Audited results for 15 months to 31 March 2013

0700hrs 26 June 2013

Hayward Tyler Group plc

("Hayward Tyler", the "Group" or the "Company")

Audited consolidated results for 15 month period to 31 March 2013

Hayward Tyler Group plc (AIM: HAYT.L), the specialist engineering group, is pleased to announce its audited consolidated results for the 15 month period to 31 March 2013. A copy of the audited results is available for download from the Company's redesigned website, www.haywardtyler.com.

Financial Highlights

·; Order intake up 25% on a pro rata basis to £49.5 million for 15 month period to 31 March 2013 (12 months to 31 December 2011: £31.6 million);

·; 1% increase in revenue on pro rata basis to £40.5 million in period (2011: £32.1 million);

·; Trading* profit before tax in period up 13% on a pro rata basis to £2.4 million (2011: £1.7 million) delivering trading* earnings per share of 3.68 pence (2011: 3.63 pence) in spite of 28% dilution from equity issue;

·; Return to overall profit with net profit of £0.1 million in period (2011: £4.6 million loss) delivering fully diluted earnings per share of 0.29 pence (2011: loss of 12.93 pence);

·; Net assets at 31 March 2013 up 110% to £9.8 million (31 December 2011: £4.7 million); and

·; Net debt** reduced by 15% to £8.5 million (2011: £10.0 million).

* measured on a trading basis (i.e. recurring business - see note 2.5 for non-trading items)

** net debt represents cash less borrowings

Operational Highlights

·; Name changed to Hayward Tyler Group plc reflecting that the Company's performance is driven by its principal subsidiary Hayward Tyler Group Limited;

·; Luton operations restructured and London Group head office closed delivering expected annualised cost savings of £1.0 million;

·; Strategic sourcing from MBE Cologne fully introduced delivering a range of operational benefits;

·; Successful move of Varley Pumps to the Company's Glasgow based operations; and

·; Recovery seen at the Company's nuclear focused US operations post-Fukushima.

Ewan Lloyd-Baker, CEO of Hayward Tyler, commented:

"The 15 month period to 31 March 2013 has seen one of the most transformational periods in the recent history of Hayward Tyler. The anticipated improvement in performance that occurred after the first half of 2012 is highly encouraging as the continuous improvement programme and operational changes to the manufacturing operation in Luton, UK improve the Company's profitability. With a stronger platform, we now have the ability to invest further in R&D, develop the relationship with MBE and continue growing in our core markets of the power, nuclear and oil and gas industries."

Enquiries:

Chairman's Statement

A period of transition and emerging strength

"I am pleased to report that the Group emerged from a period of transition to show results that were largely ahead of market expectations for the 15 months to 31 March 2013."

Change of Name

At the start of 2013 the Company changed its name to Hayward Tyler Group plc in recognition that the performance of the Company is driven by our principal subsidiary Hayward Tyler Group Limited ("Hayward Tyler"). In addition, the change of name enables clearer communication to stakeholders, including customers, suppliers, employees and shareholders.

Change of Year End

The Board decided to change the Company's year end from 31 December to 31 March to reduce the cyclicality of reporting between the first and second half of the calendar year, which we have experienced over the last few years and to align it with that of our largest shareholder, MBE Mineral Technologies Pte Ltd ("MBE"), to enhance operational and financial planning.

Results Overview

Against a back drop of a weak global economy and a continued competitive environment we did see an improvement in a number of our end markets thus enabling us to increase revenue for the 15 month period to 31 March 2013 to £40.5 million (Year to 31 December 2011: £32.1 million). That generated an underlying trading operating profit of £3.3 million (2011: £2.3 million), which represented a return on revenue of 8.1% (2011: 7.2%). Underlying trading earnings per share were 3.68 pence (2011: 3.63 pence) despite the impact of a 28% dilution from the issue of equity. Non-trading charges mainly relate to the cost of restructuring our Luton operations (£1.0 million), which gave a statutory net profit of £0.1 million (2011: loss of £4.6 million).

A fuller review for the period starts on page 12 of the Report and Accounts.

Refinancing

In April 2012 we wrote to shareholders with details of a proposed £5.0 million equity injection and an offer of new borrowing and banking facilities for the Group. These arrangements were completed during the second and third quarters of 2012 and provide the Group with far greater financial security. The new borrowing facilities extended debt maturity, increased the amount of borrowing facilities available and provided more flexible terms and conditions to the Group.

Further details of the new facilities are set out in the Financial Review on page 16.

Corporate Governance

In line with best practice we have expanded our review of corporate governance, which starts on page 30.

