Annual Report & Financial Statements 2012 - Diffusion · PDF fileEnergy Technique Plc Annual...

Job No.: 11435 Proof Event: 8 Park Communications Ltd Alpine Way London E6 6LACustomer: Energy Technique PLC Project Title: Annual Report 2012 T: 020 7055 6500 F: 020 7055 6600

Energy Technique Plc47 Central AvenueWest MoleseySurreyKT8 2QZ

Tel: +44 (0)20 8783 0033

Annual Report & Financial Statements 2012


Contents 1 Chairman’s statement 4 Directors 5 Advisers 6 Directors’ report 9 Corporate governance 10 Remuneration report 11 Independent auditors’ report 12 Consolidated statement of comprehensive

income

13 Consolidated statement of financial position 14 Consolidated statement of changes in equity 15 Consolidated cash flow statement 16 Notes to the consolidated financial statements 35 Accounts of the parent company

Energy Technique Plc 42 Notice of 2012 Annual General Meeting47 Financial calendar and corporate information48 Products and services

Heating for Marks & Spencer

Fan Coils Heathrow Terminal 2 Heating for Lancashire County Cricket Club

Fan Coils for The Shard Heating for Lincoln House Hotel Fan Coils for Leadenhall Building

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Job No.: 11435 Proof Event: 8 Park Communications Ltd Alpine Way London E6 6LACustomer: Energy Technique PLC Project Title: Annual Report T: 020 7055 6500 F: 020 7055 6600

Chairman’s statement

Headlines• ReturntoprofitabilityarisingfromDiffusion’ssales23percentaheadoflastyearat£7.09million;

• Diffusiongeneratedanoperatingprofitof£343,000,representingaturnaroundinperformancefromthelossesof£137,000incurredinthepreviousyear;

• GroupprofitonContinuingOperationsbeforetaxof£173,000,representingasignificantturnaroundfromthelossesof£396,000incurredinthepreviousyear;

• Strongbalancesheetnetassetsof£1.41millionwithnetcashandcashequivalentsof£237,000;

• Diffusion’spremiumbrandedfancoilsandcommercialheatingproductsweresuppliedintomanylandmarkandprestigiouscommercialdevelopments;

• EnquirylevelsandorderintakesareatencouraginglevelsandtheBoardlooksforwardtoasuccessfulyearahead,despitethecontinuingchallengesfacingtheUKconstructionindustry.

IntroductionI ampleased to report theCompany’s return to profitability in the year ended 31March 2012 onDiffusion’ssales23percentaheadofthepreviousyearat£7.09million.ThecombinationofincreasedsalesandtightcostcontrolproducedaGroupprofitonContinuingOperationsbeforetaxof£173,000,afterchargingCentralcosts,representingaturnaroundfromthelossesof£396,000incurredinthepreviousyear.Thiswasapleasingtradingperformanceachievedinchallengingtradingconditions.

Diffusion’smarkets did not show any signs of growth during the year and selling price pressure remained amarketfeature.TheCompanyproduceditsprofitturnaroundthroughmaintainingDiffusion’spremiumbrandingandpursuingquality jobs likelytoreturntargetsellingmargins,combinedwithfocusedbusinessdevelopmentactivities.

Trading performance of Continuing OperationsSalesintheyearended31March2012roseby23percentto£7.09million(2011:£5.79million).Increasedsaleswereachievedforbothfancoilsandcommercialheatingproducts.Followingthepreviousyear’sdisappointmentwiththecollapseoftheCompany’slongestablisheddistributorintheRepublicofIreland,termswerenegotiatedwithanewdistributor,whichprovedtobeparticularlysuccessful,andledtosalesbeing166percenthigherthantheyearbefore.

The combination of increased sales and tight cost control resultedinDiffusiongeneratinganoperatingprofitof£343,000,representinga turnaround in financial performance from the losses of £137,000incurred in the previous year. Savings achieved through shop floorinvestment in new equipment and processes allowed Diffusion tocompeteverycompetitivelyinadifficultmarketoverthelasttwoyears.

Centralcostsweremuchlowerinthefinancialyearended31March2012 at £130,000 (2011: £218,000). After net interest costs of£40,000, Group profit before tax on Continuing Operations was£173,000,representingaturnaroundinfinancialperformancefromthelossesof£396,000incurredinthepreviousyear.

SALES £000

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About DiffusionWith over 50 years in the heating and ventilation industry (“HVAC”), Energy Technique’s operating subsidiaryDiffusion isoneof theoldestandmostestablishedmanufacturersofHVACproducts in theUK.Diffusion isamarket leader inthemanufactureofpremiumqualityfancoilsandcommercialheatingproducts.TheDiffusionandEnergyTechniquebrandnamesarerecognisedashighlyengineered,qualityproductsprovidingleadingedgeperformanceandenergyefficiency.

Over its long trading life, Diffusion has been involvedwithmany challenging and prestigious projects acrossaspectrumofsectors includinghotels,commercialoffices, retail, schools,hospitals,and residential.Diffusionhasestablishedexcellentworkingrelationshipswithmanybluechipclients includingLandSecurities,Marks&Spencer,Boots,CityInnHotels,StanhopePropertiesandmanymore.Allproductsaredesigned,developedandmanufacturedatDiffusion’s30,000sq.ft.manufacturingfacilityinWestMolesey,Surrey,offeringpremiumqualityproducts,designedspecificallytomeetcustomers’bespokerequirements.

Diffusion’s operating performanceDiffusion’s continued investment in sales andmarketing resources has reaped rewards in the currentmarketconditions.Sellingmarginswerecontinuallyunderpressurefromacombinationofmarketforcesandincreasedpurchasepricesarisingfromincreasedworldmetalprices.

Notwithstandingthesechallenges,totalsellingmarginsweremaintainedbymoreeffectivepurchasingandproductionefficiencies.Inparticular,theTrumpflasercutterhasproducedbetterqualityfinishedsteelwork,isenvironmentallyfriendlyandimportantlyhasimprovedproductivityandefficiencybyreducingsteelwastagedownfrom25percenttojust12percent.

During theyear, theR&D facilitieswerealsoupgraded.Thesededicated R & D test facilities produce accurate air volume, thermal and acousticperformance data for manufactured products. They allow the accuratesimulationof real-worldoperatingconditionsandconfigurations,providingcustomers with confidence in the performance of Diffusion’s products,howeverdemandingtheenvironment.

Fan coils were supplied into a number of prestigious projects in the UKincluding“TheShardBuilding”inLondon,HeathrowTerminal2,Clyde&CoofficesinLondon,GoldmanSachsofficesinLondonandthe“Cheesegrater”at 122 Leadenhall Street in London, together with the Google EuropeanheadquartersinDublin.

TheCommercialHeatingDivisionalsohadasuccessfulyearwinninganumberofnewcustomersincludingKrispyCrème,Forever21,Victoria’sSecretsandASDAlocalstores.Duringtheyear,Diffusion’scommercialheatingproductsweresuppliedintotheLincolnHotelinLondon,MoetHennessyinLondon,

HavantAcademy,LancashireCountyCricketClub,Marks&Spencer,TheSuperdryStoreandtheCornWallisAcademySchool.Otherend-usercustomerscontinuedtobebluechipretailersandshoppingcentersincludingNewLook,Next,GAP,BananaRepublic,HugoBoss,Tesco,HouseofFraser,TKMaxx,Primark,thenewWestfieldStratfordShoppingCentreandExcelHotelLondon.

Diffusion has always offered a spares and service facility and during the year spares stockswere physicallysegregatedandcontrolledfromproductionstockstoprovideanimprovedservicetocustomers.

Chairman’s statement(continued)

Trumpf laser cutter

R & D facility

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Chairman’s statement(continued)

Cash flow and net cashCashgeneratedbyoperationswas£182,000(2011:outflowof£377,000)andtheCompanyhadnetcashandcashequivalentsat31March2012of£237,000(2011:£228,000).TheCompanyremainssoundlyfinancedwiththislevelofliquidityandnetassetsat31March2012of£1.41million.Duringtheyear,£101,000wasappliedinrepayinghirepurchaseobligationsonthelasercuttingmachine.ThelastinstalmentonthismachinewaspaidinMay2012.

Capital expenditureCapital expenditureduring the yearwas£84,000, following theheavy investment inmanufacturingplant andprocesses intheprevioustwoyears.Capitalexpenditure intheyearrelatedtoupgradingtheIT infrastructure,vehiclefleetandtheR&Ddepartment.Inthecomingyearahead,therewillbefurtherimprovementstotheITinfrastructure,includingaCRMsystem.

DividendsTheBoarddoesnotrecommendpaymentofadividend(2011:£nil).TheBoardwillbeseekingapproval fromshareholdersinconnectionwithasharereorganisationandapplicationtotheCourtforacapitalreduction,soastoallowtheCompanytopaydividendsinthefuture.Furtherdetailsaboutthiswillbesetoutinaseparatecirculartobepostedtoshareholdersshortly.

Board changesMartinKirkham,whowaspreviouslythemanagingdirectorofSIASFM,resignedfromtheBoardon6April2011followingtheearlierdisposalofSIASFMon24March2011.

Business strategyFollowing the disposal of SIAS FM inMarch 2011, theBoard has focused on theCompany’s coreDiffusionsubsidiaryanditremainscommittedtothisstrategyintheyearahead.

Current trading and prospectsDiffusionhasanexcellentbrandnamewithahighqualityreputation.Whilstnosignificantimprovementinoveralldemand from theCompany’smarkets is expected during the current financial year, enquiry levels and orderprospectsforqualityprojectsremainencouraging.

AnumberofqualityexportfancoilprojectsarecurrentlybeingpursuedintheMiddleEastandDiffusionexpectstoenhanceitsproductofferingduringthecurrentfinancialyearwiththelaunchofanumberofnewenergyefficientproductsforbothfancoilsandcommercialheatingproducts.

TheexpectedtimetableforcompletionofthesharereorganisationandcapitalreductionisaroundOctober2012.Iftradingcontinuesatcurrentlevels,theBoardmayconsiderdeclaringadividendatthattime.

Walter K GoldsmithChairman

14June2012

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Directors

Walter K GoldsmithNon-executive Chairman Aged 74WalterGoldsmithjoinedtheBoardinMay2007andwasappointedChairmaninMarch2010.Heisacharteredaccountantwithsubstantialboardlevelexperienceinpublicandprivatecompanies.AconsiderablepartofhiscareerwasspentatBlack&Decker,theglobalmanufacturerandmarketerofpowertools,wherehewaslatterlyCorporateVicePresidentandresponsibleforlaunchingBlack&Deckerinto22countries.HewassubsequentlyGroupPlanning andMarketingDirector at FortePlc, the hotel group andDirectorGeneral of the Institute ofDirectors for five years.Walter is currently chairman or director of a number of other private companies.HesupplieshisservicestotheCompanypursuanttoaletterofappointmentdatedMay2007.

