spirent communications plc
annual report 2012
inspiring innovation 
enriching life   1
spirent plays a significant role in shaping 
the way the world communicates
we inspire innovation by testing and 
assuring today’s new technologies that will 
enable tomorrow’s networks and services 
by enhancing the products services and 
applications that drive the ever‑evolving 
communications and it industries we truly 
enrich the lives of people around the world 
by enabling them to communicate faster and 
more effectively – anytime anywhere
overview
chairman’s statement 2
results and highlights 4
spirent at a glance 6
business model 8
spirent’s solutions portfolio 10
bu siness review
chief executive officer’s review 13
strategy 16
operational and financial review 18
key performance indicators 28
principal risks and uncertainties 30
corporate social responsibility statement 32
governance
corporate governance 40
board of directors 42
report of the directors 44
statement of directors’ responsibilities 49
directors’ statement on corporate 
governance 50
report on directors’ remuneration 55
financial s tatement s
consolidated financial statements
independent auditor’s report to the  
members of spirent communications plc 69
consolidated income statement 70
consolidated statement of 
comprehensive income 71
consolidated balance sheet 72
consolidated cash flow statement 73
consolidated statement of changes  
in equity 74
notes to the consolidated 
financial statements 75
parent company financial statements
independent auditor’s report to the  
members of spirent communications plc 117
parent company balance sheet 118
notes to the parent company 
financial statements 119
principal divisions and subsidiaries 135
other information
financial history 136
shareholder information 138
glossary 141
contact details ibc
cautionary statement regarding forward‑looking statements
this annual report may contain forward‑looking statements which are made in good faith and 
are based on current expectations or beliefs as well as assumptions about future events you 
can sometimes but not always identify these statements by the use of a date in the future or 
such words as “will” “anticipate” “estimate” “expect” “project” “intend” “plan” “should” 
“may” “assume” and other similar words by their nature forward‑looking statements are 
inherently predictive and speculative and involve risk and uncertainty because they relate to 
events and depend on circumstances that will occur in the future you should not place undue 
reliance on these forward‑looking statements which are not a guarantee of future performance 
and are subject to factors that could cause our actual results to differ materially from those 
expressed or implied by these statements the company undertakes no obligation to update 
any forward‑looking statements contained in this annual report whether as a result of new 
information future events or otherwise spirent commu ni cati ons pl c ann ual rep ort 2012
2
chairman’s statement significant strategic 
progress in 2012
alex w alker
chairman
spirent made significant strategic progress 
in 2012 through organic investment to bring 
new solutions to market the acquisition 
of new technologies for testing the security 
of application‑aware networks and the 
subscriber experience of mobile devices 
on live networks in order to expand the 
markets it serves and by the divestment of 
its last non‑core business a restructuring 
of the service assurance division has 
returned the business to more satisfactory 
levels of profitability these achievements 
were made against a background of 
economic uncertainty in all regions 
which in turn tempered growth
revenue for the continuing group was 
similar to last year at 4724 million 2011 
4705 million and reported profit before 
tax decreased by 3 per cent to 1107 
million 2011 1143 million the strong 
start to the year was followed by a weak 
demand environment materialising during 
the second quarter which then persisted 
throughout the remainder of the year 
operational highlights included the growth 
in new solutions for 4glte wireless   3
overview business review governance financial statements 522 million both businesses have 
been fully integrated into the performance 
analysis division the divestment of the 
systems division in november for a cash 
consideration of 632 million has enabled 
the company to focus on the development 
of its core business of the proceeds 
27 2 million was applied to the repurchase 
of spirent shares in the market for 
cancellation the company has no debt 
and cash balances were 2486 million 
at 31 december 2012
the board continues to focus on a high 
return on capital employed in the business 
the operating return on capital employed 
excluding cash balances in the continuing 
group in 2012 was 52 per cent the target 
set for return on investment in acquired 
businesses is in line with or in excess of 
the cost of capital returns remain low 
to negligible on cash balances which 
are retained to allow surety of completion 
for acquisition negotiations while the 
company expects to continue to invest 
in acquisitions which are in line with the 
strategy it is also committed to making 
returns through share buybacks to that 
end during 2012 134 million shares were 
repurchased utilising cash of 308 million 
the intention is to continue the on market 
repurchase programme during 2013 
envisaged at the time of the divestment 
of systems and to offset the dilutive 
effect of share‑based incentives
the final dividend recommended is 183 
cents per share compared with 167 cents 
per share in 2011 this brings the total 
dividend for 2012 to 322 cents per share 
compared with 293 cents for 2011 the 
increase in total dividend per share is 10 
per cent and reflects the strong operating 
margin and cash generation of the group 
in sterling terms this represents 210 pence 
per share an increase in the distribution 
to our shareholders of 15 per cent
development testing the enhancements 
to new high speed ethernet test solutions 
and the renewal of large long term service 
assurance maintenance contracts 
the one significant area of weakness 
other than service assurance was the 
global navigation satellite system 
emulation products in the positioning 
business which experienced a 26 per cent 
decrease in revenue due to caution in 
government spending and delays to the 
commercial rollout of the specifications 
to a chinese satellite navigation system 
this decrease had a 3 percentage points 
negative impact on revenue growth for the 
performance analysis division for the year
return on sales based on adjusted 
operating profit was maintained at 
25 per cent for the continuing group 
which is amongst the best in the test 
and measurement industry this was 
after expanding product development 
expenditure by 28 million and sales 
and distribution by 12 million 
adjusted basic earnings per share grew 
by 4 per cent to 1338 cents 2011 1292 
cents this is before charging exceptional 
items acquisition related costs acquired 
intangible asset amortisation and 
share‑based payment basic earnings per 
share for the continuing group decreased 
in 2012 by 5 per cent to 1246 cents per 
share 2011 1317 cents
the group’s free cash flow generation from 
continuing businesses increased to 840 
million 2011 693 million representing a 
strong increase year‑on‑year this is a cash 
conversion ratio of 105 per cent of reported 
earnings before non‑cash prior year tax 
2011 84 per cent spirent used its cash 
resources to fund the acquisitions of mu 
dynamics inc in april for 398 million and 
metrico wireless inc in september for 
dividend per share 2012
322cents
2011 293 cents spirent commu ni cati ons pl c ann ual rep ort 2012
4
adjusted basic earnings per share 
124
cents
1028
09 10 11 12
1090
1292
1338
group adjusted operating profit 
14
 million
809
09 10 11 12
1057
1169
1194
dividend per share
cents
193
09 10 11 12
250
293
322
basic earnings per share 
4
cents
1282
09 10 11 12
1079
1317
1246
free cash flow 
34
 million
764
09 10 11 12
755
693
840
results and highlights expanding our 
solutions portfolio
investment in the telecom and it industries is being made on a large 
scale to meet the demand of consumers and enterprises for anytime 
anywhere access to data applications and services with the highest 
quality of experience we executed on our strategy in 2012 to 
increase the breadth of our test solutions portfolio organically and 
through acquisition to address growing and emerging opportunities 
laying the groundwork for profitable growth in 2013 and beyond
notes
1 before exceptional items acquisition related costs acquired intangible asset amortisation and 
share‑based payment
2 before tax effect of items in note 1 and prior year tax
3 operating cash flow after tax net interest and net capital expenditure
4 continuing operations
group revenue 
4
 million
3694
09 10 11 12
4228
4705 4724  5
overview business review governance financial statements financial highlights
•	 group revenue flat at 4724 million 2011 4705 million impacted by service 
assurance down 29
•	 book to bill ratio was 97 2011 103 reflecting the weaker macro‑economic 
environment particularly in the second half‑year
•	 group adjusted operating margin was maintained at 25 after increased 
investment in product development
•	 performance analysis revenue up 4 with strong growth in 4glte wireless 
data center and high speed ethernet largely offset by a decline of 26 
in positioning test 
•	 dividend increased by 10 final dividend proposed of 183 cents per ordinary 
share giving a full year dividend of 322 cents per ordinary share 
•	 strong free cash flow of 840 million 2011 693 million cash closed 
at 2486 million 
operational and 
strategic highlights
significant strategic progress was made in 2012 through the introduction of 
new test solutions and the acquisition of mu dynamics inc “mu” and metrico 
wireless inc “metrico” taking spirent into adjacent growth markets 
•	 demand was driven by
 – expansion in data center scale for cloud computing and mobile broadband 
 – migration of ethernet technologies to higher speeds
 – application security needs resulting from mobility and growth in applications
 – 4glte technology and services such as video and voice over lte “volte”
 – need for integrated infrastructure test automation to address time to 
market pressures
•	 acquired mu for cash of 398 million in april 2012 mu offers market leading 
expertise in cyber security mu’s software has been integrated within spirent 
testcenter
tm
 resulting in the most comprehensive solution available to test 
application‑aware networks and security
•	 acquired metrico for cash of 522 million in september 2012 combining 
metrico’s live network with spirent’s lab‑based mobile device test expertise 
has resulted in an unparalleled end‑to‑end test portfolio
•	 expanded our wireless test capabilities for the deployment of 4glte networks 
devices and services into the mobile device rd market 
•	 further test capabilities developed to serve growth in location based services 
and global navigation satellite systems beyond gps
•	 new solution developed that is practical easy to use and cost effective 
for enterprises to rapidly deploy network services
•	 disposal of the systems division for a cash consideration of 632 million completed spirent commu ni cati ons pl c ann ual rep ort 2012
6
spirent at a glance a focused group
spirent is a global leader in communications test and measurement 
listed on the london stock exchange
at spirent we develop innovative hardware and software solutions 
and test methodologies which help shorten our customers’ product 
development lifecycle improve the quality of their new and existing 
services whilst reducing cost and risk
following the disposal of the 
systems division in 2012 the 
group is organised into two 
business segments
performance analysis
develops innovative solutions for 
functional conformance and performance 
testing of current and next‑generation 
communications technologies under 
actual or simulated real‑world conditions 
before a commercial launch
service assurance
provides solutions which allow service 
providers to diagnose troubleshoot 
and determine how to resolve issues 
with networks and systems within 
live networks and to monitor live 
network performance
•	 ethernet business services
•	 wireless backhaul
•	 field test solutions
•	 ethernet data center cloud computing 
virtualization applications and 
security test optimization 
•	 wireless devices and network 
infrastructure 
•	 satellite navigation and positioning 
technologies
4340m
2011 4164m
•	 revenue down 29 per cent due to fall 
in demand for legacy products
•	 cost reduction actions taken at the end 
of the first quarter to restore profitability
•	 second half‑year saw a number of spirent 
testcenter live ethernet services deals 
and improved results
•	 closed several large multi‑year deals 
for maintenance contracts
•	 strong growth in 4glte wireless data 
center switching and high speed ethernet
•	 growth reduced by decline in sales of 
positioning and legacy products
•	 acquisition of mu dynamics extends 
testing capability for application‑aware 
networks and security
•	 acquisition of metrico wireless adds 
measurement of subscriber experience 
of devices in live mobile networks
384m
2011 541m
divisional focus
r evenue
divisional highlights  7
overview business review governance financial statements where we operate
we have built a world‑class 
organisation that enables spirent 
to develop and maintain strong 
customer relationships around 
the globe
our vision
our vision is to be the global 
leader in growing and emerging 
test and measurement markets
we serve 1400 customers 
worldwide
focus on growing and 
emerging technology 
markets
evolve and expand 
our solutions portfolio
invest in our people
“right solution”  
at the “right time”
innovation
global reach
o ur strategy
at spirent we make use of our deep 
understanding of communications 
trends and technologies together with our 
close customer relationships to identify 
growing and emerging technology market 
opportunities and to deliver those solutions 
our customers need – when they need 
them we look to attract and retain the 
best and brightest people in the industry 
to enable us to develop the most innovative 
and complete test and service assurance 
solutions to address these opportunities 
our geographic diversity is a key strength
americas
r evenue
2520m
2011 2586m
europe middle east and africa
r evenue
696m
2011 738m
asia pacific
r evenue
1508m
2011 1381m spirent commu ni cati ons pl c ann ual rep ort 2012
8
business model adding value
we develop innovative test solutions for the engineers working 
within the communications industry that allow them to evaluate the 
performance of the latest technologies infrastructure and applications 
to be deployed worldwide we also provide tools for service technicians 
and field test engineers to improve network quality and make 
troubleshooting of live networks efficient and effective
network equipment manufacturers 
and service providers face numerous 
challenges associated with bringing 
products and services from the lab to 
the commercial marketplace spirent’s 
solutions allow network equipment and 
mobile device manufacturers service 
providers enterprises and government 
entities to holistically test and benchmark 
the performance of their networks 
network elements mobile devices 
and services
how spirent creates value
spirent enables its customers to increase 
their revenues by reducing their time to 
bring new products and services to 
market with higher quality and reliability 
while reducing associated cost and risk 
our test solutions which span the entire 
product lifecycle from concept to 
commercial availability deliver efficiency 
and effectiveness to development 
engineers to make better use of their 
scarce resources
much of our revenue comes from follow 
on business with our customers who have 
worked with us for many years this is a 
result of a combination of our ability to 
innovate to meet their needs and on our 
emphasis on providing professional 
service and support all of the above 
with the optimal utilisation of our own 
resources supports the sustainability 
of the margins spirent achieves
technology cycle
innovation in data technologies is required 
to satisfy the ever‑increasing demand 
for data capacity reliability and security 
by all members of society and by the 
development of new economic processes 
to create wealth worldwide
shareholder returns
our focus on value‑creation through 
investment in the business whether 
that be organically through product 
development by acquisition of 
technology or access to new served 
markets is aimed at delivering 
capital growth and cash generation 
to service distributions through 
dividends and share repurchase
adjusted earnings per share 2012
1338cents
2011 1292 cents  9
overview business review governance financial statements valuecreating culture
innovation
intellectual property
customers
value‑ creating culture
customer relationships intellectual property
innovation
we have embedded a culture 
which is aimed at creating value 
for stakeholders and shareholders 
minimising activities that do not 
contribute to this management 
encourages rational risk taking 
weighing the long term opportunity 
with the utilisation of scarce 
resources we attract and retain the 
best people to work for the company 
offering career development a 
non‑discriminatory workplace and 
fair and competitive remuneration 
within a non‑bureaucratic culture
customer relationships are key 
our customers are the leading 
providers of new technologies for data 
communications in the world it is 
our close and continuing relationships 
with them that drive our people to 
aspire to achieve at higher levels each 
and every year through spirent’s 
global sales and service organisations 
we strive to provide our customers 
with the highest quality of support 
and service possible
spirent has created a large body of 
intellectual property patented and 
proprietary which has raised the 
barriers of entry to competition 
much of the new development is 
evolutionary in nature and builds 
on our existing expertise as well 
as expanding our capabilities both 
organically and through acquisition 
we invest a significant and increasing 
amount in product development 
enabling us to bring the most 
advanced test solutions to market
spirent innovates and creates new 
products and services through the 
endeavours of its highly skilled and 
creative workforce they build on 
decades of experience and product 
management expertise external 
inputs are important through our 
technology partners as is being 
located in the world’s leading centers 
for technological development our 
pace of innovation leads our industry 
enabling us to deliver the right 
solutions to the global market 
at the right time spirent commu ni cati ons pl c ann ual rep ort 2012
10
spirent ’s solutions portfolio a global leader
our portfolio of products and services is 
well aligned with growing and emerging 
opportunities in areas that matter most 
to our customers our broad portfolio 
of solutions addresses the end‑to‑end 
testing needs of today’s converged 
application‑aware networks
spirent provides hardware and software 
solutions services and test methodologies 
that address our customers’ testing needs 
– from devices to access networks to 
the core including applications and 
content delivery 
we are a leader in testing network 
equipment which utilises ethernet 
at ever‑increasing scale including 
switches routers firewalls load 
balancers data center fabrics and 
intrusion detectionprevention 
spirent is a leading provider of solutions 
that test the performance and user 
experience of 4glte and 3g mobile 
devices in the lab and on live networks 
spirent is also the worldwide leader in 
testing positioning technologies such as gps 
in mobile devices and other receivers used 
in an ever‑increasing range of applications
we address the testing needs of all layers of 
service provider networks including access 
wi‑fi offload mobility and performance of 
the mobile packet core cloud infrastructure 
and applications
spirent’s infrastructure test optimization 
solutions help address the challenges 
of bringing quality products to market 
faster in the face of rapid change and 
increasing complexity
our service assurance solutions allow 
service providers to facilitate service 
activation and to diagnose troubleshoot 
and determine resolution of issues within 
live networks
functional conformance and 
performance testing of 4glte 
and 3g mobile devices in the lab
services and tools for measuring 
the subscriber experience of 
devices on live networks
device 
application experience  11
overview business review governance financial statements wireless and wireline access and 
backhaul network performance 
testing
leadership in testing gps 
glonass and other positioning 
technologies
mobility and performance testing 
of the mobile packet core with 
subscriber emulation 
10 40 and 100gb high speed 
ethernet functional and performance 
testing with realism and scale
service quality security scalability 
and application performance 
testing
virtualized solutions provide 
visibility into the entire data center 
infrastructure
wireless
satellite
positioning
residential
enterprise
backhauledge
2g
3g
4g
wifi
copper 
fibre 
cable
copper 
fibre 
cable
cloud applications
content delivery
internet
performance availability 
security and scalability
www
unified core
fixedmobile convergence
high speed ethernet
mobile packet core
ipmpls ethernet 12
business review
chief executive officer’s review 13
strategy 16
operational and financial review 18
key performance indicators 28
principal risks and uncertainties 30
corporate social responsibility statement 32  13
overview business review governance financial statements chief executive 
officer ’s review o ur pace of innovation 
leads our industry
bill burns
chief executive officer
the fundamental drivers of spirent’s 
business remain positive despite the 
macro‑economic uncertainty in many 
parts of the world during 2012 investment 
in the telecom and it industries is being 
made on a large scale to meet the demand 
of consumers and enterprises for anytime 
anywhere access to data applications and 
services with the highest quality of 
experience we executed on our strategy 
in 2012 to increase the breadth of our 
test solutions portfolio organically and 
through acquisition to address growing 
and emerging opportunities laying the 
groundwork for profitable growth in 
2013 and beyond
mobility – anywhere anytime with 
any device was a major driver of demand 
for our solutions as mobile broadband 
growth results in ever‑increasing volumes 
of data traffic this led service providers 
to focus on fixed and mobile network 
convergence and on the rollout of 4glte 
networks along with the services and 
devices that take advantage of this 
technology spending on cloud services 
grew rapidly driving data centers to 
ever‑increasing scale the migration 
to high speed ethernet in data centers 
and core networks accelerated while 
awareness of the critical importance of 
network and application security grew 
as a result of multiple high profile 
attacks during 2012  14
spirent commu ni cati ons pl c ann ual rep ort 2012
global lte subscribers
number million
12 13 14 15 16
1184
2101
3276
4272
source infonetics research 2012
the 4glte subscriber compound annual growth rate over the period 2012 to 2016 is forecast to be 70
512
chief executive officer ’s review continued
the impact of macro‑economic conditions 
on our served markets particularly in the 
second half of the year led to flat revenues 
and profit performance in 2012 in 
performance analysis we saw a fall 
in demand for our positioning solutions 
on the back of caution in government 
spending and the delay in the rollout of the 
commercial specifications for the chinese 
beidou‑2 formerly compass satellite 
navigation system in addition some of 
our large customers significantly reduced 
their spending as a result of the decline 
in demand in their end markets due to 
eurozone and middle east conditions 
slowing growth in china and a reduction 
in government spending or due to their 
loss of market share with some customers 
exiting certain market segments entirely 
we experienced challenges in our service 
assurance division as service providers 
sharply reduced investment in assuring 
their legacy wireline networks despite 
these headwinds spirent delivered 
a financial performance that remains 
one of the best amongst its peers 
we again expanded our global reach 
in 2012 to further strengthen our close 
cooperation with our customers including 
network equipment manufacturers mobile 
device manufacturers service providers 
enterprise technology providers 
and governments
our pace of innovation leads our industry 
enabling us to deliver on our strategy of 
bringing the right solutions to the global 
market at the right time to increase focus 
on innovation in our faster growing core 
communications test and measurement 
market we disposed of the systems 
division in november for 632 million
our strategic objectives continue to 
be furthered through the hard work 
dedication and enthusiasm of our 
employees and it is key to spirent’s 
success that we develop and nurture 
our people recognising their 
critical contribution
spirent’s solutions span all important 
technologies and serve all major customer 
segments across the telecommunications 
and it industries we increased our 
development spend on areas that matter 
most to our customers including the 
evolution of wireless networks and 
services to 4glte high speed ethernet 
and next‑generation data centers as well 
as network and application security and the 
development of a new approach to testing 
it networks by enterprise customers we 
strengthened our solutions portfolio by 
acquiring and integrating two strategically 
important businesses during the year 
mu dynamics and metrico wireless both 
acquisitions aligned well with our strategy 
of delivering profitable growth through 
expanding our capabilities in growing 
and emerging technology markets 
mu added market leading expertise in 
cyber security usability and application 
emulation to our solutions portfolio 
combining mu’s software‑based 
applications and security testing 
capabilities with spirent’s market leading 
performance test platforms has enabled 
us to rapidly create best‑in‑class security 
test solutions with higher performance 
and greater scale than any other provider   15
overview business review governance financial statements investment in product development
 million
708
09 10 11 12
758
833
861
increase 
of 3
in acquiring metrico spirent has 
responded to the needs of carriers and 
device vendors to minimise time to market 
improve subscriber quality of experience 
and reduce device return rates while 
also contending with new and emerging 
technologies including 4g data volte 
and the cloud bringing together metrico’s 
field‑based subscriber‑level focus with 
spirent’s device performance test strength 
in the lab has resulted in an unparalleled 
end‑to‑end test portfolio the combination 
enables our customers to increase 
subscriber satisfaction and loyalty 
while reducing time to market as 
well as their operational costs 
we have the industry’s broadest and 
most innovative test solution portfolio 
given our confidence in the medium 
term outlook we plan to increase our 
investment in new test solutions and in 
enhancing our current capabilities in the 
areas that matter most to our customers 
as they look to drive innovation and bring 
their industry leading products and 
services to market faster and with better 
quality this coupled with a relentless 
focus on executing our strategy 
will enable spirent to best leverage 
opportunities throughout 2013 
and beyond
outlook
the difficult economic conditions that 
characterised market dynamics in the 
second half of 2012 are unlikely to change 
markedly during the first half of 2013 
although there are some signs that 
confidence is returning with a few major 
service providers increasing capital 
spending plans for the year ahead 
the rapid pace of innovation in mobile 
and data technologies continues 
in 2013 spirent’s revenue will be driven 
by macro demand in the group’s major 
regions on‑going industry trends the 
full year effect of revenues from acquired 
businesses and revenues attributable 
to new product introductions
the group is increasing its organic 
investment for future growth in particular 
focusing on expanding spirent’s position 
in the 4glte market and entering into new 
served markets for 2013 as a whole we 
anticipate modest revenue growth given 
current trading conditions and a lower 
order book at the start of the year the 
performance in the first quarter will be 
lower compared to the strong period last 
year the board remains confident that 
the group is well placed to capitalise 
on significant medium and longer 
term opportunities 16
spirent commu ni cati ons pl c ann ual rep ort 2012
strategy a strategy for growth
our vision is to be the global leader in growing and emerging test and 
measurement markets
focus on growing and emerging 
technology markets
spirent closely monitors the ever‑changing 
trends across the communications and it 
landscape strategically reallocating 
resources to address growing and 
emerging technology markets
in 2012 we maintained our focus on 
growth markets for example we released 
new or enhanced solutions for 4glte 
wireless data center and high speed 
ethernet testing we also made two 
acquisitions which further expanded our 
served markets to include the testing of 
application‑aware networks mu and the 
subscriber experience of mobile devices 
on live networks metrico
objectives 2013
spirent will complete the integration 
of assets acquired with mu and metrico 
with the spirent portfolio enabling us to 
build leadership in the growing security 
and 4glte mobile subscriber experience 
markets we will also introduce new 
solutions for enterprise markets and 
for the new chinese beidou‑2 global 
navigation satellite system
objectives 2013
our focus will be on building reliable 
pipelines for critical positions and key 
skills in engineering and sales we will 
continue to work to better understand 
the development needs of our managers 
expanding leadership development and 
succession planning and progressing 
their individually‑centered career 
development plans
objectives 2013
spirent will invest to accelerate the 
pace of its innovation to address growth 
opportunities in markets such as 4glte 
and data center to serve new markets such 
as enterprise in order to retain its position 
at the leading edge of the rapidly‑evolving 
communications test and measurement 
industry
invest in our people 
spirent is its employees finding keeping 
and engaging highly qualified and skilled 
employees is central to our ability to 
deliver on our strategy and to the 
success of our business 
our challenging work environment inspires 
innovation with continuous learning as 
an essential part of our human resources 
philosophy in 2012 career development 
centered on the individual providing a 
variety of education and learning 
opportunities over time in a number 
of different ways further information 
on what we have achieved can be found 
in the csr statement on pages 33 and 34
innovation 
remaining at the leading edge of 
technology is critical to our continued 
success we apply our creativity to the 
development of tools and methodologies 
that meet our customers’ complex needs 
we responded to our customers’ needs 
to bring their products to market faster 
and with better quality with an innovative 
environment that supports development 
of holistic and integrated infrastructure 
test strategies we developed the spirent 
itest
®
 solution originally acquired with 
fanfare in 2011 into a leader in addressing 
this emerging trend and our business in 
this segment grew strongly during 2012  17
overview business review governance financial statements communications and it continues to grow as a result of the relentless demand for anytime anywhere 
connectivity enabled by such key trends as the mobile internet and cloud computing at spirent we 
make use of our deep understanding of communications trends and technologies together with our close 
customer relationships to identify growing and emerging market opportunities spirent’s solutions are 
used to develop and deploy the best devices networks and applications helping enrich people’s lives 
whether they are consumers employed by a business enterprise or work for a government entity 
the areas of strategic focus for spirent’s operating segments are discussed further in each of the business sections on pages 19 to 23
evolve and expand our 
solutions portfolio
we invest in development across 
our product and service portfolio at a 
level that enables us to bring the most 
advanced test solutions to market 
in 2012 spirent released over 50 new 
products and additions to functionality 
for example we broadened the coverage 
of our cs8 solution for 4glte device 
developers including the addition of a 
comprehensive capability to test voice 
over lte and other ims‑enabled services 
further information on our new solutions 
can be found in the business sections 
on pages 19 to 23
objectives 2013
in 2013 the group expects to increase 
its investment for future growth in 
particular focusing on expanding into 
new served markets such as enterprise 
and consolidating spirent’s position in the  
4glte high speed ethernet data center 
and application security markets
objectives 2013
we will once again benefit from staying 
close to our customers by introducing for 
example solutions that address security 
testing needs across a broad range of 
customers and markets as well as to 
test new voice and video chat services 
deployed on 4glte networks
objectives 2013
in 2013 spirent will continue to grow its 
operations in china and will address the 
needs of key markets across the globe 
including enterprise in europe and adding 
solutions for the 4gtd‑lte technology 
being deployed in markets that include 
china india and japan
“right solution” at the “right time” 
we enable our customers to bring new 
products and technologies to market in 
the shortest amount of time by making 
available the solutions they need 
when they need them
staying close to and working with our 
customers is key for example continuing 
growth in the scale of data centers requires 
the rapid evolution of their switching 
fabrics to higher speeds and higher 
densities spirent’s leadership in testing 
the performance of these fabrics at massive 
scale was showcased in a public test in 
2012 of qfabric™ from juniper networks 
the largest test of its kind ever conducted 
global reach 
our geographic diversity is a key strength 
we have built a world‑class organisation 
that enables spirent to develop and 
maintain strong customer relationships 
around the globe
to enable the development of technology 
from its inception to deployment in live 
networks across all geographies we again 
expanded our global reach in 2012 especially 
in the asia pacific region this further 
strengthened our close cooperation with our 
customers across all segments including 
network equipment manufacturers mobile 
device manufacturers service providers 
enterprise technology providers 
and governments 18
spirent commu ni cati ons pl c ann ual rep ort 2012
operational and 
financial review best‑in‑class financial 
performance
eric hutchinson
chief financial officer
summary financial performance
after a positive start to 2012 in the first 
quarter of the year we experienced a marked 
change in sentiment impacting growth rates 
from the second quarter to the end of the 
year revenue from continuing operations 
was similar year‑on‑year at 4724 million 
2011 4705 million spirent’s 2012 
acquisitions mu dynamics inc “mu” and 
metrico wireless inc “metrico” generated 
127 million of revenue in total since 
acquisition service assurance revenues 
were down 157 million year‑on‑year and 
our positioning products in performance 
analysis were down by 138 million 
26 per cent compared with 2011 overall 
performance analysis division revenue was 
up by 4 per cent there were some areas of 
rapid growth for example 4glte wireless 
device test data center switching and high 
speed ethernet test in addition during the 
fourth quarter of 2012 the service assurance 
division delivered a much improved result
towards the end of 2012 spirent 
commenced a review of its organisational 
reporting structure which is expected to 
be completed in the first quarter of 2013 
this may result in a change to spirent’s 
segmental reporting structure in 2013 
once the review is complete any changes 
will be communicated and restated 
comparative disclosures provided  19
overview business review governance financial statements operating profit
 million
783
09 10 11 12
979
1151
1164
increase 
of 1
revenue
 million
3168
09 10 11 12
3658
4164
4340
increase 
of 4
description of the business
spirent puts innovation to the test 
with a concentration on ethernet data 
center including cloud computing and 
virtualization mobility security and 
satellite positioning as well as the 
applications that enrich these networks 
spirent’s performance analysis division 
facilitates device and network testing 
from the research and development stage 
to the launch of communications networks 
and services we push the limits of these 
networks their elements mobile and 
satellite positioning devices and 
applications by allowing equipment 
makers service providers enterprises 
and government to subject their offerings 
to functional conformance and performance 
testing that simulates real‑world conditions 
before a commercial launch
market conditions
2012 saw our customers invest in 4glte 
mobile networks devices and services 
in high speed ethernet and data centers to 
enable cloud computing and virtualization 
and in optimization of their testing despite 
the generally unfavourable macro‑economic 
conditions we experienced a fall in 
investments in legacy and mature 
technologies such as dsl 1gb ethernet 
and cdma wireless
continuing growth in the scale of data 
centers requires the rapid evolution of 
their switching fabrics to higher speeds 
and higher densities spirent’s leadership 
in testing the performance of these fabrics 
at massive scale was showcased in a 
public test of qfabric™ from juniper 
networks the largest test of its kind 
ever conducted cisco also partnered 
with spirent to test the performance of 
its latest nexus 3548 ultra‑low‑latency 
high density high performance switch
the data center is a key factor in the 
migration of ethernet technologies to 
higher speeds we saw strong growth 
in spending on 10gb and 40gb ethernet 
as well as on 100gb ethernet for service 
provider networks spirent was once again 
honoured by frost  sullivan receiving the 
2012 market share leadership award for 
ethernet testing reflecting spirent’s 
leadership over its nearest competitors 
in every segment tracked by the leading 
analyst organisation 
the growth in cloud computing and server 
virtualization has led to a strong interest 
in software‑defined networking “sdn” 
and openflow protocol with their 
potential to greatly simplify network 
design implementation and operation 
amongst multiple engagements that 
showcased spirent’s capability in this 
space we announced a collaboration 
with indiana university to develop an open 
source openflow conformance test suite
the convergence of mobile and fixed 
networks mobile data explosion and 
scarcity of available radio spectrum are 
causing operators to evolve their access 
networks employing carrier‑grade wi‑fi 
offload and small cells core networks are 
becoming ever more intelligent with 
powerful networking devices that integrate 
capabilities such as deep packet inspection 
application security backhaul timing and 
virtualization spirent has added support for 
wi‑fi offloading to its landslide solution and 
converged its test solutions on a single high 
performance high scale platform which 
enables testing of these converged network 
elements with less equipment than was 
previously possible 
the growth in mobility and applications 
has resulted in a paramount need for 
application security in acquiring mu 
dynamics spirent added studio to its 
portfolio the industry’s first solution 
to emulate real application traffic while 
generating comprehensive security 
threats we subsequently integrated 
studio with spirent’s market leading 
performance test platforms enabling 
us to offer best‑in‑class security test 
r eturn on sales
268
2011 27 6
performance analysis 20
spirent commu ni cati ons pl c ann ual rep ort 2012
w ireless test l eadership
spirent is a leader in testing the receivers and 
multiple‑antenna schemes used in 4glte devices 
and infrastructure
the performance gains from 4glte technology come at 
the cost of greatly increased complexity over 3g and 2g 
technologies by accurately emulating radio channel 
characteristics the spirent vr5 makes it possible to find 
performance problems in the development lab well before 
commercial deployment
of cellular base stations and devices 
to support td‑lte and lte‑advanced
subscriber location awareness is a key 
element in many mobile applications 
leading to demand for accurate subscriber 
location under any conditions whether 
indoors or outdoors the resulting 
innovation in enabling technologies includes 
“hybrid” positioning techniques that make 
use of signals from satellites wi‑fi access 
points cellular networks and sensors in 
mobile devices spirent retains its global 
leadership in testing these cutting edge 
location technologies in september 2012 
a spirent solution was used in the industry’s 
first independent benchmark study of the 
location performance of leading chipset 
platforms and smartphones
investment in gnss test slowed as the 
government sector saw a sharp decline in 
spending the test market for the chinese 
beidou‑2 satellite system failed to develop 
as expected in 2012 with release of 
detailed technical specifications for the 
system being delayed until late december 
r evenue
revenue in the performance analysis 
division grew by 4 per cent in 2012 to 
4340 million 2011 4164 million 
although 1040100gb ethernet sales 
experienced strong growth this was 
offset by a fall in our legacy business 
the infrastructure test optimization 
segment built on assets acquired with 
fanfare in 2011 experienced growth on 
the back of tighter ecosystems between 
service providers and equipment 
manufacturers to support accelerated 
innovation and time to market
our portfolio of lte mobile device test 
solutions experienced very strong growth 
we continued to address the needs of the 
north american operator ecosystem of 
top‑tier device suppliers achieved the 
business objectives for our initiative to 
build our presence in device rd labs 
operational and financial review continued
solutions with higher performance 
and greater scale than any other 
solution provider
the trends mentioned above have 
increased time to market pressure on 
our customers and have led service 
providers to drive tighter equipment 
vendor ecosystems while rd teams have 
become more globalised as a result we 
saw a broader adoption of holistic and 
integrated infrastructure test automation 
the spirent itest
®
 solution acquired with 
fanfare in february 2011 is a leader in 
addressing this emerging infrastructure 
test optimization trend and this segment 
grew strongly during 2012 
with the acceleration of 4glte 
network rollouts in 2012 especially in 
north america and asia operators and 
device manufacturers are refocusing their 
investments on this fast growing technology 
the penetration of smartphones tablets and 
other connected devices continued in 2012 
while a new generation of services enabled 
by ip multimedia subsystems “ims” 
in particular voice over lte “volte” saw 
its first commercial rollouts the acquisition 
of metrico wireless in september added 
to our portfolio the capability to analyse 
performance and subscriber quality 
of experience of mobile devices on 
live networks 
for infrastructure vendors key drivers 
included time‑division lte “td‑lte” 
with large scale trials in china and early 
commercial rollouts in japan and india 
infrastructure development also focused 
on lte‑advanced technology the first 
deployments of which are expected in 
2013 spirent’s radio frequency channel 
emulator family continued to be a leader 
in addressing the unique testing needs 
replays conditions 
captured on live 
networks for the most 
realistic testing 
possible in the lab 
powerful user interface 
eliminates complexity 
in test setups saving 
time and money  21
overview business review governance financial statements and strengthened our leadership in 
location based testing orders for cdma 
technology test declined in line with 
expectations umts test sales also 
declined as our customers reallocated 
resources to higher growth 4glte 
opportunities our physical layer radio 
frequency solutions had a record year 
on the back of market and technology 
drivers that included over‑the‑air testing 
td‑lte and lte‑advanced
sales of positioning products declined 
significantly due to sharply reduced 
government spending investment caution 
amongst many commercial customers and 
delays in the release of detailed technical 
specifications for the chinese beidou‑2 
satellite system
profitability
operating profit grew 1 per cent to 1164 
million from 1151 million and operating 
margin was slightly lower at 268 per cent 
compared with 276 per cent in 2011 due 
to the higher investment in product 
development which increased from 
744 million to 791 million in 2012
product development
we extended the ability of our flagship 
spirent testcenter family to address 
evolving data center test needs with a 
focus on high speed ethernet sdn and 
application testing studio acquired with 
mu in april was integrated into spirent 
testcenter to take advantage of its 
performance scale and high speed 
ethernet abilities resulting in the 
development of the market leading solution 
for assessment of application‑aware 
networks and security we expanded the 
spirent testcenter portfolio to include a 
cost effective portable solution that gives 
our customers the flexibility to test across 
a broader spectrum of the product lifecycle 
expanding our served available market 
in addition we have developed a new test 
platform for the enterprise market utilising 
our core technologies that enables it 
professionals to validate the performance 
of applications and networks
wireless is one of spirent’s key focus 
areas in addition to its integration with 
mu’s studio testcloud we enhanced the 
ability of our landslide solution to test 
mobile infrastructure’s readiness for  
4glte services such as volte video 
streaming and multi‑player mobile gaming 
landslide also gained the capability to test 
wi‑fi offload gateways and saw major 
performance enhancements maintaining 
its leadership in testing mobile networks at 
massive scale enabling service providers 
to address the challenge of explosive 
mobile data growth 
the acquisition of fanfare and its itest family 
of products in 2011 has enabled spirent to 
address the shift in customer budgets 
towards optimising testing in their existing 
labs and building out new highly automated 
test environments in 2012 we released a 
comprehensive lab management solution 
that enables network operators and network 
equipment vendors to improve their lab 
equipment utilisation productivity and 
test cycle time
spirent enhanced its wireless test 
solutions that focus on our customers’  
4glte testing needs we extended the 
test coverage of our solution family that 
validates the performance of lte devices 
into new areas including call reliability 
we addressed a wider range of device rd 
applications including a comprehensive 
capability to test volte and other 
ims‑enabled services our physical 
layer products were enhanced to address 
testing of td‑lte technology in devices 
and base stations we also released a new 
solution to test the performance of devices 
utilising hybrid location technologies 
maintaining spirent’s leadership in the 
location based services test segment
the metrico wireless acquisition in 
september brought with it leadership 
in services and tools that enable carriers 
device vendors and technology providers 
to analyse the performance and subscriber 
quality of experience of mobile devices 
on live networks integration of metrico’s 
subscriber experience measurement tools 
with spirent’s lab‑based device test 
solutions positions spirent strongly to 
bring unprecedented realism to lab‑based 
testing and to harmonise methodologies 
across live and lab testing together with 
a true end‑to‑end test capability
our positioning solutions expanded into 
new areas including multi‑radio wi‑fi 
bluetooth nfc production test simulation 
of sensors in mobile devices and the first 
shipment of a solution for china’s beidou‑2 
satellite system testing
strategy
in 2013 we will complete the integration 
of assets acquired with mu and metrico 
into the spirent portfolio enabling us to 
build leadership in the growing application 
security and 4glte mobile subscriber 
experience markets we will consolidate 
our leadership in high speed ethernet 
and data center test as well as in mobile 
infrastructure test including packet core 
and the emerging wireless data offload 
opportunities we will further expand 
our innovative solutions portfolio that 
addresses the fast growing test automation 
market we will enter an important new 
growth segment of the enterprise market 
we will also bring solutions to market for 
other growing and emerging market 
opportunities including the new chinese 
global navigation satellite system 4g
td‑lte technology being deployed in key 
asia pacific markets and hybrid location 
technologies in smartphones and other 
mobile devices 22
spirent commu ni cati ons pl c ann ual rep ort 2012
operating profit 
1
 million
note
1 before exceptional items
75
09 10 11 12
130
70
84
increase 
of 20
revenue
 million
526
09 10 11 12
570
541
384 decrease 
of 29
operational and financial review continued
description of the business
spirent’s service assurance solutions allow 
service providers to diagnose troubleshoot 
and determine how to resolve issues with 
networks and systems within the live 
network building on the expertise gained 
through testing technologies and systems 
in the lab spirent enables service providers 
to deploy and maintain efficient cost 
effective and high performing networks 
helping to reduce subscriber churn by 
providing better quality of experience 
spirent’s solutions also allow service 
providers to reduce operational costs 
through better identification of potential 
network problems from the core of the 
network to inside the subscriber’s home 
and use of the most appropriate resources 
to address those issues
market conditions
2012 saw continuing caution around 
service provider investment especially 
on wireline networks the focus of service 
providers’ capital expenditure has shifted 
rapidly from tdm to high speed ethernet 
intense competition among service 
providers has helped drive the need 
for enterprise ethernet‑based service 
assurance solutions although buying 
decisions were frequently delayed and the 
size of the deals were reduced as rollouts 
were scaled back investment in mobile 
networks continued driven by the multiple 
4glte network rollouts underway in 
north america we saw top‑tier u s service 
providers invest in service assurance 
solution upgrades to support their 
wireless and wireline ethernet networks
r evenue
we saw a steep decline in revenue for our 
legacy tdm solutions especially in the 
first half which caused us to implement 
cost saving measures in the second 
quarter to re‑establish the division’s 
profitability revenue was down by 
157 million to 384 million from 
541 million in 2011
the second half of the year saw expansion 
of our stc live solutions in top‑tier north 
american service providers we closed 
multi‑year service contracts which are 
essential to our service provider customers 
and will contribute to our future revenues
profitability
adjusted operating profit was up 20 per 
cent year‑on‑year to 84 million from 
7 0 million in 2011 cost savings were 
implemented in the second quarter of 2012 
at a cost of 15 million which improved 
the profitability of the division in addition 
an inventory provision of 14 million has 
been incurred in relation to excess legacy 
products including these costs which have 
been classified as exceptional reported 
operating profit was 55 million
product development
our development focus remains 
on ethernet service assurance for 
next‑generation networks for spirent 
testcenter live ethernet service 
assurance we are expanding our flexible 
platform capabilities which include our 
combined 1gb and 10gb ethernet probes 
along with network troubleshooting 
capabilities we put a new development 
focus on mobile test and diagnostics 
as well as performance monitoring 
solutions for 4glte expansion and 
data center network rollouts
r eturn on sales
219
2011 129
service assurance l eader in service assurance for ethernet services
 23
overview business review governance financial statements strategy
in 2013 we will continue to invest in our 
spirent testcenter live portfolio of service 
assurance solutions in order to maximize 
our benefit from service provider 
investments that will remain focused 
on growth areas such as 4glte mobile 
higher bandwidth enterprise business 
services as well as the drive to cloud 
computing offerings and the data centers 
to enable them our innovations will 
enable service providers to improve 
efficiencies through test automation 
and service level network monitoring 
by their operations administration and 
maintenance organisations we will also 
enable installation and maintenance 
teams at leading multi‑system operators 
with unique field test tools
the use of multiple 
spirent testcenter 
live probes provides 
maximum visibility 
into the network
spirent is a leader in performance 
monitoring testing and diagnostics 
of ethernet services for wireless 
and wireline service providers 
spirent testcenter live service assurance 
solutions allow service providers to 
diagnose troubleshoot and determine 
how to resolve issues within the live 
network to ensure quality of service 
and subscriber quality of experience 
software platforms 
provide powerful user 
interface and reporting 
capabilities for 
monitoring testing 
and diagnosis 24
spirent commu ni cati ons pl c ann ual rep ort 2012
operational and financial review continued
2011 51 per cent europe represents 14 
per cent 2011 15 per cent and was down 
as had been expected by 7 per cent 
compared with 2011 asia pacific has been 
a very positive market for spirent in the 
last few years and it continued to expand 
in 2012 by 9 per cent which was a lower 
rate of growth than that for the prior year 
the key contributing factor being the 
slowdown in china where revenue 
declined by 1 per cent asia pacific 
accounts for 32 per cent of continuing 
group revenue in 2012 2011 29 per cent 
the rest of the world represents the 
remaining 3 per cent 2011 5 per cent 
of revenue
geographic revenue by market was as 
follows
 million 2012 2011
united states 2392 2388
asia pacific rest of 
world 1660 1591
europe 672 726
4724 4705
the book to bill ratio which is a measure 
of the visibility of our future revenues was 
97 for the year for the group compared 
r evenue
group revenue was similar to the prior year 
at 4724 million 2011 4705 million 
service assurance revenues were down 
157 million and those for positioning 
products in performance analysis by 138 
million 26 per cent on 2011 revenue for 
the performance analysis division as a 
whole grew 4 per cent despite the drop in 
positioning products and saw some good 
areas of growth particularly in 4glte 
mobile device data center switching and 
high speed ethernet test positioning 
products were impacted by lower us 
government spend and delays to the 
release of the technical specifications for 
a satellite navigation system from china 
service assurance reported significantly 
lower revenues for the first three quarters 
of 2012 however the fourth quarter 
yielded better results including revenue 
on several ethernet software and services 
contracts and winning the renewal of large 
long term maintenance contracts with 
major customers
by geographic region revenue in the 
united states was flat compared with 
2011 the us remains the largest market 
accounting for 51 per cent of revenue 
with 103 for 2011 with the strong start to 
the year being followed by weaker demand 
in the second half‑year
o perating profit
reported operating profit for continuing 
operations was 1092 million compared 
with 1130 million in 2011 operating 
profit before exceptional items acquisition 
related costs acquired intangible asset 
amortisation and share‑based payment 
“adjusted operating profit” which is the 
measure of profit used by the group to 
evaluate performance increased by 
2 per cent to 1194 million compared 
with 1169 million in 2011 
a reconciliation is set out below
 million 2012 2011
adjusted operating profit 1194 1169
exceptional items
inventory provision 14 –
reorganisation costs 15 –
acquisition related costs 12 12
acquired intangible 
asset amortisation 45 16
share‑based payment 16 11
reported operating profit 1092 1130
group financial performance
on 1 november 2012 the group disposed of the systems division systems is reported as a discontinued operation in these results 
all numbers provided below are for continuing operations unless otherwise stated 
the following table shows the key performance indicators monitored by the board in order to measure performance
2012 2011
change  

