spectris plc
annual report and accounts 2010
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highlights
highlights 01
business review
group overview 02
business model 04
strategy  06
key performance indicators 07
principal risks 08
chairman’s statement 10
chief executive’s review 12
operating review 14
financial review 24
corporate social responsibility 29
corporate governance
board of directors 34
directors’ report 36
directors’ remuneration report 42
financial statements 
auditor’s report  51
consolidated statement of income 52
consolidated statement of comprehensive 
income 53
consolidated statement of changes in equity 54
consolidated statement of financial position 55
consolidated statement of cash flows 56
notes to the accounts 57
company balance sheet 94
notes to the company’s accounts 95
shareholder information 101
spectris is a leading supplier of productivityenhancing 
instrumentation and controls our products applications 
and services help customers to improve product quality 
and performance improve core manufacturing processes 
reduce downtime and wastage and reduce time to 
market our businesses are leaders in the markets they 
serve providing solutions for customers across a wide 
range of industries
the purpose of the annual report is to provide information to 
the shareholders of spectris plc the company its directors 
employees agents and advisers do not accept or assume 
responsibility to any other person to whom this document 
is shown or into whose hands it may come and any such 
responsibility or liability is expressly disclaimed the annual 
report contains certain forwardlooking statements with respect 
to the operations performance and financial condition of the 
company by their nature these statements involve uncertainties 
since future events and circumstances can cause actual results to 
differ materially from those anticipated and no reliance should 
be placed on them the forwardlooking statements reflect 
knowledge and information available at the date of preparation 
of this annual report and the company undertakes no obligation 
to update these forwardlooking statements nothing in this 
annual report should be construed as a profit forecast
the front cover of this report is printed on coated paper 
and the type in the graphic has an ultraviolet uv 
radiation cured varnish paper coating control and  
uv curing are key applications of our btg and fusion  
uv systems businesses respectively 2006 2007 2008 2009 2010
6426
6598
7871 7873
9019
2006 2007 2008 2009 2010
832
1043
1183
792
1421
2006 2007 2008 2009 2010
437
581
728
454
866
2006 2007 2008 2009 2010
175
210
234
2425
280
01 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
highlights
 much faster recovery in performance achieved than after previous 
downturns 
 strong sales and profits growth in all business segments particularly 
in emerging markets 
 acquisitions strengthen materials analysis inline instrumentation 
and industrial controls
 robust conversion of operating profit to cash at 112
 net debt down by £38 million to £86 million 05x ebitda
 dividend up by 15
revenue £m  
continuing businesses
adjusted operating profit £m 
continuing businesses
adjusted earnings per share p
dividend p
2010 2009 change
change at 
cer
organic 
change at 
cer
key operational indicators £m
revenue 9019 7873 146 131 116
adjusted operating profit 1421 792 79 77 75
adjusted profit before tax 1323 682 94
adjusted earnings per share 866p 454p 91
adjusted return on sales 158 101 57pp
cash conversion 112 133 21pp
dividend 280p 2425p 15
statutory
operating profit 1279 685 87
profit before tax 1199 542 121
basic earnings per share  831p 369p 125
 adjusted figures exclude certain nonoperational items as defined in note 3 but include restructuring and 
postacquisition integration costs of £08m 2009 £140m
 constant exchange rates 
 at constant exchange rates excluding acquisitions europe
36
latin 
america
3
china 
12
asia 
excluding china
20
north 
america
25
02 spectris plc annual report and accounts 2010
group overview
our customers are multinational bluechip companies in a 
diverse range of enduser markets around the world
2010 sales by destination
other rest of world 4
figures shown are  of  
total reported group sales
spectris is a leading supplier of productivity 
enhancing instrumentation and controls
our products applications and services help customers to 
improve product quality and performance improve core 
manufacturing processes reduce downtime and wastage  
and reduce time to market providing solutions across a  
wide range of industries 03 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
03 spectris plc annual report and accounts 2010
laboratoryoffline
our products help customers to improve accuracy and speed of materials 
analysis in the laboratory and in process manufacturing applications  
we also provide test and measuring equipment for research and 
development applications
materials analysis
provides a wide range of 
analytical instrumentation and 
systems for particle and material 
characterisation
applications
material characterisation 
contamination detection 
quality control 
industries
pharmalife sciences  
metalsmining 
semiconductorelectronics 
research institutes 
inline instrumentation
provides process analytical 
measurement asset monitoring 
and online controls for both 
primary processing and the 
converting industries
applications
quality control 
process technology 
safety 
industries
process industries  
pulp and paper 
energy 
converting 
test and measurement
supplies test measurement and 
analysis equipment and software 
for product design optimisation 
manufacturing control and 
environmental monitoring
applications
measurement 
data acquisition and processing 
simulation 
industries
automotive 
aerospace  
electronics 
environmental 
industrial controls
supplies automation and 
control products for the discrete 
manufacturing industries
applications
product tracking 
machine interface 
industrial networking 
industries
general manufacturing  
machine building 
distributors 
processmanufacturing
our products and applications provide precision measurement and control 
in challenging operating environments ensuring process quality asset 
uptime safety and improved yield we also provide automation and 
control products for the discrete manufacturing industries
group contribution group contribution group contribution group contribution
30
sales

28
profit

33
sales

24
profit

30
sales

4 1
profit

7
sales

7
profit

operating companies
malvern instruments 
panalytical 
particle measuring systems 
operating companies
brüel  kjær sound  vibration 
hbm 
operating companies
beta lasermike 
brüel  kjær vibro 
btg group 
fusion uv systems 
ndc infrared engineering 
servomex 
operating companies
microscan 
red lion controls 
  reported sales 
 adjusted operating profit 
the group comprises four business segments which reflect  
the applications and enduser industries we serve
our businesses are leaders in the markets they serve with strong brands  
and marketleading products  04 spectris plc annual report and accounts 2010
business model
best practice  
transfer
organisational 
structure
product  
manufacturing
operating  
model
acquisitions
control 
framework
strong  
customer focus
organisational structure
our group comprises four business segments which reflect the enduser industries 
and applications we serve as shown on page 3 each segment contains a number 
of operating companies with dedicated management teams having a high degree 
of responsibility and accountability and operating within a framework of group 
management and control 
operating model
central to this approach is a limited group structure which together with the board sets 
the strategy and drives and monitors its implementation in addition the centre provides 
knowledge advice and selective support services such as legal tax and treasury mergers 
and acquisitions emerging market infrastructure and best practice sharing among 
businesses 
control framework
the group has developed a robust internal control framework in keeping with our 
operating model values and culture this comprises common policies procedures 
principles and processes and provides the minimum requirement for the controls the 
businesses should have in place 
powerful revenue 
drivers
in order to execute our strategy successfully 
we are organised in a way that combines the benefits 
of a multinational group whilst maintaining the 
entrepreneurial culture of our operating companies 05 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
building off this central model each operating company is required to implement its 
own system of internal controls consistent with the size and complexity of its business 
the effectiveness of the internal control framework is routinely monitored through a 
combination of certification selfassessment and a rolling programme of reviews by 
internal and external audit functions complemented by a sound risk management 
process as outlined on page 40 
strong customer focus 
within each business segment each operating company has developed its own brands 
and sales and service channels tailored to its target industrial markets the key benefit 
of this resultsdriven structure is that management teams have local ownership and can 
focus on their priorities and react quickly to changing customer and market needs 
all of our businesses are strong players in niche markets where there are significant 
barriers to entry we aim to build longterm relationships with our customers and our 
experienced engineers work with customers to understand the business and productivity 
challenges they face and offer solutions based on standard product platforms in 
addition much of our technology and applications knowhow is proprietary and  
patentprotected 
powerful revenue drivers
our products typically involve relatively low capital expenditure for customers but 
provide a significant and rapid payback customer benefits include improving production 
efficiency reducing downtime eliminating wastage reducing time to market and 
ensuring compliance with safety and quality regulations in addition aftersales service 
and support is an important part of our business and over 25 of our revenue is derived 
from consumables and services 
acquisitions
we seek to enhance the growth potential of our businesses by pursuing an active but 
disciplined approach to acquisitions standalone acquisitions must share our business 
characteristics and have the management strength to operate as autonomous units within 
the spectris group bolton acquisitions are merged with one of our existing businesses to 
create a stronger and more broadlybased growth platform
product manufacturing
we focus on our core competencies of research and development product design and 
assembly and test whilst outsourcing the majority of component and subassembly 
production to qualified suppliers as a result our businesses are capital efficient low cost 
sourcing initiatives by the group’s strategic purchasing teams continue to drive down the 
costs of procurement whilst optimising quality and supply chain performance 
best practice transfer
despite the specific industry and technology focus of each of the businesses considerable 
emphasis is placed on knowledge sharing across the group and the transfer of best 
practice this can be especially valuable when entering new enduser markets or 
geographical regions and was of real benefit to many companies when moving into 
china and more recently latin america
values
our values define who we are  
and how we do business both  
as individuals and as a company 
honesty
acting with absolute integrity in all  
that we do
empowerment
creating an environment of autonomy  
in our operating companies where  
people are expected to take the  
initiative and to succeed
ownership
taking personal ownership of the 
responsibility of our roles
delivery
performing to the highest standards 
against the commitments we make  
both internally and especially externally 
to our customers
speed
ensuring that our business decisions are 
made and actions executed with a sense 
of urgency 06 spectris plc annual report and accounts 2010
strategy and objectives
strengthening market positions through innovation 
we invest around 7 of sales each year in rd in order to 
maintain our marketleading positions we work closely with 
customers to develop solutions which are tailored to their 
specific requirements much of our technology is proprietary 
and protected by patents or process knowhow new products 
and applications may be developed in house by acquiring bolt
on product lines or by collaboration and licensing agreements 
for proprietary technology in partnership with universities and 
other institutions
achievements 
expenditure on research and development grew by 7   
to £624 million or 7 of sales 
significant number of new products applications and  
technologies introduced throughout the group these 
included empyrean the world’s first 3d detection system 
on a diffractometer and morphologi g3id adding chemical 
identification to the existing size and shape analysis for the  
first time
increasing regional expansion with a focus on  
emerging markets
we seek to grow our businesses around the world with 
particular emphasis on industrialising markets such as china 
india and latin america we continue to establish sales and 
group support facilities in these regions so that we are able to 
support our global customers wherever they are based 
 
achievements
on a constant currency basis sales to china grew by 24 and  
sales to latin america grew by 11
acquisition of omec provides further opportunities to extend  
our product range in the materials analysis segment in china
increase of 25 in sales marketing and support staff in  
existing businesses in china increase of 46 including 
acquisitions we now have a total of around 1000 employees 
in china
new business centres opened in brazil and india  
growing existing businesses through acquisition
we seek to enhance the growth potential of our businesses 
by pursuing an active but disciplined approach to acquisitions 
focusing on businesses which are strong players in specific 
application areas where there are significant barriers to entry
achievements
invested a total of £630 million in five acquisitions 
reologica a swedish rheometer specialist –
omec a chinese company specialising in particle  –
characterisation
industrial particle characterisation business of sysmex   –
a japanese company
ntron a usbased supplier of rugged industrial  –
networking components
delta f a usbased supplier of specialist gas analysers –
focusing on operational excellence
we continue to focus on improving all aspects of our business 
through a range of actions including process efficiencies value 
pricing optimising the business mix cost competitiveness 
designing products for lowcost production reducing inventory 
and improving supply chain management 
achievements
components sourced or manufactured in lowercost countries  
increased to approximately 11 of total cost of goods sold
lean manufacturing programmes drive tangible productivity  
improvements and cost reductions
inventory management processes reduced number of days of  
inventory on hand from 85 days to 71 days 
building our presence in key strategic growth areas  
both organically and through acquisition
we aim to grow our existing businesses organically by 
developing new products as well as pursuing opportunities 
for growth in new markets such as nanotechnology and life 
sciences acquisitions are targeted at both existing and new 
markets 
achievements
product development programmes focused on building  
positions in our key market segments
acquisitions made strengthen our positions in the key markets  
of pharmaceuticals and life sciences industrial controls and 
industrial gas analysis 
aftersales service and consumables are an important part of  
our business representing 29 of sales
our strategy
our objective is to deliver shareholder value 
over the long term by supplying productivityenhancing 
solutions for our customers 2006 2007 2008 2009 2010
 7
3
19
0
15
2006 2007 2008 2009 2010
437p
581p
728p
454p
866p
2006 2007 2008 2009 2010
129
158
150
101
158
2006 2007 2008 2009 2010
107
99
86
133
112
2006 2007 2008 2009 2010
 8
6
3
16
12
2006 2007 2008 2009 2010
 21
33
25
38
91
 
07 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
key performance indicators
sales 
sales growth is a measure of how we are growing our 
business organically we aim to achieve yearonyear 
growth in sales on a likeforlike basis which excludes 
the effects of currency translation and acquisitions or 
divestments
earnings per share 
earnings per share is a commonly used measure 
of financial performance for shareholders we aim 
to achieve growth in adjusted earnings per share 
adjusted earnings exclude certain nonoperational 
items as defined by management in note 3 adjusted 
earnings per share is defined as the ratio of adjusted 
net profit for the year to the weighted average  
number of ordinary shares outstanding during the year
nonfinancial kpis are described on pages 29 to 33
return on sales 
return on sales is a measure of improving profitability 
in our business return on sales is defined as adjusted 
operating profit as a percentage of sales our intention 
is to achieve a midteens return on sales margin on 
average throughout the cycle 
cash conversion 
we focus on cash generation and use cash conversion 
as a performance measure as we believe cash 
represents an effective measure of the quality of our 
earnings our target is to deliver high cash conversion 
of operating profit in each financial year cash 
conversion is defined as operating cash flow as a 
percentage of adjusted operating profit 
organic sales growth continuing 
businesses at constant currencies
growth
total sales growth continuing
businesses
adjusted eps
return on sales continuing  
businesses
cash conversion
we monitor progress against the delivery of our 
strategic goals via four key performance indicators  08 spectris plc annual report and accounts 2010
principal risks and uncertainties
strengthening market positions  
through innovation
new product development
risk description
in order to strengthen our market positions and sustain competitive 
advantage the group invests significantly in research and development 
the development of new technologies and products involves risk 
including
the product being more expensive or taking longer to develop than  
originally planned
the market for the product being smaller than originally envisaged 
the product failing to reach the production phase  
potential impact
reduced profitability and cash flow 
loss of market share  
failure to recoup investment in innovation 
mitigation
significant investment levels in rd maintained at around 7 of sales 
project management disciplines are applied in product development  
programmes
working closely with customers to ensure that we develop solutions  
tailored to their specific needs
new product developments are based on standard platforms  
customised through high addedvalue applications engineering
extensive customer involvement during product development and prior  
to product launch through beta evaluations
intellectual property
risk description
our business is focused on the design and manufacture of technologically 
advanced products and applications significant investment in rd 
is made towards this end as a consequence we own and protect 
patents trademarks trade secrets copyright information and intellectual 
property licenses
the risk therefore exists that this intellectual property may be infringed by 
third parties or that we may inadvertently infringe thirdparty rights 
potential impact
reduced profitability and cash flow 
loss of market share  
failure to recoup investment in innovation 
mitigation
procedures in place requiring all of our businesses to 
maintain a watching brief on new applications –
undertake specific reviews prior to commencing new product  –
development acquisitions or licenses
maintain a portfolio of intellectual property assets such that no single  
patent trade secret or trademark is sufficiently important to present a 
material risk to the success of the company
increasing regional expansion with a focus  
on emerging markets
political and economic risks 
risk description
we operate in a range of enduser markets around the world and may 
be affected by political economic or regulatory developments in any of 
these countries material adverse changes in the political and economic 
environments in the countries in which we operate have the potential to 
put at risk our ability to carry out our strategy
potential impact
reduced profitability and cash flow 
mitigation
maintaining a broad spread of markets products and customers limits  
risks associated with any given territory
ensure we remain structured in such a way that enables us to take  
prompt action in the event of any material change in the trading 
environment
monitor market intelligence 
ensure we maintain a strong balance sheet and financial position  
laws and regulations
risk description
we operate in a large number of jurisdictions and as a consequence 
we are subject to numerous domestic and international regulations and 
restrictions these include laws and regulations covering product safety 
export controls antibribery competition and false accounting
any failure by the group or its representatives to comply with relevant 
laws and regulations could result in civil or criminal liabilities leading to 
significant fines and penalties or the disqualification of the group from 
participation in governmentrelated contracts for a period of time in  
the event of a failure to comply with export control regulations the group 
could also be exposed to restrictions being placed upon its ability to trade 
potential impact
reduced sales profitability and cash flow 
reputational damage 
diversion of management resource to address any resulting  
investigation
mitigation
strong internal control framework policies and culture 
formal export controls compliance procedures in place including strict  
product classification and transaction screening protocols 
ethics training provided to all employees 
regular monitoring of compliance 
the group has a wellestablished risk process for  
identifying evaluating and managing significant risks
which is a part of the group’s system of internal controls as 
described in the directors’ report on page 40 09 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
all such risks are evaluated with reference to the group’s achievement of 
its strategic objectives as outlined on page 6 the key potential risks and 
uncertainties facing the group’s ability to deliver its strategy together with 
mitigating actions are described below
growing existing businesses through acquisition 
acquisitions
risk description
a key element of our strategy is to grow the business portfolio through 
acquisition of standalone or bolton businesses which complement or 
extend the range of products and applications we can provide 
integrating both the operations and personnel of acquired businesses 
can be a complex process potential risks therefore exist that the planned 
benefits from the acquisition may not be achieved as a result of problems 
encountered in integrating the acquired business incorrect assumptions 
in the original business case changing market conditions or deficiencies 
arising in the due diligence process further the company could be 
exposed to past acts or omissions of the acquired business
potential impact
failure to achieve the benefits outlined in the business case 
reduced profitability and cash flow 
unforeseen liabilities 
mitigation
rigorous financial and legal assessment of target businesses 
strict authority levels which subject to size involve review by the  
board for such transactions 
comprehensive representations and warranties in purchase agreements 
extensive integration planning and execution 
regular review against the business case for the acquired businesses 
postacquisition controls reviews 
building our presence in key strategic growth 
areas both organically and through acquisition
competitive activity
risk description
the nature of the marketplaces in which we operate means that all of our 
businesses are exposed to risk from competitor activity
potential impact
loss of market share 
reduced profitability and cash flow 
mitigation
maintain marketleading positions through significant investment in  
research and development
diversified portfolio of products and markets limits the overall risk from  
any single competitor
maintain ability to react quickly to changes in customer and market  
demand 
maintain a watching brief on new competitor activity 
revenue visibility and seasonal fluctuations
risk description
our operations are characterised by short lead times and seasonal fluctuations 
in sales with some businesses exhibiting a greater trend towards sales in the 
second half of the year the limited forward visibility makes determining the 
impact of longerterm purchasing trends more difficult 
potential impact
reduced visibility of business performance 
reduced profitability and cash flow 
mitigation
even out the first halfsecond half sales and profit split  
careful monitoring of quote activity orders and shipments in the final  
few months of the year
focusing on operational excellence
supply chain dependencies and disruption 
risk description
the company is exposed to the risk that some of the components it 
sources particularly for custombuilt items or older components are 
provided by a single supplier and are therefore vulnerable to interruption 
of supply
the company also manufactures components from proprietary 
technologies at a number of locations our ability to supply products 
to our customers could be adversely impacted by a disaster or other 
disruptive event at any of these sites 
any interruption to the company’s supplies or related increase in costs 
may result in an adverse effect on the business’ financial position and 
future performance
potential impact
inability to fulfil customer orders resulting in lost sales and reputational  
damage
increased costs reduce profitability 
loss of market share 
mitigation
strategic sourcing teams source lowercost components across a range  
of markets
alternative sources of supply actively sought to reduce dependency  
upon singlesource suppliers
safety stock levels established for critical components 
business continuity plans and disaster prevention measures in place for  
all material manufacturing locations
business interruption insurance 
strong contract review process 
fluctuations in exchange rates
risk description
because of the global nature of our business we have operations which 
sell and purchase goods in foreign currencies and whose results we 
record in a variety of different currencies we are therefore exposed to 
any significant changes in exchange rates between a number of different 
currencies
potential impact
un  expected variations in the company’s results
red  uced profitability and cash flow
mitigation
forward contracts cover up to 75 of forecast exposures up to 18  
months ahead
natural hedging strategy matching invoicing and purchasing  
currencies where practical
foreign currency investments hedged with borrowings in the same  
currency wherever possible
regular sensitivity analyses carried out to understand the impact of  
exchange rate movements on the group’s reporting 10 spectris plc annual report and accounts 2010
chairman’s statement
john hughes
chairman
146
increase in reported revenue
dear shareholder
i am pleased to report that spectris achieved a record performance in 2010 in terms 
of both revenue and adjusted operating profit for the year throughout the downturn 
we maintained the focus on our strategic objectives as a result our acquisition activity 
continued expenditure on research and development strength in emerging markets and 
good cost control have enabled us to benefit more quickly from the improvement in the 
economy than following previous downturns
improving customer demand led to revenue for the year increasing by 146 to 
£9019 million 2009 £7873 million and adjusted operating profit increasing by  
79 to £1421 million 2009 £792 million 
on a reported basis revenue growth was 146 with acquisitions contributing 15 
and currency also contributing 15 on a constant currency organic likeforlike 
basis growth was therefore 116 operating margins were 158 an increase of 
57 percentage points compared with the prior year
the growth in operating profit was due to a combination of increased volume an 
expansion in gross margins and cost benefits resulting from restructuring and integration 
activities we had implemented the previous year 
profit before tax increased by 94 to £1323 million 2009 £682 million and earnings 
per share increased by 91 from 454 pence to 866 pence the effective tax rate was 
242 2009 232 
cash conversion was robust with 112 of operating profit converted into operating 
cash largely due to a reduction in working capital of approximately £20 million net debt 
decreased by £377 million from £1239 million to £862 million 05x ebitda net interest 
costs were £98 million at 31 december 2010 the group had cash of £647 million and 
undrawn committed facilities of £80 million this strong financial position gives us the 
flexibility to continue to pursue our strategic objectives
the board is proposing to pay a final dividend of 209 pence which combined with 
the interim dividend of 71 pence gives a total for the year of 280 pence 2009 
2425 pence an increase of 15 the dividend is covered 31 times this is consistent 
with our policy of making progressive dividend payments based upon affordability and 
sustainability the dividend will be paid on 24 june 2011 to shareholders on the register at 
the close of business on 3 june 2011
we are very pleased with the group’s  
performance in 2010 with trading exceeding our 
expectations across all four business segments
280p
dividend up 15 11 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
board changes
having served for six years as a nonexecutive director anthony reading retired at the 
conclusion of the agm in may 2010 on behalf of the board i would like to thank him 
for his contribution to the group and his chairmanship of the remuneration committee 
i would also like to welcome russell king who joined the board as a nonexecutive 
director on 20 october 2010 and assumes the role of chairman of the remuneration 
committee russell was previously chief strategy officer of anglo american plc and is a 
nonexecutive director of aggreko plc 
outlook
spectris recovered quickly from the economic downturn and made excellent progress in 
2010 with trading exceeding our expectations across all four business segments looking 
ahead we expect a return to more normal sales growth during 2011 and we will continue 
to pursue our strategy of investing in new products and applications seeking acquisition 
opportunities and expanding our market positions and regional presence as a result  
the board believes spectris is well positioned for further progress in 2011
john hughes
chairman
  unless stated otherwise figures quoted for operating profit net interest profit before tax tax and earnings 
per share are adjusted measures – for explanation of adjusted figures and reconciliation to the statutory 
reported figures see note 3
1
2
3
4
5
6
7
8
9
10
1 automotive and aerospace 12
2 pulp and paper 11
3 semicon telecoms electronics 10
4 academic research 9
5 pharma life sciences 9
6 metals minerals and mining 9
7 machine building 9
8 energy and utilities 7
9 environment 5
10 other incl distribution 19
2010 sales by enduser market
 total group reported sales 12 spectris plc annual report and accounts 2010
chief executive’s review   
john o’higgins
chief executive
£624m
expenditure on rd up 7
26
increase in sales to asia pacific
growth returned during 2010 and all business segments saw higher sales than in 2009 
overall sales growth was strongest in the inline instrumentation and industrial controls 
segments as the general economic recovery resulted in production levels and customer 
expenditure returning to more usual rates the test and measurement segment saw a 
strong recovery in the second half of the year as the number of automotive customer 
projects increased and the materials analysis segment also grew strongly in the  
second half
strategy
we made significant progress on all elements of our strategy during the year as set  
out below
strengthening market positions through innovation
expenditure on research and development grew by 7 to £624 million 7 of sales 
following the sustained investment during the downturn of 2009 we launched a range 
of new products technologies and applications during the year across the group one of 
the most exciting of these was empyrean our new xray diffraction platform for materials 
research empyrean is unique in its ability to measure all sample types from powders to 
thin films nanomaterials and 3d objects on a single instrument we also launched a new 
version of the morphologi automated image analysis system the g3id developed as 
part of our collaboration with kaiser optical systems this product which adds chemical 
identification to the existing size and shape analysis in one system for the first time 
enables customers in the pharmaceutical industry to distinguish between materials  
that appear identical in traditional particle sizing systems and has been well received 
in the industry
increasing regional expansion with a focus on emerging markets
asia pacific continued to see strong growth with group sales up by 26 on a reported 
basis this remains our secondlargest regional market and is now just 4pp behind 
europe compared with 12pp in 2009 two of the acquisitions made in the year are 
based in asia and together with ntron and delta f increase our presence in the 
region we have also increased the number of staff employed in sales marketing and 
support functions in our existing businesses in china by 25 increase of 46 including 
acquisitions bringing the total number of people employed in china to around 1000 
we continued to invest in infrastructure and service channels globally opening new 
customer business centres in são paulo brazil and mumbai india 
growing existing businesses through acquisition
during the year we made five bolton acquisitions for a total consideration of 
£630 million the total annualised proforma revenues of the businesses acquired would 
have been approximately £36 million in april we acquired the assets of reologica 
instruments ab a swedish company specialising in the design and manufacture of 
rheometers in july we acquired zhuhai omec instruments co ltd a chinese company 
specialising in particle characterisation which has extended our product range in the 
materials analysis segment in october we acquired the industrial business of sysmex 
a japanese company this has increased our product offering in the industrial particle 
characterisation area and enables us to provide technical and applications support 
from laboratories and offices in kobe and tokyo these three acquisitions form part of 
the materials analysis segment in october we acquired the business of ntron corp 
a leading usbased manufacturer of rugged industrial networking components this 
business has been incorporated into the industrial controls segment finally in november 
we acquired delta f corporation a manufacturer of process analyser technologies 
based in the us delta f’s products and technologies complement our range of process 
we will continue to pursue our strategy of investing 
in new products and applications seeking acquisition 
opportunities and expanding our market positions and 
regional presence 13 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
gas analysis solutions further extending our measurement capabilities in the inline 
instrumentation segment 
 