Outlook

The 15 month period to 31 March 2013 has seen one of the most transformational periods in the recent history of Hayward Tyler. The anticipated improvement in performance after the first half of 2012 is encouraging as the continuous improvement programme and operational changes to the manufacturing operation in Luton, UK improve the Company's profitability. With a stronger platform the ability to invest in research and technical development combined

with the developing relationship with MBE is particularly encouraging.

As we move towards the bicentenary celebrations of Hayward Tyler in 2015 the Board is looking to the future with increasing confidence. I hope that will allow the Company to announce its inaugural dividend in the near term.

JOHN MAY

25 June 2013

Chief Executive's Business Review

"I am very encouraged that the business that I see now is in a stronger position than at any time in its recent history."

Introduction

This is my first statement as Chief Executive of the newly named Hayward Tyler Group plc, ironic that as one of the newest named companies on the AIM market our underlying subsidiary company is one of the UK's oldest engineering companies. The past 15 months have seen some tumultuous change across Hayward Tyler but I am very encouraged that the business that I see now is, I believe, in a stronger position than at any time in its recent history. This strength is a result of positive changes both internal and external but key to the promises we make, and then deliver to, is the hard work invested by our team of people and I'd therefore like to thank them for being part of the continuing evolution of this great business.

Performance Review

I will start by dwelling on what has historically been the wound in Hayward Tyler's side; the poor performance of our OE business in Luton, UK. As previously highlighted, towards the end of 2011 it became apparent that the operational performance of the Group was not going to improve without some fundamental changes to this part of the business. I introduced these changes in early 2012 including the appointment of a Chief Operating Officer, a Supply Chain Director and I assumed the role of operational Managing Director. As a business we went through a complete root and branch review of our Luton based operations, from capacity planning to plant layout to working practices to supply chain review. At the same time a programme of continuous improvement was introduced that now underpins the positive changes and on-going development that are a fundamental part of our strategy across the Group. Part of the turnaround of the Luton operations involved making 32 people redundant and whilst this process was not easy I am pleased that we were able to complete it with the support of our union. The turnaround was gradual but has been successful and it now provides us with a much stronger platform on which to grow not just the Luton based business but also the entire Group. Proof of the improvement is now beginning to be reflected in the numbers as highlighted here:

§ In the 6 months to 30 June 2012 the manufacturing operations lost £1.6 million

§ In the 6 months to 31 December 2012 the manufacturing operations lost £60,000

§ In the 3 months to 31 March 2013 the manufacturing operations made a profit of £13,000

To paraphrase a quote from the Chinese philosopher Lao Tzu, even a journey of a thousand miles must begin with one small step. This underpins the nature of our continuous improvement programme and the enhancements which we have witnessed to date in our Luton operations. The recovery in the underlying financial performance is the result of thousands of small improvements each with an individual person responsible for them and accountable to others for their delivery, thus it is the teamwork of our people that has helped to deliver the progress to date. There are three areas which I'd like to highlight in particular in relation to the changes in Luton:

§ Process improvements involving a fundamental analysis of our operating systems, workflow streams and the mapping of tens of thousands of individual operations to identify and eradicate inefficiencies.

§ Reduced footprint. We have reduced the number of buildings in which we operate from eight to two thus considerably reducing duplication, improving the flow of product and enabling focused investment in our main production facility.

§ Supply chain. With the significant strengthening of our balance sheet as a result of the issue of equity and improving financial performance we have been able to normalise the relationship with our supplier base. However, it has gone further than this enabling us to focus on having deeper and more strategic relationship with a fewer number of suppliers (reduced in number by 80% over the past 15 months). In particular, the partnership with MBE has developed such that its heavy machine shop, MBE Cologne, is now a key supplier of major components and kits of parts to Hayward Tyler.

Whilst the majority of the Executive management's attention has been on the turnaround of the Luton based business during the calendar year 2012 so the improving position of this operation means that we can now begin to focus on further supporting the development and growth of our other operations. Highlights from these included:

§ The successful move of our Varley Pumps business from Luton to Glasgow, which doubled the size of our Glasgow based operations within their existing footprint.

§ Significant growth in our Kunshan AM operation built on our installed base in China and the expansion of their sphere of influence to include South East Asia.

§ A recovery in our Vermont operation post-Fukushima driven by a combination of contract wins for replacement units and new synthetic gasification units together with a significant increase in field service work.

§ An increase in our AM business in Delhi driven by increasing demand for OE spares coupled with an improving order environment for our OE.

So, whilst our operations are at different stages of their development the successful continuous improvement programme, which originated in our Glasgow operation is now being rolled out across the rest of the Group.

Overall the combination of an improving performance in Luton and a record performance (in mix terms) in favour of the AM meant that revenues for the 15 month period increased to £40.5 million with trading* EBITDA of £4.2 million and trading* operating profit of £3.3 million. Gross margins were 35% as a result of this mix and whilst in the future I would expect gross margins to improve in the OE business I would also expect the overall mix of business to be closer to a more favourable (in terms of ensuring the longer term future of the business) 50%:50% split between OE and AM than the 30%:70% split seen in the period in question.

