Eleco_R_and_A_2009

Eleco House15 Gentlemen’s FieldWestmill Rd, WareHerts SG12 0EFTel: +44 (0)1920 443830Fax: +44 (0)1920 469681E-mail: [email protected]: www.eleco.com

Eleco plc Annual Report and Accounts | 2009

Buildingontechnology

Eleco

plc Annual R

eport and Accounts | 2009

Group Directory

Building SystemsBell & Webster Concrete LimitedGrantham, LincolnshireTel: +44 (0) 1476 562277 Fax: +44 (0) 1476 562944E-mail: [email protected]: www.eleco.com/bellandwebsterManufacturer and supplier of FastBuild™ precast concrete rooms,retaining walls, terracing units and other concrete products.

Milbury Systems LimitedLydney, GloucestershireTel: +44 (0) 1275 857799 Fax: +44 (0) 1275 853123E-mail: [email protected]: www.milbury.comManufacturer and supplier of prestressed and precast retainingstructures.

Gang-Nail Systems LimitedAldershot, HampshireTel: +44 (0) 1252 334691 Fax: +44 (0) 1252 334562E-mail: [email protected]: www.eleco.com/gangnailManufacturer and supplier of roof truss connector plates, EcoJoist®

floor joist webs and associated design and engineering software.

Eleco Bauprodukte GmbHMunich, GermanyTel: +49 (0) 816 187960 Fax: +49 (0) 816 1879633E-mail: [email protected]: www.eleco.com/elecobauprodukteSupplier of roof truss connector plates and associated design andengineering software.

International Truss Systems (Pty) LimitedJohannesburg, South AfricaTel: +27 (0) 11 397 4441 Fax: +27 (0) 11 397 4929E-mail: [email protected]: www.eleco.com/itsSupplier of roof truss connector plates and associated design andengineering software.

SpeedDeck Building Systems LimitedYaxley, SuffolkTel: +44 (0) 1379 788166 Fax: +44 (0) 1379 788161E-mail: [email protected]: www.eleco.com/speeddeckManufacturer and supplier of secret-fix and standing seam metalroofing and Vitesse® wall and rainscreen cladding systems.

Downer Cladding Systems LimitedYaxley, SuffolkTel: +44 (0) 1379 787215 Fax: +44 (0) 1379 788161E-mail: [email protected]: www.eleco.com/downerSupplier of fixing and support systems for rainscreen cladding.

Prompt Profiles LimitedNorwich, NorfolkTel: +44 (0) 1603 720090 Fax: +44 (0) 1603 720202E-mail: [email protected]: www.eleco.com/promptprofilesManufacturer and supplier of profiled metal products for the roofingsystems industry.

Eleco Timber Frame LimitedYaxley, Suffolk Liverpool, MerseysideTel: +44 (0) 1379 783465 Tel: +44 (0) 151 448 0066Fax: +44 (0) 1379 783659 Fax: +44 (0) 151 448 0066Website: www.eleco.com/elecotimberframeManufacturer and supplier of ElecoFrame® timber frame, EcoJoist®

floor joist and ElecoFloor® acoustic flooring products.

SoftwareAsta Development plcThame, OxfordshireTel: +44 (0) 1844 261700 Fax: +44 (0) 1844 261314E-mail: [email protected]: www.astadev.comDeveloper and supplier of project and resource management software.

Asta Development GmbHKarlsruhe, GermanyTel: +49 (0) 721 95 250 Fax: +49 (0) 721 95 25100Email: [email protected]: www.astadev.deSupplier of project and resource management software.

Consultec Byggprogram ABSkellefteå, SwedenTel: +46 (0) 910 87878 Fax: +46 (0) 910 87809E-mail: [email protected]: www.consultec.seDeveloper and supplier of building project software.

Consultec System ABSkellefteå, SwedenTel: +46 (0) 910 87800 Fax: +46 (0) 910 87849E-mail: [email protected]: www.consultec.seDeveloper and supplier of design and engineering software.

Consultec Arkitekter & Konstruktorer ABSkellefteå, SwedenTel: +46 (0) 910 87800 Fax: +46 (0) 910 87809E-mail: [email protected]: www.consultec.seArchitectural consultancy and software reseller.

Eleco Software LimitedAldershot, HampshireTel: +44 (0) 1252 339148 Fax: +44 (0) 1252 332287E-mail: [email protected]: www.3darchitect.co.ukDeveloper and supplier of 3D design software.

Eleco Software GmbHHameln, GermanyTel: +49 (0) 5151 787 9928 Fax: +49 (0) 5151 787 9929E-mail: [email protected]: www.elecosoftware.deDeveloper and supplier of 3D design software.

Esign Software GmbHHanover, GermanyTel: +49 (0) 511 856 14340 Fax: +49 (0) 511 856 14343E-mail: [email protected]: www.e-sign.comDeveloper and supplier of software solutions for the floor coveringsindustry.

Annual Report and Accounts 2009

Job No.: 1367 Proof Event: 23 Park Communications Ltd Alpine Way London E6 6LACustomer: Eleco Project Title: Annual Report T: 020 7055 6500 F: 020 7055 6600


Eleco plc

ELECO plc

Eleco is a group focused on key components of amodern construction project. Building Systems used inthe fabric of the building, Software tools used tomanage the construction project and sustainableconstruction to enhance environmental performance.

Eleco SoftwareEleco Software provides softwareapplications to help constructionbusinesses manage each stage ofthe project lifecycle, satisfying theirdrive for greater efficiency throughimproved management ofprojects.

Eleco Building SystemsEleco Building Systems focuseson modern methods ofconstruction to provide materialsefficiency and construction speedin precast concrete, timber andmetal.

Sustainable ConstructionEleco is a group focused onsustainable construction improvingenvironmental performancethrough material efficiency, fasterconstruction times and efficientmanagement of projects.

1367 Eleco R&A IFC & IBC:1367 Eleco R&A IFC & IBC 14/10/09 12:09 Page 2

Chairman’s Statement 2Business Activity Review – Building Systems 4Business Activity Review – Software 6Financial Review 7Board of Directors and Company Advisers 10Directors’ Report 11Independent Auditor’s Report 15Consolidated Income Statement 16Consolidated Statement of Recognised Income and Expense 16Consolidated Balance Sheet 17Consolidated Cash Flow Statement 18Significant Accounting Policies 19Notes to the Consolidated Financial Statements 23

Independent Auditor’s Report 46Company Balance Sheet 47Statement of Company Accounting Policies 48Notes to the Company Financial Statements 49Five Year Summary 55Financial Calendar 55Capital Gains Tax 55Notice of Meeting 56Explanatory Notes of the Principal Changesto the Company’s Articles of Association 58

Summary of the Terms of the proposed Eleco plcLong Term Incentive Plan 59

Group Directory IBC

Financial Highlights

Annual Report and Accounts 2009 1


2009 2008£’000 £’000

Revenue 70,555 84,909

Trading profit 119 8,022

(Loss)/profit from operations (1,150) 8,022

(Loss)/profit for the year (1,469) 6,133

(Loss)/earnings per share (2.5)p 10.6p

Dividends per share

Interim 0.4p 1.0p

Proposed final 0.4p 2.0p

0.8p 3.0p

Dividend cover – 3.5 times

Capital expenditure 2,941 4,016

Net Funds 908 5,848

Contents

1367 Eleco R&A Text p01-60:1367 Eleco R&A Text p01-60 14/10/09 12:07 Page 1

Chairman’s Statement

In my statement for the year ended 30 June 2008, I reportedcontinuing progress due to a strong performance from ourexpanded precast concrete interests. Unfortunately, this year Ihave to report that our results for the year to 30 June 2009 wereadversely affected by a significant setback for our precastconcrete interests, because of a major decline in hotel andstudent accommodation projects. We also experienced difficulttrading conditions generally in the remainder of our businesses,although our construction software businesses performed in linewith management expectations following the supply chain issuesreported in the first half of the year.

The unprecedentedly difficult trading conditions of the pasteighteen months have necessitated an increasingly rigorousapplication by management of sound financial and strategicpolicies to mitigate the effect of the economic circumstances. Thishas involved a major downsizing of our workforce in the UK in theface of falling demand, while continuing to invest in certainstrategic capital and product development projects. As aconsequence, despite the significant downturn in demand,experienced in particular by our UK Building Systems businesses,the Group has succeeded in maintaining a relatively strongfinancial position.

Group Performance SummaryGroup turnover for the year declined by 16.9% to £70.6m(2008: £84.9m).

Group trading profit, after deducting intangible asset amortisationcosts for the year of £712,000 (2008: £531,000), was sharplylower at £119,000 (2008: £8.02m).

After impairment charges of £1.27m (2008: Nil), the Group made aloss on ordinary activities before tax of £1.43m (2008: profit£8.22m), after net finance charges of £280,000 (2008: net financeincome £202,000).

Group loss for the year after tax was £1.47m (2008 Group Profitafter Tax: £6.13m) equivalent to a loss per share of 2.5p (2008:10.6p earnings per share). Reflecting the reduction in activityexperienced in the year, operating cash flows were sharply lowerbut nevertheless the Group ended the year with net cashbalances of £1.59m.

We continued to invest in new capital projects and productdevelopment in the period, although the amount of spend waslower at £2.94m (2008: £4.02m). In the current economic climate,we anticipate a lower rate of spend this year.

DividendsThe Board considers that it would be justified in recommending amodest final dividend and has accordingly decided to propose afinal dividend for the year ended 30 June 2009 of 0.40p per sharealthough total dividends paid and proposed, amounting to 0.80pper share for the year (2008: 3.00p) will be uncovered by earnings.

The proposed final dividend will, subject to approval byshareholders, be paid on 20 November 2009 to shareholders onthe Register on 23 October 2009.

DirectorsFollowing the closer integration of the activities of the BuildingComponents operations with others within the Building SystemsDivision, Paul Taylor left the Board on 8 October 2009. He joinedthe Board in July 2000 and has been tireless in his efforts onbehalf of the Company and in dealing with some of the moredifficult challenges.

I would like to thank him on your behalf for his contribution to theGroup’s affairs and wish him well.

Fred Newby has been appointed Deputy Chairman. He has alsobeen appointed Divisional Chief Executive of the UK BuildingSystems Division. Michael McCullen has been appointedDivisional Chief Executive of the Software Division.

2 ELECO plc



OutlookWe reported on 13 August 2009 that the uplift in activity in thefourth quarter of the financial year had not materialised to thedegree anticipated.

At this stage in the current year, I have to report that while we haveexperienced more confidence in some of the sectors in which weoperate, this improvement in business sentiment has not yetproduced a tangible change to our key Precast Concretebusinesses. Nevertheless I am confident that, in time, our recoverywill be driven by increasing use of modern methods ofconstruction, which are inherent in our Building Systems’ productoffering; by the increasing requirement for efficiency in the buildprocess, delivered by the application of our resourcemanagement software; and by our ongoing commitment to theethos of sustainable construction.

We have prospects in the pipeline. We are leaner and fitter as aGroup and can look forward to the full benefit of the costreductions achieved in the previous year. We have maintained ourrelatively strong financial position in difficult conditions.Accordingly, Eleco is well placed to take full advantage of anyupturn when it comes.

John KetteleyExecutive Chairman

9 October 2009



University of BirminghamBell & Webster Concrete

Midsummer Shopping CentreDowner Cladding Systems

The Pinnacle (CGI) – Asta Powerproject®

Asta Development UK


Business Activity Review –Building SystemsAll our Building Systems products are incorporated in the structureor the envelope of new buildings. Accordingly, the major downturn in new build starts in the year under review quickly affecteddemand for our products. As a consequence, turnover of ourBuilding Systems operations decreased by 20% to £57.4m (2008:£72.0m) and operating profit before impairment charges reducedto £0.3m (2008: £7.4m).

In normal market circumstances, our products are applied toprojects using ‘Modern Methods of Construction’ techniquesbecause such products deliver to our customers the advantagesof speed and efficiency. However in current conditions cost andslower cash flow profiles have become a primary driver and theuse of traditional “in situ build” techniques, even though this lessefficient build method has in some instances emerged as a threat,even though the overall economic benefit of using these productsoutweighs the perceived cost benefit. However, we are confidentthat this is a temporary situation and that speed and efficiency willagain become the primary drivers as the market recovers.

Precast ConcreteTurnover of our Precast Concrete operations reduced by 16% to£31.8m (2008: £37.9m) and operating profit before impairmentcharges decreased to £0.4m (2008: £4.1m).

A major cost reduction program has been on going through outthe year against a backdrop of greater competition and marginerosion. Nevertheless, our ongoing commitment to improvementwas evidenced by Bell & Webster Concrete and Milbury Systemscompleting the necessary environmental enhancement work ontheir respective sites to gain full certification under ISO 14001. Bell& Webster Concrete also gained OHSAS 18001:2007accreditation.

Bell & Webster Concrete started the year with a reduced forwardorder book from the previous year, but with a very promisingprospects list. However, our clients experienced great difficulty inthe first half year in gaining funding for their projects, although inthe second half of the year a number of projects did gain fundingand are now in manufacture. Unfortunately, in a number ofinstances clients have still not been able to obtain funding for theirprojects and as a consequence a number of these projects havestill not progressed to order stage. Nevertheless, Bell & WebsterConcrete started the current year with a forward order book higherthan last year.

Bell & Webster Concrete launched a new long span slab duringthe year which is manufactured at the new plant at Hoveringham.This slab has already been incorporated as part of the flooring fora number of student accommodation projects and has enabledBell & Webster Concrete to compete for school, hostel,care/nursing home, key worker accommodation and custodialstructures. We have recently won our first orders for the newproduct for a school and a hostel. We are also continuing to makeprogress in gaining acceptance for Bell & Webster Concreteproducts in the custodial accommodation market.

Bell & Webster Concrete also re-established itself as a supplier inthe terracing market and finished the year back in manufacture ofstadia units.

Demand for retaining walls held up during the year. The whole ofBell & Webster Concrete’s range of retaining walls, have beenupdated to comply with the new design codes which are to comeinto force in March 2010. The opportunity has also been taken torationalise our retaining wall sizes as part of our investment in newmoulds. Milbury Systems previously outsourced their retaining wallrequirement externally however, they are now supplied by Bell &Webster Concrete.

Milbury Systems had a very difficult trading year, with an everdecreasing order intake from the Irish market and the industrialsector, which, after housing, suffered the greatest percentagereduction of new orders in the construction industry. However,sales into the agricultural market were maintained. Milbury’sresponse has been to reduce its cost base and improve itsfacilities and product quality. It has also invested in people tobroaden its market sectors and market penetration.

4 ELECO plc


Brunel UniversityBell & Webster Concrete


Roofing and Cladding, Timber Frame and TimberEngineering SystemsRevenues were down 25% at £25.6m (2008: £34.1m). Operatingloss was £0.1m (2008: profit £3.3m) which reflected difficulttrading conditions across each segment, reflecting increasedcompetition, timing delays and cancellation of projects.

Roofing and CladdingMarket conditions for the roofing and cladding companiescontinue to be most difficult and our forward order bookdecreased in the second half of the year. Competition increasedand trading margins continued to be eroded. A program toreduce operating costs has been undertaken which has taken intoaccount the need to retain core skills and knowledge so that wecan respond positively and take advantage of any upturn in thegeneral market conditions. SpeedDeck substantially reduced itscash usage by strategic stock reduction. Downer Claddingcontinued to make a positive contribution in the year andperformed well in the conditions.

Timber FrameThe difficulties that have faced the housing sector during thecourse of the last 18 months are well documented with the lowesthouse starts since 1947. Although ETF had initially been a supplierto the private housing market, 80 per cent of its forward orderbook at the end of the financial year was for Social Housingprojects. While continuing to refocus into the Social Housingsector, ETF also carried out its first hotel project during the year.The Company has streamlined its internal processes to enable itto more easily respond to increasingly successful lead generation.

Timber Engineering SystemsThe UK business is predominately a timber engineering systemprovider to roof truss fabricators which supply the UK and Irishhouse building markets and were therefore greatly affected by thevery significant drop in housing starts during the year. Owing to ourproduct mix revenues in the first half did not reduce as drasticallyas the reported overall market. However, in the second half ourinter Group revenue was lower. Gang-Nail Systems has taken theopportunity in this period of lower output to give our plant anextensive overhaul. It is also continuing to invest in improvementsfor our existing software and is also working towards a suite of newgeneration software incorporating the latest technologies.

In Germany, Eleco Bauprodukte has benefited from its strongrelationships in the supermarket sector and performed aboveprevious years levels. However, some operational issues relatingto the businesses’ software rights is likely to have an adverseimpact on performance going forward.

In South Africa, International Truss Systems has been affected bythe adverse change in local economic conditions and its markethas also been impacted by a new entrant to that market.Nevertheless, it has performed generally in line with expectations.

Fred NewbyDivisional Chief Executive – UK Building Systems



BMW MiniDowner Cladding Systems

Eleco Timber Frame

EcojoistGang-Nail Systems


Business Activity Review –SoftwareEleco’s software businesses are organised into two divisions:Construction and Visualisation. Turnover of our Software operationsdecreased by 2% to £13.4m (2008: £13.7m). Our Softwareoperations made an operating profit of £343,000 (2008: £1.4m).After amortisation of intangible assets of £491,000, impairmentcharges of £269,000 and restructuring costs of £44,000 theSoftware operation made a net loss of £461,000 (2008: Net profitof £945,000, after total acquisition accounting adjustments andamortisation of intangible assets of £423,000). Fully expenseddevelopment costs were £2.3m (2008: £2.3m).

The Consultec businesses in Sweden performed very well,maintaining a strong position in their markets and achieving recordresults.

