armour group plc annual report 2011
armour group plc  
annual report 2011 for more information please visit our website armourgroupukcom
armour group plc 
annu al repo rt 2011
business review
who we ar e
 in this r epo rt
1–19
business review
	 01	 a 	 year	 of	 change
	 02 	 	 armour 	 group	 at	 a	 glance
	 04 	 	 chairman’s 	 statement
	 06 	 	 chief 	 executive’s	 review	
	 14	 finance 	 director’s	 report
20–31
governance
20	 	 directors 	 and	 	 advisers
21	 	 directors’ 	 report
25	 	 corporate 	 	 governance 	 statement
29	 	 remuneration 	 report
32–69
financial statements 
32	 	 independent 	 auditors’	 report
34	 		 consolidated	 statement	
of comprehensive	 income
35	 		 consolidated	 statement	 of	 financial	
position
36	 		 consolidated	 statement	 of	 changes	
in shareholders’	 equity
37	 	 consolidated	 statement	 of	 cash	 flows
38	 	 notes	 to	 the	 consolidated	 financial	
statements
64	 	 company 	 balance	 sheet
65	 	 notes	 to	 the	 company	 financial	
statements
annual general meeting
70	 notice 	 of	 annual	 general	 meeting
armour group is the uk’s leading 
consumer electronics group within the 
home and in‑vehicle communications 
and entertainment markets committed 
to designing manufacturing and 
distributing leading‑edge audio and 
visual products and solutions
our business model
t he group’s business model is based on five elements
to maintain and develop
• brands that are award‑winning and 
have market presence
• a quality product portfolio
• product innovation and proprietary 
technology
• an unrivalled uk customer base 
and distribution platform
• a first class customer service 01
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
a year of ch an ge
having grown sales 10 last year the year ended 31 august 2011 has been extremely challenging 
both in terms of the economy and the group’s response to it
t he principal factor has been the worsening economic outlook over the year accompanied by 
an unprecedented slowdown in consumer demand particularly in the uk t he fall in consumer 
confidence has had a detrimental impact particularly in armour home where the exposure to 
consumer electronics and entertainment products is greatest
in response the group has undertaken a restructuring programme the key aspects of which are
• merger of the companies within armour home into one business
• closure of the chinese manufacturing operation
• staff reduction of 75
• reduction of third party distribution to refocus on core brands customers and channels
• c ontinued development of award winning products
• reestablish margins on the quality product portfolio
t he group’s results for the year reflect this year of change both in reduced sales and the costs 
incurred in restructuring
 
headline figures
2011 2010
sales £423 million £566 million
underlying lossprofit from operations £17 million £12 million
underlying lossearnings per ordinary share 18 pence 14 pence
c ash utilised ingenerated from operations £13 million £18 million
n et debt £69 million £57 million
 underlying is defined as before exceptional items discontinued operations and sharebased payments but not taking into account 
the costs of disruption nor the ongoing benefit of any cost reduction measures undertaken during the year
 
t he year has not passed without some significant advances including
•  8 increase in armour automotive’s sales driven by 50 nonretail customer growth and 
6 increase in n ordic sales
•  both armour automotive and armour home again winning awards for both products and 
business operations
•  c ontinued growth in armour asia with sales through this operation doubling to £11 million
•  restructuring of armour home substantially complete for 1 september 2011 02
armour group plc 
annu al repo rt 2011
business review
the group possesses a strong brand portfolio of more than 6000 products and 
accessories this is underpinned by strong product development and investment 
in proprietary technology
an unrivalled distribution capability ensures that products are supplied direct to more 
than 6000 retail outlets within the uk and to customers in 66 countries worldwide 
t he group is also a leading supplier of audio and visual technology to many 
nonretail customers including vehicle manufacturers hotel chains house builders 
and custom installers 
global sales by region
europe
£75m
asia
£20m
australasia
£05m
america
£03m
middle east
£01m
africa
£01m
uk
£318m
armou r group a t a gl ance 03
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
armour h ome is the leading 
provider of highend 
products solutions and 
services to the hifi home 
theatre entertainment and 
furniture markets in the uk 
its portfolio spans all aspects 
of sound vision and the 
associated entertainment 
experience within the home
armour automotive is the uk 
market leader in the supply of 
audio and video solutions for 
the invehicle entertainment 
and communications market 
working with industry 
partners to research develop 
and distribute cuttingedge 
products and accessories
armour asia is responsible 
for sale of armour 
automotive and armour 
h ome products into asian 
markets and provision of 
supplier support services 
including quality control to 
the uk operations
key owned brands
key owned brands
key brands sold
key customers
john l ewis partnership
euronics
sainsburys
t esco
dixons retail plc
staples
sevenoaks sound  
vision 
richer sounds 
superfi
t he plasma centre
costco uk wholesale l td
key customers
halfords
n ew h olland
autot rail vr
c laas group
masternaut
vapormatic
jc b group
manitou bf
dynamic sounds
mekonomen
t rakm8
same deutzfahr 
key territories
c hina
singapore
t hailand
h ong kong
south korea
malaysia
indonesia
revenue £269m 
percentage of  
group revenue 63
n umber of staff 122
n umber of locations 3
facilities sq ft 136500 
n umber of customers 3300
percentage revenue 
from owned brands 72
revenue £143m 
percentage of  
group revenue 34
n umber of staff 90
n umber of locations 2
facilities sq ft 47000
n umber of customers 2000
percentage revenue  
from owned brands 85
revenue £11m 
percentage of  
group revenue 3
n umber of staff 8
n umber of locations 1
facilities sq ft 9000 
n umber of customers 50
percentage revenue  
from owned brands 96 04
armour group plc 
annu al repo rt 2011
business review
the deterioration in consumer confidence caused by the weak economic 
environment particularly in the uk has made the year to 31 august 2011 the 
most challenging experienced by the group group sales fell to £423 million 
2010 £566 million which generated a loss from operations before 
exceptional items and discontinued operations of £17 million 2010 profit 
£12 million the basic loss per ordinary share before exceptional items and 
discontinued operations was 18p 2010 earnings per ordinary share 14p 
the group’s net debt at 31 august 2011 was £69 million 2010 £57 million
the performance of the group has been severely affected by the collapse in 
retail demand which has been felt most particularly in our home division 
w hilst the uk is not technically in a recession the impact on consumer 
confidence of the steady stream of poor economic data has resulted in a 
dramatic fall in consumer demand the consumer electronics sector which is 
our core market and by its very nature exposed to discretionary expenditure 
has felt the full force of this downturn in consumer demand 
in response to the very difficult trading environment the group has 
implemented a restructuring of the home division and a cost reduction 
programme throughout all our operations which has included the closure of 
our c hinese manufacturing facility these cost reduction initiatives are 
expected to realise over £25 million in annualised savings the major elements 
of the restructuring and cost reduction programmes are now complete and we 
have started the new financial year with a more streamlined structure and cost 
base particularly in armour home 
w hilst armour home has found the market conditions very challenging 
armour automotive has enjoyed an encouraging recovery in its performance 
with profits before exceptional items in the year increasing from £02 million to 
£08 million in addition our operations in asia have continued to grow with sales 
increasing by 99 to £11 million with every expectation that this will become a 
profitable operation in 2012 
ou r 
awards
ch airman’s st ate ment 05
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
the recovery in armour automotive has been driven by strong demand for 
invehicle audio solutions supplied into the commercial vehicle market and our 
range of gps and gsm antennae as with the home division retail sales in the 
automotive aftermarket have declined although this decline has not been as 
marked as in home electronics we remain confident that armour automotive 
will continue its recovery in 2012
as with all other parts of the businesses expenditure on new product 
development has been carefully reviewed however despite the market 
difficulties the group has continued to invest in new product development and 
has launched a number of new products during the year including two new 
ranges of award winning q acoustics speakers n ew product development 
remains a fundamental part of the group strategy and we believe it is a key 
ingredient to drive sales and deliver a sustainable recovery in performance 
this year has been very testing for our employees who have had to manage a 
considerable amount of change in a very short period of time despite this they 
have worked with dedication and professionalism for the good of the group 
i would like to acknowledge the board’s appreciation of their commitment 
and effort over the course of the year
the economic outlook in our core markets continues to be uncertain and the 
prospects of a recovery in consumer confidence and demand in the near term 
remain weak the actions taken by the group have significantly reduced its 
cost base and we anticipate an improved performance in 2012
bob morton
c hairman
5 december 2011 06
armour group plc 
annu al repo rt 2011
business review
chie f executive’s r eview
the year to 31 august 2011 has been extremely challenging with a deteriorating 
economic environment undermining consumer confidence in many of the 
markets the group supplies this in turn has significantly reduced demand for 
our products particularly so in our core market sector of uk retail consumer 
electronics we have responded to this fall in demand by restructuring our 
business operations closing our factory operation in c hina and cutting the 
group operating costs by in excess of £25 million annually
our home division armour home which is most exposed to the retail sector 
has borne the brunt of the collapse in consumer demand that has hit its target 
retail markets as a result it has been restructured downsizing the business 
to reflect the change in the market conditions this restructuring programme 
is now broadly complete
our automotive division armour automotive has enjoyed a good year continuing 
the improvement reported last year and in the 2011 half year statement 
increasing demand in its nonretail sales channels has more than compensated 
for a decline in sales into the retail aftermarket we have also been prudent 
with regard to the cost base reducing our operating costs in the retail sector 
of the business to counter the decline in sales through this channel
strategically we have refocused all business operations on our core brands 
customers and sales channels this has reduced our third party distribution 
activities to concentrate on those brands that have critical size complement 
our existing product portfolio and customer base and can generate economies 
of scale from our operating infrastructure
armour home
armour home designs develops and distributes a range of consumer 
products and accessories for the home supplying the retail and house 
building markets primarily in the uk in year to 31 august 2011 armour home 
has faced considerable challenges as pressure on consumer confidence 
increased discretionary spend in the consumer electronics sector has been 
hit particularly hard sales in the year fell 37 to £27 million resulting in an 
operating loss before exceptional costs of £11 million
all the markets served by armour home in 2011 have felt the impact of lower 
consumer confidence brought on by the economic downturn the most 
noticeable has been in the retail sector where a significant fall in consumer 
demand became increasingly evident after the half year the house building 
sector has been a little more resilient although demand remains well below 
prior years
in response to the worsening market conditions a major restructuring of 
the division was undertaken which has now merged the two operating 
businesses of armour home electronics and alphason designs into a single 
trading entity this has streamlined all departmental functions and is expected 
to realise annual cost savings in excess of £22 million with the single largest 
area of saving being the reduction in headcount from 176 to 122 in addition to 
cost reduction there has been a targeted programme to reestablish gross 
margins which have been eroded through competitive pricing pressure and 
promotional activity to drive sales volumes this margin initiative which 
includes price increases has and continues to deliver improvement across 
almost all product categories to the benefit of the division’s overall 
performance the restructuring programme has undoubtedly caused 
armour automotive 
has enjoyed a good year  
increasing demand in its 
nonretail sales channels 
has more than compensated 
for a  decline in sales into 
the retail  aftermarket 07
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
ou r po rt folio
 all armour businesses maintain a quality portfolio of products 
which aim to exceed customer expectation
“fantastic quality product i was extremely impressed with the 
build quality and the overall design and felt the need to let you 
know how pleased i am too many companies fail to pay attention 
to quality  you have obviously got it spot on a very satisfied  
customer that will definitely return”   
 al phason c ustomer august 2011  08
armour group plc 
annu al repo rt 2011
business review
chie f executive’s review
continue d
disruption which in turn has had a negative impact on the financial 
performance over and above that caused by the weak economic conditions 
however the programme was substantially complete by 31 august 2011 and 
the division has started the new financial year with a significantly lower cost 
base and an improving gross margin
sales of our home automation systems and associated products declined 
during the year by 32 demand for our products in this market is directly 
related to new home building activity which has remained doggedly subdued 
throughout the year although there have been signs of some improvement 
over the recent months the market has also changed with the advent of an 
increasing number of wireless products on the market which have shifted 
demand away from the traditional professionally installed wired products 
armour home has recognised this change and wireless functionality has been 
introduced into the systemline multiroom products during the course of the 
year l ooking forward the product development programme includes the 
launch in 2012 of three new product ranges including a new wireless platform 
which we believe will open up new market areas for armour home and help 
offset what is now expected to be another year of tepid demand
sales into the uk retail channel have had a very hard year with a yearonyear 
decline of 41 this was not helped by the poor weather in december 2010 
although the underlying and principal issue has been the sudden and 
significant fall in consumer confidence and spending hardest hit has been 
the audiovisual furniture brand alphason where sales are down 47 
which directly reflects the decline in sales of televisions many of our large 
retail customers were left with excess stocks following the football world c up 
and c hristmas in 2010 and given the rapid decline in consumer demand for 
televisions and associated accessories these retailers have not reordered 
significant amounts of audiovisual furniture for most of 2011 sales of the 
division’s other core brands qed and q acoustics were also down on the prior 
year with weaker demand being compounded by supply issues during the early 
part of the year for the new financial year we have introduced a number of 
new products including two award winning q acoustics speaker ranges a new 
range of alphason audio visual furniture and a refreshed and updated range of 
qed cables these new products will be important in stimulating demand in 
this sales channel in 2012
in contrast to the sales decline in most retail product categories armour 
home’s office furniture range has performed well over 2011 with sales being 
13 up on the prior year a new category in 2010 the division has consolidated 
its position in 2011 developing a good customer base from which it can further 
grow we have also developed our customer service offering with a very 
successful “drop ship” delivery service for our retail customers whereby we 
deliver direct to the consumer from our warehouse this service has grown 
significantly over the past year and we are now delivering over 4000 parcels 
a month through this service
w hilst our product development programme has been slowed and there 
were fewer product launches in 2011 it remains very active and has recently 
delivered to market in october 2011 two w hat hifi sound and vision 
award winning speaker ranges in q7000 and q2000i the awards included 
the prestigious “product of the year” for the q7000 51 speaker package 
armour home also won a w hat hifi sound and vision award for qed 
and two for grado headphones
armour home’ s office 
furniture range has 
performed well over 201 1 
with sales being 13 up 
on the prior year  a new 
category in 2010 the division 
has consolidated its position 
in 201 1 developing a  good 
customer base from which  
it can further grow 09
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
from initial concept 
through to production 
cti armour automotive 
designs and develops 
rf antennae using 
advanced simulation 
software cti develops 
detailed 3d models 
and 2d drawings to 
convert concepts 
into products high 
quality proprietary 
products such as 
pentaband surface 
mount antennae 
greatly enhance the 
development of 
wireless communications 
and solutions
ou r innov ation
all armour businesses focus on delivering  
innovative products many of which win  
industry awards 10
armour group plc 
annu al repo rt 2011
business review
 ou r dist ribution
chie f executive’s review
continue d
armour has warehouse and distribution facilities in the uk sweden 
and hong kong 
armour home’s warehouse and distribution operations have 
been consolidated into its 78000 sq ft facility in wigan this facility 
is geared to distribute in excess of 2000 different products to over 
3000 customers despatching more than 50000 individual orders 
per annum 11
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
armour automotive
armour automotive is the leading company in the uk and sweden supplying 
the automotive aftermarket and commercial vehicle market with connectivity 
solutions and audiovideo equipment for invehicle applications t he division’s 
recovery has continued throughout 2011 with sales up 8 to £144 million 
delivering an operating profit of £07 million for the year a fourfold increase
armour automotive’s progress has been based on an expanding commercial 
and leisure vehicle business where demand has continued to grow for our 
invehicle audio solutions there has also been strong growth in sales of 
our ct i antennae range driven by a combination of both new products and an 
expanded customer base the weakest area for armour automotive has been 
in the retail sales channel where sales have declined against a background of 
an increasingly difficult consumer environment gross profit margins within the 
automotive division are marginally down on the prior year reflecting the change 
in sales mix towards the nonretail sales channels which typically generate a 
lower gross margin
in the uk retail sales channel market conditions have remained challenging 
with sales declining 12 on the prior year in part some of this decline relates 
to the poor weather in december 2010 and operational issues experienced 
by our largest customer at the start of the year however the overriding cause 
is the weakness of consumer demand in the face of the very tough economic 
conditions as a consequence of the retail market conditions retail operations 
were restructured to reduce the operating cost base relating to this channel 
the outlook for the retail market remains uncertain and subdued the current 
expectation is that the market will continue to contract over the coming year 
although there are opportunities to win market share in existing markets and 
enter new market areas with new products planned for launch in the early 
part of 2012
the nonretail business which is primarily into the commercial and leisure 
vehicle and antennae markets has had a very strong year with sales increasing 
50 demand from all our key customers grew particularly in the agricultural 
vehicle and antennae markets a number of new contracts have been secured 
and there has been increasing demand from the existing customer base as 
their own sales have been expanding the new financial year has started well 
for this sales channel and with the prospect of a new audio platform for the 
agricultural vehicle market set for launch in early 2012 the outlook remains 
promising
the i o range of invehicle bluetooth music streaming and handsfree 
solutions has been disappointing in 2011 due to the delayed launch of the 
second generation product which is now expected in the market in the first 
half of 2012 testing of this new platform which is now well advanced 
is encouraging and the reseller network is in place to accept the new 
generation product launch
armour n ordic our business in scandinavia that forms part of armour 
automotive continues to perform well with sales increasing by 6 further 
expansion of the product portfolio into the home market and a new distribution 
agreement with sony for incar audio products has more than compensated for 
slowing market demand the outlook for the n ordic region remains positive 
with sales growth expected in 2012 coming from a new distribution agreement 
in the home market with tdk and further new products planned within the 
division’s own proprietary brands
armour automotive’ s 
recovery has continued 
throughout 201 1  with  
sales up 8 to £144  
million delivering an 
operating profit of  
£07 million for the year   
a  fourfold increase 12
armour group plc 
annu al repo rt 2011
business review
chie f executive’s review
continue d
armour asia
armour asia represents the group’s interests in asiapacific both through 
selling our products in the region and acting as the liaison between the uk 
operations and our far eastern manufacturing partners sales in the region 
through armour asia are still relatively small but are growing fast and 
increased by 99 to £11 million in the year to 31 august 2011 the largest and 
fastest growing market is c hina where we sell a range of the group’s products 
into the retail and the hotel build markets the region offers considerable 
expansion opportunities and the expectation is that sales will continue to grow
in october 2010 the group set up a factory operation in c hina assembling 
audiovisual furniture following strong sales indications from large uk retail 
customers unfortunately with the fast deteriorating economic conditions 
and the sudden and significant fall in consumer demand the expected sales 
volumes from these customers did not materialise as a consequence of this 
we took the decision to close the factory which we did at the end of may 2011 
the cost to the group in the year of the c hina factory operation and its closure 
was £05 million and has been disclosed as a discontinued operation in the 
c onsolidated statement of c omprehensive income
new produc t develo pmen t
n ew product development is and remains fundamental to driving the group 
forward in terms of both sales and profits and maintaining market position 
however the economic downturn has meant that a number of programmes 
have been slowed down whilst the group restructure and resize the businesses 
to meet the changing demands of the market despite this the group has 
continued to launch a number of new products including the new q7000 and 
q2000i wwwqacousticscouk speaker ranges the alphason design first 
audiovisual furniture range wwwalphasondesignscom our highly 
successful invehicle data logger targeted at improving driver behaviour 
and a refreshed range of qed cables wwwqedcouk the new product 
programme for 2012 includes new products for all the group’s core brands
outloo k
the new financial year is expected remain challenging with uncertainty in the 
wider economic environment continuing to impact on consumer confidence 
and demand we have taken the necessary steps to downsize our business 
operations to meet the changing demand requirements and will keep them 
under review such that they remain correctly sized for the markets we serve 
george dexter
c hief executive
5 december 2011
“ just wanted to say 
thank you for your 
help and amazing 
support thanks  
again i am telling 
everyone  how good 
the support has been  
you just don’t seem to 
get it these days”
 al phason c ustomer 
april 2011  13
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
ou r service
 all armour businesses focus on customer service which includes range   
reviews product quality stock availability delivery and after sales support 
“ armour automotive is our specialist head unit supplier providing us with quality 
innovative bespoke products consistently supported by excellent levels of 
customer service”
 jc bamford exc avators l imited  armour group plc 
annual report 2011
business review
finance director’s report 
14 
financial results 
reviews of the trading results for the year are set out in the chairman’s statement and chief executive’s review 
which form part of this annual report 
group sales for the year were £423 million 31 august 2010 £566 million representing a 25 decrease on the 
comparative period last year armour automotive’s sales increased by 8 and armour asia’s sales increased by 99 
but armour home’s sales fell by 37 
the group’s underlying loss being the loss from operations and before exceptional items was £17 million 31 august 
2010 profit of £12 million which despite improvement in the performance of the other business segments reflects 
armour home’s severe reduction in sales demand 
 sales underlying lossprofit 
 