continuing operations
book to bill ratio
1
97 103
revenue  million 4724 4705 –
gross profit margin  713 696
operating profit
2
  million 1194 1169 2
return on sales
2
  253 248
adjusted basic earnings per share
3
 cents 1338 1292 4
free cash flow
4
  million 840 693 21
notes
1 ratio of orders booked to revenue billed
2 before exceptional items acquisition related costs acquired intangible asset amortisation and share‑based payment
3 adjusted basic earnings per share is based on adjusted earnings as set out in note 13 of notes to the consolidated financial statements
4 operating cash flow after tax net interest and net capital expenditure  25
overview business review governance financial statements return on sales based on adjusted 
operating profit was maintained at 
25 per cent 
cost of sales and operating expenses
gross margin increased to 713 per cent 
2011 696 per cent due to a better overall 
product mix with a higher software and 
services content an excess inventory 
provision was charged in relation to 
service assurance of 14 million in the 
period as a result of the significantly 
reduced levels of demand for our legacy 
products in this division this provision 
has been reported as an exceptional item 
in the period excluding this provision 
gross margin was 716 per cent
focus has been maintained on growing 
the business organically as well as 
through acquisition investment in product 
development rose by 3 per cent to 861 
million in 2012 18 per cent of revenue 
from 833 million and 18 per cent of 
revenue in 2011 the majority of this 
791 million 2011 744 million was 
incurred within the performance analysis 
division the higher pace of innovation 
in product development engineering is 
expected to continue into 2013 enabling 
further enhancement of spirent’s 
capabilities and to address many of the 
new market opportunities that exist
other operating expenses were higher 
at 1414 million in 2012 compared 
with 1312 million in 2011 30 per cent 
of sales 2011 28 per cent in service 
assurance in response to the rapid fall in 
legacy business experienced at the start 
of 2012 steps were taken to address the 
cost base which resulted in savings of 
approximately 50 million per annum 
at a one‑off cost of 15 million 
other operating expenses also include 
16 million for share‑based payment 
up from 11 million for 2011 due to a 
modest increase in the number of new 
awards granted during the year 
acquired intangible asset amortisation 
was 45 million 2011 16 million of 
which 32 million was due to the 2012 
acquisitions of mu and metrico within 
operating expenses is a charge of 12 
million of acquisition related costs for mu 
and metrico 2011 12 million for the 
fanfare group inc excluding these 
costs operating costs were 1326 million 
compared with 1273 million in 2011 an 
increase of 4 per cent which reflects the 
overheads of the acquired businesses
corporate costs
corporate costs are those expenses 
which cannot be attributed to the group’s 
operating segments and comprise the 
costs of the board and other corporate 
activities these costs were 54 million 
for the year 2011 52 million 
the revised accounting standard ias 19 
“employee benefits” will be mandatory 
in 2013 the effect for spirent will be an 
increase in corporate costs and a reduction 
in interest income in 2013 the costs of 
administering the defined benefit pension 
plans will be charged to corporate 
operating expenses these are currently 
deducted from the interest income in the 
pension plans the comparative numbers 
will be restated accordingly on restatement 
this will result in an increase in corporate 
costs of 11 million for 2012 compared to 
the reported number it is estimated that 
the administration costs for the pension 
plans will be 11 million in 2013 
currency impact
the effect of fluctuating exchange rates 
is relatively minimal as the group’s 
revenue and profits are denominated 
predominantly in us dollars or us 
dollar‑linked currencies
f inance income and costs
finance income for 2012 was 15 million 
compared with 17 million in 2011 in 
2012 this comprises 07 million 2011 
07 million in respect of defined benefit 
pension plan interest and income earned 
on surplus funds of 08 million 2011 
10 million surplus funds are held 
principally in the united kingdom and 
united states and earn market rates of 
interest which remain negligible 
no finance costs were incurred in 2012 
2011 04 million 
in 2013 the changes to ias 19 
“employee benefits” becomes mandatory 
in addition to the increase in corporate 
costs discussed above the expected rate 
of return on pension plan assets is now 
required to be the same as the discount 
rate used to discount plan liabilities 
comparative numbers will be restated 
for 2012 giving an interest cost on the 
pension plans of 05 million compared to 
interest income reported in 2012 of 07 
million it is estimated that the net interest 
expense for the pension plans for 2013 
will be approximately 10 million
profit before tax 
reported profit before tax for continuing 
operations was 1107 million compared 
with 1143 million for 2011 adjusted 
profit before tax was up 2 per cent at 
1209 million 2011 1182 million
tax
for the group taxable profits principally 
arise in the united states the tax charge 
for the continuing group in 2012 was 
290 million 2011 264 million 
representing a current year effective 
tax rate of 278 per cent of pre‑tax profit 
in both 2012 and 2011 excluding a prior 
year tax credit of 18 million 2011 54 
million at 31 december 2012 deferred 
tax assets amounting to 284 million 
have been recognised on the balance 
sheet 31 december 2011 294 million 
at 31 december 2012 there are deferred 
tax assets amounting to a tax value of 
163 million 31 december 2011 220 
million which remain unrecognised in 
respect of unutilised non‑trading loan 
relationship losses 147 million and 
temporary differences 16 million 26
spirent commu ni cati ons pl c ann ual rep ort 2012
operational and financial review continued
business combinations
spirent made two acquisitions during 2012 
on 23 april 2012 the group acquired 
100 per cent of the share capital of 
mu dynamics inc “mu” for a total 
consideration of 398 million in cash 
mu is included within the performance 
analysis division 
at acquisition the fair value of the assets 
and liabilities acquired were determined in 
accordance with accounting standards and 
this gave rise to 139 million of intangible 
assets which are being amortised over 
five years and goodwill of 247 million 
revenue from mu was 63 million in the 
period from acquisition and it made a 
small loss of 05 million in the period 
from the 23 april 2012 closing date 
mu is on track to generate a positive 
return in 2013 in line with plan
metrico wireless inc “metrico” was 
acquired on 13 september 2012 for 
522 million metrico is included within 
the performance analysis division 
at acquisition the fair value of the assets 
and liabilities acquired were determined in 
accordance with accounting standards and 
this gave rise to 205 million of intangible 
assets which are being amortised over 
two and a half to seven years and 
goodwill of 309 million 
revenue from metrico was 64 million 
in the period from acquisition and it 
contributed 05 million of profit in the 
period from the 13 september 2012 
closing date metrico’s results are 
in line with plan
for 2013 it is expected that the effective 
tax rate will be in the region of 28 per cent
discontinued operations
the systems division has been classified 
as a discontinued operation the division 
was sold to curtiss‑wright corporation for 
a cash consideration of 632 million with 
the sale completing on 1 november 2012 
the operating result for systems after tax 
was 26 million for the period up to 
disposal 2011 67 million and the 
net profit on disposal was 445 million 
the net proceeds from the sale are in the 
process of being returned to spirent’s 
shareholders by way of on market 
share buybacks
earnings per share
adjusted basic earnings per share for 
continuing operations rose to 1338 cents 
from 1292 cents for 2011 an increase of 
4 per cent there were 6557 million 
weighted average ordinary shares in issue 
2011 6673 million basic earnings per 
share for the continuing group was 
1246 cents for 2012 compared with 
1317 cents for 2011 
a reconciliation of adjusted profit is 
provided below for continuing operations
 million 2012 2011
profit for the year 817 879
exceptional items 29 –
acquisition related 
costs 12 12
acquired intangible 
asset amortisation 45 16
share‑based payment 16 11
tax effect on the above 
items 24 02
prior year tax credit 18 54
adjusted profit for 
the year 877 862
adjusted basic 
earnings per share 1338 1292
f inancial risk management
the key objective of the group’s treasury 
department is to manage the financial 
risks of the business and to ensure that 
sufficient liquidity is available to the 
group all treasury activity operates within 
a formal control framework the board has 
approved treasury policies and guidelines 
and periodically reviews treasury 
activities additionally it is the group’s 
policy that speculative treasury 
transactions are expressly forbidden
spirent’s financial risk management 
objectives and policies and its exposure 
to risks are discussed in note 26 of notes 
to the consolidated financial statements
f inancing and cash flow
cash and cash equivalents increased 
to 2486 million at 31 december 
2012 compared with 2365 million at 
31 december 2011 spirent continues to 
be debt free the majority is held as cash 
on demand or in short term bank deposits 
and 80 per cent of the balance was 
denominated in us dollars currency 
translation has increased cash and 
cash equivalents by 22 million in 2012
continuing operating activities generated 
1203 million of cash in the year 
compared with 1130 million in 2011 
free cash flow is set out below for the 
continuing group
 million 2012 2011
cash flow from 
operations 1203 1130
tax paid 231 218
cash inflow from 
operating activities 972 912
net interest received 06 09
net capital expenditure 138 228
free cash flow 840 693  27
overview business review governance financial statements cash conversion was good with free cash 
flow for continuing operations of 840 
million for 2012 which represents 105 per 
cent 2011 84 per cent of reported 
earnings before non‑cash prior year tax 
cash inflows include the 632 million 
received from the divestment of systems 
expenses of 33 million were paid on 
the transaction
cash outflow on the acquisitions of 
mu and metrico was 920 million with 
12 million of expenses incurred in 2012 
a final dividend for 2011 and an interim 
dividend for 2012 totalling 203 million 
2011 175 million were paid share 
repurchases have resulted in a cash 
outflow of 316 million in the period 
2011 334 million of which 08 million 
relates to share repurchases made at the 
end of 2011 but settled in 2012 
defined benefit pension plans
the group operates two funded defined 
benefit pension plans which are in the 
united kingdom both of these schemes 
were closed some time ago to new 
entrants and the main plan now has 
less than ten active members 
the accounting valuation of these plans 
at the end of 2012 was a net deficit of 
248 million compared with a net deficit 
of 118 million at 31 december 2011 and 
was based on the latest triennial actuarial 
valuation at 1 april 2009 the deficit of 248 
million is all in the main plan 31 december 
2011 125 million at 31 december 2011 
there was a surplus of 07 million in a 
smaller plan which had reduced to zero 
at 31 december 2012 the increase in the 
deficit in the main plan is a result of a rise 
in the liabilities due to changes in the 
underlying assumptions principally the 
discount rate which is based on high 
quality corporate bonds 
the next triennial actuarial valuation 
at 1 april 2012 is in the process of being 
finalised such a valuation involves 
a complete review of all assumptions 
including longevity and funding once 
complete it is likely that there will be 
increases to future company contributions 
although these are unlikely to be material
the group has also reported a liability 
of 08 million 31 december 2011 
06 million in respect of united kingdom 
unfunded plan liabilities
c apital structure 
during 2012 the company repurchased 
134 million shares at a cost of 308 million 
2011 17 6 million at a cost of 342 million 
all shares repurchased during 2012 were 
cancelled in 2011 132 million were 
cancelled and 44 million were placed 
in trust 
shares were repurchased at an average 
share price of 143 pence per share in 
2012 the board intends to continue to 
repurchase shares to manage the dilution 
attributable to the group’s share incentive 
schemes and it is also envisaged that the 
return of the remainder of the proceeds 
on the divestment of systems 327 
million will be made through on market 
share buy backs
dividend
spirent’s policy is to maintain a 
sustainable progressive dividend with 
high dividend cover
the board are therefore recommending 
the payment of a final dividend for 2012 of 
183 cents 121 pence per ordinary share 
which with the interim dividend of 139 
cents 089 pence per ordinary share paid 
in september 2012 brings the full year 
dividend to 322 cents 210 pence per 
ordinary share the dividend is covered 
42 times by adjusted earnings this is an 
increase of 10 per cent over the full year 
dividend for 2011 of 293 cents and 
reflects the strong cash generation 
of the group
subject to approval by the shareholders 
at the annual general meeting the final 
dividend will be paid on 3 may 2013 to 
ordinary shareholders on the register at 
8 march 2013 payment to adr holders 
will be made on 10 may 2013 28
spirent commu ni cati ons pl c ann ual rep ort 2012
book to bill ratio
08 10 09 11 12
98
105
102
103
97
revenue
 million
4157
08 09 10 11 12
3694
4228
4705 4724
gross profit margin

08 10 09 11 12
691
709 708
696
713
key performance indicators spirent has identified the following key performance indicators 
“kpis” that it believes are useful in assessing how the group is 
performing against its strategic objectives spirent’s strategy focuses 
on medium to long term growth and therefore its achievement cannot 
just be measured by looking at performance in 2012 compared to the 
prior year trends over a number of years must also be considered
all kpis are stated for continuing operations only
description
ratio of orders booked to revenue billed 
which is a measure of the visibility of our 
future revenues at current levels of activity 
the group aims to maintain a book to bill 
ratio of 100 or higher
description
growth in revenue is a measure of how we 
are growing our business our goal is to 
achieve year‑on‑year growth in addition 
our focus has been on increasing our 
market share and growing our new product 
revenues which are some of the key 
components of our strategy
description
gross profit as a percentage of revenue 
is a measure of our profitability we seek 
to maximise our gross margin through 
operational excellence in all aspects 
of our business
commentary
the ratio was below 100 at 97 for 
2012 2011 103 this reflects the more 
challenging market conditions experienced 
by the group’s performance analysis 
division in the second half of 2012
commentary
for the group overall revenue was flat the 
performance analysis division grew 4 per 
cent year‑on‑year excluding the effect of 
2012 acquisitions growth was 1 per cent 
demand was strong for wireless data center 
and high speed ethernet test solutions but 
this was offset by weakness in demand for 
positioning test products which suffered a 
26 per cent decline in service assurance 
revenue was down 29 per cent due to a 
fall in demand for our legacy products
commentary
gross profit margin was higher at 713 per 
cent compared with 696 per cent in 2011 
the principal driver was a higher software 
and services content an excess inventory 
provision was charged in service assurance 
of 14 million as an exceptional item 
excluding this provision gross margin 
was 716 per cent  29
overview business review governance financial statements free cash flow 
3
 million
714
08 09 10 11 12
764
755
693
840
adjusted basic earnings per share “eps” 
12
cents
1104
08 09 10 11 12
1028
1090
1292
1338
return on sales 
1