Consultec Byggprogram successfully launched the nextgeneration of its estimating software, Bidcon® and established adistribution channel in Australia for its site management software,Sitecontrol. Consultec System completed a new CAM (ComputerAided Manufacturing) product to enable its staircase designsoftware Staircon® to reliably control CNC machines for theproduction of stairs. The new product will be launched in theAutumn.

Consultec Arkitekter & Konstruktorer is a service business offeringarchitectural and consultancy services. By focusing on offering ahigh level of customer service, it was able to successfully retain itslarger clients in a more competitive market.

Asta Development experienced a slow down in the UK for itsproject management software Asta Powerproject® due to thereduced number of project starts in the construction industry. Itresponded by reducing costs in order to successfully protectmargins. The take-up and renewal of annual softwaremaintenance contracts remained high throughout the period. Inaddition, Asta expanded overseas, establishing a new Elecosubsidiary company in Germany to market its products in Germanspeaking territories. Asta Development GmbH made a usefulcontribution to profits in the period.

Eleco Software GmbH performed well and delivered very positivemargins from the sale of its 3D design tool Arcon in Germany andfrom the sale of a retail version of the product both locally andinternationally.

ESIGN Software GmbH met with a difficult market for the sales ofits software and service offering to flooring manufacturersthroughout Europe, resulting in a break-even position for thebusiness.

There had been high expectations for Eleco Software in the UK forthe sale of the retail version of our 3D design tool Arcon under theGrand Designs brand name. However distribution problemsduring the peak Christmas sales period together with a decline inretail sales generally resulted in disappointing sales and a loss forthe business.

The market for our professional construction software productsappears to have stabilised and some improvement is expectednext year. Healthy maintenance revenues and a steady level ofnew sales indicate that customers still desire the products andservices marketed by Eleco. Internationally diverse markets willcontinue to be a strength with some territories such as Swedenbeing less badly affected by the global economic slowdown thanthe UK. There are likely to be opportunities for growth in the UK asthe economy improves and overseas by strengthening ourdistribution channels.

All of Eleco’s software interests now fall within the same strongmanagement discipline. This restructuring exercise will result infurther cost reductions at Eleco Software in the UK.

The Software division will have a unified vision as the provider of asuite of software tools to help manage each stage of theconstruction project lifecycle from project visualisation, throughdesign, cost estimation and project management to sitemanagement.

Michael McCullenDivisional Chief Executive – Software

6 ELECO plc


British Museum – Asta Powerproject®

Asta Development UK

Residential VisualisationEleco Software GmbH


Financial Review



The global economic recession and the problems for the UKconstruction sector in particular are well reported. The last yearhas been very difficult for most of the Group’s operations and theimpact of this is evident in the results for the year ended 30 June2009 of the Group overall.

Trading resultsGroup revenues fell by 16.9% to £70,555,000 from £84,909,000.Before impairment charges of £1,269,000, operating profits were£119,000 compared with £8,022,000 the previous year.

While revenues in the first half-year at £37,160,000 were down5.6% on the equivalent period in the previous financial year,revenues further declined in the second half-year to £33,395,000and were some 26.5% below those of the equivalent period – areflection of the strength of the deterioration in market conditions,with project opportunities reducing in number and with marginscoming under stronger pressure. Despite the further decline inrevenues, the contained operating loss in the second half-year of£106,000 reflected the cost reduction measures progressivelyundertaken during the year.

As set out in the segmental analysis of results shown in note 2 tothe financial statements, the underlying operating profit for theyear, after adjusting for intangible asset amortisation andimpairment charges and restructuring costs incurred, was£1,205,000 (2008: £9,033,000).

The results include two charges identified as non-recurring.Impairment charges of £1,269,000 and restructuring costs of£374,000.

The Board conducted an impairment review of all cash generatingunits (CGU’s) in which there is goodwill recognised in theaccounts and of other assets where indicators of impairment hadarisen. In view of the decline in profitability at Milbury Systems andthe risk factors associated with the projections of a recovery tohigher profitability, it was concluded that a one-off impairmentcharge, with no cash effect, of £1,000,000 be made to thecarrying value of goodwill in the Milbury Systems CGU.Additionally, a charge of £269,000 has been made in respect ofthe Grand Designs 3D contract to reflect the estimated shortfallbetween contract payments made and remaining payable andanticipated revenues from software sales during the term of thearrangement.

During the year, it became unfortunately necessary to reduceemployee numbers across the Group, the effect of which waslargely to reverse the increase in headcount in recent years. Thecosts incurred in implementing the redundancy programmesamounted to £374,000.

Net bank and lease interest receivable was £46,000 (2008:£115,000). The reduction was due to both the decline in the netcash balances during the year and the major reduction in interestrates. To the extent that the Group held cash balances overseasduring the year and whilst all bank borrowings are incurred in theUK, the fall to very low levels in UK base rates produced someinterest advantage during the year. Under IAS 19, a finance chargeof £326,000 is reported (2008: finance income £87,000) being thedifference between the net investment return on assets of theEleco Retirement and Benefits Scheme expected at the outset ofthe year and the unwinding of the discount during the year used todetermine the Scheme liabilities at the beginning of the year.

Taxation, earnings and dividendA full reconciliation of the tax charge for the current year of £39,000representing an effective rate on profits (before intangible assetamortisation charges and pension scheme finance chargesrecognised on consolidation) of 3.8% (2008: 25.4%) is detailed innote 7 to the financial statements. Included in the overall taxcharge for the year, is £330,000 tax credit in respect of loss carryback claims and adjustments in respect of previous years and adeferred tax credit of £275,000 arising on timing differences. Theeffective UK mainstream Corporation Tax rate in the year was 28%(2008: 29.5%).

The loss per share was 2.5p (2008: earnings 10.6p). Adjusted forthe £1,463,000 after tax impact of the identified non-recurringitems, the adjusted loss per share was 0.0p per share.

The final dividend proposed of 0.40p per share makes a total of0.80p paid and proposed for the year. The Employee ShareOwnership Trust has waived its rights to dividends on the 956,593shares held by it and there are 59,701,646 shares ranking for thefinal dividend proposed.

Shareholders’ equity and net assetsAt 30 June 2009, shareholders’ equity amounted to £21,566,000,after recognising £6,912,000, net of the related deferred tax asset,as a retirement benefits liability, compared with £25,220,000 at30 June 2008. Reflecting the experience impact of the triennialvaluation and the updating of actuarial assumptions to 30 June2009, £1,247,000 of actuarial losses net of the related deferred taxwere recognised directly to shareholders’ equity.

At 30 June 2009, net tangible assets, after taking account of theretirement benefits liability now accounted for under IAS 19,represent 53% of total net assets compared with 51% the previousyear.


Financial Review(continued)

8 ELECO plc


105% (2008: 110%) of the Group’s net assets before bankfinancing and 96% (2008: 71%) of net assets are Sterlingdenominated. Further analysis of the Group’s transactionalcurrency and interest rate exposures is given in note 27 to thefinancial statements.

The Group’s overall deficit, before related deferred tax, in theEleco Retirement and Benefits Scheme increased to £9,599,000at 30 June 2009 from £7,961,000 the previous year. During theyear, £450,000 of deficit recovery contributions were made and,following the latest triennial valuation, these have been agreed withthe Trustees at £803,000 a year. In view of the high and increasingcost of the ongoing defined benefits provided under the Schemeand the necessity of giving priority to securing over the yearsahead the deficit position of the Scheme, consultations have beencommenced with the existing active members of the Schemeregarding the Company’s proposal to close the Scheme to futureaccrual.

Gearing and cash flowTotal net cash in hand at 30 June 2009 amounted to £908,000 netof lease borrowings of £683,000 (2008: £5,848,000). Hence,

despite the difficult year the Group remained ungeared at 30 June2009, with net cash balances representing at 30 June 2009approximately 4.2% of shareholders’ funds.

The summary Group cash flow is shown below. After takingaccount of the £374,000 restructuring costs incurred, operatingcash flow was broadly neutral. With customers looking to retaincash for longer during the procurement process and suppliersunder similar liquidity pressures, the overall Group operatingcashflow performance was robust under the circumstances.

Capital expenditure during the year on tangible and intangiblefixed assets, excluding assets acquired under leasingarrangements, amounted to £2,941,000 (2008: £4,016,000).£205,000 was further expended on the acquisition of AstaDevelopment GmbH.

The limited operating cash flow combined with the continuing,albeit reduced, investment activity, settlement of taxation liabilitiesand the payment of dividends, resulted in a net cash outflow forthe year of £5,368,000.

2009 2008£’000 % £’000 %

Intangible assets 16,958 79% 18,001 71%Retirement benefits liability (net of deferred tax) (6,912) (32%) (5,732) (22%)Other net tangible assets 11,520 53% 12,951 51%

21,566 100% 25,220 100%

The analysis of the Group’s net assets and borrowings by currency at 30 June 2009 is as follows:

Net assets Net assetsbefore after bank

£000’s financing Net cash financing 2008

Sterling 21,053 (358) 20,695 17,944Euro 57 922 979 1,776Swedish Krona (1,887) 412 (1,475) (12)South African Rand 677 606 1,283 2,783Other 75 9 84 90

19,975 1,591 21,566 25,220




Capital and financingThe Group’s capital structure remained largely unchanged and at30 June 2009 the Group remained ungeared.

The structure of the maturity profile of the Group’s leaseborrowings and bank borrowing facilities at 30 June 2009 are setout in notes 19 and 27 to the financial statements. The principalfinancial borrowing covenants in relation to the bank facilities arefor net interest payable to be covered not less than 3 times byEBITA.

In April 2009, the £4,500,000 term loan was drawn down. This willbe repayable in 20 quarterly instalments commencing 2 yearsfollowing drawdown. During the year drawings were made andsubsequently repaid under the revolving loan facility. This£10,000,000 facility expires in July 2012.

David S DannhauserFinance Director

9 October 2009

Summary Group cash flowYear ended Year ended

30 June 30 June2009 2008£’000 £’000

Cash inflow from continuing operations 1,529 11,911Capital expenditure net of proceeds from fixed asset disposals (2,870) (3,867)Interest 9 138Tax (1,949) (1,956)Free cash flow (3,281) 6,226Acquisitions and disposals (205) (2,963)Loan to Employee Share Ownership Trust (62) (15)Repayment of principal under finance leases (397) (428)Equity dividends paid (1,423) (1,600)Net cash (outflow)/inflow (5,368) 1,220Exchange adjustment 151 188(Decrease)/increase in net cash balances (5,217) 1,408

Aberdeen AcergySpeedDeck Building Systems

Wimbledon Centre Court Retractable Roof– Asta Powerproject®

Asta Development UK

Williams WharfEleco Timber Frame


Board of Directors and Company Advisers

10 ELECO plc


John Ketteley FCAExecutive ChairmanAppointed Executive Chairman in 1997,John Ketteley has an investment bankingbackground. He was formerly non-executiveChairman of BTP plc, Country Casuals plc

and Prolific Income plc. Age 70.

Fred NewbyDeputy Chairman and Divisional ChiefExecutive – UK Building SystemsAppointed a Director in April 2005. FredNewby has been Managing Director ofBell & Webster Concrete Limited since 1994.

Appointed Deputy Chairman in February 2009. Age 62.

David Dannhauser MA ACAFinance DirectorAppointed Finance Director in February 1994.David Dannhauser was previously a Directorof Caverdale Group PLC. Age 54.

Michael McCullenDivisional Chief Executive – SoftwareMichael joined the Board of Eleco plc inMarch 2007 and is Chief Executive of ElecoSoftware. Age 47.

Jonathan Cohen TD MA FCA*Chairman of the Audit CommitteeAppointed a Non-Executive Director inNovember 2002. Jonathan Cohen waspreviously Chief Executive of County NatWestLimited and Vice Chairman of Charterhouse

Bank Limited. He is currently Chairman of Savile Group plc, aNon-Executive Director of The Rose Partnership LLP and a Directorof Clearwater Hampers Limited. Age 65.

Tom Quinn*Chairman of the RemunerationCommitteeAppointed a Non-Executive Director inNovember 2000. Tom Quinn was previouslya partner of W Greenwell and Company,

stockbrokers, a Director of Samuel Montague and Company Limited,Barclays de Zoete Wedd Limited and Hambros Bank plc. Age 70.

* member of the Audit, Remuneration and Nomination Committees

SecretaryIvor A Barton ACIS

Registered officeEleco House15 Gentlemen’s FieldWestmill RoadWareHertfordshireSG12 0EFTel: +44 (0) 1920 443830 Fax: +44 (0) 1920 469681E-mail: [email protected]: http://www.eleco.com

Registered number354915

AuditorsGrant Thornton UK LLP

BankersLloyds TSB Bank Plc

Nominated Adviser & BrokerCollins Stewart Europe Limited

SolicitorsBerwin Leighton Paisner

Registrars and transfer officeCapita RegistrarsNorthern HouseWoodsome ParkFenay BridgeHuddersfieldWest YorkshireHD8 0LATel: +44 (0) 870 162 3100


Directors’ Report



The Directors present their report and the audited financial statementsfor the year ended 30 June 2009.

Review of the businessThe Group’s principal activities include the manufacture and supply ofbuilding systems and products, and the design and supply ofsoftware systems. A list of the principal operating subsidiarycompanies is set out in note 6 to the Company financial statements.

The accompanying Chairman’s Statement and Financial Reviewprovide a more detailed description of activities during the year,including comments on sales, sales volumes and margins and futureprospects. The principal risks and uncertainties in the business are theunderlying levels of activity in the markets in which they operate and therelated impact on customer demand, significant movements in rawmaterial costs, which might impact on the products supplied andunforeseen delay in the implementation of software developmentprojects.

The assessment of the major financial risks applicable to the Group isin note 27 to the financial statements.

Results for the yearThe Group loss on ordinary activities before taxation was £1,430,000(2008: profit £8,224,000). The detailed financial statements of theGroup are set out on pages 16 to 45.

DividendsAn interim dividend of 0.40 pence per share was paid during the year.The Directors recommend for payment on 20 November 2009 a finaldividend of 0.40p per share to ordinary shareholders on the registerat the close of business on 23 October 2009. Combined with theinterim dividend, this will make a total distribution of 0.80p per share(2008: 3.00p per share).

Share capitalDetails of the share capital and share options scheme are shown innotes 23 and 24 to the financial statements.

Directors and their interestsThe current composition of the Board of Directors is shown onpage 10 and all the Directors held office throughout the year.P J Taylor resigned as a Director on 8 October 2009.

M B McCullen and J Cohen retire by rotation at the forthcomingAnnual General Meeting and, being eligible, will offer themselves forre-election.

AcquisitionOn 1 January 2009, the Group acquired the business and certainassets of Asta Development GmbH for a total consideration of£260,000.

Directors’ optionsShare Options granted to the Executive Directors under the Company’s Long Term Incentive Plan were as follows:

Award At Vested Lapsed Granted At Vesting30 June 2008 during year during year during year 30 June 2009 date

J H B Ketteley 2006 240,000 240,000 – – – 1 January 2009 to31 October 2011

2007 200,000 – – – 200,000 1 January 2010 to31 October 2012

F E Newby 2003 140,000 140,000 – – – 1 April 2006 to1 December 2008

2006 110,000 110,000 – – – 1 January 2009 to31 October 2011


D S Dannhauser 2006 160,000 160,000 – – – 1 January 2009 to31 October 2011


P J Taylor 2003 70,000 – 70,000 – – 1 April 2006 to1 December 2008

2006 110,000 55,000 – – 55,000 1 January 2009 to31 October 2011



Directors’ Report(continued)

12 ELECO plc


Directors’ ShareholdingsThe interests, beneficial unless otherwise indicated, in the ordinary shares of 10p each in the Company of the Directors who held office at30 June 2009, were as follows:

At At30 June 30 June

2009 2008

J H B Ketteley 7,569,255 7,421,530D S Dannhauser 1,086,759 926,759M B McCullen 652,944 652,944P J Taylor 280,376 247,051F E Newby 180,279 28,802J Cohen 38,333 38,333T Quinn – –

There were no changes in the Directors’ interests since 30 June 2009.

Policy on remuneration of Executive Directors and seniorexecutivesThe Remuneration Committee aims to ensure that the remunerationpackages offered encourage and reward performance in a mannerwhich is consistent with the long-term interests of shareholders.

The remuneration of the Executive Directors comprises four elements:

i) a basic salary together with benefits-in-kind (such as companycar, private petrol and medical insurance);

ii) a non-pensionable performance-related annual bonus based onthe Group’s performance. The Executive Directors arecontractually entitled to a bonus scheme, but the amount to bepaid is determined by the Remuneration Committee;

iii) pension benefits based solely on basic salary;

iv) performance-related share awards and non-pensionable bonusesunder the Company’s Long Term Incentive Plans.

Executive Directors’ contractsThe Executive Directors have service agreements, which provide for anotice period for termination of up to 12 months.

In the event that employment with the Company is terminated withoutnotice, the contracts do not provide for payment of a specific sum forcompensation.

Commencement dates for contracts (as amended) were as follows:

D S Dannhauser (15 December 1994);J H B Ketteley (3 July 1997);F E Newby (4 April 2005);M B McCullen (1 March 2007).

Details on remuneration are contained in Note 5.

Share PriceThe middle market price of the Company’s ordinary shares on 30June 2009 was 39p and the range during the year was 26.5p to79.5p.

Interest in ContractsThere are no contracts of significance between the Company or itssubsidiary companies and any of the Directors. During the year, forexpenses or services provided in the normal course of business, theGroup paid £5,000 (2008: £7,900) to J H B Ketteley & Co Limited ofwhich J H B Ketteley is a Director and in which he has an interest.Additionally, an amount of £28,000 (2008: £15,000) was paid toJ H B Ketteley & Co Limited under a lease for occupation by theGroup of 66 Clifton Street, London EC2A 4HB.

