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spectris plc
annual report and accounts for the 
 year ended 31 december 2011
improving 
performance
enhancing
productivity
spectris plc annual report and accounts 2011 2111904   060312   proof 7
the purpose of the annual report is to provide information to the 
shareholders of spectris plc the company its directors employees 
agents and advisers do not accept or assume responsibility to any 
other person to whom this document is shown or into whose hands 
it may come and any such responsibility or liability is expressly 
disclaimed the annual report contains certain forwardlooking 
statements with respect to the operations performance and financial 
condition of the company by their nature these statements involve 
uncertainties since future events and circumstances can cause actual 
results to differ materially from those anticipated and no reliance 
should be placed on them the forwardlooking statements reflect 
knowledge and information available at the date of preparation of 
this annual report and the company undertakes no obligation to 
update these forwardlooking statements nothing in this annual 
report should be construed as a profit forecast
spectris is a leading supplier of productivity
enhancing instrumentation and controls 
our products applications and services help 
customers to improve product quality and 
performance improve core manufacturing 
processes reduce downtime and wastage and 
reduce time to market our businesses are 
leaders in the markets they serve providing 
solutions for customers across a wide range  
of industries
investment proposition
 spectris comprises four strategic segments which reflect the end 
user industries and applications we serve 
 our businesses are strong players in niche markets where there are 
significant barriers to entry 
 our products typically involve low capital expenditure but provide 
significant and rapid payback for customers 
 our businesses serve all the major global manufacturing industries 
and we derive significant revenues in the high growth economies 
 our product pipeline is underpinned by research and development 
which accounts for around 7 of sales each year 
 yearonyear sales growth on a likeforlike basis has averaged 
midsingle digits since 2003 this has been supplemented by 
growth from acquisitions averaging around 4 per annum 
 our businesses have low capital requirements and are highly cash 
generative
 our dividend policy is to make progressive payments based on 
affordability and sustainability
 we have an experienced board and executive management team 
a clear strategic direction and a proven business model
wwwspectriscom
read more online at
6 read more about our business model
2 read more about our worldwide operations here spectris plc annual report and accounts 2011 01
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highlights contents
business review
01 highlights
02 group overview
06 business model
08 marketplace
10 acquisition strategy
12 strategy and objectives
13 key performance indicators
14 principal risks and uncertainties
16 chairman’s statement
18 chief executive’s review
20 operating review
28 financial review
32 corporate responsibility
governance
38 board of directors
40 directors’ report
46 directors’ remuneration report
financial statements
55 auditor’s report 
56 consolidated statement of income
57  consolidated statement of comprehensive 
income
58 consolidated statement of changes  
in equity
60 consolidated statement of financial 
position
61 consolidated statement of cash flows
62 notes to the accounts
109 company balance sheet
110 notes to the company’s accounts
117 shareholder information
 record sales and operating profit in all segments
 operating margins grew by 24pp to 182
 strong growth in all key regions 
 healthy cash conversion of 89
 important acquisitions closed during the year provide 
additional growth and resilience
 dividend up by 20 
sales 
£m
up 23
2011
11062
2010
9019
2009
7873
2008
7871
2007
6598
adjusted earnings per share 
pence
up 43
2011
1241
2010
866
2009
454
2008
728
2007
581
adjusted operating profit 
£m
up 42
2011
2015
2010
1421
2009
792
2008
1183
2007
1043
dividend 
pence
up 20
2011
336
2010
280
2009
2425
2008
234
2007
210
“we are very pleased with our 
performance in 2011 the progress 
we made on all aspects of our 
strategy was fundamental to 
delivering these results 
whilst the current macroeconomic 
outlook remains uncertain the 
board is confident that as a result 
of continued investment in new 
products and applications together 
with the growth opportunities 
and resilience which our recent 
acquisitions provide spectris is 
strategically well positioned for the 
year ahead”
john o’higgins 
chief executive
 adjusted figures exclude certain nonoperational items as defined in note 3 spectris plc annual report and accounts 2011 02
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group overview
our customers are typically multinational blue chip companies 
across a diverse range of end user markets
we have sales and service offices located around the world 
providing local delivery and service for our customers 
key strategic events in 2011
north america
1 acquisition of omega 
engineering stamford 
ct provides new 
strategic growth platform 
for industrial controls 
segment
2 acquisition of sixnet 
brings additional 
networking capability 
to industrial controls 
segment albany ny 
europe
3 acquisition of irm 
group liège belgium 
extends capabilities in 
metals processing market 
for inline instrumentation 
segment
4 stateoftheart 
manufacturing facility 
opened for xray tube 
production eindhoven 
the netherlands
1
2
7
north america
26 
group sales
2321
employees
regional revenue up 27  spectris plc annual report and accounts 2011 03
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wwwspectriscom
read more online at
europe
34 
group sales
3534
employees
regional revenue up 17 
asia
5 additional regional 
sales office opened for 
malvern zibo central 
shandong province 
china
6 new systems 
engineering centre 
opened for servomex 
mumbai india
rest of the world
7 relocation of  
spectris brazil office  
to a new facility  
são paulo brazil
4
6
5
3
rest of the world
7 
group sales
81 
employees
regional revenue up 21 
asia
33 
group sales
1540 
employees
regional revenue up 26 
  increase in reported sales 
compared with prior year spectris plc annual report and accounts 2011 04
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group overview  continued
materials anal y sis
labora tor yoffline
provides a range of analytical instrumentation and systems for particle 
and material characterisation
applications
 material characterisation
 contamination detection
 quality control
industries
 pharmafine chemicals
 metalsmining
 semiconductorelectronics
 research institutes
operating companies
 malvern instruments
 panalytical
 particle measuring systems
supplies test measurement and analysis equipment and software for 
product design optimisation manufacturing control and environmental 
monitoring
applications
 measurement
 data acquisition and processing
 simulation
industries
 automotive
 aerospace
 consumer electronics
 environmental
operating companies
 brüel  kjær sound  vibration
 hbm
malvern’s new mastersizer 3000 is a much more compact benchtop 
instrument than its predecessor yet delivers greater sizing capability 
designed following extensive customer consultation routine particle 
sizing has been made simpler and more automated so that all users 
whether experienced or not can quickly and easily make reliable 
measurements accessories include the novel aero dry powder 
dispersion unit which enables measurement of materials from 
cement to fragile pharmaceuticals 
hbm’s new espressodaq series of compact usbbased data 
acquisition modules are designed to reliably measure parameters 
such as force pressure temperature or voltage designed for “plug 
and measure“ operation the modules are powered via the usb 
interface of a laptop and deliver instant measurement results the 
espressodaq family is ideally suited for mobile use for example by 
test engineers in the service sector
the group comprises four business segments which reflect the applications and end user industries we serve
our products help customers to improve accuracy and speed of materials analysis in the laboratory and in process manufacturing applications  
we also provide test and measuring equipment for research and development applications
test and measurement
group contribution
31 
sales
30 
profit
group contribution
31 
sales
27
profit
  figures shown are  of reported sales  
and adjusted operating profit  spectris plc annual report and accounts 2011 05
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processmanufa cturing
inline instr ument ation industrial controls
provides process analytical measurement asset monitoring and online 
controls for both primary processing and the converting industries
applications
 quality control
 process technology
 safety
industries
 process industries
 pulp and paper
 energy
 converting
operating companies
 beta lasermike
 brüel  kjær vibro
 btg group
 fusion uv systems
 ndc infrared engineering
 servomex
industrial controls supplies process measurement monitoring and control 
instrumentation and networking products for manufacturing industries
applications
 product tracking
 machine interface
 process control
 industrial networking
industries
 manufacturing controlsnetworking 
 machine building
 distributors
operating companies
 microscan
 omega engineering
 red lion controls
the new servotough fluegasexact 2700 from servomex is the 
world’s first combustion gas analyser with an integrated inline flow 
sensor and features the company’s advanced zirconia technology 
to provide accurate combustion gas measurements designed for 
operation in extreme environments the fluegasexact measures 
oxygen and combustibles in flue gases to improve combustion 
efficiency and reduce emissions it is ideal for controlling a range of 
combustion processes used in the hydrocarbon processing and power 
generation industries including use in process heaters utility boilers 
incinerators and furnaces 
our products and applications provide precision measurement and control in challenging operating environments ensuring process quality 
asset uptime safety and improved yield we also provide automation and control products for the discrete manufacturing industries
the omega business acquired at the end of september provides a 
broad range of process measurement and control instrumentation 
during 2011 the company introduced a new wireless sensor 
system the wseries transmitters designed for demanding industrial 
applications and harsh outdoor environments these small devices 
communicate via a standard wifi network measuring voltage and 
current temperature humidity and barometric pressure charts and 
graphs can be viewed over an ethernet network or via the internet 
from any computer tablet or smart phone with a web browser using 
omega’s own server software the wireless sensor system can be easily 
integrated with omega’s data acquisition and automation systems 
as well as with thirdparty systems creating a complete measurement 
solution 
group contribution
28
sales
32 
profit
group contribution
10 
sales
11 
profit spectris plc annual report and accounts 2011 06
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business model
culture and values
driving growth
nurturing innovation
systems and controls
spectris is a leading supplier of productivityenhancing instrumentation and controls 
our products applications and services help customers across a wide range of 
industries to improve their products and processes
we aim to achieve superior value for shareholders sustainably over the long term 
through delivering against our strategic objectives strengthening our market positions 
through innovation expanding our regional operations building our presence in 
key strategic growth areas growing our businesses both organically and through 
acquisition and focusing on operational excellence 
our group philosophy is one of autonomy 
with our operating companies entrusted 
and empowered to run and manage their 
businesses we believe that establishing and 
maintaining an ethical culture is critical to 
supporting our business model and ensuring 
our continued business success and growth 
central to our culture are our core values of 
honesty empowerment ownership delivery 
and speed which underpin the way we 
work these are part of our code of business 
ethics which provides a framework for how 
we do business and includes a clear policy on 
antibribery and corruption as well as dealings 
with customers suppliers colleagues 
conflicts of interest and human rights
 
culture and v alues
read more about our values in the 
spectris code of business ethics at
wwwspectriscomcorporate20
responsibilityaspx
find out more
use your phone’s bar code app and go directly 
to the strategy page on our website
did you know
our barcode readers are used to decode and check the print 
quality and integrity of qr codes in industrial applications spectris plc annual report and accounts 2011 07
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powerful revenue growth drivers
our products typically involve relatively 
low capital expenditure for customers but 
provide a significant and rapid payback 
customer benefits include improving 
production efficiency reducing downtime 
eliminating wastage reducing time to 
market and ensuring compliance with safety 
environmental and quality regulations in 
addition aftersales service and support is an 
important part of our business and over 25 
of our revenue is derived from consumables 
and services 
broad portfolio of customers and markets
we have a broad spread of markets products 
and customers as shown on the following 
pages this balance of geographical spread 
and end user industries helps to limit the risks 
from any adverse changes in the political or 
economic environment and also enables us 
to manage foreign exchange rate fluctuations 
and purchasing trends better we seek to 
grow our businesses around the world with 
particular emphasis on industrialising markets 
such as china india and latin america
strong financial position
we maintain a strong balance sheet which 
gives us the flexibility to pursue our strategic 
objectives we focus on cash generation and 
our target is to deliver high cash conversion of 
operating profit in each financial year 
acquisitions
we seek to enhance our growth potential by 
pursuing an active but disciplined approach 
to acquisitions both through the purchase 
of complementary companies bolton 
acquisitions and by building our presence 
in new growth areas via the acquisition 
of substantial new businesses which are 
compatible with our strategic profile platform 
acquisitions 
leading industry positions
all of our businesses are leading players 
in niche markets with strong brands and 
longterm customer relationships our 
experienced engineers work with customers 
to understand the business and productivity 
challenges they face much of our technology 
and applications knowhow is proprietary 
and patentprotected providing significant 
barriers to entry
driving growth
strong customer focus
we work closely with our customers to 
understand the challenges they face and 
develop solutions which are tailored to their 
specific requirements we involve professional 
users in the design of new products 
ensuring that we understand their needs 
and convert this knowledge into innovation 
in products and processes we offer a full 
range of services for our products including 
installation training technical support 
calibration and maintenance 
research and development
research and development underpins our 
business strategy and we invest around 
7 of sales each year in research and 
development in order to maintain our 
marketleading positions our commitment to 
constant innovation means that our products 
incorporate the very latest in technology 
and as a consequence we own patents 
trademarks and intellectual property licenses 
as part of the process of bringing new 
products to market we involve our customers 
extensively during the development phase 
and through beta evaluations prior to 
product launch
employees
we employ a highly skilled technical 
workforce in our offices around the world 
our entrepreneurial culture offers a creative 
working environment with scope for 
individual responsibility and achievement 
and we are committed to providing equal 
employment opportunities competitive 
remuneration and training and development 
programmes 
product manufacturing
we focus on our core competencies of 
research and development product design 
and assembly and test whilst outsourcing 
the majority of component and subassembly 
production to qualified suppliers as a result 
our businesses are capital efficient low cost 
sourcing initiatives by the group’s strategic 
purchasing teams help to drive down the 
costs of procurement whilst optimising quality 
and supply chain performance 
best practice transfer
despite the specific industry and technology 
focus of each of the businesses considerable 
emphasis is placed on knowledge sharing 
across the group and the transfer of best 
practice this can be especially valuable 
when entering new end user markets or 
geographical regions
nurturing inno vation
operating structure
we are organised in a way that combines 
the benefits of a multinational group whilst 
maintaining the entrepreneurial culture of 
our operating companies our decentralised 
operating structure is a key differentiator and 
the focus on accountability and ownership at 
local level ensures that management teams 
can focus on their priorities and react quickly 
to changing customer and market needs 
each business unit has responsibility for all 
aspects of its business and for developing 
and meeting its business growth plans 
within each business segment each 
operating company has developed its own 
brands and sales and service channels 
tailored to its target industrial markets 
central to our approach is a lean group 
structure which together with the board 
sets the strategy and drives and monitors 
its implementation in addition the centre 
provides knowledge advice and selective 
support services such as legal tax and 
treasury mergers and acquisitions emerging 
market infrastructure and best practice 
sharing among businesses 
control framework
the group has developed a robust internal 
control framework in keeping with our 
operating model values and culture this 
comprises common policies procedures 
principles and processes and provides the 
minimum requirement for the controls the 
businesses should have in place the code of 
business ethics provides additional guidance 
to employees on how we conduct business 
and is designed to ensure that all employees 
make decisions that are consistent with 
our values and that help us meet our many 
commitments
each operating company implements internal 
controls built off this central framework and 
consistent with the size and complexity of 
its business the effectiveness of the internal 
control framework is routinely monitored 
through a combination of certification 
selfassessment and a rolling programme 
of reviews by internal and external audit 
functions complemented by a sound risk 
management process as outlined on page 44 
systems and controls spectris plc annual report and accounts 2011 08
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marketplace
we operate in niche markets across a diverse range of industries our products 
typically involve relatively low expenditure for customers but provide a significant 
and rapid payback 
we aim to build longterm relationships with our customers and work with them to 
understand their business and the productivity challenges they face 
6 see business model
examples of customer benefits achieved

   automotive manufacturer reduced noise testing times by 75 with sound analysis equipment 

   mineral processing company increased throughput by 60 with inline particle size analyser 

   tissue manufacturer increased profitability by around £4 million and improved product quality 
  by changing from steel blades to highperformance creping blades

   product assembly process cut from overnight to just one minute using uv curing system 

   coin producer increased output by 20 using force measurement technology 

   animal feed producer generated additional production worth around €600000 per year by  
  continuous oil and moisture measurement 

   liquefied natural gas plant avoided catastrophic turbine failure using remote vibration 
  monitoring to diagnose machine fault 

   research institute used xray analysis to develop new lithium ion rechargeable batteries with 
  longer lifetimes and faster recharging capability 
customer benefits
 improving productivity and efficiency
 reducing time to market
 improving product qu ality and 
performance
 reducing downtime and w astage
 ensuring compliance with safety  
qu ality and environment al legisla tion
 helping to bring new products to 
market
wwwspectriscom
read more online at spectris plc annual report and accounts 2011 09
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2011 sales by end user market
 total group reported sales
 1 automotive and aerospace 12
 2  metals minerals and mining 11
 3  pharmaceuticals fine chemicals 10
 4  academic research 9
 5  machine building 9
 6  pulp and paper 9
 7  semicon telecoms electronics 9
 8  energy and utilities 8
 9  web print and packaging 5
10  environment 4
11  other incl distribution 14
1
2
3
4
5
6
7
8
9
10
11
spectris operates in a wide range of end user markets around the world this balanced 
portfolio of industries and geographies where no end user market accounts for more 
than 12 of sales and no single customer accounts for more than 2 of sales 
provides a degree of resilience against material adverse economic trading conditions  
in the countries in which we operate 
the majority of our sales come from upgrades to customers’ existing production 
facilities rather than the addition of new capacity in addition to participating in the 
growing markets of many of our customers we also seek to identify opportunities in 
new markets for example nanotechnology and life sciences
we aim to grow our businesses around the world with particular emphasis on 
industrialising markets and establish sales and support facilities in these regions  
so that we are able to support our global customers wherever they are based
under pressure to reduce costs yet develop ever 
more sophisticated vehicles reducing development 
times and thus time to market is a key challenge 
for the automotive industry the renault group 
in france are using brüel  kjær’s data acquisition 
system to analyse powertrain noise from the engine 
transmission drive shaft suspension and wheels in 
order to meet vehicle regulations and legislation and 
also customer expectations brüel  kjær’s solution 
has provided greater test efficiency and reduced the 
time spent on characterising a complete powertrain 
from five days to just one to two days 
case study
brüel  kjær helps renault to 
reduce testing times spectris plc annual report and accounts 2011 10
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acquisition strategy
acquisitions are a central part of spectris’ strategy with all but one of the companies currently owned by 
spectris having been acquired since the company was first floated on the london stock exchange in 1988 
over this period our portfolio has undergone a significant evolution into today’s group of 14 specialised  
marketleading instrumentation controls and process technology companies operating globally in diverse 
industrial markets 
implementat ion integra tion
r esearch
cultural fit
due diligence
striking deals
objective
the objective of our acquisition strategy is to 
create shareholder value by growing and 
enhancing existing businesses through the 
purchase of complementary companies 
referred to as bolton acquisitions and by 
building our presence in new growth areas via 
the acquisition of substantial new businesses 
which are compatible with our strategic profile 
the latter category are referred to as platform 
acquisitions whether we are looking at a 
bolton or a platform opportunity an 
acquisition candidate must exhibit the same 
characteristics and fundamental business 
strengths that exist in our current businesses 
and which underpin our group
  productivityenhancing instrumentation  
and controls for industrial and academic 
customers based on specialised technology 
and superior application knowledge
  focus on critical applications with direct 
impact on the customer’s process 
performance energy consumption asset 
utilisation quality product performance or 
other valueenhancing parameters
  high margins reflecting significant value 
added for the customer
  emphasis on products and services whose 
cost is small within the overall cost of the 
customer’s application
  proven ability to grow the market and 
capitalise on growth markets
  substantial aftermarket revenues andor 
service component
  strong entrepreneurial management able  
to capitalise on spectris’ operating culture 
which stresses empowerment responsibility 
and autonomy for our businesses
in recent years bolton acquisitions have been 
the most frequent type of acquisition with four 
to five such deals typically completed each year 
and we expect this pattern to continue by their 
nature platform acquisition opportunities 
which have the necessary business 
characteristics and are substantial enough to be 
a worthwhile new growth platform for spectris 
arise infrequently although we completed one 
such acquisition of omega engineering during 
the year spectris identifies potential acquisition 
opportunities from many sources and we 
regularly acquire businesses from private 
owners other corporations and financial 
owners such as private equity and venture 
capital institutions
bolton acquisitions
bolton acquisitions typically provide growth 
opportunities bring additional technology 
applications routes to market or geographic 
presence to one of our companies and can take 
the form of an acquisition of an entire business 
the purchase of a product line the purchase of 
intellectual property or anything in between as 
a result our bolton acquisitions vary greatly in 
size from the very small up to the purchase of 
substantial businesses valued up to £50 million 
or more whatever the size of the acquisition 
spectris’ approach is always to build upon a 
proven successful business or a technology 
with demonstrated potential 
our approach to creating value from bolton 
acquisitions is similarly focused on recognising 
and creating opportunities arising from the 
acquired business having a complementary  
or adjacent nature to one of our existing 
businesses manufacturing consolidation and 
costcutting initiatives while not overlooked 
are generally of secondary importance to the 
growth aspects in any bolton acquisition 
instead we look to integrate the acquired 
business with an existing company whilst 
retaining the strengths of both
as an illustration of how we add value it is 
quite common for innovative technologyled 
stage 2 
p ro cessing
stage 3 
implement at ion an d integrat ion
stage 1 
re sear ching opportun ities spectris plc annual report and accounts 2011 11
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lds test and measurement was acquired 
from spx corporation in december 2008 
for a consideration of 86 million on a 
debt and cashfree basis the company is 
a leading provider of electrodynamic 
vibration test systems for the automotive 
aerospace defence and electronics 
markets and of data acquisition products 
the data acquisition and instrumentation products became part of hbm extending 
their range of testing applications and generating new sales opportunities for hbm the 
vibration and controller products became part of brüel  kjær sound  vibration and 
the royston england based company has now been integrated and renamed the 
vibration testing systems business unit the company’s products are used in the most 
demanding applications from laboratory testing and structural analysis through to 
testing of complete systems as a result of the acquisition brüel  kjær are now able to 
offer complete vibration acoustic and data acquisition and analysis solutions to their 
customers since the acquisition a number of contracts have been secured with major 
aerospace manufacturers for complete system solutions for example for satellite 
testing and with automotive manufacturers where the systems are used for example 
to test hybrid vehicle batteries 
case study
lds test and measurement
on 30 september 2011 we completed 
the acquisition of the omega engineering 
business for a total consideration of 
us485 million approximately £311 
million formerly privately owned the 
company is headquartered in stamford 
connecticut usa has five manufacturing 
facilities and two distributionsales 
facilities and employs around 700 people 
omega is now a standalone business in 
the industrial controls segment
omega is a leading provider of sensors and controls for industrial testing and 
measurement applications for controlling temperature humidity pressure strain 
force flow level ph and conductivity the company has a highly successful 
defensible business model tailored to the needs of welldefined portions of the 
process control and industrial automation sectors with strong wellknown brands 
omega and newport a loyal blue chip customer base a broad intellectual property 
portfolio and high levels of repeat business omega has resilient revenue and earnings 
characteristics the company is an excellent strategic and cultural fit for spectris and a 
significant expansion of the product offering in the industrial controls segment and is 
expected to bring growth and margin opportunities under spectris’ ownership
since the acquisition was completed an experienced president has been appointed 
financial reporting processes have been upgraded efforts are underway to benefit from 
sales opportunities with other spectris companies omega already sells some spectris 
group products and opportunities in the supply chain are being pursued the majority 
of omega’ s sales are to the us domestic market currently and actions have already been 
initiated to grow sales in international markets particularly china and europe
case study
omega engineering
industrial instrumentation companies to achieve 
success on a national or perhaps regional scale 
but run out of momentum when faced with  
the multiple challenges and investment 
requirements of becoming a global business 
we are able to address these challenges in 
many cases by exploiting existing infrastructure 
and sales channels within spectris and rapidly 
take such businesses to a new level thus 
creating growth and value for our shareholders 
while preserving the qualities of the business 
that made it successful in the first place there 
are many other ways in which we can benefit 
from bolton acquisitions but in general  
we create value from boltons by applying  
our resources routes to market customer 
relationships application knowledge 
management expertise and global presence  
to the acquired business to achieve superior 
results
platform acquisitions
in addition to making regular bolton 
acquisitions spectris will occasionally identify 
an opportunity to acquire a much larger 
business which provides productivityenhancing 
products and services to industrial customers 
and which fits the strategic profile outlined 
above however to qualify as a viable platform 
acquisition there also must be a significant 
opportunity for spectris to add value to such a 
business so we will look for potential to develop 
the business organically and to add value 
through subsequent bolton acquisitions any 
acquisition of this type is likely to be stand
alone in nature with the business becoming a 
new company within our portfolio rather than 
being integrated into an existing company 
adding value to a platform acquisition can be 
achieved in a variety of ways some of which 
such as accelerated internationalisation and 
developing existing customer and industry 
relationships are akin to the opportunities we 
see on boltons but on a larger scale while 
other valuecreating opportunities commonly 
derive from our focus on operational excellence 
and strengthening market positions through 
innovation in keeping with our overall strategy  spectris plc annual report and accounts 2011 12
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strategy and objectives
our objective is to deliver shareholder value sustainably over the long term  
by supplying productivityenhancing solutions for our customers 
wwwspectriscom
read more online at
our strategy achievements
strengthening market 
positions through 
innovation
we invest around 7 of sales each year in research 
and development in order to maintain our market
leading positions we work closely with customers to 
develop solutions which are tailored to their specific 
requirements much of our technology is proprietary 
and protected by patents or process knowhow new 
products and applications may be developed in house 
by acquiring bolton product lines or by collaboration 
and licensing agreements for proprietary technology 
in partnership with universities and other institutions
  expenditure on research and development grew by 
17 to £758 million or 7 of sales 
  significant number of new products applications 
and technologies introduced throughout the group 
amongst these is the awardwinning mastersizer 
3000 particle size analyser featuring highly 
sophisticated optics to simplify and automate 
particle sizing and whose compact benchtop 
design is the product of extensive customer 
research also the recipient of an award is the new 
bt55 series of optical brightness transmitters these 
feature an innovative lightemitting system for 
monitoring and controlling the pulp process and 
enable papermakers to rapidly improve their 
process and significantly reduce costs 
increasing regional 
expansion with a focus on 
emerging markets
page 2 see group overview
we seek to grow our businesses around the world 
with particular emphasis on industrialising markets 
such as china india and latin america we continue 
to establish sales and group support facilities in these 
regions so that we are able to support our global 
customers wherever they are based 
  on a likeforlike basis sales to china grew by 27 
and sales to latin america grew by 28
  new systems engineering centre opened in 
mumbai india
  additional regional office opened in zibo central 
shandong province china
growing existing 
businesses through 
acquisition
we seek to enhance the growth potential of our 
businesses by pursuing an active but disciplined 
approach to acquisitions focusing on businesses 
which are strong players in specific application areas 
where there are significant barriers to entry
  invested £664 million including cash acquired of 
£51 million in three bolton acquisitions
 – a small product line addition to the materials 
analysis segment
 – irm group a leading manufacturer of high 
technology measuring systems for the metals 
processing industry
 – sixnet a leading manufacturer of flexible 
industrial ethernet switch automation and 
wireless solutions for the industrial market
building our presence 
in key strategic growth 
areas both organically 
and through acquisition
page 11 see case study
we aim to grow our existing businesses organically  
by developing new products as well as pursuing 
opportunities for growth in new markets such as 
nanotechnology and life sciences acquisitions are 
targeted at both existing and new markets 
  product development programmes focused on 
building positions in our key market segments
  acquisition of omega engineering a leading 
provider of sensors and controls for industrial 
testing and measurement applications adds a 
significant strategic growth platform to our 
industrial controls segment
  aftersales service and consumables are an important 
part of our business representing 26 of sales
focusing on  
operational excellence
we continue to focus on improving all aspects of our 
business through a range of actions including process 
efficiencies value pricing optimising the business mix 
cost competitiveness designing products for lowcost 
production reducing inventory and improving supply 
chain management
  components sourced or manufactured in lower
cost countries increased to approx 14 of the 
total cost of materials for goods sold
  implementation of erp system at our btg 
operation
  opening of stateoftheart manufacturing facility 
in eindhoven the netherlands for xray tube 
manufacture spectris plc annual report and accounts 2011 13
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key performance indicators
we monitor progress against the delivery of our strategic goals via four financial  
key performance indicators 
sales
2011
23
2011
15
2010
15
2010
12
2009
0
2009
16
2008
19
2008
3
2007
3
2007
6
sales growth is a measure of how we are growing our 
business organically we aim to achieve yearonyear growth 
in sales on a likeforlike basis which excludes the effects 
of currency translation and acquisitions or divestments
cash conversion
total sales growth  
continuing businesses
organic sales growth 
continuing businesses at 
constant currencies
2011
89
2010
112
2009
133
2008
86
2007
99
we focus on cash generation and use cash conversion 
as a performance measure as we believe cash 
represents an effective measure of the quality of our 
earnings our target is to deliver high cash conversion 
of operating profit in each financial year cash 
conversion is defined by management as adjusted 
operating cash flow as a percentage of adjusted 
operating profit 
return on sales
2011
182
2010
158
2009
101
2008
150
2007
158
return on sales is a measure of improving profitability in our 
business return on sales is defined as adjusted operating 
profit as a percentage of sales our intention is to achieve 
a midteens return on sales margin on average throughout 
the cycle 
earnings per share
nonfinancial kpis
2011
1241p
2011
43
2010
866p
2010
91
2009
454p
2009
38
2008
728p
2008
25
2007
581p
2007
33
earnings per share is a commonly used measure of financial 
performance for shareholders we aim to achieve growth 
in adjusted earnings per share adjusted earnings excludes 
certain nonoperational items as defined by management in 
note 3 adjusted earnings per share is defined as the ratio 
of adjusted earnings for the year to the weighted average 
number of ordinary shares outstanding during the year
to measure the critical components of our corporate 
responsibility strategy we have adopted the following 
key performance indicators these are described in more 
detail in the corporate responsibility report on pages 
32 to 37
nb acquisitions are excluded in the year of acquisition
1 workrelated accidentsill health resulting in lost time in excess of 3 days
adjusted eps pence cash conversion
2011
656
2011
27
2010
928
2010
53
accident incident rate
reportable accidents
1
 per 1000 
employees
growth 
return on sales  
continuing businesses
energy consumption 
mwh per £m revenue  spectris plc annual report and accounts 2011 14
2111904   070312   proof 8
principal risks and uncertainties
risk description potential impact mitigation
1 strengthening market positions through innovation
new product development
in order to strengthen our market positions and sustain 
competitive advantage the group invests significantly in 
research and development the development of new 
technologies and products involves risk including
  the product being more expensive or taking longer to 
develop than originally planned
  the market for the product being smaller than originally 
envisaged
  the product failing to reach the production phase
  reduced profitability 
and cash flow
  loss of market share
  failure to recoup 
investment in 
innovation
  significant investment levels in research and 
development maintained at around 7 of sales
  project management disciplines are applied in 
product development programmes
  working closely with customers to ensure that we 
develop solutions tailored to their specific needs
  new product developments are based on standard 
platforms customised through high addedvalue 
applications engineering
  extensive customer involvement during product 
development and prior to product launch through 
beta evaluations
intellectual property
our business is focused on the design and manufacture of 
technologically advanced products and applications 
significant investment in research and development is made 
towards this end as a consequence we own and protect 
patents trademarks trade secrets copyright information  
and intellectual property licenses
the risk therefore exists that this intellectual property may 
be infringed by third parties or that we may inadvertently 
infringe thirdparty rights
  reduced profitability 
and cash flow
  loss of market share
  failure to recoup 
investment in 
innovation
  procedures in place requiring all of our businesses to
 – maintain a watching brief on new applications
 – undertake specific reviews prior to commencing 
new product development acquisitions or licenses
 – register intellectual property where appropriate
  maintain a portfolio of intellectual property assets 
such that no single patent trade secret or trademark 
is sufficiently important to present a material risk to 
the success of the company
2 increasing regional expansion with a focus on emerging markets
political and economic risks
we operate in a range of end user markets around the 
world and may be affected by political economic or 
regulatory developments in any of these countries material 
adverse changes in the political and economic environments 
in the countries in which we operate have the potential to 
put at risk our ability to carry out our strategy
specifically the group has reviewed its potential exposures to the 
current macroeconomic uncertainty relating to the eurozone 
economies we believe that the broad spread of markets in 
which we operate substantially limits the risk associated with 
additional instability in any given territory whilst the group  
had sales into europe of approximately £381 million in 2011 
34 of total group sales sales into greece ireland italy 
portugal and spain represented just 5 of total sales for the 
year approximately £57 million the group does not have any 
significant operations or supply chain dependencies within these 
countries similarly the group does not have any significant 
liquidity or funding risk in relation to these countries
  reduced profitability 
and cash flow
  maintaining a broad spread of markets products 
and customers limits risks associated with any given 
territory
  ensure we remain structured in such a way that 
enables us to take prompt action in the event of any 
material change in the trading environment
  monitor market intelligence
  ensure we maintain a strong balance sheet and 
financial position
laws and regulations
we operate in a large number of jurisdictions and as a 
consequence we are subject to numerous domestic and 
international regulations and restrictions these include laws 
and regulations covering product safety export controls 
antibribery competition and false accounting
any failure by the group or its representatives to comply with 
relevant laws and regulations could result in civil or criminal 
liabilities leading to significant fines and penalties or the 
disqualification of the group from participation in government
related contracts for a period of time in the event of a failure 
to comply with export control regulations the group could also 
be exposed to restrictions being placed upon its ability to trade
  reduced sales 
profitability and cash 
flow
  reputational damage
  diversion of 
management resources 
to address any 
resulting investigation
  strong internal control framework policies and 
culture
  formal export controls compliance procedures in 
place including strict product classification and 
transaction screening protocols
  ethics training provided to all employees
  regular monitoring of compliance
the group has a wellestablished process for identifying evaluating and managing significant risks which 
forms a part of the group’s system of internal controls as described in the directors’ report on page 44 spectris plc annual report and accounts 2011 15
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risk description potential impact mitigation
3 growing existing businesses through acquisition
acquisitions
a key element of our strategy is to grow the business 
portfolio through acquisition of standalone or bolton 
businesses which complement or extend the range of 
products and applications we can provide
integrating both the operations and personnel of acquired 
businesses can be a complex process potential risks 
therefore exist that the planned benefits from the 
acquisition may not be achieved as a result of problems 
encountered in integrating the acquired business incorrect 
assumptions in the original business case changing market 
conditions or deficiencies arising in the due diligence 
process further the company could be exposed to past acts 
or omissions of the acquired business
  failure to achieve the 
benefits outlined in the 
business case
  reduced profitability 
and cash flow
  unforeseen liabilities
  rigorous financial and legal assessment of target 
businesses
  strict authority levels which subject to size involve 
review by the board for such transactions
  comprehensive representations and warranties in 
purchase agreements
  extensive integration planning and execution
  regular review against the business case for the 
acquired businesses
  postacquisition control reviews
4 building our presence in key strategic growth areas both organically and through acquisition
competitive activity
the nature of the marketplaces in which we operate  
means that all of our businesses are exposed to risk  
from competitor activity
  loss of market share
  reduced profitability 
and cash flow
  maintain marketleading positions through 
significant investment in research and development
  diversified portfolio of products and markets limits 
the overall risk from any single competitor
  maintain ability to react quickly to changes in 
customer and market demand
  maintain a watching brief on new competitor activity
5 focusing on operational excellence
supply chain dependencies and disruption
the company is exposed to the risk that some of the 
components it sources particularly for custombuilt items  
or older components are provided by a single supplier and 
are therefore vulnerable to interruption of supply
the company also manufactures components from 
proprietary technologies at a number of locations  
our ability to supply products to our customers  
could be adversely impacted by a disaster or other  
disruptive event at any of these sites
any interruption to the company’s supplies or related 
increase in costs may result in an adverse effect on the 
business’ financial position and future performance
  inability to fulfil 
customer orders 
resulting in lost sales 
and reputational 
damage
  increased costs reduce 
profitability
  loss of market share
  strategic sourcing teams source lowercost 
components across a range of markets
  alternative sources of supply actively sought to 
reduce dependency upon singlesource suppliers
  safety stock levels established for critical components
  business continuity plans and disaster prevention 
measures in place for all material manufacturing 
locations
  business interruption insurance
  strong contract review process
fluctuations in exchange rates
because of the global nature of our business we have 
operations which sell and purchase goods in foreign 
currencies and whose results we record in a  
variety of different currencies we are therefore  
exposed to any significant changes in exchange rates 
between a number of different currencies
  unexpected variations 
in the company’s 
results
  reduced profitability 
and cash flow
  forward contracts cover up to 75 of forecast 
exposures up to 18 months ahead
  natural hedging strategy matching invoicing and 
purchasing currencies where practical
  foreign currency investments hedged with 
borrowings in the same currency wherever possible
  regular sensitivity analyses carried out to understand 
the impact of exchange rate movements on the 
group’s reporting
all significant risks are evaluated with reference to the group’s achievement of its strategic objectives as 
outlined on page 12 the key potential risks and uncertainties facing the group’s ability to deliver its strategy 
together with mitigating actions are described below spectris plc annual report and accounts 2011 16
2111904   070312   proof 8
chairman’s statement
dear shareholder
spectris saw strong trading in 2011 with sales and 
operating profit at record levels building on the 
momentum generated over the past few years as 
investment in new products acquisitions and regional 
expansion has continued to drive our business 
growth our acquisition initiatives also continued 
with the addition of the omega engineering business 
being a particular highlight this adds a significant 
strategic growth platform for our industrial controls 
segment 
reported sales increased by 23 to £11062 million 
2010 £9019 million and adjusted operating profit 
grew by 42 to £2015 million 2010 £1421 
million acquisitions contributed 7 to sales and 
currency had a positive impact of 1 thus on a 
constant currency organic likeforlike basis sales 
grew by 15 on a proforma basis had each of the 
four acquisitions taken place on the first day of the 
year sales would have been £12182 million
operating margins increased by 24 percentage 
points to 182 profit before tax increased by 45 
to £1916 million 2010 £1323 million and earnings 
per share increased by 43 from 866 pence to 
1241 pence 
during the year the group invested £3721 million in 
acquisitions and net debt increased by £2700 million 
to £3562 million at the end of december 2011  
at 31 december 2011 the group had cash of  
£416 million and undrawn committed facilities 
of £1042 million 
the board is proposing to pay a final dividend of 254 
pence 2010 209 pence which combined with the 
 