08 10 09 11 12
207
250
219
248
253
adjusted operating profit 
1
 million
862
08 09 10 11 12
809
1057
1169
1194
description
return on sales is the measure of our 
overall profitability we operate in markets 
which have high operating leverage and 
we strive to achieve industry best‑in‑class 
operating returns compared with our peers
description
adjusted operating profit is the measure 
used to evaluate the overall performance 
of the group as well as each of our 
operating segments
our goal is to achieve year‑on‑year growth
description
this is the amount of adjusted earnings 
attributable to each share in issue 
using an “adjusted” measure enables 
period‑on‑period comparisons to be made 
of spirent’s performance the aim is to 
achieve growth year‑on‑year a component 
of executive directors’ compensation is 
dependent on achieving an eps target 
description
we focus on cash generation as a measure 
of the quality of our earnings and our aim 
is to achieve a high conversion of earnings 
into cash each year having strong cash 
generation allows spirent to invest in 
organic growth pursue strategic 
acquisitions and pay sustainable 
progressive dividends to shareholders
commentary
return on sales was maintained at 
25 per cent after increasing investment 
in product development in 2012 to support 
the long term growth of the business 
spirent’s return on sales is among the best 
in the test and measurement industry
commentary
operating profit increased by 2 per cent 
largely as a result of higher gross margin 
we managed costs carefully throughout 
the year but made further investment 
in product development
commentary
adjusted basic eps rose to 1338 cents 
from 1292 cents for 2011 an increase 
of 4 per cent
comparison against 2008 and 2009 
is distorted due to the abnormally low 
tax rates in those years 
commentary
cash conversion was strong with free 
cash flow of 840 million for 2012 
which represents 105 per cent of reported 
earnings before non‑cash prior year tax 
at 31 december 2012 cash balances were 
2486 million and there was no debt
notes
1 before exceptional items acquisition related costs acquired intangible asset amortisation 
and share‑based payment
2 before the tax effect of items in note 1 and prior year tax
3 operating cash flow after tax net interest and net capital expenditure 30
spirent commu ni cati ons pl c ann ual rep ort 2012
principal ris ks 
and uncertainties
we conduct regular risk reviews to identify the major risks in the business 
which may affect our operating and financial performance and where 
possible put in place mechanisms to mitigate them significant risks 
are reviewed by the board and the audit committee it is not possible 
to identify every risk that could affect the business and the actions 
described below to mitigate those risks cannot provide absolute 
assurance that the risk will not occur or adversely affect the operating 
or financial performance of the group these processes are more fully 
described in the directors’ statement on corporate governance 
the principal risks and uncertainties which the directors believe 
are currently faced by the spirent group are discussed below
r isk an d potential im pact mitigation action s
macro‑economic and industry sector
spirent is a global business exposed to the current world economic 
conditions we are particularly exposed to conditions in the 
telecommunications sector into which we sell many of our products and 
services and which has experienced significant downturns in the past 
a deterioration in economic or sector conditions may lead to a 
reduction in the level of demand for spirent’s products and services 
and cause our customers to delay their purchasing decisions
although the eu has taken steps to stabilise the euro there still 
remains significant financial and political uncertainty in the eurozone 
with the potential for a full or partial break‑up of the euro spirent is 
exposed to these factors through its operations in the eurozone 11 
per cent of spirent’s revenue is derived from this region however the 
economic situation in the eu which has been affecting growth rates 
in this region may also affect demand globally
having the ability to adapt to changing market dynamics is key in order 
to minimise the effects of adverse economic or sector conditions 
our businesses closely monitor both market and geographic trends 
so that we can respond to changes in demand and are in a position 
to take timely actions to protect profitability where possible 
in addition spirent has a broad product portfolio of innovative test 
solutions and a large number of geographically diverse customers 
a component of our strategy is our global reach
technological change and competition
spirent sells complex solutions in industries that are characterised 
by rapid technological changes keeping at the forefront of these key 
future technologies is critical to our success and to ensure that we 
remain competitive in our markets
it is critical that our innovation is directed at the right areas to enable 
spirent to develop those solutions that our customers need at the 
time when they need them
if we fail to achieve these objectives our competitive position 
revenue and operating profits will suffer
developing the “right solution” at the “right time” is a 
key component of spirent’s strategy we always work closely 
with customers and remain focused on their requirements and 
believe we are investing in areas that represent their future 
a portfolio planning team is in place which is responsible for 
reviewing and making investment decisions across spirent’s portfolio 
of investment opportunities
we continue to make significant investment in product development 
in 2012 our investment was increased by 3 per cent to 861 million 
in order to underpin our organic growth initiatives
during 2012 we have made organisational changes to further facilitate 
knowledge of new market areas outside our served market with 
individual managers designated responsibility for investigation 
review and action plans arising from such initiatives  31
overview business review governance financial statements r isk an d potential im pact mitigation action s
r eliance on contract manufacturers
we use contract manufacturers for the manufacture of a substantial 
amount of our products our major contract manufacturer is located 
in thailand 
disruption or financial problems of contract manufacturers 
or limitations in the manufacturing capacity at contract manufacturers 
could either limit supply or increase our costs
we work closely with our contract manufacturers and maintain a regular 
on‑site presence to minimise the effect on supply that could be caused 
by disruption at contract manufacturers there are contingency plans 
in place to transfer manufacturing to other locations
business continuity risks
operational risks are present in the group’s businesses these 
risks include the risk of failed internal and external processes and 
systems human error and external events such as a natural disaster 
for example a significant portion of our communications operations 
are located in california which has in the past experienced natural 
disasters including earthquakes and wildfires 
a significant natural disaster could disrupt our ability to conduct 
business and impact adversely our revenue and operating results
an important component of spirent’s corporate governance 
is its integrated risk management strategy and its regular 
self‑assessment of risks encompassing all business units
it disaster recovery plans are in place for all core business systems 
in 2012 the disaster recovery plans were reviewed for each business 
unit to ensure that the wider operations are all fully covered in addition 
the group’s largest manufacturing subcontractor has worldwide 
multiple sites and comprehensive business continuity plans
r etention and recruitment of key staff
spirent is its employees so attracting and retaining highly qualified 
and skilled employees is essential in enabling us to deliver on our 
strategy and to the success of our business
we face competition for personnel from other companies and 
organisations and the loss of our key employees the failure to attract 
and retain other highly skilled employees or the failure to adequately 
plan for succession may impair our ability to run and expand our 
business effectively
investing in our people is at the core of our strategy we aim to find 
keep and engage the highest calibre of employees and encourage 
their contribution and development an environment that fosters 
innovation and collaboration is critical to spirent’s success as 
is ensuring our incentive plans are competitive 
at a meeting of the board in august 2012 we devoted a session 
to succession planning for senior posts in the company and 
organisational structure
appropriate career paths and internal recognition programmes are 
developed for both technical and non‑technical staff further information 
on our employees is provided in the csr statement on pages 33 and 34
intellectual property
spirent’s success is dependent in part on proprietary technology 
which may be infringed by others inadvertently or otherwise 
protecting our proprietary technology is important to enabling 
us to compete successfully in our industry
companies in the telecommunications industry often aggressively 
protect and pursue their intellectual property rights and may assert 
infringement claims against spirent such claims can result in significant 
defence costs and may affect spirent’s ability to market its products
we have active intellectual property protection programmes 
in place to obtain appropriate intellectual property protection 
in a cost effective manner 
there are procedures in the development of new products that 
include consideration of intellectual property rights of third parties 
we also consult internal and external legal counsel experienced 
in intellectual property matters
acquisitions
a key element of our strategy is to evolve and expand our solutions 
portfolio which may be achieved either organically or through 
acquisition
integration of acquisitions can be a complex process and the results 
expected from acquisitions may not be achieved due to problems 
encountered in integration changes in the market conditions or 
sometimes deficiencies arising in the due diligence processes 
we carry out rigorous strategic and financial evaluations of all 
acquisition opportunities detailed financial and commercial due 
diligence are performed 
the board will only authorise transactions after all due diligence has 
been successfully completed and where the financial hurdles are within 
the agreed guidelines integration plans and processes are carefully 
considered prior to acquisition
the board regularly reviews post‑acquisition performance 32
spirent commu ni cati ons pl c ann ual rep ort 2012
corporate social 
responsibility statement 
sustainable value
corporate responsibility is integral to the way spirent conducts 
its business and we are committed to advancing our policies and 
systems across the group to ensure that we address all aspects 
of corporate social responsibility “csr”
o ur responsibility framework
ethics
spirent expects that all of its business is conducted 
in compliance with high ethical standards of business 
practice we apply these standards to all dealings 
with employees customers suppliers and 
other stakeholders
employees
spirent is its employees to sustain our competitive 
advantage the group maintains an environment where 
all employees can develop to their fullest potential 
have the opportunity to give back to their communities 
and advance their careers
health and safety
spirent is committed to continually improving its 
health and safety performance and is also committed 
to employee wellbeing by encouraging the adoption 
of healthier lifestyles by its staff members
sustainability 
and 
environmental
the group is committed to the concepts of pollution 
prevention minimising environmental impacts 
and eco‑efficiency
community
spirent aims to build stronger and healthier global 
communities through education charitable donations 
and support of non‑profit agencies in the communities 
in which we operate
the board takes ultimate responsibility 
for csr with a fundamental commitment 
to create and sustain long term value for 
shareholders recognising that acting 
responsibly and sustainably creates 
value spirent’s csr strategy covers our 
accountability to all of our stakeholders 
this includes striving for the highest 
ethical standards of business practice 
how we support develop and reward our 
employees how we minimise our impact 
on the environment and how we support 
and engage in the communities in which 
we operate  33
overview business review governance financial statements •	 we aim to be a responsible partner 
within our local communities and
•	 employees are encouraged and 
supported to report in confidence 
any suspected wrongdoings 
“whistleblowing”
appropriate ethical behaviour is reviewed as 
part of the group’s internal control process
employees
spirent is its people
spirent understands that the key to success 
is centered on our employees and that one 
of our primary responsibilities in csr is to 
the people who are spirent we rely on our 
highly skilled motivated and empowered 
employees to drive the growth of our 
business these 1400 employees 
working in over 25 locations in more 
than 12 countries provide a matchless 
competitive advantage for us creating 
innovative products for our customers 
to sustain our competitive advantage and 
bring together this culturally diverse group 
of employees spirent has built a global 
culture based on four values – being 
creative competitive customer focused 
and collaborative these values form the 
foundation of spirent’s ability to inspire 
innovation and enrich the lives of millions 
of people around the world
employees by geographic location – 
continuing operations
1
3
2
1 north america 64
2 asia 23
3 europe 13
ethics
spirent expects that all of its business is 
conducted in compliance with high ethical 
standards of business practice we apply 
these standards to all dealings with 
employees customers suppliers and 
other stakeholders during 2012 spirent’s 
employees were again clearly reminded of the 
standards expected of them by the regular 
communication and explanation of spirent’s 
vision mission and values statements
spirent has continued to ensure that all its 
systems controls and training comply with 
the anti‑bribery and corruption legislation 
in all the countries where we operate and 
that a culture of prevention and detection 
of all forms of bribery and corruption is in 
place this policy applies to spirent’s 
subsidiaries and business partners
the group’s ethics policy which has 
been approved by the board is available 
on our website at wwwspirentcom 
our ethics policy has been developed 
to ensure that the group’s business is 
conducted in adherence with high ethical 
and legal principles and sets standards 
of professionalism and integrity for all 
employees and operations worldwide
the following is a summary of the 
ethics policy
•	 all employees have the right and 
responsibility to ensure that spirent’s 
business is conducted with high ethical 
and legal principles
•	 our policy is to operate within 
applicable laws
•	 discrimination or harassment of any 
kind will not be tolerated
•	 as a matter of policy we do not make 
political donations
•	 no bribes shall be given or received
•	 conflicts of interest must be avoided
investing in our employees
for more than 75 years spirent has 
sustained a globally effective organisation 
and provided a great place to work through 
career advancement opportunities 
resulting in more than 8 per cent of 
employees receiving a promotion in 2012 
workforce diversity and transparent 
communication to find keep and bring 
out the best in our people we constantly 
review and improve our benefits 
retention development programmes 
and career growth opportunities to ensure 
that spirent remains a great place to work
at spirent there are several reward and 
recognition programmes one way we 
reward and recognise excellence is through 
our global recognition programme which 
provides spot excellence and executive 
awards these awards are one‑time cash 
incentives as recognition for exemplary 
contributions that demonstrate one or more 
of our key values spirent also provides 
project based incentives to recognise and 
reward employees for extraordinary work 
that results in significant overachievement 
of critical projects spirent’s patent award 
programme rewards employees for 
being innovative while protecting the 
company’s investment and intellectual 
property rights
spirent believes in sharing its success 
with its employees with all employees 
participating in some form of variable 
compensation tied to the achievement 
of key goals such as revenue growth 
and profitability growth sharing plan for 
individual contributors through managers 
sales commission plan for sales 
employees and management incentive 
plan for senior managers and above
our challenging work environment inspires 
innovation with continuous learning as an  34
spirent commu ni cati ons pl c ann ual rep ort 2012
corporate social responsibility statement continued
essential part of our human resources 
philosophy in 2012 career development 
centered on the individual providing 
a variety of education and learning 
opportunities over time in a number of 
different ways senior leaders participated 
in the leadership 360 feedback 
programme and employees completed over 
500 hours of e‑learning on a wide range of 
technical and business topics in our asia 
pacific region employees participated 
in technical workshops lunch and learn 
sessions and one of five toastmasters 
international clubs at spirent we also 
launched the new spirent learning center 
on our intranet which offers information 
on career management tools for managers 
and resources for new employees 
engaging our employees
spirent understands like all businesses 
it must work tirelessly to keep our talent 
in an increasingly competitive industry 
that’s why we seek to connect with and 
support our employees in many ways 
including transparent communication 
showing appreciation for a job well done 
and providing competitive compensation 
and benefits programmes our efforts 
continue to bear positive fruit with global 
voluntary turnover at 8 per cent a result 
that stands out among our competitors 
where turnover in the high tech industry 
averages over 10 per cent
spirent believes that access to health care 
benefits is a fundamental responsibility 
to our employees results from our most 
recent employee opinion survey showed 
a marked increase in satisfaction with 
benefit programmes around the world 
in all of our locations we align employee 
needs with the healthcare and wellness 
options available in each country that 
are both comprehensive and competitive 
in the united states where more than 
60 per cent of our employees reside 
we offer competitive health care benefits 
including medical dental and vision to all 
employees and their spouses or qualifying 
same‑sex and opposite‑sex domestic 
partners and dependents 
celebrating our diversity
spirent is committed to upholding human 
rights and fully believes that diversity fuels 
business success in a multicultural world 
our rich diversity is reflected in our work 
environment – including ethnicity race 
gender age sexual orientation faith 
culture and global experiences we 
believe that this variety of backgrounds 
experiences beliefs personalities 
knowledge skills and ideas not only creates 
an enriching experience for our employees 
diversity also yields the innovation and 
creativity demanded by our customers 
the group is committed to providing 
equality of opportunity to all existing and 
prospective employees without unlawful 
discrimination on the basis of religion 
disability gender age marital status 
sexual orientation race ethnicity or 
any other protected status 
health and safety
the chief financial officer is the 
director appointed by the board to have 
responsibility for the health and safety 
performance of the group no major health 
and safety issues were reported by the 
chief financial officer to the audit 
committee and board during the year
the health and safety risk profile of the 
group improved again in 2012 with the 
disposal of the systems division which 
was the only division within spirent which 
had not completely outsourced all its 
manufacturing the new businesses 
acquired by spirent in 2012 mu dynamics 
and metrico wireless both have the same 
health and safety environment as the rest 
of the continuing spirent group the main 
risks of the group continue to be based 
around final test and assembly of products 
and working environment issues such as 
ergonomics and repetitive strain injury 
toastmasterscentennial campus in raleigh nc was started in 2011 and is one of five toastmasters international 
clubs at spirent  35
overview business review governance financial statements programme and appropriate resources are 
made available for this purpose
sustainability and 
environmental
the group has made significant progress 
in 2012 in integrating sustainability and 
environmental strategy into its operations 
and in continuing to improve environmental 
performance in addition to continuing with 
existing initiatives on space utilisation 
logistics and power consumption in 
products the group has also begun 
to implement the recommendations of 
a major review of environmental strategy 
that was commissioned in 2011
environmental policy and compliance
the group environmental policy applies 
to the company and to all subsidiaries 
worldwide it commits the group to 
prevention and control of pollution 
minimising environmental impacts 
eco‑efficiency and to adopt responsible 
environmental practices
the group is also committed 
to compliance with all applicable 
environmental regulation in all of 
the jurisdictions in which we operate
to meet these objectives the group 
endeavours to continuously improve 
environmental performance and to make 
robust environmental management 
integral to its overall strategy
the full policy can be found at  
wwwspirentcom in the corporate 
responsibility section
as in previous years the group’s main 
direct environmental impacts result from 
offices laboratories and assembly sites 
the group continued to have very low 
accident rates in 2012 and no incidents 
required any hospitalisation
the group health and safety policy places 
responsibility for the management of 
health and safety on local management 
who are supported by local external 
advisers where necessary it is the group’s 
policy that each business unit should have 
a senior individual designated as being 
responsible for ensuring the business unit 
conforms to local statutory health and 
safety regulations as well as the group 
policy an annual questionnaire on health 
and safety performance is completed by 
our business units and any issues are 
addressed and resolved independent 
external reviews of the company’s health 
and safety performance are conducted 
annually at selected business units 
regular designated health and safety 
awareness training programmes are 
also carried out
spirent recognises the importance that 
health and safety is managed to high 
standards successfully throughout all 
levels of the organisation successful 
health and safety management 
contributes to spirent’s overall success 
by preserving and developing staff and 
physical resources thereby reducing 
costs and liabilities it is an essential 
element of its corporate responsibility
spirent is committed to continually 
improving its health and safety 
performance and to employee wellbeing 
by encouraging the adoption of healthier 
lifestyles by its staff members regulatory 
requirements and the outline of care form 
the basis upon which spirent’s commitment 
is achieved by realistic planning review 
and development spirent maintains a 
successful health and safety management 
accommodating employees it systems 
and travel business units across the 
group continue to take measures to 
reduce impacts including improved space 
utilisation sensor controls of equipment and 
recycling programmes the group has also 
continued to reduce total floor space used
percentage reduction of square feet used 
compared to previous year
2012 2011
 42 137
during 2012 we installed two electric 
vehicle charging stations at spirent offices 
in sunnyvale california these charging 
stations are available to the general public 
as well as spirent employees and the 
charging points are already being well 
used charging stations at additional 
spirent locations will be installed 
where there is demand for their use
having introduced video conferencing 
into the group in 2010 we invested further 
in 2012 increasing the number of sites 
covered and the quality of the user 
experience spirent is confident that video 
conferencing has reduced travel across 
the group but it is difficult to quantify 
the benefit definitively
almost all of our products continue 
to be produced by external contract 
manufacturers and we monitor the 
environmental performance of our suppliers 
through audits and surveys our largest 
contract manufacturer is responsible for 
approximately 66 per cent of our production 
and they have an iso 14001 certified 
environmental management system 
alongside an extensive carbon reduction 
programme the table overleaf shows their 
performance in reducing emissions for the 
last two years for which data is available 36
spirent commu ni cati ons pl c ann ual rep ort 2012
corporate social responsibility statement continued
percentage reduction of c0
2
 emission over 
previous year
2011 2010
 119 61
product design and manufacturing 
processes take into consideration the 
recycling and disposal of products at the 
end of their life as far as is possible 
product design also seeks to reduce power 
consumption in use for our 10gb ethernet 
products the following reductions have 
been achieved
percentage reduction of power 
consumption of 10gbe products over 
previous year
2012 2011
 33 20
our business units comply with the 
waste electrical and electronic equipment 
regulations the batteries directive and 
the california electronic waste recycling 
programme new products are designed 
to meet the restriction of hazardous 
substances directive “rohs” also known 
as directive 201165eu even though 
spirent communications’ hardware 
products are classified as category nine 
monitor and control equipment and 
are therefore currently out of scope 
with the rohs directive all spirent 
communications’ hardware products will 
be in compliance with the rohs directive 
at such time they are brought in to scope 
under the uk’s mandatory carbon emission 
trading scheme crc energy efficiency 
scheme spirent is only required to 
make an information disclosure
environment strategy
following a comprehensive review of our 
sustainability strategy and management in 
2011 we have an enhanced understanding 
of the impacts that we have on the 
environment and on the communities in 
which we operate this has spurred the 
group to make greater efforts to integrate 
sustainability into overall strategy based 
on greater visibility of the material issues 
for our business
the following material issues were 
identified in this review
•	 greenhouse gas emissions and 
climate change
•	 energy consumption in offices 
and manufacturing
•	 environmental management
•	 environmental reporting
the key environmental issues were 
energy consumption and greenhouse gas 
emissions and these have been the focus 
of the group’s efforts in 2012
the group has made great progress 
to date in setting the framework to 
proactively manage and improve 
sustainability performance this review 
of the issues material to the group has 
positioned spirent to set a clear strategic 
course in leveraging sustainable business 
thinking to improve overall performance 
and this has been the main theme of the 
work in this area in 2012
2012 work programme
the work over the course of 2012 has 
focused on defining the specific tools 
and methodologies that will add value 
in driving forward the group’s strategic 
sustainability objectives this has also built 
on the existing culture of environmental 
management at the paignton site by using 
this location as a center of excellence and 
proving ground for the group piloting 
certain key initiatives
the 2012 work programme comprised
•	 development of a low carbon center of 
excellence at the site at paignton uk
•	 development of a low carbon site 
assessment toolkit
•	 review of existing group environment 
and ethics policies
•	 development of sustainability 
management processes
paignton low carbon center of excellence
the positioning site located in paignton 
uk has had an iso 14001 certified 
environmental management system for 
several years and has a good track record 
in improving environmental performance 
for this reason the site was selected to 
act as a low carbon center of excellence for 
the group piloting a number of initiatives 
during 2012 as a result a wide range of 
potential low carbon technologies and 
services have been assessed for this site 
and financial environmental and strategic 
business cases have been developed for 
suitable candidate technologies the key 
outcomes from this project are
•	 a 15 per cent reduction in unit costs 
of electricity
•	 identification of further potential 
energy cost savings of 25 per cent 
based on technology and better 
energy management
•	 investment in a solar photovoltaic 
system that will generate 10 per cent 
of annual electricity consumption 
at the site
•	 business cases have been developed 
for the following low carbon 
technologies with positive npv and 
payback under ten years it is expected 
that these will be implemented in 2013
 – insulation
 – voltage optimization
 – air conditioning and heating system 
upgrades
 – led lighting
l ow carbon site assessment toolkit
a toolkit has been developed which 
can be used at sites across the group 
to identify carbon and energy savings 
this toolkit will be trialled at a number 
of group sites globally in 2013  37
overview business review governance financial statements group environmental and ethics policies
the group environment and ethics policies 
have been reviewed against leading 
standards iso 14001 environment 
and iso 26000 corporate responsibility 
in order to ensure that all of the issues in 
these areas are properly addressed in line 
with the constantly evolving legislation 
and best practice in the field 
group sustainability management 
processes
the group’s existing management 
procedures for environmental and 
sustainability were reviewed and toolkits 
were developed to ensure that all of our 
global sites continue to meet group policy 
requirements and to improve performance 
the toolkits cover the identification and 
management of environmental impacts 
and of legal and regulatory requirements 
these will be trialled at a number of global 
sites during 2013
2013 work programme
in 2013 the emphasis will be on utilising 
the experiences gained in 2012 and the 
lessons learned at paignton to deliver 
value across the group the most 
financially and environmentally effective 
tools and measures identified in 2012 will 
be rolled out to selected sites across the 
group this will sit alongside the trialling 
of the group management processes 
discussed above
in addition to the specific measures 
that will be trialled at a number of global 
sites the group will also seek to enhance 
internal and external reporting of 
sustainability metrics with a focus on 
greenhouse gas emissions this is partly 
driven by the forthcoming requirement for 
uk quoted companies to report emissions 
in the directors’ report but the group 
also intends to participate in the carbon 
disclosure project in 2013 and to have 
greater internal reporting on key 
sustainability issues
community
giving back to the communities where our 
employees and customers live and work
because it’s not enough to be a great 
company spirent supports a variety of 
worthy causes to be a great neighbour too 
spirent supports technical education and 
local charitable programmes and 
encourages employee volunteerism and 
participation within the communities 
where they live and work 
building talent for the 21st century
to help students prepare for the 
communication revolution of the 21st 
century the group has been actively 
working with local public and private 
non‑profit educational organisations 
throughout 2012 we continued to support 
education by offering internships and work 
experience programmes that not only help 
students develop professional knowledge 
but also provide future talent for our 
entire organisation
in china we offered the internship 
opportunities to 26 students from top 
universities in china including the beijing 
university of posts and telecommunications 
“bupt” and beihang university beijing 
university of aeronautics  astronautics 
in 2012 spirent provided scholarships to ten 
students attending bupt all of whom will 
join spirent as interns as part of their college 
education in electrical engineering
in the uk us and india spirent provided 
internship opportunities to more than 20 
engineering degree candidates we also 
hired an additional 11 college interns in 
non‑engineering functions including 
finance manufacturing and marketing 
in addition to internships our managers 
routinely work with local universities 
and industry groups as one example 
our uk management team participated 
in “employability week” at south devon 
college where they helped students 
understand how to write a cv and present 
sunnyvale employees sorted and re‑boxed more than 10 tons of oranges at the second h arvest food bank 38
spirent commu ni cati ons pl c ann ual rep ort 2012
corporate social responsibility statement continued
themselves at an interview in new jersey 
our manufacturing team participated 
in “manufacturenj” a nj advanced 
manufacturing talent network grant 
awarded to njit continuing professional 
education by the new jersey department 
of labor and workforce development 
spirent managers met with over 200 
middle school high school and 
college‑aged students along with their 
faculty and administrators to discuss 
the variety of careers available in 
manufacturing and the skills they 
will need to succeed
building strong communities by helping  
those in need
spirent has a long history of supporting 
our local communities and helping those 
in need throughout 2012 the group 
continued to provide aid to charitable and 
non‑profit organisations through corporate 
sponsorships and contributions that 
enhance our local communities when 
the eastern seaboard of north america 
suffered devastating damage and injury 
due to the unprecedented impact of 
superstorm sandy spirent responded 
to this urgent need with donations of 
10000 to the american red cross and 
7500 to the kids hurricane relief 
effort for disaster relief efforts thankfully 
everyone in the spirent family weathered 
the storm pretty well and many of our 
eatontown employees offered their talent 
and financial support to neighbouring 
communities who didn’t fare as well
our calabasas team raised 20350 for 
the american cancer society’s relay for 
life employees and their families from 
all departments participated in a 24‑hour 
walk not only raising more than any of 
the other 46 companies and agencies 
participating but also more than any 
team in the history of the calabasas 
relay for life 
in total spirent made charitable 
cash donations of 118000 in 2012 
2011 111000
committing ourselves –  
volunteerism at spirent
we’re proud of our employees who 
generously donate their time expertise 
and money to many different organisations 
around the globe our employees are 
active volunteers in their communities 
where they support a broad variety of 
causes organisations and activities 
ranging from health organisations 
educational programmes food banks and 
environmental causes they serve in many 
different ways as fundraisers board 
members coaches and mentors
our employees not only donate their time 
– they enthusiastically embrace the true 
spirit of volunteerism in their local 
communities employees in our crawley 
uk office participated in movember and 
demonstrated their gallant support for 
men’s cancer awareness by sprouting 
moustaches throughout the month of 
november many of our employees around 
the world volunteer to help feed the 
hungry raleigh north carolina employees 
packaged 24000 life‑saving meals that 
will be sent to support transformational 
development programmes in developing 
countries by stop hunger now sunnyvale 
california employees sorted and re‑boxed 
more than 10 tons of oranges at the 
second harvest food bank these boxes 
are then sent to 740 sites including food 
pantries soup kitchens and shelters 
more than half the food second harvest 
provides is fresh produce
the eatontown new jersey office supports 
the salvation army’s angel tree program 
which provides an opportunity to help 
local families and children in need during 
the holidays  39
governance
corporate governance 40
board of directors 42
report of the directors 44
statement of directors’ responsibilities in respect of the  
annual report and the financial statements 49
directors’ statement on corporate governance 50
report on directors’ remuneration 55 40
spirent commu ni cati ons pl c ann ual rep ort 2012
c orporate governance active stewardship
the board’s activities focus on strategy governance and 
business performance
how we engage with our stakeholders
shareholders and  
investment community
l
– annual report
– website
–  analyst and investor meetings
– annual general meeting
– presentations
employees
l
–  regular face‑to‑face meetings
– training and career development
–  written communications and updates
– spirent intranet
– employee opinion survey
customers and suppliers
l
– face‑to‑face meetings
– conferences and industry events
–  seminars and webinars
–  we b s i t e
–  s o c i a l m e d i a
strategy and business performance
strategy and business development 
is a primary focus for the board and 
is discussed at every meeting with a 
dedicated strategy summit being held 
each year at which the group’s overall 
strategy is reviewed by the board over a 
number of days we review and analyse 
market conditions and technology trends 
and openly debate issues such as risk 
strategic direction and allocation of 
product development investment it is 
critical that as a board we have a deep 
understanding of and remain close to 
our businesses regular site visits are 
therefore arranged with the board also 
taking the opportunity to talk directly with 
spirent’s customers for example in may 
2012 the board went to beijing in china 
one of our principal product development 
locations and where key asian customers 
are located further customer and site 
visits are planned for 2013
prior to the start of each financial year the 
board reviews and approves management’s 
plan for the coming year making sure that 
stretching but realistic targets are put in 
place the priorities for discussion are 
revenue growth margins earnings growth 
and cash generation some of our key 
performance indicators as well as ensuring 
that sufficient investment is made in 
product development opportunities so that 
this one year plan aligns with the long term 
strategy of spirent as more fully explained 
in the remuneration report these one year 
financial goals then form the basis for 
short term incentive targets for our 
executive directors
at each board meeting the executive 
directors update the board on market 
trends and conditions together with the 
company’s performance against the one 
year plan and where necessary present 
revised forecasts which are again openly 
challenged and debated
alex w alker
chairman  41
overview business review governance financial statements corporate governance
achieving good governance is key to 
the long term success of the business 
it ensures that we remain a responsible 
company and underpins our culture and 
reputation as an organisation as a board 
we are conscious of our obligations to 
think deeply thoroughly and on a 
continuing basis regarding our duties
spirent is fortunate to have non‑executive 
board members with extensive experience 
in areas critical to the long term future 
success of the company covering a deep 
understanding of our industry technology 
corporate strategy finance and investment 
this experience enables the non‑executives 
to add entrepreneurial leadership with open 
and rigorous debate that provides a valuable 
external and balanced perspective to the 
proceedings we believe that our board 
members complement each other 
delivering a broad and appropriate 
balance of skills
consideration of the significant risks 
that affect the company both internal 
and external their mitigation and the 
effectiveness of internal control is 
an essential component of corporate 
governance and these issues are 
deliberated by the board at meetings 
throughout the year
employees
spirent’s performance in 2012 has been 
achieved through the talent dedication 
and commitment of all our employees and 
management teams throughout the world 
our appreciation goes to all of them for 
their contribution to the continuing 
success of the company
we are well aware that spirent’s greatest 
resource is its employees spirent’s people 
create and drive our innovation as part of 
our continuing process for ensuring that 
we have the necessary people in place to 
meet our strategic aims in august 2012 
the board again reviewed succession 
planning for senior positions in the 
company and our organisational structure
board diversity
spirent has enjoyed a stable and 
dedicated board during 2012 however 
the board is mindful of the benefits of 
having a diverse range of members with 
a broad range of skills backgrounds 
and experience and in pursuit of these 
we were delighted to announce the 
appointment of sue swenson to our 
board as a non‑executive director in 
february 2012 sue has already made 
a valuable contribution to the board’s 
deliberations through her wealth of 
experience in the telecommunications 
and technology sectors
the board will continue to follow a policy 
of ensuring that we appoint the best 
people for the relevant roles and recognise 
the importance and benefits of greater 
diversity both at board level and 
throughout the group and will take 
this into account when considering 
any particular appointment
board evaluation
during 2012 the board commissioned 
an externally facilitated evaluation 
process and we are delighted to report 
that the feedback from that assessment 
was extremely positive with very few 
recommendations for improvement 
in our performance we will now take 
these recommendations forward
further information on board activities 
can be found in the directors’ statement on 
corporate governance on pages 50 to 54 42
spirent commu ni cati ons pl c ann ual rep ort 2012
b oard of d irectors alex walker 66
chairman
alex joined the board in december 2006 and was 
appointed chairman of the company in march 
2010 he chairs the nomination committee and 
attends other committee meetings by invitation
he is responsible for leading the board and 
ensuring that it operates in an effective manner 
as chairman he sets board agendas and ensures 
sufficient time is available for discussing all 
agenda items particularly key strategic issues 
he is also responsible for promoting a culture of 
openness and debate within the board ensuring 
constructive relations between the executive and 
non‑executive directors and encouraging effective 
communication with shareholders
until august 2006 alex was chief executive 
of yule catto  co plc and until april 2010 he 
was a non‑executive director chairman of the 
remuneration committee and member of the 
audit and nomination committees of rotork plc
alex is a non‑executive director of zotefoams plc
bill burns 45
chief executive officer
bill was appointed to the board in november 2008
he is responsible for formulating the group’s 
objectives and strategy for approval by the board 
working with the cfo he sets the annual budget 
and medium term plan and is responsible for 
reporting performance against plan to the board 
bill also plays a key role in identifying and 
executing acquisitions and disposals
before his appointment to the board bill was chief 
executive officer of the communications group 
in this position he was responsible for the overall 
leadership strategy investments coordination of 
resources and leveraging of the company’s breadth 
and depth of technology across all of the 
communications group’s business units
before joining the company in november 2004 
bill held several executive leadership positions at 
tellabs inc including senior vice president global 
marketing senior vice president – europe middle 
east and africa and vice president – competitive 
service provider sales
bill holds an associate degree in engineering from 
the pennsylvania state university a bachelor of 
science degree from college misericordia and a 
master of business administration degree from 
temple university
eric hutchinson 57
chief financial officer
eric was appointed to the board in january 2000
he is responsible for overseeing the financial 
operations of the group and setting its financial 
strategy in conjunction with the audit committee 
and the board he also oversees the overall 
framework for financial forecasting planning 
analysis and reporting
before his appointment to the board eric had 
previously been responsible for all financial 
reporting and control within the group he joined 
the company in 1983 was appointed chief 
accountant in 1987 and became head of 
corporate accounting in 1997
eric holds a degree in history from the university 
of leicester and undertook postgraduate research 
in contemporary history at trinity college oxford 
he is a fellow of the association of chartered 
certified accountants and a member of the 
financial reporting review panel  43
overview business review governance financial statements ian brindle 69
senior independent 
non‑executive director
ian was appointed to the board 
in december 2006 he is chairman 
of the audit committee and serves 
on the nomination and 
remuneration committees
as senior independent director 
he is responsible for meeting with 
the other non‑executives to review 
the chairman’s performance and is 
available to shareholders to discuss 
their concerns
he was senior partner of price 
waterhouse from 1991 to 1998 
and chairman of pricewaterhouse 
coopers until 2001 ian was also a 
member of the accounting standards 
board between 1992 and 2001 and 
deputy chairman of the financial 
reporting review panel between 
2001 and 2008
ian serves as non‑executive 
chairman of sherborne investors 
guernsey a limited sherborne 
investors guernsey b limited and 
as a non‑executive director on the 
boards of fc asset management plc 
and elementis plc
duncan lewis 61
independent non‑executive 
director
duncan was appointed to the board 
in july 2007 he is a member of the 
audit nomination and remuneration 
committees
he has wide‑ranging experience in 
the telecommunications industry and 
provides advice and counsel to the 
board on major strategic issues
until march 2011 duncan was 
chief executive officer of vislink plc 
and until october 2008 was senior 
adviser to the carlyle group 
assisting them in developing strategy 
and identifying investments in the 
telecommunications and media 
sectors worldwide
prior to joining the carlyle group 
duncan served as chief executive 
officer and president of gtsebone 
managing director of equant nv and 
chief executive officer at granada 
media group and mercury 
communications
after serving in senegal for voluntary 
service overseas duncan studied at 
cambridge university and was also 
a visiting professor of business 
management at strathclyde 
university
duncan is chairman of nextiraone 
eu and workshare limited 
non‑executive director of eunetworks 
group limited and director of several 
other companies
tom maxwell 65
independent non‑executive 
director
tom was appointed to the board 
in october 2007 he is chairman 
of the remuneration committee 
and a member of the audit and 
nomination committees
he has considerable fund 
management and investment trust 
experience and as chair of the 
remuneration committee is 
responsible for developing the 
company’s policy on remuneration 
of executive directors and other 
senior managers
until september 2007 tom was 
investment director and head of 
the uk growth  income product 
group at martin currie investment 
management in edinburgh he is a 
member of the chartered institute 
of bankers in scotland and a member 
of the society of investment 
professionals  cfa institute
tom is a non‑executive director of 
foresight 3 vct plc and is chairman 
of their audit committee
sue swenson 64
independent non‑executive 
director
sue was appointed to the board 
in february 2012 she is a member 
of the audit nomination and 
remuneration committees
she has a wealth of international 
experience and expertise in the 
telecommunications and technology 
sector which she brings to the 
development of the strategic 
vision of the company
from march 2008 until her retirement in 
april 2011 sue served as president and 
ceo of sage software inc the north 
american division of the sage group 
plc before joining sage software she 
held positions as the coo of atrinsic 
inc formerly known as new motion 
inc amp’d mobile inc and t‑mobile 
was president and coo of leap 
wireless international inc and 
president and ceo of cellular one
sue is a non‑executive director of 
wells fargo and sits on their audit 
and examination committee and 
governance and nominating 
committee she also serves as 
non‑executive director on the boards 
of harmonic inc sitting on their 
audit and examination committee 
and novatel wireless inc sitting 
on their compensation committee in 
august 2012 sue was appointed by 
the us national telecommunications 
and information administration as a 
founding board member of the first 
responder network authority 44
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt of the di recto rs the directors present their annual report to the shareholders 
together with the audited consolidated financial statements of 
the group and the parent company financial statements for the 
year to 31 december 2012
business review
the purpose of the annual report is to provide information to the 
shareholders of the company 
reviews of the group’s activities during the year the position 
at the year end and developments since that date are set out 
in the chairman’s statement chief executive officer’s review 
the directors’ statement on corporate governance and the 
business review
the business review explains financial performance 
key performance indicators the position at the year end 
any post balance sheet events likely future developments 
and a description of the principal risks and uncertainties 
facing the group and how these are managed 
the annual report contains certain forward‑looking statements 
with respect to the operations performance and financial 
condition of the group by their nature these statements involve 
uncertainty since future events and circumstances can cause 
results to differ from those anticipated the forward‑looking 
statements reflect knowledge and information available at the date 
of preparation of this annual report and the company undertakes 
no obligation to update those forward‑looking statements 
principal activities
the principal activities of the group are set out on pages 6 and 7 
of this annual report the principal global divisions and 
subsidiaries of the group are set out on page 135
results and dividends
the consolidated income statement is on page 70 profit for the 
financial year attributable to owners amounted to 1288 million 
2011 946 million
dividends are determined in us dollars and paid in sterling 
at the exchange rate prevailing when the dividend is proposed 
a final dividend of 183 cents 121 pence per ordinary share 
is recommended by the board for the year to 31 december 2012 
2011 167 cents 105 pence for which approval will be sought 
from shareholders at the company’s 2013 annual general 
meeting “2013 agm” on 1 may 2013 to be paid on 3 may 2013 
adr holders on 10 may 2013 to those shareholders whose 
names are on the register of members on 8 march 2013
together with the interim dividend of 139 cents 089 pence 
per ordinary share 2011 126 cents 077 pence which was 
paid to shareholders on 13 september 2012 this amounts to a 
total dividend for 2012 of 322 cents 210 pence per ordinary 
share 2011 293 cents 182 pence
share capital and control
the company has a single class of share which is divided into 
ordinary shares of 3
1

3
 pence each each ordinary share carries 
one vote and all of the ordinary shares rank pari passu there are 
no special control rights relating to any of the ordinary shares 
at the date of this report 6505 million ordinary shares of 3
1

3
 
pence each had been issued which are fully paid up and are listed 
on the london stock exchange the company also operates a 
level 1 american depositary receipt “adr” programme with 
each adr representing four ordinary shares the adrs trade on 
the us over‑the‑counter market and the bank of new york mellon 
is the authorised depositary bank for the programme further 
details on share capital are set out in note 28 to the consolidated 
financial statements and note 15 to the parent company 
financial statements
the rights including those relating to voting obligations and 
any restrictions on transfer relating to the company’s ordinary 
shares as well as the powers of the company’s directors are set 
out in the company’s articles of association a copy of which can 
be found on our website at wwwspirentcom or can be obtained 
from companies house or by writing to the company secretary 
the company’s articles of association may only be amended by a 
special resolution at a general meeting of shareholders the most 
recent changes to the articles of association were approved at 
the 2010 agm and became effective at the close of that meeting 
on 5 may 2010
there are no restrictions on the transfer of ordinary shares in the 
capital of the company other than certain restrictions which may 
from time to time be imposed by law for example insider trading 
law in accordance with the listing rules of the financial services 
authority certain employees are required to seek the approval 
of the company prior to dealing in its securities
the company is not aware of any agreements between 
shareholders that may result in restrictions on the transfer of 
securities or on voting rights the company is also not aware 
of any contract of significance between itself or any subsidiary 
undertaking and a controlling shareholder  45
overview business review governance financial statements during the year to 31 december 2012 and to the date of this 
report no new ordinary shares have been allotted as a result 
of the exercise of options and rights pursuant to the company’s 
share incentive plans
at each annual general meeting the directors seek authority to 
allot shares for cash and to dis‑apply pre‑emption rights within 
prescribed limits at the 2013 agm authority will be sought to 
allot new ordinary shares up to a nominal value of £7227587 
which is equal to 333 per cent of the company’s issued share 
capital as at 8 march 2013
the company has established two employee benefit trusts in 
connection with the operation of the company’s share incentive 
plans the spirent employee share ownership trust “esot” and 
the spirent sharesave trust “sst” the trustees of both trusts 
have waived their right to receive dividends on any ordinary 
shares held by them except for a nominal amount of 001 pence 
other than for those ordinary shares held in the esot which are 
the beneficial property of an employeeshareholder for further 
details on the employee benefit trusts see “investment in own 
ordinary shares” in note 28 to the consolidated financial 
statements and note 15 to the parent company financial 
statements trustees of both trusts do not vote their ordinary 
shares except for those ordinary shares held in the esot that 
are the beneficial property of an employeeshareholder which 
the trustees will vote in accordance with the instructions 
received from the beneficial owner
the company does not have agreements with any director or 
employee that would provide compensation for loss of office 
or employment resulting from a takeover except that provisions 
of the company’s share incentive plans may cause outstanding 
unvested options and awards granted to employees under such 
plans to vest on a takeover as follows
share incentive plan
change of 
control 
provisions in 
the rules
effect on 
vesting
performance 
condition
2005 employee incentive plan yes pro‑rated still applies
spirent stock incentive plan no none na
significant agreements
a group company has a significant agreement with a contract 
manufacturer which the company considers to be essential to 
its business and which it intends to keep in place until at least 
april 2014
the company is not aware of any significant agreements to which 
it is party that take effect alter or terminate upon a change of 
control of the company following a takeover
return of capital
the company was first authorised to repurchase up to 1499 per 
cent of its own issued ordinary shares within certain limits and 
as permitted by the company’s articles of association at the 
2006 agm this authority has been renewed at each subsequent 
agm reducing to 999 per cent at the 2010 agm and subsequent 
agms the authority from the 2012 agm remains valid until the 
earlier of the 2013 agm or 30 june 2013 since the company 
began returning capital to shareholders in may 2006 a total 
of £2259 million has been returned through the repurchase 
of 3587 million ordinary shares
during 2012 134 million ordinary shares each with a 
nominal value of 3
1