Corporate GovernanceAlthough companies listed on AIM are not required to comply with theCombined Code on Corporate Governance, the Board is committedto ensuring that high standards of corporate governance are followedas appropriate to the Company’s size and activity.

The Board of Directors, which consisted during the year of theExecutive Chairman, Deputy Chairman, Group Finance Director, twoother Executive Directors and two independent Non-ExecutiveDirectors, meets at least ten times throughout the year. The Directorshave access to independent professional advice in executing theirduties on behalf of the Company.

The Board has established the following committees:

Audit CommitteeThe Audit Committee, which consists of the two Non-ExecutiveDirectors and is chaired by J Cohen, has specific terms of referenceand meets with the auditors at least twice a year. The Committeereviews the financial statements prior to their recommendation to theBoard for approval and assists the Board in ensuring that appropriateaccounting policies, internal financial controls and complianceprocedures are in place.


Remuneration CommitteeThe Remuneration Committee, which consists of the Non-ExecutiveDirectors and is chaired by T Quinn, is responsible for determining theremuneration arrangements of the Executive Directors and foradvising the Board on the Company’s remuneration policy for seniorexecutives.

Nominations CommitteeThe Nominations Committee consists of the Non-Executive Directorsand chaired by the Executive Chairman, is responsible for reviewingthe structure, size and composition of the Board and its Committeesand evaluating potential candidates for nomination when and if it isdeemed necessary to appoint a new Director to the Board. TheCommittee makes its recommendations to the full Board for itsconsideration and approval.

Control EnvironmentThe Board acknowledges its responsibility for the Group’s systems ofinternal financial and other control. These are designed to givereasonable, though not absolute, assurance as the reliability ofinformation, the maintenance of proper accounting records, thesafeguarding of assets against unauthorised use or disposition andthat the Group’s businesses are being operated with appropriateawareness of the operational risks to which they are exposed.

The Directors have established an organisational structure with clearlines of responsibility and delegated authority.

The systems include:

• the appropriate delegation of responsibility to operationalmanagement;

• financial reporting, within a comprehensive financial planning andaccounting framework, including the approval by the Board of thedetailed annual budget and the regular consideration by theBoard of actual results compared with budgets and forecasts;

• clearly defined capital expenditure and investment controlguidelines and procedures; and

• monitoring of business risks, with key risks identified and reportedto the Board.

Directors’ responsibilities in relation to the financialstatementsThe Directors are responsible for preparing the annual report and thefinancial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statementsfor each financial year. The Group consolidated financial statementscontinue to be prepared in accordance with International FinancialReporting Standards (IFRS), as adopted by the EU. The Company’sfinancial statements continue to be prepared in accordance withUnited Kingdom Accounting Standards (UK GAAP).

The financial statements are required by law to give a true and fairview of the state of affairs of the Group and Company and of the profitor loss of the Group for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply themconsistently;

• make judgements and estimates that are reasonable andprudent;

• state whether applicable IFRS or UK GAAP have been followed,subject to any material departures disclosed and explained in thefinancial statements; and

• prepare the financial statements on the going concern basisunless it is inappropriate to presume that the Company willcontinue in business.

The Directors are responsible for keeping proper accounting recordsthat disclose with reasonable accuracy at any time the financialposition of the Group and Company and enable them to ensure thatthe financial statements comply with the Companies Act 2006. Theyare also responsible for safeguarding the assets of the Company andhence for taking reasonable steps for the prevention and detection offraud and other irregularities. In so far as the Directors are aware:

• there is no relevant audit information of which the Group’s auditorsare unaware; and

• the Directors have taken all steps that they ought to have taken tomake themselves aware of any relevant audit information and toestablish that the auditors are aware of that information.

The Directors are responsible for the maintenance and integrity of thecorporate and financial information included on the Company’swebsite. Legislation in the United Kingdom governing the preparationand dissemination of financial statements may differ from legislation inother jurisdictions.

Directors’ statement as to disclosure of information toauditorsThe Directors who were members of the Board at the time ofapproving the Directors’ report are listed on page 10. Having madeenquiries of fellow Directors and of the Company’s auditors, each ofthese Directors confirms that to the best of each Director‘s knowledgeand belief, there is no information relevant to the preparation of theirreport of which the Company’s auditors are unaware and eachDirector has taken all steps a Director might reasonably be expectedto have taken to be aware of relevant audit information and toestablish that the Company’s auditors are aware of that information.

Going ConcernThe financial statements, which appear on pages 16 to 45 have beenprepared on a going concern basis. Having made appropriateenquiries, the Directors have a reasonable expectation that the Grouphas adequate resources to continue in operational existence for theforeseeable future.

Research and developmentProduct innovation and development is a continuous process. TheGroup commits resources to the development of new products andquality improvements to existing products and processes in all itsbusiness segments.




Directors’ Report(continued)

14 ELECO plc


Employee involvementThe Group is committed to a policy of involvement by keeping itsemployees fully informed regarding its performance and prospects.Employees are encouraged to present their suggestions and views.

Employment of disabled personsThe Company’s policy is to provide equality of opportunity for allemployees without discrimination and continues to encourage theemployment, training and advancement of disabled persons inaccordance with their abilities and aptitudes, provided that they canbe employed in a safe working environment. Suitable employmentwould, if possible, be found for any employee who becomes disabledduring the course of their employment with the Group.

Policy regarding the payment of suppliersThe Company’s policy is to agree terms of payment with suppliers atthe commencement of the trading or contractual relationship, and tooperate within such terms subject to satisfactory completion of thesuppliers’ obligations. At 30 June 2009, the Group’s average creditorpayment period was 59 days.

Charitable contributionsDuring the financial year donations to charities and good causestotalled £1,400. The Group does not make any political donations.

Directors’ IndemnitiesQualifying third party indemnity provisions (as defined in Section234(2) of the Companies Act 2006) are in force for the benefit of theDirectors.

Annual General MeetingYour attention is drawn to the Notice of Meeting on pages 56 and 57of this report convening the Annual General Meeting of the Companyat 12:00 noon on 12 November 2009 at the Brewers’ Hall,Aldermanbury Square, London EC2V 7HR. The Notice of Meeting setsout and explains the special and ordinary business to be conductedat the meeting.

Adoption of new Articles of AssociationThe Board proposes to adopt new Articles of Association toincorporate changes, introduced by the Companies Act 2006, whichwere finally implemented on 1 October 2009. Shareholders’ approvalis being sought at the Annual General Meeting to the proposedchanges which are explained on page 58 of this document.

Adoption of new Long Term Incentive Plan (LTIP)The previous LTIP expired in June 2008 and the outstanding awardsunder that plan are detailed above. Shareholders’ approval is beingsought at the Annual General Meeting for the introduction of a newplan, with substantially the same terms as the expired plan, the mainpoints of which are explained on page 59 of this document.

AuditorsMessrs. Grant Thornton UK LLP have indicated their willingness tocontinue in office, and a resolution will be proposed at the AnnualGeneral Meeting to re-appoint them as Auditors and to determine theirremuneration.

By Order of the Board

I A BartonSecretary

Eleco House15 Gentlemen’s FieldWestmill RoadWareHertfordshireSG12 0EF

9 October 2009


Independent Auditor’s Report

Independent auditor’s report to the members of Eleco plcWe have audited the Group financial statements of Eleco plc for theyear ended 30 June 2009 which comprise the Consolidated IncomeStatement, the Consolidated Balance Sheet, the Consolidated CashFlow Statement, the Consolidated Statement of Recognised Incomeand Expenses and the related notes. The financial reportingframework that has been applied in their preparation is applicable lawand International Financial Reporting Standards (IFRSs) as adoptedby the European Union.

This report is made solely to the Company’s members, as a body, inaccordance with Sections 495 and 496 of the Companies Act 2006.Our audit work has been undertaken so that we might state to theCompany’s members those matters we are required to state to them inan auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyoneother than the Company and the Company’s members as a body, forour audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorsAs explained more fully in the Directors’ Responsibilities Statement setout on page 13, the Directors are responsible for the preparation ofthe Group financial statements and for being satisfied that they give atrue and fair view. Our responsibility is to audit the Group financialstatements in accordance with applicable law and InternationalStandards on Auditing (UK and Ireland). Those standards require usto comply with the Auditing Practices Board’s (APB’s) EthicalStandards for Auditors.

Scope of the audit of the financial statementsA description of the scope of an audit of financial statements isprovided on the APB’s website at www.frc.org.uk/apb/scope/UKNP.

Opinion on financial statementsIn our opinion the Group financial statements:

• give a true and fair view of the state of the Group’s affairs as at30 June 2009 and of its loss for the year then ended;

• have been properly prepared in accordance with IFRS as adoptedby the European Union; and

• have been prepared in accordance with the requirements of theCompanies Act 2006.

Opinion on other matter prescribed by the Companies Act2006In our opinion the information given in the Directors’ report for thefinancial year for which the Group financial statements are prepared isconsistent with the Group financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters wherethe Companies Act 2006 requires us to report to you if, in our opinion:

• certain disclosures of Directors’ remuneration specified by law arenot made; or

• we have not received all the information and explanations werequire for our audit.

Other matterWe have reported separately on the parent company financialstatements of Eleco plc for the year ended 30 June 2009.

John CorbishleySenior Statutory Auditorfor and on behalf of Grant Thornton UK LLPStatutory Auditor, Chartered AccountantsCambridge

9 October 2009



Company number: 354915


Consolidated Income Statementfor the year ended 30 June 2009

2009 2008Notes £’000 £’000

Revenue 1 70,555 84,909Cost of sales (40,601) (46,090)

Gross profit 29,954 38,819Distribution costs (3,503) (4,087)Administrative expenses (26,332) (26,710)

Trading profit 119 8,022

Impairment charges 3 (1,269) –

(Loss)/profit from operations 3, 4 (1,150) 8,022

Finance income 6 216 475Finance cost 6 (496) (273)

(Loss)/profit before tax 2 (1,430) 8,224Tax 7 (39) (2,091)


Attributable to:Equity holders of the parent (1,469) 6,133

Total and continuing earnings per share (EPS)– basic 9 (2.5)p 10.6p– diluted 9 (2.5)p 10.5p

Consolidated Statement of RecognisedIncome and Expensefor the year ended 30 June 2009

2009 2008Notes £’000 £’000

Actuarial loss on retirement benefit obligation 22 (1,705) (4,919)Associated deferred tax on retirement benefit obligation 20 458 1,246Translation differences on foreign currency net investments 362 (57)

Net expense recognised directly in equity (885) (3,730)


Total recognised income and expense in the period (2,354) 2,403

Attributable to:Equity holders of the parent (2,354) 2,403

16 ELECO plc



Consolidated Balance Sheetat 30 June 2009

2009 2008Notes £’000 £’000

Non-current assetsGoodwill 10 13,473 14,174Other intangible assets 11 3,485 3,827Property, plant and equipment 12 12,552 12,175Deferred tax assets 20 2,687 2,229

Total non-current assets 32,197 32,405

Current assetsInventories 15 3,687 4,599Trade and other receivables 17 12,985 16,585Current tax assets 242 –Cash and cash equivalents 6,091 6,808

Total current assets 23,005 27,992

Total assets 55,202 60,397

Current liabilitiesObligations under finance leases 19 (365) (364)Trade and other payables 18 (11,424) (16,222)Current tax liabilities (347) (1,687)Accruals and deferred income (6,158) (7,237)

Total current liabilities (18,294) (25,510)

Non-current liabilitiesBorrowings 19 (4,500) –Obligations under finance leases 19 (318) (596)Deferred tax liabilities 20 (804) (1,110)Other non current liabilities 21 (121) –Retirement benefit obligation 22 (9,599) (7,961)

Total non-current liabilities (15,342) (9,667)

Total liabilities (33,636) (35,177)

Net assets 21,566 25,220

EquityShare capital 23 6,066 5,995Share premium account 25 6,396 6,224Merger reserve 25 7,371 7,371Translation reserve 25 151 (211)Other reserve 25 (383) (321)Retained earnings 25 1,965 6,162

Equity attributable to shareholders of the parent 21,566 25,220

The financial statements on pages 16 to 45 were approved by the Board of Directors on 9 October 2009 and signed on its behalf by:





Consolidated Cash Flow Statement

2009 2008Notes £’000 £’000

Cash flows from operating activities(Loss)/profit before interest and tax (1,150) 8,022Depreciation charge 1,869 1,642Amortisation and impairment charges 1,931 531Profit on sale of property, plant and equipment (6) (37)Share-based payment charge 185 252Retirement benefit obligation (403) (384)Decrease in provisions – (85)

Cash generated from operations before working capital movements 2,426 9,941Decrease/(increase) in trade and other receivables 4,023 (1,474)Decrease/(increase) in inventories and work in progress 993 (140)(Decrease)/increase in trade and other payables (5,913) 3,584

Cash generated from operations 1,529 11,911Interest paid (177) (250)Interest received 186 388Income tax paid (1,949) (1,956)

Net cash (outflow)/inflow from operating activities (411) 10,093

Net cash used in investing activitiesPurchase of intangible assets (626) (70)Purchase of property, plant and equipment (2,315) (3,946)Acquisition of subsidiary undertakings net of cash acquired 26 (205) (2,963)Proceeds from sale of property, plant, equipment and intangible assets 71 149

Net cash outflow from investing activities (3,075) (6,830)

Net cash used in financing activitiesProceeds from new bank loan 11,100 4,600Repayment of bank loans (6,600) (5,140)Repayments of obligations under finance leases (397) (428)Equity dividends paid (1,423) (1,600)Own shares purchased by ESOT (62) (15)

Net cash inflow/(outflow) from financing activities 2,618 (2,583)

Net (decrease)/increase in cash and cash equivalents (868) 680

Cash and cash equivalents at beginning of period 6,808 5,940Effects of changes in foreign exchange rates 151 188

Cash and cash equivalents at end of period 6,091 6,808

18 ELECO plc



Significant Accounting Policies

The significant accounting policies adopted in the preparation of theGroup’s consolidated financial statements are prepared followingInternational Financial Reporting Standards (“IFRS”), as adopted bythe European Union, are set out below:

A. Basis of preparationThe consolidated financial statements have been prepared on thehistorical cost basis. The consolidated financial statements have beenprepared in sterling and all financial information has been rounded tothe nearest thousand.

These consolidated financial statements have been prepared inaccordance with the accounting policies, which follow IFRS in issueand effective at 30 June 2009.

A material prior period error relating to the pension scheme wasidentified during the year and the impacted prior year comparativeshave been restated in line with the requirements of IAS 8. The detail ofthe restatement is outlined in note 22.

B. Basis of consolidationThe consolidated financial statements include the financial statementsof the Company and its subsidiary undertakings for the year ended30 June 2009 and the comparative year ended 30 June 2008.Subsidiaries are entities controlled by the Group and their results havebeen adjusted, where necessary, to ensure accounting policies areconsistent with those of the Group. Control exists where the Grouphas the power to govern the financial and operating policies of anentity so as to obtain benefits from its activities. The Group obtainsand exercises control through voting rights.

The results of subsidiaries acquired or sold in the year are included inthe consolidated income statement from or up to the date controlpasses until control ceases.

The acquisition of subsidiaries is dealt with using the purchasemethod. The purchase method involves the recognition at fair value ofall identifiable assets and liabilities at the acquisition date, includingcontingent liabilities of the subsidiary regardless of whether or not theywere recorded in the financial statements of the subsidiary prior toacquisition. All intercompany balances and transactions, includingunrealised profits and losses arising from intra-Group transactions, areeliminated in full.

C. Significant accounting judgements and estimatesApplication of the Group’s accounting policies in conformity withgenerally accepted accounting principles requires judgements andestimates that affect the amounts of assets, liabilities, revenues andexpenses reported in the financial statements. These estimates maybe affected by subsequent events or actions such that actual resultsmay ultimately differ from the estimates.

The key assumptions concerning the future and other key sources ofestimation uncertainty at the balance sheet date, that have asignificant risk of causing a material adjustments to the carryingamount of assets and liabilities within the next financial year arediscussed below.

Retirement benefit costsThe Group operates a defined benefit scheme that provides benefitsto a number of current and former employees. The value of thescheme deficit is sensitive to the market value of the scheme’sassets, the discount rates and actuarial assumptions related tomortality and other factors. Further details are given in note 22.

TaxationTaxation legislation is highly complex. In preparing the financialstatements the taxation liability is estimated taking appropriateprofessional advice. However, determination of the agreed liabilitiesmay take some time and the eventual amounts paid may differ fromthe liabilities recorded in the financial statements.

Similarly, judgement is required in relation to the recognition of assetsand liabilities in relation to deferred taxation, in particular the extent towhich assets should be recognised.

Revenue recognition on long-term contractsRevenue and profit is recognised based upon the extent of completionand expected outcomes of profit, once these can be estimated withreasonable reliability. However, unforeseen events may adversely impacton the accuracy of the estimates. Further details are given in note 16.

D. RevenueRevenue from the sale of goods and services represents the fair valueof consideration received or receivable in respect of goods andservices supplied to third parties in the period, excluding value addedtax and trade discounts. Revenue from software maintenance andsupport contracts is treated as deferred income and taken to revenuein the income statement on a straight line basis in line with the serviceand obligations over the term of the contract.

Revenue is recognised on contract work in progress at an amountappropriate to the stage of completion as measured by workperformed and the amount of profit attributable to the stage ofcompletion of a contract is recognised when the outcome of thecontract can be estimated with reasonable reliability. Provision ismade for foreseen losses as soon as there is an indication that a lossis apparent. Amounts due from customers under long-term contractsare included within trade and other receivables and amountsrecoverable on contracts. Amounts recoverable on contractsrepresent revenue recognised in excess of invoiced amounts.