 
interim dividend of 82 pence gives a total for the 
year of 336 pence 2010 280 pence an increase 
of 20 the dividend is covered 37 times this is 
consistent with our policy of making progressive 
dividend payments based upon affordability and 
sustainability the dividend will be paid on 26 june 
2012 to shareholders on the register at the close of 
business on 1 june 2012
corporate governance 
as a board we are responsible to the company’s 
shareholders for delivering shareholder value 
sustainably over the long term through effective 
management and good governance we believe 
that a robust discussion focused on the critical 
strategic issues and risks is key to achieving these 
aims and we are fortunate to have nonexecutive 
directors with extensive industry and international 
experience who can actively contribute to this 
debate the board also seeks to develop and 
maintain a good understanding of the company’s 
operations by conducting site visits to two 
locations each year in addition to inviting our 
presidents and managing directors to present at 
other meetings we plan to recruit a further 
nonexecutive director during 2012 we recognise 
the benefits that diversity can bring to our business 
and this will be a key element of the selection 
process
i am pleased to confirm that spectris is in full 
compliance with the uk corporate governance 
code an evaluation of our board in 2010 by 
external consultants confirmed the effectiveness of 
our governance processes in most dimensions 
john hughes
chairman
we are very pleased with our performance in 2011 the progress 
we made on all aspects of our strategy was fundamental to 
delivering these results
336p
dividend up 20
£11062m
sales up 23 spectris plc annual report and accounts 2011 17
business review governance financial statements
2111904   070312   proof 8
with some recommendations for expanding the 
terms of reference for board committees these 
have now been updated most notably in the case 
of the audit and risk committee which now more 
formally includes a review of the group’s risk 
management processes and controls the board 
committees are described more fully in the 
corporate governance section of our annual report 
and their terms of reference are available on our 
website in 2011 an internal assessment of the 
board by all members confirmed support for the 
board’s role culture and policies 
outlook
we are very pleased with our performance in 2011 
the progress we made on all aspects of our strategy 
was fundamental to delivering these results whilst the 
current macroeconomic outlook remains uncertain 
the board is confident that as a result of continued 
investment in new products and applications together 
with the growth opportunities and resilience which 
our recent acquisitions provide spectris is strategically 
well positioned for the year ahead
john hughes
chairman
 unless stated otherwise figures 
quoted for operating profit net 
interest profit before tax tax 
earnings per share and operating 
cash flow are adjusted measures –  
for explanation of adjusted figures 
and reconciliation to the statutory 
reported figures see note 3  spectris plc annual report and accounts 2011 18
2111904   070312   proof 8
chief executive’s review
trading in 2011 was strong across all business 
segments regions and most end markets resulting in 
record sales and operating profit on a reported basis 
sales for the year were 23 higher than in 2010 
acquisitions contributed 7 and currency 1 
resulting in constant currency organic likeforlike 
sales growth of 15
regionally sales in asia pacific in the year grew by 
17 on a likeforlike basis with continued strength 
in china where sales increased by 27 north 
america grew by 14 and europe was up by 13 
aftersales service and consumables which are an 
important part of our business and provide a large 
degree of resilience represented 26 of total  
group sales
adjusted operating margin at 182 is 24pp higher 
than in 2010 as a result of the growth in sales and 
continuing good cost control across our businesses 
with gross margins increasing by 02pp to 586
cash conversion was in line with our expectations 
with 89 of operating profit converted into 
operating cash capital expenditure increased  
during the year mainly due to an investment in  
the netherlands where we opened a new state 
oftheart manufacturing facility 
strategy
we made significant progress on our strategy during 
the year some of the highlights are illustrated below
strengthening market positions through 
innovation
we maintained our investment in research and 
development with expenditure at £758 million or 
7 of sales and we launched a number of new 
products technologies and applications across  
the group which are described in more detail in  
the operating review which follows notable 
amongst these was the mastersizer 3000 particle 
characterisation system from our materials analysis 
segment launched in september this combines the 
highest optical performance with intelligent software 
providing greater analysis capabilities in a compact 
sleeklydesigned benchtop instrument the system 
has been received enthusiastically by customers and 
has already won a major design award 
increasing regional expansion with a focus on 
emerging markets
sales to asia increased by 17 compared with the 
prior year on a likeforlike basis at 33 of total 
group sales this region is now a similar size to 
europe in response to the continued growth in 
demand during the year malvern instruments 
opened an additional regional sales office in central 
shandong province china and beta lasermike 
established a direct sales operation in southeast asia 
the acquisition of the industrial business of sysmex in 
the fourth quarter of 2010 has provided us with a 
direct sales presence for materials analysis systems in 
japan and improved our market position there 
building our presence in key strategic growth 
areas both organically and through acquisition
the acquisition of omega engineering at the end of 
september 2011 represents a strategic platform for 
growth within the industrial controls segment which 
now represents around 18 of total group sales on a 
proforma basis integration of the business into the 
industrial controls segment is proceeding well and 
results for the first three months of ownership have 
exceeded our expectations 
john o’higgins
chief executive
we maintained our investment in research and development with 
expenditure at 7 of sales and launched a number of new products 
technologies and applications across the group
27
increase in sales  
to china
£758m
expenditure on  
rd up 17 spectris plc annual report and accounts 2011 19
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2111904   070312   proof 8
growing existing businesses through acquisition
we made three bolton acquisitions during 2011 the 
acquisition of irm in august extends our gauging 
product capabilities in the metals processing market 
and the acquisition of sixnet in october expands our 
position in the industrial networking market we also 
acquired key intellectual property and other assets 
relating to a line of benchtop xray analysers for the 
materials analysis segment in october the bolton 
acquisitions made in 2010 have been successfully 
integrated into the business and made a good 
contribution in 2011 
in the test and measurement segment the acquisitions 
of ncode lds and lochard completed in 2008 and 
2009 have accelerated sales in the automotive 
aerospace and environmental monitoring markets 
together with the efficiencies achieved following the 
integration of these businesses this has resulted in a 
return on sales for the segment of 158
focusing on operational excellence
initiatives to improve operational efficiency across  
the group continued to deliver benefits our strategic 
sourcing teams made excellent progress in the year 
and the value of items sourced or manufactured in 
lowercost countries principally asia and eastern 
europe has now increased to approximately 14  
of the total spend on materials in cost of goods  
sold 2010 11 we completed two significant 
investments in 2011 to improve operational 
efficiency the first phase of a new enterprise resource 
planning erp system at our btg business which will 
bring greater integration of all operational aspects  
of the business into a single management system 
and a stateoftheart manufacturing facility for our 
panalytical business in eindhoven the netherlands 
which will bring greater efficiency to the production 
of xray tubes these investments together with 
many smaller projects across all of our operations 
ensure that our focus on the manufacture and supply 
of critical components and products is done to the 
highest levels of quality and efficiency 
john o’higgins
chief executive spectris plc annual report and accounts 2011 20
2111904   070312   proof 8
operating review
overview
materials analysis provides a range of analytical 
instrumentation to the metals and mining 
pharmaceutical and fine chemicals and electronics 
industries and also to academic and research 
institutions our products help customers to improve 
accuracy and speed of materials analysis in the 
laboratory and in process quality control the 
operating companies in this segment are malvern 
instruments panalytical and particle measuring 
systems
segment performance
the metals minerals and mining sector the largest 
end user market for this segment recovered strongly 
in 2011 large investments by mining companies in 
australia south africa and brazil all resulted in strong 
orders for our xray analysis equipment we also  
saw particular interest in applications for analysing 
precious metals and rare earth elements the strategic 
alliance established in 2010 with french company 
sodern a subsidiary of the eads group to distribute 
their neutronbased crossbelt analysers made good 
progress and 2011 saw the first orders for a number 
of these systems these analysers are used in the 
cement minerals and coal industries for realtime 
characterisation of raw materials and complement 
the xray spectrometers panalytical supplies to these 
customers 
we saw good growth in sales to the pharmaceutical 
sector both for research into new drugs and in 
response to stricter regulation and quality control 
during drug manufacture a chinese pharmaceutical 
research customer purchased our new xray research 
platform empyrean for analysing the active 
ingredients in tablets in order to optimise drug 
formulation this is the first empyrean system to be 
installed in china for this application we saw good 
sales of our pharmaceutical facility monitoring 
systems particularly in north america and china 
these systems are used to monitor contamination 
within sterile environments thus ensuring the drug  
is manufactured according to national safety 
regulations 
sales to the academic sector and to research 
institutions worldwide were resilient this was helped 
by latin america and china where government 
emphasis on increasing academic leadership and 
development of the high technology sector resulted 
in increased funding for research laboratories our 
new xray research platform empyrean launched  
in 2010 continues to be well received by customers 
and won an award for the best technology 
innovations in 2011 from rd magazine in a further 
commendation malvern instruments received the 
2011 queen’s award for enterprise in the category  
of international trade this is the second year in 
succession that the company has won a queen’s 
award the 2010 award was in the category of 
innovation for the development of the zetasizer 
nano particle characterisation system
materials analysis
highlights
 strong recovery in metals and mining
 demand from pharmaceutical market driven by new drug research and 
regulatory enforcement
 academicrd markets strong helped by initiatives in emerging markets 
to invest in academic leadership
 new facility opened for xray tube manufacture
£609m
operating profit  
up 54
181
return on sales 
up 36pp
£3375m
sales up 24 spectris plc annual report and accounts 2011 21
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2111904   070312   proof 8
steadily increasing demand for our xray tubes 
resulted in projected production capacity limitations 
and in september we opened a new stateoftheart 
manufacturing facility in eindhoven the netherlands 
for these critical components of our xray 
instruments 
segment outlook
the metals minerals and mining sector has recovered 
from the slowdown of 2009–2010 and we expect 
investment to continue due to ongoing demand from 
emerging markets where infrastructure projects are 
driving expenditure for constructionrelated sectors 
academic research in emerging markets will continue 
to grow as these countries seek to increase the 
number and quality of academic institutions 
research into new drugs and stricter enforcement  
of regulations on their manufacture are likely to 
continue to drive demand for our products from the 
pharmaceutical industry 
the korea electronics t echnology institute keti is a 
government body leading research into electronics 
for korean companies such as samsung sdi one key 
project is to develop a new lithium ion rechargeable 
battery to provide more powerful and lighter power 
cells for devices such as mobile phones laptops and 
electric cars the research involves adding different 
materials such as iron or manganese to the existing 
lithium cobalt oxide technology to improve the 
performance of the battery keti used panalytical’ s 
empyrean xray diffraction system to study changes in 
the size and structure of crystals inside the battery cell 
as the quantities of iron and manganese were adjusted 
the result was a rechargeable battery with improved 
lifetime superior chargedischarge cycling and low 
discharge losses
case study
panalytical helps keti to 
develop longerlife batteries spectris plc annual report and accounts 2011 22
2111904   070312   proof 8
operating review continued
overview
test and measurement supplies test measurement 
and analysis equipment and software for product 
design optimisation manufacturing control and 
environmental monitoring systems markets are 
principally the aerospace automotive and consumer 
electronics industries for customers in the 
automotive and aerospace industries our products 
and applications help them to design and test new 
products whilst reducing time to market in consumer 
electronics our equipment and software enable 
customers to refine the performance and accuracy  
of their products in the environmental monitoring 
market the desire for higher standards of community 
comfort is driving increasing demand the operating 
companies in this segment are brüel  kjær sound  
vibration and hbm
segment performance
the automotive market a key end user market for 
this segment continued to recover one area of 
increasing rd focus is electric cars and we received 
an order from a major manufacturer of high 
performance electric cars for torque transducers and 
data acquisition equipment to test certain drivetrain 
components we also received an order for our data 
acquisition system for endurance testing of tyres for 
passenger cars and light trucks for a major korean 
tyre manufacturer our systems are used to measure 
the internal pressure of the tyre the loading force 
and the speed of rotation in durability tests demand 
was strong for our noise analysis instrumentation for 
noise source identification both for customer comfort 
and for certifying compliance with noise emission 
regulations we have also seen significant interest in 
our noise evaluation technologies from high speed 
train manufacturers
sales to the aerospace market grew strongly in 
china significant investments in the aerospace 
industry resulted in good demand for our data 
acquisition products and we received key orders for 
structural testing of aircraft materials and landing 
gear for a new narrowbody commercial airliner our 
products are also used for satellite launch simulation 
and qualification testing and at the beginning of the 
year we received an important order from inpe the 
national institute for space research in brazil for 
satellite vibration and shock testing
consumer demand for electronic items such as smart 
phones and tablet computers and the requirement 
for improved audio quality of these devices has 
resulted in manufacturers increasingly adding  
inline testing of components to endofline testing 
in response we have adapted our acoustic and 
vibration testing solutions originally designed for 
rd applications for use on production lines 
furthermore the increased use of voice control 
technologies in communication and entertainment 
systems has led to increased sales of our voice quality 
evaluation systems 
our environmental monitoring service business 
continued to grow in the traditional airport noise 
monitoring market and we received new orders  
from airports around the world as well as renewal 
contracts for existing customers including london’s 
heathrow and stansted airports new applications  
for this business in mining and construction are also 
proving particularly successful we signed a number 
of contracts for noise monitoring systems including 
the crossrail infrastructure project for a new rail link 
across london since much of the construction work 
will take place in highly builtup areas with night 
work required in some instances noise compliance is 
a critical consideration for the building contractors 
test and measurement
highlights
 good demand from automotive market new project wins for noise 
analysis and torque measurement
 new aerospace projects for structural testing of materials in china and 
vibration testing for satellites in brazil 
 successful expansion of noise monitoring services into new applications 
 good progress in other markets eg consumer electronics power 
£547m
operating profit  
up 57
158
return on sales 
up 41pp
£3469m
sales up 17 spectris plc annual report and accounts 2011 23
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2111904   070312   proof 8
in the power sector our solutions are finding 
increasing application in a number of areas growing 
demand for electrical power and new energy sources 
has necessitated expansion of the power grid and the 
replacement of ageing power infrastructure in many 
countries we have seen steady demand for our  
test and measurement solutions from a number of 
customers for both component manufacture and 
independent testing of equipment such as circuit 
breakers contactors and transformers the genesis 
highspeed family of highpower measurement 
products is ideally suited to applications in the power 
industry and provides enhanced test capabilities in full 
compliance with all relevant international standards 
for example this product is being used at the 
kennedy space center in florida to identify where 
any damage may have occurred following lightning 
strikes our data acquisition systems are also used  
in the wind energy market and a wind turbine 
manufacturer in china purchased our high capacity 
torque transducers for testing gearboxes generators 
and main bearings in the design of a large offshore 
wind turbine we also supply noise monitoring 
equipment to measure the noise produced by wind 
turbines and their component parts to ensure that 
they meet regulation on noise levels which applies  
in many countries 2011 saw the sale of the first 
commercial groundbased system with more than 
100 microphones for noise source identification  
of wind turbines this technology is also used to 
optimise new designs aimed at lowering noise levels 
from the blades 
segment outlook
the automotive sector is showing good growth  
as new research programmes are established 
particularly in asia as well as further development  
of vehicles such as hybrid and electric cars new 
aerospace programmes provide opportunities for 
growth and as these become more complex our 
products will remain in demand for applications such 
as materials and structural integrity testing of aircraft 
and increasingly satellites our products are also 
increasingly being used for test and measurement 
applications in other industry sectors such as 
consumer electronics energy and rail environmental 
noise monitoring continues to grow as regulation 
increases and we expect to continue to find more 
widespread industrial and constructionrelated 
applications for our services
french sailor alain thébault wanted to build the 
fastest sailing boat in the world but “flying” over the 
ocean with a boat demands innovative materials and 
technologies and so alain relied on hbm’s measurement 
technology to help develop his ultrafast trimaran 
the hydroptère the main challenge was to develop 
aerodynamic hydrofoils providing sufficient lift above 
the surface of the water without causing turbulence 
and able to withstand a pressure of 45 tons hbm’s 
instrumentation was installed on board to measure 
stability speed drag vibration and oscillation as well as 
the wear of the materials used alain’s speed of 5136 
knots 95 kmh successfully broke the absolute world 
speed record for a sailpowered vessel
case study
world’s fastest sailing boat 
uses hbm’s measurement 
technology spectris plc annual report and accounts 2011 24
2111904   070312   proof 8
operating review continued
overview
inline instrumentation provides process analytical 
measurement asset monitoring and online controls 
for both primary processing and the converting 
industries our products and applications provide 
precision measurement in challenging operating 
environments ensuring process quality asset uptime 
safety and improved yield the operating companies 
in this segment are beta lasermike brüel  kjær 
vibro btg group fusion uv systems ndc infrared 
engineering and servomex 
segment performance
the inline instrumentation segment which had a 
strong recovery in 2010 returned to more normalised 
growth levels during 2011 as expected operating 
margins were 07pp lower as a result of sales of 
service spare parts and consumables which are a key 
feature of this segment growing more slowly than 
sales of new products
growth was strong in the energy and utilities sector 
where customers continued to focus on improving 
productivity efficiency and safety during the year we 
launched the nanotrace ii series of analysers based 
on technology acquired with the deltaf business 
these instruments measure oxygen at the lowest 
detection level in the industry parts per trillion we 
also launched the servotough lasercompact 
which uses precision laser diode technology to detect 
a wide range of gases for applications in the chemical 
industry and in petrochemical processing in the 
power industry there was good demand for our 
safety monitoring systems for hydroelectric power 
stations and we secured orders to install these 
systems on three large hydroelectric power stations in 
china representing our first orders for this 
application in the region our condition monitoring 
systems were also selected for hydroelectric projects 
in austria brazil and turkey vibration monitoring 
provides early detection of a wide range of machine 
faults and enables targeted maintenance actions  
to prevent the unplanned shutdown of expensive 
machinery our remote monitoring systems for wind 
turbine monitoring continued to perform well and  
we secured orders from china for pilot system 
installations at two wind farms 
in the pulp and paper industry several european and 
north american producers of coated graphic papers 
curtailed their production rates to adjust for softer 
demand for print media following a strong recovery 
in 2010 this effect was offset by strong demand for 
our coating blades and rods in china where new 
coated paper capacity came on line there was also 
good demand for our instruments which are used to 
control consistency and to improve operations across 
both pulp production and paper manufacturing 
processes in the fourth quarter we launched  
a new series of optical brightness transmitters for 
monitoring and controlling bleaching chemicals 
optical brightening agents and dyes equipped with a 
uv light source for fluorescent measurement these 
instruments optimise chemical addition and reduce 
operating costs during the pulping process we also 
continue to make good progress in tissue markets 
and several large tissue manufacturers are now 
employing our combined technology to improve 
process productivity and product quality new blade 
materials in our coating blades are helping to reduce 
operating costs and increase uptime and in a trial  
at one tissue mill our new blades achieved a  
50 longer lifetime between changes than the 
conventional blades 
we saw strong demand from the converting 
industries web film plastics and packaging for our 
products continued investment by customers  
in both separator film and coating lines for 
production of lithium ion batteries particularly in 
china resulted in a significant increase in orders for 
our infrared measuring systems for this market 
compared with the prior year there was also good 
demand for our scanners for measuring plastic film 
inline instrumentation
highlights
 energy and utilities projects include chemical plant hydro and wind 
power installations
 continued success in tissue applications offsetting decline in traditional 
coated papers
 strong demand for web film and packaging solutions
 investments in optical fibre and telecoms cable continue especially in 
emerging markets
£638m
operating profit  
up 9
206
return on sales 
down 07pp
£3089m
sales up 13 spectris plc annual report and accounts 2011 25
business review governance financial statements
2111904   070312   proof 8
china’s long reliance on coal to generate its 
electricity is changing as the country plans to 
expand its hydropower capacity in a concerted 
effort to reduce carbon dioxide emissions 
brüel  kjær vibro’s safety monitoring systems 
are being used to monitor the generating 
units at three hydropower stations vibration 
monitoring provides early detection of a wide 
range of machine faults enabling targeted 
maintenance actions to prevent the unplanned 
shutdown of expensive machinery at the 
xiaowan dam the world’s tallest doublearch 
dam and the secondlargest hydroelectric 
power station in china brüel  kjær vibro’s 
monitoring systems are used on the six 700 
mw installed hydro turbine generator units
case study
brüel  kjær vibro helps  
china to expand renewable 
energy generation 
and we launched a new system for blown film which 
has been installed at two of the world’s largest 
producers of complex packaging films blown film 
production has become more sophisticated as the 
industry enters new marketplaces uniform barrier 
layer thickness is especially important in films which 
are converted into high performance packaging  
films which extend the shelf life of foods and  
medical products using our measurement and 
control systems to achieve thickness uniformity 
manufacturers can reduce the variation in roll film 
thickness by 40 to 60 our uv curing systems had 
good success in china with applications including 
production of metallised plastics and decorating film 
the latter is beginning to replace conventional spray 
coating operations for decorating the plastic housings 
found on consumer electronics with the acquisition 
of the irm business we have expanded our product 
line to include thickness and flatness gauging 
products for the steel and aluminium industries  
with significant potential in china
in the semiconductor and electronics market 
conditions were mixed demand for new generation 
large screen televisions remains subdued however 
demand for smaller more compact items such as 
tablet computers and smart phones is growing 
rapidly advances in technology for example the use 
of polarising films to improve display and touch panel 
performance has resulted in investment in new 
manufacturing processes and the associated uv 
curing equipment required to achieve this in the  
wire and cable market demand for optical fibre  
and telecom cable in general grew strongly as 
infrastructure investments in china and india 
continued together with the continued deployment 
of fibre to the home in north america previously 
mothballed equipment at customers’ sites is being 
refurbished and upgraded to meet the increase in 
demand resulting in good sales of our uv curing 
equipment and gauging systems
segment outlook
investment activity is expected to continue in 
hydrocarbon processing worldwide as oil and gas 
producers seek further productivity and efficiency 
improvements and as emissions regulations increase 
compliance requirements in the metals sector the 
acquisition of irm group will expand our market 
position particularly in the growing china market 
demand from the electronics sector including flat 
panel displays will be driven by smaller portable 
devices and demand for optical fibre is expected  
to continue to grow as infrastructure projects in 
emerging markets continue in the pulp and paper 
industry current trends are expected to continue 
with demand for coated papers declining mitigated 
by growing demand for tissue products particularly 
in emerging markets service and support contracts 
will continue to be an important feature of this 
segment as customers seek to ensure uninterrupted 
production capabilities  spectris plc annual report and accounts 2011 26
2111904   070312   proof 8
operating review continued
overview 
industrial controls supplies process measurement 
monitoring and control instrumentation and 
networking products for manufacturing industries 
our products provide track trace and control 
solutions during the manufacturing process 
instrumentation and displays for process monitoring 
and control data interfaces and rugged ethernet 
switches for a broad range of manufacturing 
industries sales are made both directly and indirectly 
via distributors to end users as well as directly to 
original equipment manufacturers with a significant 
proportion of repeat business the operating 
companies in this segment are microscan omega 
engineering and red lion controls 
segment performance
the global manufacturing sector continued to grow 
strongly and we saw good demand for our industrial 
measurement communication and control products 
augmented by the sixnet and omega engineering 
acquisitions 
our automation products performed well with high 
demand for bar code readers and machine vision 
systems track trace and control technologies are 
increasingly being adopted in response to the 
growing requirement and in some cases regulation 
for manufacturers to improve quality safety and 
efficiency we sold our smart cameras to customers  
in the food industry for validating packaged products 
to meet food safety standards and to customers in 
the electronics industry where they are used for 
process control efficiency during the manufacture  
of subassemblies for consumer electronics in the 
pharmaceutical industry strict regulations regarding 
product traceability resulted in sales of a number of 
our products for packaging and labelling applications 
in june we launched the autovision product family 
comprising smart cameras and software this suite of 
track trace and control products has been very well 
received and we have sold a number of systems into 
applications ranging from checking the integrity of 
car airbag seat covers to reading bar codes on 
medical instruments 
integration of the omega engineering business 
acquired at the end of september into the industrial 
controls segment is progressing well the transition 
to new ownership has proceeded smoothly  
and a number of actions to enhance productivity  
and introduce new products are under way the 
organisation is being expanded to increase the 
company’s presence in europe and to establish an 
operation in china these actions are expected to 
accelerate growth in 2012 and beyond investments 
in systems to improve the efficiency of the operations 
finance and administration functions are in the 
planning stage and are expected to be initiated 
during the course of the year during 2011 omega 
introduced a number of new products to focus on 
wireless communication these enable users to 
monitor and control processes remotely and are 
particularly useful for retrofitting instrumentation  
in existing process lines
red lion controls completed the acquisition of sixnet 
in october this has provided new product platforms 
and in particular wireless capability for our industrial 
automation offering and builds on the networking 
products of ntron acquired in 2010 integration of 
sixnet and ntron into red lion is proceeding on 
industrial controls
highlights
 strategic acquisitions contribute to good growth in sales
 integration actions delivering results eg productivity improvements and 
sales ahead of expectations
 strong demand for track trace and control applications for product 
traceability 
 automation products finding new applications in process industries
£221m
operating profit  
up 132
196
return on sales 
up 37pp
£1129m
sales up 89 spectris plc annual report and accounts 2011 27
business review governance financial statements
2111904   070312   proof 8
track and the enlarged company will be deploying a 
consolidated gotomarket strategy over the next few 
months in its traditional business red lion’s operator 
panels are finding new applications in process 
industries such as gas production and distribution 
where they are used for control on drilling rigs and 
on the compressors which move the gas through 
miles of crosscountry pipeline red lion’s technology 
enables customers to drive productivity improvements 
through realtime visibility of data and in october 
the company launched the productvity station a 
readytouse solution for collecting recording and 
displaying critical performance indicators and 
machine status messages in production facilities 
segment outlook
whilst demand from the general manufacturing 
sector will depend to some extent on the global 
economy recent acquisitions have strengthened our 
position in monitoring control and communication in 
the industrial automation and process measurement 
markets omega engineering will provide good 
opportunities for growth in emerging markets 
particularly china and latin america 
pharmaceutical manufacturers must meet 
stringent labelling requirements to ensure safety 
and prevent counterfeiting the data on the 
label must be accurate and legible throughout 
the supply chain us company modular 
packaging systems designs and manufactures 
tablet counters and fillers and uses microscan’ s 
machine vision system to detect and verify 
labels in the bottle filling line one camera 
verifies that the datebatch code and barcode 
on each label is correct and a second camera 
checks each bottle to detect any missing labels 
bottles with labels that do not meet the required 
specifications and unlabelled bottles are rejected 
further down the line
case study
microscan’s vision  
system helps to meet 
packaging regulations spectris plc annual report and accounts 2011 28
2111904   070312   proof 8
financial review
introduction
spectris uses adjusted figures as key performance 
measures in addition to those reported under 
adopted ifrs adjusted figures exclude certain 
nonoperational items which management has 
defined in note 3 unless otherwise stated all profit 
earnings and operating cash flow figures referred to 
below are adjusted measures
operating performance
reported sales were up 226 at £11062 million 
2010 £9019 million favourable movements in 
foreign currency exchange rates contributed 
approximately £48 million 05 and revenue from 
acquisitions contributed approximately £651 million 
72 therefore on an organic constant currency 
likeforlike basis sales increased by 149 
yearonyear
operating profit increased by 418 to £2015 
million 2010 £1421 million movements in foreign 
currency exchange rates had a positive effect of 
approximately £20 million 14 and acquisitions 
contributed an additional £136 million 96 the 
increase in likeforlike operating profit of £438 
million resulted from higher sales driving an increase 
in gross margin of £810 million offset by overheads 
increasing by £372 million predominantly personnel 
costs gross margins increased to 586 of sales 
02pp and overheads reduced to 404 22pp 
with the result that operating margins increased by 
24pp from 158 to 182 
the yearonyear increase in net finance costs was 
£01 million from £98 million to £99 million this  
is due to a net increase of £08 million in financing 
charges offset by a reduction in net pensionrelated 
costs of £07 million the £08 million increase in 
financing charges is the net result of an increase in 
charges arising from higher average net debt 
mitigated by a reduction in average interest rates
profit before tax increased by 45 from £1323 
million to £1916 million 
statutory operating profit after including acquisition
related intangible asset amortisation of £218 million 
2010 £123 million acquisitionrelated costs and 
contingent consideration fair value adjustments of 
£18 million 2010 £19 million and acquisition
related fair value adjustments to inventory of £21 
million 2010 £nil increased by 38 from £1279 
million to £1758 million
statutory profit before tax increased by 385 from 
£1199 million to £1660 million 
clive watson
group finance director
 2011 2010 increase
likeforlike 
increase
sales £m 11062 9019 226 149
adjusted operating profit £m 2015 1421 418 308
operating margin 182 158 24pp
statutory 
sales £m 11062 9019 226
operating profit £m 1758 1279 375
operating margin 159 142 17pp
reported sales were up 226 at £11062 million on a likeforlike basis 
sales increased by 149 adjusted operating profit increased by 418  
to £2015 million
182
operating margins  
up 24pp
£2015m
operating profit  
up 42 spectris plc annual report and accounts 2011 29
business review governance financial statements
2111904   070312   proof 8
the reconciliation of statutory and adjusted measures is shown in the table below
2011 2010
ifrs 
statutory 
£m
adjustments 
£m
spectris 
adjusted 
£m
ifrs 
statutory
 £m
adjustments
£m
spectris
 adjusted 
£m
sales 11062 – 11062 9019 – 9019
gross margin 6487 – 6487 5268 – 5268
operating profit before 
acquisitionrelated items 2015 – 2015 1421 – 1421
amortisation of acquisition
related intangibles 218 218 – 123 123 –
net acquisitionrelated costs 
and contingent consideration 
fair value adjustments 18 18 – 19 19 –
acquisitionrelated fair value 
adjustments to inventory 21 21 – – – –
operating profit 1758 257 2015 1279 142 1421
profit on disposal of businesses 01 01 – – – –
unrealised changes in fair value 
of financial instruments 04 04 – 14 14 –
net gains on retranslation of 
shortterm intercompany loan 
balances 04 04 – 04 04 –
net bank interest payable 98 – 98 90 – 90
net ias 19 finance incomecost 01 – 01 05 – 05
other finance costs 02 – 02 03 – 03
profit before tax 1660 256 1916 1199 124 1323
acquisitions
the total cost of acquisitions in the year was £3770 
million 2010 £630 million including £186 million 
2010 £08 million for cash acquired included in the 
total cost of acquisitions is an amount of £44 million 
2010 £41 million attributable to the fair value of 
deferred and contingent consideration expected to be 
paid in future years offset by an estimated purchase 
price adjustment receivable of £71 million 2010 
£nil in addition a further £79 million 2010  
£45 million was paid in respect of prior year 
acquisitions making the net cash outflow in the year 
£3690 million 2010 £626 million an amount of 
£31 million 2010 £19 million was spent on  
related costs mainly professional fees which makes 
the total acquisitionrelated cash outflow in 2011 
£3721 million 2010 £645 million the acquisitions 
all took place in the second half of 2011 and 
contributed £651 million 2010 £116 million  
of incremental sales and £136 million 2010  
£12 million of operating profit 
taxation
the effective tax rate on adjusted profits was 248 
2010 242 an increase of 06pp mainly due to a 
higher proportion of the profits being earned in the 
more highly taxed usa on a statutory basis the 
effective tax rate was 239 2010 198 the 
effective tax rate continues to be below the weighted 
average statutory tax rate of 285 2010 276 
primarily as a consequence of a taxefficient 
intercompany financing structure and research  
and development tax incentives
earnings per share
earnings per share increased by 43 from 866p to 
1241p reflecting the net impact of a 45 increase 
in profit before tax slightly offset by the increase in 
the weighted average number of shares from 1158 
million in 2010 to 1162 million in 2011 and the 
increase in the tax rate to 248
1241p
earnings per share 
up 43
£1916m
profit before tax  
up 45 spectris plc annual report and accounts 2011 30
2111904   070312   proof 8
financial review continued
statutory basic earnings per share increased by 31 from 831p to 
1087p the difference between the two measures is shown in the table 
below 
2011 
pence
2010 
pence
statutory basic earnings per share 1087 831
amortisation of acquisitionrelated 
intangible assets 188 106
acquisitionrelated costs and contingent 
consideration fair value adjustments 16 16
acquisitionrelated adjustments to inventory 18 –
profit on disposal of businesses 01 –
decreaseincrease in fair value of cross
currency interest rate swaps 03 12
net gains on retranslation of shortterm 
intercompany loan balances 03 03
tax effect of the above and other non
recurring items 67 72
earnings per share 1241 866
the weighted average number of shares outstanding during the year 
was 1162 million 2010 1158 million
cash flow
2011 
£m
2010 
£m
operating cash flow
operating profit 2015 1421
add back depreciation and software 
amortisation 180 165
working capital movement 112 201
capital expenditure 292 189
operating cash flow 1791 1598
operating cash flow conversion 89 112
nonoperating cash flow
tax paid 351 210
net interest paid 121 101
dividends paid 338 289
acquisition of businesses net of cash 3690 626
acquisitionrelated costs 31 19
disposals 01 –
exercise of share options 05 19
exchange 34 05
total nonoperating cash flow 4491 1221
operating cash flow 1791 1598
movement in net debt 2700 377
 operating cash flow as  of operating profit
excluding acquisitions the year end trade working capital to sales ratio 
was 99 2010 98 including acquisitions the year end trade 
working capital to sales ratio was 123 average likeforlike trade 
working capital expressed as a percentage of sales decreased to 
90 2010 94 reflecting the continuing focus on working capital 
management
capital expenditure during the year equated to 26 of sales 2010 
21 and at £292 million 2010 £189 million was 162 of 
depreciation and software amortisation 2010 115 the increase in 
capital expenditure is mainly propertyrelated longterm investments 
primarily in the netherlands where we invested in a new stateofthe
art manufacturing facility 
overall net debt increased by £2700 million 2010 decrease of £377 
million from £862 million to £3562 million interest cost excluding 
the financing charge arising from ias 19 was covered by operating 
profit 20 times 2010 158 times 
financing and treasury 
the group finances its operations from both retained earnings and 
thirdparty borrowings the majority of which are currently at floating 
rates of interest 
as at 31 december 2011 the group had £501 million of committed 
facilities denominated in different currencies consisting of £97 million 
of private placements maturing in october 2013 a fiveyear £48 
million term loan maturing in september 2015 a fiveyear £354 
million revolving credit facility maturing in august 2016 and £2 million 
from three bank loans secured on property of three of our businesses 
the revolving credit facility was signed in august 2011 to finance the 
omega engineering acquisition to refinance existing debt facilities and 
for general corporate purposes £104 million of this facility was 
undrawn at the year end in addition the group had a cash balance of 
£42 million and other uncommitted facilities mainly in the form of 
overdraft facilities at our local operations 
at the year end the group borrowings amounted to £398 million 37 
of which were at fixed interest rates 2010 99 the ageing profile at 
the year end showed that 1 of the year end borrowing is due to 
mature within one year 2010 1 24 between one and two years 
2010 1 and 75 between two and five years 2010 98 
currency
the group has both translational and transactional currency exposures 
translational exposures arise on the consolidation of overseas company 
results into sterling transactional exposures arise where the currency 
of sale or purchase invoices differs from the functional currency in 
which each company prepares its local accounts the transactional 
exposures include situations where foreign currency denominated 
trade debtor trade creditor and cash balances are held
after matching currency of revenue with currency of costs wherever 
practical forward exchange contracts are used to hedge a proportion 
up to 75 of the remaining forecast net transaction flows where 
there is reasonable certainty of an exposure at 31 december 2011 
approximately 57 of the estimated net euro us dollar and japanese 
yen exposures for 2012 were hedged using forward exchange 
contracts mainly against the swiss franc sterling the euro and the 
danish krone spectris plc annual report and accounts 2011 31
business review governance financial statements
2111904   070312   proof 8
the largest translational exposures are to the us dollar euro danish 
krone and swiss franc translational exposures are not hedged the 
table below shows the key average exchange rates compared to 
sterling during 2011 and 2010 
2011 
average
2010 
average
usd 160 155
eur 115 117
jpy 128 135
to demonstrate the transaction and translation currency exposure 
faced by the group the table below shows the differences between 
the group’s consolidated revenues and costs for each of the major 
currencies in 2011 before reflecting the effect of transactional hedges 
taken out in the year
revenue and cost by major currency
usd eur gbp jpy other total
total sales £m 409 417 69 84 127 1106
 of sales 37 38 6 8 11
total costs £m
† 312 342 97 47 116 914
pbt by currency £m 97 75 28 37 11 192
 of pbt 51 39 14 19 5
 dollareuro categories include tracking currencies
† costs include interest of £38m in usd £60m in eur and £01m in gbp
the above table is for overall guidance only as the phasing of income 
and the movement in the monthly average exchange rates during the 
year can have a significant impact 
defined benefit pension schemes
the company operates a number of pension schemes throughout the 
group the net pension liability in the balance sheet before taking 
account of the related deferred tax asset of £40 million has decreased 
to £131 million 2010 £141 million the movement can be 
summarised as follows
£m
deficit in defined benefit pension schemes at 1 january 2011 141
settlement gain in uk 03 
actuarial losses 28 
contributions in excess of service cost 32 
expected return on pension scheme assets net of interest 
costs on pension scheme liabilities  01
exchange difference and other movements 02
deficit in defined benefit pension schemes at 
31 december 2011 131
the movement in individual plan deficits is shown in the table below
uk germany netherlands switzerland total
deficit as at 
1 january 2011 37 71 04 29 141
decreaseincrease 
in deficit 24 08 – 22 10
deficit as at 
31 december 2011 13 63 04 51 131
the reduction in the uk deficit is mainly due to the favourable asset 
returns over the period and the deficit contributions £26 million pa 
paid by the company this beneficial impact was partially offset by  
an increase in liabilities due to a lower discount rate 47 as at  
31 december 2011 31 december 2010 54 
the group has undertaken an enhanced transfer value exercise for 
certain uk deferred members with a prospective pension entitlement 
of less than £1000 pa for ias 19 valuation purposes as at  
31 december 2011 this has been treated as a settlement resulting in 
a gain of £03 million credited to the statement of income difference 
between the total ias 19 liabilities for the members less the total 
amount paid from the plan
the £22 million increase in the swiss deficit arose mainly from an 
increase in liability due to a lower discount rate used 2011 225 
2010 275
clive watson
group finance director spectris plc annual report and accounts 2011 32
2111904   070312   proof 8
corporate responsibility
introduction
spectris is a leading supplier of productivityenhancing instrumentation 
and controls we employ around 7500 people working from over 130 
locations in more than 30 countries around the world our products are 
used to monitor and control research and manufacturing processes 
enabling customers in a wide range of industries to enhance their 
productivity and thereby also reduce their environmental impact 
we are committed to creating business growth through adding such 
value for our customers whilst also ensuring that our own impact on 
the environment is minimised corporate responsibility cr underpins 
our business strategy and our primary corporate value of honesty and 
integrity influences all of our dealings with our customers employees 
and communities in which we operate the core areas of our cr 
strategy are corporate governance environment and climate change 
our people our communities customers and suppliers
to measure the critical components of our cr strategy we have 
adopted the following key performance indicators
energy consumption
2011 2010
mwh per £m revenue 656 928
accident incident rate
2011 2010
reportable accidents per 1000 employees 27 53
opportunities
climate change in particular provides opportunities to develop new 
products which contribute to reducing our customers’ impact on the 
environment for example by lowering energy consumption or raw 
material usage we recently helped a major cement company to 
achieve a 2030 reduction in co
2
 emissions per tonne of cement  
by developing a new type of clinker with a lower carbon footprint  
see case study on page 33 our products are also used in the 
development of renewable energy technologies for example the 
design and testing of new materials for wind turbine blades solar 
panels and lithium ion batteries for electric vehicles our systems are 
also used for remote monitoring of wind turbines and hydroelectric 
power stations
independent accreditation
spectris continues to meet the criteria for membership of the 
ftse4good index the leading responsible investment benchmark 
the ftse4good inclusion criteria are enhanced regularly and demand 
continued improvement in order to maintain inclusion in the index 
the criteria are assessed on a regular basis by the independent 
research organisation eiris 
stations 
approximately 60 of our manufacturing operations by turnover are 
certified to the international environmental standard iso 14001 
in 2011 as part of our commitment to environmental responsibility 
we commenced participation in the carbon disclosure project an 
independent notforprofit organisation reporting on corporate climate 
change information we were pleased to be placed in the top third of 
all ftse 350 companies responding
our environmental reporting processes have been established by 
external consultants ws atkins
we have commenced a programme to audit significant suppliers 
against relevant criteria stipulated in the social accountability standard 
sa8000 and to date have audited the top 50 of key suppliers in 
asia a number of the suppliers audited have committed to gaining 
full sa8000 certification
corporate governance
details of how the company complied with the principles of the uk 
corporate governance code during 2011 are described in detail in 
the directors’ report 
overall responsibility for developing corporate policies on 
environmental social ethical and health and safety matters and for 
reviewing their effectiveness lies with the spectris board of directors 
and in particular the chief executive these policies are mandated 
across all business units and applied within each particular business 
taking account of local legislation and regulation all policies are 
reviewed periodically and any updates are communicated to the 
operating companies each year we require the president and finance 
director of each operating company to confirm that their business has 
complied in full with our corporate policies any instances of 
noncompliance must be reported there were no material cases of 
noncompliance in 2011
this certification forms an integral part of the company’s system of 
internal controls and is regularly reviewed by the group’s internal 
audit function and considered annually by the company’s external 
auditors compliance testing is a formal part of internal audit reviews 
through a structured review process the internal audit function 
undertakes visits to group locations on a rotational basis these visits 
involve an assessment of the business’ key internal controls as well as 
compliance with the group’s policies and procedures the results of 
internal audits and any cases of noncompliance are reported to the 
audit and risk committee
environment and climate change
our core business of providing instruments and controls for the design 
and manufacturing processes of major industrial companies helps our 
customers to reduce their environmental impact in a number of ways 
we offer our customers products and technologies to reduce energy 
consumption make more efficient use of resources and control 
emissions furthermore a number of our products are critical to the 
development manufacture and maintenance of renewable energy 
generation technologies as described above examples of the use of 
spectris’ products having a direct beneficial contribution to the 
environment are shown on our website 
we also take the continuing reduction in our own environmental 
impact seriously as set out in our environmental policy which is  spectris plc annual report and accounts 2011 33
business review governance financial statements
2111904   070312   proof 8
published on our website we endeavour to employ nonpolluting 
technology wherever possible in our operations and take steps to 
reduce our energy consumption further design processes take into 
account the operational lifetime of every product and endoflife 
removal or disposal consideration is also given to environment
friendly production packaging and shipping 
environmental management systems
approximately 60 of spectris’ manufacturing operations by 
turnover are certified to iso 14001 in 2011 brüel  kjær’s facility at 
royston england formerly the lds test and measurement business 
which was acquired in 2008 successfully achieved iso 14001 
certification
no significant environmental incidents were recorded in 2011 and the 
company received no environmental fines in 2007 we reported that 
investigative studies into a small area of contaminated land at almelo 
in the netherlands resulting from activities prior to ownership by 
panalytical had been made and a remediation programme discussed 
with the dutch authorities this programme has now been agreed and 
removal of the contaminated soil followed by pumping and filtering
cleaning of the contaminated water will commence during 2012
climate change
overall spectris has a low climate change impact as our products do 
not require substantial manufacturing processes at our facilities 
nevertheless we take the need to manage our carbon emissions 
seriously and also acknowledge responsibility for our suppliers 
working with them to help reduce their impact on the environment 
although we fall below the threshold for full participation in the uk 
crc energy efficiency scheme and are only required to submit an 
information disclosure we are working to improve our environmental 
performance and reduce our carbon emissions with the help of 
environmental consultants ws atkins we undertook a sustainability 
and responsibility review in 2010 and during 2011 we put in place 
actions across the group in response to their recommendations which 
are detailed below 
our sustainability objectives are designed to improve our 
environmental performance and increase the importance of health 
and safety human rights and ethics across the group roger stephens 
company secretary has overall responsibility for setting and 
monitoring the sustainability strategy the managing directors and 
presidents of our business units are responsible for implementing the 
strategy at a local level
energy
with regard to the environment our initial priority is to focus on 
accurate measurement and monitoring of three key parameters 
electricity gas and water in order to better understand and manage 
our energy use we have established a key performance indicator 
relating to energy consumption 
energy consumption 
mwh per £m revenue 
928 2010
656 2011
we estimate that the above energy consumption metric covers 100 of 
our operations acquisitions are excluded in the year of acquisition
actions to deliver progress are focused on internal initiatives rather 
than groupwide targets with the emphasis on businesses with the 
greatest opportunities to improve as a result we made good progress 
on reducing energy usage in 2011 with actions around the group 
including installing energysaving lighting and motion sensors and more 
energyefficient air conditioning systems at a number of sites fusion uv 
systems one of our most intensive energyusing businesses has 
upgraded the facilities for life testing of their equipment at their north 
american headquarters to be more efficient and this has enabled them 
to reduce electricity consumption fusion aims to reduce energy usage 
by 30 over the next three years at our hbm facility in germany 
electricity consumption has reduced despite a 15 increase in 
production panalytical’s new xray tube facility at eindhoven the 
netherlands which opened in september 2011 and which has been 
designed to modern building standards is expected to reduce 
consumption of gas and electricity per m
2
 by 10 compared with the 
old building at panalytical’s almelo site in the netherlands gas 
consumption in 2011 was 30 lower than in the prior year and 
cement production is 
responsible for around 5  
of global manmade co
2
 