3
 pence were repurchased for an aggregate 
consideration of £193 million and cancelled immediately 
following repurchase this represents 20 per cent of the 
company’s issued ordinary share capital at the beginning of 
2012 the company repurchased a further 01 million ordinary 
shares between 1 january 2013 and the date of this report
the company will seek authority to repurchase up to 999 per 
cent of its own ordinary shares at the 2013 agm to facilitate any 
further return of capital if the board concludes that it is in the 
best interests of shareholders to do so 46
spirent commu ni cati ons pl c ann ual rep ort 2012
substantial shareholdings
in accordance with listing rule 9862 the company has been notified of the following significant interests in its ordinary shares 
pursuant to disclosure and transparency rule 5
as at 31 december 2012
date of  
notification
total  
holding
 of company’s 
total voting 
rights
blackrock inc
1
19 july 2012 78785027 1211
prudential plc 19 june 2012 73489616 1129
axa investment managers sa 18 october 2011 47515946 730
ameriprise financial inc 7 march 2008 38520235 592
aviva plc
2
15 september 2011 36682422 564
legal  general group plc
3
19 march 2012 33778871 519
artemis investment management limited 17 september 2010 32940888 506
standard life investments ltd 27 january 2011 32370026 498
sun life assurance company of canada uk ltd 4 december 2008 23382347 359
notes
1 blackrock inc’s notified holding comprised 62077835 ordinary shares and 16707192 ordinary shares subject to contracts for difference
2 aviva plc’s notified holding comprised 35537422 ordinary shares and 1145000 ordinary shares subject to contracts for difference
3 legal  general group plc’s notified holding comprised 33553871 ordinary shares and 225000 ordinary shares subject to contracts for difference
the following notifications have been received during the period 1 january 2013 to 28 february 2013
date of  
notification
total  
holding
 of company’s 
total voting 
rights
blackrock inc
1
13 february 2013 70775401 1088
note
1 blackrock inc’s notified holding comprised 56866309 ordinary shares and 13909092 ordinary shares subject to contracts for difference
board of directors
the names and brief biographical details of the current directors are shown on pages 42 and 43
election and re‑election of directors
the company’s articles of association require that directors 
offer themselves for re‑election every three years and that new 
directors appointed by the board offer themselves for election 
at the next annual general meeting following their appointment 
however since 2011 and in accordance with the uk corporate 
governance code all directors stand for re‑election at each agm
directors’ interests
the directors’ interests including those of their connected 
persons in the issued ordinary share capital of the company are 
set out in the report on directors’ remuneration on pages 55 to 67 
directors’ indemnity arrangements
the company has purchased and maintained throughout the 
year directors’ and officers’ liability insurance against certain 
legal liabilities and costs for claims in connection with any act or 
omission by such directors and officers in the execution of their 
duties which remains in force
in addition to the indemnity provision contained in the company’s 
articles of association the company has provided a deed of 
indemnity for the benefit of each of the directors of the company 
in respect of the costs of defending claims against them and 
any third party liabilities which remains in force
repo rt of the di recto rs continued  47
overview business review governance financial statements other than these arrangements at no time during the year nor 
to the date of this report did any director hold a material interest 
in any contract of significance with the company or any of its 
subsidiary undertakings except for the service contracts between 
executive directors and the company
corporate social responsibility
the group’s corporate social responsibility statement appears 
on pages 32 to 38 this statement gives details of the group’s 
policies on ethics the environment health and safety charitable 
donations and involvement in the community
charitable donations of 118000 were made in the year 2011 
111000 this amount excludes operating units’ support for and 
participation in local community activities in accordance with the 
group’s ethics policy no political donations were made in the year 
2011 nil 
employees
the average number of people employed by the group during the 
year including discontinued operations was 1545 2011 1540 
and the group is proud of its history of being regarded as a 
responsible and respected employer the corporate social 
responsibility statement on pages 32 to 38 provides details of 
the group’s policies on employment training and development
disabled persons
disabled persons whether registered or not are accorded 
equal opportunities when applying for vacancies with due regard 
to their aptitudes and abilities in addition to complying with 
legislative requirements procedures ensure that disabled 
employees are fairly treated in respect of training and career 
development with regard to employees who become disabled 
during the course of their employment the group is supportive 
and will take all reasonable steps to ensure that they can remain 
in employment wherever practicable
research and development
product development and innovation are considered key 
strategies to maintain and improve the group’s competitive 
position and therefore continue to receive high priority this 
commitment is highlighted by the 861 million research and 
development spend during the year in continuing operations 
equivalent to 182 per cent of revenue 2011 833 million and 
177 per cent the group will continue to commit resources 
as appropriate to research and development
policy on payment of suppliers
group operating companies are responsible for agreeing the 
terms and conditions under which business transactions with 
their suppliers are conducted
in the uk the company is a signatory to the department for 
business innovation  skills’ prompt payment code a voluntary 
agreement to promote good payment practices the details of 
which can be found at wwwpromptpaymentcodeorguk
at 31 december 2012 the company had an average of 16 days’ 
purchases outstanding in trade creditors 2011 43 days
corporate governance
the directors’ statement on corporate governance is set out 
on pages 50 to 54 the statement of directors’ responsibilities 
in respect of the financial statements appears on page 49
going concern
the group’s business activities together with the factors likely 
to affect its future development performance and position are 
set out in the business review on pages 13 to 17 the financial 
position of the group its cash flows liquidity position and 
borrowing facilities are described in the operational and financial 
review on pages 18 to 27 in addition note 26 to the consolidated 
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 exposures to credit risk and liquidity risk the 
group has considerable financial resources together with long 
term contracts with a number of customers and suppliers across 
different geographic areas and industries as a consequence 
the directors believe that the group is well placed to manage 
its business risks successfully despite the current uncertain 
economic outlook
after making enquiries the directors have a reasonable 
expectation that the group and the company have adequate 
resources to continue in operational existence for the foreseeable 
future accordingly they continue to adopt the going concern 
basis in preparing the annual report 48
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt of the di recto rs continued
disclosure of information to auditor
each of the directors of the company at the date of this report 
confirms that
•	 so far as the director is aware there is no information needed 
by the company’s auditor in connection with preparing their 
report of which the company’s auditor is unaware and
•	 he she has taken all the steps that he she ought to have 
taken as a director in order to make himself herself aware 
of any information needed by the company’s auditor in 
connection with preparing their report and to establish 
that the company’s auditor is aware of that information
auditor
resolutions to reappoint ernst  young llp as auditor and 
to authorise the directors to determine their remuneration 
will be proposed at the 2013 agm
annual general meeting
the 2013 agm will be held at 1030am on wednesday 1 may 2013 
at holborn gate 26 southampton buildings london wc2a 1pb 
united kingdom
by order of the board
rachel whiting
company secretary
28 february 2013
spirent communications plc
company number 470893  49
overview business review governance financial statements the directors are responsible for preparing the annual report 
the consolidated financial statements of the group and financial 
statements of the parent company
company law requires the directors to prepare financial 
statements for each financial year under that law they are 
required to prepare the consolidated financial statements of 
the group in accordance with international financial reporting 
standards “ifrss” as adopted by the european union “eu” 
and have elected to prepare the parent company financial 
statements in accordance with uk generally accepted 
accounting principles and applicable law
the consolidated financial statements of the group are required 
by law and ifrss to present fairly for each financial period the 
financial position and performance of the group the companies 
act 2006 provides in relation to such financial statements that 
references in the relevant part of that act to financial statements 
giving a true and fair view are references to their achieving a 
fair presentation
the parent company financial statements are required by law to give 
a true and fair view of the state of affairs of the parent company
in preparing each of the consolidated financial statements of the 
group and parent company financial statements the directors 
are required to
•	 select suitable accounting policies and then apply 
them consistently
•	 make judgements and estimates that are reasonable 
and prudent
•	 state for the audited consolidated financial statements of the 
group whether they have been prepared in accordance with 
ifrss as adopted by the eu
•	 state for the parent company financial statements whether 
applicable uk accounting standards have been followed 
subject to any material departures disclosed and explained 
in the parent company financial statements and
•	 prepare the financial statements on a going concern basis 
unless it is inappropriate to presume the group and the parent 
company will continue in operational business for the 
foreseeable future
the directors confirm that they have complied with the above 
requirements in preparing the financial statements
the directors are responsible for keeping adequate accounting 
records that disclose with reasonable accuracy at any time the 
financial position of the group and the parent company and 
enable them to ensure that its financial statements comply with 
the companies act 2006 and for the group article 4 of the 
international accounting standards regulation they have 
general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the group and to 
prevent and detect fraud and other irregularities
under applicable law and regulations the directors are 
also responsible for preparing a directors’ report a directors’ 
remuneration report and a statement on corporate governance 
that comply with the law and those regulations they are also 
responsible for the maintenance and integrity of the corporate 
and financial information included on the company’s website
legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions
this annual report complies with the disclosure and 
transparency rules “dtr” of the financial services authority in 
respect of the requirement to produce an annual financial report
the annual report and consolidated financial statements are the 
responsibility of and have been approved by the directors
each of the directors confirms that to the best of their knowledge
•	 the consolidated financial statements of the group and parent 
company financial statements prepared in accordance with 
the applicable set of accounting standards give a true and fair 
view of the assets liabilities financial position and the profit 
or loss of the company and the undertakings included in the 
consolidation taken as a whole and
•	 the annual report includes a fair review of the development 
and performance of the business and the position of the 
company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal 
risks and uncertainties that they face
by order of the board
eric hutchinson
chief financial officer
28 february 2013
s tatement of di recto rs’ responsibilities in respect of the a nnual repo rt and the 
financial statements 50
spirent commu ni cati ons pl c ann ual rep ort 2012
compliance
the board is committed to the highest standards of corporate 
governance and fully supports the principles laid down in the uk 
corporate governance code published by the financial reporting 
council in june 2010 the “code” and september 2012 the “new 
code” the board is accountable to the company’s shareholders 
for good governance and this statement together with the 
chairman’s introduction on pages 40 and 41 and the report on 
directors’ remuneration on pages 55 to 67 describes how the 
principles of the code were applied during the year under review 
and reports on the company’s compliance with its provisions 
disclosures relating to significant shareholdings voting rights 
election and re‑election of directors powers of amendment of 
the company’s articles of association and the directors’ power 
to issue or buy back shares are included in the report of the 
directors on pages 44 to 48 it is the board’s view that the 
company was fully compliant with the provisions of the code 
throughout the period under review and with certain aspects 
of the new code to the date of this report
the board
at the date of this report the board comprises a chairman four 
independent non‑executive directors and two executive directors 
the board operates within a framework of controls including 
a formal schedule of matters specifically reserved to it which 
includes such matters as the acquisition and divestment of 
businesses the issue of shares significant contractual 
commitments review and effectiveness of risk management 
processes and major capital investment there is a clear division 
of responsibility at the head of the company the chairman 
alex walker being responsible for running the board and 
the chief executive officer bill burns being responsible 
for implementing strategy
the chairman and the non‑executive directors contribute 
entrepreneurial leadership and external expertise and experience 
in areas of importance to the company such as strategic 
investments corporate finance general finance and corporate 
governance they also contribute independent challenge and 
rigour to the board’s deliberations and assist in the development 
of the company’s strategy scrutiny of the performance of 
management in meeting agreed goals and targets and satisfying 
themselves of the integrity of the company’s internal controls 
and risk management systems the board believes that all of the 
directors devote sufficient time and attention as is necessary 
in order to perform their duties
the independence of each director is reviewed on appointment 
and at least annually the board determined that the 
non‑executive directors are each independent in character and 
judgement and within the definition of the code no individual 
or group of individuals dominates the board’s decision making 
and the requirement of the code that at least half of the board 
excluding the chairman should comprise independent 
non‑executive directors is satisfied
the company’s articles of association permit the board to 
consider and if it sees fit to authorise situations where a director 
has an interest that conflicts or may potentially conflict with the 
interests of the company “situational conflicts” the board has 
a formal system in place for directors to declare situational 
conflicts and for these to be considered for authorisation by 
those directors who have no connection with the matter being 
considered in deciding whether to authorise a situational 
conflict the non‑conflicted directors are required to act in the 
way they consider most likely to promote the success of the 
company and they may impose limits or conditions when giving 
authorisation or subsequently if they think this is appropriate 
the board considers the procedure to have continued to operate 
effectively during the year
details of other professional commitments of the chairman and 
non‑executive directors are provided in their biographies on 
pages 42 and 43
ian brindle served as senior independent non‑executive 
director during the period under review the senior independent 
non‑executive director acts as a sounding board for the chairman 
and as an intermediary for the non‑executive directors if needed 
mr brindle is available to meet shareholders upon request if they 
have concerns which contact through the normal channels of the 
chairman or an executive director has failed to resolve or for 
which such contact would be inappropriate
d i recto rs’ statement on co rpo rate gove rnance composition of board
1
2
1 executive 2 29
2 nonexecutive 5 71
length of tenure of directors
at date of this report
1
3
2
1 less than 3 years 1 14
2 3–5 years 3 43
3 more than 5 years 3 43  51
overview business review governance financial statements during 2012 seven board meetings were held the agenda is set 
by the chairman and papers are circulated to board members in 
advance of the meeting minutes of meetings are circulated to all 
board members and subject to their agreement approved at the 
following board meeting
the attendance of individual directors at board meetings held 
during the year was as follows
number of 
meetings  
held
number of 
meetings 
attended
alex walker chairman 7 7
bill burns 7 7
eric hutchinson 7 7
ian brindle 7 7
duncan lewis 7 7
tom maxwell 7 7
sue swenson 7 7
the chairman is responsible for ensuring that the directors 
receive accurate timely and clear information they receive 
regular updates on business performance and receive 
presentations from the executive directors and other senior 
managers at board meetings in addition regular site and 
customer visits are arranged for non‑executive directors 
during which briefings are arranged and the directors have the 
opportunity to discuss aspects of the business with employees 
at all levels under the direction of the chairman the company 
secretary ensures good and timely information flows between the 
board and its committees and makes sure that board procedures 
are complied with the company secretary also updates and 
advises the board on all regulatory and governance matters
there is a policy whereby the non‑executive directors and the 
board committees may take independent professional advice at 
the company’s expense in order to fulfil their duties all directors 
also have access to the advice and services of the company 
secretary whose removal may only be effected with the approval 
of the board
board appointments induction and training
the board has in place a procedure for the appointment of new 
directors to the board which complies with the code and was 
applied to the appointment of sue swenson on 1 february 2012
following appointment to the board and its committees all 
directors receive an induction tailored to their individual 
requirements to ensure they have the necessary knowledge and 
understanding of the company and its activities new directors 
are briefed on their legal and other duties and obligations as 
directors of a uk listed company visits to different facilities and 
meetings with senior management are organised to assist the 
new director in developing an understanding of how the group 
operates and the key issues that it faces
the process outlined above of regular business updates site 
and customer visits ensures that the non‑executive directors 
remain close to and have a deep understanding of the group’s 
business in addition the updates from the company secretary 
ensure that the board is fully appraised of all corporate 
governance matters directors also attend external courses 
where appropriate
the company’s articles of association require that all directors 
seek election by shareholders at the first annual general meeting 
following their appointment and that all directors retire and seek 
re‑election at least every three years however commencing in 
2011 and in accordance with the code all directors now stand 
for re‑election annually
performance evaluation
during 2012 the board engaged useful thinking ltd to 
conduct an independent external evaluation of the board and 
its committees the feedback from that evaluation was extremely 
positive and saw very few ways in which performance might be 
further strengthened however the board will take these 
recommendations forward and will also in particular continue 
to consider the need in due course to increase diversity of its 
membership especially in terms of gender useful thinking ltd 
has no other connection with the company
the chairman communicates regularly with the non‑executive 
directors and this contact provides an ongoing opportunity to 
assess performance and to discuss the performance of the 
executive directors and any other matters the chairman has 
concluded that during the year under review the commitment and 
application of the non‑executive directors was of a high standard 
including each having sufficient time to attend all board and 
appropriate committee meetings and to discharge their 
responsibilities effectively
the senior independent non‑executive director met with 
the independent non‑executive directors on 7 november 2012 
in the absence of the chairman to assess the chairman’s 
effectiveness the independent non‑executive directors were 
of the opinion that mr walker gave sufficient time to his role as 
chairman of the company and was effective in that role during 
the year under review 52
spirent commu ni cati ons pl c ann ual rep ort 2012
board committees
certain of the matters specifically reserved for the board’s 
decision have been delegated to three committees with clearly 
defined terms of reference which together with the composition 
of each committee are reviewed annually the terms of reference 
for the audit nomination and remuneration committees can be 
found on the company’s website at wwwspirentcom
audit committee
during 2012 ian brindle chairman duncan lewis tom maxwell 
and sue swenson served on the audit committee sue swenson 
having joined the committee on her appointment to the board on 
1 february 2012 all of the committee members are independent 
non‑executive directors making the composition of the committee 
compliant with the code the code also requires that the audit 
committee includes at least one member who has recent 
significant and relevant financial experience the board considers 
that both ian brindle and tom maxwell provide such experience
the attendance of individual directors at audit committee 
meetings held during 2012 was as follows
number of 
meetings  
held
number of 
meetings 
attended
ian brindle committee chairman 3 3
duncan lewis 3 3
tom maxwell 3 3
sue swenson 3 3
the company’s external auditor the chief executive officer 
the chief financial officer the group vice president finance the 
head of financial reporting and the company secretary who is 
secretary to the committee were in attendance at each meeting 
of the committee the chairman also attends each meeting by 
invitation from the committee chairman in addition the 
committee meets regularly with the company’s external auditor 
without management being present the minutes of committee 
meetings are available to all directors
role of the committee
the principal activities of the committee during the year were
•	 review the interim and full year financial statements 
key accounting policies and significant financial reporting 
judgements if any contained therein and to recommend 
such financial statements to the board for approval
•	 review the external auditor’s report on the interim review and 
year end audit and management’s responses to the issues raised
•	 review and approve the external audit strategy and scope 
for 2012
•	 review the policy on the engagement of ernst  young to 
supply non‑audit services
•	 review and recommend to the board the re‑appointment 
of ernst  young as external auditor and approve their fees
•	 monitor and review internal control and risk management 
systems
•	 review and approve the internal audit programme for 2012
•	 review the company’s whistleblowing policy
•	 review regular reports on taxation treasury operations and 
health and safety
the chairman of the committee reports any significant findings 
or identified weaknesses to the board
policy on non‑audit services
the committee has adopted a policy in relation to the provision 
of non‑audit services by the external auditor taking into account 
relevant ethical guidance and to ensure that the provision of such 
services does not impair the external auditor’s independence or 
objectivity under this policy a number of non‑audit services are 
precluded including services relating to the accounting records 
and financial statements internal audit it consulting legal and 
investment services and other services deemed by regulators to 
be precluded the policy is reviewed and financial limits for the 
provision of non‑audit services are set on an annual basis with 
regard to the non‑audit services provided during the year the 
committee determined that in the interests of cost and efficiency 
it was in the best interests of the company to purchase these 
services from ernst  young in addition the committee 
considers that notwithstanding the non‑audit services provided 
during the year totalling 04 million 2011 01 million 
ernst  young’s objectivity as external auditor was not impaired
appointment of external auditor
prior to recommending their re‑appointment as external 
auditor the committee considered ernst  young’s performance 
resources quality control procedures policy on rotating its audit 
partners audit partners rotate every five years independence 
and objectivity in the light of relevant uk professional and 
regulatory requirements it was noted that as a result of ernst  
young’s policy on rotating audit partners there had been a new 
audit partner in 2011 the committee also considered the risk of 
ernst  young withdrawing from the audit market and noted that 
there are no contractual obligations that restrict the company’s 
current choice of external auditor the committee is mindful of 
the new code’s provisions regarding the tendering of the 
external audit contract
d i recto rs’ statement on co rpo rate gove rnance continued  53
overview business review governance financial statements further details of the group’s ethics policy and health and safety 
performance are contained in the corporate social responsibility 
statement on pages 32 to 38
internal control and risk management
the board has overall responsibility for the group’s system 
of internal control and risk management and for reviewing its 
effectiveness the board assisted by the audit committee has 
reviewed the effectiveness of this system and this review did not 
reveal any significant issues or weaknesses the board confirms 
that this system of internal control and risk management was 
in place throughout the year under review and up to the date of 
approval of these financial statements the primary aim is to 
operate a system which is appropriate to the business and which 
can over time increase shareholder value whilst safeguarding 
the group’s assets the system is designed to identify evaluate 
and manage the significant risks faced by the group rather than 
to eliminate the risk of failure to achieve business objectives and 
can only provide reasonable and not absolute assurance against 
material misstatement or loss the group consists of a limited 
number of entities and the board and audit committee continue 
to consider that currently there is no need for a dedicated internal 
control and risk management department
day‑to‑day responsibility for effective internal control and risk 
management and monitoring rests with senior management at 
business unit level the group vice president finance attends 
all audit committee meetings to report on internal control and 
risk management and to apprise the committee of any control 
weaknesses control failings and risks their impact and the 
actions taken to deal with the issues the group vice president 
finance is independent of any business unit and is therefore able 
to provide an objective view and continual assessment of the 
effectiveness of internal control and risk management 
throughout the group
the group vice president finance is responsible for ensuring 
that the finance department employs a level of management 
and specialists appropriate for maintaining financial records 
and processes that provide financial information that is relevant 
reliable complies with the applicable laws and regulations and 
is distributed both internally and externally in a timely manner 
a review of the consolidation and financial statements is 
undertaken by senior management to ensure that the financial 
position and results of the group are appropriately reflected 
all financial information published by the group is subject to 
the approval of the audit committee prior to its being approved 
by the board
the group’s system of risk management comprises all business 
units maintaining up to date risk registers as an integral part of 
their normal operating and control procedures risk registers for 
both the group and operating units are reviewed by the audit 
committee and the board at least three times a year and 
significant risks are discussed in detail together with progress 
on mitigating activities and any further actions to be taken
the board and audit committee consider that having the 
following key elements in place are critical to underpinning 
the overall internal control environment
operating structure 
and controls
an organisational structure with clear 
operating procedures defined lines 
of responsibility and delegated levels 
of authority
financial control 
structure
a comprehensive strategic planning financial 
control and budgeting system which is 
properly documented and regularly reviewed
ethics policy a policy that sets standards of 
professionalism and integrity for all 
employees and operations
anti‑bribery policy a policy to ensure that all of spirent’s 
systems controls and training comply with 
the anti‑bribery and corruption legislation in 
all the countries where we operate and that 
a culture of prevention and detection of all 
forms of bribery and corruption is in place
whistleblowing 
policy
a whistleblowing procedure whereby 
employees may report in confidence 
suspected wrongdoings
acquisitions and 
divestments
a disciplined due diligence process and 
post‑acquisition integration programme
remuneration committee
during 2012 tom maxwell chairman ian brindle duncan lewis 
and sue swenson served on the remuneration committee sue 
swenson having joined the committee on her appointment to the 
board on 1 february 2012 all members of the committee are 
independent non‑executive directors making it compliant with 
the code in terms of independent non‑executive directors
further details about the remuneration committee are included 
in the report on directors’ remuneration on pages 55 to 67 54
spirent commu ni cati ons pl c ann ual rep ort 2012
nomination committee
during 2012 alex walker chairman ian brindle duncan lewis 
tom maxwell and sue swenson served on the nomination 
committee sue swenson having joined the committee on her 
appointment to the board on 1 february 2012 the company 
secretary is secretary to the committee
the attendance of individual directors at nomination committee 
meetings held during 2012 was as follows
number of 
meetings  
held
number of 
meetings 
attended
alex walker committee chairman 1 1
ian brindle 1 1
duncan lewis 1 1
tom maxwell 1 1
sue swenson 1 1
the nomination committee is responsible for reviewing the 
composition and structure of the board and for identifying 
and recommending candidates for executive and non‑executive 
positions recommendations are based on the required role and 
capabilities which have been specified for the appointment and 
having regard to the board’s balance diversity and structure and 
considering issues of succession executive search consultants 
are used by the nomination committee to assist this process 
as appropriate and were used in the process completed during 
the year which led to the appointment of sue swenson spencer 
stuart the executive search consultants used by the committee 
have no connection with the company
as all of the committee members are independent non‑executive 
directors the composition of the committee is compliant with the 
terms of the code
relations with shareholders
the board supports the use of the annual general meeting as 
a means of communicating with both private and institutional 
investors and encourages their participation the company 
is ready where practicable to enter into a dialogue with 
shareholders through analyst briefings and investor 
presentations all of which are made available on the company’s 
website at wwwspirentcom senior executives meet regularly 
with institutional and major shareholders to facilitate 
stakeholders’ understanding of the company and its objectives 
and to receive feedback which is then reported to the board 
all directors attend the annual general meeting in order to 
meet with shareholders and to answer questions they are 
also available for shareholders to meet upon request
all of the company’s communications with shareholders are 
conducted in line with our environmental approach we hold the 
majority of our events via webcast and conference calls and we 
encourage all of our investors to receive communications 
electronically where possible
d i recto rs’ statement on co rpo rate gove rnance continued  55
overview business review governance financial statements as outlined earlier in this annual report 
whilst spirent made significant strategic 
progress in 2012 the achievements made 
were against a background of economic 
uncertainty in all regions which in turn 
tempered growth the strong start to 
the year turned to a weak demand 
environment during the second quarter 
which then persisted throughout the 
remainder of the year the committee 
believes that the remuneration for 
the executive directors for the year 
appropriately reflects the performance 
achieved against the demanding targets 
that were set for them 
the committee is committed to there 
being a strong link between long term 
shareholder value creation and executive 
remuneration and it was pleasing 
therefore that the performance share 
award which vested in november 2012 
showed a tsr of 786 per cent over the 
performance period resulting in above 
median performance 
over the past year there has been 
significant focus on improving transparency 
of reporting on executive pay and although 
based on the current timeline spirent 
will not be formally required to provide 
disclosure in line with the expected 
legislation until the remuneration report 
published in 2014 we have provided some 
additional disclosures in this remuneration 
report in order to help shareholders better 
understand our current remuneration policy 
and practice the committee is strongly 
committed to open and transparent 
dialogue with shareholders on 
remuneration matters and takes 
every opportunity to engage with key 
shareholders to understand their views 
on our remuneration arrangements and to 
discuss our policy going forward our 2011 
report on directors’ remuneration received 
a strong level of support at the company’s 
agm in may 2012 with 96 per cent of 
shareholders voting in favour of the 
advisory resolution
the main priorities for the committee for 
2013 are
•	 to continue to review remuneration 
policy in the light of evolving best 
practice consulting with shareholders 
as appropriate
•	 to ensure that the executive directors 
are fairly rewarded for both individual 
and company performance and
•	 to set incentive targets that support 
the long term strategy for the group 
are stretching appropriate 
and achievable
on behalf of the committee i hope that 
you find this report comprehensive 
clear and informative
tom maxwell
chairman remuneration committee
28 february 2013
repo rt on di recto rs’ remune ration dear shareholder
as chairman of the remuneration 
committee i am pleased to present our 
remuneration report for 2012 for which 
we will be seeking your approval at the 
company’s annual general meeting on 
1 may 2013
the committee aims to ensure that 
remuneration packages are offered which
•	 set the total remuneration package 
at an appropriate level to reflect the 
competitive markets in which the 
group operates
•	 link a significant proportion of the 
total remuneration package to the 
achievement of demanding 
performance targets
•	 structure the reward of executive 
directors and senior management to 
align their interests with those of 
shareholders over the long term
•	 encourage the retention and stability 
of the management team and
•	 underpin a high performance culture 
throughout the group
during the year i was delighted 
to welcome sue swenson to the 
committee following her appointment 
to the board sue brings a wealth of 
experience to the committee and i 
welcome the contributions that she 
makes to the deliberations of the 
committee particularly from her 
international experience  56
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt on di recto rs’ remune ration continued
 
compliance with the uk corporate governance code and  
best practice 
this remuneration report has been prepared on behalf of 
the board by the remuneration committee in accordance with 
schedule 8 to the large and medium‑sized companies and 
groups accounts and reports regulations 2008 the report 
also meets the relevant requirements of the listing rules of the 
financial services authority and describes how the board has 
applied the principles and complied with the provisions of the 
uk corporate governance code the “code” relating to directors’ 
remuneration the board has complied fully with the provisions of 
section d of the code in relation to directors’ remuneration policy 
and practice and has followed schedule a to the code in relation 
to performance related remuneration policy in line with current 
reporting regulations this report is presented in two parts part 
a which is not subject to audit sets out the company’s 
remuneration policy part b which has been audited 
provides details of the remuneration pensions and share 
incentives of the directors for the period under review
part a unaudited information
remuneration committee
during 2012 tom maxwell chairman ian brindle duncan lewis 
and sue swenson served on the remuneration committee 
sue swenson having joined the committee on her appointment to 
the board on 1 february 2012 all members of the committee are 
independent non‑executive directors and the company secretary 
is secretary to the committee
the attendance of individual directors at remuneration 
committee meetings held during the year was as follows
number of 
meetings  
held
number of 
meetings 
attended
tom maxwell committee chairman 5 5
ian brindle 5 5
duncan lewis 5 5
sue swenson 5 5
role of the committee
the committee is responsible for determining all elements 
of the remuneration of the chairman executive directors 
company secretary and senior executives of the group 
reviewing remuneration policy and overseeing the operation 
of the company’s share incentive plans the committee’s 
terms of reference which are reviewed annually can be 
found on the company’s website at wwwspirentcom
the committee’s principal activities during the year were
•	 review the executive remuneration strategy for 2013
•	 set the annual and quarterly incentive targets for executive 
directors and senior managers
•	 review and approve the outcome of executive directors’ 
and senior managers’ quarterly and annual incentives
•	 review remuneration benchmarking data and
•	 review and approve share incentive awards and vesting 
of share incentive awards
advisers to the committee 
in performing its duties and where considered appropriate 
the committee has taken advice on remuneration matters from 
the following
•	 aon hewitt consulting inc – radford executive 
remuneration data
•	 deloitte llp – executive and non‑executive director 
remuneration data
•	 ernst  young llp – independent verification of earnings per 
share “eps” performance measurement to determine the 
vesting of share incentives
•	 kepler associates limited – advice on performance metrics 
for share incentive plans and measurement of total 
shareholder return “tsr” performance to determine the 
vesting of share incentives
•	 linklaters llp – advice on share incentive plans and
•	 pricewaterhousecoopers llp – advice on share incentive 
plans executive remuneration data and policy review
ernst  young llp is also the company’s auditor and linklaters 
llp is also one of the company’s general legal advisers the 
remaining advisers listed above do not have any other connection 
with the company
deloitte llp pricewaterhousecoopers llp and kepler associates 
limited are members of the remuneration consultants group 
and comply with its voluntary code of conduct in respect of the 
provision of remuneration consulting services details of which 
can be found at wwwremunerationconsultantsgroupcom
during the year the committee also consulted with the company’s 
chairman chief executive officer chief financial officer vice 
president human resources and the company secretary but 
not on matters relating directly to their own remuneration  57
overview business review governance financial statements remuneration policy for executive directors 
the committee’s policy is to set remuneration levels which ensure that executive directors are fairly and responsibly rewarded in 
return for high levels of performance the remuneration policy set by the committee aims to encourage a performance based culture 
which reinforces behaviour that will lead to the continued long term successful development of the business is sufficient to attract 
retain and motivate high calibre executive directors and senior managers and aligns their interests with those of shareholders 
the committee believes that the aims of the policy are achieved by ensuring that a significant proportion of total remuneration 
is linked to the achievement of stretching corporate and individual targets both in the short and long term 
no incentive payments are made for below threshold levels of corporate and individual performance and all performance related 
remuneration is subject to caps
as well as providing motivation to perform remuneration plays an important retention role and needs to be competitive the committee 
therefore seeks to position total executive director remuneration around mid‑market for on target performance taking into account the 
size and complexity of the group compared to other peer companies the committee takes into account a range of factors including the 
company’s performance economic conditions the responsibilities individual performance and experience of each executive director 
consideration is also given to pay and employment conditions of employees within the group and the committee particularly takes into 
account pay increases throughout the group when determining salary increases for executive directors the committee is also mindful 
of the views of shareholders in determining appropriate levels of remuneration and in ensuring that shareholder and director interests 
are aligned
3 2 1
1 fixed 
2 variable cash 
3 variable ltip
2 3 1
bill burns
eric hutchinson
fixed remuneration performance related remuneration
base salary
benefits
short term
quarterly and annual 
performance incentive
long term
employee incentive plan
the committee’s remuneration policy approach is summarised below
in 2012 the target mix of remuneration was as follows
0 20 40 60 80 100 58
spirent commu ni cati ons pl c ann ual rep ort 2012
summary of remuneration
the following table summarises the various elements of executive remuneration
element
purpose and link  
to remuneration policy
key  
features
policy operated  
in 2012
policy for  
2013
base 
salary
•	 reflects the competitive market 
salary level for the individual 
and their role
•	 takes account of personal 
performance and contribution 
to corporate performance
•	 paid in cash 
•	 based on individual 
contribution
•	 reviewed annually
•	 ceo 700000
•	 cfo £312850
•	 ceo 720000 increase 
of 29
•	 cfo £320000 increase 
of 23
•	 in line with salary increases 
within group across north 
america and europe
annual 
incentive
•	 rewards the achievement of 
stretching annual eps and 
financial goals supported 
by individual goals linked 
to strategic milestones
•	 paid in cash following 
year end
•	 no change target award 
of 33 of annual salary for 
ceo subject to cap of 50 
and 1667 of base salary 
for cfo subject to cap 
of 25 
•	 72333 and £16164 
payable to ceo and cfo 
respectively for 2012
•	 target award of 33 of 
annual salary for ceo subject 
to cap of 50 and 1833 of 
base salary for cfo subject 
to cap of 27 5 
quarterly 
incentive
•	 rewards the achievement of 
stretching quarterly eps and 
financial goals supported 
by individual goals linked 
to strategy
•	 paid in cash following 
quarter end
•	 no change target award 
of 67 of annual salary for 
ceo subject to cap of 100 
and 3333 of base salary 
for cfo subject to cap of 
50
•	 353209 and £78930 
payable to ceo and cfo 
respectively for 2012
•	 target award of 67 of 
annual salary for ceo subject 
to cap of 100 and 3667 
of base salary for cfo subject 
to cap of 55 
long term  
incentives
•	 aligns with shareholder interests 
through the delivery of shares
•	 limits of 250 and 
125 of base salary for 
awards of sars and ps 
respectively limit of 
250 of base salary 
for combined awards 
where one ps is 
equivalent to two sars 
•	 ceo received a ps award 
of 100 of base salary 
cfo received a ps award 
of 60 of base salary
•	 ceo to receive a combined 
award of 250 of base 
salary cfo to receive a 
combined award of 150 
of base salary
•	 awards of performance shares 
ps and stock appreciation 
rights sars reward growth 
in eps and tsr
•	 award vests after three 
years subject to 
performance 
conditions
•	 ps awards vest subject to 
a combination of 50 eps 
and 50 tsr performance 
conditions
•	 sars vest subject to eps 
ps awards vest subject to 
a combination of 50 eps 
after expensing share‑based 
payment and 50 tsr 
performance conditions
benefits •	 reflects market practice •	 car allowance health care life insurance
pension •	 provide funds to allow 
executives to save for retirement 
in line with local market practice
•	 contribution to 401k plan of 10000 for ceo 20 of base 
salary provided to cfo as a salary supplement in lieu of pension
repo rt on di recto rs’ remune ration continued  59
overview business review governance financial statements components of executive director remuneration
base salary
in november each year the committee reviews and determines 
the parameters for the remuneration of executive directors for the 
following year including base pay target cash and share incentive 
awards the committee’s policy is to set base salaries at an 
appropriate level to attract retain and motivate the quality of 
individual required to run a business of the size and complexity 
of spirent but without paying more than is necessary to do so 
the committee therefore considers this in the context of 
remuneration levels at companies of a similar size and 
complexity and at comparable companies in the ftse 250 
when setting the policy for directors’ remuneration the 
committee has regard to the pay and employment conditions 
elsewhere within the group particularly in europe and north 
america where the executive directors are based and is kept 
informed on a regular basis on salary increases for the general 
employee population while the committee does not directly 
consult with employees as part of the process of reviewing 
executive pay the committee does receive updates and feedback 
on employee engagement surveys and takes these into account 
when reviewing executive pay in the most recent survey 
employee feedback continued to show high levels of employee 
engagement and most of our employees indicated that they feel 
fairly rewarded the committee is also mindful of the views of 
shareholders in determining appropriate levels of remuneration 
and in ensuring that shareholder and director interests 
are aligned 
following its review of remuneration in november 2012 
the committee determined that bill burns’ salary should be 
increased by 29 per cent to 720000 from 1 january 2013 
and eric hutchinson’s by 23 per cent to £320000 both of 
which increases are below the average increase of 3 per cent for 
employees in the wider group based in europe or north america 
mr burns’ and mr hutchinson’s remuneration will next be 
reviewed from 1 january 2014
quarterly and annual performance incentives
an important element of remuneration for executive directors is 
the quarterly and annual performance incentives the committee 
sets stretching annual and quarterly performance incentive 
targets and performance measures to incentivise executive 
directors to meet the short term strategic objectives of the 
spirent group these short term objectives are specifically 
selected to underpin the roadmap to achieving the group’s  
long term strategic objectives
during 2012 the incentive plan continued to be structured so 
that two thirds of the incentive target could be earned in respect 
of quarterly targets and one third in respect of annual targets 
executive performance was measured against a carefully 
structured combination of financial and non‑financial objectives 
designed to achieve the short term strategic objectives of the 
group and to underpin its long term strategy 
growth targets in the company’s eps and order intake 
representing 75 per cent and 25 per cent of the incentive 
respectively determined the maximum incentive which could 
be earned in a given performance period performance against 
other financial targets engineering and product milestones key 
strategic goals and specific personal objectives determined the 
actual incentive earned by each executive director for a particular 
performance period the engineering and product milestones in 
particular provide the roadmap to the group’s long term strategic 
direction and success
for 2012 the maximum total cash incentive available for bill 
burns was 150 per cent of base salary and for eric hutchinson 
was 75 per cent of base salary for 2012 having reviewed 
performance achieved against the targets set the committee 
approved quarterly cash incentive payments for mr burns of 
353209 equivalent to 51 per cent of base salary and for 
mr hutchinson of £78930 equivalent to 25 per cent of base 
salary 124709 at an average exchange rate of 158£1 
in february 2013 the committee reviewed mr burns’ and 
mr hutchinson’s performance against the annual targets set 
and approved a cash incentive payment for 2012 of 72333 
equivalent to 10 per cent of base salary for mr burns and 
£16164 equivalent to 5 per cent of base salary for mr 
hutchinson 25539 at an average exchange rate of 158£1 
the total quarterly and annual incentive payments to mr burns 
was 425542 equivalent to 61 per cent of base salary and to 
mr hutchinson was £95094 150248 at an average exchange 
rate of 158£1 equivalent to 30 per cent of base salary for 
2013 the maximum total quarterly and annual cash incentive 
available for bill burns and eric hutchinson will be 150 per cent 
and 825 per cent of base salary respectively
benefits and pension contributions or cash in lieu of pension 
in addition to his base salary bill burns participates in the us 
group’s medical dental and vision plans 401k pension plan a 
non‑qualified deferred compensation plan and receives disability 
coverage benefit life insurance cover of four times base salary 
and a car allowance 60
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt on di recto rs’ remune ration continued
the spirent communications 401k pension plan the “plan” 
is a defined contribution plan established under the provisions 
of section 401k of the us internal revenue code “us ir code” 
the group makes matching contributions of up to 4 per cent of 
the maximum compensation permitted for these purposes under 
the us ir code and accordingly in 2012 made the maximum 
permitted contribution to the plan of 10000
the spirent communications inc “sci” deferred compensation 
plan is a non‑qualified plan offered as a benefit to senior 
management in the us this plan allows participants to defer up 
to 15 per cent of their base salary plus any cash incentive earned 
subject to a maximum of 50 per cent of base salary sci does 
not make contributions to this plan
in addition to his base salary eric hutchinson receives private 
medical insurance life insurance cover of four times base salary 
and a car allowance during the year under review he received 
an annual cash allowance in lieu of pension of 20 per cent of base 
salary totalling £62570 98860 at an average exchange rate 
of 158£1 2011 £58970 94352 at an average exchange rate 
of 160£1
long term share incentive awards
executive directors are eligible to participate in the company’s 
2005 employee incentive plan “eip” which is a discretionary 
share plan
under the eip the company is able to award performance 
shares share options and share‑settled stock appreciation rights 
“sars” any awards made to executive directors are subject to 
prior satisfactory performance of the individual and award levels 
vary in accordance with the individual’s potential to add value 
to the business over the medium to long term
in normal circumstances the maximum value of an award of 
performance shares under the eip is limited to 125 per cent of 
base salary with awards of options or sars limited to a maximum 
value of 250 per cent of base salary for combined awards the 
maximum value is limited to 250 per cent of base salary with one 
performance share being equivalent to two share options or sars 
awards are valued at the closing price for a spirent ordinary share 
on the business day immediately preceding the date of award
on 21 march 2012 the committee approved awards of 287287 
performance shares to bill burns and 142235 performance 
shares to eric hutchinson
vesting
in november 2010 the committee reviewed the appropriateness 
of the historical performance conditions for awards under the eip 
in the light of the company’s current and expected performance 
together with current market practice for performance conditions 
and consulted with major shareholders on the proposed changes 
the committee considered a range of alternative performance 
measures including eps tsr return on capital employed cash 
generation and revenue growth and determined that for awards 
granted after november 2010 it was appropriate to have more than 
one performance condition for awards of performance shares with 
vesting for 50 per cent of the award being based on the company’s 
relative total shareholder return “tsr” rating against a 
comparator group of companies and vesting for the remaining 
50 per cent of the award being based on the rate of growth in 
the company’s eps over the performance period in addition the 
committee determined that it would set performance parameters 
that are relevant and appropriate at the time of each grant 
all awards are tested once on the third anniversary of grant any part 
of an award which does not vest will lapse and there is no retesting
performance conditions for awards made in 2011 and 2012
performance shares
the performance conditions for performance shares are 
calculated over a three year performance period as set out 
in the following table
50 of award
growth in eps
1
 over the performance period 
proportion of  
performance shares  
vesting 
below 15 0
15 30
above 15 and below 25 on a straight line basis 
between 30 and 100
25 or above 100
note
1  eps means adjusted basic earnings per share
50 of award
tsr ranking
proportion of  
performance shares  
vesting 
below median 0
between median and upper quartile on a straight line basis 
between 30 and 100
at or above upper quartile 100  61
overview business review governance financial statements the comparator group for determining tsr consists of the 
30 largest companies by market capitalisation in the ftse 
techmark 100 index excluding those companies who were also 
constituents of the ftse 100 index at the commencement of the 
performance period together with three non‑uk listed direct 
competitors the committee considers the selected comparator 
group provides a suitable benchmark for the company’s tsr 
rating in determining the tsr for the company and its comparator 
group share prices are averaged over the 90 day period 
immediately prior to and at the end of the performance period 
sars and share options
the performance condition for sars and share options is based 
on the rate of growth in the company’s eps over the three year 
performance period
growth in eps
1
 over the performance period 
proportion of sarsshare options 
vesting 
below 15 0
15 30
above 15 and below 25 on a straight line basis 
between 30 and 100
25 or above 100
note
1  eps means adjusted basic earnings per share
performance conditions for awards made prior to 2011
performance shares
the vesting of awards of performance shares made prior to 2011 
was based solely on the company’s relative tsr growth against 
a comparator group of companies over a three year performance 
period as set out in the table below
tsr ranking
proportion of performance shares 
vesting 
below median 0
between median and upper quartile on a straight line basis 
between 30 and 100
at or above upper quartile 100
the comparator group and share price methodology used for the 
performance share award in 2009 which vested in 2012 are the 
same as those set out above
sars and share options
the vesting of awards of sars and share options made prior 
to 2011 was based on the rate of growth in the company’s 
eps excluding any increase in the retail prices index “rpi” 
over a three year performance period 
annual rate of growth in eps
1
 in excess of growth in rpi 
over the performance period 
percentage of sarsshare options 
vesting 
below 6 0
6 25
above 6 and below 15 on a straight line basis 
between 25 and 100
15 or above 100
note
1  eps means adjusted basic earnings per share
awards vesting in 2012
during 2012 the award of performance shares granted to 
bill burns and eric hutchinson on 30 november 2009 vested 
based on the performance conditions for that award the 
committee determined that 129260 of the performance shares 
awarded to bill burns and 51926 of the performance shares 
awarded to eric hutchinson vested having achieved a growth 
in tsr of 786 per cent this achievement resulted in a tsr 
percentile ranking of 515 per cent which translated to 342 per 
cent of the award vesting 
2013 policy on long term share incentive awards
in 2013 the committee expects to approve combined awards 
of performance shares and sars to mr burns and mr hutchinson 
equivalent to 250 per cent and 150 per cent of base salary 
respectively with one performance share being equivalent 
to two share options or sars
performance conditions for awards expected to be made in 2013
having reviewed the appropriateness of the performance 
parameters for awards under the eip the committee has 
determined that for the awards expected to be made in 2013 
the following performance parameters are apposite 62
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt on di recto rs’ remune ration continued
single figure of total remuneration for 2012
the table below provides a single figure of total remuneration for 2012 for the executive directors
salary
1
000
benefits
2
000
pension
3
000
performance 
related 
incentive
4
000
long term 
incentive
5
000
total 2012 
000
bill burns 7000 292 – 4255 3076 14623
eric hutchinson 4951 262 989 1502 1236 8940
notes
1 salary and fees cash paid in respect of the year
2 benefits taxable value of all benefits in respect of the year
3 pension cash value in lieu of pension
4 performance related incentive cash incentive payable in respect of the year
5 long term incentive value of performance shares vesting in the year based on the performance condition that ends in the year
performance shares
the performance conditions for performance shares will be 
calculated over a three year performance period as set out 
in the following table
50 of award
 
growth in eps
1
 over the performance period 
proportion of  
performance shares  
vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis 
between 30 and 100
30 or above 100
note
1  eps means adjusted basic earnings per share after expensing of 
share‑based payments
50 of award
  