E. Intangible assetsGoodwill arising on consolidation represents the excess of the cost ofthe acquisition, including expenses, over the Group’s interest in thefair value of the identifiable net assets acquired. The carrying value ofgoodwill is recognised as an asset and reviewed for impairment atleast annually and any impairment is recognised immediately in theincome statement.

Other intangible assets acquired separately are capitalised at costand on a business combination are capitalised at fair value as at thedate of acquisition. Following initial recognition, an intangible asset isheld at cost less accumulated amortisation and any accumulatedimpairment losses.




Significant Accounting Policies(continued)

On disposal, the attributable amount of goodwill is included in thedetermination of profit or loss on disposal. Goodwill arising onacquisitions before the date of transition to IFRS has been retained atthe previous UK GAAP amounts subject to being tested forimpairment at that date. Goodwill written off to reserves under UKGAAP prior to 1998 has not been reinstated and is not included indetermining any subsequent profit or loss on disposal.

Intangible assets are amortised on a straight line basis over theiruseful economic lives and charged to administration expenses in theincome statement. The useful economic life of each class ofintangible asset is as follows:

Customer relationships up to 12 yearsIntellectual property up to 5 years

The Group owns intellectual property both in its software tools andsoftware products. Intellectual property purchased is capitalised at costand is amortised on a straight line basis over its expected useful life.

Research expenditure is written off as incurred. Developmentexpenditure on a project is written off as incurred unless and until thefollowing principal criteria are all satisfied:

– the project is for a new/substantially new product or process.

– comprehensive testing has been performed and has establishedthe technical feasibility of the project is without doubt.

– the commercial viability of the project has been measured bydetailed market analysis and associated earnings projections.

When a project meets all these criteria, subsequent developmentcosts are capitalised and are amortised from the date the product orprocess is available for use, on a straight line basis over its estimateduseful life.

The carrying amounts of intangible assets are reviewed for impairmentwhenever events or changes in circumstances indicate that thecarrying amount may not be recoverable and in the case ofcapitalised development expenditure reviewed for impairmentannually while the asset is not yet in use.

F. Property, plant and equipmentProperty, plant and equipment is stated at purchase cost, togetherwith any directly attributable costs of acquisition. The carrying amountand useful lives of property, plant and equipment with material residualvalues are reviewed at each balance sheet date.

Depreciation is provided on all property, plant and equipment, exceptland and assets in the course of construction, on a straight line basisto write down the assets to their estimated residual value over theuseful economic life of the asset as follows:

Freehold buildings – 50 yearsLong leasehold buildings – 50 years or term of the lease, if

shorterShort leasehold property – over the term of the leasePlant, equipment and vehicles – 2 to 10 years

G. Impairment of assetsThe carrying amounts of the Group’s assets are assessed annually asto whether an impairment adjustment may be required. When annualimpairment testing for assets is required, the assets under review aregrouped under the appropriate cash generating unit for which thereare separately identifiable cash flows. The Group makes an estimateof the assets recoverable amount, based on the higher of the asset’svalue in use and fair value less costs to sell. In assessing value in use,the estimated future cash flows of the cash generating unit arediscounted to their present value using an appropriate discount ratethat reflects current market assessments of the time value of moneyand the risks specific to the asset. An impairment charge is initiallymade against goodwill of the cash generating unit and thereafteragainst other assets. Any impairment is charged to the incomestatement under the relevant expense heading.

A previously recognised impairment loss, other than goodwill, isreversed only if there has been a change in the previous indicatorused to determine the assets recoverable amount since the lastimpairment loss was recognised. The reinstated carrying amountcannot exceed the carrying amount that would have beendetermined, net of amortisation, had no impairment loss beenrecognised for the asset in prior years.

H. InventoriesInventories are stated at the lower of cost and net realisable value.

Cost includes expenditure incurred in acquiring the inventories andbringing them to their existing location and condition. The cost ofmanufactured inventories and work in progress includes relatedproduction overheads based on normal operating activity and iscalculated using the FIFO method. Net realisable value is based onestimated selling price less further costs expected to be incurred tocompletion and disposal.

I. LeasesFinance leases, which transfer to the Group substantially all of thebenefits and risks of ownership of an asset, are capitalised at theinception of the lease at the fair value of the leased asset or, if lower, atthe present value of the minimum lease payments. Lease paymentsare apportioned between the finance charges and reduction of thelease liability so as to achieve a constant rate of interest on theremaining balance of the liability. Finance charges are charged directlyagainst income.

Capitalised leased assets are depreciated over the shorter of theestimated life of the asset or the lease term. Leases where the lessorretains substantially all the risks and benefits of ownership of the assetare classified as operating leases. Operating lease payments arerecognised as an expense in the income statement on a straight linebasis over the term of the lease.

J. PensionsThe Group operates a defined benefit pension scheme, whichprovides benefits based on final pensionable pay. The defined benefitscheme is valued every three years by a professionally qualifiedindependent actuary, the rates of contribution payable beingdetermined by the actuary.

20 ELECO plc



The service cost of providing retirement benefits to employees duringthe year is charged to the income statement in the year. The full costof providing amendments to benefits in respect of past service, whereamendments to benefits vest immediately, is also charged to theincome statement in the year. The expected return on the assets ofthe scheme during the year, based on the market value of schemeassets at the start of the financial year, is included within financeincome/charge. This also includes a charge representing theexpected increase in liabilities of the scheme during the year, arisingfrom the liabilities of the scheme being one year closer to payment.The resulting net finance amount is reported in the income statement.

Differences between actual and expected returns on assets duringthe year are recognised in the statement of recognised income andexpenses in the year, together with differences from actual experienceand from changes in actuarial assumptions. The net deficit on thedefined benefit pension scheme, representing the difference betweenthe present value of the defined benefit obligation and the fair value ofscheme assets (based upon market price information and in the caseof quoted securities the published bid price) is reported on thebalance sheet.

Contributions to defined contribution pension schemes and multi-employer schemes are charged to the income statement as theybecome payable.

K. Share based paymentsThe cost of equity-settled transactions with employees is measuredby reference to the fair value at that date at which they are grantedand is recognised as an expense over the vesting period, which endson the date on which the relevant employees is unconditionallyentitled to the award. The fair value of the employees services isdetermined by reference to the fair value of instruments granted usingan appropriate pricing model. In valuing equity-settled transactions,account is taken of the probabilities of performance achievement andother conditions linked to the price of the shares of the Company(market conditions).

No expense is recognised for awards that do not ultimately vest,except for awards where vesting is conditional upon a marketcondition, which are treated as vesting irrespective of whether or notthe market condition is satisfied, provided that all other performanceconditions are satisfied.

At each balance sheet date before vesting, the cumulative expense iscalculated, representing the extent to which the vesting period hasexpired and management’s best estimate of the achievement orotherwise of non-market conditions. The movement in cumulativeexpense since the previous balance sheet date is recognised in theincome statement, with a corresponding entry in equity.

Shares, the subject of share awards granted under the long termincentive plan, may be allotted to the employee share ownership trust atany time from the date of grant. The shares held by the trust do notqualify for dividends and are deducted from equity attributable toshareholders of the parent through other reserves.

L. Foreign currenciesThe functional currency of the Company and the presentationalcurrency of the Group is UK Pounds Sterling.

Transactions in foreign currencies are translated at the exchange rateruling at the date of transaction. Foreign exchange differences arisingon the settlement of monetary items or on translating monetary itemsat rates different from those at which they were initially recorded arerecognised in the income statement for the period in which they arise.

Assets and liabilities of subsidiaries denominated in a differentfunctional currency to that of the Group’s presentational currency aretranslated into Sterling at the rate of exchange ruling at the balancesheet date and results are translated at the average rate of exchangefor the year. Differences on exchange, arising from the retranslation ofthe opening net investment in subsidiary companies and from thetranslation of the results of those companies at an average rate, aretaken to reserves and reported in the statement of recognised incomeand expense. Exchange differences arising on the retranslation of intergroup balances reported in foreign subsidiaries are regarded as partof the net investment in the subsidiary and treated as a movement inthe translation reserve on consolidation. When an operation is sold,amounts recognised in reserves on the translation of foreignoperations are recycled through the income statement.

M. Financial assets and liabilitiesFinancial assets are recognised when the Group becomes a party tothe contractual provisions of the instrument and arise principallythrough the provision of goods and services to customers (trade andother receivables) but also include other types of contractualmonetary assets. Trade and other receivables are initially recorded atfair value and subsequently carried at amortised cost using theeffective interest method. A financial asset is derecognised only wherethe contractual rights to the cash flows from the asset expire or thefinancial asset is transferred and that transfer qualifies for de-recognition.

Financial liabilities are obligations to pay cash or other financial assetsand are recognised when the Group becomes a party to thecontractual provisions of the instrument. Trade payables and othershort term monetary liabilities are initially recorded at fair value andsubsequently carried at amortised cost using the effective interest ratemethod. Bank borrowings are initially recognised at the fair value oninitial recognition date, which in the case of an arms length transactionis the amount advanced, exclusive of any transaction costs directlyattributable to the issue of the instrument and subsequently carried atamortised cost. A financial liability is derecognised when theobligation is discharged, cancelled or expires.

N. TaxationCurrent tax is the tax payable based on taxable profit for the yearcalculated using tax rates that have been enacted or substantiallyenacted by the balance sheet date.

Deferred tax is calculated using the liability method on temporarydifferences and provided on the difference between the carryingamounts of assets and liabilities and their tax bases. However,




Significant Accounting Policies(continued)

deferred tax is not provided on the initial recognition of goodwill nor onthe initial recognition of an asset or liability, unless the relatedtransaction is a business combination or affects tax or accountingprofit.

Deferred tax liabilities are provided in full, with no discounting.Deferred tax assets are recognised to the extent that it is probable thatthe underlying deductible temporary differences will be able to beoffset against future taxable income. Current and deferred tax assetsand liabilities are calculated at tax rates that are expected to apply totheir respective period of realisation, provided the expected tax ratesare enacted or substantively enacted at the balance sheet date andcharged or credited to the income statement or statement ofrecognised income and expense.

O. New standards and interpretations not appliedNew accounting standards and amendments to existing standardsthat have been published and are mandatory for the Group’saccounting periods on or after 1 July 2009, but which the Group hasnot adopted early, are as follows:

Effective date

International Accounting Standards (IAS/IFRS)IFRS 8 ‘Operating segments’ 1 January 2009Revised IAS 23 ‘Borrowing costs’ 1 January 2009Revised IAS 1 ‘Presentation of financial statements’ 1 January 2009Revised IFRS 3 ‘Business combinations’ 1 July 2009Revised IAS 27‘Consolidated and separate financial statements’ 1 July 2009Amendments to IFRS 2 ‘Share based payments’ 1 January 2009

International Financial Reporting InterpretationCommittee (IFRIC)IFRIC 15‘Agreements for the construction of real estate’ 1 January 2009IFRIC 16‘Hedges of a net investment in a foreign operation’ 1 October 2008IFRIC 17 ‘Distributions of non-cash assets to owners’ 1 July 2009IFRIC 18 ‘Transfer of assets from customers’ 1 July 2009

With the exception of IFRS 3 (revised) and IAS 1, the Directorsanticipate that the adoption of these Standards and Interpretations infuture periods will have no material impact on the financial statementsof the Group except for additional disclosures when the relevantstandard comes into effect.

The adoption of IFRS 3 (revised) will require the Group to recognisefuture acquisition related costs through the income statement ratherthan within fixed assets. IAS 1 will have an impact only on thepresentation of the financial statements.

22 ELECO plc



Notes to the Consolidated FinancialStatements for the year ended 30 June 2009

1. RevenueRevenue from continuing operations disclosed in the income statement is analysed as follows:

2009 2008£’000 £’000

Sale of goods and services 49,523 54,441Long term contracts 21,032 30,468

Total revenue 70,555 84,909

2. Segment informationPrimary reporting format – business segmentsThe two tables below present revenue and profit for each business segment together with certain asset and liability information for the yearsended 30 June 2009 and 2008. The goods and services sold by each business segment are outlined in the Group Directory on the insideback cover.

Segment revenue represents revenue from external customers arising from the sale of goods and services, plus inter-segment revenue.Inter-segment transactions are priced on an arm’s length basis. Segment results, assets and liabilities include items directly attributable to asegment as well as those that can be allocated on a reasonable basis. Unallocated assets comprise deferred tax assets and corporate assetsthat cannot be allocated on a reasonable basis to a business segment. Borrowings, deferred tax liabilities, income tax payable and corporateliabilities that cannot be allocated comprise the unallocated liabilities.

Business segment analysis 2009Building Systems

Precast Other Software Elimination Group£’000 £’000 £’000 £’000 £’000

Revenue 31,769 25,600 13,186 – 70,555Inter-segment revenue – – 209 (209) –

Total segment revenue 31,769 25,600 13,395 (209) 70,555

Adjusted operating profit 843 19 343 1,205Amortisation of intangible assets (185) (36) (491) (712)Impairment charges (1,000) – (269) (1,269)Restructuring costs (257) (73) (44) (374)

Segment result (599) (90) (461) (1,150)Net finance cost (280)

Loss before tax (1,430)Tax (39)

Loss after tax (1,469)

Segment assets 19,480 11,507 15,322 46,309Unallocated assets 8,893

Total Group assets 55,202

Segment liabilities 8,179 4,125 5,096 17,400Unallocated liabilities 16,236

Total Group liabilities 33,636

Other segment informationCapital expenditure:Property, plant and equipment 1,526 519 268 2,313Intangible assets – – 626 626

Goodwill acquired – – 260 260Depreciation 809 756 304 1,869




Notes to the Consolidated FinancialStatements for the year ended 30 June 2009 (continued)

2. Segment information (continued)Business segment analysis 2008

Building SystemsPrecast Other Software Elimination Group£’000 £’000 £’000 £’000 £’000

Revenue 37,864 33,554 13,491 – 84,909Inter-segment revenue – 583 243 (826) –

Total segment revenue 37,864 34,137 13,734 (826) 84,909

Adjusted operating profit 4,379 3,286 1,368 9,033Acquisition accounting adjustments (128) – (33) (161)Amortisation of intangible assets (108) (33) (390) (531)

Segment Result 4,143 3,253 945 8,341Abortive merger costs (319)

Profit from operations 8,022Net finance income 202

Profit before tax 8,224Tax (2,091)

Profit after tax 6,133



Segment liabilities 11,693 6,758 5,703 24,154Unallocated liabilities 11,023

Total Group liabilities 35,177

Other segment informationCapital expenditure:Property, plant and equipment 3,450 862 394 4,706Intangible assets 1,071 – 70 1,141

Goodwill acquired 3,902 – – 3,902Depreciation 673 707 262 1,642

Secondary reporting format – geographical segmentsSegment revenue by geographical segment represents revenue from external customers based upon the geographical location of thecustomer. The analysis of segment assets and capital expenditure are based upon location of the assets.

Geographical segment analysis 2009Rest of Rest of

UK Europe World Group£’000 £’000 £’000 £’000

External revenue 53,283 14,313 2,959 70,555



Capital expenditure:Property, plant and equipment 2,148 60 105 2,313Intangible assets 513 113 – 626

Goodwill acquired – 260 – 260

24 ELECO plc



2. Segment information (continued)Geographical segment analysis 2008

Rest of Rest ofUK Europe World Group

£’000 £’000 £’000 £’000

External revenue 66,599 14,164 4,146 84,909



Capital expenditure:Property, plant and equipment 4,437 188 81 4,706Intangible assets 1,134 7 – 1,141

Goodwill acquired 3,902 – – 3,902

3. Non-recurring itemsNon-recurring items represents costs considered necessary to be separately disclosed by virtue of their size or nature:

2009 2008£’000 £’000

Impairment of intangible assets 1,269 –Restructuring costs 374 –

1,643 –

As a result of the annual goodwill impairment review required under IAS 36, see note 10, an impairment of £1,000,000 has been recognised inthe accounts in respect of goodwill related to Milbury Systems. In addition, there has been an impairment of £269,000 relating to the Group’ssoftware rights under an agreement with Freemantle Media.

A review of the Group’s operating costs was carried out in response to the downturn in the construction sector, primarily in the UK, and resultedin restructuring of certain operations with associated reductions in employee numbers.

4. Operating (loss)/profitThe operating (loss)/profit for the year is stated after charging/(crediting) the following items:

2009 2008£’000 £’000

Raw materials and consumables 18,039 22,256Research and development 2,896 2,929Depreciation of property, plant and equipment 1,869 1,642Amortisation of intangible assets 712 531Impairment of intangible assets 1,269 –Profit on disposal of property, plant and equipment (6) (37)Foreign exchange gains (302) (192)Fees payable to the Company’s auditor for:The audit of the Company’s annual accounts 46 59The audit of the Company’s subsidiaries 110 97Other services 18 36

Operating lease rentals:Plant, equipment and vehicles 106 88Other assets 786 752





5. Employee informationThe average number of employees during the year, including Directors, was made up as follows:

2009 2008number number

Building systems – Precast 212 211Building systems – Other 212 235Software 171 164Corporate 10 12

605 622

Staff costs during the year, including Directors, amounted to:

2009 2008£’000 £’000

Wages and salaries 19,189 18,909Social security 2,665 2,565Pension costsDefined benefit schemes 226 250Defined contribution schemes 588 652

Share-based payments 185 252

22,853 22,628

The remuneration of the Directors of the Company, who are the key management personnel of the Group, is set out below:

2009 2008£’000 £’000

Basic salary 897 885Fees 25 25Benefits 104 92Pension benefits 176 246Annual bonus – 300

Executive Directors 1,202 1,548Fees – Non-Executive Directors 75 70

1,277 1,618

The remuneration of the Non-Executive Directors is determined by the Board. The Non-Executive Directors do not have service contracts butare appointed for an initial term of three years, which may thereafter be renewed from year to year. They do not participate in any of the Group’sshare based incentive or pension schemes.