emissions a large proportion 
of these emissions result 
from the decarbonisation  
of limestone at high 
temperatures to produce 
clinker the basic component of cement having already reduced 
its carbon footprint by modernising installations substituting 
fossil fuels with alternative fuel sources and using additives to 
produce less carbon intensive blended cements one possible 
way for the cement industry to make significant future 
improvements is to develop completely new cement types 
project aether™ is a project being led by lafarge world leader 
in building materials to develop a new class of cements which 
require much less limestone and less energy to produce than 
conventional portland cements the project has received funding 
from the european community’s life environmental 
programme a first industrial demonstration trial to produce 
aether clinkers was carried out in 2011 at lafarge’s cement 
plant in burgundy france using panalytical’s xrd and xrf 
analysers and software for quality control and analysis this trial 
confirmed that aether clinkers could be produced at lower 
temperatures and using significantly less energy than 
conventional portland cement clinker generating 2030 less 
co
2
 per tonne of cement independent testing is now ongoing 
to assess the mechanical performance and durability of mortars 
and concretes made with aether cements
panalytical helps to reduce  
carbon footprint in cement 
production spectris plc annual report and accounts 2011 34
2111904   070312   proof 8
electricity consumption for testing of high power instruments has also 
been reduced following changes to production processes
water
as spectris products do not require substantial manufacturing 
processes our sites are not large users of water nevertheless we 
recognise the importance of managing this limited natural resource 
particularly in certain parts of the world and we seek accurate 
sitespecific water reports for all of our largest facilities the data 
collection exercise has already shown results in china where evidence 
of abnormally high consumption at one of our production facilities 
enabled system modifications and a significant reduction in water 
usage at our fusion uv systems’ site in north america overall water 
usage has been reduced by 50 following installation of a chiller
recirculation system used in bulb manufacturing at our site in the 
netherlands consumption of cooling water for a specific production 
process has been reduced by 90 using closed circuit cooling
employees
we employ a highly skilled technical workforce of around 7500 
people in more than 130 locations throughout the world and are 
committed to providing our staff with a creative working environment 
with scope for individual responsibility and achievement 
compensation and benefits which are in line with other leading 
companies in the sector are designed to reward the achievement of 
objectives 
our employment policy is published on our website 
as part of our culture of respect we believe that people with varied 
backgrounds and perspectives add creativity to the company and thus 
we encourage diversity in the workplace we are committed to 
providing equal employment opportunities in terms of recruitment and 
employment training and development and promotion regardless of 
race colour religion national origin gender sexual orientation age 
disability or military veteran status 
the board has discussed the recommendations in the davies report 
‘women on boards’ the board recognises the benefits of all facets of 
diversity including experience and perspective both at board level and 
throughout our business any search firm engaged in a senior 
executive or nonexecutive search assignment will be required to 
adhere to the principles set out in the voluntary code of conduct for 
executive search firms however the board does not believe it would 
be helpful to establish specific employment targets relating to 
diversity 
spectris operates globally in more than 30 countries and is focused on 
growing its presence in industrialising economies such as china india 
and latin america and across a broad base of end user markets we 
will continue to strengthen our existing groupwide inclusion policies 
to attract and retain the most talented and appropriate people 
particularly reflecting the different markets and geographies in which 
we operate
our value of treating others with respect carries over to our policy 
against workplace discrimination and harassment we strive to create 
a culture of honesty respect and professional excellence whilst 
maintaining a healthy balance between working and personal lives 
with initiatives such as parttime and job share opportunities providing 
familyfriendly working conditions employee surveys are carried out in 
a number of companies to measure the views of employees on 
company issues and action plans agreed to address the issues raised 
initiatives such as the savings related share option scheme available 
to all uk employees and grants under the group’s performance share 
plan made to senior management across the group are designed to 
encourage loyalty and performance
a commitment to training and personal development emphasises the 
importance of retaining staff throughout the group and ensuring that 
all employees are encouraged to realise their full potential annual 
reviews provide feedback on performance set objectives and identify 
training and development opportunities data on employee turnover is 
monitored by individual businesses and reported to the board on an 
annual basis malvern and servomex our two principal uk businesses 
have received the investors in people award for their programmes of 
training appraisal employee development and skills recognition
graduate recruitment programmes and student work placements exist in 
a number of our companies providing opportunities for young people 
particularly scientists to be introduced to the business environment
health and safety
we take health and safety seriously and strive to provide a workplace 
at all of our sites where all employees feel safe and protected from 
harm our policies regarding workplace health and safety are 
implemented throughout the group with each operating company 
responsible for compliance with local legislation and regulations and 
ensuring that the highest standards of health and safety are achieved 
by its employees and by subcontractors and suppliers the company’s 
health and safety policy can be viewed on our website 
audits of health and safety policies and procedures are undertaken at 
all major locations by external assessors acting on behalf of the 
group’s insurers on an annual basis and recommendations are made 
for improving practices where appropriate 
any serious health and safety incidents are required to be reported by 
the managing director of the business in an accident report to the 
company secretary who reports on such issues to the board all 
accidents are thoroughly investigated and appropriate corrective and 
in november dr e neil lewis 
chief technology officer at 
malvern instruments was 
awarded the prestigious ernst 
abbe memorial award of the 
new york microscopical 
society in recognition of his 
outstanding contributions to 
the science of microscopy specifically for the development of 
chemical imaging microscopy dr lewis above right was 
founder and president of spectral dimensions inc sdi the 
company malvern instruments acquired in 2006  
malvern instruments’ scientist 
receives award
corporate responsibility continued spectris plc annual report and accounts 2011 35
business review governance financial statements
2111904   070312   proof 8
preventative actions put in place no workrelated serious injuries or 
deaths have been reported in the last ten years nevertheless we have 
established a formal system to monitor the health and safety situation 
throughout the group by reporting workrelated accidents or illhealth 
resulting in lost time in excess of 3 days the resulting data is shown 
below expressed as a key performance indicator 
accident incident rate air 
reportable accidents
1
 per 1000 employees
53 2010
27 2011
1
 workrelated accidentsill health resulting in lost time in excess of 3 days
acquisitions are excluded in the year of acquisition
our aim is to reduce the air to the lowest possible level and we are 
working closely with our operating companies to achieve this within 
the above figure there were five significant workrelated incidents 
resulting in lost time in excess of 20 working days these comprised 
two employees with stressrelated conditions one employee who 
suffered a fractured thumb whilst operating a machine one employee 
who was hit by a steel cable in the workplace and one employee who 
slipped and fell in the office car park 
human rights 
spectris believes in the fundamental rights of people in all parts of the 
world and is committed to adopting internationally recognised human 
rights standards wherever it operates the company’s human rights 
policy which is available on our website is consistent with the 
principles of human rights as set out in the international labour 
organization’s core conventions and includes policies on non
discrimination harassment pay and forced labour 
spectris takes its commitments to human rights seriously and our 
operating companies are required to ensure that all employees are 
aware of the policy and understand it the code of business ethics 
also contains a section on human rights and employees are required to 
ensure that all company operations adhere to these important 
standards pay practices are monitored to ensure they are non
discriminatory 
the region president is responsible for ensuring that the highest ethical 
standards are maintained in all of our asiabased operations spectris 
has a number of sales offices in china and also factories which supply 
high quality weighing components and particle characterisation 
instruments these comprise modern facilities employ skilled workers 
adopt employment conditions consistent with best local practice and 
pay wages that are higher than average for the area
hbm’s modern strain gauge 
manufacturing facility at 
suzhou china is identical to its 
european counterparts with 
regard to the advanced 
equipment used safe working 
conditions and environmental 
awareness
advanced production facilities
spectris considers human rights as part of its due diligence process for 
acquisitions ensuring that the core labour rights including non
discrimination equal opportunities and freedom of association of the 
company to be acquired are taken into account
ethics
our group philosophy is one of autonomy with our operating 
companies entrusted and empowered to run and manage their 
businesses we believe that establishing and maintaining an ethical 
culture is critical to supporting our business model and ensuring our 
continued business success and growth since 2009 we have had a 
wellestablished formal ethics programme the ‘programme’ made up 
of a number of elements 
our code of business ethics the ‘code’ is a central element of our 
programme our core values as set out in the code underpin the way 
we work the code applies to all our employees and is available in the 
15 languages relevant to our operations it provides a framework for 
how we do business and includes a clear policy on antibribery and 
corruption as well as dealings with customers suppliers colleagues 
conflicts of interest and human rights a copy of our code is available 
within the corporate responsibility section on our website 
the spectris board and senior management team are fully committed 
to responsible business conduct and demonstrate visible leadership in 
this area john o’higgins chief executive and roger stephens 
company secretary actively drive the programme and fully engage 
with our businesses on ethical and anticorruption issues the 
company secretary chaired and the chief executive attended  
the spectris global ethical leadership conference in october 2011  
at which all of our businesses were represented in addition 
presentations and workshops on ethics antibribery and corruption 
in september btg’s new 
peaktotal2 inline transmitter 
won the palme d’or for 
innovation from atip  the 
french paper association for 
its unique ability to measure 
total consistency and ash 
content at the heart of the 
new transmitter is an innovative lightemitting system that 
measures reflectance from the slurry at very high frequency using 
advanced signal processing the resulting data provides highly 
accurate information about the fibre fines and filler content of 
the pulp with results unaffected by pulp colour or brightness 
levels helping paper manufacturers to reduce operating costs 
the btg team l to r bernard rodriguez didier conjeaud philippe genest  
gwénaël tartaratbardet and claude vallier
btg wins palme d’or  spectris plc annual report and accounts 2011 36
2111904   070312   proof 8
fraud risk are delivered at our annual presidents’ meetings during  
the board visit to our operations in china in june 2011 both the 
chairman and chief executive devoted a significant proportion of 
presentations to local management to the importance of integrity in 
all our business dealings the board and senior management team’s 
commitment to the programme was further demonstrated during the 
year by the appointment of additional senior resource at the corporate 
centre focused on embedding ethical leadership across the group and 
implementing the programme
the board is given regular updates on the programme and ethical 
issues across the group by the company secretary and the audit and 
risk committee meets at least three times a year to consider the 
effectiveness of the group’s internal controls policies and procedures 
the group internal audit department carries out a rolling programme 
of internal control reviews and compliance with the code forms part 
of the focus of these this work is supplemented by specific periodic 
assessments of fraud risks including bribery in our operations
facetoface training delivered by local operating company 
management is core to engaging with employees on ethical issues and 
is an integral part of raising knowledge and awareness of our code 
newlyhired staff receive training as part of their induction and there 
are regular refresher courses for all employees this is supplemented 
with annual online training during the year an antibribery module 
was successfully rolled out in 13 of our 14 operating companies our 
business integration processes cover ethics and antibribery and the 
remaining business – our recent acquisition omega engineering – is in 
the process of being assimilated into the programme an additional 
online training module focused on conflicts of interest will be rolled 
out across all of our businesses in early 2012 ongoing training and 
awareness is coordinated by ethics officers appointed within each 
operating company and our asia and latin america sales companies 
the ethics officers are responsible for supporting their senior 
leadership teams in embedding high ethical standards within their 
businesses and facilitating the training and awareness process 
our commitment to high standards of ethical behaviour predates the 
uk bribery act but we are cognisant of the heightened legal risks 
arising as a result of the new legislation and increased global 
enforcement activity as a result an independent external risk 
assessment was carried out in march 2011 to identify risks and test 
the efficacy of the existing programme the review provided valuable 
feedback in addition the global leadership conference held in 
october the second since the programme was launched provided 
feedback which formed the basis of the strategy for the next iteration 
of the programme this together with the results from the risk 
assessment has resulted in a number of initiatives to be developed 
and implemented during the course of 2012 these include continued 
focus on developing ethical leadership across our businesses through a 
series of senior management engagement days increased emphasis 
on facetoface training for all employees a revised version of the 
code and development of other supporting materials to be launched 
in the first half of 2012 and formalisation of our thirdparty 
management and due diligence framework 
spectris places the highest importance on compliance with all 
applicable export control regulations governing shipment of products 
and appropriate detailed procedures are in place in each operating 
company designated export control officers are responsible for the 
development of these procedures their administration and the 
associated training of staff overall responsibility for the policy vests 
with roger stephens company secretary the export control officers 
are assisted in their duties by a dedicated group export control advisor 
who led a refresher conference for all export control officers in 
september 2011 all companies are subject to periodic internal audit 
of their procedures and associated conformity with reporting annually 
to the audit and risk committee our export control policy can be 
viewed on our website 
we actively promote a speakup culture at spectris and employees are 
encouraged to discuss issues of concern or any suspected violations of 
the law or our code with their managers this is supplemented with 
an externallyfacilitated telephone and internetbased multilingual 
hotline to enable employees and others to report concerns 
anonymously if they wish all reports are followed up and investigated 
and reports are summarised and communicated to the audit and risk 
committee on a sixmonthly basis in the past 12 months the hotline 
has been used on a number of occasions and the reports followed up 
by the head of internal audit to conclusion spectris is committed to 
protecting the career and reputation of employees who report 
wrongdoing in accordance with established procedures so long as 
their disclosures are delivered in good faith and seek to safeguard the 
best interests of the group
community
our social responsibilities extend to the communities in which we 
operate our companies provide charitable assistance to local causes 
and also participate in a range of activities and educational initiatives 
in support of their local communities these include providing 
apprenticeships and work placements for students working with local 
schools and colleges on science projects and sponsorship of scientists 
attending key scientific conferences 
total donations to charities and community causes in 2011 were 
£76541 of which £10935 were in the uk 2010 £27429 of which 
£8286 in uk this included donations to the red cross in response 
to the tsunami and earthquake in japan and the east africa crisis and 
to other charities and local schools and colleges
it is spectris’ policy that donations or provision of support in kind to 
political parties or campaigns are prohibited
customers
spectris sells productivityenhancing instrumentation and services to a 
large number of customers around the world we have developed 
close working relationships with our customers and in many instances 
involve them in the development of new products to ensure they meet 
their requirements surveys of customer satisfaction are conducted on 
a regular basis
corporate responsibility continued spectris plc annual report and accounts 2011 37
business review governance financial statements
2111904   070312   proof 8
suppliers
spectris has no significant suppliers who are wholly dependent upon 
the company’s business suppliers are paid in line with contractual and 
legal obligations 
we recognise that our strategy of outsourcing noncore 
manufacturing does not absolve us from responsibility for the 
environmental impact of our suppliers and we work to help them 
reduce their impact on the environment and ensure that their products 
meet relevant legislation outsourcing of products and services is only 
to qualityapproved organisations which are regularly inspected and 
audited by the group’s strategic sourcing team and local management 
due to the high technology content of our instrumentation and 
control products suppliers of our parts need to have leading edge 
manufacturing equipment and are subject to rigorous qualification 
processes which cover both their technological capabilities and their 
quality and regulatory conformance 
in order to gain improved assurance from suppliers we are auditing 
current and screening new significant suppliers those providing 
bespoke parts assemblies and systems against relevant criteria 
stipulated in the social accountability standard sa8000 the audit 
covers areas such as human rights working conditions health and 
safety and environmental compliance in addition to our ongoing 
programme of quality and technological audits the initiative has 
commenced in asia where to date we have audited the top 50 of 
key suppliers by order value the remainder will be audited by the 
end of 2012 the audit covers all prospective suppliers of bespoke 
parts and all existing suppliers where we purchase in excess of 
100000year and is carried out by spectris internal auditors in asia 
who have all received external training and qualifications no 
fundamental nonconformances against our standards have been 
discovered where minor noncompliance areas have been found 
corrective actions and completion dates have been agreed with the 
suppliers suppliers have all been very cooperative in implementing 
the necessary improvements and a number have additionally 
committed to gaining sa8000 certification through an approved 
thirdparty auditing body to date we have focused our attention on 
our lower cost manufacturing sources in asia and we may extend this 
initiative to other regions as required we will also be applying the 
same auditing process to our three manufacturing facilities in china 
with a target completion by end of 2012 
contractual arrangements
the company has no contractual or other arrangements which are 
essential to the business of the company nor any key customers or 
major suppliers upon which it is dependent
the readers of automation 
world awarded red lion a  
‘first team supplier’ in the 
publication’s ‘leadership in 
automation 2011’ programme 
red lion was honoured in three 
different categories for its 
industrial control products as 
well as for industrial networking products from the recently
acquired sixnet and ntron businesses 
red lion receives ‘first team 
supplier’ award
servomex has supported the 
annual great servomex egg 
race organised by beacon 
community college in 
crowborough england for 
twenty years providing the 
funding for materials 
refreshments and prizes in 
march ninety enthusiastic pupils took part from different schools 
in the area despite its name this is not actually an egg race but 
a test of the children’s ingenuity and imagination this year the 
science challenge saw the pupils given the scenario of stranded 
animals in a kenyan nature reserve their task was to translate a 
nature reserve sign make a mask to disguise themselves so the 
animals would not be scared and make a cranelike arm to lift 
food to the animals first prize was won by students from jarvis 
brook school
servomex sponsors great egg race spectris plc annual report and accounts 2011 38
2111904   070312   proof 8
board of directors
nomination committee
john hughes chairman
peter chambré
russell king
john o’higgins
john warren
remuneration committee
russell king chairman
peter chambré
john hughes
john warren
left to right jim webster john warren roger stephens john o’higgins peter chambré russell king john hughes clive watson
audit and risk committee
john warren chairman
peter chambré
russell king
senior independent director
john warren business review governance financial statements
spectris plc annual report and accounts 2011 39
john hughes cbe chairman
john hughes was appointed to the board in 2007 and became nonexecutive chairman in 
2008 john was previously executive vicepresident and chief operating officer of defence 
aerospace and electronic systems company thales group sa he is currently nonexecutive 
chairman of sepura plc and telecity group plc as well as a nonexecutive director of vitec 
group plc and csg systems international inc a nasdaqlisted company john also serves as 
an ambassador for the alzheimer’s society 
john o’higgins chief executive
john o’higgins joined spectris in 2006 prior to joining spectris he was with honeywell 
latterly as president of automation and control solutions asia pacific he began his career 
with daimler benz in stuttgart john has engineering degrees from university college dublin 
and purdue university and an mba from insead john is a nonexecutive director of exide 
technologies a company listed on nasdaq
clive watson group finance director
clive watson joined spectris in 2006 he was previously at borealis a leading provider of 
plastics solutions where he was chief financial officer and executive vice president for 
business support prior to this he was group finance director at thorn lighting group and 
before that group finance director europe with black  decker clive is a member of the 
institute of chartered accountants in england and wales and the chartered institute of tax 
and holds a bachelors degree in commerce  accounting from the university of birmingham 
he is a nonexecutive director of spiraxsarco engineering plc
jim webster business group director
jim webster a metallurgy graduate joined spectris in 1993 he is responsible for the 
operational supervision of a number of the group’s trading companies he was previously 
general manager of the european wire and cable division of raychem corporation 
peter chambré nonexecutive director
peter chambré was appointed to the board in 2006 he is chairman of xellia group as 
onemed ab 7tm pharma as and cancer research technology ltd all private companies 
and a nonexecutive director of btg plc he is also an adviser to private equity company 3i 
peter was formerly chief executive officer of cambridge antibody technology group plc and 
prior to that was chief operating officer of celera genomics group and chief executive of 
bespak plc
russell king nonexecutive director
russell king was appointed to the board in october 2010 he is a nonexecutive director of 
aggreko plc and nonexecutive chairman of bergteamet ab a private equityowned swedish 
mining services company and geopromining ltd a privatelyowned mining company 
operating in the cis previously russell was chief strategy officer of anglo american plc and 
a nonexecutive director of anglo platinum ltd prior to that he spent over 20 years in senior 
roles at ici gaining worldwide experience in its fertiliser petrochemical and paint businesses
john warren nonexecutive director
john warren was appointed to the board in 2006 he is a nonexecutive director of the rank 
group plc and bovis homes group plc john was previously group finance director of wh 
smith plc and united biscuits plc and a nonexecutive director of arla foods uk plc bpp 
holdings plc rac plc uniq plc and rexam plc
roger stephens head of commercial and company secretary 
roger stephens is an economics graduate and chartered company secretary prior to joining 
spectris in 1997 he held commercial roles in the power and construction sectors specialising 
in contract negotiation litigation and claims resolution ip exploitation and property 
development spectris plc annual report and accounts 2011 40
2111904   070312   proof 8
directors’ report
the directors present their report and accounts for the year ended 31 
december 2011
principal activities
spectris designs develops and markets productivityenhancing 
instrumentation and controls the businesses are grouped into four 
segments for management and segmental reporting purposes 
materials analysis test and measurement inline instrumentation and 
industrial controls further details of the trading companies within 
each segment can be found in the operating review pages 20 to 27 
developments in the group’s business activities are discussed in the 
chairman’s statement page 16 the chief executive’s review page 
18 and the business review pages 1 to 37
acquisitions
during the year the following four acquisitions were made i omega 
engineering which provides a broad range of process measurement 
and control instrumentation to customers in industrial and academic 
markets selling directly to end users in these sectors via catalogue 
telephone and internet the business will be integrated into the 
industrial controls segment ii sixnet which designs builds and 
markets rugged remote terminal units io modules ethernet network 
switches and wireless products for the broad industrial and process 
market sixnet will be integrated into red lion controls in the 
industrial controls segment iii irm a leading manufacturer of 
gauging instrumentation for the metals market irm will be integrated 
into ndc infrared engineering in the inline instrumentation segment  
iv key intellectual property and other assets relating to a line of 
benchtop xray analysers for the materials analysis segment
the total cost of acquisitions during the year was £3770 million 
including £186 million for cash acquired of this £44 million is 
attributable to the fair value of deferred and contingent consideration 
expected to be paid in future years offset by an estimated purchase 
price adjustment receivable of £71 million resulting in a deferred 
receivable of £27 million
disposals
on 1 january 2011 the group divested a sales operation in the 
netherlands for a profit of £01 million the total consideration was 
£01 million net of transaction costs
share capital
the share capital of the company comprises ordinary shares of 5p 
each each share carries the right to one vote at general meetings of 
the company the authorised and issued share capital of the company 
together with movements in the company’s issued share capital during 
the year is shown in note 24 on page 99 the articles of association 
of the company available on the company’s website contain 
provisions governing the ownership and transfer of shares
at the 2011 annual general meeting shareholders authorised the 
directors to make market purchases of the company’s ordinary shares 
up to a maximum number of 11593000 shares representing 
approximately 10 of the issued share capital of the company and  
to either cancel the shares or hold them as treasury shares which may 
then be cancelled sold for cash or transferred for the purposes of  
the company’s share plans depending on the best interests of the 
company’s shareholders at the time no such purchases were made 
during the year at the close of business on 16 february 2012  
the company had 125005123 ordinary shares in issue of which 
8630180 were held in treasury during the year 439696 shares were 
transferred out of treasury to meet the company’s obligations under 
its share plans and no shares were cancelled out of treasury an 
authority to make further market purchases of the company’s ordinary 
shares if believed appropriate will be sought at the forthcoming 
annual general meeting although the board has no present intention 
of so doing
also included in the special business of the 2012 annual general 
meeting are proposals to renew the directors’ authority to allot shares 
up to prescribed limits
at 16 february 2012 interests notified to the company in accordance 
with chapter 5 of the disclosure and transparency rules comprised
black rock inc
11626054 shares 999 material interest
standard life investments limited 
9449013 shares 812 material interest
f  c asset management plc
5700126 shares 491 material interest
massachusetts financial services company
5611725 shares 484 material interest
legal  general group plc
4603565 shares 399 material interest
kames capital
4492354 shares 386 material interest
takeovers directive
pursuant to section 992 of the companies act 2006 which 
implements the eu takeovers directive the company is required to 
disclose certain additional information the disclosures not covered 
elsewhere in this annual report are as follows
the company’s articles of association ‘articles’ give power to the 
board to appoint directors but require directors to submit themselves 
for election at the first annual general meeting following their 
appointment and for reelection where they have been a director at 
each of the preceding two annual general meetings and were not 
appointed or reappointed by the company at or since either such 
meeting the articles may be amended by special resolution of the 
shareholders and are available to view on the company’s website as it 
is now the company’s practice for all directors to submit themselves 
for annual reelection this is reflected in an amendment to the articles 
that will be proposed at the 2012 annual general meeting 
the board of directors is responsible for the management of the 
business of the company and may exercise all the powers of the 
company subject to the provisions of the relevant statutes and the 
company’s articles the articles contain specific provisions and 
restrictions regarding the company’s power to borrow money powers 
relating to the issuing and buying back of shares are also included in 
the articles and such authorities are renewed by shareholders each 
year at the annual general meeting  business review governance financial statements
spectris plc annual report and accounts 2011 41
there are a number of agreements that take effect alter or terminate 
upon a change of control of the group following a takeover such as 
bank loan agreements and company share plans none of these are 
deemed to be significant in terms of their potential impact on the 
business of the group as a whole in addition there is a service 
contract between the company and one of its directors which provides 
for compensation for loss of office or employment following a change 
of control of the group please refer to the directors’ remuneration 
report on page 50 for further explanation it is also possible that 
funding arrangements for the group’s defined benefit pension 
arrangements would need to be enhanced following a change of 
control if that resulted in a weakening of the employer covenant
dividend
results for the group are set out in the consolidated statement of 
income on page 56 and in the supporting notes a final dividend of 
254p per ordinary share is proposed for the year to 31 december 
2011 2010 209p with the interim dividend this makes a total for 
the year of 336p 2010 280p the final dividend will be paid on  
26 june 2012 to shareholders on the register on 1 june 2012
research and development
expenditure committed to research and development is focused on 
new product development applications engineering and process 
integration costs are expensed as incurred except where the 
expenditure meets certain strict criteria for capitalisation in the  
year to 31 december 2011 amounts expensed totalled £758 million  
2010 £646 million and no expenditure met the criteria for  
capitalisation 2010 £nil
fixed assets
whilst the market values of some properties differ from book values 
the directors believe that the differences are not material
payment of suppliers
the group’s policy on payment of suppliers is to ensure that terms of 
payment accord with contractual and legal obligations the company 
had £nil trade creditors at the year end 2010 £nil
directors
the directors of the company are named on pages 38 and 39 
in accordance with the requirement of the uk corporate governance 
code which the company adopted early with regard to annual 
election of directors by shareholders each director resigned at the 
2011 annual general meeting put himself up for reelection and was 
reelected a change to the articles reflecting the resignation of each 
director at every annual general meeting and their submission for 
reelection at each such meeting will be proposed at the 2012 annual 
general meeting
the directors’ total remuneration for the year and their interests in the 
shares of the company and its subsidiaries at 31 december 2011 are 
disclosed in the directors’ remuneration report on pages 52 to 54
in accordance with section 236 of the companies act 2006 the 
directors disclose a qualifying thirdparty indemnity provision entered 
into between the company and its directors and officers which was  
in force at the date of approval of this report this indemnity gives 
contractual force to the indemnity of officers provision contained  
in the company’s articles
auditors
separate resolutions to reappoint kpmg audit plc as auditors and to 
authorise the directors to agree their remuneration will be proposed at 
the annual general meeting
annual general meeting
the notice of annual general meeting to be held at the company’s 
offices on friday 20 april 2012 at 1230 pm is contained in a 
separate letter from the chairman accompanying this report
corporate governance
uk corporate governance code statement of compliance
spectris plc is subject to the uk corporate governance code ‘the 
code’ that is appended to the listing rules of the uk listing 
authority the code sets out principles and provisions relating to  
the good governance of companies 
corporate governance has been and remains the responsibility of the 
whole board this statement describes how the company applied the 
principles and complied with the provisions of the code during 2011 
the board considers that it was throughout the year and continues to 
be in full compliance with the provisions set out in the code
board composition and procedures
the board meets formally at regular intervals throughout the year to 
consider developments in relation to the company’s strategy and 
longterm objectives and to review trading results and operational and 
business issues in particular it deals with those matters reserved to it 
for decision including annual financial planning the acquisition and 
disposal of businesses major capital expenditure the appointment 
and where necessary removal of directors and board and senior 
management succession additional meetings are convened as 
required to consider specific topics requiring immediate decision 
usually at least two meetings each year are held at operating 
locations and encompass a detailed review of the relevant business 
through these meetings the induction process on appointment and 
the access given to the company’s operations and its staff all directors 
gain the knowledge of the company required for them to discharge 
their duties operational decisions are delegated by the board to 
senior management at trading company level over which the 
executive directors exercise supervision all directors receive detailed 
progress reports one week prior to each board meeting
the board currently comprises the chairman three executive directors 
and three nonexecutive directors the board considers its non
executive directors peter chambré russell king and john warren to 
be independent in that none of them are or have ever been holders 
of an executive office with the company the positions of chairman 
chief executive and senior independent director are held by separate 
individuals and in accordance with the code the board has adopted 
written profiles for the first two of these the nonexecutive directors 
have all had senior experience in other organisations and offer 
independent judgement on board matters the chairman’s other 
significant uk listed company interests are as nonexecutive chairman 
of sepura plc and telecity group plc and nonexecutive director of 
vitec group plc and csg international inc the latter company being 
quoted on nasdaq mr hughes is also chairman of privatelyheld 
business just eat and aircom international the board believes that the 
chairman’s obligations to the company are unaffected by these 
directorships spectris plc annual report and accounts 2011 42
2111904   070312   proof 8
there are procedures for individual board members to receive 
induction and training as appropriate and to solicit independent 
professional advice at the group’s expense where specific expertise is 
required in the course of exercising their duties the chairman reviews 
and agrees with each director their training and development needs 
annually all directors have access to the company secretary who is 
responsible for ensuring compliance with appropriate statutes and 
regulations
the board delegates specific responsibilities to board committees 
notably the finance nomination remuneration and audit and risk 
committees the terms of reference of these committees are published 
on the company’s website and the following additional documents are 
available to shareholders on application to the company secretary
•	 schedule of matters reserved for decision by the board
•	 responsibilities of the chairman the chief executive and the 
nonexecutive directors
board appointments and performance evaluation
the nomination committee consists of the chairman chief executive 
and all nonexecutive directors it is chaired by the chairman save in 
the event of discussions relating to his succession when the senior 
independent director takes the chair
following a decision of the board that the appointment of a new 
director is appropriate the duty of the committee is to present for 
board consideration suitably qualified candidates in making such 
recommendations the committee evaluates the balance of skills 
knowledge and experience on the board and develops a description of 
the role and required capabilities due regard is given to the benefits 
of diversity on the board and consideration is given to the time 
commitment expected for the chairman and nonexecutive director 
positions the board uses external search firms to identify potential 
nonexecutive directors and they conduct the process systematically 
utilising the evaluation of the committee and against a set of skills and 
competences developed from the strategic needs of the business 
today and in coming years whilst also taking into account the present 
strengths and any perceived gaps in the knowledge of the board 
candidates are then identified for interview the committee also 
makes recommendations to the board regarding the reelection andor 
reappointment of any director similar selection processes apply for 
the appointment of a chairman
•	 relations with shareholders
•	 performance evaluation and
•	 procedure for taking independent professional advice
the board has adopted the institute of chartered secretaries and 
administrators’ guidance note of september 2009 on board meeting 
etiquette 
under the companies act 2006 a director must avoid a situation 
where he has or may have a direct or indirect interest that conflicts 
or may conflict with the company’s interests during the year in 
accordance with the powers and duties of directors laid down in  
the company’s articles directors were asked to declare any such 
conflict or potential conflict of interest to the board for the board’s 
authorisation of a matter which otherwise may have given rise to a 
conflict of interest no such conflicts have been declared
recommendations are also made to the board concerning succession 
plans for both executive and nonexecutive directors and in particular 
for the key roles of chairman and chief executive the committee also 
recommends to the board suitable candidates for the position of 
senior independent director 
the nomination committee meets as the need arises its terms of 
reference can be found on the company’s website
the operation of the board and its committees is reviewed by the 
board as a whole annually the executive directors’ and company 