focusing on operational excellence
we continued to focus on improving operational efficiency with a number of ongoing 
initiatives during the year despite the general increases in material costs as the global 
economy recovered our chinabased strategic sourcing team together with operating 
company purchasing managers continued to accelerate the pace of sourcing from 
lowercost countries and we now have a wellestablished supply chain of partners in 
china southeast asia and eastern europe the value of items sourced or manufactured 
in lowercost countries now accounts for approximately 11 of our total cost of goods 
sold it is also worth noting that we have limited exposure to energy and commodity 
input prices lean manufacturing programmes have been introduced across the group 
an example is at ndc infrared engineering’s facility in the usa as described in the case 
study below
building our presence in key strategic growth areas both organically and 
through acquisition
the acquisitions we have made during the year have improved our positions in key 
strategic markets in addition we are placing increasing focus on the more resilient areas 
of our business for example customer support service and consumables which now 
represent 29 of sales we continue to look for suitable acquisition opportunities to build 
our strategic business segments
john o’higgins
chief executive
focusing on operational 
excellence
at ndc infrared engineering lean 
manufacturing initiatives have been 
introduced including outsourcing 
supply chain realignment and extensive 
use of organisational techniques such as 
5s and visual management these focus 
the company on critical valueadded 
processes and tangible productivity 
improvements supply chain initiatives 
include realignment with suppliers 
whose business models and processes 
more closely fit with ndc’s in order 
to establish a global supply chain 
that provides ndc with a sustainable 
competitive advantage 14 spectris plc annual report and accounts 2010
operating review
highlights
strong growth in pharmaceuticals  
and life sciences
some softening in academic rd 
h2 recovery in metals and mining 
3 bolton acquisitions 
overview
materials analysis provides a wide range of analytical instrumentation to the metals and 
mining pharmaceutical and life sciences and electronics industries and to academic 
and research institutions our products help customers to improve accuracy and speed 
of materials analysis in the laboratory and in process manufacturing applications the 
operating companies in this segment are malvern instruments panalytical and particle 
measuring systems
segment performance
sales in materials analysis at £2716 million increased by 9 compared with the prior 
year up 8 at constant currencies including 3 from acquisitions operating profit 
increased by 24 to £395 million operating margins improved from 129 to 145 
as a result of volume pricing and mix including a favourable shift towards aftersales 
services which grew by 15 and now represent 31 of sales
activity in the metals minerals and mining sector the largest enduser market for this 
segment was slow in the first half of the year but improved in the second half a number 
of orders for laboratory automation projects were secured particularly in latin america 
and europe these included an order from a major steel producer in the uk for a fully 
automated system for iron and steel analysis continued investment in infrastructure 
projects particularly in china and the middle east provided good demand for our 
equipment and we received a large number of orders for our xray analysis systems from 
the cement industry in china and in the middle east for our rheometers to control the 
quality of asphalt production 
demand from the pharmaceutical industry grew by over 40 in 2010 new regulations 
in china have led to the enforcement of stricter safety standards covering the production 
of food and pharmaceutical products with standards equivalent to the fda regulations 
in north america as a result we made a number of important sales to customers who 
need to comply with these regulations and the state food  drug administration in 
china also purchased our particle characterisation instruments to assist in standards 
enforcement we also launched a new facility monitoring system which detects both 
molecular and microbial contamination combining the microsafe microbial detection 
and monitoring products acquired in 2009 with our existing particulate measurement 
products and secured a major us manufacturer as the first customer
sales to the academic sector and to research institutions were very good in 2009 helped 
by government stimulus packages in a number of regions although some of these 
governmentfunded research programmes in the developed economies ended during 
2010 the market overall remained resilient with germany benefiting from sustained 
investment in the universityrd sector and sales to emerging markets continuing 
to increase our new empyrean xray system launched in the first quarter has also 
proved attractive to the academic and research market enabling customers to carry out 
experiments that were not previously possible we have longstanding relationships with 
many of our customers in this market and our equipment is used extensively in their 
laboratories with new systems adding to the research capabilities they can provide 
the electronics industry experienced a strong recovery in 2010 as a result of large 
investments in semiconductor manufacturing capacity driven by growth in pcs flat 
panel tvs leds and smart phones and we sold a number of products to manufacturers 
£2716m
sales up 9
£395m
operating profit up 24
materials analysis 15 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
for upgrading their facilities in july we launched the ultrachem 40 particle counter for 
the semiconductor industry this instrument uses proprietary digital imaging technology 
to detect ultrasmall particles and is the most sensitive particle counter in the industry 
increasing demand for the highbrightness leds used for display backlighting in devices 
such as computers televisions and incar lighting also provided good demand from korea 
and china for our high resolution xray diffraction instruments these are the systems 
of choice for process control by the majority of manufacturers and suppliers of gallium 
nitride the key material used in these devices 
segment outlook
the outlook for metals minerals and mining is good with further recovery expected  
in mining and steel as commodity prices rise some softness is expected to remain  
in academic segments however this will be mitigated by continued investment in 
emerging markets and an increase in industrial rd as the global economy grows  
the semiconductor market is forecast to remain strong in 2011 and we expect to see 
more investment in process monitoring in the pharmaceutical industry particularly  
in china the acquisitions made in this segment will further strengthen our asia  
presence in 2011
increasing regional expansion 
with a focus on emerging 
markets
spectris’ office in são paulo brazil 
provides sales and support for a number 
of our operating companies in latin 
america enabling them to provide 
a direct response to the increasing 
number of customers in this region 
customers include the university of são 
paulo where panalytical’s applications 
laboratory is used for research and 
support applications primarily in the 
materials and industrial segments 
samples for analysis are received from 
government institutions and industrial 
companies as well as from students 
with their own research projects 16 spectris plc annual report and accounts 2010
operating review continued
test and measurement
highlights
automotive customers reinstate  
development budgets
strong profit contribution 
good demand from aerospace 
good growth regionally   
especially asia
£2974m
sales up 11
£348m
operating profit up from £14m
overview
test and measurement supplies test measurement and analysis equipment and software 
for product design optimisation manufacturing control and environmental monitoring 
systems markets are principally the aerospace automotive and consumer electronics 
industries for customers in the automotive and aerospace industries our products and 
applications help them to design and test new products whilst reducing time to market 
in consumer electronics our equipment and software enable customers to refine the 
performance and accuracy of their products in the environmental monitoring market 
the desire for higher standards of community comfort is driving increasing demand 
the operating companies in this segment are brüel  kjær sound  vibration and hbm
segment performance
sales in test and measurement increased by 1 1 organic increase of 1 1 at constant 
currencies to £297 4 million operating profit increased to £348 million 2009 £14 million 
the margin effect of the increase in sales was boosted by a yearonyear reduction in 
overhead costs this reflects an increase in restructuring benefits and a reduction in 
restructuring charges combined with good cost control throughout the segment operating 
margins were 117 compared with 05 in the prior year of this increase 26 percentage 
points pp came from an increase in gross margins 31pp from a reduction in restructuring 
costs and 55pp from operating leverage as the benefits of the restructuring were realised
the automotive market a key enduser market for this segment experienced a dramatic 
slowdown in 2009 and although not returning to the high levels of 2008 saw a major 
improvement in 2010 as customers began to reinstate budgets 
the world of data acquisition and analysis is changing rapidly as our customers are under 
growing competitive pressure to launch products with reduced development times and 
which meet increasingly stringent environmental and legislative compliance and we 
are developing new products to help them to meet these requirements in september 
we signed an exclusive partnership agreement with mira the motor industry research 
association in the uk to jointly provide engineering services to chinese automotive 
customers mira is a world leader in advanced engineering research and product 
testing with facilities located around the world and its work includes the development of 
groundbreaking low carbon vehicle technologies in return mira has made significant 
investment in our equipment including a noise vibration harshness nvh simulator for 
use in these services the nvh simulators saw good demand from vehicle manufacturers 
and a major japanese manufacturer invested in a number of our solutions for vehicle 
development including an nvh simulator transducers invehicle measurement and 
analysis systems and array systems for wind tunnel testing
in february scuderia ferrari took delivery of a data acquisition system and software for 
test bench balancing for their formula one engines engine balancing leads to superior 
performance and increased safety and reliability and has taken on a new importance since 
the introduction of new rules limiting the number of engines per driver per season 
the growth of consumer electronics products such as smart phones mp3 players and 
tablet computers also benefited this segment in order to achieve the very high product 
quality the market demands manufacturers have increased production testing standards 
for operational and environmental performance our ability to offer complete solutions 
for both acoustics and vibration has led to new opportunities in the quality assurance 
testing of smart phones and we secured orders for our microphones and conditioning 
amplifiers from a number of manufacturers  17 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
during the year sales of our products to the aerospace industry increased particularly 
for satellite testing in october spain’s national institute for aerospace technology 
successfully achieved noise certification of the airbus a330 multi role transport tanker 
using our data acquisition system this aircraft can operate in civil airports for example 
during international human aid operations we also sold equipment for structural testing 
of new aircraft in china and japan and our recentlylaunched optical strain gauges are 
proving successful for stress analysis of the composite materials used in aircraft design 
in the environmental noise market there was good demand for our noise monitoring 
services and we secured orders from a number of airports around the world our flight 
tracking service is also proving successful assisting in the management of aircraft noise 
and safety at airports worldwide
our recentlylaunched urban and industrial noise monitoring application is aimed at 
installations which are required to report compliance with noise regulations such as 
mines ports industrial premises power stations wind farms and large construction 
projects this system negates the need for inhouse expertise by outsourcing compliance 
via our managed service and is generating significant interest with industrial plant 
managers who are faced with noise management issues in their local communities
segment outlook
the automotive aerospace and consumer electronics segments all recovered well in 2010 
and are expected to continue to provide good opportunities for growth the market 
for urban and airport noise monitoring is expected to continue to grow as regulation of 
environmental noise levels increases 
building our presence in key 
strategic growth areas
in the automotive industry a key  
enduser market for test and 
measurement ferrari have selected 
our pulse lanxi data acquisition 
system for testing engine vibration 
in their formula one cars with the 
engines running at up to 20000 rpm 
vibration is a critical issue balancing 
the crankshaft to reduce engine 
vibration leads to superior performance 
and increased safety and reliability a 
second pulse system together with 
a mannequin with builtin ear and 
mouth simulators is used to test the 
radio communication link between the 
racing driver and the engineers at the 
pit with the driver exposed to noise 
equivalent to a jet engine taking off 
miniature loudspeakers are built into 
special silicone earplugs that protect his 
hearing whilst allowing him to listen to 
messages from his team  18 spectris plc annual report and accounts 2010
operating review continued
highlights
good growth and record profitability 
pulp and paper strong 
strong growth in converting   
and plastics
acquisition of delta f corporation 
£273 1m
sales up 20
£583m
operating profit up 41
inline instrumentation
overview
inline instrumentation provides process analytical measurement asset monitoring  
and online controls for both primary processing and the converting industries our 
products and applications provide precision measurement in challenging operating 
environments ensuring process quality asset uptime safety and improved yield  
the operating companies in this segment are beta lasermike brüel  kjær vibro  
btg group fusion uv systems ndc infrared engineering and servomex 
segment performance
sales in inline instrumentation increased by 20 increase of 17 at constant currencies 
and organic to £2731 million operating profit increased by 41 to £583 million and 
operating margins increased to a record 213 up 31pp from last year this was partly 
due to gross margin increases and partly to operating leverage sales of service spare 
parts and consumables are a key feature of this segment and represent 43 of revenues
the inline instrumentation segment saw good growth in all major regions and markets 
and strong profitability the pulp and paper industry the largest enduser market for this 
segment performed well as paper mills placed increased emphasis on cost reduction 
in response to higher energy and fibre costs and we saw strong demand for both our 
instruments and creping blades our high performance blades are particularly successful 
in tissue production where they provide enhanced product properties such as tissue 
bulk and softness whilst improving tissue uniformity compared with traditional steel 
blades this results in more efficient tissue converting and less wastage demand for 
our instruments was also good particularly in china where new paper mill expansion 
projects are under way and orders were also received from a number of mills in latin 
america our new optical consistency transmitters are performing well these units can 
accurately measure consistency over a wide range of pulp types and generate savings in 
fibre fillers chemical consumption and lost production we received an order for a new 
newsprint machine in the uk which will be the first paper machine in the world to be 
entirely fitted out with optical transmitters 
sales in the energy refining and industrial gas markets continued to recover in all regions 
with excellent growth in china middle east india and latin america new business 
centres were opened in brazil and india providing sales and service for customers in 
these regions in november we acquired delta f corporation a specialist manufacturer 
of process analyser technologies the acquisition further enhances our ability to deliver a 
complete range and choice of process gas analysis technologies and systems to industry 
worldwide demand for condition monitoring systems was also strong from the energy 
sector and in october we introduced the vdau6000 condition monitor a product 
providing costeffective condition monitoring and analysis as a bolton to existing safety 
systems or for balance of plant applications the hydroelectric power market continued 
to show strong signs of growth particularly in eastern europe and also in latin america 
where we were nominated as an approved vendor for the supply of safety and condition 
monitoring equipment for two hydropower plant projects in brazil we also had a record 
year for remote monitoring orders for wind power applications and we entered into a 
frame agreement with arise windpower a leading player in the swedish wind power 
market for the supply of condition monitoring solutions for wind turbine applications
in the converting industry sales to the wire and cable market of our noneccentricity 
gauge launched in the first half greatly exceeded our expectations and our noncontact 
length and speed measurement gauge also saw good success with original equipment 
manufacturers in europe these products provide more accurate control of the production 
process and improve product quality whilst reducing material consumption  19 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
in the fibre optic market we continued to see the adoption of our noncontact 
measurement systems among the leading optical manufacturers particularly in china to 
improve product quality and increase production yields our fibermike systems which 
include diameter gauges and flaw detectors are used to monitor each stage of the draw 
tower process 
we made good progress in high technology markets such as coating lines and separator 
film lines for the production of lithium ion batteries most of the increase in battery 
production is in asia followed by north america
the investment in new technologies to improve the image quality of displays and new 
products such as 3dtv as previously mentioned in the materials analysis segment was 
also beneficial for the inline instrumentation segment and we sold a number of systems 
for uv curing of back light units and brightnessenhancing films for flat panel displays 
in japan korea and taiwan the adoption of uv in industrial markets also continues 
to expand with china one of the fastestgrowing markets for the curing of industrial 
coatings and the use of uv curing technology 
segment outlook
conditions have recovered in this segment’s end markets driven by customer investments 
in upgrades to facilities and a demand for greater production efficiencies we have 
increased our focus on service and support and we anticipate that this will continue to 
provide a resilient revenue base
growing existing businesses  
through acquisition
in november we acquired delta f 
corporation a leading manufacturer of 
specialist gas analysers based in boston 
massachusetts usa delta f develops 
manufactures and distributes a range 
of trace oxygen and moisture analysers 
primarily for use in the semiconductor 
and electronics industries this bolton 
acquisition increases our offering in the  
inline instrumentation segment with  
delta f’s products technologies and 
expertise complementing those of 
servomex enabling the company to 
deliver a complete range of process 
gas analysis systems to customers 
worldwide 20 spectris plc annual report and accounts 2010
operating review continued
highlights
general manufacturing and  
electronics sectors return to growth
good growth in all major regions 
ntron acquisition gives foothold in  
industrial networking applications
£598m
sales up 34
£95m
operating profit up 119
industrial controls
overview
industrial controls supplies automation and control products for the discrete 
manufacturing industries our products provide identification and tracking solutions 
during the manufacturing process displays for process monitoring and control and data 
interfaces for a broad range of manufacturing industries sales are made indirectly to 
end users via distributors as well as directly to original equipment manufacturers with a 
significant proportion of repeat business the operating companies in this segment are 
microscan and red lion controls 
segment performance
sales in industrial controls increased by 34 to £598 million increase of 32 at 
constant currencies including 8 from acquisitions operating profit increased by  
119 to £95 million operating margins were 159 compared with 99 in 2009  
the expansion in operating margins was largely due to the increased volume and the 
benefits of the restructuring and integration actions taken in 2009
the electronics and general manufacturing sectors returned to growth in 2010 
activity in the industrial controls and machine building markets continued to increase 
particularly with original equipment manufacturers and we secured a number of orders 
for private labelling of our networking products our data station product continued 
to find new applications and traditional interface products also continued to benefit 
from the recovery in the global manufacturing sector in october we acquired the 
business of ntron corp a leading manufacturer of rugged ethernet switches – the 
products used to connect multiple ethernet devices to each other and to build network 
infrastructure – and associated components for the industrial infrastructure and power 
generation markets
in the pharmaceutical market demand was strong for our laser scanners in china where 
they are used in systems which validate compliance to the new regulations regarding 
manufacture and distribution of pharmaceutical products all products covered by the 
scheme are now required to have an etracking bar code affixed to the packaging so that 
they can be traced in october we introduced a new inspection and verification solution 
for pharmaceutical packaging the vs1 track and trace machine vision system features 
a smart camera integrated lighting and powerful machine vision tools to read barcodes 
verify text and inspect labels for misalignment 
segment outlook
2010 saw a recovery in demand from the general manufacturing sector which we 
expect to continue with good opportunities in china we anticipate that our portfolio 
of track trace and control solutions will continue to find opportunities across a number 
of industrial controls sectors the segment has been strengthened by the acquisition of 
ntron and we expect to see growth from increased demand for industrial networking 
components  21 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
building our presence in key 
strategic growth areas
in october we acquired ntron a 
leading us manufacturer of rugged 
industrial networking components 
ntron supplies ethernet switches and 
associated components to the industrial 
infrastructure and power generation 
markets over the past few years wind 
turbine manufacturers have embraced 
the use of ethernet to monitor and 
control wind farms worldwide and  
use ntron’s switches to optimise  
their operation  22 spectris plc annual report and accounts 2010
operating review continued
strengthening market positions through innovation
biolaz realtime microbial  
monitor
vdau6000 condition  
monitoring system 
kor optical strain gauge 
the biolaz realtime microbial monitor 
provides rapid detection of airborne 
biological organisms in controlled 
environments this compact device can fit 
in restricted spaces and provides immediate 
notification when biological particles 
are present and realtime verification 
of biological activity levels during filling 
operations this results in faster batch 
releases improving productivity in 
sterile manufacturing processes in the 
pharmaceutical and biotech industries
this stateoftheart system provides a 
costeffective alternative to rackbased 
condition monitoring systems for rotating 
machinery the vdau6000 can monitor 
auxiliary machines or act as an extension 
to existing safety systems for monitoring all 
types of machines including critical turbo 
machinery its powerful userfriendly scalar 
condition monitoring functionality enables 
narrow band measurements for monitoring 
specific frequencies such as running 
speed blade pass and bearing defect  
the values are easy to monitor and trend 
providing reliable early fault detection
although this strain gauge rosette is the 
smallest in the world it is designed for 
withstanding extreme loads even in adverse 
ambient conditions and potentially explosive 
environments optical devices require no 
electrical signal and are easy to install 
opening up new opportunities for use in 
experimental stress analysis this gauge 
measures strain in three directions from 
which the twodimensional mechanical 
stress state is calculated typical applications 
include materials testing for example on the 
rotor blades of wind turbines 23 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
empyrean xray diffraction 
platform
vs1 track and trace machine 
vision inspection system 
noise sentinel noise  
monitoring system 
this urban and industrial noise monitoring 
application is aimed at installations which 
are required to report compliance with 
noise regulations such as mines ports 
industrial premises power stations wind 
farms and large construction projects 
the system negates the need for inhouse 
expertise by outsourcing compliance 
via our managed service this provides 
alerts when compliance with the relevant 
noise restrictions is exceeded delivers the 
information necessary to investigate and 
compiles regular reports demonstrating 
compliance
empyrean is our new xray diffraction 
platform for materials research featuring 
pixcel
3d
 the world’s first 3d detection 
system on a diffractometer empyrean 
is unique in its ability to measure all 
sample types from powders to thin films 
nanomaterials and 3d objects on a single 
instrument the system enables analysis 
of the widest range of properties of any 
existing or novel materials with a minimum 
of sample preparation time speeding up 
research and development processes
pharmaceutical companies are increasingly 
required to meet strict regulations on 
the manufacture and distribution of their 
products the vs1 system provides a 
complete solution for pharmaceutical 
packaging inspection featuring a smart 
camera integrated lighting and powerful 
machine vision tools it is designed to read 
barcodes verify text and inspect labels 
for misalignment 24 spectris plc annual report and accounts 2010
financial review
clive watson
group finance director
£1421m
operating profit up 79
reported sales were up 146 at £9019 million  
on an organic constant currency basis  
sales increased by 116
spectris uses adjusted figures as key performance measures in addition to those reported 
under adopted ifrs adjusted figures exclude certain nonoperational items which 
management has defined as amortisation and impairment of acquisitionrelated intangible 
assets acquisitionrelated costs and contingent consideration fair value adjustments profits or 
losses on termination or disposal of businesses unrealised changes in the fair value of financial 
instruments gains or losses on retranslation of shortterm intercompany loan balances 
related tax effects and other tax items which do not form part of the underlying tax rate see 
note 3 as noted in the 2009 annual report the definition has been modified for 2010 to 
include the income statement effects arising from the adoption of ifrs 3 revised
operating performance
2010 2009 increase
sales £m 9019 7873 146
adjusted operating profit £m 1421 792 794
operating margin 158 101 57pp
statutory 
sales £m 9019 7873 146
operating profit £m 1279 685 867
operating margin 142 87 55pp
reported sales were up 146 at £9019 million 2009 £7873 million favourable 
movements in foreign currency exchange rates contributed approximately £119 million 
15 and revenue from acquisitions contributed £116 million 15 therefore on an 
organic constant currency basis sales increased by 116 yearonyear
adjusted operating profit increased by 79 to £1421 million 2009 £792 million 
movements in foreign currency exchange rates had a positive effect of approximately 
£20 million and acquisitions contributed an additional £12 million on a likeforlike basis 
therefore operating profit increased by £597 million of this £731 million is due to an 
increase in gross margin from the higher sales offset by likeforlike overheads increasing 
by £134 million the increase in net overheads is inclusive of the yearonyear increase in 
restructuring benefits of £123 million and the yearonyear decrease in restructuring and 
postacquisition integration charges of £132 million underlying overheads therefore grew 
by £389 million of which approximately £27 million relates to the reinstatement of costs 
which were temporarily cut or frozen in 2009 mainly salaryrelated and certain discretionary 
costs and the balance of £119 million relates to the increase in variable overhead costs 
arising from increased sales activity and normal cost inflation operating margins increased 
from 101 to 158 
the yearonyear decrease in net finance costs was £12 million from £110 million 
to £98 million this includes £07 million from refinancing the 75 million us private 
placement which matured in september 2010 with a fiveyear term loan facility carrying 
an interest rate of 312 51 percentage points lower than the us private placement note 
it replaced the balance of the yearonyear reduction in net finance costs £05 million 
arises from a reduction in average net debt offset by an increase in the effective average 
interest rate caused by holding large cash balances at a lower interest rate 
profit before tax increased by 94 from £682 million to £1323 million 
statutory operating profit after including acquisitionrelated intangible asset amortisation 
of £123 million 2009 £107 million and acquisitionrelated costs and contingent 
consideration fair value adjustments of £19 million 2009 £nil due to the adoption of ifrs 
3 revised from 1 january 2010 increased by 87 from £685 million to £1279 million
158
operating margins up 57pp 25 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
statutory profit before tax increased by 121 from £542 million to £1199 million
the reconciliation of statutory and adjusted measures is shown in the table below
2010  
ifrs 
statutory 
£m
2010 
adjustments 
£m
2010 
spectris 
adjusted 
£m
2009  
ifrs 
statutory 
£m
2009 
adjustments 
£m
2009 
spectris 
adjusted 
£m
sales 9019 – 9019 7873 – 7873
gross margin 5268 – 5268 4453 – 4453
operating profit 
before amortisation 
of acquisition
related intangibles 
and acquisition
related costs 1421 – 1421 792 – 792
amortisation of 
acquisitionrelated 
intangibles 123 123 – 107 107 –
acquisition
related costs 
and contingent 
consideration fair 
value adjustments 19 19 – – – –
operating profit 1279 142 1421 685 107 792
profit on disposal of 
businesses – – – 01 01 –
unrealised 
changes in fair 
value of financial 
instruments 14 14 – 35 35 –
net gains on 
retranslation of 
shortterm inter
company loan 
balances 04 04 – 01 01 –
net bank interest 
payable 90 – 90 107 – 107
ias 19 finance cost 05 – 05 03 – 03
other finance cost 03 – 03 – – –
profit before tax 1199 124 1323 542 140 682
acquisitions
the total cost of acquisitions in the year was £630 million including £08 million for cash 
acquired of this £41 million is attributable to the fair value of deferred and contingent 
consideration expected to be paid in future years in addition a further £45 million was paid 
in respect of prior year acquisitions making the net cash outflow in the year £626 million an 
amount of £19 million was spent on incidental costs mainly professional fees which makes 
the total acquisitionrelated cash flow in 2010 £645 million the acquisitions mainly took 
place in the fourth quarter of 2010 and contributed £1 16 million of incremental sales and  
£12 million of operating profit 
taxation
the effective tax rate on adjusted profits was 242 2009 232 an increase of 1pp 
mainly due to a higher proportion of the profits being earned in the more highly taxed 
usa on a statutory basis the effective tax rate was 198 2009 214 the effective 
tax rate continues to be below the weighted average statutory tax rate of 276 2009 
251 primarily as a consequence of a taxefficient intercompany financing structure 
and research and development tax incentives
866p
earnings per share up 91
£ 1323m
profit before tax up 94 26 spectris plc annual report and accounts 2010
financial review continued
earnings per share
earnings per share increased by 91 from 454p to 866p reflecting the net impact of a 
94 increase in profit before tax slightly offset by the increase in the weighted average 
number of shares from 1154 million in 2009 to 1158 million in 2010 due to company 
share option exercises satisfied from treasury shares and an increased tax rate
statutory basic earnings per share increased by 125 from 369p to 831p the difference 
between the two measures is shown in the table below 
2010 
pence
2009 
pence
statutory basic earnings per share 831 369
amortisation of acquisitionrelated intangible assets 106 93
acquisitionrelated costs and contingent consideration fair value 
adjustments 16 –
profit on disposal of businesses – 01
increasedecrease in fair value of crosscurrency interest rate swaps 12 30
net gains on retranslation of shortterm intercompany loan balances 03 01
tax effect of the above and other exceptional items 72 36
earnings per share 866 454
cash flow
2010 
£m
2009 
£m
operating cash flow
operating profit 1421 792
add back depreciation and software amortisation 165 167
trade working capital movement 194 353
nonoperating provisions and other 07 115
net cash flow from operating activities before capital expenditure 1787 1197
capital expenditure 189 142
operating cash flow 1598 1055
cash conversion 112 133
nonoperating cash flow
tax paid 210 167
interest paid 101 108
dividends paid 289 270
acquisition of businesses net of cash acquired 626 287
acquisitionrelated costs 19 –
disposals – 01
exercise of share options 19 04
exchange 05 154
total nonoperating cash flow 1221 673
operating cash flow 1598 1055
movement in net debt 377 382
 operating cash flow as a percentage of operating profit
operating cash flow was £1598 million 2009 £1055 million a cash conversion rate of 
112 2009 133 a major contributory factor to this result was a reduction in working 
capital during the year of approximately £20 million 
average working capital and yearend working capital expressed as a percentage of sales 
decreased to 94 2009 143 and 98 2009 124 respectively this reflects 
the continuing effort by management to keep working capital to a minimum despite the 
increased value of sales capital expenditure during the year equated to 21 of sales 
2009 18 and at £189 million 2009 £142 million was 115 of depreciation and 
software amortisation 2009 85 
overall net debt decreased by £377 million 2009 decrease of £382 million from 
11 2
cash conversion rate
£862m
net debt at year end down by £377m 27 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
£1239 million to £862 million net debt was 05x ebitda interest cost excluding 
the financing charge arising from ias 19 was covered by operating profit 158 times 
2009 74 times 
financing and treasury 
the group finances its operations from both retained earnings and thirdparty borrowings the 
majority of which are currently at fixed rates of interest 
as at 31 december 2010 the group had £229 million of committed facilities denominated 
in different currencies consisting of £99 million of private placements maturing in october 
2013 £80 million of revolving credit facilities maturing between october 201 1 and september 
2012 a fiveyear £48 million term loan maturing in september 2015 and £2 million from three 
bank loans secured on property of three of our businesses the revolving credit facilities were 
undrawn at the year end in addition the group had a cash balance of £647 million and other 
uncommitted facilities mainly in the form of overdraft facilities at our local operations 
at the year end the group’s borrowings amounted to £1509 million 99 of which were 
at fixed interest rates 2009 94 the ageing profile at the year end showed that 1 of 
the year end borrowing is due to mature within one year 2009 31 and 99 is due to 
mature in between one and five years 2009 69 
currency
the group has both translational and transactional currency exposures translational exposures 
arise on the consolidation of overseas company results into sterling transactional exposures arise 
where the currency of sale or purchase invoices differs from the functional currency in which 
each company prepares its local accounts the transactional exposures include situations where 
foreign currency denominated trade debtor trade creditor and cash balances are held
after matching currency of revenue with currency of costs wherever practical forward 
exchange contracts are used to hedge a proportion up to 75 of the remaining forecast net 
transaction flows where there is reasonable certainty of an exposure at 31 december 2010 
approximately 61 of the estimated net euro us dollar and japanese yen exposures for 201 1 
were hedged using forward exchange contracts mainly against the swiss franc sterling the 
euro and the danish krone
the largest translational exposures are to the us dollar euro danish krone and swiss franc 
translational exposures are not hedged the table below shows the key average exchange 
rates compared to sterling during 2010 and 2009 
2010 
average
2009 
average
usd 155 157
eur 117 112
jpy 135 146
to demonstrate the transaction and translation currency exposure faced by the group 
the table below shows the differences between the group’s consolidated revenues and 
costs for each of the major currencies in 2010 before reflecting the effect of transactional 
hedges taken out in the year
revenue and cost by major currency
usd eur gbp jpy other total
total sales £m 317 354 65 68 98 902
 of sales 35 39 7 8 11
total costs £m 241 315 79 35 100 770
pbt by currency £m 76 39 –14 33 –2 132
 of pbt 57 30 –11 25 –1 
   dollareuro categories include tracking currencies
  costs include interest of £33 million in usd £63 million in eur and £02 million in gbp
£229m
committed facilities
£647m
cash balance 28 spectris plc annual report and accounts 2010
financial review continued
the previous table is for overall guidance only as the phasing of income and the movement 
in the monthly average exchange rates during the year can have a significant impact
defined benefit pension schemes
the company operates a number of pension schemes throughout the group the net 
pension liability in the balance sheet before taking account of the related deferred tax 
asset of £35 million has decreased to £141 million 2009 £235 million the movement 
can be summarised as follows
£m
deficit in defined benefit pension schemes at 1 january 2010 235
gain as a consequence of the uk change in inflation previously indexed  
to rpi now cpi 29 
actuarial gains 24 
contributions in excess of service cost 49 
interest costs on pension scheme liabilities net of expected return on 
pension scheme assets 05
exchange difference and other movements 03
deficit in defined benefit pension schemes at 31 december 2010 141
 