tsr ranking
proportion of  
performance shares  
vesting 
below median 0
between median and upper quartile on a straight line basis 
between 30 and 100
at or above upper quartile 100
the comparator group for determining tsr will consist of the 
30 largest companies by market capitalisation in the ftse 
techmark 100 index excluding those companies who were 
also constituents of the ftse 100 index at the commencement 
of the performance period together with one non‑uk listed direct 
competitor the committee considers the selected comparator 
group provides a suitable benchmark for the company’s tsr 
rating in determining the tsr for the company and its comparator 
group share prices will be averaged over the 90 day period 
immediately prior to and at the end of the performance period 
sars and share options
the performance condition for sars and share options will be 
based on the rate of growth in the company’s eps
1
 over the three 
year performance period
growth in eps
1
 over the performance period 
proportion of  
sarsshare options  
vesting 
below 15 0
15 30
above 15 and below 30 on a straight line basis 
between 30 and 100
30 or above 100
note
1  eps means adjusted basic earnings per share after expensing of 
share‑based payments
other share plans
executive directors are also able to participate in all employee 
share plans if offered in the country within which they are 
resident the applicable all employee plan in the uk is the uk 
employee share purchase plan and in the us is the us employee 
stock purchase plan
during 2012 historical awards of vested share incentives held 
by executive directors under the spirent stock incentive plan 
“ssip” and 1995 executive share option scheme “esos” 
remained outstanding both the ssip and esos are now closed 
for new awards
further details of the company’s all employee and 
discretionary share plans are provided in note 29 to the 
consolidated financial statements and note 15 to the parent 
company financial statements   63
overview business review governance financial statements shareholding guidelines for executive directors
the committee believes that to further align their interests with 
those of shareholders executive directors should have a significant 
shareholding in the company equivalent to at least 100 per cent of 
their base salary in the form of shares or unfettered share incentive 
awards at the date of this report bill burns’ shareholding including 
vested and unfettered share awards represented 152 per cent of his 
base salary eric hutchinson’s shareholding at the date of this 
report including unfettered share awards represented 642 per cent 
of his base salary both mr burns and mr hutchinson are continuing 
to build their shareholdings through participation in the us and uk 
employee share purchase plans
shareholder dilution
the committee is strongly committed to managing shareholder 
dilution in a responsible manner no new shares were issued during 
the year with all vesting and exercises of share incentives being 
satisfied by the transfer of shares held by the company’s esot at 
the date of this report the esot holds 18 million ordinary shares 
for the purpose of satisfying the exercises of current and future 
awards by employees and former employees of the group overall 
shareholder dilution resulting from the company’s share incentive 
plans on a rolling ten year basis has fallen by 02 per cent when 
comparing the positions at 31 december 2012 90 per cent and 
31 december 2011 92 per cent the overall number of share 
incentives outstanding has fallen by 68 million during the year 
to 58 million at 31 december 2012 2011 126 million
shareholder approval for eip
shareholder approval was given in 2005 to operate the eip until 
2015 subject to further shareholder approval being required on 
the use of new issue shares and any material changes to the plan
no material changes to the eip are proposed and therefore no 
specific shareholder approval is required at the 2013 agm to 
continue to operate this plan
service contracts
bill burns has a service agreement with spirent communications 
inc “sci” and being a us resident his contract is in line with 
us employment practice and is governed by the laws of the state 
of california
eric hutchinson has a service agreement with spirent 
communications plc and being a uk resident his contract is in line 
with uk employment practice and is governed by the laws of england
it is the company’s policy that service contracts for the executive 
directors have no fixed term and are capable of termination on 
no more than 12 months’ notice from either the company or the 
executive director it is intended that this policy would also apply 
to new appointments of executive directors
the contract dates and notice periods for each executive director 
are as follows
date of  
contract
notice period 
by either 
company or 
director 
months
bill burns 6 november 2008 1
eric hutchinson 13 december 1999 12
exit payment policy
the committee is committed to ensuring that it does not pay more 
than is necessary when executives leave the group and its policy 
on exit payments is in line with market practice in the country 
in which the executive director resides
•	 both bill burns’ and eric hutchinson’s service contracts 
contain provisions for the removal of the director for poor 
performance or material misconduct without compensation 
•	 payment in lieu of notice may be paid under each contract 
if the relevant notice period is not given to the director or if 
having received notice from the director the employer does 
not wish him to serve it
•	 in the case of bill burns mitigation provisions are contained 
in his service contract in addition to one month’s base salary 
or payment in lieu he would be entitled to accrued base salary 
cash incentives and vacation pay mr burns would also be 
entitled to 11 months’ base salary subject to a set‑off for any 
base salary earned from alternative employment during the 
12 month period following termination “severance period” 
and monthly cobra premium payments for the duration of the 
severance period subject to a set‑off for health insurance 
provided by an alternative employer during the severance period
•	 in the case of eric hutchinson the company would seek to apply 
practical mitigation measures to any payment of compensation 
on termination taking into account all relevant circumstances
•	 neither contract contains provision for additional 
compensation on termination following a change of control
•	 neither contract contains provision for liquidated damages 
of any kind
•	 incentives
¡ ¡ cash incentives as noted above bill burns’ contract entitles 
him to accrued cash incentives eric hutchinson is not 
eligible for bonus payments made following his termination
¡ ¡ employee incentive plan eip leaver provisions were 
approved by shareholders when they approved the eip  for 
good leavers as defined in the plan rules awards generally 
vest at the point of exit pro‑rated for time and subject to the 
satisfaction of each award’s performance conditions awards 
are generally forfeited in all other circumstances and 
•	 both service contracts contain appropriate provisions to 
protect the legitimate interests of the company with respect to 
preventing any terminated director from working in a business 
which competes against the company  64
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt on di recto rs’ remune ration continued
external appointments
the company recognises that its executive directors may be invited to become non‑executive directors of other companies and that such 
appointments can broaden their knowledge and experience to the benefit of the company at the date of this report neither bill burns 
nor eric hutchinson hold any such external positions
non‑executive directors’ fees and letters of appointment
the company’s remuneration policy with regard to fees for non‑executive directors including the chairman is to pay fees which are in line 
with market practice for companies of a similar size and complexity fees for the non‑executive directors are normally reviewed by the board 
once every three years and were last reviewed on 1 january 2012 having been frozen since 1 january 2008 it was determined that the basic 
annual fee for non‑executive directors would be set at £40000 per annum for 2012 to 2014 fees for the chairman which are determined by 
the remuneration committee were set at £160000 per annum for 2012 to 2014 having been frozen since 1 january 2009 the chairmen of 
the audit and remuneration committees each receive additional fees of £11000 and £9000 respectively it is considered that non‑executive 
director fees are at the median level for comparable companies fees for non‑executive directors and the chairman will next be reviewed on 
1 january 2015
all non‑executive directors have a letter of appointment with the company for a period of not more than three years subject to the 
company’s articles of association however since 2011 and in accordance with the code all directors stand for re‑election at each agm
details of individual appointments are as follows
director
first appointed  
a director
current appointment  
due to expire
ian brindle 22 december 2006 2015 agm
duncan lewis 1 july 2007 2014 agm
tom maxwell 1 october 2007 2015 agm
sue swenson 1 february 2012 2015 agm
alex walker 22 december 2006 2015 agm
the letters of appointment are available for inspection on request and will be available for inspection at the 2013 agm an example 
of a letter of appointment for a non‑executive director is available on the company’s website at wwwspirentcom
non‑executive directors are not eligible to participate in cash incentive or share incentive arrangements and their service does not 
qualify for pension or other benefits no element of their fee is performance related  65
overview business review governance financial statements total shareholder return performance
the graph below shows the tsr performance for the last five financial years of spirent communications plc against the ftse 250 index 
and the ftse techmark 100 index excluding those companies who were also constituents of the ftse 100 index at the commencement 
of the period the committee believes that these provide broad equity market indices against which the performance of the company can 
be fairly compared and that the ftse techmark 100 index provides a particularly representative collection of comparator companies
five‑year tsr performance – spirent vs ftse techmark 100
1
 and ftse 250
fiveyear tsr performance – spirent vs ftse techmark 100
1
 and ftse 250
dec 12 dec 11 dec 10 dec 09 dec 08 dec 07
300
250
200
150
100
rebased index
50
0
spirent ftse techmark 100
1
ftse 250
note
1 as of 1 january 2008 excluding ftse100 companies
part b audited information
directors’ remuneration
base salary  
and fees  
000
taxable 
benefits  
000
performance 
related 
incentive paid 
in cash  
000
cash in  
lieu of  
pension  
000
total  
2012
2
  
000
total  
2011 
000
executive directors
bill burns 7000 292 4255 – 11547 14689
eric hutchinson
1
4951 262 1502 989 7704 9235
non‑executive directors
ian brindle 806 – – – 806 752
duncan lewis 632 – – – 632 576
tom maxwell 774 – – – 774 720
sue swenson 579 – – – 579 –
alex walker 2528 – – – 2528 2400
2012 17270 554 5757 989 24570 –
2011 15174 552 11702 944 – 28372
notes
1 eric hutchinson earned a fee of 800 2011 800 in respect of his services to the board and its committees
2 these figures relate to the period of director’s board membership
figures in sterling have been translated at an average exchange rate of 158£1 2011 160£1 66
spirent commu ni cati ons pl c ann ual rep ort 2012
repo rt on di recto rs’ remune ration continued
summary of directors’ remuneration
2012  
000
2011  
000
total emoluments for all directors 24570 28372
gains made on the vesting and exercise of share incentives
1
11596 6705
pension plan contributions
2
100 98
36266 3517 5
notes
1 gains made on the vesting and exercise of share incentives
 2012 on 9 march eric hutchinson exercised 234000 esos share options granted on 2 april 2002 at an exercise price of 1335 pence and 387000 esos share options 
granted on 2 may 2002 at an exercise price of 113 pence mr hutchinson disposed of 555213 of the ordinary shares acquired at a price of 1558467 pence per share to 
cover the tax liability arising on the combined gain of £218108 344611 and retained the balance of the award 
 on 16 march bill burns exercised 62500 ssip stock appreciation rights granted at a base price of 53 pence on 25 august 2005 the applicable fair market value 
of 1603 pence resulted in a gain of £67062 105959
 on 30 november 129260 and 51926 performance shares vested and were allotted to bill burns and eric hutchinson respectively which at a fair market value of 
1506 pence resulted in a gain of £194666 307572 for mr burns and £78201 123557 for mr hutchinson
 on 3 december bill burns exercised 170625 ssip stock appreciation rights granted at a base price of 475 pence on 5 may 2006 the applicable fair market value 
of 1506 pence resulted in a gain of £175914 277945
 2011 on 1 january 24721 options granted to eric hutchinson on 26 september 2003 under the spirent savings related share option scheme at an exercise price of 
38 pence per share matured resulting in a deemed gain of £27144 on a market price of 1478 pence per ordinary share on 21 october 2010 mr hutchinson had elected 
to receive these options as shares on their maturity
 on 7 november 313262 performance shares vested and were allotted to bill burns mr burns sold 158012 ordinary shares to cover the tax liability arising on the 
deemed gain of 626861 which was realised on a market price of 1246 pence per ordinary share and retained the remaining 155250 ordinary shares
2 pension plan contributions
 during the year contributions totalling 10000 in respect of bill burns were made to the spirent communications group 401k pension plan 2011 9800
directors’ interests in shares
the beneficial interests of the directors and their connected persons in the shares of the company are set out below
at  
28 february 
2013  
ordinary 
shares
1 2
at  
31 december 
2012  
ordinary 
shares
1
at  
31 december 
2011  
ordinary 
shares
1
executive directors
bill burns 219634 218850 213242
eric hutchinson 1300693 1300379 1232570
non‑executive directors
ian brindle 4525 4525 4525
duncan lewis – – –
tom maxwell 26955 26955 26955
sue swenson – – –
alex walker 80481 80481 80000
notes
1 directors’ beneficial interests do not form part of the remuneration provided by the company
2 events since 31 december 2012
 on 24 january 2013 bill burns acquired 328 ordinary shares under the us employee stock purchase plan and eric hutchinson acquired 166 ordinary shares under the 
uk employee share purchase plan both at a price of 1510 pence per share
 on 25 february 2013 bill burns acquired 456 ordinary shares under the us employee stock purchase plan and eric hutchinson acquired 148 ordinary shares under the 
uk employee share purchase plan both at a price of 1679751 pence per share   67
overview business review governance financial statements plan and 
award 
type
1
at 1 
january 
2012
lapsed 
during the 
period
exercised
vested 
during the 
period
granted 
during the 
period
at 31 
december 
2012
date of  
grant
exercise  
price per 
share  
pence
market 
price on 
date of 
grant 
pence
date first 
exercisable
2
expiry date
bill burns
ssip 62500 – 62500 – – 25 aug 05 53 53 25 aug 08 25 aug 12
ssip 170625 – 170625 – – 05 may 06 48 48 05 may 07 05 may 13
eip sar 374000 – – – 374000 07 nov 08 51 51 07 nov 11 06 nov 18
eip ps 377 953 248693 129260 – – 30 nov 09 nil
3
98 30 nov 12 30 nov 12
eip ps 255859 – – – 255859 23 mar 11 nil
3
143 23 mar 14 23 mar 14
eip ps – – – 287 287 287 287 21 mar 12 nil
3
153 21 mar 15 21 mar 15
eric hutchinson
esos 234000 – 234000 – – 02 apr 02 134 134 02 apr 06 01 apr 12
esos 387 000 – 387 000 – – 02 may 02 113 113 02 may 06 01 may 12
eip sar 56600 – – – 56600 25 aug 05 53 53 25 aug 08 24 aug 15
eip ps 151829 99903 51926 – – 30 nov 09 nil
3
98 30 nov 12 30 nov 12
eip ps 109366 – – – 109366 23 mar 11 nil
3
143 23 mar 14 23 mar 14
eip ps – – – 142235 142235 21 mar 12 nil
3
153 21 mar 15 21 mar 15
notes
an explanation of each share plan and its operation is given in note 29 to the audited consolidated financial statements of the group and note 15 to the parent company 
financial statements
1 key to share plan and type of award
 eip sar – 2005 employee incentive plan stock appreciation rights
 eip ps – 2005 employee incentive plan performance shares
 esos – 1995 executive share option scheme share options
 ssip – spirent stock incentive plan stock appreciation rights
2 awards which have passed the date first exercisable have vested and are unfettered having passed the relevant performance conditions
3 there is no exercise price payable for a performance share upon vesting further details on performance shares are provided above
4 the market price on date of grant is the price of an ordinary share at the close of business on the day before the date of grant
the middle market price of an ordinary share at the close of business on 3 january 2012 and 31 december 2012 being the first and 
last days the london stock exchange was open for trading in 2012 was 1214 pence and 1507 pence respectively and during that 
period ranged between a high of 174 pence and a low of 115 pence
signed on behalf of the board
tom maxwell
chairman of the remuneration committee
28 february 2013 68
financial statements
consolidated financial statements
independent auditor’s report to the members of 
spirent communications plc 69
consolidated income statement 70
consolidated statement of comprehensive income 71
consolidated balance sheet 72
consolidated cash flow statement 73
consolidated statement of changes in equity 74
notes to the consolidated financial statements 75
parent company financial statements
independent auditor’s report to the members of 
spirent communications plc 117
parent company balance sheet 118
notes to the parent company financial statements 119
principal divisions and subsidiaries 135  69
overview business review governance financial statements we have audited the group financial statements of spirent 
communications plc for the year ended 31 december 2012 which 
comprise the consolidated income statement the consolidated 
statement of comprehensive income the consolidated balance 
sheet the consolidated cash flow statement and the consolidated 
statement of changes in equity and the related notes 1 to 34 
the financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting 
standards “ifrss” as adopted by the european union
this report is made solely to the company’s members as a body 
in accordance with chapter 3 of part 16 of the companies act 
2006 our audit work has been undertaken so that we might state 
to the company’s members those matters we are required to state 
to them in an auditor’s report and for no other purpose to the 
fullest extent permitted by law we do not accept or assume 
responsibility to anyone other than the company and the 
company’s members as a body for our audit work for this 
report or for the opinions we have formed 
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement set out on page 49 the directors are responsible for 
the preparation of the group financial statements and for being 
satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the group financial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require 
us to comply with the auditing practices board’s ethical 
standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of 
the financial statements in addition we read all the financial and 
non‑financial information in the annual report to identify material 
inconsistencies with the audited financial statements if we 
become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report
opinion on financial statements
in our opinion the group financial statements
•	 give a true and fair view of the state of the group’s affairs as 
at 31 december 2012 and of its profit for the year then ended
•	 have been properly prepared in accordance with ifrss 
as adopted by the european union and 
•	 have been prepared in accordance with the requirements of 
the companies act 2006 and article 4 of the ias regulation
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the directors’ report for 
the financial year for which the group financial statements are 
prepared is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if 
in our opinion
•	 certain disclosures of directors’ remuneration specified by law 
are not made or
•	 we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review
•	 the directors’ statement set out on page 47 in relation to 
going concern and
•	 the part of the corporate governance statement relating to 
the company’s compliance with the nine provisions of the uk 
corporate governance code specified for our review and
•	 certain elements of the report to shareholders by the board 
on directors’ remuneration
other matter
we have reported separately on the parent company financial 
statements of spirent communications plc for the year ended 
31 december 2012 and on the information in the directors’ 
remuneration report that is described as having been audited 
karl havers senior statutory auditor
for and on behalf of ernst  young llp statutory auditor
london
28 february 2013
notes
1 the maintenance and integrity of the spirent communications plc website 
is the responsibility of the directors the work carried out by the auditor does 
not involve consideration of these matters and accordingly the auditor accepts 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the website
2 legislation in the united kingdom governing the preparation and dissemination 
of financial statements may differ from legislation in other jurisdictions
independent aud itor’s report to the members of s p irent commun icat ions plc 70
spirent commu ni cati ons pl c ann ual rep ort 2012
consol idated inc ome statement year to 31 december 2012
notes
2012  
 million
2011
1 
 million
continuing operations
revenue 3 4 4724 4705 
cost of sales 1357 1430
gross profit 3367 3275 
product development 4 861 833
selling and distribution 917 905
administration 497 407
operating profit 4 1092 1130 
finance income 8 15 17 
finance costs 9 – 04
profit before tax 4 5 1107 1143 
tax 12 290 264
profit for the year after tax for continuing operations 817 879 
discontinued operations 6 471 67
profit for the year attributable to owners of parent company 1288 946 
earnings per share cents 13
continuing operations
 basic 1246 1317
 diluted 1241 1307
discontinued operations
 basic 718 101
 diluted 716 099
total group
 basic 1964 1418
 diluted 1957 1406
note
1 2011 has been restated to reflect the presentation of systems as a discontinued operation
the notes on pages 75 to 116 and page 135 form part of these financial statements  71
overview business review governance financial statements consol idated statement of c omprehens ive inc ome
year to 31 december 2012
notes
2012  
 million
2011  
 million
profit for the year attributable to owners of parent company 1288 946
other comprehensive income
exchange differences on retranslation of foreign operations 32 03
exchange differences recycled on disposal 33 12 –
actuarial losses on defined benefit pension plans 11 140 255
movement in irrecoverable element of defined benefit pension plan surplus 11 – 22
deferred tax credit on defined benefit pension plans 12 25 40
other comprehensive income 7 1 190
total comprehensive income for the year attributable to owners of parent company 1217 756
the notes on pages 75 to 116 and page 135 form part of these financial statements 72
spirent commu ni cati ons pl c ann ual rep ort 2012
consol idated balan ce sheet at 31 december 2012
notes
2012  
 million
2011  
 million
assets
non‑current assets
intangible assets 15 2074 1232 
property plant and equipment 16 341 355 
trade and other receivables 20 49 32 
cash on deposit 21 04 07 
defined benefit pension plan surplus 11 – 07 
deferred tax 23 284 294 
2752 1927 
current assets
inventories 19 340 436 
trade and other receivables 20 956 1061 
cash and cash equivalents 21 2486 2365 
3782 3862 
total assets 6534 5789 
liabilities
current liabilities
trade and other payables 22 1073 1193
current tax 85 95
provisions and other liabilities 25 44 33
1202 1321
non‑current liabilities
trade and other payables 24 114 103
defined benefit pension plan deficit 11 256 131
provisions and other liabilities 25 06 12
376 246
total liabilities 1578 1567
net assets 4956 4222 
capital and reserves 28
share capital 353 343 
share premium account 329 313 
capital redemption reserve 194 177 
other reserves 16 27 
translation reserve 240 196 
retained earnings 3856 3166 
total equity attributable to owners of parent company 4956 4222
the notes on pages 75 to 116 and page 135 form part of these financial statements
signed on behalf of the board
eric hutchinson
director
28 february 2013  73
overview business review governance financial statements consol idated cash flow statement year to 31 d ecember 2012
notes
2012  
 million
2011  
 million
cash flows from operating activities
cash flow from operations 31 1282 1205
tax paid 231 218
net cash inflow from operating activities 1051 987
cash flows from investing activities
interest received 09 09
transfer from long term deposit 03 04
purchase of intangible assets 15 – 37
purchase of property plant and equipment 16 164 208
proceeds from the sale of property plant and equipment 21 10
acquisition of subsidiaries and businesses 32 920 145
net proceeds from the disposal of operations 33 599 –
net cash used in investing activities 452 367
cash flows from financing activities
interest paid 03 –
dividend paid 14 203 175
proceeds from the issue of share capital and employee share ownership trust 22 04
share repurchase 316 334
net cash used in financing activities 500 505
net increase in cash and cash equivalents 99 115
cash and cash equivalents at the beginning of the year 2365 2239
effect of foreign exchange rate changes 22 11
cash and cash equivalents at the end of the year 21 2486 2365
the notes on pages 75 to 116 and page 135 form part of these financial statements 74
spirent commu ni cati ons pl c ann ual rep ort 2012
consol idated statement of changes in equ ity  million
share  
capital
share  
premium 
account
capital 
redemption 
reserve
other  
reserves
translation 
reserve
retained 
earnings
total  
equity
at 1 january 2011 353 314 173 16 193 3022 4071
profit for the year – – – – – 946 946
other comprehensive income a – – – – 03 193 190
total comprehensive income – – – – 03 753 756
share‑based payment note 30 – – – – – 11 11
deferred tax on share incentives note 12 – – – – – 25 25
new shares issued note 28 01 03 – – – – 04
share cancellation note 28 07 – 07 – – – –
share repurchase note 28 – – – – – 342 342
share buy back obligation note 28 – – – – – 78 78
equity dividends note 14 – – – – – 175 175
exchange adjustment 04 04 03 11 – – –
at 1 january 2012 343 313 177 27 196 3166 4222
profit for the year – – – – – 1288 1288
other comprehensive income b – – – – 44 115 7 1
total comprehensive income – – – – 44 1173 1217
share‑based payment note 30 – – – – – 16 16
deferred tax on share incentives note 12 – – – – – 10 10
employee share ownership trust note 28 – – – – – 22 22
share cancellation note 28 07 – 07 – – – –
share repurchase note 28 – – – – – 308 308
equity dividends note 14 – – – – – 203 203
exchange adjustment 17 16 10 43 – – –
at 31 december 2012 353 329 194 16 240 3856 4956
a the amount included in other comprehensive income for 2011 of 193 million represents actuarial losses of 255 million in 
respect of the defined benefit pension plans less an amount for the movement in the irrecoverable element of the pension plan 
surplus of 22 million net of a tax credit of 40 million
 the amount included in the translation reserve of 03 million represents other comprehensive income related to the translation 
of foreign operations
b the amount included in other comprehensive income for 2012 of 115 million represents actuarial losses of 140 million 
in respect of the defined benefit pension plans net of a tax credit of 25 million
 the amount included in the translation reserve of 44 million represents other comprehensive income related to the translation 
of foreign operations of 32 million and exchange differences of 12 million recycled on the disposal of operations
the notes on pages 75 to 116 and page 135 form part of these financial statements  75
overview business review governance financial statements notes to the consol idated f inan cial statements 1 corporate information 
the group’s consolidated financial statements for the year ended 31 december 2012 were authorised for issue by the board of directors 
on 28 february 2013 spirent communications plc is a public limited company incorporated and domiciled in england and wales 
the company’s ordinary shares are traded on the london stock exchange
as required by the european union’s “eu” ias regulation and the companies act 2006 the group has prepared its consolidated 
financial statements in accordance with international financial reporting standards “ifrss” as adopted by the eu and issued 
by the international accounting standards board “iasb” 
the company has elected to prepare the company financial statements in accordance with uk accounting standards these are 
presented on pages 118 to 135 and the accounting policies in respect of the company are set out on pages 119 to 122
2 summary of significant accounting policies 
basis of preparation 
the consolidated financial statements have been prepared under the historical cost convention except unless otherwise indicated 
the group has prepared its financial statements under ifrss the significant accounting policies applied in the preparation of these 
consolidated financial statements are set out below and the accounting policies adopted are consistent with those applied in the 
consolidated financial statements for the year ended 31 december 2011
new accounting standards
the following new standards amendments to standards and interpretations are mandatory for the first time in the current period and 
have been adopted by the group with no significant impact on its consolidated results or financial position
international accounting standards “iasifrs”
ias 12 amendments to ias 12 – deferred tax recovery of underlying assets
ifrs 1 amendments to ifrs 1 – severe hyperinflation and removal of fixed dates for first‑time adopters
ifrs 7 amendments to ifrs 7 disclosures – transfers of financial assets
basis of consolidation 
the consolidated financial statements incorporate the financial statements of the company and its subsidiaries made up to 
31 december each year the financial statements of subsidiaries are prepared for the same reporting year as the parent company 
using consistent accounting policies 
results of subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from 
the date on which control is transferred out of the group all intra group transactions balances income and expenses are eliminated 
on consolidation
goodwill 
goodwill arising on the acquisition of subsidiaries representing the excess of cost over the net fair value of the identifiable assets 
liabilities and contingent liabilities acquired is capitalised as an intangible asset goodwill is carried at cost less any accumulated 
impairment losses 
goodwill is subject to an annual review for impairment for the purpose of impairment testing goodwill is allocated to the related 
cash‑generating units monitored by management where the recoverable amount of the cash‑generating unit is less than its carrying 
amount including goodwill an impairment loss is recognised in the income statement  76
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
the carrying amount of goodwill allocated to a cash‑generating unit an operation within a cash‑generating unit an associate or jointly 
controlled entity is included in the profit or loss on its disposal 
intangible assets 
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses separately identifiable 
intangible assets such as patent fees licence fees trademarks and customer lists and relationships are capitalised on the balance 
sheet only when the value can be measured reliably or the intangible asset is purchased as part of the acquisition of a business 
such intangible assets are amortised over their useful economic lives on a straight line basis the carrying value of intangible assets 
is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable 
product development
research expenditure is recognised in the year in which it is incurred intangible assets arising on the group’s various product 
development projects are recognised only if the recognition criteria of ias 38 “intangible assets” are met 
product development costs are expensed as incurred until the technological feasibility of the product under development has 
been established technological feasibility in spirent’s circumstances occurs when a working model is completed for software 
development technological feasibility is not established until the process of developing the software is complete after technological 
feasibility is established additional costs are capitalised and amortised on a straight line basis over the estimated useful life
at 31 december 2012 and 31 december 2011 no amounts have met the recognition criteria
property plant and equipment 
property plant and equipment are stated at cost less accumulated depreciation and accumulated impairment depreciation is not 
provided on freehold land depreciation is provided to write off the cost less estimated residual value of all other assets over their 
estimated useful lives on a straight line basis at rates which take into account commercial conditions at their location usual asset 
lives are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
 building installations 20 years or lease period if less
 fittings and equipment 3 to 8 years
 motor vehicles 3 to 5 years
 business systems software 4 years
the carrying values of property plant and equipment are reviewed for impairment if events or changes in circumstances indicate the 
carrying value may not be recoverable
impairment of assets 
intangible assets with finite useful lives and property plant and equipment are tested for impairment at each reporting date 
where there is an indication that an asset may be impaired goodwill and intangible assets with an indefinite useful life are assessed 
at least annually when an impairment test is performed the recoverable amount is assessed by reference to the higher of the net 
present value of the expected cash flows value in use of the relevant cash‑generating unit or asset and the fair value less cost to sell 
in assessing value in use the estimated future cash flows are discounted to their present value using a pre‑tax discount rate that 
reflects current market assessments of the time value of money and the risks specific to the asset where the carrying amount of an 
asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount impairment 
losses are recognised in the income statement in those expense categories consistent with the function of the impaired asset  77
overview business review governance financial statements 2 summary of significant accounting policies continued
where an impairment loss has been recognised against an asset it may be reversed in future periods where there has been a change 
in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised but only to the 
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined net of depreciation 
or amortisation had no impairment loss been recognised in prior years such a reversal is recognised in the income statement 
this does not apply for goodwill for which an impairment loss must not be reversed in any circumstances 
leases 
operating leases are leases where the lessor retains substantially all the risks and rewards of ownership of the asset and are not 
finance leases operating lease rentals are charged to the income statement on a straight line basis over the period of the lease 
inventories 
inventories are stated at the lower of cost and estimated net realisable value after provisions for obsolescence cost includes all costs 
incurred in bringing each product to its present location and condition being the full manufacturing cost on a first‑in‑first‑out basis 
including all attributable overheads based on a normal level of activity 
provisions 
provisions are recorded when the group has a present legal or constructive obligation as a result of a past event for which it 
is probable that the group will be required to settle by an outflow of resources and for which a reliable estimate of the amount of 
the obligation can be made provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate 
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures 
expected to be required to settle the obligation 
foreign currencies 
the consolidated financial statements are presented in us dollars which is the group’s presentation currency 
transactions in foreign currencies are initially recorded at the rates ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies are retranslated at the rates ruling at the balance sheet date all exchange differences are taken 
to the consolidated income statement non‑monetary assets and liabilities denominated in foreign currencies are measured in terms 
of historical costs using the exchange rate at the date of the initial transaction
the functional currencies of the group’s operations are principally us dollar sterling or euro on consolidation the assets and 
liabilities of the group’s foreign operations are translated into the group’s presentation currency at exchange rates ruling at the 
balance sheet date the results of foreign operations are translated into us dollars using average rates for the period the exchange 
differences arising on retranslation are classified as a separate component of equity the translation reserve such translation 
differences are recognised as part of the profit or loss on disposal should an operation be disposed of the group has elected to apply 
the exemption in ifrs 1 “first time adoption of international financial reporting standards” which allows the cumulative translation 
differences for all foreign operations to be deemed to be zero at the date of transition to ifrss being 1 january 2003 
financial instruments 
financial assets and liabilities are recognised on the group’s balance sheet when it becomes a party to the contractual provisions 
of the instrument
trade receivables 
trade receivables are non‑interest bearing and are stated at original invoiced amount less an appropriate allowance for estimated 
irrecoverable amounts such allowances are based on an assessment of debtor ageing past experience or known customer exposures 78
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
cash and cash equivalents 
cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits which usually have an 
original maturity of three months or less for the purposes of the consolidated cash flow statement cash and cash equivalents consist 
of cash and cash equivalents as defined above there are no bank overdrafts
trade payables
trade payables are non‑interest bearing and are stated at the original invoiced amount 
equity instruments 
equity instruments are recorded at the proceeds received net of direct issue costs spirent communications plc ordinary shares 
held by the group are classified in equity as treasury shares and are recognised at cost and included as a deduction from retained 
earnings consideration received for the sale of such treasury shares is also recognised in equity with any difference between the 
proceeds from sale and the original cost being taken to retained earnings 
derivative financial instruments and hedge accounting
the group uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign 
currencies relating to firm commitments 
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into 
and are subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency exchange 
contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles the group has not 
adopted the hedge accounting rules ever since the decision was taken to change the reporting currency in 2010 consequently all gains 
and losses arising from changes in fair value are taken to the income statement
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts 
retirement benefits
the group operates two funded defined benefit pension plans which are in the united kingdom all other pension plans are defined 
contribution in nature for the defined contribution plans the amount charged to the income statement is the employers’ contributions 
paid or payable during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method 
and updates are performed at each balance sheet date the cost of providing benefits under these plans is determined separately for 
each plan and attributes entitlement to benefits to the current period to determine current service cost and to the current and prior 
periods to determine the present value of defined benefit obligations past service costs are recognised in the income statement on a 
straight line basis over the vesting period or immediately if the benefits have vested when a settlement eliminating all obligations for 
benefits already accrued or a curtailment reducing future obligations as a result of a material reduction in the plan membership or 
a reduction in future entitlement occurs the obligation and related plan assets are remeasured using current actuarial assumptions 
and the resultant gain or loss recognised in the income statement during the period in which the settlement or curtailment occurs
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting 
from the passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking 
into account material changes in the obligation during the year the expected return on plan assets is based on an assessment made 
at the beginning of the year of long term market returns on plan assets adjusted for the effect on the fair value of plan assets of 
contributions received and benefits paid during the year the difference between the expected return on plan assets and the 
interest cost is recognised in the income statement as finance costs or finance income   79
overview business review governance financial statements 2 summary of significant accounting policies continued
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments 
on liabilities and changes in actuarial assumptions are recognised immediately in the statement of comprehensive income 
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the 
defined benefit obligation using a discount rate based on high quality corporate bonds denominated in the same currency and whose 
term is consistent with the estimated term of the obligation less any past service cost not yet recognised and less the fair value of 
plan assets out of which the obligations are to be settled directly fair value is based on market price information and in the case of 
quoted securities is the published bid price the value of a net pension benefit asset is restricted to the sum of any unrecognised past 
service costs and the present value of any amount the group expects to recover by way of refunds from the plan or reductions in the 
future contributions 
revenue recognition 
revenue is recognised when it is probable that economic benefits will flow to the group the revenue can be reliably measured and 
when the group has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised 
when collectability is probable 
for the sale of services revenue is recognised in accounting periods in which the service is rendered revenue from maintenance 
contracts is recognised over the period of performance on a straight line basis
revenue from product sales of hardware and software is recognised at the time of delivery and acceptance and when there 
are no significant vendor obligations remaining it is not until acceptance has occurred that the risks and rewards of ownership are 
transferred to the buyer terms of acceptance are dependent upon the specific contractual arrangement agreed with the customer
contractual arrangements are accounted for as two or more separate transactions only where the commercial substance is that the 
individual components operate independently of each other because they are capable of being provided separately from one another 
and it is possible to attribute reliable fair values to every component to the extent that a separate component comprises a product 
sale of hardware or software revenue is recognised as described above revenue is recognised on other components as the group 
fulfils its contractual obligations and to the extent that it has earned the right to consideration 
employee benefits 
when an employee has rendered services to the group during an accounting period short term benefits expected to be paid in 
exchange for those services are recognised in the same accounting period 
share‑based payment
the group operates various equity‑settled share‑based compensation plans and accounts for these awards in accordance with ifrs 2 
“share‑based payment”
the fair value of these awards is recognised in the income statement on a straight line basis over the vesting period together with 
a corresponding change in equity the fair value is measured using the hull‑white trinomial model by reference to the share price 
and taking into account the terms and conditions of the award excluding non‑market vesting conditions at the date the awards were 
granted the charge is reassessed at each balance sheet date to reflect the expected and actual levels of vesting due to achievement 
or otherwise of non‑market conditions awards where vesting is conditional upon satisfying a market condition or non‑vesting 
condition are treated as vesting irrespective of whether the market or non‑vesting condition has been satisified
the group has an employee share trust for the granting of certain share incentives to employees shares in the group held by the 
employee share trust are treated as treasury shares and presented in the balance sheet as a deduction from equity 80
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
tax
income tax on the profit or loss for the year comprises current and deferred tax income tax is recognised in the income statement 
except to the extent that it relates to items in equity
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the 
balance sheet date and any adjustments to tax payable for previous years
deferred tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying 
amounts in the financial statements with the following exceptions
•	 where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not 
a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss 
•	 in respect of taxable temporary differences associated with investments in subsidiaries associates and joint ventures where 
the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will 
not reverse in the foreseeable future
a deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the 
deductible temporary differences carried forward tax credits or tax losses can be utilised 
deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related 
asset is realised or the liability is settled based on tax rates and laws enacted or substantively enacted at the balance sheet date
dividends paid
the interim dividend is included in the financial statements in the period in which it is paid and the final dividend in the period 
it is approved by the shareholders at an annual general meeting
critical accounting assumptions and judgements
the preparation of financial statements requires the group to make estimates and assumptions that affect items reported 
such estimates and assumptions are based on management’s best knowledge of current facts circumstances and future events 
actual results may differ possibly significantly from those estimates the areas requiring a high degree of judgement or where 
assumptions and estimates are significant to the consolidated financial statements are discussed below 
goodwill impairment
the group tests annually by cash‑generating unit whether goodwill has suffered impairment and more frequently when events or 
circumstances indicate that the current carrying value may not be recoverable the recoverable amounts of cash‑generating units have 
been determined based on value in use calculations which require the use of estimates and assumptions these are described in note 15
defined benefit pension plans
the pension cost and the defined benefit obligation of the group’s defined benefit pension plans are based on a number of selected 
assumptions these include the discount rate inflation rate salary growth longevity and expected return on the plans’ assets 
differences arising from actual experience or future changes in assumptions will be reflected in future periods the effect of changing 
these assumptions is described in note 11  81
overview business review governance financial statements 2 summary of significant accounting policies continued
revenue recognition
for revenue recognition purposes contractual arrangements are accounted for as two or more separate transactions only where 
the commercial substance is that the individual components operate independently of each other because they are capable of 
being provided separately from one another and it is possible to attribute reliable fair values to every component to the extent 
that a separate component comprises a product sale of hardware or software revenue is recognised as described above revenue 
is recognised on other components as the group fulfils its contractual obligations and to the extent that it has earned the right to 
consideration management exercises a degree of judgement in setting the criteria used for determining when revenue which 
involves several elements should be recognised and the fair values allocated to each element
income taxes
the group is subject to income taxes in a number of tax jurisdictions and judgement is applied in determining the worldwide 
provision for income taxes there are many transactions for which the final tax determinability is uncertain for example liabilities 
are recognised for anticipated tax audit issues based on whether additional taxes are likely to be due based on the facts and 
circumstances known at the time the financial statements are prepared where the final outcome differs from the amounts 
that were initially recorded the differences will be recorded in the future period in which the determination is made
deferred taxes
the extent to which deferred tax assets can be recognised is based on current forecasts and estimates prepared by management 
a change to these forecasts and estimates could result in a different recognition outcome unrecognised deferred tax assets are 
disclosed in note 23
new standards and interpretations not applied
the iasb and ifric have issued the following standards and interpretations with an effective date for the group after the date of these 
financial statements
international accounting
standards “iasifrs”
effective for annual 
periods beginning  
on or after
ias 1 amendments to ias 1 – presentation of items of other comprehensive income 1 july 2012
ias 1 amendments to ias 1 – clarification of the requirements for comparative information 1 january 2013
ias 16 amendments to ias 16 – classification of servicing equipment 1 january 2013
ias 19 employee benefits 1 january 2013
ias 32 amendments to ias 32 – offsetting financial assets and financial liabilities 1 january 2014
ias 32 amendments to ias 32 – tax effect of distribution to holders of equity instruments 1 january 2013
ifrs 1 amendments to ifrs 1 – borrowing costs 1 january 2013
ifrs 1 amendments to ifrs 1 – government loans 1 january 2013
ifrs 7 amendments to ifrs 7 – offsetting financial assets and financial liabilities 1 january 2013
ifrs 9 financial instruments 1 january 2015
ifrs 10 consolidated financial statements 1 january 2014
ifrs 11 joint arrangements 1 january 2014
ifrs 12 disclosure of interests in other entities 1 january 2014
ifrs 13 fair value measurement 1 january 2013
ifrs 10 11 and ias 27 investment entities 1 january 2014
ifrs 10 11 and 12 consolidated financial statements joint arrangements and disclosure of interests 
in other entities transition guidance
1 january 2013
annual improvements  
2009–2011 cycle 1 january 2013 82
spirent commu ni cati ons pl c ann ual rep ort 2012
n otes to the consol idated f inan cial statements continued
2 summary of significant accounting policies continued
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the group’s 
financial statements in the period of initial application other than in relation to ias 19 under ias 19 “employee benefits” the interest 
income for the defined benefit pension plans would reduce by approximately 12 million at current levels of funding this change 
results from the expected rate of return on the pension plan assets being the same rate as the discount rate used to discount the plan 
liabilities in addition the administrative expenses of running the plans would be expensed to operating costs the impact would be 
to increase operating costs by approximately 11 million
3 revenue
2012  
 million
2011  
 million
sale of goods 3620 3819
maintenance and support services 1104 886
total revenue from continuing operations 4724 4705
revenue for discontinued operations principally relates to the sale of goods
4 operating segments
the group’s organisational structure is based on differences in the products and services offered by each segment and information 
regularly reviewed by the group’s chief executive officer its chief operating decision maker is presented on this basis the group’s 
operating segments follow this structure
the group’s continuing reportable operating segments are performance analysis and service assurance its systems segment 
was sold during the year and is disclosed as a discontinued operation in these financial statements the group evaluates segment 
operating profit before exceptional items acquisition related costs acquired intangible asset amortisation and share‑based payment 
finance income and finance costs are not allocated to the reportable segments corporate is not an operating segment and costs are 
separately reported and not allocated to the reportable segments 
information on segment assets and segment liabilities is not regularly provided to the group’s chief executive officer and is therefore 
not disclosed below
the principal activities of each of the continuing reportable operating segments are as follows
•	 performance analysis provides solutions that test a broad range of communications technologies critical to the development 
of next‑generation network equipment and devices
•	 service assurance provides network monitoring and field test solutions to allow service providers to diagnose troubleshoot and 
determine how to resolve issues with networks and systems within the live network  83
overview business review governance financial statements 4 operating segments continued
segmental information is provided below for continuing operations discontinued operations are dealt with in note 6 
 