secretary’s performances are appraised annually against objectives 
established for the prior year the contributions of the chairman  
and nonexecutive directors are reviewed annually by the senior 
independent director and the chairman respectively prior to their 
being proposed to shareholders for reelection additionally the 
chairman holds periodic meetings with the nonexecutive directors 
only and led by the senior independent director the nonexecutives 
have the opportunity to meet at least annually without the chairman 
present in considering the chairman’s performance his other public 
company interests were specifically addressed and found to be of 
benefit to the board in that he brings experiences and insights gained 
from these interests which assist the board in its deliberations
directors’ report continued
board and committee meeting attendance 2011
board
remuneration 
committee
audit and 
risk committee
nomination 
committee
total meetings during year 15 5 3 3
j l m hughes chairman 15 5 na 3
j a warren senior independent director 15 5 3 3
p a chambré 15 5 3 3
r j king 15 5 3 3
j e o’higgins chief executive 15 na na 3
c g watson 15 na na na
j c webster 14 na na na business review governance financial statements
spectris plc annual report and accounts 2011 43
an externallyfacilitated evaluation of the operation and performance 
of the board and its committees was conducted in 2010 an internal 
process followed during 2011 this included submissions from all 
board members in response to a structured questionnaire focused 
upon the more significant areas identified during the prior year’s 
external process notably strategy board structure and organisation 
succession planning and risk management a summary of the 
submissions received including comparative data from the 2010 
process was considered at the november board meeting with a 
number of areas for further debate and action recorded
diversity
the board has considered the davies report ‘women on boards’ and 
the associated consultation by the financial reporting council on 
whether to make further changes to the uk corporate governance 
code requiring boards to establish a gender diversity policy whilst 
the board is opposed to numerical targets or quotas to address the 
representation of specific groups it recognises the strategic and 
business benefits of having a balanced board due regard is therefore 
given to the benefits of diversity as part of the board’s normal 
refreshment process with appointments made from candidates with 
the appropriate mix of skills knowledge and experience regardless of 
gender or otherwise the recruitment of an additional nonexecutive 
director is currently in process and the executive search firm engaged 
has signed up to the voluntary code of conduct for executive search 
firms it is therefore expected that a suitably diverse range of 
candidates will be presented to the nomination committee 
as part of our culture of respect we believe that people with varied 
backgrounds and perspectives add creativity to our company and thus 
we encourage diversity in the workplace the board recognises the 
benefits of all facets of diversity including experience and perspective 
both at board level and throughout our business spectris operates 
globally in more than 30 countries and is focused on growing its 
presence in industrialising economies such as china india and latin 
america and across a broad base of end user markets we will 
continue to strengthen our existing groupwide inclusion policies to 
attract and retain the most talented and appropriate people reflecting 
the different markets and geographies in which we operate
shareholder relations
spectris conducts regular dialogue with institutional shareholders  
and divulges such information as is permitted within the guidelines  
of the listing rules the content of presentations made after results 
announcements may be accessed by individual investors on the 
group’s website wwwspectriscom
all shareholders are invited to participate in the annual general 
meeting where the chairman the chief executive and the chairmen 
of the audit and risk and remuneration committees are available  
to answer questions the results of proxy votes are declared at the 
annual general meeting after each resolution has been dealt with on 
a show of hands these are then published on the group’s website 
the board is kept informed of the views of major shareholders 
through periodic reports from the chief executive and the company’s 
joint brokers j p morgan cazenove and rbs hoare govett the 
chairman and nonexecutive directors have the opportunity to  
attend the biannual analyst presentations
shareholders representing in excess of 25 of the company’s issued 
share capital receive a standing invitation to meet the chairman the 
senior independent director or new nonexecutive directors such 
meetings would supplement if necessary but not replace the regular 
meetings with the chief executive and group finance director
audit and risk committee
the audit and risk committee comprises the nonexecutive directors 
and is chaired by john warren who has recent and relevant financial 
experience as the former group finance director of both united 
biscuits plc and wh smith plc mr warren is also the current 
chairman of the audit committees of bovis homes group plc and the 
rank group plc the committee meets at least three times each year 
to consider the effectiveness of the group’s internal controls policies 
and procedures the process of internal audit and the conduct and 
outcome of the external audit its meetings are normally attended  
by the chairman the chief executive the group finance director  
the company secretary and the external and internal auditors all 
executive directors attend the year end audit committee meeting and 
processes requiring the disclosure of relevant information by individual 
directors to the auditor have been adopted the committee confers 
annually with both the head of internal audit and the external auditors 
without the attendance of executive directors additionally both the 
external audit partner and the head of internal audit have the right  
of direct access to the audit and risk committee chairman the 
committee’s terms of reference can be found on the company’s 
website
the committee is responsible for making recommendations to the 
board in relation to the appointment of the external auditor and  
then for approving the external auditor’s remuneration terms of 
engagement and scope of work
the committee has also adopted procedures governing and restricting 
the appointment of the external auditor for nonaudit services the 
following services are precluded
•	 bookkeeping or other services related to the accounting records or 
financial statements of spectris plc
•	 financial information systems design and implementation
•	 appraisal or valuation services fairness opinions or contribution in 
kind reports
•	 actuarial services
•	 internal audit outsourcing services
•	 management functions or human resources
•	 broker or dealer investment adviser or investment banking 
services and
•	 legal services and expert services unrelated to the audit
a cumulative annual cap of £200000 is established for all other 
nonaudit services save for acquisition due diligence and taxation 
services above which all engagements are subject to prior approval by 
the audit and risk committee spectris plc annual report and accounts 2011 44
2111904   070312   proof 8
the head of internal audit is employed by the group to perform 
internal control reviews across the group according to a work 
programme agreed by the committee the head of internal audit is 
assisted in this by five further internal auditors the nature and scope 
of the group’s internal control review resources is reviewed by the 
audit and risk committee annually the audit and risk committee 
receives reports twice a year on the results of internal control reviews
the committee has considered the risk of the withdrawal of their 
auditor kpmg audit plc from the market in their risk evaluation and 
planning and has concluded that the risk is small in the event that the 
company’s auditor did exit the market a replacement appointment 
would be made from audit firms of equivalent standing kpmg audit 
plc were appointed as the company’s auditors on 12 may 1998 but 
the nominated audit partner has changed twice subsequently and will 
change again prior to the 2012 audit the position of auditor to the 
company is kept under regular review but kpmg audit plc’s indepth 
understanding of the company’s operations is considered by the 
committee to be of benefit to both the company and its shareholders
there are no contractual obligations that act to restrict the 
committee’s choice of auditor 
internal controls 
the board is ultimately responsible for the group’s system of internal 
controls and for reviewing its effectiveness however such a system  
is designed to manage rather than eliminate risk of failure to meet 
business objectives and can provide only reasonable and not absolute 
assurance against material misstatement or loss
consistent with the guidance provided for directors on internal control 
by the financial reporting council ‘internal control revised guidance 
for directors on the combined code’ the board confirms that there is 
an ongoing process for identifying evaluating and managing assessed 
significant risks faced by the group that this has been in place for the 
year under review and up to the date of approval of the annual report 
and accounts that this process has been reviewed by the board during 
the year and that the group accords with the guidance the board 
affirms the importance it attaches to the continuous review and 
application of the guidance the regular and systematic assessment  
of the risks facing the group and the value of embedding risk 
management and internal control systems within its business processes 
the group has an internal audit function which reviews the design and 
effectiveness of internal controls across the group’s operations including 
financial operational and compliance controls
the processes which the board and the audit and risk committee have 
applied in reviewing the effectiveness of the group’s system of internal 
controls are summarised below
•	 an established process is in place whereby each business unit 
regularly assesses evaluates and reports risks of group significance 
each business unit is required to document the management and 
mitigating actions in place and proposed
•	 regular review of the status of risks and corresponding mitigating 
actions to ensure that risk management is embedded in daytoday 
management processes and decisionmaking as well as in the 
annual strategic planning cycle
•	 the effectiveness of risk management and mitigating actions is 
reviewed regularly by the executive directors and twice yearly by 
the audit and risk committee
•	 additionally the executive directors consider those risks to the 
group’s strategic objectives which are not addressed within the 
business units and develop appropriate approaches to managing 
and mitigating these risks
•	 annual financial plans for each business unit significant capital 
investments or contractual commitments and major acquisitions or 
divestments are all subject to review and approval by the board
•	 a group accounting and policies manual sets out the minimum 
standards and procedures to be applied in relation to those risk 
areas which are regarded as significant in a group context
•	 a process of selfassessment of compliance with the manual and 
reporting thereon has been established providing for a 
documented trail of accountability from business unit presidents 
and finance directors to the audit and risk committee the 
necessary actions are taken by the audit and risk committee to 
remedy any failings or weaknesses identified by its review of the 
internal control system and
•	 the executive directors report to the board on changes in the 
business and external environment which present significant risks 
the group finance director provides the board with monthly 
financial information which includes key performance indicators 
and information on the group’s operating segments regular 
reports on significant legal ethics and compliance issues and 
insurance matters are received from the company secretary
going concern
having reviewed the group’s plans and available financial facilities  
the board has a reasonable expectation that the group has adequate 
resources to continue in operational existence for the foreseeable 
future for this reason it continues to adopt the going concern basis  
in preparing the group’s accounts
business review
the information that fulfils the requirements of the business review 
as required by section 417 of the companies act 2006 and which 
should be treated as forming part of this report by reference is 
included in the following sections of the annual report
•	 chairman’s statement on pages 16 and 17
•	 chief executive’s review on pages 18 and 19
•	 group overview on pages 2 to 5
•	 operating review on pages 20 to 27 which includes a review of 
the external environment
•	 principal risks and uncertainties are described on pages 14 to 15
•	 details of the principal operating subsidiaries are set out on pages 
20 to 27
•	 financial review on pages 28 to 31
•	 corporate responsibility on pages 32 to 37 which includes the 
company’s policy on treatment of its employees 
directors’ report continued business review governance financial statements
spectris plc annual report and accounts 2011 45
statement of directors’ responsibilities in respect of the annual 
report and the financial statements
the directors are responsible for preparing the annual report and the 
group and parent company financial statements in accordance with 
applicable law and regulations 
company law requires the directors to prepare group and parent 
company financial statements for each financial year under that  
law they are required to prepare the group financial statements in 
accordance with international financial reporting standards ifrs  
as adopted by the eu and applicable law and have elected to prepare 
the parent company financial statements in accordance with uk 
accounting standards and applicable law uk generally accepted 
accounting practice 
under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair view 
of the state of affairs of the group and parent company and of their 
profit or loss for that period in preparing each 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 
•	 for the group financial statements state whether they have been 
prepared in accordance with ifrs as adopted by the eu 
•	 for the parent company financial statements state 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 the going concern basis unless 
it is inappropriate to presume that the group and parent company 
will continue in business
the directors are responsible for keeping adequate accounting  
records that are sufficient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time the 
financial position of the parent company and enable them to ensure 
that its financial statements comply with the companies act 2006 
they have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the group  
and to prevent and detect fraud and other irregularities 
under applicable law and regulations the directors are also 
responsible for preparing a directors’ report directors’ remuneration 
report and corporate governance statement that complies with that 
law and those regulations
the directors are 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 who held office at the date of approval of this directors’ 
report confirm that so far as they are each aware there is no relevant 
audit information of which the company’s auditors are unaware and 
each director has taken all the steps that he ought to have taken as a 
director to make himself aware of any relevant audit information and 
to establish that the company’s auditors are aware of that information
responsibility statement of the directors in respect of the 
annual report 
we confirm that to the best of our knowledge
•	 the 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 profit or loss of the 
company and the undertakings included in the consolidation taken 
as a whole and
•	 the information that is crossreferred from the business review 
section of the directors’ report includes a fair review of the 
development and performance of the business and the position of 
the issuer 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
roger stephens
secretary
17 february 2012 spectris plc annual report and accounts 2011 46
2111904   070312   proof 8
directors’ remuneration report
letter from russell king
chairman of the remuneration committee
dear shareholder
as the chairman of the remuneration committee i am pleased to present to you the 2011 directors’ 
remuneration report of spectris plc 
remuneration strategy
your committee is acutely aware of increasing public scrutiny of executive pay and concern regarding 
unmerited payments at spectris the close linkage of reward to the performance of the company has  
always been a guiding principle underlying our executive remuneration the balance of remuneration for the 
executive directors is therefore such that a very significant part of their overall reward is conditional upon the 
attainment of demanding growthrelated performance conditions over both the short and long term 
the key elements of the executive directors’ remuneration arrangements thus are
•	 base salary and total package including benefits set at or modestly below the median of comparable uk 
quoted companies subject to adjustment up or down to reflect the experience and performance of 
individual directors
•	 ontarget and maximum annual bonus of respectively 50 and 100 of salary only payable on 
achievement of stretching profit before tax and individual objectives
•	 annual awards under the company’s performance share plan of up to 125 of salary with vesting after  
three years based half upon total shareholder return ‘tsr’ relative to the ftse 250 index and half upon 
real growth in adjusted earnings per share ‘eps’ and
•	 longterm investment in the continuing growth of the company with any annual bonus achieved in excess 
of 60 and any performance share plan vesting having to be retained in spectris shares until a minimum 
two times base salary shareholding is achieved
the anticipated reward mix for the chief executive group finance director and business group director is 
shown in the chart below this assumes performance share plan awards with a value on grant equal to 125 
of the director’s basic salary leading to an expected vesting of 55 of the award 6875 of basic salary and 
an annual bonus onplan expectation of 50 of salary
2011 remuneration
the excellent financial performance of the company in 2011 with adjusted profit before tax ‘pbt’ rising by 
45 to record levels enabled the top end of the profitability target range established for the annual bonus to 
be surpassed 
the company has also enjoyed good absolute and relative growth over the three years 2009 to 2011 with 
adjusted eps increasing by 70 the share price by 140 and the annual dividend by 44 over the period 
consequently the performance share plan awards maturing on 25 february 2012 are expected to show 
vesting at the upper end of both the eps and tsr ranges
russell king
chairman of the  
remuneration committee
■ base pay 41
■ pension 10
■ annual bonus 21
■ performance share plan 28 business review governance financial statements
spectris plc annual report and accounts 2011 47
whilst only a snapshot in time at the end of 2011 the performance share plan grants maturing in 2013  
were on track for full vesting on both the eps 173 growth over the two years 2010 and 2011 and tsr 
performance above upper quintile performance conditions the grants made in april 2011 are at a very early 
point in their threeyear performance period but with 43 growth in eps during 2011 and tsr at above 
median to the end of 2011 they are so far on track to achieve some level of vesting
the aggregate pretax pay achieved by each executive director in 2011 was as follows
base salary
pension
contributions
  in lieu 
supplements
benefits 
in kind  
expenses
2011 
bonus 
outcome
share 
award 
exercises
2011 
total 
£’000
2010 
total 
£’000
j e o’higgins 500 125 19 500 337 1481 1104
c g watson 310 78 19 310 509 1226 726
j c webster 268 67 19 268 451 1073 841
future reviews
as we have previously advised it is your committee’s practice only to undertake detailed reviews of executive 
compensation every two years or more rather than annually the next such review will be effective 1 january 
2013 the committee had decided that a basic salary increase of 25 5 for mr watson should be 
awarded to the executive directors at 1 january 2012 however in light of the current uncertain macro
economic environment the executive directors have requested that implementation of this increase should be 
deferred until such time as the outlook becomes clearer 
the next compensation review for the chairman will take place on 1 january 2013 and the fees for the 
nonexecutive directors will also be reviewed by the board at that time 
your committee has become aware that the current maximum level of annual award under the performance 
share plan has at 125 of salary fallen materially behind market norms the operation of the plan will be 
reviewed during the coming year with the intention of submitting proposals to shareholders at the 2013 
annual general meeting 
i hope that you will support the advisory vote on the 2011 directors’ remuneration report which will be put 
to the annual general meeting
yours faithfully
russell king
chairman of the remuneration committee
17 february 2012 spectris plc annual report and accounts 2011 48
2111904   070312   proof 8
directors’ remuneration report continued
the directors present their remuneration report for the year ended  
31 december 2011
remuneration committee
the remuneration committee is responsible for recommending to the 
board the broad policy for the remuneration of the chairman the 
chief executive the executive directors and the company secretary 
the remuneration of nonexecutive directors is a matter reserved to 
the chairman and executive directors
within the terms of the agreed policy the committee determines
•	 the total individual remuneration packages including where 
appropriate bonuses and sharebased incentives
•	 the targets for any performancerelated incentives
•	 the scope of any pension arrangements
•	 contractual terms of engagement and any payments to be made 
on termination
•	 any major changes in employee benefit structures throughout the 
company and
•	 the policy for authorising claims for expenses from the chairman 
and chief executive
the committee also monitors the level and structure of remuneration 
for business unit presidents or managing directors and the head of 
corporate development 
the remuneration committee comprises russell king chairman peter 
chambré john hughes and john warren being the chairman who 
was independent on appointment and the nonexecutive directors all 
of whom are independent no member of the committee is a serving 
executive at another listed company the chief executive may be in 
attendance by invitation and the committee takes into consideration 
his recommendations regarding the remuneration of his executive 
colleagues the chief executive is not involved in discussions 
concerning his own remuneration 
fit remuneration consultants llp was appointed in august 2011  
to advise the committee on various aspects of the chairman’s and 
executive directors’ remuneration hewitt new bridge street separately 
provide services to the company in compiling ifrs 2 reporting on  
the company’s share plans and total shareholder return ‘tsr’ 
performance calculations in relation to the company’s performance 
share plan fit remuneration consultants llp was paid £14660 in 
respect of services undertaken in 2011 2010 £nil hewitt new 
bridge street was paid £51817 in respect of services undertaken  
in 2011 2010 £30534 both fit remuneration consultants llp  
and hewitt new bridge street are members of the remuneration 
consultants group and adhere to its code of conduct
the terms of reference of the remuneration committee can be found 
on the company’s website and are available on request
remuneration policy
the board in considering the recommendations of the remuneration 
committee complied throughout the year with the provisions of  
the uk corporate governance code including the principles for 
performancerelated remuneration set out in section d the policy 
objective is to ensure that the high calibre individuals required at 
board level are fairly and competitively remunerated and incentivised 
in a manner consistent with the group’s strategic objectives and 
compatible with its risk policies and internal control systems
clawback provisions were introduced from january 2011 to  
enable variable remuneration to be reclaimed under exceptional 
circumstances such provisions relate to bonus payments and to 
awards made under the company’s performance share plan were 
there to be any miscalculation of entitlement misstatement of 
accounts or incidence of fraud 
the remuneration committee also regularly reviews the balance 
between fixed and variable pay 
salaries and fees
base salaries and fees are established by reference to surveys of the 
terms offered by comparable uk quoted companies the starting point 
for comparative surveys is the scope of the position and associated 
performance of the chairman each executive director and the 
company secretary excluding his own position and performance  
the chief executive is responsible for the definition of the scope of 
positions and assessment of the performance of each executive 
director for consideration and approval by the remuneration 
committee salaries for the executive directors are set at competitive 
levels typically based around the market median although the 
remuneration committee reserves the flexibility to respond to 
individual circumstances which may cause salaries to be set at a level 
higher or lower than market median due account is also taken of pay 
conditions elsewhere in the company
the committee had decided that a basic salary increase of 25 5 
for mr watson should be awarded to the executive directors at  
1 january 2012 however in light of the current uncertain macro
economic environment the executive directors have requested that 
implementation of this increase should be deferred until such time as 
the outlook becomes clearer
a biennial compensation review for the chairman is undertaken on  
a similar basis as that for the executive directors and is next due at  
1 january 2013 fees for the nonexecutive directors will also next be 
reviewed by the board at that date neither the chairman nor the 
nonexecutive directors participate in the company’s incentive or 
benefit programmes
bonuses
to align remuneration with shareholders’ interests a proportion of 
executive directors’ potential total remuneration is related to annual 
corporate performance bonuses of up to 100 of base salary are 
achievable upon the attainment of demanding profit before tax 75 
potential and personal 25 potential targets set in relation to 
carefully considered business plans bonus payments commence only 
at a level which shows an acceptable financial result in the context of 
economic circumstances and market expectations with an ‘onplan’ 
performance yielding a payment of half the maximum potential 
targets for maximum outturn are set at highly stretching albeit 
attainable levels bonuses achieved in respect of 2011 performance 
based on the targets set at the start of the financial year were as 
follows as a percentage of salary at 31 december 2011
j e o’higgins 100
c g watson 100
j c webster 100 business review governance financial statements
spectris plc annual report and accounts 2011 49
within the above bonus payments for mr o’higgins mr watson and 
mr webster 75 related to the profitability target as the stretch level 
of performance was achieved and 25 related to achievement of 
personal targets
the bonus arrangements for 2012 will operate in a similar manner to 
those set out above in respect of 2011
the remuneration committee keeps under review the company’s 
sharebased incentive arrangements and takes advice on market 
practice the committee is of the view that offering the opportunity to 
be awarded and then retain shares in the company is an important 
part of motivating and rewarding senior management by enabling 
them to participate in the future growth in value of the company the 
spectris performance share plan the ‘plan’ is intended to support 
this objective and to facilitate the retention of key employees over the 
longer term 
under the plan annual awards of shares are made which may vest at 
the end of a threeyear period subject to continued employment the 
satisfaction of challenging performance conditions and justification of 
vesting in the context of the overall financial performance of the 
company the maximum award of performance shares that can be 
made to a participant in any financial year is limited under the rules of 
the plan approved in 2006 to shares with a market value equal to 
125 of the participant’s salary the committee’s current policy is to 
determine awards to executive directors by reference to a base award 
over shares worth 125 of salary which may be flexed downwards 
from year to year depending on corporate and personal performance 
the committee has kept the plan under review and is conscious that an 
award of 125 of salary has fallen materially below market norms and 
hence the operation of the plan will be reviewed during 2012 with the 
intention of submitting proposals to shareholders at the 2013 agm
awards to executive directors are currently structured so that half of 
the award is subject to an earnings per share ‘eps’ target and half 
subject to a total shareholder return ‘tsr’ target each condition 
operates over a fixed threeyear period with no opportunity for 
retesting these performance criteria are summarised in the tables 
below 
company eps 
performance
 of award that vests 
expressed as a percentage 
of onehalf of the 
total number of shares 
subject to an award
consumer prices index ‘cpi’  
12 compound per annum 
‘cpa’
100
between cpi  5 and 12 
cpa
prorata straight line between 
25 and 100
cpi  5 cpa 25
less than cpi  5 cpa 0
company tsr 
performance relative to 
the ftse 250 excluding  
investment trusts
 of award that vests 
expressed as a percentage 
of onehalf of the 
total number of shares 
subject to an award
upper quintile or above 100
between upper quintile and 
median
prorata straight line between 
25 and 100
median 25
below median 0
the tsr condition is also subject to the underpin that the committee 
must satisfy itself that the company’s tsr growth is reflective of its 
underlying financial performance
the above criteria will continue to apply to plan awards made in 2012
for awards in excess of 100 of salary the committee stipulates in 
accordance with undertakings provided on approval of the plan that 
the percentage of an award that will vest for threshold performance 
will be limited to 25 of a participant’s base salary rather than 25 
of the number of shares subject to an award with prorata straight 
line vesting from this lower point up to 100 of the award 
the committee considers the above performance conditions to be an 
appropriate means of aligning the interests of participants with those 
of longerterm shareholders the tsr performance condition is 
measured independently by hewitt new bridge street and the eps 
condition is verified by the company’s auditors 
it is the intention of the committee that all future sharebased 
incentives granted to executive directors should be made solely under 
the plan executive directors may however continue also to participate 
in grants made under the spectris savings related share option 
scheme which is applicable to all uk employees
share retention
each executive director is subject to personal circumstances required 
to build a retained shareholding in spectris plc greater than two times 
base salary in value within a fiveyear period from appointment 
executive directors are required to apply the posttax benefit of any 
vested plan awards or any bonus payments exceeding 60 of base 
salary to the acquisition of shares until this level of shareholding is 
achieved the executive directors all currently have holdings in excess 
of this requirement
benefits
mr o’higgins and mr watson have defined contribution pension 
arrangements to which the company currently contributes at a  
rate of £50000 pa in light of the government’s decision to reduce 
the pension lifetime allowance to £15 million in 2012 and the 
introduction of a maximum pension contribution allowance of 
£50000 pa from april 2011 the executive directors are entitled  
at their option to a taxable salary supplement in lieu of pension 
contributions otherwise payable by the company mr o’higgins and 
mr watson receive such salary supplements to 25 of their base 
salaries in excess of the £50000 pa contributed by the company to  spectris plc annual report and accounts 2011 50
2111904   070312   proof 8
directors’ remuneration report continued
their pension arrangements mr webster currently has no pension 
arrangements contributed to by the company and therefore receives 
25 of his base salary as a salary supplement in lieu of pension 
contributions 
company car and health insurance benefits are also made available to 
executive directors subject to income tax 
contractual terms
all executive directors have rolling contracts subject to 12 months’ 
notice of termination by either party or to summary notice in the 
event by the director of serious breach of obligations dishonesty 
serious misconduct or other conduct bringing the company into 
disrepute 
mr o’higgins’ and mr watson’s contracts of employment also contain 
an option at the sole discretion of the board for the contract to be 
terminated by way of payments in lieu of notice equivalent to 14 times 
monthly basic salary which was reduced in 2011 from the previous 
level of 165 times to exclude any element of compensation for loss of 
bonus in such circumstances the director also becomes subject to a 
contractual best endeavours obligation to seek alternative employment 
and full mitigation reflective of any earnings from a new position 
applies so as to reduce the payments otherwise due from the company 
during the notice period additionally bonus entitlements are calculated 
to the date of termination only the phased payment provision subject 
to reduction as explained above applies in lieu of all remuneration and 
benefits otherwise payable during the notice period and in full and final 
settlement of all employmentrelated claims the 04 uplift on monthly 
salary accounts for the 25 employer pension contribution company 
car insurance and fuel benefits mobile telephone provision life 
disability and medical expenses insurances and settlement of any 
statutory employment claims that may arise from termination no other 
payments would be made including any payment for forward bonus 
expectation whether the board elects to apply this payment in lieu 
option would depend on the circumstances underlying termination and 
the best interests of shareholders at the time
mr webster’s contract concluded in 1998 does not contain this 
option but does provide for a predetermined compensation payment 
in lieu of notice equivalent to total notice period remuneration – 
salary bonus and benefits in the event of termination by the 
employer within 12 months of a change in control of the group 
termination payments in other circumstances would be a matter for 
negotiation and remain at the discretion of the committee subject to 
mitigation andor reduction for accelerated payment 
the committee is aware of the best practice expectations set out in 
the 2008 abinapf joint statement on executive contracts and 
severance and has noted the update to the napf policy that was 
published in january 2009  this guidance and any future revisions 
will be taken into account before agreeing any future service 
contracts the committee is committed to continuous review of its 
policies in the best interests of shareholders 
no compensation payments on termination of employment were 
made during the year
external appointments
executive directors may retain any payments received in respect of 
external nonexecutive appointments such appointments are limited 
to one per director at any time and are subject to the approval of the 
board mr o’higgins is a nonexecutive director of nasdaqlisted 
exide technologies and was paid a fee of 76000 during 2011  
mr watson is a nonexecutive director of spiraxsarco engineering plc 
and was paid a fee of £52000 during 2011 no other external 
directorships are held by the executive directors
remuneration below board level
remuneration for presidents of the group’s trading companies is set  
at competitive levels to reflect the size complexity and geographic 
locations of these businesses base salaries fall within a range between 
£132000 and £318000 additionally the group’s presidents 
participate in share awards under the spectris performance share  
plan typically over 60 of base salary and in profitrelated bonus 
arrangements linked to base salary and payable against their business 
annual operating profit after exchange plus or minus a financing 
chargecredit arising from changes in working capital over the year 
on plan performance delivers a c 30 of base salary bonus with the 
upper limit of the payment range delivering 50 of base salary
internal relativity
the committee is sensitive to the need to set directors’ remuneration 
having regard to pay and conditions in the group as a whole and  
is satisfied that the approach taken by the company is fair and 
reasonable in light of current market practice and the best interests  
of shareholders
nonexecutive directors
nonexecutive directors’ fees are reviewed biennially and agreed  
by the chairman and executive directors with reference to market 
practice the base fee is supplemented by allowances for chairmanship 
of the audit and risk and remuneration committees and the pension 
scheme trustee board there is no participation in bonus share option 
or pension arrangements and no participation in the spectris 
performance share plan all nonexecutive directors’ conditions of 
appointment provide for a sixmonth period of notice and are 
renewable at each annual general meeting subject to review prior to 
proposal for reelection there is a presumption that appointments will 
not continue beyond nine years in office at which time nonexecutive 
directors cease to be regarded as independent under the uk 
corporate governance code business review governance financial statements
spectris plc annual report and accounts 2011 51
total shareholder return
the following graph indicates the value by the end of 2011 of £100 invested in spectris plc 5p ordinary shares on 31 december 2006 compared 
with the value of £100 invested in the ftse 250 index excluding investment trusts over the same period the graph was selected as the most 
appropriate comparison measure because the company is a constituent member of the ftse 250 index and the members of the ftse 250 excluding 
investment trusts form the comparator group for the purposes of the tsr performance test under the spectris performance share plan 
200
180
160
140
120
100
80
60
40
31 december 2006
value £
31 december 2007 31 december 2008 31 december 2009 31 december 2010 31 december 2011
120
spectris plc
ftse 250 excluding investment trusts
service contracts 
the following table sets out a summary of the directors’ service contracts or terms of appointment executive directors’ service contracts provide 
subject to statutory rights for automatic termination on the director reaching the age of 65 
date of contract expiry date notice period
length of service at 
17 february 2012
executive directors
j e o’higgins 1106 3229 12 months 6 years 1 month
c g watson 11006 4223 12 months 5 years 4 months
j c webster 27398 21615 12 months 18 years 4 months
nonexecutive directors
p a chambré 1806 renewable at each agm 6 months 5 years 6 months
j l m hughes 1607 renewable at each agm 6 months 4 years 8 months
r j king 121010 renewable at each agm 6 months 1 year 4 months
j a warren 7306 renewable at each agm 6 months 5 years 11 months
mr webster’s contract provides for a predetermined compensation payment in lieu of notice equivalent to total notice period remuneration – 
salary bonus and benefits in the event of termination by the employer within 12 months of a change in control of the group 
mr o’higgins’ and mr watson’s contracts contain an optional provision subject to a duty of mitigation for phased monthly payments equivalent 
to 14 times monthly salary in lieu of all remuneration and benefits otherwise payable during the notice period and full and final settlement of all 
employmentrelated claims 
the graph above shows the value at 31 december 2011 of £100 invested in spectris plc 
on 31 december 2006 compared with the value of £100 invested in the ftse 250 index 
excluding investment trusts over the same period source thomson reuters spectris plc annual report and accounts 2011 52
2111904   070312   proof 8
directors’ remuneration report continued
directors’ remuneration and interests
the auditors are required to report on the information contained in the following sections a to e
a emoluments of directors excluding pension contributions £’000
salary and
or fees bonus
pension salary 
supplement
benefits 
in kind
taxable 
expenses
2011 
total
2010 
total
executive directors
j e o’higgins 500 500 56 14 5 1075 853
c g watson 310 310 21 14 5 660 564
j c webster 268 268 61 19 – 616 504
nonexecutive directors
p a chambré 42 – – – – 42 39
j l m hughes 165 – – – – 165 140
r j king 50 – – – – 50 9
j a warren 67 – – – – 67 61
a j reading – – – – – – 19
1402 1078 138 47 10 2675 2189
benefits in kind include company cars private fuel and medical expenses insurance taxable expenses relate to allowances paid in lieu of company 
cars and private fuel
for mr king and mr warren their base fee of £42000 pa is increased by an additional fee of £8000 pa for their chairmanship of respectively 
the remuneration and audit and risk committees additionally mr warren receives a fee of £16500 pa for his chairmanship of spectris pension 
trustees limited
b directors’ pensions 
company contributions to defined contribution plans
2011 
£’000
2010 
£’000
j e o’higgins 69 107
c g watson 57 70
j c webster 6 64
total 132 241
c directors’ total remuneration
2011 
£’000
2010 
£’000
aggregate emoluments 2675 2189
company pension contributions to defined contribution schemes 132 241
gains made on exercise of sharebased incentives 1297 508
4104 2938
d directors’ interests in options to purchase ordinary shares under the spectris savings related share option scheme ‘saye’
date 
granted
options 
held 
1 jan 11
granted
 during the
 year
exercise 
price p
exercised
 during the
 year
share price
 at date of
 exercise p 
lapsed
 during the
 year
options 
held 
31 dec 11
date
 exercisable
expiry 
date
j e o’higgins
saye oct 2009 1255 723 1255 dec 2012 jun 2013
total 1255 1255
  business review governance financial statements
spectris plc annual report and accounts 2011 53
e directors’ share awards under the spectris performance share plan
number 
of shares 
subject to 
award at 
1 jan 11
date 
granted
exercise 
price 
p
granted 
during 
the year
 