Stakeholders

Given the huge change experienced across the Group in the last 15 months or so I would like to thank all of our stakeholders for their support; to our customers for their patience, to our suppliers for their understanding and especially to our employees for their fortitude, diligence and determination.

Vision

Looking forward, we have a much stronger platform on which to build and develop our vision of becoming our customers' number one choice for the provision of mission critical motors and pumps within our chosen markets.

We will be measured by our customers' on our ability to deliver the promise we sell. We have an incredible history to draw on, a strong reputation and enviable brand to build on and a dedicated team to count on which gives me every confidence that all our stakeholders can look forward to sharing in our success and our 200th anniversary celebrations in 2015.

EWAN LLOYD-BAKER

25 June 2013

* measured on a trading basis (see note 2.5)

Statement of Financial Position

The accounts were approved by the Board of Directors on 24 June 2013 and were signed on its behalf by:

E LLOYD-BAKER, DIRECTOR

N FLANAGAN, DIRECTOR

Company registration number: 116537C

Consolidated Statement of Comprehensive Income

The accompanying accounting policies and notes form part of these financial statements

Consolidated Statement of Changes in Equity

Notes to the Financial Statements

1. General Information

Hayward Tyler Group plc (formerly Specialist Energy Group plc) is incorporated and resident in the Isle of Man. The Company's registered office and principal place of business is Peregrine Corporate Services, Burleigh Manor, Peel Road, Douglas, Isle of Man, IM1 5EP. Hayward Tyler Group plc's shares are listed on the Alternative Investment Market (AIM).

Hayward Tyler Group plc is the ultimate parent company of the Group and its consolidated financial statements are presented in Pounds Sterling (£), which is its functional currency. These consolidated financial statements have been approved for issue by the Board of Directors on 24 June 2013. The Directors have not recommended a dividend.

The principal operating business of Hayward Tyler Group plc is Hayward Tyler Group Limited ("Hayward Tyler"). Established in the UK in 1815, Hayward Tyler designs, manufactures and services a comprehensive range of fluid filled electric motors and pumps. These units are custom designed to meet the most demanding of applications and environments. Focused on the power generation (conventional and nuclear), oil & gas (topside and deep subsea) and industrial markets, Hayward Tyler is a market leader in its technology solutions. Furthermore, Hayward Tyler supplies and services a range of mission critical motors and pumps for the Royal Navy submarine fleet in the UK. Hayward Tyler also undertakes service, overhaul and upgrading of third party motor and pump equipment across all sectors.

In addition to the head office in Luton (England), Hayward Tyler has manufacturing and service support facilities in Kunshan (China), Delhi (India), East Kilbride (Scotland) and Vermont (USA). These facilities and staff provide cover 24 hours 7 days a week for maintenance, overhaul and repair.

2. Summary of significant accounting policies

2.1 Going concern

The consolidated financial statements have been prepared on a going concern basis. The Directors have taken note of the guidance issued by The Financial Reporting Council on Going Concern Assessments in determining that this is the appropriate basis of preparation of the financial statements and have considered a number of factors.

On the basis of the outlook for the business, its medium term forecasts, its new borrowing arrangements (see note 35) and the continuing support of its major shareholder, MBE Technologies Pte Limited, the Directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Group and Company continues to adopt the going concern basis of accounting in preparing the annual financial statements.

2.2 Basis of preparationThe consolidated financial statements for the period ended 31 March 2013 have been prepared in accordance with IFRS as adopted by the European Union. The financial statements have been prepared under the historical cost basis for the purposes of inclusion in this document with the exception of some financial instruments which are carried at fair value (see note 30) and freehold properties which are held at revalued amounts (see note 18). The accounting policies set out below have been consistently applied to all the periods presented.

2.3 Basis of consolidationThe Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 31 March 2013. Subsidiaries are entities over which the Group has the power to control the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

2.4 Business combinationsFor business combinations occurring since 1 January 2010, the requirements of IFRS 3R have been applied. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.

2.5 Trading and non-trading

The consolidated income statement reports the results for the year under the headings Trading and Non-trading. Trading represents the underlying performance of Hayward Tyler together with head office costs. Non-trading represents non-recurring items, which include operating charges, finance costs and deferred tax charge of £0.5 million (2011: £1.1 million).

Non-trading operating charges include:

§ Collection of receivables previously provided for from jurisdictions where, due to political uncertainty, the collectability was in doubt: gain of £0.2 million (2011: charge of £0.8 million)

§ Restructuring of Luton operations: charge of £1.0 million (2011: £nil)

§ Impairment of freehold property and other assets of £nil (2011: £2.8 million).