Leigh A StimpsonExecutive Director Aged 52 and Diffusion’s Managing DirectorLeighStimpsonjoinedtheBoardon23February2010.HehasbeenanexecutivewithDiffusionsince1992andmanagingdirectorforthelast15years.LeighisaseasonedHVACindustryprofessional,withextensivemarketingskillsandproductknowledgeofthesector.Leighre-joinedDiffusion’sexecutivemanagementonafulltimebasisin2006andwasresponsiblefortheday-to-dayturnaroundsincethen.HeisemployedbyDiffusion’soperatingcompany,ETEnvironmentalLimited,underaletterofappointmentdatedApril2006.

Martin M ReidExecutive Director Aged 51 and Diffusion’s Operations DirectorMartinReidjoinedtheBoardon15September2010andhehasbeenwithDiffusionforover25years,wherehe iscurrently responsible forallday-to-dayoperations includingprocurement,manufacturingexcellenceandstockcontrol.Hehasindepthknowledgeoftheheatingandventilationsectorandisalsoheavilyinvolvedwithnewproductinnovationanddevelopment.HeisemployedbyDiffusion’soperatingcompany,ETEnvironmentalLimited,underthetermsofaserviceagreementwiththatCompany.

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Advisers

Auditors RegistrarsMilstedLangdonLLP CapitaRegistrarsWinchesterHouse TheRegistryDeaneGateAvenue 34BeckenhamRoadTauntonTA12UH Beckenham KentBR34TU

Bankers SolicitorsLloydsTSBBankPlc SherrardsSolicitorsLLP39ThreadneedleStreet 7SwallowPlaceLondonEC2R8AU LondonW1B2AG

Stockbrokers Nominated AdviserfinnCapLtd finnCapLtd60NewBroadStreet 60NewBroadStreetLondonEC2M1JJ LondonEC2M1JJ

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ThedirectorspresenttheirreportandtheGroupfinancialstatementsfortheyearended31March2012.

Principal activityTheprincipalactivityoftheGroupduringtheyearwasthemanufactureanddistributionofairconditioningandheatingsolutionsforretailandcommercialapplications,togetherwithrelatedmaintenanceservices.

Disposal of SIAS FMOn24March2011theCompanydisposedofitswholly-ownedbuildingmaintenancesubsidiaryforanetcashconsiderationof£23,000anditscomparativeresultsareincludedunderDiscontinuedOperations.

Review of businessTheGroup’soperationscomprisetheDiffusionbusinessbasedatWestMolesey,Surrey,whichisamanufactureroffancoilsandcommercialheatingproducts.AreviewoftheGroup’sperformanceandlikelyfuturedevelopmentsisgivenintheChairman’sStatement.

Results and dividendsTheGroupprofitbeforeandaftertaxamountedto£185,000(2011:loss£1.14million)and£160,000(2011:loss£1.14million)respectively.Thedirectorsdonotrecommendpaymentofadividend(2011:£nil).

Shares held in treasuryAtotalof185,000ordinarysharesof6.25penceeachwerepurchasedinthemarketintheyearended31March2009atatotalcostof£15,000.Thesesharesareheldintreasuryandrepresent0.56%ofthecalledupsharecapital.

Research and developmentOperatingprofitisstatedaftercharging£191,000(2011:£164,000)onresearchanddevelopmentinrespectofitsDiffusionoperations.

Directors and their interestsAcurrentlistofdirectorsisshownonpage4.Detailsofdirectors’interestsintheCompany’ssharesandoptionsaresetoutintheRemunerationReport.

MartinKirkham,theformermanagingdirectorofSIASFM,wasappointedtotheBoardon15September2010andresignedon6April2011followingthesaleofSIASFM.

Directors’ responsibilities for the financial statementsThedirectorsareresponsibleforpreparingtheAnnualReportandtheFinancialStatementsinaccordancewithapplicablelawandregulations.

Thedirectorsarerequiredundercompanylegislationtopreparefinancialstatementsforeachfinancialyear.Underthat lawthedirectorshaveelectedtopreparetheGroupfinancialstatements inaccordancewith InternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion,whicharerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandofitsprofitorlossforthatperiod.ThefinancialstatementsfortheParentCompanyhavebeenpreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UnitedKingdomAccountingStandardsandapplicablelaw).UndercompanylawthedirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsoftheCompanyandtheGroupandoftheprofitorlossoftheGroupforthatperiod.

Inpreparingthosefinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandapplythemconsistently;

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Directors’ report(continued)

• makejudgmentsandestimatesthatarereasonableandprudent;

• statewhetherapplicableUnitedKingdomAccountingStandardshavebeenfollowedbytheParentCompanyandapplicableIFRSsasadoptedbytheEuropeanUnionhavebeenfollowedbytheGroup,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;and

• preparethefinancialstatementsonthegoingconcernbasis,unlessit isinappropriatetopresumethattheGroupwillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingadequateaccountingrecordsthataresufficienttoshowandexplaintheCompany’stransactionsanddisclosewithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandGroupandenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.Theyarealsoresponsible forsafeguardingtheassetsof theCompanyandGroupandhence for takingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

Thedirectorshave reasonableexpectation that theGrouphasadequate resources tocontinue inoperationalexistencefortheforeseeablefuture.Forthisreasontheycontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.

ThemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheGroup’swebsiteistheresponsibilityofthedirectors.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

TheBoard’sstatementonCorporateGovernanceissetoutonpage9.

Substantial shareholdingsAt14June2012,theCompanywasawareofthefollowinginterestsof3%ormoreoftheissuedsharecapital:

Ordinary sharesof 6.25peach % No. Interest

ElsinaLimited 19,386,274 58.2

VentureInternationalFMLimited 3,999,960 12.0

MayfieldFulwoodLimited 1,250,000 3.8

WalterKGoldsmith 1,069,826 3.2

EnvironmentInanattempttoaddresstheenvironmentalandenergyissuessurroundingHVACproducts,particularemphasisisplacedintheproductdevelopmentprogrammeonenergyefficiencyandairquality.

CommunicationInvestorsTheCompanyconsidersthatcommunicationwithshareholdersisveryimportant.Inadditiontotheinterimandannualreports,theCompanykeepsitswebsiteuptodatewithnewsaffectingthebusiness.AllshareholdersareencouragedtoattendtheAnnualGeneralMeeting.

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Directors’ report(continued)

EmployeesEmployee consultation, participation and involvement in matters affecting their interests have continued tobedeveloped throughout theGroupduring theyear.TheGroupgivesequalconsideration toapplications foremployment from people regardless of their sex, ethnic origin, age or disability. It is Group policy, whereverpracticable, tocontinue toemploy, trainandpromote thecareerdevelopmentofexistingemployeeswith thesameequalconsideration.

CreditorsTheGroup’spolicyconcerningpaymentstosuppliersiseithertoagreetermsofpaymentatthestartofbusinesswitheachsupplierortoensurethesupplierismadeawareofourstandardtermsofpurchase,whichincorporatestandardtermsofpayment.IneithercasetheGroupaimstomakepaymentsinaccordancewithitscontractualorotherlegalobligations.Creditordaysat31March2012were68(2011:64).

Financial risk managementTheGroup’soperationsexposeittoavarietyoffinancialrisksthatincludetheeffectsofchangesinmarketpricesandcreditrisk.

Liquidity and cash flow riskTheGroupmonitorscashflowasapartofitsnormalactivities.CashpositionsaremonitoreddailyandforecastsarediscussedwiththeBoardonamonthlybasistoensurethatsufficientresourcesareavailabletosupporttheGroup.

Price riskTheGroupisexposedtocommoditypriceriskasaresultofitsoperations.However,giventhesizeoftheGroup’soperations,thecostofmanagingexposuretocommoditypriceriskexceedsanypotentialbenefits.ThedirectorswillrevisittheappropriatenessofthispolicyshouldtheGroup’soperationschangeinsizeornature.TheGrouphasnoexposuretoequitysecuritiespriceriskasitholdsnolistedorotherequityinvestments.

Credit riskTheGrouphas implementedpolicies that requireappropriatecreditchecksonpotentialsignificantcustomersbeforesalesaremadeanditseekstoobtaincreditinsuranceonallthemajortradeaccountsreceivable.

Market riskTheGroup’sperformance isdirectly impactedby theeconomicenvironmentand inparticularanyfluctuationsinthecommercialpropertymarket. InordertomanagethisrisktheGroupstrivestodeliverqualitygoodsandservicesatcompetitiveprices.TheGroupiscontinuallystrivingtoimproveefficiencyandreducecosts.

AuditorsAresolutionistobeproposedattheAnnualGeneralMeetingforthereappointmentofMilstedLangdonLLPasauditorsoftheCompany.

Thereisnorelevantauditinformation(thatis,informationneededbytheCompany’sauditorsinconnectionwithpreparingtheirreport)ofwhichtheCompany’sauditorsarenotaware.Thedirectorshavetakenallthestepsthattheyoughttohavetakenasdirectorsinordertomakethemselvesawareofanyrelevantauditinformationandtoestablishthattheauditorsareawareofthatinformation.

Annual general meetingNoticeofthe2012AnnualGeneralMeetingissetoutonpage42.

ByorderoftheBoard

R M UnsworthCompany Secretary

14June2012

So faras ispossible,given theGroup’ssizeand theconstitutionof theBoard, thedirectorscomplywith theprinciplesofbestpracticeassetoutintheCombinedCodeonCorporateGovernance.

The Audit CommitteeTheBoard has appointed anAuditCommittee, consisting ofWalterGoldsmith (CommitteeChairman), LeighStimpsonandMartinReid.ThisCommitteemeetsatleasttwiceannuallyandisresponsibleforensuringthatthefinancialperformanceoftheGroupisproperlyreportedandmonitoredandformeetingtheauditorsandreviewingtheirreportsinrelationtothefinancialstatementsandinternalcontrolsystems.

TheAuditCommittee reviews theservicesprovidedby theexternalauditorsat leastonanannualbasis.Thisreview includesconsiderationof theconfirmationof independencewhich theexternal auditorsprovide to theGrouponanannualbasisandof theserviceswhich theyprovide to theGroup, inorder toensure that theirindependenceisnotcompromised.

The Remuneration CommitteeTheBoardhasappointedaRemunerationCommittee,whichconsistsofWalterGoldsmith(CommitteeChairman),LeighStimpsonandMartinReid.TheRemunerationCommitteeisresponsibleforreviewingtheperformanceoftheexecutivedirectorswithin theGroupand forsetting thescaleandstructureof their remunerationand thebasisoftheirservicecontracts.GiventhesizeoftheCompany,theRemunerationCommitteewillalsoactastheNominationCommitteeresponsibleforconsideringandrecommendingtotheBoardanychangesintheBoard’scompositionandmembership.