2012  
 million
performance 
analysis
service 
assurance corporate total
revenue
external revenue 4340 384 – 4724
there were no inter‑segment sales
profit before tax
total reportable segment profitloss before exceptional items 1164 84 54 1194
exceptional items note 7 – 29 – 29
total reportable segment profitloss 1164 55 54 1165
unallocated amounts
 acquisition related costs 12
 acquired intangible asset amortisation 45
 share‑based payment note 30 16
operating profit 1092
finance income 15
profit before tax 1107
other information
product development 791 70 – 861
expenditure on intangibles note 15 900 – – 900
expenditure on property plant and equipment 157 01 01 159
intangible asset amortisation – other 16 – – 16
depreciation 134 11 01 146 84
spirent commu ni cati ons pl c ann ual rep ort 2012
n otes to the consol idated f inan cial statements continued
4 operating segments continued
 
2011
1  
 million
performance 
analysis
service 
assurance corporate total
revenue
external revenue 4164 541 – 4705
there were no inter‑segment sales
profit before tax
total reportable segment profitloss 1151 70 52 1169
unallocated amounts
 acquisition related costs 12
 acquired intangible asset amortisation 16
 share‑based payment note 30 11
operating profit 1130
finance income 17
finance costs 04
profit before tax 1143
other information
product development 744 89 – 833
expenditure on intangibles note 15 145 – – 145
expenditure on property plant and equipment 192 09 – 201
intangible asset amortisation – other 13 – – 13
depreciation 112 13 02 127
geographical information
2012  
 million
2011
1 
 million
revenue by market
united states 2392 2388
asia pacific rest of world 1660 1591
europe 672 726
4724 4705
europe includes united kingdom revenue of 134 million 2011 134 million
revenues are attributed to countries based on customer location 
2012  
 million
2011  
 million
non‑current assets
united states 2324 1491
asia pacific rest of world 57 48
europe 34 48
2415 1587 
note
1 2011 has been restated to reflect the presentation of systems as a discontinued operation  85
overview business review governance financial statements 4 operating segments continued
europe includes united kingdom non‑current assets of 22 million 2011 34 million
no one customer accounted for 10 per cent or more of total group revenue in either 2012 or 2011 
5 profit before tax 
the following items have been charged or credited in arriving at profit before tax and are disclosed for continuing and 
discontinued operations 
2012  
 million
2011  
 million
employee benefit costs note 10 1854 1840
costs of inventories recognised as an expense 1196 1369
write‑down of inventories to net realisable value note 19 37 38
amortisation of intangible assets note 15 61 29
depreciation of property plant and equipment
 owned assets note 16 152 132
loss on disposal of property plant and equipment 01 01
operating leases
 minimum lease payments 77 116
 sublease income 01 07
product development costs 901 881 
net foreign exchange chargecredit 08 17
services provided to all of the operations of the group by the auditor ernst  young llp and its associates 
2012  
 million
2011 
  million
audit services
group audit fee 08 08
other fees to auditors
audit related assurance services – 01
taxation advisory services 02 –
taxation advisory relating to corporate finance transactions 02 –
04 01
12 09
a description of the work of the audit committee is set out in the directors’ statement on corporate governance and includes 
an explanation of how auditor objectivity and independence is safeguarded when non‑audit services are provided by the auditor 86
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
6 discontinued operations
the assets and liabilities of the systems division were sold to curtiss‑wright corporation on 1 november 2012 for a cash 
consideration of 632 million
2012  
 million
2011  
 million
revenue 439 577
cost of sales 276 363
gross profit 163 214
expenses 120 124
operating profit 43 90
profit on sale of operations note 33 445 –
profit before tax 488 90
tax note 12 17 23
profit for the year after tax for discontinued operations 471 67
the net cash flows for discontinued operations were as follows
2012  
 million
2011  
 million
operating note 31 79 75
investing 05 07
net cash inflow 74 68
revenue by market for discontinued operations was as follows
2012  
 million
2011  
 million
revenue by market
united states 173 206
asia pacific rest of world 156 231
europe 110 140
439 577
europe includes united kingdom revenue of 15 million 2011 16 million
revenues are attributed to countries based on customer location  87
overview business review governance financial statements 7 exceptional items
2012  
 million
2011  
 million
reorganisation expenses 15 –
excess inventory provision 14 –
29 –
the exceptional items were incurred in the service assurance division in response to the rapid fall in demand for legacy products 
during the year
8 finance income 
2012  
 million
2011  
 million
bank interest receivable 08 10
defined benefit pension plans note 11 07 07
interest receivable 15 17
9 finance costs 
2012  
 million
2011  
 million
leasehold provisions discount unwind note 25 – 01
other interest payable – 03
– 04
10 employees 
the average number of people employed by the group during the year was 
2012  
number
2011  
number
manufacturing 363 389
product development 581 561
selling and distribution 419 402
administration 182 188
1545 1540
employee benefit costs were
2012  
 million
2011  
 million
remuneration 1634 1637
social security costs 143 134
pension and other related costs 61 58
expense of share‑based payment note 30 16 11
1854 1840
employee numbers and costs include discontinued operations
please refer to the report on directors’ remuneration on pages 55 to 67 for disclosures relating to the emoluments share incentives 
and pensions of the directors 88
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
11 pensions
defined benefit plans
the funded defined benefit pension plans are in the united kingdom and comprise the spirent communications plc staff pension 
 life assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” 
the staff plan is the group’s most significant plan there is in addition a united kingdom unfunded plan
the assets and liabilities on the balance sheet are as follows
2012  
 million
2011  
 million
assets
uk defined benefit pension plan – cash plan – 07
liabilities
uk defined benefit pension plan – staff plan 248 125
uk unfunded plan 08 06
256 131
the valuation used for these disclosures has been based on a full assessment of the liabilities of the plans as at 1 april 2009 
the present values of the defined benefit obligation the related current service cost and any past service costs were measured 
using the projected unit credit method
i the key financial assumptions 
the assumptions used for both plans were as follows 
2012 

2011 

inflation – rpi 29 30
inflation – cpi 22 20
rate of increase in pensionable salaries 29 30
rate of increase for pensions in payment pre 2001 service 36 36
rate of increase for pensions in payment 2001 to 5 april 2005 service 28 29
rate of increase for pensions post 5 april 2005 service 19 20
rate of increase in deferred pensions 22 20
rate used to discount plan liabilities 43 46
expected rate of return on plan assets weighted for both plans 50 55
spirent communications plc employs a building block approach in determining the long term rate of return on plans’ assets historical 
markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital 
market principles the assumed long term rate of return on each class of asset is set out within this note the overall expected rate of 
return on assets is then derived by aggregating the expected return of each asset class over the actual asset allocation for the plans 
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions 
are such that a member currently aged 65 2011 aged 65 will live on average for a further 233 years 2011 219 years if they are male 
and for a further 255 years 2011 238 years if they are female for a member who retires in 2032 2011 in 2021 at age 65 2011 age 
65 the assumptions are that they will live on average for a further 242 years 2011 229 years after retirement if they are male and 
for a further 266 years 2011 247 years after retirement if they are female   89
overview business review governance financial statements 11 pensions continued
the approximate impact to the past service liabilities of changing these main assumptions is as follows 
•	 reducing the discount rate by 01 per cent per annum would increase past service liabilities by 41 million 
•	 increasing rpi inflation by 01 per cent would increase the plans’ liabilities by 13 million
•	 increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling 
factor would increase past service liabilities by 104 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to 
be insignificant
ii the assets and the liabilities in the plans 
long term rate 
of return 
expected  

2012  
 million
long term rate 
of return 
expected  

2011  
 million
staff plan
equities 83 725 87 733
government bonds 25 535 26 516
corporate bonds 36 406 41 383
cash benchmarked bonds 35 502 43 315
insured annuities 43 57 46 50
property 73 228 77 217
cash and other 10 10 18 20
fair value of plan assets 51 2463 56 2234
present value of defined benefit pension plan obligations 2711 2359
deficit in the plan on the balance sheet 248 125
cash plan
equities 83 37 87 32
government bonds 25 36 27 36
insured annuities 43 03 46 03
cash and other 10 33 18 32
fair value of plan assets 40 109 43 103
present value of defined benefit pension plan obligations 109 96
surplus in the plan on the balance sheet – 07
the plans are prohibited from investing in spirent’s own financial instruments 
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these 
financial statements 90
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
11 pensions continued
iii analysis of the amounts chargedcredited to the income statement 
2012  
 million
2011  
 million
analysis of amount charged to operating costs
current service cost 03 03
curtailment loss on sale of systems 13 –
amount charged to operating costs 16 03
expected return on pension plans’ assets 121 127
interest on pension plans’ liabilities 114 120
finance income note 8 07 07
net chargecredit to the income statement 09 04
iv analysis of amount recognised directly in the statement of comprehensive income 
2012  
 million
2011  
 million
actual return on pension plans’ assets 191 138
less expected return on pension plans’ assets 121 127
experience gains on plans’ assets 70 11
experience gainslosses arising on plans’ liabilities 11 27
changes in assumptions underlying the present value of plans’ liabilities 219 239
changes in assumptions underlying the present value of unfunded plan’s liabilities 02 –
actuarial losses recognised directly in other comprehensive income 140 255
the cumulative amount of actuarial gains and losses recognised since 1 january 2003 in the statement of comprehensive income 
is 520 million loss 2011 380 million loss the directors are unable to determine how much of the pension plan deficit recognised 
on 1 january 2003 and taken directly to equity of 675 million in the group is attributable to actuarial gains and losses since inception 
of those pension plans consequently the directors are unable to determine the amount of actuarial gains and losses that would have 
been recognised in the statement of comprehensive income before 1 january 2003
2012  
 million
2011  
 million
movement in the irrecoverable element of the pension plan surplus – 22
v movements in the present value of funded defined benefit obligations 
2012  
 million
2011  
 million
at 1 january 2455 2207
current service cost 03 03
curtailment loss on sale of systems 13 –
interest cost 114 120
employee contributions 02 02
benefit payments 109 106
actuarial loss 208 266
exchange adjustment 134 37
present value of funded defined benefit pension plans’ obligations 2820 2455  91
overview business review governance financial statements 11 pensions continued
vi movements in the fair value of plans’ assets
2012  
 million
2011  
 million
at 1 january 2337 2306
expected return on plans’ assets 121 127
employer contributions 28 29
employee contributions 02 02
benefit payments 109 106
actuarial gain 70 11
exchange adjustment 123 32
fair value of plans’ assets 2572 2337
vii history of experience gains and losses 
2012  
 million
2011  
 million
2010  
 million
2009  
 million
2008  
 million
present value of defined benefit pension plans’ obligations 2820 2455 2207 2212 1821
fair value of plans’ assets 2572 2337 2306 2220 1861
net deficitsurplus in the plans 248 118 99 08 40
experience gainloss on plans’ liabilities
amount  million 11 27 06 39 07
percentage of plans’ liabilities  04 11 03 18 04
experience gainloss on plans’ assets
amount  million 70 11 109 117 285
percentage of plans’ assets  27 05 47 53 153
the above plans are funded and have full uk hm revenue  customs “hmrc” tax‑exempt approval certain members 
whose salaries were in excess of the hmrc statutory earnings cap had their benefits increased through unapproved unfunded 
arrangements to the level that would otherwise have applied in respect of basic salary only the group has contractually agreed to 
pay the additional retirement benefits itself and a provision is made in respect of this obligation in the balance sheet at 31 december 
2012 of 08 million 2011 06 million this represents the actuarial value as confirmed by the group’s pension advisers of the 
unapproved benefit entitlements accrued at that date the value is assessed and reviewed on a market value basis in line with the 
main plan valuation and adjusted each year there were no experience gains or losses in the period from 2008 to 2012 on the 
unfunded plan 
expected contributions for these plans for 2013 are 27 million including 26 million of additional contributions to fund the deficit 
arising from the actuarial valuation at 1 april 2009 92
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
11 pensions continued
defined contribution plans 
united kingdom 
the group maintains defined contribution pension plans for employees in the united kingdom employer contributions into these 
plans for 2012 were 13 million 2011 14 million 
united states 
the group maintains a defined contribution pension plan for employees of its united states subsidiaries this plan also known 
as a 401k plan allows employees to defer a percentage of their salary for retirement the investment choices offered by the plan 
are a selection of diversified mutual funds offering a broad mix of investment return potential with varying levels of risk in aggregate 
the group’s contributions to the us plan totalled 34 million for 2012 2011 32 million total assets in the defined contribution plan 
at the end of 2012 were 1670 million 2011 1457 million there were no defined benefit plans in the united states in 2012 or 2011
other jurisdictions 
outside the united kingdom and the united states employees are provided with pension arrangements determined in accordance with 
approved local practice and regulations these arrangements are defined contribution plans total employer contributions for 2012 
in respect of these plans amounted to 08 million 2011 06 million
total employer contributions to defined contribution plans were 55 million 2011 52 million
directors’ pension arrangements 
the pension arrangements of the executive directors are described in detail in the report on directors’ remuneration on pages 55 to 67 
12 tax
2012  
 million
2011  
 million
tax charge in the income statement
current income tax
uk tax 05 –
foreign tax 235 238
amounts overprovided in previous years – foreign tax 18 54
total current income tax charge 222 184
deferred tax
recognition of deferred tax assets 14 22
reversal of temporary differences 99 125
total deferred tax charge 85 103
tax charge in the income statement 307 287
attributable to
continuing operations 290 264
discontinued operations 17 23
tax charge in the income statement 307 287
the tax charge for the year ended 31 december 2012 was 307 million 2011 charge 287 million this was after a prior year tax 
credit of 18 million 2011 credit 54 million resulting from the expiration and reassessment of open tax positions for previous 
years excluding the prior year tax credit the effective tax rate was 283 per cent 2011 277 per cent   93
overview business review governance financial statements 12 tax continued
tax relating to items chargedcredited to other comprehensive income or equity 
2012  
 million
2011  
 million
deferred tax on share incentives 10 25 
deferred tax on defined benefit pension plan 25 40
reconciliation of the total tax charge
the tax expense in the income statement for the year is lower than the standard rate of corporation tax in the uk of 245 per cent 
2011 lower and 265 per cent the differences are reconciled below
2012  
 million
2011  
 million
accounting profit before tax 1595 1233 
accounting profit multiplied by the uk standard rate of corporation tax of 245 per cent 2011 265 per cent 391 327 
share‑based payment 25 –
differences in overseas rates and other adjustments 80 39 
tax overprovided in prior years 18 54
recognition of deferred tax assets 14 22
utilisation of previously unrecognised tax losses 109 –
use of pension fund and other uk adjustments 02 03
total tax charge reported in the income statement 307 287
13 earnings per share
basic
earnings per share is calculated by dividing the profit for the year attributable to owners of parent company by the weighted average 
number of ordinary shares outstanding during the year
 2012 2011
continuing 
operations
discontinued 
operations total
continuing 
operations
discontinued 
operations total
profit for the year attributable to owners of parent company 
 million 817 471 1288 879 67 946
weighted average number of ordinary shares in issue 
number million 6557 6557 6557 6673 6673 6673
basic earnings per share cents 1246 718 1964 1317 101 1418 94
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
13 earnings per share continued
diluted
diluted earnings per share is calculated by dividing the profit for the year attributable to owners of parent company by the weighted 
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would 
be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares
 2012 2011
continuing 
operations
discontinued 
operations total
continuing 
operations
discontinued 
operations total
profit for the year attributable to owners of parent company 
 million 817 471 1288 879 67 946
weighted average number of ordinary shares in issue 
number million 6581 6581 6581 6727 6727 6727
diluted earnings per share cents 1241 716 1957 1307 099 1406
adjusted 
the group is disclosing adjusted earnings per share for continuing operations attributable to owners of parent company in order 
to provide a measure to enable period‑on‑period comparisons to be made of its performance the following items are excluded from 
adjusted earnings
•	 exceptional items
•	 acquisition related costs
•	 acquired intangible asset amortisation
•	 share‑based payment
•	 tax effect on the above items
•	 prior year tax
a reconciliation is provided below
 2012 2011
 million
eps  
cents  million
eps  
cents
continuing operations
profit for the year attributable to owners of parent company 817 1246 879 1317
exceptional items 29 –
acquisition related costs 12 12
acquired intangible asset amortisation 45 16
share‑based payment 16 11
tax effect on the above items 24 02
prior year tax credit note 12 18 54
adjusted basic for continuing operations 877 1338 862 1292
adjusted diluted for continuing operations 1333 1281
there were no ordinary share transactions that occurred after 31 december that would have significantly changed the number 
of ordinary shares or potential ordinary shares outstanding at the period end if those transactions had occurred before the end 
of the reporting period in either year  95
overview business review governance financial statements 14 dividends paid and proposed
2012  
 million
2011  
 million
declared and paid in the year
equity dividend on ordinary shares
final dividend paid for the year ended 31 december 2011 of 167 cents 105 pence per ordinary share 
31 december 2010 140 cents 086 pence 109 94 
interim dividend 2012 139 cents 089 pence per ordinary share 2011 126 cents 077 pence 94 81 
203 175 
proposed for approval at agm not recognised as a liability at 31 december
equity dividend on ordinary shares
final dividend 2012 183 cents 121 pence per ordinary share 2011 167 cents 105 pence 119 109 
the directors are proposing a final dividend in respect of the financial year ended 31 december 2012 of 183 cents per share 121 pence 
2011 167 cents 105 pence which will absorb an estimated 119 million of shareholders’ funds 2011 109 million it will be paid 
on 3 may 2013 to ordinary shareholders who are on the register of members at close of business on 8 march 2013 payment will be made 
to adr holders on 10 may 2013 no liability is recorded in the financial statements in respect of this final dividend 
dividends are determined in us dollars and paid in pounds sterling the exchange rate for determining the amount of the final 
dividend to be paid for 2012 was 151£1 2011 159£1
15 intangible assets 
  million
goodwill
intangible 
assets total
cost net of accumulated amortisation and impairment losses
at 1 january 2011 1104 16 1120
amortisation for the year – 29 29
additions – 37 37
acquisitions note 32 42 66 108
exchange adjustment 04 – 04
at 1 january 2012 1142 90 1232
amortisation for the year – 61 61
acquisitions note 32 556 344 900
exchange adjustment 03 – 03
at 31 december 2012 1701 373 2074
at 31 december 2011
cost gross carrying amount 27657 226 27883
amortisation and accumulated impairment losses 26515 136 26651
net carrying amount 1142 90 1232
at 31 december 2012
cost gross carrying amount 5751 570 6321
amortisation and accumulated impairment losses 4050 197 4247
net carrying amount 1701 373 2074 96
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
15 intangible assets continued
the carrying amounts of intangible assets at 31 december by class are as follows
  million
customer list
current 
technology other total
at 31 december 2011 18 36 36 90
at 31 december 2012 98 218 57 373
goodwill of 247 million and acquired intangible assets of 139 million in relation to computer software customer relationships 
and brands have been recognised on the acquisition of mu dynamics inc “mu” mu was acquired by spirent on 23 april 2012 
see note 32 of notes to the consolidated financial statements
goodwill of 309 million and acquired intangible assets of 205 million in relation to computer software customer relationships 
brands and the database have been recognised on the acquisition of metrico wireless inc “metrico” metrico was acquired 
by spirent on 13 september 2012 see note 32 of notes to the consolidated financial statements
both mu and metrico were integrated into the performance analysis division during 2012 and the goodwill arising on these 
acquisitions has been allocated to this cash‑generating unit
amortisation and impairment charges 
goodwill at 31 december 2012 acquired through business combinations is all in the cash‑generating unit performance analysis which 
is a reportable segment there has been no goodwill impairment charged in 2012 or 2011
acquired intangible assets are amortised on a straight line basis over their estimated useful lives which are between two and a 
half and seven years and the charge is included within administration expenses in the income statement other intangible assets 
are in relation to licences and other agreements which are amortised over their useful lives or term being three to five years and are 
expensed within cost of sales or selling costs the remaining amortisation periods of the acquired intangible asset balances arising 
in relation to customer list and current technology are seven and five years respectively
annual impairment test
goodwill is tested annually for impairment or more frequently if there are indications that the goodwill might be impaired 
the recoverable amount of the performance analysis cash‑generating unit at 30 november 2012 the annual impairment testing 
date has been determined based on a value in use calculation using management’s cash flow projections over a five year period
the cash flows are derived from the most recent financial budgets for the next financial year as approved by the board and the 
group’s three year strategic plan cash flows for years four and five are then extrapolated based on long range plans the key factor in 
the cash flow forecasts is the ability to forecast revenue cash flows in subsequent years have been extrapolated using a 275 per cent 
growth rate 2011 275 per cent which management estimates to be the approximate average long term growth rate for the industries 
in which this unit operates 
the cash flows have been discounted using a pre‑tax discount rate of 145 per cent 2011 149 per cent
the recoverable amount of this unit calculated on a value in use basis was in excess of its carrying value and consequently 
no impairment has been recognised  97
overview business review governance financial statements 15 intangible assets continued
key assumptions for the annual impairment test
the key assumptions used in the value in use calculation were
•	 revenue growth rates
•	 gross margin 
•	 operating expenses 
•	 discount rate 
•	 growth rate used to extrapolate cash flows beyond the five year period covered by management’s projections
projections are denominated in the same currency as the denomination of the goodwill balance to eliminate the effect of fluctuating 
exchange rates
revenue growth rates used in management’s projections are based on management’s estimate of growth in the markets served 
and take into account historic levels of growth expected future developments in products and technology and macro‑economic conditions 
the cash flows used in the impairment review have been approved by the board
gross margins and operating expenses are based on historical values adjusted for the effect of revenue growth and recent acquisitions
the discount rate applied to the cash flows is determined based on spirent’s weighted average cost of capital by taking the risk 
free rate for ten year government bonds and making an adjustment to reflect both the increased risk of investing in equities and the 
systematic risk of the specific cash‑generating unit in making this adjustment inputs required are the equity market risk premium 
and the risk adjustment beta applied to reflect the risk of spirent relative to the market as a whole
sensitivity to changes in key assumptions 
the directors believe that no reasonable possible change in any of the key assumptions used in isolation would cause the carrying 
value of performance analysis to exceed its recoverable amount 98
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
16 property plant and equipment 
  million
land and 
buildings
plant and 
machinery
fixtures 
fittings and 
equipment total
cost net of accumulated depreciation and accumulated impairment
at 1 january 2011 46 167 78 291
additions
 owned assets 05 166 37 208
disposals – 11 – 11
inter‑class transfers – 14 14 –
depreciation charge for the year 14 84 34 132
exchange adjustment – 01 – 01
at 1 january 2012 37 223 95 355
additions
 owned assets 05 134 25 164
disposals – 21 01 22
acquisitions note 32 – 05 – 05
disposal of operations note 33 – 11 01 12
inter‑class transfers – 03 03 –
depreciation charge for the year 13 102 37 152
exchange adjustment 01 01 01 03
at 31 december 2012 30 226 85 341
at 31 december 2011
cost 221 733 521 1475
accumulated depreciation and accumulated impairment 184 510 426 1120
net carrying amount 37 223 95 355
at 31 december 2012
cost 187 770 511 1468
accumulated depreciation and accumulated impairment 157 544 426 1127
net carrying amount 30 226 85 341
none of the property plant and equipment is held under finance lease arrangements
17 capital commitments and contingent liabilities 
the group had capital commitments of 12 million at 31 december 2012 31 december 2011 nil 
the group has provided indemnities of 01 million 2011 02 million for certain ongoing business obligations under letters of credit 
for subsidiary companies
18 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest 
is given on page 135 of these financial statements  99
overview business review governance financial statements 19 inventories 
2012  
 million
2011  
 million
raw materials 141 157
work in progress 06 16
finished goods 193 263
340 436
an expense of 37 million 2011 38 million has been recognised in the period for inventory write‑downs
there were no reversals of prior period inventory write‑downs 2011 nil 
no inventories are carried at fair value less costs to sell 2011 nil
20 trade and other receivables 
2012  
 million
2011  
 million
non‑current assets
trade receivables 11 –
other receivables 31 30 
prepayments accrued income and deferred costs 07 02 
49 32 
current assets
trade receivables 849 952 
other receivables 34 33 
prepayments accrued income and deferred costs 73 76 
956 1061 
1005 1093
the trade receivables are stated net of provisions for doubtful debts the movement in the provision was as follows 
2012  
 million
2011  
 million
at 1 january 09 06
charge for the year 02 07
released in the year 03 04
at 31 december 08 09 
the directors consider that the carrying amount of trade and other receivables approximates to their fair value
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a large 
number of customers  100
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
21 cash and cash equivalents
2012  
 million
2011  
 million
cash at bank and in hand 2045 1774 
short term bank deposits 441 591 
2486 2365
cash at bank and in hand earns interest at floating interest rates of this balance 400 million 2011 12 million is callable at notice 
of between seven and 35 days
short term bank deposits are made for varying periods of between one day and three months depending on the cash requirements 
of the group and earn interest at the short term deposit rates appropriate for the term of the deposit and currency
at the end of 2012 the currency split of cash and cash equivalents was us dollar 80 per cent 2011 79 per cent sterling 10 per cent 
2011 14 per cent and other currencies 10 per cent 2011 7 per cent
for the purposes of the cash flow statement cash and cash equivalents comprise the above amounts 
2012  
 million
2011  
 million
non‑current
cash on deposit 04 07
at 31 december 2012 04 million 2011 07 million is held in a blocked trust account and is available for use by the company 
as creditors who were outstanding at the date of the cancellation of the share premium account and capital redemption reserve 
being 24 november 2004 are settled see note 28
22 trade and other payables – current 
2012  
 million
2011  
 million
trade payables 159 215
payments received on account 04 03
other taxes and social security costs 41 41
share buyback obligation note 28 81 78
accruals 362 456
deferred income 426 400
1073 1193 
trade payables are non‑interest bearing and are normally settled on 30 to 60 day terms other payables are non‑interest bearing 
the directors consider that the carrying amount of trade payables approximates to their fair value   101
overview business review governance financial statements 23 deferred tax
the movements in the deferred tax assetsliabilities are as follows 
  million
temporary 
differences tax losses
uk pension 
plans total
at 1 january 2011 182 139 08 313
recognised in the year note 12 – 22 – 22
charged in the year note 12 42 83 – 125
deferred tax on defined benefit pension plan note 12 – – 40 40
deferred tax on share incentives recognised in equity note 12 25 – – 25
deferred tax on acquisition note 32 – 73 – 73
exchange adjustment 01 02 01 04
at 1 january 2012 114 149 31 294
recognised in the year note 12 – 14 – 14
charged in the year note 12 37 62 – 99
deferred tax on defined benefit pension plan note 12 – – 25 25
deferred tax on share incentives recognised in equity note 12 10 – – 10
deferred tax on acquisition note 32 37 90 – 53
exchange adjustment 01 05 03 07
at 31 december 2012 29 196 59 284
a deferred tax asset of 284 million has been recognised at 31 december 2012 2011 294 million 118 million is in the united 
kingdom 2011 118 million 159 million is in the united states 2011 171 million and 07 million is in the rest of the world 
2011 05 million
the deferred tax asset includes 20 million 2011 38 million in respect of the tax deduction which may be available on the future 
exercise of share incentives of which 10 million 2011 20 million has been recognised in equity
movements in deferred tax in relation to the pension plan have been charged or credited to other comprehensive income in all years
all deferred tax assets on temporary differences arising principally in the united kingdom and united states have been recognised 
at 31 december 2012 and 2011 apart from 16 million in canada 2011 15 million 
the group has tax losses arising in the united kingdom of 640 million 2011 817 million that are available for offset against 
suitable future taxable profits a deferred tax asset has not been recognised in respect of these losses as their future recovery is 
uncertain united kingdom tax losses can be carried forward indefinitely in total deferred tax assets amounting to 163 million 
2011 220 million have not been recognised
the group also has capital losses carried forward of 13403 million 2011 13113 million for which no defered tax asset 
is recognised on the balance sheet these capital losses have no expiry date 
the chancellor in the 2012 budget on 21 march 2012 announced that the main corporation tax rate would be reduced to 23 per 
cent from 1 april 2013 and that there would be a further reduction of 1 per cent with effect from 1 april 2014 the finance act 2012 
received royal assent on 17 july 2012 with the rate reduction from 24 per cent to 23 per cent from 1 april 2013 being substantively 
enacted from 3 july 2012
the deferred tax assets and liabilities at the balance sheet date are calculated at the substantively enacted rate of 23 per cent 
whilst detailed calculations have not been prepared at this stage it is estimated that the impact of the remaining annual corporation 
tax rate reduction would not be material to the financial statements 102
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
24 trade and other payables – non‑current 
2012  
 million
2011  
 million
other payables 19 15
accruals 09 01
deferred income 86 87
114 103
25 provisions and other liabilities
  million
other 
provisions
lease 
provisions total
at 1 january 2011 13 63 76
discount unwind note 9 – 01 01
charged in the year – 05 05
released in the year – 02 02
utilised in the year – 35 35
at 1 january 2012 13 32 45
charged in the year 06 13 19
released in the year – 02 02
utilised in the year – 13 13
exchange adjustment – 01 01
at 31 december 2012 19 31 50
2012  
 million
2011  
 million
current 44 33
non‑current 06 12
50 45
the lease provisions are for the continuing obligations under leases in respect of properties which have been vacated by the group 
where material lease obligations are discounted the group expects these provisions to be utilised over the next three years
other provisions are mainly environmental provisions related to property disposed of and dilapidation provisions the group expects 
these provisions to be utilised in less than one year  103
overview business review governance financial statements 26 financial instruments and financial risk management
the main purpose of the group’s financial instruments other than trade receivables trade payables and provisions is to fund the 
group’s liquidity requirements
all of the group’s financial assets and liabilities are categorised as loans and receivables and these are shown in the following table 
 
2012  
 million
2011  
 million
loans and 
receivables at 
amortised cost
loans and 
receivables at 
amortised cost
non‑current cash on deposit note 21 04 07
non‑current trade and other receivables note 20 42 30
cash and cash equivalents note 21 2486 2365
current trade and other receivables note 20 883 985
financial assets 3415 3387
non‑current other payables and accruals note 24 28 16
current trade payables and accruals note 22 521 671
share buyback obligation note 22 81 78
provisions note 25 50 45
financial liabilities 680 810
the group enters into derivative transactions forward foreign currency exchange contracts for the management of the group’s 
foreign currency exposures when deemed appropriate these derivative financial instruments are measured at fair value 
however the fair values at 31 december 2012 and 2011 were immaterial to these accounts
the key objective of the group’s treasury department is to manage the financial risks of the business and to ensure that sufficient 
liquidity is available to the group all treasury activity operates within a formal control framework the board has approved treasury 
policies and guidelines and periodically reviews treasury activities additionally it is the group’s policy that speculative treasury 
transactions are expressly forbidden
a market risk 
the main types of market risk that affect the group are interest rate risk and exchange rate risk 
interest rate risk 
the group has no external debt and has limited exposure to interest rate risk
the group’s excess funds are principally held in the united kingdom and the united states and invested in on demand or short term 
bank deposits it therefore has some exposure to interest rate risk arising on changes in sterling and us dollar interest rates
cash and cash equivalents long term cash on deposit and forward foreign currency exchange contracts are the group’s financial 
instruments which are exposed to interest rate risk  104
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
26 financial instruments and financial risk management continued
short term bank deposits all mature within three months forward foreign currency exchange contracts all mature within three 
months the financial instruments bear the following interest rates 
effective 
interest rate  

