations in 15 
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 enrich the lives of millions of people around 
the world 
to attract keep and grow our people we constantly review and 
improve our benefits retention development programmes and 
career growth opportunities our efforts continue to bear positive 
fruit with global voluntary turnover at 8 per cent
rewarding our people
our compensation and benefit schemes are aligned with performance 
and are regularly benchmarked to ensure that spirent rewards 
employees competitively in every 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 
our key values
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 37
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
1
2 board diversity
 2013 2012
1 male   5  5
2 female   1  1 
1 male 83  83
2 female 17  17
employee diversity
 2013 2012
1 male   1194  1172
2 female   331  314 
1 male 78  79
2 female 22  21
1
2
1
1
2
senior manager diversity
 2013 2012
1 male   157  160
2 female   51  48 
1 male 75  77
2 female 25  23
in addition we provide project based incentives to recognise and 
reward employees for extraordinary work that results in significant 
overachievement of critical projects the patent award programme 
rewards employees for being innovative while protecting the 
company’s investment and intellectual property rights in 2013 
spirent awarded 20 patent based incentives to our employees
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 2013 we established an 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 2013 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 2013 spirent offered 
28 internships in the us seven in europe and 20 in asia
 
our challenging work environment inspires innovation with continuous 
learning as an essential part of our human resources philosophy
in 2013 employees in all regions around the globe 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 
at spirent we recognise the importance of twoway communication 
our employees’ opinions matter to us we regularly invite our 
employees for their views on a wide range of issues based on 
the feedback we develop specific action plans to increase the 
engagement of our employees and foster a stronger organisational 
culture in addition informal meetings between many of spirent’s 
executives and small groups of employees continue to be held on a 
regular basis with the aim of sharing perspectives among a broad 
cross section of our team members other tools aimed at facilitating 
twoway communication include regular all employee meetings with 
our chief executive officer and other executives employee focused 
group meetings and the continued expansion of our employee intranet
diversity
spirent is committed to upholding human rights and fully believes 
that diversity fuels business success in a multicultural world our rich 
diversity is reflected in our work environment – including ethnicity 
race gender age sexual orientation faith culture and global 
experiences we believe that this variety of backgrounds 
experiences beliefs personalities knowledge skills and ideas not 
only creates an enriching experience for our employees diversity also 
yields the innovation and creativity demanded by our customers
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
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 procedures ensure that disabled employees are fairly 
treated in respect of training and career development 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 38
spirent communications plc 
annual report 2013
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”
our responsibility framework
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
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 how we support develop and reward our 
employees how we minimise our impact on the environment and 
how we support and engage in the communities in which we operate
corporate social responsibility statement  39
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
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
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 all forms of bribery and 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 reviewed as part of the group’s 
internal control process
health and safety
the chief financial officer is the director appointed by the board to 
have responsibility for the health and safety performance of the 
group no major health and safety issues were reported by the chief 
financial officer to the audit committee and board during the year
the health and safety risk profile of the group remained low during 
2013 the main risks of the group continue to be based around final 
test and assembly of products and working environment issues such 
as ergonomics and repetitive strain injury 
the group continued to have very low accident rates in 2013 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 annually 
at selected business units regular designated health and safety 
awareness training programmes are also carried out
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 its 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 planning review and 
development spirent maintains a successful health and safety 
management programme and appropriate resources are made 
available for this purpose 40
spirent communications plc 
annual report 2013
sustainability and environmental
the group continues to make significant progress in integrating 
sustainability and environmental strategy into its operations 
environmental and sustainability performance has improved in a 
number of areas throughout 2013 with the focus reflecting the issues 
considered material by the group existing initiatives on logistics and 
power consumption in products were extended and several energy 
efficient and lowcarbon technologies have been installed across the 
group’s global estate the group has also continued to implement 
the recommendations of a major review of environmental strategy 
that was commissioned in 2011 
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 eco
efficiency and to adopt responsible environmental practices
the group is also committed to compliance with all applicable 
environmental regulation in all 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
the full policy can be found at httpcorporatespirentcom
as in previous years the group’s main direct environmental impacts 
result from offices laboratories and assembly sites accommodating 
employees it systems and travel business units across the group 
continue to take measures to reduce impacts including installation 
of energy efficient and lowcarbon technologies and improved 
waste management there have also been a number of initiatives 
at different business units to reduce environmental impacts 
particularly those related to energy consumption the group has 
also continued to reduce total floor space used
2013 2012
floor space reduction  104 42
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 is responsible for 655 per cent of our production 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
2012 2011
change in greenhouse gas emissions in co
2
e  11 –9
product design and manufacturing processes take into consideration 
the recycling and disposal of products at the end of their life as far as 
is possible product design also seeks to reduce power consumption 
in use for our 10g products the following reductions in watts per 
port have been achieved
2013 2012
reduction in 10g product power  
consumption  9 33
the group’s business units comply with the waste electrical and 
electronic equipment regulations 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 201165eu even though spirent 
communications’ hardware products are classified as category nine 
monitor and control equipment and are therefore currently out of 
scope with the rohs directive all spirent communications’ hardware 
products will be in compliance with the rohs directive at such time 
they are brought in to scope
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
environment strategy and materiality
the group commissioned external consultants to perform a 
comprehensive review of our sustainability strategy and management 
in 2011 the review included a materiality assessment identifying the 
business critical sustainability issues and this study continues to 
inform the group’s understanding of the impacts that it has on the 
environment and on the communities in which it operates 
the following material issues were identified
• greenhouse gas emissions and climate change
• energy consumption in offices and manufacturing
• environmental management and
• environmental reporting
the key environmental issues of energy consumption and greenhouse 
gas emissions continued to be the main focus of the group’s efforts 
in 2013
significant progress was made in 2013 by the group managing 
sustainability issues and improving performance building on the 
work of 2011 and 2012 to act on greenhouse gas emissions in the uk 
business and to broaden our sustainability project to cover more of 
our global estate 
corporate social responsibility statement continued 41
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
2013 work progamme
during 2013 the emphasis of the project has been on driving forward 
the group’s strategic sustainability objectives and taking concrete 
steps to improve sustainability performance the group has also 
continued the programme begun in 2012 to develop the paignton 
location as a low carbon centre of excellence
the 2013 work programme comprised
• continuing performance improvement at the low carbon centre of 
excellence at the site at paignton uk
• site energy audits at the group’s corporate headquarters in the uk 
and at four major us sites
• environmental legal compliance reviews at the group’s corporate 
headquarters in the uk and at four major us sites and
• participating in the carbon disclosure project for the first time 
completing both the investor climate change return and the 
supply chain return
paignton low carbon centre of excellence
the positioning site located in paignton uk has had an iso 14001 
certified environmental management system for several years and 
has a good track record in improving environmental performance 
this location was therefore selected to act as a low carbon centre of 
excellence for the group in 2012 and it has since piloted a number of 
sustainability initiatives led lighting has been installed across the 
site and ceiling insulation voltage optimization and smart metering is 
scheduled to occur in early 2014
the installation of a solar pv array in late 2012 has been successful 
in its first full year of operation and the array generated the following 
in 2013
kwh generated
 of electricity 
consumption
greenhouse gas 
emissions avoided 
kg co
2
e
2013 39658 109 17667
there has also been a revitalisation of employee engagement and the 
employee green team at paignton in 2013 regular internal reporting 
of environmental kpis and a committed team are in place to ensure 
that the position of the paignton site as a centre of excellence is 
maintained and that environmental performance continues to improve
site energy audits and environmental compliance reviews
energy audits were carried out at the corporate headquarters in 
crawley uk and in four of the group’s largest us sites during the 
year these audits consisted of a thorough review of the buildings 
building services and associated energy use and opportunities to 
improve energy efficiency were identified at each site a preliminary 
review of the potential for onsite renewables was also carried out 
based on local climatic market and regulatory factors
environmental compliance reviews were also carried for these sites 
to ensure that the group had the necessary understanding of 
environmental regulatory requirements and to identify any areas where 
practices could be improved it was found that overall knowledge of 
and compliance with environmental requirements was strong with 
no material issues noted some opportunities to improve current 
practices were noted and these are currently being addressed
the actions resulting from the energy audits and the compliance 
reviews form the basis of the 2014 work programme for sustainability 
at these sites the toolkits developed for these reviews will also be 
rolled out to the rest of the group’s material locations over the course 
of 2014
carbon disclosure project and greenhouse gas reporting
the group responded to the carbon disclosure project for the first 
time in 2013 completing both the climate change and supply chain 
questionnaires for the calendar year 2012
the group also reports greenhouse gas emissions for 2012 and 2013 
in its annual report this year for the first time
global ghg emissions data for the year ended 31 december 2013
emissions from
2013 tonnes  
of co
2
e
2012 tonnes 
of co
2
e
combustion of fuel and operation of facilities 238 216
electricity heat steam and cooling purchased 
for own use 6268 6359
total emissions 6506 6576
company’s chosen intensity measurements 
emissions reported above normalised per 
square metre of gross internal area of our 
facilities 015 015
emissions reported above normalised per 
£ million of revenues 1576 1392 42
spirent communications plc 
annual report 2013
methodology
we have reported on all of the emission sources required under the 
companies act 2006 strategic report and directors’ reports 
regulations 2013 these sources fall within our consolidated 
statements we do not have responsibility for any emission sources 
that are not included in our consolidated 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 uk government’s 
ghg conversion factors for company reporting 2013
2014 work programme
the work programme for 2014 has three main areas of focus
• implementing recommended actions from the 2013 site energy 
audits and environmental compliance reviews
• undertake energy and compliance audits on all other material 
sites across the group’s estate and
• review and update of environmental strategy and management
as discussed above a significant part of the 2014 project will consist 
of implementing the recommendations generated from the indepth 
site reviews carried out in 2013 and further driving environmental 
performance improvement at these locations
the toolkits that were developed for these reviews in 2013 will 
also be utilised at the group’s other locations to embed sustainable 
business processes across the group and ensure that potential 
environmental impact and cost reductions are identified and realised
in addition to these specific measures to reduce the impact of the 
global estate the group will also review and update environmental 
strategy this exercise was last undertaken in 2011 and an update 
will enable the group to incorporate changes in the strategic 
landscape and continue to focus on the material issues for the 
group and its key stakeholders
in october several employees from the fort worth usa office chose 
to make a difference in their community by joining forces with the 
trinity habitat for humanity programme the employees spent a full 
day framing out the interior and roof of a home already in progress 
the teamwork was grueling and challenging for all involved but the 
progress made towards the completed project was worth the reward 
of contributing towards a safe and decent place for an 
underprivileged family to live 
to help students prepare for the future spirent works with local 
public and private nonprofit educational organisations 
in addition to internships our managers routinely work with local 
universities and industry groups to assist in other ways 
corporate social responsibility statement continued
employees from our fort worth office join with the trinity habitat for 
humanity programme
community
spirent supports technical education and local charitable 
programmes and encourages employee volunteerism and 
participation within the communities where they live and work 
employees not only donate their time – they enthusiastically embrace 
the true spirit of volunteerism in their local communities where they 
support a broad variety of causes these include organisations and 
activities ranging from health organisations educational 
programmes food banks and environmental causes they serve 
in many different ways as fundraisers board members coaches 
and mentors 
in 2013 we introduced the voluntary time off “vto” policy part 
of the giving back programme the purpose of this programme is 
to support activities that enhance and serve communities in which 
we live and work the vto policy encourages employee involvement 
in volunteer efforts supporting the community at the same time 
participating in these sorts of activities enriches the lives 
of employees  strategic report
governance
financial statements
spirent communications plc 
annual report 2013
43
the ashington cougars under 13s football team are supported by spirent
employees from the eatontown office used some of their vto to 
participate in an event coordinated by jersey cares enabling local 
corporations to support the community where they live 
in september 21 spirent employees and family members participated 
in one of the largest volunteer events in california coastal cleanup 
day during the three hour event volunteers collected tons of rubbish 
and debris from shorelines and inland locations
in total during 2013 spirent made charitable cash donations 
of 104000
spirent supports organisations that serve the local community 
in the vicinity of its offices worldwide in 2013 this included the 
sponsorship of the ashington cougars football club under 13s 
football team in sussex ashington cougars fc is an fa charter 
development standard club which provides children from the 
ages of 5 to 16 with the opportunity to play football in a safe 
and enjoyable environment
pages 2 to 43 form part of the strategic report
by order of the board
rachel whiting
company secretary
27 february 2014
spirent has a long history of helping those in need and throughout 
2013 continued to provide aid to charitable and nonprofit 
organisations through corporate sponsorships and contributions 
following the devastation of typhoon haiyan we responded with a 
donation of 10000 to the international committee of the red cross 
to assist with the disaster relief efforts in the philippines
spirent is proud of its employees who generously donate their 
time expertise and money to many different organisations around 
the globe 
our calabasas team raised 17 434 for the american cancer society’s 
relay for life of calabasas employees and their families from all 
departments participated in the 24hour walk in support of the 
society’s efforts in research education advocacy and patient services 44
spirent communications plc 
annual report 2013
“chairmen are encouraged to report 
personally in their annual statements 
how the principles relating to the role 
and effectiveness of the board have 
been applied”
uk corporate governance code 2012
chairman’s introduction
alex walker
chairman
dear shareholder
in the revised uk corporate governance code issued in september 
2012 company chairmen were encouraged to relate the role and 
effectiveness of their company’s board to the opening sections of the 
code dealing with leadership and effectiveness so allow me to take this 
opportunity of so doing
during 2013 your board continued to focus on strategy and 
business development with a dedicated strategy summit held at 
our germantown md facility in may we reviewed and analysed 
market conditions and technology trends and openly debated 
issues such as risk strategic direction and allocation of product 
development investment it is critical that as a board we have a deep 
understanding of and remain close to our businesses and regular 
site visits give us the opportunity to talk directly with spirent’s 
employees and also its customers
prior to the start of each financial year the board reviews and approves 
management’s plan for the coming year making sure that stretching 
but realistic targets are put in place the priorities for discussion this 
year were revenue growth margins earnings growth and cash 
generation some of our key performance indicators as set out more 
fully on pages 18 to 19 as well as ensuring that sufficient investment 
is made in product development opportunities so that spirent’s one 
year plan aligns with its long term strategy
at each board meeting the executive directors update the board 
on market trends and conditions together with the company’s 
performance against the one year plan and where necessary present 
revised forecasts which are again openly challenged and debated 
consideration of the significant risks that affect the company both 
internal and external their mitigation and the effectiveness of internal 
control is an essential component of corporate governance and these 
issues are deliberated by the board at meetings throughout the year
further details of the board’s activities during the year can be found 
on page 49 of this report
as discussed in the strategic report on pages 2 to 43 of this 
annual report 2013 marks a turning point for the company and in 
response to the challenges experienced we have undertaken a radical 
reorganisation of the activities within spirent your board are confident 
that in our executive directors we have two highlyskilled capable 
individuals who we are pleased to have had the opportunity to work 
with eric and rachel while both relatively new to their current roles 
have deep knowledge and experience of the company its operations 
and history they are both committed to delivering an agile responsive 
spirent and i look forward to the board playing a full and constructive 
role in the development and determination of the group’s strategy and 
overall commercial objectives 45
strategic report
governance
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spirent communications plc 
annual report 2013
the role of chairman is a vital one we can provide a sounding board 
for our nonexecutive directors while also maintaining a dialogue 
with our executive directors so that the board’s focus and debate 
can be developed both within the boardroom and also between 
meetings board effectiveness should not just be about ticking 
boxes on a checklist just as important is a robust culture of 
openness and respect which i have certainly been witness to 
at spirent board meetings
as a board we are conscious of our obligations to think deeply 
thoroughly and on a continuing basis regarding our duties our 
nonexecutive directors do so from a strong position of independence 
scrutinised on a regular basis by reflecting specifically on the definition 
of independence contained within the code our executive directors 
also must challenge their teams to encourage this positive debate 
throughout the company
spirent is fortunate to have nonexecutive board members with 
extensive experience in areas critical to the long term future success 
of the company covering a deep understanding of our industry 
technology corporate strategy finance and investment
this experience enables the nonexecutives to add entrepreneurial 
leadership with open and rigorous debate that provides a valuable 
external and balanced perspective to the proceedings we believe that 
our board members complement each other delivering a broad and 
appropriate balance of skills biographical details of our directors 
can be found on pages 46 to 47 of this report
we are well aware that spirent’s greatest resource is its employees 
spirent’s people create and drive our innovation the board will 
continue to follow a policy of ensuring that we appoint the best people 
for the relevant roles and recognise the importance and benefits of 
greater diversity both at board level and throughout the group and will 
take this into account when considering any particular appointment
as i have already mentioned our new chief executive officer and 
new chief financial officer have both been internal promotions who 
have extremely detailed knowledge of the company’s operations 
the board receives updates on developments in market trends 
developments in law corporate governance and best practice and are 
actively encouraged to ask questions or seek training on any matter 
they feel could advantage them and the board a fuller description of 
induction and development can be found on page 51 of the report
the board are in agreement with the recommendation of the code that 
all directors should be submitted to reelection at regular intervals and 
indeed all spirent directors have stood for reelection since 2011 
it is a failing of our industry as a whole that technology companies 
have a tendency to live in a world of jargon and acronym and every year 
we make an extra effort to present our annual report in a way that is 
accessible to all our stakeholders the glossary on pages 140 to 142 
goes some way to help on the technology side but we also work to 
make our corporate governance and financial statements clearer 
it is not just in order to comply with the uk corporate governance 
code that we strive for our annual report to be fair balanced and 
understandable if we are truly to “help the world connect” we 
must do as we say in all our areas of communications
alex walker
chairman
27 february 2014 46
spirent communications plc 
annual report 2013
board of directors
1 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
he is responsible for leading the board and ensuring that it operates in 
an effective manner as chairman he sets board agendas and ensures 
sufficient time is available for discussing all agenda items particularly 
key strategic issues he is also responsible for promoting a culture of 
openness and debate within the board ensuring constructive relations 
between the executive and nonexecutive directors and encouraging 
effective communication with shareholders
until august 2006 alex was chief executive of yule catto  co plc and 
until april 2010 he was a nonexecutive director chairman of the 
remuneration committee and member of the audit and nomination 
committees of rotork plc
alex is a nonexecutive director of zotefoams plc
2 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
he is responsible for formulating the group’s objectives and strategy 
for approval by the board working with the chief financial officer he 
sets the annual budget and medium term plan and is responsible for 
reporting performance against plan to the board eric also plays a key 
role in identifying and executing acquisitions and disposals
4
5 6
7
3
1
2 47
strategic report
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financial statements
spirent communications plc 
annual report 2013
before this appointment eric had been spirent’s chief financial officer 
since january 2000 having joined the company in 1983 working in 
various roles within the finance function
eric holds a degree in history from the university of leicester and 
undertook postgraduate research in contemporary history at trinity 
college oxford he is a fellow of the association of chartered certified 
accountants and a member of the financial reporting review panel
3 rachel whiting chief financial officer
rachel was appointed to the board in february 2014
she is responsible for overseeing the financial operations of the group 
and setting its financial strategy in conjunction with the audit 
committee and the board she also oversees the overall framework for 
financial forecasting planning analysis and reporting
before her appointment to the board rachel was company secretary 
and head of group tax and will continue to be company secretary until 
a successor can be appointed she joined the company in 1986 and 
worked in various roles within the finance function before being 
appointed head of group tax in 2003 adding the role of company 
secretary in 2009
rachel holds a degree in economics from the university of bristol 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
4 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
as senior independent director he is responsible for meeting with 
the other nonexecutives to review the chairman’s performance and 
is available to shareholders to discuss their concerns
he was senior partner of price waterhouse from 1991 to 1998 and 
chairman of pricewaterhouse coopers until 2001 ian was also a 
member of the accounting standards board between 1992 and 2001 
and deputy chairman of the financial reporting review panel between 
2001 and 2008
ian serves as a nonexecutive director of elementis plc
5 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
he has wideranging experience in the telecommunications industry 
and provides advice and counsel to the board on major strategic issues
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
prior to joining the carlyle group duncan served as chief 
executive officer and president of gtsebone managing director 
of equant nv and chief executive officer at granada media group 
and mercury communications
after serving in senegal for voluntary service overseas duncan 
studied at cambridge university and was also a visiting professor 
of business management at strathclyde university
duncan is chairman of nextiraone eu and workshare limited 
nonexecutive director of eunetworks group limited and director 
of several other companies
6 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
he has considerable fund management and investment trust 
experience and as chairman of the remuneration committee is 
responsible for developing the company’s policy on remuneration 
of executive directors and other senior managers
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  cfa institute
tom is a nonexecutive director of foresight 3 vct plc and is chairman 
of their audit committee
7 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
she has a wealth of international experience and expertise in the 
telecommunications and technology sector which she brings to the 
development of the strategic vision of the company
from march 2008 until her retirement in april 2011 sue served as 
president and ceo of sage software inc the north american division 
of the sage group plc before joining sage software she held 
positions as the coo of atrinsic inc formerly known as new motion 
inc amp’d mobile inc and tmobile was president and coo of leap 
wireless international inc and president and ceo of cellular one
sue is a nonexecutive director of wells fargo and sits on their 
audit and examination committee and governance and nominating 
committee she also serves as nonexecutive director on the boards 
of harmonic inc serving as chair of the nominating and governance 
committee and sitting on their audit and 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 48
spirent communications plc 
annual report 2013
directors’ statement on corporate governance
shareholders
3557 shareholders 
as at 27 february 2014
nomination 
committee
nonexecutive chairman
four independent  
nonexecutive directors
primary responsibility  
for succession planning  
boarddirector selection and  
board composition
committee report –  
page 53
audit 
committee
four independent  
nonexecutive directors
provides oversight and  
governance over the group’s 
annual reporting internal controls 
risk management and relationship 
with external auditors
committee report –  
pages 54 – 57
remuneration 
committee
four independent  
nonexecutive directors
agrees remuneration policy and 
sets individual compensation 
levels for executive directors  
and senior management
committee report –  
pages 58 – 76
board
nonexecutive chairman
two executive directors
four independent  
nonexecutive directors
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 is 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
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 described more fully in the report on directors’ remuneration 
on page 64
governance framework 49
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
strategy
• identification and 
evaluation of strategic 
options for near and long 
term
governance
• the group’s treasury 
policy
• the group’s tax policy
• the group’s risk appetite
• board evaluation
shareholder relations
• investor feedback 
following investor 
presentations and 
meetings
board and committees
diversity and talent
• talent management and 
development across the 
group
business performance
• operational performance 
of each business unit
financial
• the group’s annual 
budget and additional 
investment in research 
and development
values and standards
• updates on legal 
developments 
compliance and ethics 
training
• development and 
update of the group’s 
antibribery programme
board
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
division of responsibilities
there is a clear division of responsibilities at the company between the 
running of the board undertaken by the nonexecutive 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
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
board activity during the period
at each board meeting the chief executive officer presents a 
comprehensive 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 in order that 
strategy discussions can reflect a greater understanding
during the period under review the board in particular reviewed 50
spirent communications plc 
annual report 2013
directors’ statement on corporate governance continued
1
2
3
board composition
1
1  chairman
2 independent nonexecutive directors 4
3  executive directors 2
1
2
length of tenure of directors
1
1  less than 3 years 2 
2 more than 5 years 5
1
2
gender diversity
1
1  male 5
2 female 2
note
1 at the date of this annual report
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
independence
the independence of each director is reviewed on appointment and at 
least annually with particular reference to the considerations set out 
in code provision b11 the board determined that the nonexecutive 
directors are each independent in character and judgement 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 65 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 code provision b12 stating that at least half of the board 
excluding the chairman should comprise independent nonexecutive 
directors is satisfied
board procedures
during 2013 ten 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 minutes of meetings are circulated to all board members and 
subject to their agreement approved at the following board meeting
attendance
the attendance of individual directors at board meetings held during 
2013 was as follows
number of 
meetings held
number of 
meetings 
attended
alex walker chairman 10 10
bill burns
1
5 5
eric hutchinson 10 10
ian brindle
2
10 8
duncan lewis 10 10
tom maxwell 10 10
sue swenson 10 10
notes
1 mr burns stepped down from the board on 3 september 2013