Going concernAftermakingenquiries,thedirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinue inoperationalexistence for the foreseeable future.For this reason, theycontinue toadopt thegoingconcernbasisinpreparingthefinancialstatements.

Internal auditDuetotheGroup’ssmallsizeandtheactiveinvolvementoftheoperationaldirectorsinitsday-to-dayactivities,theBoarddoesnotconsiderthereisaneedforaninternalauditfunction.Thisdecisionisreviewedannually.

Health and safetyDiffusionhasitsownHealthandSafetyOfficer,whoadvisesastoitscomplianceandresponsibility.TheBoardensuresthatallrecommendationsareimplementedinareasonabletimeperiodandfullsupervisionandguidanceisgiven.TheGroupprovidestrainingforrelevantstaffonstatutoryhealthandsafetyrequirementsandwrittenguidanceisgivenintheCompany’shealthandsafetymanual.

ByorderoftheBoard


14June2012

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Remuneration report

Remuneration policy and directors’ service agreementsWalterGoldsmith,Chairman,enteredintoaletterofappointmentwiththeCompanydated24May2007,pursuanttowhichhereceivesremunerationbywayoffeescurrentlyat£25,000perannum.Hedoesnotparticipateinanyincentiveorbenefitscheme,orreceiveanyotherbenefitsinkind.

LeighStimpson,executivedirector,hasacontractofemploymentwiththeCompany’ssubsidiaryETEnvironmentalLimited,pursuanttowhichhereceivesasalaryof£106,000perannumand10%personalpensioncontributions.Inaddition,heiseligibleforcommissionsbasedonsales,ofwhich£16,000waspaidintheyearended31March2012anddiscretionarybonuses.

MartinReid,executivedirector,hasacontractofemploymentwiththeCompany’ssubsidiary,ETEnvironmentalLimited,pursuanttowhichhereceivesasalaryof£80,000perannumand10%personalpensioncontributions,togetherwithdiscretionarybonuses.

Directors’ remunerationTheremunerationofthedirectorswasasfollows:

Salary 2012 Salary Lossof 2011 & fees Bonus Total Pensions &fees office Benefits Total Pensions £000 £000 £000 £000 £000 £000 £000 £000 £000

WalterGoldsmith(1) 15 – 15 – 12 – – 12 –

LeighStimpson 122 5 127 12 118 – – 118 11

MartinReid(2) 80 13 93 8 44 – – 44 4

Current directors 217 18 235 20 174 – – 174 15

MartinKirkham(2) – – – – 33 – 2 35 –

JamesLugg – – – – 23 30 – 53 –

Former directors – – – – 56 30 2 88 –

217 18 235 20 230 30 2 262 15

(1)WalterGoldsmith’sremunerationwasallfeespaidtoTheWalterGoldsmithConsultancy,apartnershipwherehehasa50%share. (2)Sincedateofappointmentin2011.

Directors’ interests in ordinary shares of 6.25p each 14 June 31 March 31March 2012 2012 2011 No. No. No.

WalterGoldsmith 1,069,826 1,069,826 1,069,826

LeighStimpson 36,120 36,120 36,120

MartinReid – – –

ByorderoftheBoard


14June2012

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Wehaveaudited theGroupfinancialstatementsofEnergyTechniquePlc for theyearended31March2012whichcomprisetheConsolidatedStatementofComprehensiveIncome,theConsolidatedStatementofFinancialPosition, theConsolidated Statement of Changes in Equity, theConsolidatedCash FlowStatement and therelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion.

ThisreportismadesolelytotheCompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosemattersweare required tostate to them inanauditors’ reportand fornootherpurpose.To the fullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabodyforourauditwork,forthisreportorfortheopinionswehaveformed.

Respective responsibilities of directors and auditorsAsexplainedmorefully inthedirectors’responsibilitiesstatementsetoutonpages6and7,thedirectorsareresponsibleforthepreparationoftheGroupfinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopinionontheGroupfinancialstatementsinaccordancewith applicable law and International Standards onAuditing (UK and Ireland). Those standards require us tocomplywiththeAuditingPracticesBoard’sEthicalStandardsforAuditors.

Scope of the audit of the financial statementsAnauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.This includesanassessmentof:whethertheaccountingpoliciesareappropriatetotheGroup’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.Inaddition,wereadallthefinancialandnon-financialinformationinthedirectors’reporttoidentifymaterialinconsistencieswiththeauditedfinancialstatements.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on financial statementsInouropinionthefinancialstatements:

• giveatrueandfairviewofthestateoftheGroup’saffairsasat31March2012andoftheGroup’sprofitandtheGroup’scashflowsfortheyearthenended;

• havebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion;and

• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.

Opinion on other matter prescribed by the Companies Act 2006Inouropinion the informationgiven in thedirectors’ report for thefinancialyear forwhich theGroupfinancialstatementsarepreparedisconsistentwiththeGroupfinancialstatements.

Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowing:

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.

Other matterWehavereportedseparatelyontheparentcompanyfinancialstatementsofEnergyTechniquePlcfortheyearended31March2012.

Nigel Fry (Senior Statutory Auditor)For and on behalf of Milsted Langdon LLPChartered Accountants and Statutory AuditorsTaunton14June2012

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Consolidated statement of comprehensive incomefortheyearended31March2012

2012 2011 Asrestated Note £000 £000

CONTINUING OPERATIONSRevenue 5 7,093 5,786

Costofsales (5,102) (4,297)

Gross profit 1,991 1,489

Distributioncosts (1,383) (1,392)

Administrationexpenses (395) (452)

Operating profit/(loss)Beforeexceptionalitems 213 (247)

Exceptionalitems – (108)

6 213 (355)

Financerevenue 7 – 1

Financecosts 8 (40) (42)

Profit/(loss) before tax 173 (396)

Incometaxcharge 9 (25) –

Profit/(loss) for the year from continuing operations 148 (396)

DISCONTINUED OPERATIONSProfit/(loss)fortheyearattributabletodiscontinuedoperations 10 12 (740)

Total comprehensive income/(loss) for the year 11&24 160 (1,136)

Earnings/(losses) per share:Basicanddiluted 13 0.48p (3.43)p

Basicanddilutedfromcontinuingoperations 13 0.45p (1.20)p

There are no other recognised gains or losses other than as recorded in the consolidated statement ofcomprehensiveincomefortheyear.

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ASSETSNon-current assetsIntangibleassets 14 25 25

Plantandequipment 15 336 325

Deferredtaxasset 9 280 305

Total non-current assets 641 655

Current assetsInventories 17 673 745

Tradeandotherreceivables 18 1,382 1,137

Cash 27 393 417

Total current assets 2,448 2,299

Total assets 3,089 2,954

LIABILITIESCurrent liabilitiesTradeandotherpayables 19 (1,205) (1,143)

Currenttaxliabilities (160) (150)

Obligationsunderhirepurchaseagreements 27 (27) (96)

Invoicediscounting 27 (156) (189)

Total current liabilities (1,548) (1,578)

Non-current liabilitiesObligationsunderhirepurchaseagreements 27 (22) (16)

Provisions 20 (110) (111)

Total liabilities (1,680) (1,705)

Net assets 1,409 1,249

EQUITYEquity attributable to equity holdersIssuedcapital 22 7,773 7,773

Reserves 23 7,449 7,449

Retainedearnings 24 (13,813) (13,973)

Total equity 1,409 1,249

ApprovedbytheBoardon14June2012andsignedonitsbehalfby:

W K Goldsmith L A Stimpson

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Consolidated statement of financial positionat31March2012Companynumber00013273

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Consolidated statement of changes in equityfortheyearended31March2012

Share Share Retained capital premium Reserves earnings Total £000 £000 £000 £000 £000

At 1 April 2010 4,351 3,422 7,449 (12,726) 2,496

Priorperiodadjustment – – – (111) (111)Comprehensiveloss – – – (1,136) (1,136)

Total comprehensive loss – – – (1,247) (1,247)

At 31 March 2011 (as restated) 4,351 3,422 7,449 (13,973) 1,249

Comprehensiveincome – – – 160 160

Total comprehensive income – – – 160 160

At 31 March 2012 4,351 3,422 7,449 (13,813) 1,409

Prior period adjustmentThepriorperiodadjustmentat1April2010of£111,000istheestablishmentofaprovisionfortheonerousliabilitiesofemployers’nationalinsuranceandpensioncontributionsonannualpaymentsmadeunderapermanenthealthinsurancepolicy.Thesepaymentshavebeenmadesince2006andtheDirectorsconsideritwasmoreappropriatetoestablishaprovisionforsuchcostsratherthanthepreviouspracticeofexpensingthepaymentsasincurred,formerlychargedunderadministrationexpenses.

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Cash flows from operating activitiesProfit/(loss)beforetax 185 (1,136)

Profit/(loss)ondisposalofSIASFM 10 (12) 416

Netfinancecosts 7&8 40 47

Depreciation(netofdisposalprofits) 11&15 71 92

Operating income/(loss) before changes in working capital 284 (581)

Reduction/(increase)ininventories 72 (29)

Increaseintradeandotherreceivables (245) (161)

Increaseintradeandotherpayables 71 394

Cash generated/(absorbed) by operations 182 (377)

Financecosts 8 (40) (48)

Net cash generated/(absorbed) by operating activities 10 142 (425)

Cash flows from investing activitiesPurchaseofplantandequipment 15 (84) (26)

Disposalofplantandequipment 11 2 –

Financeincome 7 – 1

DisposalofSIASFM:

Consideration 10 12 23

Costsofdisposal – (9)

Cashincompanyondisposal – (136)

Net cash used in investing activities (70) (147)

Financing activitiesReceiptsunderhirepurchaseagreements 38 –

Repaymentsunderhirepurchaseagreements (101) (91)

Net cash used in financing activities (63) (91)

Net increase/(reduction) in cash and cash equivalents 27 9 (663)

Cashandcashequivalentsatbeginningofyear 228 891

Cash and cash equivalents at end of year 237 228

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Consolidated cash flow statementfortheyearended31March2012

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Notes to the consolidated financial statements

1. General informationEnergy TechniquePlc (the “Company”) is a public limited company incorporated in England andWales. TheCompanyisdomiciledintheUnitedKingdomanditsregisteredofficeandprincipalplaceofbusinessis47CentralAvenue,WestMolesey,SurreyKT82QZ.TheprincipalactivitiesoftheCompanyanditssubsidiary(the“Group”)aredescribed in note6. The financial statements arepresented in sterling andall values are rounded to thenearestthousandpounds(£000)exceptwhenotherwiseindicated.

2. Adoption of new and revised standardsStandards and Interpretations effective in the current periodTherewerenonewstandardsadoptedbytheGroupduringthecurrentperiod.

