Adoption of Financial Reporting Standard FRS102

15 April 2016

Flowgroup plc

("Flowgroup", "Group" or the "Company")

Adoption of Financial Reporting Standard FRS102

Flowgroup plc (AIM: FLOW), which provides a range of innovative energy technologies, energy supply and energy services, announces that following the publication of FRS 100 'Application of Financial Reporting Requirements' by the Financial Reporting Council, the Company is required to change the accounting framework for its Company and subsidiary financial statements which currently adopt United Kingdom Generally Accepted Accounting Practice (UK GAAP).

Flowgroup Plc's consolidated financial statements, which cover the Group as a whole, will continue to be prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The Group's financial statements are unaffected by this adoption going forward and do not require any changes to be made to historic reported numbers.

The Board considers that it is in the best interests of the Group for the Company and its subsidiaries to adopt FRS 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland. It is intended that for the year ended 31 December 2015 and for future accounting periods FRS 102 is adopted, and the relevant disclosure exemptions permitted under FRS 102 are applied. These disclosure exemptions are consistent with those adopted in the financial statements for the year ended 31 December 2014 as produced under the then applicable UK GAAP.

The Company's election to adopt FRS 102 for its parent company financial statements does not require shareholder approval. However, as stipulated in FRS 102, the Company is required to notify shareholders of this election. Any shareholder or shareholders holding in aggregate 5 per cent or more of the total allotted shares in the Company may serve an objection. Objections must be served in writing and delivered to the Company Secretary at Flowgroup plc, Castlefield House, Liverpool Road, Castlefield, Manchester M3 4SB by 25 April 2016.