2 mr brindle was unable to attend two ad hoc meetings of the board as they conflicted 
with meetings already in his diary for other listed companies mr brindle received all 
papers relating to the meetings and had the opportunity to discuss issues arising 
directly with the chairman he also appointed alex walker as his proxy for the duration 
of the meetings
biographical details for each of the directors are set out on pages 46 
and 47 and can also be found on the company’s website at 
httpcorporatespirentcomaboutusourboardofdirectors
reelection of directors
in accordance with code provision b7 1 all directors will be subject 
to election or annual reelection by shareholders at the 2014 agm 
the board recommends to shareholders the reappointment of all 
directors retiring at the 2014 agm on the basis that they are all 
effective directors of the company and demonstrate the appropriate 
level of commitment in their respective roles 51
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
service contracts and letters of appointment
the terms of executive directors’ service contracts are disclosed in 
the report on directors’ remuneration on pages 58 to 76 directors’ 
interests in the shares of the company are disclosed on page 70
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 agm which will take place 
on 23 april 2014
induction and development
following the appointment of any new director the chairman and 
company secretary ensure that a full formal and tailored induction to 
the company is made available the company secretary is on hand to 
answer any questions which may arise all directors receive regular 
updates on key administrative issues and changes in the law corporate 
governance and best practice directors are given the opportunity to 
highlight specific areas where they feel their skills or knowledge would 
benefit from development as part of the board evaluation process
company secretary
the company secretary who was appointed by the board 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
directors’ indemnification
in accordance with its articles 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 thirdparty 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
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 the board reflected on the points raised by the process and 
during 2013 focused in particular on the development of strategic 
planning and increasing the diversity both on the board itself and 
within the company’s executive team this year the process was 
managed internally in the form of a confidential questionnaire which 
focused on all areas of board and committee activities the results 
were discussed by the board and as a result of this year’s evaluation 
the board intends to look at the following during 2014
• to continue to review and advance strategic planning
• to provide 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
• to build greater visibility and connection with the business units to 
develop a mutual understanding of roles and challenges and
• to strengthen 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
the chairman communicates regularly with the nonexecutive directors 
and this contact provides an ongoing opportunity to assess 
performance and to discuss the performance of the executive directors 
and any other matters the chairman has concluded that during the 
year under review the commitment and application of the non
executive directors was of a high standards including each having 
sufficient time to discharge their responsibilities effectively 52
spirent communications plc 
annual report 2013
the senior independent nonexecutive director met with the other 
independent nonexecutive directors on 6 november 2013 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 2013 
directors’ conflicts
under the companies act 2006 the directors have a statutory duty to 
avoid a situation where they have or could have a direct or indirect 
interest that conflicts or possibly may conflict with the interests of the 
company directors of public companies may authorise conflicts and 
potential conflicts where appropriate if the articles of association 
contain a provision to this effect
the board is aware of the other commitments of its directors and 
is satisfied that these do not conflict with their duties as directors 
of the company
the board believes that the following process shown below and 
established to monitor conflicts of interest is operating effectively
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
directors are required to review 
and approve a register of potential 
conflicts on appointment and 
annually thereafter
any conflicts identified are 
presented to the board for 
consideration and as appropriate 
authorised in accordance with the 
companies act and the company’s 
articles of association
directors are responsible for 
notifying the company secretary  
if they become aware of any  
actual or potential conflict 
situations or a change in 
circumstances relating to an 
existing authorisation
presentations are made to analysts investors and prospective 
investors covering the fullyear and halfyear results and the company 
seeks to maintain a dialogue with the various bodies which monitor the 
company’s governance policies and procedures the strategic report 
on pages 2 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 
– investorrelationsspirentcom – for detailed enquiries and to access 
our website – wwwspirentcom – for our company reports and 
business information
any concerns raised by shareholders whether directly or expressed 
through voting patterns at the company’s agm are discussed by the 
directors and an appropriate response given
annual general meeting
the company’s agm will be held at 1030am on wednesday 23 april 
2014 at the offices of ubs 1 finsbury avenue london ec2m 2pp
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 and the senior 
independent director will be in attendance and will be available 
to respond to questions at the agm
the board looks forward to welcoming all our shareholders to our 2014 
agm and to updating them on our business developments
directors’ statement on corporate governance continued 53
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
responsibilities
the nomination committee’s main focus is on strengthening balancing 
and understanding the range of skills experience and diversity of the 
board its committees and key roles below board level
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
meetings and attendance
the committee meets at least two times each year and at other times 
as necessary during 2013 three meetings were held with individual 
members’ attendance as follows
number of 
meetings held
number of  
meetings attended
alex walker chairman 3 3
ian brindle
1
3 2
duncan lewis 3 3
tom maxwell 3 3
sue swenson 3 3
note
1 mr brindle was unable to attend an ad hoc committee meeting as it conflicted with a 
meeting already in his diary for another listed company mr brindle received all papers 
relating to the meeting and had the opportunity to discuss issues arising direct with the 
chairman in this instance he also appointed alex walker as his proxy for the duration 
of the meeting
committee activity during the period
the committee considered and made recommendations to the board in 
respect of
• the appointment of eric hutchinson as chief executive officer
• the appointment of rachel whiting as chief financial officer and to 
the board
• the appointment of senior executives resulting from the group’s 
internal reorganisation
• matters relating to succession planning in the light of the tenure of 
current nonexecutive directors and
• the results of the evaluation of the board its committees and the 
directors including the review of the continued independent status 
of the nonexecutive directors
appointment of directors
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 the balance of skills knowledge and experience on the board 
is maintained when discussions relate to the appointment of the 
company chairman the senior independent nonexecutive director 
chairs the committee
on 3 september 2013 when bill burns stepped down as chief 
executive officer the nomination committee considered the skills and 
experience of the company’s chief financial officer eric hutchinson in 
particular his knowledge of the company and its operations and 
unanimously recommended to the board his appointment as chief 
executive officer
after a period of adjustment and internal reorganisation 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 wellknown 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 company
following the internal reorganisation undertaken by the chief executive 
officer in the second half of 2013 the committee will be developing an 
updated succession plan in 2014 to take account of new roles and 
reporting lines
diversity
the committee and indeed the board recognises the benefits of 
having diversity across all areas of the group and believes that this 
contributes to the company’s strategic advantage neither the 
committee nor the board sets specific targets or objectives for 
diversity however when considering the optimum composition of the 
board the benefits of a diverse board are appropriately reviewed and 
balanced where possible including in terms of differences in skills 
industry experience business model experiences gender race 
disability age nationality background and other contributions that 
individuals may bring the 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
when identifying suitable candidates the committee will seek 
candidates from a range of backgrounds with the final decision being 
based on merit over objective criteria
with the appointment of rachel whiting to the board on 1 february 
2014 women currently represent 29 of our board further details of 
the gender diversity within the company can be found in the “our 
employees” section on pages 36 to 37 of this annual report
committee performance evaluation
having reviewed the results of the board’s and the committee’s 
performance evaluations the committee has confirmed to the board 
that the present board and its committees continue to operate 
effectively and that all of the nonexecutive directors remained 
independent in accordance with the code and should stand for 
reelection at the 2014 agm
nomination committee 54
spirent communications plc 
annual report 2013
audit committee
ian brindle
chairman of the audit committee
dear shareholder
in this audit committee report you will find details of the work of the 
audit committee “the committee” during the year and in particular 
details of how it has discharged its responsibilities as set out in the uk 
corporate governance code in respect of the following three principal 
areas of focus
• how the significant accounting issues that the committee has 
considered in relation to the financial statements for the year have 
been addressed
• how the committee has assessed the effectiveness of the external 
audit process and the approach that has been taken to the 
appointment of ey as external auditor and 
• how ey’s objectivity and independence has been safeguarded 
in relation to their provision of nonaudit services
in addition during 2013 the board and the committee have been 
briefed on and considerable attention has been given to the recently 
introduced governance requirements for the annual report taken as 
a whole to be fair balanced and understandable the board and 
committee understand that ‘fair’ should mean reasonable and 
impartial ‘balanced’ should mean even handed in terms of being 
positive and negative and ‘understandable’ should mean simple 
clear and free from jargon or unnecessary clutter
the board and committee consider that the annual report for 2013 
taken as a whole is fair balanced and understandable with 
appropriate signposting being made throughout the various sections 
to assist shareholders and others understand the information and 
disclosures contained within them
the committee’s focus areas for the rest of 2014 are
• monitoring revenue recognition policy
• challenging the corporate risk appetite as it moves into  
new business areas and testing the risk tolerance of the  
company’s strategy and
• assessing the company’s response to the changing regulations 
relating to the tendering of the external audit
also in 2014 we are welcoming a new chief financial officer rachel 
whiting to the board rachel has worked in several roles at spirent and 
has a deeprooted understanding of the financial reporting structure 
throughout the company and the committee is confident that she will 
provide a robust approach to the high standards that it has come to 
expect from the finance team 
ian brindle
chairman of the audit committee
27 february 2014 55
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
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 auditors
the full terms of reference of the committee are available at http
corporatespirentcomgovernanceboardcommittees or from the 
company secretary at the registered office
composition of the 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 committee ian brindle 
who acts as committee chairman and tom maxwell provide recent 
significant and relevant financial experience
further biographical details of the committee members can be found 
on pages 46 and 47 
meetings and attendance
the committee meets at least two times each year and at other times 
as necessary during 2013 three meetings were held with individual 
members’ attendance as follows
number of 
meetings held
number of  
meetings attended
ian brindle chairman 3 3
duncan lewis 3 3
tom maxwell 3 3
sue swenson 3 3
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 committee
in addition the committee meets regularly with the company’s 
external auditor and with the group vice president finance without 
management present
committee activity during the period
the committee discharged its responsibilities to the board and 
communicated with them on the following matters during the period 
under review
• review of the fullyear and halfyear financial 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 87 to 93 and 
recommendation of such financial statements to the board for 
approval
• review of whether the annual report taken as a whole is fair 
balanced and understandable and forming an opinion thereon prior 
to recommending it to the board
• review and consideration of assumptions in relation to the going 
concern basis for preparation of financial statements
• review of the external auditor’s report on the interim review and 
year end audit and management’s responses to the issues raised
• review of the policy on the engagement of ey to supply nonaudit 
services
• review and recommendation to the board of 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
• review of recommendations on segmental reporting in accordance 
with ifrs 8 and the impact of ias19 revised
• review and approval of restructuring of the finance team in light of 
business unit reorganisation
• monitoring and review of internal control and risk management 
systems
• review and approval of the internal audit programme for 2013
• review of risk assessment of cyber security
• review of the company’s whistleblowing policy and antibribery and 
corruption procedures and
• review of regular reports on taxation treasury operations and 
health and safety
the committee chairman reports any significant findings or identified 
weaknesses to the board
financial reporting and significant financial issues
following discussions with management with regard to their own review 
of accounting policies and internal controls the audit committee 
concluded that there were two significant financial issues arising from 
the financial statements which would require particular consideration 
during the year
• revenue recognition 
having discussed the impact that complex commercial 
arrangements entered into by the group could have on the 
recognition of revenue and associated balances the committee 
noted that a review of current procedures in the light of current 
trading should be undertaken as part of their audit procedures 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 the complexity associated with the 
group operating in a number of tax jurisdictions may lead to an 
incorrect tax charge being recognised in the income statement for 
the period and deferred tax assets being inappropriately 
recognised 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
the committee noted that ey had included these areas of significant 
risk in the auditor’s report on pages 80 to 81 of this annual report and 
was satisfied with the results of the procedures followed 56
spirent communications plc 
annual report 2013
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
internal control
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 internal control 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 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 “our principal risks and uncertainties” section on 
pages 20 to 25 the group risk review committee reviews the key risks 
facing the business membership of the group risk review committee 
which includes representation from each of the key business areas 
is currently
• chief executive officer
• chief financial officer
• executive vice president networks applications and 
infrastructure
• executive vice president wireless and service experience and
• group vice president finance
members of the group risk review committee 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 the 
committee to analyse and rank together with companywide risks to 
form a robust corporate risk register this corporate risk register is then 
presented to the audit committee at each of its meetings 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
audit committee continued
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 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
antibribery policy a policy to ensure that all of 
spirent’s 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 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 57
strategic report
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financial statements
spirent communications plc 
annual report 2013
external audit
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 auditors 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 auditors 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 auditors ernst  young llp “ey” provided 
the committee with their plan for undertaking the year end audit at 
the committee meeting in november 2013 this highlighted the 
proposed approach and scope of the audit for the year and identified 
the areas of significant risk and other financial statement risk 
including the audit approach for these areas in some detail the areas 
of significant risk were primarily identified as issues of judgement 
and complexity and included revenue recognition and tax accounting 
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 2014 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 auditors 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 ey have been the company’s 
external auditors for more than 25 years and the audit has not been 
tendered during that time although it was noted that as a result of ey’s 
policy on rotating audit partners there had been a new audit partner in 
2011 the committee determined that given the developing nature of 
the regulations relating to audit tendering provisions from the 
competition commission and the eu and that there are no contractual 
obligations that restrict the company’s current choice of external 
auditor it would not be appropriate to instigate a tender process at 
the present time
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 in 
relation 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 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 2013 
06 million 2012 06 million any amounts in excess of this limit 
must be approved in advance by the audit committee
requests for approval of any permitted nonaudit service are reviewed 
and if necessary challenged by the company secretary who reports to 
the committee all nonaudit services undertaken at each committee 
meeting so that it can monitor the types of services being provided and 
the fees incurred details of the fees paid to the external auditor for 
nonaudit services can be found in note 5 to the consolidated financial 
statements the committee considers that notwithstanding the 
nonaudit services provided during the year totalling 02 million 2012 
04 million ey’s objectivity as external auditor was not impaired
ian brindle
chairman of the audit committee
27 february 2014 58
spirent communications plc 
annual report 2013
report on directors’ remuneration
tom maxwell
chairman of the remuneration committee
dear shareholder
as chairman of the remuneration committee i am pleased to present 
our remuneration report for the year ended 31 december 2013
last year’s remuneration report anticipated many of the new 
remuneration reporting requirements which were in draft form at that 
time this report has been prepared in accordance with the now 
finalised requirements and we hope that you find it comprehensive 
clear and informative 
the committee aims to operate a simple and transparent remuneration 
structure comprising base salary a cash incentive plan and a long term 
incentive plan which provide a clear link between remuneration and the 
group’s strategic priorities in support of this the committee aims to 
ensure that remuneration packages are offered which
• set the total remuneration package at an appropriate level to reflect 
the competitive markets in which the group operates
• link a significant proportion of the total remuneration package to 
the achievement of demanding performance targets
• structure the reward of executive directors and senior management 
to align their interests with those of shareholders over the long 
term
• encourage the retention and stability of the management team and
• underpin a high performance culture throughout the group
as a committee we believe it is essential that directors’ remuneration 
is aligned with the company’s strategic framework the interests of 
shareholders and the external competitive market 
as outlined earlier in this annual report it has been a challenging year 
for spirent with decreasing revenues and a significant impact on profit 
2013 also marks a turning point for the company and this was reflected 
in the activities for the committee which in addition to routine matters 
set out in the report included
• reviewing and settling bill burns’ termination arrangements in line 
with his service agreement and
• reviewing the future policy for cash incentive arrangements for 
executive directors and determining that to drive longer term focus 
cash incentives will now be based on annual performance only with 
no quarterly incentive
with the introduction of the new reporting requirements there 
continues to be a significant focus on transparency of reporting on 
executive pay the committee is strongly committed to open and 
transparent dialogue with shareholders on remuneration matters and 
takes every opportunity to engage with key shareholders to 
understand their views on our remuneration arrangements and to 
discuss our policy going forward as set out later in this report our 
2012 report on directors’ remuneration received a strong level of 
support at the company’s agm in may 2013 with 9877 per cent of 
shareholders voting in favour of the advisory resolution strategic report
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59
the main priorities for the committee for 2014 are
• to continue to review remuneration policy in the light of evolving 
best practice consulting with shareholders as appropriate
• to ensure that the executive directors are fairly rewarded for both 
individual and company performance 
• to set incentive targets that support the long term strategy for the 
group are stretching appropriate and achievable
• to commence a review of our employee incentive plan which is due 
to expire in 2015 seeking investor views as appropriate before 
seeking shareholder approval in 2015 and
• reviewing malus and clawback provisions to ensure that we are in 
line with best practice
on behalf of the committee i hope that you find this report 
comprehensive clear and informative
tom maxwell
chairman of the remuneration committee
27 february 2014
compliance statement
this report on directors’ remuneration for the year ended 31 december 
2013 has been prepared on behalf of the board by the remuneration 
committee in accordance with schedule 8 to the large and medium
sized companies and groups accounts and reports as amended in 
2013 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 64 the board has 
complied with the provisions of the uk corporate governance code 
issued in september 2012
the report is presented in two parts 
part a sets out the remuneration policy and provides the details of the 
remuneration policy that we propose will apply following the 2014 agm 
subject to obtaining shareholder approval at the agm on 23 april 2014
part b sets out the directors’ annual remuneration report and includes 
details of how our remuneration policy was implemented for the year 
ended 31 december 2013 and how it will be applied for the year ended 
31 december 2014
at the annual general meeting to be held on 23 april 2014 there will be 
two resolutions in respect of this remuneration report
• the directors’ remuneration policy report set out in part a on pages 
59 to 67 will be put to a binding shareholder vote and 
• the directors’ annual report on remuneration in part b on pages 68 
to 76 will be put to an advisory shareholder vote
part a remuneration policy
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 performance based 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 60
spirent communications plc 
annual report 2013
report on directors’ remuneration continued
future policy table
the table below sets out the executive remuneration policy that we intend to apply subject to shareholder approval from 24 april 2014 and 
summarises the various elements of executive remuneration
 purpose and link to strategy operation maximum potential value performance metrics
base salary
fixed pay
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 
develop and 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 
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 2014 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 andor 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 cost
effective 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 health care 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 strategic report
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61
 purpose and link to strategy operation maximum potential value performance metrics
pension or cash allowance
fixed pay
to provide costeffective 
and 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 of base salary is provided to 
the chief executive officer and 14 
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
annual incentive
variable pay
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 
value creation
measures and targets are set 
annually payments are then 
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 of 
base salary for chief executive 
officer subject to a cap of 150 of 
base salary
on target opportunity of 50 of 
base salary for chief financial officer 
subject to a cap of 75 of 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 2014 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 and 100 
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 and 125 of base 
salary for awards of sars or share 
options and performance shares 
respectively
limit of 250 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 62
spirent communications plc 
annual report 2013
report on directors’ remuneration continued
 purpose and link to strategy operation maximum potential value performance metrics
allemployee share plans
variable pay
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 
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 strategic report
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63
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
2014 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 2014
having reviewed the appropriateness of the performance parameters for awards under the eip the committee has determined that for awards to 
be made in 2014 the following parameters are apposite
performance shares
the performance conditions for performance shares will be calculated over a three year performance period as set out in the following table
50 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 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 three year 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
shareholder approval was given in 2005 to operate the eip until 2015 subject to further shareholder approval being required on the use of new 
issue shares and any material changes to the plan no material changes to the eip are proposed and therefore no specific shareholder approval is 
required at the 2014 agm to continue to operate this plan however we expect to seek shareholder approval at the 2015 agm for an extension to 
the eip’s operating period 64
spirent communications plc 
annual report 2013
report on directors’ remuneration continued
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
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 60 to 62 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 on page 65
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 however 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 longterm success of the company not to 
comply with code provision d15 of the uk corporate governance code with regard to the length of service agreements for executive directors 
the company therefore entered into a fixed term contract with eric hutchinson which at the date of this report has an unexpired term of 15 months 
and will expire on 31 may 2015 following its expiration in 2015 and in line with normal policy the service agreement with eric hutchinson would 
be renewed on 12 months’ notice
both eric hutchinson and rachel whiting currently have a service agreement with spirent communications plc and being uk resident 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 rachel eric hutchinson’s service agreement may be 
terminated on six months from eric
until his termination on 3 september 2013 bill burns had a service agreement with spirent communications inc governed by the laws of california
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 2014 agm 65
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annual report 2013
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 2014 agm
tom maxwell 1 october 2007 2014 agm
sue swenson 1 february 2012 2015 agm
alex walker 22 december 2006 2015 agm
the letters of appointment are available for inspection on request and will be available for inspection at the 2014 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 2012 having been frozen since 1 january 2008 it was determined that the basic annual fee 
for nonexecutive directors would be set at £40000 per annum for 2012 to 2014 inclusive fees for the chairman which are determined by the 
remuneration committee were set at £160000 per annum for 2012 to 2014 inclusive 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 it is considered that 
nonexecutive director fees are at the median level for comparable companies fees for nonexecutive directors and the chairman will next be 
reviewed on 1 january 2015
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 performance related
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 poor performance 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 78
• 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 pro rated for time and vested awards may be exercised within 12 months following the date of termination  
of employment 66
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annual report 2013
illustrations of the application of our remuneration policy in 2014
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 of target cash incentive paid
2
• 65 vesting under the employee incentive plan
3
maximum performance • fixed remuneration
1
• 150 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 2014 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 2013 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
long term incentive £000 cash incentive fixed
chief executive officer policy for 2014
497
1310
1816
100
38 30 32
27 40 33
long term incentive £000 cash incentive fixed
maximum performance
on target performance
minimum performance
maximum performance
on target performance
minimum performance
chief financial officer policy for 2014
286
535
689
long term incentive £000 cash incentive fixed
100
54 23 23
42 31 27
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 2014
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 takes these into account when reviewing executive pay an employee engagement 
survey is scheduled for 2014
further details of employee remuneration arrangements can be found in the “our employees” section on pages 36 to 37 of this annual report
report on directors’ remuneration continued strategic report
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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 directors’ interests are aligned in particular the committee expects to consult key 
shareholders in relation to the possible extension of the employee incentive plan’s operating period prior to making a decision on whether to
seek approval by shareholders at the 2015 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 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 ten year basis has fallen by 
01 per cent when comparing the positions at 31 december 2013 89 per cent and 31 december 2012 90 per cent the overall number of share 
incentives outstanding has fallen by 03 million during the year to 55 million at 31 december 2013 2012 58 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 is intended to provide for changed circumstances or strategy that has not been provided for  
in the remuneration policy when it would be disproportionate to seek specific approval from a general meeting of shareholders
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 68
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part b annual report on remuneration for 2013
audited information
single figure of total remuneration for 2013
the table below provides a single figure of total remuneration for 2013 and 2012 for the executive directors
2013
salary
1
 