the movement in individual plan deficits is shown in the table below
uk germany netherlands switzerland total
deficit as at 1 january 2010 143 70 03 19 235
decreaseincrease in deficit 106 01 01 10 94
deficit as at 31 december 2010 37 71 04 29 141
the reduction in the uk deficit is mainly as a consequence of the increase in investment 
returns arising from a recovery in equity values supplemented by the continuing 
deficit recovery contributions made to the plan these contributions were increased to 
£26 million in 2010 formerly £20 million pa and augmented by a special funding 
contribution of £19 million made during the year putting the group on track to eliminate 
the uk deficit by the end of 2012 it should be noted that actions taken in earlier years 
have contained the pension deficit and reduced risk the uk plan was closed to new 
members in 1996 and closed to future accruals in 2009 in addition the uk plan is largely 
protected from interest rate and inflation rate volatility due to swaps held by the plan 
but remains exposed to equity volatility corporate default and mortality experience 
a programme to reduce equity volatility commenced in 2008 by transitioning towards 
longterm corporate bond holdings matched to pensioner and deferred pensioner 
liabilities at 31 december 2010 70 of the uk plan’s assets excluding swaps were held 
in corporate bonds with the remainder in equity investments in july the uk government 
announced that cpi should be used as the basis for statutory minimum pension increases 
the impact of the change to cpi from rpi for the uk plan where the pension rules 
mandate inflation according to the deemed statutory index was a credit to the income 
statement of £29 million within administrative expenses 
the £10 million increase in the swiss deficit arose largely from a combination of adverse 
exchange rate movements and lower than expected asset returns
clive watson
group finance director 29 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
corporate social responsibility 
spectris is committed to creating business growth through 
adding value for our customers whilst also ensuring that  
our own impact on the environment is minimised
introduction
spectris is a leading supplier of productivityenhancing instrumentation and controls
our 6000 employees operate from 134 offices in 29 countries around the world 
our products are used to monitor and control research and manufacturing processes 
enhancing productivity and reducing environmental impact for customers in a wide range 
of industries 
we are committed to creating business growth through adding such value for our 
customers whilst also ensuring that our own impact on the environment is minimised and 
that we adhere to high standards of corporate social responsibility generally
spectris continues to meet the criteria for membership of the ftse4good index the 
leading responsible investment benchmark the ftse4good inclusion criteria are 
enhanced regularly and demand continued improvement in order to maintain inclusion 
in the index the criteria are assessed on a regular basis by the independent research 
organisation eiris
corporate governance
details of how the company complied with the principles of the combined code 
during 2010 and will henceforth comply with the new corporate governance code are 
described in detail in the directors’ report 
overall responsibility for developing corporate policies on environmental social ethical 
and health and safety matters and for reviewing their effectiveness lies with the spectris 
board of directors these policies are mandated across all business units and applied 
within each particular business taking account of local legislation and regulation all 
policies are reviewed periodically and any updates are communicated to the operating 
companies each year we require the president and finance director of each operating 
company to confirm that their business has complied in full with our corporate policies 
any instances of noncompliance must be reported there were no material cases of  
noncompliance in 2010
this certification forms an integral part of the company’s system of internal controls and 
is regularly reviewed by the group’s internal audit function and considered annually by the 
company’s external auditors compliance testing is a formal part of internal audit reviews 
through a structured review process the internal audit function undertakes visits to 
group locations on a rotational basis these visits involve an assessment of the business’ 
key internal controls as well as compliance with the group’s policies and procedures the 
results of internal audits and any cases of noncompliance are reported to the  
audit committee
environment and climate change
our core business of providing instruments and controls for the design and manufacturing 
processes of major industrial companies helps our customers to reduce their environmental 
impact in a number of ways we offer our customers products and technologies to 
reduce energy consumption make more efficient use of resources and control emissions 
furthermore a number of our products are critical to the development manufacture 
and maintenance of renewable energy generation technologies such as wind turbine 
generators and solar panels examples of the use of spectris’ products having a direct 
beneficial contribution to the environment are shown on our website 
ftse4good
index member 30 spectris plc annual report and accounts 2010
we also take the continuing reduction in our own environmental impact seriously 
endeavouring to employ nonpolluting technology wherever possible in our operations 
and taking steps to reduce our energy consumption further design processes take into 
account the operational lifetime of every product and endoflife removal or disposal 
consideration is also given to environmentfriendly production packaging and shipping 
our environmental policy is published on our website approximately half of spectris’ 
manufacturing operations by turnover are certified to iso14001 
no significant environmental incidents were recorded in 2010 and the company received 
no environmental fines 
overall spectris has a low climate change impact as our products do not require 
substantial manufacturing processes at our facilities see below for details of supplier 
impacts although we fall below the threshold for full participation in the uk crc 
energy efficiency scheme and are only required to submit an information disclosure 
we recognise the importance of managing our impact on the environment and are 
working to improve our environmental performance further and reduce our carbon 
emissions to this end we employed environmental consultants ws atkins to undertake 
a sustainability and responsibility review during 2010 and are in the process of acting on 
their recommendations as detailed below 
we take seriously the need to manage our carbon emissions and in 2010 ws atkins 
helped develop a reporting tool to collect data on electricity gas and fuel oil consumption 
across our global operations which will enable us to monitor and better manage our 
energy use to support this initiative we have established a new key performance 
indicator for energy consumption to provide a baseline against which future performance 
can be measured see chart using the data we have gathered we have commenced a 
programme to evaluate the potential for improvement around the group and will develop 
appropriate action plans for delivery
we will participate in the 2011 carbon disclosure project as a further part of our 
commitment to monitoring and managing our environmental impacts we are also 
reviewing the impact of water usage across our businesses and plan to assess the 
feasibility of collecting data on waste management throughout the group 
employees
we employ a highly skilled technical workforce averaging around 6000 people in 2010 
in 134 offices throughout the world and are committed to providing our people with a 
creative working environment with scope for individual responsibility and achievement 
compensation and benefits which are in line with other leading companies in the sector 
are designed to reward the achievement of objectives 
our employment policy is published on our website 
as part of our culture of respect we believe that people with varied backgrounds and 
perspectives add creativity to the company and thus we encourage diversity in the 
workplace we are committed to providing equal employment opportunities in terms 
of recruitment and employment training and development and promotion regardless 
of race colour religion national origin sex sexual orientation age disability or military 
veteran status our value of treating others with respect carries over to our policy against 
workplace discrimination and harassment we strive to create a culture of honesty 
respect and professional excellence whilst maintaining a healthy balance between 
working and personal lives with initiatives such as parttime and job share opportunities 
providing familyfriendly working conditions employee surveys are carried out in a 
number of companies to measure the views of employees on company issues and action 
plans agreed to address the issues raised initiatives such as the savings related share 
option scheme available to all uk employees and grants under the group’s performance 
share plan made to senior management across the group are designed to encourage 
loyalty and performance
corporate social responsibility continued
928
key performance indicator
2010 energy consumption  
mwh per £m revenue
we estimate that the above energy consumption 
metric covers 100 of our operations
our policies
are published on our website  
at wwwspectriscom 31 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
a commitment to training and personal development emphasises the importance of 
retaining staff throughout the group and ensuring that all employees are encouraged 
to realise their full potential annual reviews provide feedback on performance set 
objectives and identify training and development opportunities data on employee 
turnover is monitored by individual businesses and reported to the board on an 
annual basis malvern and servomex our two principal uk businesses have received 
the investors in people award for their programmes of training appraisal employee 
development and skills recognition
graduate recruitment programmes and student work placements exist in a number 
of companies providing opportunities for young people particularly scientists to be 
introduced to the business environment
health and safety
we take health and safety seriously and strive to provide a workplace at all of our sites 
where all employees feel safe and protected from harm our policies regarding workplace 
health and safety are implemented throughout the group with each operating company 
responsible for compliance with local legislation and regulations and ensuring that the 
highest standards of health and safety are achieved by its employees and by subcontractors 
and suppliers the company’s health and safety policy can be viewed on our website 
audits of health and safety policies and procedures are undertaken at all major locations 
by external assessors acting on behalf of the group’s insurers on an annual basis and 
recommendations are made for improving practices where appropriate 
any serious health and safety incidents are required to be reported by the managing 
director of the business in an accident report to the company secretary who reports 
on such issues to the board all accidents are thoroughly investigated and appropriate 
corrective and preventative actions put in place no workrelated serious injuries or deaths 
have been reported in the last ten years nevertheless in 2010 we established a formal 
reporting system which enables us to monitor and measure workrelated accidents or ill 
health resulting in lost time in excess of three days which in the uk are reportable to the 
health and safety executive ‘hse‘ under the riddor regulations the resulting data is 
shown opposite expressed as a key performance indicator as recognised by the hse and 
records the health and safety situation throughout the group 
we will work with our operating companies to reduce the air to the lowest possible level 
within the reported figure significant workrelated incidents resulting in lost time in excess 
of 20 working days included two stressrelated cases two cases of repetitive strain injury 
and several cases involving injuries to limbs sustained as a result of falls in the workplace 
human rights 
spectris believes in the fundamental rights of people in all parts of the world and is committed 
to adopting internationally recognised human rights standards wherever it operates the 
company’s human rights policy which is available on our website is consistent with the 
principles of human rights as set out in the international labour organization’s core 
conventions and includes policies on nondiscrimination harassment pay and forced labour 
spectris takes its commitments to human rights seriously and our operating companies 
are required to ensure that all employees are aware of the policy and understand it 
the code of business ethics also contains a section on human rights and employees are 
required to ensure that all company operations adhere to these important standards  
pay practices are monitored to ensure they are nondiscriminatory 
the region president is responsible for ensuring that the highest ethical standards are 
maintained in all of our asiabased operations we have a number of sales offices in 
china and also factories supplying high quality weighing components and particle 
characterisation instruments these comprise modern facilities employ skilled workers 
adopt employment conditions consistent with best local practice and pay wages that are 
higher than average for the area
53
key performance indicator
2010 accident incident rate air
reportable accidents per 1000 employees
 workrelated accidentsill health resulting in  
lost time in excess of three days
investors in people
malvern servomex 32 spectris plc annual report and accounts 2010
corporate social responsibility continued
spectris considers human rights as part of its due diligence process for acquisitions 
ensuring that the core labour rights including nondiscrimination equal opportunities 
and freedom of association of the company to be acquired are taken into account
ethics
our core values – honesty empowerment ownership delivery and speed – underpin 
the way we work and are set out in our code of business ethics the ‘code’ which is 
available on our website the code applies to all employees of spectris and is available in 
all 15 languages relevant to our operations it provides a clear framework for how we do 
business and includes policies on antibribery and corruption dealings with customers 
suppliers and colleagues conflicts of interest and human rights all employees have 
participated in a training course and received a printed copy of the code and each 
operating company has a nominated ethics compliance officer who is responsible for 
ensuring compliance in their business compliance is also monitored by the internal audit 
function as part of the risk assessment process 
online training modules supporting the ethics programme were introduced during 2010 
and further modules will be implemented in 2011 
 
all operating companies are required to comply with export control regulations governing 
shipment of products and the appropriate compliance procedures are in place our export 
control policy can be viewed on our website
employees are encouraged to report any concerns they may have over fraud including 
bribery and corruption unethical business practices or conduct dangers to health and 
safety or breach of company policies via the group’s ‘whistleblowing’ policy this is 
supported by a telephone and internetbased multilingual hotline enabling employees 
and others to report concerns anonymously if they wish all whistleblowing reports 
are summarised for the audit committee on a sixmonthly basis in the past 12 months 
the hotline has been used on a number of occasions and the reports followed up to a 
successful conclusion spectris is committed to protecting the career and reputation of 
employees who report wrongdoing in accordance with established procedures so long  
as their disclosures are delivered in good faith and seek to safeguard the best interests of 
the group
community
our social responsibilities extend to the communities in which we operate our companies 
provide charitable assistance to local causes and also participate in a range of activities 
and educational initiatives in support of their local communities these include providing 
apprenticeships and work placements for students working with local schools and 
colleges on science projects and sponsorship of scientists attending key scientific 
conferences 
total donations to charities and community causes in 2010 were £27429 of which 
£8286 were in the uk 2009 £19955 of which £6042 in uk this included donations in 
response to disasters such as the haiti earthquake and the pakistan floods and to charities 
such as the international red cross as well as to local sports clubs schools and colleges 
and local arts and educational projects the company also makes contributions in kind to 
a number of projects for example as part of boulder county’s annual day of caring in 
the usa ten staff from particle measuring systems volunteer a half day each to help on 
local projects for charities at microscan in renton usa 15 employees volunteer one 
hour each on a weekly basis to help local elementary school pupils with maths reading 
and special education activities at hbm in darmstadt germany the company provided 
work placements for 13 pupils and also held inhouse seminars for students from the 
technical university
it is spectris’ policy that donations or provision of support in kind to political parties or 
campaigns are prohibited
our values
honesty 
empowerment
ownership 
delivery 
speed 33 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
customers
spectris sells productivityenhancing instrumentation and services to a large number of 
customers around the world we have developed close working relationships with our 
customers and in many instances involve them in the development of new products to 
ensure they meet their requirements surveys of customer satisfaction are conducted on 
a regular basis for example via webbased questionnaires where customers are asked 
amongst other things to rate product performance and the quality of documentation 
and to specify overall satisfaction
suppliers
spectris has no significant suppliers who are wholly dependent upon the company’s 
business suppliers are paid in line with contractual and legal obligations 
we recognise that our strategy of outsourcing noncore manufacturing does not absolve 
us from responsibility for the environmental impact of our suppliers and we work to 
help them reduce their impact on the environment and ensure that their products meet 
relevant legislation outsourcing of products and services is only to qualityapproved 
organisations which are regularly inspected and audited by the group’s strategic sourcing 
team and local management due to the high technology content of our instrumentation 
and control products suppliers of our parts need to have leading edge manufacturing 
equipment and are subject to rigorous qualification processes which cover both their 
technological capabilities and their quality and regulatory conformance in order to gain 
improved assurance from suppliers particularly in the areas of human rights working 
conditions health and safety and environmental issues significant suppliers those 
providing bespoke parts assemblies and systems both new and current will be  
screened against relevant criteria stipulated in the social accountability standard sa8000 
the initiative will commence with asia pacific with the intention that all significant 
suppliers and all new suppliers in this region will be audited by the end of 2011  
and the programme will then be extended to suppliers in other regions based on  
experience gained
contractual arrangements
the company has no contractual or other arrangements which are essential to the 
business of the company nor any key customers or major suppliers upon which it 
is dependent
sa8000
auditing against this standard will 
commence in 2011 34 spectris plc annual report and accounts 2010
board of directors
nomination committee
john hughes chairman
peter chambré
russell king
john o’higgins
john warren
remuneration committee
russell king chairman
peter chambré
john hughes
john warren
audit and risk committee 
john warren chairman
peter chambré
russell king
senior independent director
john warren
front row left to right john o’higgins john hughes clive watson
back row russell king john warren peter chambré jim webster roger stephens 35 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
1 john o’higgins chief executive
john o’higgins joined spectris in 2006 prior to joining spectris he was with honeywell 
latterly as president of automation and control solutions asia pacific he began his 
career with daimler benz in stuttgart john has engineering degrees from university 
college dublin and purdue university and an mba from insead john is a nonexecutive 
director of exide technologies a company listed on nasdaq
2 john hughes cbe chairman
john hughes was appointed to the board in 2007 and became nonexecutive chairman 
in 2008 john was previously executive vicepresident and chief operating officer of 
defence aerospace and electronic systems company thales group sa he is currently 
nonexecutive chairman of sepura plc and telecity group plc and a nonexecutive 
director of nice systems limited a company listed on nasdaq john is an adviser 
to private equity firm advent international and also serves as an ambassador for the 
alzheimer’s society 
3 clive watson group finance director
clive watson joined spectris in 2006 he was previously at borealis a leading provider 
of plastics solutions where he was chief financial officer and executive vice president for 
business support prior to this he was group finance director at thorn lighting group 
and before that group finance director europe with black  decker clive is a member of 
the institute of chartered accountants in england and wales and the chartered institute 
of tax and holds a bachelors degree in commerce and accounting from the university of 
birmingham he is a nonexecutive director of spiraxsarco engineering plc
4 russell king nonexecutive director 
russell king was appointed to the board in october 2010 until october 2009 russell 
was chief strategy officer of anglo american plc and between 2006 and 2009 was a 
nonexecutive director of anglo platinum ltd prior to that he spent over 20 years in 
senior roles at ici gaining worldwide experience in its fertiliser petrochemical and paint 
businesses russell is also a nonexecutive director of aggreko plc  
5 john warren nonexecutive director
john warren was appointed to the board in 2006 from 2000 to 2005 john was group 
finance director at wh smith plc prior to that he was with united biscuits plc for 19 
years latterly as group finance director he has been a nonexecutive director of rexam 
plc rac plc arla foods uk plc and bpp holdings plc and is currently chairman of uniq plc 
and a nonexecutive director of the rank group plc and bovis homes group plc
6 peter chambré nonexecutive director
peter chambré was appointed to the board in 2006 he is chairman of xellia pharmaceuticals 
and 7tm pharma both private companies and a nonexecutive director of btg plc he is 
also an adviser to private equity company 3i peter was formerly chief executive officer of 
cambridge antibody technology group plc and prior to that was chief operating officer of 
celera genomics group and chief executive of bespak plc
7 jim webster business group director
jim webster a metallurgy graduate joined spectris in 1993 he is responsible for the 
operational supervision of a number of the group’s trading companies he was previously 
general manager of the european wire and cable division of raychem corporation 
8 roger stephens head of commercial and company secretary
roger stephens is an economics graduate and chartered company secretary prior to 
joining spectris in 1997 he held commercial roles in the power and construction sectors 
specialising in contract negotiation litigation and claims resolution ip exploitation and 
property development 36 spectris plc annual report and accounts 2010
directors’ report
the directors present their report and accounts for the year ended 
31 december 2010
principal activities
spectris designs develops and markets productivityenhancing 
instrumentation and controls the businesses are grouped 
into four segments for management and segmental reporting 
purposes materials analysis test and measurement inline 
instrumentation and industrial controls further details of the 
trading companies within each segment can be found in the 
operating review pages 14 to 23 developments in the group’s 
business activities are discussed in the chairman’s statement  
page 10 the chief executive’s review page 12 and the  
business review pages 2 to 33
acquisitions
during the year five acquisitions were made the assets of 
reologica instruments ab a swedish company specialising in 
the design and manufacture of rheometers were acquired by 
malvern instruments and provide access to additional technologies 
and intellectual property that will support the continued 
development of malvern’s rheometry product offering zhuhai 
omec instruments co ltd a privatelyowned chinese company 
specialising in particle characterisation extends the group’s 
range of instrumentation in the materials analysis segment 
malvern instruments acquired from sysmex corporation the 
japanese distribution and service business for both malvern’s 
own instruments and sysmex’s fpia analysers and cda particle 
counters ntron corporation a producer of rugged industrial 
networking components based in mobile alabama usa is a 
leading manufacturer of ethernet switches – the products used 
to connect multiple ethernet devices to each other and to build 
network infrastructure – and associated components for the 
industrial infrastructure and power generation markets the 
business will become part of the industrial controls segment 
operating in close cooperation with red lion controls finally 
within the inline instrumentation segment the acquisition 
of delta f corporation adds trace and ultratrace oxygen and 
moisture analysis capability to servomex’s product offering 
the total cost of acquisitions during the year was £630 million 
including £08 million for cash acquired of this £41 million 
is attributable to the fair value of deferred and contingent 
consideration expected to be paid in future years
disposals
there were no disposals during the year
share capital
the share capital of the company comprises ordinary shares of 5p 
each each share carries the right to one vote at general meetings 
of the company the authorised and issued share capital of the 
company together with movements in the company’s issued 
share capital during the year is shown in note 24 on page 86 the 
articles of association of the company available on the company’s 
website contain provisions governing the ownership and transfer 
of shares
at the 2010 annual general meeting shareholders authorised 
the directors to make market purchases of the company’s 
ordinary shares up to a maximum number of 12500000 shares 
representing approximately 10 of the issued share capital of the 
company and to either cancel the shares or hold them as treasury 
shares which may then be cancelled sold for cash or transferred 
for the purposes of the company’s share plans depending on the 
best interests of the company’s shareholders at the time no such 
purchases were made during the year at the close of business 
on 24 february 2011 the company had 125005123 ordinary 
shares in issue of which 9063279 were held in treasury during 
the year 419815 shares were transferred out of treasury to meet 
the company’s obligations under its share plans and no shares 
were cancelled out of treasury an authority to make further 
market purchases of the company’s ordinary shares if believed 
appropriate will be sought at the forthcoming annual general 
meeting although the board has no present intention of so doing
also included in the special business of the 2011 annual general 
meeting are proposals to renew the directors’ authority to allot 
shares up to prescribed limits
at 24 february 2011 interests notified to the company in 
accordance with chapter 5 of the disclosure and transparency 
rules comprised
black rock inc
15048498 shares 1298 material interest
standard life investments limited 
8229088 shares 71 material interest
global aegon asset management group 
8156408 shares 704 material interest
f  c asset management plc
6128308 shares 529 material interest
massachusetts financial services company
5611725 shares 484 material interest
legal  general group plc
4603565 shares 399 material interest
takeovers directive
pursuant to section 992 of the companies act 2006 which 
implements the eu takeovers directive the company is required to 
disclose certain additional information the disclosures not covered 
elsewhere in this annual report are as follows
the company’s articles of association ‘articles’ give power to 
the board to appoint directors but require directors to submit 
themselves for election at the first annual general meeting 
following their appointment and for reelection where they 
have been a director at each of the preceding two annual 
general meetings and were not appointed or reappointed by 
the company at or since either such meeting the articles may 
be amended by special resolution of the shareholders and are 
available to view on the company’s website
the board of directors is responsible for the management of the 
business of the company and may exercise all the powers of the 
company subject to the provisions of the relevant statutes and the  37 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
company’s articles the articles contain specific provisions and 
restrictions regarding the company’s power to borrow money 
powers relating to the issuing and buying back of shares are 
also included in the articles and such authorities are renewed by 
shareholders each year at the annual general meeting 
there are a number of agreements that take effect alter or 
terminate upon a change of control of the group following a 
takeover such as bank loan agreements and company share 
plans none of these are deemed to be significant in terms of 
their potential impact on the business of the group as a whole 
in addition there is a service contract between the company and 
one of its directors which provides for compensation for loss of 
office or employment following a change of control of the group 
please refer to the directors’ remuneration report on page 46 for 
further explanation it is also possible that funding arrangements 
for the group’s defined benefit pension arrangements would need 
to be enhanced following a change of control if that resulted in a 
weakening of the employer covenant
dividend
results for the group are set out in the consolidated statement of 
income on page 52 and in the supporting notes a final dividend 
of 209 pence per ordinary share is proposed for the year to 31 
december 2010 2009 1785 pence with the interim dividend 
this makes a total for the year of 280 pence 2009 2425 pence 
the final dividend will be paid on 24 june 2011 to shareholders on 
the register on 3 june 2011
research and development
expenditure committed to research and development is focused 
on new product development applications engineering and 
process integration costs are expensed as incurred except where 
the expenditure meets certain strict criteria for capitalisation  
in the year to 31 december 2010 amounts expensed totalled 
£624 million 2009 £582 million and no expenditure met the 
criteria for capitalisation 2009 £nil
fixed assets
whilst the market values of some properties differ from book 
values the directors believe that the differences are not material
payment of suppliers
the group’s policy on payment of suppliers is to ensure that terms 
of payment accord with contractual and legal obligations the 
company had no trade creditors at the year end 2009 £nil
directors
the directors of the company are named on pages 34 and 35 
in accordance with the requirement of the uk corporate 
governance code which the company is adopting early with 
regard to annual election of directors by shareholders each 
director has agreed to resign at the 2011 annual general meeting 
and put themselves up for reelection a change to the articles 
reflecting the resignation of each director at every annual 
general meeting and their submission for reelection at each such 
meeting will be proposed at the 2012 annual general meeting
the directors’ total remuneration for the year and their interests 
in the shares of the company and its subsidiaries at 31 december 
2010 are disclosed in the directors’ remuneration report on 
pages 48 to 50
in accordance with section 236 of the companies act 2006 the 
directors disclose a qualifying thirdparty indemnity provision 
entered into between the company and its directors and officers 
which was in force at the date of approval of this report this 
indemnity gives contractual force to the indemnity of officers 
provision contained in the company’s articles
auditors
separate resolutions to reappoint kpmg audit plc as auditors 
and to authorise the directors to agree their remuneration will be 
proposed at the annual general meeting
annual general meeting
the notice of annual general meeting to be held at the 
company’s offices on friday 13 may 2011 at 1130 am is 
contained in a separate letter from the chairman accompanying 
this report
corporate governance
combined code statement of compliance
spectris plc is subject to the combined code on corporate 
governance the ‘combined code’ that is appended to the  
listing rules of the uk listing authority the combined code  
sets out principles and provisions relating to the good governance 
of companies 
corporate governance has been and remains the responsibility 
of the whole board this statement describes how the company 
applied the principles and complied with the provisions of the 
combined code during 2010 the board considers that it was 
throughout the year and continues to be in full compliance with the 
provisions set out in section 1 of the combined code save that
between 19 may and 19 october 2010 comprising the •	
period between the retirement of anthony reading and the 
appointment of russell king at least half the board excluding 
the chairman did not comprise independent nonexecutive 
directors as required by provision a32
board composition and procedures
the board meets formally at regular intervals throughout the 
year to consider developments in relation to the company’s 
strategy and longterm objectives and to review trading results 
and operational and business issues in particular it deals with 
those matters reserved to it for decision including the acquisition 
and disposal of businesses major capital expenditure the 
appointment and where necessary removal of directors and 
board and senior management succession planning additional 
meetings are convened as required to consider specific topics 
requiring immediate decision usually two meetings each year 
are held at operating locations and encompass a detailed review 
of the relevant business through these meetings the induction 
process on appointment and the access given to the company’s 
operations and its staff all directors gain the knowledge of the 
company required for them to discharge their duties operational 
decisions are delegated by the board to senior management at 
trading company level over which the executive directors exercise  38 spectris plc annual report and accounts 2010
directors’ report continued
supervision all directors receive detailed progress reports one 
week prior to each board meeting
the board currently comprises the chairman three executive 
directors and three nonexecutive directors the board considers 
its nonexecutive directors peter chambré russell king and john 
warren to be independent in that none of them are or have 
ever been holders of an executive office with the company the 
positions of chairman chief executive and senior independent 
director are held by separate individuals and in accordance with 
the combined code the board has adopted written profiles for 
the first two of these the nonexecutive directors have all had 
senior experience in other organisations and offer independent 
judgement on board matters the chairman’s other significant 
listed company interests are as nonexecutive chairman of sepura 
plc and telecity group plc the board believes that the chairman’s 
obligations to the company are unaffected by these directorships
there are procedures for individual board members to receive 
induction and training as appropriate and to solicit independent 
professional advice at the group’s expense where specific expertise 
is required in the course of exercising their duties the chairman 
annually reviews and agrees with each director their training and 
development needs all directors have access to the company 
secretary who is responsible for ensuring compliance with 
appropriate statutes and regulations
the board delegates specific responsibilities to board committees 
notably the nomination remuneration and audit and risk 
committees the terms of reference of these committees are 
published on the company’s website and the following additional 
documents are available to shareholders on application to the 
company secretary
schedule of matters reserved for decision by the board •	
responsibilities of the chairman the chief executive and the •	
nonexecutive directors
relations with shareholders •	
performance evaluation •	
procedure for taking independent professional advice •	
the board has adopted the institute of chartered secretaries and 
administrators’ guidance note of september 2009 on board 
meeting etiquette 
under the companies act 2006 a director must avoid a situation 
where he has or may have a direct or indirect interest that 
conflicts or may conflict with the company’s interests during the 
year in accordance with the powers and duties of directors laid 
down in the company’s articles directors were asked to declare 
any such conflict or potential conflict of interest to the board  
for the board’s authorisation of a matter which otherwise may 
have given rise to a conflict of interest no such conflicts have 
been declared
board and committee meeting attendance 2010
board
remuneration 
committee
audit 
committee
nomination 
committee
total meetings  
during year 14 4 3 2
j l m hughes 
chairman 14 4 na 2
j a warren senior 
independent director 14 4 3 2
p a chambré 14 4 3 2
r j king 2 2 – –
j e o’higgins 
chief executive 14 na na 2
c g watson 14 na na na
j c webster 14 na na na
a j reading 7 1 2 1
r j king and a j reading held office for part of the year only r j king attended two 
of the three board meetings and all of the remuneration committee meetings which 
he was eligible to attend a j reading attended all of the board meetings and all of 
the audit nomination and remuneration committee meetings which he was eligible 
to attend
board appointments and performance evaluation
the nomination committee consists of the chairman chief 
executive and all nonexecutive directors it is chaired by the 
chairman save in the event of discussions relating to his 
succession when the senior independent director takes the chair
following a decision of the board that the appointment of a new 
director is appropriate the duty of the committee is to present 
for board consideration suitably qualified candidates in making 
such recommendations the committee evaluates the balance 
of skills knowledge and experience on the board and develops 
a description of the role and required capabilities due regard is 
given to the benefits of diversity on the board and consideration 
is given to the time commitment expected for the chairman and 
nonexecutive director positions candidates are then identified 
for interview external search consultants being engaged as part 
of this process the committee also makes recommendations to 
the board regarding the reelection andor reappointment of any 
director similar selection processes apply for the appointment of 
a chairman
recommendations are also made to the board concerning 
succession plans for both executive and nonexecutive directors 
and in particular for the key roles of chairman and chief 
executive the committee also recommends to the board suitable 
candidates for the position of senior independent director 
the nomination committee meets as the need arises its terms of 
reference can be found on the company’s website
the operation of the board and its committees is reviewed by 
the board as a whole annually the executive directors’ and 
company secretary’s performances are appraised annually against 
objectives established for the prior year the contributions of the 
chairman and nonexecutive directors are reviewed in advance  39 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
of the conclusion of their initial threeyear term by the senior 
independent director and the chairman respectively prior to 
their being proposed to shareholders for reelection additionally 
the chairman holds periodic meetings with the nonexecutive 
directors only and led by the senior independent director the 
nonexecutives have the opportunity to meet at least annually 
without the chairman present
an evaluation of the operation and performance of the board 
was conducted in 2010 by external facilitators egon zehnder the 
process included submissions from all board members in response 
to a structured questionnaire covering a range of issues which 
were then reviewed by the board as a whole areas addressed 
and reviewed included strategy board structure and organisation 
development plan input for the directors board dynamics the 
performance of the chairman information flows shareholder 
reporting the board committees succession planning and risk 
management a number of action items identified to enhance the 
board’s governance were agreed egon zehnder are additionally 
retained by the company as search consultants
shareholder relations
spectris conducts regular dialogue with institutional shareholders 
and divulges such information as is permitted within the guidelines 
of the listing rules the content of presentations made after 
results announcements may be accessed by individual investors on 
the group’s website wwwspectriscom
all shareholders are invited to participate in the annual general 
meeting where the chairman the chief executive and the 
chairmen of the audit and risk remuneration and nomination 
committees are available to answer questions the results of proxy 
votes are declared at the annual general meeting after each 
resolution has been dealt with on a show of hands these are then 
published on the group’s website 
the board is kept informed of the views of major shareholders 
through periodic reports from the chief executive and the 
company’s joint brokers j p morgan cazenove and rbs hoare 
govett the chairman and nonexecutive directors have the 
opportunity to attend the biannual analyst presentations
shareholders representing in excess of 3 of the company’s 
issued share capital receive a standing invitation to meet the 
chairman the senior independent director or new nonexecutive 
directors such meetings would supplement if necessary but not 
replace the regular meetings with the chief executive and group 
finance director
audit and risk committee
the audit and risk committee comprises the nonexecutive 
directors and is chaired by john warren who has recent and 
relevant financial experience as the former group finance director 
of both united biscuits plc and wh smith plc mr warren is also 
the current chairman of the audit committees of bovis homes 
group plc the rank group plc and uniq plc the committee 
meets at least three times each year to consider the effectiveness 
of the group’s internal controls policies and procedures the 
process of internal audit and the conduct and outcome of 
the external audit its meetings are normally attended by the 
chairman the chief executive the group finance director the 
company secretary and the external and internal auditors all 
executive directors attend the year end audit committee meeting 
and processes requiring the disclosure of relevant information 
by individual directors to the auditor have been adopted the 
committee confers annually with both the head of internal audit 
and the external auditors without the attendance of executive 
directors additionally both the external audit partner and the 
head of internal audit have the right of direct access to the audit 
and risk committee chairman the committee’s terms of reference 
can be found on the company’s website
the committee is responsible for making recommendations to the 
board in relation to the appointment of the external auditor and 
then for approving the external auditor’s remuneration terms of 
engagement and scope of work
the committee has also adopted procedures governing and 
restricting the appointment of the external auditor for nonaudit 
services the following services are precluded
bookkeeping or other services related to the accounting •	
records or financial statements of spectris plc
financial information systems design and implementation •	
appraisal or valuation services fairness opinions or contribution •	
in kind reports
actuarial services •	
internal audit outsourcing services •	
management functions or human resources •	
broker or dealer investment adviser or investment banking •	
services
legal services and expert services unrelated to the audit •	
a cumulative annual cap of £200000 is established for all other 
nonaudit services save for acquisition due diligence and taxation 
services above which all engagements are subject to prior 
approval by the audit and risk committee
the head of internal audit is employed by the group to perform 
internal control reviews across the group according to a work 
programme agreed by the committee the head of internal audit 
is assisted in this by two further internal auditors the nature and 
scope of the group’s internal control review resources is reviewed 
by the audit and risk committee annually the audit and risk 
committee receives reports twice a year on the results of internal 
control reviews
the committee has considered the risk of the withdrawal of 
their auditor kpmg audit plc from the market in their risk 
evaluation and planning and has concluded that the risk is small 
in the event that the company’s auditor did exit the market a 
replacement appointment would be made from audit firms of 
equivalent standing kpmg audit plc were appointed as the 
company’s auditors on 12 may 1998 the position of auditor to 
the company is kept under regular review but kpmg audit plc’s 
indepth understanding of the company’s operations is considered 
by the committee to be of benefit to both the company and its 
shareholders 40 spectris plc annual report and accounts 2010
directors’ report continued
there were no contractual obligations that acted to restrict the 
committee’s choice of auditor 
internal controls 
the board is ultimately responsible for the group’s system of 
internal controls and for reviewing its effectiveness however such 
a system is designed to manage rather than eliminate risk of failure 
to meet business objectives and can provide only reasonable and 
not absolute assurance against material misstatement or loss
consistent with the guidance provided for directors on internal 
control by the financial reporting council ‘internal control 
revised guidance for directors on the combined code’ the 
board confirms that there is an ongoing process for identifying 
evaluating and managing assessed significant risks faced by the 
group that this has been in place for the year under review and 
up to the date of approval of the annual report and accounts that 
this process has been reviewed by the board during the year and 
that the group accords with the guidance the board affirms the 
importance it attaches to the continuous review and application of 
the guidance the regular and systematic assessment of the risks 
facing the group and the value of embedding risk management 
and internal control systems within its business processes the 
group has an internal audit function which reviews the design and 
effectiveness of internal controls across the group’s operations 
including financial operational and compliance controls
 
