Annual Financial Report

Low & Bonar PLC 8 March 2010

Low & Bonar PLC (the "Company")

2009 Annual Financial Report and Annual General Meeting

The Company confirms that its Annual General Meeting will be held on 8th April 2010 at The Cumberland Hotel, Great Cumberland Place, London W1A 4RF, commencing at midday. A notice convening that meeting has today been posted to shareholders, together with a copy of the Company's Annual Report for the year ended 30 November 2009.

In accordance with section 311A of the Companies Act 2006, certain information concerning the AGM is given on the Company's website at ww.lowandbonar.com.

The Company confirms that copies of the documents listed below have been submitted to the UK Listing Authority and will be available for inspection in the UK Listing Authority's Document Viewing Facility, which is situated at:

The Financial Services Authority

25 The North Colonnade

Canary Wharf

London

E14 5HS

Listing of documents:

1. Report and Accounts for the year ended 30 November 2009

2. Chairman's Explanatory Letter and Notice of Annual General Meeting

3. Annual General Meeting Proxy Card

The Company announced its preliminary results for the year ended 30 November 2009 on 16 February 2010. The Company today provides the following additional regulated information, in relation to the Annual Report, in full unedited text as required to be made public under the Disclosure and Transparency Rules. This announcement should be read together with the preliminary results announcement.

A condensed set of financial statements were included in the Company's preliminary results announcement, which also included an indication of important events that occurred during the year. The Annual Report also contains information regarding the Company's risks and uncertainties and a responsibility statement relating to its content; an extract of this information is provided below as is required under the Disclosure and Transparency Rules. 

Risks and uncertainties

Risk

Global economic activity

The Group may be adversely affected by global economic conditions, particularly in its principal markets in mainland Europe and North America. The current depressed global economy and the volatility of international markets could result in reduced levels of demand for the Group's products, a greater risk of debtors defaulting on payment terms and a higher risk of inventory obsolescence.

 Mitigating strategy

Local operating management are responsible for monitoring their own markets and are empowered to respond quickly to changing conditions. Production costs may be quickly flexed to balance production with demand, including the use of short-time working arrangements where available. Further actions, such as reducing the Group's cost base and cancelling or delaying capital investment plans, are available to allow continued profitability in the face of a sustained reduction in volumes.

 The Group has a broad base of customers and no single customer represents more than 3% of total revenue. Group policies ensure customers are given an appropriate level of credit based on their trading history and financial status, and a prudent approach is adopted towards credit control. Credit insurance is used where available.

 Risk

Organic growth and competition

The markets in which the Group operates are mature and highly competitive with respect to price, geographic distinction, functionality, brand recognition and the effectiveness of sales and marketing.

 Mitigating strategy

The Group has chosen to operate in attractive niche markets within the technical textile industry, using proprietary technology to manufacture products which are important determinants of the performance and/or efficiency of our customers' final product or process.

 Significant resources are dedicated to developing and maintaining strong relationships with our customers, and to developing new and innovative products which meet their precise needs. The Board believes that these factors maintain its strong competitive position.

 Risk

Raw material pricing

The Group's profitability can be affected by the purchase price of its key raw materials and its ability to reflect any changes through its selling prices. The Group's main raw materials are polypropylene, polyester, nylon, polyethylene and PVC. The prices of these raw materials are volatile, and they are influenced ultimately by oil prices and the balance of supply and demand for each polymer.

Mitigating strategy

The Group has a good level of expertise in polymer purchasing and uses a number of suppliers to ensure a balance between competitive pricing and continuity of supply. The effect of raw material cost increases have in the past been successfully mitigated through improved operating efficiencies and higher selling prices.

 Risk

Growth strategy

The Board believes that growth, both organic and through acquisitions, may be part of its strategy for the Group. The Board reviews such growth opportunities on an ongoing basis

and its strategy is based on appropriate acquisition targets being available and on acquired companies being integrated rapidly and successfully into the Group.

 Mitigating strategy

The current focus of the Group is on profitable, cash generative organic growth. The senior management team is experienced and has successfully executed and integrated several acquisitions in the past. Acquisitions would be made in existing or adjacent segments whose products and technologies are well understood, and only after extensive pre-acquisition due diligence. Acquisition proposals are supported by a detailed post-acquisition integration plan that is rigorously managed through to completion.

 Laws and regulations

The Group's operations are subject to a wide range of laws and regulations, including employment, environmental and health and safety legislation along with product liability and contractual risks.