The emoluments of the highest paid Director were £350,800 (2008: £430,600). In addition Company contributions to defined contributionschemes in respect of this Director were £90,500 (2008: £86,000). At 30 June 2009 retirement benefits were accruing under definedcontribution schemes in respect of four Directors (2008: four).

F E Newby is a member of the Eleco Retirements and Benefits scheme, which provides pensions and other benefits within HMRC limitsdetermined by reference to basic salary.

26 ELECO plc



6. Net finance (cost)/income

2009 2008£’000 £’000

Finance incomeBank and other interest receivable 216 388Net return on pension scheme assets and liabilities – 87

Finance costsBank overdrafts (18) (82)Loan interest (99) (138)Finance leases and hire purchase contracts (53) (53)Net return on pension scheme assets and liabilities (326) –

Total net finance (cost)/income (280) 202

7. Taxation(a) Tax on profit on ordinary activitiesThe tax charged/(credited) in the income statement is as follows:

2009 2008£’000 £’000

Current tax:UK corporation tax on profits of the year (222) 1,721Tax adjustments in respect of previous years (108) 5

(330) 1,726Foreign tax 661 739

Total current tax 331 2,465

Deferred tax:Origination and reversal of temporary differences (322) (28)Tax adjustments in respect of previous years 30 (346)

Total deferred tax (292) (374)

Tax charge in the income statement 39 2,091

Income tax for the UK has been calculated at the standard rate of UK corporation tax of 28% (2008: 29.5%) on the estimated assessable profitfor the year. Taxation for foreign companies is calculated at the rates prevailing in the relevant jurisdictions.





7. Taxation (continued)(b) Reconciliation of the total tax chargeThe tax assessed on the accounting profit before income tax for the year is higher than the standard rate of UK corporation tax of 28%.The differences are explained below:

2009 2008£’000 £’000

(Loss)/profit on ordinary activities before tax (1,430) 8,224

Tax calculated at the standard rate of UK corporation tax of 28% (2008: 29.5%) applied to profits before tax (400) 2,426

Effects of:Expenses not deductible for tax purposes 98 181Impairment of goodwill not deductible for tax purposes 280 –Deferred tax in statement of recognised income and expense (22) (139)Share option deduction 26 –Prior year adjustments (78) (341)Utilisation of losses – (8)Tax rate differences (10) (28)Secondary tax on overseas dividends 190 –Other differences (45) –

Total tax charge for year 39 2,091

(c) Unrecognised tax lossesThe Group has tax losses of £1,521,000 (2008: £1,346,000) arising overseas for which no deferred tax asset has been recognised and taxlosses of £987,000 arising in the UK. No deferred tax is recognised on the unremitted earnings of overseas subsidiaries.

8. Dividends paid and proposed2009 2008 2009 2008

Ordinary shares per share per share £’000 £’000

Declared and paid during the yearInterim – current year 0.40p 1.00p 239 592Final – previous year 2.00p 1.80p 1,184 1,008

2.40p 2.80p 1,423 1,600

The Directors propose a final dividend of 0.40p per share at a cost of £239,000. The liability in respect of the 2009 final dividend has not beenaccrued for at 30 June 2009.

9. Loss per shareThe calculations of the loss per share are based on the total loss after tax attributable to ordinary equity shareholders of the Company and theweighted average number of shares in issue for the reporting period.

2009 2008

(Loss)/profit after taxation £(1,469,000) £6,133,000Weighted average number of shares in issue in the period 59,351,220 57,970,041

Basic (loss)/earnings per share (2.5)p 10.6p

28 ELECO plc



10.Goodwill2009 2008£’000 £’000

Cost:At 1 July 14,174 10,249Acquisition of subsidiaries 310 3,902Exchange differences (11) 23

At 30 June 14,473 14,174

Impairment:At 1 July – –Impairment charge 1,000 –

At 30 June 1,000 –

Net book value at 30 June 13,473 14,174

Goodwill resulting from acquisitions net of impairments is set out below:

2009 2008£’000 £’000

Building Systems – Precast– Milbury Systems 2,952 3,902

Building Systems – Other– Downer Cladding 258 258– Prompt Profiles 276 276

Software– Asta Development UK 4,804 4,804– Asta Development Germany 260 –– Consultec Sweden 3,736 3,747– Eleco Software UK 481 481– Eleco Software Germany 336 336– Esign Software Germany 370 370

13,473 14,174

The Group considers each of the operating businesses listed above, which are those units for which a separate cash flow is computed, to be acash generating unit (CGU) and each CGU is reviewed annually for impairment. For each CGU the Group has determined its recoverableamount based on value in use calculations.

The value in use was derived from discounted management cash flow forecasts for the businesses, based on budgets and strategic plans.These budgets and strategic plans cover a three year period. The growth rate used to extrapolate the cash flows beyond this period is 2% whichis in line with the medium term GDP forecasts. Sensitivity analysis is carried out on all budgets and strategic plans used in the calculations. Thediscount rates used are based on the Group’s weighted average cost of capital and appropriate risk factor for the particular CGU.

The impairment testing identified a deficit at the Milbury Systems CGU, using a discount rate of 9.74% (2008: 11.9%), and resulted in animpairment charge of £1,000,000. Cash flows from this CGU are generated from the sale of pre-stressed and precast retaining structures. Themarket in the UK has weakened significantly over the last year and the Group has revised its expectations about the level of activity in thesemarkets in the short and medium term. Future projections used in the calculation allow for a modest recovery during the short and medium term.

The key sensitivities in assessing the value in use of goodwill are the forecast cash flows and the discount rate applied. The parameters testedwere as follows:

– 1% reduction in the annual average growth rate of operating profit

– 1% increase in the discount rate applied to cash flows.





10.Goodwill (continued)The financial impact of the key sensitivities outlined above on the carrying value of the Milbury CGU goodwill is as follows:

– 1% reduction in the annual average growth rate of operating profit £1,083,000

– 1% increase in the discount rate applied to cash flows £1,590,000

These sensitivity analyses for the remaining CGU’s, excluding Milbury Systems for which an impairment has been recognised, identified nofurther shortfalls in the value in use amounts compared to the CGU asset carrying value.

The impairment charged to administrative expenses in the year was £1,000,000 (2008: £nil) and the cumulative impairment charge recognisedto date was £1,000,000 (2008: £nil).

11.Other intangible assetsCustomer Intellectual

relationships property Total£’000 £’000 £’000

Cost:At 1 July 2008 3,228 2,031 5,259Reclassification – 164 164Additions – 626 626Exchange differences – 6 6

At 30 June 2009 3,228 2,827 6,055

Accumulated amortisation and impairment:At 1 July 2008 426 1,006 1,432Reclassification – 148 148Amortisation for the year 269 443 712Impairment charge – 269 269Exchange differences – 9 9

At 30 June 2009 695 1,875 2,570

Net book value at 30 June 2009 2,533 952 3,485

The values attributed to the customer relationships represent the fair value of acquired customer contracts and relationships held by the acquiredcompany at the date of acquisition. Similarly, values attributed to intellectual property represent the fair value of acquired intellectual property.

An impairment charge of £269,000 was recognised against the carrying value of the Group’s software rights under an agreement withFreemantle Media due to a shortfall in projected profit performance of the contract. The value in use was derived from discounted managementcash flow forecasts for the remaining term to September 2011 of the contract. The discount rate used was 8.74%.

Amortisation and impairment charges are included within administrative expenses.Customer Intellectual

relationships property Total£’000 £’000 £’000

Cost:At 1 July 2007 3,228 831 4,059Additions – 70 70Acquisition of subsidiary – 1,071 1,071Exchange differences – 59 59

At 30 June 2008 3,228 2,031 5,259

Accumulated amortisation:At 1 July 2007 157 715 872Amortisation for the year 269 262 531Exchange differences – 29 29

At 30 June 2008 426 1,006 1,432

Net book value at 30 June 2008 2,802 1,025 3,827


30 ELECO plc


12.Property, plant and equipmentFreehold Leasehold Plant,land and land and equipmentbuildings buildings and vehicles Total

£’000 £’000 £’000 £’000

Cost:At 1 July 2008 5,588 956 17,458 24,002Reclassification – – (164) (164)Additions – 186 2,127 2,313Disposals – – (1,027) (1,027)Exchange differences – – 30 30

At 30 June 2009 5,588 1,142 18,424 25,154

Accumulated depreciation:At 1 July 2008 1,214 239 10,374 11,827Reclassification – – (148) (148)Depreciation charge for the year 94 59 1,716 1,869Disposals – – (962) (962)Exchange differences – – 16 16

At 30 June 2009 1,308 298 10,996 12,602

Net book value at 30 June 2009 4,280 844 7,428 12,552

The net book value of plant, equipment and vehicles includes an amount of £734,000 (2008: £645,000) in respect of assets held under financeleases and hire purchase agreements. Assets in the course of construction were £48,000 (2008: £20,000). Freehold land of £883,000(2008: £883,000) and leasehold land of £234,000 (2008: £234,000) are not depreciated.

Freehold Leasehold Plant,land and land and equipmentbuildings buildings and vehicles Total

£’000 £’000 £’000 £’000

Cost:At 1 July 2007 4,558 366 13,951 18,875Additions 1,030 557 3,119 4,706Acquisition of subsidiary – 33 756 789Disposals – – (529) (529)Exchange differences – – 161 161

At 30 June 2008 5,588 956 17,458 24,002

Accumulated depreciation:At 1 July 2007 1,125 204 9,174 10,503Depreciation charge for the year 89 35 1,518 1,642Disposals – – (417) (417)Exchange differences – – 99 99

At 30 June 2008 1,214 239 10,374 11,827

Net book value at 30 June 2008 4,374 717 7,084 12,175





13.Operating lease commitmentsFuture minimum rentals payable under non-cancellable operating leases are as follows:

Property Other Property Other2009 2009 2008 2008£’000 £’000 £’000 £’000

Within one year 712 81 752 44Between two and five years 1,198 67 1,599 47After five years 344 – 515 –

2,254 148 2,866 91

The property leases are subject to periodic rent reviews. The Group has annual rent income in respect of property sub-leases of £76,000(2008: £73,000).

14.Capital commitmentsCapital expenditure contracts of £12,000 (2008: £377,000) have been placed with suppliers at 30 June 2009.

15. Inventories2009 2008£’000 £’000

Raw materials and components 1,432 2,387Finished goods 2,255 2,212

3,687 4,599

At 30 June 2009 the Group’s inventory provisions were £53,000 (2008: £35,000). The amount written off to the income statement in respect ofwritten down inventories was £53,000 (2008: £64,000).

16.Construction contractsConstruction contracts in progress at the balance sheet date were as follows:

2009 2008£’000 £’000

Contract costs incurred to date 5,860 13,365Add: recognised profits 3,519 6,350Less: progress invoicing (9,388) (19,931)

(9) (216)

Advances received from customers for construction contracts in progress amounted to £165,000 (2008: £181,000). Retentions held bycustomers for construction contracts in progress were £53,000 (2008: £42,000).

17. Trade and other receivables2009 2008£’000 £’000

Trade receivables 10,687 13,686Amounts recoverable on contracts 940 762Other receivables 325 338Prepayments and accrued income 1,033 1,799

12,985 16,585

The Group has a variety of credit terms depending on the customer. The Group makes provision against trade receivables when it considersthem to be impaired and takes into account the specific circumstances of the receivable and the Group’s relationship with the customer.

32 ELECO plc



17. Trade and other receivables (continued)Movement in the provision for doubtful debts in respect of trade receivables during the year was as follows:

2009 2008£’000 £’000

At 1 July (249) (269)Written off as uncollectable 129 234Recovered during the year 97 29Provided against during the year (164) (233)Exchange (4) (10)

At 30 June (191) (249)

The ageing of trade receivables at the balance sheet date that are past due but against which no provision has been made is as follows:

2009 2008£’000 £’000

Not more than 3 months 572 1,086More than 3 months but not more than 6 months 33 131More than 6 months but not more than 1 year 6 1More than one year – 9

611 1,227

Management has no indication that unimpaired amounts will be irrecoverable.

18. Trade and other payables2009 2008£’000 £’000

Trade payables 8,905 12,531Payments received on account 165 181Other taxation and social security 1,672 2,859Other liabilities 682 651

11,424 16,222

19.Borrowings2009 2008£’000 £’000

Current liabilities:Obligations under finance leases and hire purchase contracts 365 364

365 364

Non-current liabilities:Bank loans 4,500 –Obligations under finance leases and hire purchase contracts 318 596

4,818 596





19.Borrowings (continued)The bank loans and overdrafts are repayable as follows:

2009 2008£’000 £’000

In one year or less – –Between one and two years 225 –Between two and five years 2,700 –More than five years 1,575 –

4,500 –

The principal commitments of the Group under finance leases are repayable as follows:

Plant, Plantequipment equipment

and vehicles and vehicles2009 2008£’000 £’000

In one year or less 365 364Between one and two years 265 340Between two and five years 53 256

683 960

The minimum lease payments of the Group under finance leases are as follows:

Present Minimumlease leasevalue Interest payments£’000 £’000 £’000

In one year or less 365 30 395Between one and two years 265 12 277Between two and five years 53 1 54

At 30 June 2009 683 43 726

In one year or less 364 48 412Between one and two years 340 29 369Between two and five years 256 11 267

At 30 June 2008 960 88 1,048

34 ELECO plc



20.Deferred TaxThe movement in the deferred tax liabilities analysed by category is shown below:

Temporary differencesNon-deductible Accelerated Share

intangible capital basedassets allowances payments Other Total£’000 £’000 £’000 £’000 £’000

At 1 July 2008 1,054 249 (164) (29) 1,110(Credit)/charge to the income statement (127) 15 26 (206) (292)Exchange – – – (14) (14)

At 30 June 2009 927 264 (138) (249) 804

At 1 July 2007 860 462 (75) (196) 1,051(Credit)/charge to the income statement (106) (302) (89) 123 (374)On acquisition of subsidiary 300 89 – 38 427Exchange – – – 6 6

At 30 June 2008 1,054 249 (164) (29) 1,110

The movement in the retirement benefit obligation deferred tax asset is shown below:

2009 2008£’000 £’000

At 1 July 2,229 983Credit to the statement of recognised income and expense 458 1,246

At 30 June 2,687 2,229

Deferred tax assets and liabilities are presented as non-current in the consolidated balance sheet. Deferred tax assets have been recognisedwhere it is probable that they will be recovered.

21.Other non-current liabilities2009 2008£’000 £’000

Amounts payable on contracts 121 –





22.Retirement benefit obligationsEleco plc operates one defined benefit scheme in the UK, the Eleco Retirement and Benefits Scheme (“ERBS”). The ERBS provides benefitson two scales based on final pensionable pay. The assets of the ERBS are held in a separate trustee administered fund and contributions intothe ERBS are determined by a qualified actuary on the basis of triennial valuations.

During the year, a review of the experience gains reported at 30 June 2008 identified an understatement of the present value of the schemeobligations due to the omission of 20 deferred members from the calculation. This resulted in a correction of £927,000 to the experience gainsand a related deferred tax credit of £260,000. The financial statements and notes to the financial statements for the year ended 30 June 2008have been restated accordingly.

The valuation used for disclosures has been based on the most recent full actuarial valuation as at 30 June 2008 updated at 30 June 2009 byan independent qualified actuary under an appropriate method given the ERBS is closed to new members. Company contributions totalled£619,000 (2008: £635,000). The Company contribution rates during the year were 12.2 per cent of pensionable salaries for 1/80th accrualmembers and 14.9 per cent. of pensionable salaries for 1/60th accrual members plus £450,000.

Consultec Group AB and subsidiaries contribute to a defined benefits scheme under the ITP pension arrangement operated by Alecta, aSwedish insurance company. Contributions to the scheme totalling £140,000 (2008: £138,000) were made during the year. This is a multi-employer scheme and accordingly the Group is unable to identify its share of the surplus in the scheme on a reasonable and consistent basis.Consequently, the scheme has been accounted for as a defined contribution scheme.

Contributions are paid into the fund operated by Alecta pension insurance in respect of each employee at rates defined by Alecta each year,having taken account of the solvency margin of the scheme. The solvency margin which Alecta is required not to maintain above 155%,represents the extent to which the market value of the assets of the fund, calculated by Alecta, exceeds its pension commitments. At 30 June2009, the fund had a solvency margin of 156.0 per cent. (2008: 140.0 per cent.).

The principal assumptions used by the actuary for the ERBS were (in nominal terms):

At 30 June At 30 June2009 2008

Rate of increase in salaries 3.70% 4.35%Rate of increase in pension payment– pre 1997 increases 3.00% 3.00%–1997 to 2005 increases 3.10% 3.95%– post 2005 increases 2.50% 2.50%

Discount rate 6.40% 6.50%Price inflation 3.20% 4.10%

The mortality rate used is PA92 medium cohort with 1% floor, rated up 1 year advised by the Institute of Actuaries.

36 ELECO plc



22.Retirement benefit obligations (continued)The assets in the scheme and the expected rate of return were:

Long-term Long-termrate of return rate of return

expected Value expected Valueat 30 June at 30 June at 30 June at 30 June

2009 2009 2008 2008£’000 £’000 £’000 £’000

Equities 7.10% 8,582 7.75% 10,773Fixed interest bonds 5.60% 4,089 6.40% 3,789Property 7.10% 17 7.75% 146Insurance annuity contracts 6.40% 243 – –

Total market value of assets 12,931 14,708Present value of scheme obligations (22,530) (22,669)

Liability in the scheme (9,599) (7,961)

Analysis of the amounts charged to administrative expenses in the income statement:

2009 2008£’000 £’000

Current service cost 226 250Past service cost – –

Total operating charge 226 250

Analysis of the amount (charged)/credited to financial income in the income statement:

2009 2008£’000 £’000

Expected return on pension scheme assets 1,068 1,214Interest on pension scheme liabilities (1,394) (1,127)

Net finance (cost)/income (326) 87

Analysis of the amount recognised in the statement of recognised income and expense:

2009 2008£’000 £’000

Actual return less expected return on pension scheme assets (2,760) (2,745)Experience (losses)/gains arising on the scheme liabilities (391) 624Changes in assumptions underlying the present value of the liabilities 1,446 (2,798)

Actuarial (losses) (1,705) (4,919)

The total amount of actuarial loss charged to the statement of recognised income and expenses since the date of transition is £5,499,000(2008 (restated): £3,794,000).