Standards and Interpretations in issue not early adoptedAtthedateofauthorisationofthesefinancialstatements,thefollowingStandards,InterpretationsandAmendmentstoexistingstandardswereinissuebutnotyeteffectiveforthereportingperiodoftheGroup:

• IFRS9 ‘FinancialInstruments’effective1January2013

• IFRS13 ‘Fairvaluemeasurement’effective1January2013

The directors anticipate that the adoption of these Standards, Interpretations and Amendments to existingstandardsinfutureperiodswillhavenomaterialimpactonthefinancialstatementsoftheGroup.

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3. Significant accounting policiesStatement of complianceThefinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEuropeanUnion.

Basis of preparationThefinancialstatementshavebeenpreparedonthehistoriccostbasis.

Basis of consolidationTheGroupfinancialstatementsconsolidate theaccountsof theCompanyandall itssubsidiaryundertakings,whichareallmadeupto31Marcheachyear.

GoodwillGoodwillrepresentstheexcessofthecostofacquisitionsoverthefairvalueoftheidentifiableassetsacquired(includingintangibleassetsoftheacquiredbusiness)atthedateofacquisition.Goodwillisrecognisedasanassetandassessed for impairmentat leastannually.Any impairment is recognised immediately in thestatementofcomprehensiveincome.Thedirectorsconsiderthatgoodwillhasaninfiniteusefullife.

InaccordancewiththetransitionalrulesofIFRSs,goodwillthathasbeenwrittenofftoreservescannotberestatedorrecycled,eitherontransitionoratanylaterdate.Onthesubsequentdisposalorterminationofapreviouslyacquiredbusiness,theprofitor lossondisposalortermination iscalculatedaftercharginggoodwillpreviouslytakentoreserves.

Revenue recognitionRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.Revenueisreducedforestimatedcustomerreturns,rebatesandsimilarallowances.

Revenuefromthesaleofgoodsandservicesisrecognisedwhenallofthefollowingconditionsaresatisfied:

• theGrouphastransferredtothebuyerthesignificantrisksandrewardsofownership;

• theGroupretainsneithercontinuingmanagementinvolvementtothedegreeusuallyassociatedwithownership,noreffectivecontroloverthegoodsandservicessold;

• theamountofrevenuecanbemeasuredreliably;

• itisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheentity;and

• thecostsincurredortobeincurredinrespectofthetransactioncanbemeasuredreliably.

Interest revenueInterestrevenueisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheeffectiveinterestrateapplicable.

Operating leasesPaymentsunderoperatingleasesarechargedtoprofitsonastraight-linebasisoverthelifeofthelease.

Research and development expenditureResearch expenditure iswritten off as incurred. Development expenditure is generallywritten off as incurredunlessitmeetstherecognitioncriteriaofanintangibleasset,asdefinedinInternationalAccountingStandard38(IntangibleAssets),inwhichcaseitwouldberecognisedasanassetoftheGroup.

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3. Significant accounting policies (continued)Foreign currenciesMonetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedintosterlingattheclosingrateofexchangeanddifferencestakentothecomprehensiveincomestatement.Transactionsinforeigncurrenciesarerecordedusingtherateofexchangerulingatthedateofthetransaction.

Borrowing costsBorrowingcostsarerecognisedinthecomprehensiveincomestatementintheperiodinwhichtheyareincurred.

Retirement benefit costsA number of theGroup’s permanent employees aremembers of personal pension plans,which are definedcontributionschemes(moneypurchase).Contributionstotheseschemesarerecognisedasanexpensewhenemployeeshaverenderedservicesentitlingthemtothecontributions.

TaxationNocorporationtaxarisesontheresultsfortheyearbecauseoftheavailabilityoflossesbroughtforward.

Fullprovisionismadefordeferredtaxation,usingtheliabilitymethodwithoutdiscounting,totakeaccountofthetemporarydifferencesbetweentheincidenceofincomeandexpenditurefortaxationandaccountingpurposes.Deferredtaxassetsarerecognisedtotheextentthattheyareconsideredrecoverableintheforeseeablefuture.Anychangesinthedeferredtaxassetarerecognisedimmediatelyinthecomprehensiveincomestatement.

Plant and equipmentPlantandequipmentisstatedatcostlessaccumulateddepreciationandimpairmentcharges.

Depreciationisprovidedonthecostofplantandequipmentonastraight-linebasisinordertowritethemdowntoestimatedrealisablevalueovertheirestimatedusefullivesasfollows:

Rate Plantandequipment between10%and33%perannum

InventoriesInventorieshavebeenvaluedatthelowerofcostandnetrealisablevalue,usingtheFirstInFirstOut(FIFO)costbasis,withdueallowancemadeforobsoleteandslowmovingitems.Forworkinprogressandfinishedgoods,costconsistsofdirectmaterials,labourandappropriateworksoverheads.

Financial assetsTradereceivablesandotherreceivablesthathavefixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasreceivables,whicharemeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment.Interestincomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.

Financial liabilities and equity instruments issued by the GroupDebtandequityinstrumentsareclassifiedaseitherfinancialliabilitiesorasequityinstrumentsinaccordancewiththesubstanceofthecontractualarrangement.

Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofanentityafterdeductingallofitsliabilities.EquityinstrumentsissuedbytheGrouparerecordedattheproceedsreceived,netofdirectissuecosts.

ProvisionsAprovisionhasbeenmadetocovertheonerousliabilitiesofemployers’nationalinsuranceandpensioncontributionsonannualpaymentstobemadeunderapermanenthealthinsurancepolicy.Theprovisionismeasuredatthepresentvalueoftheexpendituresexpectedtosettletheobligationusingpre-taxratesthatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheobligations.

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4. Critical accounting judgments and key sources of estimation uncertaintyIntheapplicationoftheGroup’saccountingpolicies,whicharedescribedinnote3,thedirectorsarerequiredtomake judgments, estimates andassumptions about the carrying amountsof assets and liabilities that arenot readily apparent from other sources. The estimates and associated assumptions are based on historicalexperienceandotherfactorsthatareconsideredtoberelevant.Actualresultsmaydifferfromtheseestimates.

Theestimatesandunderlyingassumptionsarereviewedonanon-goingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisediftherevisionaffectsonlythatperiodorintheperiodoftherevisionandfutureperiodsiftherevisionaffectsbothcurrentandfutureperiods.

ThedirectorsdonotconsiderthereareanycriticaljudgmentsorkeysourcesofestimationuncertaintymadeintheprocessofapplyingtheGroup’saccountingpoliciesandtheamountsrecognisedinthefinancialstatements.

5. Revenue 2012 2011 £000 £000

Continuing OperationsSaleofgoods 6,713 5,450

Renderingofservices 380 336

7,093 5,786

6. Business segments6.1. Products and services within each business segment Formanagementpurposes,theGroupisorganisedintotwooperatingactivities:theDiffusionbusinessand

Centralcosts.Theprincipalproductsandservicesoftheseactivitiesareasfollows:

Diffusion Manufacture anddistributionof fan coils andcommercial heatingproducts, togetherwithaftersalessparesandservicefromitsfacilityinWestMolesey,Surrey.

Centralcosts CostsassociatedwithbeingapubliccompanyandmaintainingtheAIMquotationontheLondonStockExchange.

SIAS FM, the Company’s former buildingmaintenance subsidiary, became non-core during the previousfinancial yearandwassoldon24March2011.Asaconsequence, its resultshavebeen includedunderDiscontinuedOperations.

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6. Business segments (continued)6.2. Segment revenue and segment result Segmentrevenue Segmentresult

2012 2011 2012 2011 Asrestated £000 £000 £000 £000

CONTINUING OPERATIONS Diffusion Beforeexceptionalitems 7,093 5,786 343 (74)

Exceptionalitems – – – (63)

Afterexceptionalitems 7,093 5,786 343 (137)

Central costs Beforeexceptionalitems – – (130) (173)

Exceptionalitems – – – (45)

Afterexceptionalitems – – (130) (218)

Revenue and operating profit/(loss) 7,093 5,786 213 (355)

Netfinancecosts (40) (41)


Incometaxcharge (25) –

Profit/(loss) for the year from Continuing Operations 148 (396)

DISCONTINUED OPERATIONS SIASFM – 1,709 12 (734)

Revenue and operating profit/(loss) – 1,709 12 (734)

Finance costs – (6)


Incometaxcharge – –

Profit/(loss) for the year from Discontinued Operations 12 (740)

Consolidated revenue and result for the year 7,093 7,495 160 (1,136)

Revenuereportedaboverepresentsrevenuegeneratedfromexternalcustomers.Inter-segmentsalesintheyearamountedto£nil(2011:£nil).Diffusionhadonecustomer(2011:nil)withrevenueinexcessof10%.

ThenetfinancecostsunderContinuingOperationsof£40,000(2011:£41,000)comprisesfinancerevenueof£nil(2011:£1,000)andfinancecostsof£40,000(2011:£42,000)byDiffusion.

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6. Business segments (continued)6.3. Segment assets and liabilities Assets Liabilities

2012 2011 2012 2011 Asrestated £000 £000 £000 £000

Diffusion 3,087 2,929 1,658 1,651

Centralcosts 2 25 22 54

3,089 2,954 1,680 1,705

6.4. Other segment information Additionsto Depreciation non-currentassets

2012 2011 2012 2011 £000 £000 £000 £000

Diffusion 73 68 83 9

Centralcosts – 2 1 –

Discontinued – 22 – 17

73 92 84 26

6.5. Geographical segments Acquisitionof Revenue Segmentassets segmentassets

2012 2011 2012 2011 2012 2011 £000 £000 £000 £000 £000 £000

UnitedKingdom 6,248 6,666 3,089 2,954 84 26

Europe 792 297 – – – –

MiddleEast 53 532 – – – –

7,093 7,495 3,089 2,954 84 26

7. Finance revenue 2012 2011 £000 £000

Interestreceivedonbankbalances – 1

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8. Finance costs 2012 2011 Asrestated £000 £000

Invoicediscounting 22 26

Obligationsunderhirepurchaseagreements 4 8

Notionalinterestonprovisions 14 14

40 48

Attributableto:

ContinuingOperations 40 42

DiscontinuedOperations – 6

40 48

The weighted average capitalisation rate, excluding service charges, on funds borrowed generally wasapproximately7.4%perannum(2011:6.4%).

9. Taxation9.1. Taxation charge 2012 2011 £000 £000

Currenttax

–UKcorporationtaxonprofit/(loss)fortheyear – –

Deferredtax(Note9.2)

–Chargeinrelationtoutilisationoftaxlosses 25 –

Total tax charge for the year 25 –

Attributableto:

ContinuingOperations 25 –

DiscontinuedOperations – –

25 –

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9. Taxation (continued)9.1. Taxation charge (continued) The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 26%

(2011:28%).Thedifferencesareexplainedbelow:

2012 2011 £000 £000

Profit/(loss)fromContinuingOperations 173 (396)

Profit/(loss)fromDiscontinuedOperations 12 (740)

Profit/(loss)fromOperations 185 (1,136)

UKcorporationtaxat26%(2011:28%) 48 (318)

Adjustedfor:

(Income)/expensesnot(taxable)/deductiblefortaxpurposes (1) 217

Taxlosses(utilised)/generated (6) 104

Capitalallowancesinexcessofdepreciation (16) (3)

Total tax charge for the year 25 –

9.2. Deferred tax asset Deferredtaxiscalculatedinfullontemporarydifferencesundertheliabilitymethodusingataxrateof23%

(2011:25%).