 Mitigating strategy

The Group's policy manuals ensure all applicable legal and regulatory requirements are met or exceeded in all territories in which it operates, and ongoing programmes and systems monitor compliance and provide training for relevant employees. Product liability risks are managed through stringent quality control procedures covering review of goods on receipt and prior to despatch and all manufacturing processes. Insurance cover, appropriate for the nature of the Group's business and its size, is maintained. The Group also seeks to minimise risks through its terms and conditions of trading.

 Risk

Funding risks

The Group, like many other companies, is dependent on its ability to both service its existing debts, and to access sufficient funding to refinance its liabilities when they fall due and to provide sufficient capital to finance its growth strategy.

 Mitigating strategy

The Group manages its capital to safeguard its ability to continue as a going concern, to optimise its capital structure, and to provide sufficient liquidity to support its operations and the Board's strategic plans. Committed bank facilities of at least 110% of the Group's projected peak requirements are maintained, and plans to refinance these before their expiry in December 2011 are well advanced. Compliance with the covenants associated with these facilities is closely monitored.

Risk

Treasury risks

Foreign exchange is the most significant treasury risk for the Group. The reported value of profits earned by the Group's overseas entities is sensitive to the strength of Sterling, particularly against the Euro and, to a lesser extent, the US Dollar. The Group is exposed to a lesser extent to other treasury risks such as interest rate risk and counterparty credit risk. These financial risks are discussed more fully in Note 19 to the accounts.

Mitigating strategy

Group policy ensures treasury activities are focused on the management of risk with high quality counterparties; no speculative transactions are undertaken. The Group uses financial instruments to manage the exposures that may arise from its business operations as a result of movements in financial markets.

 Risk

Employees

The Group is reliant on its ability to attract and retain key employees.

 Mitigating strategy

Employee retention and development is a key feature in ensuring the continued success of the Group. Employees are recruited and regularly appraised against a formal job specification. Formal policies cover all material aspects of employment and we are committed to high standards of health and safety at work, effective communication with employees and employee development.

 Risk

Business continuity

The occurrence of major operational problems could have a material adverse effect on the Group.

 Mitigating strategy

The Group has business continuity measures in place to minimise the impact of any disruption to its operations. These are supported by regular site visits from the Group Risk Manager and internal audit. Where appropriate, risks are partially transferred through insurance programmes.

 Risk

Pension funding

The Group may be required to increase its contributions into its defined benefit pension schemes to cover an increase in the cost of funding future benefits or to cover funding shortfalls. The funding may be affected by poor investment performance of pension fund investments, changes in the discount rate applied and longer life expectancy of members.

 Mitigating strategy

The main Group scheme is closed to new members; and assumptions, including funding rates, are set in line with the actuaries' recommendations. Regular dialogue takes place with pension fund trustees and the Board regularly discusses pension fund strategy.

 Directors' responsibility statement

The 2009 Annual Report contains a responsibility statement signed on behalf of the Board by the Group Chief Executive, Steve Good, and the Group Finance Director, Kevin Higginson. As stated above, this statement is repeated here to comply with the provisions of the Disclosure and Transparency Rules.

 The Directors are responsible for preparing the Annual Report and the Group and Company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the European Union and applicable laws and have elected to prepare the Company financial statements on the same basis.

 Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of their profit or loss for that period.

 In preparing each of the Group and Company financial statements, the Directors are required to:

·; select suitable accounting policies and then apply them consistently;

·; make judgements and estimates that are reasonable and prudent;

·; state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

·; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.

 The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

 Under applicable law and regulations the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

 The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 DTR 4.1 statement

 The Directors confirm, to the best of their knowledge that:

 ·; these financial statements, prepared in accordance with IFRS, as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation as a whole; and

·; the management report, which comprises the Chairman's Statement and the Business Review, includes a fair review of the development and performance of the business and of the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face."

Directors

The Directors of the Company are:

Duncan Clegg, ChairmanSteve Good, Chief Executive OfficerKevin Higginson, Group Finance DirectorSteve Hannam, Non-Executive DirectorMartin Flower, Non-Executive DirectorFolkert Blaisse, Non-Executive DirectorChris Littmoden, Non-Executive Director

Related party transactions

There are no related party transactions requiring disclosure.

For further information, please contact:

Low & Bonar PLC

Matthew Joy, Company Secretary 020 7535 3180