Non-trading finance costs include:

§ Re-banking costs: charge of £0.5 million (2011: £0.1 million)

§ The movement in fair value of derivatives: gain of £0.5 million (2011: charge of £1.1 million).

2.6 Segmental reporting

In identifying its operating segments, management follows the Group's service lines, which represent the main products and services provided by the Group.

The activities undertaken by the original equipment manufacturing segment ("OE") includes the design and manufacture of pumps and motors. The aftermarket segment ("AM") provides a comprehensive range of aftermarket services and spares supporting the Group's own product range as well as those of other original equipment manufacturers. Each of these operating segments is managed separately as they require different resources and have a different customer base, including sales and marketing approach. All inter-segment transfers are carried out at arm's length prices.

The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements, except that:

§ post-employment benefit expenses

§ expenses relating to share-based payments

§ research costs relating to new business activities

are not included in arriving at the operating profit of the operating segments. In addition, corporate assets which are not directly attributable to the business activities of any operating segment are not allocated to a segment. There have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

2.7 Foreign currency translation

The consolidated financial statements are presented in Pounds Sterling, which is the Company's functional currency.

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). In the Group's financial statements, all assets, liabilities and transactions of the Group entities, with a functional currency other than the Pound Sterling (the Group's presentation currency) are translated into Pounds Sterling upon consolidation. The functional currencies of the entities in the Group have remained unchanged during the reporting period.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency of the respective Group entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined.

(c) Foreign subsidiaries

The assets and liabilities in the financial statements of foreign subsidiaries and related goodwill are translated at the rate of exchange ruling at the reporting date. Income and expenses are translated at the average rate. The exchange differences arising from the retranslation of the opening net investment in subsidiaries are recognised in other comprehensive income and accumulated in the "Foreign Currency Translation Reserve" in equity. On disposal of a foreign operation the cumulative translation differences are reclassified from equity to profit or loss when the gain or loss on disposal is recognised.

2.8 Property, plant and equipment

Land held for use in production or administration is stated at historical cost. As land is considered to have an unlimited useful life, related carrying amounts are not depreciated. Buildings for use in production or administration are initially recognised at acquisition cost and subsequently measured using the cost model, cost less accumulated depreciation and impairment losses.

Property and equipment held under finance leases are capitalised and included in property, plant and equipment. Such assets are depreciated over their expected useful lives (determined by reference to comparable owned assets) or over the term of the lease, if shorter. Buildings are stated at cost or revaluation less depreciation and impairment losses. Equipment, furniture and fittings are stated at cost less depreciation and impairment losses. Depreciation is provided at rates calculated to write off the cost or revaluation of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Buildings - 4%

Plant and machinery - 10%

Fixtures and fittings - 20%

Short leasehold improvements - over period of lease

Material residual value estimates and estimates of the useful life are updated as required, but at least annually, whether or not the asset is re-valued.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within 'other income' or 'other expenses'.

2.9 Leased assets

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance leasing liability. Leases of land and buildings are classified separately and are split into a land and a building element, in accordance with the relative fair values of the leasehold interests at the date the asset is recognised initially.

Depreciation methods and useful lives for assets held under finance lease agreements correspond to those applied to comparable assets which are legally owned by the Group. The corresponding finance leasing liability is reduced by lease payments, less finance charges, which are expensed as part of finance costs.

The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to profit or loss over the period of the lease.

All other leases are treated as operating leases. Payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

2.10 Goodwill

Goodwill represents the excess of the acquisition cost in a business combination over the fair value of the Group's share of the identifiable net assets acquired. Goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing.

2.11 Other intangible assets

Other intangible assets include capitalised development costs used in respect of the development of subsea motor and electrical joint technology. They are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful life, which in the case of the subsea motor is 10 years and in the case of the electrical joint is 5 years. Expenditure on research is recognised as an expense in the period in which it is incurred.

Costs that are directly attributable to the development phase of technology are recognised as an intangible asset, provided they meet the following recognition requirements:

§ completion of the intangible asset to the development phase is technically feasible, so that it will be available for use or sale;

§ the Group intends to complete the intangible asset and use or sell it;

§ the Group has the ability to use or sell the intangible asset;

§ the intangible asset will generate probable future economic benefits. Among other things, this requires that there be a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits;

§ there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

§ the expenditure attributable to the intangible asset during its development can be measured reliably.

Development costs not meeting these criteria for capitalisation are expensed as incurred.

Directly attributable costs include employee costs incurred on the development along with an appropriate portion of relevant overheads. Development costs recognised as an intangible asset are subject to the same subsequent measurement method. However, until completion of the development project, the assets are subject to impairment testing only as described below in the note on impairments.