Themovementonthedeferredtaxaccountisasshownbelow:

Opening Closing balance Movement balance £000 £000 £000

Acceleratedcapitalallowances (21) (1) (22) Short-termtimingdifferences 1 – 1

(20) (1) (21) Taxlosses 1,714 75 1,789

31 March 2011 1,694 74 1,768

Acceleratedcapitalallowances (22) (12) (34) Short-termtimingdifferences 1 25 26

(21) 13 (8) Taxlosses 1,789 (197) 1,592

31 March 2012 1,768 (184) 1,584

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9. Taxation (continued)9.2. Deferred tax asset (continued) Deferredtaxassetsplit:

ET Energy Environmental Technique Ltd Plc Total £000 £000 £000

Acceleratedcapitalallowances (22) – (22) Short-termtimingdifferences 1 – 1 Losses 367 1,422 1,789

31 March 2011 346 1,422 1,768

Acceleratedcapitalallowances (34) – (34) Short-termtimingdifferences 26 – 26 Losses 288 1,304 1,592

31 March 2012 280 1,304 1,584

Thedeferred taxassethasbeen recognised forETEnvironmentalLimited, theGroup’s tradingsubsidiarybecauserecoveryisconsideredreasonablycertain.Thedirectorshavemadenofurtherprovisionduringtheyear.Adeferredtaxassethasnotbeenrecognised in respectof the lossesheld inEnergyTechniquePlcbecauserecoveryisnotconsideredreasonablycertain.

Deferredtaxassetrecognised:

2012 2011 £000 £000

Deferredtaxassettoberecoveredaftermorethan12months 280 305

Deferredtaxassettoberecoveredwithin12months – –

280 305

Therearenodeferredtaxliabilitiesandconsequentlynooffsetofdeferredtaxassetsandliabilities.

Inadditiontothetradinglossesshownabove,theGrouphascapitallossesof£3.8million(2011:£3.8million)andsurplusACTof£0.6million(2011:£0.6million).Neitherofthesehasbeenrecognisedasadeferredtaxassetbecauserecoveryisnotconsideredreasonablycertain.

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10. Discontinued Operations10.1. SIAS FM DiscontinuedOperationscomprisedSIASFMsoldon24March2011toStromaEvolutionLimited,aspecial

purposevehicleofStromaDevelopmentsLimited.

10.2. Analysis of profit/(loss) for the year from Discontinued Operations

2012 2011 £000 £000

Profit/(loss) for the year Revenue – 1,709

Expenses – (2,027)

Operatingloss – (318)

Finance costs – (6)

Profit/(loss)ondisposalofSIASFM 12 (416)

Profit/(loss)beforetax 12 (740)

Incometaxcharge – –

Profit/(loss)aftertax 12 (740)

Cash flows

Netcashabsorbedbyoperatingactivities – (460)

Netcashgenerated/(absorbed)byinvestingactivities 12 (122)

10.3. Analysis of loss on disposal of SIAS FM 2012 2011 £000 £000

Cashproceeds 12 23

Assetsdisposedof:

Goodwill – (359)

Fixedassets – (1)

Cash – (136)

Debtors – (452)

Creditors – 518

12 (407)

Expensesofdisposal – (9)

Loss on disposal before and after tax 12 (416)

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11. Profit/(loss) for the year 2012 2011 £000 £000

Profit/(loss) for the year has been arrived at after charging/(crediting):Impairmentlossontradereceivables 32 93

Depreciationofplantandequipment 73 92

Profitondisposalofplantandequipment (2) –

Researchanddevelopmentcostsexpensedimmediately 191 164

Hireofplantandequipment 12 9

Auditors’remuneration 20 21

Operatinglease–landandbuildings 191 218

Operatinglease–plantandmachinery 118 192

Remunerationpaidtotheauditorsfornon-auditservicesamountedto£3,000(2011:£5,000)fortaxationservices.

DuringtheyeartheCompany’ssubsidiary,ETEnvironmentalLimited,purchasedsupportservicesof£nil(2011:£6,800) fromFolio (UK)Limited,acompanywhereMrJamesLugg,whowasadirectorof theCompanyuntilSeptember2010,hada50%shareholdinginterest.At31March2012,theoutstandingbalancepayabletoFolio(UK)Limitedwas£nil(2011:£169).

12. Employees 2012 2011 Asrestated No. No.

Theaveragenumberofpeople,includingdirectors,employedbytheGroupwas:

Operations 38 50

Salesandservice 20 21

Administration 4 13

62 84

£000 £000

Employee costs:

Wagesandsalaries 1,777 2,479

Social security charges 200 281

Pension costs 42 43

2,019 2,803

Thedirectors’remunerationisdisclosedwithintheRemunerationReportonpage10.

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13. Earnings/(losses) per share 2012 2011 Pence Pence

Basic and diluted earnings/(losses) per shareContinuingOperations 0.45 (1.20)

DiscontinuedOperations 0.03 (2.23)

0.48 (3.43)

Theearningsandweightedaveragenumberofordinarysharesusedinthecalculationofbasicanddilutedearningspershareareasfollows:

£000 £000

Profit/(loss)fromContinuingOperations 148 (396)

Profit/(loss)fromDiscontinuedOperations 12 (740)

Earnings/(losses)usedinthecalculationofbasicanddilutedearningspershare 160 (1,136)

No. No.

Weightedaveragenumberofordinarysharesinissue 33,120,160 33,120,160

Weightedaveragenumberofordinarysharesonadilutedbasis 33,120,160 33,120,160

14. Intangible assets 2012 2011 £000 £000

Cost:

Atbeginningofyear 25 –

Additions – 384

DisposalofSIASFM – (359)

At end of year 25 25

Theadditionsin2011comprisedgoodwillarisingontheBensonassetsacquiredinJuly2009andonSIASFMacquiredinAugust2009.

Goodwillisnotamortised,buttestedannuallyforimpairmentwiththerecoverableamountbeingdeterminedfromvalueinusecalculations.Thesehavebeenpreparedusingdiscountedcashflowforecastsforthenexttwoyearsandapre-taxdiscountrateof15%.

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15. Plant and equipment 2012 2011 £000 £000

Cost:

Atbeginningofyear 1,623 1,616

Eliminatewritten-offassets (869) –

Additions 84 26

Externaldisposals (5) –


At end of year 833 1,623

Depreciation:


Eliminatewritten-offassets (869) –

Providedintheyear 73 92

Disposals (5) –


At end of year 497 1,298

Net book value:


Atbeginningofyear 325 392

Includedinthetotalnetbookvalueoftangiblefixedassetsis£254,000(2011:£249,000)ofassetsheldunderhirepurchaseagreementsonwhichdepreciationof£33,000(2011:£31,000)hasbeenchargedintheyear.

16. SubsidiariesDetailsoftheCompany’soperatingsubsidiaryat31March2012isasfollows:

NameofGroup %shares %votingundertaking Incorporated held held Principalactivity

ETEnvironmental England 100% 100% Manufactureanddistributionof Limited(tradingas commercialairconditioningandDiffusionandEnergy heatingproducts Technique)

AllsharesheldareordinarysharesandareheldbyEnergyTechniquePlc.TheGroupundertakingoperatesintheUnitedKingdomandisengagedinmanufacturing,distributionandmaintenance.DormantGroupundertakingshavebeenexcludedbyvirtueofSection405(2)oftheCompaniesAct2006.

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17. Inventories 2012 2011 £000 £000

Rawmaterialsandconsumables 533 578

Workinprogress 5 5

Finishedgoods 135 162

673 745

Thecostofinventoriesrecognisedasanexpenseduringtheyear,inrespectofbothContinuingandDiscontinuedOperationswas£3.31million(2011:£3.38million).Thecostofinventoriesrecognisedasanexpensewas£52,000(2011:£nil)inrespectofwritedownsofinventoriestonetrealisablevalue.

18. Trade and other receivables 2012 2011 £000 £000

Tradereceivables 1,311 1,137

Allowancefordoubtfuldebts (41) (104)

1,270 1,033

Prepaymentsandaccruedincome 112 104

1,382 1,137

Theaverageperiodofcreditonsalesis50days(2011:46days).Interestisgenerallynotchargedonoverduedebts.TheGrouphasprovidedforalltradereceivablesbasedonestimatedirrecoverableamounts.

TheGroupaimstoobtaincreditinsuranceforallofthetradereceivablesofETEnvironmentalLimited,althoughinthecurrenteconomicenvironmentthishasbecomemoredifficult.Thetradereceivableduefromthelargestcustomerattheyearendwas£156,000(2011:£277,000).Inaddition,therewerefourothercustomers(2011:twocustomers)whoaccountedformorethan5%oftradereceivables.

Indeterminingtherecoverabilityofatradereceivable,theGroupconsidersanychangeinthequalityofthetradereceivablefromthedatecreditwasinitiallygranteduptothereportingdate.Withtheavailabilityofcreditinsuranceandthelimitedconcentrationofcreditriskduetothelargecustomerbase,thedirectorsbelievethereisnofurthercreditprovisionrequiredinexcessoftheallowancefordoubtfuldebts.

18.1. Ageing of past due date but not impaired 2012 2011 £000 £000

Morethan60days – 7

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18. Trade and other receivables (continued)18.2. Movement in the allowance for doubtful debts 2012 2011 £000 £000

Atbeginningofyear 104 36

Impairmentlossesrecognised 32 93

Amountswrittenoff (95) –

SIASFMdisposedof – (25)


19. Trade and other payables 2012 2011 £000 £000

Tradecreditors 1,083 1,069

Othercreditorsandaccruals 122 74

1,205 1,143

Theaverageperiodofcreditonpurchasesis68days(2011:64days).TheGrouphasfinancialriskmanagementpoliciesinplacetoensurethatallpayablesarepaidwithinthecredittimeframe.Asaconsequence,interestisgenerallynotpayableontradepayables.

20. Provisions 2012 2011 £000 £000

Atbeginningofyear 111 –

Priorperiodadjustment – 111

Notional interest 14 14

Payments (15) (14)


The provisions relate to the onerous liabilities of employers’ national insurance and pension contributions onannualpaymentstobemadeunderapermanenthealthinsurancepolicy.

TheannualpaymentsincludeaprovisionforanincreaseunderRPIwhichhasbeenestimatedat2%.Thepre-taxdiscountrateappliedtotheamountspayableis15%.