2011
£000
2010
£000
variance
£000
variance

2011 
£000 
2010 
£000 
variance
£000
armour automotive 14354 13252 1102 8 768 163 605
armour home 26870 42794 15924 37 1059 2633 3692
armour asia 1087 545 542 99 275 499 224
central operations – ––– 1099 1125 26
group 42311 56591 14280 25 1665 1172 2837
exceptional costs of £14 million were incurred in the year in a groupwide restructuring and cost cutting programme with 
particular emphasis on the armour home business segment details of which are set out in note 5 of the consolidated 
financial statements net interest expense of £04 million 31 august 2010 £02 million reflects the maturity of the 
previous fiveyear funding facilities and their replacement in december 2010 at interest rates that reflect the current 
market pricing the group’s loss before taxation from continuing operations was £35 million 31 august 2010 profit of 
£09 million 
the loss from discontinued operations arising from the set up and subsequent closure of the dedicated manufacturing 
facility in china was £05 million as set out in note 6 of the consolidated financial statements 
taxation 
the total taxation credit for the year was £12 million 31 august 2010 charge of £007 million which reflects an effective 
taxation rate of 29 31 august 2010 8 the reason for the effective rate to be higher 31 august 2010 lower from the 
expected rate of 272 31 august 2010 28 is principally due to enhanced research and development relief as set out for 
both the current and prior year in note 10 of the consolidated financial statements 
the expected taxation rate during the current year of 272 arises from the change in rate in april 2011 from 28 to 26 
earnings per share and dividend 
the basic loss per ordinary share was 37p 31 august 2010 earnings of 14p which includes the cost of both the 
exceptional items and discontinued operations 
the basic underlying loss per ordinary share which adjusts for discontinued operations exceptional items and share
based payments as set out in note 11 of the consolidated financial statements was 18p 31 august 2010 earnings of 
14p  
the board did not propose a dividend for the year ended 31 august 2010 and has not recommended a final dividend for the 
year ended 31 august 2011   armour group plc 
annual report 2011
business review
business review governance financial statements annual general meeting
 
15
share capital and equity 
at a general meeting held on 23 february 2011 it was resolved that each 10p ordinary share in issue be subdivided into one 
new ordinary share of 1p each and one deferred share of 9p each each authorised but unissued ordinary share was 
subdivided into 10 new ordinary shares of 1p each on the same date the company issued 28571429 new ordinary shares 
of 1p each by way of a placing at 7p per share at 31 august 2011 the issued share capital amounted to £71 million 31 
august 2010 £68 million and further details are set out in note 24 of the consolidated financial statements   
at 31 august 2011 the group’s equity was £290 million 31 august 2010 £301 million reflecting the placing of shares and 
the retained loss for the year of £29 million 31 august 2010 retained profit of £09 million this is set out in the 
consolidated statement of changes in shareholders’ equity on page 36   
funding and banking facilities 
since february 2006 the group’s funding was principally by way of committed loan and overdraft through a fiveyear credit 
agreement with national westminster bank plc which was due for maturity in february 2011 in december 2010 the 
group changed its funding to a threeyear assetbased lending agreement with ge commercial finance limited 
under the new assetbased lending agreement the group’s ukbased subsidiary undertakings can borrow funds based 
on the value of unpaid sales invoices and stock held in their uk warehouses amounts borrowed are secured by way of 
a cross guarantee and debenture over the assets of the group companies based in the uk unlike the previous credit 
agreement which provided a fixed and constant borrowing capacity the new funding is variable depending upon the value 
of the assets on which it is based the maximum borrowing capacity is however capped at £10 million for unpaid sales 
invoices and £6 million in regard to stock  
as a consequence of the economic conditions leading to the significant fall in armour home’s sales coupled with the costs 
of restructuring incurred during the year the group entered into a £12 million loan from hawk investment holdings 
limited to assist with working capital requirements the loan is a related party transaction details of which are disclosed in 
note 27 of the consolidated financial statements  
in september 2011 the group changed its daytoday uk banking arrangements from national westminster bank plc to 
lloyds tsb bank plc 
cash flow and net debt 
the group’s consolidated statement of cash flows is on page 37 
the group’s cash outflow from operations was £13 million 31 august 2010 £18 million inflow previous taxation 
payments were recovered during the year resulting in an overall tax inflow of £01 million 31 august 2010 £02 million 
outflow  
expenditure on investing activities reduced to £14 million 31 august 2010 £20 million £04 million 31 august 2010 £04 
million was spent on property plant and equipment and £11 million 31 august 2010 17 million on intangible assets 
the cash inflow in regard to financing activities was £76 million 31 august 2010 £14 million outflow an inflow of £19 
million 31 august 2010 nil was in regard to the placing of shares during the year a net inflow of £61 million 31 august 
2010 £10 million outflow related to the refinancing undertaken during the year and the movements on loans interest 
payments were £04 million 31 august 2010 £02 million the prior year comparative figures record the payment of £02 
million of dividend relating to the year ended 31 august 2009 and approved by shareholders at the annual general meeting 
held on 28 january 2010  
net debt is defined in note 30 on page 63 of the consolidated financial statements and at 31 august 2011 was £69 million 
31 august 2010 £57 millionthe group’s borrowings are shown in note 21 on page 57 of the consolidated financial 
statements and at 31 august 2011 the group had undrawn facilities of £08 million 31 august 2010 £33 million 
principal risks and uncertainties 
risk is an inherent part of doing business the board’s approach to risk management is balanced with encouragement of 
entrepreneurial flair and recognition that some necessary activities carry an inherent risk over which the group may at 
best have only limited control the corporate governance statement on pages 25 to 28 describes the systems and 
processes through which the directors manage and aim to mitigate risk the board considers that the principal 
commercial and financial risks are identified below however the board also recognises that the nature and scope of risks 
can change particularly in a period of economic uncertainty  armour group plc 
annual report 2011
business review
finance director’s report  
continued 
16 
business model 
our business strategy is based on five elements being to  
• own and develop strong brands highly regarded in their markets 
• offer a quality product portfolio to our customers  
• continually improve our products through a structured programme of product development and innovation 
• maintain and grow our distribution platform and  
• offer our customers a first class service 
pursuit of this business strategy introduces new risks to the group through for example the adoption of new technologies 
and interaction with new customers and territories conversely the strategy allows the group to diversify its interests and 
areas of expertise at a strategic level this is considered to increase resilience and reduce overall risk by avoiding reliance 
on a single brand restricted product portfolios or confined business areas this has particular relevance in periods of 
sharp economic downturn customer uncertainty and depressed market conditions and in the current year has been seen 
in armour automotive’s yearonyear improvement by continued development of its nonretail sales channels  
economic and market conditions 
the uk’s economy has been in a period of depression and uncertainty since mid 2008 which is generally accepted to also 
be reflected by a worldwide slowdown at the outset a period of two years was considered a reasonable timeframe to 
stage recovery but this has not proved to be the case since the general election in 2010 and the austerity programme 
subsequently implemented uk market conditions and particularly consumer confidence has further declined causing 
progressive downgrades of the uk’s economic indicators over the course of the year other territories most recently and 
particularly europe are experiencing difficulties implementing the necessary remedial measures given the effects these 
have on their populations 
as reported in previous annual reports whilst various national strategies have been deployed it still remains unclear as to 
their effectiveness the timeframe of continued depression and uncertainty the degree of market volatility yet to be 
experienced and the speed of any sustained economic recovery  
consumer confidence and spending is of particular relevance to the markets in which the group operates many factors 
which include job security and levels of employment cost inflation availability of credit interest rates and taxation all 
influence consumer behaviour and the general economic climate in such times of economic uncertainty future predictions 
of market conditions trends and performance are difficult nonetheless as best as practicably possible the group takes 
into account external opinions in regard to the economic outlook and the potential effects on the group’s markets   
competition 
armour home and armour automotive operate in highly competitive markets and have to respond to market behaviour 
such as price deflation caused by advances in technology or aggressive pricing by competitors possibly itself prompted by 
an unfavourable economic environment 
both divisions have established strong market positions by building recognised brands adopting new technologies and 
having the necessary infrastructure to meet customer needs these positions are maintained through measures that 
include continued expenditure on research and development and facilities 
changing consumer demands 
the group’s products are targeted at the consumer either through our retail customers or by being part of a larger 
product offering such as homes or vehicles consequently the group must respond to changing consumer demands that 
may be a response to aesthetic appeal functionality or technological advancement 
the group addresses this risk by reviewing its product lines and regularly introducing enhanced and refreshed 
generations many of which win awards in addition the group’s concept design centre focuses on emerging technologies 
and future product development strategies for the group’s core product categories   armour group plc 
annual report 2011
business review
business review governance financial statements annual general meeting
 
17
foreign manufacturers 
a significant proportion of the group’s products are sourced from outside the united kingdom consequently the group is 
subject to associated risks which include foreign exchange rate fluctuations inflation in foreign countries and duties 
imposed on foreign goods in addition legal standards which are a requirement of the designated market of sale but not 
the country of manufacture must be complied with 
the group addresses this risk through armour asia which based in hong kong liaises directly with the group’s far 
eastern suppliers this operation contains management with significant experience of the group’s activities and 
requirements and also local nationals with an understanding of local culture and practices 
in addition both armour home and armour automotive retain ukbased assembly capability this enables rapid response 
to customer demands adaptability to short production runs and initial production of new products to identify errors and 
difficulties that may be encountered prior to offshore manufacture  
raw material prices 
many of the group’s products contain copper or other metals and plastics whose prices can fluctuate either directly or by 
virtue of being a derivative product the group manages this risk by seeking longterm relationships with its development 
partners and suppliers assessing lower cost design and subject to other factors including market conditions reflecting 
underlying cost increases in sales pricing 
senior management 
as with many other organisations the group is dependent upon the hard work dedication and experience of its 
management and staff this is particularly true during challenging economic conditions the board and senior 
management supervise and monitor all aspects of the group’s operations in the context of the business strategy and the 
execution of remedial measures taken in response to market conditions retention of senior management is desired so 
that experience is maintained and shortterm measures are implemented with the least disruption possible all in the 
context of maintaining the group’s business model and objectives 
the remuneration report on pages 29 to 31 details the procedures in place to attract motivate and retain high calibre 
senior management personnel  
internal controls 
the group has a system of internal controls which are included within the corporate governance statement on page 27 as 
part of the group’s consideration and application of corporate governance as a whole the group continues to review its 
internal controls but recognises that any such procedures can provide only reasonable not absolute assurance 
treasury management and banking arrangements 
the group’s treasury function is controlled centrally with the objective of securing funding availability and flexibility to meet 
the group’s ongoing requirements foreign exchange exposures are generally managed directly by the operating 
subsidiary undertakings within the guidelines and controls established by the directors 
the group maintains a continuing regular dialogue with its funders in regard to the group’s performance and use 
of facilities 
other financial risks 
details of credit risk interest rate risk currency risk liquidity risk and capital management are given in note 3 of the 
consolidated financial statements on pages 44 to 47 
performance indicators 
the group measures its performance through a number of performance indicators the group sales ebitda and basic 
underlying earnings per ordinary share performance indicators used by the group are shown below where in each case 
the figures have as applicable been adjusted to show continuing operations only  armour group plc 
annual report 2011
business review
finance director’s report  
continued 
18 
group sales 
 
2007
£000
2008
£000
2009
£000
2010 
£000 
2011
£000
group sales 55171 54008 51614 56591 42311
the sales in the current year have been adversely affected by declining consumer confidence causing a significant year
onyear reduction in armour home’s sales this volume decline in a year of restructuring is reflected in the ebitda and 
earnings per share indicators below 
ebitda 
ebitda is defined as the lossearnings before interest taxation depreciation amortisation of both goodwill and other 
intangible assets and sharebased payments it provides a useful indicator of both profitability and cash generation in the 
current year the group has been subject to exceptional items and discontinued operations the adjustment for which to 
provide underlying ebitda is given below 
underlying
£000
exceptional
items
note 5
£000
discontinued 
operations 
note 6 
£000 
total
note 29
£000
post tax loss for the year 1424 1045 485 2954
taxation credit 681 397 134 1212
net finance expense 440 – – 440
loss from operations 1665 1442 619 3726
depreciation 5502242 776
amortisation and impairment 1110438– 1548
sharebased payments 18 – – 18
ebitda 13780617 1384
the group’s ebitda for the last five years including underlying ebitda for the current year is shown in the table below 
 
2007
£000
2008
£000
2009
£000
2010 
£000 
2011
£000
profitloss from operations 5243 4029 1528 1172 1665
depreciation 638619631596 550
amortisation and impairment 540 456 782 977 1110
sharebased payments 115 100 65 32 18
ebitda 6536520430062777 13
  armour group plc 
annual report 2011
business review
business review governance financial statements annual general meeting
 
19
basic underlying lossearnings per ordinary share 
the calculation of basic underlying lossearnings per ordinary share for the current year and the 2010 comparative is 
shown in note 11 of the consolidated financial statements on pages 52 and 53 the measure adjusts for sharebased 
payments discontinued operations and exceptional items the table below shows the basic underlying earnings per 
ordinary share for five years 
 