2012  
 million
effective 
interest rate  

2011  
 million
fixed rate
fixed deposits 042 441 039 591 
floating rate
cash at bank and in hand 2045 1774 
interest rates on financial instruments classified as fixed rate are fixed until the maturity of the instrument all fixed rate deposits 
mature within three months after which date they will be exposed to floating rates of interest 
in addition 04 million 2011 07 million was held in a blocked trust account and was earning interest of 044 per cent at 
31 december 2012 2011 077 per cent the maturity of the deposit is three months at maturity the interest rate will be reset 
this cash must be retained in the blocked trust account in accordance with the terms of the undertakings made at the time of the 
cancellation of the share premium account and capital redemption reserve the “cancellation” in 2004 the funds must remain 
in this account until creditors which existed at the date of the cancellation have been repaid and therefore the maturity of this 
account is uncertain 
interest receivable for the year was 08 million note 8 2011 10 million and is under the effective interest method 
the other financial instruments of the group that are not included in the above table are non‑interest bearing and are therefore not 
subject to interest rate risk 
a movement of 25 basis points in interest rates based on levels of investment at 31 december 2012 would increase or reduce interest 
income and equity by 05 million 
exchange rate risk 
currency exposures arise from trading transactions undertaken by the group in foreign currencies and on the translation of the 
operating results and net assets of overseas subsidiaries 
the group has the majority of its operations in the united states and presents its consolidated financial statements in us dollars 
the company’s functional currency is sterling and its share capital is denominated in pounds sterling the group also has operations 
in europe and asia and therefore its results and assets and liabilities are affected on translation by movements in exchange rates 
in relation to the us dollar the group does not enter into instruments to hedge the translation exposure of the operating results 
or net assets of its overseas subsidiaries since these are considered accounting and not cash exposures
the group is not exposed to significant transactional foreign currency risk at 31 december 2012 nor at 31 december 2011 
because the majority of its businesses do not enter into non‑functional currency transactions where such transactions 
do occur the group typically enters into forward foreign currency exchange contracts as appropriate 
group treasury by means of forward foreign currency exchange contracts carries out the transaction hedging activity in relation 
to normal trading activity at 31 december 2012 the group has hedged the majority of its financial assets and liabilities in relation 
to trading which are denominated in non‑functional currencies however the group holds cash balances in non‑functional currencies 
which are exposed to us dollar to sterling exchange rates  105
overview business review governance financial statements 26 financial instruments and financial risk management continued
at 31 december 2012 these balances amounted to 09 million 2011 20 million a 10 per cent appreciation or depreciation 
of sterling against the us dollar would increase or reduce profit before tax by 01 million 2011 02 million based on the balance 
at the reporting dates
b credit risk 
investment counterparties are subject to pre‑approval by the board and as such short term deposits are limited to banks with a rating 
of standard  poor’s a or moody’s a there are pre‑approved limits set for each bank to avoid any concentrations of credit risk 
the maximum credit exposure at the balance sheet date under financial instruments in relation to cash and bank deposits is equal 
to the carrying value of 2490 million 2011 2372 million 
trade receivables which generally have 30 to 90 day terms are carried at original invoice amount less an allowance for uncollectable 
amounts where appropriate trade receivable exposures are managed in the business units where they arise allowance is made 
for bad and doubtful debts based on management’s assessment of the risk taking into account ageing profile experience 
and circumstance 
the group has no significant concentration of credit risk attributable to its trade receivables as the exposure is spread over a 
large number of customers with no one customer accounting for more than 10 per cent of total group revenue the maximum credit 
exposure at the balance sheet date in relation to trade receivables is equal to the carrying value of 860 million 2011 952 million 
the composition of trade receivables at 31 december is as follows 
2012  
 million
2011  
 million
neither impaired nor past due 588 617 
past due but not impaired
 less than 30 days overdue 141 245 
 30 to 60 days 52 50 
 over 60 days 79 40 
trade receivables 860 952 
the group closely monitors amounts due from customers and performs activities such as credit checks and review of payment history 
and has put in place appropriate credit approval limits based on these procedures management assessed the quality of those 
receivables that are past due but not impaired as low risk 
the movement on the receivables provision during the year is given in note 20 the value of impaired trade receivables is 08 million 
2011 09 million for all other financial assets the maximum exposure to credit risk is represented by the carrying amount
c liquidity risk 
the group’s objective is to ensure that there are sufficient sources of funding to meet projected requirements its operations are 
financed through cash and cash equivalents held centrally and cash generated from operations 
at 31 december 2012 the group had cash and cash equivalents of 2486 million 2011 2365 million of which 1645 million 
2011 1774 million is available on demand and 841 million 2011 591 million of which is on one month’s notice or matures 
within three months
during 2012 the group generated 1051 million of cash from operating activities 2011 987 million and considers that with 
current cash resources no debt and positive cash flow from its operating activities it has adequate resources available to it to 
remain in operational existence for the foreseeable future  106
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
26 financial instruments and financial risk management continued
the group has entered into forward foreign currency exchange contracts all of which mature within three months the gross settlement 
amounts of these contracts are as follows
2012  
 million
2011  
 million
sale of us dollars against sterling 36 88 
the group is debt free and does not have loans payable financial liabilities are trade and other payables the majority of which are 
all due to be settled within one year and provisions note 25
the group does not have any other material financial contractual commitments 
d fair value of financial instruments 
the carrying value of all financial assets and liabilities is a reasonable approximation of fair value
derivative financial instruments are stated at fair value although the amounts at 31 december 2012 and 2011 were immaterial
the fair value of currency derivatives is determined by reference to forward foreign currency exchange rates for contracts with similar 
maturity profiles and is therefore determined to be a level 2 financial instrument as its value is based on observable market inputs
e capital management
the primary objective of the group’s capital management is to support its business and maximise shareholder value the group’s 
capital is its total shareholders’ funds
the group manages its capital structure and makes adjustments to it in the light of changes in economic conditions during 2012 and 
2011 the company has been operating an on market share repurchase programme in 2012 the company repurchased 134 million of 
its ordinary shares at a cost of 308 million 2011 176 million at a cost of 342 million the group intends to continue to repurchase 
shares to manage the dilution attributable to the group’s share incentive schemes and to repurchase further shares on a one‑off basis 
as it deems appropriate
spirent’s policy on the payment of dividends to shareholders is to maintain a sustainable progressive dividend with high dividend cover
27 operating lease commitments
at 31 december the group had outstanding commitments for future minimum lease payments under non‑cancellable operating 
leases which fall due as follows
2012  
 million
2011  
 million
within one year 79 91 
in the second to fifth years 99 100 
over five years 03 04 
181 195
the group leases certain land and buildings under non‑cancellable operating lease agreements with a variety of terms the group also 
leases certain plant and equipment under non‑cancellable operating lease agreements there are no sublease payments receivable 
relating to the above leases 2011 01 million recognised within one year  107
overview business review governance financial statements 28 equity
a issued share capital
issued and fully paid 
number of 
ordinary 
shares  
million  million
at 1 january 2011 6749 353
allotted pursuant to share incentives exercised 23 01
cancelled during the year
1
132 07
exchange adjustment – 04
at 1 january 2012 6640 343
cancelled during the year
1
134 07
exchange adjustment – 17
at 31 december 2012 6506 353
note
1 during 2012 under the programme of returning capital to shareholders the company repurchased 134 million 2011 132 million ordinary shares on market which 
were subsequently cancelled
during 2012 and 2011 no ordinary shares were transferred from the spirent sharesave trust “sst” to satisfy options exercised 
under the uk all employee share schemes and in 2012 56 million ordinary shares were transferred from the spirent employee share 
ownership trust “esot” to satisfy options exercised under the spirent stock incentive plan and 2005 employee incentive plan 
2011 04 million ordinary shares 44 million ordinary shares were purchased and placed into the esot during 2011
there has been no material increase in the issued ordinary share capital whether by exercise of share incentives or otherwise 
between 31 december 2012 and 28 february 2013 the date on which these financial statements have been signed
b equity and reserves
the nature and purpose of each reserve within equity is as follows
i share premium account this reserve records the consideration premium for shares issued at a value that exceeds their nominal value
ii capital redemption reserve this reserve arises in relation to share capital cancellation
iii other reserves share capital share premium account and capital redemption reserve are translated into us dollars at the rates 
of exchange at the balance sheet date and the resultant exchange differences are included in other reserves and
iv translation reserve this reserve is used to record exchange differences arising from the translation of the financial statements 
of foreign subsidiaries
investment in own ordinary shares
at 31 december 2012 the esot held 23 million ordinary shares 2011 79 million ordinary shares to satisfy awards under various 
share incentive plans in addition at 31 december 2011 the esot held 01 million ordinary shares which were the beneficial property 
of an employeeshareholder at 31 december 2012 the sst held 05 million ordinary shares 2011 05 million ordinary shares to 
satisfy awards made to united kingdom based employees under an all employee share scheme the market value of own ordinary 
shares held in trust being in total 28 million ordinary shares 2011 85 million ordinary shares at 31 december 2012 was 
69 million 2011 155 million 108
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
28 equity continued
cancellation of share premium account and capital redemption reserve
on 24 november 2004 spirent communications plc was granted an order of the high court for the approval of the cancellation of the 
share premium account and capital redemption reserve the “cancellation” which stood at that date at 13211 million £7027 million 
and 13 million £07 million respectively
the cancellation created a reserve in the financial statements of the company which was applied to eliminate the deficit in distributable 
reserves the balance of this reserve created after the deficit in distributable reserves had been eliminated was transferred to a special 
non‑distributable reserve during 2006 the company transferred funds equal to the aggregate amount due to any creditors of spirent 
communications plc who were creditors on 24 november 2004 and who still remained creditors to a blocked trust account placing 
these funds in a blocked trust account in accordance with the undertakings made at the time of the cancellation allowed the special 
reserve to be released to distributable reserves
capital redemption reserve
during 2012 the company cancelled 134 million ordinary shares 2011 132 million ordinary shares that had been the subject of the 
on market share repurchase programme and transferred 07 million 2011 07 million to the capital redemption reserve
share repurchase
during 2012 the company repurchased 134 million ordinary shares on market at a cost of 308 million which were subsequently 
cancelled in 2011 176 million ordinary shares were repurchased at a cost of 342 million of which 132 million ordinary shares 
were subsequently cancelled and 44 million were placed into the esot
share buyback obligation
on 30 december 2011 the company entered into an irrevocable agreement with ubs limited to purchase up to a maximum of 
43 million ordinary shares at no more than 105 per cent of the average market value of a share for the five business days immediately 
preceding the day on which the share is purchased and at a maximum price of 115 pence per share from 3 january 2012 to 
29 february 2012 on their behalf this agreement entered into in respect of share buybacks during the close period has been 
recognised as a financial liability of 78 million
as at the close of business on 29 february 2012 20 million shares had been repurchased under this buyback programme at 
115 pence per share for a total consideration of 36 million the remaining liability expired at close of business on 29 february 2012 
and was reversed in 2012
on 31 december 2012 the company entered into an irrevocable agreement with ubs limited to purchase up to a maximum of 
34 million ordinary shares at no more than 105 per cent of the average market value of a share for the five business days immediately 
preceding the day on which the share is purchased and at a maximum price of 145 pence per share from 10 january 2013 to 
27 february 2013 on their behalf this agreement entered into in respect of share buybacks during the close period has been 
recognised as a financial liability of 81 million
as at the close of business on 27 february 2013 01 million shares had been repurchased under this buyback programme at 
145 pence per share for a total consideration of 03 million the remaining liability expired at close of business on 27 february 2013  109
overview business review governance financial statements 29 employee share plans
movements in share incentives over a two year period ending on 31 december 2012 are shown below
 2005 employee incentive plan
1
spirent stock incentive plan
2
1995 executive share 
option scheme
number
of share
incentives
million
weighted
average
exercise
price
pence
number
of share
incentives
million
weighted
average
exercise
price
pence
number
of share
incentives
million
weighted
average
exercise
price
pence
incentives outstanding at 31 december 2010 27 11 114 55 14 140
exercised 03 3 38 63 – –
granted 16 42 – – – –
forfeited 01 – – – – –
expired – – 01 49 02 305
incentives outstanding at 31 december 2011 39 24 75 51 12 117
exercised 06 2 57 51 11 123 
granted 20 59 – – – –
forfeited 14 2 – – – –
incentives outstanding at 31 december 2012 39 53 18 50 01 69 
incentives exercisable
at 31 december 2011 06 50 74 51 12 117
at 31 december 2012 05 50 18 50 01 69 
notes
1 figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate 
2 figures for the spirent stock incentive plan show both share options and stock appreciation rights in aggregate
the weighted average share price at exercise date was 1554 pence 2011 1451 pence
 2012 2011
share plan
exercise period
as at 31 december
r ange of
exercise
prices
pence
weighted
average
exercise
price
pence
number
of share
incentives
outstanding
million
weighted
average
remaining
contractual
life
years
weighted
average
exercise
price
pence
number
of share
incentives
outstanding
million
weighted
average
remaining
contractual
life
years
2005 employee 250808 – 091122 0–53 10 27 80 9 34 80
 incentive plan 230314 – 091122 143–169 150 12 89 143 05 92
spirent stock 120107 – 131115 37–57 48 16 04 50 69 11
 incentive plan 041105 – 120816 59–79 73 02 24 67 06 23
1995 executive share 300607 – 290614 69 69 01 15 69 02 25
 option scheme 020405 – 010512 113–134 – – – 126 10 03
total 58 126  110
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
29 employee share plans continued
description of employee share plans
discretionary plans
2005 employee incentive plan “eip”
the eip which was approved by shareholders and introduced in 2005 is available for selected employees including executive 
directors on a discretionary basis
under the eip the company is able to grant share options including hmrc approved options share‑settled stock appreciation rights 
“sars” and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions have been 
met for share options and sars the performance conditions relate to the company’s earnings per share “eps” for performance share 
awards made prior to 2011 performance conditions related to total shareholder return “tsr” for awards made since 2011 performance 
conditions relate to the company’s eps and tsr
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on pages 
55 to 67
options and sars granted under the eip expire on the tenth anniversary of their grant unless they have previously lapsed or 
been exercised
spirent stock incentive plan “ssip”
the ssip is now closed for new awards and has been replaced by the eip referred to above
the ssip was introduced in 2000 this discretionary plan was primarily targeted at us employees with grants normally determined 
by reference to the seniority and contribution of the individual together with the performance of the relevant business and prevailing 
local market practice grants were also permitted to selected newly hired and promoted employees on a monthly basis under the 
ssip the company was able to grant share options and share‑settled sars no price was payable on the grant of an award
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not 
normally subject to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant 
and thereafter in equal tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary 
of the date of grant will lapse
the vesting of ssip awards made to bill burns prior to his appointment as chief executive officer and to certain other key senior 
managers within the communications group were subject to the company meeting eps growth targets over the vesting periods 
all outstanding awards have now passed their eps performance conditions and remain exercisable until they expire on the seventh 
anniversary of their respective grant dates
sars granted under the eip and ssip will deliver the appreciation value ie the increase in market value of an ordinary share over 
the base price of the sar in the form of ordinary shares this “sars approach” helps the company manage its dilution headroom 
more efficiently as only the sar gain needs to be funded using a sars approach it is not possible to determine the precise level 
of dilution until the sars are exercised at 31 december 2012 17 million eip sars and 18 million ssip sars with an average base 
price of 118 pence and 50 pence respectively were outstanding 2011 09 million eip sars and 73 million ssip sars with an average 
base price of 91 pence and 51 pence respectively during 2012 56 million eip and ssip sars were exercised resulting in the 
transfer of 39 million ordinary shares 2011 36 million ordinary shares were issued or transferred on the exercise of 21 million 
eip and ssip sars  111
overview business review governance financial statements 29 employee share plans continued
1995 executive share option scheme “esos”
the esos is now closed for new grants and has been replaced by the eip referred to above
under the esos awards of share options including hmrc approved options were on a discretionary basis no price was payable 
on the grant of an option and no options were granted at a discount to the market price
the normal exercise period for options granted under the esos is between the third and tenth anniversary of the date of grant 
options awarded under the esos were subject to the achievement of an eps performance condition before they could be exercised 
all outstanding options have now passed their eps performance conditions and remain exercisable until they expire on the tenth 
anniversary of their respective grant dates
all employee plans
uk employee share purchase plan “uk espp”
the uk espp which is an hmrc approved share incentive plan was approved by shareholders in 2005 and is available to all uk 
employees the uk espp offers three ways to provide ordinary shares to employees free shares partnership shares and matching 
shares the uk espp operates in conjunction with a trust which holds the shares on behalf of participants
in november 2010 the company commenced making invitations to all uk employees to acquire partnership shares on market using 
deductions from payroll
us employee stock purchase plan “us espp”
the us espp was initially approved by shareholders in 2000 with amendments being approved by shareholders in 2005 and 2011 
the us espp enables the company to invite all us employees to acquire ordinary shares in the company on market using deductions 
from payroll in november 2010 the company commenced making six‑monthly invitations to employees 
the us espp also enables the company to grant eligible us employees the right to acquire ordinary shares in the company using 
the proceeds of a savings contract if such a grant were made when joining the us espp participants would enter into a 12 month 
contract to save up to 15 per cent of base salary subject to an individual limit of 1000 per month no grants of this nature have 
been made since 2003
global all employee share purchase plan “gaespp”
the gaespp was initially approved by shareholders in 2001 with amendments being approved by shareholders in 2005 and 2011 
the gaespp enables the company to invite employees in countries other than the us or uk to acquire ordinary shares in the company 
on market using deductions from payroll in september 2011 the first such invitation was made to all employees in canada 
hong kong france and germany and subsequent invitations have been made in 2012
the gaespp can also be operated on similar terms to the us espp above with participants entering into a 12 month contract to save 
up to 15 per cent of base salary subject to an individual limit no grants of this nature have been made since 2003
2005 sharesave scheme 
the 2005 sharesave scheme was approved by shareholders in 2005 and was introduced following the expiry of the savings related 
share option scheme the scheme is an hmrc approved save‑as‑you‑earn scheme open to all uk employees subject to a qualifying 
service period no price is payable on the grant of an option the option exercise price is calculated by reference to the middle market 
closing price of an ordinary share on the business day prior to the beginning of the invitation period discounted by up to 20 per cent 
at the board’s discretion options are normally exercisable within six months of the third fifth or seventh anniversary of the contract 
commencement date as elected by the option holder at the start of the contract no invitations have yet been made under this scheme 112
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
30 share‑based payment
the total charge for the year relating to employee share‑based payment plans is as follows 
2012  
 million
2011  
 million
2005 employee incentive plan 16 11 
all schemes are equity‑settled
20 million share incentives were granted during 2012 2011 16 million for 2012 the fair value of share incentives has been 
estimated as at the date of grant using the hull‑white trinomial model the following table gives the assumptions made in arriving 
at the share‑based payment charge and the fair value 
2012 2011
weighted average share price pence 1532 1432
weighted average exercise price pence 593 416
weighted average fair value pence 781 1110
expected volatility  350 365
option life years
 performance shares 3 3
 options and sars 10 10
suboptimal exercise factor 15 –
risk free rate  15–24 20–36
dividend yield  16 20
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two years 
which management considers to be the period which is likely to be most representative of future volatility the risk free rate is calculated 
by reference to uk government bonds   113
overview business review governance financial statements 31 reconciliation of profit to cash generated from operations
2012  
 million
2011  
 million
profit for the year 1288 946
adjustments for
 tax 307 287
 profit on the sale of operations 445 –
 finance income 15 17
 finance costs – 04
 intangible asset amortisation 61 29
 depreciation of property plant and equipment 152 132
 loss on the disposal of property plant and equipment 01 01
 share‑based payment 16 11
changes in working capital
 deferred income releasedreceived 34 16
 decreaseincrease in receivables 70 75
 decreaseincrease in inventories 16 62
 decrease in payables 114 09
increasedecrease in provisions 04 32
defined benefit pension plan 25 26
cash flow from operations 1282 1205
cash flow from operations comprises
continuing operating activities 1203 1130
discontinued operating activities 79 75
cash flow from operations 1282 1205
32 business combinations
mu dynamics inc 
on 23 april 2012 spirent acquired 100 per cent of the share capital of mu dynamics inc “mu” for a cash consideration of 
398 million mu is included within the performance analysis division 
mu is a security testing pioneer offering innovative solutions that enable faster higher quality deployments of cloud applications 
and application‑aware networks mu brings additional market leading expertise in cyber security usability and application emulation 
to the spirent solutions portfolio combining mu’s software based applications and security testing capabilities with spirent’s market 
leading performance test platforms will enable the rapid development of best‑in‑class security test solutions with higher performance 
and greater scale than any other provider  114
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the consol idated f inan cial statements continued
32 business combinations continued
from the date of acquisition to 31 december 2012 mu contributed 63 million of revenue and a 05 million loss before tax 
to the results of the group before charging 08 million of acquisition related costs and 19 million of acquired intangible asset 
amortisation if the combination had occurred at the beginning of the financial year additional revenue of 36 million and a loss 
before tax of 12 million would have been included in the group result
the goodwill arising of 247 million consists largely of the synergies and economies of scale expected from the combination of the 
entities together with intangible assets not qualifying for separate recognition such as workforce in place
none of the goodwill recognised is expected to be deductible for income tax purposes 
the intangible assets acquired represent computer software customer relationships and brands and these have been assigned a life 
of five years
metrico wireless inc
on 13 september 2012 spirent acquired 100 per cent of the share capital of metrico wireless inc “metrico” for a cash consideration 
of 522 million metrico is included within the performance analysis division
the acquisition brings together spirent’s strength in the lab with metrico’s focus on subscriber‑level device testing in the field 
resulting in a unique end‑to‑end test portfolio this offering enables spirent to address the needs of service providers and device 
manufacturers who must contend with new and emerging technologies including 4g data voice over lte and the cloud it enables 
service providers and their suppliers to minimise time to market improve subscriber satisfaction and loyalty and reduce device 
return rates 
from the date of acquisition to 31 december 2012 metrico contributed 64 million of revenue and 05 million of profit before 
tax to the results of the group before charging 04 million of acquisition related costs and 13 million of acquired intangible asset 
amortisation if the combination had occurred at the beginning of the financial year additional revenue of 187 million and a profit 
before tax of 48 million would have been included in the group result
the goodwill arising of 309 million consists largely of the synergies and economies of scale expected from the combination of the 
entities together with intangible assets not qualifying for separate recognition such as workforce in place
the goodwill recognised is expected to be deductible for income tax purposes 
the intangible assets acquired represent computer software customer relationships database and brands and these have been 
assigned lives of between 25 and 7 years
acquisition related costs in relation to both acquisitions were 12 million and these have been expensed and are included 
in administration costs
prior year acquisition
in 2011 the group acquired 100 per cent of the share capital of the fanfare group inc  115
overview business review governance financial statements 32 business combinations continued
the following table summarises the consideration paid and the assets and liabilities acquired at the acquisition date 
 
2012  
 million
2011  
 million
mu metrico total total
net assets acquired
intangible fixed assets 139 205 344 66
tangible fixed assets – 05 05 –
deferred tax asset 93 09 102 81
inventories 01 – 01 –
trade and other receivables 13 33 46 05
trade and other payables 46 39 85 41
deferred tax liability 49 – 49 08
total identifiable net assets 151 213 364 103
goodwill 247 309 556 42
total consideration 398 522 920 145
satisfied by
 cash 398 522 920 145
33 disposals
systems division
on 1 november 2012 the group completed the disposal of the assets and liabilities of its systems division to curtiss‑wright corporation
the assets and liabilities sold the proceeds and the resulting profit on disposal are shown below
 
2012  
 million
systems
cash consideration 632
less
net assets sold
 tangible fixed assets 12
 inventories 85
 trade and other receivables 79
 trade and other payables 47
total net assets sold 129
other items
 disposal costs 33
 curtailment loss note 11 13
 exchange differences transferred from equity 12
profit on sale of operations 445
cash flows in respect of the disposal of operations are as follows
cash consideration 632
cash disposal costs 33
net proceeds from the disposal of operations 599 116
spirent commu ni cati ons pl c ann ual rep ort 2012
34 related party transactions 
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are not 
disclosed in this note
remuneration of key management personnel 
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of the 
categories specified in ias 24 “related party disclosures” 
2012  
000
2011  
000
short term employee benefits 2457 2837
share‑based payment 673 279
post retirement benefits 10 10
3140 3126
in 2012 eric hutchinson made gains on the exercise of share incentives of 468000 2011 44000
in 2012 bill burns made gains on the exercise of share incentives of 691000 2011 627000
notes to the consol idated f inan cial statements continued  117
overview business review governance financial statements we have audited the parent company financial statements of 
spirent communications plc for the year ended 31 december 2012 
which comprise the parent company balance sheet and the related 
notes 1 to 19 the financial reporting framework that has been 
applied in their preparation is applicable law and united kingdom 
accounting standards united kingdom generally accepted 
accounting practice
this report is made solely to the company’s members as a body 
in accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to 
them in an auditor’s report and for no other purpose to the fullest 
extent permitted by law we do not accept or assume responsibility 
to anyone other than the company and the company’s members 
as a body for our audit work for this report or for the opinions 
we have formed 
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement set out on page 49 the directors are responsible 
for the preparation of the parent company financial statements 
and for being satisfied that they give a true and fair view our 
responsibility is to audit and express an opinion on the parent 
company financial statements in accordance with applicable 
law and international standards on auditing uk and ireland 
those standards require us to comply with the auditing 
practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting policies 
are appropriate to the parent company’s circumstances and 
have been consistently applied and adequately disclosed 
the reasonableness of significant accounting estimates made 
by the directors and the overall presentation of the financial 
statements in addition we read all the financial and 
non‑financial information in the annual report to identify 
material inconsistencies with the audited financial statements 
if we become aware of any apparent material misstatements 
or inconsistencies we consider the implications for our report
opinion on financial statements
in our opinion the parent company financial statements
•	 give a true and fair view of the state of the company’s affairs 
as at 31 december 2012
•	 have been properly prepared in accordance with united 
kingdom generally accepted accounting practice and
•	 have been prepared in accordance with the requirements 
of the companies act 2006
opinion on other matters prescribed by the companies act 2006
in our opinion
•	 the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the companies 
act 2006 and
•	 the information given in the directors’ report for the financial 
year for which the financial statements are prepared is 
consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you if 
in our opinion
•	 adequate accounting records have not been kept by the parent 
company or returns adequate for our audit have not been 
received from branches not visited by us or
•	 the parent company financial statements and the part of 
the directors’ remuneration report to be audited are not 
in agreement with the accounting records and returns or
•	 certain disclosures of directors’ remuneration specified by law 
are not made or
•	 we have not received all the information and explanations 
we require for our audit
other matter
we have reported separately on the group financial statements of 
spirent communications plc for the year ended 31 december 2012 
karl havers senior statutory auditor
for and on behalf of ernst  young llp statutory auditor
london
28 february 2013
notes
1 the maintenance and integrity of the spirent communications plc website is 
the responsibility of the directors the work carried out by the auditor does not 
involve consideration of these matters and accordingly the auditor accepts 
no responsibility for any changes that may have occurred to the financial 
statements since they were initially presented on the website
2 legislation in the united kingdom governing the preparation and dissemination 
of financial statements may differ from legislation in other jurisdictions
independent aud itor’s report to the members of s p irent commun icat ions plc 118
spirent commu ni cati ons pl c ann ual rep ort 2012
notes
2012  
£ million
2011  
£ million
fixed assets
intangible assets 4 31 37
tangible assets 5 11 20
investments 6 3020 2573
3062 2630
current assets
stocks 7 25 66
debtors 8 54 166
cash at bank and in hand 172 238
251 470
creditors amounts falling due within one year
trade and other creditors 9 101 156
net current assets 150 314
total assets less current liabilities 3212 2944
creditors amounts falling due after more than one year 10 667 586
provisions 12 – 01
net assets excluding defined benefit pension plan deficitsurplus 2545 2357
defined benefit pension plan deficit 3 121 62
net assets 2424 2295
capital and reserves 15
called up share capital 217 222
share premium account 202 202
capital redemption reserve 118 113
profit and loss account 1887 1758
shareholders’ funds – equity 2424 2295
the notes on pages 119 to 135 form part of these financial statements
signed on behalf of the board
eric hutchinson
director
28 february 2013
p arent company balan ce sheet at 31 d ecember 2012  119
overview business review governance financial statements 1 significant accounting policies
basis of accounting
the financial statements have been prepared under the historical cost convention modified for measurement of derivative financial 
instruments at fair value and in accordance with applicable uk law and uk generally accepted accounting principles uk gaap
as the company is included in the consolidated financial statements made up to 31 december each year it is not required to present 
a separate profit and loss account as provided by section 408 of the companies act 2006
cash flow statement
the company is exempt under the terms of frs 1 “cash flow statements” from the requirement to publish its own cash flow 
statement as its cash flows are included within the consolidated cash flow statement of the group
intangible assets
intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses the carrying value of 
intangible assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable
purchased goodwill representing the excess of cost over the fair value of assets acquired is written off on a straight line basis from 
the date of acquisition over 20 years being its anticipated useful life
tangible assets
depreciation is not provided on freehold land depreciation is provided to write off the cost of all other assets less residual value 
on a straight line basis over their estimated useful lives at rates which take into account commercial conditions at their location 
usual asset lives are as follows
freehold buildings 50 years
plant and machinery 3 to 8 years
fixtures fittings and equipment
 building installations 20 years or lease period if less
 fittings and equipment 3 to 8 years
 motor vehicles 3 to 5 years
 business systems software 4 years
the carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate the carrying 
value may not be recoverable
investments
fixed asset investments including investment in subsidiaries are stated at cost and reviewed for impairment if there are indications 
that the carrying value may not be recoverable
leases
operating lease rentals are charged to the profit and loss account over the period of the lease on a straight line basis
inventories
inventories are valued at the lower of cost and estimated net realisable value cost includes all costs in bringing each product to 
its present location and condition being the full manufacturing cost on a first‑in‑first‑out basis including all attributable overheads 
based on a normal level of activity net realisable value represents the selling price less further costs to be incurred to completion 
and on sale
notes to the parent company f inan cial statements 120
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
1 significant accounting policies continued
trade and other debtors
trade debtors which generally have 30 to 90 day terms are recognised and carried at original invoice amount less an allowance 
for any uncollectable amounts an estimate for doubtful debts is made when collection of the full amount is no longer probable 
bad debts are written off when identified
provisions
provisions are recorded when the company has a present legal or constructive obligation as a result of a past event for which it is 
probable that it will be required to settle by an outflow of resources and for which a reliable estimate of the amount of the obligation 
can be made provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate
where the effect of the time value of money is material the amount of the provision shall be the present value of the expenditures 
expected to be required to settle the obligation
revenue recognition
revenue is recognised when it is probable that economic benefits will flow to the company the revenue can be reliably measured and 
when the company has transferred to the buyer the significant risks and rewards of ownership in addition revenue is only recognised 
when collectability is probable
for the sale of services revenue is recognised in accounting periods in which the service is rendered
foreign currencies
transactions in foreign currencies are recorded at the exchange rate ruling at the date of the transaction
monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date 
all exchange gains and losses are taken to the profit and loss account
product development
expenditure is charged to the profit and loss account in the year in which it is incurred
financial instruments
financial assets and liabilities are recognised on the company’s balance sheet when it becomes a party to the contractual provisions 
of the instrument
equity instruments
equity instruments are recorded at the proceeds received net of direct issue costs
derivative financial instruments and hedge accounting
the company uses forward foreign currency exchange contracts to manage exposures arising on receipts and payments in foreign 
currencies relating to firm commitments 
forward foreign currency exchange contracts are initially recognised at fair value on the date on which the contract is entered into 
and are subsequently remeasured to fair value at each reported balance sheet date the fair value of forward foreign currency exchange 
contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles the company has not 
adopted the hedge accounting rules consequently all gains and losses arising from changes in fair value are taken to the profit and 
loss account
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts   121
overview business review governance financial statements 1 significant accounting policies continued
pensions
the company operates two funded defined benefit pension plans all other plans are defined contribution in nature where the amount 
charged to the profit and loss account is the contributions paid or payable during the year
for defined benefit pension plans full actuarial valuations are carried out every three years using the projected unit credit method 
and updates are performed at each balance sheet date the cost of providing benefits under these plans is determined separately for 
each plan and attributes entitlement to benefits to the current period to determine current service cost and to the current and prior 
periods to determine the present value of defined benefit obligations
past services are recognised in the profit and loss account on a straight line basis or immediately if the benefits have vested 
when a settlement eliminating all obligations for benefits already accrued or a curtailment reducing future obligations as a result 
of a material reduction in the plan membership or a reduction in future entitlement occurs the obligation and related plan assets are 
remeasured using current actuarial assumptions and the resultant gain or loss recognised in the profit and loss account during the 
period in which the settlement or curtailment occurs
the interest element of the defined benefit pension plan cost represents the change in present value of plan obligations resulting from 
the passage of time and is determined by applying the discount rate to the opening present value of the benefit obligation taking into 
account material changes in the obligation during the year 
the expected return on plan assets is based on an assessment made at the beginning of the year of long term market returns 
on plan assets adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year 
the difference between the expected return on plan assets and the interest cost is recognised in the profit and loss account as 
finance costs or finance income
actuarial gains and losses arising from differences between actual and expected returns on plan assets experience adjustments 
on liabilities and changes in actuarial assumptions are recognised immediately in the statement of total recognised gains and losses
the defined benefit pension plan asset or liability in the balance sheet comprises the total for each plan of the present value of the 
defined benefit obligation using a discount rate based on high quality corporate bonds denominated in the same currency and whose 
term is consistent with the estimated term of the obligation fair value is based on market price information and in the case of quoted 
securities is the published bid price the value of a net pension benefit asset is restricted to the sum of any unrecognised past service 
costs and the present value of any amount the company expects to recover by way of reductions in the future contributions or refunds 
from the plan that have been agreed by the trustees 
treasury shares
spirent communications plc ordinary shares held by the company are classified in shareholders’ equity as treasury shares and are 
recognised at cost and shown as a deduction from retained earnings consideration received for the sale of such ordinary shares is 
also recognised in equity with any difference between the proceeds from sale and the original cost being taken to retained earnings
employee benefits
when an employee has rendered service to the company during an accounting period short term benefits expected to be paid 
in exchange for that service are recognised in the same accounting period
dividends paid
the interim dividend is included in the financial statements in the period in which it is paid and the final dividend in the period 
it is approved by the shareholders at an annual general meeting 122
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
1 significant accounting policies continued
share‑based payment
the cost of equity‑settled transactions with employees is measured by reference to the fair value at the date at which they are granted 
the fair value is determined using the hull‑white trinomial model
the cost of equity‑settled transactions is recognised as a cost to the company or as an addition to the cost of investment in the 
subsidiary in which the relevant employees work over the vesting period of the equity‑settled transactions with a corresponding 
adjustment to reserves any payments received from the company’s subsidiaries in respect of these share‑based payments result 
in a reduction in the cost of investment
no expense is recognised for awards that do not ultimately vest except for awards where vesting is conditional upon a market 
condition which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other 
vesting conditions are satisfied
where the terms of an equity‑settled award are modified as a minimum an expense is recognised as if the terms had not been 
modified in addition an expense is recognised for any increase in the value of the transaction as a result of the modification 
as measured at the date of modification
where an equity‑settled award is cancelled it is treated as if it had vested on the date of cancellation and any expense not yet 
recognised for the award is recognised immediately however if a new award is substituted for the cancelled award and designated 
as a replacement award on the date that it is granted the cancelled and new awards are treated as if they were a modification of the 
original award as described in the previous paragraph
the company has an employee share trust for the granting of certain share incentives to employees shares are held by the employee 
share trust treated as treasury shares and presented in the balance sheet as a deduction from equity 
tax
the tax expense represents the sum of the tax currently payable and deferred tax
the tax currently payable represents the amount expected to be paid or recovered in respect of taxable profit for the year and 
is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date
deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed at the balance sheet 
date except as referred to below amounts provided are calculated with reference to tax rates that are expected to apply in the periods 
in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted 
by the balance sheet date
deferred tax assets are recognised only to the extent that it is considered more likely than not that there will be suitable taxable profits 
from which the future reversal of the underlying timing differences can be deducted
deferred tax is not provided on gains on the disposal of fixed assets that have been rolled over into replacement assets unless there 
is a binding agreement to dispose of the assets concerned provision will not be made where it is considered more likely than not that 
the taxable gain will be rolled over into replacement assets and charged to tax only when the replacement assets are sold
2 employees
please refer to the report on directors’ remuneration on pages 55 to 67 for disclosures relating to the emoluments share incentives 
and long term incentive interests and pensions of the directors  123
overview business review governance financial statements 3 pensions
defined benefit plans 
the funded defined benefit pension plans are in the united kingdom and comprise the spirent communications plc staff pension 
 life assurance plan “staff plan” and the spirent communications plc retirement cash  life assurance plan “cash plan” 
the staff plan is the company’s most significant plan there is in addition an unfunded plan 
the valuation used for these disclosures has been based on a full assessment of the liabilities of the plans as at 1 april 2009 
the present values of the defined benefit obligation the related current service cost and any past service costs were measured 
using the projected unit credit method
i the key financial assumptions
the assumptions used for both plans were as follows
2012  

2011  

inflation – rpi 29 30
inflation – cpi 22 20
rate of increase in pensionable salaries 29 30
rate of increase for pensions in payment pre 2001 service 36 36
rate of increase for pensions in payment 2001 to 5 april 2005 service 28 29
rate of increase for pensions post 5 april 2005 service 19 20
rate of increase in deferred pensions 22 20
rate used to discount plan liabilities 43 46
expected rate of return on plan assets weighted for both plans 50 55
spirent communications plc employs a building block approach in determining the long term rate of return on plans’ assets historical 
markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital 
market principles the assumed long term rate of return on each class of asset is set out within this note the overall expected rate of 
return on assets is then derived by aggregating the expected return of each asset class over the actual asset allocation for the plans 
the mortality assumptions are based on standard mortality tables which allow for future mortality improvements the assumptions 
are such that a member currently aged 65 2011 aged 65 will live on average for a further 233 years 2011 219 years if they are male 
and for a further 255 years 2011 238 years if they are female for a member who retires in 2032 2011 in 2021 at age 65 2011 age 
65 the assumptions are that they will live on average for a further 242 years 2011 229 years after retirement if they are male and 
for a further 266 years 2011 247 years after retirement if they are female 
the approximate impact to the past service liabilities of changing these main assumptions is as follows
•	 reducing the discount rate by 01 per cent per annum would increase past service liabilities by £25 million
•	 increasing the rpi inflation assumption by 01 per cent would increase the plans’ liabilities by £08 million
•	 increasing the life expectancy of a member by one year by modifying the standard mortality tables using an appropriate scaling 
factor would increase past service liabilities by £64 million 
there will also be an impact on the future service cost but given the small active population in these plans this is likely to be insignificant 124
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
3 pensions continued
ii the assets and the liabilities in the plans were as follows
long term
rate of return
expected