22.Retirement benefit obligations (continued)The movement in the fair value of plan assets during the year is as follows:

2009 2008£’000 £’000

At 1 July 14,708 16,320Expected return on scheme assets 1,068 1,214Shortfall in actual return on scheme assets (2,760) (2,745)Contributions 619 635Benefits paid (704) (716)

At 30 June 12,931 14,708

The movement in the defined benefit obligation during the year is as follows:

2009 2008£’000 £’000

At 1 July 21,742 19,834Current service cost 226 250Interest cost 1,394 1,127Actuarial gains/(losses) (128) 2,174Benefits paid (704) (716)

At 30 June 22,530 22,669

History of experience gains and losses:

2009 2008

Difference between the expected and actual return on scheme assets:Amount (£’000) (2,760) (2,745)Percentage of scheme assets (21%) (19%)

Experience gains/(losses) on scheme liabilities:Amount (£’000) (391) 624Percentage of the present value of the scheme liabilities (2%) 3%

23.Called up share capital2009 2008

Nominal Nominalvalue value£’000 £’000

Authorised:85,000,000 (2008: 85,000,000) ordinary shares of 10p each 8,500 8,500

Allotted, called up and fully paid:60,658,239 (2008: 59,953,239) ordinary shares of 10p each 6,066 5,995

During the year, 705,000 ordinary shares were issued for consideration of £243,000 to the Employee Share Ownership Trust to satisfy LTIPoptions.

38 ELECO plc



24.Share based paymentsThe Company operates one share scheme and options outstanding at 30 June 2009 over ordinary shares granted under this scheme were asfollows:

Weightedaverage

remainingNumber of Vesting dates contractual life

Date awarded ordinary shares Earliest Latest (months)

25 January 2006 115,000 1 January 2009 31 October 2011 2812 January 2007 620,000 1 January 2010 31 October 2012 4016 March 2007 30,000 1 March 2010 31 December 2012 42

765,000 38

All the options have a £nil exercise price. Certain of the options are subject to performance requirements and options may be capable ofexercise in certain circumstances earlier than the dates given.

Details of the number of options over ordinary shares outstanding during the year are as follows:

2009 2008Weighted Weightedaverage averagefair value fair value

Number per share Number per share

Outstanding at the beginning of the year 1,540,000 55.0 1,540,000 55.0Granted during the year – – – –Exercised during the year (705,000) 33.0 – –Lapsed during the year (70,000) 20.5 – –

Outstanding at the end of the year 765,000 77.5 1,540,000 55.0

Exercisable at the end of the year 115,000 210,000

The expense recognised by the Group for share based payments under the Long Term Incentive Plan in respect of employee services duringthe year ended 30 June 2009 was £185,000 (2008: £252,000).

An appropriate financial model is used to value the share options and the key assumptions used for the outstanding awards are shown below:

2006 2007(A) 2007(B)

Share price at grant date 47.5p 89.0p 90.0pFair value per share 40.7p 81.2p 82.5p% expected to vest (at date of grant) 49% 87% 50%Expected life (years) 3 3 3Dividend yield 2.95% 2.36% 2.36%Fair value £23,000 £436,000 £12,000

The Employee Share Ownership Trust (“ESOT”) held 956,593 shares at 30 June 2009 (2008: 744,120) with a market value of £383,000(2008: £616,000) and has waived its entitlement to dividends on ordinary shares held by it until such time as they are vested in employees.





25.Statement of changes in equityShare Share Merger Translation Other Retainedcapital premium reserve reserve reserve earnings Total£’000 £’000 £’000 £’000 £’000 £’000 £’000

At 1 July 2008 5,995 6,224 7,371 (211) (321) 6,162 25,220Loss for the year – – – – – (1,469) (1,469)Dividends – – – – – (1,423) (1,423)Actuarial loss on defined benefit pension schemenet of tax – – – – – (1,247) (1,247)

Exchange differences on translation of net investments inforeign operations – – – 362 – – 362

Share based payments 71 172 – – – (58) 185Other – – – – (62) – (62)

Total changes in equity 71 172 – 362 (62) (4,197) (3,654)

At 30 June 2009 6,066 6,396 7,371 151 (383) 1,965 21,566

The balances classified as share capital and share premium represent the proceeds of the nominal value and premium value respectively onthe issue of the Company’s equity share capital net of issue costs, see note 23.

The merger reserve is an undistributable reserve and represents the premium not recognised on the issues of shares pursuant to s131 of theCompanies Act on acquisition of subsidiary companies. The translation reserve is used to record exchange differences arising from theretranslation of the opening net investment and income statement of foreign subsidiaries. Shares in the Company held by the ESOT arereported in the other reserve and the movement in the year represents the increase in own shares held by the ESOT.

Share Share Merger Translation Other Retainedcapital premium reserve reserve reserve earnings Total£’000 £’000 £’000 £’000 £’000 £’000 £’000

At 1 July 2007 5,674 6,224 4,453 (154) (306) 5,050 20,941Profit for the year – – – – – 6,133 6,133Dividends – – – – – (1,600) (1,600)Acquisition of subsidiary 321 – 2,918 – – – 3,239Actuarial loss on defined benefit pension scheme netof tax – – – – – (3,673) (3,673)

Exchange differences on translation of net investments inforeign operations – – – (57) – – (57)

Share based payments – – – – – 252 252Other – – – – (15) – (15)

Total changes in equity 321 – 2,918 (57) (15) 1,112 4,279

At 30 June 2008 5,995 6,224 7,371 (211) (321) 6,162 25,220

40 ELECO plc



26.Business Combinations

Asta Development GmbHOn 1 January 2009, the Group acquired the business and certain assets of Asta Development GmbH for a total consideration of £258,000before expenses. The consideration comprised the payment of £65,000 in cash satisfied from the Group’s existing resources and deferredconsideration of £193,000.

During the year Asta Development GmbH contributed turnover of £574,000 and operating profit of £50,000.

The net assets at 30 June 2009 of Asta Development GmbH were £64,000.

Asta Development GmbH has no recognised income and expense, other than the profits above, and therefore no separate statement ofrecognised income and expense is presented.

An analysis of the fair value of the Asta Development GmbH net assets acquired and the fair value of the consideration paid is set out below:

Fair value ProvisionalBook value adjustments fair value

£’000 £’000 £’000

Other debtors 112 – 112Other creditors (18) – (18)Accruals and deferred income (94) – (94)

Net assets – – –

Goodwill 260

Total consideration 260

Satisfied by:Cash 65Acquisition expenses 2Deferred purchase consideration 193

260

Total consideration paid at 30 June 2009 was £205,000 including £138,000 of deferred consideration and £2,000 of acquisition expenses.

In the period since acquisition, Asta Development GmbH contributed £350,000 to the Group’s net operating cash flow, utilised £10,000 forpurchase of property, plant and equipment and £1,000 for financing activities.

Included in the £260,000 of goodwill recognised above are certain intangible assets that cannot be individually, separately and reliablymeasured from the acquiree due to their nature. These items include the value of the management and workforce together with synergies thatare expected to be gained from being part of the Group.

27. Financial instrumentsa) The carrying amount and fair value of financial assets and liabilities at 30 June

2009 2008£’000 £’000

Financial assets:Cash and cash equivalents 6,091 6,808Trade and other receivables 11,952 14,786

18,043 21,594

Financial liabilities:Trade and other payables 9,752 13,363Bank loans 4,500 –

14,252 13,363

The carrying value of the Group’s financial assets and liabilities are considered to approximate their respective fair values.





27. Financial instruments (continued)b) Interest rate and currency profile of financial assets and liabilitiesThe interest rate and currency profiles of the Group’s financial assets and liabilities are set out below:

NetFinancial liabilities Financial assets financial

Floating Floating (assets)/rate Total rate Total liabilities

£’000 £’000 £’000 £’000 £’000

Sterling 13,702 13,702 14,136 14,136 (434)Euro 259 259 1,811 1,811 (1,552)Swedish Krona 136 136 894 894 (758)South African Rand 148 148 1,148 1,148 (1,000)Other 7 7 54 54 (47)

At 30 June 2009 14,252 14,252 18,043 18,043 (3,791)

Sterling 12,563 12,563 13,091 13,091 (528)Euro 210 210 2,843 2,843 (2,633)Swedish Krona 224 224 2,350 2,350 (2,126)South African Rand 337 337 3,210 3,210 (2,873)Other 29 29 100 100 (71)

At 30 June 2008 13,363 13,363 21,594 21,594 (8,231)

There are no fixed rate financial assets.

The interest rate risk profile of the Group’s finance leases at 30 June was:

Weighted average Weighted averageperiod interest rate

2009 2008 2009 2008Years Years % %

Sterling 1.6 2.4 5.42 5.47Euro 2.8 – 3.00 –Swedish Krona 2.2 3.5 5.78 5.74

42 ELECO plc



27. Financial instruments (continued)c) Currency profile of net foreign currency monetary assets and liabilitiesThe table below shows the net unhedged monetary assets/(liabilities) of the Group that are not denominated in the functional currency of theoperating unit and which therefore give rise to exchange gains and losses in the income statement.

SouthSwedish US African Other

Sterling Euro Krona Dollar Rand Other TotalFunctional currency of Group operation £’000 £’000 £’000 £’000 £’000 £’000 £’000

Sterling – 390 – 3 9 1 403Euro 78 – – – – – 78Swedish Krona 1,374 109 – 3 – 46 1,532South African Rand 20 – – – – – 20

At 30 June 2009 1,472 499 – 6 9 47 2,033

Sterling – 695 (2) (8) – 6 691Euro 59 – – – – 52 111Swedish Krona 109 35 – 20 – 20 184South African Rand 21 – – – – – 21

At 30 June 2008 189 730 (2) 12 – 78 1,007

d) Market risk: objectives, policies and strategiesThe Group’s interest rate risks, liquidity risks and currency risks are managed centrally within policies approved by the Board.

Interest rate risks are moderated by the use of a mixture of fixed and floating rate borrowings. The net interest receivable for the year was£46,000 compared to £115,000 receivable last year. No speculative transactions are undertaken.

At present there is no policy to hedge the Group’s currency exposures arising from the profit translation or the effect of exchange ratemovements on the Group’s overseas net assets.

e) Market risk: sensitivitiesA sensitivity analysis for financial assets and liabilities affected by market risk is set out below. Each risk is analysed separately and shows thesensitivity of financial assets and liabilities when a certain parameter is changed. The sensitivity analysis has been performed on balances at30 June each year and therefore is not representative of transactions throughout the year. The rates used are based on historical trends and,where relevant, projected forecasts.

(i) CurrenciesThe Group is exposed to currency risk in relation to the value of its financial assets and liabilities that are denominated in currenciesother than Sterling (see note 27(c) above), arising from fluctuations in exchange rates. The table below shows the impact on the value ofthe Group’s reported net financial assets at 30 June of exchange rates either strengthening or weakening by 10 per cent. againstSterling and the impact this would have on the reported profit or loss and equity. The Group’s reported profit is not impacted by theeffect of changes in exchange rates on the value of its net financial liabilities, but equity would be £205,000 lower if Sterling strengthenby 10 per cent. and £251,000 higher if Sterling weakened by 10 per cent.

Effect of Sterling strengthening Effect of Sterling weakeningby 10% by 10%

2009 Rate Profit/ Rate Profit/As reported +10% (loss) Equity –10% (loss) Equity

Net financial (assets)/liabilities: £’000 £’000 £’000 £’000 £’000 £’000 £’000

Denominated in Sterling (434) – – – – – –Not denominated in Sterling (3,357) 406 (127) (205) (497) 155 251

Total net financial assets (3,791) 406 (127) (205) (497) 155 251





27. Financial instruments (continued)Effect of Sterling strengthening Effect of Sterling weakening

by 10% by 10%2008 Rate Profit/ Rate Profit/

As reported +10% (loss) Equity –10% (loss) EquityNet financial (assets)/liabilities: £’000 £’000 £’000 £’000 £’000 £’000 £’000

Denominated in Sterling (528) – – – – – –Not denominated in Sterling (7,703) 581 (207) (313) (724) 253 382

Total net financial assets (8,231) 581 (207) (313) (724) 253 382

(ii) interest ratesChanges in market interest rates expose the Group to the risk of fluctuations in the cash flow relating to its financial assets and liabilitiessome of which attract interest at floating rates (see note 27(b) above). Based upon the interest rate profile of the Group’s financial assetsand liabilities as at 30 June, the table below shows the impact of a one percentage point change in the market interest rates on theGroup’s profit and equity.

Effect of increase in interest Effect of decrease in interestrate of 1% rate of 1%


£’000 £’000 £’000 £’000 £’000 £’000 £’000

Net finance income 46 52 52 – (64) (64) –

Effect of increase in interest Effect of decrease in interestrate of 1% rate of 1%


£’000 £’000 £’000 £’000 £’000 £’000 £’000

Net finance income 115 18 18 – (18) (18) –

f) Liquidity riskThe Group monitors its liquidity to maintain a sufficient level of undrawn committed debt facilities together with central management of theGroup’s cash resources to minimise liquidity risk.

The contractual maturities of financial liabilities is as follows:

Between BetweenCarrying 3 months 3 to 6 6 to 12 1 and 2 2 and 4 Overamount or less months months years years 5 years£’000 £’000 £’000 £’000 £’000 £’000 £’000

Trade and other payables 9,752 9,540 60 31 121 – –Bank loans 4,787 17 17 34 291 2,832 1,596

At 30 June 2009 14,539 9,557 77 65 412 2,832 1,596

Trade and other payables 13,363 12,657 706 – – – –

At 30 June 2008 13,363 12,657 706 – – – –

44 ELECO plc



27. Financial instruments (continued)At 30 June, the Group had available to it the following committed borrowing facilities expiring in the periods shown:

2009 2008£’000 £’000

Expiring in one year or less 900 900Expiring between one and two years – –Expiring between two and five years 12,925 10,000Expiring after more than five years 1,575 4,500

15,400 15,400

g) Credit riskGroup policies are aimed at minimising losses due to customer payment default. Deferred payment terms are only granted to those customerswho satisfy creditworthiness criteria and individual exposures to customers are monitored. Where the cost is not excessive when compared tothe exposure being covered, some operations purchase credit insurance.

The maximum exposure to credit risk for uninsured trade receivables at the reporting date by geographic region is as follows:

2009 2008£’000 £’000

UK 2,236 2,049Rest of Europe 1,247 1,156Rest of World 185 128

3,668 3,333

h) Capital riskThe Group’s objective is to minimise its cost of capital by optimising the efficiency of its capital structure, being the balance between equity anddebt. The objective is subject always to an overriding principle that capital must be managed to ensure the Group’s ability to continue as agoing concern in order to provide returns for shareholders and benefits for other stakeholders. The Group uses a range of financial metrics tomonitor the efficiency of its capital structure, including its weighted average cost of capital and net debt to EBITDA and ensures that its capitalstructure provides sufficient financial strength to allow it to secure access to debt finance at reasonable cost.

At 30 June 2009, the Group’s EBITDA for the year was £2,700,000 (2008: £10,195,000) and net cash balances were £1,591,000(2008: £6,808,000).

i) Hedging instrumentsThere were no hedging instruments outstanding at 30 June 2009 or 30 June 2008.

28.Contingent liabilitiesThe Group routinely enters into a range of contractual arrangements in the ordinary course of events which can give rise to claims or potentiallitigation against Group companies. It is the Group’s policy to make specific provisions at the balance sheet date for all liabilities includingwarranty costs and guarantees which, in the opinion of the Directors, are likely to result in a significant loss. The Directors have reviewed theopen claims and pending litigation against the Group at the 30 June 2009 and concluded that no material unprovided loss is likely to accruefrom any such unprovided claims.

29.Related party transactionsTransactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

The Directors of the Company had no material transactions with the Company during the year, other than a result of service agreements.

During the year, for expenses or services provided in the normal course of business, the Group paid £5,000 (2008: £7,900) to J H B Ketteley &Co Limited of which J H B Ketteley is a Director and in which he has an interest. Additionally, an amount of £28,000 (2008: £15,000) was paid toJ H B Ketteley & Co Limited under a lease for occupation by the Group of 66 Clifton Street, London EC2A 4HB.




Independent Auditor’s Report

Report of the independent auditor to the members of Eleco plcWe have audited the parent Company financial statements of Elecoplc for the year ended 30 June 2009 which comprise the Companybalance sheet and the related notes. The financial reportingframework that has been applied in their preparation is applicable lawand United Kingdom Accounting Standards (United KingdomGenerally Accepted Accounting Practice).

This report is made solely to the Company’s members, as a body, inaccordance with Sections 495 and 496 of the Companies Act 2006.Our audit work has been undertaken so that we might state to theCompany’s members those matters we are required to state to themin an auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility toanyone other than the Company and the Company’s members as abody, for our audit work, for this report, or for the opinions we haveformed.