addition 
of 
reinvested
 dividends
exercised 
during 
the year
market 
price at 
exercise 
p
lapsed 
during 
the year
number 
of shares 
subject to 
award at 
31 dec 11 
market 
value 
of each 
share at 
date of 
award 
 p
date 
exercisable 
expiry 
date
j e o’higgins
53400 feb 2008 5 6616 28000 121020 3017 28999 7865 feb 2011 feb 2018
96600 feb 2009 5 96600 4345 feb 2012 feb 2019
65400 mar 2010 5 65400 8185 mar 2013 mar 2020
apr 2011 5 44600 44600 1401 apr 2014 apr 2021
215400 235599
c g w atson
34900 feb 2008 5 3581 36509 140050 1972 0 7865 feb 2011 feb 2018
63200 feb 2009 5 63200 4345 feb 2012 feb 2019
42800 mar 2010 5 42800 8185 mar 2013 mar 2020
apr 2011 5 27600 27600 1401 apr 2014 apr 2021
140900 133600
j c w ebster
31700 feb 2008 5 3253 33161 13636385 1792 0 7865 feb 2011 feb 2018
57500 feb 2009 5 57500 4345 feb 2012 feb 2019
38900 mar 2010 5 38900 8185 mar 2013 mar 2020
apr 2011 5 23900 23900 1401 apr 2014 apr 2021
128100 120300
total 484400 96100 13450 97670 6781 489499
 under the terms of the performance share plan notional dividends of the company are applied over award shares during the performance 
period and exercise period to date of exercise thus increasing the number of award shares granted these additional award shares are subject 
to application of the performance criteria attaching to the award 
the above awards were made as conditional rights to acquire shares structured as nominal cost options and the number of shares awarded was 
based on the midmarket closing price of the company’s shares on the business day prior to the date of grant in respect of the 2011 award for 
each of mr o’higgins mr watson and mr webster the value of the award was equivalent to 125 of their base salaries at the date of grant 
following satisfaction in whole or part of the performance criteria attaching to the awards as summarised on page 49 the directors may call 
for the release to them of the vested shares during the aboveshown exercise periods 
the awards granted to mr o’higgins mr watson and mr webster in 2008 of 53400 34900 and 31700 award shares respectively became 
exercisable and were exercised by mr o’higgins in part and by mr watson and mr webster in full during the year the awards had two 
performance conditions attaching to them the tsr target was met in full 50 of the award and the eps target was met to 4435 of the 
award in determining the level of vesting against the tsr target the committee took into account the company’s underlying financial 
performance the awards were satisfied from the company’s treasury shares
the spectris performance share plan operates within the dilution limits laid down by the association of british insurers 34 of the 5 limit has 
been utilised spectris plc annual report and accounts 2011 54
2111904   070312   proof 8
directors’ remuneration report continued
mr o’higgins retained 28000 shares arising from the part exercise of his 2008 award on 25 october 2011 the gain on exercise was £337456
mr watson retained 19500 shares arising from the exercise of his 2008 award on 10 march 2011 and sold 17009 shares the gain on exercise 
was £509483
mr webster sold all 33161 shares arising from the exercise of his 2008 award on 21 march 2011 the gain on exercise was £450538
the aggregate gains on exercise for all directors under the company’s share plans were thus £1297477 2010 £508456
f directors’ interests
the following directors or their families had beneficial interests in the ordinary shares of the company
shareholdings
2011 
31 dec 
or date of 
resignation
 2011 
1 jan 
or date of 
appointment
j l m hughes 8000 8000
j e o’higgins 131319 103319
p a chambré 5451 5344
r j king 3000 3000
j a warren 3000 3000
c g watson 52982 32745
j c webster 118310 118310
there were no changes to the above interests between the year end and the date of this report 
no director had during the year or at the end of the year any material interest in any contract of significance to the group’s business
at 31 december 2011 the middle market closing share price on the london stock exchange was 1289p the highest share price in the year was 
1679p and the lowest was 1039p
g loans to directors
during the year there were no outstanding loans to any director 
by order of the board
russell king 
chairman of the committee
17 february 2012
company no 02025003 business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 55
independent auditor’s report to the members of spectris plc
we have audited the financial statements of spectris plc for the year ended 31 december 2011 which comprise the consolidated statement of 
income the consolidated statement of comprehensive income the consolidated statement of changes in equity the consolidated statement of 
financial position the consolidated statement of cash flows the parent company balance sheet and the related notes the financial reporting 
framework that has been applied in the preparation of the group financial statements is applicable law and international financial reporting 
standards ifrs as adopted by the eu the financial reporting framework that has been applied in the preparation of the parent company 
financial statements is applicable law and uk accounting standards uk 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 45 the directors are responsible for the preparation of the 
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 
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 apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion
•	 the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 december 2011 and 
of the group’s profit for the year then ended
•	 the group financial statements have been properly prepared in accordance with ifrs as adopted by the eu
•	 the parent company financial statements have been properly prepared in accordance with uk generally accepted accounting practice and
•	 the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the group 
financial statements article 4 of the ias regulation
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 directors’ report for the financial year for which the financial statements are prepared is consistent with the 
financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if in our opinion
•	 adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us or
•	 the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the 
accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by law are not made or
•	 we have not received all the information and explanations we require for our audit
under the listing rules we are required to review
•	 the directors’ statement set out on page 44 in relation to going concern
•	 the part of the corporate governance statement on page 41 relating to the company’s compliance with the nine provisions of the uk 
corporate governance code specified for our review and
•	 certain elements of the report to shareholders by the board on directors’ remuneration
ik bone senior statutory auditor
for and on behalf of kpmg audit plc statutory auditor
chartered accountants
15 canada square
london
e14 5gl
17 february 2012 spectris plc annual report and accounts 2011 56
2111904   060312   proof 7
consolidated statement of income 
for the year ended 31 december 2011
note
2011
£m
2010
£m
continuing operations
revenue 5 11062 9019 
cost of sales 4575 3751
gross profit 6487 5268 
indirect production and engineering expenses 880 754
sales and marketing expenses 2389 2060
administrative expenses 1460 1175
operating profit before acquisitionrelated items 2015 1421 
net acquisitionrelated costs and contingent consideration fair value adjustments 18 19
acquisitionrelated fair value adjustments to inventory 21 –
amortisation of acquisitionrelated intangible assets 218 123
operating profit 3 6 1758 1279 
profit on disposal of businesses 26 01 –
financial income 9 72 82 
finance costs 9 171 162
profit before tax 1660 1199 
taxation  uk 10 26 55
taxation  overseas 10 371 182
profit after tax for the year from continuing operations 
attributable to owners of the company 1263 962 
basic earnings per share 12 1087p 831p
diluted earnings per share 12 1069p 816p
interim dividends paid and final dividends proposed for the year per share 11 3360p 2800p
dividends paid during the year per share 11 2910p 2495p
spectris uses adjusted figures as key performance measures in addition to those reported under adopted ifrs reconciliations showing how the 
adjusted performance measures are derived from those reported under adopted ifrs are set out in note 3 business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 57
consolidated statement of comprehensive income 
for the year ended 31 december 2011
note
2011
£m
2010
£m
profit for the year attributable to owners of the company 1263 962
other comprehensive income
net lossgain on effective portion of changes in fair value of forward exchange contracts 38 07
foreign exchange movements on translation of overseas operations 55 13
net gain on changes in fair value of effective portion of hedges 
of net investment in overseas operations 20 22
actuarial lossgain arising on pension schemes net of foreign exchange 8 26 21
tax on items recognised directly in other comprehensive income 10 11 01
total comprehensive income for the year attributable to owners of the company 1175 1026 spectris plc annual report and accounts 2011 58
2111904   060312   proof 7
consolidated statement of changes in equity 
for the year ended 31 december 2011
share 
capital
£m
share
 premium
£m
retained
 earnings
£m
translation
 reserve
£m
hedging
 reserve
£m
merger
 reserve
£m
capital 
redemption
 reserve
£m
total 
equity
£m
balance at 1 january 2011 62 2314 1975 753 02 31 03 5136
profit for the year – – 1263 – – – – 1263
other comprehensive income
net loss on effective portion of changes 
in fair value of forward exchange 
contracts net of tax – – – – 34 – – 34
foreign exchange movements on 
translation of overseas operations – – – 55 – – – 55
net gain on changes in fair value of 
effective portion of hedges of net 
investment in overseas operations  
net of tax – – – 20 – – – 20
actuarial loss arising on pension 
schemes net of exchange and tax – – 19 – – – – 19
total comprehensive income for the year – – 1244 35 34 – – 1175
distributions to and transactions with 
owners
equity dividends paid – – 338 – – – – 338
sharebased payments net of tax – – 64 – – – – 64
share options exercised from own 
shares treasury purchased – – 05 – – – – 05
balance at 31 december 2011 62 2314 2950 718 36 31 03 6042 business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 59
consolidated statement of changes in equity 
for the year ended 31 december 2010
share 
capital
£m
share
 premium
£m
retained
 earnings
£m
translation
 reserve
£m
hedging
 reserve
£m
merger
 reserve
£m
capital 
redemption
 reserve
£m
total 
equity
£m
balance at 1 january 2010 62 2314 1195 709 05 31 03 4309
profit for the year  –  – 962  –  –  –  – 962
other comprehensive income
net gain on effective portion of 
changes in fair value of forward 
exchange contracts net of tax  –  –  –  – 03  –  – 03
foreign exchange movements on 
translation of overseas operations  –  –  – 13  –  –  – 13
net gain on changes in fair value of 
effective portion of hedges of net 
investment in overseas operations  
net of tax  –  –  – 31  –  –  – 31
actuarial gain arising on pension 
schemes net of exchange and tax  –  – 17  –  –  –  – 17
total comprehensive income for the year  –  – 979 44 03  –  – 1026
distributions to and transactions with 
owners
equity dividends paid  –  – 289  –  –  –  – 289
sharebased payments net of tax  –  – 71  –  –  –  – 71
share options exercised from own 
shares treasury purchased  –  – 19  –  –  –  – 19
balance at 31 december 2010 62 2314 1975 753 02 31 03 5136 spectris plc annual report and accounts 2011 60
2111904   060312   proof 7
consolidated statement of financial position 
as at 31 december 2011
note
2011
£m
2010
£m
assets
noncurrent assets
intangible assets
goodwill 13 5445 3551 
other intangible assets 14 2059 974 
7504 4525
property plant and equipment 15 1527 1105 
equityaccounted investments 06 05 
deferred tax assets 23 206 184 
 9243 5819
current assets
inventories 16 1718 1210 
taxation recoverable 43 85 
trade and other receivables 17 2208 1948 
derivative financial instruments 20 01 23 
cash and cash equivalents 18 416 647 
4386 3913 
total assets 13629 9732 
liabilities
current liabilities
shortterm borrowings 19 27 17
derivative financial instruments 20 17 –
trade and other payables 21 2276 2121
current tax liabilities 403 367
provisions 22 319 234
3042 2739
net current assets 1344 1174 
noncurrent liabilities
medium and longterm borrowings 19 3839 1355
derivative financial instruments 20 128 149
other payables 21 112 173
retirement benefit obligations 8 131 141
deferred tax liabilities 23 335 39
4545 1857
total liabilities 7587 4596
net assets 6042 5136 
equity 
issued share capital 24 62 62 
share premium 2314 2314 
retained earnings 2950 1975 
translation reserve 718 753 
hedging reserve 36 02
merger reserve 31 31 
capital redemption reserve 03 03 
total equity attributable to equity holders of the company 6042 5136 
total equity and liabilities 13629 9732
the financial statements on pages 56 to 108 were approved by the board of directors on 17 february 2012 and were signed on its behalf by
clive watson 
director company registration no 02025003 business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 61
consolidated statement of cash flows 
for the year ended 31 december 2011
note
2011
£m
2010
£m
cash flows from operating activities
profit after tax 1263 962 
adjustments for
tax 10 397 237 
profit on disposal of businesses 26 01 –
finance costs 9 171 162 
financial income 9 72 82
depreciation 15 149 144 
amortisation of intangible assets 14 249 144 
acquisitionrelated fair value adjustments to inventory 21 –
contingent consideration fair value adjustments 28 13 –
gain on sale of property plant and equipment 6 04 01
equitysettled sharebased payment transactions 7 64 66 
operating profit before changes in working capital and provisions 2224 1632 
increase in trade and other receivables 73 185
increase in inventories 243 151
increase in trade and other payables 96 566 
increasedecrease in provisions and employee benefits 40 108
corporation tax paid 351 210
net cash from operating activities 1693 1544 
cash flows from investing activities
purchase of property plant and equipment and software 292 189
proceeds from sale of property plant and equipment 08 14 
acquisition of businesses net of cash acquired 28 3690 626
proceeds from disposal of businesses 01 –
interest received 07 10 
net cash flows used in investing activities 3966 791
cash flows from financing activities
interest paid 128 111
dividends paid 11 338 289
proceeds from exercise of share options treasury shares 05 19 
proceeds from borrowings 2950 468 
repayment of borrowings 458 528
net cash flows generatedused in financing activities 2031 441
net decreaseincrease in cash and cash equivalents 242 312 
cash and cash equivalents at beginning of year 633 337 
effect of foreign exchange rate changes 14 16
cash and cash equivalents at end of year 18 405 633 
reconciliation of changes in cash and cash equivalents to movements in net debt note
2011
£m
2010
£m
net decreaseincrease in cash and cash equivalents 242 312 
proceeds from borrowings 2950 468
repayment of borrowings 458 528
effect of foreign exchange rate changes 34 05
movement in net debt 2700 377 
net debt at start of year 19 862 1239
net debt at end of year 19 3562 862 spectris plc annual report and accounts 2011 62
2111904   060312   proof 7
notes to the accounts 
1 accounting policies
general information
spectris plc is a public limited company incorporated and domiciled in the united kingdom whose shares are publicly traded on the london 
stock exchange 
these financial statements are presented in millions of pounds sterling rounded to the nearest one decimal place foreign operations are included 
in accordance with the policies set out below 
statement of compliance and basis of preparation
the group financial statements have been prepared and approved by the directors in accordance with international financial reporting standards 
as adopted by the eu adopted ifrs the company has elected to prepare its parent company financial statements in accordance with uk 
generally accepted accounting practice these are presented on pages 109 to 116 
the financial statements are prepared on the historical cost basis except that derivative financial instruments are stated at fair value
the group’s business activities together with factors likely to affect its future development performance and position are set out in the business 
review on pages 1 to 27 the financial position of the group its cash flows liquidity position and borrowing facilities are described in the 
financial review on pages 28 to 31 in addition note 2 to the financial statements includes the group’s objectives policies and processes for 
managing its capital its financial risk management objectives details of its financial instruments and hedging activities and its exposure to credit 
risk and liquidity risk
having reviewed the group’s plans and available financial facilities the board has a reasonable expectation that the group has adequate resources 
to continue its operational existence for the foreseeable future for this reason it continues to adopt the going concern basis in preparing the 
group’s accounts there are no key sensitivities identified in relation to this conclusion
the preparation of financial statements in conformity with adopted ifrs requires management to make judgements estimates and assumptions 
that affect the application of policies and reported amounts of assets and liabilities income and expenses the key judgements made in respect 
of the appropriateness of the group accounting policies relate to 
•	 the timing of revenue recognition where the group has some responsibility for installation activity 
•	 the classification of financial instruments in relation to hedge accounting 
•	 the classification of retirement benefit arrangements between defined benefit and defined contribution schemes 
•	 the point at which development activity meets the cost capitalisation threshold 
the directors do not consider the practical application of any of these judgements to involve significant subjectivity or uncertainty
the estimates and associated assumptions used are continually evaluated and are based on historical experience and various other factors that 
are believed to be reasonable under the circumstances actual results may differ from these estimates revisions to accounting estimates are 
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods 
if the revision affects both current and future periods estimates that have the most significant effect on the amounts recognised in the financial 
statements are recognised in the following areas 
•	 business combinations in relation to the determination of the fair value of acquired assets and liabilities note 28 
•	 goodwill in relation to the assumptions underpinning impairment testing note 13 
•	 retirement benefit schemes in relation to the assumptions used to value plan assets and liabilities note 8 
•	 provisions and contingent liabilities in relation to determining the quantum and timing of management’s best estimate of outflows  
notes 22 and 29
the accounting policies set out below have been applied consistently by group entities to all periods presented in these financial statements 
new standards and interpretations not yet adopted
there are a number of new standards amendments to standards and interpretations that are not yet effective for the year ended 31 december 
2011 none of these have been adopted early in preparing these consolidated financial statements none of these are anticipated to have any 
impact on the results or statement of financial position reported in these consolidated financial statements none of these new standards 
amendments to standards and interpretations not yet effective are anticipated to materially change the group’s published accounting policies business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 63
1 accounting policies continued
basis of consolidation
the consolidated financial statements include the results of the company and all of its subsidiary undertakings and associates equityaccounted 
investments
a subsidiary is an entity controlled by the group control is the power to govern the financial and operating policies of the entity so as to obtain 
benefits from its activities the financial statements of subsidiaries are included in the consolidated financial statements from the date that 
control commences until the date that control ceases
associates are those entities in which the group has significant influence but not control over the financial and operating policies significant 
influence is presumed to exist when the group holds between 20 and 50 of the voting power of another entity associates are accounted for 
using the equity method of accounting and are recognised initially at cost
intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in 
preparing the consolidated financial statements
the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on consolidation are translated into 
sterling at exchange rates ruling at the balance sheet date the revenues and expenses of foreign operations are translated into sterling at 
average exchange rates foreign exchange differences arising on retranslation are recognised directly in a separate translation reserve within the 
statement of changes in equity
foreign currency transactions
transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date with any exchange differences 
arising on retranslation being recognised in the statement of income nonmonetary assets and liabilities that are measured in terms of historical 
cost in a foreign currency are translated using the exchange rate at the date of the transaction
derivative financial instruments may be purchased to hedge the group’s exposure to changes in foreign exchange rates the accounting policies 
applied in these circumstances are described under the heading “derivative financial instruments and hedge accounting” below
interestbearing borrowings
interestbearing borrowings are recognised initially at fair value less attributable transaction costs subsequent to initial recognition interest
bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of 
income over the period of the borrowings on an effective interest basis
derivative financial instruments and hedge accounting
the group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operating and 
financing activities in accordance with its treasury policy it does not hold or use derivative financial instruments for trading or speculative 
purposes
derivative financial instruments are presented as current or noncurrent based on their contracted maturity dates
cash flow hedge accounting
derivative financial instruments may be transacted to hedge the variability in cash flows of a recognised asset or liability or of highly probable 
forecast transactions caused by changes in exchange rates
derivative financial instruments are carried in the balance sheet at fair value where a derivative financial instrument is designated in a cash 
flow hedge relationship with a highly probable forecast transaction the effective part of any gain or loss arising is recognised in the hedging 
reserve via the statement of comprehensive income the ineffective part of any gain or loss is recognised in the statement of income when the 
forecast transaction subsequently occurs and results in the recognition of a financial asset or liability that impacts on the statement of income 
the associated cumulative gain or loss is removed from the hedging reserve and presented within the statement of income when the forecast 
transaction subsequently occurs and results in the recognition of a nonfinancial asset or liability the associated cumulative gain or loss is 
removed from the hedging reserve and included within the initial cost of the nonfinancial asset or liability 
hedge accounting is discontinued when the hedging instrument expires or is either sold terminated or exercised without replacement or rollover 
or the group revokes the designation or the hedging instrument no longer qualifies for hedge accounting
if a derivative financial instrument is not formally designated in a cash flow hedge relationship any change in fair value is recognised in the 
statement of income spectris plc annual report and accounts 2011 64
2111904   060312   proof 7
1 accounting policies continued
net investment hedge accounting
the group uses us dollar and eurodenominated borrowings and derivative financial instruments as a hedge against the translation exposure 
on the group’s net investment in overseas companies where the hedge is fully effective at hedging the variability in the net assets of such 
companies caused by changes in exchange rates the changes in value of the borrowings are recognised in the statement of comprehensive 
income the ineffective part of any change in value caused by changes in exchange rates is recognised in the statement of income
the group takes advantage of crosscurrency swaps for some of its us dollardenominated private placement borrowings the swaps have the 
effect of converting fixed rate us dollar borrowings into “synthetic” fixed rate eurodenominated borrowings the value of the element of the 
swap that locks interest payments at a fixed euro interest rate changes as us dollar variable interest rates euro variable interest rates and foreign 
currency exchange rates change under ias 39’s rules such changes in value are considered to be ineffective as a net investment hedge and 
accordingly they are recognised in the statement of income
business combinations and goodwill
the group applies ifrs 3 revised ‘business combinations’ for transactions arising after 1 january 2010 this changed the group’s definition 
of the cost of business combinations and the treatment of contingent consideration the subsequent accounting for contingent consideration 
depends on whether this was initially recognised as equity or as a liability and whether the event is considered a measurement period adjustment 
transaction costs on a business combination are expensed as incurred
for transactions relating to acquisitions before 1 january 2010 subsequent adjustments to contingent consideration are made against goodwill 
and the transaction costs on a business combination are included in the cost of acquisition and thus capitalised   
all business combinations are accounted for by applying the purchase method goodwill represents the excess of the fair value of the purchase 
consideration for the interests in subsidiary undertakings over the net fair value to the group of the identifiable assets liabilities and contingent 
liabilities acquired in respect of acquisitions prior to 1 january 2004 goodwill is included on the basis of its deemed cost which represents the 
amount recorded previously under uk gaap  prior to 1 january 1998 goodwill was written off to reserves in the year of acquisition 
goodwill arising on acquisitions is stated at cost less any accumulated impairment losses impairment losses on goodwill are not reversed from  
1 january 2004 goodwill is allocated on acquisition to cashgenerating units that are anticipated to benefit from the combination and is no 
longer amortised but is tested annually for impairment impairment is determined by assessing the recoverable amount of the cashgenerating 
unit to which the goodwill relates this estimate of recoverable amount is determined at each balance sheet date the group’s identified cash
generating units are smaller than reportable segments 
the estimate of recoverable amount requires significant assumptions to be made and is based on a number of factors such as the nearterm 
business outlook for the cashgenerating unit including both its operating profit and operating cash flow performance where the recoverable 
amount of the cashgenerating unit is less than the carrying amount an impairment loss is recognised where goodwill forms part of a cash
generating unit and part of the operation within that unit is disposed of the goodwill associated with the operation disposed of is included in 
the carrying amount of the operation when determining the gain or loss on disposal goodwill disposed of in this circumstance is measured on 
the basis of the relative values of the operation disposed of and the portion of the cashgenerating unit retained
segmental reporting
an operating segment is a distinguishable component of the group that is engaged in business activities from which it may earn revenues and 
incur expenses and whose operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to 
be allocated to the segment and assess its performance and for which discrete financial information is available
reportable segments are operating segments that either meet the thresholds and conditions set out in ifrs 8 or are considered by the board to 
be appropriately designated as reportable segments
segment results are the results reviewed by the chief operating decision maker and represent adjusted operating profits for definitions see 
note 3 and include an allocation of head office expenses segment results exclude tax and financing items
segment assets comprise goodwill other intangible assets property plant and equipment inventories trade and other receivables segment 
liabilities comprise trade and other payables provisions and other payables unallocated items represent corporate and deferred taxation 
balances defined benefit scheme liabilities and all components of net debt
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 65
1 accounting policies continued
intangible assets 
the cost of acquiring software including associated implementation costs where applicable that is not specific to an item of property plant and 
equipment is classified as an intangible asset 
selffunded research and development costs are charged to the statement of income in the year in which they are incurred unless development 
expenditure meets certain strict criteria for capitalisation these criteria include demonstration of the technical feasibility and intent of completing 
a new intangible asset that will be available for sale and that the asset will generate probable future economic benefits from the point where 
expenditure meets the criteria development costs are capitalised and amortised over their useful economic lives the directors consider that due 
to the nature of projects undertaken the proportion of development costs incurred that meets the criteria for capitalisation is immaterial
other intangible assets that are separately acquired by the group are stated at cost less accumulated amortisation and impairment losses 
subsequent expenditure is capitalised only when it increases the future economic benefits otherwise it is expensed as incurred
intangible assets arising from a business combination are recognised at fair value
amortisation of intangible assets is charged to administrative expenses in the statement of income on a straightline basis over the estimated 
useful lives of intangible assets determined on an assetbyasset basis the estimated useful lives are as follows
software — 3 to 5 years 
patents and contractual rights — up to 10 years dependent upon the nature of the underlying contractual right
technology — up to 10 years dependent upon the nature of the underlying technology acquired
trade names — up to 20 years
customerrelated — 3 to 10 years dependent upon the underlying contractual arrangements and specific circumstances such as customer 
retention experience
property plant and equipment
property plant and equipment is stated at cost which from 1 january 2009 includes capitalised borrowing costs where appropriate less 
accumulated depreciation and impairment losses the group recognises in the carrying amount of property plant and equipment the additions 
that are appropriate to capitalise and the subsequent costs of replacing the parts of such items when there are future economic benefits that will 
flow to the group and its cost can be measured reliably cost includes expenditure that is directly attributable to the acquisition of the asset cost 
all other costs are recognised in the statement of income as an expense as they are incurred
depreciation is recognised in the statement of income on a straightline basis to write off the cost less the estimated residual value which is 
reviewed annually of property plant and equipment over its estimated useful life the depreciation charge is revised where useful lives are 
different from previously estimated or where technically obsolete assets are required to be written down where parts of an item of plant and 
equipment have separate lives they are accounted for and depreciated as separate items land is not depreciated estimated useful lives are as 
follows
freehold and long leasehold property — 20 to 40 years 
short leasehold property — over the period of the lease 
plant and equipment — 3 to 20 years 
impairment of tangible and intangible assets excluding goodwill
the carrying amount of the group’s assets is reviewed at each balance sheet date to determine whether there is any indication of impairment if 
any such indication exists the asset’s recoverable amount is estimated where the asset does not generate cash flows that are independent from 
other assets the group estimates the recoverable amount of the cashgenerating unit to which the asset belongs any intangible asset with an 
indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired the group currently 
has no such assets
recoverable amount is the higher of fair value less costs to sell and value in use 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 for which the estimates of future cash flows have not been adjusted spectris plc annual report and accounts 2011 66
2111904   060312   proof 7
1 accounting policies continued
if the recoverable amount of an asset is estimated to be less than its carrying amount the carrying amount is reduced to its recoverable amount 
with the impairment loss recognised as an operating expense immediately
where an impairment loss subsequently reverses the carrying amount of the asset is increased to the revised estimate of its recoverable amount 
but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been 
recognised for the asset in prior years a reversal of an impairment loss is recognised as income immediately
trade and other receivables
trade and other receivables are initially recognised at their fair value and are subsequently reduced by appropriate allowances for estimated 
irrecoverable amounts discounting is applied where it is expected to have a material impact
inventories 
inventories and work in progress are carried at the lower of cost and net realisable value inventory acquired as part of business combinations 
is valued at fair value less cost to sell cost represents direct costs incurred and where appropriate production or conversion costs and other 
costs to bring the inventory to its existing location and condition in the case of manufacturing inventory and work in progress cost includes an 
appropriate share of production overheads based on normal operating capacity inventory is accounted for on a firstin firstout basis or in some 
cases a weighted average basis is used if deemed more appropriate for the business provision is made to write down slowmoving and obsolete 
items to net realisable value based on an assessment of technological and market developments and on an analysis of historic and projected 
usage with regard to quantities on hand 
cash and cash equivalents
cash and cash equivalents comprises cash balances and call deposits bank overdrafts that are repayable on demand and form an integral part of 
the group’s cash management are included as a component of cash equivalents for the purposes of the statement of cash flows
trade and other payables
trade and other payables are initially recognised at fair value
provisions 
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past event and it is 
probable that an outflow of economic benefits will be required to settle the obligation in respect of warranties a provision is recognised when 
the underlying products or services are sold provisions are recognised at an amount equal to the best estimate of the expenditure required to 
settle the group’s liability obligations arising from restructuring plans are recognised when detailed formal plans have been established and when 
there is a valid expectation that such a plan will be carried out
postretirement benefits
the group operates pension schemes providing benefits based on final pensionable pay the assets of the schemes are held separately from 
those of the group the group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating 
the amount of future benefit that employees have earned in return for their service in the current and prior periods that benefit is discounted to 
determine its present value and the fair value of any plan assets is deducted the discount rate is determined by reference to market yields at the 
balance sheet date on high quality corporate bonds that have maturity dates approximating to the terms of the group’s obligations
the calculation is performed by a qualified actuary using the projected unit method actuarial gains and losses are recognised in full in the year in 
which they arise in the statement of comprehensive income 
when the benefits of a plan are improved the portion of the increased benefit relating to past service by employees is recognised as an expense 
in the statement of income on a straightline basis over the average period until the benefits become vested to the extent that the benefits 
vest immediately the expense is recognised immediately in the statement of income similarly any cost or income relating to the curtailment or 
settlement of a pension scheme is recognised as a cost or income immediately in the statement of income
for defined contribution schemes the assets are held separately from those of the group in independently administered funds payments to 
defined contribution schemes are charged to the statement of income as they fall due 
in certain countries the group participates in industrywide defined benefittype pension arrangements in such circumstances it is not possible 
to determine the amount of any surplus or deficit attributable to the group and the pension costs are accounted for as if the arrangements were 
defined contribution schemes these are not material to the group and accordingly no additional disclosures are provided
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 67
1 accounting policies continued
other longterm employee benefits
the group’s net obligation in respect of longterm employee benefits other than pension plans is the amount of future benefit that employees 
have earned in return for their service in the current and prior periods that benefit is discounted to determine its present value and the fair value 
of any plan assets is deducted the discount rate is determined by reference to market yields at the balance sheet date on high quality corporate 
bonds that have maturity dates approximating to the terms of the group’s obligations
sharebased payments
the fair value of equitysettled employee share option grants is calculated at the grant date the resulting cost is charged to the statement of 
income over the vesting period of the plans the value of the charge is adjusted to reflect expected and actual levels of options that vest except 
where forfeiture is only due to share prices not achieving the threshold for vesting 
revenues
revenues comprise sales to outside customers after discounts and excluding value added tax and similar sales taxes 
revenue from the sale of goods is recognised in the statement of income when the significant risk and rewards of ownership of the goods 
have been transferred to the customer which is typically on delivery for contracts that involve a significant element of installation or testing of 
equipment revenue is recognised at the point of customer acceptance revenue from services rendered is recognised in the statement of income 
in proportion to the measurement of the stage of completion of services rendered as at the balance sheet date this is assessed by reference to 
the amount of time incurred in proportion to the total expected time to be taken to deliver the service
occasionally the initial contract covers both the supply of goods and ongoing support servicing and maintenance for such contracts revenue is 
allocated across the components in line with their relative value and each element is accounted for as described above
the group has an immaterial amount of activity accounted for under ias 11 construction contracts and accordingly the applicable disclosures 
for these types of contracts are not provided
interest payable and receivable
interest payable comprises the interest payable on borrowings calculated using the effective interest method interest receivable is recognised in 
the statement of income as it accrues
leasing
leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee 
all other leases are classified as operating leases
rentals payable under operating leases are charged to the statement of income on a straightline basis over the term of the relevant lease 
benefits received and receivable as an incentive to enter into an operating lease are also spread on a straightline basis over the lease term
taxation
tax on the profit or loss for the year comprises both current and deferred tax tax is recognised in the statement of income except to the extent 
that it relates to items recognised either in other comprehensive income or directly in equity in which case tax is recognised in the statement of 
comprehensive income or statement of changes in equity respectively
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 in respect of previous years
deferred tax is provided using the balance sheet method providing for temporary differences between the carrying amounts of assets and 
liabilities for financial reporting purposes and the amounts used for taxation purposes a deferred tax asset is recognised only to the extent that  
it is probable that future taxable profits will be available against which the asset can be utilised
additional income taxes that arise from the distribution of intragroup dividends are recognised at the same time as the liability to pay the  
related dividend spectris plc annual report and accounts 2011 68
2111904   060312   proof 7
2 financial risk management
the group’s multinational operations and debt financing expose it to a variety of financial risks in the course of its business the group is exposed 
to foreign currency risk interest rate risk liquidity risk and credit risk financial risk management is an integral part of the way the group is 
managed financial risk management policies are set by the board of directors these policies are implemented by a central treasury department 
that has formal procedures to manage foreign exchange risk interest rate risk and liquidity risk including where appropriate the use of 
derivative financial instruments the group has clearly defined authority and approval limits 
in accordance with its treasury policy the group does not hold or use derivative financial instruments for trading or speculative purposes such 
instruments are only used to manage the risks arising from operating or financial assets or liabilities or highly probable future transactions the 
quantitative analysis of financial risk is included in note 20
a foreign currency risk
foreign currency risk arises both where sale or purchase transactions are undertaken in currencies other than the respective functional currencies 
of group companies transactional exposures and where the results of overseas companies are consolidated into the group’s reporting currency 
of £ sterling translational exposures the group has operations around the world which record their results in a variety of different local 
functional currencies in countries where the group does not have operations it invariably has some customers or suppliers that transact in a 
foreign currency the group is therefore exposed to the changes in foreign currency exchange rates between a number of different currencies but 
the group’s primary exposures relate to the us dollar euro danish krone swiss franc and japanese yen where appropriate the group manages 
its foreign currency exposures using derivative financial instruments 
the group manages its transactional exposures to foreign currency risks through the use of forward exchange contracts forward exchange 
contracts are typically used to hedge highly probable transactions which can be forecast to occur from anything between 1 and 18 months into 
the future  
the group’s translational exposures to foreign currency risks can relate both to the statement of income and net assets of overseas subsidiaries  
the group’s policy is not to hedge the translational exposure that arises on consolidation of the statement of income of overseas subsidiaries  
the group finances overseas company investments partly through the use of foreign currency borrowings in order to provide a natural hedge  
of foreign currency risk arising on translation of the group’s foreign currency subsidiaries the quantitative analysis of foreign currency risk is  
included in note 20 
b interest rate risk 
interest rate risk comprises both the interest rate price risk that results from borrowing at fixed rates of interest and also the interest cash flow risk 
that results from borrowing at variable rates where appropriate interest rate swaps are used to manage the group’s interest rate profile 
as at 31 december 2011 the majority of the group’s borrowings attract floating rates of interest linked to libor and therefore the group’s 
principal interest rate risk is a cash flow risk quantitative analysis of interest rate risk is included in note 20
c liquidity risk 
liquidity risk represents the risk that the group will not be able to meet its financial obligations as they fall due the group’s approach to 
managing this risk is to ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due under both normal 
and stressed conditions without incurring unacceptable losses or risking damage to the group’s reputation the group manages this risk through 
the use of regularly updated cash flow and covenant compliance forecasts and a liquidity headroom analysis which is used to determine funding 
requirements adequate committed lines of funding are maintained from high quality investment grade lenders the facilities committed to the 
group as at 31 december 2011 are set out in note 19
d credit risk 
credit risk arises because a counterparty may fail to perform its obligations the group is exposed to credit risk on financial assets such as cash 
balances derivative financial instruments trade and other receivables
the group’s credit risk is primarily attributable to its trade receivables the amounts recognised in the balance sheet are net of appropriate 
allowances for doubtful receivables estimated by the group’s management based on prior experience and their assessment of the current 
economic environment trade receivables are subject to credit limits and control and approval procedures in the operating companies due to 
its large geographic base and number of customers the group is not exposed to material concentrations of credit risk on its trade receivables 
quantitative analysis of credit risk to receivables is included in note 17
credit risk associated with cash balances and derivative financial instruments is managed centrally by transacting with an existing relationship 
bank with strong investment grade rating accordingly the group’s associated credit risk is limited the group has no significant concentration of 
credit risk 
the group’s maximum exposure to credit risk is represented by the carrying amount of each financial asset including derivative financial 
instruments in the group balance sheet see note 20 
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 69
2 financial risk management continued
capital management 
the board considers equity shareholders’ funds together with committed debt facilities as capital for the purposes of funding the group’s 
operations total managed capital at 31 december is
 