the processes which the board and the audit and risk committee 
have applied in reviewing the effectiveness of the group’s system 
of internal controls are summarised below
an established process is in place whereby each business •	
unit regularly assesses evaluates and reports risks of group 
significance each business unit is required to document the 
management and mitigating actions in place and proposed
regular review of the status of risks and corresponding •	
mitigating actions ensure that risk management is embedded 
in daytoday management processes and decisionmaking as 
well as in the annual strategic planning cycle
the effectiveness of risk management and mitigating actions is •	
reviewed regularly by the executive directors and twice yearly 
by the audit and risk committee
additionally the executive directors consider those risks to the •	
group’s strategic objectives which are not addressed within 
the business units and develop appropriate approaches to 
managing and mitigating these risks
annual financial plans for each business unit significant •	
capital investments or contractual commitments and major 
acquisitions or divestments are all subject to review and 
approval by the board
a group accounting and policies manual sets out the minimum •	
standards and procedures to be applied in relation to those risk 
areas which are regarded as significant in a group context
a process of selfassessment of compliance with the manual •	
and reporting thereon has been established providing 
for a documented trail of accountability from business 
unit presidents and finance directors to the audit and risk 
committee the necessary actions are taken by the audit and 
risk committee to remedy any failings or weaknesses identified 
by its review of the internal control system 
the executive directors report to the board on changes in the •	
business and external environment which present significant 
risks the group finance director provides the board with 
monthly financial information which includes key performance 
indicators and information on the group’s operating segments 
regular reports on significant legal ethics and compliance 
issues and insurance matters are received from the company 
secretary
going concern
having reviewed the group’s plans and available financial facilities 
the board has a reasonable expectation that the group has 
adequate resources to continue in operational existence for the 
foreseeable future for this reason it continues to adopt the going 
concern basis in preparing the group’s accounts
business review
the information that fulfils the requirements of the business 
review as required by section 417 of the companies act 2006 
and which should be treated as forming part of this report by 
reference is included in the following sections of the annual 
report
chairman’s statement on •	 pages 10 and 11
chief executive’s review on •	 pages 12 and 13
group overview on •	 pages 2 to 5
operating review on •	 pages 14 to 23 which includes a review 
of the external environment
principal risks and uncertainties are described on •	 pages 8  
to 9
details of the principal operating subsidiaries are set out on •	
pages 14 to 23
financial review on •	 pages 24 to 28
corporate social responsibility on •	 pages 29 to 33 which 
includes the company’s policy on treatment of its employees 
statement of directors’ responsibilities in respect of the 
annual report and the financial statements
the directors are responsible for preparing the annual report and 
the group and parent company financial statements in accordance 
with applicable law and regulations 
company law requires the directors to prepare group and parent 
company financial statements for each financial year under that 
law they are required to prepare the group financial statements 
in accordance with international financial reporting standards 
‘ifrs’ as adopted by the eu and applicable law and have elected 
to prepare the parent company financial statements in accordance 
with uk accounting standards and applicable law uk generally 
accepted accounting practice 
under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the group and parent company and  41 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
of their profit or loss for that period in preparing each of the 
group and parent company financial statements the directors are 
required to 
select suitable accounting policies and then apply them •	
consistently 
make judgements and estimates that are reasonable  •	
and prudent 
for the group financial statements state whether they have •	
been prepared in accordance with ifrs as adopted by the eu 
for the parent company financial statements state whether •	
applicable uk accounting standards have been followed 
subject to any material departures disclosed and explained in 
the parent company financial statements 
prepare the financial statements on the going concern basis •	
unless it is inappropriate to presume that the group and parent 
company will continue in business
the directors are responsible for keeping adequate accounting  
records that are sufficient to show and explain the parent company’s  
transactions and disclose with reasonable accuracy at any time 
the financial position of the parent company and enable them to 
ensure that its financial statements comply with the companies 
act 2006 they have general responsibility for taking such steps as 
are reasonably open to them to safeguard the assets of the group 
and to prevent and detect fraud and other irregularities 
under applicable law and regulations the directors are also 
responsible for preparing a directors’ report directors’ 
remuneration report and corporate governance statement that 
complies with that law and those regulations
the directors are responsible for the maintenance and integrity of 
the corporate and financial information included on the company’s 
website legislation in the uk governing the preparation and 
dissemination of financial statements may differ from legislation in 
other jurisdictions
the directors who held office at the date of approval of this 
directors’ report confirm that so far as they are each aware there 
is no relevant audit information of which the company’s auditors 
are unaware and each director has taken all the steps that he 
ought to have taken as a director to make himself aware of any 
relevant audit information and to establish that the company’s 
auditors are aware of that information
responsibility statement of the directors in respect of the 
annual report 
we confirm that to the best of our knowledge
the financial statements prepared in accordance with the •	
applicable set of accounting standards give a true and fair 
view of the assets liabilities financial position and profit or 
loss of the company and the undertakings included in the 
consolidation taken as a whole and
the information that is crossreferred from the business review •	
section of the directors’ report includes a fair review of the 
development and performance of the business and the position 
of the issuer and the undertakings included in the consolidation 
taken as a whole together with a description of the principal 
risks and uncertainties that they face
by order of the board
r j stephens
secretary
25 february 2011 42 spectris plc annual report and accounts 2010
directors’ remuneration report
russell king
chairman of the remuneration committee
dear shareholder
as the new chairman of the remuneration committee i am pleased to present to you the 
2010 directors’ remuneration report of spectris plc 
a policy of relating pay to the performance of spectris continues to be a strong principle 
underlying your committee’s consideration of executive remuneration we aim to ensure 
that the company continues to attract motivate and retain high calibre management to 
deliver the best possible performance for shareholders commensurate with appropriate 
risk considerations
the key elements of the executive directors’ remuneration arrangements are
base salary and total remuneration set at or modestly below the median of •	
comparable uk quoted companies subject to adjustment up or down to reflect the 
experience and performance of individual incumbents
ontarget and maximum annual bonus of respectively 50 and 100 of salary only •	
payable on achievement of stretching profit and individual objectives with any bonus 
in excess of 60 being applied to the purchase of spectris shares until a two times 
base salary shareholding is achieved
annual awards under the company’s performance share plan of up to 125 of salary •	
with vesting after three years based 50 upon total shareholder return ‘tsr’ 
relative to the ftse 250 index and 50 upon earnings per share ‘eps’ growth this 
longterm incentive links individual reward to the continuing growth of the company 
with vested share retention until a shareholding of two times base salary is achieved
benefits provided on a market competitive basis •	
during 2010 the company’s remuneration advisers hewitt new bridge street conducted 
a benchmarking review of directors’ salaries and fees spectris does not undertake 
benchmarking on an annual basis the normal period being every two to three years as 
recently endorsed in napf guidelines however the review scheduled for 1 january 2009 
was deferred for two years as a result of the recession salaries and fees for all directors 
were frozen as at 1 january 2009 a voluntary 77 salary cut was implemented for the 
second half of the year and no profitrelated or individual bonuses were awarded as of  
1 january 2010 salaries were increased by 2 across the board it has thus been five 
years since hewitt new bridge street were last commissioned to undertake a review 
in the interim the spectris executive team has produced commendable results adjusted 
profit before tax rose by 94 during 2010 producing maximum payment under this 
element of the annual bonus plan as can be seen from the tsr graph opposite spectris 
has also outperformed over the longer term £100 invested in spectris on 31 december 
2005 would have been worth £240 at the end of 2010 compared to the £153 it would 
have been worth if invested in the ftse 250 index
 
the hewitt new bridge street review concluded that although the current remuneration 
structure remained appropriate the fee payable to the chairman and the salaries of the 
executive directors had fallen significantly below market median in particular the chief 
executive had been appointed to his first ceo role in january 2006 on a below market 
salary with a view to this increasing as he became established but due to the economic 
situation that realignment had to date not been possible your committee therefore
letter from russell king  
chairman of the remuneration committee 60
80
100
120
140
160
180
200
220
240
260
31 dec 05
value £
31 dec 06 31 dec 07 31 dec 08 31 dec 09 31 dec 10
the graph above shows the value at 31 december 2010 of £100 invested in spectris plc 
on 31 december 2005 compared with the value of £100 invested in the ftse 250 index
excluding investment trusts over the same period  
spectris plc
ftse 250 excluding investment trusts
43 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
total shareholder return
       source thomson reuters
determined that the salary increases below should be implemented with effect from  
1 january 2011 conditional with regard to mr o’higgins and mr watson that their salary 
uplift in lieu of benefits payable on termination of employment as described on page 46 
be reduced to 04 times salary
j l m hughes chairman £165000 179
j e o’higgins chief executive £500000 167
c g watson finance director £310000 105
j c webster business group director £268000 51
your committee’s approach to setting remuneration packages for the company’s 
executives is designed to reward management fairly if it is successful in continuing the 
track record of performance and longterm growth enjoyed by shareholders in recent 
years we consider that compensation is now at a competitive level to the external market 
and that the balance between fixed and variable elements remains appropriate we will 
however keep remuneration packages under review to ensure that this remains the case 
i hope that you will support the advisory vote on the 2010 directors’ remuneration 
report which will be put to the annual general meeting
yours sincerely
russell king
chairman of the remuneration committee
25 february 2011 44 spectris plc annual report and accounts 2010
directors’ remuneration report continued
the directors present their remuneration report for the year ended 
31 december 2010
remuneration committee
the remuneration committee is responsible for recommending to 
the board the broad policy for the remuneration of the chairman 
the chief executive the executive directors and the company 
secretary the remuneration of nonexecutive directors is a matter 
reserved to the chairman and executive directors
within the terms of the agreed policy the committee determines
the total individual remuneration package including where •	
appropriate bonuses and sharebased incentives
the targets for any performancerelated incentives •	
the scope of any pension arrangements •	
contractual terms of engagement and any payments to be •	
made on termination
any major changes in employee benefit structures throughout •	
the company and
the policy for authorising claims for expenses from the •	
chairman and chief executive
the committee also monitors the level and structure of 
remuneration for business unit presidents or managing directors 
and the head of corporate development 
the remuneration committee consists of the chairman john hughes 
who was independent on appointment and the nonexecutive 
directors all of whom are independent being at the date of this 
report russell king chairman peter chambré and john warren 
the chief executive may be in attendance by invitation and the 
committee takes into consideration his recommendations regarding 
the remuneration of his executive colleagues the chief executive is 
not involved in discussions concerning his own remuneration 
the committee has appointed hewitt new bridge street to 
advise on various aspects of the chairman’s and executive 
directors’ remuneration they additionally provide services to the 
committee and to the company in relation to ifrs 2 reporting on 
the company’s share plans and total shareholder return ‘tsr’ 
performance calculations in relation to the company’s performance 
share plan hewitt new bridge street were paid £30534 in 
respect of services undertaken in 2010 2009 £29323 hewitt 
new bridge street is part of aon corporation a subsidiary of aon 
corporation provides actuarial services to the company 
the terms of reference of the remuneration committee can be 
found on the company’s website and are available on request
remuneration policy
the board in considering the recommendations of the 
remuneration committee complied throughout the year with 
the provisions of the combined code including the principles 
for performancerelated remuneration set out in schedule a 
the policy objective is to ensure that the high calibre individuals 
required at board level are fairly and competitively remunerated 
and incentivised in a manner consistent with the group’s strategic 
objectives and compatible with its risk policies and internal  
control systems
clawback provisions have been introduced from january 2011 
and are in place to enable variable remuneration to be reclaimed 
under exceptional circumstances such provisions relate to bonus 
payments and to future awards made under the company’s 
performance share plan were there to be any miscalculation of 
entitlement misstatement of accounts or incidence of fraud 
the remuneration committee also regularly reviews the balance 
between fixed and variable pay 
salaries and fees
base salaries and fees are established by reference to surveys 
of the terms offered by comparable uk quoted companies 
the starting point for comparative surveys is the scope of the 
position and associated performance of the chairman each 
executive director and the company secretary excluding his own 
position and performance the chief executive is responsible 
for the definition of the scope of positions and assessment of 
the performance of each executive director for approval by the 
remuneration committee salaries for the executive directors are 
reviewed at the beginning of each year and are set at competitive 
levels typically based around the market median although 
the remuneration committee reserves the flexibility to respond 
to individual circumstances which may cause salaries to be set 
at a level higher or lower than market median a biannual 
compensation review for the chairman is undertaken on a similar 
basis as that for the executive directors due account is also taken 
of pay conditions elsewhere in the company market ranges are 
reviewed on a regular basis 
following a review of board remuneration conducted by hewitt 
new bridge street during the year the salaries of the chairman 
and the executive directors were adjusted as detailed on page 
43 it was also determined that the base nonexecutive director 
fee and the fee paid for chairing the remuneration and audit and 
risk committees were below the market median accordingly 
following the approval of the chairman and the executive 
directors the nonexecutive director fee was increased from 
£39270 to £42000 70 increase and the committee chairman 
fee was increased from £6630 to £8000 207 increase 
additionally the fee paid to mr warren for his chairmanship of 
spectris pension trustees limited was increased from £15300 to 
£16500 78 increase the salaries and fees given above and 
those detailed on page 43 were increased on 1 january 2011 and 
will not be further reviewed until 1 january 2012 for the executive 
directors and until 1 january 2013 for the chairman and the non
executive directors 
bonuses
to align remuneration with shareholders’ interests a proportion 
of executive directors’ potential total remuneration is related to 
annual corporate performance
under the 2010 arrangements bonuses of up to 100 of base 
salary were achievable upon the attainment of demanding 
profitability 75 potential and personal 25 potential targets 
set in relation to carefully considered business plans bonus 
payments commence only at a level which shows an acceptable 
financial result in the context of economic circumstances and 
market expectations with an ‘onplan’ performance yielding a  45 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
payment of approximately half the maximum potential targets for 
maximum outturn are set at highly stretching albeit attainable 
levels there is no change for the 2011 bonus potential and the 
same performance measurement framework remains in place 
bonuses achieved in respect of 2010 performance based on 
targets set at the start of the financial year were as follows as a 
percentage of salary at 31 december 2010
j e o’higgins 95
c g watson 95
j c webster 90
in respect of the above bonus payments for mr o’higgins 
mr watson and mr webster 75 of their salary related to 
profitability targets and 20 20 and 15 of their salary 
respectively related to personal targets
sharebased incentives
the remuneration committee keeps under review the company’s 
sharebased incentive arrangements and takes advice on market 
practice the committee is of the view that offering senior 
management the opportunity to be awarded and then retain shares 
in the company is an important part of motivating and rewarding 
key employees so that they may participate in the future growth 
in value of the company the spectris performance share plan the 
‘plan’ is intended to support this objective and to facilitate the 
retention of senior management over the longer term 
under the plan annual awards of shares may be made which 
vest at the end of a threeyear period subject to continued 
employment the satisfaction of challenging performance 
conditions and justification of vesting in relation to the overall 
underlying financial performance of the company the maximum 
award of performance shares that can be made to any participant 
in any financial year is limited to shares with a market value equal 
to 125 of the participant’s salary in line with median awards 
for ftse 250 companies the committee’s policy is to determine 
awards by reference to a base award over shares worth 125 of 
salary which may then be flexed downwards from year to year 
depending on corporate and personal performance 
awards to executive directors are currently structured so that 
50 of the award is subject to an earnings per share ‘eps’ target 
and 50 subject to a total shareholder return ‘tsr’ target 
each condition operates over a fixed threeyear period with no 
opportunity for retesting
the performance criteria for grants made in 2008 2009 and 2010 
are summarised in the tables below 
company eps performance
 of award that vests expressed as 
a percentage of onehalf of the total 
number of shares subject to an award
consumer prices index ‘cpi’ 
 12 compound per annum 
‘cpa’ 100
between cpi  5 and  
12 cpa
prorata straight line between
25 and 100
cpi  5 cpa 25
less than cpi  5 cpa 0
company tsr performance  
relative to the ftse 250 excluding  
investment trusts
 of award that vests expressed as 
a percentage of onehalf of the total 
number of shares subject to an award
upper quintile or above 100
between upper quintile  
and median
prorata straight line between
25 and 100
median 25
below median 0
the above criteria will continue to apply to plan awards to be 
made in 2011
for awards in excess of 100 of salary the committee stipulates 
in accordance with undertakings provided on approval of the 
plan that the percentage of an award that will vest for threshold 
performance will be limited to 25 of a participant’s base salary 
rather than 25 of the number of shares subject to an award 
with prorata straight line vesting from this lower point up to 
100 of the award this restriction applies to awards made in 
2010 and beyond 
the committee considers the above performance conditions to be 
an appropriate means of aligning the interests of participants with 
those of longerterm shareholders the tsr performance condition 
is measured independently by hewitt new bridge street and the 
eps condition is verified by the company’s auditors 
the committee undertook to review the plan’s provisions 
including performance criteria five years after its approval by 
shareholders at the 2006 annual general meeting such review 
was completed within the scope of hewitt new bridge street’s 
overall assessment of the remuneration arrangements the 
only amendments proposed to be made to the plan following 
the review are as follows subject to hm revenue  customs 
approval the plan will be amended to permit a proportion of the 
value provided under the plan to be delivered in a taxefficient 
manner via an hm revenue  customs approved option scheme 
this amendment will not increase the cost to the company of  
the awards 
it is the intention of the committee that all future sharebased 
incentives granted to senior managers or executive directors 
should be made solely under the plan executive directors may 
however continue to participate in grants made under the spectris 
savings related share option scheme which is applicable to all  
uk employees
 
exercise of share options granted under the 1996 executive share 
plan or the 1999 executive share option scheme was subject 
to prior achievement of a performance condition requiring 
compound annual growth in eps before exceptional items and 
amortisation of goodwill over three financial years to be between 
3 and 5 per annum ahead of the increase in the retail prices 
index ‘rpi’ this condition was met for the executive director 
option exercised during the year no options now remain to be 
exercised by the executive directors under the 1996 executive 
share plan or the 1999 executive share option scheme  46 spectris plc annual report and accounts 2010
directors’ remuneration report continued
share retention
it is intended that each executive director should subject to 
personal circumstances build a retained shareholding in spectris 
plc greater than two times base salary in value within a fiveyear 
period from appointment executive directors are required to 
apply the posttax benefit of any vested plan awards or any bonus 
payments exceeding 60 of base salary to the acquisition of 
shares until this level of shareholding is achieved 
benefits
company car and health insurance benefits are subject to income 
tax the executive directors have defined contribution pension 
arrangements to which the company currently contributes at a 
rate of 25 of base salary in light of the government’s intention 
to reduce the pension lifetime allowance to £15 million in 2012 
and introduce a maximum pension contribution allowance of 
£50000 pa in 2011 the executive directors will be entitled at 
their option to a taxable salary supplement in lieu of pension 
contributions otherwise payable by the company 
contractual terms
all executive directors have rolling contracts subject to 12 months’ 
notice of termination by either party or to summary notice in the 
event by the director of serious breach of obligations dishonesty 
serious misconduct or other conduct bringing the company into 
disrepute 
mr o’higgins’ and mr watson’s contracts of employment 
concluded in 2006 and modified in 2011 simultaneous to their 
salary review also contain an option at the sole discretion of 
the board for the contract to be terminated by way of payments 
in lieu of notice equivalent to 14 times reduced from 165 
times monthly basic salary in such circumstances the executive 
becomes subject to a contractual best endeavours obligation 
to seek alternative employment and full mitigation reflective 
of any earnings from a new position applies so as to reduce the 
payments otherwise due from the company during the notice 
period additionally in these circumstances bonus entitlements 
are calculated to the date of notice of termination only with the 
phased payment provision subject to reduction as explained 
above then applying in lieu of all remuneration and benefits 
otherwise payable during the notice period and in full and final 
settlement of all employmentrelated claims the 04 uplift on 
monthly salary is intended to account for the 25 employer 
pension contribution company car insurance and fuel benefits 
mobile telephone provision life disability and medical expenses 
insurances and settlement of any statutory employment claims 
that may arise from termination no other payments would be 
made including any forward bonus payment whether the board 
elects to apply this payment in lieu option will depend on the 
circumstances underlying termination and the best interests of 
shareholders at the time
mr webster’s contract concluded in 1998 provides for a 
predetermined compensation payment in lieu of notice equivalent 
to total notice period remuneration – salary bonus and benefits 
in the event of termination by the employer within 12 months of 
a change in control of the group termination payments in other 
circumstances would be a matter for negotiation and remain 
at the discretion of the committee subject to mitigation andor 
reduction for accelerated payment 
the committee has discussed the best practice expectations set 
out in the 2008 abinapf joint statement on executive contracts 
and severance and noted the update to the napf policy that was 
published in january 2009 this guidance and any future revisions 
will be taken into account before agreeing any future service 
contracts the committee is committed to continuous review of its 
policies in the best interests of shareholders 
no compensation payments on termination of employment were 
made during the year
external appointments
executive directors may retain any payments received in respect 
of external nonexecutive appointments such appointments 
are limited to one per director at any time and are subject to the 
approval of the board mr o’higgins is a nonexecutive director of 
nasdaq listed exide technologies and was paid a fee of 17000 
during 2010 from his appointment on 15 september 2010 and 
mr watson is a nonexecutive director of spiraxsarco engineering 
plc and was paid a fee of £50000 during 2010 no other external 
directorships are held by the executive directors
remuneration below board level
remuneration for presidents of the group’s trading companies 
is set at competitive levels to reflect the size complexity and 
geographic locations of these businesses base salaries fall within 
a range between £310000 and £132000 additionally the 
group’s presidents participate in share awards under the spectris 
performance share plan typically over 60 of base salary and 
in profitrelated bonus arrangements linked to base salary and 
payable against their business annual operating profit after 
exchange plus or minus a financing chargecredit arising from 
changes in working capital over the year on plan performance 
delivers a c 30 of base salary bonus with the upper limit of the 
payment range delivering 50 of base salary
internal relativity
the committee is sensitive to the need to set directors’ remuneration 
having regard to pay and conditions in the group as a whole 
and is satisfied that the approach taken by the company is fair 
and reasonable in light of current market practice and the best 
interests of shareholders
nonexecutive directors
nonexecutive directors’ fees are agreed by the chairman and 
executive directors by reference to market practice the base fee 
is supplemented by allowances for chairmanship of the audit 
and risk and remuneration committees and the pension scheme 
trustee board there is no participation in bonus share option 
or pension arrangements and no participation in the spectris 
performance share plan all nonexecutive directors’ conditions 
of appointment provide for a sixmonth period of notice within 
an initial term of three years from election by shareholders at the 
director’s first annual general meeting the appointment may be 
renewed by mutual agreement for a further threeyear period  47 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
total shareholder return
the following graph indicates the value by the end of 2010 of £100 invested in spectris plc 5p ordinary shares on 31 december 2005 
compared with the value of £100 invested in the ftse 250 index excluding investment trusts over the same period the graph was 
selected as the most appropriate comparison measure because the company is a constituent member of the ftse 250 index and the 
members of the ftse 250 excluding investment trusts form the comparator group for the purposes of the tsr performance test under 
the spectris performance share plan 
0
20
40
60
80
100
120
140
160
180
200
220
240
260
31 dec 05 31 dec 10 31 dec 06 31 dec 07 31 dec 08 31 dec 09
spectris plc
ftse 250 excluding investment trusts
the graph above shows the value by 31 december 2010 of £100 invested in spectris plc on 31 december 2005 compared with the value of £100 invested 
in the ftse 250 index excluding investment trusts the other points plotted are the values at intervening ﬁnancial year ends 
source datastream
value £
service contracts
the following table sets out a summary of the directors’ service contracts or terms of appointment executive directors’ service contracts 
provide for automatic termination on the director reaching the age of 65 
date of contract expiry date notice period
length of service at 
24 february 2011
executive directors
j e o’higgins 1106 3229 12 months 5 years 1 month
c g watson 11006 4223 12 months 4 years 4 months
j c webster 27398 21615 12 months 17 years 4 months
nonexecutive directors
p a chambré 1806 16513 6 months 4 years 6 months
j l m hughes 1607 16511 6 months 3 years 8 months
r j king 121010 16514 6 months 4 months
j a warren 7306 16512 6 months 4 years 11 months
mr webster’s contract provides for a predetermined compensation payment in lieu of notice equivalent to total notice period 
remuneration – salary bonus and benefits in the event of termination by the employer within 12 months of a change in control  
of the group 
mr o’ higgins’ and mr watson’s contracts provide subject to a duty of mitigation for phased monthly payments equivalent to  
14 times monthly salary in lieu of all remuneration and benefits otherwise payable during the notice period in full and final settlement 
of all employmentrelated claims  48 spectris plc annual report and accounts 2010
directors’ remuneration report continued
directors’ remuneration and interests
the auditors are required to report on the information contained in the following sections a to e
a emoluments of directors excluding pension contributions £’000
salary 
andor 
fees bonus
benefits 
in kind
taxable 
expenses
2010 
total
2009 
total
executive directors
j e o’higgins 428 407 13 5 853 422
c g watson 281 266 12 5 564 280
j c webster 255 229 20 – 504 262
nonexecutive directors
p a chambré 39 – –  – 39 37
j l m hughes 140 – –  – 140 135
r j king 9 – –  – 9 –
j a warren 61 – –  – 61 54
a j reading 19 –  – – 19 43
2189 1233
1 benefits in kind include company cars private fuel and medical expenses insurance taxable expenses relate to allowances paid in lieu 
of company cars and private fuel
2 for mr king and mr warren their base fee of £39270 pa is increased by an additional fee of £6630 pa for their chairmanship of 
respectively the remuneration and audit committees additionally mr warren receives a fee of £15300 pa for his chairmanship of 
spectris pension trustees limited following his appointment to that position in april 2008
3 during the year mr o’higgins received 17000 in respect of his appointment as a nonexecutive director of exide technologies and  
mr watson received £50000 in respect of his appointment as a nonexecutive director of spiraxsarco engineering plc
b directors’ pensions 
company contributions to defined contribution plans
2010 
£’000
2009 
£’000
j e o’higgins 107 105
c g watson 70 69
j c webster 64 63
the company contributes at the rate of 25 of salary 
c directors’ total remuneration 
2010 
£’000
2009 
£’000
aggregate emoluments 2189 1233
company pension contributions to defined contribution schemes 241 237
gains made on exercise of share options 508 469
2938 1939
balance of remuneration
the balance of remuneration for the executive directors is such that a significant part of overall remuneration is subject to achieving 
performance conditions over both the short and long term the reward mix for the chief executive finance director and business group 
director is shown in the chart below this assumes performance share plan awards with a value on grant equal to 125 of the director’s 
basic salary giving an expected vesting of 55 of the award 6875 of basic salary and an annual bonus onplan expectation of 60 
of salary
  
 base pay 39
 pension 10
 annual bonus 24
 performance share plan 27
note based on remuneration for 2011 49 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
d directors’ interests in options to purchase ordinary shares
date 
granted
options 
held 
1 jan 10
granted 
during the 
year
exercise 
price p
exercised 
during the 
year
share price 
at date of 
exercise p 
lapsed 
during the 
year
options 
held 
31 dec 10
date 
exercisable expiry date
j e o’higgins
saye oct 2009 1255 723 1255 dec 2012 jun 2013
1255 1255
c g watson
saye oct 2007 1146 837 1146 1165 0 dec 2010 jun 2011
1146 0
j c webster
sep 2005 85000 589 85000 81301 0 sep 2008 sep 2015
85000 0 
total 87401 86146 1255
  
shares other than those marked saye relate to executive share option grants entitlement to exercise grants under the unapproved 1996 
executive share plan is conditional upon a performance criterion requiring compound growth in normalised eps over three years up to 
5 per annum in excess of the increase in rpi please refer to the directors’ remuneration report on page 45 for further explanation 
this condition has been met for all outstanding option grants no consideration was paid by any recipient in relation to the grant of an 
option and there were no changes to the conditions on which any option was granted during the year 
j c webster exercised 85000 options under the unapproved 1996 executive share plan during the year the gain on exercise  
was £190404
mr watson exercised his 2007 saye option on 1 december 2010 the gain on exercise was £3759 
e  directors’ share awards under the spectris performance share plan
number 
of shares 
subject to 
award at 
1 jan 10
date 
granted
exercise 
price
p
granted 
during 
the 
year
exercised 
during 
the year
market 
price at 
exercise
p
addition 
of 
reinvested 
dividends
lapsed 
during 
the 
year
number 
of shares 
subject to 
award at 
31 dec 10 
market 
value 
of each 
share at 
date of 
award 
p
date 
exercisable expiry date
j e o’higgins
35500 mar 2007 5 17572 82200 3522 21450 0 865 mar 2010 mar 2017
53400 feb 2008 53400 7865 feb 2011 feb 2018
96600 feb 2009 96600 4345 feb 2012 feb 2019
mar 2010 65400 65400 8185 mar 2013 mar 2020
185500 215400
c g watson
21500 mar 2007 5 10641 83040 2133 12992 0 865 mar 2010 mar 2017
34900 feb 2008 34900 7865 feb 2011 feb 2018
63200 feb 2009 63200 4345 feb 2012 feb 2019
mar 2010 42800 42800 8185 mar 2013 mar 2020
119600 140900
j c webster
20500 mar 2007 5 10147 82200 2034 12387 0 865 mar 2010 mar 2017
31700 feb 2008 31700 7865 feb 2011 feb 2018
57500 feb 2009 57500 4345 feb 2012 feb 2019
mar 2010 38900 38900 8185 mar 2013 mar 2020
109700 128100
total 414800 147100 38360 7689 46829 484400
  under the terms of the plan notional dividends of the company are applied over award shares during the performance period and exercise period to date of exercise 
thus increasing the number of award shares granted these additional award shares are subject to application of the performance criteria attaching to the award  
 