000
benefits
2
 
000
performance 
related cash 
incentive
3
 
000
long term 
incentive
4
 
000
pension
5
 
000
total  
2013 
000
bill burns
6
5862 296 – – 102 6260
eric hutchinson
7
5408 270 381 – 1080 7139
2012
salary
1
 
000
benefits
2
 
000
performance 
related cash 
incentive
3
 
000
long term 
incentive
4
 
000
pension
5
 
000
total  
2012 
000
bill burns 7000 292 4255 3076
8
100 14723
eric hutchinson 4951 262 1502 1236
8
989 8940
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 bill burns stepped down as ceo on 3 september 2013
7 eric hutchinson became ceo on 3 september 2013
8 on 30 november 2012 129260 and 51926 performance shares vested and were alloted to bill burns and eric hutchinson respectively which at a fair market value of 1506 pence 
resulted in a gain of £194666 307572 for mr burns and £78201 123557 for mr hutchinson
quarterly and annual performance incentives
during 2013 the cash incentive plan continued to be structured so that twothirds of the incentive target could be earned in respect of quarterly 
targets and onethird in respect of annual targets
growth targets in the company’s eps and order intake representing 70 per cent and 30 per cent of the incentive respectively determined the 
maximum incentive which could be earned in respect of the annual incentive element
quarterly incentives were structured in two stages growth targets in the company’s quarterly eps and order intake formed the first stage and 
determined the maximum incentive which could be earned in respect of each quarter performance against key strategic goals including 
engineering and product milestones and other financial targets determined the actual incentive earned by each executive director in each 
quarterly performance period the engineering and product milestones in particular provide the roadmap to the group’s long term strategic 
direction and success
the annual growth targets for eps and order intake for an on target award for 2013 were 56 per cent and 103 per cent respectively these targets 
were not achieved and accordingly no award was earned the quarterly targets for eps order intake and individual goals are set prior to the 
commencement of each quarter the targets set for eps and order intake were not met in the first three quarters of 2013 and accordingly no 
award was earned in respect of those quarters in the fourth quarter the eps and order intake goals were partially met and all engineering and 
other personal goals were achieved resulting in an award of £24400 to eric hutchinson engineering and product milestone goals were 84 per 
cent achieved during the year other specific target detail for quarterly incentives is considered to be commercially sensitive in the prior year 
cash incentive payments of 425500 and 150200 were paid to bill burns and eric hutchinson respectively
for 2014 cash incentives will only be 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
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financial statements
spirent communications plc 
annual report 2013
69
total pension entitlements
during 2013 and prior to his termination bill burns participated in the spirent communications 401k pension plan “the plan” which is  
a defined contribution plan established under the provisions of section 401k of the us internal revenue code “us irc” the group makes 
matching contributions of up to 4 per cent of the maximum compensation permitted for these purposes under the us irc for 2013 the maximum 
permitted compensation was 255000 and accordingly the contribution made to the plan for the period up to bill burns’ termination was 
10200 2012 contribution 10000 eric hutchinson receives a taxable cash allowance in lieu of pension of 20 per cent of base salary  
for 2013 the allowance paid was £69233 108000 at an average exchange rate of 156£1 2012 £62570 98860 at an average exchange 
rate of 158£1
payments to past directors
there were no payments to past directors during the year under review
payments for loss of office
bill burns stepped down as chief executive officer on 3 september 2013 his termination payments are 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 will receive 
11 months’ base salary 660000 in ten equal monthly instalments of 66000 each commencing in december 2013 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” monthly cobra premium payments of 1840 are also being paid for the duration of the severance period subject to a set off for health 
insurance provided by an alternative employer during the severance period the company paid 8000 in respect of bill burns’ legal fees all 
outstanding unvested share awards granted to bill lapsed on termination however the committee exercised its discretion under the plan rules 
of the eip to allow bill’s vested and unfettered share awards to continue to be exerciseable during the 12 month period following termination  
as these awards had been retained by bill as part of his shareholding to meet the committee’s shareholding guideline for executive directors
nonexecutive director fees
details of fees paid to nonexecutive directors in 2013 and 2012 are as follows
2013 
£000
2012 
£000
alex walker chairman 1600 1600
ian brindle 510 510
duncan lewis 400 400
tom maxwell 490 490
sue swenson 400 366
total 3400 3366
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 2013 and to the date of this report at their respective date of termination 31 december 2013 or date of 
appointment as applicable
guideline holding
beneficially  
owned shares
unfettered  
share incentives guideline met
bill burns
1
100 of base salary
223484 374000 na
eric hutchinson 1302775 56600 yes
rachel whiting
2
83353 60348 no
note
1 the holding shown for bill burns is as at the date when he stepped down as ceo 3 september 2013
2 the holding shown for rachel whiting is as at the date of her appointment to the board 1 february 2014 70
spirent communications plc 
annual report 2013
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 2012
ordinary shares
1
at 31 december 2013 
ordinary shares
at 27 february 2014
ordinary shares
2
executive directors
eric hutchinson 1300379 1302775 1303285
rachel whiting na na 83475
3
bill burns 218850 223484
4
na
nonexecutive directors
ian brindle 4525 4525 4525
duncan lewis – – –
tom maxwell 26955 50000 50000
sue swenson – – –
alex walker 80481 180481 180481
notes
1 directors’ beneficial interests do not form part of the remuneration provided by the company
2 events since 31 december 2013
 on 24 january 2014 eric hutchinson acquired 266 ordinary shares under the uk employee share purchase plan at a price of 938381 pence per share
 on 24 february 2014 eric hutchinson acquired 244 ordinary shares and rachel whiting acquired 122 ordinary shares both under the uk employee share purchase plan at a price of 
10246 pence per share
3 rachel whiting joined the board on 1 february 2014
4 the holding shown for bill burns is as at the date when he stepped down as ceo 3 september 2013
report on directors’ remuneration continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
71
outstanding share incentive awards
1
the share incentive interests of executive directors who served during the period 1 january 2013 to the date of this report are set out below
eric hutchinson
plan type eip eip eip eip eip
award type sar ps ps ps sar
award date 25 august 2005 23 march 2011 21 march 2012 8 may 2013 8 may 2013
at 1 january 2013 or at date of appointment 56600 109366 142235 – –
granted during the period – – – 172531 86266
vested during the period – – – – –
exercised during the period – – – – –
lapsed during the period – – – – –
any other adjustments during period – – – – –
at 31 december 2013 or at date of cessation 56600 109366 142235 172531 86266
market price at date of award £ 053 1432 1531 1291 1291
face value of award granted in period £ – – – 222737 111369
exercise price £ 053 nil
2
nil
2
nil
2
1291
subject to performance conditions yes yes yes yes yes
performance condition eps 50 eps 50 tsr 50 eps 50 tsr 50 eps 50 tsr eps
performance condition testing date
3
25 august 2008 23 march 2014 21 march 2015 8 may 2016 8 may 2016
result of performance condition testing 100 vest – – – –
market price at vesting date £
4
080 – – – –
exercise date – – – – –
market price at exercise date £ – – – – –
gain on exercise £ – – – – –
expiry date 24 august 2015 23 march 2014 21 march 2015 8 may 2016 8 may 2023
rachel whiting
plan type eip eip eip eip
award type sar ps ps ps
award date 5 may 2006 23 march 2011 21 march 2012 8 may 2013
at 1 january 2013 or at date of appointment
5
60348 21873 19928 –
granted during the period – – – 24262
vested during the period – – – –
exercised during the period – – – –
lapsed during the period – – – –
any other adjustments during period – – – –
at 31 december 2013 or at date of cessation 60348 21873 19928 24262
market price at date of award £ 0475 1432 1531 1291
face value of award granted in period £ – – – 31322
exercise price £ 0475 nil
2
nil
2
nil
2
subject to performance conditions yes yes yes yes
performance condition eps 50 eps 50 tsr 50 eps 50 tsr 50 eps 50 tsr
performance condition testing date
3
5 may 2009 23 march 2014 21 march 2015 8 may 2016
result of performance condition testing 100 vest – – –
market price at vesting date £
4
0595 – – –
exercise date – – – –
market price at exercise date £ – – – –
gain on exercise £ – – – –
expiry date 5 may 2016 23 march 2014 21 march 2015 8 may 2016 72
spirent communications plc 
annual report 2013
bill burns
plan type eip eip eip eip eip
award type sar ps ps ps sar
award date 7 november 2008 23 march 2011 21 march 2012 8 may 2013 8 may 2013
at 1 january 2013 or at date of appointment 374000 255859 287287 – –
granted during the period – – – 360183 180091
vested during the period – – – – –
exercised during the period – – – – –
lapsed during the period – 255859 287287 360183 180091
any other adjustments during period – – – – –
at 31 december 2013 or at date of cessation
6
374000 – – – –
market price at date of award £ 0505 1432 1531 1291 1291
face value of award granted in period £ – – – 464996 232498
exercise price £ 0505 nil
2
nil
2
nil
2
1291
subject to performance conditions yes yes yes yes yes
performance condition eps 50 eps 50 tsr 50 eps 50 tsr 50 eps 50 tsr eps
performance condition testing date
3
7 november 2011 3 september 2013 3 september 2013 3 september 2013 3 september 2013
result of performance condition testing 100 vest 0 vest 0 vest 0 vest 0 vest
market price at vesting date £
4
1246 1346 1346 1346 1346
exercise date – – – – –
market price at exercise date £ – – – – –
gain on exercise £ – – – – –
expiry date 3 september 2014 3 september 2013 3 september 2013 3 september 2013 3 september 2013
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 there is no exercise price payable for a performance share upon vesting further details on performance shares are provided above
3 awards which have passed the date first exercisable have vested and are unfettered having passed the relevant performance conditions
4 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
5 rachel whiting was appointed to the board on 1 february 2014 the awards shown were awarded prior to her appointment as chief financial officer
6 bill burns stepped down from the board on 3 september 2013
scheme interests awarded during the year
in 2013 the committee approved combined awards of performance shares and sars to mr burns and mr hutchinson equivalent to 250 per cent 
and 150 per cent of base salary respectively with one performance share being equivalent to two share options or sars
policy for performance shares granted in 2013
the performance conditions for performance shares awarded in 2013 under the eip are calculated over a three year performance period as set out 
in the following table
50 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 of award
tsr ranking proportion of performance shares vesting 
below median 0
between median and upper quartile on a straight line basis between 30 and 100
at or above upper quartile 100
report on directors’ remuneration continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
73
the comparator group for determining tsr comprises the 30 largest companies by market capitalisation in the ftse techmark 100 index 
excluding those companies who were also constituents of the ftse 100 index at the commencement of the performance period together with one 
nonuk listed direct competitor the committee considered that the selected comparator group provided a suitable benchmark for the company’s 
tsr rating in determining the tsr for the company and its comparator group share prices will be averaged over the 90 day period immediately 
prior to and at the end of the performance period
policy for sars and share options granted in 2013
the performance condition for sars and share options awarded in 2013 under the eip is based on the rate of growth in the company’s eps over 
the three year 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 2014
awards which are due to vest on 23 march 2014 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 23 march 2014 and are subject to a tsr performance condition will have that performance condition tested on 
23 march 2014
unaudited information
total shareholder return performance
the graph below shows the tsr performance for the last five financial years of spirent communications plc against the ftse 250 index and the 
ftse techmark 100 index excluding those companies who were also constituents of the ftse 100 index at the commencement of the period 
the committee believes that these provide broad equity market indices against which the performance of the company can be fairly compared 
and that the ftse techmark 100 index provides a particularly representative collection of comparator companies
fiveyear tsr performance – spirent vs ftse techmark 100
1
 and ftse 250
dec 13 dec 12 dec 11 dec 10 dec 09 dec 08
600
500
400
300
200
rebased index
100
spirent ftse techmark 100
1
ftse 250
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 2013 and 31 december 2013 being the first and last days the 
london stock exchange was open for trading in 2013 was 1538 pence and 1038 pence respectively and during that period ranged between a 
high of 1692 pence and a low of 985 pence 74
spirent communications plc 
annual report 2013
2012 2013
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
 