2011
£m
2010
 £m
equity shareholders’ funds page 60 6042 5136
committed debt facilities 5009 2295
11051 7431
ordinary shares are classified as equity incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a 
deduction from equity net of any tax effects
the board’s policy is to maintain a strong capital base so as to maintain investor creditor and market confidence and to sustain future 
development of the business the board of directors monitors both the demographic spread of shareholders and the level of dividends to 
ordinary shareholders 
the board encourages employees to hold shares in the company this is carried out through a save as you earn option scheme in the uk as well 
as performance share plans full details of these schemes are given in the sharebased payments note note 25 of these accounts 
the board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings the advantages and 
security afforded by a sound capital position and the benefits of an implied investment grade credit rating
in line with this objective the group financed its 2011 acquisitions from existing cash and a new us550 million fiveyear revolving credit facility 
the main financial covenants in the company’s debt facilities are the ratio of net debt to adjusted earnings before interest tax depreciation and 
amortisation and the ratio of finance charges to adjusted earnings before interest tax and amortisation at 31 december 2011 the company 
had and is expected to continue to have significant headroom under these financial covenant ratios
from time to time the group purchases its own shares in the market the timing of these purchases depends on market prices buy and sell 
decisions are made on a specific transaction basis by the board 
there were no changes to the group’s approach to capital management during the year 
neither the company nor any of its subsidiaries are subject to externally imposed capital requirements
3 adjusted performance measures 
spectris uses adjusted figures as key performance measures in addition to those reported under adopted ifrs adjusted figures exclude certain 
nonoperational items which management has defined as amortisation and impairment of acquisitionrelated intangible assets acquisition
related costs and contingent consideration fair value adjustments acquisitionrelated fair value adjustments to inventory profits or losses on 
termination or disposal of businesses unrealised changes in the fair value of financial instruments gains or losses on retranslation of shortterm 
intercompany loan balances related tax effects and other tax items which do not form part of the underlying tax rate see note 10 
management has modified the definition of the adjusted performance measures to include acquisitionrelated fair value adjustments to inventory 
carried at fair value less cost to sell to provide an adjusted profit measure that will include results from acquired businesses on a consistent basis 
over time to assist comparison of performance this adjustment was not material in the past
the adjusted performance measures are derived from the reported figures under adopted ifrs as follows
adjusted operating profit
note
2011
£m
2010 
£m
operating profit as reported under adopted ifrs 1758 1279
net acquisitionrelated costs and contingent consideration fair value adjustments 28 18 19 
acquisitionrelated fair value adjustments to inventory 28 21 –
amortisation of acquisitionrelated intangible assets 14 218 123 
adjusted operating profit 2015 1421
   spectris plc annual report and accounts 2011 70
2111904   060312   proof 7
3 adjusted performance measures continued 
adjusted operating profit by segment – 2011
note 
materials 
analysis 
£m
test and
 measurement
 £m
inline
instrumentation
 £m
industrial 
controls 
£m
2011 
total 
£m
operating profit as reported under adopted ifrs 560 485 603 110 1758 
net acquisitionrelated costs and contingent 
consideration fair value adjustments – 03 09 24 18 
acquisitionrelated fair value adjustments to 
inventory – – 02 19 21 
amortisation of acquisitionrelated intangible 
assets 49 59 42 68 218 
adjusted operating profit segment result under 
adopted ifrs 4 609 547 638 221 2015 
adjusted operating profit by segment – 2010
note 
materials 
analysis 
£m
test and
 measurement
 £m
inline
instrumentation
 £m
industrial 
controls 
£m
2010 
total 
£m
operating profit as reported under adopted ifrs 347 283 571 78 1279 
net acquisitionrelated costs and contingent 
consideration fair value adjustments 12 02 03 02 19
amortisation of acquisitionrelated intangible 
assets 36 63 09 15 123 
adjusted operating profit segment result under 
adopted ifrs 4 395 348 583 95 1421
return on sales by segment – 2011
materials 
analysis 
test and
 measurement
inline
instrumentation
industrial 
controls 
2011
total 
using operating profit as reported under adopted ifrs 166 140 195 97 159
using adjusted operating profit 181 158 206 196 182
return on sales by segment – 2010
materials 
analysis 
test and
 measurement
inline
instrumentation
industrial 
controls 
2010 
total 
using operating profit as reported under adopted ifrs 128 95 209 130 142
using adjusted operating profit 145 117 213 159 158
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 71
3 adjusted performance measures continued 
reconciliation to adjusted profit before tax and adjusted operating profit 
note
2011
£m
2010
£m
profit before tax as reported under adopted ifrs 1660 1199 
adddeduct
net acquisitionrelated costs and contingent consideration fair value adjustments 28 18 19 
acquisitionrelated fair value adjustments to inventory 28 21 –
amortisation of acquisitionrelated intangible assets 14 218 123 
net gains on retranslation of shortterm intercompany loan balances 9 04 04
profit on disposal of businesses 26 01 –
decreaseincrease in fair value of crosscurrency interest rate swaps 20 04 14
adjusted profit before tax 1916 1323 
adjusted net finance costs see below 99 98 
adjusted operating profit 2015 1421 
adjusted net finance costs
note
2011
£m
2010
£m
net interest costs as reported under adopted ifrs 9 99 80
decreaseincrease in fair value of crosscurrency interest rate swaps 20 04 14
net gains on retranslation of shortterm intercompany loan balances 9 04 04
adjusted net finance costs 99 98
adjusted operating cash flow
note
2011
£m
2010
£m
net cash from operating activities under adopted ifrs 1693 1544 
acquisitionrelated costs paid 28 31 19 
corporation tax paid 351 210 
purchase of property plant and equipment and software 292 189
proceeds from sale of property plant and equipment 08 14
adjusted operating cash flow 1791 1598 spectris plc annual report and accounts 2011 72
2111904   060312   proof 7
3 adjusted performance measures continued 
adjusted earnings per share
note
2011
£m
2010
£m
profit after tax as reported under adopted ifrs 1263 962 
adjusted for
net acquisitionrelated costs and contingent consideration fair value adjustments 28 18 19 
acquisitionrelated fair value adjustments to inventory 28 21 –
amortisation of acquisitionrelated intangible assets 14 218 123 
profit on disposal of businesses 26 01 –
decreaseincrease in fair value of crosscurrency interest rate swaps 20 04 14
net gains on retranslation of shortterm intercompany loan balances 9 04 04
tax effect of the above and other nonrecurring items 10 78 83
adjusted earnings 1441 1003
weighted average number of shares outstanding millions 12 1162 1158
adjusted earnings per share pence 1241 866
adjusted diluted earnings per share
note 2011 2010
adjusted earnings as above £m 1441 1003
diluted weighted average number of shares outstanding millions 12 1181 1179
adjusted diluted earnings per share pence 1220 851
basic and diluted earnings per share in accordance with ias 33 are disclosed in note 12
analysis of net debt for management purposes
note
2011
£m
2010
£m
bank overdrafts 11 14
bank loans – secured 19 22
bank loans – unsecured 2983 483
unsecured loan notes 853 853
crosscurrency interest rate swaps – currency portion 20 112 137
total borrowings 3978 1509
cash balances 18 416 647
net debt 3562 862
4 operating segments 
the group has four reportable segments as described below which are the group’s strategic business units these units offer different 
applications assist companies at various stages of the production cycle and are focused towards specific industries these segments reflect the 
internal reporting provided to the chief operating decision maker considered to be the board on a regular basis the following summary 
describes the operations in each of the group’s reportable segments
•	 materials analysis provides a range of analytical instrumentation to the metals and mining pharmaceutical and fine chemicals and 
electronics industries and also to academic and research institutions
•	 test and measurement supplies test measurement and analysis equipment and software for product design optimisation manufacturing 
control and environmental monitoring systems
•	 inline instrumentation provides process analytical measurement asset monitoring and online controls for both primary processing and the 
converting industries
•	 industrial controls supplies process measurement monitoring and control instrumentation and networking products for manufacturing industries
further details of the nature of these segments and the products and services they provide are contained in the business review on pages  
4 to 27
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 73
4 operating segments continued 
information about reportable segments 
segment revenue intersegment revenue external customer revenue reportable segment profit
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
materials analysis 3375 2717 – 01 3375 2716 609 395 
test and measurement 3473 2982 04 08 3469 2974 547 348 
inline instrumentation 3092 2737 03 06 3089 2731 638 583 
industrial controls 1133 605 04 07 1129 598 221 95 
eliminate intersegment sales 11 22 11 22 – – – –
total continuing operations 11062 9019 – – 11062 9019 2015 1421 
net acquisitionrelated costs and 
contingent consideration fair value 
adjustments 18 19
acquisitionrelated fair value 
adjustments to inventory 21 –
amortisation of acquisitionrelated 
intangibles 218 123
operating profit 1758 1279 
profit on disposal of businesses 01 –
financial income 72 82 
finance costs 171 162
profit before tax 1660 1199 
tax 397 237
profit after tax 1263 962 
reportable segment profit is consistent with that presented to the chief operating decision maker intersegment pricing is on an arm’s length 
basis segments are presented on the basis of actual intersegment charges made 
 not allocated to reportable segments in reporting to the chief operating decision maker
carrying amount of segment assets carrying amount of segment liabilities
†
2011
£m
2010
£m
2011
£m
2010
£m
materials analysis 3466 2562 1076 1046
test and measurement 4332 3469 944 939
inline instrumentation 2918 2243 501 466
industrial controls 2247 519 186 77
total segment assets and liabilities 12963 8793 2707 2528
cash and borrowings 416 647 3866 1372
derivative financial instruments 01 23 145 149
net pension liability  – – 131 141
taxation 249 269 738 406
consolidated total assets and liabilities 13629 9732 7587 4596
 not allocated to reportable segments in reporting to the chief operating decision maker  
†
 segment liabilities are presented here on a voluntary basis spectris plc annual report and accounts 2011 74
2111904   060312   proof 7
4 operating segments continued 
additions to noncurrent assets depreciation and amortisation impairment charges
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
materials analysis 187 228 103 74  – – 
test and measurement 99 130 131 141  – – 
inline instrumentation 124 242 84 53  – – 
industrial controls 3458 288 80 20  – – 
3868 888 398 288  – – 
geographical segments
the group’s operating segments are each located in several geographical locations and sell on to external customers in all parts of the world no 
individual country amounts to more than 3 of turnover other than those noted below
the following is an analysis of revenue by geographical destination
materials 
analysis 
£m
test and
 measurement
 £m
inline
instrumentation
 £m
industrial 
controls 
£m
2011 
total 
£m
uk 118 131 84 33 366
germany 200 657 281 77 1215
france 141 202 93 18 454
rest of europe 562 625 523 60 1770
usa 606 527 762 681 2576
rest of north america 117 47 79 68 311
japan 285 291 296 07 879
china 469 439 500 85 1493
south korea 136 129 61 27 353
rest of asia pacific 408 219 208 55 890
rest of the world 333 202 202 18 755
3375 3469 3089 1129 11062 
materials 
analysis 
£m
test and
 measurement
 £m
inline
instrumentation
 £m
industrial 
controls 
£m
2010 
total 
£m
uk 105 113 76 20 314 
germany 190 547 260 48 1045 
france 117 181 78 13 389 
rest of europe 438 562 469 35 1504 
usa 555 495 630 349 2029 
rest of north america 87 49 80 28 244 
japan 192 235 301 04 732 
china 330 324 415 43 1112 
south korea 109 112 51 17 289
rest of asia pacific 323 193 187 33 736
rest of the world 270 163 184 08 625
2716 2974 2731 598 9019
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 75
4 operating segments continued 
the following is an analysis of the carrying amount of noncurrent segment assets analysed by the geographical area in which the assets are 
located
noncurrent assets
2011
£m
2010
£m
uk 801 756
germany 275 293
france 02 04
rest of europe 2816 2604
usa 4506 1249
rest of north america 59 63
japan 41 42
china 101 131
south korea 02 02
rest of asia pacific 416 434
rest of the world 18 57
9037 5635
 principally in denmark and switzerland
5 revenue 
an analysis of the group’s revenue is as follows
2011
£m
2010
£m
sale of goods 9636 7783 
services rendered 1426 1236 
revenue 11062 9019
no individual customer accounted for more than 2 of external revenue in either 2011 or 2010 
spectris does not have the necessary information readily available to disclose the revenue from external customers for each product and service 
or each group of similar products and services and the cost to develop this would be excessive
6 operating profit 
operating profit has been arrived at after charging 
2011
£m
2010
£m
net foreign exchange losses 03 03 
research and development expenditure 758 646 
depreciation of property plant and equipment 149 144 
amortisation of intangible assets 249 144 
gain on sale of property plant and equipment 04 01
research and development expenditure now includes costs that relate to specific customer contracts spectris plc annual report and accounts 2011 76
2111904   060312   proof 7
6 operating profit continued 
auditor’s remuneration
2011
£m
2010
£m
fees payable to the company’s auditor for audit of the group’s annual accounts 06 04
fees payable to the company’s auditor and its associates for other services
– the audit of the company’s subsidiaries pursuant to legislation 11 10
– tax services 04 05
– corporate finance related
†
06 –
27 19
 increase relates to additional work performed over significant acquisitions in the year
†
 services related to acquisitions
7 employee costs 
employee costs including directors’ remuneration comprise
note
2011
£m
2010
£m
wages and salaries 2956 2610 
social security costs 504 430 
defined benefit pension plans current service cost 8 09 07 
defined benefit pension plans past service credit 8 – 29
defined benefit pension plans settlements 8 03 –
defined contribution pension plans 8 104 90 
equitysettled sharebased payment expense 64 66
cashsettled sharebased payment expense 09 07
3643 3181
where it is not possible to incentivise managers of the group’s operating companies with equitysettled options they are issued with cashsettled 
options the charge for these awards is adjusted to reflect the expected and actual levels of options that vest and the fair value is based on either 
the share price at date of exercise or the share price at the reporting date if sooner the impact has progressively become more significant and 
as such these options are now separately disclosed the statement of cash flows reflects this change as a movement in other payables and the 
comparative has been amended accordingly 
directors’ remuneration
2011
£m
2010
£m
shortterm benefits 27 22
postemployment benefits 01 02
equitysettled sharebased payment expense 10 11
38 35
further details of directors’ remuneration and share options are given in the directors’ remuneration report on pages 52 to 54
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 77
7 employee costs continued
average number of employees
2011
number
2010
number
production and engineering 3270 2904
sales and marketing 2534 2296
administrative 643 581
6447 5781
8 retirement benefit schemes
spectris plc operates funded defined benefit and defined contribution pension plans for the group’s qualifying employees in the uk in addition 
11 overseas subsidiaries 2010 12 overseas subsidiaries in three overseas countries provide defined benefit plans other uk and overseas 
subsidiaries have their own defined contribution plans invested in independent funds
defined contribution plans
the total cost of the defined contribution plans for the year ended 31 december 2011 was £104m 2010 £90m there were no outstanding or 
prepaid contributions to these plans as at 31 december 2011 or 31 december 2010
defined benefit plans
the last full actuarial valuations were carried out as at the following dates
plan name
date of last full actuarial valuation
german
brüel  kjær gmbh 31 december 2011
brüel  kjær vibro gmbh 31 december 2011
btg instruments gmbh formerly btg mütek gmbh 31 december 2011
spectris germany gmbh formerly spectris gmbh sensoren und systeme 31 december 2011
hottinger baldwin messtechnik gmbh 31 december 2011
panalytical gmbh 31 december 2011
dutch
hbm netherlands bv 31 december 2009
brüel  kjær bv 31 december 2009
brüel  kjær vibro as dutch branch formerly brüel  kjær vibro bv 31 december 2009
hottinger baldwin messtechnik gmbh dutch branch 31 december 2009
swiss
btg eclépens sa 31 december 2011
uk
spectris pension plan 31 december 2008
 the previous lds test and measurement plans have been included into other dutch and german plans
the valuations were updated to 31 december 2011 for ias 19 purposes by qualified independent actuaries
a valuation is underway in relation to the spectris pension plan uk spectris plc annual report and accounts 2011 78
2111904   060312   proof 7
8 retirement benefit schemes continued
the total company contributions made to the defined benefit plans during the year ended 31 december 2011 were £41m 2010 £56m 
contributions for 2012 are expected to be as follows
plan name 
expected 2012 contributions 
£m
german
spectris germany gmbh 01
hottinger baldwin messtechnik gmbh 04
swiss
btg eclépens sa 09
uk
spectris pension plan 26
total 40
the above contribution rates are subject to review at future valuations and periodic certifications of the schedule of contributions 
the spectris pension plan uk was closed to future accural of benefits with effect from 31 december 2009
the major assumptions used by the actuary to value the liabilities of the defined benefit plans were
uk plans
2011
 pa
2010
 pa
discount rate 470 540
salary increases 450 490
pension increases in payment
rpi max 5 lpi 290 320
rpi max 3 240 260
rpi max 25 210 230
rpi min 3 max 5 360 370
cpi max 5 210 270
pension increases in deferment
rpi 300 340
cpi 210 270
inflation assumption
rpi 300 340
cpi 210 270
lpi is limited price indexation
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2011 valuation is based on the following table
current and future pensioners pxa00 tables with medium cohort projections and a 1 year age rating and 
a 1 pa underpin to future improvements
samples of the age which pensioners are assumed to live to are as follows
males females
pensioner aged 65 in 2011 867 890
pensioner aged 65 in 2021 876 900
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 79
8 retirement benefit schemes continued
german plans
2011
 pa
2010
 pa
discount rate 470 480
salary increases 300 300
pension increases in payment 200 200
inflation assumption 200 200
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2011 valuation is based on the following table
current pensioners and future pensioners dr k heubeck pension tables 2005 g
samples of the age which pensioners are assumed to live to are as follows
males females
pensioner aged 60 in 2011 835 876
pensioner aged 60 in 2021 848 889
dutch plans
2011
 pa
2010
 pa
discount rate 520 520
salary increases 300 300
inflation assumption 200 200
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2011 valuation is based on the following table
current pensioners and future pensioners prognosetafel 20052050 tables
sample ages to which pensioners are expected to live are not available but this table covers improving life expectancies and is a general standard 
in the netherlands these details will be provided when the next actuarial assessment of this pension scheme is made at 31 december 2012
swiss plans
2011
 pa
2010
 pa
discount rate 225 275
salary increases 100 100
inflation assumption 100 100
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2011 valuation is based on the following table
current pensioners and future pensioners bvg 2010 p12
samples of the age which pensioners are assumed to live to are as follows
males females
pensioner aged 60 in 2011 847 870
pensioner aged 60 in 2021 856 879 spectris plc annual report and accounts 2011 80
2111904   060312   proof 7
8 retirement benefit schemes continued
amounts recognised in the statement of income
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
current service cost – – 09 07 09 07
interest cost 51 53 09 07 60 60
expected return on scheme assets 56 53 05 02 61 55
settlement gain uk 03 –  – –  03 –
past service credit – 29  – – – 29
 08 29 13 12 05 17
on materiality grounds the current service cost is recognised solely in administrative expenses in the statement of income the interest cost and 
expected return on scheme assets are recognised in finance costs and financial income respectively in the statement of income actuarial losses 
or gains are recognised in the statement of comprehensive income
during the year insurance premiums for deathinservice benefits were paid amounting to £03m 2010 £02m
the total return on scheme assets in the year and reimbursed rights was £123m 2010 £102m
in july 2010 the uk government announced that cpi should be used as the basis for statutory minimum pension increases instead of rpi the 
impact on benefits of this change for the uk plan was a credit to the statement of income in 2010 of £29m within administrative expenses
amounts recognised in the statement of comprehensive income
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
actuarial lossesgains recognised in 
the current year 10 32 18 08 28 24
exchange gainslosses in the current 
year – – 02 01 02 01
loss on inclusion of dutch plan – – – 02 – 02
total lossesgains recognised in the 
current year 10 32 16 11 26 21
cumulative actuarial losses since 
1 january 2004 351 341 57 41 408 382
amounts recognised in the balance sheet
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
present value of defined benefit 
obligations 1043 969 285 260 1328 1229
fair value of scheme assets 1030 932 167 156 1197 1088
net deficit in schemes 13 37 118 104 131 141
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 81
8 retirement benefit schemes continued
reconciliation of movement in net deficit
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
at 1 january 37 143 104 92 141 235
expected return on plan assets 56 53 05 02 61 55
contributions from sponsoring 
company 26 45 15 11 41 56
current service cost – – 09 07 09 07
interest cost 51 53 09 07 60 60
actuarial lossesgains 10 32 18 08 28 24
settlement gain uk 03 – – – 03 –
exchange difference – – 02 01 02 01
past service credit – 29 – – – 29
inclusion of three additional dutch 
plans – – – 02 – 02
at 31 december 13 37 118 104 131 141
analysis of movement in the present value of the defined benefit obligation
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
at 1 january 969 964 260 209 1229 1173
current service cost – – 09 07 09 07
interest cost 51 53 09 07 60 60
actuarial losses 70 16 20 07 90 23
settlement gain uk 03 – – – 03 –
exchange difference – – 03 16 03 16
contributions from scheme 
members – – 08 07 08 07
benefits paid 44 35 18 11 62 46
past service credit – 29 – – – 29
settlement of swiss plan – – – 12 – 12
inclusion of three additional dutch 
plans – – – 06 – 06
at 31 december 1043 969 285 260 1328 1229
analysis of defined benefit obligation
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
present value of unfunded 
defined benefit obligation – – 59 68 59 68
present value of funded defined 
benefit obligation 1043 969 226 192 1269 1161 spectris plc annual report and accounts 2011 82
2111904   060312   proof 7
8 retirement benefit schemes continued
reconciliation of movement in fair value of plan assets
uk plans overseas plans total
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
at 1 january 932 821 156 117 1088 938
expected return on plan assets 56 53 05 02 61 55
actuarial gainslosses 60 48 02 01 62 47
exchange difference – – 01 15 01 15
contributions from sponsoring 
company 26 45 15 11 41 56
contributions from scheme 
members – – 08 07 08 07
benefits paid 44 35 18 11 62 46
settlement of swiss plan – – – 12 – 12
inclusion of three additional 
dutch plans – – – 04 – 04
at 31 december 1030 932 167 156 1197 1088
analysis of the scheme assets and expected rate of return
expected return fair value of assets
uk plans
2011