the above awards were made as conditional rights to acquire shares structured as nominal cost options and the number of shares 
awarded were based on the midmarket closing price of the company’s shares on the business day prior to the date of grant in respect  50 spectris plc annual report and accounts 2010
directors’ remuneration report continued
of the 2010 award for each of mr o’higgins mr watson and mr webster the value of the award was equivalent to 125 of their base 
salaries at the date of grant following satisfaction in whole or part of the performance criteria attaching to the awards as summarised 
on page 45 the directors may call for the release to them of the vested shares during the aboveshown exercise periods 
during the year the terms and conditions of all subsisting awards were varied to allow a sevenyear period of exercise from vesting 
formerly the period of exercise for awards was 12 months
the awards granted to mr o’higgins mr watson and mr webster in 2007 of 35500 21500 and 20500 award shares respectively 
became exercisable and were exercised by them during the year the awards had two performance conditions attaching to them the 
eps target lapsed completely 50 of the award and the tsr target was met to 4503 of the award in determining the level of 
vesting against the tsr target the committee took into account the company’s underlying financial performance the awards were 
satisfied from the company’s treasury shares
the spectris performance share plan operates within the dilution limits laid down by the association of british insurers 
mr o’higgins retained 10386 shares arising from the exercise of his 2007 award on 11 march 2010 and sold 7186 shares the gain on 
exercise was £143563
mr watson retained 6289 shares arising from the exercise of his 2007 award on 12 march 2010 and sold 4352 shares the gain on 
exercise was £87830
mr webster retained 5935 shares arising from the exercise of his 2007 award on 11 march 2010 and sold 4212 shares the gain on 
exercise was £82900
the aggregate gains on exercise for all directors under the company’s share plans were thus £508456 2009 £469356 
f directors’ interests
the following directors or their families had beneficial interests in the ordinary shares of the company
shareholdings
2010  
31 dec  
or date of 
resignation
 2010  
1 jan  
or date of 
appointment
j l m hughes 8000 8000
j e o’higgins 103319 92933
p a chambré 5344 5197
r j king 3000 –
j a warren 3000 3000
c g watson 32745 24964
j c webster 118310 118736
there were no changes to the above interests between the year end and the date of this report 
no director had during the year or at the end of the year any material interest in any contract of significance to the group’s business
at 31 december 2010 the middle market closing share price on the london stock exchange was 1311p the highest share price in the 
year was 1326p and the lowest was 735p
by order of the board
r j king 
chairman of the committee
25 february 2011
company no 2025003 51 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
independent auditor’s report to the members of spectris plc
we have audited the financial statements of spectris plc  
for the year ended 31 december 2010 which comprise the 
consolidated statement of income the consolidated statement  
of comprehensive income the consolidated statement of changes 
in equity the consolidated statement of financial position the 
consolidated statement of cash flows the parent company 
balance sheet and the related notes the financial reporting 
framework that has been applied in the preparation of the  
group financial statements is applicable law and international 
financial reporting standards ‘ifrss’ as adopted by the eu 
the financial reporting framework that has been applied in 
the preparation of the parent company financial statements 
is applicable law and uk accounting standards uk generally 
accepted accounting practice
this report is made solely to the company’s members as a body 
in accordance with chapter 3 of part 16 of the companies act 
2006 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose 
to the fullest extent permitted by law we do not accept or 
assume responsibility to anyone other than the company and the 
company’s members as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement 
set out on page 40 the directors are responsible for the 
preparation of the financial statements and for being satisfied that 
they give a true and fair view our responsibility is to audit and 
express an opinion on the financial statements in accordance with 
applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing 
practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements  
is provided on the apb’s website at  
wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion
the financial statements give a true and fair view of the  •	
state of the group’s and of the parent company’s affairs as  
at 31 december 2010 and of the group’s profit for the year 
then ended
the group financial statements have been properly prepared in •	
accordance with ifrss as adopted by the eu
the parent company financial statements have been properly •	
prepared in accordance with uk generally accepted 
accounting practice and
the financial statements have been prepared in accordance •	
with the requirements of the companies act 2006 and as 
regards the group financial statements article 4 of the ias 
regulation
opinion on other matters prescribed by the  
companies act 2006
in our opinion
the part of the directors’ remuneration report to be audited •	
has been properly prepared in accordance with the companies 
act 2006 and
the information given in the directors’ report for the financial •	
year for which the financial statements are prepared is 
consistent with the financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you 
if in our opinion
adequate accounting records have not been kept by the parent •	
company or returns adequate for our audit have not been 
received from branches not visited by us or
the parent company financial statements and the part of •	
the directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns or
certain disclosures of directors’ remuneration specified by law •	
are not made or
we have not received all the information and explanations we •	
require for our audit
under the listing rules we are required to review
the directors’ statement set out on •	 page 40 in relation to 
going concern
the part of the corporate governance statement on •	 page 37 
relating to the company’s compliance with the nine provisions 
of the june 2008 combined code specified for our review and
certain elements of the report to shareholders by the board on •	
directors’ remuneration
i k bone senior statutory auditor
for and on behalf of kpmg audit plc statutory auditor
chartered accountants
15 canada square
london
e14 5gl
25 february 2011 52 spectris plc annual report and accounts 2010
consolidated statement of income
note
2010 
£m
2009 
£m
continuing operations
revenue 5 9019 7873 
cost of sales 3751 3420
gross profit 5268 4453
indirect production and engineering expenses 754 840
sales and marketing expenses 2060 1847
administrative expenses 1175 1081
operating profit
operating profit before acquisitionrelated costs and amortisation of acquisitionrelated  
intangible assets 1421 792
acquisitionrelated costs and contingent consideration fair value adjustments 19 –
amortisation of acquisitionrelated intangible assets 123 107
6 1279 685 
profit on disposal of businesses 26 – 01 
financial income 9 82 59 
finance costs 9 162 203
profit before tax 1199 542 
taxation – uk 10 55 26
taxation – overseas 10 182 90
profit after tax for the year from continuing operations attributable  
to owners of the company 962 426 
basic earnings per share 12 831p 369p 
diluted earnings per share 12 816p 368p 
interim dividends paid and final dividends proposed for the year per share 11 2800p 2425p
dividends paid during the year per share 11 2495p 2340p
spectris uses adjusted figures as key performance measures in addition to those reported under adopted ifrs reconciliations showing 
how the adjusted performance measures are derived from those reported under adopted ifrs are set out in note 3
for the year ended 31 december 2010 53 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
consolidated statement of comprehensive income
note
2010 
£m
2009 
£m
profit for the period attributable to owners of the company 962 426
other comprehensive income
net gain on effective portion of changes in fair value of forward exchange contracts 07 81
foreign exchange movements on translation of overseas operations 13 368
net gain on changes in fair value of effective portion of hedges of net investment in overseas 
operations 22 148
actuarial gainloss arising on pension schemes net of exchange 8 21 190
tax on items recognised directly in comprehensive income 10 01 50
total comprehensive income for the period attributable to owners of the company 1026 147
for the year ended 31 december 2010 54 spectris plc annual report and accounts 2010
consolidated statement of changes in equity
for the year ended 31 december 2010
share 
capital 
£m
share 
premium 
£m
retained 
earnings 
£m
translation 
reserve 
£m
hedging 
reserve 
£m
merger 
reserve 
£m
capital 
redemption 
reserve 
£m
total 
equity 
£m
balance at 1 january 2010 62 2314 1195 709 05 31 03 4309
total comprehensive income for the period
profit for the period – – 962 – – – – 962
other comprehensive income
net gain on effective portion of changes in 
fair value of forward exchange contracts 
net of tax – – – – 03 – – 03
foreign exchange movements on 
translation of overseas operations – – – 13 – – – 13
net gain on changes in fair value of 
effective portion of hedges of net 
investment in overseas operations  
net of tax – – – 31 – – – 31
actuarial gain arising on pension schemes 
net of exchange net of tax – – 17 – – – – 17
distributions to and transactions with 
owners
equity dividends paid – – 289 – – – – 289
sharebased payments net of tax – – 71 – – – – 71
share options exercised from own shares  
treasury purchased – – 19 – – – – 19
balance at 31 december 2010 62 2314 1975 753 02 31 03 5136
for the year ended 31 december 2009
share 
capital 
£m
share 
premium 
£m
retained 
earnings 
£m
translation 
reserve 
£m
hedging 
reserve 
£m
merger 
reserve 
£m
capital 
redemption 
reserve 
£m
total 
equity 
£m
balance at 1 january 2009 62 2314 1173 930 81 31 03 4432
total comprehensive income for the period
profit for the period – – 426 – – – – 426
other comprehensive income
net gain on effective portion of changes in 
fair value of forward exchange contracts 
net of tax – – – – 76 – – 76
foreign exchange movements on 
translation of overseas operations – – – 368 – – – 368
net gain on changes in fair value of 
effective portion of hedges of net 
investment in overseas operations  
net of tax – – – 147 – – – 147
actuarial loss arising on pension schemes 
net of exchange net of tax – – 134 – – – – 134
distributions to and transactions with 
owners
equity dividends paid – – 270 – – – – 270
sharebased payments net of tax – – 04 – – – – 04
share options exercised from own shares 
treasury purchased – – 04 – – – – 04
balance at 31 december 2009 62 2314 1195 709 05 31 03 4309 55 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
consolidated statement of financial position
note
2010 
£m
2009 
£m
assets
noncurrent assets
intangible assets
goodwill 13 3551 3248 
other intangible assets 14 974 703 
4525 3951 
property plant and equipment 15 1105 1076 
equityaccounted investments 05 06 
deferred tax assets 23 184 262 
5819 5295 
current assets
inventories 16 1210 998 
taxation recoverable 85 81 
trade and other receivables 17 1948 1678 
derivative financial instruments 20 23 09 
cash and cash equivalents 18 647 368 
3913 3134 
total assets 9732 8429 
liabilities
current liabilities
shortterm borrowings 19 17 498
trade and other payables 21 2121 1507
current tax liabilities 367 361
provisions 22 234 253
2739 2619
net current assets 1174 515
noncurrent liabilities
medium and longterm borrowings 19 1355 924
derivative financial instruments 20 149 211
other payables 21 173 93
retirement benefit obligations 8 141 235
deferred tax liabilities 23 39 38
1857 1501
total liabilities 4596 4120
net assets 5136 4309 
equity 
issued share capital 24 62 62 
share premium 2314 2314 
retained earnings 1975 1195 
translation reserve 753 709 
hedging reserve 02 05
merger reserve 31 31 
capital redemption reserve 03 03 
total equity attributable to equity holders of the company 5136 4309 
total equity and liabilities 9732 8429
 
the financial statements on pages 52 to 93 were approved by the board of directors on 25 february 2011 and were signed on its  
behalf by
clive watson
director
company registration no 02025003
as at 31 december 2010 56 spectris plc annual report and accounts 2010
consolidated statement of cash flows
note
2010
£m
2009
£m
cash flows from operating activities
profit after tax 962 426 
adjustments for
tax 10 237 116 
profit on disposal of businesses 26 – 01
finance costs 9 162 203 
financial income 9 82 59
depreciation 15 144 143 
amortisation of intangible assets 14 144 131 
gain on sale of property plant and equipment 6 01 03
sharebased payment chargecredit 7 73 04
operating profit before changes in working capital and provisions 1639 952 
increasedecrease in trade and other receivables 185 310 
increasedecrease in inventories 151 381 
increasedecrease in trade and other payables 559 429
decrease in provisions and employee benefits 108 32
corporation tax paid 210 167
net cash from operating activities 1544 1015 
cash flows from investing activities
purchase of property plant and equipment and software 189 142
proceeds from sale of property plant and equipment 14 15 
acquisition of businesses net of cash acquired 28 626 287
proceeds from disposal of businesses – 01 
interest received 10 04 
net cash flows used in investing activities 791 409
cash flows from financing activities
interest paid 111 112
dividends paid 11 289 270
share options exercised from treasury shares 19 04 
proceeds from borrowings 468 990 
repayment of borrowings 528 1420
net cash flows used in financing activities 441 808
net increasedecrease in cash and cash equivalents 312 202
cash and cash equivalents at beginning of year 337 548 
effect of foreign exchange rate changes 16 09
cash and cash equivalents at end of year 18 633 337
 
reconciliation of changes in cash and cash equivalents to movements in net debt
note
2010
£m
2009 
£m
net increasedecrease in cash and cash equivalents 312 202
proceeds from borrowings 468 990
repayment of borrowings 528 1420 
effect of foreign exchange rate changes 05 154
movement in net debt 377 382 
net debt at start of year 19 1239 1621
net debt at end of year 19 862 1239
for the year ended 31 december 2010 57 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
notes to the accounts
1 accounting policies
general information
spectris plc is a public limited company incorporated and 
domiciled in the united kingdom whose shares are publicly 
traded on the london stock exchange 
these financial statements are presented in millions of pounds 
sterling rounded to the nearest one decimal place foreign 
operations are included in accordance with the policies set out 
below 
statement of compliance and basis of preparation
the group financial statements have been prepared and approved 
by the directors in accordance with international financial 
reporting standards as adopted by the eu adopted ifrs the 
company has elected to prepare its parent company financial 
statements in accordance with uk generally accepted accounting 
practice these are presented on pages 94 to 100 
the financial statements are prepared on the historical cost basis 
except that derivative financial instruments are stated at fair value
the group’s business activities together with factors likely to 
affect its future development performance and position are set 
out in the business review on pages 2 to 33 the financial position 
of the group its cash flows liquidity position and borrowing 
facilities are described in the financial review on pages 24 to 
28 in addition note 2 to the financial statements includes the 
group’s objectives policies and processes for managing its capital 
its financial risk management objectives details of its financial 
instruments and hedging activities and its exposure to credit risk 
and liquidity risk
having reviewed the group’s plans and available financial facilities 
the board has a reasonable expectation that the group has 
adequate resources to continue its operational existence for the 
foreseeable future for this reason it continues to adopt the going 
concern basis in preparing the group’s accounts there are no key 
sensitivities identified in relation to this conclusion
the preparation of financial statements in conformity with 
adopted ifrs requires management to make judgements 
estimates and assumptions that affect the application of 
policies and reported amounts of assets and liabilities income 
and expenses the key judgements made in respect of the 
appropriateness of the group accounting policies relate to 
the timing of revenue recognition where the group has some •	
responsibility for installation activity
the classification of financial instruments in relation to hedge •	
accounting
the classification of retirement benefit arrangements between •	
defined benefit and defined contribution schemes
the point at which development activity meets the cost •	
capitalisation threshold
the directors do not consider the practical application of any of 
these judgements to involve significant subjectivity or uncertainty
the estimates and associated assumptions used are continually 
evaluated and are based on historical experience and various 
other factors that are believed to be reasonable under the 
circumstances actual results may differ from these estimates 
revisions to accounting estimates are recognised in the period in 
which the estimate is revised if the revision affects only that period 
or in the period of the revision and future periods if the revision 
affects both current and future periods estimates that have the 
most significant effect on the amounts recognised in the financial 
statements are recognised in the following areas
business combinations in relation to the determination of the •	
fair value of acquired assets and liabilities note 28
goodwill in relation to the assumptions underpinning •	
impairment testing note 13
retirement benefit schemes in relation to the assumptions used •	
to value plan assets and liabilities note 8
provisions and contingent liabilities in relation to determining •	
the quantum and timing of management’s best estimate of 
outflows notes 22 and 29
the accounting policies set out below have been applied 
consistently by group entities to all periods presented in these 
financial statements 
new standards and interpretations not yet adopted
there are a number of new standards amendments to standards 
and interpretations that are not yet effective for the year ended 
31 december 2010 none of these have been adopted early in 
preparing these consolidated financial statements none of  
these are anticipated to have any impact on the results or 
statement of financial position reported in these consolidated 
financial statements the adoption of ifrs 3 revised with effect 
from 1 january 2010 has changed the group’s definition of the 
cost of business combinations and the treatment of contingent 
consideration for transactions completed from that date none 
of the other new standards amendments to standards and 
interpretations not yet effective are anticipated to materially 
change the group’s published accounting policies
new standards adopted during the year
as at 1 january 2010 the group changed its accounting policies 
in the following area to reflect accounting standards adopted for 
the year
the group has adopted ifrs 3 revised ‘business combinations’ 
for transactions arising after 1 january 2010 this has changed 
the group’s definition of the cost of business combinations and 
the treatment of contingent consideration the adoption of ifrs 3 
revised has been applied prospectively and has had no material 
impact on assets profit or earnings per share in the year ended 
31 december 2010 the impact on profit and earnings per share is 
highlighted in note 3
had this accounting policy change not arisen then acquisition
related costs of £19m would have been capitalised within intangible 
assets arising on acquisition and operating costs reduced and profit 
before tax increased by the same amount basic earnings per share 
would have been 16p per share higher at 847p per share adjusted 
earnings per share as defined would not differ from that presented
for acquisitions on or after 1 january 2010 the group measures 
goodwill as the fair value of the consideration transferred less the 
net recognised amount generally fair value of the identifiable 
assets acquired and liabilities assumed all measured as at the 
acquisition date 58 spectris plc annual report and accounts 2010
notes to the accounts continued
1 accounting policies continued
previously transaction costs to effect a business combination were 
included in the cost of acquisition but under ifrs 3 revised these 
acquisitionrelated costs are expensed as incurred 
for transactions relating to acquisitions before 1 january 2010 
subsequent adjustments to contingent consideration were 
made against goodwill but under ifrs 3 revised subsequent 
accounting depends on whether the contingent consideration is 
initially recognised as equity or as a liability and whether the event 
is considered a measurement period adjustment 
basis of consolidation
the consolidated financial statements include the results of the 
company and all of its subsidiary undertakings and associates 
equityaccounted investments
a subsidiary is an entity controlled by the group control is the 
power to govern the financial and operating policies of the entity 
so as to obtain benefits from its activities the financial statements 
of subsidiaries are included in the consolidated financial 
statements from the date that control commences until the date 
that control ceases
associates are those entities in which the group has significant 
influence but not control over the financial and operating 
policies significant influence is presumed to exist when the group 
holds between 20 and 50 of the voting power of another 
entity associates are accounted for using the equity method of 
accounting and are recognised initially at cost
intragroup balances and any unrealised gains and losses or 
income and expenses arising from intragroup transactions are 
eliminated in preparing the consolidated financial statements
the assets and liabilities of foreign operations including goodwill 
and fair value adjustments arising on consolidation are translated 
into sterling at exchange rates ruling at the balance sheet date 
the revenues and expenses of foreign operations are translated 
into sterling at average exchange rates foreign exchange 
differences arising on retranslation are recognised directly in a 
separate translation reserve within the statement of changes  
in equity
foreign currency transactions
transactions in foreign currencies are translated at the foreign 
exchange rate ruling at the date of the transaction monetary 
assets and liabilities denominated in foreign currencies at the 
balance sheet date are translated at the exchange rate ruling at 
that date with any exchange differences arising on retranslation 
being recognised in the statement of income nonmonetary 
assets and liabilities that are measured in terms of historical cost 
in a foreign currency are translated using the exchange rate at the 
date of the transaction
derivative financial instruments may be purchased to hedge 
the group’s exposure to changes in foreign exchange rates the 
accounting policies applied in these circumstances are described 
under the heading ‘derivative financial instruments and hedge 
accounting’ below
interestbearing borrowings
interestbearing borrowings are recognised initially at fair value less 
attributable transaction costs subsequent to initial recognition 
interestbearing borrowings are stated at amortised cost with any 
difference between cost and redemption value being recognised 
in the statement of income over the period of the borrowings on 
an effective interest basis
derivative financial instruments and hedge accounting
the group uses derivative financial instruments to hedge its 
exposure to foreign exchange and interest rate risks arising from 
operating and financing activities in accordance with its treasury 
policy it does not hold or use derivative financial instruments for 
trading or speculative purposes
derivative financial instruments are presented as current or non
current based on their contracted maturity dates
cash flow hedge accounting
derivative financial instruments may be transacted to hedge 
the variability in cash flows of a recognised asset or liability or 
of highly probable forecast transactions caused by changes in 
exchange rates
derivative financial instruments are carried in the balance 
sheet at fair value where a derivative financial instrument is 
designated in a cash flow hedge relationship with a highly 
probable forecast transaction the effective part of any gain or 
loss arising is recognised in the hedging reserve via the statement 
of comprehensive income the ineffective part of any gain or 
loss is recognised in the statement of income when the forecast 
transaction subsequently occurs and results in the recognition of a 
financial asset or liability that impacts on the statement of income 
the associated cumulative gain or loss is removed from the 
hedging reserve and presented within the statement of income 
when the forecast transaction subsequently occurs and results in 
the recognition of a nonfinancial asset or liability the associated 
cumulative gain or loss is removed from the hedging reserve and 
included within the initial cost of the nonfinancial asset or liability 
hedge accounting is discontinued when the hedging instrument 
expires or is either sold terminated or exercised without 
replacement or rollover or the group revokes the designation or 
the hedging instrument no longer qualifies for hedge accounting
if a derivative financial instrument is not formally designated 
in a cash flow hedge relationship any change in fair value is 
recognised in the statement of income
net investment hedge accounting
the group uses us dollar and eurodenominated borrowings and 
derivative financial instruments as a hedge against the translation 
exposure on the group’s net investment in overseas companies 
where the hedge is fully effective at hedging the variability in 
the net assets of such companies caused by changes in exchange 
rates the changes in value of the borrowings are recognised in the 
statement of comprehensive income the ineffective part of any 
change in value caused by changes in exchange rates is recognised 
in the statement of income
the group takes advantage of crosscurrency swaps for some of its 
us dollardenominated private placement borrowings the swaps 
have the effect of converting fixed rate us dollar borrowings into  59 spectris plc annual report and accounts 2010
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financial statements
‘synthetic’ fixed rate eurodenominated borrowings the value of 
the element of the swap that locks interest payments at a fixed 
euro interest rate changes as us dollar variable interest rates euro 
variable interest rates and foreign currency exchange rates change 
under ias 39’s rules such changes in value are considered to be 
ineffective as a net investment hedge and accordingly they are 
recognised in the statement of income
business combinations and goodwill
all business combinations are accounted for by applying the 
purchase method goodwill represents the excess of the fair 
value of the purchase consideration for the interests in subsidiary 
undertakings over the net fair value to the group of the identifiable 
assets liabilities and contingent liabilities acquired in respect of 
acquisitions prior to 1 january 2004 goodwill is included on the 
basis of its deemed cost which represents the amount recorded 
previously under uk gaap prior to 1 january 1998 goodwill was 
written off to reserves in the year of acquisition 
goodwill arising on acquisitions is stated at cost less any 
accumulated impairment losses impairment losses on goodwill 
are not reversed from 1 january 2004 goodwill is allocated 
on acquisition to cashgenerating units that are anticipated to 
benefit from the combination and is no longer amortised but 
is tested annually for impairment impairment is determined by 
assessing the recoverable amount of the cashgenerating unit to 
which the goodwill relates this estimate of recoverable amount 
is determined at each balance sheet date the group’s identified 
cashgenerating units are smaller than reportable segments 
the estimate of recoverable amount requires significant 
assumptions to be made and is based on a number of factors 
such as the nearterm business outlook for the cashgenerating 
unit including both its operating profit and operating cash 
flow performance where the recoverable amount of the cash
generating unit is less than the carrying amount an impairment 
loss is recognised where goodwill forms part of a cash
generating unit and part of the operation within that unit  
is disposed of the goodwill associated with the operation 
disposed of is included in the carrying amount of the operation 
when determining the gain or loss on disposal goodwill disposed 
of in this circumstance is measured on the basis of the relative 
values of the operation disposed of and the portion of the cash
generating unit retained
segmental reporting
an operating segment is a distinguishable component of the 
group that is engaged in business activities from which it may 
earn revenues and incur expenses and whose operating results 
are reviewed regularly by the chief operating decision maker to 
make decisions about resources to be allocated to the segment 
and assess its performance and for which discrete financial 
information is available
reportable segments are operating segments that either meet the 
thresholds and conditions set out in ifrs 8 or are considered by 
the board to be appropriately designated as reportable segments
segment result is the result reviewed by the chief operating 
decision maker and represents operating profits excluding 
intangible asset amortisation and goodwill impairment charges 
acquisitionrelated costs and contingent consideration fair value 
adjustments and includes an allocation of head office expenses 
segment result excludes tax and financing items
segment assets comprise goodwill other intangible assets 
property plant and equipment inventories trade and other 
receivables segment liabilities comprise trade and other payables 
provisions and other payables unallocated items represent 
corporate and deferred taxation balances defined benefit scheme 
liabilities and all components of net debt
intangible assets
the cost of acquiring software including associated 
implementation costs where applicable that is not specific to  
an item of property plant and equipment is classified as an 
intangible asset
selffunded research and development costs are charged to 
the statement of income in the year in which they are incurred 
unless development expenditure meets certain strict criteria 
for capitalisation these criteria include demonstration of the 
technical feasibility and intent of completing a new intangible 
asset that will be available for sale and that the asset will generate 
probable future economic benefits from the point where 
expenditure meets the criteria development costs are capitalised 
and amortised over their useful economic lives the directors 
consider that due to the nature of projects undertaken the 
proportion of development costs incurred that meets the criteria 
for capitalisation is immaterial
other intangible assets that are separately acquired by the group are 
stated at cost less accumulated amortisation and impairment losses 
subsequent expenditure is capitalised only when it increases the 
future economic benefits otherwise it is expensed as incurred
intangible assets arising from a business combination are 
recognised at fair value
amortisation of intangible assets is charged to administrative 
expenses in the statement of income on a straightline basis over 
the estimated useful lives of intangible assets determined on an 
asset by asset basis the estimated useful lives are as follows
software – 3 to 5 years •	
patents trademarks and technology – up to 10 years •	
dependent upon the nature of the underlying contractual right 
or the technology acquired
customer related – 3 to 10 years dependent upon the •	
underlying contractual arrangements and specific 
circumstances such as customer retention experience
property plant and equipment
property plant and equipment is stated at cost which from 
1 january 2009 includes capitalised borrowing costs where 
appropriate less accumulated depreciation and impairment losses 
the group recognises in the carrying amount of property plant 
and equipment the additions that are appropriate to capitalise and 
the subsequent costs of replacing the parts of such items when 
there are future economic benefits that will flow to the group and 
its cost can be measured reliably cost includes expenditure that is 
directly attributable to the acquisition of the asset cost all other 
costs are recognised in the statement of income as an expense as 
they are incurred 60 spectris plc annual report and accounts 2010
notes to the accounts continued
1 accounting policies continued
depreciation is recognised in the statement of income on 
a straightline basis to write off the cost less the estimated 
residual value which is reviewed annually of property plant and 
equipment over its estimated useful life the depreciation charge is 
revised where useful lives are different from previously estimated 
or where technically obsolete assets are required to be written 
down where parts of an item of plant and equipment have 
separate lives they are accounted for and depreciated as separate 
items land is not depreciated estimated useful lives are as follows
freehold and long leasehold property – 20 to 40 years
short leasehold property – over the period of the lease
plant machinery and other equipment – 5 to 20 years
motor vehicles – 4 years
tooling computer hardware – 3 to 5 years
impairment of tangible and intangible assets excluding 
goodwill
the carrying amount of the group’s assets is reviewed at each 
balance sheet date to determine whether there is any indication 
of impairment if any such indication exists the asset’s recoverable 
amount is estimated where the asset does not generate cash 
flows that are independent from other assets the group estimates 
the recoverable amount of the cashgenerating unit to which 
the asset belongs any intangible asset with an indefinite useful 
life is tested for impairment annually and whenever there is an 
indication that the asset may be impaired the group currently has 
no such assets
recoverable amount is the higher of fair value less costs to sell 
and value in use in assessing value in use the estimated future 
cash flows are discounted to their present value using a pretax 
discount rate that reflects current market assessments of the time 
value of money and the risks specific to the asset for which the 
estimates of future cash flows have not been adjusted
if the recoverable amount of an asset is estimated to be less 
than its carrying amount the carrying amount is reduced to its 
recoverable amount with the impairment loss recognised as an 
operating expense immediately
where an impairment loss subsequently reverses the carrying 
amount of the asset is increased to the revised estimate of its 
recoverable amount but so that the increased carrying amount 
does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the asset 
in prior years a reversal of an impairment loss is recognised as 
income immediately
trade and other receivables
trade and other receivables are initially recognised at their fair 
value and are subsequently reduced by appropriate allowances for 
estimated irrecoverable amounts discounting is applied where it is 
expected to have a material impact
inventories
inventories and work in progress are carried at the lower of cost 
and net realisable value inventory acquired as part of business 
combinations is valued at fair value cost represents direct costs 
incurred and where appropriate production or conversion costs 
and other costs to bring the inventory to its existing location 
and condition in the case of manufacturing inventory and work 
in progress cost includes an appropriate share of production 
overheads based on normal operating capacity inventory is 
accounted for on a firstin firstout basis provision is made to 
write down slowmoving and obsolete items to net realisable 
value based on an assessment of technological and market 
developments and on an analysis of historic and projected usage 
with regard to quantities on hand 
cash and cash equivalents
cash and cash equivalents comprises cash balances and call 
deposits bank overdrafts that are repayable on demand and form 
an integral part of the group’s cash management are included as a 
component of cash equivalents for the purposes of the statement 
of cash flows
trade and other payables
trade and other payables are initially recognised at fair value
provisions
a provision is recognised in the balance sheet when the group 
has a present legal or constructive obligation as a result of a past 
event and it is probable that an outflow of economic benefits 
will be required to settle the obligation in respect of warranties a 
provision is recognised when the underlying products or services 
are sold provisions are recognised at an amount equal to the best 
estimate of the expenditure required to settle the group’s liability 
obligations arising from restructuring plans are recognised when 
detailed formal plans have been established and when there is a 
valid expectation that such a plan will be carried out
postretirement benefits
the group operates pension schemes providing benefits based on 
final pensionable pay the assets of the schemes are held separately 
from those of the group the group’s net obligation in respect of 
defined benefit pension plans is calculated separately for each plan 
by estimating the amount of future benefit that employees have 
earned in return for their service in the current and prior periods 
that benefit is discounted to determine its present value and the fair 
value of any plan assets is deducted the discount rate is determined 
by reference to market yields at the balance sheet date on high 
quality corporate bonds that have maturity dates approximating to 
the terms of the group’s obligations
the calculation is performed by a qualified actuary using the 
projected unit method actuarial gains and losses are recognised 
in full in the period in which they arise in the statement of 
comprehensive income
when the benefits of a plan are improved the portion of 
the increased benefit relating to past service by employees is 
recognised as an expense in the statement of income on a 
straightline basis over the average period until the benefits 
become vested to the extent that the benefits vest immediately 
the expense is recognised immediately in the statement of 
income similarly any cost or income relating to the curtailment or 
settlement of a pension scheme is recognised as a cost or income 
immediately in the statement of income
for defined contribution schemes the assets are held separately 
from those of the group in independently administered funds 
payments to defined contribution schemes are charged to the 
statement of income as they fall due  61 spectris plc annual report and accounts 2010
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financial statements
in certain countries the group participates in industrywide 
defined benefittype pension arrangements in such 
circumstances it is not possible to determine the amount of 
any surplus or deficit attributable to the group and the pension 
costs are accounted for as if the arrangements were defined 
contribution schemes
other longterm employee benefits
the group’s net obligation in respect of longterm employee 
benefits other than pension plans is the amount of future benefit 
that employees have earned in return for their service in the 
current and prior periods that benefit is discounted to determine 
its present value and the fair value of any plan assets is deducted 
the discount rate is determined by reference to market yields at 
the balance sheet date on high quality corporate bonds that have 
maturity dates approximating to the terms of the group’s obligations
sharebased payments
the fair value of equitysettled employee share option grants 
is calculated at grant date the resulting cost is charged to the 
statement of income over the vesting period of the plans the 
value of the charge is adjusted to reflect expected and actual levels 
of options that vest except where forfeiture is only due to share 
prices not achieving the threshold for vesting 
revenues
revenues comprise sales to outside customers after discounts and 
excluding value added tax
revenue from the sale of goods is recognised in the statement of 
income when the significant risk and rewards of ownership of the 
goods have been transferred to the customer which is typically 
on delivery for contracts that involve a significant element of 
installation or testing of equipment revenue is recognised at the 
point of customer acceptance revenue from services rendered 
is recognised in the statement of income in proportion to the 
measurement of the stage of completion of services rendered 
as at the balance sheet date this is assessed by reference to the 
amount of time incurred in proportion to the total expected time 
to be taken to deliver the service
the group has an immaterial amount of activity accounted 
for under ias 11 construction contracts and accordingly the 
applicable disclosures for these types of contracts are not provided
interest payable and receivable
interest payable comprises the interest payable on borrowings 
calculated using the effective interest method 
interest receivable and payable is recognised in the statement of 
income as it accrues using the effective interest method
leasing
leases are classified as finance leases whenever the terms of the 
lease transfer substantially all the risks and rewards of ownership 
to the lessee all other leases are classified as operating leases
rentals payable under operating leases are charged to the 
statement of income on a straightline basis over the term of the 
relevant lease benefits received and receivable as an incentive 
to enter into an operating lease are also spread on a straightline 
basis over the lease term
taxation
tax on the profit or loss for the year comprises both current 
and deferred tax tax is recognised in the statement of income 
except to the extent that it relates to items recognised either in 
other comprehensive income or directly in equity in which case 
tax is recognised in the statement of comprehensive income or 
statement of changes in equity respectively
current tax is the expected tax payable on the taxable income for 
the year using tax rates enacted or substantively enacted at the 
balance sheet date and any adjustments to tax payable in respect 
of previous years
deferred tax is provided using the balance sheet method 
providing for temporary differences between the carrying 
amounts of assets and liabilities for financial reporting purposes 
and the amounts used for taxation purposes a deferred tax  
asset is recognised only to the extent that it is probable that  
future taxable profits will be available against which the asset  
can be utilised
additional income taxes that arise from the distribution of intra
group dividends are recognised at the same time as the liability to 
pay the related dividend
2 financial risk management
the group’s multinational operations and debt financing expose 
it to a variety of financial risks in the course of its business 
the group is exposed to foreign currency risk interest rate risk 
liquidity risk and credit risk financial risk management is an 
integral part of the way the group is managed financial risk 
management policies are set by the board of directors these 
policies are implemented by a central treasury department that 
has formal procedures to manage foreign exchange risk interest 
rate risk and liquidity risk including where appropriate the use 
of derivative financial instruments the group has clearly defined 
authority and approval limits
in accordance with its treasury policy the group does not hold 
or use derivative financial instruments for trading or speculative 
purposes such instruments are only used to manage the risks 
arising from operating or financial assets or liabilities or highly 
probable future transactions the quantitative analysis of financial 
risk is included in note 20
a foreign currency risk
foreign currency risk arises both where sale or purchase 
transactions are undertaken in currencies other than the 
respective functional currencies of group companies transactional 
exposures and where the results of overseas companies are 
consolidated into the group’s reporting currency of £ sterling 
translational exposures the group has operations around the 
world which record their results in a variety of different local 
functional currencies in countries where the group does not have 
operations it invariably has some customers or suppliers that 
transact in a foreign currency the group is therefore exposed 
to the changes in foreign currency exchange rates between a 
number of different currencies but the group’s primary exposures 
relate to the us dollar euro danish krone swiss franc and 
japanese yen where appropriate the group manages its foreign 
currency exposures using derivative financial instruments 62 spectris plc annual report and accounts 2010
notes to the accounts continued
2 financial risk management continued
the group manages its transactional exposures to foreign currency 
risks through the use of forward exchange contracts forward 
exchange contracts are typically used to hedge highly probable 
transactions which can be forecast to occur from anything 
between 1 and 18 months into the future 
the group’s translational exposures to foreign currency risks can 
relate both to the statement of income and net assets of overseas 
subsidiaries the group’s policy is not to hedge the translational 
exposure that arises on consolidation of the statement of income 
of overseas subsidiaries the group finances overseas company 
investments partly through the use of foreign currency borrowings 
in order to provide a natural hedge of foreign currency risk arising 
on translation of the group’s foreign currency subsidiaries the 
quantitative analysis of foreign currency risk is included in note 20
b interest rate risk
interest rate risk comprises both the interest rate price risk that 
results from borrowing at fixed rates of interest and also the 
interest cash flow risk that results from borrowing at variable rates 
where appropriate interest rate swaps are used to manage the 
group’s interest rate profile
currently the majority of the group’s borrowings attract fixed 
rates of interest payments and therefore the group’s principal 
interest rate risk is a price risk quantitative analysis of interest rate 
risk is included in note 20
c liquidity risk
liquidity risk represents the risk that the group will not be able 
to meet its financial obligations as they fall due the group’s 
approach to managing this risk is to ensure as far as possible 
that it will always have sufficient liquidity to meet its liabilities 
when due under both normal and stressed conditions without 
incurring unacceptable losses or risking damage to the group’s 
reputation the group manages this risk through the use of 
regularly updated cash flow and covenant compliance forecasts and 
a liquidity headroom analysis which is used to determine funding 
requirements adequate committed lines of funding are maintained 
from high quality investment grade lenders the facilities committed 
to the group as at 31 december 2010 are set out in note 19
d credit risk
credit risk arises because a counterparty may fail to perform its 
obligations the group is exposed to credit risk on financial assets 
such as cash balances derivative financial instruments trade and 
other receivables
the group’s credit risk is primarily attributable to its trade 
receivables the amounts recognised in the balance sheet are net 
of appropriate allowances for doubtful receivables estimated by 
the group’s management based on prior experience and their 
assessment of the current economic environment trade receivables 
are subject to credit limits and control and approval procedures 
in the operating companies due to its large geographic base 
and number of customers the group is not exposed to material 
concentrations of credit risk on its trade receivables quantitative 
analysis of credit risk to receivables is included in note 17
credit risk associated with cash balances and derivative financial 
instruments is managed centrally by transacting with an 
existing relationship bank with strong investment grade rating 
accordingly the group’s associated credit risk is limited the group 
has no significant concentration of credit risk
the group’s maximum exposure to credit risk is represented by 
the carrying amount of each financial asset including derivative 
financial instruments in the group balance sheet see note 20
capital management
the board considers equity shareholders’ funds together with 
committed debt facilities as capital for the purposes of funding the 
group’s operations total managed capital at 31 december 2010 is
2010 
£m
2009 
£m
equity shareholders’ funds page 55 5136 4309
committed debt facilities 2295 2814
7431 7123
ordinary shares are classified as equity incremental costs directly 
attributable to the issue of ordinary shares and share options are 
recognised as a deduction from equity net of any tax effects
the board’s policy is to maintain a strong capital base so as to 
maintain investor creditor and market confidence and to sustain 
future development of the business the board of directors 
monitors both the demographic spread of shareholders and the 
level of dividends to ordinary shareholders
the board encourages employees to hold shares in the company 
this is carried out through a save as you earn option scheme in 
the uk as well as performance share plans full details of these 
schemes are given in the sharebased payments note note 25 of 
these accounts
the board seeks to maintain a balance between the higher returns 
that might be possible with higher levels of borrowings the 
advantages and security afforded by a sound capital position and 
the benefits of a good credit rating
from time to time the group purchases its own shares in the 
market the timing of these purchases depends on market prices 
buy and sell decisions are made on a specific transaction basis by 
the board 
there were no changes to the group’s approach to capital 
management during the year
neither the company nor any of its subsidiaries are subject to 
externally imposed capital requirements 63 spectris plc annual report and accounts 2010
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3 adjusted performance measures
spectris uses adjusted figures as key performance measures in addition to those reported under adopted ifrs adjusted figures exclude 
certain nonoperational items which management has defined as amortisation and impairment of acquisitionrelated intangible assets 
acquisitionrelated costs and contingent consideration fair value adjustments profits or losses on termination or disposal of businesses 
unrealised changes in the fair value of financial instruments gains or losses on retranslation of shortterm intercompany loan balances 
related tax effects and other tax items which do not form part of the underlying tax rate see note 10 as noted in the 2009 annual 
report the definition has been modified for 2010 to include the income statement effects arising from the adoption of ifrs 3 revised 
the adjusted performance measures are derived from the reported figures under adopted ifrs as follows 
    