 
percentage change 
in group employee 
cash remuneration
percentage change 
in ceo cash 
remuneration
2
0
–25
–21
1636 1634
2012 2013
 
 
remuneration 
paid to all 
employees
remuneration paid to all employees m 
during 2013
2
102
120
555
308
109
94
2012
511
2013
777
 
 
returns to shareholders m during 2013
final dividend
paid may 2013
4
onmarket share
repurchase
3
interim dividend
paid september
2013
4
 
report on directors’ remuneration continued
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
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 mr burns stepped down as chief executive officer
statement of implementation of remuneration policy in 2014
the following components of remuneration are effective from 1 january 2014 or date of appointment if later
salary
eric hutchinson £400000
rachel whiting £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
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 2012 and 2013
2 total as set out in note 10 to the consolidated financial statements
3 total as set out in note 28 to the consolidated  financial statements
4 total as set out in note 14 to the consolidated  financial statements 75
strategic report
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financial statements
spirent communications plc 
annual report 2013
retirement benefits
eric hutchinson will receive a taxable cash sum in lieu of pension at a rate of 20 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 of base salary
annual cash incentive
the committee has set stretching targets for the year focused on order intake and earnings per share growth although the target detail is 
considered commercially sensitive the weightings for the year ended 31 december 2014 are as follows
earnings per share 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
award under employee incentive plan eip
it is anticipated that awards will be made under the eip in 2014 as follows
anticipated value of award £000
eric hutchinson 500
rachel whiting 150
the awards are valued on the basis 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 63 of this report
statement of shareholder voting
at the 2013 agm on 1 may 2013 the results of the advisory vote regarding the report on directors’ remuneration for the year to 31 december 2012 
were
votes for
1
votes against
number  number  votes cast votes withheld
2
512859440 9877 6407015 123 519266455 645149
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 76
spirent communications plc 
annual report 2013
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
meetings and attendance
the committee meets at least four times each year and at other times as necessary during 2013 five meetings were held with individual 
members’ attendance as follows
number of  
meetings held
number of  
meetings attended
tom maxwell committee chairman 5 5
ian brindle
1
5 4
duncan lewis 5 5
sue swenson 5 5
note
1 mr brindle was unable to attend an ad hoc committee meeting as it conflicted with a meeting already in his diary for another listed company mr brindle received all papers relating to the 
meeting and had the opportunity to discuss issues arising direct with the committee chairman in this instance he also appointed alex walker as his proxy for the duration of the meeting 
the company’s chairman was also in attendance at each of the meetings 
advisers to the committee
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 2013 for the remuneration committee totalled £17 460 and were based on 
time and materials
during the year the committee also consulted with the company’s chairman chief executive officer chief financial officer and the company 
secretary but not on matters relating to their own remuneration
signed on behalf of the board
tom maxwell
chairman of the remuneration committee
27 february 2014
report on directors’ remuneration continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
77
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 employee share ownership trust “esot” and the 
spirent sharesave trust “sst” the trustees of both trusts have 
waived their right to receive dividends on any ordinary shares held by 
them except for a nominal amount of 1 pence other than for those 
ordinary shares 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 employeeshareholder 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 2013 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 annual general meeting the directors seek authority to allot 
shares for cash and to disapply preemption rights within prescribed 
limits at the 2014 agm authority will be sought to allot new ordinary 
shares up to a nominal value of £6797 132 which is equal to 333 per 
cent of the company’s issued share capital as at 7 march 2014
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 2013 agm remains valid until the earlier of the 2014 agm or 30 
june 2014 since the company began returning capital to shareholders 
in may 2006 a total of £2608 million has been returned through the 
repurchase of 387 9 million ordinary shares
pages 44 to 79 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
other information which forms part of the directors’ report can be 
found in the following sections of the annual report
information
location in 
annual report
acquisitions 29
audit committee report 54
board and committee membership 46
corporate governance report 48
directors’ biographies 46
directors’ responsibilities statement 79
financial risk management 28
treasury policy 28
future developments 16
development costs 93
disability 37
diversity 37
greenhouse gas emissions 40
nomination committee report 53
employees 36
pension schemes 98
post balance sheet events 120
results and dividends 4
share capital 77
corporate social responsibility 38
sustainable development 40
directors’ indemnity arrangements 51
political donations
in accordance with the group’s ethics policy no political donations 
were made during the year 2012 nil
share capital
the company has a single class of share which is divided into ordinary 
shares of 3
1
 3 pence each each ordinary share carries one vote and all 
of the ordinary shares rank pari passu there are no special control 
rights relating to any of the ordinary shares at the date of this report 
6119 million ordinary shares of 3
1
 3 pence each had been issued 
which are fully paid up and are listed on the london stock exchange 
the company also operates a level 1 american depositary receipt 
“adr” programme with each adr representing four ordinary shares 
the adrs trade on the us overthecounter market and the bank of 
new york mellon is the authorised depositary bank for the programme 
further details on share capital are set out in note 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 
report of the directors 78
spirent communications plc 
annual report 2013
during 2013 292 million ordinary shares each with a nominal value 
of 3
1
 3 pence were repurchased for an aggregate consideration of 
£349 million and cancelled immediately following repurchase this 
represents 449 per cent of the company’s issued ordinary share 
capital at the beginning of 2013 the company repurchased a further 
100 million ordinary shares between 1 january 2014 and the date of 
this report
the company will seek authority to repurchase up to 999 per cent of 
its own ordinary shares at the 2014 agm to facilitate any further return 
of capital if the board concludes that it is in the best interests of 
shareholders to do so
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 2013
date of notification total holding
 of 
company’s
total
voting
rights
prudential plc 9 september 2013 70463646 1134
blackrock inc 11 july 2013 64825665 1043
axa investment 
managers sa 18 october 2011 47515946 765
aviva plc 16 december 2013 40696410 655
schroders plc 5 august 2013 34270136 552
artemis investment 
management limited 17 september 2010 32940888 530
standard life 
investments ltd 27 january 2011 32370026 521
ameriprise  
financial inc 11 december 2013 31590545 508
sun life assurance 
company of canada  
uk ltd 5 december 2008 23382347 376
norges bank 30 may 2013 19516804 314
the following notifications have been received during the period 
1 january 2014 to 27 february 2014
date of notification total holding
 of 
company’s
total
voting
rights
aviva plc 22 january 2014 40597969 657
prudential plc 29 january 2014 67877796 1100
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
details of post balance sheet events are included in note 35 to 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 20 and 25 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 57 of the audit committee report 
the board will be proposing a resolution to reappoint ey as auditiors at 
the 2014 agm
annual general meeting
the 2014 agm will be held at 1030am on wednesday 23 april 2014  
at the offices of ubs 1 finsbury avenue london ec2m 2pp
by order of the board
rachel whiting
company secretary
27 february 2014
spirent communications plc
company number 470893
report of the directors continued 79
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
the directors are responsible for preparing the annual report the report 
on directors’ remuneration the consolidated financial statements of the 
group and financial statements of the parent company
company law requires the directors to prepare financial statements 
for each financial year under that law they are required to prepare the 
consolidated financial statements of the group in accordance with 
international financial reporting standards “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 regulation they have general responsibility for taking such 
steps as are reasonably open to them to safeguard the assets of the 
group and to prevent and detect fraud and other irregularities
under applicable law and regulations the directors are also 
responsible for preparing a 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
27 february 2014
directors’ responsibilities statement 80
spirent communications plc 
annual report 2013
independent auditor’s report to the members of spirent 
communications plc
we have audited the group financial statements of spirent 
communications plc for the year ended 31 december 2013 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 and the related notes 1 to 35 the financial 
reporting framework that has been applied in their preparation is 
applicable law and international financial reporting standards 
“ifrss” as adopted by the european union 
this report is made solely to the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 2006 our 
audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them in 
an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for 
our audit work for this report or for the opinions we have formed 
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement set 
out on page 79 the directors are responsible for the preparation of the 
group financial statements and for being satisfied that they give a true 
and fair view our responsibility is to audit and express an opinion on 
the group financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s ethical 
standards for auditors 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the 
financial statements in addition we read all the financial and 
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 
opinion on financial statements 
in our opinion the group financial statements 
• give a true and fair view of the state of the group’s affairs as at 
31 december 2013 and of its profit for the year then ended 
• have been properly prepared in accordance with ifrss as adopted 
by the european union and 
• have been prepared in accordance with the requirements of the 
companies act 2006 and article 4 of the ias regulation 
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 and 
• 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 the 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
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 determined 
materiality for the group to be 225 million 2012 57 million 
which is approximately 5 of profit before tax for the year ending 
31 december 2013 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 materiality namely 17 million 2012 43 million our 
objective in adopting this approach is to ensure that total detected and 
undetected audit differences do not exceed our planning materiality of 
225 million for the financial statements as a 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 01 million 2012 03 
million and differences below that threshold which in our view 
warranted reporting on qualitative grounds
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 10 locations which 
present the principal business units within the group’s three 
reportable segments networks and applications wireless and service  81
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
experience and service assurance and account for 94 of the group’s 
total assets and 94 of the group’s profit before tax 
the audit work at the 10 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 
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 all material or high risk 
locations have been visited during the current year aside from asia 
which was visited in the prior year for all inscope locations the group 
audit team participated in the component team’s planning event 
including discussion of fraud and error 
the principal ways in which we responded to the risks described 
above included
revenue recognition
• we have carried out audit procedures on the allocation of 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 as adopted 
by the eu and
• we have carried out audit procedures on cut off in relation to 
revenue recognised close to year end and with particular focus in 
china and india which might be caused by import challenges
tax accounting
• we have assessed the consistency and robustness of tax 
provisions particularly in the light of any expected resolution of 
older issues and
• we have reviewed the 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
opinion on other matter prescribed by the companies act 2006 
in our opinion the information given in the strategic report and 
the directors’ report for the financial year for which the group 
financial statements are prepared is consistent with the group 
financial statements 
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 
• 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 78 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 
other matter 
we have reported separately on the parent company financial 
statements of spirent communications plc for the year ended 
31 december 2013 and on the information in the directors’ 
remuneration report that is described as having been audited 
karl havers senior statutory auditor
for and on behalf of ernst  young llp statutory auditor
london
27 february 2014
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 2013
82
notes
2013 
 million
restated
2012
1
 
 million
continuing operations
revenue 3 4 4135 4724
cost of sales 1267 1357
gross profit 2868 3367
product development 4 1005 861
selling and distribution 966 917
administration 506 508
operating profit 4 391 1081
finance income 8 09 08
finance costs 9 09 05
profit before tax 4 5 391 1084
tax 12 64 290
profit for the year after tax for continuing operations 327 794
discontinued operations 6 – 471
profit for the year attributable to owners of the parent company 327 1265
earnings per share cents 13
continuing operations
 basic 510 1211
 diluted 509 1207
discontinued operations
 basic – 718
 diluted – 715
total group
 basic 510 1929
 diluted 509 1922
note
1  restated for the implementation of ias 19 “employee benefits”
the notes on pages 87 to 120 and page 135 form part of these financial statements
consolidated income statement
 year to 31 december 2013 strategic report
governance
financial statements
spirent communications plc 
annual report 2013
83
consolidated statement of comprehensive income 
 year to 31 december 2013
notes
2013  
 million
restated
2012
1
 