2010

2011
£m
2010
£m
equity instruments 75 73 321 290
debt instruments 53 55 673 662
other assets 30 40 36 20
59 61 1030 932
expected return fair value of assets
german plans
2011

2010

2011
£m
2010
£m
insurance policies 47 48 13 12
expected return fair value of assets
dutch plans
2011

2010

2011
£m
2010
£m
insurance policies 47 52 12 13
 
expected return fair value of assets
swiss plans
2011

2010

2011
£m
2010
£m
insurance policies 25 30 142 131
the overall expected return on assets is calculated as the weighted average of the expected return on each individual asset class the expected 
return on equity instruments is the sum of inflation dividend yield and economic growth less investment expenses the return on debt 
instruments is based on the current market yield on bonds the expected return on other assets reflects market conditions for interest rate swaps
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 83
8 retirement benefit schemes continued
history of experience adjustments
2011
£m
2010 
£m
2009 
£m
2008 
£m
2007
£m
present value of defined benefit obligations 1328 1229 1173 985 937
fair value of scheme assets 1197 1088 938 900 826
deficit in the scheme 131 141 235 85 111
experience adjustment on scheme liabilities 
amount £m 12 23 230 100 48
percentage of scheme liabilities  09 19 196 102 51
experience adjustment on scheme assets 
amount £m 62 47 33 80 11
percentage of scheme assets  52 43 35 90 13
 the history of experience for 2007 excludes the german and dutch lds test and measurement plans as they were new acquisitions in 2008  
it also excludes the swiss plan that had not previously been treated as a defined benefit arrangement
9 finance costs and financial income
financial income
note
2011
£m
2010
£m
interest receivable 07 09 
increase in fair value of crosscurrency interest rate swaps 20 – 14 
net gains on retranslation of shortterm intercompany loan balances 04 04
expected return on pension scheme assets 61 55 
72 82
finance costs
note
2011
£m
2010
£m
interest payable on loans and overdrafts 105 99 
decrease in fair value of crosscurrency interest rate swaps 20 04 –
interest cost on pension scheme liabilities 60 60 
other finance costs 02 03
171 162
net interest costs of £98m 2010 £90m for the purposes of the calculation of interest cover comprise bank interest receivable of £07m  
2010 £09m and interest payable on loans and overdrafts of £105m 2010 £99m spectris plc annual report and accounts 2011 84
2111904   060312   proof 7
10 taxation
2011 2010
uk
£m
overseas
£m
total
£m
uk
£m
overseas 
£m
total
£m
current tax charge 63 419 482 48 245 293
adjustments in respect of current tax 
of prior years 04 15 19 06 68 74
deferred tax – origination and 
reversal of temporary differences 33 33 66 13 05 18
26 371 397 55 182 237
the standard rate of corporation tax for the year based on the weighted average of tax rates applied to the group’s profits is 285 2010 
276 the tax charge for the year is lower than the standard rate of corporation tax for the reasons set out in the following reconciliation
2011
£m
2010
£m
profit before taxation 1660 1199
corporation tax at standard rate of 285 2010 276 473 331
nontaxable income and gains 38 28
nondeductible expenditure 18 17
movements on unrecognised deferred tax assets 05 03
research and development tax incentives 34 21
other current year tax items 03 04
change in tax rates 01 01
adjustments relating to prior year acquisitions and disposals – 43
other adjustments to prior year current and deferred tax charges 23 17
total taxation 397 237
factors that may affect the future tax charge 
the group’s tax charge in future years is likely to be affected by the proportion of profits arising and the effective tax rates in the various 
territories in which the group operates
tax on items recognised directly in other comprehensive income
2011
£m
2010
£m
tax on net lossgain on effective portion of changes in fair value of forward exchange contracts 04 04
tax on changes in fair value of effective portion of hedges of net investment in overseas operations – 09
tax on actuarial lossgain arising on pension schemes net of foreign exchange 07 04
aggregate current and deferred tax credit relating to items that are charged directly to the statement of 
comprehensive income 11 01
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 85
10 taxation continued
the following tax charges relate to items of income and expense that are excluded from the group’s adjusted performance measures
tax on items of income and expense that are excluded from the group’s adjusted profit before tax
2011
£m
2010
£m
tax creditcharge on unrealised change in fair value of crosscurrency interest rate swaps 01 04
tax credit on amortisation of intangible assets 65 40
tax credit on acquisitionrelated costs 04 01
tax credit on acquisitionrelated fair value adjustments to inventory  08 –
tax credit on retranslation of shortterm intercompany loan balances – 03
tax credit relating to prior year acquisitions and disposals – 43
total tax credit 78 83
the effective adjusted tax rate for the year was 248 2010 242 as set out in the reconciliation below
reconciliation of total tax charge on adopted ifrs basis to adjusted tax charge
note
2011
£m
2010
£m
total tax charge on adopted ifrs basis 397 237
tax credit on items of income and expense that are excluded from the group’s adjusted profit 
before tax 78 83
adjusted tax charge 475 320
adjusted profit before tax 3 1916 1323
11 dividends
amounts recognised and paid as distributions to owners of the company in the year
2011
£m
2010
£m
final dividend for the year ended 31 december 2010 of 209p 2009 1785p per share 243 207
interim dividend for the year ended 31 december 2011 of 82p 2010 71p per share 95 82
338 289
amounts arising in respect of the year 
2011
£m
2010
£m
interim dividend for the year ended 31 december 2011 of 82p 2010 71p per share 95 82
proposed final dividend for the year ended 31 december 2011 of 254p 2010 209p per share 296 242
391 324
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in these 
financial statements 
12 earnings per share
basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary shareholders by the weighted average 
number of ordinary shares outstanding during the year excluding treasury shares
diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary shareholders by the weighted average 
number of ordinary shares outstanding during the year but adjusted for the effects of dilutive options the key features of share option contracts 
are described in note 25 spectris plc annual report and accounts 2011 86
2111904   060312   proof 7
12 earnings per share continued
basic earnings per share
2011 2010
profit after tax £m 1263 962
weighted average number of shares outstanding millions 1162 1158
basic earnings per share pence 1087 831
diluted earnings per share
2011 2010
profit after tax £m 1263 962
basic weighted average number of shares outstanding millions 1162 1158
weighted average number of dilutive 5p ordinary shares under option millions 26 22
weighted average number of 5p ordinary shares that would have been issued at average market value from 
proceeds of dilutive share options millions 07 01
diluted weighted average number of shares outstanding millions 1181 1179
diluted earnings per share pence 1069 816
13 goodwill 
cost note £m
at 1 january 2010 3635
recognised on acquisitions 28 243
adjustments to contingent consideration for transactions under ifrs 3 2004 28 83
exchange differences 37
at 31 december 2010 3924
recognised on acquisitions 28 1958
adjustments to contingent consideration for transactions under ifrs 3 2004 28 10
exchange differences 65
at 31 december 2011 5807
accumulated amortisation and impairment losses
at 1 january 2010 387
exchange differences 14
at 31 december 2010 373
exchange differences 11
at 31 december 2011 362
carrying amount
at 31 december 2011 5445
at 31 december 2010 3551
at 1 january 2010 3248
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 87
13 goodwill continued
in accordance with the requirements of ias 36 impairment of assets goodwill is allocated to the group’s cashgenerating units which are 
represented by the group’s trading businesses the most significant elements of the group’s total consolidated goodwill of £5445m at  
31 december 2011 are allocated to panalytical £950m 2010 £977m btg £536m 2010 £547m hbm £669m 2010 £723m brüel  
kjær sound  vibration £732m 2010 £689m and omega engineering £1747m 2010 na except for omega engineering the acquired 
entities are quickly integrated into existing group companies with the result that it is not appropriate to consider their individual performance 
when determining cashgenerating units and performing goodwill impairment testing each cashgenerating unit is assessed for impairment 
annually and whenever there is a specific indication of impairment omega engineering is a standalone entity which is operating separately 
within the industrial controls segment as such it is being treated as a cashgenerating unit for goodwill impairment testing for all cash
generating units there were no indications of impairment in 2011
as part of the annual impairment test review the carrying value of goodwill for all businesses excluding omega engineering has been assessed with 
reference to value in use to perpetuity reflecting the projected cash flows of each cashgenerating unit based on actual operating results the most 
recent budget for the next financial year and strategic review projections for 2013 and 2014 for omega engineering the carrying value of goodwill 
has been assessed by reference to the acquisition business plan that assumed a sales growth in line with that anticipated for the rest of the spectris 
group margins consistent with recent history certain synergies in procurement and sales channels and reduced working capital 
the key assumptions on which the value in use calculations are based for all businesses excluding omega engineering relate to business 
performance over the next three years longterm growth rates beyond 2014 and the discount rates applied there are no individually significant 
business level cash flow assumptions in respect of any business that materially impact the impairment testing the key judgements are the level 
of revenue and operating margins anticipated and the proportion of operating profit converted to cash in each year growth rates for the period 
beyond 2014 are assumed to be 25 2010 25 which is considered to be at or below longterm market trends for each business the cash 
flow projections have been discounted using entityspecific pretax discount rates between 13 and 18 2010 12 and 17 these rates 
have been determined by taking the size of business and specific geographic and industry risk factors into account no impairment charge has 
been required to be recognised in either 2011 or 2010
the directors do not consider that there are any reasonable possible sensitivities for these businesses that could arise in the next 12 months 
that could result in an impairment charge arising for illustration the directors have continued to consider the following specific individual 
sensitivities 
•	 a 2 increase in the pretax discount rate applied to each business would result in an impairment of £nil 2010 £nil 
•	 if the longterm growth rate assumption was reduced to 1 no impairment would arise 2010 £nil and 
•	 if the cash flow projections of all businesses were reduced by 25 for the next two years no impairment would arise 2010 £nil
the directors consider that operating results in 2011 confirm that none of the group’s brought forward trading businesses have suffered 
permanent diminutions in value as a result of recent difficult economic conditions
reflecting the fact that it represents 32 of total goodwill the directors consider the goodwill related to the omega engineering business to 
be individually significant and accordingly have provided additional commentary for this business the lowest level of headroom on goodwill 
impairment testing among the cashgenerating units at 31 december 2011 is in respect of the omega engineering business reflecting the 
proximity of the acquisition date to the year end however having regard to trading activity post acquisition and the conservative assumptions 
built into the acquisition business case the directors do not believe there is a significant risk of material impairment of goodwill arising in the next 
12 months the pretax discount rate applied to the cash flows is 16 with a longterm growth rate assumption of 25 per annum and a long
term conversion of operating profit to cash of 90 reflecting the highly dispersed customer base wide range of industries served and extensive 
product list no other individual assumptions have been identified that are material to this assessment spectris plc annual report and accounts 2011 88
2111904   060312   proof 7
14 other intangible assets 
cost
patents
and
contractual
rights
£m
trade 
names
£m
technology
£m
customerrelated 
intangibles
£m
software
£m
total
£m
at 1 january 2010 126 – 411 351 281 1169 
additions  – – –  – 19 19
recognised on acquisitions  41 – 121 203 01 366 
disposals  – – –  – 05 05
exchange differences 03 – 20 15 02 36 
at 31 december 2010 170 – 552 569 294 1585 
additions – – – – 27 27 
transfers from property plant and equipment – – – – 25 25 
recognised on acquisitions note 28 32 633 437 192 02 1296 
disposals – – – – 03 03
exchange differences 02 03 – 03 03 05
at 31 december 2011 204 636 989 764 342 2935 
accumulated amortisation and impairment losses
at 1 january 2010 95  – 67 93 211 466
disposals  – – – – 03 03
charge for the year 15  – 50 58 21 144
exchange differences 02  – – 06 04 04
at 31 december 2010 112  – 117 157 225 611 
disposals – – – – 03 03
charge for the year 12 08 91 107 31 249
transfers from property plant and equipment – – – – 19 19
exchange differences – – 01 03 04 –
at 31 december 2011 124 08 209 267 268 876
carrying amount
at 31 december 2011 80 628 780 497 74 2059
at 31 december 2010 58  – 435 412 69 974 
at 1 january 2010 31  – 344 258 70 703
of the total amortisation charge of £249m 2010 £144m the amount attributable to the amortisation of acquisitionrelated intangible assets 
was £218m 2010 £123m
the transfers from property plant and equipment to software in 2010 relate to identifiable software assets
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 89
15 property plant and equipment
cost
freehold property
£m
leasehold property
£m
plant and 
equipment
£m
total
£m
at 1 january 2010 959 101 1361 2421 
additions 46 12 115 173
recognised on acquisitions  –  – 04 04
disposals 19 04 73 96
transfers fromto plant and equipment 03  – 03  –
exchange differences 09 05 18 14
at 31 december 2010 980 114 1422 2516 
additions 98 08 159 265
recognised on acquisitions note 28 254 01 77 332
disposals 02 04 67 73
transfers to other intangible assets – – 25 25
exchange differences 19 01 15 33
at 31 december 2011 1311 120 1551 2982
accumulated depreciation and impairment
at 1 january 2010 306 67 972 1345 
charge for the year 26 09 109 144 
disposals 18 04 65 87
exchange differences 05 03 11 09 
at 31 december 2010 309 75 1027 1411 
charge for the year 29 13 107 149
disposals 01 04 64 69
transfers to other intangible assets – – 19 19
exchange differences 08 01 10 17
at 31 december 2011 329 85 1041 1455
carrying amount
at 31 december 2011 982 35 510 1527
at 31 december 2010 671 39 395 1105 
at 1 january 2010 653 34 389 1076
the amount recognised in the carrying amount of items of plant and equipment in the course of its construction was £39m 2010 £10m 
no borrowing costs met the required criteria for capitalisation during the year 2010 £nil
the group has pledged land and buildings having a carrying amount of approximately £19m 2010 £22m to secure bank loans granted to  
the group spectris plc annual report and accounts 2011 90
2111904   060312   proof 7
16 inventories 
2011
£m
2010
£m
raw materials 672 465 
work in progress 294 236 
finished goods 752 509
1718 1210 
in the ordinary course of business the group makes provision for slowmoving excess and obsolete inventory as appropriate 
inventory is stated after charging impairments of £16m 2010 £40m and crediting reversals of previous impairments of £17m 2010 £25m 
impairments and reversals of impairments are included within operating profit
the calculation of the group’s inventory provision requires the use of various estimates and assumptions in relation to the impact of technology 
and market changes on future demand for onhand inventory across a very large number of individual product lines reversals of previous 
inventory provisions arise when these estimates prove pessimistic and actual product demand is higher than assumed this normally occurs when 
the product lifecycle is longer than anticipated there are no individually significant provision reversals the directors do not consider there to be 
significant levels of estimation risk in the determination of inventory provisions with regard to the total value of inventory 
inventory carried at fair value less cost to sell is £192m 2010 £02m due to the acquisitions as described in note 28
in 2011 raw materials and changes in finished goods and work in progress recognised within cost of sales amounted to £3014m 2010 £2432m
17 trade and other receivables 
2011
£m
2010
£m
trade receivables 1914 1688 
prepayments and accrued income 123 104 
other receivables 171 156 
2208 1948
included within prepayments and accrued income and other receivables above are amounts receivable in more than one year of £63m 2010 £53m 
trade receivables are noninterest bearing standard credit terms provided to customers differ according to business and country and are typically 
between 30 and 60 days trade receivables and other receivables are stated after net impairments recognised and utilised during the year of £45m 
2010 £33m and reversals of impairments of £22m 2010 £14m impairments and reversals of impairments are included within operating profit
the maximum exposure to credit risk for trade receivables at 31 december by geographic region was
2011
£m
2010
£m
uk 77 62
germany 191 175
france 109 103
rest of europe 378 365
usa 472 376
rest of north america 76 58
japan 171 156
china 129 106
south korea 49 49
rest of asia pacific 142 137
rest of the world 120 101
1914 1688
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 91
17 trade and other receivables continued 
impairment losses 
the ageing of trade receivables and related impairment provisions at 31 december was
2011 2010
gross
£m
impairment
£m
gross
£m
impairment
£m
not past due 1413 06 1283 03
one month past due 350 02 276 01
two months past due 104 01 81 03
three months past due 52 02 36 02
over three months past due 97 91 90 69
2016 102 1766 78
the movement in the allowance for impairment in respect of trade receivables during the year was as follows 
2011
£m
2010
£m
balance at 1 january 78 58
impairment loss recognised 54 43
impairment loss utilised 09 10
impairment loss released 22 14
exchange differences 01 01
balance at 31 december 102 78
an impairment has been recorded against the trade receivables that the group believes may not be recoverable in the case of trade receivables 
that are past due management makes an assessment of the risk of noncollection taking into account factors such as any disputes or other 
factors delaying payment and the risk of bankruptcy or other failure of the customer to meet their obligations for trade receivables that are not 
past due taking into account good historic collection experience management records an impairment charge only where there is a specific risk 
of noncollection all trade receivables past due for more than 120 days have been fully provided in line with the group’s credit risk policy there 
is no material unprovided risk in relation to eu countries 
the fair value of trade and other receivables approximates to book value due to the shortterm maturities associated with these items there is no 
impairment risk identified with regards to prepayments and accrued income or other receivables where no amounts are past due
18 cash and cash equivalents
analysis of balances of cash and cash equivalents 
note
2011
£m
2010
£m
cash balances 416 647
bank overdrafts 19 11 14
cash and cash equivalents in the statement of cash flows 405 633
the group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in note 20 spectris plc annual report and accounts 2011 92
2111904   060312   proof 7
19 borrowings 
current
effective 
interest rate
earlier of
 repricing date
 or maturity date
2011 
£m
2010 
£m
bank loans – secured see below see below 16 03
bank overdrafts on demand 11 14
27 17
noncurrent
effective 
interest rate
earlier of
 repricing date
 or maturity date
2011 
£m
2010 
£m
bank loans – secured see below see below 03 19
bank loans – unsecured 178 14 aug 2016 2497 –
bank loans unsecured – 756m 312 10 sep 2015 486 483
unsecured loan notes – 2003 100m 608 15 oct 2013 644 639
unsecured loan notes – 2003 €25m 556 15 oct 2013 209 214
total unsecured borrowings 3836 1336
total noncurrent borrowings 3839 1355
at 31 december 2011 the group had available £1042m 2010 £800m of undrawn committed borrowing facilities in respect of which all 
conditions precedent had been met
secured bank loans 
bank loans are secured by fixed charges over property at three of the group’s subsidiaries of these £14m is denominated in chinese renminbi 
and is repayable by instalments until december 2012 with a fixed interest rate of 75 £04m is denominated in us dollars and is repayable by 
instalments until december 2014 with a variable interest rate of libor plus a small margin and £01m is denominated in euros and is repayable 
by instalments until december 2012 with a variable interest rate of libor plus a small margin
unsecured loan notes
the interest rates on the unsecured loan notes are those contracted on the underlying borrowings before taking into account any crosscurrency 
interest rate swaps and remain fixed until redemption on issue of the us100m loan notes in october 2003 the group entered into a cross
currency interest rate swap which has the effect of converting this us dollar borrowing into fixed interest eurodenominated debt the combined 
effect of the borrowing and swap arrangement results in euro debt of €905m with a fixed interest rate of 564 this interest rate remains fixed 
until redemption 
under adopted ifrs where crosscurrency interest rate swaps are used the value of the underlying us dollar borrowing is presented in this 
borrowings note and the value of the related crosscurrency interest rate swaps is presented separately within derivative financial instruments in 
note 20 for management purposes the value attributed to the portion of the swap arrangements that converts us dollar borrowings into euro 
borrowings is viewed as part of the group’s net debt as analysed below
analysis of net debt 
note
2011
£m
2010
£m
bank overdrafts 11 14
bank loans – secured 19 22
bank loans – unsecured 2983 483
unsecured loan notes 853 853
crosscurrency interest rate swaps – currency portion 20 112 137
total borrowings 3978 1509
cash balances 18 416 647
net debt 3562 862
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 93
20 financial instruments
fair value and carrying amount of financial instruments
2011 2010
carrying
amount
£m
fair
value
£m
carrying
amount
£m
fair
value
£m
trade and other receivables excluding prepayments 2085 2085 1844 1844
trade and other payables excluding deferred income 2152 2152 2090 2090
cash and cash equivalents 416 416 647 647
floating rate borrowings 2506 2506 18 18
fixed rate borrowings 1360 1437 1354 1450
forward exchange contracts 16 16 23 23
crosscurrency interest rate swaps 128 128 149 149
3661 3738 1097 1193
the fair value of floating rate borrowings approximates to the carrying value because interest rates are at floating rates where payments are reset 
to market rates at intervals of less than one year
the fair value of fixed rate borrowings and derivative financial instruments is estimated by discounting the future contracted cash flow using 
appropriate yield curves to the net present values
the fair value of forward exchange contracts outstanding as at 31 december 2011 is a net liability of £16m 2010 asset of £23m of which  
£17m has been debited to the hedging reserve 2010 £19m credit and £01m credited to the statement of income 2010 £04m credit these 
contracts mature over periods not exceeding 15 months a summary of the movements in the hedging reserve during the year is presented 
below there was no ineffectiveness arising with regards to cash flow hedges in either 2011 or 2010
analysis of movements in hedging reserve
2011
£m
2010
£m
at 1 january 02 05
amounts removed from statement of changes in equity and included in statement of income during the year 25 06
amounts recognised in statement of changes in equity during the year 09 09
at 31 december 36 02
the fair value of forward exchange contracts is determined using discounted cash flow techniques based on readily available market data and 
represents a level 2 measurement in the fair value hierarchy under ifrs 7
the amount included in the statement of income is split between revenue and administrative expenses depending on the nature of the hedged item
the following table shows the contractual forward exchange contracts hedging designated transactional exposures these contracts mature in 
the next 15 months therefore the cash flows and resulting effect on profit and loss are expected to occur within the next 15 months 
forward exchange contracts at 31 december 
2011 2010
foreign currency sale amount £m 1102 937
percentage of total
us dollar 34 24
euro 37 41
japanese yen 27 30
other 2 5 spectris plc annual report and accounts 2011 94
2111904   060312   proof 7
20 financial instruments continued
crosscurrency interest rate swaps
the value of the group’s crosscurrency interest rate swaps can effectively be split into two components a portion that is attributable to 
converting a 100m us dollardenominated borrowing liability into a eurodenominated borrowing liability the currency portion – the value of 
this portion changes as currency exchange rates change – and a portion that is attributable to converting fixed rate us dollar interest payments 
into fixed rate euro interest payments the interest portion – the value of this portion of the swap changes as us dollar variable interest rates 
euro variable interest rates and foreign currency exchange rates change
under adopted ifrs the underlying us dollar borrowings are required to be presented separately in the balance sheet from the crosscurrency 
interest rate swaps in addition the fair value of the crosscurrency interest rate swaps is required to be recognised in full on the balance sheet
the table below shows the movements in the total value of the crosscurrency interest rate swaps during the year and also how it is attributed to 
its currency and interest portions
fair value of crosscurrency interest rate swaps
currency 
portion
£m
interest 
portion
£m
total 
value
£m
as at 1 january 2010 185 26 211
change in fair value recognised in statement of comprehensive income 48  – 48
change in fair value recognised in statement of income  – 14 14
as at 31 december 2010 137 12 149
change in fair value recognised in statement of comprehensive income 25 – 25
change in fair value recognised in statement of income – 04 04
as at 31 december 2011 112 16 128
together with the group’s €25m borrowing this combination of the underlying us dollar borrowings and crosscurrency interest rate swap has 
been designated as a net investment hedge of the group’s net investment in its european businesses however the interest portion of the swap 
is ineffective in this hedging relationship accordingly the change in value of the currency portion of the swap is recognised together with the 
change in value of the underlying us dollar borrowings in the statement of comprehensive income and the change in value of the interest 
portion of the swap is recognised in the statement of income within financing costs the group’s us756m borrowings have been designated as 
a net investment hedge of the group’s net investment in its us businesses
the fair value of crosscurrency interest rate swaps is determined using discounted cash flow techniques based on readily available market data 
and represents a level 2 measurement in the fair value hierarchy under ifrs 7 the principal borrowing amounts match exactly with the related 
unsecured loan note borrowings as described in note 19 
the table below shows the maturity profile of the gross cash flows related to financial liabilities
maturity of financial liabilities
2011
bank loans and
 overdrafts
£m
secured 
bank loans
£m
unsecured 
loans 
£m
crosscurrency 
swap 
£m
total 
£m
due within one year 11 16 120 04 151
due between one and two years – 02 975 116 1093
due between two and five years – 01 3210 – 3211
11 19 4305 120 4455
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 95
20 financial instruments continued
maturity of financial liabilities
2010
bank loans and 
overdrafts
£m
secured 
bank loans
£m
unsecured 
loans
£m
crosscurrency 
swap
£m
total
£m
due within one year 14 03 66 05 88
due between one and two years – 17 66 05 88
due between two and five years – 03 1431 142 1576
14 23 1563 152 1752
trade and other payables note 21 are substantially due within one year
it is not expected that the cash flows described above could occur significantly earlier or at substantially different amounts
interest rate exposure of financial assets and liabilities by currency
financial assets financial liabilities 2011
fixed 
rate
£m
floating 
rate
£m
noninterest
 bearing
£m
total
£m
fixed 
rate
£m
floating 
rate
£m
total
£m
net financial 
assets
liabilities
£m
sterling – – 08 08 – – – 08
euro – 109 32 141 966 – 966 825
us dollar – 104 19 123 486 2506 2992 2869
japanese yen – 02 02 04 – – – 04
other 08 68 64 140 20 – 20 120
08 283 125 416 1472 2506 3978 3562
interest rate exposure of financial assets and liabilities by currency
financial assets financial liabilities 2010
fixed 
rate
£m
floating 
rate
£m
noninterest
 bearing
£m
total
£m
fixed 
rate
£m
floating 
rate
£m
total
£m
net 
financial 
assets
liabilities
£m
sterling – 388 02 390  –  –  – 390
euro 03 52 27 82 991 – 991 909
us dollar 04 38 02 44 483 13 496 452
japanese yen – 07 – 07  – 01 01 06
other 26 60 38 124 17 04 21 103
33 545 69 647 1491 18 1509 862
the above exposures are net of the crosscurrency interest rate swap spectris plc annual report and accounts 2011 96
2111904   060312   proof 7
20 financial instruments continued
sensitivity analysis 
at 31 december 2011 it is estimated that a general increase of one percentage point in interest rates would decrease the group’s profit before 
tax by approximately £22m 2010 increase of £05m
based on foreign exchange translational exposures for the year ended 31 december 2011 it is estimated that a ten percentage point weakening 
in the value of the us dollar against £ sterling would have decreased the group’s profit before tax by approximately £45m 2010 £22m a 
ten percentage point weakening in the value of the eurodanish krone against £ sterling would have decreased the group’s profit before tax 
by approximately £62m 2010 £29m and a ten percentage point weakening in the value of the swiss franc against £ sterling would have 
decreased the group’s profit before tax by approximately £22m 2010 £22m in addition a ten percentage point weakening in the value of the 
us dollar against £ sterling would have decreased the group’s net assets by approximately £488m and a ten percentage point weakening in the 
value of the euro against £ sterling would have decreased the group’s net assets by approximately £540m exposures to other currencies are not 
considered to have a material impact on net assets
21 trade and other payables
current 
2011
£m
2010
£m
trade payables 919 847
accruals 942 852
deferred income 236 204
other nontrade payables 179 218
2276 2121
noncurrent
other nontrade payables 112 173
the fair value of trade and other payables approximates to book value due to the shortterm maturities associated with these items 
the effect of discounting on noncurrent amounts is not material
22 provisions 
reorganisation
£m
product 
warranty
£m
legal
contractual 
and other
£m
total
£m
at 1 january 2011 14 84 136 234 
additional provision in the year 21 59 72 152 
acquired on acquisition – 04 05 09 
utilised during the year 08 37 14 59
released during the year 07 04 06 17
at 31 december 2011 20 106 193 319 
provisions are all presented as current liabilities
provisions are discounted to reflect the time value of money where the effect is significant generally only where it is anticipated that a liability 
will crystallise in more than one year
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 97
22 provisions continued
reorganisation 
reorganisation provisions relate to committed restructuring plans in place within the business and represent the directors’ best estimate of the 
cost to complete the restructuring costs are expected to be incurred within one year and there is little judgement in determining the amount
product warranty 
product warranty provisions reflect commitments made to customers on the sale of goods in the ordinary course of business and included within 
the group’s standard terms and conditions warranty commitments typically apply for a 12month period with the occasional extension up to 36 
months these extended warranties are not significant the provision represents the directors’ best estimate of the group’s liability based on past 
experience and barring significant unforeseen events there is little judgement involved in determining the amount 
legal contractual and other 
legal contractual and other comprises mainly amounts reserved against open legal and contractual disputes the company has on occasion 
been required to take legal or other actions to protect its intellectual property rights to enforce commercial contracts or otherwise and similarly 
to defend itself against proceedings brought by other parties provisions are made for the expected costs associated with such matters based 
on past experience of similar items and other known factors taking into account professional advice received and represent management’s best 
estimate of the likely outcome the timing of utilisation of these provisions is frequently uncertain reflecting the complexity of issues and the 
outcome of various court proceedings and negotiations contractual and other provisions represent the directors’ best estimate of the cost of 
settling future obligations although there is a higher degree of judgement involved unless specific evidence exists to the contrary these reserves 
are shown as current  
however no provision is made for proceedings which have been or might be brought by other parties against group companies unless 
management taking into account professional advice received assesses that it is more likely than not that such proceedings may be successful 
contingent liabilities associated with such proceedings have been identified but the directors are of the opinion that any associated claims that 
might be brought can be resisted successfully and therefore the possibility of any material outflow in settlement in excess of amounts provided is 
assessed as remote
23 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using the current corporate tax rate in the relevant local 
jurisdiction
the movement on the deferred tax account is shown below 
2011
£m
2010
£m
at 1 january 145 224
exchange adjustments 03 01
acquisition of subsidiary undertakings 349 57
deferred tax on changes in fair value of forward exchange contracts recognised in statement of comprehensive 
income 07 04
deferred tax on actuarial gains and losses on pension schemes recognised in statement of comprehensive income 08 04
deferred tax on sharebased payments recognised in equity 03 05
charged to statement of income in the year see note 10 66 18
at 31 december 129 145
comprising
deferred tax liabilities 335 39 
deferred tax assets 206 184
129 145 spectris plc annual report and accounts 2011 98
2111904   060312   proof 7
23 deferred tax continued
the movements in deferred tax assets and liabilities during the year are shown below deferred tax assets and liabilities are only offset where 
there is a legally enforceable right of offset and they relate to income taxes levied by the same taxation authority
net deferred tax assetsliabilities
accelerated tax 
depreciation
£m
accruals 
and 
provisions
£m
tax 
losses
£m
unrealised 
profit on 
inter
company
 transactions
£m
pension 
schemes
£m
goodwill 
and 
intangible 
assets
£m
other
£m
2011
total
£m
at 1 january 2011 24 143 26 63 35 133 13 145
exchange adjustments – 03 – – – – – 03
acquisition of subsidiary 
undertakings – – – – – 349 – 349
deferred tax on changes in 
fair value of forward exchange 
contracts recognised in statement 
of comprehensive income – – – – – – 07 07
deferred tax on actuarial loss 
on pension schemes recognised 
in statement of comprehensive 
income – – – – 08 – – 08
deferred tax on sharebased 
payments recognised in equity – – – – – – 03 03
chargedcredited to statement 
of income 42 107 16 13 03 03 10 66
at 31 december 2011 18 247 10 76 40 485 01 129
net deferred tax assetsliabilities
accelerated tax 
depreciation
£m
accruals 
and 
provisions
£m
tax 
losses
£m
unrealised 
profit on 
inter
company 
transactions
£m
pension 
schemes
£m
goodwill 
and 
intangible 
assets
£m
other
£m
2010
total
£m
at 1 january 2010 12 106 38 36 52 54 34 224
exchange adjustments – 01 – – – – – 01
acquisition of subsidiary 
undertakings – – – – – 57 – 57
deferred tax on changes in 
fair value of forward exchange 
contracts recognised in statement 
of comprehensive income – – – – – – 04 04
deferred tax on actuarial gain 
on pension schemes recognised 
in statement of comprehensive 
income – – – – 04 – – 04
deferred tax on sharebased 
payments recognised in equity – – – – – – 05 05
chargedcredited to statement 
of income 12 38 12 27 13 22 48 18
at 31 december 2010 24 143 26 63 35 133 13 145
notes to the accounts continued business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 99
23 deferred tax continued
unrecognised temporary differences
deferred tax assets have not been recognised on the following temporary differences due to the degree of uncertainty over both the amount and 
utilisation of the underlying tax losses and deductions in certain jurisdictions there is no expiry date associated with losses
2011
£m
2010
£m
tax losses 231 290
other temporary differences 90 96
321 386
the uk corporation tax rate was reduced to 26 with effect from 1 april 2011 and a further reduction to 25 will take effect from 1 april 
2012 being substantively enacted on 5 july 2011 these rate reductions have had no material impact on the financial statements as at  
31 december 2011 
a further phased reduction in the uk tax rate to 23 is planned but has not yet been substantively enacted no account will be taken of the 
expected further rate reduction until substantive enactment of these changes however for indicative purposes only had the uk main corporate 
tax rate been reduced to 23 the net impact on recognised deferred tax assets and liabilities at 31 december 2011 would not have been 
material
it is likely that the unremitted earnings of overseas subsidiaries would qualify for the uk dividend exemption such that no uk tax would be due 
upon remitting these earnings to the uk however £349m 2010 £225m of those earnings may still result in a tax liability principally as a 
result of the dividend withholding taxes levied by the overseas tax jurisdictions in which those subsidiaries operate these tax liabilities are not 
expected to exceed £18m 2010 £12m of which only £03m has been provided as the group is able to control the timing of the dividends it is 
not expected that further amounts will crystallise in the foreseeable future
24 share capital and reserves 
2011 2010
number of 
shares 
millions
 