adjusted operating profit note
2010 
£m
2009 
£m
operating profit as reported under adopted ifrs 1279 685 
acquisitionrelated costs and contingent consideration fair value adjustments 28 19 –
amortisation of acquisitionrelated intangible assets 14 123 107 
adjusted operating profit 1421 792 
restructuring and postacquisition integration charges 08 140 
adjusted operating profit before restructuring and postacquisition integration charges 1429 932
  
       
adjusted operating profit by segment – 2010 note
materials 
analysis 
£m
test and 
measurement 
£m
inline 
instrumentation 
£m
industrial 
controls 
£m
2010 
total 
£m
operating profit as reported under adopted ifrs 347 283 571 78 1279
acquisitionrelated costs and contingent consideration  
fair value adjustments 12 02 03 02 19
amortisation of acquisitionrelated intangible assets 36 63 09 15 123
adjusted operating profit segment result under adopted ifrs 4 395 348 583 95 1421
restructuring and postacquisition integration charges 01 04 02 01 08
adjusted operating profit before restructuring and  
postacquisition integration charges 396 352 585 96 1429
 
 
adjusted operating profit by segment – 2009 note
materials 
analysis 
£m
test and 
measurement 
£m
inline 
instrumentation 
£m
industrial 
controls 
£m
2009 
total 
£m
operating profit as reported under adopted ifrs 296 53 407 35 685 
amortisation of acquisitionrelated intangible assets 23 67 08 09 107 
adjusted operating profit segment result under adopted ifrs 4 319 14 415 44 792 
restructuring and postacquisition integration charges 23 97 09 11 140 
adjusted operating profit before restructuring and  
postacquisition integration charges 342 111 424 55 932
return on sales by segment – 2010
materials 
analysis
test and 
measurement
inline 
instrumentation
industrial 
controls
2010 
total
using operating profit as reported under adopted ifrs 128 95 209 130 142
using adjusted operating profit 145 117 213 159 158
return on sales by segment – 2009
materials 
analysis
test and 
measurement
inline 
instrumentation
industrial 
controls
2009 
total
using operating profit as reported under adopted ifrs 119 20 179 78 87
using adjusted operating profit 129 05 182 99 101 64 spectris plc annual report and accounts 2010
notes to the accounts continued
3 adjusted performance measures continued
reconciliation to adjusted profit before tax and adjusted operating profit note
2010 
£m
2009 
£m
profit before tax as reported under adopted ifrs 1199 542
adddeduct
acquisitionrelated costs and contingent consideration fair value adjustments 28 19 –
amortisation of acquisitionrelated intangible assets 14 123 107
net gains on retranslation of shortterm intercompany loan balances 9 04 01
profit on disposal of businesses 26 – 01
increasedecrease in fair value of crosscurrency interest rate swaps 20 14 35
adjusted profit before tax 1323 682
adjusted net finance costs see below 98 110
adjusted operating profit 1421 792
adjusted net finance costs note
2010 
£m
2009 
£m
net interest costs as reported under adopted ifrs 9 80 144
increasedecrease in fair value of crosscurrency interest rate swaps 20 14 35
net gains on retranslation of shortterm intercompany loan balances 9 04 01
adjusted net finance costs 98 110
operating cash flow note
2010 
£m
2009 
£m
net cash from operating activities under adopted ifrs 1544 1015
acquisitionrelated costs and contingent consideration adjustments paid 28 19 –
corporation tax paid 210 167
purchase of property plant and equipment and software 189 142
proceeds from sale of property plant and equipment 14 15
operating cash flow for management purposes 1598 1055
adjusted earnings per share note
2010 
£m
2009 
£m
profit after tax as reported under adopted ifrs 962 426
adjusted for
acquisitionrelated costs and contingent consideration fair value adjustments 28 19 –
amortisation of acquisitionrelated intangible assets 14 123 107
profit on disposal of businesses 26 – 01
increasedecrease in fair value of crosscurrency interest rate swaps 20 14 35
net gains on retranslation of shortterm intercompany loan balances 9 04 01
tax effect of the above and other exceptional items 10 83 42
adjusted earnings 1003 524
weighted average number of shares outstanding millions 12 1158 1154
adjusted earnings per share pence 866 454
adjusted diluted earnings per share note 2010 2009
adjusted earnings as above £m 1003 524
diluted weighted average number of shares outstanding millions 12 1179 1158
adjusted diluted earnings per share pence 851 452
basic and diluted earnings per share in accordance with ias 33 are disclosed in note 12 65 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
analysis of net debt for management purposes note
2010
 £m
2009 
£m
bank overdrafts 14 31
bank loans – secured 22 24
bank loans – unsecured 483 62
unsecured loan notes 853 1305
crosscurrency interest rate swaps – currency portion 20 137 185
total borrowings 1509 1607
cash balances 18 647 368
net debt 862 1239
4 operating segments
the group has four reportable segments as described below which are the group’s strategic business units these units offer different 
applications assist companies at various stages of the production cycle and are focused towards specific industries these segments 
reflect the internal reporting provided to the chief operating decision maker considered to be the board on a regular basis the 
following summary describes the operations in each of the group’s reportable segments
materials analysis provides a wide range of analytical instrumentation to the metals and mining pharmaceutical and life sciences •	
and electronics industries and to academic and research institutions
test and measurement supplies test measurement and analysis equipment and software for product design optimisation •	
manufacturing control and environmental monitoring systems principally to the aerospace automotive and consumer electronics 
industries
inline instrumentation provides process analytical measurement asset monitoring and online controls for both primary processing •	
and the converting industries
industrial controls supplies automation and control products for the discrete manufacturing industries •	
further details of the nature of these segments and the products and services they provide are contained in the business review on 
pages 2 to 33
 
segment revenue
 
intersegment revenue
external  
customer revenue
reportable  
segment profit
information about 
reportable segments
2010
£m
2009
£m
2010
£m
2009
£m
2010
£m
2009
£m
2010
£m
2009
£m
materials analysis 2717 2486 01 05 2716 2481 395 319
test and measurement 2982 2678 08 07 2974 2671 348 14
inline instrumentation 2737 2276 06 01 2731 2275 583 415
industrial controls 605 450 07 04 598 446 95 44
eliminate intersegment sales 22 17 22 17 – – – –
total continuing operations 9019 7873 – – 9019 7873 1421 792
acquisitionrelated costs and contingent 
consideration fair value adjustments 19 –
amortisation of acquisitionrelated 
intangibles 123 107
operating profit 1279 685
profit on disposal of businesses – 01
financial income 82 59
finance costs 162 203
profit before tax 1199 542
tax 237 116
profit after tax 962 426
reportable segment profit is consistent with that presented to the chief operating decision maker intersegment pricing is on an arm’s 
length basis segments are presented on the basis of actual intersegment charges made
 not allocated to reportable segments in reporting to the chief operating decision maker 66 spectris plc annual report and accounts 2010
notes to the accounts continued
4 operating segments continued
carrying amount of  
segment assets
carrying amount of  
segment liabilities
 
2010
£m
2009
£m
2010
£m
2009
£m
materials analysis 2562 2219 1046 675
test and measurement 3469 3375 939 780
inline instrumentation 2243 1939 466 350
industrial controls 519 176 77 48
total segment assets and liabilities 8793 7709 2528  1853
cash and borrowings 647 368 1372 1422
derivative financial instruments 23 09 149 211
net pension liability – – 141 235
taxation 269 343 406 399
consolidated total assets and liabilities 9732 8429 4596  4120
 not allocated to reportable segments in reporting to the chief operating decision maker
 segment liabilities are presented here on a voluntary basis
additions to  
noncurrent assets
depreciation and 
amortisation impairment charges
 
2010
£m
2009
£m
2010
£m
2009
£m
2010
£m
2009
£m
materials analysis 228 55 74 59 – –
test and measurement 130 416 141 152 – –
inline instrumentation 242 43 53 50 – –
industrial controls 288 07 20 13 – –
888 521 288 274 – –
geographical segments
the group’s operating segments are each located in several geographical locations and sell on to external customers in all parts of the 
world
no individual country amounts to more than 3 of turnover other than those noted below
the following is an analysis of revenue by geographical destination
 
materials 
analysis
£m
test and  
measurement
£m
inline 
instrumentation
£m
industrial 
controls
£m
2010 
total
£m
uk 105 113  76 20 314 
germany 190 547 260 48 1045 
france 117 181 78 13 389 
rest of europe 438 562 469 35 1504 
usa 555 495 630 349 2029 
rest of north america 87 49 80 28 244 
japan 192 235 301 04 732 
china 330 324 415 43 1112 
rest of asia pacific 432 305 238 50 1025 
rest of the world 270 163 184 08 625 
2716 2974 2731 598 9019 67 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
 
materials 
analysis
£m
test and  
measurement
£m
inline 
instrumentation
£m
industrial 
controls
£m
2009 
total
£m
uk 93 119 75 15 302 
germany 198 540 213 33 984 
france 121 187 75 11 394 
rest of europe 502 563 440 30 1535 
usa 431 389 532 278 1630 
rest of north america 66 38 58 21 183 
japan 118 169 216 05 508 
china 326 233 304 15 878 
rest of asia pacific 360 280 221 31 892 
rest of the world 266 153 141 07 567 
 2481 2671 2275 446 7873 
the following is an analysis of the carrying amount of noncurrent segment assets analysed by the geographical area in which the 
assets are located
noncurrent assets
 
2010
£m
2009
£m
uk 756 726
germany 293 293
france 04 03
rest of europe 2604 2669
usa 1249 794
rest of north america 63 117
japan 42 06
china 131 45
rest of asia pacific 436 328
rest of the world 57 52
5635 5033
5 revenue
an analysis of the group’s revenue is as follows
 
2010
£m
2009
£m
sale of goods 7783 6858 
services rendered 1236 1015 
revenue 9019 7873 
no individual customer accounted for more than 2 of external revenue in either 2010 or 2009
spectris does not have the necessary information readily available to disclose the revenue from external customers for each product and 
service or each group of similar products and services and the cost to develop this would be excessive 68 spectris plc annual report and accounts 2010
6 operating profit
operating profit has been arrived at after charging
 
2010 
£m
2009 
£m
net foreign exchange losses 03 05 
research and development expenditure 624 582 
depreciation of property plant and equipment 144 143 
amortisation of intangible assets 144 131 
gain on sale of property plant and equipment 01 03
auditors remuneration
2010 
£m
2009 
£m
fees payable to the company’s auditor for audit of the groups annual accounts 04 04
fees payable to the company’s auditor and its associates for other services
– the audit of the companys subsidiaries pursuant to legislation 10 10
– tax services 05 04
19 18
7 employee costs
employee costs including directors remuneration comprise
 
 
note
2010 
£m
2009 
£m
wages and salaries 2610 2392
social security costs 430 413
defined benefit pension plans current service cost 8 07 18
defined benefit pension plans past service credit 8 29 –
defined benefit pension plans curtailment gain 8 – 18
defined benefit pension plans settlements 8 – 01
defined contribution pension plans 8 90 94
sharebased payment chargecredit 73 04
3181 2896
 
directors remuneration
2010 
£m
2009 
£m
shortterm benefits 13 12
postemployment benefits 02 02
sharebased payment expense 11 01
26 15
further details of directors’ remuneration and share options are given in the directors’ remuneration report on pages 48 to 50
 
average number of employees
2010 
number
2009 
number
production and engineering 2904 2862
sales and marketing 2296 2307
administrative 581 595
5781 5764
8 retirement benefit schemes
spectris plc operates funded defined benefit final salary and defined contribution pension plans for the group’s qualifying employees 
in the uk in addition 12 overseas subsidiaries in three overseas countries provide defined benefit plans other uk and overseas 
subsidiaries have their own defined contribution plans invested in independent funds
notes to the accounts continued 69 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
defined contribution plans
the total cost of the defined contribution plans for the year ended 31 december 2010 was £90m 2009 £94m there were no 
outstanding or prepaid contributions to these plans as at 31 december 2010 or at 31 december 2009
defined benefit plans
the last full actuarial valuations were carried out as at the following dates
plan name date of last full actuarial valuation
german
brüel  kjær gmbh 31 december 2010
brüel  kjær vibro gmbh 31 december 2010
btg mütek gmbh 31 december 2010
spectris gmbh sensoren und systeme 31 december 2010
hottinger baldwin messtechnik gmbh 31 december 2010
lds test and measurement gmbh 31 december 2010
panalytical gmbh 31 december 2010
dutch
lds test and measurement 31 december 2009
brüel  kjær bv 31 december 2009
brüel  kjær vibro bv 31 december 2009
hottinger baldwin messtechnik bv 31 december 2009
swiss
btg eclépens sa 31 december 2010
uk
spectris pension plan 31 december 2008
the valuations were updated to 31 december 2010 for ias 19 purposes by qualified independent actuaries
the total company contributions made to the defined benefit plans during the year ended 31 december 2010 were £56m 2009 
£44m contributions for 2011 are expected to be as follows
plan name
expected 2011 contributions  
£m
german
brüel  kjær gmbh –
brüel  kjær vibro gmbh –
btg mütek gmbh –
spectris gmbh sensoren und systeme –
hottinger baldwin messtechnik gmbh 05
lds test and measurement gmbh –
panalytical gmbh –
dutch
lds test and measurement –
brüel  kjær bv –
brüel  kjær vibro bv –
hottinger baldwin messtechnik bv –
swiss
btg eclépens sa 09
uk
spectris pension plan 26
the above contribution rates are subject to review at future valuations and periodic certifications of the schedule of contributions 
the spectris pension plan uk was closed to future accrual of benefits with effect from 31 december 2009
since 1 january 2010 the directors have included three additional defined benefit plans in the netherlands in this note these had 
previously been excluded on the grounds of immateriality 70 spectris plc annual report and accounts 2010
8 retirement benefit schemes continued
the major assumptions used by the actuary to value the liabilities of the defined benefit plans were
uk plans
2010 
 pa
2009 
 pa
discount rate 540 560
salary increases 490 510
pension increases in payment
rpi max 5 lpi 320 340
rpi max 3 260 280
rpi max 25 230 240
rpi min 3 max 5 370 380
cpi max 5 270 na
pension increases in deferment
rpi 340 360
cpi 270 na
inflation assumption
rpi 340 360
cpi 270 na
 lpi is limited price indexation
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2010 valuation is based on the following table
current and future pensioners pxa00 tables with medium cohort projections and a 1 year age 
rating and a 1 pa underpin to future improvements
samples of the age which pensioners are assumed to live to are as follows
males females
pensioner aged 65 in 2010 865 890
pensioner aged 65 in 2020 876 899
german plans
2010 
 pa
2009 
 pa
discount rate 480 520
salary increases 300 300
pension increases in payment 200 200
pension increases in deferment – –
inflation assumption 200 200
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2010 valuation is based on the following tables 
current pensioners and future pensioners dr k heubeck pension tables 2005 g
samples of the ages which pensioners are assumed to live to are as follows
males females
pensioner aged 60 in 2010 833 879
pensioner aged 60 in 2020 848 893
dutch plans
2010 
 pa
2009 
 pa
discount rate 520 520
salary increases 300 300
inflation assumption 200 200
notes to the accounts continued 71 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2010 valuation is based on the following tables
current pensioners and future pensioners prognostetafel 2005–2050 tables
sample ages to which pensioners are expected to live are not available but this table covers improving life expectancies and is a general 
standard in the netherlands
swiss plans
2010 
 pa
2009 
 pa
discount rate 275 275
salary increases 100 100
inflation assumption 100 100
mortality rate assumptions
pensioner life expectancy assumed in the 31 december 2010 valuation is based on the following tables
current pensioners and future pensioners evk 2000 tables
sample ages to which pensioners are expected to live are not available but this table covers improving life expectancies and is a general 
standard in switzerland
uk plans overseas plans total
amounts recognised in the statement of income
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
current service cost – 10 07 08 07 18
interest cost 53 47 07 10 60 57
expected return on scheme assets 53 49 02 05 55 54
curtailment gain – 18 – – – 18
past service credit 29 – – – 29 –
settlement charge – servomex inc retirement plan – – – 01 – 01
29 10 12 14 17 04
on materiality grounds the current service cost is recognised solely in administrative expenses in the statement of income the interest 
cost and expected return on scheme assets are recognised in finance costs and financial income respectively in the statement of 
income actuarial losses or gains are recognised in the statement of comprehensive income
during the year insurance premiums for deathinservice benefits were paid amounting to £02m 2009 £02m
the total return on scheme assets in the year and reimbursed rights was £102m 2009 £87m
in july 2010 the uk government announced that cpi should be used as the basis for statutory minimum pension increases the impact 
of the change to cpi from rpi for the uk plan where the pension rules mandate inflation according to the deemed statutory index 
was a credit to the statement of income of £29m within administrative expenses
uk plans overseas plans total
amounts recognised in the statement of  
comprehensive income
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
actuarial gainslosses recognised in the current year 32 171 08 26 24 197
exchange lossesgains in the current year – – 01 07 01 07
loss on inclusion of dutch plan – – 02 – 02 –
total gainslosses recognised in the current year 32 171 11 19 21 190
cumulative actuarial losses since 1 january 2004 341 373 41 30 382 403 72 spectris plc annual report and accounts 2010
8 retirement benefit schemes continued
uk plans overseas plans total
amounts recognised in the balance sheet
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
present value of defined benefit obligations 969 964 260 209 1229 1173
fair value of scheme assets 932 821 156 117 1088 938
net deficit in scheme 37 143 104 92 141 235
uk plans overseas plans total
reconciliation of movement in net deficit
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
at 1 january 143 07 92 78 235 85
expected return on plan assets 53 49 02 05 55 54
contributions from sponsoring company 45 25 11 19 56 44
current service cost – 10 07 08 07 18
interest cost 53 47 07 10 60 57
actuarial gainslosses 32 171 08 26 24 197
curtailment gain – 18 – – – 18
exchange difference – – 01 07 01 07
settlement of servomex inc pension plan – – – 01 – 01
past service credit 29 – – – 29 –
inclusion of three additional dutch plans – – 02 – 02 –
at 31 december 37 143 104 92 141 235
uk plans overseas plans total
analysis of movement in the present value of the defined 
benefit obligation
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
at 1 january 964 754 209 231 1173 985
current service cost – 10 07 08 07 18
interest cost 53 47 07 10 60 57
actuarial losses 16 213 07 17 23 230
curtailment gain uk – 18 – – – 18
exchange difference – – 16 17 16 17
contributions from scheme members – 03 07 06 07 09
benefits paid 35 45 11 25 46 70
past service credit 29 – – – 29 –
settlement of servomex inc pension plan – – – 16 – 16
settlement of swiss plan – – 12 05 12 05
inclusion of three additional dutch plans – – 06 – 06 –
at 31 december 969 964 260 209 1229 1173
uk plans overseas plans total
analysis of defined benefit obligation
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
present value of unfunded defined benefit obligation – – 68 67 68 67
present value of funded defined benefit obligation 969 964 192 142 1161 1106
uk plans overseas plans total
reconciliation of movement in fair value of plan assets 
2010 
£m
2009 
£m
2010 
£m
2009 
£m
2010 
£m
2009 
£m
at 1 january 821 747 117 153 938 900
expected return on plan assets 53 49 02 05 55 54
actuarial gainslosses 48 42 01 09 47 33
exchange difference – – 15 10 15 10
contributions from sponsoring company 45 25 11 19 56 44
contributions from scheme members – 03 07 06 07 09
benefits paid 35 45 11 25 46 70
settlement of servomex inc pension plan – – – 17 – 17
settlement of swiss plan – – 12 05 12 05
inclusion of three additional dutch plans – – 04 – 04 –
at 31 december 932 821 156 117 1088 938
notes to the accounts continued 73 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
analysis of the scheme assets and expected rate of return
expected return fair value of assets
uk plans
2010 

2009 

2010 
£m
2009 
£m
equity instruments 73 75 290 211
debt instruments 55 61 662 640
other assets 40 48 20 30
61 65 932 821
expected return fair value of assets
german plans
2010 

2009 

2010 
£m
2009 
£m
insurance policies 48 52 12 15
expected return fair value of assets
dutch plan
2010 

2009 

2010 
£m
2009 
£m
insurance policies 52 52 13 09
expected return fair value of assets
swiss plan
2010 

2009 

2010 
£m
2009 
£m
insurance policies 30 20 131 93
the overall expected return on assets is calculated as the weighted average of the expected return on each individual asset class the 
expected return on equities is the sum of inflation dividend yield and economic growth less investment expenses the return on gilts 
and bonds is the current market yield on longterm gilts and bonds the expected return on other assets reflects market conditions for 
interest rate swaps
history of experience adjustments
2010 
£m
2009  
£m
2008  
£m
2007
£m
2006
£m
present value of defined benefit obligations 1229 1173 985 937 967
fair value of scheme assets 1088 938 900 826 779
deficit in the scheme 141 235 85 111 188
experience adjustment on scheme liabilities
amount £m 23 230 100 48 13
percentage of scheme liabilities  19 196 102 51 13
experience adjustment on scheme assets
amount £m 47 33 80 11 24
percentage of scheme assets  43 35 90 13 31
  the history of experience for 2007 and earlier excludes the german and dutch lds test and measurement plans as they were new acquisitions in 2008 it also 
excludes the swiss plan that had not previously been treated as a defined benefit arrangement
9 finance costs and financial income
financial income note
2010 
£m
2009 
£m
interest receivable 09 04 
increase in fair value of crosscurrency interest rate swaps 20 14 –
net gains on retranslation of shortterm intercompany loan balances 04 01 
expected return on pension scheme assets 55 54 
82 59  74 spectris plc annual report and accounts 2010
9 finance costs and financial income continued
finance costs note
2010 
£m
2009 
£m
interest payable on loans and overdrafts 99 111 
decrease in fair value of crosscurrency interest rate swaps 20 – 35 
interest cost on pension scheme liabilities 60 57 
other finance costs 03 –
162 203 
net interest costs of £90m 2009 £107m for the purposes of the calculation of interest cover comprise of bank interest receivable of 
£09m 2009 £04m and interest payable on loans and overdrafts of £99m 2009 £111m
10 taxation
2010 2009
 
uk
£m
overseas
£m
total
£m
uk
£m
overseas 
£m
total
£m
current tax charge 48 245 293 31 91 122
adjustments in respect of current tax of prior years 06 68 74 05 08 03
deferred tax – origination and reversal of temporary differences 13 05 18 10 07 03
55 182 237 26 90 116
the standard rate of corporation tax for the year based on the weighted average of tax rates applied to the group’s profits is 276 
2009 251 the tax charge for the year is lower than the standard rate of corporation tax for the reasons set out in the following 
reconciliation
 