 million
profit for the year attributable to owners of the parent company 327 1265
other comprehensive income
items that may subsequently be reclassified to profit or loss
 exchange differences on retranslation of foreign operations 07 32
 exchange differences recycled on disposal 33 – 12
07 44
items that will not subsequently be reclassified to profit or loss
 remeasurement of the net defined benefit pension liability 11 178 117
 income tax effect 12 42 25
136 92
other comprehensive income 129 48
total comprehensive income for the year attributable to owners of the parent company 456 1217
note
1 restated for the implementation of ias 19 “employee benefits”
the notes on pages 87 to 120 and page 135 form part of these financial statements spirent communications plc 
annual report 2013
84
notes
2013 
 million
2012 
 million
assets
non‑current assets
intangible assets 15 1988 2074 
property plant and equipment 16 396 341 
trade and other receivables 20 44 49 
cash on deposit 21 01 04 
defined benefit pension plan surplus 11 06 – 
deferred tax 23 183 284 
2618 2752 
current assets
inventories 19 316 340 
trade and other receivables 20 1027 956 
cash and cash equivalents 21 2162 2486 
3505 3782 
total assets 6123 6534 
liabilities
current liabilities
trade and other payables 22 1307 1073
current tax 36 85
provisions and other liabilities 25 60 44
1403 1202
non‑current liabilities
trade and other payables 24 152 114
defined benefit pension plan deficit 11 39 256
provisions and other liabilities 25 05 06
196 376
total liabilities 1599 1578
net assets 4524 4956 
capital and reserves 28
share capital 344 353 
share premium account 335 329 
capital redemption reserve 213 194 
other reserves 32 16
translation reserve 233 240 
retained earnings 3431 3856 
total equity attributable to owners of the parent company 4524 4956 
the notes on pages 87 to 120 and page 135 form part of these financial statements
signed on behalf of the board
eric hutchinson
director
27 february 2014   
consolidated balance sheet
 at 31 december 2013 strategic report
governance
financial statements
spirent communications plc 
annual report 2013
85
notes
2013 
 million
2012 
 million
cash flows from operating activities
cash flow from operations 31 735 1282
tax paid 61 231
net cash inflow from operating activities 674 1051
cash flows from investing activities
interest received 08 09
transfer from long term deposit 03 03
purchase of intangible assets 15 24 –
purchase of property plant and equipment 16 229 164
proceeds from the sale of property plant and equipment 10 21
acquisition of subsidiaries and businesses 32 – 920
net proceeds from the disposal of operations 33 – 599
net cash used in investing activities 232 452
cash flows from financing activities
interest paid – 03
dividend paid 14 222 203
proceeds from the issue of share capital and employee share ownership trust 02 22
share repurchase 547 316
net cash used in financing activities 767 500
net decreaseincrease in cash and cash equivalents 325 99
cash and cash equivalents at the beginning of the year 2486 2365
effect of foreign exchange rate changes 01 22
cash and cash equivalents at the end of the year 21 2162 2486
the notes on pages 87 to 120 and page 135 form part of these financial statements
consolidated cash flow statement
 year to 31 december 2013 spirent communications plc 
annual report 2013
86
 million
share 
capital
share 
premium 
account
capital 
redemption 
reserve
other  
reserves
translation 
reserve
retained 
earnings
total 
equity
at 1 january 2012 343 313 177 27 196 3166 4222
profit for the year restated
1
 – – – – – 1265 1265
other comprehensive income restated
1
 a – – – – 44 92 48
total comprehensive income – – – – 44 1173 1217
sharebased payment note 30 – – – – – 16 16
tax on share incentives note 12 – – – – – 10 10
employee share ownership trust note 28 – – – – – 22 22
share cancellation note 28 07 – 07 – – – –
share repurchase note 28 – – – – – 308 308
equity dividends note 14 – – – – – 203 203
exchange adjustment 17 16 10 43 – – –
at 1 january 2013 353 329 194 16 240 3856 4956
profit for the year – – – – – 327 327
other comprehensive income b – – – – 07 136 129
total comprehensive income – – – – 07 463 456
sharebased payment note 30 – – – – – 12 12
employee share ownership trust note 28 – – – – – 02 02
share cancellation note 28 15 – 15 – – – –
share repurchase note 28 – – – – – 555 555
share buyback obligation note 28 – – – – – 101 101
equity dividends note 14 – – – – – 222 222
exchange adjustment 06 06 04 16 – – –
at 31 december 2013 344 335 213 32 233 3431 4524
note
1  restated for the implementation of ias 19 “employee benefits”
a the amount included in other comprehensive income for 2012 of 92 million represents remeasurement losses of the net defined benefit 
pension liability of 117 million net of a tax credit of 25 million
 the amount included in the translation reserve of 44 million represents other comprehensive income related to the translation of foreign 
operations of 32 million and exchange differences of 12 million recycled on the disposal of operations
b the amount included in other comprehensive income for 2013 of 136 million represents remeasurement gains of the net defined benefit 
pension liability of 17 8 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
the notes on pages 87 to 120 and page 135 form part of these financial statements
consolidated statement of changes in equity strategic report
governance
financial statements
spirent communications plc 
annual report 2013
87
1 corporate information 
the group’s consolidated financial statements for the year ended 31 december 2013 were authorised for issue by the board of directors on 
27 february 2014 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 122 to 135 and the accounting policies in respect of the company are set out on pages 123 to 126
2 summary of significant accounting policies 
basis of preparation 
the consolidated financial statements have been prepared under the historical cost convention except unless otherwise indicated
the group has prepared its financial statements under ifrss the significant accounting policies applied in the preparation of these consolidated 
financial statements are set out below and the accounting policies adopted are consistent with those applied in the consolidated financial 
statements for the year ended 31 december 2012 other than in relation to ias 19 “employee benefits” discussed below
change to segmental reporting
ifrs 8 “operating segments” requires operating segments to be determined based on the group’s internal reporting to the chief operating 
decision maker the chief operating decision maker has been determined in spirent’s case to be the chief executive officer as he is primarily 
responsible for the allocation of resources to segments and the assessment of the performance of segments
a review of the group’s organisational structure which was completed in 2013 has resulted in a change to the segmental information provided 
to the chief operating decision maker and this has required a change to spirent’s segmental reporting structure spirent is now reporting three 
operating segments networks  applications wireless  service experience and service assurance previously networks  applications and 
wireless  service experience were reported as one segment performance analysis comparatives have been restated accordingly
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 other than in relation to ias 19 “employee benefits”
international accounting standards “iasifrs”
ias 1 amendments to ias 1 – presentation of items of other comprehensive income
ias 1 amendments to ias 1 – clarification of the requirements for comparative information
ias 16 amendments to ias 16 – classification of servicing equipment
ias 19 employee benefits
ias 32 amendments to ias 32 – tax effect of distribution to holders of equity instruments
ias 36 amendments to ias 36 – recoverable amount disclosures for nonfinancial assets
ifrs 1 amendments to ifrs 1 – borrowing costs
ifrs 1 amendments to ifrs 1 – government loans
ifrs 7 amendments to ifrs 7 – offsetting financial assets and financial liabilities
ifrs 13 fair value measurement
annual improvements 2009–2011 cycle
ias 19 “employee benefits”
with effect from 1 january 2013 the group has implemented the amendments to the accounting standard ias 19 “employee benefits” in relation 
to its united kingdom defined benefit pension plans comparative numbers have been restated accordingly
notes to the consolidated financial statements spirent communications plc 
annual report 2013
88
2 summary of significant accounting policies continued
under the revised accounting standard the principal change is that the expected returns on defined benefit pension plan assets are not 
recognised in profit or loss instead interest on the net defined benefit pension obligation is recognised in profit or loss calculated using the 
discount rate used to measure the pension obligation for spirent this change has caused net interest income on the defined benefit pension 
plans under the previous standard to become a net finance cost under the revised standard in addition certain administrative expenses of 
running the plans are expensed to operating costs having been deducted from the return on assets under the previous standard plan asset 
administration costs are recognised as remeasurement adjustments in other comprehensive income
the implementation of ias 19 has had no effect on the prior year consolidated balance sheet or consolidated cash flow statement
impact on total comprehensive income for the year of application
2013 
 million
2012 
 million
impact on profit for the year
increase in administration costs 07 11
decrease in finance income 03 07
increase in finance expense 09 05
tax 04 –
decrease in profit for the year 15 23
impact on other comprehensive income
increase in remeasurement of the net defined benefit pension liability 19 23
income tax effect 04 –
increasedecrease in total comprehensive income for the year – –
impact on earnings per share
basic earnings per share cents 023 035
diluted earnings per share cents 023 035
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 
results of subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date 
on which control is transferred out of the group all intra group transactions balances income and expenses are eliminated on consolidation
goodwill 
goodwill arising on the acquisition of subsidiaries representing the excess of cost over the net fair value of the identifiable assets liabilities 
and contingent liabilities acquired is capitalised as an intangible asset goodwill is carried at cost less any accumulated impairment losses 
goodwill is subject to an annual review for impairment for the purpose of impairment testing goodwill is allocated to the related 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 
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
89
2 summary of significant accounting policies continued
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 2013 and 31 december 2012 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 
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  spirent communications plc 
annual report 2013
90
2 summary of significant accounting policies continued
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 
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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
91
2 summary of significant accounting policies continued
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
contractual arrangements are accounted for as two or more separate transactions only where the commercial substance is that the individual 
components operate independently of each other because they are capable of being provided separately from one another and it is possible 
to attribute reliable fair values to every component to the extent that a separate component comprises a product sale of hardware or software 
revenue is recognised as described above revenue is recognised on other components as the group fulfils its contractual obligations and to the 
extent that it has earned the right to consideration 
employee benefits 
when an employee has rendered services to the group during an accounting period short term benefits expected to be paid in exchange for 
those services are recognised in the same accounting period 
sharebased payment
the group operates various equitysettled sharebased compensation plans and accounts for these awards in accordance with ifrs 2 
“sharebased payment”
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 satisified
the group has an employee share trust for the granting of certain share incentives to employees shares in the group held by the employee share 
trust are treated as treasury shares and presented in the balance sheet as a deduction from equity
tax
income tax on the profit or loss for the year comprises current and deferred tax income tax is recognised in the income statement except to the 
extent that it relates to items in equity
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the balance sheet 
date and any adjustments to tax payable for previous years spirent communications plc 
annual report 2013
92
2 summary of 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 
goodwill impairment
the group tests annually by cashgenerating unit whether goodwill has suffered impairment and more frequently when events or circumstances 
indicate that the current carrying value may not be recoverable the recoverable amounts of cashgenerating units have been determined based 
on value in use calculations which require the use of estimates and assumptions these are described in note 15
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 11
revenue recognition
for revenue recognition purposes contractual arrangements are accounted for as two or more separate transactions only where the commercial 
substance is that the individual components operate independently of each other because they are capable of being provided separately from 
one another and it is possible to attribute reliable fair values to every component to the extent that a separate component comprises a product 
sale of hardware or software revenue is recognised as described above revenue is recognised on other components as the group fulfils its 
contractual obligations and to the extent that it has earned the right to consideration management exercises a degree of judgement in setting the 
criteria used for determining when revenue which involves several elements should be recognised 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 23
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
93
2 summary of 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
ias 19 amendments to ias 19 – employee contributions 1 july 2014
ias 32 amendments to ias 32 – offsetting financial assets and financial liabilities 1 january 2014
ifrs 9 financial instruments to be confirmed
ifrs 10 consolidated financial statements 1 january 2014
ifrs 11 joint arrangements 1 january 2014
ifrs 12 disclosure of interests in other entities 1 january 2014
ifrs 1012 and ias 27 amendments to ifrs 10 and 12 and ias 27 – investment entities 1 january 2014
ias 39 and ifrs 9 amendments to ias 39 and ifrs 9 – novation of derivatives and continuation of  
hedge accounting 1 january 2014
ifric 21 levies 1 january 2014
annual improvements  
2010–2012 cycle 
2011–2013 cycle
1 july 2014 
1 july 2014
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the group’s financial 
statements in the period of initial application
3 revenue 
2013 
 million
2012 
 million
sale of goods 2862 3620
maintenance and support services 1273 1104
total revenue from continuing operations 4135 4724
revenue for discontinued operations principally relates to the sale of goods
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
as explained in note 2 the group has amended its operating segments for 2013 and comparative information has been restated the group’s 
continuing reportable operating segments are networks  applications wireless  service experience and service assurance its systems 
segment was sold during 2012 and is disclosed as a discontinued operation the group evaluates segment operating profit before exceptional 
items acquisition related costs acquired intangible asset amortisation 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 continuing reportable operating segments are as follows
• networks  applications develops innovative solutions for functional and performance 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 nextgeneration mobile wireless and 
satellite positioning devices in the lab before a commercial launch and measurement of the mobile experience on live networks
• service assurance provides solutions to allow service providers to diagnose troubleshoot and determine how to resolve issues with networks 
and systems within the live network and to monitor live network performance spirent communications plc 
annual report 2013
94
4 operating segments continued
segmental information is provided below for continuing operations discontinued operations are dealt with in note 6 
2013  
 million
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 note 7 16 – – 22 38
total reportable segment profitloss 116 338 90 81 463
unallocated amounts
 acquired intangible asset amortisation 84
 sharebased payment note 30 12
operating profit 391
finance income 09
finance expense 09
profit before tax 391
other information
product development 551 376 78 – 1005
expenditure on intangibles note 15 – 24 – – 24
expenditure on property plant and equipment 107 112 10 – 229
intangible asset amortisation – other – 15 – – 15
depreciation 87 66 10 02 165
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
95
4 operating segments continued
restated
2012  
 million
networks  
applications
wireless 
 service 
experience
service 
assurance corporate total
revenue
external revenue 2595 1745 384 – 4724
there were no intersegment sales
profit before tax
total reportable segment profitloss before exceptional items 597 567 84 65 1183
exceptional items note 7 – – 29 – 29
total reportable segment profitloss 597 567 55 65 1154
unallocated amounts
 acquisition related costs 12
 acquired intangible asset amortisation 45
 sharebased payment note 30 16
operating profit 1081
finance income 08
finance costs 05
profit before tax 1084
other information
product development 498 293 70 – 861
expenditure on intangibles note 15 386 514 – – 900
expenditure on property plant and equipment 95 62 01 01 159
intangible asset amortisation – other – 16 – – 16
depreciation 84 50 11 01 146
geographical information
2013 
 million
2012 
 million
revenue by market
united states 2158 2392
asia pacific rest of world 1469 1660
europe 508 672
4135 4724
europe includes united kingdom revenue of 98 million 2012 134 million
revenues are attributed to countries based on customer location 
2013 
 million
2012 
 million
non‑current assets
united states 2280 2324 
asia pacific rest of world 71 57 
europe 33 34 
2384 2415 
europe includes united kingdom noncurrent assets of 21 million 2012 22 million
no one customer accounted for 10 per cent or more of total group revenue in either 2013 or 2012  spirent communications plc 
annual report 2013
96
5 profit before tax 
the following items have been charged or credited in arriving at profit before tax and are disclosed for continuing and discontinued operations 
2013 
 million
restated
2012 
 million
employee benefit costs note 10 1838 1862
costs of inventories recognised as an expense 823 1196
writedown of inventories to net realisable value note 19 03 37
amortisation of intangible assets note 15 99 61
depreciation of property plant and equipment
 owned assets note 16 165 152
loss on disposal of property plant and equipment – 01
operating leases
 minimum lease payments 84 77
 sublease income – 01
product development costs 1005 901
net foreign exchange charge 04 08
services provided to all of the operations of the group by the auditor ernst  young llp and its associates 
2013 
 million
2012 
 million
audit services
group audit fee 08 08
other fees to auditors
taxation advisory services 02 02
taxation advisory relating to corporate finance transactions – 02
02 04
10 12
a description of the work of the audit committee is set out in the audit committee report on pages 54 to 57 and includes an explanation of how 
auditor objectivity and independence is safeguarded when nonaudit services are provided by the auditor
6 discontinued operations
the assets and liabilities of the systems division were sold to curtisswright corporation on 1 november 2012 for a cash consideration of 
632 million
2013 
 million
2012 
 million
revenue – 439
cost of sales – 276
gross profit – 163
expenses – 120
operating profit – 43
profit on sale of operations note 33 – 445
profit before tax – 488
tax note 12 – 17
profit for the year after tax for discontinued operations – 471
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
97
6 discontinued operations continued
the net cash flows for discontinued operations were as follows
2013 
 million
2012 
 million
operating note 31 – 79
investing – 05
net cash inflow – 74
revenue by market for discontinued operations was as follows
2013 
 million
2012 
 million
revenue by market
united states – 173
asia pacific rest of world – 156
europe – 110
– 439
europe includes united kingdom revenue of nil 2012 15 million
revenues are attributed to countries based on customer location
7 exceptional items
2013 
 million
2012 
 million
review of the group’s organisational structure 34 –
reorganisation expenses – service assurance – 15
excess inventory provision – service assurance – 14
abortive acquisition costs 04 –
38 29
in the fourth quarter of 2013 the group undertook a review of its operational structure this resulted in a number of management and structural 
changes being made in order to deliver a streamlined decentralised and more simplified business these internal changes have been made to 
create a more agile and responsive organisation to better serve spirent’s customers as well as sharpen the business’s focus on anticipating 
customers’ requirements for the future
the tax effect of exceptional items is a credit of 08 million 2012 10 million
8 finance income 
2013 
 million
2012 
 million
bank interest receivable 09 08
9 finance costs 
2013 
 million
2012 
 million
net defined benefit pension plan interest note 11 09 05
10 employees 
the average number of people employed by the group during the year was 
2013 
number
2012 
number
manufacturing 339 363
product development 596 581
selling and distribution 394 419
administration 185 182
1514 1545 spirent communications plc 
annual report 2013
98
10 employees continued
employee benefit costs were
2013 
 million
restated
2012 
 million
remuneration 1636 1634
social security costs 149 143
pension and other related costs 65 69
creditexpense of sharebased payment note 30 12 16
1838 1862
employee numbers and costs include discontinued operations in 2012
please refer to the report on directors’ remuneration on pages 58 to 76 and note 34 for disclosures relating to the emoluments share incentives 
and pensions of the directors
11 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 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 and property investments 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 2014 are 48 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 43 million per annum from 1 july 2013 to 30 june 2019 plus a further contribution of up to 42 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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
99
11 pensions continued
ii amounts in the financial statements
the assets and liabilities on the balance sheet are as follows
2013 
 million
2012 
 million
assets
uk defined benefit pension plan – cash plan 06 –
liabilities
uk defined benefit pension plan – staff plan 31 248
uk unfunded plan 08 08
39 256
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these financial statements
a the assets and liabilities in each plan 
2013 
 million
2012 
 million
staff plan
quoted
 equities 894 725
 uk government index linked bonds – 535
 corporate bonds – 406
unquoted
 inflation only ldi funds 239 –
 cash benchmarked bonds 1204 502
 insured annuities 55 57
 property 254 228
 cash and other 08 10
fair value of plan assets 2654 2463
present value of defined benefit pension plan obligations 2685 2711
deficit in the plan on the balance sheet 31 248
cash plan
quoted
 equities 45 37
 government bonds 33 36
unquoted
 insured annuities 03 03
 cash and other 40 33
fair value of plan assets 121 109
present value of defined benefit pension plan obligations 115 109
surplus in the plan on the balance sheet 06 –
the plans are prohibited from investing in spirent’s own financial instruments 
the fair values of the above equity and debt instruments are determined based on quoted market prices in active markets whereas the fair values 
of property and insured annuities are not spirent communications plc 
annual report 2013
100
11 pensions continued
b analysis of the amounts charged to the income statement 
2013 
 million
restated 
2012 
 million
plan administration expenses 07 11
current service cost 02 03
curtailment loss on sale of systems – 13
amount charged to operating costs 09 27
net interest on the net defined benefit pension liability 09 05
net charge to the income statement 18 32
c analysis of amount recognised directly in the statement of comprehensive income 
2013 
 million
restated 
2012 
 million
remeasurement gain on plans’ assets 112 93
actuarial gain arising from experience – 11
actuarial loss arising from the demographic assumptions – 130
actuarial gainloss arising from changes in financial assumptions 66 89
changes in assumptions underlying the present value of unfunded plan’s liabilities – 02
re‑ measurement of the net defined benefit pension liability 178 117
d movements in the present value of funded defined benefit obligations 
2013 
 million
restated 
2012 
 million
at 1 january 2820 2455
current service cost 02 03
curtailment loss on sale of systems – 13
interest cost 114 114
employee contributions – 02
benefit payments 117 109
actuarial gain arising from experience – 11
actuarial loss arising from the demographic assumptions – 130
actuarial gainloss arising from changes in financial assumptions 66 89
exchange adjustment 47 134
present value of funded defined benefit pension plans’ obligations 2800 2820
e movements in the fair value of plans’ assets
2013 
 million
restated 
2012 
 million
at 1 january 2572 2337
interest income on plans’ assets 105 109
employer contributions 53 28
employee contributions – 02
benefit payments 117 109
plan administration expenses 07 11
remeasurement gain on plans’ assets 112 93
exchange adjustment 57 123
fair value of plans’ assets 2775 2572
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
101
11 pensions continued
f the key financial assumptions 
the assumptions used for both plans using a weighted average were as follows 
2013
 
2012 

inflation – rpi 33 29
inflation – cpi 22 22
rate of increase in pensionable salaries 31 29
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 31 28
rate of increase for pensions post 5 april 2005 service 22 19
rate of increase in deferred pensions 22 22
rate used to discount plan liabilities 45 43
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 2012 aged 65 will live on average for a further 235 years 2012 233 years if they are male and for a further 256 
years 2012 255 years if they are female for a member who retires in 2033 2012 in 2032 at age 65 2012 age 65 the assumptions are that they 
will live on average for a further 243 years 2012 242 years after retirement if they are male and for a further 267 years 2012 266 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 40 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 108 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
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 2012 16 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 2013 
were 14 million 2012 13 million 
united states 
the group maintains a defined contribution pension plan for employees of its united states subsidiaries this plan also known as a 401k plan 
allows employees to defer a percentage of their salary for retirement the investment choices offered by the plan are a selection of diversified 
mutual funds offering a broad mix of investment return potential with varying levels of risk in aggregate the group’s contributions to the us plan 
totalled 33 million for 2013 2012 34 million total assets in the defined contribution plan at the end of 2013 were 2046 million 2012 
167 0 million there were no defined benefit plans in the united states in 2013 or 2012
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 2013 in respect of these 
plans amounted to 09 million 2012 08 million
total employer contributions to defined contribution plans were 56 million 2012 55 million
directors’ pension arrangements 
the pension arrangements of the executive directors are described in detail in the report on directors’ remuneration on pages 58 to 76 spirent communications plc 
annual report 2013
102
12 tax
2013 
 million
2012 
 million
tax charge in the income statement
current income tax
uk tax – 05
foreign tax 51 235
amounts overprovided in previous years – foreign tax 37 18
total current income tax charge 14 222
deferred tax
recognition of deferred tax assets – 14
reversal of temporary differences 50 99
total deferred tax charge 50 85
tax charge in the income statement 64 307
attributable to
continuing operations 64 290
discontinued operations – 17
tax charge in the income statement 64 307
the tax charge for the year ended 31 december 2013 was 64 million 2012 charge 307 million this was after a prior year tax credit of 37 
million 2012 credit 18 million resulting from the expiration and reassessment of open tax positions for previous years excluding the prior year 
tax credit the effective tax rate for continuing operations was 258 per cent 2012 284 per cent 
tax relating to items chargedcredited to other comprehensive income or equity 
2013 
 million
2012 
 million
deferred tax on share incentives 06 10 
current tax on share incentives 06 –
tax charge on share incentives – 10 
deferred tax chargecredit on defined benefit pension plan 42 25
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 2325 per cent 2012 lower and 
245 per cent the differences are reconciled below
2013 
 million
restated 
2012 
 million
accounting profit before tax 391 1572 
accounting profit multiplied by the uk standard rate of corporation tax of 2325 per cent 2012 245 per cent 91 385 
sharebased payment – 25
differences in overseas rates and other adjustments 11 80 
tax overprovided in prior years 37 18
recognition of deferred tax assets – 14
utilisation of previously unrecognised tax losses – 109
use of pension fund and other uk adjustments 01 08 
total tax charge reported in the income statement 64 307
 