2012
£ million
long term
rate of return
expected

2011
£ million
staff plan
equities 83 445 87 473
government bonds 25 328 26 333
corporate bonds 36 249 41 247
cash benchmarked bonds 35 308 43 203
insured annuities 43 35 46 32
property 73 140 77 140
cash and other 10 06 18 13
fair value of plan assets 51 1511 56 1441
present value of defined benefit pension plan obligations 1663 1522
deficit in the plan 152 81
cash plan
equities 83 23 87 21
government bonds 25 22 27 23
insured annuities 43 02 46 02
cash and other 10 20 18 21
fair value of plan assets 40 67 43 67
present value of defined benefit pension plan obligations 67 62
surplus in the plan – 05
surplus restriction – 02
surplus recognised – 03
total net deficit recognised 152 78
unfunded plan
present value of unfunded obligations 05 04
net pension plan deficit 157 82
deferred tax asset note 11 36 20
net pension plan deficit on the balance sheet 121 62
the recognition of the surplus is restricted in 2011 to the present value of the economic benefits available in the form of refunds 
from the plan or reductions in future contributions to the plan as a result only £03 million of the surplus in the cash plan was 
recognised at 31 december 2011 
the plans are prohibited from investing in spirent’s own financial instruments
for the purposes of the following disclosures the two plans have been combined as the cash plan is immaterial to these financial statements  125
overview business review governance financial statements 3 pensions continued
iii analysis of the amounts chargedcredited to the profit and loss account 
2012  
£ million
2011  
£ million
analysis of amount charged to operating costs
current service cost 02 02
curtailment loss 08 –
amount charged to operating costs 10 02
expected return on pension plans’ assets 76 79
interest on pension plans’ liabilities 72 75
finance income 04 04
net profit and loss chargecredit 06 02
iv analysis of amount recognised directly in equity
2012  
£ million
2011  
£ million
actual return on pension plans’ assets 120 86
less expected return on pension plans’ assets 76 79
experience gains on plans’ assets 44 07
experience gainslosses arising on plans’ liabilities 07 17
changes in assumptions underlying the present value of plans’ liabilities 139 149
changes in assumptions underlying the present value of unfunded plan’s liabilities 01 –
movement in surplus restriction 02 39
actuarial losses recognised directly in equity 87 120
the cumulative amount of actuarial gains and losses recognised since 1 january 2003 in the company’s statement of total recognised 
gains and losses is £323 million loss 2011 £236 million loss the directors are unable to determine how much of the pension plan 
deficit recognised on 1 january 2003 and taken directly to equity of £419 million in the company is attributable to actuarial gains 
and losses since inception of those pension plans consequently the directors are unable to determine the amount of actuarial gains 
and losses that would have been recognised in the company’s statement of recognised gains and losses before 1 january 2003
v movements in the present value of funded defined benefit obligations
2012  
£ million
2011  
£ million
at 1 january 1584 1406
current service cost 02 02
curtailment loss 08 –
interest cost 72 75
employee contributions 01 01
benefit payments 69 66
actuarial loss 132 166
present value of funded defined benefit pension plans’ obligations 1730 1584 126
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
3 pensions continued
vi movements in the fair value of plans’ assets
2012  
£ million
2011  
£ million
at 1 january 1508 1469
expected return on plans’ assets 76 79
employer contributions 18 18
employee contributions 01 01
benefit payments 69 66
actuarial gain 44 07
fair value of plans’ assets 1578 1508
vii history of experience gains and losses
2012
£ million
2011
£ million
2010
£ million
2009
£ million
2008
£ million
present value of defined benefit pension plans’ obligations 1730 1584 1406 1374 1265
fair value of plans’ assets 1578 1508 1469 1379 1293
net deficitsurplus in plans 152 76 63 05 28
experience gainloss on plans’ liabilities
amount £ million 07 17 04 25 04
percentage of plans’ liabilities  04 11 03 18 03
experience gainloss on plans’ assets
amount £ million 44 07 71 75 154
percentage of plans’ assets  28 05 48 54 119
expected cash contributions for 2013 for these plans are £17 million
the above plans are funded and have full uk hm revenue  customs “hmrc” tax‑exempt approval certain members whose salaries 
were in excess of the hmrc statutory earnings cap had their benefits increased through unapproved unfunded arrangements to the 
level that would otherwise have applied in respect of basic salary only the company has contractually agreed to pay the additional 
retirement benefits itself and a provision is made in respect of this obligation in the balance sheet at 31 december 2012 of £05 million 
2011 £04 million this represents the actuarial value as confirmed by the company’s pension advisers of the unapproved benefit 
entitlements accrued at that date the value is assessed and reviewed on a market value basis in line with the main plan valuation 
and adjusted each year there were no experience gains or losses on the unfunded plan in the period from 2008 to 2012
defined contribution plans
the company also maintains defined contribution pension plans for employees employer contributions into these plans for 2012 were 
£08 million 2011 £09 million
4 intangible assets 
 £ million
goodwill
cost
at 1 january 2012 and 31 december 2012 68
amortisation
at 1 january 2012 31
provided during the year 06
at 31 december 2012 37
net book value at 31 december 2011 37
net book value at 31 december 2012 31  127
overview business review governance financial statements 5 tangible fixed assets
 £ million
freehold land
and buildings
plant and
machinery
fixtures
fittings and
equipment total
cost
at 1 january 2012 06 50 26 82
additions 01 03 01 05
disposals – 30 15 45
at 31 december 2012 07 23 12 42
depreciation and impairment
at 1 january 2012 01 39 22 62
provided during the year 01 05 01 07
disposals – 24 14 38
at 31 december 2012 02 20 09 31
net book value at 31 december 2011 05 11 04 20
net book value at 31 december 2012 05 03 03 11
6 investments
 £ million
shares in 
subsidiaries
loans to 
subsidiaries total
cost
at 1 january 2012 9740 36 9776
additions 484 – 484
disposals 30 – 30
repayments – 04 04
at 31 december 2012 10194 32 10226
provisions
at 1 january 2012 7203 – 7203
increase in provision – 03 03
at 31 december 2012 7203 03 7206
net book value at 31 december 2011 2537 36 2573
net book value at 31 december 2012 2991 29 3020
7 stocks
2012  
£ million
2011  
£ million
raw materials – 33
work in progress 02 07
finished goods 23 26
25 66 128
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
8 debtors
2012  
£ million
2011  
£ million
due within one year
trade debtors 13 58
owed by subsidiaries 17 55
other debtors 02 07
prepayments and accrued income 03 04
35 124
due after more than one year
deferred tax asset note 11 19 42
54 166
9 trade and other creditors amounts falling due within one year
2012  
£ million
2011  
£ million
trade creditors 05 41
owed to subsidiaries 03 02
accruals and deferred income 40 56
share buyback obligation 50 50
other taxes and social security costs 03 07
101 156
10 creditors amounts falling due after more than one year
2012  
£ million
2011  
£ million
owed to subsidiaries 664 583
deferred income 03 03
667 586
11 deferred tax
£ million
at 1 january 2012 42
reversed in the year 23
at 31 december 2012 19
the deferred tax asset is in relation to short term timing differences of £02 million 2011 £03 million and tax losses of £17 million 
2011 £39 million the company has tax losses of £371 million 2011 £380 million that are available for offset against suitable 
future taxable profits a deferred tax asset has not been recognised in respect of these losses as their future recovery is uncertain 
these losses can be carried forward indefinitely
there is a deferred tax asset at 31 december 2012 of £36 million 2011 asset of £20 million in relation to the pension plans note 3  129
overview business review governance financial statements 12 provisions
£ million
lease provisions
at 1 january 2012 01
transferred 01
at 31 december 2012 –
provisions are analysed as follows
2012  
£ million
2011  
£ million
current – 01
these provisions were in respect of dilapidations for properties under operating leases
13 operating lease commitments
at the balance sheet date the company had annual commitments which expire as follows
2012  
£ million
2011  
£ million
in the second to fifth years 01 05
14 derivative financial instruments
the company has taken advantage of the exemption under frs 29 “financial instruments disclosures” for parent company financial 
statements the disclosures in respect of the group are included in the consolidated financial statements
15 capital and reserves
 £ million
c alled up
share capital
share
premium
account
c apital
redemption
reserve
profit and
loss account
2
total
at 1 january 2012 222 202 113 1758 2295
share cancellation 05 – 05 – –
profit for the year
3
– – – 496 496
share‑based payment
4
– – – 10 10
actuarial loss recognised on defined benefit pension plans – – – 87 87
deferred tax on defined benefit pension plans – – – 16 16
share repurchase – – – 193 193
equity dividends – – – 127 127
employee share ownership trust – – – 14 14
at 31 december 2012 217 202 118 1887 2424
notes
1 the company has taken advantage of the exemption given in section 408 of the companies act 2006 not to publish its profit and loss account 
2 the company’s profit and loss account of £1887 million 2011 £1758 million includes no non‑distributable reserves 2011 £69 million 
3 the profit for the year dealt with in the financial statements of the company was £496 million 2011 £418 million which after dividends of £127 million 
2011 £109 million gave a retained profit of £369 million 2011 £309 million 
4 share‑based payment has been recorded for subsidiary companies whose incentives are satisfied by the company’s shares 130
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
15 capital and reserves continued
changes during the year in the issued ordinary share capital were as follows
number of
o rdinary 
shares
million
issued and fully paid ordinary shares of 3
1

3
 pence each at 1 january 2012 6640
cancelled during the year
1
134
issued and fully paid ordinary shares of 3
1

3
 pence each at 31 december 2012 6506
note
1 during 2012 under the programme of returning capital to shareholders the company repurchased 134 million 2011 132 million ordinary shares on market which 
were subsequently cancelled
during 2012 and 2011 no ordinary shares were transferred from the sst to satisfy options exercised under the uk all employee 
share schemes and in 2012 56 million ordinary shares were transferred from the esot to satisfy options exercised under the spirent 
stock incentive plan and 2005 employee incentive plan 2011 04 million ordinary shares 44 million ordinary shares were 
purchased and placed into the esot during 2011
there has been no material increase in the issued ordinary share capital whether by exercise of share incentives or otherwise 
between 31 december 2012 and 28 february 2013 the date on which these financial statements have been signed
investment in own ordinary shares
at 31 december 2012 the esot held 23 million ordinary shares 2011 7 9 million ordinary shares to satisfy awards under various 
share incentive plans in addition at 31 december 2011 the esot held 01 million ordinary shares which were the beneficial property of 
an employeeshareholder at 31 december 2012 the sst held 05 million ordinary shares 2011 05 million ordinary shares to satisfy 
awards made to uk based employees under an all employee share scheme the market value of own ordinary shares held in trust being 
in total 28 million ordinary shares 2011 85 million ordinary shares at 31 december 2012 was £42 million 2011 £100 million
capital redemption reserve
during 2012 the company cancelled 134 million ordinary shares 2011 132 million ordinary shares that had been the subject of the 
on market share repurchase programme and transferred £05 million 2011 £04 million to the capital redemption reserve
share repurchase
during 2012 the company repurchased 134 million ordinary shares on market at a cost of £193 million 2011 176 million ordinary 
shares at a cost of £217 million all shares repurchased in 2012 2011 132 million were subsequently cancelled in 2011 44 million 
ordinary shares were placed into the esot 
share buyback obligation
on 31 december 2012 the company entered into an irrevocable agreement with ubs limited to purchase up to a maximum of 
34 million ordinary shares at no more than 105 per cent of the average market value of a share for the five business days immediately 
preceding the day on which the share is purchased and at a maximum price of 145 pence per share from 10 january 2013 to 
27 february 2013 on their behalf this agreement entered into in respect of share buybacks during the close period has been 
recognised as a financial liability of £50 million
as at the close of business on 27 february 2013 01 million shares had been repurchased under this buyback programme at 
145 pence per share for a total consideration of £02 million the remaining liability expired at close of business on 27 february 2013  131
overview business review governance financial statements 15 capital and reserves continued
employee share plans 
the company operates a number of employee share incentive plans as described below the following share incentives over ordinary 
shares under these plans have been granted and remain outstanding held by employees of the parent company
movements in share incentives during the year to 31 december 2012 are shown below
 
2005 employee  
incentive plan
spirent stock  
incentive plan
1995 executive share 
option scheme
number
of share
incentives
million
weighted
average
exercise price
pence
number
of share
incentives
million
weighted
average
exercise price
pence
number
of share
incentives
million
weighted
average
exercise price
pence
incentives outstanding at 31 december 2010 18 17 07 53 12 135
granted 05 2 – – – –
exercised 03 – 01 65 – –
cancelled 01 – – – – –
expired – – – – 01 305
incentives outstanding at 31 december 2011 19 16 06 50 11 116
granted 06 8 – – – –
exercised 03 4 06 50 10 123
cancelled 06 – – – – –
incentives outstanding at 31 december 2012 16 21 – – 01 69
incentives exercisable at 31 december 2011 06 50 06 50 11 116
incentives exercisable at 31 december 2012 05 50 – – 01 69
the weighted average share price at exercise date was 1548 pence 2011 1194 pence 132
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
15 capital and reserves continued
the following information relates to outstanding share incentives at 31 december 2012
 2012 2011
share plan
exercise period
as at 31 december
r ange of
exercise
prices
pence
weighted
average
exercise
price
pence
number
of share
incentives
outstanding
million
weighted
average
remaining
contractual
life
years
weighted
average
exercise
price
pence
number
of share
incentives
outstanding
million
weighted
average
remaining
contractual
life
years
2005 employee 
incentive plan
1
250808 – 200322 0–53 18 16 74 15 19 46
spirent stock 
incentive plan
250806 – 090813 43–53 – – – 49 06 11
300605 – 17 0414 59–69 – – – 60 – 18
1995 executive share 300607 – 290614 69 69 01 15 69 02 25
 option scheme 020405 – 010512 113–134 – – – 125 09 03
17 36
note
1 figures for the 2005 employee incentive plan include share options stock appreciation rights and performance shares in aggregate no exercise price is payable on the 
vesting of a performance share 
description of employee share plans
discretionary plans
2005 employee incentive plan “eip”
the eip which was approved by shareholders and introduced in 2005 is available for selected employees including executive 
directors on a discretionary basis
under the eip the company is able to grant share options including hmrc approved options share‑settled stock appreciation rights 
“sars” and performance shares no price is payable on the grant of an award
in normal circumstances eip awards vest three years following the date of grant provided the relevant performance conditions have 
been met for share options and sars the performance conditions relate to the company’s earnings per share “eps” for performance 
share awards made prior to 2011 performance conditions related to total shareholder return “tsr” for awards made since 2011 
performance conditions relate to the company’s eps and tsr
further information on the performance conditions for eip share incentives is set out in the report on directors’ remuneration on pages 
55 to 67
options and sars granted under the eip expire on the tenth anniversary of their grant unless they have previously lapsed or been exercised
spirent stock incentive plan “ssip”
the ssip is now closed for new awards and has been replaced by the eip referred to above
the ssip was introduced in 2000 this discretionary plan was primarily targeted at us employees with grants normally determined 
by reference to the seniority and contribution of the individual together with the performance of the relevant business and prevailing 
local market practice grants were also permitted to selected newly hired and promoted employees on a monthly basis under the 
ssip the company was able to grant share options and share‑settled sars no price was payable on the grant of an award  133
overview business review governance financial statements 15 capital and reserves continued
most awards made pursuant to the ssip vest over four years provided that the participant remains in employment vesting is not 
normally subject to a performance condition and awards become 25 per cent exercisable on the first anniversary of the date of grant 
and thereafter in equal tranches on a monthly basis over a further 36 months any award not exercised by the seventh anniversary 
of the date of grant will lapse
the vesting of ssip awards made to bill burns prior to his appointment as chief executive officer and to certain other key senior 
managers within the communications group were subject to the company meeting eps growth targets over the vesting periods 
all outstanding awards have now passed their eps performance conditions and remain exercisable until they expire on the seventh 
anniversary of their respective grant dates
sars granted under the eip and ssip will deliver the appreciation value ie the increase in market value of an ordinary share over the 
base price of the sar in the form of ordinary shares this “sars approach” helps the company manage its dilution headroom more 
efficiently as only the sar gain needs to be funded using a sars approach it is not possible to determine the precise level of dilution 
until the sars are exercised 
1995 executive share option scheme “esos”
the esos is now closed for new grants and has been replaced by the eip referred to above 
under the esos awards of share options including hmrc approved options were on a discretionary basis no price was payable 
on the grant of an option and no options were granted at a discount to the market price 
the normal exercise period for options granted under the esos is between the third and tenth anniversary of the date of grant 
options awarded under the esos were subject to the achievement of an eps performance condition before they could be exercised 
all outstanding options have now passed their eps performance conditions and remain exercisable until they expire on the tenth 
anniversary of their respective grant dates 
all employee plans
uk employee share purchase plan “uk espp” 
the uk espp which is an hmrc approved share incentive plan was approved by shareholders in 2005 and is available to all uk 
employees the uk espp offers three ways to provide ordinary shares to employees free shares partnership shares and matching 
shares the uk espp operates in conjunction with a trust which holds the shares on behalf of participants
in november 2010 the company commenced making invitations to all uk employees to acquire partnership shares on market using 
deductions from payroll
2005 sharesave scheme
the 2005 sharesave scheme was approved by shareholders in 2005 and was introduced following the expiry of the savings related 
share option scheme the scheme is an hmrc approved save‑as‑you‑earn scheme open to all uk employees subject to a qualifying 
service period no price is payable on the grant of an option the option exercise price is calculated by reference to the middle market 
closing price of an ordinary share on the business day prior to the beginning of the invitation period discounted by up to 20 per cent 
at the board’s discretion options are normally exercisable within six months of the third fifth or seventh anniversary of the contract 
commencement date as elected by the option holder at the start of the contract no invitations have yet been made under this scheme 134
spirent commu ni cati ons pl c ann ual rep ort 2012
notes to the parent company f inan cial statements continued
16 share‑based payment 
the total charge for the year relating to employee share‑based payment plans is as follows
2012  
£ million
2011  
£ million
2005 employee incentive plan 06 03
all schemes are equity‑settled 
for 2012 the fair value of share incentives has been estimated as at the date of grant using the hull‑white trinomial model
the following table gives the assumptions made in arriving at the share‑based payment charge and the fair value
2012 2011
weighted average share price pence 1531 1432
weighted average exercise price pence 76 19
weighted average fair value pence 926 1337
expected volatility  350 365
option life years
 performance shares 3 3
 options and sars 10 10
suboptimal exercise factor 15 –
risk free rate  24 20–36
dividend yield  16 20
the expected volatility was determined by calculating the historical volatility of the company’s share price over the previous two 
years which management considers to be the period which is likely to be most representative of future volatility the risk free rate 
is calculated by reference to uk government bonds 
17 related party transactions 
the company has taken advantage of the exemption under frs 8 “related party disclosures” in relation to disclosing transactions 
with its subsidiaries
18 subsidiaries 
a list of the significant investments in subsidiaries including the name country of incorporation and proportion of ownership interest 
is given on page 135 of this annual report 
19 capital commitments and contingent liabilities 
there were no capital commitments at 31 december 2012 or 31 december 2011 
spirent communications plc has provided indemnities of £01 million 2011 £02 million for certain ongoing business obligations 
under letters of credit for subsidiary companies  135
overview business review governance financial statements  held at 
31 december  
2012
canada
spirent communications of ottawa limited nepean ontario 100
france
spirent communications sas paris 100
hong kong
spirent communications asia limited 100
india
spirent communications india pvt limited bangalore 100
japan
spirent communications japan kk tokyo 100
people’s republic of china
spirent communications technology beijing limited 100
singapore
spirent communications singapore pte limited 100
taiwan
spirent communications taiwan limited taipei 100
united kingdom
spirent communications international limited crawley west sussex 100
spirent communications positioning paignton devon†
united states
spirent communications hawaii llc honolulu hawaii 100
spirent communications inc 100
 calabasas california
 sunnyvale california
 eatontown new jersey
 germantown maryland
notes
the above companies operate and are incorporated in the countries listed all shareholdings in the companies are held indirectly by spirent communications plc 
except where indicated by an asterisk  where the shareholding is held directly by spirent communications plc
† spirent communications positioning operates as a division of spirent communications plc
 
p r incipal d iv is ions and subs id iar ies  136
spirent commu ni cati ons pl c ann ual rep ort 2012
  million
2012 2011 2010 2009 2008
summary income statement
continuing operations
revenue 4724 4705 4228 3694 4157
operating profit 1092 1130 1039 789 821
net finance incomecosts 15 13 05 19 50
exceptional net finance costs – – – – 33
profit before tax 1107 1143 1034 770 838
tax 290 264 309 85 06
exceptional tax – – – – 473
profit from continuing operations after tax 817 879 725 855 1305
discontinued operations 471 67 66 57 79
profit attributable to owners of parent company 1288 946 791 912 1384
summary balance sheet
intangible assets 2074 1232 1120 1124 1117
property plant and equipment 341 355 291 236 268
working capital excluding cash and deferred tax 73 138 104 83 230
operating assets 2488 1725 1515 1443 1615
derivative financial instruments net – – 02 08 81
net funds including long term cash 2490 2372 2250 1757 896
provisions and other liabilities 50 45 76 114 171
deferred tax 284 294 313 425 175
defined benefit pension plan deficitsurplus 256 124 71 01 28
net assets 4956 4222 4071 3518 2462
total equity 4956 4222 4071 3518 2462
summary cash flows
cash flow from operating activities 1051 987 994 961 883
net interest received 06 09 08 06 26
net capital expenditure 143 235 176 102 128
free cash flow 914 761 826 865 781
acquisitions and disposals 321 145 – – –
share capital and share repurchase 294 330 150 27 1129
dividends paid 203 175 137 121 64
transfer from long term deposit 03 04 06 22 22
net increasedecrease in cash and cash equivalents 99 115 545 793 390
fi nan cial h istory  137
  million
2012 2011 2010 2009 2008
other information – continuing operations
expenditure on property plant and equipment 159 201 175 98 130
depreciation 146 127 114 129 156
product development 861 833 758 708 796
share information
earnings per share from continuing operations cents
basic 1246 1317 1079 1282 1767
diluted 1241 1307 1069 1275 1755
adjusted basic
12
1338 1292 1090 1028 1104
total dividend per ordinary share cents 322 293 250 193 185
fully paid ordinary shares in issue at year end number million 6506 6640 6749 6781 6718
segmental analysis – continuing operations
revenue
performance analysis 4340 4164 3658 3168 3537
service assurance 384 541 570 526 620
4724 4705 4228 3694 4157
operating profit
performance analysis 1164 1151 979 783 831
service assurance 84 70 130 75 89
corporate – non‑segmental 54 52 52 49 58
operating profit
1
1194 1169 1057 809 862
exceptional items – service assurance 29 – – – –
acquisition related costs 12 12 – – –
acquired intangible asset amortisation 45 16 14 14 13
share‑based payment 16 11 04 06 28
1092 1130 1039 789 821
geographical information – continuing operations
revenue by market
united states 2392 2388 2300 1959 2203
asia pacific rest of world 1660 1591 1263 1179 1214
europe 672 726 665 556 740
4724 4705 4228 3694 4157
notes
1 before exceptional items acquisition related costs acquired intangible asset amortisation and share‑based payment
2 before tax effect of items in note 1 and prior year tax 138
spirent commu ni cati ons pl c ann ual rep ort 2012
financial calendar 2013
28 february 2013 preliminary results and final dividend announcement
6 march 2013 final dividend – ex‑dividend date
8 march 2013 final dividend – record date
1 may 2013 annual general meeting and interim management statement
3 may 2013 final dividend – payment date ordinary shareholders
10 may 2013 final dividend – payment date adr holders
30 june 2013 half‑year end
august half‑year results and interim dividend announcement
august interim dividend – ex‑dividend date
august interim dividend – record date
september interim dividend – payment date ordinary shareholders
september interim dividend – payment date adr holders
november interim management statement
31 december 2013 financial year end
februarymarch 2014 2013 preliminary results and final dividend announcement
ordinary shares and american depositary receipts
the company’s ordinary shares are traded on the london stock exchange ticker spt the company operates a level 1 american 
depositary receipt “adr” programme with each adr representing four ordinary shares the adrs trade on the us over‑the‑counter 
market symbol spmyy cusip 84856m209 the bank of new york mellon is the authorised depositary bank for the company’s adr 
programme the adrs are quoted on the otc pink electronic quotation service which can be found at wwwotcmarketscomotc‑pink
annual general meeting
the company’s 2013 annual general meeting “2013 agm” will be held at 1030am on wednesday 1 may 2013 at holborn gate 
26 southampton buildings london wc2a 1pb united kingdom
dividends
shareholders are able to choose how they receive their dividends
•	 direct to their bank account
•	 reinvested in ordinary shares through the company’s dividend reinvestment plan see below
•	 paid by cheque or
•	 paid in foreign currencies
the quickest and most efficient way to receive your dividends is to have them paid direct to your bank account it saves waiting for 
funds to clear and reduces the paper and postage we use to change how you receive your dividends please contact the company’s 
registrar equiniti on 0871 384 2268 or log on to wwwshareviewcouk
dividend reinvestment plan
the company has a dividend reinvestment plan “drip” delivered by equiniti financial services limited the drip allows eligible 
shareholders to use their cash dividend to buy additional shares in the company so increasing their shareholding if you would like 
additional information please contact the company’s registrar equiniti on 0871 384 2268 or log on to wwwshareviewcouk
electronic communications
all of the company’s communications with shareholders are conducted in line with our environmental approach we hold the majority 
of our events via webcast and conference calls and we encourage all of our investors to receive communications electronically 
shareholders who do not currently receive company mailings electronically but wish to do so should notify the company’s registrar 
equiniti on 0871 384 2126 or via wwwshareviewcouk
s hareholder informat ion  139
company’s registrar
enquiries concerning shareholdings change of address or other particulars should be directed in the first instance to the company’s 
registrar equiniti on 0871 384 2126 equiniti also provide a range of online shareholder information services at wwwshareviewcouk 
where shareholders can check their holdings and find practical help on transferring shares or updating their details
share dealing services
equiniti shareview dealing is a service that provides a simple and convenient way of buying and selling the company’s ordinary 
shares for telephone services call 08456 037 037 between 800am and 430pm monday to friday and for internet services visit 
wwwshareviewcoukdealing a postal share dealing service for buying and selling ordinary shares is also available and a dealing 
form can be obtained by calling 0871 384 2248 or at wwwshareviewcouk
individual savings accounts
information about investing in the company’s ordinary shares through an individual savings account “isa” may be obtained from 
equiniti on 0845 300 0430 or at wwwshareviewcouk isas are also offered by other organisations
shareholder security
shareholders are advised to be wary of any unsolicited advice offers to buy shares at a discount or offers of free reports about the 
company details of any share dealing facilities that the company endorses will be included in the company’s mailings or on our 
website more detailed information can be found at wwwfsagovukconsumerinformation
unsolicited mail
the company is obliged by law to make its share register publicly available subject to a “proper purpose” test should a request 
be received as a consequence some shareholders may receive unsolicited mail to limit the amount of unsolicited mail received 
please contact the mailing preference service mps dma house 70 margaret street london w1w 8ss or register online at  
wwwmpsonlineorguk the mailing preference service is an independent organisation which offers a free service to the public 
within the uk registering with them will help stop most unsolicited consumer advertising material
company’s website
the directors are responsible for the maintenance and integrity of the company’s website financial information published on the 
website is based on legislation in the uk governing the preparation and dissemination of financial statements that may be different 
from comparable legislation in other jurisdictions 140
spirent commu ni cati ons pl c ann ual rep ort 2012
shareholder analysis
at 28 february 2013 the number of registered shareholders was 3700 and the number of ordinary shares in issue was 6505 million
number of ordinary shares held
number of
shareholders
 of total
shareholders
number of
ordinary
shares
 of share
capital
1–5000 2615 7068 3687009 057
5001–10000 365 986 2707445 042
10001–50000 380 1027 8202094 126
50001–100000 74 200 5297179 081
100001–250000 69 186 11267396 173
250001–500000 54 146 20709314 318
500001–1000000 44 119 30234660 465
1000001–highest 99 268 568377718 8738
total 3700 10000 650482815 10000
number of
holders
 of total
holders
number of
ordinary
shares
 of total
shares
individuals 2905 7851 14320677 220
institutions 795 2149 636162138 9780
total 3700 10000 650482815 10000
s hareholder informat ion continued  141
2g second generation second generation remains the most common type of wireless cellular communication 
in use globally although its primary focus has been voice service and short message 
service “sms” it has also been enhanced to allow low rate data communication 
3g third generation third generation of mobile communications that promises data rates of hundreds 
of kilobits per second to tens of megabits per second
4g fourth generation fourth generation of mobile communications that promises data rates of tens to hundreds 
of megabits per second future 4g technologies promise data rates in excess of one 
gigabit per second
application security the use of software hardware and procedural methods to prevent security flaws 
in applications and protect them from external threats
backhaul the portion of a network that comprises the intermediate links between the core network 
or backbone and the sub‑networks at the “edge” of the entire hierarchical network
beidou‑2 formerly compass china’s second generation global satellite navigation system which is under construction 
but eventually planned to consist of 35 satellites service was launched in china during 
2011 with plans to provide service globally by 2020
bluetooth a wireless technology used to exchange data between devices over short distances 
generally less than 10 metres 33 feet using a low power low cost transceiver 
in the devices
broadband generic term for bit rates greater than approximately 15 to 2 megabits per second
cdma code division multiple access a digital cellular technology standard which allows numerous signals to occupy 
a single transmission channel thus increasing network capacity used in 2g and 3g 
radio communications
cellular networks wireless communications networks consisting essentially of two parts the radio access 
network “ran” which controls transmission and reception of radio signals and the 
core network which provides switching transport and enhanced services for traffic 
emanating from and directed to the cellular network’s ran
chipset platforms a device a chip or part of a chip that comprises a baseband processor to manage the 
radio functions in a mobile device which may include wi‑fi and bluetooth some chipset 
platforms may also integrate an application processor
cloud computing the delivery of computing as a service rather than a product whereby shared resources 
software and information are provided to computers and other devices as a metered 
service over a network typically the internet
content delivery the delivery of media content such as audio video software and video games over online 
delivery mediums such as broadcasting or the internet
converged network a single network able to carry voice video and data usually based on internet protocol “ip”
core networks a combination of high capacity switches and transmission facilities which form the 
backbone of a carrier network end users gain access to the core of the network from 
the edge network
data center a centralised location where computing resources critical to an organisation are 
maintained in a highly controlled environment
deep packet inspection a term used to describe the capabilities of a firewall or an intrusion detection system 
to look within the application payload of a packet or traffic stream and make decisions 
on the significance of that data based on the content of that data
g lossary 142
spirent commu ni cati ons pl c ann ual rep ort 2012
dsl digital subscriber line technology that uses existing telephonecopper lines to transport high bandwidth data 
such as multimedia and video to service subscribers
ethernet a family of networking technologies originally developed for local area networks 
which migrated to metro area networks and eventually became the dominant standard 
in wireline networks worldwide
galileo a global navigation satellite system being built by the european union and european 
space agency that will offer users anywhere in the world “metre‑class” geographic 
positioning when it becomes operational between 2014 and 2019
gateway an internetworking system capable of joining together two networks that use different 
base protocols 
gbe gigabit ethernet a transmission technology based on the ethernet frame format and protocol used in 
local area networks that provides a data rate of 1 billion bits per second one gigabit 
and which is used as the backbone in many enterprise networks
glonass global navigation 
satellite system
a global navigation satellite system operated by the russian federation deployment 
began in 1976 and although the system fell into disrepair in the 1990s full global 
service was restored in 2011
gnss global navigation satellite systems the standard generic term for satellite navigation systems that provide autonomous 
geo‑spatial positioning with global coverage gnss allows users’ receivers to determine 
their location to within a few metres by employing a triangulation technique that uses 
information from multiple satellites
gps global positioning system a global navigation satellite system operated by the united states government for 
determining a user’s location and height at any point on the earth’s surface a receiver 
uses minute differences in measured time signals from clocks on satellites to calculate 
these positions and altitudes
ims internet protocol multimedia 
subsystems
a standardised next‑generation architecture for telecoms operators who want to provide 
mobile and fixed multimedia services
intrusion detectionprevention a technology that gathers and analyses information across gateways servers and 
desktops to identify possible security breaches that can occur from within or outside 
an organisation
ip internet protocol a network protocol used on the internet and other network devices to facilitate and 
control the flow of data each computer known as a host has at least one ip address 
that uniquely identifies it from all other computers
infrastructure test optimization the practices required to ensure that infrastructures meet a defined quality of service 
and quality of experience that are necessary to meet strategic business objectives 
load balancer in server farms a load balancer accepts ip packets and then distributes them among 
identical web servers enabling web servers to be added or taken out of service 
as loads fluctuate
location based services the delivery of location specific information mapping business and public data over 
a wireless network these services require the ability to locate a user’s mobile device 
by means of direct satellite or cellular assisted satellite signals
lte long term evolution an advanced wireless data communications technology standard sometimes called 
“4g” which is an evolution of 3g umts standards in addition to a new wireless interface 
specification lte uses a simplified flat ip‑based network architecture
g lossary continued  143
lte‑advanced an evolution of lte technology specified in 3gpp release 10 and later specifications 
regarded by some as the first true 4g technology 
mobile packet core an integrated ip‑based mobile transport network with the ability to support 2g 3g and 
lte coexistence
multiple‑system operator a company that owns more than one cable system often in different locations most 
commonly used to refer only to companies that own a large number of cable systems
nfc near field communication a standard for smartphones and similar devices which allows them to establish radio 
communication with each other by touching them together or bringing them into close 
proximity usually no more than a few centimetres applications include contactless 
transactions such as payments and data exchange
openflow an open standard network protocol from the open network foundation “onf” 
openflow enables software‑defined networking for programmable networks 
ota over‑the‑air any kind of event transfer or transaction that takes place wirelessly using the cellular 
network as opposed to using a cable or other local connection testing of mobile device 
performance is commonly carried out using ota techniques that take into account 
antenna design and implementation
physical layer in the open systems interconnection “osi” communications model the physical layer 
supports the electrical or mechanical interface to the physical medium
rf radio frequency a technology used for wireless broadcasting andor communications that uses radio 
waves within the range over which they may be transmitted from about 3 kilohertz 
to about 300000 megahertz
sdn software defined networking an approach to networking in which control is decoupled from hardware and given 
to a software application called a controller
small cell a generic term for microcells picocells and femtocells small cells provide network coverage 
in dead zones within a macrocell the coverage area of a traditional cellular base station 
and extra network capacity by offloading mobile data traffic from macrocells
switch a mechanical electrical or electronic device which opens or closes circuits completes 
or breaks an electrical path or selects paths or circuits
switching fabric the component at the heart of a data communications switch that allows any input port 
to send data to any output port 
td‑lte time division lte lte standards accommodate cellular network and subscriber transmissions in different 
frequency bands frequency division duplex as well as in the same frequency band 
time division duplex often referred to as td‑lte td‑lte is expected to be widely 
deployed in major asian markets such as china india and japan as well as parts 
of north america and europe
tdm time division multiplexing a digital transmission method that combines signals from multiple sources on a common 
path increasing capacity
test automation the ability to control all elements of a test system from a single point in order to execute 
test cases automatically
timing clock synchronization between the different elements in a communications network 
umts universal mobile 
telecommunications system
the most common 3g wireless technology globally which uses wcdma on its underlying 
air interface and offers support for data transfer rates from hundreds of kilobits per 
second to tens of megabits per second 144
spirent commu ni cati ons pl c ann ual rep ort 2012
g lossary continued
virtualization technologies designed to provide a layer of abstraction from the physical characteristics 
of computing resources to simplify the way in which other systems applications or end 
users interact with those resources
volte voice over lte a standards‑based scheme adopted by the gsma the cellular industry’s association to 
provide voice service over data‑only lte networks volte’s use of an ip media subsystem 
enables voice to be offered as part of a rich communications solution integrated with 
services such as messaging live video sharing and file transfer
wcdma wideband cdma an international telecommunication union standard derived from cdma which is used 
globally in 3g mobile communications
wi‑fi a mechanism that enables devices such as personal computers video game consoles 
smartphones or digital audio players to exchange data wirelessly over a computer 
network and connect to network resources such as the internet coverage ranges from 
a few rooms to several square miles depending on the number of access points used registered office
spirent communications plc
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conta ct details registered office
spirent communications plc
northwood park
gatwick road
crawley
west sussex rh10 9xn
united kingdom
tel 44 01293 767676
fax 44 01293 767677
email investorrelationsspirentcom
website wwwspirentcom
registered in england no 470893
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all rights reserved


Summary:
 spirent commu ni cati ons pl c ann ual rep ort 2012
2
chairman’s statement significant strategic 
progress in 2012
alex w alker
chairman
spirent made significant strategic progress 
in 2012 through organic investment to bring 
new solutions to market the acquisition 
of new technologies for testing the security 
of application‑aware networks and the 
subscriber experience of mobile devices 
on live networks in order to expand the 
markets it serves and by the divestment of 
its last non‑core business a restructuring 
of the service assurance division has 
returned the business to more satisfactory 
levels of profitability these achievements 
were made against a background of 
economic uncertainty in all regions 
which in turn tempered growth
revenue for the continuing group was 
similar to last year at 4724 million 2011 
4705 million and reported profit before 
tax decreased by 3 per cent to 1107 
million 2011 1143 million the strong 
start to the year was followed by a weak 
demand environment materialising during 
the second quarter which then persisted 
throughout the remainder of the year 
operational highlights included the growth 
in new solutions for 4glte wireless   3
overview business review governance financial statements 522 million both businesses have 
been fully integrated into the performance 
analysis division the divestment of the 
systems division in november for a cash 
consideration of 632 million has enabled 
the company to focus on the development 
of its core business of the proceeds 
27 2 million was applied to the repurchase 
of spirent shares in the market for 
cancellation the company has no debt 
and cash balances were 2486 million 
at 31 december 2012
the board continues to focus on a high 
return on capital employed in the business 
the operating return on capital employed 
excluding cash balances in the continuing 
group in 2012 was 52 per cent the target 
set for return on investment in acquired 
businesses is in line with or in excess of 
the cost of capital returns remain low 
to negligible on cash balances which 
are retained to allow surety of completion 
for acquisition negotiations while the 
company expects to continue to invest 
in acquisitions which are in line with the 
strategy it is also committed to making 
returns through share buybacks to that 
end during 2012 134 million shares were 
repurchased utilising cash of 308 million 
the intention is to continue the on market 
repurchase programme during 2013 
envisaged at the time of the divestment 
of systems and to offset the dilutive 
effect of share‑based incentives
the final dividend recommended is 183 
cents per share compared with 167 cents 
per share in 2011 this brings the total 
dividend for 2012 to 322 cents per share 
compared with 293 cents for 2011 the 
increase in total dividend per share is 10 
per cent and reflects the strong operating 
margin and cash generation of the group 
in sterling terms this represents 210 pence 
per share an increase in the distribution 
to our shareholders of 15 per cent
development testing the enhancements 
to new high speed ethernet test solutions 
and the renewal of large long term service 
assurance maintenance contracts 
the one significant area of weakness 
other than service assurance was the 
global navigation satellite system 
emulation products in the positioning 
business which experienced a 26 per cent 
decrease in revenue due to caution in 
government spending and delays to the 
commercial rollout of the specifications 
to a chinese satellite navigation system 
this decrease had a 3 percentage points 
negative impact on revenue growth for the 
performance analysis division for the year
return on sales based on adjusted 
operating profit was maintained at 
25 per cent for the continuing group 
which is amongst the best in the test 
and measurement industry this was 
after expanding product development 
expenditure by 28 million and sales 
and distribution by 12 million 
adjusted basic earnings per share grew 
by 4 per cent to 1338 cents 2011 1292 
cents this is before charging exceptional 
items acquisition related costs acquired 
intangible asset amortisation and 
share‑based payment basic earnings per 
share for the continuing group decreased 
in 2012 by 5 per cent to 1246 cents per 
share 2011 1317 cents
the group’s free cash flow generation from 
continuing businesses increased to 840 
million 2011 693 million representing a 
strong increase year‑on‑year this is a cash 
conversion ratio of 105 per cent of reported 
earnings before non‑cash prior year tax 
2011 84 per cent spirent used its cash 
resources to fund the acquisitions of mu 
dynamics inc in april for 398 million and 
metrico wireless inc in september for 
dividend per share 2012
322cents
2011 293 cents