Respective responsibilities of Directors and auditorsAs explained more fully in the Directors’ Responsibilities Statement setout on page 13, the Directors are responsible for the preparation ofthe parent Company financial statements and for being satisfied thatthey give a true and fair view. Our responsibility is to audit the parentCompany financial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standardsrequire us to comply with the Auditing Practices Board’s (APB’s)Ethical Standards for Auditors.

Scope of the audit of the financial statementsA description of the scope of an audit of financial statements isprovided on the APB’s website at www.frc.org.uk/apb/scope/UKNP.

Opinion on financial statementsIn our opinion the parent Company financial statements:

• give a true and fair view of the state of the Company’s affairs as at30 June 2009;

• have been properly prepared in accordance with United KingdomGenerally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of theCompanies Act 2006.

Opinion on other matter prescribed by the Companies Act2006In our opinion the information given in the Directors’ report for thefinancial year for which the financial statements are prepared isconsistent with the parent Company financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters wherethe Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parentCompany, or returns adequate for our audit have not beenreceived from branches not visited by us; or

• the parent Company financial statements are not in agreementwith the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law arenot made; or

• we have not received all the information and explanations werequire for our audit.

Other matterWe have reported separately on the Group financial statements ofEleco plc for the year ended 30 June 2009.

John CorbishleySenior Statutory Auditorfor and on behalf of Grant Thornton UK LLPStatutory Auditor, Chartered AccountantsCambridge

9 October 2009

46 ELECO plc


Company number: 354915


Company Balance Sheet

2009 2008Notes £’000 £’000

Fixed assetsIntangible assets 4 140 33Tangible assets 5 4,838 4,949Investments 6 53,961 49,513

58,939 54,495

Current assetsStocks 7 69 –Debtors 8 5,606 2,622Cash at bank and in hand 1,444 1,436

7,119 4,058

Creditors: amounts falling due within one year 9 (18,525) (17,744)

Net current liabilities (11,406) (13,686)

Total assets less current liabilities 47,533 40,809Creditors: amounts falling due after more than one year 10 (4,621) –Provisions 11 – (94)

Net assets 42,912 40,715

Capital and reservesCalled up share capital 12 6,066 5,995Share premium account 14 6,396 6,224Other reserve 14 16,603 16,640Profit and loss account 14 13,847 11,856

Shareholders’ equity 42,912 40,715

The financial statements on pages 47 to 54 were approved by the Board of Directors on 9 October 2009 and signed on its behalf by:





Statement of Company Accounting Policies

The financial statements have been prepared under UK GAAP.A summary of the more important Company accounting policies,which have been applied consistently, is set out below:

Basis of accountingThe financial statements are prepared in accordance with thehistorical cost convention.

Intangible and tangible fixed assetsTangible fixed assets are stated at their purchase cost, together withany incidental costs of acquisition, net of depreciation and provisionfor impairment.

The Company owns intellectual property both in its software tools andsoftware products. Intellectual property acquired is capitalised at costand is amortised on a straight-line basis over its expected useful lifenot exceeding twenty years.

Depreciation is provided on all tangible fixed assets, except freeholdland, at annual rates calculated to write off the cost, less the estimatedresidual value of each asset, over its expected useful life as follows:

Freehold and long leasehold buildings 50 yearsPlant, equipment and vehicles 2 to 10 yearsIntellectual property up to 5 years

InvestmentsFixed asset investments are shown at cost, together with anyincidental costs of acquisition, less any provision for impairment.

Finance and operating leasesThe capital element of finance lease commitments is shown asobligations under finance leases. The capital element of finance leaserentals is applied to reduce the outstanding obligations under financeleases. The interest element of the rental obligations is charged to theprofit and loss account over the period of the lease in proportion tothe reducing capital balance outstanding. Amounts payable underoperating leases are recognised in the profit and loss account on astraight line basis over the term of the lease.

Share based paymentsThe cost of equity-settled transactions with employees is measuredby reference to the fair value at that date at which they are grantedand is recognised as an expense over the vesting period, which endson the date on which the relevant employees is unconditionallyentitled to the award. The fair value of the employees services isdetermined by reference to the fair value of instruments granted usingan appropriate pricing model. In valuing equity-settled transactions,account is taken of the probabilities of performance achievement andother conditions linked to the price of the shares of the Company(market conditions).

No expense is recognised for awards that do not ultimately vest,except for awards where vesting is conditional upon a marketcondition, which are treated as vesting irrespective of whether or notthe market condition is satisfied, provided that all other performanceconditions are satisfied.

At each balance sheet date before vesting, the cumulative expense iscalculated, representing the extent to which the vesting period hasexpired and management’s best estimate of the achievement orotherwise of non-market conditions. The movement in cumulativeexpense since the previous balance sheet date is recognised in theincome statement, with a corresponding entry in equity.

Shares, the subject of share awards granted under the long termincentive plan, may be allotted to the employee share ownership trustat any time from the date of grant. The shares held by the trust do notqualify for dividends and are deducted from equity attributable toshareholders of the parent through other reserves.

Foreign exchangeTransactions in foreign currencies are recorded at the rate ofexchange at the date of the transaction. Monetary assets and liabilitiesdenominated in foreign currencies at the balance sheet date arereported at the rates of exchange prevailing at that date. Any gain orloss arising from a change in exchange rates subsequent to the dateof the transaction is included as an exchange gain/loss in the profitand loss account.

TaxationCurrent UK corporation tax is provided at amounts expected to bepaid (or recovered) using the tax rates and laws that have beenenacted or substantially enacted by the balance sheet date.

Deferred taxation is recognised in respect of all timing differences thathave originated but not reversed at the balance sheet date wheretransactions or events have occurred at the date will result in anobligation to pay more tax or a right to pay less or to receive more tax,with the following exceptions:

• provision is made for tax on gains arising from the revaluation(and similar fair value adjustments) of fixed assets, and gains ondisposal of fixed assets that have been rolled over intoreplacement assets, only to the extent that, at the balance sheetdate, there is a binding agreement to dispose of the assetsconcerned. However, no provision is made where, on the basis ofall available evidence at the balance sheet date, it is more likelythan not that the taxable gain will be rolled over into replacementassets and charged to tax only where the replacement assets aresold;

• provision is made for deferred tax that would arise on remittanceof the retained earnings of overseas subsidiary undertakings onlyto the extent that, at the balance sheet date, dividends have beenaccrued as receivable;

• deferred tax assets are recognised only to the extent that theDirectors consider that it is more likely than not that there will besuitable taxable profits from which the future reversal of theunderlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax ratesthat are expected to apply in the periods in which timing differencesreverse, based on tax rates and laws enacted or substantivelyenacted at the balance sheet date.

48 ELECO plc



Notes to the Company Financial Statements


1. Profit for the yearAs permitted by section 408 of the Companies Act 2006, the parent Company’s profit and loss account has not been included in thesefinancial statements. The parent Company’s profit for the financial year was £3,456,000 (2008: £4,029,000).

2. EmployeesThe aggregate remuneration of the Directors is shown in the employee in note 5 on page 26.

The average number of employees during the year including Directors by function was as follows:

2009 2008Number Number

Management 8 8Administration 5 4

13 12

Their aggregate remuneration comprised:

2009 2008£’000 £’000

Wages and salaries 1,194 1,222Social security costs 198 171Pension costs 86 159Share based payments 140 178

1,618 1,730

3. Dividends paid and proposed2009 2008 2009 2008

Ordinary shares per share per share £’000 £’000

Declared and paid during the yearInterim – current year 0.40p 1.00p 239 592Final – previous year 2.00p 1.80p 1,184 1,008

2.40p 2.80p 1,423 1,600

The Directors propose a final dividend of 0.40p per share at a cost of £239,000. The liability in respect of the 2009 final dividend has not beenaccrued for at 30 June 2009.

4. Intangible assetsIntellectual property

£’000

Cost:At 1 July 2008 838Additions 590

At 30 June 2009 1,428

Accumulated amortisation and impairment:At 1 July 2008 805Amortisation charge for the year 214Impairment charge for the year 269

At 30 June 2009 1,288

Net book value at 30 June 2009 140

Net book value at 30 June 2008 33

An impairment charge of £269,000 was recognised against the carrying value of the Group’s software rights under an agreement withFreemantle Media. The value in use was derived from discounted management cash flow forecasts for the remaining term to September 2011of the contract. The discount rate used was 8.74%.



Notes to the Company Financial Statements(continued)

50 ELECO plc


5. Tangible fixed assetsFreehold Leasehold Plant,land and land and equipmentbuildings buildings and vehicles Total

£’000 £’000 £’000 £’000

Cost:At 1 July 2008 5,588 547 155 6,290Additions – – 7 7

At 30 June 2009 5,588 547 162 6,297

Accumulated depreciation:At 1 July 2008 1,214 22 105 1,341Depreciation charge for the year 94 6 18 118

At 30 June 2009 1,308 28 123 1,459

Net book value at 30 June 2009 4,280 519 39 4,838

Net book value at 30 June 2008 4,374 525 50 4,949

The net book value of plant equipment and vehicles includes an amount of £nil (2008: £nil) in respect of assets held under finance leases andhire purchase agreements. Freehold land of £883,000 (2008: £883,000) and leasehold land of £234,000 (2008: £234,000) are not depreciated.

6. Investments in subsidiariesShares at cost Loans Total

£’000 £’000 £’000

Cost:At 1 July 2008 21,015 58,837 79,852Additions 61 5,302 5,363

At 30 June 2009 21,076 64,139 85,215

Accumulated provision:At 1 July 2008 9,173 21,166 30,339Charge to profit and loss account – 915 915

At 30 June 2009 9,173 22,081 31,254



The principal subsidiary undertakings are unlisted and wholly owned. They are registered in England and Wales , where their operations arelocated in the United Kingdom. Overseas subsidiary undertakings are incorporated in their country of operations.



6. Investments in subsidiaries (continued)Company Country of Operations

Building Systems – PrecastBell & Webster Concrete Limited UKMilbury Systems Limited UK

Building Systems – OtherSpeedDeck Building Systems Limited UKDowner Cladding Systems Limited UKPrompt Profiles Limited UKEleco Timber Frame Limited UKGang-Nail Systems Limited UKEleco Bauprodukte GmbH GermanyInternational Truss Systems (Pty) Limited South Africa

SoftwareAsta Development PLC UKEleco Software Limited UKConsultec Group AB SwedenConsultec Byggprogram AB SwedenConsultec System AB SwedenConsultec Arkitekter & Konstruktorer AB SwedenAsta Development GmbH GermanyEleco Software GmbH GermanyEsign Software GmbH Germany

The ordinary shares in the above companies are held through intermediate holding companies except Esign Software GmbH.

7. Stock2009 2008£’000 £’000

Finished goods 69 –

69 –

8. Debtors2009 2008£’000 £’000

Trade debtors 51 105Other debtors 36 54Prepayments and accrued income 75 104Deferred tax 183 246Amounts due from subsidiary undertakings 5,261 2,113

5,606 2,622

9. Creditors: amounts falling due within one year2009 2008£’000 £’000

Other creditors 824 470Accruals and deferred income 336 1,152Other taxation and social security 121 212Corporation tax – 666Amounts due to subsidiary undertakings 17,244 15,244

18,525 17,744



52 ELECO plc



10.Creditors: amounts falling due after more than one year2009 2008£’000 £’000

Bank loans 4,500 –Amounts payable on contracts 121 –

4,621 –

Bank loans and overdrafts are repayable as follows:

2009 2008£’000 £’000

In one year or less – –Between one and two years 225 –Between two and five years 2,700 –More than five years 1,575 –

4,500 –

11.Provisions2009 2008£’000 £’000

At 1 July 94 138Credit to profit and loss account (94) (44)

At 30 June – 94

The balance represents provisions for losses in subsidiaries.

12.Called up share capital2009 2008

Nominal Nominalvalue value£’000 £’000

Authorised:85,000,000 (2008: 85,000,000) ordinary shares of 10p each 8,500 8,500

Allotted, called up and fully paid:60,658,239 (2008: 59,953,239) ordinary shares of 10p each 6,066 5,995

During the year, 705,000 ordinary shares were issued for consideration of £243,000 to the Employee Share Ownership Trust to satisfy LTIPoptions.



13.Share based paymentsThe Company operates one share scheme and options outstanding at 30 June 2009 over ordinary shares granted under this scheme toemployees of the Company were as follows:

Weightedaverage

remainingNumber of Vesting dates contractual life

Date awarded ordinary shares Earliest Latest (months)

25 January 2006 55,000 1 January 2009 31 October 2011 2812 January 2007 430,000 1 January 2010 31 October 2012 40

485,000 39

All the options have a £nil exercise price. Certain of the options are subject to performance requirements described in the Directors Report onpage 11. Options may be capable of exercise in certain circumstances earlier than the dates given.

Details of the number of options over ordinary shares outstanding during the year are as follows:

2009 2008Weighted Weightedaverage averagefair value fair value

Number per share Number per share

Outstanding at the beginning of the year 1,010,000 57.7 1,010,000 57.7Granted during the year – – – –Exercised during the year (455,000) 39.8 – –Lapsed during the year (70,000) 20.5 – –

Outstanding at the end of the year 485,000 77.1 1,010,000 57.7

Exercisable at the end of the year 55,000 70,000

The expense recognised in respect of services of employees of the Company for share based payments under the Long Term Incentive Planduring the year ended 30 June 2009 was £140,000 (2008: £178,000).

An appropriate financial model is used to value the share options and the key assumptions used for the outstanding awards are shown below:

2006 2007(A)

Share price at grant date 47.5p 89.0pFair value per share 40.5p 80.7p% Expected to vest 75% 96%Expected life (years) 3 3Dividend yield 2.95% 2.36%Fair value £17,000 £333,000



54 ELECO plc



14.ReservesProfit

Share Other and losspremium reserve account

£’000 £’000 £’000

At 1 July 2008 6,224 16,640 11,856Profit for the year – – 3,456Dividends – – (1,423)Share based payments 172 – (42)Other movements – (37) –

At 30 June 2009 6,396 16,603 13,847

The other reserve includes the shares in the Company held by the Employee Share Ownership Trust and the unrealised profit on the intragrouptransfer of investments.

Other movements during the year reflects the impact of purchases of own shares, held by the Employee Share Ownership Trust and the relatedcharges in respect of the LTIP options.

15.Operating lease commitmentsAnnual commitments under operating leases are as follows:

Property Other Property Other2009 2009 2008 2008£’000 £’000 £’000 £’000

Within one year – – 30 –Between two and five years – – – –After five years – – – –

– – 30 –

16.Related party transactionsThe Company has taken advantage of the exemption granted by paragraph 3(c) of amended FRS 8 not to disclose transactions with otherGroup companies as all subsidiaries are wholly owned. The Directors of Eleco plc had no material transactions with the Company during theyear, other than as a result of service agreements or as disclosed in the Directors’ Report. Details of the Directors’ remuneration are disclosed inthe Directors’ Report on page 11.


Five Year Summary

IFRS UK GAAP2009 2008 2007 2006 2005£’000 £’000 £’000 £’000 £’000

RevenueContinuing operations 70,555 84,909 61,923 55,197 47,836Discontinued operations – – – – 182

Profit/(loss) from operations (1,150) 8,022 5,821 4,592 2,556

Finance income/(expense) (280) 202 59 (156) (231)

Profit/(loss) before taxation (1,430) 8,224 5,880 4,436 2,325

Taxation (39) (2,091) (942) (1,103) (242)

Profit/(loss) after taxation (1,469) 6,133 4,938 3,333 2,083

Dividends (1,423) (1,600) (1,122) (786) (621)

Retained profit/(loss) (2,892) 4,533 3,816 2,547 1,462

Shareholders equity 21,566 25,887 20,941 12,185 8,669

Earnings/(loss) per share (basic) (2.5)p 10.6p 9.3p 6.8p 4.3p

Dividend per share 2.40p 2.80p 2.20p 1.60p 1.275p

Financial Calendar12 November 2009 Annual General Meeting

12 noon at theBrewers’ HallAldermanbury SquareLondon EC2V 7HR

March 2010 Announcement of half year results

Final Dividend – Ordinary shares

21 October 2009 Ex-dividend date23 October 2009 Record date20 November 2009 Payment date

Capital Gains TaxThe price of one ordinary share of 10p on 31 March 1982 (unadjusted) was 70.5p.




Notice of Meeting

NOTICE is hereby given that the seventieth Annual General Meeting ofEleco plc (the “Company”) will be held at the Brewers’ Hall,Aldermanbury Square, London EC2V 7HR on 12 November 2009 at12.00 noon for the purpose of considering and, if thought fit, passingthe following resolutions. Resolutions numbered 1 to 5 and 9 will beproposed as Ordinary Resolutions and Resolutions numbered 6 to 8will be proposed as Special Resolutions.

Ordinary Business1. To receive the financial statements for the year ended 30 June

2009, together with the Reports of the Directors and Auditors.

2. To declare a final dividend of 0.40p on the ordinary shares.

3. To re-elect M B McCullen, who retires by rotation, as a Director ofthe Company.

4. To re-elect J Cohen, who retires by rotation, as a Director of theCompany.

5. To re-appoint Grant Thornton UK LLP as Auditors and to authorisethe Directors to determine their remuneration.

Special Business6. Disapplication of pre-emption rights

That the Directors be empowered, pursuant to section 570 of theCompanies Act 2006 (the “Act”), to allot equity securities (withinthe meaning of section 560 of the Act) for cash as if section561(1) of the Act did not apply to any such allotment, providedthat this power shall be limited to the allotment of equitysecurities:

(a) in connection with an offer of such securities by way of a rightsissue (as defined below); and

(b) otherwise than pursuant to paragraph 6(a) above up to anaggregate nominal amount of £303,291,

and shall expire at the conclusion of the next annual generalmeeting of the Company, save that the Company may, beforesuch expiry, make an offer or agreement which would or mightrequire equity securities to be allotted after such expiry and theDirectors may allot equity securities in pursuance of any such offeror agreement as if this power had not expired.