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
103
13 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
2013
restated
2012
total and 
continuing
continuing 
operations
discontinued 
operations total
profit for the year attributable to owners of the parent company  million 327 794 471 1265
weighted average number of ordinary shares in issue number million 6406 6557 6557 6557
basic earnings per share cents 510 1211 718 1929
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
2013
restated
2012
total and 
continuing
continuing 
operations
discontinued 
operations total
profit for the year attributable to owners of the parent company  million 327 794 471 1265
weighted average number of ordinary shares in issue number million 6420 6581 6581 6581
diluted earnings per share cents 509 1207 715 1922
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
• sharebased payment
• tax effect on the above items
• prior year tax
a reconciliation is provided below
2013
restated
2012
 million
eps 
cents  million
eps 
cents
continuing operations
profit for the year attributable to owners of the parent company 327 510 794 1211
exceptional items note 7 38 29
acquisition related costs – 12
acquired intangible asset amortisation 84 45
sharebased payment note 30 12 16
tax effect on the above items 34 24
prior year tax credit note 12 37 18
adjusted basic for continuing operations 366 571 854 1302
adjusted diluted for continuing operations 570 1297
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 spirent communications plc 
annual report 2013
104
14 dividends paid and proposed
2013 
 million
2012 
 million
declared and paid in the year
equity dividend on ordinary shares
final dividend paid for the year ended 31 december 2012 of 183 cents 121 pence per ordinary share 31 december 
2011 167 cents 105 pence 120 109 
interim dividend 2013 153 cents 101 pence per ordinary share 2012 139 cents 089 pence 102 94 
222 203 
proposed for approval at agm not recognised as a liability at 31 december
equity dividend on ordinary shares
final dividend 2013 201 cents 120 pence per ordinary share 2012 183 cents 121 pence 123 119
 
the directors are proposing a final dividend in respect of the financial year ended 31 december 2013 of 201 cents per ordinary share 120 
pence 2012 183 cents 121 pence which will absorb an estimated 123 million of shareholders’ funds 2012 119 million it will be paid on 
25 april 2014 to ordinary shareholders who are on the register of members at close of business on 7 march 2014 payment will be made to adr 
holders on 2 may 2014 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 2013 was 167£1 2012 151£1
15 intangible assets 
 million
goodwill
customer
 list
current 
technology
data 
base
brand 
names licences total
cost net of accumulated amortisation and impairment 
losses
at 1 january 2012 1142 18 36 – – 36 1232
acquisitions note 32 556 92 210 26 16 – 900
amortisation for the year – 13 28 03 01 16 61
exchange adjustment 03 – – – – – 03
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 31 december 2013 1690 77 167 13 12 29 1988
at 31 december 2012
cost gross carrying amount 5751 126 311 26 18 89 6321
amortisation and accumulated impairment losses 4050 29 93 03 03 69 4247
net carrying amount 1701 97 218 23 15 20 2074
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 84 427 5
net carrying amount 1690 77 167 13 12 29 1988
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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
105
15 intangible assets continued
following the change to the group’s reportable segments described in note 2 goodwill has been reallocated to the following cgus
• networks  applications an operating segment
• wireless  positioning product lines within the wireless  service experience operating segment
• service experience a product line within the wireless  service experience operating segment
goodwill has been allocated as follows
2013 
 million
2012 
 million
networks  applications 860 –
wireless  positioning 521 –
service experience 309 –
performance analysis – 1701
1690 1701
this reallocation was based on the relative values for the networks  applications and for the wireless  positioning cgus for the service 
experience cgu goodwill has been based on historical cost due to the recent nature of this acquisition
acquired intangible assets being customer list current technology database and brand names are amortised on a straight line basis over 
their estimated useful lives which are between two and a half and seven years and the charge is included within administration expenses in the 
income statement licences are amortised over their useful lives or term being three to five years and are expensed within cost of sales or selling 
costs the remaining amortisation periods of the acquired intangible asset balances arising in relation to customer list and current technology are 
six and four years respectively
annual impairment test
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 the key factor in the cash flow forecasts 
is the ability to forecast revenue cash flows in subsequent years have been extrapolated using a 275 per cent growth rate 2012 275 per cent 
which management estimates to be the approximate average long term growth rate for the industries in which these units operate 
the cash flows have been discounted using a pretax discount rate of 138 per cent for all cgus 2012 145 per cent
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
key assumptions for the annual impairment test
the key assumptions used in the value in use calculations were
• revenue growth rates
• gross margin
• operating expenses
• discount rate
• growth rate used to extrapolate cash flows beyond the five year period covered by management’s projections
projections are denominated in the same currency as the denomination of the goodwill balance to eliminate the effect of fluctuating exchange rates
revenue growth rates used in management’s projections are based on management’s estimate of growth in the markets served and take into 
account historic levels of growth expected future developments in products and technology and macroeconomic conditions 
the cash flows used in the impairment review have been approved by the board
gross margins and operating expenses are based on historical values adjusted for the effect of revenue growth and recent acquisitions spirent communications plc 
annual report 2013
106
15 intangible assets continued
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 ten year 
government bonds and making an adjustment to reflect both the increased risk of investing in equities and the systematic risk of the specific 
cashgenerating unit in making this adjustment inputs required are the equity market risk premium and the risk adjustment beta applied to 
reflect the risk of spirent relative to the market as a whole
sensitivity to changes in key assumptions 
the directors believe that no reasonable possible change in any of the key assumptions used in isolation would cause the carrying value of the 
networks  applications wireless  positioning and service experience cgus to exceed their recoverable amount
16 property plant and equipment 
 million
land and 
buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost net of accumulated depreciation and accumulated impairment
at 1 january 2012 37 223 95 355
additions
 owned assets 05 134 25 164
disposals – 21 01 22
acquisitions note 32 – 05 – 05
disposal of operations note 33 – 11 01 12
interclass transfers – 03 03 –
depreciation charge for the year 13 102 37 152
exchange adjustment 01 01 01 03
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 31 december 2013 23 289 84 396
at 31 december 2012
cost 187 770 511 1468
accumulated depreciation and accumulated impairment 157 544 426 1127
net carrying amount 30 226 85 341
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
none of the property plant and equipment is held under finance lease arrangements
17 capital commitments and contingent liabilities 
the group had capital commitments of 13 million at 31 december 2013 31 december 2012 12 million 
the group has provided indemnities of 01 million 2012 01 million for certain ongoing business obligations under letters of credit for 
subsidiary companies
18 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest is given on 
page 135 of these financial statements
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
107
19 inventories 
2013 
 million
2012 
 million
raw materials 130 141
work in progress 10 06
finished goods 176 193
316 340
an expense of 03 million 2012 37 million has been recognised in the period for inventory writedowns there were no reversals of prior 
period inventory writedowns 2012 nil 
no inventories are carried at fair value less costs to sell 2012 nil
20 trade and other receivables 
2013 
 million
2012 
 million
non‑current assets
trade receivables 04 11 
other receivables 35 31 
prepayments accrued income and deferred costs 05 07 
44 49 
current assets
trade receivables 896 849 
other receivables 42 34 
prepayments accrued income and deferred costs 89 73 
1027 956 
1071 1005 
the trade receivables are stated net of provisions for doubtful debts the movement in the provision was as follows 
2013 
 million
2012 
 million
at 1 january 08 09
charge for the year 04 02 
released in the year 02 03
at 31 december 10 08
 
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 
21 cash and cash equivalents 
2013 
 million
2012 
 million
cash at bank and in hand 1721 2045 
short term bank deposits 441 441 
2162 2486
cash at bank and in hand earns interest at floating interest rates of this balance 12 million 2012 400 million is callable at notice of between 
seven and 35 days
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 spirent communications plc 
annual report 2013
108
21 cash and cash equivalents continued
at the end of 2013 the currency split of cash and cash equivalents was us dollar 84 per cent 2012 80 per cent sterling 10 per cent 2012 10 per 
cent and other currencies 6 per cent 2012 10 per cent
for the purposes of the cash flow statement cash and cash equivalents comprise the above amounts 
2013 
 million
2012 
 million
non‑ current
cash on deposit 01 04
 
at 31 december 2013 01 million 2012 04 million is held in a blocked trust account and is available for use by the company as creditors 
who were outstanding at the date of the cancellation of the share premium account and capital redemption reserve being 24 november 2004 
are settled see note 28
22 trade and other payables – current 
2013 
 million
2012 
 million
trade payables 183 159 
payments received on account 02 04 
other taxes and social security costs 45 41 
share buyback obligation note 28 182 81 
accruals 382 362 
deferred income 513 426 
1307 1073
 
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 
23 deferred tax 
the movements in the deferred tax assetsliabilities are as follows 
 million
temporary 
differences tax losses
uk pension 
plans total
at 1 january 2012 114 149 31 294
recognised in the year note 12 – 14 – 14
charged in the year note 12 37 62 – 99
deferred tax on defined benefit pension plan note 12 – – 25 25
deferred tax on share incentives recognised in equity note 12 10 – – 10
deferred tax on acquisition note 32 37 90 – 53
exchange adjustment 01 05 03 07
at 1 january 2013 29 196 59 284
charged in the year note 12 09 34 07 50
deferred tax on defined benefit pension plan note 12 – – 42 42
deferred tax on share incentives recognised in equity note 12 06 – – 06
exchange adjustment – – 03 03
at 31 december 2013 14 162 07 183
a deferred tax asset of 183 million has been recognised at 31 december 2013 2012 284 million 52 million is in the united kingdom 
2012 118 million 120 million is in the united states 2012 159 million and 11 million is in the rest of the world 2012 07 million
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
109
23 deferred tax continued
the deferred tax asset includes 07 million 2012 20 million in respect of the tax deduction which may be available on the future exercise of 
share incentives
deferred tax assets on temporary differences arising in canada of 47 million 2012 16 million have not been recognised
the group has tax losses arising in the united kingdom of 651 million 2012 640 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 17 7 million 2012 163 million have not been recognised
the group also has capital losses carried forward of 13666 million 2012 13403 million for which no deferred tax asset is recognised on the 
balance sheet these capital losses have no expiry date
future changes in tax rates
the uk current tax rate was reduced from 24 per cent to 23 per cent with effect from 1 april 2013 under the finance act 2013 the uk current tax 
rate will reduce to 21 per cent with effect from 1 april 2014 and then 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 2014 have been based on the existing 
23 per cent rate those being realised or settled between 1 april 2014 and 1 april 2015 have been based on the new 21 per cent rate and those 
being realised or settled after 1 april 2015 have been based on the new 20 per cent rate
24 trade and other payables – noncurrent 
2013 
 million
2012 
 million
other payables 22 19
accruals 04 09
deferred income 126 86
152 114
25 provisions and other liabilities
 million
lease 
provisions
restructuring 
provisions
other 
provisions total
at 1 january 2012 32 – 13 45
charged in the year 13 – 06 19
released in the year 02 – – 02
utilised in the year 13 – – 13
exchange adjustment 01 – – 01
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 31 december 2013 27 19 19 65
2013 
 million
2012 
 million
current 60 44
noncurrent 05 06
65 50 spirent communications plc 
annual report 2013
110
25 provisions and other liabilities continued
the lease provisions are for the continuing obligations under leases in respect of properties which have been vacated by the group where 
material lease obligations are discounted the group expects these provisions to be utilised over the next two 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 and dilapidation provisions the group expects these 
provisions to be utilised in less than one year
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 
2013
 million
2012 
 million
loans and 
receivables 
at amortised 
cost
loans and 
receivables 
at amortised 
cost
noncurrent cash on deposit note 21 01 04
noncurrent trade and other receivables note 20 39 42
cash and cash equivalents note 21 2162 2486
current trade and other receivables note 20 938 883
financial assets 3140 3415
noncurrent other payables and accruals note 24 26 28
current trade payables and accruals note 22 565 521
share buyback obligation note 22 182 81
provisions note 25 65 50
financial liabilities 838 680
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 
2013 and 2012 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 on demand 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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
111
26 financial instruments and financial risk management continued
short term bank deposits all mature within three months forward foreign currency exchange contracts all mature within three months the 
financial instruments bear the following interest rates 
effective 
interest rate 

2013 
 million
effective 
interest rate 

2012 
 million
fixed rate
fixed deposits 027 441 042 441 
floating rate
cash at bank and in hand 1721 2045 
interest rates on financial instruments classified as fixed rate are fixed until the maturity of the instrument all fixed rate deposits mature within 
three months after which date they will be exposed to floating rates of interest
in addition 01 million 2012 04 million was held in a blocked trust account and was earning interest of 044 per cent at 31 december 2013 
2012 044 per cent the maturity of the deposit is three months at maturity the interest rate will be reset this cash must be retained in the 
blocked trust account in accordance with the terms of the undertakings made at the time of the cancellation of the share premium account and 
capital redemption reserve the “cancellation” in 2004 the funds must remain in this account until creditors which existed at the date of the 
cancellation have been repaid and therefore the maturity of this account is uncertain
interest receivable for the year was 09 million note 8 2012 08 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 2013 would increase or reduce interest income and 
equity by 05 million 2012 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 is not exposed to significant transactional foreign currency risk at 31 december 2013 nor at 31 december 2012 because the majority 
of its businesses do not enter into nonfunctional currency transactions where such transactions do occur the group typically enters into forward 
foreign currency exchange contracts as appropriate
group treasury by means of forward foreign currency exchange contracts carries out the transaction hedging activity in relation to normal 
trading activity at 31 december 2013 the group has hedged the majority of its financial assets and liabilities in relation to trading which are 
denominated in nonfunctional currencies however the group holds cash balances in nonfunctional currencies which are exposed to us dollar 
to sterling exchange rates
at 31 december 2013 these balances amounted to 11 million 2012 09 million a 10 per cent appreciation or depreciation of sterling against 
the us dollar would increase or reduce profit before tax by 01 million 2012 01 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 2163 million 2012 2490 million spirent communications plc 
annual report 2013
112
26 financial instruments and financial risk management continued
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 900 million 2012 860 million
the composition of trade receivables at 31 december is as follows 
2013 
 million
2012 
 million
neither impaired nor past due 599 588 
past due but not impaired
 less than 30 days overdue 155 141 
 30 to 60 days 51 52 
 over 60 days 95 79 
trade receivables 900 860
 
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 20 the value of impaired trade receivables is 10 million 2012 08 
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 2013 the group had cash and cash equivalents of 2162 million 2012 2486 million of which 1709 million 2012 1645 
million is available on demand and 453 million 2012 841 million of which is on one month’s notice or matures within three months
during 2013 the group generated 67 4 million of cash from operating activities 2012 1051 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
2013 
 million
2012 
 million
sale of us dollars against sterling 35 36 
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
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 2013 and 2012 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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
113
26 financial instruments and financial risk management continued
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 2013 and 2012 the 
company has been operating an on market share repurchase programme in 2013 the company repurchased 292 million of its ordinary shares at 
a cost of 555 million 2012 134 million at a cost of 308 million the group intends to continue to repurchase shares on a oneoff basis as it 
deems appropriate
spirent’s policy on the payment of dividends to shareholders is to maintain a sustainable progressive dividend
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
2013 
 million
2012 
 million
within one year 82 79
in the second to fifth years 123 99
over five years 32 03
237 181
 
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 3 
1

3
 pence each
number of 
ordinary 
shares  
million  million
at 1 january 2012 6640 343
cancelled during the year
1
134 07
exchange adjustment 17
at 1 january 2013 6506 353
cancelled during the year
1
292 15
exchange adjustment 06
at 31 december 2013 6214 344
note
1  during 2013 under the programme of returning capital to shareholders the company repurchased 292 million 2012 134 million ordinary shares on market which were 
subsequently cancelled
during 2013 and 2012 no ordinary shares were transferred from the spirent sharesave trust “sst” to satisfy options exercised under the uk all 
employee share schemes and in 2013 14 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 2012 56 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 2013 and 27 february 2014 the date on which these financial statements have been signed spirent communications plc 
annual report 2013
114
28 equity continued
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 2013 the esot held 09 million ordinary shares 2012 23 million ordinary shares to satisfy awards under various share 
incentive plans at 31 december 2013 the sst held 05 million ordinary shares 2012 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 
14 million ordinary shares 2012 28 million ordinary shares at 31 december 2013 was 25 million 2012 69 million
cancellation of share premium account and capital redemption reserve
on 24 november 2004 spirent communications plc was granted an order of the high court for the approval of the cancellation of the 
share premium account and capital redemption reserve the “cancellation” which stood at that date at 13211 million £7027 million 
and 13 million £07 million respectively
the cancellation created a reserve in the financial statements of the company which was applied to eliminate the deficit in distributable reserves 
the balance of this reserve created after the deficit in distributable reserves had been eliminated was transferred to a special nondistributable 
reserve during 2006 the company transferred funds equal to the aggregate amount due to any creditors of spirent communications plc who 
were creditors on 24 november 2004 and who still remained creditors to a blocked trust account placing these funds in a blocked trust account 
in accordance with the undertakings made at the time of the cancellation allowed the special reserve to be released to distributable reserves
capital redemption reserve
during 2013 the company cancelled 292 million ordinary shares 2012 134 million ordinary shares that had been the subject of the on market 
share repurchase programme and transferred 15 million 2012 07 million to the capital redemption reserve
share repurchase
during 2013 the company repurchased 292 million 2012 134 million ordinary shares on market at a cost of 555 million 2012 308 million 
which were subsequently cancelled 
share buyback obligation
on 31 december 2012 the company entered into an irrevocable agreement with ubs limited to purchase up to a maximum of 34 million ordinary 
shares 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 and at a maximum price of 145 pence per share from 10 january 2013 to 27 february 2013 on their behalf this agreement 
entered into in respect of share buybacks during the close period was recognised as a financial liability of 81 million
as at the close of business on 27 february 2013 01 million shares had been repurchased under this buyback programme at 145 pence per share 
for a total consideration of 03 million the remaining liability expired at close of business on 27 february 2013
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
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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
115
29 employee share plans
movements in share incentives over a two year period ending on 31 december 2013 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 2011 39 24 75 51 12 117
exercised 06 2 57 51 11 123
granted 20 59 – – – –
forfeited 14 2 – – – –
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 – –
incentives exercisable
at 31 december 2012 05 50 18 50 01 69
at 31 december 2013 05 50 01 60 – –
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 1437 pence 2012 1554 pence
the following information relates to outstanding share incentives at 31 december 2013
2013 2012
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 250808–080523 0–53 11 24 74 10 27 80 
 incentive plan 230314–080523 129–169 137 30 88 150 12 89 
spirent stock 120107–131115 37–57 53 01 19 48 16 04 
 incentive plan 041105–120816 59–79 – – – 73 02 24 
1995 executive share 
 option scheme 300607–290614 69 – – – 69 01 15 
total 55 58
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 sharesettled stock appreciation rights “sars” 
and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions have been met 
for share options and sars the performance conditions relate to the company’s earnings per share “eps” 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 spirent communications plc 
annual report 2013
116
29 employee share plans continued
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on pages 58 to 76
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 sharesettled sars no price was payable on the grant of an award
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not normally 
subject to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant and thereafter in 
equal tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary of the date of grant will lapse
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 2013 28 million eip sars and 01 million ssip sars with an average base price of 127 pence and 60 pence respectively were 
outstanding 2012 17 million eip sars and 18 million ssip sars with an average base price of 118 pence and 50 pence respectively during 
2013 16 million eip and ssip sars were exercised resulting in the transfer of 11 million ordinary shares 2012 39 million ordinary shares were 
issued or transferred on the exercise of 56 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 three ways to provide ordinary shares to employees free shares partnership shares and matching shares the uk espp 
operates in conjunction with a trust which holds the shares on behalf of participants
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
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
117
29 employee share plans continued
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 in 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 
the total creditcharge for the year relating to employee sharebased payment plans is as follows
2013 
 million
2012 
 million
2005 employee incentive plan 12 16
 