2.12 Impairment testing of goodwill, other intangible assets and property, plant and equipment

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represents the lowest level within the Group at which management monitors goodwill. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and the value in use of the asset. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, where an impairment loss for an asset (or cash-generating unit) subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognised as income immediately.

2.13 Investments

Investments in undertakings are recorded at fair value of consideration paid less impairment.

2.14 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises the direct purchase price, including all expenses directly attributable to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Costs are assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses.

2.15 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and short-term deposits that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

2.16 Equity, reserves and dividend payments

Share capital represents the nominal value of shares that have been issued.

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The foreign currency translation reserve represents differences arising on the retranslation of net investments in overseas subsidiary undertakings, based on the rate of exchange ruling at the balance sheet date.

The merger reserve of £14.5 million includes £9.9 million arising as a result of the acquisition of Southbank in January 2010. The merger reserve represents the difference between the nominal value of the share capital issued by Hayward Tyler Group plc and its fair value at 20 January 2010, the date of the acquisition.

The reverse acquisition reserve arises as a result of the method of accounting for the acquisition of Southbank by Hayward Tyler Group plc. In accordance with IFRS 3 Business Combinations (Revised 2008) the acquisition has been accounted for as a reverse acquisition.

Retained earnings include all current and prior period retained profits.

Dividend distributions payable to equity shareholders are included in 'other liabilities' when the dividends have been approved in a general meeting prior to the reporting date.

2.17 Taxation

The tax expense recognised in profit or loss represents the sum of the current tax and deferred tax. The current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available in future against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, provided that they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full.

Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and liabilities from the same taxation authority.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in the other comprehensive income or directly in equity, respectively.

2.18 Post employment benefits

The Group provides post employment benefits through defined benefit plans as well as various defined contribution plans.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into an independent entity. The Group has no legal or constructive obligations to pay further contributions after its payment of the fixed contribution. The contributions are recognised as an employee benefit expense when they are due.

Plans that do not meet the definition of a defined contribution plan are defined benefit plans. The defined benefit plans sponsored by the Group defines the amount of pension benefit that an employee will receive on retirement by reference to length of service and final salary. The legal obligation for any benefits remains with the Group, even if plan assets for funding the defined benefit plan have been set aside. Plan assets may include assets specifically designated to a long-term benefit fund as well as qualifying insurance policies.

The liability recognised in the statement of financial position for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs.

Management estimates the defined benefit obligation annually with the assistance of independent actuaries. The estimate of its post-retirement benefit obligations is based on standard rates of inflation, medical cost trends and mortality. It also takes into account the Group's specific anticipation of future salary increases. Discount factors are determined close to each year-end by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses are recognised in the statement of other comprehensive income. Past service costs are recognised immediately in profit or loss, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period.

Interest expenses related to pension obligations and expected return on plan assets are included net in other finance costs in profit or loss. All other post employment benefit expenses are included in 'employee benefits expense'.

Short-term employee benefits, including holiday entitlement, are current liabilities included in 'pension and other employee obligations', measured at the undiscounted amount that the Group expects to pay as a result of the unused entitlement.

2.19 Share based payment

The Group operates equity-settled share-based remuneration plans for its employees. None of the Group's plans feature any share options or any options for a cash settlement. Prior to the reverse acquisition in 2010 the Group issued equity settled share based payments to certain employees and third parties. These arrangements are no longer operating for the issue of new options.

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where employees are rewarded using share-based payments, the fair value of employees' services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to retained earnings. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of shares expected to vest.

Equity settled share based payments are measured at fair value at the date of the grant. The fair value determined at the grant date of the equity settled share based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects on non-transferability, exercise restrictions and behavioural considerations.

2.20 Provisions, contingent liabilities and contingent assets

Provisions are recognised when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive commitment that has resulted from past events, for example, product warranties granted to a customer, legal disputes or onerous contracts.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar

obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, or the amount provided for cannot be measured reliably, no liability is recognised, unless it was assumed in the course of a business combination. In a business combination contingent liabilities are recognised at their fair values in the course of the allocation of the purchase price to the assets and liabilities acquired in the business combination. They are subsequently measured at the higher amount of a comparable provision as described above and the amount initially recognised, less any amortisation.

Probable inflows of economic benefits to the Group that do not yet meet the recognition criteria of an asset are considered contingent assets and disclosed where an inflow of economic benefits is probable.

2.21 Revenue recognition

Revenue comprises revenue from the sale of goods and the rendering of services.

Revenue is measured at the fair value of consideration received or receivable and represents amounts obtained through trading activities, net of value added tax and trade discounts. The Group applies the revenue recognition criteria set out below to each separately identifiable component of the sales or service transaction in order to reflect the substance of the

transaction. The consideration received from these transactions is allocated to the separately identifiable component by taking into account the relative fair value of each component.