21. BorrowingsTheGrouphasprovidedLloydsTSBBankPlcwithfixedandfloatingchargesoverallof theGroup’sassets,includingcrossguarantees,assecurityfortheinvoicediscountingfacilitiesprovided.TheGroupusestheinvoicediscountingfacilityforshort-termfluctuationsinworkingcapital.At31March2012,£156,000(2011:£189,000)hadbeendrawndownundertheinvoicediscountingfacility.

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22. Share capital Share capital Share premium 2012 2011 2012 2011 £000 £000 £000 £000

Authorised166,666,667OrdinarySharesof6.25penceeach 10,417 10,417 – –

350,789,120deferredsharesof0.75penceeach 2,631 2,631 – –

13,048 13,048 – –

Allotted, called up and fully paid33,305,160OrdinarySharesof6.25penceeach 2,082 2,082 3,422 3,422


4,351 4,351 3,422 3,422

Thedeferredshareshavenovotingrightsanddonotcarryanyentitlementtoattendgeneralmeetingsof theCompany.Theycarryonlytherighttoparticipateinanyreturnofcapitaltotheextentof0.75ppershare,butonlyaftereachOrdinarySharehasreceivedinaggregatecapitalrepaymentsof£100pershare.

185,000OrdinarySharesof6.25penceeachareheldbytheCompanyintreasuryandrepresent0.56%ofthecalledupsharecapital.

23. Reserves 2012 2011 £000 £000

At beginning and end of year 7,449 7,449

Reservescompriseacapitalreductionreserveof£11.41millionandmergerreliefof£1.56million,lessgoodwillwrittenoffof£4.28millionandamergerreserveof£1.25million.

24. Retained earnings 2012 2011 £000 £000

Atbeginningofyear (13,973) (12,726)

Priorperiodadjustment – (111)

Profit/(loss)fortheyear 160 (1,136)

At end of year (13,813) (13,973)

25. Retirement benefit plansTheGroupcontributestodefinedcontributionretirementbenefitplansforcertainqualifyingemployees.TheassetsoftheplansareheldseparatelyfromthoseoftheGroupinfundsunderthecontroloftrustees.

Thetotalexpenserecognisedinthecomprehensive incomestatementof£42,000(2011:£43,000)representscontributions payable to these plans by theGroup at rates specified in the rules of the plans. At 31March2012,contributionsof£3,000(2011:£3,000)hadnotbeenpaidovertotheplans.Theamountswerepaidoversubsequenttothebalancesheetdate.

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26. Financial instruments26.1. Capital risk management

TheGroupmanagesitscapitaltoensureitwillbeabletocontinueasagoingconcernwhilemaximisingthereturnstostakeholders.ThecapitalstructureoftheGroupconsistsofcashandequityoftheparent,comprisingissuedcapital,reservesandretainedearnings.Inaddition,theGrouphasaninvoicediscountingfacilitytofundvariationsinworkingcapital.

26.2. Short-term trade payables and receivablesShort-termtradepayablesandreceivableshavebeenexcludedfromallofthefollowingdisclosures,apartfromforeignexchangerisk.

26.3. Gearing ratioTheGrouphadnonetborrowingsateither31March2011or31March2012.

26.4. Significant accounting policiesDetailsofthesignificantaccountingpoliciesandmethodsadopted,inrespectofeachclassoffinancialassetandfinancialliabilityaredisclosedinnote3tothefinancialstatements.

26.5. Categories of financial instrument 2012 2011 £000 £000

Cashandcashequivalents 393 417

Obligationsunderhirepurchaseagreements (49) (112)

Invoicediscounting (156) (189)

188 116

CashandcashequivalentsrepresentsamountsdepositedwithLloydsTSBBankPlc.

26.6. Financial risk managementThedirectorsdonotconsideranymaterialbenefitwouldaccruetotheGroupbyusingderivativeinstruments.

26.7. Foreign currency risk managementThedirectorsdonotconsiderthereisanymaterialexposuretoforeigncurrencyfluctuations.

26.8. Interest rate risk managementInterestonthecashdepositswithLloydsTSBBankPlcisvariableandbasedoncurrentratesavailable.Interestpayableontheinvoicediscountingfacility,whendrawndown,is2.50%overbaserate.

Ifinterestrateshadbeen50basispointshigherandallothervariableswereheldconstant,thentheprofitfortheyearandnetequityattheyearendwouldhavedecreasedbyapproximately£2,000(2011:£1,000).

26.9. Financing facilitiesTheGrouphadcashdepositsof£393,000at31March2012(2011:£417,000).Inaddition,theGrouphadaninvoicediscountingfacilitywithLloydsTSBBankPlcofupto50%ofapprovedeligibledebts.Theundrawncommittedinvoicediscountingfacilityisdependentonthelevelofapprovedeligibledebtsatanytimeandamountedto£364,000at31March2012(2011:£339,000).

TheLloydsTSBBankPlcinvoicediscountingfacilityisundatedastoitsdurationandincommonwithallsuchfacilitiesisrepayableondemand.

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26. Financial instruments (continued)26.10. Credit risk management

Creditriskreferstotheriskthatacounterpartywilldefaultonitscontractualobligationsresultinginfinancialloss to theGroup.Thecarryingamountoffinancialassets recorded in thefinancialstatements,netofimpairmentlosses,representstheGroup’smaximumexposuretocreditrisk.

ThecreditriskonliquidfundsdepositedwithLloydsTSBBankPlcwasinexcessof5%ofmonetaryassets,butthisislimitedbecausethecounterpartyisabankwithahighcreditratingassignedbyinternationalcreditratingagencies.

Thecreditriskontradereceivablesismanagedbysellingtoalargenumberofcustomersandobtainingcreditinsurancewhereverpossible.

26.11. Liquidity risk managementThe Group manages liquidity risk by maintaining adequate reserves and banking facilities, and bycontinuouslymonitoring forecast and actual cash flows andmatching thematurity profiles of financialassetsandliabilities.

26.12. Fair value of financial instrumentsThedirectorsconsiderthecarryingamountsoffinancialassetsandliabilitiesrecordedatamortisedcostsinthefinancialstatementsapproximatestofairvalue.

27. Cash and cash equivalents Beginning Cash Non-cash End ofyear flow changes of year £000 £000 £000 £000

Cashatbank 417 (24) – 393Invoicediscounting (189) 33 – (156)

228 9 – 237Obligationsunderhirepurchaseagreements (112) 63 – (49)

116 72 – 188

28. Operating leases28.1. Leasing arrangements

Operating leases relate to properties and certain company vehicles. The lease on theWest Moleseypropertyexpiresin2015andtherearenofurtherrentreviews.Carleasesaregenerallytakenoutforatermofthreeyears.

28.2. Payments recognised as an expense 2012 2011 £000 £000

Landandbuildings 191 218

Plantandmachinery 117 192

308 410

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28. Operating leases (continued)28.3. Non-cancellable operating lease commitments Land&buildings Other 2012 2011 2012 2011 £000 £000 £000 £000

Totalfutureminimumleasepaymentsfallingdue:

Within one year 191 191 34 33

Betweentwoandfiveyears 382 573 62 68

573 764 96 101

28.4. Present value of hire purchase agreements Plant

2012 2011 £000 £000

Within one year 27 96

Betweentwoandfiveyears 22 16

49 112

29. Immediate parent companyTheimmediateparentcompanyisElsinaLimited,whichisincorporatedintheBritishVirginIslands.

30. Ultimate controlling partyInthedirectors’opinion,theultimatecontrollingpartyoftheCompanywastheTchenguizFamilyTrust.

31. Approval of financial statementsThefinancialstatementswereapprovedbytheboardofdirectorsandauthorisedforissueon14June2012.

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Accounts of the parent companyEnergy Technique Plc

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WehaveauditedtheParentCompanyfinancialstatementsofEnergyTechniquePlcfortheyearended31March2012whichcomprisetheParentCompanyBalanceSheet,theParentCompanyStatementofChangesinEquityandtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).

Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.OurauditworkhasbeenundertakensothatwemightstatetotheCompany’smembersthosemattersweare required tostate to them inanauditors’ reportand fornootherpurpose.To the fullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany’smembersasabodyforourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditorsAsexplainedmorefully inthedirectors’responsibilitiesstatementsetoutonpages6and7,thedirectorsareresponsible for the preparation of the ParentCompany financial statements and for being satisfied that theygiveatrueandfairview.OurresponsibilityistoauditandexpressanopinionontheParentCompanyfinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’sEthicalStandardsforAuditors.

Scope of the audit of the financial statementsAnauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogive reasonableassurance that thefinancial statementsare free frommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriatetotheParentCompany’scircumstancesandhavebeenconsistentlyappliedandadequatelydisclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.In addition, we read all the financial and non-financial information in the directors’ report to identifymaterialinconsistencieswiththeauditedfinancialstatements.Ifwebecomeawareofanyapparentmaterialmisstatementsorinconsistenciesweconsidertheimplicationsforourreport.

Opinion on financial statementsInouropiniontheParentCompanyfinancialstatements:

• giveatrueandfairviewofthestateoftheCompany’saffairsasat31March2012fortheyearthenended;

• havebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and

• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.

Opinion on other matter prescribed by the Companies Act 2006Inouropiniontheinformationgiveninthedirectors’reportforthefinancialyearforwhichtheParentCompanyfinancialstatementsarepreparedisconsistentwiththeParentCompanyfinancialstatements.

Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowing:

UndertheCompaniesAct2006wearerequiredtoreporttoyouifinouropinion:

• adequateaccountingrecordshavenotbeenkeptbytheparentcompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• theParentCompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or

• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.

Other matterWehavereportedseparatelyontheGroupfinancialstatementsofEnergyTechniquePlcfortheyearended31March2012.

Nigel Fry (Senior Statutory Auditor)For and on behalf of Milsted Langdon LLPChartered Accountants and Statutory AuditorsTaunton14June2012

Independent auditors’ reporttothemembersofEnergyTechniquePlc

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2012 2011 Note £000 £000

ASSETSNon-current assetsComputerequipment 3 1 –

Investmentsingroupundertakings 4 2,127 2,127

Total non-current assets 2,128 2,127

Current assetsTradeandotherreceivables 5 416 400

Cash – 23

Total current assets 416 423

Total assets 2,544 2,550

LIABILITIESCurrent liabilitiesTradeandotherpayables 6 (27) (65)

Total current liabilities (27) (65)

Total liabilities (27) (65)

Net assets 2,517 2,485

EQUITYEquity attributable to equity holdersIssuedcapital 7 7,773 7,773

Reserves 8 2,336 2,336

Retainedearnings 9 (7,592) (7,624)

Total equity 2,517 2,485

ApprovedbytheBoardon14June2012andsignedonitsbehalfby:

W K Goldsmith L A Stimpson

Energy Technique Plc – Balance sheetat31March2012Companynumber00013273

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Share Share Retained capital premium Reserves earnings Total £000 £000 £000 £000 £000

At 1 April 2010 4,351 3,422 2,336 (6,837) 3,272

Lossfortheyear – – – (787) (787)

Total recognised income and expense – – – (787) (787)

At 31 March 2011 4,351 3,422 2,336 (7,624) 2,485

Profitfortheyear – – – 32 32

Total recognised income and expense – – – 32 32

At 31 March 2012 4,351 3,422 2,336 (7,592) 2,517

Energy Technique Plc – Changes in equityfortheyearended31March2012

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1. Significant accounting policiesStatement of preparationThefinancialstatementshavebeenpreparedonthehistoriccostbasisandinaccordancewithUKGAAP.