2007
£000
2008
£000
2009
£000
2010 
£000 
2011
£000
profitloss after taxation 3241 2494 886 879 2954
loss from discontinued operations –––– 485
exceptional items –––– 1045
sharebased payments 115 100 65 32 18
underlying profitloss after taxation 3356 2594 951 911 1406
weighted shares 000s 67494 67192 65056 65056 79851
basic underlying earningsloss per 
ordinary share 49p 39p 15p 14p 18p
 
 
john harris 
finance director 
5 december 2011 
  armour group plc 
annual report 2011
governance
directors and advisers 
20 
directors 
bob morton 69 fca 
chairman 
appointed as a nonexecutive director and chairman in 
january 2002 he is also chairman of rsm tenon group 
plc servoca plc wfca plc and st peter port capital ltd 
and holds directorships in a wide range of private 
companies he is a member of the audit remuneration 
and nominations committees 
george dexter 49 bsc aca 
chief executive  
appointed in april 1998 he was previously a director 
of brink’s uk limited and held various positions at 
transport development group plc and ml holdings plc 
after qualifying as a chartered accountant he is a member 
of the nominations committee 
john harris 51 bsc aca 
finance director and company secretary 
appointed finance director in february 1999 and company 
secretary in april 2004 he was finance director of 
howden asia pacific part of charter plc where he held 
a number of positions including that of group financial 
controller he is a member of the nominations committee 
steve bodger 62 ma fca 
senior independent director 
appointed in january 2002 he is chairman of jaques vert 
plc a director of work group plc and is chairman of a 
number of private companies he is chairman of the audit 
remuneration and nominations committees 
nonexecutive directors 
advisers 
auditors 
bdo llp 
2 city place 
beehive ring road 
gatwick 
west sussex rh6 0pa 
bankers 
lloyds tsb bank plc 
2 city place 
beehive ring road 
gatwick 
west sussex rh6 0pa 
nominated adviser and stockbrokers 
finncap 
60 new broad street 
london ec2m 1jj 
registrars 
capita registrars 
northern house 
fenay bridge 
woodsome park 
huddersfield 
west yorkshire hd8 ola 
telephone 0871 664 0300 
facsimile 020 8639 2342 
solicitors 
arnold  porter uk llp 
tower 42 
25 old broad street 
london ec2n 1hq 
registered office 
lonsdale house 
7–9 lonsdale gardens 
tunbridge wells 
kent tn1 1nu  
telephone 01892 502700 
facsimile  01892 502707 
registered number 803572 
wwwarmourgroupukcom 
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
directors’ report 
21
the directors present their report and the audited financial statements for the year ended 31 august 2011 
principal activities  
armour group plc is a public limited company incorporated in great britain registered number 803572 which is listed on 
the alternative investment market “aim” of the london stock exchange its principal activity is that of a holding company 
providing corporate and technical guidance and services to its subsidiary undertakings  
armour group plc is the ultimate parent company of a group the principal activity of which is the design manufacture 
distribution and sale of consumer electronics entertainment and furniture products focused on the home entertainment 
and invehicle communications and entertainment markets  
review of business  
the chairman’s statement on pages 4 and 5 chief executive’s review on pages 6 to 12 and finance director’s report on 
pages 14 to 19 provide a review of the business the group’s trading for the year ended 31 august 2011 key performance 
indicators and an indication of future developments and risks these form part of the directors’ report  
result and dividend  
the group has reported its consolidated financial statements in accordance with international financial reporting 
standards as adopted by the european union the group’s results for the year are set out in the consolidated statement 
of comprehensive income on page 34 the company financial statements continue to be reported under uk gaap  
the group’s loss before taxation and exceptional items amounted to £17 million exceptional items of £14 million 
were incurred during the year in regard to restructuring of the uk businesses note 5 the loss on discontinued 
operations amounted to £05 million note 6 the group’s loss for the year was £30 million 31 august 2010 profit of £09 
million  
the directors did not recommend a dividend for the year ended 31 august 2010 and have not recommended a final 
dividend for the year ended 31 august 2011 
directors  
the following persons were directors during the year ended 31 august 2011 and up to the date of this report 
bob morton 
george dexter 
john harris 
steve bodger 
the names of the directors and company secretary along with their brief biographical details are given on page 20  
in accordance with the company’s articles of association bob morton steve bodger and john harris are retiring at the 
forthcoming agm and being eligible will offer themselves for reelection at that meeting 
directors’ interests  
the directors’ interests in the company’s shares and options over ordinary shares are shown in the remuneration report 
on pages 29 to 31  
the company has taken out insurance to indemnify directors and officers of the group against third party claims  
no director has any beneficial interest in the share capital of any subsidiary undertaking  
on 25 july 2011 the company entered a £12 million loan agreement with hawk investment holdings limited a company 
in which bob morton has a beneficial interest the company announced this loan on the same day the purpose of the loan 
was to assist with working capital requirements during a period of restructuring pursuant to the economic environment 
this related party transaction is disclosed in note 27 of the consolidated financial statements other than this loan 
agreement no director had any material interest at any time during the year in any contract with the company or any of its 
subsidiary undertakings other than his service contract and indemnity agreements   armour group plc 
annual report 2011
governance
directors’ report  
continued 
22 
corporate governance  
the financial reporting council has issued the uk corporate governance code for adoption in accounting periods 
starting after 29 june 2010 the company has as far as practical voluntarily complied with this code and a review of the 
company’s application of its principles and provisions is given in the corporate governance statement on pages 25 to 28 
this also includes the statement of directors’ responsibilities in preparing the annual report and financial statements on 
pages 27 and 28 the corporate governance statement forms part of this directors’ report 
disclosure of information to auditors 
as far as the directors are aware there is no relevant audit information that is information needed by the group’s 
auditors in connection with preparing their report of which the group’s auditors are unaware and each director has 
taken all reasonable steps that he ought to have taken as a director in order to make himself aware of any relevant audit 
information and to establish that the group’s auditors are aware of that information  
donations  
during the year the group made no charitable donations 31 august 2010 £932 no political donations were made in 
either the current or preceding year  
financial instruments  
the financial risk management objectives of the group including credit risk interest rate risk and currency risk are 
provided in note 3 of the consolidated financial statements on pages 44 to 47 
creditor payment policy  
the group does not follow any formal code or standard on payment practice however its policy is for subsidiary 
undertakings to agree terms and conditions for their business transactions with suppliers payment is normally made on 
these terms subject to the terms and conditions being met by the suppliers the company had no trade creditors at the 
year end the number of trade creditor days of the group outstanding at the year end was 51 31 august 2010 61 days  
research and development  
the company and its subsidiary undertakings are committed to ongoing research and development to meet the changing 
needs of the markets that they serve research and development expenditure totalled £16 million for the year of which 
£06 million was expensed to the consolidated statement of comprehensive income and £10 million was capitalised as 
intangible assets  
employees  
the group’s policy is to encourage effective communication and consultation between employees and management 
subsidiary undertakings develop their own consultative and communication procedures as part of their operating 
practices  
the company and its subsidiary undertakings give full consideration to applications for employment made by disabled 
people having regard to their aptitudes and abilities should employees become disabled during their employment they 
are considered for any necessary retraining and available work within their capabilities for the purposes of training 
career development and promotion disabled employees are treated in the same way as other employees  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
 
23
environmental policy  
the group consults professional experts on environmental matters as part of preacquisition enquiries for new businesses 
and takes appropriate action on the advice received the group is committed to maintaining a responsible attitude to 
environmental management in all areas of its business  
share capital structure  
at a general meeting held on 23 february 2011 it was resolved to reorganise the company’s share capital and to amend 
the company’s articles accordingly each of the then existing issued 10p ordinary shares was split into one new ordinary 
share of 1p each and one deferred share of 9p each each of the authorised but unissued 10p ordinary shares was 
subdivided into 10 new ordinary shares of 1p each on the same date the company issued 28571429 new ordinary shares 
of 1p each by way of a placing at 7p per share 
at 31 august 2011 the company’s authorised share capital was £15000000 divided into 883679397 ordinary shares 
of 1p each and 68480067 deferred shares of 9p each  
at 31 august 2011 the company’s issued share capital was £7133721 divided into 97051496 ordinary shares of 1p each 
and 68480067 deferred shares of 9p each 
save for shares held by the armour employees’ share trust holders of ordinary shares are entitled to one vote per share 
at the meetings of the company the holders of the deferred shares have restricted rights including no entitlement to 
receive any dividend or other distribution nor to receive notice or speak or vote at general meetings of the company  
further details of the company’s share capital is given in note 24 of the consolidated financial statements 
armour employees’ share trust  
the armour employees’ share trust is a discretionary settlement controlled and managed by an independent trustee 
company it is empowered to purchase the company’s ordinary shares up to a maximum of 5 of the issued ordinary 
share capital and subsequently make them available to employees principally through the grant and exercise of rights 
under certain share option schemes operated by the company at 31 august 2011 the armour employees’ share trust 
held 3424000 ordinary shares but these have not been allocated to any specific beneficiaries under any scheme the 
trustee is required to waive both voting rights and dividends payable on any ordinary share in the company in excess 
of 0001p unless otherwise directed by the company 
substantial interests  
the company has been notified that as at 5 december 2011 the following shareholders are interested in 3 or more of 
the ordinary shares in issue  
 
hawk investment holdings limited 299
seraffina holdings limited 38
armour employees’ share trust 35
maven capital partners limited 34
national grid uk pension scheme 31
the directors have not been advised of any other substantial interest in the share capital of the company   armour group plc 
annual report 2011
governance
directors’ report  
continued 
24 
share option schemes  
details of employee share schemes are set out in note 26 of the consolidated financial statements  
no grant of options was made in either the current or prior year under any of the company’s employee share schemes 
no options were granted to the executive directors  
no options were exercised in either the current or prior year  
going concern  
after making enquiries the directors have a reasonable expectation that the group has adequate resources to continue 
in operational existence for the foreseeable future for this reason they continue to adopt the going concern basis in 
preparing the financial statements 
auditors  
bdo llp has expressed its willingness to continue in office as auditors and a resolution to reappoint them will 
be proposed at the forthcoming agm  
agm  
the agm will be held on tuesday 31 january 2012  
the ordinary business comprises receipt of the directors’ report and audited financial statements for the year ended 
31 august 2011 the reappointment of bdo llp as auditors and authorisation of the directors to determine the auditors’ 
remuneration the reappointment of bob morton steve bodger and john harris as directors and authorisation of the 
directors to allot shares resolutions 1 to 6 deal with these matters  
the special business comprises the approval of a new executive share option plan the disapplication of section 561 of the 
companies act 2006 and the authority for the company to purchase its own ordinary shares resolutions 7 to 9 deal with 
these matters  
the notice of agm and the ordinary and special resolutions to be put to the meeting are included at the end of this 
annual report and financial statements  
john harris  
company secretary 
5 december 2011 
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
corporate governance statement 
25
the company is committed to good standards of corporate governance the financial reporting council has issued the 
uk corporate governance code the “code” for adoption by fully listed companies for accounting periods starting on 
or after 29 june 2010 this code superseded previous requirements although the company is listed on the alternative 
investment market and therefore not required to comply with the code it has as far as practical voluntarily complied 
with its guidelines this statement outlines how the company has applied the relevant provisions of the code  
the board 
the board comprises two nonexecutive directors and two executive directors bob morton is the nonexecutive chairman 
and steve bodger is the nonexecutive senior independent director the position of chief executive is separate from that of 
chairman and is held by george dexter biographical details of all board members are shown on page 20 
the board is the link in the chain of authority between the shareholders and the executive management and as such 
plays a key role in the corporate governance process it recognises the dual role played by the executive directors as both 
members of the board and leaders of the executive management team this duality is addressed by the nonexecutive 
directors through their positions of authority on the board and through the board committees that they manage 
the board believes that restricting its membership to four is appropriate given the group’s size and enables collective 
decisions to be made without undue delay however the board recognises that its capacity is limited and consequently 
reserves to itself the making of strategic including budget approval and broad policy decisions daytoday decisions 
and policies are delegated to the executive directors the board monitors progress on strategy and policy either through 
its committees or directly through the executive directors 
a formal schedule of matters is reserved for consideration at board meetings which is updated as and when new 
situations require key activities of the business are reviewed and the board receives full supporting papers to enable it to 
do so effectively the company secretary is responsible to the board and is available to individual directors in respect of 
board procedures directors may take independent professional advice on any matter relating to the company at the 
company’s expense 
the board met thirteen times during the year bob morton george dexter and john harris were present at all meetings 
and steve bodger was present at ten meetings for those meetings at which directors may be absent all directors are 
nonetheless briefed on the matters arising so that their opinions can be taken into account 
board independence 
in selecting directors the company looks for individuals who provide business experience strong personal skills and 
independence of thought and perspective the nonexecutive directors regularly visit the operations and have a sound 
understanding of the group’s businesses and affairs enabling them to properly evaluate information and responses 
provided by management they provide an objective challenge to management by being prepared to question assumptions 
and air alternative views as necessary for the good of the businesses and group as a whole 
the code sets out circumstances that may be relevant to the board’s determination of whether a nonexecutive director 
is independent bob morton has declared to the board his beneficial and nonbeneficial interests in the company’s 
shares and these interests are taken into account at all meetings of the board and any decisions made by the board 
as appropriate 
the board believes the nonexecutive directors’ experience and knowledge of the group’s businesses combined with 
their external business experience enable them to provide both an effective challenge and a constructive contribution 
to the board 
board committees 
the terms of reference for the nominations remuneration and audit committees have been approved by the board 
and are on the group’s website wwwarmourgroupukcom 
the nominations committee 
the nominations committee meets as and when required to consider candidates for appointment as directors 
all directors are required to submit themselves for reelection on the third anniversary of their last appointment 
all of the directors are members of the nominations committee of which steve bodger is the chairman 
the nominations committee did not meet during the year as the membership of the board was both functional and stable 
  armour group plc 
annual report 2011
governance
corporate governance statement 
continued 
26 
the remuneration committee 
the remuneration committee is responsible for ensuring that the remuneration packages of the executive directors and 
senior managers are appropriate to attract motivate and retain high calibre individuals the remuneration report on 
pages 29 to 31 contains more detailed information on the directors’ remuneration the members of the remuneration 
committee are the two nonexecutive directors steve bodger who is the chairman and bob morton 
the remuneration committee met three times during the year and both members were present 
the audit committee 
the audit committee monitors the effectiveness of the internal controls and reviews the interim and annual financial 
statements before submission to the board it also advises the board on the appointment of auditors reviews their fees 
and discusses the nature scope and results of the audit with the auditors 
the members of the audit committee are the two nonexecutive directors steve bodger who is the chairman 
and bob morton 
the audit committee met seven times during the year and both members were present on each occasion the executive 
directors were invited to attend these meetings the company’s auditors may also be invited to attend meetings 
particularly to discuss the results of the annual audit and are available to the audit committee throughout the year 
as and when required 
the audit committee monitors the objectivity and independence of the company’s auditors generally the auditors’  
nonaudit services are restricted to taxation advice and compliance any proposed additional work is considered on an 
individual basis 
performance and evaluation 
the performance of the board and its committees has been evaluated during the year in light of the size of the group and 
resources available the conclusions of this review were that 
• there was the potential to increase the number of nonexecutive directors but that this was not necessary given the size 
of the group 
• the number of board meetings and information presented at those meetings allowed continual monitoring of progress 
and informed decision making throughout the year and 
• the committees operated satisfactorily throughout the year and were able to attend to group issues in a timely manner 
relations with shareholders 
the company maintains communication with institutional shareholders through individual meetings with senior 
management and through reports published by the company’s stockbrokers private shareholders are encouraged to 
attend the annual general meeting at which the company’s activities are considered and questions answered general 
information about the company and its businesses is also available on the company’s website wwwarmourgroupukcom 
compliance with the code 
throughout the year ended 31 august 2011 the company has been in compliance with the provisions set out in the 
code except for 
• b23 nonexecutive appointments are not restricted to specified terms other than by the requirement for reelection 
every three years 
• b71 nonexecutive directors who have served longer than nine years are not subsequently automatically required to be 
reelected on an annual basis the company considers that the benefit conferred by continuity of service coupled with 
the existing requirement for reelection every three years and the terms of nonexecutive directors’ service contracts to 
be appropriate 
• c31 the code recommends that the audit committee comprise excluding the chairman entirely independent  
nonexecutive directors and that given the company’s size there should be at least two the group’s audit committee 
comprises two nonexecutive directors one of whom is the company’s chairman 
• d21 the code recommends that the remuneration committee comprise at least two independent nonexecutive 
directors the group’s remuneration committee comprises two nonexecutive directors one of whom is the 
company’s chairman  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
 
27
internal controls 
the board has overall responsibility for the group’s system of internal control it should be recognised that any such 
system of internal control can provide only reasonable but not absolute assurance against material misstatement or loss 
the board confirms that it has carried out a review of the effectiveness of the group’s internal controls as operated during 
the year 
processes to assess and manage the risks to success faced by the businesses are reviewed and improved as necessary 
the objective is to enable the businesses to achieve their objectives without being hindered by circumstances that could 
have been reasonably foreseen whilst at the same time not adversely constricting the businesses with unnecessary 
bureaucracy the principal elements of the system which are designed to recognise the specific requirements of the 
group include 
• an organisational structure with defined levels of responsibility and delegation of authority which is subject to the overall 
group control procedures 
• review of the risks faced by the businesses 
• comprehensive budgeting system producing detailed profit and loss account balance sheet and cash flows which are 
approved by the board 
• monthly reporting of results that are compared to budget and revised forecasts 
• regular meetings with the managing directors of the group’s operating divisions to review the current and forecast 
performance of each business 
• central control over key areas such as capital expenditure authorisation insurance and banking facilities and 
• annual completion by the operating divisions of a selfcertification internal control questionnaire which confirms that 
appropriate controls are in place where potential weaknesses are identified appropriate action is taken 
the group continues to review its system of internal control to ensure compliance with best practice whilst also having 
regard to its size and the resources available in this context the board has concluded that the introduction of an internal 
audit function is not appropriate at this juncture 
statement of directors’ responsibilities 
the directors are responsible for preparing the annual report and the financial statements in accordance with applicable 
law and regulations 
company law requires the directors to prepare financial statements for each financial year under that law the directors 
have elected to prepare the group’s consolidated financial statements in accordance with international financial 
reporting standards “ifrs” as adopted by the european union and the company financial statements in accordance 
with united kingdom generally accepted accounting practice united kingdom accounting standards and applicable law 
under company law the directors must not approve the financial statements unless they are satisfied that they give a true 
and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period the 
directors are also required to prepare financial statements in accordance with the rules of the london stock exchange for 
companies trading securities on the alternative investment market 
in preparing these financial statements the directors are required to 
• select suitable accounting policies and then apply them consistently 
• make judgements and accounting estimates that are reasonable and prudent 
• state whether they have been prepared in accordance with applicable accounting standards subject to any material 
departures disclosed and explained in the financial statements and 
• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will 
continue in business 
  armour group plc 
annual report 2011
governance
corporate governance statement 
continued 
28 
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 
enable them to ensure that the financial statements comply with the requirements of the companies act 2006 they are 
also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities 
website publication 
the directors are responsible for ensuring the directors’ report and financial statements are made available on a website 
financial statements are published on the company’s website in accordance with legislation in the united kingdom 
governing the preparation and dissemination of financial statements which may vary from legislation in other jurisdictions 
the maintenance and integrity of the company’s website is the responsibility of the directors the directors’ responsibility 
also extends to the ongoing integrity of the financial statements contained therein 
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
remuneration report 
29
scope of report 
the remuneration report sets out the company’s remuneration policy and particularly its approach for directors it also 
explains how the company applies the principles of good corporate governance in relation to remuneration this report 
has been prepared by the remuneration committee and has been approved by the board 
composition and role 
the remuneration committee’s members are steve bodger who is the chairman and bob morton the committee 
is responsible for reviewing all senior executive appointments and determining the group’s policy in respect of the 
terms of employment including remuneration packages of executive directors and for monitoring senior management 
development programmes the constitution and operation of the committee are in compliance with the principles 
which are incorporated in schedule a of the uk corporate governance code the “code” the committee has given 
full consideration to the best practice provisions set out in the code in determining the remuneration packages for 
executive directors 
remuneration policy 
the objective of the group’s remuneration policy is to attract motivate and retain high quality individuals who will 
contribute fully to the success of the group to achieve this objective the group provides competitive salaries and benefits 
to all employees packages are established having regard to current market practice 
executive directors’ remuneration is set to create an appropriate balance between both fixed and performancerelated 
elements performancerelated elements are intended to comprise a significant part of potential remuneration 
remuneration is reviewed each year in light of the group’s business objectives it is the remuneration committee’s 
intention that remuneration should reward achievement of objectives and that these are aligned with shareholders’ 
interests over the medium term 
remuneration consists of the following elements 
• basic salary 
• performancerelated annual bonus 
• benefits 
• defined contribution pension payments and 
• share options 
bonuses and benefits 
the executive directors’ bonus scheme is linked to the group’s yearonyear profit performance and working 
capital management 
divisional performancerelated bonus schemes are in place so that bonuses may be payable to senior executives provided 
their divisional results reach preset profit and cash generation targets 
senior executives’ benefits typically but not necessarily include a car or cash alternative and insurance for life disability 
and health care 
share options 
the company has a number of share option schemes details of which are in note 26 of the consolidated financial 
statements under these schemes share options have been granted to the executive directors and senior executives 
within the group 
the grant of share options is a recognised mechanism practiced by the company to encourage continual improvement 
and align the interests and objectives of the senior management team with those of shareholders over the medium term  armour group plc 
annual report 2011
governance
remuneration report  
continued 
30 
in its review of share options the remuneration committee is mindful of recommended practice which is taken into 
account with other factors that include 
• the available headroom under the schemes for new grants 
• the price of previously granted options and whether these continue to act as the intended incentive and 
• share price movements as compared to the group’s performance 
pension arrangements 
the majority of senior executives are members of a defined contribution pension plan operated by the group or 
alternatively have their own personal pension arrangements to which the group contributes between 7 and 11 
of pensionable salary 
executive directors’ service contracts 
the executive directors have service contracts with the company which are not of fixed duration and are terminable 
by either party giving twelve months’ written notice 
nonexecutive directors 
there are service contracts with the company for the provision of nonexecutive directors’ services which may be 
terminated by either party giving three months’ written notice the fees payable for the services of the nonexecutive 
directors are set by the board 
directors’ remuneration 
the following table summarises the total gross remuneration excluding gains on the exercise of options of the directors 
who served during the year ended 31 august 2011 
  