Revenue is recognised when the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Group's different activities has been met. These activity-specific recognition criteria are based on the goods or solutions provided to the customer and the contract conditions in each case, and are described below.

(a) Original equipment manufacture

The Group provides pumps and motors specifically customised to each customer. These contracts specify a fixed price for the development and installation of pumps and motors.

When the outcome can be assessed reliably, contract revenue and associated costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Revenue is measured at the fair value of consideration received or receivable in relation to that activity.

When the Group cannot measure the outcome of a contract reliably, revenue is recognised only to the extent of the contract costs incurred and to the extent that such costs are recoverable. Contract costs are recognised in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the total expected loss is recognised immediately in profit or loss.

The stage of completion of any contract is assessed by management by taking into consideration all information available at the reporting date. The percentage of completion is calculated by comparing costs incurred to date with the total estimated costs of the contract.

The gross amount due from customers for contract work is presented as an asset within 'trade and other receivables' for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. The gross amount due to customers for contract work is presented as a liability within 'other liabilities' for all contracts in progress for which progress billings exceed costs incurred plus recognised profits (less losses).

(b) Aftermarket

Revenue comprises the sale of spare parts and other aftermarket services, which is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership of the goods and services supplied. Significant risks and rewards are generally considered to be transferred to the buyer when the customer has taken undisputed delivery of the goods and services.

(c) Interest income

Interest income is recorded on an accrual basis using the effective interest method.

2.22 Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. Expenditure for warranties is recognised and charged against the associated provision when the related revenue is recognised.

2.23 Borrowing costs

Borrowing costs primarily comprise interest on the Group's borrowings. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, are capitalised as part of the cost of that asset when it is probable that they will result in future

economic benefits and the costs can be measured reliably. All other borrowing costs are expensed in the period in which they are incurred and reported within 'finance costs'.

2.24 Finance costs - re-banking

Re-banking costs comprise the costs of repaying existing borrowings and the costs of arranging new borrowing and banking facilities. Re-banking costs are accounted for using the extinguishment method with any difference on the extinguishment of the old debt and recognition of the new debt charged to the income statement in the period the re-banking occurred. To the extent that costs relate to new borrowing facilities whose term exceeds 1 year, such costs are charged to the income statement evenly over the term of the loan..

2.25 Financial instruments

Financial assets and liabilities are recognised on the Group's Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or when the financial asset and all substantial risks and rewards are transferred.

A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value.

Financial assets and financial liabilities are measured subsequently as described below.

Financial assets

For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition loans and receivables.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within 'finance costs' or 'finance income', except for impairment of trade receivables, which is presented within 'other expenses'.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents and trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other available features of shared credit risk characteristics. The percentage of the write down is then based on recent historical counterparty default rates for each identified group. Impairment of trade receivables is presented within 'other expenses'.

Financial liabilities

The Group's financial liabilities include borrowings, trade and other payables and derivative financial instruments.

Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities held for trading or designated at fair value through profit or loss, that are carried subsequently at fair value with gains or losses recognised in profit or loss.

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within 'finance costs' or 'finance income'.

Derivative financial instruments

Derivatives are financial assets or financial liabilities classified as held for trading and recorded at fair value through profit and loss.

Due to certain customer contracts being settled in foreign currencies, the Group enters into forward exchange contracts and swaps in order to reduce the exposure to foreign currency risk. The Group has also used a fixed rate swap to fix the rate of interest payable on some of its borrowings and an inflation swap as part of a fixed rate loan arrangement. Refer to note 30 for more details regarding the Group's use of derivatives.

3 Standards, amendments and interpretation to existing standards that are not yet effective and have not been adopted early by the Group

At the date of authorisation of these financial statements, certain new standards,amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the pronouncements will be adopted in the Group's financial statements for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.

Amendments to IAS 19 'Employee Benefits' (IAS 19 Amendments)

The IAS 19 Amendments include a number of targeted improvements throughout the Standard. The main changes relate to defined benefit plans. They:

§ eliminate the 'corridor method', requiring entities to recognise all actuarial gains and losses arising in the reporting period;

§ changes the measurement and presentation of certain components of defined benefit cost;

§ enhance the disclosure requirements, including information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in them.

The IAS 19 Amendments are effective for annual periods beginning on or after 1 January 2013 and will apply retrospectively. The Group will be affected as it sponsors a defined benefit pension plan, however, these changes will not have a material impact on the Group. Firstly, the Group does not use the corridor method.Secondly, the net pension expense in profit or loss will be affected by the removal of the expected return on plan assets and interest cost components and their replacement by a net interest cost based on the net defined benefit asset or liability. Management has determined with its actuarial advisers that this change will have an immaterial impact on the Group's consolidated financial statements.