DepreciationDepreciation is provided on the cost of fixed assets on a straight line basis in order towrite them down toestimatedrealisablevalueattherateof33%perannum.

Deferred taxationFullprovisionismadefordeferredtaxation,usingtheliabilitymethodwithoutdiscounting,totakeaccountofthetemporarydifferencesbetweentheincidenceofincomeandexpenditurefortaxationandaccountingpurposes.Deferredtaxassetsarerecognisedtotheextentthattheyareconsideredrecoverableintheforeseeablefuture.

Investments in subsidiary undertakingsInvestmentsinsubsidiaryundertakingsarestatedatcost,lessprovisionsforanyimpairmentlosses.

Financial assetsTradereceivablesandotherreceivablesthathavefixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasreceivables,whicharemeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment.Interestincomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.

Financial liabilities and equity instruments issued by the CompanyDebtandequityinstrumentsareclassifiedaseitherfinancialliabilitiesorasequityinstrumentsinaccordancewiththesubstanceofthecontractualarrangement.

Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofanentityafterdeductingallofitsliabilities.EquityinstrumentsissuedbytheCompanyarerecordedattheproceedsreceived,netofdirectissuecosts.

2. Profit and loss account 2012 2011 £000 £000

Profit/(loss)fortheyeardealtwithintheaccountsoftheCompany 32 (787)

AspermittedbySection408oftheCompaniesAct2006,aseparateprofitandlossaccountoftheCompanyisnotpresented.

2012 2011 £000 £000

Auditors’remuneration 5 6

Remunerationpaidtotheauditorsfornon-auditservicesamountedto£1,000(2011:£2,000)fortaxationservices.

Energy Technique Plc – Notes to the financial statements

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3. Computer equipment 2012 2011 £000 £000

Cost:

Atbeginningofyear – 2

Additions 1 –

Disposals – (2)

At end of year 1 –

Depreciation:

Atbeginningofyear – –

Providedintheyear – 2

Disposals – (2)

At end of year – –

Net book value:

At end of year 1 –

Atbeginningofyear – 2

4. Investments in group undertakings Shares in groupundertakings

2012 2011 £000 £000

Cost:


Provisions:


Net book value:

At end of year 2,127 2,127


5. Trade and other receivables 2012 2011 £000 £000

Amountsowedbygroupundertakings 413 391

Currenttaxasset 2 7

Prepaymentsandaccruedincome 1 2

416 400

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Energy Technique Plc – Notes to the financial statements(continued)

6. Trade and other payables 2012 2011 £000 £000

Tradecreditors 7 51

Othercreditorsandaccruals 20 14

27 65

7. Share capital Share capital Share premium 2012 2011 2012 2011 £000 £000 £000 £000

Authorised166,666,667OrdinarySharesof6.25penceeach 10,417 10,417 – –


13,048 13,048 – –

Allotted, called up and fully paid33,305,160OrdinarySharesof6.25penceeach 2,082 2,082 3,422 3,422


4,351 4,351 3,422 3,422

Thedeferredshareshavenovotingrightsanddonotcarryanyentitlementtoattendgeneralmeetingsof theCompany.Theycarryonlytherighttoparticipateinanyreturnofcapitaltotheextentof0.75ppershare,butonlyaftereachOrdinarySharehasreceivedinaggregatecapitalrepaymentsof£100pershare.

185,000OrdinarySharesof6.25penceeachareheldbytheCompanyintreasuryandrepresent0.56%ofthecalledupsharecapital.

8. Reserves 2012 2011 £000 £000


9. Retained earnings 2012 2011 £000 £000

Atbeginningofyear (7,624) (6,837)

Profit/(loss)fortheyear 32 (787)

At end of year (7,592) (7,624)

Notice of Annual General MeetingofEnergyTechniquePlc

Notice is hereby given that the 2012 Annual General Meeting (the “Meeting”) of the members of EnergyTechniquePlc(the“Company”)willbeheldat35ParkLane,LondonW1K1RBon19July2012at12.00Noonforthefollowingpurposes:

ORDINARY BUSINESS

1. Toreceiveandadoptthedirectors’reportandfinancialstatementsfortheyearended31March2012.

2. Toadopttheboard’sreportonremuneration.

3. Toconsiderand,ifthoughtfit,topassthefollowingresolution,whichwillbeproposedasanordinaryresolution:

“ItisresolvedthatMilstedLangdonLLPbeandareherebyreappointedauditorsoftheCompanytoholdofficefromtheconclusionofthismeetinguntiltheconclusionofthenextgeneralmeetingatwhichaccountsarelaidbeforetheCompanyataremunerationtobedeterminedbythedirectors.”

SPECIAL BUSINESS

4. Toconsiderand,ifthoughtfit,topassthefollowingresolution,whichwillbeproposedasanordinaryresolution:

“Insubstitution forallpreviousauthoritiesconferredon thedirectors inaccordancewithsection80of theCompaniesAct1985orsection551oftheCompaniesAct2006(the“Act”)andinaccordancewithsection551oftheAct,thedirectorsbeandaregenerallyandunconditionallyauthorisedtoexerciseallpowersoftheCompanytoallotshares intheCompanyortograntrightstosubscribeforortoconvertanysecurityintosharesintheCompanyuptoamaximumaggregatenominalamountof£7,000,000,providedthatthisauthorityshall(unlesspreviouslyrevoked,variedorrenewedbytheCompany)expireonthedatefallingontheearlierof15monthsfromthedatehereofortheconclusionoftheCompany’sannualgeneralmeetingtobeheldin2013,savethattheCompanymaymakepriortosuchexpiryanofferoragreementwhichwouldormightrequiresuchsharesorrightstobeallottedorgrantedaftertheexpiryofthesaidperiodandthedirectorsmayallotsuchsharesorgrantsuchrightsinpursuanceofanysuchofferoragreementnotwithstandingtheexpiryoftheauthoritygivenbythisresolution.”

5. Toconsiderand,ifthoughtfit,topassthefollowingresolution,whichwillbeproposedasaspecialresolution:

“Subject to the passing of the previous resolution, in substitution for all previous powers granted to thedirectorstoallotequitysecuritiesasifeithersection89(1)oftheCompaniesAct1985orsection561(1)oftheActdidnotapply,thedirectorsbeandaregenerallyempoweredinaccordancewithsection570oftheActtoallotequitysecurities(asdefinedinsection560oftheAct)forcash,pursuanttotheauthorityconferredonitbytheresolutionabove,asifsection561(1)oftheActdidnotapplytoanysuchallotment,providedthatthispowerislimitedto:

(1) theallotmentofequitysecuritiesuptoanaggregatenominalamountof£1,500,000;

(2) theallotment(otherwisethanpursuanttoparagraph5(1)above)ofequitysecuritiesuptoanaggregatenominalamountof£208,000representingnomorethan10%oftheissuedsharecapitalatthedateofthenoticeoftheAGMpursuanttotheexerciseofanyoptionsunderanyoptionarrangementsenteredintobytheCompanyforthebenefitoftheofficersandexecutivesoftheCompany;and

(3) thisauthorityshall,unlessrevoked,variedorrenewedbytheCompanypriortosuchtime,expireonthedatefalling15monthsafterthedateofthepassingofthisresolution,ortheconclusionofthenextAnnualGeneralMeetingoftheCompany,whicheveristheearlier,savethattheCompanymaymakepriortosuchexpiryanofferoragreementwhichwouldormightrequirerelevantsecuritiestobeallottedaftertheexpiryandthedirectorsmayallotequitysecuritiesinpursuanceofanysuchofferoragreementasifthepowerconferredherebyhadnotexpired.

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Notice of Annual General Meeting(continued)

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ThisresolutionrevokesandreplacesallunexercisedpowerspreviouslygrantedtotheDirectorstoallotequitysecuritiesasifsection561(1)ofthe2006Actdidnotapplybutwithoutprejudicetoanyallotmentofequitysecuritiesalreadymadeoragreedtobemadepursuanttosuchauthorities.”

6. Toconsiderand,ifthoughtfit,topassthefollowingresolution,whichwillbeproposedasaspecialresolution:

“THATtheCompany isherebygenerallyandunconditionallyauthorisedtomakemarketpurchases (withinthemeaningofSection693(4)of theAct)ofordinarysharesof6.25peach inthecapitalof theCompany(“OrdinaryShares”)providedthat:

(1) themaximumnumberofOrdinarySharesherebyauthorisedtobepurchasedis6,624,032(representing20%oftheissuedordinarysharecapitaloftheCompany,excludingOrdinarySharesheldintreasury,asatthedateofthisNotice);

(2) themaximumprice (exclusiveofexpenses)whichmaybepaid foreachOrdinaryShare isanamountequalto125%oftheaverageofthemiddlemarketquotationsofanOrdinarySharetakenfromtheAIMappendixtotheStockExchangeDailyListforthefivebusinessdaysimmediatelyprecedingthedayonwhichtheOrdinaryShareiscontractedtobepurchased;

(3) theminimumprice (exclusiveofexpenses)whichmaybepaidforeachOrdinaryShare isthe lowerof6.25pandanamountequalto75%oftheaverageofthemiddlemarketquotationsofanOrdinarySharetaken fromtheAIMappendix to theStockExchangeDailyList for thefivebusinessdays immediatelyprecedingthedayonwhichtheOrdinaryShareiscontractedtobepurchased;and

(4) thisauthorityshall,unlessrevoked,variedorrenewedbytheCompanypriortosuchtime,expireon:thedatefalling15monthsafterthedateofthepassingofthisresolution;ortheconclusionofthenextAnnualGeneralMeetingoftheCompany,whicheveristheearlier,savethattheCompanymayenterintocontractsofpurchasewhichwouldormightbecompletedaftertheexpiryandtheCompanymayacquiresharespursuanttosuchcontractsasiftheauthorityconferredherebyhadnotexpired.”