total remuneration 
excluding pensions 
 
pension contributions 
 
fees 
£000 
basic  
salary  
£000  
bonus 
£000 
benefits
£000 
31 august 
2011
£000 
31 august  
2010 
£000  
 31 august  
2011  
£000  
31 august 
2010
£000
executive      
george dexter  – 164 – 14 178 178  18 17
john harris  – 120 – 12 132 134  13 13
nonexecutive      
bob morton  30 – – – 30 51  – –
steve bodger  13 – – – 13 30  – –
total 2011  43 284 – 26 353 –  31 –
total 2010  81 284 – 28 – 393  – 30
the above figures represent remuneration earned as directors during the relevant year 
the executive directors’ basic salaries have remained unchanged for the fourth consecutive year and no bonuses have 
been awarded over that period benefits relate to the assessable taxation benefits arising from a company car allowance 
and insurance for life disability and health care the reduction in benefits in the current year reflects reduced 
insurance cost 
the nonexecutive directors have reduced their fees for the year ending 31 august 2011 
fees for bob morton’s services inclusive of all expenses are payable to hawk consulting limited a company in which 
he has an interest 
fees for steve bodger’s services are payable to stratys limited a company in which he has an interest 
the figures for pensions shown above are the contributions paid by the company 
neither george dexter nor john harris exercised any options during the current or prior year  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
governance
 
31
directors’ shareholdings 
the directors who served during the year ended 31 august 2011 and who held an interest in the ordinary shares of the 
company were as follows 
 at 31 august 2011 at 1 september 2010
 
ordinary shares 
of 1p each
deferred shares 
of 9p each
options on ordinary 
shares 
ordinary shares of 
10p each 
options on ordinary 
shares
bob morton 30228397 14225152 – 1110000 –
george dexter 1854736 1354736 625000 1354736 625000
john harris 247969 176541 875000 176541 875000
steve bodger 242857 100000 – 100000 –
at the company’s general meeting held on 23 february 2011 each 10p ordinary share then in issue was subdivided into one new ordinary share of 1p each and one 
deferred share of 9p each further information in regard to the share capital reorganisation is given in note 24 of the consolidated financial statements 
at 31 august 2011 in addition to his beneficial interest in the share capital of the company bob morton had a non
beneficial interest in 7758185 ordinary shares of 1p each representing 8 of the ordinary shares in issue and 6120000 
deferred shares of 9p each representing 89 of the deferred shares in issue   
there have been no changes in the directors’ share interest from 1 september 2011 to 5 december 2011 
share options 
the nonexecutive directors are not entitled to participate in the company’s share option schemes 
the share options held by the executive directors are as follows 
1999 unapproved executive share option scheme 
 
options at 
31 august 
2011
movements 
during 
the year
options at 
1 september 
2010
exercise 
price 
p exercise period
george dexter  125000 – 125000 200 10 may 2002 – 9 may 2012
john harris 175000 – 175000 200 10 may 2002 – 9 may 2012
 200000 – 200000 345 24 july 2004 – 23 july 2013
enterprise management incentive share option plan 
 
options at 
31 august 
2011
movements 
during 
the year
options at 
1 september 
2010
exercise 
price 
p exercise period
george dexter  500000 – 500000 200 21 january 2004 – 20 january 2013
john harris  500000 – 500000 200 21 january 2004 – 20 january 2013
the highlow market price of ordinary shares in the company during the year was 1084p – 188p and the market price of 
the ordinary shares at 31 august 2011 was 213p 31 august 2010 1175p 
the details of these share option schemes are set out in note 26 of the consolidated financial statements 
by order of the board 
john harris 
company secretary 
5 december 2011  armour group plc 
annual report 2011
financial statements
independent auditors’ report to the shareholders 
of armour group plc 
32 
we have audited the financial statements of armour group plc for the year ended 31 august 2011 which comprise the 
consolidated statement of comprehensive income consolidated statement of financial position and company balance 
sheet consolidated statement of changes in shareholders equity consolidated statement of cash flows and the related 
notes the financial reporting framework that has been applied in the preparation of the group’s consolidated financial 
statements is applicable law and international financial reporting standards “ifrs” as adopted by the european union 
the financial reporting framework that has been applied in preparation of the company financial statements is applicable 
law and united kingdom accounting standards united kingdom generally accepted accounting practice  
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so that we might state to the company’s members those 
matters we are required to state to them in an auditors’ report and for no other purpose to the fullest extent permitted by 
law we do not accept or assume responsibility to anyone other than the company and the 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 auditors 
as explained more fully in the statement of directors’ responsibilities the directors are responsible for the preparation of 
the financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the financial 
statements in accordance with applicable law and international standards on auditing uk and ireland those standards 
require us to comply with the auditing practices board’s apb’s ethical standards for auditors 
scope of the audit of the financial statements 
a description of the scope of an audit of financial statements is provided on the apb’s website at 
wwwfrcorgukapbscopeprivatecfm  
opinion on financial statements 
in our opinion 
• the financial statements give a true and fair view of the state of the group’s and the company’s affairs as at 
31 august 2011 and of the group’s loss for the year then ended 
• the group’s consolidated financial statements have been properly prepared in accordance with ifrs as adopted by the 
european union 
• the company financial statements have been properly prepared in accordance with united kingdom generally 
accepted accounting practice and 
• the financial statements have been prepared in accordance with the requirements of the companies act 2006 
opinion on other matters prescribed by the companies act 2006 
in our opinion the information given in the directors’ report for the financial year for which the financial statements are 
prepared is consistent with the financial statements  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
 
33
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 company or returns adequate for our audit have not been 
received from branches not visited by us or 
• the company financial statements 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 
john everingham  
senior statutory auditor 
for and on behalf of bdo llp statutory auditor 
gatwick united kingdom 
5 december 2011 
bdo llp is a limited liability partnership registered in england and wales with registered number oc305127 
  armour group plc 
annual report 2011
financial statements
consolidated statement of comprehensive income 
for the year ended 31 august 2011 
34 
note 
31 august  
2011  
£000 
31 august 
2010 
£000
revenue 4 42311 56591
changes in inventory of finished goods and work in progress   503 1057
raw materials and consumables   25386 33559
employee benefits costs  8 8411 9756
depreciation and amortisation expense   1660 1573
other expenses   8016 9474
total expenses excluding exceptional items  43976 55419
exceptional items 5 1442 –
total expenses   45418 55419
lossprofit from operations  47 3107 1172
finance expense  9 454 233
finance income  9  14 8
lossprofit before taxation   3547 947
taxation creditexpense  10  1078 68
lossprofit from continuing operations  2469 879
loss on discontinued operation net of tax 6 485 –
lossprofit for the year  2954 879
other comprehensive income   
exchange gains on translation of foreign operations  56 19 
total other comprehensive income  56 19 
total comprehensive lossincome for the year  2898 898
   
lossearnings per ordinary share  11  
continuing and discontinued operations   
basic  37p 14p
diluted  37p 14p
continuing operations   
basic   31p 14p
diluted   31p 14p
the notes on pages 38 to 63 form part of the consolidated financial statements 
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
consolidated statement of financial position 
at 31 august 2011 
35
 
note  
31 august
2011 
£000
31 august 
2010
£000
noncurrent assets   
goodwill  13 21084 21084
other intangible assets  14  3842 4319
property plant and equipment  15  1415 1829
deferred taxation asset 23 26 –
total noncurrent assets   26367 27232
current assets   
inventories  17  9967 10653
trade and other receivables  18  7192 9523
cash and cash equivalents  19  756 397
total current assets   17915 20573
total assets   44282 47805
current liabilities   
bank overdrafts and borrowings  21  7661 5613
trade and other payables  20  7225 10392
corporation taxation liability   31 182
provisions  22  328 132
total current liabilities   15245 16319
noncurrent liabilities   
borrowings  21  – 480
deferred taxation liability  23  – 946
total noncurrent liabilities   – 1426
total liabilities   15245 17745
total net assets   29037 30060
equity   
share capital  24  7134 6848
share premium  25  10084 8513
other reserves  25  871 871
retained earnings  25  11382 14318
translation reserve  25  138 82
share trust reserve  25  572 572
total equity   29037 30060
these financial statements were approved by the board and authorised for issue on 5 december 2011 
george dexter  john harris 
director  director 
the notes on pages 38 to 63 form part of the consolidated financial statements 
  armour group plc 
annual report 2011
financial statements
consolidated statement of changes in 
shareholders’ equity 
for the year ended 31 august 2011 
36 
  
 
share  
capital  
£000  
share 
premium 
£000 
other 
reserves 
£000 
retained 
earnings 
£000 
translation  
reserve  
£000  
share trust  
reserve  
£000  
total 
equity 
£000
at 1 september 2009 6848 8513 871 13602 63 572 29325
    
total comprehensive income – – – 879 19 – 898
    
sharebased payments  – – – 32 – – 32
dividend paid  – – – 195 – – 195
at 31 august 2010 6848 8513 871 14318 82 572 30060
    
total comprehensive loss – – – 2954 56 – 2898
     
issue of equity 286 1571 – – – – 1857
sharebased payments  – – – 18 – – 18
at 31 august 2011 7134 10084 871 11382 138 572 29037
the notes on pages 38 to 63 form part of the consolidated financial statements  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
consolidated statement of cash flows 
for the year ended 31 august 2011 
37
 