This power applies in relation to a sale of treasury shares as if allreferences in this resolution to an allotment included any suchsale.

“Rights issue” means an offer of equity securities to holders ofordinary shares in the capital of the Company on the register on arecord date fixed by the Directors in proportion as nearly as maybe to the respective numbers of ordinary shares held by them, butsubject to such exclusions or other arrangements as the Directorsmay deem necessary or expedient to deal with any treasuryshares, fractional entitlements or legal or practical issues arisingunder the laws of, or the requirements of any recognisedregulatory body or any stock exchange in, any territory or any othermatter.

7. Purchase of the Company’s own sharesThat the Company be and is hereby generally and unconditionallyauthorised to make market purchases (within the meaning ofSection 693(4) of the Act) of equity securities of the Company upto an aggregate nominal amount of £606,582 at a price per share(exclusive of expenses) of not less than 10 pence and not morethan 105% of the average of the middle market quotations forsuch equity securities as derived from the London StockExchange Daily Official List for the five dealing days immediatelypreceding the date on which the equity securities are contractedto be purchased, provided that this authority shall expire on theearlier of the conclusion of the next annual general meeting and12 February 2011, save that the Company may purchase equitysecurities pursuant to this authority at any later date where suchpurchase is made pursuant to any contract concluded by theCompany before the expiry of this authority and which will or maybe excluded wholly or partly after such expiry.

8. Adoption of new Articles of AssociationThat :

(a) the articles of association of the Company be amended bydeleting all the provisions of the Company’s memorandum ofassociation which, by virtue of section 28 of the Act, are to betreated as provisions of the Company’s articles of association;and

(b) the articles of association of the Company contained in thedocument produced to the meeting (and signed by theChairman for the purposes of identification) be adopted as thearticles of association of the Company in substitution for, andto the exclusion of, the existing articles of association of theCompany.

9. Adoption of a new Long Term Incentive PlanThat:

(a) the Eleco plc Long Term Incentive Plan (the “LTIP”), the mainprovisions of which are summarised in the notes to thisNotice, be and is hereby renewed in the form of the draftproduced to the meeting and signed for the purposes ofidentification by the chairman of the meeting and the Directorsbe and they are hereby authorised to do all acts and things asmay be necessary or desirable to carry the same into effect.

(b) the Directors be and they are hereby authorised to establishsuch number of appendices to the LTIP or establish suchother share-based incentive plans for the benefit ofemployees of the Company or its subsidiaries in order to takeaccount of local tax, exchange control or securities laws asthey consider appropriate, subject however, to the conditionsthat:

(i) any share made available under such appendices or otherplans shall be treated as counting against any individual oroverall limits contained in the LTIP; and

56 ELECO plc



(ii) such appendices or other plans shall confer benefits andcontain limitations so as to ensure, so far as the Directorsconsider practicable, that the participants obtainsubstantially no greater benefit (before tax) thanemployees may obtain from participating in the LTIP.

By order of the Board

I A BartonSecretary

9 October 2009

Registered Office:Eleco House15 Gentlemen’s FieldWestmill RoadWareHertfordshireSG12 0EF

NOTES:1. A member entitled to attend, speak and vote at the annual general meeting (“AGM”)

may appoint one or more proxies (who need not be members of the Company) toexercise these rights instead of him. A proxy form is enclosed. A member mayappoint more than one proxy, provided that each proxy is appointed to exercise therights attached to different shares. To be effective, an instrument appointing a proxymust be returned so as to reach the Company’s registrars, Capita Registrars, PO Box25, Beckenham, Kent BR3 4BR at least 48 hours before the time appointed for theholding of the meeting or any adjournment thereof. The appointment of a proxy willnot preclude a member from attending and/or voting at the meeting should hesubsequently decide to do so.

2. Any person to whom this Notice is sent who is a person nominated under section146 Companies Act 2006 to enjoy information rights (a “Nominated Person”) may,under an agreement between him or her and the member by whom he or she wasnominated, have a right to be appointed (or to have someone else appointed) as aproxy for the AGM. If a Nominated Person has no such proxy appointment right ordoes not wish to exercise it, he or she may, under any such agreement, have a rightto give instructions to the member as to the exercise of voting rights.

The statement of rights of members in relation to the appointment of proxies inNote 1 above does not apply to Nominated Persons. The rights described in thatnote can only be exercised by members of the Company.

3. Any corporation which is a member can appoint one or more corporaterepresentatives who may exercise on its behalf all of its powers as a memberprovided that they do not do so in relation to the same shares.

4. Copies of contracts of service and letters of appointment between the Directors andthe Company will be available for inspection at the Registered Office of the Companyduring normal business hours until the conclusion of the AGM, and at the place of themeeting for at least 15 minutes prior to the AGM until its conclusion. In addition, acopy of the articles of association marked to show the changes being proposed byResolution 8 will be available for inspection at the Company’s registered office and atthe place of the meeting for at least 15 minutes prior to the annual general meetinguntil its conclusion.




Explanatory Notes of the Principal Changesto the Company’s Articles of AssociationArticles which duplicate statutory provisionsProvisions in the Company’s Current Articles which replicateprovisions contained in the Companies Act 2006 are in the main eitherremoved in the New Articles or amended to bring them in line with theCompanies Act 2006.

The Company’s objectsThe provisions regulating the operations of the Company are currentlyset out in the Company’s memorandum and articles of association.The Company’s memorandum contains, among other things, theobjects clause which sets out the scope of the activities the Companyis authorised to undertake. This is usually drafted to give a widescope.

The Companies Act 2006 significantly reduces the constitutionalsignificance of a company’s memorandum. The Companies Act 2006provides that a memorandum will record only the names ofsubscribers and the number of shares each subscriber has agreed totake in the Company. Under the Companies Act 2006 the objectsclause and all other provisions which are contained in a company’smemorandum, for existing companies as at 1 October 2009, aredeemed to be contained in the Company’s articles of association butthe Company can remove these provisions by special resolution.

Further the Companies Act 2006 states that unless a company’sarticles provide otherwise, a company’s objects are unrestricted. Thisabolishes the need for companies to have objects clauses. For thisreason the Company is proposing a resolution to remove its objectsclause together with all other provisions of its memorandum which, byvirtue of the Companies Act 2006, are treated as forming part of theCompany’s articles of association. Resolution 8(a) confirms theremoval of these provisions for the Company. As the effect of thisresolution will be to remove the current statement in the Company’smemorandum of association regarding limited liability, the NewArticles should also contain an express statement regarding thelimited liability of the members.

Authorised share capital and unissued sharesThe Companies Act 2006 abolishes the requirement for a company tohave an authorised share capital and the New Articles reflect this.Directors will still be limited as to the number of shares they can at anytime allot because allotment authority continues to be required underthe Companies Act 2006, save in respect of employee shareschemes.

Change of nameUnder the Companies Act 1985 a company could only change itsname by special resolution. The Companies Act 2006 permits thearticles to specify another method of changing the Company’s namee.g. by Board resolution. To take advantage of this provision, the NewArticles enable the directors to pass a resolution to change theCompany’s name.

58 ELECO plc



Summary of the Terms of the proposedEleco plc Long Term Incentive PlanThe principal terms of the Eleco plc Long Term Incentive Plan (“LTIP”)are outlined below. Shareholders are being asked to renew the LTIP inits current form as updated to take account of minor changes inlegislation.

GeneralThe LTIP operates in conjunction with the Eleco plc Employee ShareOwnership Trust (“Trust”). The LTIP will, in so far as it relates to theExecutive Directors of the Company, be administered by theRemuneration Committee of the Board.

EligibilityThe Board may recommend to the Trustees (“Trustees”) of the Trustthat any full time employee of the Group (including ExecutiveDirectors) should participate in the LTIP.

Grant of AwardsAfter the Trustees have considered the recommendations made tothem by the Board they may make awards of ordinary shares of theCompany to participants (“Awards”). In making recommendations tothe Trustees regarding Awards, the Board may have regard (amongstother things) to the employee’s own performance, as well as that ofthe Company by which he is employed, or his importance to thefuture success and profitability of the Group. No Award may be mademore than eleven years after the renewal of the LTIP.

Terms of AwardsThe Board will make recommendations to the Trustees regarding theterms of an Award including any performance criteria to be satisfiedbefore ordinary shares subject to an Award are released to aparticipant and the length of time before ordinary shares subject to anAward are released (the “Restricted Period”). It is intended that theRestricted Period will usually not be less than three years.

The market value of ordinary shares comprised in Awards made to aparticipant in any plan year when combined with awards made in theprevious two plan years may not exceed the aggregate of annualbasic salary for those three years.

The LTIP allows the Trustees, on the recommendation of the Board, tomake any of four types of Award: Restricted Share Awards,Performance Share Awards, Matched Share Awards and MatchedPerformance Share Awards. Awards may instead take the form ofoptions having the same economic effect.

Restricted Share AwardsA Restricted Share Award is a conditional award where the release ofordinary shares is normally only subject to the expiration of theRestricted Period.

Performance Share AwardsA Performance Share Award is a Restricted Share Award but wherethe release of ordinary shares is subject to the satisfaction ofperformance criteria during the Restricted Period.

Matched Share AwardsA Matched Share Award is a Restricted Share Award where the size ofthe Award is dependent on the number of ordinary shares which theparticipant undertakes to acquire and hold pursuant to the LTIP duringthe Restricted Period (“his Invested Shareholding”). To the extent thatany ordinary shares subject to an Invested Shareholding are disposedof during the relevant Restricted Period any Matched Share Awardshall be correspondingly reduced unless the Trustees otherwisedetermine.

Matched Performance Share AwardsA Matched Performance Share Award is a Matched Share Awardwhere the release of Ordinary shares is subject to the satisfaction ofperformance criteria during the Restricted Period.

Rights during the Restricted PeriodInvested ShareholdingsA participant will be entitled to direct the Trustees how to vote ordinaryshares comprised in his Invested Shareholding and will also receiveany dividends paid on such shares.

AwardsA participant will not be entitled to direct the Trustees how to vote inrespect of ordinary shares subject to his Awards or, unless theTrustees otherwise determine, to receive dividends in respect of suchshares.

Release of ordinary sharesNormally, the ordinary shares subject to Awards will be transferred toparticipants as soon as practicable after the end of the RestrictedPeriod provided that:

(i) the participant is then employed by a company within the Group;

(ii) in the case of a Matched Share Award the participant still holds hisInvested Shareholding; and

(iii) in the case of Performance and Matched Performance ShareAwards, any relevant performance criteria have been met.

Where any performance criteria have not been met, or are onlypartially met, the relevant Award, or part of it, will lapse.

If a participant’s employment terminates during the Restricted Period,all his Invested Shareholding will normally be transferred to him. AllAwards will lapse unless the cessation of employment is due to injury,illness, disability, death, redundancy, retirement, a sale of theCompany or business in which the participant works or for any otherreason as determined by the Trustees (having consulted with theRemuneration Committee). In these circumstances, the Award willvest on its normal date subject to satisfaction of any performancecriteria save that the Trustees may, at their absolute discretion, transferthe ordinary shares comprised in the Award to the participant prior tothe end of the Restricted Period irrespective of whether anyperformance criteria have been satisfied. In the event of anamalgamation, take-over or winding-up of the Company, ordinaryshares subject to Awards will be transferred to participants irrespectiveof whether any performance criteria have been satisfied.




60 ELECO plc


Summary of the Terms of the proposedEleco plc Long Term Incentive Plan (continued)

PensionsAwards are not pensionable.

Variation of capitalIn the event of a capitalisation issue any new shares issued in relationto an Invested Shareholding will be treated as part of the InvestedShareholding and any new shares issued in respect of ordinaryshares held subject to Awards will be added to the relevant Awards. Inthe event of other variations of share capital, demerger or othercircumstances determined by the Trustees, the Trustees (havingconsulted with the Remuneration Committee) may adjust Awards insuch a way as they consider fair and reasonable.

AlterationsThe LTIP may be amended by the Board.

LimitsIn any ten year period, not more than 10% of the issued ordinary sharecapital of the Company from time to time may be issued or issuablepursuant to rights acquired under the LTIP and any other employees’share plans of the Company. Shares subscribed by the Trustees tosatisfy Awards and (whilst it continues to be good practice to do so)shares transferred from treasury do count against this limit.


Group Directory

Building SystemsBell & Webster Concrete LimitedGrantham, LincolnshireTel: +44 (0) 1476 562277 Fax: +44 (0) 1476 562944E-mail: [email protected]: www.eleco.com/bellandwebsterManufacturer and supplier of FastBuild™ precast concrete rooms,retaining walls, terracing units and other concrete products.

Milbury Systems LimitedLydney, GloucestershireTel: +44 (0) 1275 857799 Fax: +44 (0) 1275 853123E-mail: [email protected]: www.milbury.comManufacturer and supplier of prestressed and precast retainingstructures.

Gang-Nail Systems LimitedAldershot, HampshireTel: +44 (0) 1252 334691 Fax: +44 (0) 1252 334562E-mail: [email protected]: www.eleco.com/gangnailManufacturer and supplier of roof truss connector plates, EcoJoist®

floor joist webs and associated design and engineering software.

Eleco Bauprodukte GmbHMunich, GermanyTel: +49 (0) 816 187960 Fax: +49 (0) 816 1879633E-mail: [email protected]: www.eleco.com/elecobauprodukteSupplier of roof truss connector plates and associated design andengineering software.

International Truss Systems (Pty) LimitedJohannesburg, South AfricaTel: +27 (0) 11 397 4441 Fax: +27 (0) 11 397 4929E-mail: [email protected]: www.eleco.com/itsSupplier of roof truss connector plates and associated design andengineering software.

SpeedDeck Building Systems LimitedYaxley, SuffolkTel: +44 (0) 1379 788166 Fax: +44 (0) 1379 788161E-mail: [email protected]: www.eleco.com/speeddeckManufacturer and supplier of secret-fix and standing seam metalroofing and Vitesse® wall and rainscreen cladding systems.

Downer Cladding Systems LimitedYaxley, SuffolkTel: +44 (0) 1379 787215 Fax: +44 (0) 1379 788161E-mail: [email protected]: www.eleco.com/downerSupplier of fixing and support systems for rainscreen cladding.

Prompt Profiles LimitedNorwich, NorfolkTel: +44 (0) 1603 720090 Fax: +44 (0) 1603 720202E-mail: [email protected]: www.eleco.com/promptprofilesManufacturer and supplier of profiled metal products for the roofingsystems industry.

Eleco Timber Frame LimitedYaxley, Suffolk Liverpool, MerseysideTel: +44 (0) 1379 783465 Tel: +44 (0) 151 448 0066Fax: +44 (0) 1379 783659 Fax: +44 (0) 151 448 0066Website: www.eleco.com/elecotimberframeManufacturer and supplier of ElecoFrame® timber frame, EcoJoist®

floor joist and ElecoFloor® acoustic flooring products.

SoftwareAsta Development plcThame, OxfordshireTel: +44 (0) 1844 261700 Fax: +44 (0) 1844 261314E-mail: [email protected]: www.astadev.comDeveloper and supplier of project and resource management software.

Asta Development GmbHKarlsruhe, GermanyTel: +49 (0) 721 95 250 Fax: +49 (0) 721 95 25100Email: [email protected]: www.astadev.deSupplier of project and resource management software.

Consultec Byggprogram ABSkellefteå, SwedenTel: +46 (0) 910 87878 Fax: +46 (0) 910 87809E-mail: [email protected]: www.consultec.seDeveloper and supplier of building project software.

Consultec System ABSkellefteå, SwedenTel: +46 (0) 910 87800 Fax: +46 (0) 910 87849E-mail: [email protected]: www.consultec.seDeveloper and supplier of design and engineering software.

Consultec Arkitekter & Konstruktorer ABSkellefteå, SwedenTel: +46 (0) 910 87800 Fax: +46 (0) 910 87809E-mail: [email protected]: www.consultec.seArchitectural consultancy and software reseller.

Eleco Software LimitedAldershot, HampshireTel: +44 (0) 1252 339148 Fax: +44 (0) 1252 332287E-mail: [email protected]: www.3darchitect.co.ukDeveloper and supplier of 3D design software.

Eleco Software GmbHHameln, GermanyTel: +49 (0) 5151 787 9928 Fax: +49 (0) 5151 787 9929E-mail: [email protected]: www.elecosoftware.deDeveloper and supplier of 3D design software.

Esign Software GmbHHanover, GermanyTel: +49 (0) 511 856 14340 Fax: +49 (0) 511 856 14343E-mail: [email protected]: www.e-sign.comDeveloper and supplier of software solutions for the floor coveringsindustry.

Annual Report and Accounts 2009



Eleco plc

ELECO plc

Eleco is a group focused on key components of amodern construction project. Building Systems used inthe fabric of the building, Software tools used tomanage the construction project and sustainableconstruction to enhance environmental performance.

Eleco SoftwareEleco Software provides softwareapplications to help constructionbusinesses manage each stage ofthe project lifecycle, satisfying theirdrive for greater efficiency throughimproved management ofprojects.

Eleco Building SystemsEleco Building Systems focuseson modern methods ofconstruction to provide materialsefficiency and construction speedin precast concrete, timber andmetal.

Sustainable ConstructionEleco is a group focused onsustainable construction improvingenvironmental performancethrough material efficiency, fasterconstruction times and efficientmanagement of projects.

1367 Eleco R&A IFC & IBC:1367 Eleco R&A IFC & IBC 14/10/09 12:09 Page 2

Eleco House15 Gentlemen’s FieldWestmill Rd, WareHerts SG12 0EFTel: +44 (0)1920 443830Fax: +44 (0)1920 469681E-mail: [email protected]: www.eleco.com

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