all schemes are equitysettled
33 million share incentives were granted during 2013 2012 20 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 
2013 2012
weighted average share price pence 1291 1532
weighted average exercise price pence 733 593
weighted average fair value pence 590 781
expected volatility  33 35
option life years
 performance shares 3 3
 options and sars 10 10
suboptimal exercise factor 15 15
risk free rate  16 15–24
dividend yield  13 16
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  spirent communications plc 
annual report 2013
118
31 reconciliation of profit to cash generated from operations 
2013 
 million
restated 
2012 
 million
profit for the year 327 1265
adjustments for
 tax 64 307
 profit on the sale of operations – 445
 finance income 09 08
 finance costs 09 05
 intangible asset amortisation 99 61
 depreciation of property plant and equipment 165 152
 loss on the disposal of property plant and equipment – 01
 sharebased payment 12 16
changes in working capital
 deferred income receivedreleased 129 34
 increasedecrease in receivables 60 70
 decrease in inventories 24 16
 increasedecrease in payables 28 114
increase in provisions 15 04
defined benefit pension plan 44 14
cash flow from operations 735 1282
cash flow from operations comprises
 continuing operating activities 735 1203
 discontinued operating activities – 79
cash flow from operations 735 1282
32 business combinations
the group made no acquisitions during 2013
prior year acquisitions
in 2012 the group acquired 100 per cent of the share capital of mu dynamics inc and metrico wireless inc
the following table summarises the consideration paid and the assets and liabilities acquired at the acquisition date 
2012 
 million
mu dynamics
metrico 
wireless total
net assets acquired
intangible fixed assets 139 205 344
tangible fixed assets – 05 05
deferred tax asset 93 09 102
inventories 01 – 01
trade and other receivables 13 33 46
trade and other payables 46 39 85
deferred tax liability 49 – 49
total identifiable net assets 151 213 364
goodwill 247 309 556
total consideration 398 522 920
satisfied by
 cash 398 522 920
notes to the consolidated financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
119
33 disposals
systems division
on 1 november 2012 the group completed the disposal of the assets and liabilities of its systems division to curtisswright corporation
the assets and liabilities sold the proceeds and the resulting profit on disposal are shown below
2012 
 million
cash consideration 632
less
net assets sold
 tangible fixed assets 12
 inventories 85
 trade and other receivables 79
 trade and other payables 47
total net assets sold 129
other items
 disposal costs 33
 curtailment loss note 11 13
 exchange differences transferred from equity 12
profit on sale of operations 445
cash flows in respect of the disposal of operations are as follows
cash consideration 632
cash disposal costs 33
599 spirent communications plc 
annual report 2013
120
34 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” 
2013 
000
2012 
000
short term employee benefits 1666 2457
contribution to defined contribution scheme post employment benefits 10 10
compensation for loss of office termination benefits 136 –
statutory disclosures 1812 2467
sharebased payment 350 673
1462 3140
in 2013 eric hutchinson made gains on the exercise of share incentives of nil 2012 468000 and bill burns made gains on the exercise of share 
incentives of nil 2012 691000
35 post balance sheet events 
on 19 february 2014 spirent completed the acquisition of the business of dax technologies corp “dax” privately held by dragos alexe and 
others for a cash consideration of 37 0 million based in matawan new jersey 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
the addition of dax positions spirent well to help service providers with the unprecedented challenges they face when developing and managing 
new services in mobile and wireline network environments of rapidly increasing complexity this acquisition will enable us to strengthen our 
service assurance portfolio expanding spirent’s addressable market in the live network 
on 20 february 2014 spirent completed the acquisition of 58 per cent of the share capital of testing technologies ist gmbh “testing tech” 
which was in private ownership for a cash consideration of euro 20 million the company develops and markets standardised and customer
specific 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 expires on 31 march 2016 the consideration is based on the 2015 performance of testing 
tech and set at a minimum amount of euro 14 million testing tech will be reported within our wireless and service experience division
as both acquisitions have only very recently completed neither the fair values of the assets and liabilities acquired nor the consideration 
have yet been determined
notes to the consolidated financial statements continued 121
strategic report
governance
financial statements
spirent communications plc 
annual report 2013
we have audited the parent company financial statements of spirent 
communications plc for the year ended 31 december 2013 which 
comprise 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 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 79 the directors are responsible for the preparation of the 
parent company financial statements and for being satisfied that they 
give a true and fair view our responsibility is to audit and express an 
opinion on the parent company financial statements in accordance 
with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing 
practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the overall 
presentation of the financial statements in addition we read all the 
financial and 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
opinion on financial statements
in our opinion the parent company financial statements
• give a true and fair view of the state of the company’s affairs as at 
31 december 2013
• have been properly prepared in accordance with united kingdom 
generally accepted accounting practice and
• have been prepared in accordance with the requirements of the 
companies act 2006
opinion on other matters prescribed by the companies act 2006
in our opinion
• the part of the directors’ remuneration report to be audited has 
been properly prepared in accordance with the companies act 
2006 and
• the information given in the strategic and the directors’ report for 
the financial year for which the financial statements are prepared 
is consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the 
companies act 2006 requires us to report to you if in our opinion
• adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been received 
from branches not visited by us or
• the parent company financial statements and the part of the 
directors’ remuneration report to be audited are not in agreement 
with the accounting records and returns or
• certain disclosures of directors’ remuneration specified by law 
are not made or
• we have not received all the information and explanations we 
require for our audit
other matter
we have reported separately on the group financial statements of 
spirent communications plc for the year ended 31 december 2013
karl havers senior statutory auditor
for and on behalf of ernst  young llp statutory auditor
london
27 february 2014
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
independent auditor’s report to the members of  
spirent communications plc spirent communications plc 
annual report 2013
122
notes
2013 
£ million
2012 
£ million
fixed assets
intangible assets 4 24 31
tangible assets 5 11 11
investments 6 3102 3020
3137 3062
current assets
stocks 7 16 25
debtors 8 70 54
cash at bank and in hand 142 172
228 251
creditors amounts falling due within one year
trade and other creditors 9 184 101
net current assets 44 150
total assets less current liabilities 3181 3212
creditors amounts falling due after more than one year 10 750 667
net assets excluding defined benefit pension plan deficitsurplus 2431 2545
defined benefit pension plan deficit 3 16 121
net assets 2415 2424
capital and reserves 14
called up share capital 207 217
share premium account 202 202
capital redemption reserve 128 118
profit and loss account 1878 1887
shareholders’ funds – equity 2415 2424
the notes on pages 123 to 135 form part of these financial statements
signed on behalf of the board
eric hutchinson
director
27 february 2014   
parent company balance sheet
at 31 december 2013 strategic report
governance
financial statements
spirent communications plc 
annual report 2013
123
1 significant accounting policies
basis of accounting
the financial statements have been prepared under the historical cost convention modified for measurement of derivative financial instruments 
at fair value and in accordance with applicable uk law and uk generally accepted accounting principles uk gaap
as the company is included in the consolidated financial statements made up to 31 december each year it is not required to present a separate 
profit and loss account as provided by section 408 of the companies act 2006 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 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 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
notes to the parent company financial statements spirent communications plc 
annual report 2013
124
1 significant accounting policies continued
provisions
provisions are recorded when the company has a present legal or constructive obligation as a result of a past event for which it is probable that it 
will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the obligation can be made provisions are 
reviewed at each balance sheet date and adjusted to reflect the current best estimate
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures expected to be 
required to settle the obligation
revenue recognition
revenue is recognised when it is probable that economic benefits will flow to the company the revenue can be reliably measured and when the 
company has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised when collectability 
is probable
for the sale of services revenue is recognised in accounting periods in which the service is rendered
foreign currencies
transactions in foreign currencies are recorded at the 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 recognised in the profit and loss account during the period in which the settlement or 
curtailment occurs
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
125
1 significant accounting policies continued
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting from the 
passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking into account 
material changes in the obligation during the year
the expected return on plan assets is based on an assessment made at the beginning of the year of long term market returns on plan assets 
adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year the difference between the 
expected return on plan assets and the interest cost is recognised in the profit and loss account as finance costs or finance income
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments on liabilities 
and changes in actuarial assumptions are recognised immediately in the statement of total recognised gains and losses
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit 
obligation using a discount rate based on high quality corporate bonds denominated in the same currency and whose term is consistent with the 
estimated term of the obligation fair value is based on market price information and in the case of quoted securities is the published bid price 
the value of a net pension benefit asset is restricted to the sum of any unrecognised past service costs and the present value of any amount the 
company expects to recover by way of reductions in the future contributions or refunds from the plan that have been agreed by the trustees
treasury shares
spirent communications plc ordinary shares held by the company are classified in shareholders’ equity as treasury shares and are recognised at 
cost and shown as a deduction from retained earnings consideration received for the sale of such ordinary shares is also recognised in equity 
with any difference between the proceeds from sale and the original cost being taken to retained earnings
employee benefits
when an employee has rendered service to the company during an accounting period short term benefits expected to be paid in exchange for 
that service are recognised in the same accounting period
dividends paid
the interim dividend is included in the financial statements in the period in which it is paid and the final dividend in the period it is approved by 
the shareholders at an annual general meeting
sharebased payment
the cost of equitysettled transactions with employees is measured by reference to the fair value at the date at which they are granted the fair 
value is determined using 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 spirent communications plc 
annual report 2013
126
1 significant accounting policies continued
the tax currently payable represents the amount expected to be paid or recovered in respect of taxable profit for the year and is calculated using 
tax rates that have been enacted or substantively enacted at the balance sheet date
deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed at the balance sheet date except 
as referred to below amounts provided are calculated with reference to tax rates that are expected to apply in the periods in which the timing 
differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date
deferred tax assets are recognised only to the extent that it is considered more likely than not that there will be suitable taxable profits from 
which the future reversal of the underlying timing differences can be deducted
deferred tax is not provided on gains on the disposal of fixed assets that have been rolled over into replacement assets unless there is a binding 
agreement to dispose of the assets concerned provision will not be made where it is considered more likely than not that the taxable gain will be 
rolled over into replacement assets and charged to tax only when the replacement assets are sold
2 employees
please refer to the report on directors’ remuneration on pages 58 to 76 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
2013 

2012 

inflation – rpi 33 29
inflation – cpi 22 22
rate of increase in pensionable salaries 31 29
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 31 28
rate of increase for pensions post 5 april 2005 service 22 19
rate of increase in deferred pensions 22 22
rate used to discount plan liabilities 45 43
expected rate of return on plan assets weighted for both plans 46 50
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 2012 aged 65 will live on average for a further 235 years 2012 233 years if they are male and for a further 256 
years 2012 255 years if they are female for a member who retires in 2033 2012 in 2032 at age 65 2012 age 65 the assumptions are that they 
will live on average for a further 243 years 2012 242 years after retirement if they are male and for a further 267 years 2012 266 years after 
retirement if they are female 
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
127
3 pensions continued
the approximate impact to the past service liabilities of changing these main assumptions is as follows
• reducing the discount rate by 01 per cent per annum would increase past service liabilities by £24 million
• increasing the rpi inflation assumption by 01 per cent would increase the plans’ liabilities by £10 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 £65 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to be insignificant
ii the assets and the liabilities in the plans were as follows
long term 
rate of return 
expected

2013 
£ million
long term 
rate of return 
expected

2012
 £ million
staff plan
equities 74 539 83 445
government bonds – – 25 328
inflationonly ldi funds 13 144 – –
corporate bonds – – 36 249
cash benchmarked bonds 30 725 35 308
insured annuities 45 33 43 35
property 55 153 73 140
cash and other 13 05 10 06
fair value of plan assets 46 1599 51 1511
present value of defined benefit pension plan obligations 1618 1663
deficit in the plan 19 152
cash plan
equities 74 27 83 23
government bonds 32 20 25 22
insured annuities 45 02 43 02
cash and other 13 24 10 20
fair value of plan assets 42 73 40 67
present value of defined benefit pension plan obligations 69 67
surplus in the plan 04 –
total net deficit recognised 15 152
unfunded plan
present value of unfunded obligations 05 05
net pension plan deficit 20 157
deferred tax asset note 11 04 36
net pension plan deficit on the balance sheet 16 121
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 spirent communications plc 
annual report 2013
128
3 pensions continued
iii analysis of the amounts creditedcharged to the profit and loss account 
2013 
£ million
2012 
£ million
analysis of amount charged to operating costs
current service cost 01 02
curtailment loss – 08
amount charged to operating costs 01 10
expected return on pension plans’ assets 75 76
interest on pension plans’ liabilities 73 72
finance income 02 04
net profit and loss creditcharge 01 06
iv analysis of amount recognised directly in equity
 
2013 
£ million
2012 
£ million
actual return on pension plans’ assets 135 120
less expected return on pension plans’ assets 75 76
experience gains on plans’ assets 60 44
experience gains arising on plans’ liabilities – 07
changes in assumptions underlying the present value of plans’ liabilities 42 139
changes in assumptions underlying the present value of unfunded plan’s liabilities – 01
movement in surplus restriction – 02
actuarial gainslosses recognised directly in equity 102 87
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 £221 million loss 2012 £323 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
2013 
£ million
2012 
£ million
at 1 january 1730 1584
current service cost 01 02
curtailment loss – 08
interest cost 73 72
employee contributions – 01
benefit payments 7 5 69
actuarial gainloss 42 132
present value of funded defined benefit pension plans’ obligations 1687 1730
vi movements in the fair value of plans’ assets
2013 
£ million
2012 
£ million
at 1 january 1578 1508
expected return on plans’ assets 75 76
employer contributions 34 18
employee contributions – 01
benefit payments 7 5 69
actuarial gain 60 44
fair value of plans’ assets 1672 1578
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
129
3 pensions continued
vii history of experience gains and losses
2013 
£ million
2012 
£ million
2011 
£ million
2010 
£ million
2009 
£ million
present value of defined benefit pension plans’ obligations 1687 1730 1584 1406 1374
fair value of plans’ assets 1672 1578 1508 1469 1379
net deficitsurplus in plans 15 152 76 63 05
experience gainloss on plans’ liabilities
amount £ million – 07 17 04 25
percentage of plans’ liabilities  – 04 11 03 18
experience gainloss on plans’ assets
amount £ million 60 44 07 71 75
percentage of plans’ assets  36 28 05 48 54
expected cash contributions for 2014 for these plans are £29 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 2013 of £05 million 2012 £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 2009 to 2013
defined contribution schemes
the company also maintains defined contribution pension plans for employees employer contributions into these plans for 2013 were 
£09 million 2012 £08 million
4 intangible assets 
£ million 
goodwill
cost
at 1 january 2013 and 31 december 2013 68
amortisation
at 1 january 2013 37
provided during the year 07
at 31 december 2013 44
net book value at 31 december 2012 31
net book value at 31 december 2013 24 spirent communications plc 
annual report 2013
130
5 tangible fixed assets
£ million
freehold land 
and buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost
at 1 january 2013 07 23 12 42
additions – 03 – 03
disposals – – 01 01
at 31 december 2013 07 26 11 44
depreciation and impairment
at 1 january 2013 02 20 09 31
provided during the year – 03 01 04
disposals – 01 01 02
at 31 december 2013 02 22 09 33
net book value at 31 december 2012 05 03 03 11
net book value at 31 december 2013 05 04 02 11
6 investments
£ million
shares in 
subsidiaries
loans to 
subsidiaries total
cost
at 1 january 2013 10194 32 10226
additions 74 30 104
sharebased payment 05 – 05
at 31 december 2013 10263 62 10325
provisions
at 1 january 2013 7203 03 7206
increase in provision 06 11 17
at 31 december 2013 7209 14 7223
net book value at 31 december 2012 2991 29 3020
net book value at 31 december 2013 3054 48 3102
7 stocks
2013 
£ million
2012 
£ million
work in progress 03 02
finished goods 13 23
16 25
8 debtors
2013 
£ million
2012 
£ million
due within one year
trade debtors 17 13
owed by subsidiaries 27 17
other debtors 07 02
prepayments and accrued income 05 03
56 35
due after more than one year
deferred tax asset note 11 14 19
70 54
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
131
9 trade and other creditors amounts falling due within one year
2013 
£ million
2012 
£ million
trade creditors 10 05
owed to subsidiaries 10 03
accruals and deferred income 51 40
share buyback obligation 109 50
other taxes and social security costs 04 03
184 101
10 creditors amounts falling due after more than one year
2013 
£ million
2012 
£ million
owed to subsidiaries 750 664
deferred income – 03
750 667
11 deferred tax
£ million
at 1 january 2013 19
reversed in the year 05
at 31 december 2013 14
the deferred tax asset is in relation to short term timing differences of £02 million 2012 £02 million and tax losses of £12 million 2012 
£17 million the company has tax losses of £288 million 2012 £371 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 2013 of £04 million 2012 asset of £36 million in relation to the pension plans note 3
the company also has capital losses carried forward of £8233 million 2012 £8223 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
2013 
£ million
2012 
£ million
in the second to fifth years 02 01
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 spirent communications plc 
annual report 2013
132
14 capital and reserves
£ million
called up 
share capital
share 
premium 
account
capital 
redemption 
reserve
profit and 
loss
account total
at 1 january 2013 217 202 118 1887 2424
share cancellation 10 – 10 – –
profit for the year
2
– – – 474 474
sharebased payment
3
– – – 08 08
actuarial gain recognised on defined benefit pension plans – – – 102 102
deferred tax on defined benefit pension plans – – – 27 27
share repurchase – – – 349 349
share buyback obligation – – – 59 59
equity dividends – – – 143 143
employee share ownership trust – – – 01 01
at 31 december 2013 207 202 128 1878 2415
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 £474 million 2012 £496 million which after dividends of £143 million 2012 £127 million 
gave a retained profit of £331 million 2012 £369 million 
3  sharebased payment has been recorded for subsidiary companies whose incentives are satisfied by the company’s shares
changes during the year in the issued ordinary share capital were as follows
number of 
ordinary 
shares 
million
issued and fully paid ordinary shares of 3
1
 3 pence each at 1 january 2013 6506
cancelled during the year
1
292
issued and fully paid ordinary shares of 3
1
 3 pence each at 31 december 2013 6214
note 
1  during 2013 under the programme of returning capital to shareholders the company repurchased 292 million 2012 134 million ordinary shares on market which were 
subsequently cancelled
during 2013 and 2012 no ordinary shares were transferred from the spirent sharesave trust “sst” to satisfy options exercised under the uk all 
employee share schemes and in 2013 14 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 2012 56 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 2013 and 27 february 2014 the date on which these financial statements have been signed
investment in own ordinary shares
at 31 december 2013 the esot held 09 million ordinary shares 2012 23 million ordinary shares to satisfy awards under various share 
incentive plans at 31 december 2013 the sst held 05 million ordinary shares 2012 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 
14 million ordinary shares 2012 28 million ordinary shares at 31 december 2013 was £15 million 2012 £42 million
capital redemption reserve
during 2013 the company cancelled 292 million ordinary shares 2012 134 million ordinary shares that had been the subject of the on market 
share repurchase programme and transferred £10 million 2012 £05 million to the capital redemption reserve
share repurchase
during 2013 the company repurchased 292 million ordinary shares on market at a cost of £349 million 2012 134 million ordinary shares 
at a cost of £193 million all shares repurchased in 2013 and 2012 were subsequently cancelled 
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
133
14 capital and reserves 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 £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 has been 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
movements in share incentives during the year to 31 december 2013 are shown below
2005 
employee 
incentive plan
spirent stock 
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
number 
of share 
incentives 
million
weighted 
average 
exercise price 
pence
incentives outstanding at 31 december 2011 19 16 06 50 11 116
granted 06 8 – – – –
exercised 03 4 06 50 10 123
cancelled 06 – – – – –
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 – – – –
incentives exercisable at 31 december 2012 05 50 – – 01 69
incentives exercisable at 31 december 2013 05 50 – – – –
the weighted average share price at exercise date was 1459 pence 2012 1548 pence
the following information relates to outstanding share incentives at 31 december 2013
2013 2012
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
250808–080523 0–53 210 13 66 18 16 74
230314–080523 129–153 1310 05 93 – – –
1995 executive share option 
scheme 300607–290614 69 – – – 69 01 15
18 17
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 2013
134
15 sharebased payment 
the total charge for the year relating to employee sharebased payment plans is as follows 
2013 
£ million
2012 
£ million
2005 employee incentive plan 03 06
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
2013 2012
weighted average share price pence 1291 1531 
weighted average exercise price pence 547 76 
weighted average fair value pence 651 926 
expected volatility  330 350 
option life years
 performance shares 30 30 
 options and sars 100 100 
suboptimal exercise factor 15 15 
risk free rate  16 24 
dividend yield  13 16
 