note 
31 august 
2011 
£000
31 august 
2010
£000
cash flow from operating activities   
cash utilised ingenerated from operations  29  1308 1818
income taxes recoveredpaid  82 178
net cash outflowinflow from operating activities   1226 1640
investing activities   
purchase of property plant and equipment   395 401
sale of property plant and equipment   47 36
expenditure on intangible assets   1071 1684
interest received   14 8
net cash used in investing activities   1405 2041
financing activities   
dividend paid   – 195
issue of equity  1857 –
new loans  11870 –
refinancing arrangement costs  305 –
repayment of bank loans   5473 1000
interest paid   365 196
net cash generatedused in financing activities   7584 1391
net increasedecrease in cash cash equivalents and bank overdrafts  30  4953 1792
currency variations on cash cash equivalents and bank overdrafts   63 23
cash cash equivalents and bank overdrafts at the start of the year   4260 2491
cash cash equivalents and bank overdrafts at the end of the year  19  756 4260
the notes on pages 38 to 63 form part of the consolidated financial statements  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
38 
1 accounting policies  
basis of preparation 
the group’s consolidated financial statements have been prepared in accordance with international financial reporting 
standards international accounting standards and interpretations collectively “ifrs” issued by the international 
accounting standards board as adopted by the european union and with those parts of the companies act 2006 applicable 
to companies preparing their financial statements under ifrs 
the principal accounting policies adopted in the preparation of the group’s consolidated financial statements are set out 
below the policies have been consistently applied to all of the years presented unless otherwise stated 
changes in accounting policies 
new standards interpretations and amendments effective from 1 september 2010 
the following new standards interpretations and amendments effective for the first time from 1 september 2010 have not 
had a material effect on the financial statements 
• ifrs 2 amendment group cashsettled sharebased payment transactions from 1 january 2010 
• improvements to ifrs 2010 from 1 january 2010  
• ias 32 amendment classification of rights issues from 1 february 2010 and 
• ifric 19 extinguishing financial liabilities with equity instruments from 1 july 2010 
basis of consolidation 
these consolidated financial statements present the results of the company and its subsidiary undertakings “group” as 
if they form a single entity subsidiary undertakings are entities over which the company has control in terms of the power 
to govern the financial and operating policies of an acquired entity so as to obtain benefits from its activities intercompany 
transactions and balances between entities within the group are therefore eliminated in full 
business combinations 
these consolidated financial statements incorporate the results of business combinations using the purchase method in 
the consolidated statement of financial position the acquired identified assets liabilities and contingent liabilities are 
initially recognised at their fair values at the date of acquisition the results of acquired operations are included in the 
consolidated statement of comprehensive income from the date on which control is obtained 
goodwill 
goodwill arising on the acquisition of a business represents any excess of the fair value of the consideration over the fair 
value of the identifiable assets and liabilities acquired the identifiable assets and liabilities acquired are incorporated into 
the consolidated financial statements at their fair value to the group 
goodwill is not amortised but tested for impairment annually any impairment is recognised immediately in the 
consolidated statement of comprehensive income and is not subsequently reversed on disposal of a business the 
attributable amount of goodwill is included in the determination of the profit or loss on disposal  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
39
1 accounting policies continued 
intangible assets excluding goodwill 
intangible assets excluding goodwill include the following 
a development costs 
both internal and external development costs associated with the production of saleable products are capitalised as an 
intangible asset in accordance with the criteria of ias 38 which include that the asset created can be identified the cost can 
be measured reliably and it is probable that the asset will generate future economic benefits the asset is then amortised 
on a straightline basis over the expected sales period for the product on a product type by product type basis this is 
normally between three and five years 
where no intangible asset can be identified development costs are recognised as an expense in the financial period in 
which they are incurred 
b other intangible assets 
other intangible assets include investments recorded at cost in software which is separately identifiable from the 
hardware on which it runs and acquired brands the assets so created are amortised on a straightline basis over their 
expected useful lives as follows software between three and five years and brands twenty years 
where the software is not separately identifiable from the hardware it is included with the hardware in property plant 
and equipment 
impairment of nonfinancial assets 
impairment tests on goodwill and other intangible assets with indefinite useful lives are undertaken annually for the 
reporting year end other nonfinancial assets are subject to impairment tests whenever events or changes in 
circumstances indicate that their carrying amount may not be recoverable where the carrying value of an asset is judged 
to exceed its recoverable amount ie the higher of value in use or the fair value less costs to sell the asset is written 
down accordingly 
where it is not possible to estimate the recoverable amount of an individual asset the impairment test is carried out on the 
asset’s cashgenerating unit ie the lowest group of assets in which the asset belongs for which there are separately 
identifiable cash flows goodwill is allocated on initial recognition to each of the group’s cashgenerating units that are 
expected to benefit from the synergies of the combination giving rise to the goodwill 
impairment charges and the reversal of previous impairment charges are expensedcredited to the consolidated 
statement of comprehensive income 
property plant and equipment 
property plant and equipment are stated at cost less the accumulated depreciation and where appropriate provision for 
impairment in value or estimated loss on disposal property plant and equipment are depreciated over their estimated 
useful lives on a straightline basis as follows 
leasehold improvements   over the term of the lease 
plant and fixtures and fittings  10 – 33 
motor vehicles   20 – 25 
foreign currencies 
the results of overseas subsidiary undertakings are translated into sterling at the actual rates of exchange during the 
financial period and their balance sheets at the rates ruling at the financial period end gains or losses arising on the 
translation of the opening net assets and results of overseas subsidiary undertakings are recognised in other 
comprehensive income and taken to the group’s translation reserve 
transactions denominated in foreign currencies are translated into sterling at the exchange rate in operation on the date 
of the transaction monetary assets and liabilities originally denominated in foreign currencies are translated into sterling 
at the exchange rate in operation at the date of the financial period end exchange gains and losses are reported as part of 
the consolidated statement of comprehensive income  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
40 
1 accounting policies continued 
financial instruments 
a derivative financial instruments 
the group uses foreign exchange forward contracts to hedge financial risks to changes in foreign currency exchange 
rates these financial instruments are included in the consolidated statement of financial position as assets or liabilities 
at their fair values the group does not use derivative financial instruments for speculative purposes but its financial 
instruments do not qualify for hedge accounting under ifrs and consequently changes in their fair values are recognised 
in the consolidated statement of comprehensive income as they arise  
b bank borrowings 
bank borrowings are initially recognised at fair value such interest bearing liabilities are subsequently measured at 
amortised cost using the effective interest rate method which ensures that any interest expense over the period to 
repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position 
the interest expense includes initial transaction costs and premiums payable on redemption as well as any interest 
coupon payable while the liability is outstanding 
c trade receivables and trade payables 
trade receivables and trade payables are nonderivative assets and liabilities of fixed or determinable amounts that are 
not quoted in an active market they arise principally through the provision of goods and services to customers trade 
debtors or the purchase of goods and services trade creditors and accruals they are initially recognised at fair value and 
subsequently carried at amortised cost and in the case of trade receivables less any provision for impairment 
inventories 
inventories have been valued at the lower of cost and net realisable value cost includes all direct expenditure to bring 
items to their condition and location at the accounting date together with in the case of goods manufactured by the group 
an appropriate proportion of production overhead expenditure attributable thereto 
cash and cash equivalents 
cash and cash equivalents comprise cash in hand at bank and deposits where the amounts are not part of the group’s 
setoff arrangements and in the case of deposits where they are repayable within three months and are subject to an 
insignificant risk of a change in value bank overdrafts are shown within current liabilities in the consolidated statement 
of financial position but are included within cash and cash equivalents in respect of the consolidated statement of 
cash flows 
provisions 
provisions are recognised when the group has a present obligation legal or constructive as a result of a past event it is 
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable 
estimate can be made of the amount of the obligation the provision is recorded at the present value of the expenditures 
expected to be required to settle the obligation using a discount rate that reflects the current market assessment of the 
time value of money and the risks specific to the obligation the increase in the provision due to the passage of time is 
recognised as a finance cost 
deferred taxation 
deferred taxation is the taxation expected to be payable or recoverable on differences between the carrying amounts of 
assets and liabilities in the financial statements and the corresponding taxation bases used in the computation of taxable 
profit it is accounted for using the balance sheet liability method deferred taxation liabilities are generally recognised for 
all taxable temporary differences except goodwill deferred taxation assets are recognised to the extent that it is probable 
that taxable profit will be available against which deductible temporary differences can be utilised 
deferred taxation is calculated at the taxation rate that is expected to apply in the financial period when the liability is 
settled or the asset is realised  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
41
1 accounting policies continued 
leases 
where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the 
group a “finance lease” the asset is treated as if it had been purchased outright the amount initially recognised as an 
asset is the present value of the minimum lease payments payable over the term of the lease the corresponding lease 
commitment is shown as a liability lease payments are analysed between capital and interest the interest element is 
charged to the consolidated statement of comprehensive income over the period of the lease and is calculated so that it 
represents a constant proportion of the lease liability the capital element reduces the balance owed to the lessor 
where substantially all of the risks and rewards incidental to ownership are retained by the lessor an “operating lease” 
the total rental payable under the lease is charged to the consolidated statement of comprehensive income on a straight
line basis over the lease term 
revenue 
revenue represents the invoiced value of goods sold and the value of services provided to third party customers excluding 
value added tax revenue is recognised when the risks and rewards of owning the goods have passed to the customer 
which is generally on delivery or when services have been provided 
sharebased payments 
where share options are awarded to employees the fair value of the option at the date of grant is charged to the 
consolidated statement of comprehensive income over the vesting period nonmarket vesting conditions are taken into 
account by adjusting the number of equity instruments expected to vest at each balance sheet date so that ultimately the 
cumulative amount recognised over the vesting period is based on the number of options that eventually vest market 
vesting conditions are factored into the fair value of the options granted as long as all other vesting conditions are 
satisfied a charge is made irrespective of whether the market vesting conditions are satisfied the cumulative expense is 
not adjusted for failure to achieve a market vesting condition 
where share options are cancelled their remaining unamortised fair value is fully written off through the consolidated 
statement of comprehensive income 
pension costs 
the group operates defined contribution arrangements the pension costs payable by the group in the financial period are 
charged to the consolidated statement of comprehensive income 
dividends 
equity dividends are recognised when they become legally payable which is when they are approved by the shareholders 
at the annual general meeting they are charged directly to equity 
armour employees’ share trust 
as the company is deemed to have control of the armour employees’ share trust it is treated as a subsidiary 
undertaking the assets other than investments in the company’s ordinary shares liabilities income and expenses are 
included on a linebyline basis in the consolidated financial statements the investment in the company’s ordinary 
shares is shown in the share trust reserve and is treated as a deduction from equity in the consolidated statement of 
financial position  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
42 
1 accounting policies continued 
standards amendments and interpretations to existing standards not yet effective 
the following standard has been published but is not effective for the periods presented has not been endorsed by the 
european union and the group has chosen not to early adopt 
ifrs 9 financial instruments effective for accounting periods beginning on or after 1 january 2013 it is envisaged that 
this standard will replace ias 39 financial instruments recognition and measurement in its entirety the group is 
currently assessing the impact of the new standard on its consolidated financial statements 
at the date of authorisation of these financial statements the following standards amendments or revisions to standards 
and interpretations of existing standards were in issue but were not yet effective andor had not been endorsed by the 
european union they have not been applied to the consolidated financial statements 
applicable to the group from 1 september 2011 
• ifrs 7 amendment disclosures – transfers of financial assets from 1 july 2011 
• ifrs 1 amendment severe hyperinflation and removal of fixed dates for firsttime adopters from 1 july 2011 
applicable to the group subsequent to 31 august 2012 
• ias 12 amendment deferred tax – recovery of underlying assets from 1 january 2012 
• ias 1 amendment presentation of items of other comprehensive income from 1 july 2012 
• ifrs 10 consolidated financial statements from 1 january 2013 
• ifrs 12 disclosure of interests in other entities from 1 january 2013 
• ias 13 fair value measurement from 1 january 2013 
• ias 27 separate financial statements from 1 january 2013 
• ias 19 employee benefits from 1 january 2013 
the group is currently assessing the impact of these amendments revisions and interpretations on its consolidated 
financial statements but at this stage does not consider that they will have a significant material effect save for any 
additional disclosure requirements  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
43
2 accounting estimates and judgements 
a impairment of goodwill and other intangible assets 
the group is required to test on an annual basis whether goodwill has suffered any impairment other intangible assets 
are tested for impairment when indication of impairment exists the recoverable amount is determined based on value in 
use calculations the use of this method requires the estimation of future cash flows and the choice of a discount rate in 
order to calculate the present value of the cash flows actual outcomes may vary more information on goodwill 
impairment testing including the carrying value is included in note 13 
b useful lives of intangible assets and property plant and equipment 
intangible assets and property plant and equipment are amortised or depreciated over their useful lives useful lives are 
based on the management’s estimates of the period that the assets will generate revenue which are periodically reviewed 
for continued appropriateness changes to estimates can result in significant variations in the carrying value and amounts 
charged to the consolidated statement of comprehensive income in specific periods more details including the carrying 
values are included in notes 14 and 15 
c fair value of financial instruments 
the group determines the fair value of financial instruments that are not quoted using valuation techniques those 
techniques are significantly affected by the assumptions used including discount rates and estimates of future cash flows 
in that regard the derived fair value estimates cannot always be substituted by comparison with independent markets and 
in many cases may not be capable of being realised immediately 
more details on financial instruments are given in note 3 
d inventories 
the companies within the group that carry inventory review the net realisable value of and demand for their inventory on 
a regular basis and particularly at the year end to provide assurance that it is stated at the lower of cost and net realisable 
value factors that could impact estimated demand and selling prices include the timing and success of future 
technological innovations competitor activities supplier prices and economic trends 
e sharebased payments 
the fair value of share option sharebased payments is estimated using the blackscholes valuation model as at the date 
of grant and using certain assumptions 
f provisions 
the group recognises provisions in accordance with its accounting policy described on page 40 in arriving at estimates for 
provisions estimates and judgements are made in particular with regard to timing and amount calculations are based on 
anticipated future cash flows relating to the relevant event which are estimated by management and where appropriate 
supported by the use of external advisers 
g taxation 
the group is subject to taxation in several jurisdictions and judgement is required in determining the provision for income 
and deferred taxation the group recognises taxation assets and liabilities based upon estimates and assessments of 
many factors including past experience advice received on the relevant taxation legislation and judgements about the 
outcome of future events to the extent that the final outcome of these matters is different from the amounts recorded 
such differences will impact on the taxation charge made in the consolidated statement of comprehensive income in the 
period in which such determination is made  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
44 
3 financial instruments and risk management  
the principal financial instruments used by the group from which financial instrument risk arises are as follows 
• trade receivables 
• cash at bank 
• bank overdrafts 
• trade and other payables 
• floating rate loans and 
• forward currency contracts 
the following tables show financial instruments by category 
 31 august 2011 31 august 2010 
 
loans and 
receivables 
£000 
derivative 
financial 
instruments 
£000 
total 
£000 
loans and 
receivables  
£000  
derivative 
financial 
instruments 
£000  
total 
£000
assets   
trade and other receivables  6200 – 6200 8129 1 8130
cash and cash equivalents  756 – 756 397 – 397
 6956 – 6956 8526 1 8527
 
 31 august 2011 31 august 2010 
 
derivative 
financial 
instruments 
£000
other
 financial 
liabilities 
£000 
total 
£000 
derivative 
financial 
instruments 
£000 
other 
 financial 
liabilities  
£000  
total 
£000
liabilities   
borrowings  – 7661 7661 – 6093 6093
trade and other payables  – 7225 7225 23 10369 10392
 – 14886 14886 23 16462 16485
valuation hierarchy 
the adoption of the amendment to ifrs 7 requires enhanced disclosures about fair value measurements of financial 
instruments through the use of a threelevel fair value hierarchy that prioritises the valuation techniques used in fair value 
calculations 
the levels can be broadly described as follows 
• level 1 – use of unadjusted quoted prices in active markets for identical assets or liabilities  
• level 2 – use of observable inputs other than quoted prices included within level 1 such as quoted prices for similar 
assets or liabilities in active markets and  
• level 3 – use of inputs not based on observable market data but reflecting management’s own assumptions about 
pricing the asset or liability   business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
45
3 financial instruments and risk management continued 
the group’s financial instruments measured at fair value are categorised as follows 
 
level 1
£000 
level 2 
£000 
level 3
£000
total
£000
at 31 august 2011  
assets  
derivative assets – – – –
total assets – – – –
liabilities  
derivative liabilities – – – –
total liabilities – – – –
 
 
level 1
£000 
level 2 
£000 
level 3
£000
total
£000
at 31 august 2010  
assets  
derivative assets – 1 – 1
total assets – 1 – 1
liabilities  
derivative liabilities – 23 – 23
total liabilities – 23 – 23
the group encounters through its operations the following financial risks 
• credit risk 
• market risk being 
 a interest rate risk 
 b currency risk 
• liquidity risk 
• capital management 
in common with all other businesses the group encounters risks that arise from its use of financial instruments this note 
describes the group’s objectives policies and processes for managing those risks and the methods used to measure 
them additional information in respect of these risks is included throughout the consolidated financial statements 
credit risk 
credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its 
contractual obligations the group is mainly exposed to credit risk from credit sales it is the group’s policy implemented 
in the operating subsidiary undertakings to assess the credit worthiness of customers prior to opening new accounts this 
assessment includes an internal assessment of the acceptable risk corroborated where available with an external rating 
from an acceptable credit rating agency purchase limits are established for customers which represent the maximum 
open amount authorisation to allow sales that would cause this limit to be exceeded is required from the operating 
subsidiary undertaking senior management team if this authorisation is not given no further sales are made to that 
customer until payment has been received 
credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions the group’s main 
daytoday banking arrangements were transferred in september 2011 to lloyds tsb bank plc amounts held by overseas 
operations with foreign banks are kept to a minimum 
the group does not enter into derivatives to manage credit risk although in certain cases may take steps to mitigate such 
risks if it is sufficiently concentrated 
quantitative disclosure of the credit risk exposure in relation to trade and other receivables is given in note 18  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
46 
3 financial instruments and risk management continued 
market risk 
market risk arises from the group’s interest bearing tradable and foreign currency financial instruments it is the risk that 
the fair value or future cash flows of a financial instrument will fluctuate because of changes in the interest rates interest 
rate risk or foreign exchange rates currency risk 
a interest rate risk 
the group is exposed to cash flow interest rate risk from its overdraft and loan facilities which carry interest at variable 
rates the group’s policy is to balance exposure to interest rate risk with the cost and flexibility of funding this policy is 
managed centrally and subsidiary undertakings are generally not permitted to borrow from external sources and not 
without central approval 
the requirement for interest rate hedging is reviewed periodically being a mechanism available to manage interest rate 
risk these reviews acknowledge that interest rate hedges will not necessarily protect the group from the risk of paying 
rates in excess of current market rates nor eliminate cash flow risk associated with the variability in interest payments 
judgements are therefore exercised in the context of the market and the materiality of the potential risk compared to the 
cost at 31 august 2011 none 31 august 2010 none of the group’s borrowings were hedged against interest rate 
movements 
based upon the average of the group’s net debt during the year it is estimated that a risefall of one percentage point in 
the principal interest rates to which the group is exposed would decreaseincrease profit before taxation by approximately 
£72000 31 august 2010 £73000 
b currency risk 
currency risk arises because the group has operations located in various parts of the world whose functional currencies 
are different from that of the group however these are not currently considered to be of a size that would warrant use of 
a hedge against the net investments in these overseas operations 
currency risk also arises when operating subsidiary undertakings enter into transactions denominated in a currency that 
is different from their functional currency the principal exposure is through purchases made from suppliers in north 
america and the far east which are denominated in us dollars 
the group’s policy is where possible to allow operating subsidiary undertakings to settle foreign currency transactions 
with cash generated in the same functional currency from their normal operations if this is not possible but cash in the 
required functional currency exists elsewhere in the group it will be transferred generally however purchases in foreign 
currency exceed receipts consequently the group will enter into forward currency contracts to protect against currency 
risk forward currency contracts typically crystallise on a monthly basis account for up to half the projected forward 
monthly exposure and may be taken out up to twelve months forward judgement is exercised with respect to the 
appropriate time to enter into forward currency contracts and in the context of the overall funding facilities available 
to the group 
although the board accepts that this policy does not protect the group entirely from currency risk or from incurring an 
exchange rate in the future that is adverse to the then spot rate in operation it considers that it achieves an appropriate 
balance against exposure to the risk 
financial instruments within individual group companies that are not denominated in the functional currency of the 
company concerned at 31 august 2011 were as follows 
net foreign currency monetary assetsiiabilities 
functional currency of group operation  
euro
£000 
us dollar 
£000  
other 
£000  
total
£000
at 31 august 2011   
sterling 200 583 – 783
at 31 august 2010   
sterling  288 1151 37 1476 business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
47
3 financial instruments and risk management continued 
the group’s major nonfunctional currency exposure is to the us dollar and euro it is estimated that the impact of a 10 
strengthening of the us dollar and euro would decrease profit before taxation by approximately £87000 31 august 2010 
£160000 a 10 weakening of the us dollar and euro would increase profit before taxation by approximately £71000 
31 august 2010 £131000 
it should be noted that the sensitivity indication given above reflects the impact on financial instruments held at the 
financial reporting date it does not reflect changes in revenue or costs that may result from changing exchange rates 
liquidity risk 
liquidity risk arises from the group’s management of working capital and the finance charges and principal repayments 
on its debt instruments it is the risk that the group will encounter difficulty in meeting its financial obligations as they 
fall due 
the group finances its operations through a mix of equity and borrowings the group’s objective is to provide funding for 
future growth and achieve a balance between continuity and flexibility through its borrowing arrangements at the year end 
the group was able to draw on funds based upon the value within its uk trading subsidiary undertakings of unpaid sales 
invoices and stock held in their uk warehouses at 31 august 2011 the group had undrawn facilities of £08 million 31 
august 2010 £33 million further details of the group’s facilities and changes thereto over the year are given in the 
finance director’s report on page 15 and in note 21 
if from time to time the group has surplus funds interest income is earned on a daily basis 
capital management 
the group manages its capital structure in order to safeguard the going concern of the group and provide returns for 
shareholders and benefits for other stakeholders the capital structure of the group consists of debt which includes 
borrowings disclosed in note 21 cash and cash equivalents and equity attributable to equity holders of the company 
comprising issued capital reserves and retained earnings 
the group may maintain or adjust its capital structure by adjusting the amount of dividend paid to shareholders returning 
capital to shareholders issuing new shares or selling assets to reduce debt 
4 segment information 
the group operates in the following main business segments 
armour automotive the design manufacture and supply of products for the invehicle communications and 
entertainment market 
armour home    the design manufacture and supply of products into the hifi home theatre home entertainment 
and office furniture markets 
armour asia   the sale of armour automotive and armour home products into asian markets and provision of 
supplier support services including quality control to the uk businesses and 
central operations  the provision of groupwide support services including finance and future product concepts to the 
other business segments within the group   armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
48 
4 segment information continued 
these segments are considered on the basis of different products and services the accounting policies of the operating 
segments are the same as those described in the accounting policies in note 1 
year ended 31 august 2011 
armour 
automotive 
£000 
armour
home 
£000 
armour  
asia 
 £000 
central  
operations  
£000  
total 
£000
revenue 14354 26870 1087 – 42311
underlying profitloss for the period 768 1059 275 1099 1665
exceptional items 106 1336 – – 1442
profitloss from continuing operations 662 2395 275 1099 3107
balance sheet   
assets 10415 14287 422 19158 44282
liabilities 5314 7952 384 1595 15245
net assets 5101 6335 38 17563 29037
other   
additions to noncurrent assets 339 1086 41 – 1466
finance expense 118 194 – 142 454
finance income 6 6 – 2 14
taxation creditexpense 14 1122 66 8 1078
depreciation 161 597 8 8 774
amortisation of intangible assets 1 250 – 1297 1548
sharebased payments 4 12 – 2 18
 
year ended 31 august 2010 
armour 
automotive 
£000 
armour 
home 
£000 
armour  
asia  
£000 
central  
operations  
£000  
total 
£000
revenue  13252 42794 545 – 56591
profitloss from operations 1632633499 1125 1172
balance sheet   
assets  11235 21696 376 14498 47805
liabilities  3680 9274 344 4447 17745
net assets  7555 12422 32 10051 30060
other   
additions to noncurrent assets  350 1724 9 2 2085
finance expense 19 11 – 203 233
finance income 5 3 – – 8
taxation expenseincome 16 252 4 204 68
depreciation  178 403 7 8 596
amortisation of intangible assets  213 762 – 2 977
sharebased payments 4 25 – 3 32
geographical information 
revenue by 
location of customers  
total noncurrent assets  
by location 
2011
£000
2010
£000 
2011 
£000 
2010
£000
united kingdom 31771 45077 26316 27214
sweden 2103 1927 8 10
france 1328 1461 – –
hong kong 940 1785 23 8
other countries 6169 6341 20 –
 42311 56591 26367 27232
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
49
5 exceptional items 
over the course of the year and in response to the economic environment the group has implemented a restructuring 
programme particularly within the armour home division the restructuring involved redundancies and the closure of 
various uk operational activities which in turn has necessitated the writedown of various assets held by the subsidiary 
undertakings the exceptional costs incurred are shown below 
 £000
redundancy and agency termination costs 638
amounts writtenoff tangible fixed assets 224
amounts writtenoff intangible fixed assets 438
property exit relocation and other associated costs 142
total exceptional items 1442
6 discontinued operations 
at the start of the year in response to customer indicated demand the group setup a chinese manufacturing facility 
due to the subsequent curtailment of demand continued operation of this facility which required a steady and reliable 
production volume was no longer viable consequently the facility was closed in may 2011 the costs of setting up and 
then terminating this now discontinued operation and the associated tax credit are shown below  
result of discontinued operation 
31 august  
2011 
£000 
31 august
2010
£000
intragroup revenue 342 –
operating expenses 959 –
depreciation of tangible fixed assets 2 –
tax credit 134 –
loss for the year 485 –
 
loss per share from discontinued operation 
31 august 
2011 
pence 
31 august 
2010
pence
basic loss per share 06 –
diluted loss per share 06 –
the statement of cash flows includes the following amounts relating to discontinued operations 
 