IFRS 9 Financial Instruments (effective from 1 January 2015)

The IASB aims to replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety. The replacement standard (IFRS 9) is being issued in phases. To date, the chapters dealing with recognition, classification, measurement and derecognition of financial assets and liabilities have been issued. These chapters are effective for annual periods beginning 1 January 2015. Further chapters dealing with impairment methodology and hedge accounting are still being developed.

Management have yet to assess the impact that this amendment is likely to have on the financial statements of the Group. However, they do not expect to implement the amendments until all chapters of IFRS 9 have been published and they can comprehensively assess the impact of all changes.

4 Significant management judgements in applying accounting policies

The following are significant management judgements in applying accounting policies of the Group that have the most effect on the financial statements.

Internally generated development costs

Management monitors progress of internal research and development projects by using a project management system. Significant judgement is required in distinguishing research from the development phase. Development costs are recognised as an asset when all the criteria are met, whereas research costs are expensed as incurred.

To distinguish any research-type project phase from the development phase, it is the Group's accounting policy to also require a detailed forecast of sales or cost savings expected to be generated by the intangible asset. The forecast is incorporated into the Group's overall budget forecast as the capitalisation of development costs commences. This ensures that managerial accounting, impairment testing procedures and accounting for internally-generated intangible assets is based on the same data.

The Group's management also monitors whether the recognition requirements for development costs continue to be met and an assessment made of its recoverability. This is necessary as the economic success of any product development is uncertain and may be subject to future technical problems after the time of recognition.

Revenue recognition - original equipment manufacture

The stage of completion of a contract is assessed by management taking into consideration all information available at the reporting date. In this process management carries out significant judgements about milestones, actual work performed and the estimated costs to complete the work. Further information on the Group's accounting policy for contracts is in note 2.21.

Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

Leases

In applying the classification of leases in IAS 17, management considers its leases of equipment as finance lease arrangements. In some cases, the lease transaction is not always conclusive, and management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership.

5 Estimation uncertainty

When preparing financial statements management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

The actual results may differ from the judgements, estimate and assumptions made by management, and will seldom equal the estimated results.

Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.

Original equipment revenue

The stage of completion of any contract is assessed by management by taking into consideration all information available at the reporting date. In this process management formulates estimates regarding actual work performed and the estimated costs to complete the work.

Deferred tax asset - refer to note 21

Management estimates the deferred tax asset semi-annually with the assistance of independent tax advisers; however, the actual outcome may vary due to estimation uncertainties. The assessment of the probability of future taxable trading income in which deferred tax assets, in respect of trading losses, can be utilised is based on management's latest financial projections. If a positive projection of taxable income indicates the probable use of such deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances. The value of deferred tax asset in respect of trading losses at 31 March 2013 was £3.7 million (2011: £2.8 million).

Defined benefit pension liability - refer to note 27

Management estimates the defined benefit pension liability annually with the assistance of independent actuaries; however, the actual outcome may vary due to estimation uncertainties. The estimate of its defined benefit pension gross liability of £13.1 million (2011: £13.1 million) is based on standard rates of inflation and mortality. The estimate does not include anticipation of future salary increases, as there are no members with benefits related to future salary progression. Discount factors are determined close to each period end by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related pension liability. Estimation uncertainties exist particularly with regard to medical cost trends, which may vary significantly in future appraisals of the Group's defined benefit pension obligations. The value of the defined benefit pension liability at 31 March 2013 was £1.6 million (2011: £2.5 million).

Provisions - refer to note 25

The amount recognised for warranties for which customers are covered for the cost of repairs is estimated based on management's past experience and the future expectations of defects. The value of warranty provisions at 31 March 2013 was £0.6 million (2011: £0.6 million).

6 Segment information

Management currently identifies the Group's two service lines, OE and AM, as operating segments. The activities undertaken by the OE segment include the manufacture of pumps and motors. The activities of the AM division include the servicing of, and provision of spares for, a wide range of pumps and motors.

Segment information can be analysed as follows for the reporting periods under review:

The Group's revenues from external customers and its non-current assets (other than goodwill and deferred tax assets) are divided into the following geographical areas:

Revenues from external customers in the Group's domicile, United Kingdom, as well as its major market the USA have been identified on the basis of the customers' geographical location. Non-current assets are allocated based on their physical location.

No customer represented greater than 10% of Group revenue in the 15 months to 31 March 2013 nor the year to 31 December 2011.

The totals presented for the Group's operating segments reconcile to the entity's key financial figures as presented in its financial statements as follows:

Segment total assets can be reconciled to Group assets as follows:

7 Operating profit/(loss)

Operating profit/(loss) is stated after charging:

Foreign currency exchange differences relate to a loss on hedge contracts at rates that were adverse to actual rates offset by a gain arising on the retranslation of net current assets.