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 135 of this annual report
18 capital commitments and contingent liabilities 
there were no capital commitments at 31 december 2013 or 31 december 2012
spirent communications plc has provided indemnities of £01 million 2012 £01 million for certain ongoing business obligations under letters 
of credit for subsidiary companies
notes to the parent company financial statements continued strategic report
governance
financial statements
spirent communications plc 
annual report 2013
135
 held at 
31 december 
2013
canada
spirent communications of ottawa limited nepean ontario 100
france
spirent communications sas paris 100
hong kong
spirent communications asia limited 100
india
spirent communications india pvt limited bangalore 100
japan
spirent communications japan kk tokyo 100
people’s republic of china
spirent communications technology beijing limited 100
republic of korea
spirent communications korea inc 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
germantown maryland
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 a full list of subsidiary companies will be attached to the company’s annual return which will be 
filed with companies house in due course
†  spirent communications positioning operates as a division of spirent communications plc
principal divisions and subsidiaries  spirent communications plc 
annual report 2013
136
 million
2013
restated 
2012
restated 
2011
restated
 2010
restated 
2009
summary income statement
continuing operations
revenue 4135 4724 4705 4228 3694
operating profit 391 1081 1122 1026 778
net finance incomecosts – 03 14 09 01
profit before tax 391 1084 1136 1035 777
tax 64 290 264 309 85
profit from continuing operations after tax 327 794 872 726 862
discontinued operations – 471 67 66 57
profit attributable to owners of the parent company 327 1265 939 792 919
summary balance sheet
intangible assets 1988 2074 1232 1120 1124
property plant and equipment 396 341 355 291 236
working capital excluding cash and deferred tax 108 73 138 104 83
operating assets 2276 2488 1725 1515 1443
derivative financial instruments net – – – 02 08
net funds including long term cash 2163 2490 2372 2250 1757
provisions and other liabilities 65 50 45 76 114
deferred tax 183 284 294 313 425
defined benefit pension plan deficitsurplus 33 256 124 71 01
net assets 4524 4956 4222 4071 3518
total equity 4524 4956 4222 4071 3518
summary cash flows
cash flow from operating activities 674 1051 987 994 961
net interest received 08 06 09 08 06
net capital expenditure 243 143 235 176 102
free cash flow 439 914 761 826 865
acquisitions and disposals – 321 145 – –
share capital and share repurchase 545 294 330 150 27
dividends paid 222 203 175 137 121
transfer from long term deposit 03 03 04 06 22
net increasedecrease in cash and cash equivalents 325 99 115 545 793
financial history spirent communications plc 
annual report 2013
137
 million
2013
restated 
2012
restated 
2011
restated
 2010
restated 
2009
other information – continuing operations
expenditure on property plant and equipment 229 159 201 175 98
depreciation 165 146 127 114 129
product development 1005 861 833 758 708
share information
earnings per share from continuing operations cents
basic 510 1211 1307 1080 1292
diluted 509 1207 1296 1070 1286
adjusted basic
12
571 1302 1281 1092 1039
total dividend per ordinary share cents 354 322 293 250 193
fully paid ordinary shares in issue at year end number million 6214 6506 6640 6749 6781
segmental analysis – continuing operations
revenue
networks  applications 2134 2595 2546 2420 1981
wireless  service experience 1677 1745 1618 1238 1187
service assurance 324 384 541 570 526
4135 4724 4705 4228 3694
operating profit
networks  applications 132 597 566 582 366
wireless  service experience 338 567 585 397 417
service assurance 90 84 70 130 75
corporate – nonsegmental 59 65 60 65 60
operating profit
1
501 1183 1161 1044 798
exceptional items 38 29 – – –
acquisition related costs – 12 12 – –
acquired intangible asset amortisation 84 45 16 14 14
sharebased payment 12 16 11 04 06
391 1081 1122 1026 778
geographical information – continuing operations
revenue by market
united states 2158 2392 2388 2300 1959
asia pacific rest of world 1469 1660 1591 1263 1179
europe 508 672 726 665 556
4135 4724 4705 4228 3694
notes 
1 before exceptional items acquisition related costs acquired intangible asset amortisation and sharebased payment
2  before tax effect of items in note 1 and prior year tax
the five year history has been restated to reflect the effect of ias19 “employee benefits” on all years spirent communications plc 
annual report 2013
138
financial calendar 2014
27 february 2014   preliminary results and final dividend announcement
5 march 2014   final dividend – exdividend date
7 march 2014   final dividend – record date
23 april 2014   annual general meeting and interim management statement
25 april 2014   final dividend – payment date ordinary shareholders
2 may 2014   final dividend – payment date adr holders
30 june 2014   halfyear end
august    halfyear results and interim dividend announcement
august    interim dividend – exdividend date
august    interim dividend – record date
september   interim dividend – payment date ordinary shareholders
september   interim dividend – payment date adr holders
november   interim management statement
31 december 2014   financial year end
februarymarch 2015  2014 preliminary results and final dividend announcement
ordinary shares and american depositary receipts
the company’s ordinary shares are traded on the london stock exchange ticker spt the company operates a level 1 american depositary 
receipt “adr” programme with each adr representing four ordinary shares the adrs trade on the us overthecounter market symbol 
spmyy cusip 84856m209 the bank of new york mellon is the authorised depositary bank for the company’s adr programme the adrs are 
quoted on the otc pink electronic quotation service which can be found at wwwotcmarketscomotcpinkhome
annual general meeting
the company’s 2014 annual general meeting “2014 agm” will be held at 1030am on 23 april 2014 at the offices of ubs 1 finsbury avenue 
london ec2m 2pp
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
shareholder information spirent communications plc 
annual report 2013
139
share dealing services
equiniti shareview dealing is a service that provides a simple and convenient way of buying and selling the company’s ordinary shares for 
telephone services call 08456 037 037 between 800am and 430pm monday to friday and for internet services visit wwwshareviewcoukdealing 
a postal share dealing service for buying and selling ordinary shares is also available and a dealing form can be obtained by calling 0871 384 2248 
or at wwwshareviewcouk
individual savings accounts
information about investing in the company’s ordinary shares through an individual savings account “isa” may be obtained from equiniti on 
0845 300 0430 or at wwwshareviewcouk isas are also offered by other organisations
shareholder security
shareholders are advised to be wary of any unsolicited advice offers to buy shares at a discount or offers of free reports about the company 
details of any share dealing facilities that the company endorses will be included in the company’s mailings or on our website more detailed 
information can be found at 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 27 february 2014 the number of registered shareholders was 3557 and the number of ordinary shares in issue was 6119 million
number of ordinary shares held
number of 
shareholders
 of total 
shareholders
number of 
ordinary shares
 of share 
capital
1–5000 2539 7138 3578441 059
5001–10000 365 1026 2720729 045
10001–50000 379 1066 8202761 134
50001–100000 58 163 4051420 066
100001–250000 63 177 9804957 160
250001–500000 38 107 13585189 222
500001–1000000 47 132 33861599 553
1000001–highest 68 191 536089534 8761
total 3557 10000 611894630 10000
number of 
shareholders
 of total 
shareholders
number of 
ordinary shares
 of share 
capital
individuals 2803 7880 13536330 221
institutions 754 2120 598358300 9779
total 3557 10000 611894630 10000 spirent communications plc 
annual report 2013
140
2g second generation second generation remains the most common type of wireless cellular communication in use 
globally although its primary focus has been voice service and short message service “sms” 
it has also been enhanced to allow low rate data communication 
3g third generation third generation of mobile communications that delivers data rates of hundreds of kilobits per 
second to tens of megabits per second
3gpp third generation partnership project a collaboration between groups of telecommunications associations from around the world the 
scope of which is primarily to establish globally applicable third generation and beyond mobile 
phone system specifications
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
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 formerly compass 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
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
code division multiple access “cdma” a digital cellular technology standard which allows numerous signals to occupy a single 
transmission channel thus increasing network capacity used in 2g and 3g radio 
communications
core router a router designed to operate in the internet backbone able to support multiple 
telecommunications interfaces of the highest speed in use in the core internet and to forward  
ip packets at full speed on all of them it must also support the routing protocols being used in 
the core
cyber security aka it security the body of technologies processes and practices designed to protect networks computers 
programmes and data from attack damage or unauthorised access in an it context the term 
security implies cyber security
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
gigabit ethernet “g” a transmission technology based on the ethernet frame format and protocol used in local area 
networks that provides a data rate of 1 billion bits per second one gigabit and which is used as 
the backbone in many enterprise networks
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
glossary spirent communications plc 
annual report 2013
141
glonass the russian global navigation 
satellite system
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
high definition voice “hd voice” a technology based on standards from the international telecommunication union “itu” that 
delivers high definition voice quality compared to standard digital telephony
infrastructure test optimization “ito” the practices required to ensure that infrastructures meet a defined quality of service and quality 
of experience that are necessary to meet strategic business objectives
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 detectionprevention a technology that gathers and analyses information across gateways servers and desktops  
to identify possible security breaches that can occur from within or outside an organisation
load balancer a piece of hardware or virtual hardware for distributing network andor application traffic 
across multiple computing resources with the aim of optimizing resource use maximising 
throughout and improving overall reliability of applications
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
mobile packet core an integrated ipbased mobile transport network with the ability to support 2g 3g and lte 
coexistence
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
openflow an open standard network protocol from the open network foundation “onf” openflow 
enables softwaredefined networking for programmable networks 
open networking foundation “onf” a nonprofit mutually beneficial trade organisation to improve networking through software
defined networking “sdn” and standardising the openflow protocol and related technologies
optical transport network “otn” an efficient and globallyaccepted approach standardised by the itu to multiplexing 
communication services onto optical light paths which can provide significant cost benefits  
to carriers
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
softwaredefined networking “sdn” an approach to networking in which control is decoupled from hardware and given to a software 
application called a controller
switch a computer networking device used to connect many devices together on a computer network 
switches manage the flow of data across a network by only transmitting a received message to 
the device for which the message was intended
testingasaservice “taas” an outsourcing model in which testing activities associated with some of an organisation’s 
business activities are performed by a test service provider rather than employees services 
suited to a taas model include automated regression testing performance testing security 
testing and monitoringtesting of cloudbased applications spirent communications plc 
annual report 2013
142
time division lte “tdlte” lte standards accommodate cellular network and subscriber transmissions in different 
frequency bands frequency division duplex as well as in the same frequency band time 
division duplex often referred to as “tdlte” tdlte is expected to be widely deployed in 
major asian markets such as china india and japan as well as parts of the united states  
and europe
time division multiplexing “tdm” a digital transmission method that combines signals from multiple sources on a common path 
increasing capacity
triple play voice video and data transmitted over a single transport medium
universal mobile telecommunications system 
“umts”
the most common 3g wireless technology globally which uses wcdma on its underlying air 
interface and offers support for data transfer rates from hundreds of kilobits per second to tens 
of megabits per second
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
wideband cdma “wcdma” an itu standard derived from cdma which is used globally in 3g mobile communications
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
wireless backhaul the portion of a mobile network that provides connectivity between cellular base stations and 
the core network over wireline fibre or radio links
wireline communication services provided over a physical connection which may be copper or fibre
glossary continued spirent communications plc 
annual report 2013
143
notes spirent communications plc 
annual report 2013
144
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contact details spirent communications plc annual report 2013
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:
 spirent communications plc 
annual report 2013
2
chairman’s statement
the changes made in 2013 will take 
time to be fully reflected in the 
financial performance of the company 
but it is planned to restore revenue to 
growth in 2014 which will fund the 
necessary investment in product 
development and in the expansion of 
the sales and marketing activities for 
the long term growth of the business
total dividend
354¢
10
alex walker
chairman 3
spirent communications plc 
annual report 2013
strategic report
governance
financial statements
2013 is a year that marks a turning point for the company the impact 
on the business due to the significant changes in our markets and 
accelerating shifts in the structure of the industry we serve has 
been marked these trends manifested themselves through intense 
competition in the data center market wireless device vendors 
seeing lower profitability combined with a lull in new technology and 
service launches in addition under investment in development of 
new test systems in some parts of the business in previous years 
and the lack of expansion of our products into new markets has 
had a negative impact in response we have undertaken a radical 
reorganisation of the activities within spirent with the key strategic 
objective to create long term value by harnessing spirent’s leading 
capabilities and talent it will take time to be fully reflected in the 
financial performance of the company but it is planned to restore 
revenue to growth in 2014 which will fund the necessary investment 
in product development and in the expansion of the sales and 
marketing activities for the long term growth of the business
group revenue reduced to 4135 million 2012 4724 million this 
resulted in a considerable fall in reported profit before tax to 391 
million 2012 1084 million the first halfyear saw revenue fall by 
19 per cent but the rate of decline slowed in the second halfyear with 
revenues down by 6 per cent and underlying stability in order intake the 
order book increased by 214 million in 2013 2012 a reduction of 145 
million operational highlights included the release of nextgeneration 
products for ethernet test the launch of our advanced applications and 
security test system avalanche next and the delivery of test solutions 
for china’s regional satellite navigation system beidou
return on sales based on adjusted operating profit was 12 per cent for 
the group down from 25 per cent last year reflecting the impact of the 
fall in revenues and the investment in the business to drive recovery 
and long term growth this investment was in the expansion of our 
operating capabilities product development expenditure has been 
increased by 144 million and sales and marketing by 49 million 
basic earnings per share for the continuing group decreased in 2013 
to 510 cents per share 2012 1211 cents adjusted basic earnings 
per share was 571 cents 2012 1302 cents this is before charging 
exceptional items acquisition related costs acquired intangible 
asset amortisation and sharebased payment 
the group’s free cash flow generation was 439 million in 2013 
2012 840 million this is a cash conversion ratio of 13 times 
reported earnings 2012 11 times continuing operations the 
company has no debt and cash balances were 2162 million at 
31 december 2013
the board aims to achieve a high return on capital employed in the 
business the operating return on capital employed in the continuing 
group in 2013 was 16 per cent excluding cash balances the target 
set for return on investment in acquired businesses is 16 per cent 
returns are low to negligible on cash balances which are retained to 
allow surety of completion for acquisition negotiations whilst the 
company continues to expect to invest in acquisitions which are in line 
with the strategy it is also committed to returning surplus capital as 
appropriate to that end during 2013 the balance of the proceeds of 
the divestment of the systems business approximately 33 million 
was applied to the repurchase of spirent shares in the market for 
cancellation and the programme extended beyond this in total 
292 million shares were repurchased for 555 million in 2013 
no further buybacks are currently planned
i am delighted to report the completion of the acquisition of the 
business of dax technologies corp “dax” for a cash consideration 
of 370 million 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 
customers deploy and manage complex new networks and services 
faster and more effectively 
in addition today we are announcing the completion of the acquisition 
of a majority stake of 58 per cent of testing technologies ist gmbh 
“testing tech” for a cash consideration of euro 20 million this 
acquisition although small in size is an important step in the 
progression of spirent’s strategy to enter the automotive market
we very much welcome the employees of both these companies into 
the spirent group
the final dividend recommended is 201 cents per share compared with 
183 cents per share in 2012 this brings the total dividend for 2013 to 
354 cents per share compared with 322 cents for 2012 the increase in 
total dividend per share is 10 per cent in sterling terms this represents 
an increase in the distribution to our shareholders of 5 per cent
board changes
september 2013 saw a change in senior management with bill burns 
stepping down as chief executive officer and replaced in the role by 
eric hutchinson rachel whiting who has extensive financial 
experience and long service with spirent was welcomed to the 
board in february 2014 as chief financial officer
outlook
the disruption and structural changes experienced in our markets 
in the first half of 2013 stabilised during the second halfyear 
the reorganisation of the group in the fourth quarter of 2013 has 
released creativity and energy which is driving a dynamic change 
in the responsiveness and agility of our businesses we continue to 
see opportunities arising through infrastructure investment in the 
wireless networks worldwide and in the development and rollout 
of virtual and cloud based services 
in 2014 we anticipate that spirent’s revenue will be linked to recovery in 
china growth in the americas and expected stability in the european 
market and we look to achieve high single digit organic growth
this year the group intends to make an additional investment of 
around 330 million in future growth in particular through a 15 per 
cent increase in product development extending the sales channel 
to break into new areas expanding spirent’s capabilities in the 
core markets that it serves and by entering new markets including 
automotive and enterprise whilst there continue to be near term 
uncertainties activity levels at the beginning of 2014 are in line with 
our expectations the board remain confident that progress will be 
achieved and that the group will benefit from the investment to 
create long term strategic value