31 august 
2011 
£000 
31 august 
2010
£000
operating activities 390 –
investing activities 19 –
net cash utilised by discontinued operations 409 –
  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
50 
7 lossprofit from operations 
 
31 august  
2011  
£000  
31 august 
2010
£000
lossprofit from operations is stated after chargingcrediting  
depreciation of property plant and equipment 774 596
amortisation and impairment of intangible fixed assets note 14  1548 977
profit on disposal of property plant and equipment  14 17
research and development expenditure  611 716
operating lease rentals  
 hire of plant and machinery  201 212
 other  1202 1413
lossgain on financial instruments  92 424
foreign exchange gainloss 87 289
 
 
31 august  
2011 
£000  
31 august 
2010
£000
services provided by the company’s auditors and its associates  
audit services  
fees payable to the company’s auditors for the audit of the company 
and consolidated financial statements  15 16
fees payable to the company’s auditors and its associates for other services  
audit of the company’s subsidiary undertakings pursuant to legislation  66 69
taxation services  14 14
 95 99
8 staff and key management 
the aggregate amounts payable to people employed by the group including directors during the year was as follows 
 
31 august  
2011  
£000  
31 august 
2010
£000
wages and salaries  8435 9178
social security costs  876 995
pension costs  289 292
sharebased payments  18 32
total employment costs  9618 10497
amount capitalised as development  490 741
exceptional items 587 –
discontinued operations 130 –
 8411 9756
the average number of people employed by the group was 
 
31 august  
2011  
31 august 
2010
armour automotive 98 114
armour home  148 183
armour asia 8 8
central operations  9 9
 263 314
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
51
8 staff and key management continued 
directors’ remuneration was 
 
31 august 
2011 
£000 
31 august 
2010
£000
emoluments 310 312
amounts paid to third parties for directors’ services  43 81
company contributions to money purchase pension schemes  31 30
 384 423
no options were exercised by the directors and no gains were made in either the current or prior year two directors 
accrued pension benefits 
the remuneration of the highest paid director amounted to £178000 31 august 2010 £178000 and company 
contributions to the defined contribution pension scheme amounted to £18000 31 august 2010 £17000  
further information in regard to the directors’ remuneration interests in ordinary shares and interests in share options is 
included in the remuneration report on pages 29 to 31 
key management remuneration was 
 
31 august 
2011 
£000
31 august 
2010
£000
emoluments 769 767
amounts paid to third parties for directors’ services  43 81
contributions to money purchase pension schemes  72 67
sharebased payments  7 12
 891 927
exceptional items 115 –
 776 927
the amounts shown above for key management comprise amounts in respect of the directors of armour group plc as 
shown in the remuneration report on page 30 and the managing directors and finance directors of armour automotive 
and armour home the prior year comparatives have been changed to reflect this structure 
9 finance income and expense 
 
31 august 
2011 
£000
31 august 
2010
£000
finance income 
interest received on bank deposits  14 8
finance expense 
unwinding of discounts  – 10
loans and overdrafts  320 185
bank loan arrangement costs expensed  134 38
 454 233
  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
52 
10 taxation  
 
31 august  
2011  
£000 
31 august 
2010
£000
current taxation creditexpense  
uk corporation tax on result for the year  – –
adjustment in respect of prior years  258 261
income taxation of overseas operations  24 42
total current taxation credit 234 219
  
deferred taxation creditexpense  
uk operations  1227 70
adjustment in respect of prior years  240 228
overseas operations  9 11
total deferred taxation creditexpense  978 287
total taxation creditexpense  1212 68
  
taxation creditexpense from continuing operations 1078 68
taxation credit from discontinued operations 134 
total taxation creditexpense 1212 68
the reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the 
united kingdom applied to the result for the year are as follows  
 
31 august  
2011  
£000 
31 august 
2010
£000
lossprofit for the year 2954 879
total taxation creditexpense 1212 68
lossprofit before taxation 4166 947
  
lossprofit multiplied by the rate of uk corporation tax of 2716 2010 28  1131 265
effects of  
expenses not deductible for taxation purposes  52 31
taxation credits  134 189
lower taxation rates on overseas profit and marginal relief  6 6
differences arising from variation of taxation rates 25 –
adjustments in respect of prior years  18 33
total taxation creditexpense  1212 68
11 lossearnings per ordinary share 
basic lossearnings per ordinary share are calculated using the weighted average number of ordinary shares in issue 
during the financial year of 79850588 31 august 2010 65056067 diluted lossearnings per ordinary share are 
calculated with reference to 79850588 31 august 2010 65056067 ordinary shares the effect of the exercise of options 
on the weighted average number of ordinary shares in issue is nil 31 august 2010 nil 
at the company’s general meeting held on 23 february 2011 the share capital was reorganised which gave rise to the 
creation of deferred shares note 24 these deferred shares have restricted and minimal rights whereby holders are not 
entitled to receive any dividend or other distribution the deferred shares are therefore excluded from the weighted 
average and the diluted weighted average ordinary shares in issue during the financial year 
at 31 august 2011 the armour employees’ share trust held 3424000 31 august 2010 3424000 ordinary shares 
the weighted average number of ordinary shares held by the armour employees’ share trust during the year of 3424000 
31 august 2010 3424000 is not included in either the weighted average or diluted weighted average ordinary shares in 
issue during the financial year  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
53
11 lossearnings per ordinary share continued 
underlying lossearnings per ordinary share are also shown calculated by reference to earnings before exceptional 
items discontinued operations and sharebased payments the directors consider that this gives a useful additional 
indication of underlying performance it should be noted that the term “underlying” is not defined under ifrs and may not 
therefore be comparable with similarly titled profit measures reported by other entities 
 31 august 2011 31 august 2010 
 £000 
basic
p 
diluted
p £000 
basic
p 
diluted
p
lossprofit for the year  2954 37 37 879 14 14
discontinued operations net of tax 485 06 06 – – –
continuing operations 2469 31 31 879 14 14
exceptional items net of tax 1045 13 13 – – –
sharebased payments  18 – – 32 – –
underlying lossearnings  1406 18 18 911 14 14
12 dividend 
the board did not recommended a dividend for the year ended 31 august 2010 and has not recommended a final dividend 
for the year ended 31 august 2011 
the dividend proposed in the financial statements as at 31 august 2009 and approved by shareholders at the annual 
general meeting held on 28 january 2010 is shown as paid in the 2010 comparative figures 
13 goodwill and impairment 
 
31 august 
2011 
£000 
31 august 
2010
£000
at the start and end of the year  21084 21084
goodwill acquired in business combinations and carried in the consolidated statement of financial position is allocated to 
the cashgenerating units “cgus” that are expected to benefit from that business combination the carrying amount of 
goodwill has been allocated as follows 
 
31 august 
2011 
£000 
31 august 
2010
£000
armour automotive 2088 2088
armour home  18996 18996
at the end of the year  21084 21084
the recoverable amounts of the cgus are determined from value in use calculations the key assumptions for the value in 
use calculations are those regarding discount rates growth rates expected sales prices and costs during the period 
management estimates discount rates that reflect current market assessments of the time value of money and the risks 
specific to the cgus the growth rates selling prices and direct costs are based on past experience and expectations of 
future changes in the market 
the group prepares cash flow forecasts derived from the most recent financial budgets approved by management and 
extrapolates cash flows for the following years based upon estimated growth rates 
the extrapolated cash flows have been prepared for 10 years with an average growth rate of 3 31 august 2010 3 the 
pretaxation rate used to discount the cash flows was 10 31 august 2010 15  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
54 
14 other intangible assets 
 31 august 2011 31 august 2010 
 
computer 
software  
£000  
brands 
£’000 
development 
costs 
£000 
total 
£000 
computer 
software 
£000 
brands 
£’000 
development 
costs  
£000  
total 
£000
cost     
at the start of the year  610 500 6364 7474 543 – 4747 5290
additions  61 – 1010 1071 67 500 1617 2184
disposals  49 – 790 839 –– – –
at the end of the year  622 500 6584 7706 610 500 6364 7474
amortisation     
at the start of the year  518 24 2613 3155 457 – 1721 2178
charge for the year  51 24 983 1058 61 24 892 977
impairment charge  – – 490 490 –– – –
disposals  49 – 790 839 –– – –
at the end of the year  520 48 3296 3864 518 24 2613 3155
net book value     
at the end of the year  102 452 3288 3842 92 476 3751 4319
of the additions in the prior year the £500000 of brands acquired was for a noncash consideration in the acquisition of the 
audica business ifrs 3 disclosures have not been made as this is not considered a material transaction during the year 
15 property plant and equipment 
leasehold 
improvements 
£000 
motor 
vehicles 
£000 
plant and 
equipment  
£000  
fixtures and 
fittings  
£000  
total 
£000
cost   
at 1 september 2010 688 349 3374 1193 5604
additions  – – 294 101 395
disposals  28 125 415 38 606
foreign exchange movement – – 5 2 3
at 31 august 2011 660 224 3258 1254 5396
depreciation   
at 1 september 2010 255 304 2366 850 3775
charge for the year  70 29 559 118 776
disposals  28 120 408 17 573
foreign exchange movement – – 4 1 3
at 31 august 2011 297 213 2521 950 3981
net book value   
at 1 september 2010 433 45 1008 343 1829
at 31 august 2011 363 11 737 304 1415
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
55
15 property plant and equipment continued 
leasehold 
improvements 
£000 
motor 
vehicles 
£000 
plant and 
equipment  
£000  
fixtures and 
fittings 
£000 
total 
£000
cost  
at 1 september 2009 635 508 3176 1056 5375
additions  53 7 204 137 401
disposals  – 166 6 1 173
foreign exchange movement ––– 1 1
at 31 august 2010 688 349 3374 1193 5604
depreciation  
at 1 september 2009 161 385 2138 647 3331
charge for the year  94 69 231 202 596
disposals  – 150 4 – 154
foreign exchange movement ––1 1 2
at 31 august 2010 255 304 2366 850 3775
net book value  
at 1 september 2009 474 123 1038 409 2044
at 31 august 2010 433 45 1008 343 1829
at 31 august 2011 and 31 august 2010 there were no assets held under finance leases 
16 subsidiary undertakings 
the principal subsidiary undertakings of armour group plc all of which have been included in these consolidated 
financial statements are as follows 
 
 
proportion of ownership  
at 31 august 
 
country of incorporation  
2011

2010

armour automotive group limited  great britain  100 100
armour hong kong limited  hong kong   100 100
armour automotive   
armour automotive limited  great britain  100 100
armour nordic ab  sweden   100 100
armour nordic as norway  100 100
armour home   
armour home electronics limited  great britain   100 100
alphason designs limited  great britain   100 100
note 4 on pages 47 and 48 describes the nature of the businesses contained within each business segment 
17 inventories 
 
31 august 
2011
£000 
31 august 
2010
£000
raw materials and consumables  1102 1167
finished goods and goods for resale  8865 9486
total inventories  9967 10653
  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
56 
18 trade and other receivables 
 
31 august  
2011  
£000 
31 august
2010
£000
trade receivables  6502 8280
less provision for impairment of trade receivables  382 292
net trade receivables  6120 7988
other receivables  80 141
prepayments  992 1393
derivative financial instruments  – 1
total trade and other receivables  7192 9523
there is no material difference between the net book amount and the fair value of current trade and other receivables due 
to their shortterm nature 
there is no particular concentration of credit risk to the group’s trade receivables as the group has a large number of 
customers the provision for impairment is analysed as follows 
 
31 august  
2011  
£000 
31 august
2010
£000
at 1 september  292 416
consolidated statement of comprehensive income charge  234 125
written off as uncollectable  144 249
at 31 august  382 292
the creation and release of provision for impaired receivables has been included in the consolidated statement of 
comprehensive income under other expenses 
trade and other receivables that have not been received within the payment terms agreed are classified as overdue the 
ageing of overdue amounts at 31 august is as follows 
31 august 2011  31 august 2010 
impaired 
£000
not impaired 
£000 
impaired  
£000 
not impaired
£000
past due 0 – 3 months  60 675 25 596
past due 4 – 6 months  97 120 60 80
past due 7 – 12 months  45 41 19 22
past due over 12 months  180 – 188 32
 382 836 292 730
19 cash and cash equivalents 
 
31 august  
2011  
£000 
31 august
2010
£000
cash at bank and in hand being cash and cash equivalents in the consolidated statement 
of financial position  756 397
less overdrafts note 21 – 4657
cash cash equivalents and bank overdrafts in the consolidated statement of cash flows  756 4260
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
57
20 trade and other payables – current 
 
31 august 
2011 
£000
31 august
2010
£000
trade payables  3567 6838
other taxation and social security  805 964
other payables  974 925
accruals  1879 1642
derivative financial instruments  – 23
total trade and other payables  7225 10392
there is no material difference between the net book amount and fair value of trade and other payables due to their 
shortterm nature 
21 borrowings 
31 august 2011  31 august 2010 
fair value 
£000
carrying 
amount  
£000  
fair value 
£000
carrying 
amount
£000
noncurrent   
secured bank term loan – –  480 480
current   
secured bank term loans – –  956 956
other secured loans 7661 7661  ––
secured overdraft note 19 – –  4657 4657
 7661 7661  5613 5613
total borrowings  7661 7661  6093 6093
the group’s previous principal funding arrangements with national westminster bank plc were in the form of loan and 
overdraft the bulk of which were subject to maturity in february 2011 in december 2010 the group changed its funding to 
a three year assetbased lending agreement with ge commercial finance limited under which the group’s subsidiary 
undertakings can borrow funds based on the value of unpaid sales invoices capped at £10 million and stock held in their 
uk warehouses capped at £6 million amounts borrowed are secured by way of a cross guarantee and debenture over 
the assets of the group companies based in the uk 
amounts borrowed are subject to a floating rate of interest being three month libor plus margin at 31 august 2011 the 
interest rate applicable to the amount borrowed was 29 31 august 2010 175  
in july 2011 the group entered into a £12 million loan from hawk investment holdings limited this loan is for a period of 
364 days carries interest at 1 per month and can be repaid at any time at the request of the company with no early 
redemption cost the loan is secured by a debenture that ranks behind that held by ge commercial finance limited 
the maturity of noncurrent borrowing is as follows 
 
31 august 
2011
£000
31 august
2010
£000
between one and two years  – 516
between two and five years  – –
 – 516
although the current agreement is for a period of three years to december 2013 each amount borrowed under the asset 
based lending arrangement is considered repayable within one year and will be replaced with new borrowings on an on
going basis the prior year figures are based on the previous term loan arrangements and show the contractual 
undiscounted cash flow including an estimate that the interest rate then ruling of 175 would persist to maturity    armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
58 
22 provisions 
restructuring  
£000 
dilapidations 
£000 
total
£000
at 1 september 2009 98 138 236
amounts utilised 69 45 114
unwinding of discount – 10 10
at 1 september 2010 29 103 132
amounts utilised 29 103 132
restructuring costs 328 – 328
at 31 august 2011 328 – 328
the provisions have been analysed between current and noncurrent as follows 
 
31 august  
2011  
£000 
31 august
2010
£000
current  328 132
noncurrent  – –
 328 132
at 1 september 2010 the restructuring provision related to the termination of satellite leased premises arising from 
business disposals and the reorganisation of operations within armour home performed in prior years the dilapidations 
provision related to the probable exposure arising from returning leasehold property to its original state at the end of the 
lease in accordance with the lease terms 
the restructuring provision at 31 august 2011 relates to the costs of the reorganisation within the group during the year 
that had yet to be settled at the balance sheet date 
23 deferred taxation 
deferred taxation is calculated in full on temporary differences under the liability method using the taxation rate of 25 
2010 28 the movement on the deferred taxation account is shown below 
 