Non-trading operating loss in the 15 months to 31 March 2013 is stated after the cost of restructuring the Luton operations (£1.0 million) offset by collection of receivables from jurisdictions provided for in 2011 where, due to political uncertainty, collectability was in doubt (£0.2 million).

8 Employee remuneration

Employee benefits expense

The employee benefit expense during the year was as follows:

The average numbers of employees during the year were as follows:

Key management personnel

Key management of the Group are members of the Board of Directors in Hayward Tyler Group plc.

Remuneration in respect of the Directors including employer's national insurance cost was as follows:

The amounts set out above include remuneration in respect of the highest paid director as follows:

None of the Directors participate in the Group's defined benefit plan. Details of related party transactions are given in note 31 to the financial statements.

During the period the Company established a subsidiary, Specialist Energy Group Trustee Limited, for the purpose of acting as an Employee Benefit Trust ("EBT"). Authorities were granted to the EBT to purchase ordinary shares in the Company to be distributed to relevant employees and on 5 October 2012 the EBT purchased 600,000 shares at a price of 13 pence per share. On 9 October 2012 the EBT gifted these shares with an aggregate value of £96,000 to Ewan Lloyd-Baker. These arrangements constitute a related party transaction and further details are provided in note 31.

9 Directors' Emoluments

The remuneration received by each Director that served during the period was as follows:

Notes

1. None of the Directors participate in the Group's defined benefit scheme. Pension contributions represent payments to a personal pension arrangement

2. Employer's National Insurance Contributions made relating to directors' emoluments in the period were £70,000 (2011: £46,000)

3. Appointed 15 May 2012 following subscription for 10,000,000 ordinary shares of the Company by MBE Mineral Technologies Pte Limited

4. During the period to 31 March 2013 £31,500 was paid to MBE Mineral Technologies Pte Limited for the provision of non-executive director services by Deepak Khaitan

5. During the period to 31 March 2013 £22,750 was paid to MBE Mineral Technologies Pte Limited for the provision of non-executive director services by Prabir Ghosh

6. Resigned 15 August 2012 following the completion of the re-banking of the Group

10 Trading EBITDA

Trading earnings before interest, tax, depreciation and amortisation are as follows:

11 Finance costs

Further details of the re-banking are set out in the Financial Review, which starts on page 16, and in note 35.

12 Income tax expense

(a) Analysis of total tax charge

(b) Reconciliation of profit/( loss) before tax total tax charge/(credit)

The relationship between the expected tax expense based on the domestic effective tax rate of Hayward Tyler Group plc at 24.4% (2011: 26.5%) and the reported tax expense in the income statement is set out below, which also shows the major components of tax expense:

Note 21 provides information on the entity's deferred tax assets and liabilities, including the amounts recognised directly in the income statement.

13 Income tax asset/(liability)

14 Earnings/(loss) per share

The calculation of the basic earnings/ (loss) per share is based on the earnings/(loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

The calculation of diluted earnings/(loss) per share is based on the basic earnings/(loss) per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

*Anti-dilutive in the prior year due to loss therefore loss per share does not change as would make loss per share smaller

Dividends

No dividends have been declared during the current period (2011: nil).

15 Goodwill

The net carrying amount of goodwill can be analysed as follows:

There is no impairment charge for the period (2011: nil). For the purposes of periodic impairment testing the carrying amount of goodwill is allocated to the following cash generating units ("CGU").

The recoverable amounts of the OE and AM cash-generating units were determined based on value-in-use calculations. The key assumptions used in the calculations were:

§ The forecast operating cash flows for the next five years and a terminal value of such flows based on approved budgets and plans. These budgets and plans are based on past performance, current orders, future order pipeline and expectations for the market development of the CGU, taking into account the current economic climate and forecast assumptions (both internal and external where appropriate) around the relevant product markets.

§ An estimate of the long-term growth rate for the CGU representing management's best estimate of future long-term growth in the respective divisions, taking into account both internal and external projections for the markets in which they operate. The long-term growth rate used for the first five years was 11% and the terminal value growth rate used was 2%.

§ A discount rate of 11.3% was used to discount future cash flows and reflects management's estimate of the weighted average cost of capital of the Group.

Impairment test are carried out at each reporting date and indicate present values of future cash flows in respect of both the OE and AM divisions are far in excess of the carrying values of the associated assets including goodwill that management considers the likelihood of any impairment arising to be remote.

16 Other intangible assets

The Group's other intangible assets comprise solely internally generated development costs (see note 2.11). The net carrying amounts for the reporting periods under review can be analysed as follows:

The amortisation charge for the year is included within operating charges and disclosed in note 7.

17 Investments

The Company had the following investments in subsidiary undertakings:

The addition in 2011 reflects the capitalisation of Southbank UK Limited.

The Company owns more than 20% of the following companies: