Reports and AccountsAish Technologies Ltd
Approved by the Board on 27March 2013. Mr E Bates Director

Report of the directors

The directors present their report and the financial statements of the group for the year ended 30 November 2013.

Principal activities and business review

Aish Technologies (Aish) is a private limited company engaged in advanced engineering and manufacturing and through life support of electronic and mechanical systems that are used on land and at sea. The company’s principal business is the design, manufacture and support of products used in surface ships, submarines, radar, communications, electronics, guided weapon systems and specialist military vehicles.

Aish has delivered another robust set of results and has performed well in a challenging business environment. The adoption of a diversification strategy to embrace other previously unexplored defence markets has continued to provide the driving force for continued growth despite the general UK economic difficulties. However, the significant ongoing organisation restructuring that occurred within Aish during the year and the decision by certain customers to delay existing contracts resulted in Aish being unable to achieve profit recognition milestones within the 2013 financial year.

Our order book and bid pipeline have remained stable at around £7 million and £30 million respectively since last reported. We continue to discover and develop opportunities for organic growth and remain confident in delivering strong and sustainable performance in 2014.

Financial overview
Aish achieved another successful year in 2013, which included good progress on all its major contracts. Sales turnover at £14.2 million (2012 £13.7 million) increased by 2.5% but headline profit before tax and extraordinary items was £385k which reflects costs associated with continued organisation changes to realign the increasing technological nature of the business. The Company has continued its policy of reinvestment in the business and consequently this strategy shows an improved balance sheet.

Aish’s continued organic growth is based on the niche nature of its products and technologies, its success in developing in-house design and improved manufacturing processes and its proven ability to be agile, flexible and responsive to its customers’ technological and programme requirements.

Aish is an advanced engineering and manufacturing company and its strategy is to continue to focus on what it does best, but do it better each year.

The company continued to benefit from its long-term focus on gaining strong market positions through being a niche supplier of electronic and electro-mechanical systems products and services within our chosen Maritime and specialist Land systems defence markets.

The year has seen us make excellent progress towards the Board’s objective of delivering superior performance as measured through achieving our customers’ expectations.

The initiatives associated with continuous and sustainable Lean Process Improvements that began in 2003, have continued through 2013. The company has signed up to the Defence and Aerospace supplier excellence programme known as Twenty First Century Supply Chain (SC21).

Although there have been no acquisitions since our management buyout in 2000, such acquisitions and Joint Ventures will be considered, provided that they meet the business objectives and lead to an overall increase in the value of the company’ s equity and future potential.

Research and Development
Investment in the development of innovative high quality products is central to the company’s growth. Aish strategy of strong investment in product development is a major contributor to sales growth over the long term.

Capital Expenditure
To ensure that we are always best equipped to serve our customers needs, Aish invested over £216k in new technology during 2013 to remain at the forefront of advanced engineering and manufacturing innovation. It is anticipated that further significant investments will be made in new technology during 2014.

Internal Controls
The Board has established procedures for financial controls and business recovery. These procedures are reviewed and tested on a regular basis

2014 Outlook
The benefits of the organisation restructuring that occurred in 2012 and 2013 are already having a positive effect. Aish continues to be in good financial condition with an improving balance sheet. We continue to discover and develop opportunities for organic growth and remain confident in delivering strong and sustainable performance in 2014.

The Company continues to increase its presence in the maritime defence and specialist military vehicle markets with further substantial growth forecast for 2014.

During the year Aish has been successful in winning export business including the technology refresh and follow on manufacturing contracts for the Aish designed Impressed Current Cathodic Protection (ICCP) system for further submarine build programmes in the USA. In addition, Aish has recently won the ICCP design and manufacturing contract for the UK’s Military Afloat Reach and Sustainability (MARS) tanker programme with Daewoo Shipbuilding and Marine Engineering (DSME) in South Korea. This business will provide significant work for all areas of the business for a number of years.

We believe that the key markets in which the Company operates remain attractive and that with the improving economic climate, we will continue to create medium and long term growth opportunities both in the UK and overseas.

In this environment we believe that we are well placed to benefit from the scope of our operations, the breadth of our expertise and our record of achieving innovative solutions for our customers. Aish is therefore on track to achieve sustained underlying performance in 2014 and beyond.

Mr E Bates
April 2014