31 august  
2011 
£000 
31 august
2010
£000
at 1 september  946 656
exchange 6 3
discontinued operations 76 –
consolidated statement of comprehensive income creditcharge 902 287
at 31 august  26 946
deferred taxation assets have been recognised in respect of taxation losses and other temporary differences giving rise to 
deferred taxation assets where the directors believe that it is probable that these assets will be recovered 
 31 august 2011 31 august 2010 
 
asset
liability 
£000
exchange
£000
discontinued
operations
£000
chargecredit 
to income 
£000
asset 
liability  
£000 
exchange 
£000 
chargecredit 
to income
£000
accelerated capital allowances  428 – – 364 792 – 76
shortterm temporary differences  28 8 – 237 201 3 238
taxation losses  426 2 76 301 47 – 27
 26 6 76 902 946 3 287
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
59
24 share capital 
on 23 february 2011 each 10p ordinary share in issue was subdivided into one new ordinary share of 1p each and one 
deferred share of 9p each each authorised but unissued ordinary share was subdivided into 10 new ordinary shares 
of 1p each on the same date the company issued 28571429 new ordinary shares of 1p each by way of a placing at 
7p per share  
 
nominal value number 
authorised 
ordinary shares 
of 10p each
£000
ordinary shares 
of 1p each
£000
deferred shares 
of 9p each
£000
ordinary shares  
of 10p each 
‘000 
ordinary shares 
of 1p each
‘000
deferred shares 
of 9p each
‘000
at 1 september 2010 15000 –– 150000 – –
subdivision of shares in issue 6848 685 6163 68480 68480 68480
subdivision of unissued shares 8152 8152 – 81520 815199 
at 31 august 2011 – 8837 6163 – 883679 68480
 
allotted called up and fully paid number 
ordinary shares  
of 10p each 
‘000 
ordinary shares 
of 1p each 
‘000 
deferred shares 
of 9p each
‘000
in issue at 1 september 2010 68480 – –
subdivision of shares 68480 68480 68480
issued during the year – 28571 –
in issue at 31 august 2011 – 97051 68480
 
allotted called up and fully paid £’000 
ordinary shares 
of 10p each
£000
ordinary shares 
of 1p each 
£000 
deferred shares 
of 9p each
£000
total
£000
in issue at 1 september 2010 6848 – – –
subdivision of shares 6848 685 6163 6848
issued during the period – 286 – 286
in issue at 31 august 2011 – 971 6163 7134
the new ordinary shares of 1p each have the same rights as the previous ordinary shares of 10p each no new share 
certificates were issued in respect to the new ordinary shares of 1p each the existing certificates continuing to be valid and 
accepted as evidence of title for the new ordinary shares  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
60 
24 share capital continued 
the deferred shares of 9p each have restricted and minimal rights whereby 
• holders are not entitled to receive any dividend or other distribution or to receive notice or speak or vote at general 
meetings of the company 
• on a return of assets on a winding up holders are only entitled to amounts paid up on such shares after the repayment 
of £10 million per ordinary share 
• the deferred shares are not freely transferable 
• the creation and issue of further shares which rank equally or in priority to the deferred shares or the passing of a 
resolution of the company to cancel the deferred shares or to effect a reduction of the capital shall not constitute a 
modification or abrogation of their rights 
• the company has the right at any time to purchase all of the deferred shares for an aggregate consideration of £100 
• no application has or will be made for the deferred shares to be admitted to trading on aim or any other stock exchange 
and 
• no share certificates have or will be issued for any of the deferred shares 
25 reserves 
the nature of the reserves shown in the consolidated statement of financial position and consolidated statement of 
changes in shareholders’ equity is as follows 
share premium  amount subscribed for share capital in excess of nominal value 
other reserves  the premium on shares issued as consideration shares for acquisitions being the difference between 
the nominal value and fair value of these shares in accordance with sections 612 and 615 of the 
companies act 2006 the acquiring company has taken no account of this premium and the cost of 
investment includes only the nominal value of the consideration shares on consolidation the 
premium has been credited to this reserve 
retained earnings  cumulative net gains and losses recognised in the consolidated statement of comprehensive 
income 
translation reserve  gains and losses arising on retranslating the net assets of overseas operations into sterling 
share trust reserve  cost of company’s shares held by the armour employees’ share trust 
26 sharebased payments 
during the year the company and group operated three equitysettled sharebased schemes being the 
• 1999 unapproved executive share option scheme 
• 1999 approved executive share option scheme and 
• enterprise management incentive share option plan 
options granted under the 1999 unapproved executive share option scheme 1999 approved executive share option 
scheme and enterprise management incentive share option plan are subject to performance criteria relating to the 
growth in earnings per ordinary share or growth in the average ordinary share price these criteria were approved by the 
shareholders at the annual general meeting held on 3 december 2002 in addition the options lapse if the employee 
leaves within the service period required following the date of grant  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
61
26 sharebased payments continued 
no options were granted or exercised during either the current or prior year 
weighted 
average 
exercise price 
p 
2011
number  
2011 
weighted 
average 
exercise price
p 
2010
number
2010
outstanding at the start of the year  283 5845000 282 5905000
lapsed during the year  287 300000 175 60000
outstanding at the year end  283 5545000 283 5845000
the exercise price of options outstanding at the end of the year ranged between 175p and 565p 31 august 2010 175p – 
565p and the weighted average contractual life was 37 years 31 august 2010 restated to 48 years 
of the total number of options outstanding at the end of the year 5545000 31 august 2010 4050000 had vested and 
were exercisable 
the group recognised a total expense of £18000 31 august 2010 £32000 in respect of equitysettled sharebased 
payments in the year 
at 31 august 2011 the following options were outstanding in respect of the ordinary shares 
1999 unapproved executive share option scheme 
date of grant number
exercise 
price p exercise period
10 may 2000  300000 200 10 may 2002 – 9 may 2012
24 july 2003  550000 345 24 july 2004 – 23 july 2013
14 november 2005  725000 565 14 november 2008 –13 november 2015
12 december 2006  250000 455 12 december 2009 –11 december 2016
4 july 2008  20000 210 4 july 2011 – 3 july 2018
 1845000
1999 approved executive share option scheme 
date of grant number 
exercise 
price p exercise period
12 december 2006  180000 455 12 december 2009 –11 december 2016
 180000
enterprise management incentive share option plan 
date of grant number 
exercise 
price p exercise period
5 december 2002  100000 200 5 december 2003 – 4 december 2012
21 january 2003  1500000 200 21 january 2004 – 20 january 2013
24 july 2003  325000 345 24 july 2004 – 23 july 2013
4 july 2008  1595000 175 4 july 2011 – 3 july 2018
 3520000
  armour group plc 
annual report 2011
financial statements
notes to the consolidated financial statements 
continued 
62 
27 related party transactions 
transactions between the company and its subsidiary undertakings which are related parties of the company have been 
eliminated on consolidation and are not disclosed in this note details of transactions between the group and other related 
parties are disclosed below amounts owed by and to related parties are included in trade receivables and trade payables 
respectively 
on 25 july 2011 the company entered a £12 million loan agreement with hawk investment holdings limited a company 
in which bob morton chairman has a beneficial interest the company announced this loan on the same day the 
purpose of the loan is to assist with working capital requirements during a period of restructuring pursuant to the 
economic environment the loan is for a period of up to 364 days carries interest of 1 per month and can be repaid at any 
time at the request of the company with no early redemption cost the loan is secured by a debenture which ranks behind 
the security in respect of the existing funding facilities 
 interest charge 
amounts owed by  
related parties 
 amounts owed to  
related parties 
 
2011
£000
2010
£000
2011
£000
2010
£000
 2011 
£000 
2010
£000
shortterm loan  12 – – – 1200 –
28 leases 
total commitments under operating leases with expiry dates are as follows 
31 august 2011  31 august 2010 
land and 
buildings 
£000
other 
£000
 land and 
buildings  
£000 
other
£000
within one year  865 178 871 119
two to five years inclusive  2319 257 2936 204
over five years  2591 – 2763 –
 5775 435 6570 323
29 net cash flow from operations 
 
31 august  
2011  
£000 
31 august
2010
£000
lossprofit for the year 2954 879
depreciation of property plant and equipment  776 596
amortisation of intangible assets  1058 977
impairment of intangible assets 490 
sharebased payments  18 32
finance income 14 8
finance expense 454 233
income tax creditexpense 1212 68
ebitda 1384 2777
gain on sale of property plant and equipment and fair value adjustments 14 165
decrease in inventories  686 1028
decrease in trade and other receivables  2331 353
decrease in trade other payables and provisions  2927 2175
 76 959
cash utilised ingenerated from operations  1308 1818
ebitda is defined as the lossprofit before interest taxation depreciation amortisation and sharebased payments  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
63
30 reconciliation of net cash flow to movement in net debt 
net debt incorporates the group’s borrowings and bank overdrafts less cash and cash equivalents a reconciliation of the 
movement in the net debt from the beginning to the end of the year is shown below 
 
31 august 
2011 
£000
31 august
2010
£000
net increasedecrease in cash and cash equivalents  4953 1792
new loans 11870 –
repayment of loans 5473 1000
other noncash movements  235 17
increase in net debt  1209 809
opening net debt  5696 4887
closing net debt  6905 5696
31 guarantees contingent liabilities and capital commitments 
the company and its uk trading subsidiary undertakings have cross guarantees in regard to the amounts drawn under the 
group’s funding facilities at 31 august 2011 the group’s subsidiary undertakings had no contingent liabilities in regard to 
outstanding documentary credits 31 august 2010 £963000 
the group’s uk trading subsidiaries have duty deferment arrangements with hmrc amounts outstanding previously 
backed by bank bonds are now backed by assurance bonds and the company and its uk subsidiaries have indemnified the 
issuer at 31 august 2011 the amount outstanding was £186000 31 august 2010 £216000  
the group had no capital commitments at 31 august 2011 and 31 august 2010  armour group plc 
annual report 2011
financial statements
company balance sheet 
registered number 803572 
at 31 august 2011 
64 
note 
31 august  
2011  
£000 
31 august
2010
£000
fixed assets   
investment in subsidiary undertakings  4  – –
tangible assets  5  6 15
total fixed assets   6 15
current assets   
amounts owed by subsidiary undertakings   22644 30059
prepayments   23 22
corporation tax  – 105
deferred taxation  6  16 14
cash and cash equivalents   315 8
  22998 30208
creditors amounts falling due within one year   
bank overdrafts and borrowings   1200 10028
amounts owed to subsidiary undertakings   63 63
other taxes and social security   54 57
other creditors and accruals   408 427
  1725 10575
net current assets   21273 19633
total assets less current liabilities   21279 19648
creditors amounts falling due after more than one year   
borrowings   – 480
  – 480
net assets   21279 19168
capital and reserves   
share capital  7  7134 6848
share premium account  8  10084 8513
profit and loss account  8  4633 4379
share trust reserve  8  572 572
shareholders’ funds   21279 19168
these financial statements were approved by the board and authorised for issue on 5 december 2011 
george dexter  john harris 
director  director 
the notes on pages 65 to 69 form part of these company financial statements  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
notes to the company financial statements 
65
1 basis of preparation 
the company financial statements have been prepared on the basis of accounting policies set out in note 2 below using 
applicable accounting standards generally accepted in the united kingdom uk gaap as permitted by section 408 of the 
companies act 2006 the profit and loss account is not presented the profit for the year amounted to £236000 31 august 
2010 £12000 details of the auditors’ remuneration payable by the company are disclosed in note 7 to the consolidated 
financial statements on page 50 
2 principal accounting policies 
the principal accounting policies set out below have been consistently applied to all the periods presented 
foreign currencies 
foreign currency transactions are translated using the exchange rate at the date of transaction foreign exchange gains 
and losses arising from the settlement of transactions and from the translation at the year end exchange rates of 
monetary assets and liabilities are recognised in the profit and loss account 
investments in subsidiary undertakings 
investments in subsidiary undertakings are included at cost less provision for impairment in value 
deferred taxation 
deferred taxation is provided on the incremental liability approach in respect of timing differences giving rise to an asset or 
liability deferred taxation assets are recognised to the extent that it is regarded as more likely than not that they will be 
recovered deferred taxation assets and liabilities are not discounted 
sharebased payments 
the company operates equitysettled sharebased option plans the fair value of the employee services received in 
exchange for the participation in the plan is recognised as an expense in the profit and loss account in accordance with 
uitf 44 group and treasury transactions the company has accounted for options granted to the employees of subsidiary 
undertakings as capital contributions which have been recharged to the intermediate company holding the investment 
the corresponding credit has been recognised in the profit and loss account reserve 
the fair value of the employee service is based on the fair value of the equity instrument granted this expense is spread 
over the vesting period of the instrument the corresponding entry is credited to equity the liability for social security costs 
arising in relation to the awards is measured at each reporting date based upon the share price at the reporting date and 
the elapsed portion of the relevant vesting periods to the extent that it is considered that a liability will arise 
dividends 
dividend distributions to the company’s shareholders are recognised in the period when paid or if earlier in which the 
dividend is approved by the company’s shareholders 
3 staff costs 
the aggregate payroll costs including those of directors during the year was as follows 
 
31 august 
2011
£000
31 august
2010
£000
wages and salaries  663 610
social security costs  76 73
pension costs  46 43
sharebased payments  3 3
 788 729 armour group plc 
annual report 2011
financial statements
notes to the company financial statements  
continued 
66 
4 investment in subsidiary undertakings 
 
31 august  
2011 
£000 
31 august
2010
£000
cost  
at start and end of the year  1743 1743
provisions  
at start and end of the year 1743 1743
net book value  
at start and end of the year  – –
5 fixed assets 
the company’s tangible fixed assets comprise computer equipment plant and fixtures and fittings 
depreciation is charged over each asset’s expected useful life on a straightline basis the annual depreciation rates used are 
• computer equipment  20 – 33 
• plant and fixtures and fittings  10 – 20 
 £000
cost 
at 1 september 2010 125
disposals 42
at 31 august 2011 83
depreciation 
at 1 september 2010 110
charge for the year 9
disposals 42
at 31 august 2011 77
net book value 
at 1 september 2010 15
at 31 august 2011 6
6 deferred taxation 
 
31 august  
2011  
£000 
31 august
2010
£000
accelerated capital allowances  6 4
shortterm timing differences  10 10
 16 14
at 1 september  14 9
movement in the year  2 5
at 31 august  16 14
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
67
7 share capital 
on 23 february 2011 each 10p ordinary share in issue was subdivided into one new ordinary share of 1p each and one 
deferred share of 9p each each authorised but unissued ordinary share was subdivided into 10 new ordinary shares 
of 1p each on the same date the company issued 28571429 new ordinary shares of 1p each by way of a placing at 
7p per share  
 nominal value number 
authorised 
ordinary shares 
of 10p each
£000
ordinary shares 
of 1p each 
£000
deferred shares 
of 9p each
£000
ordinary shares 
 of 10p each 
‘000 
ordinary shares
 of 1p each 
‘000
deferred shares 
of 9p each
‘000
  
at 1 september 2010 15000 –– 150000 – –
subdivision of shares in issue 6848 685 6163 68480 68480 68480
subdivision of unissued shares 8152 8152 – 81520 815199 
at 31 august 2011 – 8837 6163 – 883679 68480
 
allotted called up and fully paid number 
ordinary shares 
of 10p each 
‘000 
ordinary shares
 of 1p each
‘000
deferred shares 
of 9p each
‘000
in issue at 1 september 2010 68480 – –
subdivision of shares 68480 68480 68480
issued during the period – 28571 –
in issue at 31 august 2011 – 97051 68480
 
allotted called up and fully paid £’000 
ordinary shares
 of 10p each
£000
ordinary shares 
 of 1p each 
£000 
deferred shares 
of 9p each
£000
total
£000
in issue at 1 september 2010 6848 – – –
subdivision of shares 6848 685 6163 6848
issued during the period – 286 – 286
in issue at 31 august 2011 – 971 6163 7134
the new ordinary shares of 1p each have the same rights as the previous ordinary shares of 10p each no new share 
certificates were issued in respect to the new ordinary shares of 1p each the existing certificates continuing to be valid and 
accepted as evidence of title for the new ordinary shares  armour group plc 
annual report 2011
financial statements
notes to the company financial statements  
continued 
68 
7 share capital continued 
the deferred shares of 9p each have restricted and minimal rights whereby 
• holders are not entitled to receive any dividend or other distribution or to receive notice or speak or vote at general 
meetings of the company 
• on a return of assets on a winding up holders are only entitled to amounts paid up on such shares after the repayment 
of £10 million per ordinary share 
• the deferred shares are not freely transferable 
• the creation and issue of further shares which rank equally or in priority to the deferred shares or the passing of a 
resolution of the company to cancel the deferred shares or to effect a reduction of the capital shall not constitute a 
modification or abrogation of their rights 
• the company has the right at any time to purchase all of the deferred shares for an aggregate consideration of £100 
• no application has or will be made for the deferred shares to be admitted to trading on aim or any other stock exchange 
and 
• no share certificates have or will be issued for any of the deferred shares 
details of outstanding share options are given in note 26 of the consolidated financial statements on pages 60 and 61 
8 reserves 
share 
premium 
£000
profit and loss 
account  
£000 
share trust 
reserve  
£000 
total
£000
at 1 september 2009 8513 4530 572 12471
profit for the year – 12 – 12
dividend paid – 195 – 195
sharebased payments – 32 – 32
at 31 august 2010 8513 4379 572 12320
issue of equity 1571 – – 1571
profit for the year – 236 – 236
sharebased payments – 18 – 18
at 31 august 2011 10084 4633 572 14145
the company’s reconciliation of movements in shareholders’ funds is shown below 
 
31 august  
2011  
£000 
31 august
2010
£000
opening shareholders’ funds  19168 19319
profit for the year  236 12
dividend paid  – 195
profit for the year retained  236 183
issue of equity 1857 
sharebased payments  18 32
net movement in shareholders’ funds  2111 151
closing shareholders’ funds  21279 19168
9 sharebased payments 
sharebased payment arrangements for the executive directors are set out in the remuneration report on pages 29 to 31 
no new sharebased payment arrangements were put in place for the directors in either the current or prior year 
details of the share options in existence are shown in note 26 of the consolidated financial statements  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
financial statements
 
69
10 related party transactions 
on 25 july 2011 the company entered a £12 million loan agreement with hawk investment holdings limited a company 
in which bob morton chairman has a beneficial interest the company announced this loan on the same day the 
purpose of the loan is to assist with working capital requirements during a period of restructuring pursuant to the 
economic environment the loan is for a period of up to 364 days carries interest of 1 per month and can be repaid at any 
time at the request of the company with no early redemption cost the loan is secured by a debenture which ranks behind 
the security in respect of the existing funding facilities 
details of transactions between the company and its subsidiary undertakings which are related parties of the company 
and the related party loan are shown below 
 
interest charge  
management fees 
amounts owed by  
related parties 
 amounts owed to  
related parties 
 
2011
£000
2010 
£000
2011
£000
2010 
£000 
 2011
£000
2010
£000
shortterm loan 12 – – –  1200 –
subsidiary undertakings 1095 617 22644 30059  63 63
11 guarantees contingent liabilities and capital commitments 
the company has guaranteed certain borrowings and credit facilities of its subsidiary undertakings at 31 august 2011 
the company had contingent liabilities under these guarantees of £69 million 31 august 2010 £nil 
at 31 august 2011 and 31 august 2010 the company had no capital commitments armour group plc 
annual report 2011
annual general meeting
notice of annual general meeting 
 