2010
£m
2009
£m
profit before taxation 1199 542
corporation tax at standard rate of 276 2009 251 331 136
nontaxable income and gains 28 34
nondeductible expenditure 17 09
movements on unrecognised deferred tax assets 03 03
research and development tax incentives 21 06
other current year tax items 04 04
change in tax rates 01 01
adjustments relating to prior year acquisitions and disposals 43 –
other adjustments to prior year current and deferred tax charges 17 03
total taxation 237 116
factors that may affect the future tax charge
the group’s tax charge in future years is likely to be affected by the proportion of profits arising and the effective tax rates in the 
various territories in which the group operates due to a change in uk tax legislation in 2009 no uk tax is expected to be payable on 
the future remittance of the retained earnings of overseas subsidiaries
tax on items recognised directly in other comprehensive income
2010
£m
2009
£m
tax on net gain on effective portion of changes in fair value of forward exchange contracts 04 05
tax on changes in fair value of effective portion of hedges of net investment in overseas operations 09 01
tax on actuarial lossgain arising on pension schemes net of exchange 04 56
aggregate current and deferred tax charge relating to items that are charged directly to the statement of 
comprehensive income 01 50
notes to the accounts continued 75 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
the following tax charges relate to items of income and expense that are excluded from the group’s adjusted performance measures
tax on items of income and expense that are excluded from the group’s adjusted profit before tax
2010
£m
2009
£m
tax chargecredit on unrealised change in fair value of crosscurrency interest rate swaps 04 10
tax credit on amortisation of intangible assets 40 32
tax credit on acquisitionrelated costs 01 –
tax credit on retranslation of shortterm intercompany loan balances 03 –
tax credit relating to prior year acquisitions and disposals 43 –
total tax credit 83 42
the effective adjusted tax rate for the year was 242 2009 232 as set out in the reconciliation below
reconciliation of total tax charge on adopted ifrs basis to adjusted tax charge note
2010
£m
2009
£m
total tax charge on adopted ifrs basis 237 116
tax credit on items of income and expense that are excluded from the group’s adjusted profit 
before tax 83 42
adjusted tax charge 320 158
adjusted profit before tax 3 1323 682
11 dividends
amounts recognised and paid as distributions to owners of the company in the year
2010
£m
2009
£m
final dividend for the year ended 31 december 2009 of 1785p 2008 170p per share 207 196
interim dividend for the year ended 31 december 2010 of 71p 2009 64p per share 82 74
289 270
amounts arising in respect of the year
2010
£m
2009
£m
interim dividend for the year ended 31 december 2010 of 71p 2009 64p per share 82 74
proposed final dividend for the year ended 31 december 2010 of 209p 2009 1785p per share 242 206
324 280
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a 
liability in these financial statements
12 earnings per share
basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary shareholders by the weighted 
average number of ordinary shares outstanding during the year excluding treasury shares
diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary shareholders by the weighted 
average number of ordinary shares outstanding during the year but adjusted for the effects of dilutive options the key features of share 
option contracts are described in note 25
basic earnings per share 2010 2009
profit after tax £m 962 426
weighted average number of shares outstanding millions 1158 1154
basic earnings per share pence 831 369 76 spectris plc annual report and accounts 2010
notes to the accounts continued
12 earnings per share continued
diluted earnings per share 2010 2009
profit after tax £m 962 426
basic weighted average number of shares outstanding millions 1158 1154
weighted average number of dilutive 5p ordinary shares under option millions 22 06
weighted average number of 5p ordinary shares that would have been issued at average market value from 
proceeds of dilutive share options millions 01 02
diluted weighted average number of shares outstanding millions 1179 1158
diluted earnings per share pence 816 368
13 goodwill
cost note £m
at 1 january 2009 3841
recognised on acquisitions 163
adjustments to provisional fair values
recognition of acquired intangible assets 244
other fair value adjustments 67
exchange differences 192
at 31 december 2009 3635
recognised on acquisitions 28 243
adjustments to contingent consideration 28 83
exchange differences 37
at 31 december 2010 3924
accumulated amortisation and impairment losses £m
at 1 january 2009 415
exchange differences 28
at 31 december 2009 387
exchange differences 14
at 31 december 2010 373
carrying amount £m
at 31 december 2010 3551
at 31 december 2009 3248
at 1 january 2009 3426
in accordance with the requirements of ias 36 impairment of assets goodwill is allocated to the group’s cashgenerating units which 
are represented by the group’s trading businesses the most significant elements of the group’s total consolidated goodwill of £3551m 
at 31 december 2010 are allocated to panalytical £977m 2009 £993m btg £547m 2009 £549m hbm £723m 2009 £747m 
and brüel  kjær sound  vibration £689m 2009 £594m acquired entities are quickly integrated into existing group companies 
with the result that it is not appropriate to consider their individual performance when determining cashgenerating units and 
performing goodwill impairment testing each cashgenerating unit is assessed for impairment annually and whenever there is a specific 
indication of impairment there were no indications of impairment in 2010
as part of the annual impairment test review the carrying value of goodwill has been assessed with reference to value in use to 
perpetuity reflecting the projected cash flows of each cashgenerating unit based on actual operating results the most recent budget 
for the next financial year and strategic review projections for 2012 and 2013
the key assumptions on which the value in use calculations are based relate to business performance over the next three years long
term growth rates beyond 2013 and the discount rates applied there are no individually significant business level cash flow assumptions 
in respect of any business that materially impact the impairment testing the key judgements are the level of revenue and operating 
margins anticipated and the proportion of operating profit converted to cash in each year growth rates for the period beyond 2013 
are assumed to be 25 2009 25 which is considered to be at or below longterm market trends for each business the cash flow 
projections have been discounted using entityspecific pretax discount rates between 12 and 17 2009 14 and 18 these rates 
have been determined taking size of business and specific geographic and industry risk factors into account no impairment charge has 
been required to be recognised in either 2010 or 2009 77 spectris plc annual report and accounts 2010
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business review
corporate governance
financial statements
the directors do not consider that there are any reasonable possible sensitivities that could arise in the next 12 months that could result 
in a significant impairment charge arising for illustration the directors have considered the following specific individual sensitivities
a 2 increase in the pretax discount rate applied to each business would result in an impairment of £nil 2009 £nil •	
if the longterm growth rate assumption was reduced to 1 no impairment would arise 2009 £nil and •	
if the cash flow projections of all businesses were reduced by 25 for the next two years no impairment would arise 2009 £nil •	
management considers that operating results in 2010 confirm that none of the group’s trading businesses have suffered permanent 
diminutions in value as a result of recent difficult economic conditions
14 other intangible assets
cost
patents 
trademarks and 
technology
£m
customer 
related 
 intangibles 
£m
software
£m
total
£m
at 1 january 2009 344 153 273 770 
additions – – 24 24 
reclassification of intangibles 26  – 26 –
recognised on acquisitions 53 86  – 139 
disposals – – 01 01
transfer from goodwill 138 106  – 244 
transfer from property plant and equipment – – 31 31
exchange differences 24 06 20 38
at 31 december 2009 537 351 281 1169 
additions – – 19 19
recognised on acquisitions 162 203 01 366
disposals – – 05 05
exchange differences 23 15 02 36
at 31 december 2010 722 569 294 1585
accumulated amortisation and impairment losses
at 1 january 2009 98 58 175 331 
transfer from property plant and equipment – – 27 27
charge for the year 67 40 24 131 
exchange differences 03 05 15 23
at 31 december 2009 162 93 211 466 
disposals – – 03 03
charge for the year 65 58 21 144
exchange differences 02 06 04 04
at 31 december 2010 229 157 225 611
carrying amount
at 31 december 2010 493 412 69 974
at 31 december 2009 375 258 70 703
at 1 january 2009 246 95 98 439
of the total amortisation charge of £144m 2009 £131m the amount attributable to the amortisation of acquisitionrelated intangible 
assets was £123m 2009 £107m
the transfers from property plant and equipment to software in 2009 relate to identifiable software assets
the transfer from goodwill to intangibles and the reclassification within intangibles in 2009 relates to the finalisation during 2009 of the 
allocation of goodwill and intangibles for the 2008 acquisitions note 28 78 spectris plc annual report and accounts 2010
notes to the accounts continued
15 property plant and equipment
cost
freehold  
property
£m
leasehold  
property
£m
plant and  
equipment
£m
total 
£m
at 1 january 2009 1020 111 1489 2620
additions 16 09 93 118
recognised on acquisitions – – 10 10
disposals 03 13 86 102
disposal of subsidiary undertakings – – 01 01
transfers to intangible fixed assets – – 31 31
exchange differences 74 06 113 193
at 31 december 2009 959 101 1361 2421 
additions 46 12 115 173
recognised on acquisitions – – 04 04
disposals 19 04 73 96
transfers fromto plant and equipment 03 – 03 –
exchange differences 09 05 18 14
at 31 december 2010 980 114 1422 2516
accumulated depreciation and impairment
at 1 january 2009 313 77 1048 1438
charge for the year 26 08 109 143
disposals 02 12 78 92
disposal of subsidiary undertakings – – 01 01
transfers to intangible fixed assets – – 27 27
exchange differences 31 06 79 116
at 31 december 2009 306 67 972 1345 
charge for the year 26 09 109 144
disposals 18 04 65 87
exchange differences 05 03 11 09
at 31 december 2010 309 75 1027 1411
carrying amount
at 31 december 2010 671 39 395 1105
at 31 december 2009 653 34 389 1076
at 1 january 2009 707 34 441 1182
the amount recognised in the carrying amount of items of plant and equipment in the course of its construction was £10m 2009 £10m 
no borrowing costs met the required criteria for capitalisation during the year 2009 £nil
the group has pledged land and buildings having a carrying amount of approximately £22m 2009 £24m to secure bank loans 
granted to the group
16 inventories
2010
£m
2009
£m
raw materials 465 377 
work in progress 236 191 
finished goods 509 430 
1210 998 
in the ordinary course of business the group makes provision for slowmoving excess and obsolete inventory as appropriate 
inventory is stated after charging impairments of £40m 2009 £41m and crediting reversals of previous impairments of £25m  
2009 £28m impairments and reversals of impairments are included within operating profit 79 spectris plc annual report and accounts 2010
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financial statements
inventory carried at fair value less cost to sell is £02m 2009 £nil
the amount of inventory recognised as an expense during both the current and prior year is equal to the amount recognised within the 
cost of sales
17 trade and other receivables
2010
£m
2009
£m
trade receivables 1688 1446 
prepayments and accrued income 104 93
other receivables 156 139 
1948 1678 
trade receivables are noninterest bearing standard credit terms provided to customers differ according to business and country and 
are typically between 30 and 60 days included within the above are amounts receivable in more than one year of £nil 2009 £nil 
trade receivables and other receivables are stated after net impairments recognised and utilised during the year of £33m 2009 £22m 
and reversals of impairments of £14m 2009 £10m impairments and reversals of impairments are included within operating profit
the maximum exposure to credit risk for trade receivables at 31 december by geographic region was
2010
£m
2009
£m
uk 62 83
germany 175 135
france 103 92
rest of europe 365 360
usa 376 283
rest of north america 58 28
japan 156 126
china 106 80
rest of asia pacific 186 178
rest of the world 101 81
1688 1446
impairment losses
the ageing of trade receivables and related impairment provisions at 31 december was
2010 2009
gross
£m
impairment
£m
gross
£m
impairment
£m
not past due 1283 03 1100 03
one month past due 276 01 237 02
two months past due 81 03 56 02
three months past due 36 02 28 03
over three months past due 90 69 83 48
1766 78 1504 58
the movement in the allowance for impairment in respect of trade receivables during the year was as follows
2010
£m
2009
£m
balance at 1 january 58 49
impairment loss recognised 43 32
impairment loss utilised 10 10
impairment loss released 14 10
exchange differences 01 03
balance at 31 december 78 58 80 spectris plc annual report and accounts 2010
notes to the accounts continued
17 trade and other receivables continued
an impairment has been recorded against the trade receivables that the group believes may not be recoverable in the case of trade 
receivables that are past due management makes an assessment of the risk of noncollection taking into account factors such as any 
disputes or other factors delaying payment and the risk of bankruptcy or other failure of the customer to meet their obligations for 
trade receivables that are not past due taking into account good historic collection experience management records an impairment 
charge only where there is a specific risk of noncollection all trade receivables past due for more than 120 days have been fully 
provided in line with the group’s credit risk policy
the fair value of trade and other receivables approximates to book value due to the shortterm maturities associated with these items 
there is no impairment risk identified with regards to prepayments and accrued income or other receivables where no amounts are 
past due
18 cash and cash equivalents
analysis of balances of cash and cash equivalents note
2010 
£m
2009 
£m
cash balances 647 368
bank overdrafts 19 14 31
cash and cash equivalents in the statement of cash flows 633 337
the group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in note 20
19 borrowings
current effective interest rate
earlier of repricing date or 
maturity date
2010 
£m
2009 
£m
bank loans – secured see below see below 03 03
bank overdrafts on demand 14 31
unsecured loan notes – 2000 75m 823 13 september 2010 – 464
17 498
noncurrent effective interest rate
earlier of repricing date or 
maturity date
2010 
£m
2009 
£m
bank loans – secured see below see below 19 21
bank loans – unsecured – 9 october 2011 – 62
bank loans – unsecured 756m 312 10 september 2015 483 –
unsecured loan notes – 2003 100m 608 15 october 2013 639 619
unsecured loan notes – 2003 €25m 556 15 october 2013 214 222
total unsecured borrowings 1336 903
total noncurrent borrowings 1355 924
at 31 december 2010 the group had available £800m 2009 £1238m of undrawn committed borrowing facilities in respect of which 
all conditions precedent had been met
secured bank loans
bank loans are secured by fixed charges over property at three of the group’s subsidiaries of these £15m is denominated in chinese 
renminbi and is repayable by instalments until december 2012 with a fixed interest rate of 75 £05m is denominated in us dollars and 
is repayable by instalments until december 2014 with a variable interest rate of libor plus a small margin and £02m is denominated in 
euros and is repayable by instalments until december 2012 with a variable interest rate of libor plus a small margin
unsecured loan notes
the interest rates on the unsecured loan notes are those contracted on the underlying borrowings before taking into account any 
crosscurrency interest rate swaps and remain fixed until redemption on issue of the us100m loan notes in october 2003 the 
group entered into a crosscurrency interest rate swap which has the effect of converting this us dollar borrowing into fixed interest 
eurodenominated debt the combined effect of the borrowing and swap arrangement results in euro debt of €905m with a fixed 
interest rate of 564 this interest rate remains fixed until redemption 81 spectris plc annual report and accounts 2010
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business review
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financial statements
under adopted ifrs where crosscurrency interest rate swaps are used the value of the underlying us dollar borrowing is presented 
in this borrowings note and the value of the related crosscurrency interest rate swaps is presented separately within derivative financial 
instruments in note 20 for management purposes the value attributed to the portion of the swap arrangements that converts us 
dollar borrowings into euro borrowings is viewed as part of the group’s net debt as analysed below
analysis of net debt note
2010  
£m
2009 
£m
bank overdrafts 14 31
bank loans – secured 22 24
bank loans – unsecured 483 62
unsecured loan notes 853 1305
crosscurrency interest rate swaps – currency portion 20 137 185
total borrowings 1509 1607
cash balances 18 647 368
net debt 862 1239
20 financial instruments
2010 2009
fair value and carrying amount of financial instruments
carrying 
amount
£m
fair
value
£m
carrying
amount
£m
fair
value
£m
trade and other receivables 1948 1948 1678 1678
trade and other payables 2294 2294 1600 1600
cash and cash equivalents 647 647 368 368
floating rate borrowings 18 18 101 101
fixed rate borrowings 1354 1450 1321 1479
forward exchange contracts 23 23 09 09
crosscurrency interest rate swaps 149 149 211 211
1197 1293 1178 1336
the fair value of floating rate borrowings approximates to the carrying value because interest rates are at floating rates where payments 
are reset to market rates at intervals of less than one year 
the fair value of fixed rate borrowings and derivative financial instruments is estimated by discounting the future contracted cash flow 
using appropriate yield curves to the net present values
the fair value of forward exchange contracts outstanding as at 31 december 2010 is an asset of £23m 2009 £09m of which £19m 
has been credited to the hedging reserve 2009 £10m and £04m credited to the income statement 2009 £01m debit these 
contracts mature over periods not exceeding 12 months a summary of the movements in the hedging reserve during the year is 
presented below there was no ineffectiveness arising with regards to cash flow hedges in either 2010 or 2009
analysis of movements in hedging reserve
2010 
£m
2009 
£m
at 1 january 05 81
amounts removed from statement of changes in equity and included in statement of income during the year 06 66
amounts recognised in statement of changes in equity during the year 09 10
at 31 december 02 05
the fair value of forward exchange contracts is determined using discounted cash flow techniques based on readily available market 
data and represents a level 2 measurement in the fair value hierarchy under ifrs 7
the amount included in the income statement is split between revenue and administrative expenses 82 spectris plc annual report and accounts 2010
notes to the accounts continued
20 financial instruments continued
the following table shows the contractual forward exchange contracts hedging designated transactional exposures these contracts 
mature in the next 12 months therefore the cash flows and resulting effect on profit and loss are expected to occur within the next 
12 months
forward exchange contracts at 31 december 2010 2009
foreign currency sale amount £m 937 598
percentage of total
us dollar 24 32
euro 41 43
japanese yen 30 25
other 5 –
crosscurrency interest rate swaps 
the value of the group’s crosscurrency interest rate swaps can effectively be split into two components a portion that is attributable 
to converting a 100m us dollardenominated borrowing liability into a eurodenominated borrowing liability the currency portion 
– the value of this portion changes as currency exchange rates change and a portion that is attributable to converting fixed rate us 
dollar interest payments into fixed rate euro interest payments the interest portion – the value of this portion of the swap changes as 
us dollar variable interest rates euro variable interest rates and foreign currency exchange rates change
under adopted ifrs the underlying us dollar borrowings are required to be presented separately in the balance sheet from the cross
currency interest rate swaps in addition the fair value of the crosscurrency interest rate swaps is required to be recognised in full on the 
balance sheet
the table below shows the movements in the total value of the crosscurrency interest rate swaps during the year and also how it is 
attributed to its currency and interest portions
fair value of crosscurrency interest rate swaps
currency 
portion 
£m
interest 
portion 
£m
total 
value 
£m
as at 1 january 2009 178 09 169
change in fair value recognised in statement of comprehensive income 07 – 07
change in fair value recognised in statement of income – 35 35
as at 31 december 2009 185 26 211
change in fair value recognised in statement of comprehensive income 48 – 48
change in fair value recognised in statement of income – 14 14
as at 31 december 2010 137 12 149
together with the group’s €25m borrowing this combination of the underlying us dollar borrowings and crosscurrency interest 
rate swap has been designated as a net investment hedge of the group’s net investment in its european businesses however the 
interest portion of the swap is ineffective in this hedging relationship accordingly the change in value of the currency portion of the 
swap is recognised together with the change in value of the underlying us dollar borrowings in the statement of comprehensive income 
and the change in value of the interest portion of the swap is recognised in the statement of income within financing costs the group’s 
us756m borrowings have been designated as a net investment hedge of the group’s net investment in its us businesses
the fair value of crosscurrency interest rate swaps is determined using discounted cash flow techniques based on readily available 
market data and represent a level 2 measurement in the fair value hierarchy under ifrs 7 the principal borrowing amounts match 
exactly with the related unsecured loan note borrowings as described in note 19
a maturity profile of the gross cash flows related to financial liabilities is
2010 2009
maturity of financial liabilities
bank 
loans and 
overdrafts 
£m
secured 
bank 
loans 
£m
unsecured 
loans 
£m
cross 
currency 
swap 
£m
total 
£m
bank 
loans and 
overdrafts 
£m
secured 
bank 
loans 
£m
unsecured 
loans 
£m
cross 
currency 
swap 
£m
total 
£m
due within one year 14 03 66 05 88 31 03 553 08 595
due between one and two years – 17 66 05 88 – 05 112 08 125
due between two and five years – 03 1431 142 1576 – 17 941 201 1159
due in more than five years – – – – – – – – – –
14 23 1563 152 1752 31 25 1606 217 1879 83 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
trade and other payables note 21 are substantially due within one year
it is not expected that the cash flows described above could occur significantly earlier or at substantially different amounts
financial assets financial liabilities 2010 
net 
financial 
assets 
liabilities 
£m
interest rate exposure of financial 
assets and liabilities by currency
fixed  
rate 
£m
floating 
rate 
£m
non 
interest 
bearing 
£m
total 
£m
fixed  
rate 
£m
floating 
rate 
£m
total 
£m
sterling – 388 02 390 – – – 390
euro 03 52 27 82 991 – 991 909
us dollar 04 38 02 44 483 13 496 452
japanese yen – 07 – 07 – 01 01 06
other 26 60 38 124 17 04 21 103
33 545 69 647 1491 18 1509 862
financial assets financial liabilities 2009  
net 
financial 
assets 
liabilities 
£m
interest rate exposure of financial 
assets and liabilities by currency
fixed  
rate 
£m
floating 
rate 
£m
non 
interest 
bearing 
£m
total 
£m
fixed  
rate 
£m
floating 
rate 
£m
total 
£m
sterling – 126 02 128 – – – 128
euro 16 70 08 94 1026 07 1033 939
us dollar – 40 08 48 464 78 542 494
japanese yen – 08 – 08 – 05 05 03
other 13 57 20 90 16 11 27 63
29 301 38 368 1506 101 1607 1239
the above exposures are net of the crosscurrency interest rate swap
sensitivity analysis
at 31 december 2010 it is estimated that a general increase of one percentage point in interest rates would increase the group’s profit 
before tax by approximately £05m 2009 increase of £02m
based on foreign exchange translational exposures for the year ended 31 december 2010 it is estimated that a ten percentage point 
weakening in the value of the us dollar against £ sterling would have decreased the group’s profit before tax by approximately £22m 
2009 £06m a ten percentage point weakening in the value of the eurodanish krone against £ sterling would have decreased 
the group’s profit before tax by approximately £29m 2009 £11m and a ten percentage point weakening in the value of the swiss 
franc against £ sterling would have decreased the group’s profit before tax by approximately £22m 2009 £16m in addition a 
ten percentage point weakening in the value of the us dollar against £ sterling would have decreased the group’s net assets by 
approximately £261m and a ten percentage point weakening in the value of the euro against £ sterling would have decreased the 
group’s net assets by approximately £412m exposures to other currencies are not considered to have a material impact on net assets
21 trade and other payables
current
2010 
£m
2009 
£m
trade payables 847 506 
nontrade payables accruals and deferred income 1274 1001 
2121 1507 
 
noncurrent
nontrade payables accruals and deferred income 173 93 
the fair value of trade and other payables approximates to book value due to the shortterm maturities associated with these items
the effect of discounting on noncurrent amounts is not material 84 spectris plc annual report and accounts 2010
notes to the accounts continued
22 provisions
reorganisation 
£m
product 
warranty 
£m
legal 
contractual 
and other 
£m
total 
£m
at 1 january 2010 54 72 127 253
additional provision in the year 05 67 74 146
acquired on acquisition – 01 – 01
utilised during the year 43 20 21 84
released during the year 01 37 46 84
exchange adjustments 01 01 02 02
at 31 december 2010 14 84 136 234
provisions are all presented as current liabilities
provisions are discounted to reflect the time value of money where the effect is significant generally only where it is anticipated that a 
liability will crystallise in more than one year
reorganisation
reorganisation provisions relate to committed restructuring plans in place within the business and represent the directors’ best estimate 
of the cost to complete the restructuring costs are expected to be incurred within one year and there is little judgement in determining 
the amount
product warranty
product warranty provisions reflect commitments made to customers on the sale of goods in the ordinary course of business and 
included within the group’s standard terms and conditions warranty commitments typically apply for a 12month period with the 
occasional extension up to 36 months these extended warranties are not significant the provision represents the directors’ best 
estimate of the group’s liability based on past experience and barring significant unforeseen events there is little judgement involved in 
determining the amount 
legal contractual and other
legal contractual and other comprises mainly amounts reserved against open legal and contractual disputes the company has on 
occasion been required to take legal or other actions to protect its intellectual property rights to enforce commercial contracts or 
otherwise and similarly to defend itself against proceedings brought by other parties provisions are made for the expected costs 
associated with such matters based on past experience of similar items and other known factors taking into account professional advice 
received and represent management’s best estimate of the likely outcome the timing of utilisation of these provisions is frequently 
uncertain reflecting the complexity of issues and the outcome of various court proceedings and negotiations contractual and other 
provisions represent the directors’ best estimate of the cost of settling future obligations although there is a higher degree of judgement 
involved unless specific evidence exists to the contrary these reserves are shown as current
however no provision is made for proceedings which have been or might be brought by other parties against group companies unless 
management taking into account professional advice received assesses that it is more likely than not that such proceedings may be 
successful contingent liabilities associated with such proceedings have been identified but the directors are of the opinion that any 
associated claims that might be brought can be resisted successfully and therefore the possibility of any material outflow in settlement 
in excess of amounts provided is assessed as remote 85 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
23 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using the current corporate tax rate in the relevant 
local jurisdiction
the movement on the deferred tax account is shown below
2010 
£m
2009 
£m
at 1 january 224 290
exchange adjustments 01 30
acquisition of subsidiary undertakings 57 77
deferred tax on changes in fair value of forward exchange contracts recognised in statement of 
comprehensive income 04 18
deferred tax on actuarial gains and losses on pension schemes recognised in statement of  
comprehensive income 04 53
deferred tax on sharebased payments recognised in equity 05 –
tax on foreign exchange in statement of comprehensive income – 03
charged to statement of income in the year see note 10 18 03
at 31 december 145 224
 
comprising
deferred tax liabilities 39 38 
deferred tax assets 184 262
145 224
the movements in deferred tax assets and liabilities during the period are shown below deferred tax assets and liabilities are only offset 
where there is a legally enforceable right of offset and they relate to income taxes levied by the same taxation authority
net deferred tax assets
accelerated 
tax 
depreciation 
£m
accruals 
and 
provisions 
£m
tax 
losses 
£m
unrealised 
profit on 
inter 
company 
transactions 
£m
pension 
schemes 
£m
goodwill  
and 
intangible 
assets 
£m
other 
£m
2010 
total 
£m
at 1 january 2010 12 106 38 36 52 54 34 224
exchange adjustments – 01 – – – – – 01
acquisition of subsidiary undertakings – – – – – 57 – 57
deferred tax on changes in fair value of 
forward exchange contracts recognised in 
statement of comprehensive income – – – – – – 04 04
deferred tax on actuarial gain on pension 
schemes recognised in statement of 
comprehensive income – – – – 04 – – 04
deferred tax on sharebased payments 
recognised in equity – – – – – – 05 05
chargedcredited to statement of income 12 38 12 27 13 22 48 18
at 31 december 2010 24 143 26 63 35 133 13 145 86 spectris plc annual report and accounts 2010
notes to the accounts continued
23 deferred tax continued
net deferred tax assets
accelerated 
tax 
depreciation 
£m
accruals 
and 
provisions 
£m
tax 
losses 
£m
unrealised 
profit on 
inter
company 
transactions 
£m
pension 
schemes 
£m
goodwill  
and 
intangible 
assets 
£m
other 
£m
2009 
total 
£m
at 1 january 2009 12 131 31 42 11 21 42 290
exchange adjustments 01 12 04 04 05 03 01 30
acquisition of subsidiary undertakings – – 13 – – 90 – 77
deferred tax on changes in fair value of forward 
exchange contracts recognised in statement of  
comprehensive income – – – – – – 18 18
deferred tax on actuarial gain on pension 
schemes recognised in statement of 
comprehensive income – – – – 53 – – 53
tax on foreign exchange in statement of 
comprehensive income – – – – – – 03 03
chargedcredited to statement of income 01 13 02 02 07 18 08 03
at 31 december 2009 12 106 38 36 52 54 34 224
unrecognised temporary differences
deferred tax assets have not been recognised on the following temporary differences due to the degree of uncertainty over both the 
amount and utilisation of the underlying tax losses and deductions in certain jurisdictions £15m of the tax losses will expire after 
seven years there is no expiry date associated with the other tax losses
2010 
£m
2009 
£m
tax losses 290 236
other temporary differences 96 64
386 300
the uk government’s emergency budget statement in june 2010 announced a phased reduction in the main uk corporation tax rate  
from 28 to 24 with the first 1 reduction taking effect from 1 april 2011 being substantively enacted on 20 july 2010 this rate 
reduction has no material impact on the financial statements as at 31 december 2010 no account will be taken of the expected further 
3 reduction in uk tax rates until substantive enactment of these changes until this change and other potential changes are enacted it is 
not possible to identify the impact these changes might have however for indicative purposes only had the uk main corporate tax rate 
been reduced to 24 the net impact on recognised deferred tax assets and liabilities at 31 december 2010 would not have been material
24 share capital and reserves
2010 2009
number  
of shares  
million £m
number  
of shares 
million £m
authorised
ordinary shares of 5p each 2100 105 2100 105
issued and fully paid
at 1 january 1250 62 1250 62
at 31 december 1250 62 1250 62
the group has one class of ordinary voting shares which carry no right to fixed income
other reserves
movements in reserves are set out in the consolidated statement of changes in equity the retained earnings reserve also includes own 
shares purchased by the company and treated as treasury shares see note 27 the nature and purpose of other reserves forming part 
of equity are as follows
translation reserve
the foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of 
foreign subsidiaries including gains or losses arising on net investment hedges 87 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
hedging reserve         
this reserve records the cumulative net change in the fair value of forward exchange contracts where they are designated as effective 
cash flow hedge relationships
merger reserve
this reserve arose on the acquisition of servomex limited in 1999 a purchase satisfied substantially by the issue of share capital and 
therefore eligible for merger relief under the provisions of section 612 of the companies act 2006
capital redemption reserve
this reserve records the historical repurchase of the group’s own shares
25 sharebased payments
under the save as you earn scheme equity shares are issued following a vesting period of three years options may be exercised during a  
sixmonth period following the vesting date and exercise prices are determined according to the midmarket closing share price prevailing on 
the day before the date of grant there are no performance criteria associated with options granted under the save as you earn scheme
the executive share option scheme and save as you earn share option schemes were set up in order to provide executives and selected 
employees with options to purchase ordinary shares in the company under the executive share option scheme exercise prices are 
determined according to the midmarket closing share price prevailing on the day before the date of grant share options granted under 
the executive share option scheme are also subject to performance criteria being the fulfilment of earnings growth targets options 
vest after a period of three years and have a maximum term of ten years 
under the performance share plan the exercise price is the nominal cost of the company’s shares awards to spectris plc executives and 
senior managers are subject to performance criteria 50 of the award being based on fulfilment of an earnings growth target eps 
and 50 subject to a total shareholder return target tsr awards made to executives and senior managers of the group’s operating 
companies in 2008 and 2009 have performance criteria subject to eps in respect of 50 of the award and operating company targets 
in respect of 50 of the award for awards made in 2010 the performance criteria is eps in respect of 3333 of the award and 
operating company targets in respect of 6667 of the award operating company manager awards are entirely subject to operating 
company profitability targets awards vest after a period of three years and must be exercised during the sevenyear period previously 
oneyear period following vesting except for the 2006 awards no longer capable of exercise which had a 12month exercise period
share options outstanding at the end of the period
saye – year of grant
exercise price 
£
exercise  
period
2010 
number 
thousands
2009 
number 
thousands
2006 618 2010 – 14
2007 837 2011 7 31
2008 766 2012 35 37
2009 723 2013 51 51
2010 1019 2014 19 –
112 133
executive share option scheme – year of grant
exercise price 
£
exercise  
period
2010 
number 
thousands
2009 
number 
thousands
2000 513–525 2003–2010 – 119
2001 358–499 2004–2011 60 107
2004 406–462 2007–2014 7 7
2005 589 2008–2015 5 163
72 396
performance share plan – year of grant
exercise price 
£
exercise  
period
2010 
number 
thousands
2009 
number 
thousands
2006 005 2009–2010 – 14
2007 005 2010–2017 23 434
2008 005 2011–2018 709 755
2009 005 2012–2019 1391 1491
2010 005 2013–2020 943 –
3066 2694  88 spectris plc annual report and accounts 2010
notes to the accounts continued
25 sharebased payments continued
movements in the year
2010 2009
saye
number 
thousands
weighted 
average 
exercise 
price 
£
value of 
shares 
£m
number 
thousands
weighted 
average 
exercise  
price 
£
value of 
shares 
£m
at 1 january 133 752 10 158 712 12
granted 19 1019 02 51 723 03
exercised 32 766 02 29 618 02
lapsed 8 712 01 47 672 03
at 31 december 112 795 09 133 752 10
exercisable at 31 december 7 837 003 16 618 010 
2010 2009
executive share option scheme 
number 
thousands
weighted 
average 
exercise 
price 
£
value of 
shares 
£m
number 
thousands
weighted 
average 
exercise  
price 
£
value of 
shares 
£m
at 1 january 396 517 21 445 511 23
granted – – – – – –
exercised 299 549 17 42 444 02
lapsed 25 504 01 7 543 –
at 31 december 72 392 03 396 517 21
exercisable at 31 december 72 392 03 396 517 21
2010 2009
performance share plan
number 
thousands
weighted 
average 
exercise 
price 
£
value of 
shares 
£m
number 
thousands
weighted 
average 
exercise  
price 
£
value of 
shares 
£m
at 1 january 2694 005 014 1412 005 007
shares granted 972 005 005 1520 005 008
dividends granted 17 005 – – – –
exercised 89 005 001 134 005 001
lapsed 528 005 003 104 005 –
at 31 december 3066 005 015 2694 005 014
exercisable at 31 december 23 005 – 14 005 –
sharebased payment expense
share options are valued using a stochastic option pricing model with support from an independent remuneration consultant the tsr 
performance condition was included in the calculation of fair value under the performance share plan for options granted in 2010 and 
2009 the fair value per option granted and the assumptions used in the calculation are as follows
saye performance share plan
2010 2009 2010 2009
weighted average share price pence 1075 685 738–1311 435–5515
weighted average exercise price pence 1019 723 5 5
expected volatility 412 399 416 364
expected life 325 yrs 325 yrs 02–30 yrs 13–30 yrs
riskfree rate 11 21 31 18
expected dividends expressed as a yield 23 34 0–32 0–42
fair value per option 246 179 – –
fair value per award – tsr condition 684–714 562–596
fair value per award – profit condition 927–996 885–989
fair value per award – eps condition 927–996 885–989 89 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
the expected volatility is based on historical volatility over the expected term the expected life is the average expected period to 
exercise the riskfree rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed  
option life 
the group recognised a total charge of £73m 2009 £04m credit in the statement of income of which £66m related to equity settled 
sharebased payment transactions
26 disposal of businesses
during the year the group did not divest any businesses
on 30 september 2009 the group sold its operation in hungary for a profit on disposal of £01m the total consideration was £01m net 
of transaction costs
27 treasury shares
at 31 december 2010 the group held 9073760 treasury shares 2009 9493575 419815 of these shares were issued to satisfy 
options exercised by employees which were granted under the group’s share schemes 2009 200920 no shares were repurchased by 
the group during the year 2009 nil and no shares were cancelled during the year 2009 nil
28 acquisitions
on 7 april 2010 the group acquired the trade and assets of reologica instruments ab located in sweden for a consideration of £05m 
no goodwill arose on the reologica instruments ab acquisition with the excess of the fair value of the consideration paid over the 
fair value of the net assets acquired represented by technologybased intangibles this business has been integrated into the materials 
analysis segment
on 6 july 2010 the group acquired 100 of the share capital of zhuhai omec instruments co ltd a company based in china which 
extends the groups capabilities in analytical systems for particle characterisation for a total consideration of £92m including £19m 
contingent on the future performance of the acquired business this forms part of the materials analysis segment the excess of the 
fair value of the consideration paid over the fair value of the assets acquired is represented by customerrelated and marketing based 
intangibles and the value of a noncompete agreement entered into with the previous owners of the business
on 1 october 2010 the group acquired the trade and assets of a distributor in japan where direct presence was sought for a 
consideration of £46m including £17m contingent on the future performance of the acquired business this also forms part of the 
materials analysis segment no goodwill arose on this acquisition with the excess of the fair value of the consideration paid over the  
fair value of the net assets acquired represented by customerbased intangibles there was no material fair value attaching to the pre
existing relationships with the distributor
also on 1 october 2010 the group acquired the trade and assets of ntron corp a company based in the usa which extends the 
groups capabilities in industrial networking products for a consideration of £329m including deferred consideration of £01m this 
forms part of the industrial controls segment an analysis of the assets acquired is provided below the excess of the fair value of the 
consideration paid over the fair value of the net assets acquired is represented by customerrelated technology and other intangibles of 
£91m £25m and £21m respectively with residual goodwill arising of £167m the goodwill arising is considered to represent the value 
of the acquired workforce and the ability to exploit the group’s existing distribution arrangements to expand ntron’s routes to market 
particularly outside of north america where it currently makes limited sales
on 24 november 2010 the group acquired 100 of the shares of the delta f corporation a company based in the usa which extends  
the groups capabilities in trace oxygen and water measurement for a consideration of £158m including deferred consideration of 
£04m this forms part of the inline instrumentation segment the excess of the fair value of the consideration paid over the fair 
value of the net assets acquired is represented by technologybased intangibles of £90m with residual goodwill arising of £76m the 
goodwill arising is considered to represent the value of the acquired workforce and the ability to exploit the group’s existing customer 
relationships and knowhow to expand delta f’s routes to market particularly into markets both geographic and industry where it 
currently makes limited sales
the assets and liabilities acquired as a result of the above transactions together with the aggregate purchase consideration are 
summarised below the revenue and operating profit contribution from the acquisitions in the year to the groups results for the year 
were £81m and £11m respectively group revenue and operating profit would have been £9296m and £1354m respectively had each 
of these acquisitions taken place on the first day of the year 90 spectris plc annual report and accounts 2010
notes to the accounts continued
28 acquisitions continued
on acquisitions prior to 1 january 2010 the deferred and contingent consideration has been revised to reflect the increased earnout 
payments amounting to £83m that were not accrued at 31 december 2009 with a corresponding increase to goodwill the group also 
paid £45m in respect of prior period acquisitions which had been accrued as deferred or contingent consideration at 31 december 2009
acquisitionrelated costs of £19m have been recognised in the statement of income under ifrs 3 revised and included within 
administrative expenses
the effect of the acquisition on the individual assets and liabilities of the group is as follows
net assets acquired under 2010 acquisitions
book 
value 
£m
adjustments 
£m
2010 
fair value 
£m
intangible fixed assets 01 365 366
tangible fixed assets 05 01 04
inventories 41 02 39
trade and other receivables 45 – 45
trade and other payables 17 – 17
provisions 01 – 01
deferred tax liabilities – 57 57
cash 08 – 08
net assets acquired 82 305 387
goodwill 243
total consideration in respect of 2010 acquisitions 630
analysis of cash outflow in consolidated cash flow statement
total consideration in respect of 2010 acquisitions 630
adjustment for cash acquired on 2010 acquisitions 08
deferred and contingent consideration on 2010 acquisitions to be paid in future years 41
cash paid in 2010 in respect of 2010 acquisitions 581
prior year acquisitions
purchase price adjustment re prior year acquisition 83
deferred and contingent consideration in relation to prior year acquisitions
accrued at 31 december 2009 45
accrued during 2010 but not paid at 31 december 2010 83
cash paid in 2010 in respect of prior year acquisitions 45
net cash outflow relating to acquisitions 626
   an additional purchase price of £83m in relation to prior period acquisitions has been accrued but not paid during the year based on updated expectations 
of the amounts to be paid under contingent consideration arrangements
due to their contractual due dates the fair value of receivables acquired shown above approximates the gross contractual amounts 
receivable the amount of gross contractual receivables not expected to be recovered is immaterial 
there are no material contingent liabilities recognised in accordance with paragraph 23 of ifrs 3 revised 
 
contingent consideration exists on two of the acquisitions made in 2010 the maximum amounts payable which will be settled in cash 
total £41m and are contingent based on the future performance of the acquired businesses over periods of up to three years reflecting 
the levels of the performance targets set and expected business performance these amounts have been accrued in full at the respective 
acquisition dates as the fair value of the contingent consideration is considered by the directors to approximate the full amounts 
potentially payable under the ‘earn out’ arrangements 
£167m of the goodwill arising on acquisitions in the year is expected to be amortised and deductible for tax purposes 91 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
net assets acquired for ntron
book value 
£m
adjustments 
£m
2010 
fair value 
£m
intangible fixed assets 01 136 137
tangible fixed assets 01 – 01
inventories 15 03 18
trade and other receivables 18 – 18
trade and other payables 12 – 12
net assets acquired 23 139 162
goodwill 167
total consideration 329
adjustment for cash acquired –
net consideration 329
the following table presents the information related to 2009 acquisitions including the effect of the finalisation of acquisition fair values 
on prior year acquisitions reflected in the comparative figures
amount previously 
recognised at  
31 december 2009
net assets acquired
book 
value 
£m
fair value 
adjustments 
£m
final fair 
values 
£m
intangible fixed assets 19 364 383
tangible fixed assets 10 – 10
deferred tax asset 13 – 13
inventories 18 06 12
trade and other receivables 51 – 51
trade and other payables 60 – 60
provisions – 06 06
deferred tax liabilities 06 84 90
cash 06 – 06
net assets acquired 51 268 319
goodwill 14
total consideration recognised in the year 305
 
total consideration in relation to 2009 acquisitions 266
adjustment for cash acquired on 2009 acquisitions 06
deferred and contingent consideration to be paid in future years 41
cash paid in 2009 in respect of 2009 acquisitions 219
 
prior year acquisitions
additional consideration
purchase price adjustment re prior year acquisitions not previously recognised 39
deferred and contingent consideration in relation to prior year acquisitions previously recognised 29
68
net cash outflow in 2009 relating to acquisitions 287 92 spectris plc annual report and accounts 2010
notes to the accounts continued
29 contingent liabilities
royal bank of scotland
spectris plc and its uk subsidiaries are party to a cross guarantee arrangement to support trade finance facilities provided by the bank 
they are also party to a cross guarantee arrangement that allows individual subsidiaries to borrow from the bank on overdraft within the 
overall borrowing limit agreed with the bank spectris plc has provided a parent company guarantee to support trade finance facilities 
provided by the bank to its subsidiaries in various countries outside of the uk and usa spectris plc has also provided a parent company 
guarantee to support overdraft and intraday facilities provided by the bank to its subsidiaries who participate in the crossborder euro 
zero balance pooling arrangement an amount of £112m 2009 £119m was outstanding at 31 december 2010
jp morgan chase na
spectris plc has provided a parent company guarantee to jp morgan chase na to support trade finance facilities provided by the bank to 
its subsidiaries in the usa an amount of £14m 2009 £13m was outstanding at 31 december 2010
other banks
group companies have in the normal course of business provided bonds and guarantees through local banking arrangements 
amounting to £85m 2009 £56m
legal
refer to note 22 ‘provisions’
30 operating lease arrangements 
2010 2009
total commitments under noncancellable operating leases 
property 
£m
other 
£m
property 
£m
other 
£m
not later than one year 59 29 47 27 
later than one year and not later than five years 143 54 110 57 
later than five years 53 – 91 –
255 83 248 84 
group companies are party to a number of operating leases mainly for plant and machinery including motor vehicles and property 
rentals the arrangements do not impose any significant restrictions on the group
during the year £106m 2009 £102m was recognised in the statement of income in respect of operating lease rental payments 
31 capital commitments
at 31 december 2010 the group had entered into contractual commitments for the acquisition of property plant and equipment and 
software amounting to £20m 2009 £06m which have not been provided for
32 related party transactions
details of directors’ remuneration being the key management personnel are summarised in note 7 and shown in detail in the directors’ 
remuneration report on page 48 there were no other related party transactions requiring disclosure 93 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
33 subsidiary undertakings
the following are the groups principal subsidiary undertakings they operate mainly in the countries of incorporation all the subsidiaries 
are involved in the manufacture and sale of materials analysis systems test and measurement equipment inline instrumentation and 
industrial controls
spectris plc holds 100 of the ordinary share capital of all the subsidiaries either directly or indirectly through intermediate holding 
companies
country of 
incorporation
malvern instruments limited uk
servomex group limited uk
spectris china limited china
brüel  kjær sound  vibration measurement as denmark
brüel  kjær vibro as denmark
hottinger baldwin messtechnik gmbh germany
spectris company limited japan
btg eclépens sa switzerland
panalytical bv the netherlands
beta lasermike inc usa
fusion uv systems inc usa
microscan systems inc usa
ndc infrared engineering inc usa
particle measuring systems inc usa
red lion controls inc usa
lds test and measurement limited uk
lochard limited australia 94 spectris plc annual report and accounts 2010
notes
2010
£m
2009
£m
fixed assets
intangible fixed assets 36 16 20
tangible fixed assets 37 02 02
fixed asset investments 38 2471 1938
2489 1960
current assets
debtors 39 3982 3938
cash at bank 351 95
4333 4033
creditors due within one year
shortterm borrowings 40 – 464
other creditors 40 1790 1299
1790 1763
net current assets 2543 2270
debtors due after more than one year
debtors 41 1706 1918
total assets less current liabilities 6738 6148
creditors due after more than one year
medium and longterm borrowings 42 1687 1330
derivative financial instruments 43 150 214
1837 1544
provisions for liabilities and charges 44 27 03
 
net assets 4874 4601
capital and reserves
called up share capital 45 62 62
share premium account 46 2314 2314
merger reserve 46 31 31
capital redemption reserve 46 03 03
special reserve 46 341 341
profit and loss account 46 2123 1850
equity shareholders’ funds 4874 4601
the financial statements on pages 94 to 100 were approved by the board of directors on 25 february 2011 and were signed on its 
behalf by
clive watson
director
company registration no 02025003
company balance sheet
as at 31 december 2010 95 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
34 accounting policies
the separate financial statements of the company are presented as required by the companies act 2006 as permitted by that act  
the separate financial statements have been prepared in accordance with applicable accounting standards in the united kingdom  
in accordance with the exemption provided by section 408 of the companies act 2006 the company has not presented its own  
profit and loss account
the company has taken the exemption available in respect of the requirements of frs 29 financial instruments disclosures
basis of accounting
the accounts are prepared on the historical cost basis except that derivative financial instruments are stated at fair value as described 
below
derivative financial instruments
the company uses derivative financial instruments to hedge the group’s exposure to foreign exchange and interest rate risks arising  
from operating and financing activities in accordance with its treasury policy it does not hold or use derivative financial instruments  
for trading or speculative purposes
crosscurrency interest rate swaps
the company takes advantage of crosscurrency interest rate swaps for some of its us dollardenominated private placement 
borrowings the swaps have the effect of converting fixed rate us dollar borrowings into fixed rate eurodenominated borrowings 
the underlying us dollar borrowings are required to be presented separately in the balance sheet from the crosscurrency interest rate 
swaps in addition the fair value of the crosscurrency interest rate swap is required to be recognised in full on the balance sheet  
all changes in value are recognised in the profit and loss account
financial guarantees
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group 
the company considers these to be insurance arrangements and accounts for them as such in this respect the company treats the 
guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment 
under the guarantee
foreign currencies
transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and 
liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date with any 
exchange differences arising on retranslation being recognised in the profit and loss account nonmonetary assets and liabilities that  
are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction
tangible fixed assets and depreciation
tangible fixed assets are stated at historic cost
depreciation is calculated to write off the difference between the cost or valuation of fixed assets and their residual value over their 
estimated useful lives on a straightline basis at the following rates per annum
leasehold improvements – 5 years
office equipment – 3 years
intangible fixed assets and amortisation
intangible fixed assets purchased by the company are capitalised at their cost
amortisation of intangible assets is charged to administrative expenses in the income statement on a straightline basis over the 
estimated useful lives of intangible assets the estimated useful lives are as follows
software costs – 5 years
fixed asset investments
investments in subsidiaries are stated at cost less where appropriate provisions for impairment
trade and other receivables
trade and other receivables are initially recognised at fair value and subsequently measured at their amortised cost reduced by 
appropriate allowances for estimated irrecoverable amounts
notes to the company’s accounts 96 spectris plc annual report and accounts 2010
notes to the company’s accounts continued
34 accounting policies continued
trade and other payables
trade and other payables are initially recognised at fair value and are subsequently measured at amortised cost
taxation
the charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences 
between the treatment of certain items for taxation and accounting purposes deferred tax is recognised without discounting in 
respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not 
reversed by the balance sheet date except as otherwise required by frs 19
leasing
annual payments under operating leases are charged to the profit and loss account on an accruals basis
postretirement benefits
the company participates in group operated defined contribution and defined benefit pension schemes the assets of the schemes 
are held separately from those of the company in independently administered funds the company is unable to identify its share of the 
group defined benefit scheme’s underlying assets and liabilities and therefore accounts for it as a defined contribution scheme the 
amounts charged against profits represent contributions payable to the schemes in respect of the accounting period
sharebased payments
the fair value of the options granted is measured using an option pricing model taking into account the terms and conditions upon 
which the options were granted the amount recognised as an expense is adjusted to reflect the actual number of awards for which the 
related service and nonmarket vesting conditions are expected to be met such that the amount ultimately recognised as an expense is 
based on the number of awards that do meet the related service and nonmarket performance conditions at the vesting date for share
based payment awards with nonvesting conditions the grant date fair value of the sharebased payment is measured to reflect such 
conditions and there is no trueup for differences between expected and actual outcomes
where the company grants options over its own shares to the employees of its subsidiaries it recognises an increase in the cost of 
investment in its subsidiaries equivalent to the equitysettled sharebased payment charge recognised in its subsidiary’s financial 
statements with the corresponding credit being recognised directly in equity
cash flow statement
the company has not presented a separate cash flow statement in accordance with the exemption provided by frs 1 revised as its 
cash flows are included within the cash flows of the group as set out elsewhere in this annual report
35 employee costs and other information
employee costs including directors’ remuneration
2010
£m
2009
£m
wages and salaries 47 31
social security costs 18 08
defined benefit pension plans 35 17
defined contribution pension plans 04 04
sharebased payment expense 19 01
123 61
2010
number
2009
number
average number of employees 29 30
directors’ remuneration
further details of directors’ remuneration and share options are given in note 7 to the group’s consolidated financial statements and in 
the directors’ remuneration report on pages 48 to 50
auditor’s fees
fees paid in respect of audit services amounted to £02m 2009 £02m 97 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
36 intangible fixed assets
cost
software 
costs
£m
at 1 january 2010 26
additions 02
at 31 december 2010 28
amortisation
at 1 january 2010 06
charge for the year 06
at 31 december 2010 12
net book value
at 31 december 2010 16
at 31 december 2009 20
37 tangible fixed assets
cost
leasehold 
improvements
£m
office
equipment
£m
total
£m
at 1 january 2010 05 05 10
additions – 01 01
at 31 december 2010 05 06 11
depreciation
at 1 january 2010 03 05 08
charge for the year 01 – 01
at 31 december 2010 04 05 09
net book value
at 31 december 2010 01 01 02
at 31 december 2009 02 – 02
38 fixed asset investments
cost
investments 
in subsidiary 
undertakings
£m
at 1 january 2010 2634
additions 533
at 31 december 2010 3167
provision for impairment
at 1 january 2010 696
charge for the year –
at 31 december 2010 696
net book value
at 31 december 2010 2471
at 1 january 2010 1938
further details regarding the investments in subsidiaries are given in note 33 to the group’s consolidated financial statements 98 spectris plc annual report and accounts 2010
notes to the company’s accounts continued
39 debtors
amounts falling due within one year
2010
£m
2009
£m
amounts owed by group undertakings 3944 3894
other debtors 05 08
prepayments and accrued income 07 07
corporation tax 10 –
deferred tax asset 16 29
3982 3938
40 creditors due within one year
2010
£m
2009
£m
shortterm borrowings
unsecured bank loans – 464
amounts owed to group undertakings 1729 1245
other taxation and social security 02 –
corporation tax – 06
accruals and deferred income 59 48
1790 1299
total 1790 1763
further details regarding the company’s borrowings are set out in note 19 of the group’s consolidated financial statements
41 debtors due after more than one year
2010
£m
2009
£m
medium and longterm debtors
amounts owed by group undertakings 1706 1918
42 creditors due after more than one year
2010
£m
2009
£m
medium and longterm borrowings
amounts owed to group undertakings 351 427
unsecured bank loans 483 62
unsecured loan notes 853 841
1687 1330
further details regarding the company’s borrowings are set out in note 19 of the group’s consolidated financial statements
43 derivative financial instruments
2010
£m
2009
£m
crosscurrency interest rate swaps 149 211
forward exchange contracts 01 03
150 214
further details regarding the company’s crosscurrency interest rate swaps and forward exchange contracts are set out in note 20 of the 
group’s consolidated financial statements 99 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
44 provisions for liabilities and charges
£m
at 1 january 2010 03
utilised during the year 01
charged during the year 25
at 31 december 2010 27
provisions represent the directors’ best estimate of settling various potential claims against the company arising in the ordinary course of 
business
45 share capital
2010 2009
number of 
shares  
million £m
number of 
shares  
million £m
authorised
ordinary shares of 5p each 2100 105 2100 105
issued and fully paid
at 1 january 1250 62 1250 62
at 31 december 1250 62 1250 62
during the year no ordinary shares were issued upon exercise under share option schemes 2009 nil
share options have been granted to subscribe for ordinary shares of spectris plc full details of share options currently in issue including 
those issued during the year together with information regarding the basis of calculation of the sharebased payment expense is 
contained in note 25 to the group’s consolidated financial statements
the company recognised total expenses of £19m related to equitysettled sharebased payment transactions in 2010 2009 £01m 
in addition the company recognised a charge of £47m 2009 credit of £06m related to equitysettled sharebased transactions for 
certain employees of other group companies
46 reserves
share
premium
account
£m
merger
reserve
£m
capital
redemption
reserve
£m
special
reserve
£m
profit and
loss
account
£m
total
£m
at 1 january 2010 2314 31 03 341 1850 4539
profit for the year – – – – 477 477
equity dividends paid – – – – 289 289
sharebased payments – – – – 66 66
share options exercised from own shares treasury purchased – – – – 19 19
at 31 december 2010 2314 31 03 341 2123 4812
the purpose of the merger reserve and capital redemption reserve is detailed in note 24 of the group’s consolidated financial 
statements the special reserve was created historically following the cancellation of an amount of share premium for the purpose of 
writing off goodwill the special reserve is not distributable 100 spectris plc annual report and accounts 2010
47 reconciliation of movement in equity shareholders’ funds
2010 
£m
2009 
£m
profit for the year 477 1237
amounts recycled to profit and loss – 13
equity dividends paid in the year 289 270
sharebased payments 66 04
share options exercised from own shares treasury purchased 19 04
net increase in equity shareholders’ funds 273 980
opening equity shareholders’ funds 4601 3621
closing equity shareholders’ funds 4874 4601
48 pensions
the company operates the spectris pension plan a uk defined benefit pension plan that is closed to new members further details of 
the spectris pension plan are contained in note 8 to the group’s consolidated financial statements the company is unable to identify its 
share of the plan’s underlying assets and liabilities and therefore accounts for the plan as a defined contribution scheme in accordance 
with the schedule of contributions in place for the spectris pension plan for the financial year ending 31 december 2010 employer 
contributions of £1620000 pa were due the actuary certified in 2010 that this level of contribution was adequate for the purposes of 
securing the statutory funding objective on 25 june 2010 a payment of £1900000 was made by the company as an additional one
off contribution towards the spectris pension plan contributions paid in the year to the spectris pension plan were £35m 2009 £17m 
and the amounts outstanding at the year end were £01m 2009 £01m contributions paid in the year to defined contribution plans 
were £04m 2009 £04m
49 related party disclosures
the company has taken advantage of the exemption under frs 8 related party disclosures not to disclose related party transactions 
between the company and whollyowned subsidiaries
there are no material transactions with directors and other related parties of the company except those relating to remuneration and 
share dealing disclosed in the director’s remuneration report enclosed within this annual report
50 commitments
land and buildings
annual commitments for operating leases expiring
2010 
£m
2009 
£m
between two and five years 02 –
after five years – 02
at the balance sheet date the company had no capital commitments for which provision has not been made 2009 £nil
51 contingent liabilities
there are no contingent liabilities as at the year end the cross guarantee arrangements to support trade finance facilities are stated in 
note 29 of the group’s consolidated financial statements
notes to the company’s accounts continued 101 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
financial calendar
annual general meeting and interim 
management statement  13 may 2011
record date for 2010 final dividend  3 june 2011 
2010 final dividend payable  24 june 2011 
2011 interim results  23 august 2011 
interim management statement  11 november 2011 
2011 preliminary results february 2012  
company secretary
r j stephens fcis
registered office
spectris plc
station road
egham
surrey
tw20 9np
england
tel 44 01784 470470
email infospectriscom
company registered in england no 2025003
auditors
kpmg audit plc
bankers
royal bank of scotland plc
shareholder information
solicitors
macfarlanes llp
brokers
rbs hoare govett limited 
j p morgan cazenove
financial pr advisers
fd
registrars
equiniti limited
aspect house
spencer road
lancing
west sussex
bn99 6da
the registrars provide a range of shareholder services online at 
wwwshareviewcouk
share price information
the company’s ordinary shares are listed on the london stock 
exchange the latest share price is available via the company’s 
website at wwwspectriscom
email news service
to receive details of press releases and other announcements 
as they are issued register with the email alert service on the 
company’s website at wwwspectriscom
board photography by simon jarratt
page 15 panalytical laboratory at university of são paulo brazil 
photograph by dudu tresca
page 17 formula one racing car photograph courtesy of  
scuderia ferrari
page 21 windmills at middelgrunden copenhagen photograph 
by tore johannesen
designed by emperor design
printed in england by park communications ltd
this report is printed on heaven 42 comprising pulp sourced 
from wellmanaged forests certified in accordance with the 
forest stewardship council fsc the paper is manufactured 
using elemental chlorinefree processes and the high degree of 
whiteness is achieved through high quality natural materials
© spectris plc february 2011
the name ‘spectris’ is a trade mark of spectris plc and is protected 
by registration in the united kingdom and other jurisdictions other 
product names referred to in this annual report are registered or 
unregistered trade marks or registered names or logos of spectris 
plc or its subsidiary companies and are similarly protected spectris plc
station road
egham
surrey
tw20 9np
england
t 44 01784 470470
f 44 01784 470848
infospectriscom
wwwspectriscom


Summary:
 10 spectris plc annual report and accounts 2010
chairman’s statement
john hughes
chairman
146
increase in reported revenue
dear shareholder
i am pleased to report that spectris achieved a record performance in 2010 in terms 
of both revenue and adjusted operating profit for the year throughout the downturn 
we maintained the focus on our strategic objectives as a result our acquisition activity 
continued expenditure on research and development strength in emerging markets and 
good cost control have enabled us to benefit more quickly from the improvement in the 
economy than following previous downturns
improving customer demand led to revenue for the year increasing by 146 to 
£9019 million 2009 £7873 million and adjusted operating profit increasing by  
79 to £1421 million 2009 £792 million 
on a reported basis revenue growth was 146 with acquisitions contributing 15 
and currency also contributing 15 on a constant currency organic likeforlike 
basis growth was therefore 116 operating margins were 158 an increase of 
57 percentage points compared with the prior year
the growth in operating profit was due to a combination of increased volume an 
expansion in gross margins and cost benefits resulting from restructuring and integration 
activities we had implemented the previous year 
profit before tax increased by 94 to £1323 million 2009 £682 million and earnings 
per share increased by 91 from 454 pence to 866 pence the effective tax rate was 
242 2009 232 
cash conversion was robust with 112 of operating profit converted into operating 
cash largely due to a reduction in working capital of approximately £20 million net debt 
decreased by £377 million from £1239 million to £862 million 05x ebitda net interest 
costs were £98 million at 31 december 2010 the group had cash of £647 million and 
undrawn committed facilities of £80 million this strong financial position gives us the 
flexibility to continue to pursue our strategic objectives
the board is proposing to pay a final dividend of 209 pence which combined with 
the interim dividend of 71 pence gives a total for the year of 280 pence 2009 
2425 pence an increase of 15 the dividend is covered 31 times this is consistent 
with our policy of making progressive dividend payments based upon affordability and 
sustainability the dividend will be paid on 24 june 2011 to shareholders on the register at 
the close of business on 3 june 2011
we are very pleased with the group’s  
performance in 2010 with trading exceeding our 
expectations across all four business segments
280p
dividend up 15 11 spectris plc annual report and accounts 2010
highlights
business review
corporate governance
financial statements
board changes
having served for six years as a nonexecutive director anthony reading retired at the 
conclusion of the agm in may 2010 on behalf of the board i would like to thank him 
for his contribution to the group and his chairmanship of the remuneration committee 
i would also like to welcome russell king who joined the board as a nonexecutive 
director on 20 october 2010 and assumes the role of chairman of the remuneration 
committee russell was previously chief strategy officer of anglo american plc and is a 
nonexecutive director of aggreko plc 
outlook
spectris recovered quickly from the economic downturn and made excellent progress in 
2010 with trading exceeding our expectations across all four business segments looking 
ahead we expect a return to more normal sales growth during 2011 and we will continue 
to pursue our strategy of investing in new products and applications seeking acquisition 
opportunities and expanding our market positions and regional presence as a result  
the board believes spectris is well positioned for further progress in 2011
john hughes
chairman
  unless stated otherwise figures quoted for operating profit net interest profit before tax tax and earnings 
per share are adjusted measures – for explanation of adjusted figures and reconciliation to the statutory 
reported figures see note 3
1
2
3
4
5
6
7
8
9
10
1 automotive and aerospace 12
2 pulp and paper 11
3 semicon telecoms electronics 10
4 academic research 9
5 pharma life sciences 9
6 metals minerals and mining 9
7 machine building 9
8 energy and utilities 7
9 environment 5
10 other incl distribution 19
2010 sales by enduser market
 total group reported sales