ByorderoftheBoard

R M Unsworth Registered officeCompany Secretary 47CentralAvenue22June2012 WestMolesey SurreyRegisteredinEnglandNo.13273 KT82QZ



NOTES TO THE NOTICE OF ANNUAL GENERAL MEETINGEntitlement to attend and vote1. PursuanttoRegulation41oftheUncertificatedSecuritiesRegulations2001,theCompanyspecifiesthatonly

thosemembersregisteredontheCompany’sregisterofmembersat:

• 6.00pmon17July2012;or

• ifthisMeetingisadjourned,at6.00pmonthedaytwodayspriortotheadjournedMeeting,

shallbeentitledtoattendandvoteattheMeeting.

Appointment of proxies2. IfyouareamemberoftheCompanyatthetimesetoutinnote1above,youareentitledtoappointaproxy

toexercisealloranyofyourrightstoattend,speakandvoteattheMeetingandyoushouldhavereceivedaproxyformwiththisnoticeofmeeting.Youcanonlyappointaproxyusingtheproceduressetoutinthesenotesandthenotestotheproxyform.

3. AproxydoesnotneedtobeamemberoftheCompanybutmustattendtheMeetingtorepresentyou.DetailsofhowtoappointtheChairmanoftheMeetingoranotherpersonasyourproxyusingtheproxyformaresetoutinthenotestotheproxyform.Ifyoureturntheproxyformwithnonameinsertedforyourproxy,theChairmanofthemeetingwillbedeemedtobeyourproxy.

4. Avotewithheldisnotavoteinlaw,whichmeansthatthevotewillnotbecountedinthecalculationofvotesfororagainsttheresolution.Ifnovotingindicationisgiven,yourproxywillvoteorabstainfromvotingathisorherdiscretion.Yourproxywillvote(orabstainfromvoting)asheorshethinksfitinrelationtoanyothermatterwhichisputbeforetheMeeting.Ifyouwantyourproxytomakeanycommentonyourbehalf,youwillneedtoappointsomeoneotherthantheChairmanoftheMeetingandgivethemtherelevantinstructionsdirectly.

Appointment of proxy using hard copy proxy form5. Thenotestotheproxyformexplainhowtodirectyourproxytovoteoneachresolutionorwithholdtheirvote.

Toappointaproxyusingtheproxyform,theformmustbe:

• completedandsigned;

• sentordeliveredtoCapitaRegistrars,PXS,34BeckenhamRoad,Beckenham,KentBR34TU;and

• received by Capita Registrars no later than 12.00 Noon on 17 July 2012 (being the time that is 48hoursbeforetheMeeting).

Inthecaseofamemberwhichisacompany,theproxyformmustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.

Anypowerofattorneyoranyotherauthorityunderwhichtheproxyformissigned(oradulycertifiedcopyofsuchpowerorauthority)mustbeincludedwiththeproxyform.

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Appointment of proxies through CREST6. CRESTmemberswhowishtoappointaproxyorproxiesbyutilisingtheCRESTelectronicproxyappointment

servicemaydosofortheMeetingandanyadjournment(s)thereofbyutilisingtheproceduresdescribedintheCRESTManual.CRESTPersonalMembers or otherCREST sponsoredmembers and thoseCRESTmemberswhohaveappointedavotingserviceprovider(s),should refer to theirCRESTsponsororvotingserviceprovider(s),whowillbeabletotaketheappropriateactionontheirbehalf.

InorderforaproxyappointmentmadebymeansofCRESTtobevalid,theappropriateCRESTmessage(aCRESTProxyInstruction)mustbeproperlyauthenticatedinaccordancewithEuroclearUK&IrelandLimited’s(EUI)specificationsandmustcontaintheinformationrequiredforsuchinstructions,asdescribedintheCRESTManual.Themessagemustbetransmittedsoastobereceivedbythe issuer’sagent(IDRA10)by12.00Noonon17July2012.Forthispurpose,thetimeofreceiptwillbetakentobethetime(asdeterminedbythetimestampappliedtothemessagebytheCRESTApplicationsHost)fromwhichtheissuer’sagentisabletoretrievethemessagebyenquirytoCRESTinthemannerprescribedbyCREST.

CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersshouldnotethatEUIdoesnotmakeavailablespecialproceduresinCRESTforanyparticularmessages.NormalsystemtimingsandlimitationswillthereforeapplyinrelationtotheinputofCRESTProxyInstructions.ItistheresponsibilityoftheCRESTmemberconcernedtotake(or,iftheCRESTmemberisaCRESTpersonalmemberorsponsoredmemberorhasappointedavotingserviceprovider(s),toprocurethathisCRESTsponsororvotingserviceprovider(s)take(s))suchactionasshallbenecessarytoensurethatamessageistransmittedbymeansoftheCRESTsystembyanyparticulartime.Inthisconnection,CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersarereferred,inparticular,tothosesectionsoftheCRESTManualconcerningpracticallimitationsoftheCRESTsystemandtimings.

TheCompanymaytreatasinvalidaCRESTProxyInstructioninthecircumstancessetoutinRegulation35(5)(a)oftheUncertificatedSecuritiesRegulations2001.

Changing proxy instructions7. Tochangeyourproxyinstructionssimplysubmitanewproxyappointmentusingthemethodssetoutabove.

Notethatthecut-off timeforreceiptofproxyappointments(seeabove)alsoapply inrelationtoamendedinstructions;anyamendedproxyappointmentreceivedaftertherelevantcut-offtimewillbedisregarded.Whereyouhaveappointedaproxyusingthehard-copyproxyformandwouldliketochangetheinstructionsusinganotherhard-copyproxyform,pleasecontactCapitaRegistrars,PXS,34BeckenhamRoad,Beckenham,KentBR34TU.Ifyousubmitmorethanonevalidproxyappointment,theappointmentreceivedlastbeforethelatesttimeforthereceiptofproxieswilltakeprecedence.

Termination of proxy appointments8. InordertorevokeaproxyinstructionyouwillneedtoinformtheCompanybysendingasignedhardcopynotice

clearlystatingyour intention to revokeyourproxyappointment toCapitaRegistrars,PXS,34BeckenhamRoad,Beckenham,KentBR34TUtobereceivedbynolaterthan12.00Noonon17July2012.Inthecaseofamemberwhichisacompany,therevocationnoticemustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.Anypowerofattorneyoranyotherauthorityunderwhich the revocationnotice issigned (oradulycertifiedcopyofsuchpowerorauthority)mustbe includedwiththerevocationnotice. Ifyouattempttoterminateyourproxy’sappointmentbuttherevocationnoticeisreceivedafterthetimespecified,yourproxy’sappointmentwillremainvalid.

AppointmentofaproxydoesnotprecludeyoufromattendingtheMeetingandvotinginperson.IfyouhaveappointedaproxyandattendtheMeetinginperson,yourproxyappointmentwillautomaticallybeterminated.

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Issued shares and total voting rights9. Asat17.00hourson21June2012, theCompany’s issuedsharecapitalcomprised33,305,160ordinary

sharesof6.25penceeach,ofwhich185,000ordinarysharesof6.25penceeachareheldintreasury.Eachordinarysharecarries theright toonevoteatageneralmeetingof theCompanyand, therefore, the totalnumberofvotingrightsintheCompanyasat17.00hourson21June2012is33,120,160.

Documents on display10.ThefollowingdocumentswillbeavailableforinspectionattheMeetingandforatleast15minutespriortothe

MeetingandduringtheMeeting:

• Copiesoftheletterofappointmentofthenon-executivedirectoroftheCompany.

Communication11.Exceptasprovidedabove,memberswhohavegeneralqueriesabouttheMeetingshouldcallourshareholder

helplineon08716640300(noothermethodsofcommunicationwillbeaccepted).Callscost10pperminuteplusnetworkextras.Linesareopenfrom8.30amto5.30pm,MondaytoFriday.

Youmaynotuseanyelectronicaddressprovidedeither:

• inthisnoticeofAnnualGeneralMeeting;or

• anyrelateddocuments(includingthechairman’sletterandproxyform),

tocommunicatewiththeCompanyforanypurposesotherthanthoseexpresslystated.

47E


nnual Report &

Financial Statem

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Key datesPreliminaryannouncementoftheresultsfortheyear 14June2012

2012AnnualReportandFinancialStatementspostedtoshareholdersby 22June2012

AnnualGeneralMeeting 19July2012

Half-yearresultsto30September2012announcedby 14December2012

Registered officeEnergy Technique Plc47CentralAvenueWestMoleseySurreyKT82QZ

Website addresswww.diffusion-group.co.uk

Financial calendar and corporate information

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DIFFUSION

Fan coilsFan coils are traditionally fitted into ceiling voids, under floors or onwallsbehind decorative casings. Fan coils have heat exchangers, which whenfedwithhotwaterorchilledwaterdischargeheatedorcooledair intotheworkingenvironmentprovidingacomfortableandconstantcondition.

Over door heatersOver door heaters are fitted over the external doors of many retail andcommercialbuildings.Heatedbyeitherhotwaterorelectricity, theseunitsprovideabarrierofwarmairpreventingoutsideairfromenteringthebuilding.Inaddition,thehighvelocityjetofairhelpspreventtheingressofinsects.

Fan convectorsFanconvectors are traditionally fitted into ceiling voidsor onwalls and/orbehinddecorativecasings.Theyhaveheatexchangers,whichwhenfedwithhotwater,dischargeheatedairintotheworkingenvironment.

Air handling unitsAirhandlingunitsareusedtoconditionandcirculateairaspartofaheating,ventilating and air conditioning system. Air handling units usually connecttoductworkthatdistributestheconditionedairthroughabuildingandthenreturns it forextractoftenusingheat recoveryunits.Airhandlingunitsaregenerallymountedonbuildingrooftopsorinplantrooms.

Spares and serviceProductsupportandaftersalesservicepredominantlyforownbrandedproducts.

Products and services


Contents 1 Chairman’s statement 4 Directors 5 Advisers 6 Directors’ report 9 Corporate governance 10 Remuneration report 11 Independent auditors’ report 12 Consolidated statement of comprehensive

income

13 Consolidated statement of financial position 14 Consolidated statement of changes in equity 15 Consolidated cash flow statement 16 Notes to the consolidated financial statements 35 Accounts of the parent company

Energy Technique Plc 42 Notice of 2012 Annual General Meeting47 Financial calendar and corporate information48 Products and services

Heating for Marks & Spencer

Fan Coils Heathrow Terminal 2 Heating for Lancashire County Cricket Club

Fan Coils for The Shard Heating for Lincoln House Hotel Fan Coils for Leadenhall Building


Energy Technique Plc47 Central AvenueWest MoleseySurreyKT8 2QZ

Tel: +44 (0)20 8783 0033

Annual Report & Financial Statements 2012

Annual Report & Financial Statements 2012 - Diffusion · PDF fileEnergy Technique Plc Annual...

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Transcript of Annual Report & Financial Statements 2012 - Diffusion · PDF fileEnergy Technique Plc Annual...