70 
notice is hereby given that the annual general meeting of armour group plc will be held at the offices armour automotive 
limited woolmer industrial estate bordon hants gu35 9qe on tuesday 31 january 2012 at 1200 noon for the following 
purposes 
ordinary business 
1  to receive and consider the annual report and audited financial statements for the year ended 31 august 2011 
the directors’ report and the auditors’ report on those financial statements 
2  to reappoint bdo llp as auditors to hold office from the conclusion of this meeting until the conclusion of the next 
general meeting of the company at which financial statements are laid and to authorise the directors to determine 
their remuneration 
3 to reappoint mr alr morton as a director 
4 to reappoint mr sg bodger as a director 
5 to reappoint mr jld harris as a director 
6  that in accordance with section 551 of the companies act 2006 “act” and in substitution for all previous authorities 
conferred on the directors the directors be generally and unconditionally authorised to allot ordinary shares in the 
company up to an aggregate nominal amount of £600000 provided that this authority shall unless renewed varied or 
revoked by the company expire on 30 january 2017 save that the company may before such expiry make an offer or 
agreement which would or might require shares to be allotted and the directors may allot shares in pursuance of such 
offer or agreement notwithstanding that the authority conferred by this resolution has expired  
special business 
7 to consider the following resolution which will be proposed as an ordinary resolution 
      that 
a the armour 2012 company share option plan for approved and unapproved share options the “option plan” a copy of 
the rules of which have been produced to the meeting and initialled by the chairman for the purposes of identification 
only and a summary of the principal terms of which are set out in the appendix to the notice of the agm be and they 
are hereby approved and established and 
b the directors be and they are herby authorised to make such amendments to the rules of the option plan as may be 
necessary to ensure that the option plan is approved by hmrc under part 7 chapter 8 and schedule 4 of the income 
tax earnings and pensions act 2003 in regard to the grant of approved options 
8 to consider the following resolution which will be proposed as a special resolution 
 that in substitution for all existing authorities the directors be and are hereby empowered pursuant to section 570 of 
the act to allot equity securities within the meaning of section 560 of the act wholly for cash pursuant to the authority 
conferred by resolution 6 above as if section 5611 of the act did not apply to any such allotment provided that this 
power shall be limited to the allotment of equity securities  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
annual general meeting
 
71
special business continued 
 
a in connection with an offer of such securities by way of rights issue or other offering in favour of the holders of 
ordinary shares in proportion as nearly as may be practicable to their holdings of such shares but subject to 
such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional 
entitlements or any legal or practical problems under the laws of any territory or the requirements of any 
regulatory body or stock exchange and 
b otherwise than pursuant to paragraph a above up to an aggregate nominal amount of £200000 representing 
2061 of the issued ordinary share capital of the company 
 and shall expire 15 months after the date of the passing of this resolution or at the conclusion of the next annual 
general meeting of the company following the passing of this resolution whichever first occurs save that the 
company may before such expiry make an offer or agreement which would or might require equity securities to be 
allotted after such expiry and the directors may allot equity securities in pursuance of any such offer or agreement 
notwithstanding that the power conferred by this resolution has expired 
9 to consider the following resolution which will be proposed as a special resolution 
 that 
a in accordance with article 52 of its articles of association and chapter iv of the act and subject to paragraph b of 
this resolution the company be and hereby is granted general and unconditional authority pursuant to section 701 
of the act to make market purchases as defined in section 6934 of the act of its own ordinary shares on such 
terms and in such manner as the directors may from time to time determine and 
b the authority conferred by paragraph a of this resolution shall 
i expire on the date of the next annual general meeting of the company 
ii be limited to the purchase of a maximum 14557724 ordinary shares representing 15 of the issued ordinary 
share capital of the company  
iii not permit the payment per ordinary share of more than 5 above the average market value for an ordinary 
share for the five business days immediately preceding the day on which any purchase by the company of 
ordinary shares is made or less than 1p exclusive of any applicable corporation tax payable by the company  
iv before expiry entitle the company to enter into any contract for the purchase of ordinary shares which might be 
executed and completed wholly or partly after its expiry and 
v only be capable of variation revocation or renewal by the company in general meeting 
  
by order of the board 
john harris  
company secretary  
5 december 2011  armour group plc 
annual report 2011
annual general meeting
notice of annual general meeting 
continued 
72 
notes 
1 a shareholder entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend and 
on a poll vote instead of himher the proxy need not be a shareholder of the company 
2 to be effective the instrument appointing a proxy and any authority under which it is executed or a notarially certified 
copy of such authority must be deposited at the offices of capita registrars the registry 34 beckenham road 
beckenham kent br3 4tu not less than two days before the time for holding the meeting completion and return 
of the form of proxy will not preclude shareholders from attending and voting in person at the meeting 
3 a corporation’s form of proxy must be executed pursuant to the terms of section 44 of the companies act 2006 
or under the hand of a duly authorised officer or attorney any corporation which is a member of the company may 
authorise a person who need not be a member of the company to act as its representative to attend speak and vote 
on a show of hands or a poll on its behalf a corporate representative may exercise on behalf of a member corporation 
all of its powers as a member provided that they do not do so in relation to the same shares 
4 pursuant to regulation 41 of the uncertificated securities regulations 2001 the time by which a person must be 
entered on the register of members in order to have the right to attend and vote at the meeting is close of business on 
27 january 2012 or if the meeting is adjourned such time being not more than 48 hours prior to the time fixed for the 
adjourned meeting changes to entries on the register of members after that time will be disregarded in determining 
the right of any person to attend or vote at the meeting 
5 the register of interests of the directors and their families in the issued share capital of the company and copies 
of all directors’ service contracts will be available for inspection at the registered office of the company during usual 
business hours saturdays sundays and public holidays excepted from the date of this notice until the conclusion of 
the meeting 
6 as at 500 pm on the date immediately prior to the date of posting of this notice the company’s issued share capital 
comprised of 
i 97051496 ordinary shares of 1p each and each ordinary share carries the right to one vote at a general 
meeting of the company 
ii 68480067 deferred shares of 9p each the holders of which are not entitled to receive notice or speak or vote at a 
general meeting of the company 
  business review governance financial statements annual general meeting
armour group plc 
annual report 2011
annual general meeting
appendix to notice of annual general meeting 
73
summary of the principal terms of the armour 2012 company share option plan 
the armour 2012 company share option plan the “option plan” provides for the grant of rights to acquire shares by way 
of purchase and subject to the limitations set out below by subscription to eligible employees of the company and its 
subsidiaries the “group” the option plan provides for the grant of both approved and unapproved options such options 
are not transferrable and are not pensionable benefits 
1 eligibility 
options may only be granted to employees and fulltime executive directors of the group the board of directors of the 
company the “directors” will have a discretion as to the selection of executives to whom options may be granted decisions 
concerning the grant of an option must be approved by the remuneration committee of the directors the “committee” 
2 grant of options 
there are no specific restrictions on the grant of unapproved options save for any market practices that may apply in which 
the decision of the committee will be final and conclusive 
approved options may be granted within the period ending 42 days after the date on which the hmrc formally approves 
the option plan thereafter approved options may only be granted within the period of 42 days following an announcement 
of the company’s interim or annual results and within the period of 14 days after a new employee first joins the group but 
otherwise only in circumstances judged by the committee to be exceptional 
no option may be granted more than ten years after the date on which the option plan is adopted by the company 
3 the exercise price 
the price per share at which shares may be acquired upon the exercise of an option shall be determined by the committee 
at the time of grant but shall not be less than the higher of 
a the market value of a share at the date of grant and 
b in the case of options to subscribe for shares the nominal value of an ordinary share 
4 performancerelated conditions of exercise 
an option will normally become vested in respect of any number or proportion of the shares over which it is granted only if 
the applicable performance targets set by the committee are met or exceeded the committee may from time to time vary 
any performancerelated conditions as they apply to outstanding options if in their opinion to do so would more effectively 
achieve the objective of affording realistic incentives to optionholders or produce a fairer measure of performance 
the option plan provides for standard performance targets based upon growth in the company’s earnings per ordinary 
share andor increase in the company’s average share price 
5 exercise of options 
an option is exercisable normally only after the third anniversary of the date of grant and then only in respect of the 
number or proportion of the option shares which have become immediately exercisable “vested” in consequences of 
the performance targets having been met an option cannot in any event be exercised later than the tenth anniversary 
of the date of grant 
if the optionholder dies in service hisher options may be exercised by his personal representatives within twelve months 
thereafter in respect of a vested shares or if the optionholder dies before the end of the performance period b a 
proportion of the option shares which are deemed to have vested corresponding to such proportion of the period over 
which performance is measured “the performance period” has elapsed before the date of death 
if the optionholder retires from employment then within three months thereafter an option may be exercised in respect 
of vested shares the extent to which options which have not completed the performance period may be exercised is 
at the discretion of the committee whose decision will be final and conclusive and if deemed exercisable must be 
so exercised within three months of the retirement date  armour group plc 
annual report 2011
annual general meeting
appendix to notice of annual general meeting 
continued 
74 
if the optionholder leaves the group by reason of injury ill health disability redundancy or dismissal other than through 
misconduct or impropriety or the company in which heshe is employed is sold outside the group then within three 
months thereafter an option may be exercised in respect of vested shares and an option may be exercised in respect of 
a proportion of the option shares as determined by the committee whose decision will be final and conclusive taking into 
account such proportion of the performance period as has then elapsed and the performance of the optionholder as 
against the performance targets to that point 
if an optionholder leaves the group for any other reason or options are not exercised within the prescribed periods hisher 
options forthwith cease and determine 
6 demerger reconstruction or windingup 
early exercise of options within specified periods is permitted with the consent of the committee in the event of a 
demerger or statutory reconstruction of the company if notice is given to shareholders of a resolution for the voluntary 
windingup of the company options may be exercised at any time before the windingup of the company otherwise all 
unexercised options will lapse upon the commencement of a windingup 
7 takeover of the company 
in the event of a change of control of the company in consequence of a takeover bid options may be exercised early 
8 rights attaching to shares 
shares issued or transferred upon the exercise of options will rank equally in all respects with all other ordinary shares of 
the company for the time being in issue save as regards any rights attaching to ordinary shares by reference to a record 
date prior to the allotment or transfer of such shares 
9 limits on the issue of ordinary share capital under the option plan 
there is a limit of 15 of issued ordinary share capital on the new shares over which options to subscribe for shares 
“subscription options” may be granted under the option plan and any other executive employee share scheme in any 
periods of ten years “the 15 limit” options granted by the trustee of the armour employees’ share trust and which 
are to be satisfied by the purchase of existing shares by the trustee in the market will not count towards the 15 limit 
10 individual limitations 
there is a limit of four times current salary on the initial market value of shares over which unexercised options to 
acquire shares may be held by an executive under all option schemes operated by the company the aggregate market 
value of shares as at the dates of grant over which unexercised approved options may be held by an individual at any 
time is limited to £30000 or such other statutory limit on the grant of options under an hmrc approved company share 
option scheme as may apply from time to time 
11 variation of share capital 
in the event of a variation in the ordinary share capital of the company the committee may adjust the number of shares 
subject to any option andor the exercise price provided that 
a no such adjustment to approved options may be made without the prior approval of hmrc and 
b except in the case of a subdivision consolidation or capitalisation issue any such adjustment must be confirmed 
in writing by the auditors to be in their opinion fair and reasonable 
12 amendment of the option plan 
the committee may amend the option plan in any respect but may not make any alteration or addition to the advantage of 
existing or new optionholders to the provisions relating to eligibility the overall and individual limits to the option plan the 
basis for determining optionholders’ entitlements to the shares or the adjustment of such entitlements on a variation of 
share capital without the prior approval of ordinary shareholders in general meeting except for minor amendments to 
benefit the administration of the option plan to take account of any change in legislation or to obtain or maintain 
favourable taxation exchange controls of regulatory treatment for optionholders or any member of the group any 
amendment relating to approved options will not take effect until hmrc has confirmed that it will not affect its approved 
status 
  form of proxy 
iwe  
name in full 
of  
being a shareholders of armour group plc hereby appoint the chairman of the meeting or 
 
as myour proxy to vote for meus and on myour behalf at the annual general meeting of the company to be held at the 
offices of armour automotive limited woolmer industrial estate bordon hants gu35 9qe on tuesday 31 january 2012 
at 1200 noon and any adjournment thereof 
please indicate with an “x” in the space below how you wish your vote to be cast in the absence of any specific direction 
and on any other resolution or motion put to the meeting the proxy will on a poll vote or abstain as the proxy thinks fit 
a vote to abstain will not be counted as either for or against a resolution 
 resolutions 
for abstain against discretion 
 1  to receive the annual report and audited financial statements for the 
year ended 31 august 2011   
 2  to reappoint bdo llp as auditors and authorise the directors to determine 
their remuneration   
 3  to reappoint mr alr morton as a director   
 4  to reappoint mr sg bodger as a director   
 5  to reappoint mr jld harris as a director   
 6  to authorise the directors to allot relevant securities   
 7  to authorise the new executive share option plan   
 8  to disapply section 561 of the companies act 2006   
 9  to authorise the company to purchase its own shares   
 
 
 
signatures  date 201112 
 
notes 
1 to be valid this form of proxy duly completed must be deposited with the company’s registrars at the address overleaf not less than 
two days before the time appointed for the meeting 
2 in the case of joint holders only one signature is required 
3 in the case of a corporation this form of proxy must be executed under its common seal or signed on its behalf by an attorney or officer 
duly authorised 
4 any alteration made to this form or proxy must be initialled  
5 completion and return of a form of proxy will not preclude shareholders from attending and voting in person should they subsequently decide 
to do so 
6 any shareholder entitled to attend and vote at the above meeting may appoint one or more proxies of hisher own choice to attend and on a 
poll to vote instead of himher a proxy need not be a shareholder of the company a shareholder completing a form of proxy will not thereby 
be precluded from attending in person instead of by proxy to appoint more than one proxy a photocopy of this form may be used 
7 shares held in uncertificated form ie in crest may be voted through the crest proxy voting service in accordance with the procedures 
set out in the crest manual    
76 
  designed and produced by radley yeldar wwwrycom using the paperless proofing 
system wizardry 
armour group plc are committed to caring for the environment and looking for sustainable 
ways to minimise our impact on it
we take care to minimise the impact on the environment in the paper we use the paper we 
have chosen 
•  contains material sourced from responsibly managed forests certified in accordance with 
the fsc forest stewardship council
• is made from 10 recovered fibre diverting waste from landfill
•  is manufactured under strict environmental management systems the international  
iso 14001 standard emas eco‑management  audit scheme and the ippc integrated  
pollution prevention and control regulation
fsc – forest stewardship council this ensures there is an audited chain of custody from the tree in the 
well‑managed forest through to the finished document in the printing factory
 iso 14001 – a pattern of control for an environmental management system against which an organisation 
can be credited by a third party armour group plc annual report 2011
armour group plc
lonsdale house 
7–9 lonsdale gardens 
tunbridge wells 
kent tn1 1nu 
united kingdom
t 44 01892 502700 
f 44 01892 502707
wwwarmourgroupukcom


Summary:
 04
armour group plc 
annu al repo rt 2011
business review
the deterioration in consumer confidence caused by the weak economic 
environment particularly in the uk has made the year to 31 august 2011 the 
most challenging experienced by the group group sales fell to £423 million 
2010 £566 million which generated a loss from operations before 
exceptional items and discontinued operations of £17 million 2010 profit 
£12 million the basic loss per ordinary share before exceptional items and 
discontinued operations was 18p 2010 earnings per ordinary share 14p 
the group’s net debt at 31 august 2011 was £69 million 2010 £57 million
the performance of the group has been severely affected by the collapse in 
retail demand which has been felt most particularly in our home division 
w hilst the uk is not technically in a recession the impact on consumer 
confidence of the steady stream of poor economic data has resulted in a 
dramatic fall in consumer demand the consumer electronics sector which is 
our core market and by its very nature exposed to discretionary expenditure 
has felt the full force of this downturn in consumer demand 
in response to the very difficult trading environment the group has 
implemented a restructuring of the home division and a cost reduction 
programme throughout all our operations which has included the closure of 
our c hinese manufacturing facility these cost reduction initiatives are 
expected to realise over £25 million in annualised savings the major elements 
of the restructuring and cost reduction programmes are now complete and we 
have started the new financial year with a more streamlined structure and cost 
base particularly in armour home 
w hilst armour home has found the market conditions very challenging 
armour automotive has enjoyed an encouraging recovery in its performance 
with profits before exceptional items in the year increasing from £02 million to 
£08 million in addition our operations in asia have continued to grow with sales 
increasing by 99 to £11 million with every expectation that this will become a 
profitable operation in 2012 
ou r 
awards
ch airman’s st ate ment 05
armour group plc 
annu al repo rt 2011
business review
business review governance financial statements annual general meeting
the recovery in armour automotive has been driven by strong demand for 
invehicle audio solutions supplied into the commercial vehicle market and our 
range of gps and gsm antennae as with the home division retail sales in the 
automotive aftermarket have declined although this decline has not been as 
marked as in home electronics we remain confident that armour automotive 
will continue its recovery in 2012
as with all other parts of the businesses expenditure on new product 
development has been carefully reviewed however despite the market 
difficulties the group has continued to invest in new product development and 
has launched a number of new products during the year including two new 
ranges of award winning q acoustics speakers n ew product development 
remains a fundamental part of the group strategy and we believe it is a key 
ingredient to drive sales and deliver a sustainable recovery in performance 
this year has been very testing for our employees who have had to manage a 
considerable amount of change in a very short period of time despite this they 
have worked with dedication and professionalism for the good of the group 
i would like to acknowledge the board’s appreciation of their commitment 
and effort over the course of the year
the economic outlook in our core markets continues to be uncertain and the 
prospects of a recovery in consumer confidence and demand in the near term 
remain weak the actions taken by the group have significantly reduced its 
cost base and we anticipate an improved performance in 2012
bob morton
c hairman
5 december 2011