£m
number of 
shares 
millions
 
£m
authorised
ordinary shares of 5p each 2100 105 2100 105
issued and fully paid
at 1 january 1250 62 1250 62
at 31 december 1250 62 1250 62
the group has one class of ordinary voting shares which carry no right to fixed income
other reserves 
movements in reserves are set out in the consolidated statement of changes in equity the retained earnings reserve also includes own shares 
purchased by the company and treated as treasury shares see note 27 the nature and purpose of other reserves forming part of equity are as 
follows
translation reserve 
the foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign 
subsidiaries including gains or losses arising on net investment hedges
hedging reserve 
this reserve records the cumulative net change in the fair value of forward exchange contracts where they are designated as effective cash flow 
hedge relationships 
merger reserve 
this reserve arose on the acquisition of servomex limited in 1999 a purchase satisfied substantially by the issue of share capital and therefore 
eligible for merger relief under the provisions of section 612 of the companies act 2006
capital redemption reserve 
this reserve records the historical repurchase of the group’s own shares spectris plc annual report and accounts 2011 100
2111904   060312   proof 7
25 sharebased payments
under the save as you earn share option scheme equity shares are issued following a vesting period of three years options may be exercised 
during a sixmonth period following the vesting date and exercise prices are determined according to the midmarket closing share price 
prevailing on the day before the date of grant there are no performance criteria associated with options granted under the save as you earn 
share option scheme
the executive share option scheme and the save as you earn share option scheme were set up in order to provide executives and selected 
employees with options to purchase ordinary shares in the company under the executive share option scheme exercise prices are determined 
according to the midmarket closing share price prevailing on the day before the date of grant share options granted under the executive share 
option scheme are also subject to performance criteria being the fulfilment of earnings growth targets options vest after a period of three 
years and have a maximum term of ten years 
under the performance share plan unapproved share options as defined by hmrc the exercise price is the nominal cost of the company’s shares 
awards to spectris plc executives and senior managers are subject to performance criteria 50 of the award being based on fulfilment of an 
adjusted earnings growth target eps and 50 subject to a total shareholder return target tsr awards made to executives and senior managers 
of the group’s operating companies in 2008 and 2009 have performance criteria subject to eps in respect of 50 of the award and operating 
company profit targets in respect of 50 of the award for awards made in 2010 and 2011 the performance criteria are eps in respect of 3333 
of the award and operating company profit targets in respect of 6667 of the award operating company manager awards are entirely subject to 
operating company profit targets awards vest after a period of three years and must be exercised during the sevenyear period following vesting
during 2011 performance share plan options were granted that were approved share options as defined by hmrc the performance criteria and 
vesting conditions are consistent with the unapproved options granted described above
share options outstanding at the end of the year 
saye – year of grant
2011 2010
exercise price
£
exercise 
year
number
thousands
number
thousands
2007 837 2011 – 7
2008 766 2012 8 35
2009 723 2013 49 51
2010 1019 2014 18 19
2011 1381 2015 33 –
108 112
executive share option scheme – year of grant
2011 2010
exercise price
£
exercise 
period
number
thousands
number
thousands
2001 358–499 2004–2011 – 60
2004 406–462 2007–2014 5 7
2005 589 2008–2015 5 5
10 72
performance share plan unapproved – year of grant
2011 2010
exercise price
£
exercise 
period
number
thousands
number
thousands
2007 005 2010–2017 10 23
2008 005 2011–2018 198 709
2009 005 2012–2019 1348 1391
2010 005 2013–2020 897 943
2011 005 2014–2021 657 –
3110 3066
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 101
25 sharebased payments continued
performance share plan approved – year of grant
2011 2010
exercise price
£
exercise 
period
number
thousands
number
thousands
2011 1130 20142021 7 –
movements in the year
saye
2011 2010
number 
thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
number
 thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
at 1 january 112 795 09 133 752 10
granted 33 1381 05 19 1019 02
exercised 33 777 03 32 766 02
lapsed 4 858 – 8 712 01
at 31 december 108 977 11 112 795 09
exercisable at 31 december 8 766 006 7 837 003
executive share option scheme
2011 2010
number 
thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
number
 thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
at 1 january 72 392 028 396 517 21
exercised 61 375 023 299 549 17
lapsed 1 375 – 25 504 01
at 31 december 10 498 005 72 392 03
exercisable at 31 december 10 498 005 72 392 03
performance share plan unapproved
2011 2010
number 
thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
number
 thousands
weighted 
average 
exercise price 
£
value of 
shares 
£m
at 1 january 3066 005 015 2694 005 014
shares granted 657  005  003 972 005 005
addition of reinvested dividends 55  005  – 17 005  –
exercised 346 005 002 89 005 001
lapsed 322 005 001 528 005 003
at 31 december 3110 005 015 3066 005 015
exercisable at 31 december 208 005 001 23 005  – spectris plc annual report and accounts 2011 102
2111904   060312   proof 7
25 sharebased payments continued
sharebased payment expense 
share options are valued using a stochastic option pricing model with support from an independent remuneration consultant the tsr 
performance condition was included in the calculation of fair value under the performance share plan for options granted in 2011 and 2010 
the fair value of options granted and the assumptions used in the calculation are as follows
saye
performance share plan
unapproved
2011 2010 2011 2010
weighted average share price pence 1039 1075 1391 815
weighted average exercise price pence 1381 1019 5 5
expected volatility 421 412 410 416
expected life 325 yrs 325 yrs 3 yrs 3 yrs
riskfree rate 09 11 18 31
expected dividends expressed as a yield 28 23 0–23 0–19
fair value per option pence 157 264 – –
weighted average fair values at date of grant pence 
equitysettled tsr condition 925 564
equitysettled profit condition 1392 810
equitysettled eps condition 1382 810
cashsettled profit condition 1337 779
cashsettled eps condition 1337 779
weighted average fair values at 31 december pence
cashsettled profit condition 1219 1253
cashsettled eps condition 1219 1253
the assumptions used for the performance share plan approved are as follows grant date share price 1039p grant date exercise price 1130p 
expected volatility 42 riskfree rate 08 and expected dividends expressed as a yield 28 the fair values at the date of grant were 183p 
224p and 224p for the tsr profit and eps conditions respectively 
the expected volatility is based on historical volatility over the expected term the expected life is the average expected period to exercise the 
riskfree rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed option life 
the group recognised a total charge of £73m 2010 £73m in the statement of income of which £64m 2010 £66m related to equitysettled 
sharebased payment transactions 
26 disposal of business
on 1 january 2011 the group divested a sales operation in the netherlands for a profit of £01m the total consideration was £01m net of 
transaction costs 
the group did not divest any businesses during 2010 
27 treasury shares
at 31 december 2011 the group held 8634064 treasury shares 2010 9073760 439696 of these shares were issued to satisfy options 
exercised by employees which were granted under the group’s share schemes 2010 419815 no shares were repurchased by the group during 
the year 2010 nil and no shares were cancelled during the year 2010 nil
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 103
28 acquisitions 
on 10 august 2011 the group acquired 100 of the share capital of irm group a company based in belgium which extends the group’s 
capabilities in measuring systems for the metals industry for a consideration of £109m £67m net of cash acquired the excess of the fair value  
of the consideration paid over the fair value of the net assets acquired is represented by the following intangible assets customerrelated mainly  
the benefits arising from the installed product base technology contractual rights and goodwill of £17m £10m £01m and £31m respectively 
the goodwill arising is considered to represent the value of the acquired workforce and related knowhow and the ability to exploit spectris’ 
knowhow to further develop irm’s product offering and to expand irm’s routes to market this business has been integrated into the inline 
instrumentation segment
on 30 september 2011 the group acquired 100 of the share capital of omega engineering a company based in the usa which broadens 
spectris’ range of process measurement and control instrumentation to customers in the industrial and academic markets for a total 
consideration of £3106m £2971m net of cash acquired including £30m deferred consideration and an expected working capital adjustment 
receivable from the seller of £71m the excess of the fair value of the consideration paid over the fair value of the net assets acquired is 
represented by the following intangible assets customerrelated order backlog contractual rights including supplier contracts and marketing
related trade names omega and related brands technology and goodwill of £06m £30m £633m £287m and £1741m respectively the 
company sells a wide range of products to a large customer base of principally engineers across a broad group of industries the customer base 
has been developed through focused marketing and excellence in order fulfilment which has created a high degree of brand awareness and 
customer loyalty it is this brand loyalty together with the product base rather than longterm customer supply agreements that represents 
the source of customer orders accordingly the principal intangible assets identified are the omega and related trade names which have strong 
profile and recognition particularly in north america the goodwill arising is considered to represent the value of the acquired workforce and 
related knowhow and the benefits that will accrue as the company exploits spectris’ global presence and knowledge of international markets to 
expand omega’s routes to market outside of north america this business has been integrated into the industrial controls segment
on 5 october 2011 the group acquired 100 of the share capital of sixnet a company based in the usa which extends the group’s capabilities 
in industrial networking products for a total consideration of £474m £465m net of cash acquired including £04m deferred consideration 
the excess of the fair value of the consideration paid over the fair value of the net assets acquired is represented by the following intangible 
assets customerrelated order book and customer relationships technology other intangibles and goodwill of £169m £64m £01m and 
£186m respectively the goodwill arising is considered to represent the value of the acquired workforce and related knowhow and the ability 
to use spectris’ sales and distribution channels to expand sixnet’s routes to markets both geographic and industry where it currently makes 
limited sales this business has been integrated into the industrial controls segment
on 20 october 2011 the group acquired certain of the trade and assets of a company based in finland which extends the group’s capabilities 
in critical detector technology for a total consideration of £81m including £10m contingent on the future performance of the business 
no goodwill arose on the acquisition with the excess of the fair value of the consideration paid over the fair value of the net assets acquired 
represented by technologybased intangibles of £76m this business has been integrated into the materials analysis segment
the assets and liabilities acquired as a result of the above transactions together with the aggregate purchase consideration are summarised 
below the revenue and operating profit contribution from the acquisitions in the year to the group’s results for the year were £363m and  
£75m respectively group revenue and operating profit would have been £12182m and £1894m adjusted operating profit £2268m 
respectively had each of these acquisitions taken place on the first day of the year
on acquisitions prior to 1 january 2010 the deferred and contingent consideration has been revised to reflect the increased earnout payments 
amounting to £07m that were not accrued at 31 december 2010 and the decreased earn out payments amounting to £30m that were accrued 
at 31 december 2010 but are now not required with a corresponding decrease to goodwill of £17m the balance of £13m would have created 
a credit balance in goodwill and has thus been credited to the statement of income in line with ifrs 3 2004 the group also paid £72m in 
respect of prior years’ acquisitions which had been accrued as deferred or contingent consideration at 31 december 2010
acquisitionrelated costs of £31m have been recognised in the statement of income under ifrs 3 revised and included within administrative 
expenses
acquisitionrelated costs and the credit arising on the reduction in deferred and contingent consideration have been excluded from the adjusted 
operating profit see note 3 spectris plc annual report and accounts 2011 104
2111904   060312   proof 7
28 acquisitions continued 
the following fair value tables are provisional reflecting the timing of the acquisitions and are expected to be finalised within 12 months of the 
acquisition date
net assets acquired under 2011 acquisitions 
2011 
book value 
£m
adjustments 
£m
fair value 
£m
intangible fixed assets 02 1294 1296
tangible fixed assets 140 192 332
deferred tax asset 18 16 02
inventories 305 16 289
trade and other receivables 203 02 201
trade and other payables 124 11 135
provisions 12 04 08
deferred tax liabilities – 351 351
cash 186 – 186
net assets acquired 718 1094 1812
goodwill 1958
total consideration in respect of 2011 acquisitions 3770
analysis of cash outflow in consolidated cash flow statement
total consideration in respect of 2011 acquisitions 3770
adjustment for cash acquired on 2011 acquisitions 186
deferred and contingent consideration on 2011 acquisitions to be paid in future years 44
working capital adjustment receivable in future years 71
cash paid in 2011 in respect of 2011 acquisitions 3611
prior year acquisitions
purchase price adjustment re prior year acquisition 07
deferred and contingent consideration in relation to prior years’ acquisitions 
– accrued at 31 december 2010 72
cash paid in 2011 in respect of prior years’ acquisitions 79
net cash outflow relating to acquisitions 3690
 an additional purchase price of £07m in relation to prior period acquisitions has been paid during the year based on updated expectations
due to their contractual due dates the fair value of receivables acquired shown above approximates the gross contractual amounts receivable 
the amount of gross contractual receivables not expected to be recovered is immaterial 
there are no material contingent liabilities recognised in accordance with paragraph 23 of ifrs 3 revised                
£390m of the goodwill arising on acquisitions in the year is expected to be amortised and deductible for tax purposes
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 105
28 acquisitions continued 
net assets acquired for significant 2011 acquisitions 
2011 
net assets acquired for omega engineering
book value 
£m
adjustments 
£m
fair value 
£m
intangible fixed assets – 956 956
tangible fixed assets 114 189 303
deferred tax asset 13 11 02
inventories 249 17 232
trade and other receivables 144 01 143
trade and other payables 66 05 71
provisions – 05 05
deferred tax liabilities – 330 330
cash 135 – 135
net assets acquired 589 776 1365
goodwill 1741
total consideration 3106
adjustment for cash acquired 135
net consideration 2971
the fair values of the intangible and tangible assets have been determined on the following basis 
•	 intangible assets – an independent valuation 
•	 tangible assets – by management based on current market prices
2011
net assets acquired for sixnet
book value 
£m
adjustments 
£m
fair value 
£m
intangible fixed assets 02 234 236
tangible fixed assets 15 01 14
deferred tax asset 05 05 –
inventories 31 01 32
trade and other receivables 42 01 41
trade and other payables 35 – 35
provisions 01 – 01
deferred tax liabilities – 08 08
cash 09 – 09
net assets acquired 68 220 288
goodwill 186
total consideration 474
adjustment for cash acquired 09
net consideration 465 spectris plc annual report and accounts 2011 106
2111904   060312   proof 7
28 acquisitions continued 
the following table presents the information related to 2010 acquisitions reflected in the comparative figures
net assets acquired under 2010 acquisitions
2010
book value 
£m
adjustments 
£m
fair value 
£m
intangible fixed assets 01 365 366
tangible fixed assets 05 01 04
inventories 41 02 39
trade and other receivables 45 – 45
trade and other payables 17 – 17
provisions 01 – 01
deferred tax liabilities – 57 57
cash 08 – 08
net assets acquired 82 305 387
goodwill 243
total consideration in respect of 2010 acquisitions 630
analysis of cash outflow in consolidated cash flow statement
total consideration in respect of 2010 acquisitions 630
adjustment for cash acquired on 2010 acquisitions 08
deferred and contingent consideration on 2010 acquisitions to be paid in future years 41
cash paid in 2010 in respect of 2010 acquisitions 581
prior year acquisitions
purchase price adjustment re prior year acquisition 83
deferred and contingent consideration in relation to prior year acquisitions
– accrued at 31 december 2009 45
– accrued during 2010 but not paid at 31 december 2010 83
cash paid in 2010 in respect of prior year acquisitions 45
net cash outflow relating to acquisitions 626
 an additional purchase price of £83m in relation to prior year acquisitions was accrued but not paid during 2010 based on updated 
expectations of the amounts to be paid under contingent consideration arrangements
 
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 107
28 acquisitions continued 
net assets acquired for significant 2010 acquisitions 
2010 
net assets acquired for ntron
book value 
£m
adjustments 
£m
fair value 
£m
intangible fixed assets 01 136 137
tangible fixed assets 01 – 01
inventories 15 03 18
trade and other receivables 18 – 18
trade and other payables 12 – 12
net assets acquired 23 139 162
goodwill 167
total consideration 329
adjustment for cash acquired –
net consideration 329
29 contingent liabilities
royal bank of scotland 
spectris plc and its uk subsidiaries are party to a cross guarantee arrangement to support trade finance facilities provided by the bank they are 
also party to a cross guarantee arrangement that allows individual subsidiaries to borrow from the bank on overdraft within the overall borrowing 
limit agreed with the bank spectris plc has provided a parent company guarantee to support trade finance facilities provided by the bank to its 
subsidiaries in various countries outside of the uk and usa spectris plc has also provided a parent company guarantee to support overdraft and 
intraday facilities provided by the bank to its subsidiaries who participate in the crossborder euro zero balance pooling arrangement an amount 
of £153m 2010 £112m was outstanding at 31 december 2011
jp morgan chase na 
spectris plc has provided a parent company guarantee to jp morgan chase na to support trade finance facilities provided by the bank to its 
subsidiaries in the usa an amount of £09m 2010 £14m was outstanding at 31 december 2011
other banks 
group companies have in the normal course of business provided bonds and guarantees through local banking arrangements amounting to  
£90m 2010 £85m
legal 
refer to note 22 ‘provisions’
30 operating lease arrangements  
total commitments under noncancellable operating leases
2011 2010
property
£m
other
£m
property
£m
other
£m
not later than one year 96  34 59 29 
later than one year and not later than five years 264  62 143 54 
later than five years 56 – 53 –
 416  96 255 83 
group companies are party to a number of operating leases mainly for plant and machinery including motor vehicles and property rentals the 
arrangements do not impose any significant restrictions on the group
during the year £108m 2010 £106m was recognised in the statement of income in respect of operating lease rental payments   spectris plc annual report and accounts 2011 108
2111904   060312   proof 7
31 capital commitments
at 31 december 2011 the group had entered into contractual commitments for the acquisition of property plant and equipment and software 
amounting to £31m 2010 £20m which have not been provided for  
32 related party transactions
details of directors’ remuneration being the key management personnel are summarised in note 7 and shown in detail in the directors’ 
remuneration report on page 52 there were no other related party transactions requiring disclosure
33 subsidiary undertakings
the following are the group’s principal subsidiary undertakings they operate mainly in the countries of incorporation all the subsidiaries are 
involved in the manufacture and sale of materials analysis systems test and measurement equipment inline instrumentation and industrial 
controls
spectris plc holds 100 of the ordinary share capital of all the subsidiaries either directly or indirectly through intermediate holding companies
country of 
incorporation
brüel  kjær vts limited formerly lds test and measurement limited uk
malvern instruments limited uk
servomex group limited uk
brüel  kjær ems pty ltd formerly lochard limited australia
spectris china limited china
brüel  kjær sound  vibration measurement as denmark
brüel  kjær vibro as denmark
hottinger baldwin messtechnik gmbh germany
spectris company limited japan
btg eclépens sa switzerland
panalytical bv the netherlands
beta lasermike inc usa
fusion uv systems inc usa
microscan systems inc usa
ndc infrared engineering inc usa
omega engineering inc usa
particle measuring systems inc usa
red lion controls inc usa
sixnet holdings llc usa
notes to the accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 109
note
2011
£m
2010
£m
fixed assets
intangible fixed assets 36 11 16
tangible fixed assets 37 21 02
fixed asset investments 38 2514 2471
2546 2489
current assets
debtors 39 4989 3982
cash at bank 53 351
5042 4333
creditors due within one year
other creditors 40 1307 1790
1307 1790
net current assets 3735 2543
debtors due after more than one year
debtors 41 3073 1706
total assets less current liabilities 9354 6738
creditors due after more than one year
medium and longterm borrowings 42 4294 1687
derivative financial instruments 43 128 150
4422 1837
provisions for liabilities and charges 44 27 27
net assets 4905 4874
capital and reserves
called up share capital 45 62 62
share premium account 46 2314 2314
merger reserve 46 31 31
capital redemption reserve 46 03 03
special reserve 46 341 341
profit and loss account 46 2154 2123
equity shareholders’ funds 4905 4874
the financial statements on pages 109 to 116 were approved by the board of directors on 17 february 2012 and were signed on its behalf by
clive watson 
director company registration no 02025003
company balance sheet
as at 31 december 2011  spectris plc annual report and accounts 2011 110
2111904   060312   proof 7
34 accounting policies
the separate financial statements of the company are presented as required by the companies act 2006 as permitted by that act the separate 
financial statements have been prepared in accordance with applicable accounting standards in the united kingdom in accordance with the 
exemption provided by section 408 of the companies act 2006 the company has not presented its own profit and loss account
the company has taken the exemption available in respect of the requirements of frs 29 financial instruments disclosures
basis of accounting
the accounts are prepared on the historical cost basis except that derivative financial instruments are stated at fair value as described below
derivative financial instruments
the company uses derivative financial instruments to hedge the group’s exposure to foreign exchange and interest rate risks arising from 
operating and financing activities in accordance with its treasury policy it does not hold or use derivative financial instruments for trading or 
speculative purposes
crosscurrency interest rate swaps
the company takes advantage of crosscurrency interest rate swaps for some of its us dollardenominated private placement borrowings the 
swaps have the effect of converting fixed rate us dollar borrowings into fixed rate eurodenominated borrowings 
the underlying us dollar borrowings are required to be presented separately in the balance sheet from the crosscurrency interest rate swaps in 
addition the fair value of the crosscurrency interest rate swap is required to be recognised in full on the balance sheet all changes in value are 
recognised in the profit and loss account
financial guarantees
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group the company 
considers these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee contract as a 
contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee
foreign currencies
transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date with any exchange differences 
arising on retranslation being recognised in the profit and loss account nonmonetary assets and liabilities that are measured in terms of 
historical cost in a foreign currency are translated using the exchange rate at the date of the transaction
tangible fixed assets and depreciation
tangible fixed assets are stated at historic cost 
depreciation is calculated to write off the difference between the cost or valuation of fixed assets and their residual value over their estimated 
useful lives on a straightline basis land is not depreciated estimated useful lives are as follows
freehold property — 20 to 40 years 
leasehold improvements — over the period of the lease 
office equipment — 3 to 5 years
intangible fixed assets and amortisation
intangible fixed assets purchased by the company are capitalised at their cost 
amortisation of intangible assets is charged to administrative expenses in the profit and loss account on a straightline basis over the estimated 
useful lives of intangible assets the estimated useful lives are as follows
software — 3 to 5 years
fixed asset investments
investments in subsidiaries are stated at cost less where appropriate provisions for impairment
trade and other receivables
trade and other receivables are initially recognised at fair value and subsequently measured at their amortised cost reduced by appropriate 
allowances for estimated irrecoverable amounts
trade and other payables
trade and other payables are initially recognised at fair value and are subsequently measured at amortised cost
notes to the company’s accounts  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 111
34 accounting policies continued
taxation
the charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between 
the treatment of certain items for taxation and accounting purposes deferred tax is recognised without discounting in respect of all timing 
differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance 
sheet date except as otherwise required by frs 19
leasing
annual payments under operating leases are charged to the profit and loss account on an accruals basis
postretirement benefits
the company participates in group operated defined contribution and defined benefit pension schemes the assets of the schemes are held 
separately from those of the company in independently administered funds the company is unable to identify its share of the group defined 
benefit scheme’s underlying assets and liabilities and therefore accounts for it as a defined contribution scheme the amounts charged against 
profits represent contributions payable to the schemes in respect of the accounting period
sharebased payments
the fair value of the options granted is measured using an option pricing model taking into account the terms and conditions upon which the 
options were granted the amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service 
and nonmarket vesting conditions are expected to be met such that the amount ultimately recognised as an expense is based on the number 
of awards that do meet the related service and nonmarket performance conditions at the vesting date for sharebased payment awards with 
nonvesting conditions the grant date fair value of the sharebased payment is measured to reflect such conditions and there is no trueup for 
differences between expected and actual outcomes
where the company grants options over its own shares to the employees of its subsidiaries it recognises an increase in the cost of investment 
in its subsidiaries equivalent to the equitysettled sharebased payment charge recognised in its subsidiary’s financial statements with the 
corresponding credit being recognised directly in equity in cases where a subsidiary is recharged for the sharebased payment expense no such 
increase in investment is recognised
cash flow statement
the company has not presented a separate cash flow statement in accordance with the exemption provided by frs 1 revised as its cash flows 
are included within the cash flows of the group as set out elsewhere in this annual report 
35 employee costs and other information
employee costs including directors’ remuneration 
2011
£m
2010
£m
wages and salaries 61 47
social security costs 20 18
defined benefit pension plans 16 35
defined contribution pension plans 03 04
sharebased payment expense 17 19
117 123
2011
number
2010
number
average number of employees 33 29
directors’ remuneration 
further details of directors’ remuneration and share options are given in note 7 to the group’s consolidated financial statements and in the 
directors’ remuneration report on pages 52 to 54
auditor’s fees 
details regarding the remuneration of the company’s auditor are included in note 6 to the group’s consolidated financial statements under “fees 
payable to the company’s auditor for the audit of the group’s annual accounts” spectris plc annual report and accounts 2011 112
2111904   060312   proof 7
36 intangible fixed assets
cost
software 
costs
£m
at 1 january 2011 28
additions 01
at 31 december 2011 29
amortisation
at 1 january 2011 12
charge for the year 06
at 31 december 2011 18
net book value
at 31 december 2011 11
at 31 december 2010 16
37 tangible fixed assets
cost
freehold
property
£m
leasehold 
improvements
£m
office
equipment
£m
total
£m
at 1 january 2011 – 05 06 11
additions 19 – – 19
at 31 december 2011 19 05 06 30
depreciation
at 1 january 2011 – 04 05 09
at 31 december 2011 – 04 05 09
net book value
at 31 december 2011 19 01 01 21
at 31 december 2010 – 01 01 02
the company purchased a freehold property during in the year for use as the group’s headquarters the building is currently undergoing 
refurbishment therefore no depreciation has been charged for the year
notes to the company’s accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 113
38 fixed asset investments 
cost
investments
 in subsidiary
 undertakings
£m
at 1 january 2011 3167
additions 382
disposals 339
at 31 december 2011 3210
provision for impairment
at 1 january 2011 696
at 31 december 2011 696
net book value
at 31 december 2011 2514
at 1 january 2011 2471
during the year spectris group holdings limited a whollyowned subsidiary bought back 33874203 ordinary shares of £1 each pursuant to 
and in accordance with the provisions of section 6942 of the companies act 2006 at par value on the same date spectris group holdings 
limited issued 40140931 redeemable ordinary shares of €1 each for a consideration of £339m included in the additions above
further details regarding the investments in subsidiaries are given in note 33 to the group’s consolidated financial statements
39 debtors
amounts falling due within one year 
2011
£m
2010
£m
amounts owed by group undertakings 4931 3944
other debtors 03 05
prepayments and accrued income 26 07
corporation tax 12 10
deferred tax asset 15 16
derivative financial instrument 02 –
4989 3982
derivative financial instrument assets represent the value of forward exchange contracts at the year end further details regarding the company’s 
forward exchange contracts are set out in note 20 of the group’s consolidated financial statements
40 creditors due within one year
2011
£m
2010
£m
amounts owed to group undertakings 1222 1729
other taxation and social security – 02
accruals and deferred income 85 59
1307 1790
further details regarding the company’s borrowings are set out in note 19 of the group’s consolidated financial statements spectris plc annual report and accounts 2011 114
2111904   060312   proof 7
41 debtors due after more than one year
2011
£m
2010
£m
medium and longterm debtors
amounts owed by group undertakings 3073 1706
42 creditors due after more than one year
2011
£m
2010
£m
medium and longterm borrowings
amounts owed to group undertakings 459 351
unsecured bank loans 2983 483
unsecured loan notes 852 853
4294 1687
further details regarding the company’s borrowings are set out in note 19 of the group’s consolidated financial statements
43 derivative financial instruments
2011
£m
2010
£m
crosscurrency interest rate swaps 128 149
forward exchange contracts – 01
128 150
further details regarding the company’s crosscurrency interest rate swaps and forward exchange contracts are set out in note 20 of the group’s 
consolidated financial statements
44 provisions for liabilities and charges
£m
at 1 january 2011 27
utilised during the year 01
charged during the year 01
at 31 december 2011 27
provisions represent the directors’ best estimate of settling various potential claims against the company arising in the ordinary course of business
notes to the company’s accounts continued  business review governance financial statements
2111904   060312   proof 7
spectris plc annual report and accounts 2011 115
45 share capital  
2011 2010
number of
 shares 
million £m
number of
 shares 
million £m
authorised
ordinary shares of 5p each 2100 105 2100 105
issued and fully paid
at 1 january 1250 62 1250 62
at 31 december 1250 62 1250 62
no ordinary shares were issued upon exercise under share option schemes 2010 nil
share options have been granted to subscribe for ordinary shares of spectris plc full details of share options currently in issue including those 
issued during the year together with information regarding the basis of calculation of the sharebased payment expense is contained in note 25 
to the group’s consolidated financial statements
the company recognised total expenses of £17m related to equitysettled sharebased payment transactions in 2011 2010 £19m in addition 
the company recognised a charge of £47m 2010 £47m related to equitysettled sharebased transactions for certain employees of other 
group companies
46 reserves
share
premium
account
£m
merger
reserve
£m
capital
redemption
reserve
£m
special
reserve
£m
profit and 
loss
account
£m
total
£m
at 1 january 2011 2314 31 03 341 2123 4812
profit for the year – – – – 300 300
equity dividends paid – – – – 338 338
sharebased payments – – – – 64 64
share options exercised from own 
shares treasury purchased – – – – 05 05
at 31 december 2011 2314 31 03 341 2154 4843
the purpose of the merger reserve and capital redemption reserve is detailed in note 24 of the group’s consolidated financial statements  
the special reserve was created historically following the cancellation of an amount of share premium for the purpose of writing off goodwill 
the special reserve is not distributable spectris plc annual report and accounts 2011 116
2111904   060312   proof 7
47 reconciliation of movement in equity shareholders’ funds
2011
£m
2010
£m
profit for the year 300 477
equity dividends paid in the year 338 289
sharebased payments 64 66
share options exercised from own shares treasury purchased 05 19
net increase in equity shareholders’ funds 31 273
opening equity shareholders’ funds 4874 4601
closing equity shareholders’ funds 4905 4874
48 pensions
the company operates the spectris pension plan a uk defined benefit pension plan that is closed to new members further details of the 
spectris pension plan are contained in note 8 to the group’s consolidated financial statements the company is unable to identify its share of the 
plan’s underlying assets and liabilities and therefore accounts for the plan as a defined contribution scheme in accordance with the schedule of 
contributions in place for the spectris pension plan for the financial year ending 31 december 2011 employer contributions were £16m per 
annum the actuary certified in 2010 that this level of contribution was adequate for the purposes of securing the statutory funding objective 
no additional contribution was made during the year 2010 £19m towards the spectris pension plan contributions paid in the year to the 
spectris pension plan were £16m 2010 £35m and the amounts outstanding at the year end were £01m 2010 £01m contributions paid in 
the year to defined contribution plans were £03m 2010 £04m the company has undertaken an enhanced transfer value exercise for certain 
uk deferred members with a prospective pension entitlement of less than £1000 per annum the total estimated cost for this exercise for the 
year ended 31 december 2011 is expected to be £05m
49 related party disclosures
the company has taken advantage of the exemption under frs 8 related party disclosures not to disclose related party transactions between 
the company and whollyowned subsidiaries
there are no material transactions with directors and other related parties of the company except those relating to remuneration and share 
dealing disclosed in the directors’ remuneration report enclosed within this annual report
50 commitments
annual commitments for operating leases expiring
land and buildings
2011
£m
2010
£m
between one and two years 02 –
between two and five years – 02
at the balance sheet date the company had capital commitments of £12m in respect of the refurbishment of freehold property for which 
provision has not been made 2010 £nil
51 contingent liabilities
there are no contingent liabilities as at the year end the cross guarantee arrangements to support trade finance facilities are stated in note 29 of 
the group’s consolidated financial statements
 
notes to the company’s accounts continued  2111904   060312   proof 7
shareholder information
financial calendar
annual general meeting and interim  
management statement 20 april 2012
record date for 2011 final dividend 1 june 2012 
2011 final dividend payable 26 june 2012 
2012 interim results 27 july 2012 
interim management statement 19 october 2012 
2012 preliminary results february 2013  
company secretary
r j stephens fcis
registered office
spectris plc
station road
egham
surrey
tw20 9np
england
tel 44 01784 470470
email infospectriscom
company registered in england no 2025003
auditors
kpmg audit plc
bankers
royal bank of scotland plc
solicitors
macfarlanes llp
brokers
jefferies hoare govett 
j p morgan cazenove
financial pr advisers
fti consulting
registrars
equiniti limited
aspect house
spencer road
lancing
west sussex
bn99 6da
the registrars provide a range of shareholder services online at
wwwshareviewcouk
share price information
the company’s ordinary shares are listed on the london stock
exchange the latest share price is available via the company’s
website at wwwspectriscom
email news service
to receive details of press releases and other announcements
as they are issued register with the email alert service on the
company’s website at wwwspectriscom
photography
board photography by ross vincent
hydroptère image on front cover and page 23 by guilain grenier
xiaowan hydroelectric power station on page 25 by chen haining
xinhua presscorbis
‘spectris’ is a trademark of spectris plc and is protected by registration  
in the united kingdom and other jurisdictions other product names 
referred to in this annual report are registered or unregistered 
trademarks or registered names of spectris plc or its subsidiary 
companies and are similarly protected
this report is printed on revive 50 white silk a 
recycled paper containing 50 recycled waste and 
50 virgin fibre which is manufactured at a mill 
certified to the iso 14001 environmental standard 
the pulp used in this product is bleached using an 
elemental chlorine free process
© spectris plc march 2012 
designed and printed by jones and palmer
spectris plc annual report and accounts 2011 117 2111904   060312   proof 7
spectris plc
station road
egham
surrey
tw20 9np
england
t 44 01784 470470
f 44 01784 470848
infospectriscom
wwwspectriscom
spectris plc annual report and accounts 2011


Summary:
 spectris plc annual report and accounts 2011 16
2111904   070312   proof 8
chairman’s statement
dear shareholder
spectris saw strong trading in 2011 with sales and 
operating profit at record levels building on the 
momentum generated over the past few years as 
investment in new products acquisitions and regional 
expansion has continued to drive our business 
growth our acquisition initiatives also continued 
with the addition of the omega engineering business 
being a particular highlight this adds a significant 
strategic growth platform for our industrial controls 
segment 
reported sales increased by 23 to £11062 million 
2010 £9019 million and adjusted operating profit 
grew by 42 to £2015 million 2010 £1421 
million acquisitions contributed 7 to sales and 
currency had a positive impact of 1 thus on a 
constant currency organic likeforlike basis sales 
grew by 15 on a proforma basis had each of the 
four acquisitions taken place on the first day of the 
year sales would have been £12182 million
operating margins increased by 24 percentage 
points to 182 profit before tax increased by 45 
to £1916 million 2010 £1323 million and earnings 
per share increased by 43 from 866 pence to 
1241 pence 
during the year the group invested £3721 million in 
acquisitions and net debt increased by £2700 million 
to £3562 million at the end of december 2011  
at 31 december 2011 the group had cash of  
£416 million and undrawn committed facilities 
of £1042 million 
the board is proposing to pay a final dividend of 254 
pence 2010 209 pence which combined with the 
 
 
interim dividend of 82 pence gives a total for the 
year of 336 pence 2010 280 pence an increase 
of 20 the dividend is covered 37 times this is 
consistent with our policy of making progressive 
dividend payments based upon affordability and 
sustainability the dividend will be paid on 26 june 
2012 to shareholders on the register at the close of 
business on 1 june 2012
corporate governance 
as a board we are responsible to the company’s 
shareholders for delivering shareholder value 
sustainably over the long term through effective 
management and good governance we believe 
that a robust discussion focused on the critical 
strategic issues and risks is key to achieving these 
aims and we are fortunate to have nonexecutive 
directors with extensive industry and international 
experience who can actively contribute to this 
debate the board also seeks to develop and 
maintain a good understanding of the company’s 
operations by conducting site visits to two 
locations each year in addition to inviting our 
presidents and managing directors to present at 
other meetings we plan to recruit a further 
nonexecutive director during 2012 we recognise 
the benefits that diversity can bring to our business 
and this will be a key element of the selection 
process
i am pleased to confirm that spectris is in full 
compliance with the uk corporate governance 
code an evaluation of our board in 2010 by 
external consultants confirmed the effectiveness of 
our governance processes in most dimensions 
john hughes
chairman
we are very pleased with our performance in 2011 the progress 
we made on all aspects of our strategy was fundamental to 
delivering these results
336p
dividend up 20
£11062m
sales up 23 spectris plc annual report and accounts 2011 17
business review governance financial statements
2111904   070312   proof 8
with some recommendations for expanding the 
terms of reference for board committees these 
have now been updated most notably in the case 
of the audit and risk committee which now more 
formally includes a review of the group’s risk 
management processes and controls the board 
committees are described more fully in the 
corporate governance section of our annual report 
and their terms of reference are available on our 
website in 2011 an internal assessment of the 
board by all members confirmed support for the 
board’s role culture and policies 
outlook
we are very pleased with our performance in 2011 
the progress we made on all aspects of our strategy 
was fundamental to delivering these results whilst the 
current macroeconomic outlook remains uncertain 
the board is confident that as a result of continued 
investment in new products and applications together 
with the growth opportunities and resilience which 
our recent acquisitions provide spectris is strategically 
well positioned for the year ahead
john hughes
chairman
 unless stated otherwise figures 
quoted for operating profit net 
interest profit before tax tax 
earnings per share and operating 
cash flow are adjusted measures –  
for explanation of adjusted figures 
and reconciliation to the statutory 
reported figures see note 3